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Introduction
The second quarter of 2004 will be dominated by four themes. The first will be the strike and counterstrike activity between al Qaeda and the United States. The second will be the intensifying political struggle in the United States as the administration of U.S. President George W. Bush fights for its life. The third will be the re-intensification of the Israeli-Palestinian conflict, and the fourth will be growing global awareness of the increasing weakness of China’s economy — coupled with readjustments in Beijing’s political plans.
The basic U.S. strategic plan for the war against militant Islam is in place, and we will be seeing increasing — although still low-key — American military activity in Pakistan while the United States tries to liquidate the remnants of al Qaeda. As the recent failures in Waziristan show, Pakistan’s ability to deliver intelligence and military effectiveness is limited. Current U.S. forces available in Afghanistan are not sufficient to force a definitive battle without intelligence and combat assistance from Pakistan. This will delay the confrontation — unless the United States gets very lucky — until the fall. It also will generate a substantial political crisis in Pakistan this fall.
Meanwhile, we anticipate an intensifying political crisis in the United States. The Bush administration’s inability to provide a coherent explanation for its decision to invade Iraq is now haunting the White House. A year after the end of major combat operations, the Bush team still seems incapable of clearly explaining its rationale for invading Iraq. As a result, the Democrats have put the administration on the defensive. This quarter will determine whether Bush can recover and take the offensive as well. We have said that the election is Bush’s to lose — and at this moment, he is doing what he can to lose it. This moment may pass, but the second quarter will give us the first indication of whether the president can regroup. We suspect he can, but we no longer are certain.
Elsewhere, the strategic purpose of the assassination of Hamas leader Sheikh Ahmed Yassin by Israel in mid-March remains unclear. The Israelis have said they intend to liquidate the leadership of the Palestinian radicals. If this is so, they are doing it in a very odd and very slow way. The Palestinians have made bold threats, some of which appear to be beyond their operational capability. Nevertheless, we would expect major attacks from both sides. If the Palestinians don’t respond to the Israelis, their credibility and morale will collapse. Therefore, they will strike the Israelis, to the extent that they can. We expect this quarter to be bloody in the Middle East.
Finally — and in some ways most importantly — the Chinese economic miracle will become tarnished this quarter. Indeed, beneath the surface, it has been tarnishing for quite a while, but public attention to this deterioration will grow in the second quarter. We would be surprised to see an overt meltdown take place over the next three months — or even this year — but the fact is that the objective health of the Chinese economy is dubious, and the defining dimension behind timing is the rate at which the problems become public and well-known. That can happen with surprising speed. Our forecast for this quarter is increased sobriety about China, but not yet calamity.
In order to get more specific, we must begin with the U.S.-Islamist war.
The War
In the predominantly Muslim regions that lie between the Moroccan shores of the Atlantic and the border between India and Myanmar, seven states and the non-state of al Qaeda will drive events in the second quarter of 2004. These states — listed from west to east — are Israel, Syria, Iraq, Iran, Afghanistan, Pakistan and India. The continuing war between the United States and militant Islamists undoubtedly will be the common thread in the choices made by a diverse set of actors, who face a host of opportunities and challenges to their objectives.
Afghanistan
We expect an upsurge of fighting between Pashtun jihadists under the leadership of the Taliban and Hizb-i-Islami, given that the United States — along with the Afghan military — launched a counterinsurgency offensive at the beginning of March. Elections that were to be held in June are now going to be delayed until at least September. Security will continue to elude south and southeastern Afghanistan because many districts in the various provinces reportedly are controlled by the Taliban and Hizb-i-Islami. The International Security Assistance Force (ISAF), comprised mostly of NATO forces, will attempt to spread its troops beyond Kabul into far-flung areas where the writ of the government remains virtually absent.
Pakistan
Pakistan — which appears to have weathered the storm that overshadowed the nuclear fiasco involving its top scientist, Abdul Qadeer Khan, in the first quarter — will be embroiled in the U.S. hunt in Pakistani territory for al Qaeda’s top leaders during the second quarter. Islamabad will try its level best to get Washington to ease the pressure on the Musharraf regime, through a mixture of cooperation and negotiation. Washington, however, will continue to push the government with regard to the hunt for the jihadist leaders, which will lead to problems for Islamabad with domestic Islamists and in the tribal areas. Should things get out of hand, there is also a possibility that President Gen. Pervez Musharraf could begin to face opposition from the military over cooperation with the United States. Given these factors and the repeated threats and attempts on Musharraf’s life, we would not be at all surprised to see events get out of hand.
Iran
Having secured their hold over power in Tehran, the conservative/traditionalist clerics will spend the bulk of the second quarter trying to enhance their position internationally through posturing on the issues of Iraq’s and Iran’s nuclear program. During the first quarter, Iran secured its position as the dominant force in Iraq via the proxy Shiite community. Tehran now must make certain that its influence among the Shia remains as secure as it once was. Underlying tensions between the theological schools of thought of An Najaf and Qom could surface, now that the Iraqi Shia are assured of a dominant position in Iraq and might not wish to continue to subordinate their interests to Iran. Tehran will move to consolidate its position in Iraq.
Meanwhile, the second quarter will be a time of political wrangling, leading up to the meeting of the International Atomic Energy Agency board of directors at the beginning of the third quarter. Until then, Tehran will try to use Europe and its strategic advantage in Iraq to negotiate a settlement with the agency that allows it to avoid international sanctions.
Iraq
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