via USIP

What is the state of Iran’s economy in 2013 compared to a year ago? 

Iran’s economy enters 2013 significantly worse than a year ago, particularly with higher inflation and unemployment than at the beginning of 2012. The rial also plunged from around 11,000 to the dollar at [...]]]> By Kevan Harris

via USIP

What is the state of Iran’s economy in 2013 compared to a year ago? 

Iran’s economy enters 2013 significantly worse than a year ago, particularly with higher inflation and unemployment than at the beginning of 2012. The rial also plunged from around 11,000 to the dollar at the beginning of 2012 down to between 22,500 and 31,000 at the beginning of 2013, depending on the type of transaction. The past year was probably the most tumultuous economically for Iran since 1994, when an external debt crisis triggered a serious inflationary shock and a recession.

At the outset of 2012, many Iranians expected another economic shock due to the growing array of sanctions on Tehran’s oil sales and financial transactions led by the United States and European Union. In 2013, many now expect the international economic cordon to be further tightened. The 2012 squeeze did not produce a hyperinflationary spiral, but annual overall inflation in 2012 was estimated to hit between 40 percent and 60 percent, according to Iran’s business media. Tehran was forced to limit foreign exchange transactions and the export of strategic goods in response to the effect of sanctions on Iran’s currency market.

Due to sanctions, Iran’s oil exports were also basically cut in half in 2012, from 2.3 million barrels a day at the beginning of 2012 down to around 1 million barrels a day at year’s end, according to the International Energy Agency. The accumulated impact of revenue declines is likely to produce two additional problems in 2013.

First, the national budget deficit is expected to increase to around 30 percent of the current budget (in the Persian year ending in March 2013), which means that President Mahmoud Ahmadinejad will be forced next year to cut spending, raise revenue, and prop up state banks with new cash injections. Iran’s parliament wants to put as much control over the government budget as it can, since many members of parliament contend that Ahmadinejad’s use of revenue is opaque at best.

Second, further changes in subsidies for basic commodities—which date back to hardships during the eight-year Iran-Iraq war in the 1980s—are on hold. Ahmadinejad introduced changes to this subsidy program over 2011-2012, including liberalization of some prices combined with monthly stipends for the entire Iranian population. But he only got through one round of subsidy cuts before Iran’s parliament halted further increases in fuel prices as well as higher stipends. Inflation had whittled away the benefits of both, although the idea is not dead.

Iranian economists are divided about subsidy reforms. Some think the subsidy cutbacks generated an inflationary shock at a time that the domestic economy—both the manufacturing and agricultural sectors—were unprepared for higher production and raw material costs that they then either had to absorb or pass along to consumers. So sanctions were not the only driver of inflation in 2012.

Other economists are more sanguine about the reforms, given the difficulties of enacting any economic policy changes in Iran. The ill-effects are temporary, they contend, and many other developing countries use stipends as part of their welfare programs. A diplomatic solution about Iran’s controversial nuclear program over the next year, they say, would lessen the pain and other subsidies could then be removed.

What is the debate within the government over what to do about the current economic situation?

The admission of economic woes by most of Iran’s political class has opened up space for debate over economic policy. Some officials, including the president, now argue that reducing Iran’s reliance on oil revenues, a byproduct of international sanctions, is a blessing in disguise. Private sector representatives in Iran’s Chamber of Commerce counter that they could manage the economy better than the state does. Both claims are seriously exaggerated, but the rival positions reflect the political impact of the deepening economic crisis in a presidential election year.

A viable solution may depend less on economic policy than on the outcome of Iran’s negotiations on its nuclear program, several Iranian officials have admitted publicly. Iranian officials are now gearing up for talks  with the world’s major powers—the so-called P5+1—from the United States, Britain, China, France, Germany and Russia. Iranian negotiators want sanctions relief in exchange for any concessions limiting its nuclear program.

How much influence does the economic situation have on the presidential election due in June 2013?

