''Intelligence Brief: Unocal''

Drafted By:Dr. Michael A. Weinstein 19 July 2005

During the week of July 11, the bidding war between U.S.-based oil giant Chevron and the Chinese National Offshore Oil Corporation (C.N.O.O.C.) for control of U.S. oil company Unocal heated up, with both adversaries mounting major public relations and lobbying campaigns, and U.S. Congressional opposition to a C.N.O.O.C. takeover ratcheting up to a fever pitch. [See: "Intelligence Brief: China"]

Until C.N.O.O.C. weighed in with an unsolicited $18.5 billion cash offer, it appeared that Chevron's $16.6 billion bid for Unocal would face clear sailing. The Chevron acquisition had already gained approval from Unocal's board, pending an August 10 stockholder vote, but C.N.O.O.C.'s intervention sent the deal off course. At a July 17 meeting, Unocal's board rejected C.N.O.O.C.'s offer in its present form, but the decision was not final. Analysts believe that Unocal's board is trying to play the two sides off against one another, seeking to get the adversaries to raise their bids.

Although Unocal accounts for only 0.23 percent of world oil production and 0.3 percent of U.S. consumption, the company has 1.75 billion barrels of reserves, 980 million of which are in Asia and 447 million of which are in the U.S. Unocal is particularly attractive to C.N.O.O.C. and to China's government, which owns 70 percent of C.N.O.O.C., because of the Asian reserves, which are located in Indonesia, Myanmar and Thailand. As the global oil industry consolidates and competition for reserves becomes more intense, Chevron sees Unocal -- a California neighbor -- as a prime strategic acquisition.

Neither of the adversaries seems willing to give way and, having been placed on the defensive, Chevron has politicized the conflict, exerting pressure in the U.S. Congress on a broad front to ban the C.N.O.O.C. takeover outright or to delay it sufficiently to persuade Unocal shareholders to accept Chevron's offer, which already has regulatory approval. Chevron's lobbying effort, which has met with impressive success, has been countered by a similar C.N.O.O.C. campaign. Vice Chairman of Chevron, Peter J. Robinson, openly admits trying to turn the company's conflict with C.N.O.O.C. into a "geopolitical" issue. C.N.O.O.C. strives to interpret the bidding war as simply an ordinary business deal.

Despite the Congressional outcry, the Bush administration has remained neutral in the Unocal dispute, promising that C.N.O.O.C.'s bid -- if it is accepted -- will be reviewed by the Committee on Foreign Investment in the U.S., which vets foreign takeovers of U.S. companies on security grounds. The administration's silence reflects the conflicting interests at play in Washington's global economic policy, which the Unocal fight has highlighted.

Globalization or Economic Nationalism

In its attempt to portray its conflict with C.N.O.O.C. as a geopolitical issue, Chevron has brought to the fore the increasingly difficult decisions faced by Washington in responding to the rise of China's economic power. Writing in U.S. News and World Report, Matthew Benjamin has summarized the problem succinctly: "Essentially, the United States and its politicians are learning that globalization is not pain free."

Sino-U.S. relations are among the most complex bilateral ties in the world and are marked by subtle patterns of dependency, interdependence, competition, cooperation and conflict. Up until the Unocal dispute, economic relations between the two great powers had achieved a highly unstable equilibrium based on Chinese exploitation of the U.S. market for its exports in return for China buying U.S. debt. That tacit bargain had already come under stress through the loss of U.S. manufacturing jobs to China, ballooning Chinese textile exports, alleged Chinese violations of intellectual property rights of U.S. companies, technological transfers and mounting opposition to the low currency valuation of China's yuan relative to the U.S. dollar.

Resistance in the U.S. to the domestic impact of China's growing strength has crystallized around the Unocal dispute because C.N.O.O.C.'s bid is the most serious instance of recent Chinese moves to acquire U.S. assets rather than simply to fund its debt. The recent rise in the price of oil and the high probability that elevated price levels will persist has made energy a sensitive political issue in the U.S. By going to Congress, Chevron has succeeded in making Unocal a strategic issue.

