Barry Lynn - Globalisation must be saved from the radical global utopians - FT

Globalisation must be saved from the radical global utopians
>Published: May 30 2006 03:00 | Last updated: May 30 2006 03:00
http://news.ft.com/cms/s/01726816-ef79-11da-b435-0000779e2340.html

Now may hardly seem the time to imagine a more global future, let alone do so with optimism. Most of us are hard pressed just to maintain the illusion that the present system is not breaking down, to deny with conviction what everyone knows - that the grand trade liberalisation project is, at best, on life support.

It is only natural to think conservatively, even defensively, when witnessing the collapse of an empire. Few outside the US doubt that America's free-trade system, constructed with such care in the decades after the war, is crumbling fast. The proximate cause is America's looming bankruptcy. As the ongoing Doha round of world trade negotiations has already proved, the US simply lacks the currency - in the form of believable promises of sustainable access to the US marketplace - to "buy" the next round of trade liberalisation, as Washington has "bought" every round since the 1960s. Clearly no other nation is willing or able to take America's place.

Yet we will find no better moment to begin, once again, to imagine a world in which expanding trade helps to promote a more just, secure, free and peaceful world. This is because there is no better time than today to face up to the two fatal flaws of the radical globalisation project that in the early 1990s came to supplant the more careful trade liberalisation of the postwar era: first, America's utopian belief that an unregulated "market" would somehow do the work of government; and second, the rise of global companies - especially in the retail and electronics sectors - to fill the power vacuum created by the retreat of the American state from its traditional role managing US trading relationships.

Similarly, there is no better time than now to grasp that the real question is not, as Americans like to frame it, free trade versus protectionism. It is whether the world trading system will be regulated by private companies that are answerable only to the rich and powerful, and are profoundly unequipped for the task of processing complex information for the sake of society, or by states built to assess risk and to be answerable to all citizens.

It would be Pollyannaish to deny that grave dangers abound. The last time a free-trade system unwound, when Britain's "invisible empire" vanished almost overnight in the 1880s, one result was a scramble for territory. Europe's powers carved up Africa, then began to hack away at China, in a process that helped set the stage for the first world war.

Already today, two scrambles are under way. One aims to grab keystone parts of the global industrial system, as nations ranging from Japan to South Korea and China to France resurrect a variety of mercantilist tactics to seize and hold industrial operations. The other scramble is for greater control over natural resources, especially oil. Although neither scramble poses an immediate threat to peace, both only exacerbate the biggest danger the world now faces: the extreme fragility of our highly specialised, cross-border industrial systems.

By far the greatest obstacle to understanding the failings of post-cold-war globalisation is the US's own utopian ideology. For most of the nation's history, America was guided by deeply realistic thinking, and idealistic rhetoric was trotted out mainly to clothe cold strategic aims. But after the fall of the Berlin Wall, in that moment of self-congratulatory euphoria, much of the US's ruling elite came to believe the rhetoric itself. The result was a uniquely American, fin-de-siècle paganism - absolute faith in the ability of an all-determining market mechanism to deliver universal prosperity and peace, in perpetuity - which was then hawked abroad with evangelical zeal.

This is not the first time an imperial power has imagined a link between the workings of empire and the benevolent actions of some higher force. It is, however, the first time a power that strove so relentlessly to sit in the driver's seat of a world system then chose to close its eyes to the road.

It is the first time that the central director of a hyper-complex industrial system has had so little ability to process basic information about the workings of that system, which is also, by design, the central framework of its empire. The depth and intensity of America's trade utopianism becomes more astonishing as time wears on. Look at how the US treats oil politics and you will see the realistic America of old. The nation's leaders shape an energy policy, they intervene in markets, they invade oil-rich nations. But when it comes to the global trading system, America today operates on an entirely different set of principles. No one dares whisper the words "industrial policy". No one dares admit the degree to which the trade system is actually manipulated, not by any state but by companies built to straddle many states. No one dares admit the degree to which these companies tend to destroy not merely soft social infrastructure, such as pensions and wages, but basic production infrastructure.

The dangers of this perverse duality in the US mind are extreme. Yet even in America, the fantastic delusion of trade utopianism cannot last - it is neither logically nor physically sustainable. Indeed, as can be seen in the growing willingness of politicians in both parties to engage in xenophobic demagoguery, America's utopian fever seems to be breaking. This brings us back to the question of whether the nations of the world will, together, take proactive steps to expand an open global system, or will stumble into blind and destructive protectionism.

The biggest reason for hope is the prospect of a reformed, sober US. Once the American mind is exorcised of today's mechanistic utopianism, the most probable result will be a return to a far more realistic, practical, ethical internationalism. Rather than attempt to retreat into an equally impossible autarky, it is far more likely that America will re-embrace the responsibility of using state power to engineer markets and systems to serve its own people, while ceding to other states far more space to serve their citizens in ways of their own choosing. The next global system will be far more heterogeneous, cosmopolitan, liberal and flexible than today's.

Utopian universalism is dead. The sooner nations gather to bury its corpse - and harness, hobble or break up the immense companies that have grown so powerful in the shadow of that myth - the more likely we will be to save globalisation. This, of course, can happen only if we define globalisation, once again, as a political process that must be managed by nation states. The result may not be perfect, and it certainly will be no utopia. But it is the best we can expect on this earth. And that may be enough.

The writer, a senior fellow at the New America Foundation in Washington DC, is author of End of the Line: The Rise and Coming Fall of the Global Corporation (Doubleday)

FT - Neo-cons question Bush’s democratisation strategy

Neo-cons question Bush’s democratisation strategy
By Guy Dinmore in Washington
Published: May 29 2006 21:52 | Last updated: May 29 2006 21:52
http://news.ft.com/cms/s/1f808bd2-ef54-11da-b435-0000779e2340.html

President George W. Bush has likened the “war on terrorism” to the cold war against communism.

Addressing military cadets graduating from West Point, Mr Bush reaffirmed at the weekend that the US “will not rest until the promise of liberty reaches every people in every nation”.

But as the US struggles to assert itself on the international stage, the president’s most radical supporters now dismiss this as mere rhetoric, and traditional conservatives are questioning the wisdom of a democratisation strategy that has brought unpleasant consequences in the Middle East.

