The Presidency: Deepening Questions

By George Friedman

Readers know that we have been tracking one
issue almost above all others since last fall: the strength of the Bush
presidency. The question that emerged following Hurricane Katrina was
whether the administration would become a classic failed presidency or
whether, having flirted with disaster, it would recover. Last week, the
first indicator (apart from routine approval polls) came in: Congress, in
essence, blocked a deal that would have put a state-run company from the
United Arab Emirates (UAE) in charge of several U.S.
ports.

Far more important than the ports issue or congressional
assertiveness over the deal was the fact that the revolt was led by
Republicans. Democratic opposition was predictable and uninteresting, but
the open rebellion among Republicans was far less predictable and highly
significant. In fact, it was of extraordinary importance.

In our
view, the business deal in question -- the acquisition by Dubai Ports World
of a British company that has managed the ports up to now -- does not
increase the threat to U.S. national security, which is substantial
regardless of who manages the ports. In the broadest sense, whether the UAE
gets a contract to run the ports is neither here nor there. If they got it,
it would mean little; if they were denied it, U.S. relations with the
Islamic world would not get much worse. It is not an important
issue.

What is a vitally important issue is whether President George
W. Bush has the ability to govern. Presidents, unlike prime ministers, do
not leave office when they lose the confidence
of voters; the Framers did not want a parliamentary system. What happens,
rather, is that a president can lose the ability to govern -- either because
he cannot get needed legislation passed, or because Congress blocks his
initiatives. Congress controls the purse strings and can, by withholding
funds, shut down presidential initiatives. That is how the Vietnam War
ended: Congress cut off all military aid to South Vietnam, and it collapsed.
The idea that a president can continue to govern without congressional
support, because of the inherent powers of the presidency, simply isn't
true. You wind up with a paralyzed government.

Consider that Bush
recently returned from India with a series of agreements on U.S.-Indian
nuclear cooperation. It is far from certain that Bush will be able to muster
the two-thirds vote needed in the Senate in order to get a treaty passed;
there is substantial unease in Congress about U.S. acquiescence to any
nuclear proliferation, and there is not a powerful pro-Indian lobby on the
Hill. Now, it also is possible that Bush will be able to get the votes. But
the problem that is emerging is that the president no longer has the ability
to negotiate with full confidence. Any foreign leader in negotiations will be
aware that the president's word is not final and there will have to be
dealings with Congress as well. Since reaching an agreement with the U.S.
president, and then having it repudiated by Congress, is more than a little
embarrassing for foreign leaders, they will be much more careful in making
agreements with Bush -- and much less susceptible to any threats he might
issue, since it would not be clear that he has the backing to carry them
out.

Context of the Controversy

As we have previously
discussed, Bush is not the first president to face political paralysis; most
who did encountered it over foreign policy issues. Wilson collapsed over the
League of Nations, Truman over Korea. Johnson collapsed over Vietnam, and
Nixon had Watergate with a touch of Vietnam. Carter was done in by the
Iranian hostage situation. But there is one difference between these and the
current president: Bush is only one year into his second term. He has just
reached a critical low in approval ratings and Republicans have begun
distancing themselves. If he doesn't recover, it will be one of the longest
failed presidencies in history. There would be three years in which foreign
powers would operate with diminished concern for U.S. wishes and responses.
Three years is a very long time.

It is important to understand why
this has happened. The ports deal does not stand alone. It was preceded by
what, in retrospect, is appearing to have had a substantial effect: the
Danish
cartoon controversy. That affair had a startling effect in the West and
the United States that is still reverberating.

Western views of the
Muslim world appear to have been divided into two camps. One camp holds that
radical Islamists and jihadists are a marginal force in the Muslim world,
which is dominated by a moderate mainstream. The other holds that Islam is
an inherently intolerant and violent religion, and that the idea of a
moderate tendency within Islam amounts to self-delusion. Those who took the
first view argued that the extreme response the United States has taken to
al Qaeda has weakened moderates in the Muslim world, played into the hands
of the radicals and increased the danger of terrorism. Those who took the
second view argued that a state of war exists, not between the United States
and al Qaeda, but between the West and Islam.

The cartoon affair
weakened the first school of thought and strengthened the second. The
publication of cartoons depicting the Prophet Mohammed generated a massive
outpouring of anger from the Muslim world. Some very publicly called for the
death of the cartoonists, Danes, Scandinavians and so on, and even moderate
Muslims argued that the West was insensitive to their religious feelings.
This Muslim response ran directly counter to the Western view, which holds
freedom of expression above all values. Moreover, the idea that Muslims have
a right not to be offended struck many as outrageous. Since Muslims do not
believe that everyone has a right to publicly express negative opinions when
it comes to God and his prophet, the collision was absolute.

In the
context of the United States, the cartoon controversy should have
strengthened Bush politically, by strengthening his support base among
national-security conservatives. But Bush did not reach out with an effort
to draw those who were offended by the Muslim response into his coalition.
Instead of defending the right to free speech regardless of who is offended,
Bush tried to reach out to Muslims, expressing regret over the pain the
cartoons had caused. In other words, rather than capitalizing on the event
to broaden his political base, he left his own supporters wondering what he
was talking about. Some of these supporters saw the Islamic response to the
cartoons as vindication of their view that all Muslims are potentially
dangerous and enemies. Thus, while Bush was reaching out to the Islamic
world, a key part of his coalition was becoming even more
radical.

The GOP Mutiny

In the wake of the cartoon
affair, this faction saw the transfer of U.S. ports to Arab hands as
completely unacceptable under any circumstances. They didn't care if the UAE
had cooperated with the United States against jihadists or not. They recalled
that at least one of the Sept. 11 operatives was a UAE citizen, and they
viewed UAE citizens the same way they tended to view all Muslim moderates --
as appearing to be moderate but ultimately falling on the side of the
radicals. Whatever the truth might be, this faction was not prepared to
collaborate when it came to the ports.

