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From: Office of Tetje Rod-Larse
Subject: August 26 update
Date: Mon, 27 Aug 2012 14:36:57 +0000
26 August, 2012
Article 1.
NYT
I Made the Robot Do It
Thomas L. Friedman
Article 2.
World Politics Review
The Realist Prism: Tracing the Roots of the Arab Spring
Nikolas Gvosdev
Article 3.
Hurriyet Daily News
Turkey's longest war
Mustafa Akyol
Article 4.
The National Interest
Turkey's Syria Conundrum
Sinan Ulgen
Article 5.
The Globe and Mail
The `new cold war' is an information war
Anne-Marie Slaughter
Article 6.
Foreign Policy
Is relying on Saudi Arabia in times of war smart ?
Amy Jaffe
NYT
I Made the Robot Do It
Thomas L. Friedman
August 25, 2012 -- WHEN you hear the insane notion of "legitimate rape"
being aired by a Republican congressman — a member of the House
science committee no less — it makes you wonder some days how we
became the world's richest, most powerful country, and, more important,
how we're going to stay there. The short answer is that, thank God, there's
still a bunch of people across America — innovators and entrepreneurs —
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who just didn't get the word. They didn't get the word that Germany will
eat our breakfast or that China will eat our lunch. They didn't get the word
that we're in a recession and heading for a fiscal cliff. They're not
interested in politics at all. Instead, they just go out and invent stuff and
fix stuff and collaborate on stuff. They are our saving grace, and whenever
I need a pick-me-up, I drop in on one of them.
I did just that last week, visiting the design workshop of Rethink
Robotics, near Boston's airport, where I did something I've never done
before: I programmed a robot to perform the simple task of moving
widgets from one place to another. Yup, I trained the robot's arms using a
very friendly screen interface and memory built into its mechanical limbs.
And therein lie the seeds of a potential revolution. Rethink's goal is
simple: that its cheap, easy-to-use, safe robot will be to industrial robots
what the personal computer was to the mainframe computer, or the iPhone
was to the traditional phone. That is, it will bring robots to the small
business and even home and enable people to write apps for them the way
they do with PCs and iPhones — to make your robot conduct an
orchestra, clean the house or, most important, do multiple tasks for small
manufacturers, who could not afford big traditional robots, thus speeding
innovation and enabling more manufacturing in America.
"If you see pictures of robots welding or painting" in a factory, "you will
not see humans nearby because it is not safe" being around swinging
robot arms, explains Rethink's founder, Rodney Brooks, the Australian-
born former director of the M.I.T. Computer Science and Artificial
Intelligence Laboratory and the co-founder of iRobot, which invented the
Roomba vacuum-cleaning robot. Traditional industrial robots are fixed
and not flexible, and they take a long time — and a skilled engineer — to
program them to do one repeatable task.
"Our robot is low-cost, easily programmable, not fixed and not
dangerous," says Brooks. "We were in a small plastics company the other
day, and the owner said he is using the robot for two hours to do one task
and then rolling it over to do another. With our robots, you teach them
about the specific task you want done, and when you are done with that,
you program another one." And if your hand gets in the way, the robot just
stops.
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The Rethink design team includes Bruce Blumberg, the product manager
of the Apple LaserWriter — as well as 75 other experts from Russia,
Georgia, Venezuela, Egypt, Australia, India, Israel, Portugal, Britain, Sri
Lanka, the United States and China. "It is all made in America," says
Brooks, but by "the best talent" gathered "from around the world."
This is the company of the future. Forget about "outsourcing." In today's
hyperconnected world, there is no "in" and no "out." There's only "good,
better and best," and if you don't assemble the best team you can from
everywhere, your competitor will.
The Rethink robot will be unveiled in weeks. I was just given a sneak
peek — on the condition that I did not mention its "disruptive" price point
and some other unique features.
"Just as the PC did not replace workers but empowered them to do many
new things," argues Brooks, the same will happen with the Rethink robot.
"Companies will become even more competitive, and we will be able to
keep more jobs here. ... The minute you say `robots' people say: `It's
going to take away jobs. But that is not true. It doesn't take away jobs. It
will change how you do them," the way the PC did not get rid of
secretaries but changed what they did.
Actually, the robots will eliminate jobs, just as the PC did, but they be will
lower-skilled ones. And the robots will also create new jobs or enlarge
existing ones, but they will be jobs that require more skills. I watched a
Rethink robot being tested at the Nypro plastics factory in Clinton, Mass.