Finding access points in every Congressional committee concerned with foreign trade, resources and military security, Chevron's campaign culminated on July 13 at a hearing of the House Armed Services Committee at which congressmen favorable to Chevron joined with anti-Beijing defense hawks to commit to introducing a bill blocking a C.N.O.O.C. takeover. Linking fears that Beijing might use its acquisitions to disrupt the U.S. economy and the arguments that U.S. energy companies are barred from buying Chinese firms and that Beijing's financing of C.N.O.O.C.'s bid with low-interest loans violates fair trade principles, Congressional opposition to the bid spread beyond its original base in California to include every region.

The wave of economic nationalism set in motion by Chevron's lobbying carries with it the long term possibility that U.S. resistance to asset acquisition might place foreign investments of U.S. corporations in jeopardy, stalling or even reversing economic globalization. Analysts agree that C.N.O.O.C.'s bid, which follows Lenovo's acquisition of IBM's personal computer business and Haier's bid for Maytag, will be repeated by many more efforts by Chinese firms to acquire U.S. assets. As time goes on Washington will be increasingly forced to choose between globalization and nationalism.

The Bottom Line

Whether or not C.N.O.O.C. succeeds in making an offer generous enough to persuade Unocal's shareholders to acquiesce in a takeover, the bidding war has brought to the surface an underlying strain of economic nationalism in the U.S. that is unlikely to abate. As interests in the U.S. are affected adversely by Chinese economic initiatives, the alliance between those interests and anti-Beijing security hawks will strengthen, placing strains on Washington's support of globalized investment markets.

Look for a series of difficult decisions on asset acquisition to emerge in the years ahead that will significantly determine the future of globalization and the shape of Sino-U.S. relations.
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The 'Great Game' Heats Up in Central Asia

Drafted By: Adam Wolfe

Russia and China delivered a one-two punch to Washington's ambitions in Central Asia on the eve of the G8 summit with a joint statement on "international order" followed by a meeting of the Shanghai Cooperation Organization (S.C.O.) that was hostile to U.S. interests. While this combination was not enough to knock the U.S. out of the region, it was the most forceful challenge to U.S. interests in Central Asia since the invasion of Afghanistan in 2001. [See: "Intelligence Brief: Shanghai Cooperation Organization"]

Seeking to prevent any further damage to Washington's position in the "Great Game," last week U.S. Secretary of Defense Donald Rumsfeld traveled to the region to shore up support for maintaining its bilateral agreements with the key players. This was followed by Uzbekistan announcing a deadline for U.S. withdrawal from a military base in its territory. These moves indicate that even though fighting in Afghanistan has yet to cool down, the traditional power politics of Central Asia are heating up.

China and Russia Coordinate Their Central Asian Policies

Before the S.C.O. meeting, Russia's and China's leaders met at the Kremlin on July 1 to discuss their goals in Central Asia and the upcoming G8 summit. The meeting signaled a shift toward greater cooperation between the two states, completely solved their long-standing border disputes from the legal perspective, and laid the foundation for greater integration of their state-controlled oil companies and banking sectors. One reason that the atmosphere in the Kremlin was so unusually amiable was the perception that a shared threat loomed larger than their differences in policy goals; that threat was Washington's role in Central Asia.

The "Joint Statement of the People's Republic of China and the Russian Federation Regarding the International Order of the 21st Century," signed by Chinese President Hu Jintao and Russian President Vladimir Putin on July 2, addresses U.S. hegemony in several less-than-oblique passages. The text emphasizes "non-interference in internal affairs," "mutual respect" for other nations' "sovereignty," and stresses the role of "multipolarity" in dealing with conflicts.

