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2013: The year the West lost leadership

Source : BUSINESS_STANDARD
Last Updated: Wed, Dec 25, 2013 20:16 hrs
Barack Obama <br>

All in all, 2013 has been a bad year for the Western world and it all boils down to one reason: a dismal failure of leadership.

Let's start with the United States, where Barack Obama is already seen by many as a lame-duck president just one year after his re-election. Despite a last-minute agreement on the budget to stave off the threat of another government shutdown, 2013 will remain the most unproductive year on record for the US Congress.

True, non-Americans might not care about the setbacks suffered by Mr Obama - the disastrous launch of Obamacare, the inability to get Congress to pass legislation limiting gun sales, the deadlock on the immigration bill, the president's inability to have Larry Summers appointed to the Federal Reserve. But the only real good news of 2013 for the US is that the economic recovery is, at long last, taking hold, and that the country is now well on its way to energy self-sufficiency.



The tarnished standing of Mr Obama at home has paralleled and compounded, in 2013, the decline of the US' ability to shape events abroad. The White House erred in its support for Mohamed Morsi in Egypt and sunk into quasi-irrelevance as Abdul-Fattah al-Sisi ignored the US president's call.

Then there was the flip-flop over the "red line" that Bashar al-Assad apparently crossed by using chemical weapons, which was supposed to trigger a military response from the US. A response that never came, as the president felt an urgent need to consult Congress - painting himself into a corner, as it was obvious that Congress would not have endorsed military action against Syria. It was left to Vladimir Putin - of all people - to step in and engineer some semblance of face-saving for the head of the world's superpower.

While Mr al-Assad agreed officially to the destruction of his stock of chemical weapons, he got something more important in exchange: the tacit recognition by Washington that the official US goal trumpeted until now - "Bashar al-Assad must go" - has become obsolete. In fact, according to many reports, the talk in Washington these days is that as "the devil that we know", Mr al-Assad, might be better than the alternative - a takeover of Syria by Jihadist forces. Two years of inept Western policies on Syria are ending in confusion and impotence.

Yes, you might say, but there was also in 2013 the interim agreement with Iran, freezing its nuclear efforts and alleviating the risk of a military confrontation. This is indeed a positive development. But, as has been observed, this agreement provides a pause in the Iranian nuclear programme, which - while salutary - does not constitute a rolling back. The most worrisome element is that the interim deal can be seen as an acceptance - the Iranians say a legitimisation - of Tehran's nuclear ambition.

The interim deal goes beyond what existing United Nations resolutions and previous US and European positions were ready to accept with respect to Iran's nuclear development. As of now, nothing indicates that the regime of Ali Khamenei is ready to renounce its ambitions, and it increasingly appears that the best outcome that Washington and its European allies, along with Moscow and Beijing, can expect is a nuclear-capable Iran - that is, an Iran that has the capability to go nuclear very rapidly but will freeze its efforts before the last step (a little bit like Japan, but of course with a very different kind of regime).

This explains why the Saudis and the Israelis have crossed the diplomatic line and gone very public in their opposition to Washington's policy on Iran.

As for Europe, the picture for 2013 is not much brighter. The official line is now that the euro zone is coming out of its six-year recession. But the reality remains quite the same behind this exercise in make-believe; for the euro zone, the growth forecast for 2014 has now been trimmed down from an already disastrous 1.2 per cent to 1.1 per cent, with unemployment remaining stuck at 12.2 per cent next year.

This statistical average masks the tragedy of youth unemployment in Spain, Greece or Ireland, where it is hovering between 40 and 50 per cent. It is 25 per cent in France and closer to 30 per cent in Italy. The dire reality is that, as the gross domestic product of most euro zone countries has again declined in 2013 or at best stagnated, the ratio of debt to GDP has remained the same or even increased.

The fashionable notion last summer was that once the German elections took place, Berlin would tone down its obsessive emphasis on austerity, which is killing other European economies and leading to social tragedies unprecedented in Europe's modern economic history. But nothing has changed. Neither Angela Merkel nor Wolfgang Schaeuble - her finance minister, who has kept his position in the new coalition government - feels the need to relent on their policy of imposing the Berlin consensus on the rest of the European Union (EU), whatever the cost.

One more demonstration of that was the much-scaled-down version of banking union, given German resistance to a full-fledged banking resolution mechanism - which would have meant a much broader mutualisation of the debt in Europe than Berlin was ready to accept. The European resolution fund will be only euro 55 billion, and in 10 years - a ridiculous amount compared to the size of Europe's banking sector. Meanwhile, national governments and creditors will have to bear the brunt of any new bailout.

Ironically enough, what could be one of the best bits of news for Europe in 2013 was perceived as a bitter setback: the decision of Ukraine's president, Viktor Yanukovych, to renounce the association agreement he was scheduled to sign with the EU at the end of November.

One wonders why, with all the problems and challenges it confronts, the EU would wish at this time to burden itself with an association with a country on the verge of bankruptcy, rotten to the core by corruption and nepotism, where rule of law does not exist, and undermined by a fast demographic decline.

All this was compounded by an astonishing miscalculation about how Vladimir Putin would react to the prospect of losing influence on a country crucial to his objective of creating a Eurasian Economic Union that would help anchor Russia's status as a global player.

Looking at these developments and thinking about the recent passing away of Nelson Mandela, one cannot but reflect on what, on the one hand, transformational change leadership is able to achieve and, on the other hand, damage the lack of leadership can cause.

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