A single worker was operating a big molding machine that occasionally
spewed out too many widgets, which forced the system to overload. The
robot was brought in to handle overflow, while the same single worker
still operated the machine. "We want the robot to be the extension of the
worker, not the replacement of the worker," said Michael McGee, Nypro's
director of technology.
This is the march of progress. It eliminates bad jobs, empowers good jobs,
but always demands more skill and creativity and always enables fewer
people to do more things. We went through the same megashift when our
agricultural economy was replaced by the industrial economy in the late
19th and early 20th centuries. Therefore, what this election should be
about is how we spawn thousands of Rethinks that create new industries,
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new jobs and productivity tools. Alas, it isn't. So I'm just grateful these
folks here in Boston didn't get the word.
World Politics Review
The Realist Prism: Tracing the Roots of the
Arab Spring
Nikolas Gvosdcv
24 Aug 2012 -- For the past year and a half, the Arab Spring has
convulsed the Middle East. It has resulted in the overthrow of four leaders
who only two years before seemed destined to rule for life, plunged
another country into a fratricidal civil war and placed even long-
established monarchies under renewed political and economic stress.
What triggered this tsunami of political upheaval? And is it localized to
the Arab world, or could it spread? It is no secret that authorities in
Beijing and Moscow are playing close attention, attempting to ferret out
any indications that a prerevolutionary situation may be building up in
their own societies.
Many have cited new social media technology as a key driver of the
revolutions. But these devices and the software that powers them are
tools. Certainly, they helped to facilitate the uprisings -- allowing people
to circumvent traditional filters used to control information and to be able
to organize without having to always physical assemble -- but their mere
presence was not the cause. For those in the West enamored with the
prospect of Facebook revolutions, airdropping iPhones is not a democracy
promotion strategy on the cheap.
Others pointed to the role of Al Jazeera in focusing attention on the
uprisings; its coverage of the revolution in Tunisia, it is argued, helped to
"seed" the Arab Spring in other countries of the region. A proximate
cause, to be sure -- but it is also important to keep in mind that Al Jazeera
has been broadcasting since 1996.
Indeed, political unrest has long simmered in the Arab world, sometimes
even flaring up into open revolt, without producing the convulsions we
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have witnessed. Why should the Benghazi revolt have turned out any
differently from other failed rebellions against Moammar Gadhafi that
originated in eastern Libya over the years? Why didn't the Tahrir Square
protests fizzle like earlier so-called Facebook protests that had taken place
in Egypt?
Several things have changed, and it is important to look beyond the
headlines to examine other root factors.
To begin with, in countries like Egypt and Libya, there were growing
disputes about political succession prior to the outbreak of protests.
Former Egyptian President Hosni Mubarak's efforts to install his son
Gamal as his heir apparent aroused significant opposition from different
quarters in the Egyptian power structure, especially the military. In Libya,
factions had been developing around Saif al-Islam and Mutassim Gadhafi,
rivals to succeed their father as leader of Libya -- and in turn, the elder
Gadhafi played these factions off against each other. Elites throughout the
region have been fracturing as long-established regimes begin to falter,
and it was those divisions among elites that gave revolutionary uprisings a
chance for success in 2011 that they had not enjoyed in previous years.
Some of the defectors from Gadhafi's regime to the interim government
had been associated with the more liberalizing groups that were
previously associated with Saif al-Islam -- including Musa Kusa, the
former foreign minister and head of Libya's external intelligence
organization, who broke with the government after it decided to used
armed force to repress protesters. The regimes that had fallen were not
monolithic nor, at the end, were they particularly united.
Rising corruption also played a role. There comes a point at which the
expected rapaciousness of a leader and his entourage reaches the breaking
point. When times are good, some degree of corruption can be
overlooked. But the economic crisis of the last several years did not spare
these countries, especially not Egypt and Tunisia. Crony capitalism
blocked opportunities for members of the middle class. As Leila Bouazizi,
the sister of Mohammed Bouazizi, the Tunisian fruit vendor whose
December 2010 self-immolation triggered the Arab Spring, commented,
"Those with no connections and no money for bribes are humiliated and
insulted and not allowed to live." In addition, all sectors of society, but
particularly the poor, have been hard hit by major increases in the price of
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basic staples. Indeed, many have concluded that it was the astronomical
rise in food prices over the last several years -- not simply the prevalence
of mobile phones -- that provided the impetus for protests in Egypt,
Tunisia and other areas.