In a passage aimed at Washington's perceived encroachment in Central Asia, the document states, "The peoples of all countries should be allowed to decide the affairs of their own countries, and world affairs should be decided through dialogue and consultation on a multilateral and collective basis. The international community should thoroughly renounce the mentality of confrontation and alignment, should not pursue the right to monopolize or dominate world affairs, and should not divide countries into a leading camp and a subordinate camp." This last statement could also easily be read as a preemptive dismissal of the G8 on the eve of the Scotland meeting. Though Russia is now a member and China an observer of the grouping, they feel that the organization is dominated by the West's agenda.

This dismissal of Western-style multilateralism is further expanded in a passing broadside aimed at the World Bank and the I.M.F. and their emphasis on reform in exchange for aid or loans: "The international community should establish an economic and trade regime that is comprehensive and widely accepted and that operates through the means of holding negotiations on an equal footing, discarding the practice of applying pressure and sanctions to coerce unilateral economic concessions, and bringing into play the roles of global and regional multilateral organizations and mechanisms."

Beijing and Moscow resent the West demanding economic reforms before further integrating China and Russia into the existing globalization power structures. They wish to present an alternative marketplace for developing countries to sell their goods -- one that does not tie economic access to reform or transparency. China has been able to successfully use the widely expected expansion of its domestic market to sell this alternative source of revenue to countries irked by the I.M.F. or World Bank, from South America to Africa. Now it hopes to further cement such a relationship with the states of Central Asia.

In the joint statement, China and Russia sent a clear message to the other members of the S.C.O. -- Washington poses a threat to Central Asia's sovereignty; China and Russia can offer a similar economic and security package, only it will be designed to preserve the current status quo not to encourage market economies or democratic reforms. Fearing future waves of "color" revolutions in the region, these states were eager to receive this message.

A Bigger and Stronger S.C.O.

On July 5, the members of the S.C.O. -- China, Russia, Uzbekistan, Kazakhstan, Kyrgyzstan and Tajikistan -- met in Astana, Kazakhstan to discuss the changing political situation in Central Asia. While previous meetings focused nearly exclusively on the "three evil forces" -- terrorism, separatism and extremism -- and were dominated by China's desire to control the Uighur population in its Xinjiang region and protect its access to energy resources, this meeting demonstrated that the organization, which represents nearly 50 percent of the world's population, desires to be a serious force in international affairs. This can be seen in the granting of observer status to India (at Russia's request), Pakistan (at China's insistence) and Iran (to the delight of all members).

The environment of the S.C.O. meeting was most influenced by the reaction to Uzbekistan's violent suppression of the May rebellion in Andijan. Western criticism of Uzbek President Islam Karimov's tactics brought to the surface the fears that the clan-based governments of Central Asia might fall in a wave of "color" revolutions, similar to that of Ukraine's "orange" revolution. Russia and China provided blanket support for Karimov after the suppression, while Washington could only offer nuanced criticism, fearing that intense criticism of Karimov would result in the loss of access to the Karshi-Khanabad air base, or K2, used to support U.S. operations in Afghanistan; nevertheless, the loss of this base now appears a likely scenario.

Washington's criticism was enough to spread fear throughout the ruling clans of Central Asia that the U.S. is engaged in covert operations to undermine or overthrow the current ruling regimes. This fear does not even escape Kyrgyzstan's subsequently elected government -- which swept into power in a similar manner as Ukraine's government -- because its support still rests on a shaky foundation of clan alliances.

In this environment, the S.C.O. sought to limit Washington's presence in the region -- Uzbekistan, Kazakhstan, Kyrgyzstan and Tajikistan shifted their support to China and Russia in order to protect their sovereignty from U.S. meddling. The joint declaration issued at the end of the summit took aim at Washington by rejecting attempts at "monopolizing or dominating international affairs" and insisting on "non-interference in the internal affairs of sovereign states." The members further urged the U.S.-led forces in Afghanistan to declare a timetable for withdrawal from Afghanistan and the Uzbek and Kyrgyz bases in the region that were established to support the Afghan operations. The Central Asian states see it in their interests to fill the power vacuum that the withdrawals would create with that of China and Russia, which they believe would better ensure the longevity of their regimes.