The economy will clearly be one of the main issues in the election. Unlike many developing countries, however, Iran does not have a large external debt.  It has a porous, open economy, which helps the country’s 79 million people deal with the negative effects of financial sanctions. So the situation is not yet dire. But people may vote for a candidate who they believe can actually get something done in the economic arena.

Many candidates will likely run against Ahmadinejad—notably his economic policies—even though he is not allowed to run again under a constitutional limit of two consecutive terms.  Across the political spectrum, Ahmadinejad’s administration is now widely associated with failed policies and gross mismanagement. In 2012, most conservative media blasted the president and his staff for Iran’s growing economic woes.

Indeed, Iran’s economic policy debate has often served as a cover for political criticism since the 1979 revolution. The 2013 presidential election will almost certainly follow the same pattern, given growing economic woes and the linking of their alleviation with a resolution of the nuclear issue.

By Scott McConnell

I spent the weekend canvassing for Obama in the Virginia Beach area. The task for the hundreds of volunteers who descended from DC and New York was to make sure the maximum number of Virginia’s “sporadic Democratic voters” — a designation which seemed to mean, pretty much, [...]]]> via Lobe Log

By Scott McConnell

I spent the weekend canvassing for Obama in the Virginia Beach area. The task for the hundreds of volunteers who descended from DC and New York was to make sure the maximum number of Virginia’s “sporadic Democratic voters” — a designation which seemed to mean, pretty much, poor minorities — get to the polls on Tuesday. People needed to know where their polling place was, what ID they needed, be reminded that it’s important and make a foolproof plan to vote. And, of course shooting down the various disinfomational memes that “someone” has been circulating in the area: that “because of the hurricane” you can vote by calling this number, or that you can’t vote a straight Democratic ticket — if you do, your Senate or Congress vote won’t count.

It is a core axiom among Democratic activists that the essence of the Republican “ground game” is to suppress the Democratic votes with lies, intimidation and whatever might work.

It was a curiously moving experience. Much of the sentiment comes from simple exposure. I have led most of my life not caring very much whether the poor voted, and indeed have sometimes been aware my interests aligned with them not voting at all. But that has changed. And so one knocks on one door after another in tiny houses and apartments in Chesapeake and Newport News, some of them nicely kept and clearly striving to make the best of a modest lot, others as close to the developing world as one gets in America. And at moments one feels a kind of calling — and then laughs at the Alinskian presumption of it all. Yes, we are all connected.

At times when I might have been afraid — knocking on a door of what might of well have been a sort of crack house — I felt no fear. I was protected by age and my Obama campaign informational doorhangers.

And occasionally, one strikes canvassing gold. In one decrepit garden apartment complex, where families lived in dwellings the size of maybe two large cars, a young man (registered) came around behind me while I was talking to his mother. “Yeah” he said, “Romney wins, I’m moving back to the islands. He’s gonna start a war, to get the economy going.” Really. He stopped to show me a video on his smart phone, of one of his best friends, a white guy in the Marines. I couldn’t make out what the video was saying, but I took it as a Monthly Review moment. In a good way.

And Tomiko. Plump, pretty, dressed in a New York Jets jersey and sweatpants. “If the campaign can get me a van, I can get dozens of people around here to the polls on Tuesday.” Yes, Tomiko, the campaign might be able to do that, and someone will be calling you.

A very small sample size, but of the white female Obama volunteers with whom I had long conversations, one hundred percent had close relatives who had failed marriages with Mormon men. I think Mormonism is the great undiscussed subject of the campaign, and I don’t quite know what to make of it myself. But contrary to Kennedy’s Catholicism (much agonized over) and Obama’s Jeremiah Wright ties (ditto), Mormonism is obviously the central driving factor of Romney’s life. This may be a good thing or a bad thing — but it is rather odd that it is not discussed, at all. I think it’s safe to say that if Romney wins, the Church of Latter Day Saints will come under very intense scrutiny, and those of us who have thought of the church as simply a Mountain West variation on Protestantism will be very much surprised.