The economic crisis also changed the calculations of a growing number of
young, educated people who do not see any opportunity for advancement.
In particular, young educated people, who felt they had nothing more to
lose, were willing not simply to protest but to sustain their opposition to
the old regimes in the face of initial repression conducted by the security
forces. They did not choose to go home after the first incidents of
violence.
This is what makes the current situation in Russia, in the aftermath of the
verdict handed down in the Pussy Riot case, so interesting. The two-year
sentence seems designed, in part, to send a clear message to Russia's
young business class. In recent months, Russia's young entrepreneurs
have been favorably inclined toward the opposition protest movements,
with some even treating it as almost fashionable. The punk band's jailing
is a signal to reconsider that support: Would they want to sacrifice the
lifestyle and opportunities that they have grown accustomed to in order to
take active measures against the Putin government? But that calculation
only works if there is a growing economy that promises opportunity,
highlighting a possible trigger for unrest in countries defined by soft
authoritarian forms of governance: Any economic slowdown could
produce more political unrest.
But even in more democratic systems, there are signs of brittleness. The
massive power outages that plunged much of India into darkness, the
ongoing labor unrest in South Africa and the growing frustration in
various European countries with austerity measures are all symptoms of
possible problems that could produce protest movements. One striking
factor -- from Russia to the United States -- is the erosion of trust by
ordinary people that current governments and politicians are capable of
finding solutions. So while the Arab Spring may be unique in that actual
governments are being overthrown, it seems part and parcel of a larger
global trend -- the "days of shaking" -- that will be confronting regimes
both autocratic and democratic all around the world.
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Nikolas K Gvosdev is the former editor of the National Interest and a
frequent foreign policy commentator in both the print and broadcast
media. He is currently on the faculty of the U.S. Naval War College.
Anicic 3.
Hiirriyet Daily News
Turkey's longest war
Mustafa Akyol
August/25/2012 -- The longer the conflict between the Turkish
government and the outlawed Kurdistan Workers Party (PKK) goes on,
the less optimistic I am. I not only begin to doubt whether Turkey can
remain unified as a nation over the next few decades, but I also worry that
a possible partition could be a very bloody nightmare.
Let's go back in history a bit to understand exactly what we are talking
about. Kurds used to be one of the many peoples of the multi-ethnic
Ottoman Empire, to which they often showed a strong loyalty. That
tradition also lived on during World War I and the subsequent Turkish War
of Liberation (1919-22), during which the Kurds fought side by side with
the Turks, with a feeling of Muslim solidarity against aggressive
"infidels."
With the formation of the Republic of Turkey, however, Kurds felt fooled
and betrayed. Unlike the Ottoman Empire, this new state, whose official
ideology was based on Turkish secular nationalism, would tolerate no
identity other than a Turkish one. It was therefore no accident that a big
Kurdish revolt took place in 1925, just two years after the proclamation of
the republic. The revolt was crushed with brutality, only to lay ground for
the future revolts. In the first 15 years of the republic, the very era of
Atatiirk's one-man rule, hardly a year went by without conflict in the
southeast of the country. The revolt in Dersim in 1937, the last Kurdish
revolt of that era, was subdued only by aerial bombing and poison gas.
In a sense, the PKK, which initiated the most significant uprising to date
against the Turkish government in 1983, was a continuation of this
doomed legacy. It had come as a reaction to the military junta regime of
1980-83, which unleashed a reign of terror and restored the crudest forms
of forced assimilation. (Kenan Evren, the leader of the coup, famously
called the Kurds "mountain Turks.") Nevertheless, the PKK was, and has
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been, also driven by its own ideology, which is a combination of fierce
Kurdish nationalism, mirroring that of the most far-right Turks, and an
orthodox version of Marxism-Leninism.
This "last Kurdish revolt" proved to be the most resilient one, as it still is
alive and kicking. So far, it has led to more than 40,000 casualties — a
huge death toll at least ten times greater than that in the conflict in
Northern Ireland. The stamina of the PKK is certainly a result of its large
base among Turkey's Kurds. Yet, a larger number of Kurds despise the
PKK, and give their political support to Turkish parties that try to win
their hearts and minds, such as the incumbent Justice and Development
Party (AKP), which receives more votes among Kurds than do the pro-
PKK parties.
