Sonntag, 25. Oktober 2009

The Kremlin Wars (Special Series), Part 2: The Combatants

October 23, 2009 | 2047 GMT



Summary

Former Russian president and current Prime Minister Vladimir Putin is the indisputable executive power in Russia. His strength comes largely from his ability to control Russia's opposing political clans. Those two clans, which have been fighting for influence for most of the past eight years, are about to see fresh conflict as a new force, the civiliki, attempt to use Russia's economic crisis as an opportunity to reshape the country.

Executive power in Russia indisputably rests with former president and current Prime Minister Vladimir Putin. Putin emerged as the supreme political force in Russia following the chaos that defined the 1990s precisely because he stepped outside of the fray and acted effectively as an arbiter for the disparate power structures. Although Putin's background is in the KGB (now called the Federal Security Service, or FSB) and he used these links in intelligence and security services to initially consolidate his reign, his power does not rest on those foundations alone. Putin's power comes from his ability to control Russia's opposing clans through favors and fear that he will give one clan the tools and authority to destroy the other.

The two main clans within the Kremlin are the Sechin clan led by Deputy Prime Minister Igor Sechin and the Surkov clan led by Russian President Dmitri Medvedev's First Deputy Chief of Staff Vladislav Surkov. These clans have been involved in almost continual competition for power for the past eight years. The group that may tip the balance in the coming clan wars is a newly defined class that is part of the Surkov clan: the civiliki. Putin's balance of power is intertwined with economic reform, and the civiliki -- a group of lawyers and economic technocrats -- want to use the economic crisis to reform Russia.





Sechin and the FSB and Siloviki

Sechin has deep roots within the FSB and the siloviki (a term which translates as "the strongmen") who are either directly linked to the FSB or are former security officers who have tried their hand at business or politics or both during their "retirement." Sechin and his group generally have a comparatively Soviet frame of mind, but without any ideological nostalgia for communism. They do, however, long for the powerful Soviet Union, which acted forcefully on the world stage, was respected by its foes and allies, was suspicious of the West and was led by a firm (bordering on brutal) hand at home. The economic system Sechin favors is one that harnesses Russia's plentiful natural resources to fund champions of industry and military technology, and essentially depends on high commodity prices to sustain itself.

Sechin's main source of power is undoubtedly the FSB. Although the FSB is fully loyal to Putin, this does not mean that it would not side with Sechin in a showdown against its opponents. Sechin uses the FSB as a talent pool from which to fill various positions under his command, including the chairmanships of various state-owned companies. This naturally irks the civiliki, who abhor the thought of intelligence operatives running Russian companies.

Aside from the FSB, Sechin's other pillars of power are the state-owned oil giant Rosneft and the interior, energy and defense ministries. The distribution of assets between the Sechin and Surkov clans is not random; Putin coordinated it precisely so that neither clan becomes too powerful. Sechin's control of Rosneft is therefore balanced by Surkov's control of Gazprom, the state-owned natural gas company. While Sechin gets control of the energy ministry, Surkov is in charge of the natural resources ministry and so on.

Surkov and the GRU

Surkov rose through the ranks by proving himself invaluable in two key episodes of Russian state consolidation: the Chechen insurgency and the collapse of the largest Russian private energy firm, Yukos. Originally from Chechnya, Surkov played a role in eliminating a major thorn in the Kremlin's side: Chechen President Dzhokhar Dudayev. He also helped mastermind Moscow's win in the Second Chechen War by creating a strategy that divided the insurgency between the nationalist Chechens and the Islamists. His role in bringing down Yukos oligarch Mikhail Khodorkovsky began the all-important consolidation of those economic resources pillaged during the 1990s by disparate business interests.

Surkov's power base is the Russian Foreign Military Intelligence Directorate (GRU). The GRU represents both military intelligence and the military. Throughout Soviet and post-Soviet history, it has been the counterbalance to the KGB/FSB. The GRU is larger than the FSB and has a longer reach abroad, although it its accomplishments are not as well known as those of the FSB.

Also under Surkov's control are Gazprom; the ministries of finance, economics and natural resources; and the Russian prosecutor general. However, Surkov's rival Sechin controls the interior and defense ministries -- which have most of Russia's armed forces under their command. This limits the GRU's ability to control the military.

Surkov has sought to weaken Sechin and the FSB's position by constantly looking for potential allies to add to his group. In 2003, he formed an alliance with the heads of the reformist camp -- previously known as the St. Petersburgers -- that has proven to be invaluable in the context of the financial crisis. It is this group, the civiliki, that will help Surkov in his attempt to defeat Sechin, possibly for the last time.

The Civiliki

The civiliki are rooted in two camps. The first is the St. Petersburgers group of legal experts and economists that coalesced around Anatoly Sobchak, mayor of St. Petersburg from 1991-1996. Many of Russia's power players -- from Putin to Medvedev to key civiliki figures like Finance Minister Alexei Kudrin and German Gref, the former trade and economics minister and current head of Sberbank -- either worked directly under Sobchak or were somehow related to his administration. The second is the somewhat younger group of Western-leaning businessmen and economists that eventually joined the reformists from St. Petersburg.

The civiliki primarily want economic stability and believe Russia has to reform its economic system and move past state intervention in the economy that depends largely on natural resources for output. They try to be non-ideological and are for the most part uninterested in political intrigue. In their mind, economic stability is to be founded on a strong business relationship with the West that would provide Russia with access to capital with which to fund economic reforms. From their perspective, funding from the West has to go to rational and efficient companies that seek to maximize profit, not political power.

The first grouping of economic experts and Western leaning businessmen was led by Anatoly Chubais, who led the St. Petersburg group and was essentially in charge of various privatization efforts in the 1990s under former Russian President Boris Yeltsin. However, most of the St. Petersburg group was sidelined by the general failure of economic reforms enacted during this period. They were then almost snuffed out by the siloviki during the commodities boom from 2005 onward, leaving only Kudrin in a position of some power.

However, Surkov rescued the civiliki and incorporated them, giving them the powerful protector they lacked. Part of Surkov's plan was to turn one of the more prominent civiliki -- Medvedev -- into a superstar at the Kremlin. In Surkov's mind Medvedev was the correct choice since he was neither FSB nor GRU, though Surkov still felt he could influence him. This move helped Medvedev become president. Since Medvedev's ascendance to the presidency, and with Surkov's support, the other civiliki leaders -- Kudrin and Gref -- have been given even greater liberty to run the economy without fear of being replaced. Kudrin is handling the economy while Gref essentially is masterminding the banking system reform. The two of them work very well together, and with their allies Economic Minister Elvira Nabiullina and Natural Resources Minister Yuri Trutnev.

There is a rapidly brewing Surkov-backed conflict between the civiliki and Sechin. The strife is rooted in the simple issue of efficiency: The civiliki argument is that the Sechin clan wasted the good years of high commodity prices, crashed the Russian economy and weakened the state. This forces Putin to look at the conflict differently from previous clan battles. The Surkov-Sechin arguments typically are "just" about power, and thus about maintaining a balance. But the civiliki see Sechin's group not so much as a threat to them but as a threat to Russia. This is an argument that Putin has been able to ignore, but the latest economic crisis could have changed this.

The civiliki have a ready-made solution for the inherent problems in the Russian economy. Surkov's support for the civiliki, along with the financial crisis, has given Putin pause and he is giving their proposals consideration. However, the implementation of such reforms could reignite the feud between the clans and thus completely destabilize the delicate balance Putin has attempted to keep in the Kremlin.