Administration officials speak privately of a sense of fatigue over the worsening crisis in Iraq that has drained energy from other important policy issues. Senior officials are leaving – not so unusual in a second term, but still giving the sense of a sinking ship run in some quarters by relatively inexperienced crew.

Neo-conservative commentators at the American Enterprise Institute wrote last week what amounted to an obituary of the Bush freedom doctrine.

“Bush killed his own doctrine,” they said, describing the final blow as the resumption of diplomatic relations with Libya. This betrayal of Libyan democracy activists, they said, came after the US watched Egypt abrogate elections, ignored the collapse of the “Cedar Revolution” in Lebanon, abandoned imprisoned Chinese dissidents and started considering a peace treaty with Stalinist North Korea.

The neo-conservatives offered no explanation for desertion of the doctrine, other than a desire to make quick but transitory short-term gains. “The president continues to believe his own preaching, but his administration has become incapable of making the hard choices those beliefs require,” they wrote.

But the ranks of the neo-conservatives are also being depleted. In his new book, America at the Crossroads, Francis Fukuyama, perhaps the movement’s most outstanding intellectual force, confirms his defection from the brand concepts of “pre-emption, regime change, unilateralism and benevolent hegemony as put into practice by the Bush administration”.

“It seems to me better to abandon the label and articulate an altogether distinct foreign policy position,” he writes.

Advisers to the White House say it would be premature, however, to write off the doctrine of pre-emption, which was restated in the National Security Strategy released in March. But on Iran, for example, they believe the Bush administration is moving towards a cold war-style strategy of containment and deterrence with as broad an international coalition as possible.

Graham Fuller, former diplomat and intelligence officer, suggests the US is suffering from “strategic fatigue” brought on by “imperial over-reach”.

“The administration’s bark is minimised, and much of the bite seems gone,” he writes in the Nixon Center’s National Interest journal. “Has superpower fatigue set in? Clearly so, to judge by the administration’s own dwindling energy and its sober acknowledgment that changing the face of the world is a lot tougher than it had hoped.”

Short-term economic costs of the empire have been bearable, says Mr Fuller, but long-term indicators show it is not sustainable – massive domestic debt, growing trade imbalances, an extraordinary gap in wealth between rich and poor Americans, the growing outsourcing of jobs.

More immediately, the unprecedented unilateral character of the US exercise of global power has proved its undoing.

Condoleezza Rice, the secretary of state, has tried to redress this in Mr Bush’s second term, but key allies – Britain’s Tony Blair, for example – are also suffering from weakened credibility.

In contrast, Russia, which Mr Bush saw as a declining power when he came to office in 2001, is asserting itself on the international stage. So is China.

Neither wants to declare itself explicitly at odds with the US, but they share a common agenda and ability to stymie Washington’s will. This is seen in their policies towards Iran, North Korea, Syria, the new Palestinian government led by Hamas, and Venezuela.

“In the last few years, diverse countries have deployed a multiplicity of strategies and tactics designed to weaken, divert, complicate, limit, delay or block the Bush agenda through a death by a thousand cuts,” says Mr Fuller.

Even some traditional Republicans are challenging the concept that the global “war on terror” is the paramount issue for generations to come.

Richard Lugar, chairman of the Senate’s powerful foreign relations committee, suggested that “there are a good many who would feel that the possibilities for devastation of countries, including our own, may come much more from our myopia in terms of energy policy than our ability to track down the last of the al-Qaeda cells”.

Robert Jervis, professor of international politics at Columbia University, argues in the Washington Quarterly that the US system does not have the commitment to sustain the prolonged efforts required by Mr Bush’s “transformationalist” agenda.

WaPo - U.S. Urges Financial Sanctions On Iran

U.S. Urges Financial Sanctions On Iran
White House Tries to Enlist Europe, Japan

http://www.washingtonpost.com/wp-dyn/content/article/2006/05/28/AR2006052800999.html

By Dafna Linzer
Washington Post Staff Writer
Monday, May 29, 2006; A01

The Bush administration is pressing Europe and Japan to impose wide-ranging sanctions designed to stifle the Iranian leadership financially if diplomatic efforts fail to resolve an impasse over the country's nuclear program, according to internal government memos and interviews with three U.S. officials involved.

Developed by a Treasury Department task force that reports directly to Secretary of State Condoleezza Rice, the economic measures go far beyond the diplomatic pressure exerted by the Bush administration to date, both in scope of action and in objective.

The plan is designed to curtail the financial freedom of every Iranian official, individual and entity the Bush administration considers connected not only to nuclear enrichment efforts but to terrorism, government corruption, suppression of religious or democratic freedom, and violence in Iraq, Lebanon, Israel and the Palestinian territories. It would restrict the Tehran government's access to foreign currency and global markets, shut its overseas accounts and freeze assets held in Europe and Asia.

The United States, which has imposed unilateral sanctions on Iran for nearly three decades, would shoulder few of the costs of its ambitious new proposal. But internal U.S. assessments suggest that the sanctions could not hurt Tehran without causing significant economic pain for Washington's friends. That calculation has made the plan a difficult sell, especially in capitals such as Rome and Tokyo, which import significant quantities of Iranian oil.

"I have been very open with people about the costs that could fall on them," said Stuart Levey, Treasury undersecretary for terrorism and financial intelligence, in a recent interview.

U.S. intelligence agencies have spent months trolling through the personal accounts of Iranian leaders in foreign banks, analyzing Iranian financial systems and transactions and assessing how the government does its banking. They have calculated the amount of foreign investment at stake and even which charities have connections to the Tehran government.

Decades of stand-alone U.S. sanctions on Iran, North Korea and Cuba have failed to bring down those countries' leaders or modify their behavior. But U.S. officials believe that if other Western allies join in a sanctions pact, it could magnify pressure on Iran in much the same way that some Bush administration officials believe U.N. sanctions helped persuade Libya to give up its nuclear weapons program in 2003.

With Britain, France, Germany, Italy and Japan on board, collective sanctions would "isolate the Iranian regime" and see it "shunned by the international financial community," according to one internal Bush administration memo.