Democrats, like Sen. Charles
Schumer, saw an opening and went for it. That's to be expected, it's what
the opposition does. But the response among Republican national-security
conservatives was visceral and explosive. Even if Republican senators and
congressman did not agree with the views held by their constituents, the
pressure they were under still would have been enormous. Thus, they broke
with Bush in the face of his early threat to veto any legislation blocking
the ports deal. By the end, the president was in retreat, very publicly
unable to get his way.

This has not happened before. The president's
Social Security initiative died a sort of death, but an outright repudiation
of Bush led by Republicans is unprecedented. This likely would not have
happened if Bush had not slipped in the polls as he did -- but on the other
hand, a lot of his slippage has come from within his coalition. Of late, it
was the Republicans who were bolting. Within the party, Bush has held the
support of the social conservatives, and he continues to hold the economic
conservatives and business interests. But the national security
conservatives splintered, and it is not clear that they will come back
aboard.

Iraq, Investigations and Fatigue

It is
significant that the White House overlooked the political opportunity
presented by the cartoon affair and then blundered with the handling of the
ports issue. The White House under Bush has had its defects, but these kinds
of mistakes have not been common. When one also considers the way Vice
President Dick Cheney's hunting accident was handled, the crisp cadences
that marked the old Bush White House seem to be gone. We are not talking
here about policy matters, but simply the mechanics of running the White
House -- of knowing that the UAE deal was about to break.

The core
problem for the administration is, of course, Iraq. No matter how much
progress one thinks is being made, the fact is that the progress is far from
solid, and from the standpoint of American voters, it doesn't seem
particularly persuasive. Bush has burned through a huge amount of political
capital because of the war. In the end, it is not the cartoons or the ports
that did this to Bush, but above all else, his inability to devise an end
game in Iraq.

But there are other important, if lesser,
considerations. One factor, which we have mentioned before, is that Bush's
staff is exhausted. There is no one very important around him who hasn't
been there from the beginning. Cheney, Defense Secretary Donald Rumsfeld,
Secretary of State Condoleezza Rice, Deputy Chief of Staff Karl Rove, Chief
of Staff Andrew Card -- all have been on the job for five years. Not only is
there burnout, but they have made their share of mistakes. The president's
unusual resistance to bringing in fresh blood is clearly damaging his
ability to operate the political system.

We suspect that this
situation is compounded by two ongoing investigations. One, concerning the
Plame
affair, has already resulted in an indictment for Cheney's chief of
staff, Lewis Libby, who is obviously under heavy pressure from the
prosecutor to name other names. Rumors (not worthy of the name intelligence)
say that Rove is well in the prosecutor's sights now, and that he is trying
to gather evidence against Cheney as well. Lobbyist Jack Abramoff is another
concern; in a recent article in Vanity Fair, Abramoff asserted that plenty of
senior Republicans knew what he was doing and had no problem with it. While
Libby might remain loyal to the administration, Abramoff, it seems, is going
to look out for Abramoff. He is clearly talking, and we wonder how much the
White House is preoccupied with those investigations. Something is on their
minds aside from governing.

The Geopolitical
Implications

Whatever is going on, there could be profound
geopolitical consequences. The United States is the center of gravity of the
international system. When a failed presidency is on the table, the world
begins to operate in a different way. The North Koreans and the Chinese, for
example, wouldn't negotiate seriously with the United States while Truman was
president; they waited for Eisenhower. The North Vietnamese waited for Nixon.
Not only did they not want to negotiate with a president who couldn't
guarantee agreements, but in fact, the feeling was that time was on their
side after Watergate crippled Nixon. The fact that Nixon no longer had any
military options that wouldn't be blocked by Congress certainly contributed
to the final collapse of Saigon. And the Iranians wouldn't negotiate with
Carter over the hostages; they waited for Reagan.

The United States
has some crucial negotiations under way. In Iraq, it is trying to broker a
deal between the Shia and Sunnis. Its ability to do so, however, depends to
a great degree on the perception by both parties that Bush can deliver on
both threats and promises. Further complicating matters, the British have
announced plans for a drawdown in Iraq, even mentioning a timetable. There
are broad implications here. First, if Bush no longer is able to provide
guarantees for what is said at the bargaining table, Iraq will suddenly take
a dramatically different course. Second, if the Iranians know that Bush
doesn't have military options in Iraq and cannot engage in covert
negotiations authoritatively, that entire dynamic is changed. Similarly, if
the Pakistanis conclude they have nothing to fear from Bush, then that
changes everything for Islamabad. Go through the list, from Russia to China,
and we see easily what it could mean.

Now, can Bush recover from this
weakened position? It is possible, but the historical record for such
recoveries is not good. Most presidents who have sunk to such low approval
ratings and have a rebellion within their party never recover. The reason is
that a psychological barrier has been broken -- and a political one as well.
In the GOP, everyone is looking at the 2006 elections. Congress members have
to run for re-election; the president doesn't. Bush and Cheney have terrible
ratings. It is unlikely, then, that campaign swings into contested areas by
either of them will aid the party's chances. At the moment, staying far away
from both officials is the most rational strategy for congressional
candidates. And to do that, senators and congressmen have to publicly show
their independence.

Bush needs a win as badly as Truman, Johnson,
Nixon and Carter did. The Koreans, Vietnamese and Iranians made certain
those presidents didn't get one. The difference here, the chief wild card,
is that those presidents measured their remaining time in terms of a year or
so (though Nixon didn't know how short his time actually would be). Bush has
three years left in office.

If the Koreans had to face three years
of Truman after negotiations started, they might have acted differently. In
Iraq, it could be that American weakness compels the Sunnis and the Shia to
sort things out themselves.