I spent a good deal of time driving and sharing meals with three fellow volunteers, professional women maybe in their early forties, two black, one white, all gentile, all connected in some way, as staffers or lobbyists, to the Democratic Party. All had held staff positions at the Democratic convention. They had scoped out my biography, knew the rough outlines from neocon, to Buchananite, to whatever I am now. They knew my principal reason for supporting Obama was foreign policy, especially Iran. They spent many hours interrogating me about my reactionary attitudes on women, race, immigration, all in good comradely fun of course. At supper last night before we drove back to DC,  I asked them (all former convention staffers) what they thought about the contested platform amendment on Jerusalem. Silence. Finally one of them said, with uncharacteristic tentativeness, “Well, I’m not sure I really know enough about that issue.” More silence.

Then I told them I thought it was a historic moment, (though I refrained from the Rosa Parks analogy I have deployed before) which portended a sea change in Democratic Party attitudes on the question. I cited various neocon enforcers who feared the same thing.

And now, with permission to speak freely, they spoke up. It came pouring out. Yes, obviously Israel has to give up something.  There has to be a two-state solution. We can’t just one-sidedly support Israel, and so on. But really striking was their reluctance, perhaps even fear, to voice their own opinions before hearing mine.

– Scott McConnell is a founding editor of The American Conservative. 

US-Iran relations expert Trita Parsi explains why diplomatic headway can be made with Iran in the time period after the US presidential election and before the Iranian election in the Daily Beast’s “Open Zion“:

Between November 8, 2012, and mid-March 2013, a unique opportunity exists to make diplomatic headway [...]]]> via Lobe Log

US-Iran relations expert Trita Parsi explains why diplomatic headway can be made with Iran in the time period after the US presidential election and before the Iranian election in the Daily Beast’s “Open Zion“:

This week Secretary of State Hillary Clinton and EU foreign policy chief Catherine Ashton indicated they wanted talks with Iran to resume even as the US’s dual-track policy of pressure and diplomacy (translation: more sanctions) continues:

HIGH REPRESENTATIVE ASHTON: As you know, in New York, I was feeding back to the P-5+1/E-3+3 ministers [...]]]> via Lobe Log

This week Secretary of State Hillary Clinton and EU foreign policy chief Catherine Ashton indicated they wanted talks with Iran to resume even as the US’s dual-track policy of pressure and diplomacy (translation: more sanctions) continues:

HIGH REPRESENTATIVE ASHTON: As you know, in New York, I was feeding back to the P-5+1/E-3+3 ministers on the discussions I’d been having with Dr. Jalili, who is the chief negotiator for the Iranians, on how to move forward. It is, as you know, my view that we have a twin-track approach of pressure and negotiation. The pressure you’ll have seen most recently in new rounds of sanctions from the European Union, and we continue to try and find ways to move forward on our negotiations.

Over the weekend, there was a contact between my deputy and Dr. Jalili’s deputy, and I will be making contact with Dr. Jalili in the near future. And I will continue to do everything I possibly can to move these negotiations forward, and I am pleased to do so with the full support of the ministers from the P-5+1/E-3+3, which is enormously important if we’re to make the progress I’d like to make.

MODERATOR: Thank you.

SECRETARY CLINTON: Let me just add that we so appreciate Cathy’s leadership in a unified P-5+1 approach, our dual-track approach, as she mentioned. So our message to Iran is clear: The window remains open to resolve the international community’s concerns about your nuclear program diplomatically and to relieve your isolation, but that window cannot remain open indefinitely. Therefore, we hope that there can be serious, good-faith negotiations commenced soon.

I reckon any kind of change in bilateral relations between Iran and America impractical and precluded until the holding of Iran’s presidential election. If they have understood well that the subject of foreign relations falls under the scope of the highest authority of the Islamic regime, namely the Supreme Leader, why weren’t they ready and aren’t ready to negotiate with Mr. Ahmadinejad and to solve the issues with his government? The government and president whose days left are ending fast and who enjoys a negative position inside the American political system because of some of the slogans he has offered.

via IPS News 

Graphic: The figures signify the number of times each country was mentioned in the Oct. 22 presidential debate. Credit: Zachary Fleischmann/IPS

U.S. strategy in the Greater Middle East, which has dominated foreign policy-making since the 9/11 attacks more than 11 years ago, similarly dominated the third and last debate between [...]]]>

via IPS News 

Graphic: The figures signify the number of times each country was mentioned in the Oct. 22 presidential debate. Credit: Zachary Fleischmann/IPS

U.S. strategy in the Greater Middle East, which has dominated foreign policy-making since the 9/11 attacks more than 11 years ago, similarly dominated the third and last debate between President Barack Obama and Governor Mitt Romney Monday night.