All this makes the "Kurdish problem" in Turkey a very complicated issue
with no easy solution. Unlike in Ireland, the separation lines between the
two peoples in question (Turks and Kurds) are vague, considering also
that there are at least a million mixed families, and with Kurds living all
around Turkey, including in Istanbul, which harbors the country's largest
Kurdish population. Besides, while there obviously are Kurds who would
happily die for the PKK, there are also those who would rather die than
live under the PKK, which is still a "Stalinist" party at its core.
In fact, the government has already met most of the Kurdish demands,
while the realization of the others (such as public school education in
Kurdish or more local governance in the southeast) is not unthinkable. But
the PKK's commitment to violence, and the consequent hawkishness on
the Turkish side, poisons everything. Hence right now, as of August 2012,
a peaceful solution still seems very far off.
The National Interest
Turkey's Syria Conundrum
Sinan Ulm
August 24, 2012 -- Syria used to be the poster child for Ankara's "zero
problems with neighbors" policy. At the peak of their rapprochement,
Turkey and Syria were holding joint cabinet meetings and talking about
spearheading a common market in the Middle East. Then the Arab wave
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of reforms reached Damascus. The relationship turned hostile as the
Syrian leadership resisted reforms and engaged in large-scale massacres to
subdue the opposition.
With the support of Prime Minister Erdogan, Turkey's foreign minister
Davutoglu positioned Ankara in the vanguard of the community of nations
seeking regime change in Syria. Thus Ankara gave support to the Syrian
National Council and harbored the Free Syrian Army. Even when former
UN secretary-general Annan's plan for a political settlement was
announced, the Turkish leadership made it clear that there could be no
solution with Assad in power.
With this policy of direct confrontation, Ankara not only strove to obtain
the moral high ground. It also sought to precipitate the fall of Assad while
building a relationship with the future leadership of Syria by heavily
investing in the Muslim Brotherhood-dominated Syrian National Council.
Today, this policy of forcefully pushing the regime change agenda in
Syria is under criticism domestically as some of the risks of a post-Assad
world are becoming clearer.
The fear in Turkey is of Syria's disintegration into ethnically and
religiously purer ministates, with a Kurdish entity in the north, an Alawite
entity in the west and a Sunni entity in the rest. The Kurdish opposition's
recent unilateral power grab in northeastern Syria rekindled Turkish
concerns about the emergence of an independent Kurdish entity linking
the north of Iraq to the north of Syria.
The right policy response to this threat would certainly have been for the
Turkish body politic to finally and permanently address Turkey's own
Kurdish problem. But the Justice and Development Party (AKP)
leadership's prevailing populist tendencies seem to preclude this option
despite a well-intentioned effort undertaken before the 2011 elections. The
fact that even the highly popular AKP, facing no imminent threat to its
rule, backed away from tackling this complex issue does not bode well for
the prospects of a lasting settlement.
The failure to solve its own Kurdish problem therefore raises the stakes
for Turkey should Syria implode along sectarian lines. As a result (and
somewhat paradoxically because it has failed to do so sufficiently at
home), Turkey will almost inevitably be pulled in to invest in the future
stability and territorial integrity of Syria.
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With its long-standing support to the Syrian National Council and the Free
Syrian Army, Ankara hopes to have gained the leverage to influence the
behavior of the future leadership in the post-Assad era. But now harder
choices await Turkish policy makers.
To create the right conditions for the emergence of a political process of
reconciliation and reconstruction in Syria, Turkey must shift its position.
With Assad on his way out, Ankara should start the practice of
conditionality. Its continued support to the Sunni opposition should be
conditional on the Sunni leadership taking the lead on midwifing an
inclusive, nonhegemonic, multipartite process of political dialogue on the
future order in Syria. Also Ankara should seek to reengage with the
Alawite minority and support efforts to nurture a new political leadership
within this once-powerful minority.
The success of this engagement is critical for a country faced with
allegations of exclusively supporting the Sunni camp in Syria alongside
Saudi Arabia and Qatar. Only a Turkey that acts in harmony with its
secular roots can play the crucial role of helping to build a better future
for all Syrians and, by extension, ensuring its own safety and security in
this volatile region.
Sinan Ulgen is the chairman of the Istanbul-based think tank EDAM and
a visiting scholar at Carnegie Europe.
A,tklc 5.