Donnerstag, 22. Oktober 2009

The Kremlin Wars (Special Series), Part 1: The Crash


October 22, 2009 | 2025 GMT

Summary

Russia was hit particularly hard by the global economic crisis. The crisis and its aftermath have given rise to a force that wants to use the economic crisis as an opportunity to reshape Russia. This force is led by the civiliki, a group of lawyers and technocrats including Russian President Dmitri Medvedev. As the civiliki attempt to carry out their plans, a new round of conflict between Russia's two political clans will erupt.


The global economic crisis has hit Russia particularly hard. In the second quarter of 2009, Russia experienced a 10.9 percent gross domestic product (GDP) decline as measured from a year earlier and is expected to have its GDP decline by 8.5 percent overall in 2009. The budget surplus gained during the years of strong commodity prices has been replaced by an 8 percent budget deficit in 2009, which is expected to decrease only slightly to 7.5 percent in 2010. The state has been forced to spend a lot of its money on bailing out companies and private banks indebted to the West and has seen its hoard of foreign reserves amassed during the commodity boom decline from the pre-crisis peak of $599 billion to the current $417 billion. This economic situation has spurred the Kremlin to plan destabilizing changes that will remake Russia's internal political scene and prompt a fresh round of conflict between the Kremlin's powerful clans.

To understand the coming evolution in the Kremlin, STRATFOR is taking an in-depth look at the effects of the economic crisis on Russia thus far and the current power structures inside the Kremlin.

Origins of the Economic Crisis

The geography of the Russian steppe is dominated by vast distances and a shortage of rivers suitable for transport. Therefore, to achieve basic economic development, Russia had to build an extensive transportation network across this territory -- a task that is gargantuan in scope and cost. Furthermore, since Russia has no natural boundaries to serve as defenses, it had to expand outward from its core to establish buffer regions in order to maintain security. This exacerbated the scope and cost of the development effort. No state can achieve such development cheaply or efficiently without firm direction from above -- hence Russia's inclination toward a centralized economy.


Central planning is not perfect, however. It can ensure that a large proportion of state resources are thrown at a problem, but due to the vast need and the low efficiency, there is never enough capital. Capital is therefore Russia's most critical import because not only is it scarce domestically, it is also hoarded by the state during times of plenty, like the recent commodity boom. To overcome its lack of capital, Russia has traditionally turned to the West. Prior to the global financial crisis, Russian private banks and corporations gorged on cheap and readily available credit.

The August 2008 Russo-Georgian war, Moscow's increasing tendencies to nationalize portions of the economy and the onset of the global financial crisis in mid-September 2008 combined to bring Russia's credit excesses to an end. With investors terrified of emerging markets, Russian markets were almost completely liquidated. This resulted in not only the flight of foreign capital from Russia, but also market collapse and ruble depreciation. The latter was a double blow -- the Russian economy had to deal with both the inflationary effects of a weaker ruble and the reality that Russian corporations and banks still owed some $400 billion in foreign loans, the servicing of which only became more expensive as the ruble declined. The Kremlin spent at least $216 billion of its reserves to manage the ruble's depreciation.



Having already spent more than $200 billion to blunt the effects of the crisis, the Kremlin felt confident enough to step in and consolidate both the banking and corporate sectors which were so heavily leveraged abroad. It achieved this by issuing short-term, high-interest loans to Russian corporations and banks -- loans that it was not clear could ever be repaid. As the banks and corporations faltered, terms of the loans gave shares to the Russian state, quickly granting it considerable control over them. As of June, the Russian state held 12 percent of all bank liabilities, making the state the banking industry's largest creditor.

The Russian Economy Today

As of July, the latest data point available from the Central Bank of Russia, non-performing loans (NPL) in the Russian banking system stood at 5.4 percent, up from 1 percent in July 2008. The fear that the NPLs will rise is still prevalent -- at one point the assessment was that they could rise to a whopping 20 percent -- and that fear is motivating Russian banks to hoard cash. Despite some improvements since the worst of the global recession in March, bank lending in Russia remains firmly in the negative.

However, there is mounting evidence that investors' confidence in the Russian economy is returning. First, the ruble has rebounded and has appreciated around 19 percent against the U.S. dollar from its low of 36 rubles per dollar in February/March to its current rate of 29.28. Second, the precipitous capital flight that characterized the third and fourth quarters of 2008 has slowed dramatically. Net capital outflow from Russia has recovered from $55 billion last October to just $6 billion in September, and it even turned positive briefly in June. Third, interest in the Russian stock market has returned, particularly as investors abandon low-yielding U.S. sovereign debt and seek riskier assets that offer greater returns. Between higher oil prices (at the current $78 per barrel, oil is at more than double its February lows) and a greater appetite for risk, investors are trickling back.

With the return of some semblance of stability in the Russian economy, the question now is what Russia has learned from the crisis. The state has become much more involved in both the corporate and banking sectors. Since July, state-owned Vnesheconombank has provided approximately $10.93 billion in financing to various firms in need of funding to refinance their foreign loans. However, Russian corporations' current foreign-held loans still constitute an enormous liability -- at $237 billion ($75 billion of which is due in 2010) their levels are practically unchanged since December 2008.

Setting the Stage for a Clan War

Prompted by the global financial crisis and the economic disaster that followed, a force has emerged within Russia's power structures that seeks to use the crisis as an opportunity to reshape Russia. This force is led by the civiliki, a new term for a group of lawyers and technocrats whose main figures are Russian President Dmitri Medvedev, Finance Minister Alexei Kudrin and German Gref, former minister of economics and CEO of Sberbank, Russia's largest state-owned bank. In theory, the civiliki attempt to be apolitical and want to use the crisis to reform the Russian economy.

The civiliki exist under the aegis of the Surkov clan, the powerful Kremlin clan led by Medvedev's Deputy Chief of Staff Vladislav Surkov. Surkov intends to use economic reforms enacted by the civiliki to purge the influence of his archnemesis -- Deputy Prime Minister Igor Sechin, whose political clan is backed by the Federal Security Service (FSB) -- in the Kremlin's corridors of power. To do so, Surkov and the civiliki intend to go after the Sechin clan's business interests directly and blame those interests for the economic crisis.

While all businesses were guilty of gorging on foreign loans, the civiliki are zeroing in on those firms controlled by a specific set of businessmen in Russia that they see as better suited for non-business positions: those from the Sechin clan and the FSB. Their argument is that these companies are guilty of inefficiency in both their spending and management. Kudrin is particularly irked by the fact that the Russian state spent more than $200 billion protecting the ruble due to the mismanagement of companies whose CEOs are former intelligence officers instead of experienced businessmen.

With return of foreign interest in Russia, and with credit again available, the civiliki are concerned that the Russian corporate and banking sectors will once again overindulge in foreign capital. In the third quarter, Russian companies borrowed about $16 billion from abroad. Because locally-sourced credit will continue to be scarce, any Russian entity that cannot directly access the state's coffers will have to rely on foreign borrowing. However, the civiliki want to make sure that the companies borrowing abroad are led by people they believe to be competent individuals.

The civiliki therefore believe that there is opportunity in the effects of the economic crisis. The state stepped in forcefully during the crisis to consolidate the banking sector and to finish reining in various oligarchs, a process that began in 2004. Oligarchs have essentially ceased to exist as an independent source of power inside Russia. Their wealth has decreased precipitously, and those who were offered government bailouts are now little more than employees of the state.




But the civiliki cannot implement their plan on their own. They will need the support of their clan leader, Surkov, to help purge Sechin's forces.

