TLR 161 – Obamacareless
This issue is devoted entirely to Section A: Regional Developments and has as its main focus and premise that it is the changes in America’s involvement in the Middle East that are driving developments across the region. The most recent and dramatic of these changes has been the announcement of the opening to Tehran, a move which has been at least a year or more in the making. But what is happening is not merely a change of policy, certainly not one towards a single country, however important. Rather, we are witnessing a wider process of disengagement on the part of the US, which has been formalised and accelerated during the Obama presidency – and which has been accompanied by several specific decisions by this administration which have sown confusion and distrust among America’s allies in the region.
The discussion ranges over the impact of these changes in US policy and presence on the region as a whole and on key countries — and how these have facilitated the re-emergence of Russia as a central player in the region. The net result of the fading of American power has been the creation of a vacuum in which every country is left to pursue its own interests and agenda, with the outcome being greater volatility and instability.
The coup in Egypt stands out as the most significant regional development of the year and one that, from the Israeli viewpoint, represents an improvement in many important respects as well as opening new strategic and economic opportunities. The stalemate in Syria and the agreement imposed on the Assad regime to neutralize the Syrian chemical weapon arsenal are also positive developments for Israel, given the complexity of the Syrian situation and the potential for negative outcomes.
But ultimately it is the Iranian threat that continues to dominate Israeli strategic thinking. I review the options available to Israel in the wake of the change in US policy toward Iran, the diplomatic dialogue that has opened and the detailed negotiations underway between America, Russia and Europe on the one hand and Iran on the other – and the relative likelihood of each option being realised in the immediate future or during 2014.
Whether viewed as positive or negative, the geo-political developments of recent months seem to have had little or no impact on the Israeli economy and financial markets. This is not surprising, especially since they have been gradual and have pulled in differing directions. The Iranian threat is too large and vague to be ‘priced in’ in any meaningful way, whilst the improved relations with Egypt and the reduction of Syria’s offensive capability and of the fear of Syria sliding into chaos are similarly vague, albeit with a positive skew.
However, one of the new realities in Israel’s situation is its status as an energy producer – and in this context, the improvement of relations with Egypt offers the prospect of co-operation in the development of Israel’s natural gas reserves. This and other recent developments in the economic policy and business arenas will be examined in the next issue.
A: Regional Developments
a) The new realpolitik: America wuz here
b) Putin’s Russia: Last man standing
c) The Great Power Vacuum – you’re on your own
d) Confusion: Egypt after the coup
e) Syria defanged, Assad reflated
f) Iran‘s nuclear programme: the deal takes shape