Top U.S. General Richard B. Myers summed up Washington's interpretation of the shift in blunt terms: "It looks to me like two very large countries were trying to bully some smaller countries." Ten days later, Rumsfeld landed in Kyrgyzstan to ensure that the world's only superpower wasn't elbowed out of the region.

Washington Pushes Back

The U.S. secretary of defense's visit to Kyrgyzstan and Tajikistan was aimed at shoring up support for the continuation of the U.S. military presence in each country, which was successful at least for the mid-term. Kyrgyzstan hosts a U.S. military base at the Manas air base, and Tajikistan offers the U.S. military and N.A.T.O. fly-over rights and hosts a small contingent of French soldiers involved in Afghan operations. French Defense Minister Michèle Alliot-Marie was in Dushanbe on July 21 to firm up that arrangement. Notably, Rumsfeld did not visit Uzbekistan, the other S.C.O. member-state that hosts a U.S. military base. Whether his absence was the result of an Uzbek request or a calculation of Washington's, it demonstrated how the U.S. plans to address the shifting power relations in the region.

Washington has approached Central Asia on bilateral terms, never treating the S.C.O. members as a bloc. In terms of leverage in the relations, this shifts the fulcrum to Washington's advantage. China and Russia encourage the S.C.O. states to act multilaterally in an effort to limit Washington's reach. Rumsfeld's trip demonstrated Washington's ability to act bilaterally with Kyrgyzstan, which has a newly elected government and has yet to fully congeal its foreign policy, and Tajikistan, which has traditionally been the S.C.O. member that follows a balanced approach with its foreign suitors.

Recently, the relations between Uzbekistan and Kyrgyzstan have shown the strengths of Washington's bilateral approach. When over 500 Uzbeks crossed over into Kyrgyzstan following the crushing of protesters in Andijan, Kyrgyzstan initially reacted instep with the Uzbek government. Eighty-seven Uzbek refugees were sent back, prompting outrage from the U.N. and Washington. This led to negotiations between the U.N. and officials in Kyrgyzstan, which, by Washington's design, left out any avenue for input from Uzbekistan. On July 29, a plane with 440 Uzbek refugees left Kyrgyzstan for Romania. This demonstrated Washington's ability to directly influence the geopolitics of Central Asia only a few weeks after the united front presented by the S.C.O. called for a U.S. withdrawal.

However, in dealing with Karimov's government in Uzbekistan, Washington's bilateral approach is no longer effective, in part because of its success in Kyrgyzstan. The Uzbek suspicion of Washington's involvement in the Kyrgyzstan revolution and uprising in Andijan has caused Karimov to throw his government's support behind China's and Russia's vision for the region. As such, the same day that the plane carried refugees out of Kyrgyzstan, Uzbekistan asked Washington to leave the K2 air base within 180 days. The immediate reaction from Washington was to hold back on sending a high-level representative to renegotiate the arrangement while waiting for things to "cool down."

This seems to suggest that the U.S. is leaning toward the future goal of regime change in Uzbekistan and is willing to sacrifice the air base if necessary. This does not mean that Washington will cut off all relations with Uzbekistan, but if it becomes apparent that future negotiations will not lead to an extension of the air base use agreement, Washington can be expected to pursue further bilateral agreements with the other governments in Central Asia to isolate Karimov's government.

Conclusion

Beijing, Moscow and Washington are once again using Central Asia, the setting for the "Great Game" between Tsarist Russia and Victorian England over 150 years ago, as their game board in a region rarely neglected by the world's great powers. In the contemporary version of the game, Washington approaches each state bilaterally, offering incentives to support the operations in Afghanistan while undermining the consensus put forth at the recent S.C.O. meeting.