The question in the Kremlin is what to do next. Having sidelined the oligarchs and tightened its grip on the Russian economy, the Kremlin can either move to establish a firm state-directed economic system or begin to compensate for some of the Russian economy's fundamental weaknesses by attracting investment and capital from abroad. To choose one over the other means a war among the Kremlin's power clans.

The Kremlin Wars (Special Series Introduction): The War Begins

October 22, 2009 | 1954 GMT



Strange things are happening inside Russia these days. Pro-Kremlin political parties have boycotted the parliament, our sources say lawsuits are about to be filed against some of the state's favorite companies, and rumors are circulating high within the Kremlin that the Russian economy is destined to be liberalized.

When looked at separately, each of these currents can be rationalized, for Russia has just recently completed elections and the global financial crisis is still hammering its economy. But a deeper look reveals instability inside what is normally a consolidated, stable and politically-locked Russia. Something much bigger and more fundamental is afoot: a war among the most powerful men of the Kremlin is coming.

Though Russian Prime Minister Vladimir Putin undoubtedly rules the country, he does not rule it alone. Over the past decade he has carefully crafted a balanced structure of power. Beneath him on the Kremlin's organizational chart are two very ambitious men: Deputy Prime Minister Igor Sechin and Deputy Chief of Staff Vladislav Surkov. Both of these men control vast swaths of the government bureaucracy, state companies and levers of power throughout the Russian system -- including the powerful Federal Security Service (FSB) and Military Intelligence Directorate (GRU).

It is the classic balance-of-power arrangement. So long as these two clans scheme against each other, Putin's position as the ultimate power is not threatened and the state itself remains strong -- and not in the hands of one power-hungry clan or another.

But having all major parts of Russia's government and economy fall under the two clans creates a certain structural weakness, a problem exacerbated over the past few years by the effects on the Russian economy of chronic mismanagement, falling oil prices and, most recently, the global financial crisis. All have weakened the state. Economic problems have become so acute that Putin, for the first time since his rise to power in Russia, has had to step back and reassess whether his system of balanced power is the best way to run the country.

The first to plant this seed of doubt were the liberal-leaning economists (known as the civiliki) within Surkov's clan, who went to Putin over the summer and told him the Russian economy had to be fixed and that they knew how to achieve that. As it happened, their plan called for excluding Sechin's clan -- especially those in the FSB -- from any involvement in economic matters. The plan presents, of course, a good opportunity for Surkov to grab hold of a critical issue in Russia and twist it to weaken his rival clan.

And it presents Putin with a pivotal dilemma. He likes the idea of fixing the Russian economy and making it work like a real economy, but it would mean throwing off the balance of power in the country -- the equilibrium he has worked all these years to achieve. And should this balance be thrown off, the effects could ripple throughout every part of Russia -- all levels of government, influential security institutions and even the country's powerful state-owned companies.

When these issues came to our attention some months ago, our first thought was that they were merely the machinations of just another high-level Russian source hoping we would promote his agenda. So we sought confirmation with a number of unrelated sources -- and we received it. The final convincing event in our minds was Putin's Sept. 29 declaration that some heavy economic reforms are indeed necessary. We cannot rule out that this could all be a disinformation campaign -- those are as Russian as vodka and purges -- but we cannot ignore our intelligence from such a broad array of sources, especially when it's combined with signs of political and economic instability now cropping up inside Russia.

So, herewith, STRATFOR presents The Kremlin Wars, a five-part series on the civiliki's ambitious plan to repair the Russian economy, the impact of that plan on the equilibrium of Russian power and the dilemma Putin now faces in trying to keep Russia politically stable as well as economically sound.

Freitag, 16. Oktober 2009

EU and the Lisbon Treaty, Part 2: The Coming Institutional Changes

The Lisbon Treaty introduces institutional changes that will increase the European Union’s federal powers and reduce the number of policy issues for which member states will retain a veto. The changes almost guarantee tensions between members favoring a strong union and those wary of losing sovereignty on key issues of national interest.

The main change brought by the Lisbon Treaty — which will take effect immediately upon ratification — is that several policy issues will be subject to qualified majority voting (QMV) rather than the unanimous vote now required. The QMV is a voting mechanism used by the Council, the highest decision-making body in the European Union. The list of issues that can no longer be vetoed by a single country includes immigration, financing foreign policy and security initiatives, and energy (To see the complete list included in the European Commission’s official document on the voting change, click on the link above.)

The treaty includes a passerelle clause that expands an existing procedure by which even more policy issues — including essentially everything that does not have military implications — could be shifted from unanimity voting to QMV. In short, the Lisbon Treaty allows the European Union to amend its constitution with very little fuss once the heads of government reach an agreement. If the leaders of all 27 member states agree to shift taxation matters to QMV, for example, they will be able to do so without an intergovernmental conference or more referendums in individual countries — essentially, without another treaty that could take years to negotiate and ratify.

Although national parliaments would have six months to lodge a complaint against such a voting shift, the fact that most heads of government in Europe are leaders of respective parliaments would make such complaints unlikely.

Although it might seem nearly impossible to get all 27 EU members to give up sovereignty on an issue, they have agreed on this through the Lisbon Treaty. Furthermore, governments rise and fall; if the European Council (which represents all 27 heads of government) wants to make a raft of voting changes, it can wait for a particularly pro-European constellation of governments to emerge.

However, STRATFOR does not expect France and Germany to immediately force legislation upon the union’s smaller member states. The European Union traditionally has favored incremental changes that avoid pushing any member state to its limit on an important issue. Therefore, Paris and Berlin will likely wait to move any new issues from unanimity voting to QMV, and will seek to limit the number of controversial measures that are passed without a veto.

The Lisbon Treaty also amends the QMV procedure. The current Nice Treaty QMV — under which votes are distributed in a way that over-represents small and medium-sized member states — will be used until 2014. Then, there will be a transition period until 2017, during which member states can call upon the Nice Treaty QMV. The delay in adopting the Lisbon procedure is meant to appease the states that are threatened by QMV and are wary of a powerful union dominated by the large member countries.

The key change in the QMV procedure under Lisbon is that a member state’s population will determine its voting share. The approval of legislation under the Lisbon QMV procedure will require the support of 15 out of 27 states that collectively represent 65 percent of the union’s population. More importantly, to block legislation, the Lisbon Treaty requires that four countries representing more than 35 percent of the EU population must oppose it. This gives populous member states that tend to work together on strengthening the European Union — such as Germany, France and Italy — an advantage. The ability to secure a blocking minority will be a vital negotiation strategy, as most EU decisions are made in negotiations before voting takes place. Other countries would have to take the blocking minority into consideration and ask for the proposal to be redrafted to the blocking countries’ liking if they wanted it to pass.

The Lisbon Treaty introduces two positions that should increase the union’s internal coherence and visibility on the world stage: the president of the European Council (unofficially referred to as the president of the European Union), and the high representative of the union for foreign affairs and security policy (unofficially referred to as the foreign minister of the European Union). U.S. Secretary of State Henry Kissinger once asked, “If I want to call Europe, who do I call?” The EU members in favor of a strong union hope that the two positions will answer that question and give the union greater force internationally, but it is not certain that they will overcome resistance from those member states that are skeptical or even suspicious of a strong union.

