The Iran Deal: America Leading From The Front

Has the US stepped back from the global political and economic leadership role it has played since the end of WWII? The critics who attribute the turbulence in the Middle East, Russia’s aggressive actions in Ukraine and a resurgent China to a lack of global leadership by the US and specifically President Obama think so.

I suggest, however, that the critics take a breather to consider what happened yesterday and how it could change the world for the better.

I felt a sense of national pride over the announcement that Iran and the US-led P5+1 Countries (UK, France, Germany, Russia, China and US) had reached an agreement on a process that would ensure Iran develops nuclear capabilities only for peaceful purposes in exchange for a cessation of the US and EU economic sanctions that have crippled Iran’s economy.

The immediate and heated criticism of the agreement from opponents in the Republican majority of the U.S Congress, Iran’s neighbors, especially Saudi Arabia and Israel, however, could not diminish the historic significance of what occurred yesterday.

It was US leadership that resulted in an agreement that removed the certainty that war was the only path to resolving the future of Iran’s nuclear program, all in the middle of a region of the world that is engulfed in a war against Islamic extremists, rising tensions between Sunnis and Shias and the seemingly intractable Israeli-Palestinian conflict.

Secretary of State Kerry admitted that a lot of hard work was still ahead and that the deal could still unravel during the next stage of negotiations over the process for reducing monitoring Iran’s nuclear program and what needs to be accomplished before economic sanctions are lifted.

Were these the actions of a declining nation state? Hardly.  The United States has steadfastly fulfilled the global leadership role it assumed in 1945 during high points, the end of the Cold War, and low points, the Vietnam War. The US led initiative to create the United Nations, World Bank and International Monetary Fund helped to shape the dramatically different world of 2015. The post-WWII world of impoverished developing countries and former socialist economies are now the BRICS and the rapidly growing economies of Asia, Africa and South America.

These countries are now demanding their rightful place at the decision-making table on political and economic governance issues for the global community.

The critics of the Obama Administration’s foreign policies who still see the world as it was in the post-WWII era of the Cold War are out of touch with the political and economic realities of the 21st Century. They don’t recognize that America’s influence over global affairs is now less about domination and more about mutual collaboration.

Which is why I find it curious that the US government is so adamantly opposed to the Chinese led Asian Infrastructure Investment Bank (AIIB). Sure, the AIIB is a challenge to the World Bank and IMF, and a response to what China and other emerging economies see as US-led western domination of the international financial system. But it’s going to happen whether we like it or not. US participation would provide an opportunity to play an influential role in the formation of the AIIB’s governance structure.

The Iran agreement demonstrated how important US influence continues to be in today’s world. Let’s hope that the White House continues to choose engagement over calls to retreat from global affairs. We need to have trade agreements like TPP and TTIP for economic growth and US jobs. And, most importantly, we must have wise leadership that can use America’s immense powers to address the new realities and opportunities of the post-20th Century world.

Can Hope Emerge From The MH 17 Tragedy?

A brief reprieve from the rising tensions and outrage over the missile attack that destroyed MH 17 and killed nearly 300 hundred innocent people occurred when Ukrainian separatists allowed international authorities to inspect the plane’s wreckage, and the remains of the dead and the aircraft’s black boxes were turned over Malaysian officials in an area controlled by the Poroshenko government.

There is little doubt that the Ukrainian separatists were responsible for the missile attack. The Obama Administration put on public display the results of the classified technology used by the American intelligence services that showed the missile was fired in territory held by Ukrainian separatists, and evidence of monitored conversations between Ukrainian separatists about shooting down the plane.

While the Ukrainian separatists shot the plane out of the sky, it was Russia who supplied the missile, and whose government has now become the focal point of anger over MH17. Russia will likely face more economic sanctions, as well as other possible consequences, such as losing the 2018 World Cup and getting booted out the G20. Russia’s global reputation is in tatters, as is its economy and business climate. Capital flight is already at record levels, and growing concern over the government’s policy on Ukraine among the business community.

President Putin has not wavered in his support for the Ukrainian separatists, and nor has the flow of anti-western, nationalistic rhetoric on Russian media subsided. However, he has given some indications that the downing of MH 17 has shifted the political calculus and provided a brief opportunity for meaningful discussions between all parties.

I hope all parties recognize this opportunity and not let it slip away. The alternative is to have already hardened positions held by all parties to become unmovable, and elevate the risk of war between Russia and Ukraine.

In the short-term, the goal needs to be a ceasefire and multilateral talks between all parties. The fighting needs to stop. Two things must happen first. The Ukrainian government needs to stop the military offense against the separatist rebels and Russia needs to stop supplying weapons to the separatists. One cannot happen without the other.

Next, all parties must immediately enter into negotiations under the UN’s supervision and station UN peacekeepers between the Ukrainian separatist rebels and Ukrainian government’s armed forces – The presence of UN peacekeepers would reduce the risk of more violence, which would undoubtedly have a negative influence on the negotiations. The talks will likely last a long time and be frustrating for both sides. At least, however, the bloodletting will stop, and the possibility of achieving some kind of consensus for a way forward that addresses the needs of the Ukrainians, the pro-Russian separatists and Russia, with the involvement of the EU and the US.

Unfortunately, solving Ukraine’s troubles will not be easy and will require patience and a long-term commitment by all sides. In the process, Russia could also address some its own long-term problems. Some of the most pressing issues are:

Rebuilding Ukraine’s economy – The rebellion that ousted former President Yanukovych and the conflict between the Poroshenko government and the Ukrainian separatists has totally ruined Ukraine’s economy, which was already on the verge of collapse under President Yanukovych. Financial support from the IMF, The World Bank and the international investment community will be needed to reinvigorate Ukraine’s economy and must include eastern and southern Ukraine, which suffered greatly under Yanukovych’s crony capitalism.

Establish normal trade relations between Russian and Ukraine – The unavoidable fact is the Russian and Ukrainian economies are inextricably linked. If Russia chooses a trade war over a revised trade agreement, they risk more economic sanctions and further damage it already sinking economy, as well as stoking political unrest at home. The better choice would be a negotiated bilateral trade agreement that addresses the national interests of Russia and Ukraine, and relies on the WTO to settle trade disputes rather than the arbitrary gas wars of the past.

Europe needs to get serious about reducing its dependence on Russia for energy – The Ukraine crisis is a grim reminder of how perilous Europe’s economy and standard of living is when you depend on one major source for your energy. How many times does a disagreement between Russia and Ukraine that results in a stoppage of gas supplies to Europe will it take for Europe to grasp the reality that a long-term strategy to diversify it sources of energy is overdue.

Russia needs to get serious about becoming less dependent upon foreign imports and build up its domestic production capabilities and diversify Russia’s economy – Like the Europeans, the Russians have been equally remiss in not building its domestic manufacturing base. The Russian government has positioned policy initiatives to jumpstart local manufacturing of goods and technologies as counter measures to US and EU sanctions. To the contrary, expanding Russia’s domestic production will help to modernize Russia’s economy. It will provide jobs and exports, while reducing Russia’s reliance on the price of energy on the global market for its economic security.

This is just a start….

I am hopeful the MH17 tragedy will be enough of a wakeup call to all parties that the momentum of events in Ukraine can be interrupted long enough to keep them from descending into all out war, and to recognize the dangerous long-term consequences to all parties if it doesn’t.