Under the plan, the major allies involved would freeze Iranian government accounts and financial assets in their countries, much as the United States did after Iranian students took over the U.S. Embassy in Tehran in 1979. Iranian officials who appear on lists being drawn up by U.S. officials would be prevented from opening accounts, trading on foreign markets or obtaining credit.

U.S. officials said in interviews that it is their hope the allies will carry out the punitive measures if Iran refuses a package of incentives the Europeans are preparing to offer in coming weeks.

So far, potential partners have not jumped at the plan, raised again last week in London by senior diplomats from Washington and European capitals. European officials who spoke on the condition of anonymity attributed their reluctance to a reliance on Iranian oil, domestic legal constraints and the fear of being dragged toward another conflict in the Middle East.

In an effort to minimize financial risks, the plan does not include oil or trade embargoes. But, according to a Treasury Department assessment, it could jolt world oil prices nonetheless if Iran responds by limiting exports. The internal assessment also predicts additional economic repercussions for Western allies, such as trade loss, and adverse effects for the Iranian people as their government is squeezed out of global markets and foreign banks stop taking their business.

The potential side effects have led European officials to turn the pressure back on Washington to hold direct talks with Iran.

"The sanctions could make Iran miserable, and Iran can respond by making everyone miserable back," said one senior Western official, who consulted on the issue recently with Rice. "In the end, the whole world is miserable and Iran gets to keep its nuclear program."

Although sanctions would not be directed "at the country or people of Iran," the measures "can be expected to bear second-order consequences for the people of Iran," according to a footnote on a Treasury Department task force memo sent to Rice last month.

The task force, made up of financial investigators, analysts and intelligence officers, is part of a growing government effort -- at the White House, the State Department, the CIA and the Pentagon -- focused on Iran. While some parts of the administration are studying prospects for negotiations with Iran -- an ally turned enemy nearly 30 years ago -- others are preparing for increased isolation and the possibility of a military strike against nuclear installations.

For four years, President Bush has sought to isolate Iran and roll back its nuclear energy program, which could provide the Islamic republic with a pathway to a nuclear bomb. Over that time, Iran's capabilities and nuclear expertise have only advanced, while soaring crude prices have brought the oil-rich nation additional hard currency.

The situation has emboldened the Iranians and left the White House searching for leverage. Bush administration officials believe that one approach may be to prevent Tehran from spending money on the open market.

European governments have spent months considering travel bans and arms embargoes on Iran, both of which would be largely symbolic. U.S. officials now hope the Europeans will impose sharper sanctions on Iran, at some cost to themselves, as diplomacy fails to yield results.

In interviews, U.S. officials described the plan as a new approach to international sanctions and said they believe it could succeed if implemented correctly.

"I would argue that targeted sanctions are designed to have minimal effects on people," Levey said, "and more designed to have effect . . . on the government and the people in the government. We are trying to design things that are not intended to inflict harm on the people." Undersecretary of State R. Nicholas Burns and Levey first briefed their Western counterparts on aspects of the proposal at a meeting last month in Moscow.

But the impact on U.S. allies could be steep as well. A Treasury Department memo recently predicted that Britain, which does not import Iranian oil, faces a low level of financial risk if it agrees to implement the sanctions plan. Germany, which imports 1 percent of its oil from Iran, and France, which gets 6 percent, are deemed at medium financial risk, whereas Italy and Japan would be taking the largest risks. The assessment is considered internally "an initial -- first blush -- estimate based on each country's overall volume of exports to Iran, dependence on Iranian oil and degree of investment in Iran oil projects," according to the Treasury memo.

Japan exports nearly $1.3 billion worth of goods to Iran, has nearly $2 billion worth of oil projects there and gets about 12 percent of its oil from the country, which is approximately equivalent to what the United States buys from Saudi Arabia. Italy buys 9 percent of its oil from Iran, and has $3.2 billion in oil investments in the country and $2.7 billion worth of exports to Iran.

Originally, U.S. policymakers discussed plans for sanctions through the U.N. Security Council, but that has proved more difficult than convincing a handful of allies.

The new plan would operate outside the council's authority and would "not depend on recalcitrant countries," identified in one government document as China and Russia, which have resisted the idea of U.N. sanctions. But if they did not participate, Beijing and Moscow would also be spared any financial burden and be free to pick up lost European business with Iran.

In the hopes of encouraging other governments to act, the Treasury Department has pursued a secondary path, approaching private-sector banks in Europe and Japan, one by one, in the hopes that they will reject Iranian business on their own.

A similar strategy was successfully employed with a bank in Macau, off mainland China, that was doing business with North Korea.

So far, four financial institutions have signed on to the U.S. effort. "These institutions are looking at which way this is headed and are asking themselves if they want to get in front of this wave," Levey said.

NYT - Iran Chief Eclipses Power of Clerics

May 28, 2006

Iran Chief Eclipses Power of Clerics

By MICHAEL SLACKMAN

http://www.nytimes.com/2006/05/28/world/middleeast/28iran.html?hp&ex=1148875200&en=3926c18faed214ea&ei=5094&partner=homepage

TEHRAN, May 27 — President Mahmoud Ahmadinejad is trying to consolidate power in the office of the presidency in a way never before seen in the 27-year history of the Islamic Republic, apparently with the tacit approval of Iran's supreme leader, according to government officials and political analysts here.

That rare unity of elected and religious leadership at the highest levels offers the United States an opportunity to talk to a government, however combative, that has often spoken with multiple voices. But if Washington, which severed relations with Iran after the 1979 revolution, opened such a dialogue, it could lift the prestige of the Iranian president, who has pushed toward confrontation with the West.

Political analysts and people close to the government here say Mr. Ahmadinejad and his allies are trying to buttress a system of conservative clerical rule that has lost credibility with the public. Their strategy hinges on trying to win concessions from the West on Iran's nuclear program and opening direct, high-level talks with the United States, while easing social restrictions, cracking down on political dissent and building a new political class from outside the clergy.

Mr. Ahmadinejad is pressing far beyond the boundaries set by other presidents. For the first time since the revolution, a president has overshadowed the nation's chief cleric, Supreme Leader Ayatollah Ali Khamenei, on both domestic and international affairs.