Of Mosques, Oil Fields and Ports

By George Friedman

Last week was dominated by three apparently
discrete events. The al-Askariyah mosque -- a significant Shiite shrine in
As Samarra, Iraq -- was bombed, triggering intensifying violence between
Shiite and Sunni groups. A group linked to al Qaeda claimed responsibility
for attacking a major oil facility in Abqaiq, Saudi Arabia. And a furor
broke out in the United States over the proposed purchase, by a
government-owned United Arab Emirates (UAE) firm, of a British company that
operates a number of important American ports. Apart from the fact that all
of these incidents involve Muslims, the stories don't appear to be linked.
They are.

All three stories are commentaries on three things. First,
they are measures of the current state of the U.S.-jihadist war. Second,
they are measures of the Bush administration's strategy of splitting the
Islamic world against itself, along its natural fault lines, and using that
split to contain and control the radical Islamist threat against the United
States. And finally, they are the measure of U.S. President George W. Bush's
ability to manage public perceptions of his plans and
operations.

The Fault Lines in Iraq

Begin with the
bombing of al-Askariyah, or "the Golden Mosque," in As Samarra.


After the failures of U.S. intelligence and operations in Iraq in
spring 2003, the United States adopted a long-term strategy of using the
natural split between the country's Shiite and Sunni populations to first
stabilize its own position, and then improve it. During the first phase,
Washington tilted heavily toward the Shia, doing everything possible to
assure that there would be no Shiite rising to accompany that of the Sunnis.
Since the Shia had no love for the Sunni minority, given their experiences
under Saddam Hussein's anti-Shiite regime, this was not overly difficult. In
addition, the Shia were able to take advantage of the U.S.-Sunni war to shape
and dominate post-Hussein politics. The Shia and Americans suited each
other.

In the second phase of this policy, the United States reached
out to the Sunnis, trying to draw them into a Shiite-Kurdish government.
Washington had two goals: One was a Sunni counterweight to the Shia.
Whatever it had promised the Shia, Washington did not simply want to hand
Iraq over to them, out of fear that the country would become an Iranian
satellite state. The second goal was to exploit fault lines within the Sunni
community itself, in order to manipulate the balance of power in favor of the
United States.

By the time this phase of the policy was being
implemented -- at the end of the first battle of Al Fallujah, in 2004 -- the
U.S.-Sunni war had developed a new dimension, consisting of jihadists. These
were Sunnis, but differed from the Iraqi Sunnis in a number of critical
ways. First, many were foreigners who lacked roots in Iraq. Second, the
Sunni community in Iraq was multidimensional; Sunnis had been the backbone
of support for Hussein's regime, which had been far more secular than
Islamist. The jihadists, of course, were radical Islamists. Thus, there was
the potential for yet another rift; the stronger the jihadists grew, the
greater the risk to the traditional leadership of Iraq's Sunnis. The
jihadists might increase their influence within the community, marginalizing
the old leadership.

The U.S. success in manipulating this split
reached a high point in December 2005, with Iraq's national elections. The
jihadists opposed Sunni participation in the election, but the Sunni
leadership participated anyway. The jihadists threatened the leadership but
could not strike; as foreigners, they depended on local Sunni communities to
sustain and protect them. If they alienated the Sunni leadership without
destroying them, the jihadists would in turn be destroyed.

Thus,
after the disaster in December, the jihadists embarked on a different
course. Rather than focusing on American forces or Shiite collaborators, the
goal was to trigger a civil war between the Shia and Sunnis. The brilliantly
timed attack on the Golden Mosque, much like the 9/11 attacks, was intended
to ignite a war. There would be an event that the Shia could not ignore and
to which they would respond with maximum violence, preferably against the
Sunnis as a whole. In an all-out civil war, the Sunni leadership would not
be able to dispense with the jihadists, or so the jihadists hoped. Their own
position would be cemented and the Americans would be trapped in a country
torn by civil war.

The Sunni leadership, of course, understands the
situation. If the Sunnis protect the jihadists who carried out the attack --
and we are convinced they were jihadists -- they will be in a civil war they
cannot win. Given their numbers compared to the Shiite majority, the Sunnis
-- if they were to break with the Shia -- eventually would have to come back
to the table and make some sort of a deal. The jihadists are betting that the
terms the Shia would impose would be so harsh that the Sunnis would prefer
civil war. The United States has an interest in limiting what terms the Shia
can impose, and the Iraqi Shia themselves understand that if there is civil
war, they will need Iran's help. Getting caught between the United States
and Iran is not in their interest.

There is, interestingly, the
possibility of what passes for peace in Iraq embedded in all of this. The
jihadists, marginalized and desperate due to American maneuvers, have tossed
up a "Hail Mary" in the hope of disrupting the works. It is certainly
possible that the maneuver will work. But a more reasonable assumption is
that the bombing of the Golden Mosque achieves merely a shift in the time
frame the Sunnis thought they had for negotiations. What might have taken
months now could take much less. Certainly, the Sunnis have been forced to a
decision point.

Attempt at Strategic Attack

The al
Qaeda attack against the Abqaiq facility has similar roots.

Prior to
2003, the Saudi position on al Qaeda was one of benign neglect. The Saudi
regime tried to limit both its exposure to the American war against the
jihadists, and to intelligence cooperation with the United States, out of
fear of the consequences from al Qaeda. After the invasion of Iraq, however,
and the realization that the United States was rampaging just to the north,
the Saudis shifted their position, and significant intelligence cooperation
began. There were two consequences of this shift: One, the United States was
receiving Saudi intelligence and became much more effective than before in
blocking al Qaeda attacks and disrupting their operations; and two, the
jihadists went to war against the Saudi regime, launching a series of
strikes and counterstrikes over the next two years. The United States had
split the Saudi government off from the jihadists, and the Saudis absorbed
the price of collaboration.