China and Russia are acting in tandem to shore up support for S.C.O. policies by offering blanket support for the current regimes and implicitly calling attention to U.S.-led efforts to undermine their governments. The states hosting the game board will continue to swing their support from China and Russia to the U.S., and back again, so long as they keep their hold on power. The past month has seen a flurry of activity in the Great Game, and it can be expected that things will not cool down anytime soon.
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The Pentagon's Bid to Militarize Space

Drafted By: Giuseppe Anzera

A series of Pentagon initiatives aimed at space militarization and at the creation of new types of armament -- capable of precisely striking small targets in every corner of the world and to neutralize most of today's anti-aircraft defenses -- will likely result in a new power battlefield in the near future.

While the implementation of space weapons is likely to increase the capability gap between Washington and other powers at first, a broader vision reveals dangers involved in the move that could affect U.S. interests, for it will likely trigger off determined reactions by its competitors. Competitor states could successfully deploy a small number of low cost orbital weapons, thus forcing the U.S. to design an extremely expensive space defense system.

At the moment, a space weaponization policy may generate more troubles than advantages for Washington.

Washington's Turn Toward Space Militarization

The Pentagon's plans to militarize space have definitely emerged. In mid-May 2005, the U.S. Air Force formally asked President George W. Bush to issue a presidential directive that allows Washington to deploy defensive and offensive weapons into orbit. Formally, the new directive is necessary to replace a precedent decree (PDD-NSC-49 -- National Space Policy) issued by the Clinton administration which forbids the indiscriminate militarization of space. While the decree has not yet been issued, speculations over the Pentagon's move already hit the news.

After the 2002 unilateral U.S. withdrawal from the Anti-Ballistic Missile Treaty, worries were raised about Washington's possible start of such a program, for it could transform space into a new battlefield. The U.S. Air Force request, coupled with the April 2005 launch of the XSS-11 orbital micro-satellite, increased the concerns of observers and world powers. XSS-11 is in fact specifically designed to disturb other states' military/reconnaissance or communication satellites.

A discontinuance of U.S. traditional policy about the restricted (e.g. peaceful) use of space could engender a new arms race -- which appears economically and technologically challenging and way beyond many states' reach.

Global Strike and Rods from God

On the technological level, the Pentagon's planning is in the advanced stage: some projects -- aimed at space weaponization -- have already been in place for some time. Among the (partially known) Pentagon's new plans, the two most interesting projects are the "Global Strike" program and the "Rods from God" program. Global Strike involves the employment of military space planes capable of carrying about 500 kg (1100 lbs) of high-precision weapons (with a circular error probability less than 3 meters) with the primary use of striking enemy military bases and command and control facilities in any point of the world.

The main strength of military space planes is the ability to reach any spot on the globe within 45 minutes. This is a short period of time that could provide U.S. forces with a formidable quick reaction capability, as opposed to the enemy's subsequent inability to organize any effective defense. Such a weapon's primary target would be the enemy's strategic forces and -- according to U.S. Air Force sources widely quoted in the press -- the Pentagon is inclined to give priority to this project. One of the main reasons, these sources say, is that the Pentagon itself -- after spending over US$100 billion -- has finally admitted its failure to create an infallible earth-based anti-missile system to protect the American soil from ballistic strikes.

The U.S. Air Force often underscores the space plane's wide operational spectrum. In fact, its utilization encompasses that of a strategic weapon as well as that of its defensive uses of neutralizing nuclear missiles; it would have the ability to target and eliminate militant and terrorist leaders. The space plane could also be employed to suppress long-range air defenses, thanks to its high mobility, hyper-fast deployment and its immunity from the defenses of its opponents. Other uses could be envisaged in the Integrated Air Defense System, as well as surveillance tasks. Moreover, space planes could be easily deployed to support the U.S. Army's rapid reaction force and units of Marines during power projection operations and redeployment phases.