The Globe and Mail
The `new cold war' is an information war
Anne-Marie Slaughter
Aug. 25, 2012 -- An information war has erupted around the world. The
battle lines are drawn between governments that regard the free flow of
information, and the ability to access it, as a matter of fundamental human
rights, and those that regard official control of information as a
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fundamental sovereign prerogative. The contest is being waged
institutionally in organizations like the International Telecommunications
Union (ITU) and daily in countries like Syria.
The sociologist Philip N. Howard recently used the term "new cold war"
to describe "battles between broadcast media outlets and social-media
upstarts, which have very different approaches to news production,
ownership and censorship." Because broadcasting requires significant
funding, it is more centralized — and thus much more susceptible to state
control. Social media, by contrast, transforms anyone with a mobile phone
into a potential roving monitor of government misdeeds. Surveying
struggles between broadcast and social media in Russia, Syria and Saudi
Arabia, Mr. Howard concludes that, notwithstanding their different media
cultures, all three governments strongly back state-controlled
broadcasting. These intramedia struggles are interesting and important.
The way that information circulates does reflect, as Mr. Howard argues, a
conception of how a society/polity should be organized. But an even
deeper difference concerns the fundamental issue of who owns
information in the first place. In January, 2010, U.S. Secretary of State
Hillary Clinton proclaimed that the United States "stand[s] for a single
Internet where all of humanity has equal access to information and ideas."
She linked that stand not only to the U.S. Constitution's First Amendment,
which protects freedom of expression and freedom of the press, but also
to the Universal Declaration of Human Rights, which holds that all people
have the right "to seek, receive, and impart information and ideas through
any media and regardless of frontiers." Many governments' determination
to "erect electronic barriers" to block their citizens' efforts to access the
full resources of the Internet, she said, means that "a new information
curtain is descending across our world."
This larger struggle is playing out in many places, including the ITU,
which will convene 190 countries in Dubai in December to update an
international telecommunications treaty first adopted in 1988. Although
many of the treaty's details are highly technical, involving the routing of
telecommunications, various governments have submitted proposals
aimed at facilitating government censorship of the Internet. Russian
President Vladimir Putin has been open about his desire to use the ITU
"to establish international control" over the Internet, thereby superseding
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current arrangements, which leave Internet governance in the hands of
private groups like the Internet Corporation for Assigned Names and
Numbers and the Internet Engineering Task Force. On the ground,
governments are often still primarily focused on blocking information
about what they are doing. One of the Syrian government's first moves
after it began shooting protesters, for example, was to expel all foreign
journalists. Several weeks ago, the government of Tajikistan blocked
YouTube and reportedly shut down communications networks in a remote
region where government forces were battling an opposition group.
These more traditional tactics can now be supplemented with new tools
for misinformation. For close followers of the Syrian conflict, tracking
key reporters and opposition representatives on Twitter can be a surreal
experience. Two weeks ago, Ausama Monajed, a Syrian strategic
communications consultant who sends out a steady stream of information
and links to opposition activities in Syria, suddenly started sending out
pro-government propaganda. The Saudi-owned satellite news channel Al
Arabiya has also reported the hacking of its Twitter feed by the
"Electronic Syrian Army."
In the many manifestations of the ongoing and growing information
war(s), the pro-freedom-of-information forces need a new weapon. A
government's banning of journalists or blocking of news and social-media
sites that were previously allowed should be regarded as an early warning
sign of a crisis meriting international scrutiny. The presumption should be
that governments with nothing to hide have nothing to lose by allowing
their citizens and internationally recognized media to report on their
actions.
To give this presumption teeth, it should be included in international trade
and investment agreements. Imagine if the International Monetary Fund,
the World Bank, and regional development banks suspended financing as
soon as a government pulled down an information curtain. Suppose
foreign investors wrote contracts providing that the expulsion and banning
of foreign journalists or widespread blocking of access to international
news sources and social media constituted a sign of political risk
sufficient to suspend investor obligations.
Americans say that sunlight is the best disinfectant. Citizens' access to
information is an essential tool to hold governments accountable.
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Government efforts to manipulate or block information should be
presumed to be an abuse of power — one intended to mask many other
abuses.
Anne-Marie Slaughter, a former director of policy planning in the U.S.
State Department, is professor of politics and international affairs at
Princeton University.
Foreign Policy
Is relying on Saudi Arabia in times of war a
smart tradition or future folly?