Al Qaeda has been relatively quiet in
Saudi Arabia since June 2004. It had appeared to many observers that al
Qaeda was finished in Saudi Arabia. Thus, just as Abu Musab al-Zarqawi's
faction in Iraq had to assert itself or be marginalized, the al Qaeda
faction in Saudi Arabia had to demonstrate its continued capability to mount
operations -- however dangerous and difficult that task might be. It was Hail
Mary time in the kingdom as well. The result was the Feb. 24 attack against
Abqaiq, a critical oil processing facility.

This was intended to be
a strategic attack. A strategic attack differs from a tactical attack in
several ways:

1. It shifts the political equation dramatically by
demonstrating capabilities.

2. It involves a strike against a target
or resource that, if destroyed, changes the economic or political scene
definitively.

3. It requires a substantial commitment of resources.


The Sept. 11 strikes amounted to a strategic attack; a suicide
bombing by jihadists in Iraq normally does not. The Abqaiq operation was an
attempt at a strategic attack. It was designed to be a shocking
demonstration of al Qaeda's continued capabilities -- and to massively
affect world oil supplies. Such an operation would involve a great deal of
planning and, we suspect, a substantial proportion of trained and available
al Qaeda personnel in Saudi Arabia (as opposed to sympathizers).

But
the strike was a fiasco. Rather than demonstrating al Qaeda's capabilities
in Saudi Arabia, the attackers barely penetrated the first security cordon
before they were gunned down by security forces. Certainly, they
demonstrated that al Qaeda still has operatives who are willing to attempt a
strategic attack, but they failed to demonstrate that they still have the
ability to actually execute one. Special operations are always difficult,
but it now appears that either the group had been penetrated by Saudi
security from the beginning, or the cell was not trained in the arts that al
Qaeda previously dominated. All three cars used in the strike appear to have
been identified and destroyed before there was any possibility they could
reach their targets inside the Abqaiq compound.

In Iraq, two
divisions in the Muslim world revealed themselves and were manipulated. The
first was the Sunni-Shiite split, the second was the rift between the
jihadists and mainstream Sunnis. In Saudi Arabia, the split was between, on
one side, the state apparatus and the leaders of the royal family -- who had
lost their ability to remain neutral in the face of the Iraq invasion, U.S.
bellicosity and the fear of a U.S.-Iranian entente over Iraq -- and an
increasingly radicalized faction of the religious establishment that was
supporting al Qaeda. Within the kingdom, the latter could not withstand the
weight of the former, and the result showed itself last week, with a feeble
al Qaeda effort that was followed by bombastic rhetoric.

The
Debate on the Ports Deal

The third dimension in all of this
became apparent with the ports issue. Washington has tried to draw a line
between Muslim states that have cooperated with the United States in due
course -- regardless of what their earlier behavior might have been like --
and those states that it still doesn't trust. It distinguishes in this way
between, for example, Syria and Kuwait. The former has always been seen as
hostile to the United States, the latter has been a mainstay of American
strategy since its liberation by the United States in 1991. The rest of the
Muslim world is distributed along a continuum between these
poles.

Washington's only hope for something approaching a
satisfactory outcome in Iraq was to work with factions it never would have
spoken to prior to 2003. Its hope for a satisfactory outcome in the global
war with the jihadists was in getting Saudi intelligence to work with the
United States. That also required actions and compromises that would not
have been made before 2003. Finally, in order to reshape the Muslim world,
the United States needed to have relations with countries that did not have
immaculate records but which, on the whole and for a variety of reasons, now
found it in their interest to work with Washington.

For Saudi Arabia,
the motivating factor was fear. For the UAE, it was greed. To be more fair,
the UAE is something like a Switzerland: Its business is business, and it
tilts its politics in such a way that business is likely to be good. The
Islamic world is a complex place, and there are many players. If the United
States is to be successful, it must divide, manipulate and conquer that
world along the lines of its complexity. The Sunni-Shiite fault line is one
axis, but the division between countries that are motivated by mercenary
considerations, as opposed to those that have more complex motives, is
another.

The UAE wants to do business, and it is good at it. One of
its businesses is managing ports. Purchasing a British company in the same
industry is a natural thing to do in business; the fact that the purchase in
question would give the UAE company oversight of ports in the United States
is another attraction of the deal. The attraction is not that the UAE could
facilitate the movement of al Qaeda operatives into the United States; that
is not what the UAE is after, since it would be bad for business. What it is
after is the profits that come from doing the business.

Now, some
argue that this business deal will make it easier for al Qaeda operatives to
get into the United States. We find that doubtful. Al Qaeda operatives -- the
real ones, not the wannabes -- if they are out there, will get into the
United States just fine by a number of means. And if they try to slip a bomb
into a container ship, it won't be one sent from a Muslim country -- the
level of scrutiny there is too high. It would be from a place and under a
flag that no one would suspect for a moment, like Denmark. At any rate,
given what it means to "operate a port," the risk to the United States from
having a British company manage its ports is about the same as that from the
UAE: Has anyone noticed that holding a British passport these days is no
guarantee of loyalty to Western ideals?

The Administration's
Strategy

The point here is not to argue the merits of the Dubai
ports deal, but rather to place the business deal in the context of the U.S.
grand strategy. That strategy is, again, to split the Islamic world into its
component parts, induce divisions by manipulating differences, and to create
coalitions based on particular needs. This is, currently, about the only
strategy the United States has going for it -- and if it can't use
commercial relations as an inducement in the Muslim world, that is quite a
weapon to lose.

The problem has become political, and stunningly so.
One of the most recent opinion polls, by CBS, has placed Bush's approval
rating at 34 percent -- a fairly shocking decline, and clearly attributable
to the port issue. As we have noted in the past, each party has a core
constituency of about 35-37 percent. When support falls significantly below
this level, a president loses his ability to govern.

The Republican
coalition consists of three parts: social conservatives, economic
conservatives and business interests, and national security conservatives.
The port deal has apparently hit the national security conservatives in
Bush's coalition hard. They were already shaky over the administration's
personnel policies in the military and the question of whether he had a
clear strategy in Iraq, even as they supported the invasion.