The biggest surprise of the debate, which was supposed to be devoted exclusively to foreign policy and national security, was how much Romney agreed with Obama’s approach to the region.

His apparent embrace of the president’s policies appeared consistent with his recent efforts to reassure centrist voters that he is not as far right in his views as his primary campaign or his choice for vice president, Rep. Joe Ryan, would suggest.

The focus on the Greater Middle East, which took up roughly two-thirds of the 90-minute debate, reflected a number of factors in addition to the perception that the region is the main source of threats to U.S. security, a notion that Romney tried hard to foster during the debate.

“It’s partly because all candidates have to pander to Israel’s supporters here in the United States, but also four decades of misconduct have made the U.S. deeply unpopular in much of the Arab and Islamic world,” Stephen Walt, a Harvard international relations professor who blogs on foreignpolicy.com, told IPS.

“Add to that the mess Obama inherited from (George W.) Bush, and you can see why both candidates had to keep talking about the region,” he said.

But the region’s domination in the debate also came largely at the expense of other key regions, countries and global issues – testimony to the degree to which Bush’s legacy, particularly from his first term when neo-conservatives and other hawks ruled the foreign-policy roost, continues to define Washington’s relationship to the world.

Of all the countries cited by the moderator and the two candidates, China was the only one outside the Middle East that evoked any substantial discussion, albeit limited to trade and currency issues.

Romney re-iterated his pledge to label Beijing a “currency manipulator” on his first day in office, while Obama for the first time described Beijing as an “adversary” as well as a “partner” – a reflection of how China-bashing has become a predictable feature of presidential races since the end of the Cold War.

With the exception of one very short reference (by Romney) to Venezuelan President Hugo Chavez and another to trade with Latin America, Washington’s southern neighbours were completely ignored by the two candidates, as was Canada and all of sub-Saharan Africa, except Somalia and Mali where Romney charged that “al Qaeda-type individuals” had taken over the northern part of the country.

Not even the long-running financial crisis in the European Union (EU) – arguably, one of the greatest threats to U.S. national security and economic recovery – came up, although Romney warned several times that the U.S. could become “Greece” if it fails to tackle its debt problems.

Similarly, the big emerging democracies, including India, Brazil, South Africa, and Indonesia – all of which have been wooed by the Obama administration – went entirely unmentioned, although at least one commentator, Tanvi Madan, head of the Indian Project at the Brookings Institution, said Indians should “breathe a sigh of relief” over its omission since it signaled a lack of controversy over Washington’s relations with New Delhi.

Another key emerging democracy, Turkey, was mentioned several times, but only in relation to the civil war in Syria.

And climate change or global warming, which has been considered a national-security threat by U.S. intelligence agencies and the Pentagon for almost a decade, was a no-show at the debate.

“There was no serious discussion of climate change, the Euro crisis, the failed drug war, or the long-term strategic consequences of drone wars, cyberwar, and an increasingly ineffective set of global institutions,” noted Walt.

“Neither candidate offered a convincing diagnosis of the challenges we face in a globalised world, or the best way for the U.S. to advance its interests and values in a world it no longer dominates.”

Romney, whose top foreign-policy advisers include key neo-conservatives who were major promoters of Bush’s misadventures in the region, spent much of the debate repeatedly assuring the audience that he would be the un-Bush when it came to foreign policy.

“We don’t want another Iraq,” he said at one point in an apparent endorsement of Obama’s drone strategy. “We don’t want another Afghanistan. That’s not the right course for us.”