Of the two new posts, the foreign minister will be the most important. The foreign minister will carry out EU foreign policy on behalf of the European Council, which will continue to decide on foreign and defense policy matters through unanimity. This person will have the 10-year track record of Javier Solana — Europe’s unofficial foreign minister — to build on and will also have a diplomatic corps (called the External Action Service) with which to build a bureaucracy independent of the European Commission. Therefore, while the foreign minister will technically still be part of the Commission as its vice president, he or she will also stand apart from it. This will allow Berlin and Paris to slowly remove foreign affairs from the European Commission’s purview.

The presidential position has thus far received the most attention, but the position is poorly endowed with institutional powers. Member states like Poland and even the European Commission have already come out against the post, arguing that the president will have to stick to the literal reading of the treaty, which only allows him to chair the European Council. However, the president’s two-and-a-half-year mandate will replace the main functions of the current six-month rotating member state presidency, which allows every country in the union its time in the spotlight (though the six-month presidency will remain, as more of a consultative role). This means that smaller countries like the Czech Republic and Denmark will no longer get to set the agenda for the European Council — a change that powerful states like France will welcome.

In part three of this series, STRATFOR will look at how the new decision-making rules of the Lisbon Treaty could affect the balance of power within the European Union.

Sonntag, 5. Juli 2009

America's Indivisible Imperatives

Americans will celebrate the Fourth of July holiday on Saturday. For STRATFOR, this is a time to reflect on just how the world came to look the way it does today.

In the late 18th century, Britain was the most powerful country in the world for two reasons: first, it was an island, and second, the height of human technology at the time was deepwater navigation. Combining advancements in naval operations with the protection of the English Channel, Britain could focus all of its efforts on maritime-based imperial expansion, while its European peers were forced to fight for dominance on land. The result was a far-flung and remarkably lucrative empire with which no one could compete.

Eventually, Britain’s American colonies grew too large in land area, wealth and population to control from afar, and a revolution wrested them from the Crown’s control. Since that development, five core rules – what we call “geopolitical imperatives” — have determined the behavior of the colonies that became the United States.

The first imperative was to secure strategic depth for the new nation. One of the most successful tactics employed by the British during the American Revolutionary War was the coastal raid. Britain’s superior navy proved able not only to blockade the fledgling country’s coast, but also to move men and materiel up and down the coast much faster than the Americans could over land. That combination of economic and military disadvantages almost cost the nascent United States the revolution — and gravely threatened it again in the War of 1812, when the new country lost its capital for a short time. Thus, in its early years, the United States aggressively pushed inland to establish economic centers that were less exposed to naval power. By moving across the Appalachians, the United States opened up vast tracts of territory to absorb all the immigrants that Europe could supply.

The second U.S. imperative was to secure North America. Depth — particularly that acquired in the Louisiana Purchase — gave the United States insulation from the sea, but it also put the country into direct contact with land-based powers. This was partially resolved immediately after the War of 1812, when the United States and Canada forged agreements that would gradually loosen Canada’s ties to mother Britain.

But the much larger event was settled in Texas. During Texas’s battle for independence, the forces of Mexican general Santa Ana crossed north of the Chihuahuan Desert and sacked the Alamo. From there, they marched east to pursue retreating Texican forces in a series of battles that, at the time, the Mexicans seemed fated to win. Had Santa Ana succeeded in subduing the Texas rebellion, he would have been within reach of the very lightly defended New Orleans. (And after the agony of crossing the deserts and mountains of Chihuahua, this would have been a cakewalk.)

Santa Ana’s intent is lost to history, but if he had chosen to seize New Orleans, history would have turned out very differently. The Mississippi, Missouri, Ohio, Red and Tennessee River basins — all the territory of the Louisiana Purchase, in addition to that ceded by Britain to the United States at the end of the Revolutionary War — would have been held hostage by Mexican forces, which would have controlled the only point of sea access. As fate had it, Santa Ana did not make it that far; Texican forces defeated his army at the Battle of San Jacinto in 1836, achieving independence for Texas and pushing Mexican forces back through the desert. The United States quickly annexed Texas in the aftermath (1845), largely to secure New Orleans, and a mere year later prosecuted a war with Mexico to underscore the point. North America — or at least the really useful bits — belonged to the United States.

With North America largely secure from land invasion and coastal raiding, the third step for the United States was to gain control of the ocean approaches. This was accomplished in two phases.

First, the United States took over the Sandwich Islands (aka Hawaii), the only territory in the Pacific that lay within an easy sail of the West Coast, in 1898. That pretty much sealed up the Pacific.

The Atlantic — which contained European assets in the Bahamas, the Caribbean, Canada and South America — was more complicated. The United States seized Puerto Rico and Cuba from Spain in 1898. But the breaking point here did not occur until the early days of World War II, when the United States allowed the United Kingdom to borrow some mothballed destroyers in exchange for almost every naval base the British owned in the Western Hemisphere. What had been the world’s largest navy for three centuries was suddenly a nonpower in half the globe.

Once a nation controls its approaches, the next logical step — the fourth imperative — is to reach farther and control the oceans themselves. In this endeavor, the battles of World War II proved pivotal. The United States seized direct control of places like Micronesia in the Pacific, and the Azores and Iceland in the Atlantic. At the war’s conclusion, the United States’ containment strategy first and foremost included courting island and naval powers. Some, like Australia and Norway, proved to be new friends. The United Kingdom and Japan, onetime rivals, became regional lynchpins. But there was a deep commonality among these powers: They all controlled maritime chokepoints and were situated at or near the world’s major shipping lanes. Leveraged by U.S. naval power, their strategic locations ensured American dominance of the waves. In the years since, alliances with states like Singapore, Denmark and Taiwan have sealed the United States’ maritime dominance.

The only way to challenge a country that controls a continent-sized mass is to control an even bigger one. To prevent that from happening, the United States works to keep Eurasia divided. World Wars I and II both were fought in large part to prevent a single power from rising to dominance. After these wars, the United States developed a much more nuanced approach to its fifth imperative; rather than fighting battles directly, the Americans assisted states that were in a position to — and wanted to — resist local hegemons. The strategy most famous in this regard was containment of the Soviet Union — ringing a hostile power with a necklace of willing allies that feared the Soviets every bit as much as the Americans did. That strategy has been repeated with other powers ever since — backing Taiwan against China, Yugoslavia against the Soviet Union, Pakistan against India, Iraq against Iran, and more recently, Kuwait against Iraq.

These five strategic imperatives are not found anywhere in the Constitution or laws of the United States. But every one of the country’s 44 presidents, regardless of intention, has conformed to them, compelled by the inexorable logic of geography. In yesterday’s wars, under George W. Bush, U.S. forces stormed into Afghanistan and Iraq to preclude the formation of a unified, jihadist-inspired Muslim empire. In preparation for tomorrow’s conflict with a resurgent Russia, Barack Obama is attempting to recruit Poland and Turkey as active checks on Russian power. And the same geopolitical imperatives that drove these actions will shape American efforts into the future — just as they have since 1776.

Samstag, 4. Juli 2009

The Geopolitics of Sweden

Comprising essentially the eastern half of Northern Europe’s Scandinavian Peninsula, Sweden sits across the Baltic Sea from Poland and Germany and the former Soviet Union. The country has literally watched over the continental strife that has swept over the North European Plain since the Napoleonic Wars — the last war in history in which Sweden was officially a combatant (until then it had been an enthusiastic participant in European strife). Though its borders have fluctuated much since the Middle Ages, Sweden remains both anchored in and constrained by its geographic circumstances.


The heart of Sweden is the southern tip of the Scandinavian Peninsula, just northeast of Denmark. This is by far the premier territory on the entire peninsula and encompasses the most temperate climate and fertile land in the entire region. A quick glance at a satellite map vividly illustrates just how much longer growing seasons are in the Swedish core compared to its Scandinavian neighbors.