Another
part of the national security faction consists of those who believe that the
Muslim world as a whole is, in the end, united against the United States,
and that it poses a clear and present danger. Bush used to own this faction,
but the debate over the ports has generated serious doubts among this faction
about Bush's general policy. In their eyes, he appears inconsistent and
potentially hypocritical. Economic conservatives might love the ports deal,
and so might conservatives of the "realpolitik" variety, but those who buy
into the view that there is a general danger of terrorism emanating from all
Muslim countries are appalled -- and it is showing in the polls.

If
Bush sinks much lower, he will breaks into territory from which it would be
impossible for a presidency to recover. He is approaching this territory
with three years left in his presidency. It is the second time that he has
probed this region: The first was immediately after Hurricane Katrina. He is
now down deeper in the polls, and it is cutting into his core constituency.


In effect, Bush's strategy and his domestic politics have
intersected with potential fratricidal force. The fact is that the U.S.
strategy of dividing the Muslim world and playing one part off against the
other is a defensible and sophisticated strategy -- even if does not, in the
end, turn out to be successful (and who can tell about that?) This is not the
strategy the United States started with; the strategy emerged out of the
failures in Iraq in 2003. But whatever its origins, it is the strategy that
is being used, and it is not a foolish strategy.

The problem is that
the political coalition has eroded to the point that Bush needs all of his
factions, and this policy -- particularly because of the visceral nature of
the ports issue -- is cutting into the heart of his coalition. The general
problem is this: The administration has provided no framework for
understanding the connection between a destroyed mosque dome in As Samarra,
an attack against a crucial oil facility in Saudi Arabia, and the UAE buyout
of a British ports-management firm. Rather than being discussed in the light
of a single, integrated strategy, these appear to be random, disparate and
uncoordinated events. The reality of the administration's strategy and the
reality of its politics are colliding. Bush will backtrack on the ports
issue, and the UAE will probably drop the matter. But what is not clear is
whether the damage done to the strategy and the politics can be undone. The
numbers are just getting very low.

The United States and the 'Problem' of Venezuela

By George Friedman

Venezuela has become an ongoing problem for
the Bush administration, but no one seems able to define quite what the
issue is. President Hugo Chavez is carrying out the Bolivarian revolution in
Venezuela and feuding with the United States. He has close ties with Cuba and
has influenced many Latin American countries. The issue that needs to be
analyzed, however, is whether any of this matters -- and if it does, why it
is significant.

Chavez came to power in 1999 through a democratic
election. He unseated a constellation of parties that had dominated
Venezuela for years. Chavez, an army officer, had led a failed coup attempt
in 1992 and spent time in prison for that. He sought the presidency without
any clear ideology other than hostility to the existing regime. There was a
vague belief at the time of his election that Chavez would be simply another
passing event in Latin America. Put a little more bluntly, there was an
assumption that Chavez rapidly would be corrupted by the opportunities
opened to him as president, and that he would proceed to enrich himself
while allowing business to go on as usual.

The business of Venezuela,
however, is oil. Not only is the country a major exporter, but the
state-owned oil company, Petroleos de Venezuela SA (PDVSA), also owns the
American refiner and retailer Citgo Petroleum Corp. Venezuela has tried to
diversify its economy many times, but oil has remained its mainstay. In
other words, the Venezuelan state is indistinguishable from the Venezuelan
oil industry. Chavez, therefore, has faced two core issues: The first was
how income from the oil would be used, and the second was the degree to
which foreign oil companies could be allowed to influence that
industry.

Chavez was able to win the presidency because he promised
the Venezuelan masses a bigger cut of the oil revenues than they had seen
before. More precisely, he promised a series of social benefits, which could
be financed only through the diversion of oil revenues. From Chavez's point
of view, the problem was that the Venezuelan upper class and the foreign oil
companies were pocketing the oil money that could be used to pay for the
social services upon which his government rested and his political future
depended. From his fairly simple populist position, then, he proceeded to
move against the technical apparatus of PDVSA and against the foreign oil
companies, most of which opposed him and threatened to undermine his plans.


But there was yet a further dilemma. In order to support his
political base, Chavez had to have oil revenues. In order to generate oil
revenues, he had to have investment into the oil sector. But diverting
revenues and building up the oil sector were competing goals. Given the
political climate, foreign oil companies were not inclined to make major
investments in Venezuela, and PDVSA -- minus its technical experts -- was
not capable of maintaining operations and existing output levels. There was,
then, a terrific problem embedded in Chavez's political strategy. In the long
term, something would have to give.

Two things saved him from his
dilemma. The first was a short-lived coup by his opposition in April 2002.
This coup was truly something to behold. Having captured Chavez and sent him
to an island, the coupsters fell into squabbling with each other over who
would hold what office and sort of forgot about Chavez. Chavez flew back to
Caracas, went to the Miraflores presidential palace, and took over, less
than 48 hours after it all began. The coupsters headed out of town.


The coup gave Chavez a new, credible platform: anti-Americanism. He
was never pro-American, but the brief coup allowed him to claim that the
United States was trying to topple him. It would be a huge surprise to us if
it turned out that the CIA was utterly unaware of the coup plans, but we
would also be moderately surprised if the CIA planned events as Chavez
charged. Even on its worst day, the CIA couldn't be that incompetent. But
Chavez's claim was not implausible. It certainly was believed by his
followers, and it expanded his support base to include Venezuelan patriots
who disliked American interference in their affairs. What the coup did was
flesh out Chavez's ideology a bit. He was for the poor and against the
United States.

Chavez got lucky in a second way: rising oil prices.
The appetite of his government for cash was enormous. Someone once referred
to Citgo as "Chavez's ATM." With Venezuela's oil production declining,
Chavez's government likely would have collapsed under social pressure if
world oil prices had remained low. But oil prices didn't remain low -- they
soared. Venezuela still had substantial economic problems and its oil
industry was suffering from lack of expertise, investment and exploration,
but at $60 a barrel, Chavez had room for maneuver.