“I want to see peace,” he asserted somewhat awkwardly as he began his summation, suggesting that it was a talking point his coaches told him he must impress upon his audience before he left the hall in Boca Raton, Florida.

“Romney clearly decided he needed to head off perceptions of himself as a throwback to George W. Bush-era foreign policy adventurism, repeatedly stressing his desire for a peaceful world,” wrote Greg Sargent, a Washington Post blogger.

So strongly did he affirm most of Obama’s policies that, for those who hadn’t been paying close attention to Romney’s previous stands, the president’s charge that his rival’s foreign policy was “wrong and reckless” must have sounded somewhat puzzling.

As Obama was forced to remind the audience repeatedly, Romney’s positions on these issues have been “all over the map” since he launched his candidacy more than two years ago.

“I found it confusing, because he has spent much of the campaign season in some ways recycling Bush’s foreign policy, and, at least for one night, he seemed to throw the neo-cons under the bus,” said Charles Kupchan, a foreign policy specialist at the Council on Foreign Relations.

“Whether it was accepting the withdrawal timetable in Afghanistan, walking back a more aggressive stance on Syria, or basically agreeing with Obama’s approach on Iran, he seems to be stepping away from a lot of the positions he was taking just a few weeks ago,” he noted. “At this point, it’s impossible for voters to actually know what he thinks because he spent most of the campaign embracing a platform that was much further to the right.”

That Obama, who took the offensive from the outset and retained it for the next 90 minutes, won the debate was conceded by virtually all but the most partisan Republican commentators, with some analysts calling the president’s performance as decisive a victory as that which Romney achieved in the first debate earlier this month and which reversed his then-fading fortunes.

A CBS/Knowledge Networks poll of undecided voters taken immediately after the debate found that 53 percent of respondents thought Obama had won; only 23 percent saw Romney as the victor.

Whether that will be sufficient to reverse Romney’s recent gains in the polls – national surveys currently show a virtual tie among likely voters – remains to be seen.

Foreign policy remains a relatively minor issue in the minds of the vast majority of voters concerned mostly about the economy and jobs – one reason why, at every opportunity, Romney Monday tried, with some success, to steer the debate back toward those problems.

Reposted by arrangement with Tom Dispatch

By John Feffer

The United States has long styled itself a Pacific power. It established the model of counterinsurgency in the Philippines in 1899 and defeated the Japanese in World War II. It [...]]]> Can Washington Move from Pacific Power to Pacific Partner?

Reposted by arrangement with Tom Dispatch

By John Feffer

The United States has long styled itself a Pacific power. It established the model of counterinsurgency in the Philippines in 1899 and defeated the Japanese in World War II. It faced down the Chinese and the North Koreans to keep the Korean peninsula divided in 1950, and it armed the Taiwanese to the teeth. Today, America maintains the most powerful military in the Pacific region, supported by a constellation of military bases, bilateral alliances, and about 100,000 service personnel.

It has, however, reached the high-water mark of its Pacific presence and influence. The geopolitical map is about to be redrawn. Northeast Asia, the area of the world with the greatest concentration of economic and military power, is on the verge of a regional transformation. And the United States, still preoccupied with the Middle East and hobbled by a stalled and stagnating economy, will be the odd man out.

Elections will be part of the change. Next year, South Koreans, Russians, and Taiwanese will all go to the polls. In 2012, the Chinese Communist Party will also ratify its choice of a new leader to take over from President Hu Jintao.  He will be the man expected to preside over the country’s rise from the number two spot to the pinnacle of the global economy.

But here’s the real surprise in store for Washington. The catalyst of change may turn out to be the country in the region that has so far changed the least: North Korea. In 2012, the North Korean government has trumpeted to its people a promise to create kangsong taeguk, or an economically prosperous and militarily strong country. Pyongyang now has to deliver somehow on that promise — at a time of food shortages, overall economic stagnation, and political uncertainty. This dream of 2012 is propelling the regime in Pyongyang to shift into diplomatic high gear, and that, in turn, is already creating enormous opportunities for key Pacific powers.

