The Re-Pivot

Forget Asia. It's time for Obama to put his focus back on the Middle East.

Thank goodness President Barack Obama overcame his pivot penchant to Asia and has sent Secretary of State Hillary Clinton back to the Middle East. Her arrival can come none too soon.

Given the high potential for the crisis to escalate and for the Israeli Defense Forces (IDF) to launch a ground war into Gaza, the adverse fallout for U.S. strategic interests in the Middle East could be quite dramatic. As Palestinian civilian casualties mount, the anger that is already roiling the streets in Egypt and Jordan could grow into more shrill demands to abrogate the peace treaties with Israel, which are the foundation stones of U.S. strategy and influence in the region.

In the meantime, Hamas' claim that violence is the only way to liberate Palestine, or at least put it back on the world's agenda, gains credibility, casting a shadow over the forlorn efforts of the Palestinian Authority in the West Bank to negotiate peace with Israel. And under the cover of this distraction -- which it helped create -- Tehran is able to complete the deployment of 3,000 centrifuges in its underground Fordo enrichment facility without any international outcry.

What's urgently required is not just the establishment of a ceasefire before continued rocket fire prompts Israel's leadership to send the IDF into Gaza. Also needed now is a longer-term strategy to stabilize relations between Israel and Gaza as a basis for healing the longstanding rift between Palestinians, which is the only way Israel could even begin to contemplate negotiating a final resolution of the Israeli-Palestinian conflict.

But none of these can happen if the White House continues to focus on Asia. Obama's critical partner in this strategy is an unlikely one: Mohamed Morsy, the Muslim Brotherhood president of Egypt. Morsy seems prepared to play the role but he is engaged in a high-wire act, balancing efforts to negotiate a ceasefire with his need to play to the Egyptian street with harangues about the Israeli "aggressor." If the IDF moves into Gaza, it will be increasingly difficult -- if not impossible -- for him to maintain that balancing act. But if he can be turned into a partner in reestablishing calm and laying the basis for a new effort at peacemaking, all sides could greatly benefit.

The Egyptian Muslim Brotherhood is the progenitor of Hamas. Nevertheless, since the days of the second intifada, Hamas' military wing has been dependent on Iran for arms and funding. Many of the rockets now being fired at Israel, especially the longer-range Fajr-5s that are reaching the outskirts of Tel Aviv and Jerusalem, have been supplied by Iran. Ahmad Jabari, the Hamas militant leader that Israel assassinated last week, was a principal architect of this military alliance with Iran. Breaking that alliance is a strategic and ideological imperative for the Egyptian president. Egypt, as the natural leader of the Arab world, is an inevitable rival of Persian Iran, which seeks to dominate the region. And as Sunni Islamists, the Muslim Brotherhood is an unavoidable religious rival of the revolutionary Shiite clerics in Tehran. Moreover, Iran's smuggling of weapons through the Sinai to Gaza is creating a national security challenge in Cairo.

This should be a strategic imperative for President Obama, as well. Working with a willing Morsy to broker a ceasefire between Hamas and Israel can prevent an escalation that could threaten the peace treaty, while taking Hamas out of the Iranian "rejectionist camp" and placing it in the Egyptian-led "peace camp." If this were just another case of Sunni-Shiite rivalry it would be understandable for President Obama to say, "been there, done that, didn't work out well." But the critical difference between this case and the sectarian rivalry in Syria, Iraq, or Bahrain (that he prefers to remain aloof from) lies in the need to protect the Israel-Egypt peace treaty and the opportunity to develop a positive dynamic between post-revolutionary Cairo, Washington, and Jerusalem on the hot-button Palestinian issue that he promised the world he would resolve.

But Obama may have reason to go for a quick ceasefire and avoid the larger objective. The U.S. president might be wary of attempting this larger objective given his less than productive experience with Benjamin Netanyahu. The Israeli prime minister's intervention in the U.S. elections (on the side of Obama's rival) has only deepened the gulf between them. Yet Obama now has acquired considerable leverage over his bête noir. Netanyahu needs his help to extract Israel from the dilemma he has created for himself. It cannot be his preference to invade Gaza: it will vastly increase the price Israel pays in international opprobrium, threaten the Egypt-Israel peace treaty, and leave unanswered the real question of whom the IDF would hand over power to when and if they withdraw. That means Netanyahu should be willing to respond to Obama's efforts -- if the administration gives him a better choice than the one he now faces.

Obama also will likely have a trump card in these particular circumstances that he lacked during his first term: the support of an Israeli public grateful to him for standing up for Israel's right to defend itself in this conflict, and for funding the Iron Dome anti-rocket defense system that is doing so much to protect them. In addition, Netanyahu is facing an election in eight weeks. While he clearly leads in all polling, he knows that the electorate will punish him if he mishandles this conflict -- or his relationship with a newly popular, newly elected American president who is trying to extract Israel from a sticky predicament.

