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The International Outlook for 2012

2011 witnessed enormous global developments. What lies ahead in 2012?

January 4, 2012

2011 witnessed enormous global developments. What lies ahead in 2012?

Key points from Stephan Richter’s January 2 appearance on The Diane Rehm Show:

On the United States’ global role

1. Attaining freedom in the Middle East will be a decades-long process. It is a continuation of the self-liberalization Eastern Europe realized 20 years ago. It is also increasingly finding clear expressions in Asia, well beyond Burma.

2. Much of this process of transformation, difficult and messy as it is, will be driven by in-country political and economic forces and regional actors.

3. It is key for the United States to have realistic goals for its own foreign policymaking. Contrary to the view of many in Washington, the United States is not central to all developments around the world.

4. In fact, its past pattern of universal self-immersion in issues all over the globe has not been overly successful, and has even been counterproductive (witness Iraq).

5. To bring peace and stability to a given region, a certain amount of “subcontracting,” or a willingness to stand back, would be very helpful for the United States, strategically speaking. The problem of Afghanistan, for example, can only be “solved” with the full engagement of its regional neighbors, not by military force.

6. The constant focus on imposing sanctions and articulating fears and worries about other countries tends to eliminate the space for constructive engagement, dialogue and the exercise of regional responsibility. Iran is a case in point.

7. The fact that Iran is now making overtures throughout Latin America is a telling reflection of the short-sightedness of the U.S. strategy, which does not tend to focus on constructive opportunities and rather obsesses about the avoidance of negative developments. The United States has failed to engage Latin America constructively and strategically for decades, whether on issues related to energy, water or transportation.

8. Recent U.S. global engagements, especially in the Middle East, have come at a great domestic cost. Since money doesn’t grow on trees, either in the United States or elsewhere, choices will have to be made.

9. The Iraq war itself cost $1 trillion. That is equal to over 30 years of what the United States spends on development aid annually. Imagine what could have been done with that money in a constructive fashion, either domestically on rebuilding crumbling U.S. infrastructure, or internationally.

10. In conclusion, it would help the United States a great deal not to be overly ambitious any longer. The range of domestic tasks is pressing — and too much focus on the international agenda only prevents the country from addressing its domestic challenges. It’s not about bombing Iran, but creating jobs at home.

On Europe

1. The eurozone countries are facing big problems. However, Europe’s key issues — fiscal consolidation, pensions, benefit levels, labor market reforms and so on — need to be dealt with whether the country in question is part of the eurozone or not.

2. The current troubles constitute an overdue domestic battle in the countries that have been laggards when it comes to economic restructuring. They need to do right by the young and the unemployed, not just protect the “insiders.”

3. A crucial part of the solution is for wealthy elites in those troubled countries to pay the statutory tax rates and close the avenues for tax evasion and corruption.

4. The euro will survive, even though the eurozone may shrink. Well more than half of the EU countries, mostly in the continent’s north, have successfully undertaken serious economic reforms over the past two decades.

5. Europe’s troubles are just a sign of the global economy’s trend toward equitable development. They give the lie to the notion that it is only developing, not developed, countries that face enormous challenges relating to debt and their social, economic and financial choices.