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Strategies & Market Trends : Coming Financial Collapse Moderated

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To: TobagoJack who wrote (661)4/12/2002 8:06:08 PM
From: TobagoJack  Read Replies (1) of 974
 
stratfor.com
MIDDLE EAST
9 April 2002

Barring simultaneous U.S. strikes against multiple terrorism targets, preparations for an attack on Iraq and the ongoing hunt for al Qaeda will drive events in this region.

We expect continued Israeli-Palestinian violence to reach a crescendo this quarter and then begin to subside - if for no other reason than sheer exhaustion. An increasingly marked shift by Palestinians toward military tactics, rather than suicide bombing campaigns, will emerge as Palestinian leader Yasser Arafat proves powerless and younger leaders, such as Fatah official Marwan Barghouti, strive to become more relevant. The strife will outlast the administration of Israeli Prime Minister Ariel Sharon. Unable to forge a peace deal in the short term, the United States will attempt to contain the conflict - portraying the Israeli-Palestinian struggle to Arab governments as a distraction from broader issues.

Elsewhere in the Middle East, political turmoil will be widespread. Military reshufflings -- which already have emerged in Saudi Arabia, Jordan and Syria -- are likely in many Arab states, and extra-governmental and opposition political groups may surface. With its Middle East peace proposal - a ploy to deflect U.S. pressure for cooperation against al Qaeda -- largely rebuffed by Arab states, the regime in Saudi Arabia will retrench and attempt to withstand continued U.S. arm-twisting. Faced with the loss of a vital source of revenue, some pro-U.S. officials may be forced to become more active. Meanwhile, U.S.-Yemeni military incursions may be made into southern Saudi Arabia, though they will remain unconfirmed.

Syria, under pressure as a publicly labeled sponsor of terrorism, will cautiously and gradually align itself more closely with the United States amid continued military and political purges by President Bashar al-Assad.

Egypt will rise again to lead diplomatic initiatives for the region, though the regime in Cairo -- as in neighboring countries -- must continue to walk a fine line between U.S. and domestic interests. Tough-sounding public statements will mask internal acquiescence to Washington and anti-terrorism cooperation by domestic security apparatuses.

In the Persian Gulf, regimes will take steps -- such as increased domestic security measures or political reforms -- designed to keep the ruling parties in power.

Meanwhile, Iraq will continue to be a source of international tension - particularly in May, when U.N. economic sanctions come up for renewal and Iraqi military defectors meet in Europe. Washington may attempt to turn the sanctions debate into a referendum on future military action against Baghdad. Look for continued U.S. military build-ups in the Gulf region as well as in Turkey and perhaps Jordan. Military defectors may attempt to turn their U.S. State Department-sponsored convention into a second "Bonn conference" and declare themselves the government-in-waiting.

Iraqi President Saddam Hussein will not sit idly by. He will conduct a series of purges to rid himself of any cloaked enemies who may dream of his ouster. Knowing that the United States would prefer a Sunni-led replacement force, he will concentrate on keeping Iraq's Sunni populace contained and on building alliances with Iran and Syria.

Iran also will remain a key player in the coming quarter. The country is a major source of concern for the United States due to its WMD capability and potential financial and political support for anti-U.S. militant groups. Although an intense struggle between the factions of Supreme Leader Ali Khamenei and President Mohammad Khatami is clearly under way, we expect it will remain contained within the next few months - making it impossible for the United States to reach a stable understanding with Iran. The country will continue to seek a political-military alliance with China and a political-economic relationship with Europe in attempts to counter Washington. The internal conflict is not likely to reach a crisis point before summer, if it does so at all.
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