Today, this southern area is composed principally of a region known as Gotaland, the northern boundary of which extends from just below the capital of Stockholm in the east to just below the Oslofjord region — home to modern Oslo, the Norwegian capital — in the west. Svealand to the north includes the capital region itself and extends northwestward to the Norwegian border, bounded to the north by the Dalalven River. This area — with its indented coastline and many rivers — quickly and naturally gave rise to a maritime culture. Together, Gotaland and Svealand contain the vast majority of Sweden’s population.

The territory stretching northeast of Svealand all the way to Sweden’s northern tip is known as Norrland, a land of decreasing usefulness the farther north it goes. Traversed by rivers running from the mountains to the Gulf of Bothnia, the region is densely forested and then gives way to taiga and tundra at higher altitudes and latitudes. So even as Swedes moved northward, they tended to concentrate closer and closer to the shore and remained reliant on maritime transport. Even today, though infrastructure exists, only a small fraction of the population lives in Norrland, which encompasses more than half the modern country’s territory.
MAP - Baltics - Population Density


The most important of Sweden’s neighbors are Denmark and Russia. The islands of Denmark sit astride the Skagerrak strait and largely bar Sweden from expanding west into the North Sea region, if not due to Danish forces directly then to some other power aligned with Denmark. This simple fact has historically forced Sweden’s outlook to the east and into continual conflict with Russia. In this context, Sweden has the best and worst of all worlds. Best in that, as a country with a deep maritime tradition, it can easily outmaneuver any Russian land force in the Baltic region (the Gulf of Finland ices over almost as regularly as the Gulf of Bothnia, greatly hampering Russian naval efforts). Worst for Sweden in that Russia has a mammoth territory to draw power from while Sweden can truly tap only a small chunk of the Scandinavian Peninsula, much of which is useless in supporting population. In any conflict of maneuverability, Sweden will prevail — easily. But in any conflict of attrition Sweden will lose — badly.

Norway and Finland are far less threatening for Sweden. The mountains of Norway form an excellent a defensive barrier to invasion as they block to Sweden’s ability to project power westward. There is one pass that accesses the Trondheim region, but it is sufficiently rugged to prevent significant power projection (in modern times it has been used as a transportation route for Swedish goods when the Baltic region experiences a harsh winter). And since the only portion of Norway that can support a meaningful population — the capital region of Oslofjord — is hard by the Swedish border, and all of its meaningful ground-transportation infrastructure has to go directly through Sweden to reach the rest of Europe, Norway has never threatened Sweden in modern times. In fact, Norway was twice incorporated into a union with Sweden, most recently in the 19th century.
MAP - Sweden - Transportation Infrastructure


To the east, Finland is an important buffer for Sweden from Russia, although it formed part of the Swedish Empire until its annexation to Russia in the early 19th century. Just where the international boundary is drawn (today at the Torne River) is less important than the relationship between Stockholm and Helsinki. Since its disastrous 1808-1809 Finnish War, Sweden has had plans for the defense of its homeland from a Russian invasion by fighting on the turf of northern Scandinavia. So long as Stockholm can prevent Finland from being used as a staging ground for such an attack (as during the Finnish War, when Russian troops managed to cross via Finland and nearly take Stockholm), Finland can serve as a buffer.

The Baltic Sea’s southeastern coastline — today home to the three tiny states of Estonia, Latvia and Lithuania — is sandwiched between Sweden and Russia and serves as the natural cultural, economic and military battleground for the two powers. The Polish coast is well within Sweden’s naval reach, but lying as it does on the Northern European Plain, it forces Sweden to compete there with not only Russia but also Germany — and, of course, Poland — all of which have far larger populations than Sweden and less complicated supply problems. This largely limits Swedish activity there to commerce.

Luckily for the Swedes, commerce is something that they are quite good at, but they approach trade in a radically different way from most maritime cultures. These differences are rooted in peculiarities of Swedish geography that make Sweden unique both as a maritime and commercial power.

Most maritime cultures are island-based and, as such, are oceangoing (the United Kingdom comes to mind). Sweden, in contrast, is locked into a single sea and has many rivers that do not interconnect. This made Sweden much more at home with riverine naval transport and combat than activity on the open ocean. Also, because Sweden’s climate — especially in its northern reaches — is so hostile, in lean years its sailors had to resort to raiding to survive, contributing to the rise of a Viking culture. Taken together, Swedish force in medieval times proved able to push far inland using Europe’s river networks to their advantage, and the proclivity to raid (versus the British proclivity to establish colonies) shaped Sweden’s imperial and commercial experiences greatly.

Given a naval culture and lack of competition, it is no surprise that the Swedish Vikings quickly became the preeminent power on the Gulf of Bothnia and regularly raided the rest of the Baltic Coast. But as Sweden matured, its tendency to raid gave way to a tendency to foster the development of largely non-Swedish communities so that there would be something to exploit in the future. Over time, raiding turned into trading and eventually rather deep economic links down the rivers and back to Sweden proper. Swedish ships are known to have made it to the Caspian Sea through the Volga River and the Black Sea through the Dnieper — going as far as Constantinople. And evidence of their political handiwork was seen in places as far afield as Muscovy and Kieven Rus (political entities that eventually evolved into modern-day Belarus, Russia and Ukraine).

History

The retreat of ice around 10,000 B.C. that had enveloped most of Northern Europe during the so-called “last glacial period” allowed for the settlement of Scandinavia by various Germanic tribes that eventually evolved into today’s Norwegians, Swedes and Danes. Population increase due to advances in agricultural techniques, combined with a Scandinavian geography that limited growth, eventually led to the Viking Age (approximately 750-1050). Scandinavians left their fjords and sheltered bays to wreak havoc, pillage and loot the European continent. The Danes, closest to the Continent, were the first to pursue political control and settlement, extending their control over the British Isles and northern France (establishing Normandy in the 10th century, although the question of whether Normandy was also established by Norwegian Vikings is still open). Norwegian Vikings, meanwhile, expanded via the Norwegian Sea, which led them to various outlying islands in the Atlantic — the Faroes, Hebrides, Orkneys, Shetlands, Ireland, Iceland and Greenland — and eventually Newfoundland in North America.

Since they were essentially blocked off from the free-for-all their relatives the Danes and Norwegians were engaged in throughout the North and the Norwegian seas, the Scandinavians living on what is today Sweden’s eastern seaboard concentrated on expansion via the Baltic Sea and its various gulfs: the Gulf of Bothnia, the Gulf of Finland and the Gulf of Riga. They were also able to use the land bridge of Karelia, which stretches from the White Sea (a gulf in the Barents Sea, which itself is part of the Arctic Ocean) to the Gulf of Finland in the Baltic Sea. Karelia was an extremely important strategic region for the Vikings, and through its control they were able to access Europe even without complete control of the Baltic Sea. It is also the one region that Sweden has continuously competed for against various Russian political entities.
map: geography of the baltic region


The Swedes established trading outposts on the Neva River in the 8th century, the most famous of which was Ladoga, which afforded them strategic control of the most accessible land route to the rest of Europe, the sliver of land between the Gulf of Finland and Lake Ladoga known as the Karelian land bridge. The Swedes also established various other outposts along the shores of the Baltic Sea and near strategic rivers that flowed through the Continent, such as the Oder, Volga, Vistula and Dnieper, which became strategic waterways for access to the Black Sea and the Mediterranean. This control of Eastern Europe’s rivers allowed the Swedish Vikings to organize and manage a very profitable trade with the Byzantine Empire and even the various Middle Eastern caliphates. In the course of establishing these trade routes, Vikings had an impact on the evolution of the nascent Russian political entities Novgorod and Kievan Rus.