He has evicted the former president, Mohammad Khatami, from his offices, taken control of a crucial research organization away from another former president, Ali Akbar Hashemi Rafsanjani, challenged high-ranking clerics on the treatment of women and forced prominent academics out of the university system.

"Parliament and government should fight against wealthy officials," Mr. Ahmadinejad said in a speech before Parliament on Saturday that again appeared aimed at upending pillars of the status quo. "Wealthy people should not have influence over senior officials because of their wealth. They should not impose their demands on the needs of the poor people."

In this theocratic system, where appointed religious leaders hold ultimate power, the presidency is a relatively weak position. In the multiple layers of power that obscure the governance of Iran, no one knows for certain where the ultimate decisions are being made. But many of those watching in near disbelief at the speed and aggression with which the president is seeking to accumulate power assume that he is operating with the full support of Ayatollah Khamenei.

"Usually the supreme leader would be the front-runner in all internal and external issues," said Hamidreza Taraghi, the political director of the strongly conservative Islamic Coalition Party. "Here we have the president out front on all these issues, and the supreme leader is supporting him."

Mr. Ahmadinejad is pursuing a risky strategy that could offer him a shot at long-term influence over the direction of the country — or ruin. He appears motivated at least in part by a recognition that relying on clerics to serve as the public face of the government has undermined the credibility of both, analysts here said.

The changing nature of Iran's domestic political landscape has potentially far-reaching implications for the United States. While Iran has adopted a confrontational approach toward the West, it has also signaled — however clumsily — a desire to mend relations. Though the content of Mr. Ahmadinejad's letter to President Bush was widely mocked here and in Washington for its religious focus and preachy tone, it played well to Iran's most conservative religious leaders. Analysts here said it represented both Mr. Ahmadinejad's independence and his position as a messenger for the system, and that the very act of reaching out was significant.

"If the U.S. had relations with Iran under the reform government, it would not have been a complete relationship," said Alireza Akhari, a retired general with the Revolutionary Guard and former deputy defense minister, referring to Mr. Khatami's administration. "But if there can be a détente now, that means the whole country is behind relations with the West."

Mr. Ahmadinejad is trying to outpace the challenges buffeting Iran, ones that could undermine his presidency and conservative control. The economy is in shambles, unemployment is soaring, and the new president has failed to deliver on his promise of economic relief for the poor. Ethnic tensions are rising around the country, with protests and terrorist strikes in the north and the south, and students have been staging protests at universities around the country.

Mr. Ahmadinejad's critics — and there are many — say that the public will turn on him if he does not improve their lives, and soon. It may ultimately prove impossible to surmount these problems while building a new political elite, many people here said.

"The real issue here is we now have a government with no experience running a country and dealing with foreign policy," said Nasser Hadian, a political science professor at Tehran University and childhood friend of the president.

Mr. Ahmadinejad, who was elected last June, has adopted an ideologically flexible strategy. He has called for restoring the conservative values of the Islamic Revolution, yet at the same time has relaxed enforcement of strict Islamic social codes on the street. During the spring, when the warm weather sets in, young women are often harassed by the volunteer vigilantes known as the Basiji for their dress, but not this year. More music seems to be available in stores than in the past — small but telling changes, people here say.

If there is one consistent theme to his actions, it is the concept of seeking justice, reflecting a central characteristic of Shiite Islam. In more temporal terms, his strategy appears to be two-pronged: to reinforce his support among hard-liners with sharp attacks on Israel and the West, for example, while moving to appease a society weary of the social and economic challenges of life in the Islamic republic.

"He is reshaping the identity of the elite," said a political science professor in Tehran who asked not to be identified so as not to affect his relations with government officials. "Being against Jews and Zionists is an essential part of this new identity."

Mr. Ahmadinejad has been far freer to maneuver than his predecessor, Mr. Khatami, whose movement for change frightened religious leaders. Instead of having to prove his fealty to the system, Mr. Ahmadinejad has been given — or has taken — the opportunity to try to calm the streets. Perhaps most surprising, the man who was rumored to want to segregate men and women on elevators and even sidewalks has emerged as a proponent of women's rights, challenging some of the nation's most powerful religious leaders.

"I believe Ahmadinejad's government will be the most secular we have had since the start of the revolution," said Mahmoud Shamsolvaezin, a journalist and political analyst. "The government is not a secular one with secular thought. Ahmadinejad is a very religious man. But the government recognizes it has no choice, this is what the public demands."

Mr. Ahmadinejad called for allowing women into stadiums, in an attempt to reverse a post-revolution ban when religious leaders decreed that sports arenas were not the proper environment for women. Four grand ayatollahs objected to his decision, but he backed down only when the supreme leader stepped in. Even then, Mr. Ahmadinejad said he was suspending the decision, not canceling it.

Most significant, during the discussion of the stadium issue, the president defended women in a way that put him outside the mainstream of conservative Islamic discourse, even beyond Iran's borders.

"Unfortunately, whenever there is talk of social corruption, fingers are pointed at women," Mr. Ahmadinejad said, in comments that for a leader in this society were groundbreaking. "Shouldn't men be blamed for the problems, too?"

The president's strategy is also aimed at limiting political challenges to the system. While political arrests are down, and the government has not moved to close privately held newspapers, it has staged a few crucial arrests — sending a chill through intellectual and academic circles — and it has pressured newspapers to be silent on certain topics, like opposition to the nuclear program.

He also has struck back at those who would undermine or mock him. The local press reported that the president became so incensed with jokes about his personal hygiene that were being exchanged via text messages on cellphones, that he had the messages stopped and people at the top of the cellphone system punished.

Mr. Ahmadinejad offered voters change and promises to improve the lives of the poor, who make up the majority of this country. But he has been unable to push through economic changes by personal fiat, as he has done in the political realm. He ordered the banks, for example, to lower interest rates, and was rebuffed by the head of the central bank. He offered to give inexpensive housing loans to the poor — but with only 300,000 available, more than 2 million people applied. The program will cost the government more than $3 billion.

He has traveled around the country, promising to dole out development projects the government can hardly afford. In the last year, the cost of construction materials has jumped 30 to 50 percent, and prices of dairy products have increased by more than 15 percent. Many people are asking how this can happen when the price of oil is so high.