Amy Jaffe
August 24, 2012 -- As oil prices ticked above $115 per barrel last week, a
White House leak revealed that President Barack Obama may dip into the
Strategic Petroleum Reserve (SPR), the United States' 695 million barrel
stockpile of emergency fuel supplies. The leak might have been a signal
that Washington wants Gulf countries to take action to lower oil prices. It
might also have been an attempt to wring the risk premium out of current
prices by reassuring the market that America won't let a potential war with
Iran shut off the spigot. The one thing we can say for sure is that the
announcement highlights two interrelated problems with U.S. energy
policy: that every president since Ronald Reagan has used Saudi Arabia as
his de facto SPR and that there exist no clear standards for when to dip
onto the actual SPR. Both problems have the potential to bite us -- badly.
Over the years, the United States has been surprisingly reluctant to release
SPR during times of crisis, preferring instead to let Saudi Arabia handle
the problem by simply increasing its production. For decades, in fact, U.S.
presidents have been able to count on the Middle Eastern petro giant to
pre-release oil in anticipation of times of war. For example, Riyadh
flooded the market ahead of the first Gulf War and, though many do not
remember, it also put extra oil on the market ahead of the U.S. invasion of
Iraq in 2003. Saudi Arabia even increased its oil production after the 9/11
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attacks, which badly strained U.S.-Saudi relations. Likewise, this spring,
when the Obama administration was debating whether or not to release
the SPR ahead of the tightening of sanctions against Iran, Saudi Arabia
helpfully boosted its production above 10 million barrels per day, causing
oil prices to fall more than $10 a barrel and eliminating the need for the
White House to make a firm decision.
But relying on Saudi Arabia, while politically convenient, is not without
risks. The most obvious is that the Saudis have come under increased
pressure -- both internal and external -- as a result of their longstanding
oil-for-security alliance with Washington. Iran has warned its fellow Gulf
producer not to make up the slack resulting from American and European
sanctions, threatening direct retaliation if it does. Saudi Arabia isn't taking
any chances. In recent months, it has arrested prominent Shiite dissidents
-- always suspected of possible ties to Iran -- and doubled the number of
Saudi National Guard forces in the Eastern Province, home to the vast
majority its 2 million-plus Shiite citizens as well as the close to 90 percent
of its oil production.
Oil markets might have taken solace in Saudi preparedness until rumors
surfaced of an assassination attempt aimed at the kingdom's intelligence
chief, a move purported to be a revenge killing by Iran for similar
assassinations of senior military leaders in Syria. The rumors proved to be
false, but like much of the region's murky political intrigue, it moved
markets and served as a reminder that a tit-for-tat game of high level
assassinations is not out of the realm of possibility. The oil implications of
this unpredictability are clear: It will be hard to keep global oil markets
calm in the coming weeks and months. Deaths of rulers can change
dynamics overnight virtually anywhere in the region, and Israel's defense
policy remains an ever-present black swan. Saudi Arabia's own rumored
pursuit of new nuclear-style ballistic missiles from China adds an
additional layer of uncertainty about a nuclear arms race in the region.
America's ability to fall back on the Saudis is further imperiled by the
inherent instability of the kingdom's political and economic system. Saudi
Arabia is going to need more and more oil revenue just to keep its
population from growing restive. Riyadh-based Jadwa Investment predicts
that Saudi Arabia will be forced to run budget deficits from 2014
onwards, even at a break-even price forecast of $90.70 per barrel in 2015.
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Other forecasts are even bleaker in the medium term, estimating the
breakeven price at $110 a barrel in 2015. Either way, the kingdom's thirst
for cash is likely to mean that U.S. and Saudi interests diverge. The oil-
for-security deal between the two countries has destabilized the kingdom
in the past by igniting support for al Qaeda in the Arabian Peninsula and it
could be used again by agents of internal opposition groups. Moreover,
the recent pro-democracy upheavals in Egypt, Syria, and above all
Bahrain are bound to influence U.S.-Saudi relations over time in ways
that are hard to predict.
For the time being, these risks have been at least temporarily mitigated.