All of this led
him into an alliance with Cuba. When you're anti-U.S. in Latin America,
Havana welcomes you with open arms. Cuba needed Venezuela as well: After the
fall of the Soviet Union, the Cubans were cut off from subsidized oil
supplies, and their ability to pay world prices wasn't there. Chavez could
afford to provide Castro with oil to sustain the Cuban economy. It could be
argued that without Chavez, the Castro regime might have collapsed once
faced with soaring oil prices.

In return for this support, Chavez
benefited from Cuba's greatest asset: a highly professional security and
intelligence apparatus. Arguing, not irrationally, that the United States
was not yet through with Venezuela, Chavez used Cuban expertise to build a
security system designed to protect his regime. His government -- though not
nearly as repressive as Cuba's is at the popular level -- nevertheless came
under the protection not only of Cuban professionals, but of cadres of
Venezuelan personnel trained by the Cubans. The relationship with the Cubans
certainly predated the coup in Caracas, but it kicked into high gear
afterwards. Both sides benefited.

Chavez's rise to power also
intersected with another process under way in Latin America: the
anti-globalization movement. From about 1990 onward, Latin America was
dominated by an ideology that argued that free-market reforms, including
uncontrolled foreign investment and trade, would in the long run lift the
region out of its chronic misery. The long run turned out to be too long,
however, because the pain caused in the short run began forcing advocates of
liberalization out of office. In Brazil, Argentina and Bolivia, economic
problems created political reversals.

The old Latin American "left,"
which had been deeply Marxist and always anti-American, had gone quiet
during the 1990s. It recently has surged back into action -- no longer in
its dogmatic Marxist style, but in a more populist mode. Its key tenets now
are state-managed economies and, of course, anti-Americanism. For the
leftists, Chavez was a hero. The more he baited the United States, the more
of a hero he became. And the more heroic he was in Latin America, the more
popular in Venezuela. He spoke of the Bolivarian revolution, and he started
to look like Simon Bolivar to some people.

In reality, Chavez's
ability to challenge the United States is severely limited. The occasional
threat to cut off oil exports to the United States is fairly meaningless, in
spite of conversations with the Chinese and others about creating alternative
markets. The United States is the nearest major market for Venezuela. The
Venezuelans could absorb the transportation costs involved in selling to
China or Europe, but the producers currently supplying those countries then
could be expected to shift their own exports to fill the void in the United
States. Under any circumstances, Venezuela could not survive very long
without exporting oil. Symbolizing the entire reality is the fact that
Chavez's government still controls Citgo and isn't selling it, and the U.S.
government isn't trying to slam controls onto Citgo.

Washington
ultimately doesn't care what Chavez does so long as he continues to ship oil
to the United States. From the American point of view, Chavez -- like Castro
-- is simply a nuisance, not a serious threat. Latin American countries in
general are of interest to Washington, in a strategic sense, only when they
are being used by a major outside power that threatens the United States or
its interests. The entire Monroe Doctrine was built around that
principle.

There was a fear at one point that Nazi U-boats would have
access to Cuba. And when Castro took power in Cuba, it mattered, because it
gave the Soviets a base of operations there. What happened in Nicaragua or
Chile mattered to the United States because it might create opportunities
the Soviets could exploit. Nazis in Argentina prior to 1945 mattered to the
United States; Nazis in Argentina after 1945 did not. Cuba before 1991
mattered; after 1991, it did not. And apart from oil, Venezuela does not
matter now to the United States.

The Bush administration unleashes
periodic growls at the Venezuelans as a matter of course, and Washington
would be quite pleased to see Chavez out of office. Should al Qaeda
operatives be found in Venezuela, of course, then the United States would
take an obsessive interest there. But apart from the occasional Arab -- and
some phantoms generated by opposition groups, knowing that that is the only
way to get the United States into the game -- there are no signs that
Islamist terrorists would be able to use Venezuela in a significant way.
Chavez would be crazy to take that risk -- and Castro, who depends on
Chavez's cheap oil, is not about to let Chavez take crazy risks, even if he
were so inclined.

From the American point of view, an intervention
that would overthrow Chavez would achieve nothing, even if it could be
carried out. Chavez is shipping oil; therefore, the United States has no
major outstanding issues. A coup in Venezuela, even if not engineered by the
United States, would still be blamed on the United States. It would increase
anti-American sentiment in Latin America, which in itself would not be all
that significant. But it also would increase hostility toward the United
States in Europe, where the Allende coup is still recalled bitterly by the
left. The United States has enough problems with the Europeans without
Venezuela adding to them.

Taken in isolation, Venezuela can't really
hurt the United States. If all of South America were swept by a Bolivarian
revolution, it wouldn't hurt the United States. Absent a significant global
power to challenge the United States, Latin America and its ideology are of
interest to Latin Americans but not to Washington. The only real threat that
Venezuela poses to the United States would be if its oil production becomes
so degraded that the United States has to seek out new suppliers and world
prices rise. That would matter to Washington, and indeed it may eventually
occur -- Venezuelan output has dropped about 1 million bpd below pre-Chavez
highs -- but it would matter a thousand times more to Venezuela.


This explains the strange standoff between Venezuela and the United
States, and Washington's basic indifference to events in Latin America.
Venezuela is locked into its oil relationship with the United States. Latin
America poses no threat on its own. The chief geopolitical challenge to the
United States -- radical Islam -- intersects Latin America only marginally.
Certainly, there are radical Islamists in Latin America; Hezbollah in
particular has assets there. But for them to mount an attack against the
United States from Latin America would be no more efficient than mounting it
from Europe. The risk is a concern, not an obsession.