Without a strong grasp of economics, and an economy that is almost entirely in the hands of the government, Mr. Ahmadinejad has grappled with ways to inject oil revenue into the system without causing inflation to soar. At the same time, the volatile political situation has caused capital flight and limited foreign investment as the needs of the public continue to grow alongside the president's promises.

In politics, the president by turns ignores and confronts those who have opposed him from the start, whether conservative or liberal, all the while playing to the masses.

"Ahmadinejad knows there is a big gap between the intellectual elite and the masses, and he knows how it serves his interest," said Emadedin Baghi, director of a prisoners' rights group. "He is playing to the masses and trying to widen this gap."

He has managed to sideline opponents like Mr. Rafsanjani, either through his own initiative or with the back-channel support of Mr. Khamenei, the supreme leader. Mr. Rafsanjani, a midlevel cleric whom Mr. Ahmadinejad defeated in a runoff for the presidency, "has been undermined, he's not a powerful person anymore," said Muhammad Atrianfar, a close ally of Mr. Rafsanjani and publisher of the daily newspaper Shargh. He said Mr. Rafsanjani had tried to get the supreme leader to rein the president in, but was unable to convince him.

Mr. Rafsanjani is representative of the class of people — wealthy and influential from the first generation of the revolution — that the president is trying to displace, said the retired general, Mr. Akhari.

Nazila Fathi contributed reporting for this article.

NYT - U.S. Is Debating Talks With Iran on Nuclear Issue

May 27, 2006

U.S. Is Debating Talks With Iran on Nuclear Issue

By STEVEN R. WEISMAN

http://www.nytimes.com/2006/05/27/world/middleeast/27iran.html?hp&ex=1148788800&en=602d1881e4ca95b7&ei=5094&partner=homepage

WASHINGTON, May 26 — The Bush administration is beginning to debate whether to set aside a longstanding policy taboo and open direct talks with Iran, to help avert a crisis over Tehran's suspected nuclear weapons program, European officials and Americans close to the administration said Friday.

European officials who have been in contact with the administration in recent weeks said the discussion was heating up, as Secretary of State Condoleezza Rice worked with European foreign ministers to persuade Iran to suspend its efforts to enrich uranium.

European leaders make no secret of their desire for the United States to join in the talks with Iran, if only to show that the Americans have gone the extra mile to avoid a confrontation that could spiral into a fight over sanctions or even military action.

But since the Iranian revolution of 1979 and the crisis over the seizure of American hostages in November that year, the United States has avoided direct talks with Iran. There were sporadic contacts during the war in Afghanistan, in the early stages of the Iraq war and in the days after the earthquake in Bam, Iran, at the end of 2003.

European officials say Ms. Rice has begun discussing the issue with top aides at the State Department. Her belief, they say, is that ultimately the matter will have to be addressed by the administration's national security officials, whether talks with Iran remain at an impasse or even if there is some progress.

But others who know her well say she is resisting on the ground that signaling a willingness to talk would show weakness and disrupt the delicate negotiations with Europe. Ms. Rice is also said to fear that the administration might end up making too many concessions to Iran.

Administration officials said President Bush, Vice President Dick Cheney and Defense Secretary Donald H. Rumsfeld have opposed direct talks, even through informal back channels. As a result, many European officials say they doubt that a decision to talk is likely soon.

The prospect of direct talks between the United States and Iran is so politically delicate within the Bush administration that the officials who described the emerging debate would discuss it only after being granted anonymity.

Those officials included representatives of several European countries, as well as Americans who said they had discussed the issue recently with people inside the Bush administration. Some of the officials made clear that they favored direct talks between the United States and Iran.

State Department officials refused to talk about the issue, even anonymously. But over the last week, administration spokesmen have been careful not to rule out talks.

Discussion about possible American contacts with Iran has been fueled not simply by the Europeans, but by a growing chorus of outsiders with ties to the administration who have spoken out in favor of talks.

Former Secretary of State Henry Kissinger, in a recent column in The Washington Post, raised the possibility that the recent rambling letter from President Mahmoud Ahmadinejad to President Bush — dismissed by Ms. Rice as an offensive tirade— could be seen as an opportunity to open contacts.

Both Richard N. Haass, president of the Council on Foreign Relations and a former top aide to Secretary of State Colin L. Powell, and Richard L. Armitage, the former deputy secretary of state under Mr. Powell, have also advocated talks with Iran.

"Diplomacy is much more than just talking to your friends," Mr. Armitage said in a telephone interview. "You've got to talk to people who aren't our friends, and even people you dislike. Some people in the administration think that diplomacy is a sign of weakness. In fact, it can show that you're strong."

Mr. Armitage held the last high-level discussions with Iran, after the Bam earthquake. In November 2004, Mr. Powell sat next to the Iranian foreign minister at a dinner during a conference in Egypt on Iraq, but he said they engaged only in small talk.

The United States has stayed out of the talks with Iran, which began in late 2004 and got new life last summer when, with American endorsement, the Europeans offered to help Iran integrate politically and economically with the West if it ended its nuclear ambitions.

Also on the table were unspecified security guarantees suggesting that Iran would not have to worry about outside efforts to topple the government.

The Europeans are now working with the United States, Russia and China on a revised package of economic, political and nuclear energy incentives if Iran ended its nuclear enrichment activities. Also being sought, at least by the Europeans and the United States, is an agreement to take Iran to the United Nations Security Council if it continues to defy the demands for compliance on nuclear issues.

European officials say the discussions about possible American-Iranian contacts are not part of these talks, but would be a way to improve the atmosphere with Iran.

Among the European diplomats who have urged Ms. Rice to consider direct contacts with Iran are Germany's foreign minister, Frank-Walter Steinmeier, and the European Union's foreign policy chief, Javier Solana. The German chancellor, Angela Merkel, raised the issue with President Bush when she visited Washington earlier this year.

"What's interesting about Rice is that she listens when you make your case," a European official said.

Another European diplomat said, "It's a European aspiration for talks to happen," but added, "Nothing is likely at the moment." Still another European diplomat said of the Americans that "everyone and their brother has been telling them to do it."