Recent leadership successions in the senior ranks of the Saudi security
apparatus (defense, interior, and intelligence) and the common interest in
containing Iran has brought Saudi oil policy closer in line with White
House goals -- at least for now. Saudi oil shipments to the United States
have been on the upswing this year -- a reversal of previous policy that
favored sales to China -- and the kingdom, together with Kuwait and the
United Arab Emirates, has stockpiled oil in ships off the coast of Al-
Fujairah, outside the critical shipping chokepoint of the Strait of Hormuz,
and added emergency crude oil stocks in China, Japan, South Korea, and
Rotterdam. This coordination helped keep oil prices from spiking when
Western countries tightened the sanctions regime against Iran's oil
industry. The extra Gulf crude was aimed not only to wean Asian and
European buyers off Iranian oil but also to give the United States (or even
Israel) more economic leeway for a military strike against Iran's nuclear
facilities in the event that diplomatic negotiations stalled out. But as more
and more Iranian oil comes off the market and the specter of military
action intensifies, the impact of these significant moves is wearing off.
But if Obama's trial balloon reveals the dangers of treating Saudi Arabia
as a de facto emergency stockpile, the absence of concrete standards for
releasing the real SPR will also make the president's job harder. There
exists no defined mechanism to trigger a release, and each time it seems to
make sense, the United States winds up initiating a cumbersome, time-
consuming diplomatic process of negotiations with foreign allies and the
International Energy Agency (IEA) that often over-politicizes the result.
Moreover, the actual process of getting the oil from the reserves to the
pump isn't instantaneous. It takes weeks after the announcement of an
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SPR sale for the U.S. Department of Energy to collect bids and award
sales volumes. Then, the buyers have to schedule oil with nearby pipeline
companies, so by the time the oil actually reaches the refineries and is
processed into gasoline another several weeks will have passed. Thus,
releasing stocks after a major crisis is a losing strategy -- better to plan
ahead to shape the marketplace.
There is no question that the United States should get more oil onto the
market, not only because prices have been rising but also because the war
drums are beating again over Iran. But within the constraints posed by
poorly designed energy policies, the president has made it harder for
himself by adopting a non-committal approach. The optimum utilization
of strategic oil stocks requires broad diplomatic coordination, a
transparent policy, and well-articulated procedures. In 1991, that
coordination was well advertised months in advance and markets knew
what to expect. As a result, the oil-price impact of the Gulf war was small
(by today's standards) and short-lived, and its impact on the U.S. and
global economy was muted compared with other similar crises.
Where the oil markets are concerned, the president's coy, "see what you
can get first" negotiating strategy with Western and Middle East allies
might be less than useful. Transparency and planning are what takes
volatility out of prices. In days gone by, a photo-op of senior U.S. and
Saudi officials shaking hands was enough to convince the markets that oil
would be there in a crisis. In the volatile post-Arab Spring world,
however, this style of oil diplomacy can no longer be implemented
without unexpected political consequences -- suggesting that the United
States needs to shift its thinking about how it manages the SPR and oil
crises in general. The time to revise the trigger mechanism for the SPR is
now, before we hit a major crisis. Dithering only helps our enemies and
puts the global recovery at risk.
That said, there is no wrong answer for when to time an SPR release.
Given how long the process takes, an early release now means that
markets would be physically well supplied by the time a possible war
breaks out, potentially muting the impact on prices then. If the president
waits, however, and announces perhaps an even larger release at the time
of a crisis, it could have greater psychological power to move prices
sharply lower all at once. The only wrong policy is to be indecisive.
EFTA00713336
Having no policy means that market participants cannot plan whether to
build commercial inventory or not. It gives speculators free rein and
increases the chance American consumers will pay unnecessary fuel-risk
premiums.
The geopolitics of the Middle East has likely changed forever as a result
of the Arab Spring, and the United States has neither the resources nor the
power to put Humpty Dumpty back together again. We must acknowledge
this fact and forge an emergency oil stocks policy that fits 21st-century
realities. Not only does Washington need to break its habit of falling back
on the Saudis, it needs clearer definitions for the goals and mechanisms of
an SPR release. It should also consider requiring U.S. refiners to hold a
mandated minimum level of gasoline inventories (as is done in Europe
and Japan) to ensure that Americans have immediate supplies of fuel in
the event of a major oil disruption from the Middle East. Such domestic
fuel stocks proved invaluable to Japan in the aftermath of the Fukushima
nuclear crisis last spring. A more transparent and effective strategic stocks
policy would not only better protect the U.S. economy in times of oil-
market uncertainty, it would also give America more freedom of
maneuver in the new Middle East.
Amy Jaffe is the Wallace S. Wilson fellow for energy studies at Rice
University's Baker Institute and co-author of Oil, Dollars, Debt and
Crises: The Global Curse of Black Gold.
EFTA00713337
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