For the United
States, its border with Mexico matters. For the Venezuelans, high oil prices
that subsidize their social programs and buy regional allies matter. Both
want Venezuelan oil to keep pumping. Aside from the one issue that they
agree on, the United States can live and is living with Chavez, and Chavez
not only lives well with the United States but needs it -- both as a source
of cash, through Citgo, and as a whipping boy.

Sometimes, there
really isn't a problem.

The Cartoon Backlash: Redefining Alignments

By George Friedman

There is something rotten in the state of
Denmark. We just couldn't help but open with that -- with apologies to
Shakespeare. Nonetheless, there is something exceedingly odd in the notion
that Denmark -- which has made a national religion of not being offensive to
anyone -- could become the focal point of Muslim rage. The sight of the
Danish and Norwegian embassies being burned in Damascus -- and Scandinavians
in general being warned to leave Islamic countries -- has an aura of the
surreal: Nobody gets mad at Denmark or Norway. Yet, death threats are now
being hurled against the Danes and Norwegians as though they were mad-dog
friends of Dick Cheney. History has its interesting moments.

At the
same time, the matter is not to be dismissed lightly. The explosion in the
Muslim world over the publication of 12 cartoons by a minor Danish newspaper
-- cartoons that first appeared back in September -- has, remarkably,
redefined the geopolitical matrix of the U.S.-jihadist war. Or, to be more
precise, it has set in motion something that appears to be redefining that
matrix. We do not mean here simply a clash of civilizations, although that
is undoubtedly part of it. Rather, we mean that alignments within the
Islamic world and within the West appear to be in flux in some very
important ways.

Let's begin with the obvious: the debate over the
cartoons. There is a prohibition in Islam against making images of the
Prophet Mohammed. There also is a prohibition against ridiculing the
Prophet. Thus, a cartoon that ridicules the Prophet violates two fundamental
rules simultaneously. Muslims around the world were deeply offended by these
cartoons.

It must be emphatically pointed out that the Muslim
rejection of the cartoons does not derive from a universalistic view that
one should respect religions. The criticism does not derive from a
secularist view that holds all religions in equal indifference and requires
"sensitivity" not on account of theologies, but in order to avoid hurting
anyone's feelings. The Muslim view is theological: The Prophet Mohammed is
not to be ridiculed or portrayed. But violating the sensibilities of other
religions is not taboo. Therefore, Muslims frequently, in action, print and
speech, do and say things about other religions -- Christianity, Judaism,
Buddhism -- that followers of these religions would find defamatory. The
Taliban, for example, were not concerned about the views among other
religions when they destroyed the famous Buddhas in Bamiyan. The Muslim
demand is honest and authentic: It is for respect for Islam, not a general
secular respect for all beliefs as if they were all equal.

The
response from the West, and from Europe in particular, has been to frame the
question as a matter of free speech. European newspapers, wishing to show
solidarity with the Danes, have reprinted the cartoons, further infuriating
the Muslims. European liberalism has a more complex profile than Islamic
rage over insults. In many countries, it is illegal to incite racial hatred.
It is difficult to imagine that the defenders of these cartoons would sit by
quietly if a racially defamatory cartoon were published. Or, imagine the
reception among liberal Europeans -- or on any American campus -- if a
professor published a book purporting to prove that women were
intellectually inferior to men. (The mere suggestion of such a thing, by the
president of Harvard in a recent speech, led to calls for his
resignation.)

In terms of the dialogue over the cartoons, there is
enough to amuse even the most jaded observers. The sight of Muslims arguing
the need for greater sensitivity among others, and of advocates of laws
against racial hatred demanding absolute free speech, is truly marvelous to
behold. There is, of course, one minor difference between the two sides: The
Muslims are threatening to kill people who offend them and are burning
embassies -- in essence, holding entire nations responsible for the actions
of a few of their citizens. The European liberals are merely making
speeches. They are not threatening to kill critics of the modern secular
state. That also distinguishes the Muslims from, say, Christians in the
United States who have been affronted by National Endowment for the Arts
grants.

These are not trivial distinctions. But what is important is
this: The controversy over the cartoons involves issues so fundamental to the
two sides that neither can give in. The Muslims cannot accept visual satire
involving the Prophet. Nor can the Europeans accept that Muslims can, using
the threat of force, dictate what can be published. Core values are at
stake, and that translates into geopolitics.

In one sense, there is
nothing new or interesting in intellectual inconsistency or dishonesty. Nor
is there very much new about Muslims -- or at least radical ones --
threatening to kill people who offend them. What is new is the breadth of
the Muslim response and the fact that it is directed obsessively not against
the United States, but against European states.

One of the primary
features of the U.S.-jihadist war has been that each side has tried to
divide the other along a pre-existing fault line. For the United States, in
both Afghanistan and Iraq, the manipulation of Sunni-Shiite tensions has
been evident. For the jihadists, and even more for non-jihadist Muslims
caught up in the war, the tension between the United States and Europe has
been a critical fault line to manipulate. It is significant, then, that the
cartoon affair threatens to overwhelm both the Euro-American split and the
Sunni-Shiite split. It is, paradoxically, an affair that unifies as well as
divides.

The Fissures in the West

It is dangerous and
difficult to speak of the "European position" -- there really isn't one. But
there is a Franco-German position that generally has been taken to be the
European position. More precisely, there is the elite Franco-German position
that The New York Times refers to whenever it mentions "Europe." That is the
Europe that we mean now.

In the European view, then, the United
States massively overreacted to 9/11. Apart from the criticism of Iraq, the
Europeans believe that the United States failed to appreciate al Qaeda's
relative isolation within the Islamic world and, by reshaping its relations
with the Islamic world over 9/11, caused more damage. Indeed, this view
goes, the United States increased the power of al Qaeda and added
unnecessarily to the threat it presents. Implicit in the European criticisms
-- particularly from the French -- was the view that American cowboy
insensitivity to the Muslim world not only increased the danger after 9/11,
but effectively precipitated 9/11. From excessive support for Israel to
support for Egypt and Jordan, the United States alienated the Muslims. In
other words, 9/11 was the result of a lack of sophistication and poor policy
decisions by the United States -- and the response to the 9/11 attacks was
simply over the top.

