Peace Dividend

Why China stands to gain the most from the Middle East talks.

Remember when the Israeli-Palestinian conflict made front pages every day and the United States fought wars to secure oil and gas in the Middle East? Back then, the region's political problems were of primary economic importance to Americans. But now, as the prospect of energy independence dawns, to whom does the Middle East really matter?

On the surface, it sure seems like American interests are at stake. Thirteen years almost to the day after the Camp David summit failed, negotiations have started anew in Washington. A lot has changed since 2000, however.

Monthly imports of crude oil and other petroleum products from the Persian Gulf peaked at 96.7 million barrels in April 2001. This year, they've been hovering around 50 million to 60 million barrels. Natural gas imports from the Middle East are also much smaller today than they were in 2000, but they've always been dwarfed by pipeline imports from Canada. Even American imports of liquefied natural gas -- a major export for Qatar and Yemen -- come primarily from Trinidad and Tobago. And overall, imports of natural gas have been falling since 2007.

Petroleum imports from the Middle East aren't as important as they used to be for the European Union, either. In 2001, about 25 percent of the EU's imports came from the Middle East. Last year, the share was just 15 percent; Russia and the rest of the former Soviet Union supply far more of Europe's oil.

So where is all the Middle East's oil going? Countries in East Asia depend on it. China, for example, got about half its crude from the Middle East in 2011. But that figure paled next to that of Japan, which imports 87 percent of its oil from the Middle East.

Of course, oil and gas aren't the only economic reasons to worry about the Middle East. Egypt's Suez Canal is still a critical passageway for commerce, and its throughput more than doubled between 2001 and 2012. Not much of that traffic was traveling to or from the United States, though. The biggest users were shippers in Southeast Asia, the Red Sea region, and Northern Europe.

As a whole, the European Union received about 4.4 percent of its merchandise imports from Gulf countries in 2012. Adding Egypt, Israel, Jordan, Lebanon, Syria, and Turkey brought the total to 8.3 percent. Both of these shares have been increasing in recent years. Meanwhile, China's total trade with the Middle East has been growing steadily, too; imports from the region tripled between 2007 and 2011.

Trade between the United States and the Middle East is much smaller, though it has increased since the collapse at Camp David. Thanks in part to new trade agreements, the share of American imports of goods and services coming from the region has risen by about two-thirds, from 3 percent in 2000 to 4.9 percent in 2012. The twist is that the new trade agreements -- and trade with the Middle East in general -- have often been pursued for political reasons.

Bahrain, Jordan, and Oman were never going to be the most crucial trading partners for the United States. Nor are they necessarily the most economically efficient sources of imports; other countries might have offered Americans lower-priced goods under the same favorable trading rules. But strengthening economic ties in the Middle East has long been seen as a useful underpinning for strategic goals: protecting Israel, isolating Iran, and maintaining a local military presence. As a result, the importance of the American economic relationship with the Middle East has been artificially maintained.

Yet America's economic interest in the Middle East is still far smaller than Europe's or Asia's. This does not stop the United States from doing most of the political legwork in the region, at least publicly. Once again, the world can bear witness to the ritual of the American president and secretary of state organizing an Israeli-Palestinian peace conference as if it were another station of the cross on the way to Golgotha. At the United Nations, American officials wail weekly about the continuing onslaught of death in Syria. Americans lead the effort to stop Iran's nuclear program, and Americans are trying to rein in the excesses of Egypt's military.

So where are the Europeans, Chinese, and Japanese? They may be active behind the scenes, but in public they look like classic free riders. Perhaps they see little to gain by involving themselves in conflicts whose economic consequences have been largely contained. They may also, as a general rule, have less of an interventionist attitude than the United States. Still, in economic terms their people arguably have more at stake in the Middle East than Americans do, and the gap between those interests is likely to increase.

If Washington's latest effort to bring the Israelis and Palestinians together fails, it may be a long time before an American president takes the initiative in the Middle East again. War and frustration have taken their toll, and the economic imperative is far from clear. To fill the vacuum, China, Japan, and the European Union could form a new coalition of partners for peace. It may seem like a stretch to imagine these three heavyweights working together on Egypt, Syria, or Jerusalem. But can they afford not to?

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Daniel Altman

Winter Is Coming ... to the World Cup

Can switching up seasons save the 2022 tournament in Qatar?