But just how should President Obama engage? The first step was dispatching his secretary of state to Israel and Egypt. The large number of would-be negotiators that have already turned up there - Turkey's Recep Tayyip Erdogan, the U.N.'s Ban Ki-moon, Qatar's Hamad bin Jassem, and now the Quartet's Tony Blair -- can only complicate the process. They cannot substitute for a partnership between the United States and Egypt -- one using its influence with Israel, the other with Hamas -- to put together a ceasefire package as the foundation for a wider resolution of the conflict.

Hillary Clinton's first objective should be a comprehensive ceasefire which Hamas commits to impose on all the terrorist groups now operating in Gaza. This should be complemented by a series of reciprocal commitments. Israel will need to implement the ceasefire on its side, open the passages that would allow the flow of goods into and out of Gaza, and allow Gazans access to the sea; Egypt would have to agree to open the Rafah passage between Gaza and Egypt. In return, Hamas would have to commit to prevent any act of violence against Israel emanating from Gaza -- including attacks from Sinai that originate in Gaza. Hamas also has to commit to prevent the smuggling of offensive weapons -- rockets, in particular -- into Gaza. Monitoring mechanisms would need to be established to ensure compliance, including passage monitors, stepped up Egyptian patrols of its border with Gaza, and an international maritime inspection force. To this end, the Palestinian Authority would need to be given responsibility for policing the passages on the Palestinian side, as it is the only recognized Palestinian government and the only one that Israel will deal with directly. In the event of non-compliance by Hamas, the passages would simply be shut down until they came back into compliance.

Clinton can set all this up for him, but Obama's indispensable role will be to sharpen the choices for each of the parties and provide the necessary incentives for them to make the right ones. Only an American president committed to resolving the conflict rather than just tamping it down can achieve that. If Hamas is willing finally to choose between feeding the people of Gaza and fighting Israel, this arrangement could hold, providing the foundations for a Hamas-Fatah reconciliation that would present Israel with a unified Palestinian partner for peace negotiations. If Egypt's Muslim Brotherhood president is willing to make his own choice between feeding the Egyptian people and the Brotherhood's anti-American, anti-Israeli ideology, he could help persuade Hamas to take the right course and regain Egypt's role as a broker of Israeli-Palestinian peace and a power player in the region. And if Israel's prime minister is willing to choose between lifting an increasingly counterproductive siege of Gaza and returning to the unsatisfactory status quo of intermittent rocket attacks on his citizens, a virtuous dynamic can be created to replace the destructive cycle that threatens to dramatically worsen the region's tumult, and Israel's well-being.

But there is only one person in the world that can make this happen. And doing so will require that President Obama pivots back to the Middle East once more, before he heads off to Asia again.


Democracy Lab

Southeast Asia's Economic Poster Child Is Stalling

How the Communist Party is fiddling while Vietnam burns.

"Long live the glorious Communist Party of Vietnam," proclaims one of the many red-and-yellow official banners that loom over central Hanoi.

Like citizens of other one-party states, most Vietnamese have developed a handy ability to block out propaganda as they buzz through the streets on their ubiquitous scooters in search of subsistence, stability, or greater riches. "Is the Party really attempting to send a message to the people, or merely trying to reassure itself?" quips one Vietnamese academic, unwilling, like most in this police state, to speak openly about the future of the country's self-appointed rulers.

Vietnam's leaders have good reason to be nervous these days. After an extended period of rapid economic growth (above 7 percent per year) that ended in 2008, the economy has been floundering, beset by inflationary bubbles, large outflows of capital, the collapse of two major state-owned companies, and a crippling build-up of bad debt in the banking sector.

In the headlong rush to invest in Vietnam as it prepared to join the World Trade Organization in 2007, foreigners overlooked structural weaknesses such as widespread corruption, the clunky but politically powerful state-owned sector, and a dearth of investment in infrastructure, health, and education. With most economists forecasting that Vietnam will struggle to grow much more than five percent in the near future -- hardly fast enough to absorb the young people entering the labor force -- no one is ignoring these difficulties now. Indeed, the timing of the slowdown could hardly be worse: Other Southeast Asian emerging-market economies, including Indonesia and the Philippines, appear to have sharpened their acts, while Burma has peeked from the shadows in search of connection to the global economy after decades of isolation and stagnation.

Everyone, from government advisers to foreign investors, knows what it would take to get the economy back on the fast track. Hanoi must stop providing, monopoly licenses, cheap credit, and other privileges to state-owned companies and their private-sector cronies. The banking sector must be recapitalized and given sufficient incentives to channel capital to enterprises with the best prospects. And the government must get serious about preventing corruption, which has a synergistic relationship with all the other ills. The catch is that this would require more than technocratic tuning of policies, and an atavistic, secretive Communist Party is hardly a promising vehicle for such reform.