Now an affair has blown up that not only did not
involve the United States, but also did not involve a state decision. The
decision to publish the offending cartoons was that of a Danish private
citizen. The Islamic response has been to hold the entire state responsible.
As the cartoons were republished, it was not the publications printing them
that were viewed as responsible, but the states in which they were
published. There were attacks on embassies, gunmen in EU offices at Gaza,
threats of another 9/11 in Europe.

From a psychological standpoint,
this drives home to the Europeans an argument that the Bush administration
has been making from the beginning -- that the threat from Muslim extremists
is not really a response to anything, but a constantly present danger that
can be triggered by anything or nothing. European states cannot control what
private publications publish. That means that, like it or not, they are
hostage to Islamic perceptions. The threat, therefore, is not under their
control. And thus, even if the actions or policies of the United States did
precipitate 9/11, the Europeans are no more immune to the threat than the
Americans are.

This combines with the Paris
riots last November and the generally deteriorating relationships between
Muslims in Europe and the dominant populations. The pictures of demonstrators
in London, threatening the city with another 9/11, touch extremely sensitive
nerves. It becomes increasingly difficult for Europeans to distinguish
between their own relationship with the Islamic world and the American
relationship with the Islamic world. A sense of shared fate emerges, driving
the Americans and Europeans closer together. At a time when pressing issues
like Iranian nuclear weapons are on the table, this increases Washington's
freedom of action. Put another way, the Muslim strategy of splitting the
United States and Europe -- and using Europe to constrain the United States
-- was heavily damaged by the Muslim response to the cartoons.

The
Intra-Ummah Divide

But so too was the split between Sunni and
Shia. Tensions between these two communities have always been substantial.
Theological differences aside, both international friction and internal
friction have been severe. The Iran-Iraq war, current near-civil war in
Iraq, tensions between Sunnis and Shia in the Gulf states, all point to the
obvious: These two communities are, while both Muslim, mistrustful of one
another. Shiite Iran has long viewed Sunni Saudi Arabia as the corrupt tool
of the United States, while radical Sunnis saw Iran as collaborating with
the United States in Iraq and Afghanistan.

The cartoons are the one
thing that both communities -- not only in the Middle East but also in the
wider Muslim world -- must agree about. Neither side can afford to allow any
give in this affair and still hope to maintain any credibility in the Islamic
world. Each community -- and each state that is dominated by one community or
another -- must work to establish (or maintain) its Islamic credentials. A
case in point is the violence against Danish and Norwegian diplomatic
offices in Syria (and later, in Lebanon and Iran) -- which undoubtedly
occurred with Syrian government involvement. Syria is ruled by Alawites, a
Shiite sect. Syria -- aligned with Iran -- is home to a major Sunni
community; there is another in Lebanon. The cartoons provided what was
essentially a secular regime the opportunity to take the lead in a religious
matter, by permitting the attacks on the embassies. This helped consolidate
the regime's position, however temporarily.

Indeed, the Sunni and
Shiite communities appear to be competing with each other as to which is
more offended. The Shiite Iranian-Syrian bloc has taken the lead in
violence, but the Sunni community has been quite vigorous as well. The
cartoons are being turned into a test of authenticity for Muslims. To the
degree that Muslims are prepared to tolerate or even move past this issue,
they are being attacked as being willing to tolerate the Prophet's
defamation. The cartoons are forcing a radicalization of parts of the Muslim
community that are uneasy with the passions of the
moment.

Beneficiaries on Both Sides

The processes under
way in the West and within the Islamic world are naturally interacting. The
attacks on embassies, and threats against lives, that are based on
nationality alone are radicalizing the Western perspective of Islam. The
unwillingness of Western governments to punish or curtail the distribution
of the cartoons is taken as a sign of the real feelings of the West. The
situation is constantly compressing each community, even as they are
divided.

One might say that all this is inevitable. After all, what
other response would there be, on either side? But this is where the odd
part begins: The cartoons actually were published in September, and --
though they drew some complaints, even at the diplomatic level -- didn't
come close to sparking riots. Events unfolded slowly: The objections of a
Muslim cleric in Denmark upon the initial publication by Jyllands-Posten
eventually prompted leaders of the Islamic Faith Community to travel to
Egypt, Syria and Lebanon in December, purposely "to stir up attitudes
against Denmark and the Danes" in response to the cartoons. As is now
obvious, attitudes have certainly been stirred.

There are
beneficiaries. It is important to note here that the fact that someone
benefits from something does not mean that he was responsible for it. (We
say this because in the past, when we have noted the beneficiaries of an
event or situation, the not-so-bright bulbs in some quarters took to
assuming that we meant the beneficiaries deliberately engineered the event.)


Still, there are two clear beneficiaries. One is the United States:
The cartoon affair is serving to further narrow the rift between the Bush
administration's view of the Islamic world and that of many Europeans.
Between the Paris riots last year, the religiously motivated murder

of a Dutch filmmaker and the "blame Denmark" campaign, European patience is
wearing thin. The other beneficiary is Iran. As Iran moves toward a
confrontation with the United States over nuclear weapons, this helps to
rally the Muslim world to its side: Iran wants to be viewed as the defender
of Islam, and Sunnis who have raised questions about its flirtations with
the United States in Iraq are now seeing Iran as the leader in outrage
against Europe.

The cartoons have changed the dynamics both within
Europe and the Islamic world, and between them. That is not to say the furor
will not die down in due course, but it will take a long time for the bad
feelings to dissipate. This has created a serious barrier between moderate
Muslims and Europeans who were opposed to the United States. They were the
ones most likely to be willing to collaborate, and the current uproar makes
that collaboration much more difficult.

It's hard to believe that a
few cartoons could be that significant, but these are.