What do you do to make the crazy idea of a World Cup in Qatar a little less crazy? If you're Joseph "Sepp" Blatter, president of global soccer's governing body, you switch the tournament from the summer to the winter. Apparently, he didn't realize that making a winter World Cup a success may be an even bigger challenge.

The decision to award Qatar the 2022 World Cup was perhaps the most bizarre in FIFA's history. Until then, every host country had been decent at soccer and had boasted a population bigger than the tournament's total attendance. Today, Qatar has about the same population, about 1.8 million, that Uruguay did when it hosted the first World Cup in 1930. But attendance then was below 600,000; at the last World Cup, in South Africa in 2010, 3.2 million seats were filled.

Either a lot of people are going to have to go to Qatar to match that figure, or the Qataris are each going to have to attend a lot of matches. Unlike most people, they can probably afford to, with income per capita soon to hit $100,000. There isn't exactly a lot of competition in the market for flights to Doha, either; only a handful of airlines fly there from outside the region.

Climate has been another obvious issue. The Qataris promised to build air-conditioned stadiums, but they may have neglected the fact that much of what's enjoyable about a World Cup happens outside, in the streets and plazas of the host cities, where people chant, kick balls around, and watch matches on big screens until late at night.

This omission is not surprising. In most of the recently constructed Gulf cities, there's very little street life to speak of. The fun happens inside private compounds, clubs, restaurants, and hotels. The locals whizz around in expensive cars, and the only people on the streets -- especially in the heat of the day -- tend to be male migrant workers. Often, they don't even have the benefit of sidewalks.

Putting the fun back into the World Cup is going to be a challenge for Qatar, as it tries to turn itself into a $200 billion soccer Disneyland. Of course, the legions of wealthy businessmen -- they do tend to be men -- whose companies buy up thousands of seats won't be out on the streets. But soccer isn't just for them.

The first step, moving the tournament to the winter, now has the influential endorsement of Blatter, who has been FIFA's president for the past 15 years. His decision has provoked outrage among the real powers in soccer: the top professional teams. For starters, these teams are rarely pleased when their millionaire players go off to play for their respective countries; it's just another opportunity for them to get injured. But placing the tournament in the middle of their seasons, when the players are supposed to be at peak fitness and involved in as many as five lucrative competitions, is equivalent to FIFA stealing part of the return on some very big investments.

By the same token, though, the switch to the winter could lead to better soccer games at the World Cup. When teams full of top players fail to meet expectations in the tournament, as France did when it exited after the first round in 2002, observers often blame the rigors of the August-to-May schedule used by most of Europe's big leagues. Players usually take a couple of months off in the summer to recuperate. When they can't, the strain sometimes shows.

But the real problem with switching the tournament to the winter has to do with the success of the tournament for FIFA and soccer itself. Sports fans usually enjoy more than one sport. In the winter, several sports besides soccer are in full swing: American football, basketball, ice hockey, and, in 2022, the Winter Olympics. By contrast, summer World Cups coincide with the monotonous middle of the baseball season, some car races, a few international cricket matches, and little else of global importance.

As a result, a winter World Cup will face some stern competition for the casual viewer's attention. Will Americans turn off the NFL playoffs to watch Iran play Tunisia? Will the Chinese skip the NBA to tune into Belgium versus Ecuador? At the margins, people who might have switched on a match or two in the summer -- and perhaps become long-term fans of the game -- may make another choice.

The winter is also a tougher time for many fans to travel. Except in the lightly populated Southern Hemisphere, most countries have school breaks in the summer. In Europe, which has the biggest base of soccer fans with enough money to go to Qatar, several big countries have fairly standard vacation periods in the summer, too. Faced with the prospect of going to a culturally conservative country without a lot of well-known attractions beyond the World Cup itself, traveling fans may simply opt to stay home.

It seems very likely that the inflow of tourists to Qatar will be much smaller than the 300,000 who came to South Africa during the 2010 World Cup. The Qataris may well protect FIFA's ticket sales by putting rear ends in seats, even if they're the same rear ends over and over. Where FIFA stands to lose is in the broadcast revenues. If fewer people are expected to watch, advertising will be less valuable, and networks won't pay as much to show the games.

Yet FIFA executives are unlikely to fret much about this. They'll still be wined and dined to the heights of extravagance in Qatar, and they may already have received some rich payoffs for picking the host country in the first place. In this game, only the sport of soccer will lose.

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