"Rods from God" is the evolution of a 1980s program. Basically, it consists of orbiting platforms stocked with metal tungsten rods around 6.1 meters long (20 feet) and 30 cm (one foot) in diameter that could be satellite-guided to targets anywhere on the earth within minutes, for the rods would move at over 11,000 km/hr (6,835 mph). This weapon exploits kinetic energy to cause an explosion the same magnitude of that of an earth-penetrating nuclear weapon, but with no radioactive fall-out. The system would function due to two satellites, one of which would work as a communications platform, while the other would contain an arsenal of tungsten rods. Each of the satellites would be seven meters long (23 feet) and its diameter would be approximately 30 cm (one foot).

However, serious problems would arise if the Pentagon begins the operational phase -- especially from a financial perspective. Some studies maintain that Rods from God could be fully operational in ten years. The targets of the rods would be much more restricted than those of Global Strike. Their main targets remains ballistic missiles stockpiled in hardened sites, or orbital devices and satellite systems deployed by other powers -- according to the counter-space operation doctrine. Rods from God can, however, be employed to strike targets in desert areas -- be they hardened sites or concentrated hostile forces.

Its devastating striking power does not allow such a weapon to be used for other missions, if unsustainable collateral damage is to be avoided.

Other projects -- which often look like a revisited version of former U.S. President Ronald Reagan's Strategic Defense Initiative's (S.D.I.) programs -- could also be undertaken, such as space mirrors satellites redirecting laser beams from earth against any orbit or surface target and satellites that send out radio waves with a high range in power and breadth.

Problems

The White House will face several problems if it wants to pursue the ambitious project of space militarization consisting of both offensive and defensive weapons.

The first point is the political issue. International reactions to U.S. plans have already appeared: Russian Defense Minister Sergei Ivanov recently evoked an immediate reaction from Moscow, and serious consequences were threatened should an orbital weapon deployment be performed by Washington. Such a reaction could consist of a modified version of the SS-18 intercontinental ballistic missile, capable of putting into orbit a remarkable quantity of space vehicles -- which could even carry military nukes, thus making the U.S. planned intercepting effort much more difficult.

It is easy to imagine that space weaponization -- once in place -- could be employed as well by U.S. rivals at any occasion, as these latter will develop mutual strategic ties just like China and Russia are doing in Central Asia.

The second problem is economic. Orbital weapons -- as the Strategic Defense Initiative showed in the 1980s -- are extremely expensive. It has been estimated that a space defense system against weak ballistic missile strikes could cost between US$220 billion and US$1 trillion. A laser-based system to be used against ballistic missiles would cost about US$100 million for each target.

For instance, the Future Imagery Architecture -- a project aimed at the implementation of new spy satellites which are vital to identify targets for space weapons -- has already reached a cost of US$25 billion. It is a legitimate question, therefore, of whether Washington really needs to finance such projects in today's geostrategic context. Moreover, would these tools be cost-effective in relation of their real operational capability? The first question raises doubts and the second one remains, at the moment, without answer. Henceforth, such initiatives resemble more and more Reagan's S.D.I.

The third fundamental problem is of strategic nature. The implications of space militarization are enormous, and its consequences can't be predicted. It is certain that -- in the short term -- U.S. financial and technological superiority would increase the already prominent gap in military power between Washington and the rest of the world. In addition, some of the new weapons could give the White House new effective tools to fight against symmetrical (states) and asymmetrical (terror networks) threats. However, in the long run, a military colonization of outer space could very well be started by other powers -- which would hardly tolerate Washington's quasi-private use of space.

The Clinton administration decided to take the opposite route and avoided international space militarization, as it considered a new front useless because of the U.S. military's overwhelming dominance on land, sea and air.

Moreover, the orbital deployment of offensive weapons -- even though unequivocally non-nuclear -- can be perilous for various reasons. First of all, the U.S. is currently obligated not to deploy atomic or W.M.D. space weapons, as it signed the 1967 Outer Space Treaty. Even if Rods of God is not a nuclear weapon, its impact power is near the magnitude of a nuke. Hence, it is not certain that the international community will consider it a conventional weapon, and a violation of the treaty could, therefore, be claimed. As a consequence, an indiscriminate race to space weaponization could begin -- involving the orbital deployment of W.M.D. and nuclear weapons. This latter scenario could result in a problem for the United States, a problem that its decision-makers in the 1960s strived to avoid at any cost.