One reason senior administration officials do not like the idea of talking with Iran, many of them say, is that they are not certain Iranian leaders would respond positively. A rebuff from Iran, even to a back-channel query, is to be avoided at all costs, various officials agree.

The administration, for example, has been embarrassed by the on-again, off-again possibility of talks with Iran on Iraq, which were authorized by Ms. Rice late last year.

The concern, some say, is that talking to Iran only about Iraq will anger Sunni dissidents in Iraq, reinforcing the Sunni-led insurgency while enhancing the status of Iraqi Shiites, whose strong ties to Iran make Washington uneasy.

On the other hand, the American ambassador to Iraq, Zalmay Khalilzad, was said to be eager to enlist Iran in helping to deal with Iranian-backed Shiite militias, which are accused of carrying out killings and kidnappings of Sunnis in Iraq.

Some Europeans favor American participation in the European-Iranian talks, at least down the road. Others raise the possibility of informal contacts through nongovernmental organizations or policy institutes.

Incentives and possible sanctions against Iran are to be the focus of negotiations between the United States and the European nations in coming days and weeks.

The United States is resisting the Europeans' desire to increase economic incentives for Iran, because that would involve a lifting of American sanctions on European businesses that helped Iran. At the same time, Russia and China are resisting the idea of seeking a new resolution at the United Nations Security Council that could be seen as clearing the way for sanctions or possible military action against Iran.

David E. Sanger contributed reporting for this article.

Tony Judt - Why Israel cannot always rely on America's helping hand - FT

Why Israel cannot always rely on America's helping hand
By Tony Judt
Published: May 23 2006 03:00 | Last updated: May 23 2006 03:00
http://news.ft.com/cms/s/26d2c3a6-ea12-11da-a33b-0000779e2340.html

By the age of 58 a country - like a man - should have achieved a certain maturity. After nearly six decades of existence we know, for good and ill, who we are and how we appear to others, warts and all. And though we still harbour occasional illusions about ourselves, we know they are, for the most part, just illusions. In short, we are adults.

But the state of Israel, which has just turned 58, remains curiously immature. The country's social transformations - and its many economic achievements - have not brought the political wisdom that usually accompanies age. Seen from outside, Israel still comports itself like an adolescent: confident of its uniqueness; certain that no one "understands"; quick to take offence, and to give it. Like many adolescents, Israel is convinced - and aggressively asserts - that it can do as it wishes; that its actions carry no consequences; that it is immortal.

That, Israeli readers will say, is the prejudiced view of the outsider. What looks from abroad like a self-indulgent, wayward country is simply an independent little state doing what it has always done: protecting its interests in an inhospitable part of the globe.

Why should embattled Israel even acknowledge foreign criticism, much less act on it? Because the world and its attitudes have changed. It is this change - largely unrecognised in Israel - to which I want to draw attention. Before 1967 Israel may have been tiny and embattled, but it was not typically hated: certainly not in the west. Most admirers (Jews and non-Jews) knew little about the Palestinian catastrophe of 1948. They preferred to see in the Jewish state the last incarnation of the 19th century idyll of agrarian socialism - or else a paragon of modernising energy, "making the desert bloom".

I remember in the spring of 1967 how student opinion at Cambridge University was overwhelmingly pro-Israel before the Six-Day War - and how little attention was paid either to the Palestinians or to Israel's collusion with France and Britain in the disastrous 1956 Suez adventure. For a while these sentiments persisted. The pro-Palestinian enthusiasms of post-1960s radical groups were offset by growing public acknowledgement of the Holocaust. Even the inauguration of illegal settlements and the invasion of Lebanon did not shift the international balance of opinion.

But today everything is different. We can see, in retrospect, that Israel's victory in June 1967 and its occupation of the territories it conquered then have been the Jewish state's very own nakba: a moral and political catastrophe. Israel's actions in the West Bank and Gaza have magnified its shortcomings to a watching world. The routines of occupation and repression were once familiar only to an informed minority; today, computer terminals and satellite dishes put Israel's behaviour under daily global scrutiny. The result has been a complete transformation in the international view of Israel.

The universal shorthand symbol for Israel, reproduced in political cartoons, is the Star of David emblazoned on a tank. Today the universal victims, the emblematic persecuted minority, are not Jews but Palestinians. This shift does little to advance the Palestinian case but it has redefined Israel forever. Israel's long-cultivated persecution mania no longer elicits sympathy. The country's national narrative of macho victimhood appears to many now as simply bizarre: a collective cognitive dysfunction. Israel, in the world's eyes, is a normal state; but one behaving in abnormal ways. As for the charge that criticism of Israel is implicitly anti-Semitic, this is in danger of becoming a self-fulfilling assertion: Israel's reckless behaviour, and its insistent identification of all criticism with anti-Semitism, is now the leading source of anti-Jewish sentiment in western Europe and much of Asia.

If Israel's leaders have been able to ignore such developments it is because they have counted on the unquestioning support of the US - the one country where the claim that anti-Zionism equals anti-Semitism is still echoed by mainstream politicians and the media. This confidence in unconditional US approval may prove to be Israel's undoing. For something is changing in America. Israel and the US appear increasingly bound together in a symbiotic embrace, whereby the actions of each party exacerbate their common unpopularity abroad. But whereas Israel has no choice but to look to America, the US is a Great Power - and Great Powers have interests that eventually transcend the local obsessions of even the closest client states. It seems to me suggestive that the recent essay "The Israel Lobby" by John Mearsheimer and Stephen Walt, published in March in the London Review of Books, provoked so much debate. It is true that, by their own account, the authors could not have published their indictment of the influence of the "Israel lobby" on US foreign policy in a major US-based journal. But the point is that 10 years ago they probably could not have published it at all. And while the ensuing debate generated more heat than light, it is of great significance.