WWashington, which has focused for years on North Korea’s small but developing nuclear arsenal, has barely been paying attention to the larger developments in Asia. Nor will Asia’s looming transformation be a hot topic in our own presidential election next year. We’ll be arguing about jobs, health care, and whether the president is a socialist or his Republican challenger a nutcase. Aside from some ritual China-bashing, Asia will merit little mention.

President Obama, anxious about giving ammunition to his opponent, will be loath to fiddle with Asia policy, which is already on autopilot. So while others scramble to remake East Asia, the United States will be suffering from its own peculiar form of continental drift.

Pyongyang Turns on the Charm

On April 15, 1912, in an obscure spot in the Japanese empire, a baby was born to a Christian family proud of its Korean heritage. The 100th anniversary of the birth of Kim Il Sung, North Korea’s founder and dynastic leader, is coming up next year. Ordinarily, such an event would be of little importance to anyone other than 24 million North Koreans and a scattering of Koreans elsewhere. But this centennial also marks the date by which the North Korean regime has promised to finally turn things around.

Despite its pretensions to self-reliance, Pyongyang has amply proven that it can only get by with a lot of help from its friends. Until recently, however, North Korea was not exactly playing well with others.

It responded in a particularly hardline fashion, for instance, to the more hawkish policies adopted by new South Korean President Lee Myung Bak, when he took office in February 2008. The shooting of a South Korean tourist at the Mount Kumgang resort that July, the sinking of the South Korean naval ship the Cheonan in March 2010 (Pyongyang still claims it was not the culprit), and the shelling of South Korea’s Yeonpyeong Island later that year all accelerated a tailspin in north-south relations. During this period, the North tested a second nuclear device, prompting even its closest ally, China, to react in disgust and support a U.N. declaration of condemnation. Pyongyang also managed to further alienate Washington by revealing in 2010 that it was indeed pursuing a program to produce highly enriched, weapons-grade uranium, something it had long denied.

These actions had painful economic consequences. South Korea cancelled almost all forms of cooperation. The North’s second nuclear test scotched any incipient economic rapprochement with the United States.  (The Bush administration had removed North Korea from its terrorism list, and there had been hints that other longstanding sanctions might sooner or later be dropped as part of a warming in relations.)

Only the North’s relationship with China was unaffected, largely because Beijing is gobbling up significant quantities of valuable minerals and securing access to ports in exchange for just enough food and energy to keep the country on life support and the regime afloat. Between 2006 and 2009, an already anemic North Korean economy contracted, and chronic food shortages again became acute.

To these economic travails must be added political ones. The country’s leadership is long past retirement, with 70-year-old leader Kim Jong Il younger than most of the rest of the ruling elite. He has designated his youngest son, Kim Jeong Eun, as his successor, but the only thing that this mystery boy seems to have going for him is his resemblance to his grandfather, Kim Il Sung.

Still, North Korea seems no closer to full-scale collapse today than during previous crises — like the devastating famine of the mid-1990s. A thoroughly repressive state and zero civil society seem to insure that no color revolution or “Pyongyang Spring” is in the offing. Waiting for the North Korean regime to go gently into the night is like waiting for Godot.

But that doesn’t mean change isn’t in the air.  To jumpstart its bedraggled economy and provide a political boost for the next leader in the year of kangsong taeguk, North Korea is suddenly in a let’s-make-a-deal mode.

Kim Jong Il’s recent visit to Siberia to meet Russian President Dmitri Medvedev, for instance, raised a few knowledgeable eyebrows. Conferring at a Russian military base near Lake Baikal, for the first time in a long while the North Korean leader even raised the possibility of a moratorium on nuclear weapons production and testing. More substantially, he concluded a preliminary agreement on a natural gas pipeline that could in itself begin to transform the politics of the region. It would transfer gas from the energy-rich Russian Far East through North Korea to economically booming but energy-hungry South Korea. The deal could net Pyongyang as much as $100 million a year.

The North’s new charm offensive wouldn’t have a hope in hell of succeeding if a similar change of heart weren’t also underway in the South.