Vietnam's chattering classes (and a growing number of highly critical, if highly anonymous, bloggers), have laid much of the blame for the country's woes at the door of Prime Minister Nguyen Tan Dung. Critics inside the Party, foreign diplomats, and academics all argue that Dung amassed unprecedented power in his own office, overturning a consensus-based approach to governing in the Politburo, the Party's 14-member top leadership body. More importantly, they contend that he used his excessive influence to support cronies and to drive the development of the powerful state-owned corporations and banks that have frittered away vast sums and served as a drag on growth.

When the Party's central committee recently met behind closed doors (as always) to thrash out a way forward, there was much speculation (or wishful thinking) that Dung would be deposed. But in the end, the Party opted for a classic "muddle through" solution. It criticized the Politburo and, in particular, "one comrade in the Politburo" -- widely rumored to be Dung, for mismanaging the economy. But it opted not to discipline them, lest "hostile forces" use the occasion to "distort and sabotage the country."

While senior Party members implicitly acknowledged the threat to its survival from poor economic performance, rampant corruption, and a surge in land and labor disputes, they clearly felt that the threat posed by accountability was greater. It is little wonder, then, that as the economy has struggled and social tensions have increased, Vietnam's powerful Ministry of Public Security has stepped up its crackdown on dissent. The latest among dozens to be arrested or jailed this year on catch-all charges of "propaganda against the state" are two songwriters and a bookish student, pictured on blogs hugging a teddy bear.

In the run-up to joining the World Trade Organization in 2007, Vietnam was on its best behavior when it came to human rights, persuading U.S. diplomats and others that it was committed to upholding freedom of speech and religion more seriously. But according to those same U.S. diplomats, the bloom is off the rose; they are now reluctantly chiding a Vietnam they have been keen to court as part of America's "pivot" back to Asia to counter-balance a rising China.

The crackdown hasn't been limited to political boat-rockers. Vietnamese authorities have been busy investigating the heads of state companies and banks who are widely blamed for Vietnam's economic woes. Among those accused or convicted: executives from Vinashin and Vinalines, the two giant state-owned shipping companies that collapsed after amassing billions of dollars in debt; Nguyen Duc Kien, the founder of Asia Commercial Bank (Vietnam's largest private bank) and one of the country's most prominent tycoons; and Tran Xuan Gia, a former investment minister and chairman of the aforementioned ACB.

The wide range and high level of the people targeted has sent shockwaves through the business community in Vietnam, domestic and foreign. Kickbacks, bribes, and fraudulent accounting are systemic in Vietnam, and not just among domestically-owned companies. Indeed, as many of those arrested on suspicion of economic crimes have disappeared from view, and rumors swirl about who could be next, some senior executives have felt compelled to appear in public just to prove that they haven't been caught in the net.

Keen to revitalize Vietnam's image as a successful emerging market, some foreign investors and international donors have asserted that these arrests are a reassuring sign that the Party is trying to get its house in order. But that's a stretch: As the British political scientist Martin Gainsborough (who's written extensively on the country), has argued, crackdowns on corruption in Vietnam are typically related to infighting within a system that is driven more by patronage than policy.

China has been facing similar imperatives to fight corruption and restructure its economy. But, setting aside the intrigues surrounding Bo Xilai and the recent outcry over the reported wealth of other top leaders, China's Communists have proved far more adept at re-inventing themselves for the modern era than their Vietnamese comrades.

Richard McGregor, the former Beijing bureau chief for the Financial Times, has concluded that the Chinese Communist Party has morphed into a large, powerful Ivy League-style networking club for those who want to get ahead. In Vietnam, by contrast, the party and the government are hemorrhaging their best assets. Young people have been quitting by the thousands, frustrated by the low salaries and the old-fashioned hierarchy. Real ideology, as opposed to vapid slogans, is notably absent in Vietnam today.

Many observers like to argue that Vietnamese officials have a unique ability to muddle through without facing up to systemic crises -- a talent that has been found lacking in almost every other transition country, from Indonesia to Argentina. But this reliance on improvisation seems to have become part of the problem. "The Party displays an extraordinary ability to adapt, but has tended to react to challenges [only] when they came," wrote Tuong Vu, a political scientist at the University of Oregon. "This reactive mentality has not helped the party to stem corruption and decay, which now reach the top level."

In contrast to nearby Burma, which has been freeing political prisoners and starting to implement overdue economic and political reforms, Vietnam's leaders appear to be trying to turn back the clock in hopes of shoring up their power. Over the last year, they have introduced new restrictions on imports and foreign workers, and are finalizing regulations to increase state control of the Internet and to reassert Soviet-style price controls.

The vast scale of the government's repressive apparatus probably assures the Party its grip on power for many years to come. But without a radical shake-up, the Party's political legitimacy will continue to ebb and the country's great economic potential -- only glimpsed to date -- will remain under wraps. Even reform-minded, Western-influenced officials feel caught in a bind. "We need a major crisis if the country is to move forward," says one mid-ranking economic official. "But we're scared about what will happen in such a situation."

Photo by HOANG DINH NAM/AFP/Getty Images