The fact is that the disastrous Iraq invasion and its aftermath have set in train a sea-change in America's foreign-policy debate. It is becoming clear to prominent thinkers across the political spectrum - from erstwhile neo-conservative interventionists such as Francis Fukuyama to hard-nosed realists such as Mr Mearsheimer - that in recent years the US has suffered a catastrophic loss of international influence and degradation of its image. There is much repair work ahead, above all in Washington's dealings with economically and strategically vital regions of the world. But this cannot succeed while US foreign policy is tied by an umbilical cord to the needs andinterests of one small Middle Eastern country of little relevance to America's long-term concerns - a country that is, in the words of the Mearsheimer/Walt essay, a strategic burden. That essay is thus an indication of the direction of debate in the US about its peculiar ties to Israel. Of course, it generated fierce criticism - and, just as they anticipated, the authors have been charged with anti-Semitism. But it is striking how few people now take that accusation seriously, so predictable has it become. This is bad for Jews as it means that genuine anti-Semitism may also cease to be taken seriously. But it is worse for Israel.

From one perspective, Israel's future is bleak. Not for the first time, a Jewish state is on the vulnerable periphery of someone else's empire: wilfully blind to the danger that its indulgent excesses might ultimately push its imperial mentor beyond the point of irritation, and heedless of its own failure to make any other friends. Yet, modern Israel still has options. Precisely because the country is an object of such universal mistrust, a truly statesmanlike shift in its policies (dismantling of big settlements, opening unconditional negotiations with Palestinians and the like) could have disproportionately beneficial effects.

Such a radical realignment of strategy would entail a difficult reappraisal of every illusion under which the country and its political elite have nestled. Israel would have to acknowledge that it no longer has any special claim on international sympathy or indulgence; that the US will not always be there; that colonies are always doomed unless you are willing to expel or exterminate the indigenous population.

Other countries and their leaders have understood this: Charles de Gaulle saw that France's settlement in Algeria was disastrous for his country and, with outstanding political courage, withdrew. But when de Gaulle came to that realisation he was a mature statesman, aged nearly 70. Israel cannot afford to wait that long. The time has come for it to grow up.

The writer is director of the Remarque Institute at New York University

Philip Stephens - Blair and Bush will not bridge still-troubled Atlantic waters - FT

Blair and Bush will not bridge still-troubled Atlantic waters By Philip Stephens
>Published: May 26 2006 03:00 | Last updated: May 26 2006 03:00
http://news.ft.com/cms/s/f19acbf8-ec54-11da-b3e2-0000779e2340.html

The Middle East, China, India, globalisation. The other day I listened to a senior official in George W. Bush's administration enumerate Washington's foreign policy concerns. The list was unremarkable. The omissions were striking. Here was another reminder, if one were needed, of just how far the world's strategic centre of gravity has shifted.

Unsurprisingly, the drive to combat Islamist terrorism and to extend democracy in the Middle East headed the list. With fires still raging in Iraq, Iran pressing ahead with its nuclear programme and a continuing stand-off between Israelis and Palestinians, it could scarcely have been otherwise.

The concern about China's rise, the official said, was to ensure it became a responsible stakeholder in the global system. A cynical translation would say this means that, in return for a place at the top table, Beijing accepts the (US-made) rules of the game. Another interpretation might add that at some point China must recognise it cannot indefinitely pursue a values-free foreign policy. Witness its recent role in stalling international action over Darfur.

With India, the US hope is not so much to mould the behaviour of an emerging great power as to build a strong bilateral alliance - not least, though this is always denied, to balance China. As for globalisation, the concern is to ensure that everyone plays by liberal market rules.

The common denominator is that all these preoccupations are located outside what diplomats call the Euro-Atlantic space. The US still has important interests in Europe. It worries about Russia's use of gas as a blunt instrument of foreign policy and about Moscow's interference in the affairs of would-be democratic neighbours such as Ukraine.

Europe, though, is now part of Washington's peripheral vision. For more than four decades, it was the geographical cockpit of a shared strategic imperative. Without the cold war, the transatlantic relationship has become one of choice rather than necessity. If much of the history of the past century was written in Europe, that of the 21st will be made largely in Asia.

During the past year or so we have seen the restoration of good manners between the US and Europe. In different ways both sides have been humbled - America by the limits to its power evidenced by the insurgency in Iraq, Europe by internal divisions and the absence of convincing political leadership. So the French and the Americans have stopped sniping at each other and, with the election as chancellor of Angela Merkel, Germany has repositioned itself as a mediator. Much of the rancour has gone from the argument about Iraq and there has been a significant effort to build a common front towards Iran.

All this is sensible. The Center for Strategic and International Studies, an influential Washington think-tank, makes a powerful case for rebuilding the partnership. At a recent CSIS conference in Germany I heard senior figures from both sides of the Atlantic offer a compelling exposition of the mutual benefits. The shared interest in forestalling Iran's nuclear ambitions should speak for itself. So, too, should a quest to persuade Hamas to forswear violence against Israel in favour of political engagement.

"Should", though, is not the same as "will" or "does". For all that the rhetoric is warmer and the US has rediscovered the mechanics of diplomacy, the sense of distance between the two sides is palpable. Even where they agree on the objective - as in the case of preventing Iran from acquiring a nuclear weapons capability - they see the world through different lenses. The impatience for pre-emptive action of the sole superpower still collides with the European predilection for thumb-sucking.

Mr Bush and Tony Blair might be expected to defy this continental drift. Both have been governing in a sea of political troubles and, over time, they have become more candid about some of their differences. But they have dutifully suppressed their different political backgrounds and outlooks in the cause of the transatlantic solidarity.

At their White House meeting this week the two leaders have been sharing some good (in a strictly relative sense) news about Iraq. For the first time since 2003 they see a possible pathway out of the quagmire. The prime minister's visit to Baghdad this week following the formation of a new Iraqi government has hardened the expectation that the troops will soon begin to return home.

We cannot call it a timetable or an exit strategy. A conditional drawdown is as far as officials will go. Whatever the public utterances, though, the two leaders anticipate a steep reduction in the military commitment during the next 12 to 24 months. One scenario sees US forces in Iraq being cut from 130,000 to 100,000 by the end of this year, with a further steady decline throughout 2007. In what condition the departure of foreign forces will leave Iraq - some would say better, some worse - is far less certain.

Mr Blair, meanwhile, will press Mr Bush for a more flexible US stance towards Iran and Hamas. The prime minister is as determined as the president that Iran should not acquire nuclear weapons. But my sense is that he also believes that Iranians should be presented with a worthwhile choice - significant incentives as well as threats. Likewise Hamas. Refusing to treat with a Palestinian authority committed to violence against Israel should not preclude setting out the gains available to Hamas were it to opt instead for political engagement.