As trade with Eastern Europe and Byzantium flourished throughout the ninth and part of the 10th centuries, political organization in Sweden became more complex, in part because the increased wealth allowed (and demanded) more organization. As nascent Sweden coalesced into a unified political entity from the kingdoms of Svear and Goter in the 12th century, it also began to lose its grip on, or face competition for control of, the Baltic Sea due to the rising prominence of Russian kingdoms.

Denmark’s growing power and command of a strategic, powerful and profitable location on the Jutland peninsula also curtailed Swedish expansion. A dynastic union between Norway, Sweden and Denmark was established in 1397, in part because the Swedes were looking to gain greater protection from various German and Baltic powers eroding their influence in the Baltic Sea. However, Denmark was far too powerful to join with in a supposedly decentralized union of equals. With its strategic location controlling the sea routes between the Baltic and the Atlantic and with a foothold in continental Europe, Denmark very quickly began to dominate its northern brethren. Trouble started less than 40 years after the proclamation of the union, and throughout the 15th century the Swedish and Norwegian nobility attempted to resist Danish domination. The political and military threat to Swedish core regions was finally eliminated when Sweden seceded from the union in 1523.

Following independence from Denmark, Sweden grew in confidence and turned its attention toward the Baltic region once again — its default region of interest. However, this meant conflict with Russia, now in its much more politically coherent incarnation than when the Swedish Vikings first encountered it. Major war with Russia ended in 1617 with great gains for Sweden, including Estonia and Latvia. Russia was denied access to the Baltic for essentially the next 100 years.

With a foothold in continental Europe established early in the 17th century, Sweden turned its attention to Poland and German states bordering the Baltic. The Protestant Reformation gave Sweden a useful excuse for deepening involvement on the Continent. Swedish engagements in Poland eventually led to involvement with various German states, with now-powerful and assertive Sweden supporting Protestant states against Catholic states. Eventually, Sweden pushed for involvement in Europe’s Thirty Years’ War, which, while religious in nature, also was a litmus test for a rising Sweden to determine how far on the Continent it could project its influence.
MAP - Swedish Empire 1525-1660

Sweden came very close during the Thirty Years’ War not just to dominating the Baltic region but also expanding its influence deep into the European heartland. However, as in all continental conflicts in Europe, allegiances were quickly created to prevent any one country from completely dominating the Continent. The Treaty of Westphalia that ended the Thirty Years’ War in 1648 gave Sweden the status of a great power in Europe, but it did not conclude with complete Swedish domination of Germany. Sweden received possessions on both sides of the Jutland Peninsula, thus retaining influence within German states, and gained complete control of the Finnish coast and the Gulf of Finland. Sweden, therefore, retained dominance in its usual region of interest, the Baltic, but its attempt to become a major player on the European continent itself largely failed.

Sweden’s neighbors in the late 17th century became nervous not only because of Sweden’s conquests and dominance of the Baltic region but also its extremely well-trained army, which had some nascent characteristics of a professional fighting force. Impeded in its conquests by its small population, Sweden relied on military innovation and technology to gain advantage against the much more populous continental European powers it faced across the Baltic (military characteristics it has retained to the present day).

The fulcrum for Sweden’s decline was the Great Northern War (1700-1721), which pitted Sweden against essentially all of its neighbors: Poland, Denmark, Norway and Russia. Early on, Sweden successfully defended against the attack using its well-trained military, but it soon became apparent that it could not withstand the combined forces of all four rivals, particularly because a rising Russia during the reign of Peter the Great was ready and willing to fight Sweden in a war of attrition to gain access to the Baltic. Sweden ultimately lost its Baltic possessions, Estonia and Latvia, as well as parts of the crucial Karelia land bridge. Peter the Great, looking to establish a permanent Russian presence on the Baltic that could withstand future Swedish encroachment on the Neva River, founded St. Petersburg while the war against Sweden was still going on. That the Russian Empire moved its capital to St. Petersburg is a testament to just how serious Russia perceived the Swedish threat to be and how much importance it placed on the land bridge between the Baltic Sea and Lake Ladoga, which St. Petersburg was meant to control.

In 1721, Sweden’s defeat in the Great Northern War ultimately relegated its status to that of a secondary power in Europe, and the next 87 years saw much warfare in the region as Sweden tried to regain its lost influence. In the process, Sweden became a pawn in the larger geopolitical game of containing Russia’s rising power. Both France and the United Kingdom encouraged Sweden’s wars against Russia, since they wanted to distract Russian advances on the crumbling Ottoman Empire, which would have threatened the Mediterranean. Sweden’s attempts to regain influence ultimately ended in 1808 in the disastrous Finnish War against the Russian Empire, which cost Sweden its Finnish possessions and essentially ended its influence over the eastern Baltic region. For all intents and purposes, Sweden had been reduced to irrelevance by 1808, when it established an official policy of neutrality that has lasted, essentially unchanged, for the past 200 years.

By retreating to its core, Sweden was fortunate enough to be left alone by other powers. Its policy of neutrality was largely respected because of its geography; invading Sweden was simply not necessary for any participant in the great continental wars that followed the Napoleonic conflicts. Sweden also kept itself out of the colonial scramble that dominated European affairs in the 19th century and thus did not enter into any conflict with its European neighbors even beyond the region.

Nonetheless, Sweden’s tradition of military innovation, nurtured by the conflicts of the 17th and 18th centuries, continued with the advent of industrialization, which Sweden embraced in earnest. Sweden began a serious rearmament program in response to German militarization before World War II. The combination of Swedish military innovation with industrial capacity and its aggressive defense of neutrality (similar to the Swiss approach) has bestowed Sweden with one of the most advanced — and independent — military-industrial complexes in Europe, certainly one that belies Sweden’s small population and puts many more powerful countries to shame.

Geopolitical Imperatives

Sweden’s core is the extreme southern tip of the Scandinavian Peninsula — in essence a peninsula on a peninsula — because that tip is the warmest and most fertile area on any landmass in the region. Sweden’s peninsular nature gives it a strong maritime culture, but the geography of Denmark — blocking access to the North Sea and thus the wider oceans — forces Sweden to focus its activities eastward toward the Baltic region. Thus, here are Sweden’s key imperatives as a nation-state:

* Expand the Swedish core north to include all coastal regions that are not icebound in the winter. In the west, this grants Sweden coastline on the Skagerrak strait, giving it somewhat more access to the North Sea. Stockholm, the current capital, is situated at the southernmost extreme of the Baltic winter iceline.
* Extend Swedish land control around the Gulf of Bothnia until reaching meaningful resistance. The tundra, taiga, lakes and rivers of northern Sweden and Finland provide a wealth of defensive lines that Sweden can hunker behind. Due to the region’s frigid climate, the specific location of the border — at the Torne River in the modern era — is largely academic. At Sweden’s height it was able to establish a defensive perimeter as far south as the shores of Lake Ladoga, just east of modern-day St. Petersburg.
* Use a mix of sea and land influence to project power throughout the Baltic Sea region. Unlike most European powers, Sweden does not benefit greatly from the direct occupation of adjacent territories. The remaining portions of the Scandinavian Peninsula boast little of economic value, while the rest of the Baltic coast lies on or near the Northern European Plain, a region that is extremely difficult to defend against the often more powerful Continental powers. This gives Sweden the option, perhaps even the predilection, to expand via trade links, cultural influence and the establishment of proxy states. Using these strategies along with rivers as routes of influence, Sweden has dominated the Baltic Sea region for centuries and at times its influence has reached as far inland as modern-day France, Ukraine and the Caspian Sea.