The Bulldozer’s Miscalculation

On taking office, the conservative South Korean president Lee Myung Bak, known as “the Bulldozer” when he headed up Hyundai’s engineering division, promised to put Korean relations on a new footing. Ten years of “engagement policy” with the North had, according to Lee, produced an asymmetrical relationship. The South, he insisted, was providing all the cash, and the North was doing very little in exchange. Lee promised a relationship based only on quid pro quos.

What he got instead was tit for tat: harsher rhetoric and military action. Ultimately, although the North made no friends below the 38th parallel that way, the new era of hostility didn’t help the Lee administration either. South Koreans generally watched in horror as a relatively peaceful relationship veered dangerously close to military conflict.

Lee’s ruling party suffered a loss in last April’s by-elections, and in August, he replaced his hardline “unification” minister with a more conciliatory fellow. Still insisting on an apology for the Cheonan sinking and the Yeonpyeong shelling, the ruling party is nevertheless looking for ways to restore commercial ties and again provide humanitarian assistance to the North. Since the summer, representatives from North and South have met twice to discuss Pyongyang’s nuclear program. Although the two sides haven’t made substantial progress, the stage is set for the resumption of the Six Party Talks between the two Koreas, Russia, Japan, China, and the United States that broke off in 2007.

Even if the opposition party doesn’t sweep the conservatives out of power in the 2012 elections, South Korea will likely abandon Lee’s tough-guy approach. In September, his likely successor as the ruling party candidate in 2012, Park Geun-Hye, openly criticized Lee’s approach in an article in Foreign Affairs that called instead for “trustpolitik.”

One project Park singled out for mention is an inter-Korean railroad line that would “perhaps transform the Korean Peninsula into a conduit for regional trade.” That’s an understatement. Restoring the line and hooking it up to Russia’s Trans-Siberian Railroad would connect the Korean peninsula to Europe, reduce the shipment time of goods from one end of Eurasia to the other by about two weeks, and save South Korea up to $34 to $50 per ton in shipping costs. Meanwhile, the natural gas pipeline, which South Korea approved at the end of September, could reduce its gas costs by as much as 30%. For the world’s second largest natural gas importer, this would be a major savings.

Serious economic steps toward Korean reunification are not just a dream, in other words, but good business, too. Even in the worst moments of the recent period of disengagement, it’s notable that the two countries managed to preserve the Kaesong industrial complex located just north of the Demilitarized Zone. Run by South Korean managers and employing more than 45,000 North Koreans, the business zone is a boon to both sides. It helps South Korean enterprises facing competition from China, even as it provides hard currency and well-paying jobs to the North. The railroad and the pipeline would offer similar mutual benefits.

According to conventional wisdom, North Korea has a single bargaining chip, its small nuclear arsenal, which it will never give up. But a real estate agent would look at the situation differently. What North Korea really has is “location, location, location,” and it finally seems ready to cash in on its critical position at the heart of the world’s most vital economic region.

The train line would bind the world’s two biggest economic regions into a huge Eurasian market. And the pipeline, coupled with green energy projects in China, South Korea, and Japan, might begin to wean East Asia from its dependency on Middle Eastern oil and thus on the U.S. military to secure access and protect shipping routes.

Thought of another way, these projects and others like them lurking in the Eurasian future are significant not just for what they connect, but what they leave out: the United States.

Out in the Cold

The Bush administration anticipated Lee Myung Bak’s approach to North Korea by chucking the carrot and waving the stick. By 2006, however, Washington had made a U-turn and was beginning to engage Pyongyang seriously. The Obama administration took another tack, eventually adopting a policy of “strategic patience,” a euphemism for ignoring North Korea and hoping it wouldn’t throw a tantrum.