The paradox is that, for all the closeness of the personal relationship with Mr Bush, Mr Blair's view on such issues describes almost perfectly the difference between European and American approaches. In a speech in Washington today, the prime minister will call for the reform and modernisation of the United Nations and other institutions central to the multilateral system. Mr Blair, like most Europeans, wants to refurbish and renew the international order created largely by the Americans after the end of the second world war. Though few now believe it, the desire to preserve the global system was one of the reasons he was ready to go to war in Iraq.

Here, however, lies the critical divide with his host. For all that Mr Bush has embraced diplomacy in recent months, his administration still bridles at the constraints of multilateralism. Europeans, including Mr Blair, want a rules-based system of global governance. Mr Bush still cannot see why anyone would want to challenge the pax Americana.

Efraim Halevy - A View from inside the Mossad - Washington Institute

PolicyWatch #1107: Special Forum Report

Understanding the Middle East: A View from inside the Mossad

Featuring Efraim Halevy
May 25, 2006

http://www.washingtoninstitute.org/templateC05.php?CID=2472

On May 3, 2006, Efraim Halevy addressed The Washington Institute’s Special Policy Forum. Efraim Halevy is head of the Center for Strategic and Policy Studies at the Hebrew University of Jerusalem. He served as head of the Mossad from 1998 to 2002 and head of Israel’s National Security Council from 2002 to 2003. He was previously Israel’s ambassador to the European Union. His most recent book is Man in the Shadows. The following is a rapporteur’s summary of his remarks.

Intelligence in Policymaking

In the current global circumstances, the role of intelligence gathering and analysis in policymaking has become increasingly important. As a result, intelligence leaders have ever more influence in the policymaking process. This is particularly the case in Israel, where some of the political leadership’s most significant decisions came on the heels of Mossad and Military Intelligence initiatives and assessments.

One case in which the decisions of intelligence personnel were adopted by the political leadership is the construction of Israel’s security fence. At the time the fence was first proposed, Prime Minister Ariel Sharon opposed it, believing that it would ultimately be the point of departure for determining the final borders of Israel. Sharon only accepted the plan when he was pressed by the heads of the security services, who argued that without the fence, the Israeli military and security establishments would be unable to provide Israelis with adequate protection from Palestinian terror attacks.

As a result of intelligence becoming increasingly important to political decisions, leaders have become immersed in intelligence and read it in enormous quantities. Former Israeli prime ministers Yitzhak Shamir and Sharon were particularly attentive to intelligence. Shamir often spent nights reading intelligence reports; he knew the names of sources and was often able to point out discrepancies from one report to the next. Sharon had previously served as the intelligence officer of northern and southern command; as prime minister, he would delve into intelligence operations almost compulsively. As a consequence, intelligence chiefs had the ear of these prime ministers, and the role of intelligence officials in influencing policy increased.

Intelligence officers are uniquely positioned to effectively advise political leaders on policy. This is because they are equipped with sensitive, often exclusive information, as well as the ability to extrapolate from it a series of policy options. In Israel’s approach toward the Palestinians, security services have been critical in making assessments and proposing policies after terrorist attacks.

Given the increasing importance of intelligence officers in policymaking, governments must insure that their intelligence offers are recruited from the best and the brightest. It is critical that intelligence officers enjoy the support of the greater public—not just that confidence of the president or the powers that be.

The Art of Intelligence

In the field of intelligence, it is essential that responsibility be wed to authority. There must be a direct line of authority, command, and responsibility between the head of state and the highest operational level in the intelligence community. In this vein, the creation of the post of director of national intelligence in the United States was a mistake. Its ultimate consequence is removing the president from oversight of each intelligence agency. Given the stakes in today’s global environment, it is critical for leaders to be intimately involved in the intelligence services. As a matter of principle, there should be a clear chain of command within the intelligence community, and the senior level should report directly to the political leadership, not to a liaison.

The commission appointed to investigate the September 11 attacks faulted the American intelligence community with a lack of imagination. It argued, compellingly, that given all the facts known at the time, such an attack should have been imagined. On the other hand, the Senate committee that investigated the use of intelligence in the runup to the Iraq war faulted the intelligence community for being overzealous in assuming that Iraq still possessed weapons of mass destruction. This sends the conflicting messages that intelligence agencies should imagine the worst cases and that they should restrain their imaginations.

The Value of Leadership in the Arab World

In the months before the 1991 Gulf War, Jordan’s King Hussein met regularly with Israeli intelligence officials; a relationship of confidence developed. When discussing the countdown to war, King Hussein often observed that the West failed to understand Saddam Hussein. Too often, the King argued, Saddam was viewed as a bloodthirsty dictator and, in his invasion of Kuwait, a violator of international law. To the Arab masses, however, Saddam was a modern day Nebuchadnezzar who commands respect. Visits to other Arab capitals confirmed this: the simultaneous fear and respect for Saddam was profound. As war was about to break out, thousands demonstrated in Muslim capitals.

The importance of leadership to a nation is a key element within the Muslim world that cannot be ignored. Too little weight is given to the fears and reservations of people in the region on matters of such consequence. The West has erred in this respect.

Challenges Facing Israel

Hamas is a central element in Palestinian society—it is well organized and highly motivated, and has put in motion an effective machine of education, health, and social welfare. The strength of Hamas’s popularity within Palestinian society is even greater than the percentages indicate, and no resolution to the Israeli-Palestinian conflict can come about without Hamas being part of the solution. This is not the official view in Israel.

Every word of Iranian President Mahmoud Ahmadinejad must be taken at face value. He is sincere in wanting to destroy Israel and will certainly do everything he can to achieve success in this area. But he will not succeed. Currently, Iran is maneuvering very effectively, but it is also feeling mounting pressure. While the final outcome is difficult to predict, the international community is unlikely to allow Iran to obtain nuclear weapons capabilities. Because Iran was at the center of the Israeli intelligence community’s work for the last fifteen years, Israel has many options for dealing with Tehran. Israel is amply prepared to head off this challenge should it boil over.

This rapporteur’s summary was written by Eric Trager.