Sweden Today

Sweden originally chose neutrality because it had lost. Russia seized not only its forward positions but shrank Sweden down to little more than its core territory. As the decades rolled by, German states that Sweden had once dominated unified into a major Continental power, introducing a player to the south that Sweden could not hope to influence, much less dominate.
MAP - Modern Sweden

So for Sweden, changes imposed by post-World War II alignments were somewhat of a relief. Denmark’s alliance with the United Kingdom and the United States in the context of NATO ensured that the Soviet Union would have to focus its efforts on Copenhagen, not on Stockholm. The division of Germany between NATO and the Warsaw Pact removed from the board the one power that had flirted with the idea of conquering Sweden in World War II. (Germany occupied Norway and was outraged with the Soviets for their invasion of Finland, considering it “their” territory.) Sweden may have been isolated and surrounded by much larger powers, but these powers were focused on each other, not on Stockholm.

Nonetheless, German flirtations with invading Sweden during World War II convinced Stockholm that an independent and advanced military-industrial complex was certainly a useful thing to cultivate. Sweden was even suspected of developing an independent nuclear deterrent in the 1960s. Sweden was not leaving its neutrality up to chance, or to the benevolence of its neighbors.

If the Cold War architecture was an improvement, the post-Cold War architecture is a godsend, and Sweden’s warm relationship with NATO has become even more cordial. What is most notable about Sweden in the modern world is how much it looks like it did in the 17th century. Russia is resurging at the moment but will face, over the long term, a plethora of fundamental structural problems; the Baltic states are looking to Stockholm for leadership (and financial capital); and Finland and Norway are fast allies. The biggest difference, in fact, lies in Denmark, which, while still jealously guarding its sovereignty as an enthusiastic ally of the United States — the power that has taken the firmest stance in containing Russian power — is quite friendly to Sweden. In many ways, Sweden has already reconstituted the Swedish Empire at its height, and it has done so without firing a shot.

Swedish foreign policy began reacting to these shifts immediately upon the end of the Cold War, with Sweden joining the European Union in 1995. Now, a regular topic of discussion in Swedish political circles is NATO membership. Whether Sweden formally abandons its neutrality at this point is irrelevant; for all practical purposes it already has.

Sweden today plays a key leadership role in the Baltic Sea region. Its financial institutions practically own the Baltic states (although the current economic recession has negatively exposed Swedish penetration in the Baltics, this penetration is likely to continue despite potential losses). Sweden also boasts a strong military with an independent military-industrial complex and is respected as a key member of the European Union by the main powers on the Continent. The Baltic Sea region has historically been one of the more prosperous regions of Europe (giving rise to the Hanseatic League, a political entity united first and foremost by commerce). For much of the 20th century, however, the Baltics have been divided between two competing geopolitical blocs. With the lines of the Cold War withdrawn, the region is again gaining prominence as a center of commerce, trade and energy transportation. Sweden is very well poised not only to take advantage of this Baltic revival but also to lead it.

Sweden assumes the presidency of the European Union on July 1, and it has aggressively moved to place the development of the Baltic region at the top of its presidential agenda. It is fitting that Sweden will head the union almost exactly 200 years following the disastrous Finnish War, which relegated Sweden to regional irrelevance. In those 200 years, Stockholm has patiently waited for a chance to once again emerge as a leader of Europe’s north.

Samstag, 28. Februar 2009

The Gaza Withdrawal and Israel's Permanent Dilemma

August 17, 2005 | 0147 GMT

By George Friedman

Israel has begun its withdrawal from Gaza. As with all other territorial withdrawals by Israel, such as that from the Sinai or from Lebanon, the decision is controversial within the Jewish state. It represents the second withdrawal from land occupied in the 1967 war, and the second from land that houses significant numbers of anti-Israeli fighters. Since these fighters will not be placated by the Israeli withdrawal -- given that there is no obvious agreement of land for an enforceable peace -- the decision by the Israelis to withdraw from Gaza would appear odd.

In order to understand what is driving Israeli policy, it is necessary to consider Israeli geopolitical reality in some detail.

Israel's founders, taken together, had four motives for founding the state.

1. To protect the Jews from a hostile world by creating a Jewish homeland.
2. To create a socialist (not communist) Jewish state.
3. To resurrect the Jewish nation in order to re-assert Jewish identity in history.
4. To create a nation based on Jewish religiosity and law rather than Jewish nationality alone.

The idea of safety, socialism, identity and religiosity overlapped to some extent and were mutually exclusive in other ways. But each of these tendencies became a fault line in Israeli life. Did Israel exist simply so that Jews would be safe -- was Israel simply another nation among many? Was Israel to be a socialist nation, as the Labor Party once envisioned? Was it to be a vehicle for resurrecting Jewish identity, as the Revisionists wanted? Was it to be a land governed by the Rabbinate? It could not be all of these things. Thus, these were ultimately contradictory visions tied together by a single certainty: none of these visions were possible without a Jewish state. All arguments in Israel devolve to these principles, but all share a common reality -- the need for the physical protection of Israel.

In order for there to be a Jewish state, it must be governed by Jews. If it is also to be a democratic state, as was envisioned by all but a few of the fourth (religiosity) strand of logic, then it must be a state that is demographically Jewish.

This poses the first geopolitical dilemma for Israel: Whatever the historical, moral or religious arguments, the fact was that at the beginning of the 20th century, the land identified as the Jewish homeland -- Palestine -- was inhabited overwhelmingly by Arabs. A Jewish and democratic state could be achieved only by a demographic transformation. Either more Jews would have to come to Palestine, or Arabs would have to leave, or a combination of the two would have to occur. The Holocaust caused Jews who otherwise would have stayed in Europe to come to Palestine. The subsequent creation of the state of Israel caused Arabs to leave, and Jews living in Arab countries to come to Israel.

However, this demographic shift was incomplete, leaving Israel with two strategic problems. First, a large number of Arabs, albeit a minority, continued to live in Israel. Second, the Arab states surrounding Israel -- which perceived the state as an alien entity thrust into their midst -- viewed themselves as being in a state of war with Israel. Ultimately, Israel's problem was that dealing with the external threat inevitably compounded the internal threat.

Israel's Strategic Disadvantage

Israel was at a tremendous strategic disadvantage. First, it was vastly outnumbered in the simplest sense: There were many more Arabs who regarded themselves as being in a state of war with Israel than there were Jews in Israel. Second, Israel had extremely long borders that were difficult to protect. Third, the Israelis lacked strategic depth. If all of their neighbors -- Egypt, Jordan, Syria and Lebanon -- were joined by the forces of more distant Arab and Islamic states, Israel would find it difficult to resist. And if all of these forces attacked simultaneously in a coordinated strike, Israel would find it impossible to resist.

Even if the Arabs did not carry out a brilliant stroke, cutting Israel in half on a Jerusalem-Tel Aviv line (a distance of perhaps 20 miles), Israel would still lose an extended war with the Arabs. If the Arabs could force a war of attrition on Israel, in which they could impose an attrition rate of perhaps 1 percent per day of forces on the forward edge of the battle area, Israel would not be able to hold for more than a few months at best. In the 20th century, an attrition rate of that level, in a battle space the size of Israel, would be modest. Israel's effective forces rarely numbered more than 250,000 men -- the other 250,000 were older reserves with inferior equipment. Extended attritional warfare was not an option for Israel.