It hasn’t worked. North Korea has plunged full speed ahead with its nuclear program.  The U.S./NATO air campaign against Libya’s Muammar Gaddafi, who had given up his nuclear program to secure better relations with the West, only reinforced Pyongyang’s belief that nukes are the ultimate guarantor of its security. The Obama administration continues to insist that the regime show its seriousness about denuclearization as a precondition for resuming talks. Even though Washington recently sent a small amount of flood relief, it refuses to offer any serious food assistance. Indeed, in June, the House of Representatives passed an amendment to the agriculture bill that prohibited all food aid to the country, regardless of need.

Though the administration will likely send envoy Stephen Bosworth to North Korea later this year, no one expects major changes in policy or relations to result. With a presidential election year already looming, the Obama administration isn’t likely to spend political capital on North Korea — not when Republicans would undoubtedly label any new moves as “appeasement” of a “terrorist state.”

Obama came into office with a desire to shift U.S. policy away from its Middle Eastern focus and reassert America’s importance as a Pacific power, particularly in light of China’s growing regional influence. But the president has invested more in drones than in diplomacy, sustaining the war on terror at the expense of the sort of bolder engagement of adversaries that Obama hinted at as a candidate. In the meantime, the administration is prepared to just wait it out until the next elections are history — and by then, it might already be too late to catch up with regional developments.

After all, Washington has watched China become the top trading partner of nearly every Asian country. Similarly, the economic links between China and Taiwan have deepened considerably, a reality to which even that island’s opposition party must bow. The Obama administration’s recent decision not to upset Beijing too much by selling advanced F-16 fighter jets to Taiwan, opting instead for a mere upgrade of the F-16s it bought in the 1990s, is a clear sign of relative U.S. decline in the region, suggests big-picture analyst Robert Kaplan.

Then there’s the sheer cost of the U.S. military presence in the Pacific, which looks like a juicy target to budget cutters in Washington. Key members of Congress like Senators John McCain and Carl Levin have already signaled their anxiety about the high price tag of a planned “strategic realignment” in Asia that involves, among other things, an expansion of the U.S. military base in Guam and an upgrading of facilities in Okinawa. In response to a question about potential military cuts, new Deputy Secretary of Defense Ashton Carter has confirmed that reducing U.S. troops and bases overseas is “on the table.”

The future of East Asia is hardly a given, nor is an economic boom and regional integration the only possible scenario. Virtually every country in the region has hiked its military spending.  Tension points abound, particularly in potentially energy-rich waters that various countries claim as their own. China’s staggering economic growth is not likely to be sustainable in the long term. And North Korea could ultimately decide to make do as an economically destitute but adequately strong military power.

Still, the trend lines for 2012 and after point to greater engagement on the Korean peninsula, across the Taiwan Strait, and between Asia and Europe. Right now, the United States, for all of its military clout, is not really part of this emerging picture. Isn’t it time for America to gracefully acknowledge that its years as the Pacific superpower are over and think creatively about how to be a pacific partner instead?

John Feffer is the co-director of Foreign Policy in Focus at the Institute for Policy Studies, writes its regular World Beat column, and will be publishing a book on Islamophobia with City Lights Press in 2012. His past essays, including those for TomDispatch.com, can be read at his website.  To listen to Timothy MacBain’s latest Tomcast audio interview in which Feffer discusses the 2012 election season in Asia click here, or download it to your iPod here.

Copyright 2011 John Feffer

Iran will be able to achieve a nuclear bomb within one or two years, the incoming head of Israel’s Military Intelligence said Tuesday, but added that such a move would [...]]]> Well, the 2015 deadline didn’t last very long. Here’s the latest Israeli time-warp exercise — walking back softened Iranian nuclear timelines. From Haaretz:

Iran will be able to achieve a nuclear bomb within one or two years, the incoming head of Israel’s Military Intelligence said Tuesday, but added that such a move would depend on the will of the Tehran leadership.

“The question is not when Iran will have the bomb. The question is how long it will take for an Iranian leader to decide to have the centrifuges start enriching at 90 percent,” Brigadier-General Aviv Kochavi told a meeting of the Knesset’s Foreign Affairs and Defense Committee.

Kochavi said he does not expect an Iranian leader to make such a decision in the next year out of a fear of harming the government, which is already paying an economic price over fear of their nuclear program.