The Chessboard: The Economic Factor

by MAJ. GEN. PAUL E. VALLELY, US ARMY (RET) February 9, 2011
As events unfold in the Middle East and North Africa, fears of dire economic impact prevail. It is not just America that faced the problems of forced austerity before the crises now unfolding; Europe was already in trouble over its own debt crises. This is especially true in Portugal, Ireland, Italy, Greece, Spain, Belgium, and the UK. The affluent lifestyle of millions is threatened even more deeply than just a few weeks ago and the introduction of tough belt-tightening measures has led to considerable public dissatisfaction and social upheaval already.
As in the United States, the European Union (EU) unemployment rate is high. It is currently estimated that over 23 million people are jobless, as European leaders are being forced to raise taxes, cut spending, and trim social benefits that average citizens have taken for granted since birth. In this new age of austerity, the European people are beginning to rethink their way of life just as we are in America. But now, it is even more urgent and tenuous. No longer can the economies of the west sustain such liberal tax and spending programs. No longer can these nations withstand unmitigated immigration from poor nations who take advantage of these liberal social programs. Europe and America are losing their identities, wealth, and way of life, and what happens in the Middle East bodes badly for these endeavors.
What must be faced by all the previously prosperous nations of the West is that global trade, and the resulting global economy is slowly bringing the world into economic balance. The rich nations are losing wealth, and some poor nations are gaining.
Businesses go where labor costs are lower than home due to the policies that are anti- business and anti- free market dynamics. Eventually, it may work itself out, and labor costs, as well as living costs, will be readjusted but I am not hopeful of that happening anytime soon. Until then, our standard of living will go down until it matches that of the rest of the world whose fortunes are rising if current policies continue. What happens next, determines the speed at which this occurs.
The chaotic events now occurring in the Middle East may be apocalyptic. The rapidly changing Chessboard is affecting America’s future role on the international scene in this regard. Political upheaval in the Middle East will have a striking effect globally, and if America treads down the wrong road, our way of life will decline even more rapidly.
What is striking about the current Chessboard movement and the current crisis in Egypt is the rapidly changing scene and evolution of other events and uprisings. The anti-Mubarak protesters remain in the streets, yet President Hosni Mubarak retains his position; and the military, at least overtly, has not made a strong move against either side. The next shoe is about to drop. Mubarak in my opinion will depart Egypt soon under the guise of healthcare issues. The Egyptian Army and VP Suleiman appear to be the faction and government entity that will fill the vacuum at least for the interim period.
The Chess Masters in Iran and the Muslim Brotherhood are still playing out their moves very judiciously and both fully understand the domino effect of radical Islam, the caliphate, and Jihad. The key is Egypt, but it is not the only chess match in play. There is talk of a split between the old and new guard in the military over how to manage the transition, particularly about who will lead the post-Mubarak regime. How are these tensions contributing to confusion in talks and negotiations with the United States and Israel? Are there any signs that the military is sending mixed messages? How significant are the differences within the military to unity and cohesiveness?
 Mubarak and Suleiman
Former intelligence chief and new Vice President Omar Suleiman, who by all accounts, appears to be running the regime now, has held talks with the Muslim Brotherhood and other factions. What is the youth-drive April 6 Movement’s reaction to the Muslim Brotherhood’s rejection of terms offered in negotiations? How dependent is the Muslim Brotherhood on the ‘April 6 Movement’ to sustain street demonstrations? How divided are the opposition forces? Are there fissures within the Muslim Brotherhood? How manageable or unmanageable will the various other factions be as the crisis drags out?
In looking at the regime, it is not only about Mubarak, but other elites, including Egypt’s wealthy families. What role are they playing in the transition discussions? How much money is being moved, and to where? Beyond the individuals, what impact is the sustained crisis having on the Egyptian economy, and on port and canal operations?
We also need to watch for unrest along the Gaza border. There is only one major border crossing at Rafah (besides the cargo crossing at Kerem Shalom). The area along the northern Sinai route – El Arish, Sheikh Zuwayd – witnessed violence in the last week from Bedouins. We need to watch these groups, and Hamas must be closely monitored. In addition, we need to look for troop movements anywhere in the Sinai, including the Israelis.
In regards to Israel, there has been recent talk within the opposition about the fate of the peace treaty between Egypt and Israel – with the idea that the treaty might be put to a popular referendum. As the fate of the regime in Cairo is being decided, what is Israel thinking? Which contingencies worry it most, and how is it preparing for them? What is Israel anticipating with its relationship and understanding with Egypt; one long taken for granted?
Events in Iran, Lebanon, Israel, Syria, Jordon, Yemen, and Saudi Arabia are very much in play as well. Russia and China remain in their similar modes of non-involvement playing their moves behind the scenes as the United States finds itself languishing in the ‘Sea of Ambiguity’. If the trade routes are cut off or disturbed, when oil and other goods cease flowing, the world economy could implode in hours or days. It would take less than two weeks for the global financial collapse scenario to occur.
The dollar and global currencies, already falling in value, would plummet. The year 2011 may be, in fact, the year of the Apocalypse or at least we may experience a series of apocalyptic events that changes the United States and the world as we know it. Watch the movement of the oil market and other commodities; these are the key indicators of the future.
Finally, a warning to our Generals and Admirals – reposition our forces now for likely future events resulting from the current crises. Do not be misled by the political leaders as we were in Vietnam. Your duty is to the Constitution and the American People, first and foremost. Protect America and its interests first. Stand Up America now recognizes that Afghanistan and Pakistan are not our greatest concern; our economy, the outcome of the crises in the Middle East, and our Southern Border are our clearest and most present dangers to the United States. Contributing Editor Paul E. Vallely, Major General (USA/Ret.) is an author, military strategist and Chairman of Stand Up America and Save Our Democracy Projects.  Dr. Raymond Tanter is an Affiliate of Government Department, Georgetown University, Adjunct Scholar at The Washington Institute for Near East Policy and Professor Emeritus, University of Michigan. He is also President of the Iran Policy Committee.Thomas McInerney is a retired Lieutenant General from the United States Air Force, with experience of more than 4,100 flyinghours. He flew 407 combat missions in Vietnam and is now a contributor on Fox News. He is also a member of the Iran Policy Committee.

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