Thus, in order for Israel to survive, three conditions were necessary:

1. The Arabs must never unite into a single, effective force.
2. Israel must choose the time, place and sequence of any war.
3. Israel must never face both a war and an internal uprising of Arabs simultaneously.

Israel's strategy was to use diplomacy to prevent the three main adversaries -- Egypt, Jordan and Syria -- from simultaneously choosing to launch a war. From its founding, Israel always maintained a policy of splitting the front-line states. This was not particularly difficult, given the deep animosities among the Arabs. For example, Israel always maintained a special relationship with Jordan, which had unsatisfactory relations with its own neighbors. Early on, Israel worked to serve as the guarantor of the Jordanian regime's survival. Later, after the Camp David Accords split Egypt off from the Arab coalition, Israel had neutralized two out of three of its potential adversaries. The dynamics of Arab geopolitics and the skill of Israeli diplomacy achieved an outcome that is rarely appreciated. From its founding, Israel managed to prevent simultaneous warfare with its neighbors except at a time and place of its own choosing. It had to maintain a military force capable of taking the initiative in order to have a diplomatic strategy.

But throughout most of its history, Israel had a fundamental challenge in achieving this pre-eminence.

Israel's Geopolitical Problem

The state's military pre-eminence had to be measured against the possibility of diplomatic failure. Israel had to assume that all front-line states would become hostile to it, and that it would have to launch a pre-emptive strike against them all. If this were the case, Israel had this dilemma: Its national industrial base was insufficient to provide it with the technological wherewithal to maintain its military superiority. It was not simply a question of money --all the money in the world could not change the demographics -- but also that Israel lacked the manpower to produce all of the weapons it needed to have and also to field an army. Therefore, Israel could survive only if it had a patron that possessed such an industrial base. Israel had to make itself useful to another country.

Israel's first patron was the Soviet Union, through its European satellites. Its second patron was France, which saw Israel as an ally during a time when Paris was trying to hold onto its interests in an increasingly hostile Arab world. Its third patron -- but not until 1967 -- was the United States, which saw Israel as a counterweight to pro-Soviet Egypt and Syria, as well as a useful base of operations in the eastern Mediterranean.

In 1967, Israel -- fearing a coordinated strike by the Arabs and also seeking to rationalize its defensive lines and create strategic depth -- launched an air and land attack against its neighbors. Rather than risk a coordinated attack, Israel launched a sequential attack -- first against Egypt, then Jordan, then Syria.

The success of the 1967 war gave rise to Israel's current geopolitical crisis.

Following the war, Israel had to balance three interests:

1. It now occupied the West Bank and Gaza Strip, which contained large, hostile populations of Arabs. A full, peripheral war combined with an uprising in these regions would cut Israeli lines of supply and communication and risk Israel's defeat.
2. Israel was now dependent on the United States for its industrial base. But American interests and Israeli interests were not identical. The United States had interests in the Arab world, and had no interest in Israel crushing Palestinian opposition or expelling Palestinians from Israel. Retaining the industrial base and ruthlessly dealing with the Palestinians became incompatible needs.
3. Israel had to continue manipulating the balance of power among Arab states in order to prevent a full peripheral war. That, in turn, meant that it was further constrained in dealing with the Palestinian question by force.

Israeli geopolitics created the worst condition of all: Given the second and third considerations, Israel could not crush the Palestinians; but given its need for strategic depth and coherent borders, it could not abandon the occupied territories. It therefore had to continually constrain the Palestinians without any possibility of final victory. It had to be ruthless, which would enflame the Palestinians, but it could never be ruthless enough to effectively suppress them.

The Impermanence of Diplomacy
Israel has managed to maintain the diplomatic game it began in 1948: The Arabs remain deeply split. It has managed to retain its relationship with the United States, even with the end of the Cold War. Given the decline of the conventional threat, Israel's dependency on the United States has actually dwindled. For the moment, the situation is contained.

However -- and this is the key problem for Israel -- the diplomatic solution is inherently impermanent. It requires constant manipulation, and the possibility of failure is built in. For example, an Islamist rising in Egypt could rapidly generate shifts that Israel could not contain. Moreover, political changes in the United States could end American patronage, without the certainty of another patron emerging. These things are not likely to occur, but they are not inconceivable. Given enough time, anything is possible.

Israel's advantage is diplomatic and cultural. Its ability to split the Arabs, a diplomatic force, is coupled with its technological superiority, a cultural force. But both of these can change. The Arabs might unite, and they might accelerate their technological and military sophistication. Israel's superiority can change, but its inferiority is fixed: Geography and demography put it in an unchangeably vulnerable position relative to the Arabs.

The potential threats to Israel are:

1. A united and effective anti-Israeli coalition among the Arabs.
2. The loss of its technological superiority and, therefore, the loss of military initiative.
3. The need to fight a full peripheral war while dealing with an intifada within its borders.
4. The loss of the United States as patron and the failure to find an alternative.
5. A sudden, unexpected nuclear strike on its populated heartland.

Therefore, it follows that Israel has three options.

The first is to hope for the best. This has been Israel's position since 1967. The second is to move from conventional deterrence to nuclear deterrence. Israel already possesses this capability, but the value of nuclear weapons is in their deterrent capability, not in their employment. You can't deal with an intifada or with close-in conventional war with nuclear weapons -- not given the short distances involved in Israel. The third option is to reduce the possibility of disaster as far as possible by increasing the tensions in the Arab world, reducing the incentive for cultural change among the Arabs, eliminating the threat of intifada in time of war, and reducing the probability that the United States will find it in its interests to break with Israel

Hence, the withdrawal from Gaza. As a base for terrorism, Gaza poses a security threat to Israel. But the true threat from Gaza, and even more the West Bank, lies in the fact that they create a dynamic that decreases Israel's diplomatic effectiveness, risks creating Arab unity, increases the impetus for military modernization and places stress on Israel's relationship with the United States. The terrorist threat is painful. The alternative risks long-term catastrophe.

Some of the original reasons for Israel's founding, such as the desire for a socialist state, are now irrelevant to Israeli politics. And revisionism, like socialism, is a movement of the past. Modern Israel is divided into three camps:

1. Those who believe that the survival of Israel depends on disengaging from a process that enrages without crushing the Palestinians, even if it opens the door to terrorism.
2. Those who regard the threat of terrorism as real and immediate, and regard the longer-term strategic threats as theoretical and abstract.
3. Those who have a religious commitment to holding all territories.

The second and third factions are in alliance but, at the moment, it is the first faction that appears to be the majority. It is not surprising that Prime Minister Ariel Sharon is leading this faction. As a military man, Sharon has a clear understanding of Israel's vulnerabilities. It is clearly his judgment that the long-term threat to Israel comes from the collapse of its strategic position, rather than from terrorism. He has clearly decided to accept the reality of terrorist attacks, within limits, in order to pursue a broader strategic initiative.

Israel has managed to balance the occupation of a hostile population with splitting Arab nation states since 1967. Sharon's judgment is that, given the current dynamics of the Muslim world, pursuing the same strategy for another generation would be both too costly and too risky. The position of his critics is that the immediate risks of disengagement increase the immediate danger to Israel without solving the long-term problem. If Sharon is right, then there is room for maneuver. But if his critics, including Benjamin Netanyahu, are right, Israel is locked down to an insoluble problem.

That is the real debate.