Second, political consequences of a quasi-nuclear weapon should not be overlooked. If Rods of God will be used and other powers will perceive it as the equivalent of a nuclear strike, many states could change their perception of W.M.D. and nuclear weapons standards. A stark decrease in the traditional refrain from using nuclear bombs could then occur, thus changing the current strategy behind nuclear weapons: that of deterrence tools.

Conclusion

The road to space weaponization is hazardous. The current U.S. administration appears confident that it can handle the issue successfully. As usual, when a new category of weapons sees the light, it is not clear whether newcomers will suffer from perpetual disadvantage.

If other powers succeed in implementing low-cost orbital instruments that could endanger Washington's sophisticated space weapons, the U.S. could rapidly find itself in need of financing hyper-expensive programs designed to protect the country -- a situation which could make the Pentagon regret having opened the space front to begin with.
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Intelligence Brief: Saudi Arabia

Drafted By: Giuseppe Anzera

At the end of July, Saudi Arabia's ambassador to the United States, Prince Bandar bin Sultan, handed in his resignation. During the 22 years in which he held this position, he managed to exert undisputable influence over successive U.S. administrations. However, his replacement appears equally capable: the next Saudi ambassador to Washington will be Prince Turki al-Faisal.

Born on February 15, 1945 (the very day on which King Abdul Aziz al-Saud and U.S. President Franklin Roosevelt met on board the USS Quincy and agreed on the "enduring relationship" that has linked the United States and Saudi Arabia up to the present day), at age 14 Turki was sent to boarding school in Lawrenceville, New Jersey. He subsequently enrolled at Georgetown University in the same year as future President William Clinton, but left before graduating and then completed his studies by obtaining a degree from Oxford. His father, King Faisal, had reigned over Saudi Arabia from 1964 until his murder in 1975. Prince Turki's career has been pursued mostly within the General Intelligence Directorate (G.I.D.), Riyadh's main intelligence service, which he headed from 1977 to 2001.

Background of Prince Turki

His appointment to the G.I.D., which came almost by chance due to the need to maintain a precarious balance of power among the various clans in the Saudi royal family, would make him one of the longest lasting and authoritative intelligence chiefs in the world. Under Turki's leadership, the G.I.D. transformed into a modern information service; as a member of the Safari Club (which brought together the intelligence chiefs of France, Morocco, Egypt, Arabia and Iran in an anti-Soviet effort during Washington's difficult Watergate phase), he exerted a determinant influence on Afghani events following the Soviet invasion.

From 1980 onward, Turki committed the G.I.D. to the task of providing financial support for the mujahideens' war-effort against the Soviets, channelling vast amounts of funding to Pakistan's Inter-Services Intelligence (I.S.I.), subsidizing jihadis from all over the Middle East who wanted to participate in the anti-communist crusade, and assisting the efforts that the C.I.A. was starting to make in the same direction.

The impact of Turki's influence determined who was to prevail among the Afghani leaders; his funding laid the foundations for the Islamic volunteer groups who fought in Afghanistan (giving rise to the formation of groups such as al-Qaeda) and enabled the I.S.I. to attain such importance that it became a parallel government in Pakistan. It was Turki who made a deal with the C.I.A. that Riyadh would supply I.S.I. with an amount equal to the funding provided by U.S. intelligence, thus pouring huge sums of money onto the Afghani chessboard.

Turki had known Osama bin Laden since 1978; bin Laden became one of the lynchpins of the G.I.D.'s funding policy toward the I.S.I. and anti-Soviet warfare in Afghanistan, and he met with Turki several times in Islamabad. Many years afterward, in 1998, when bin Laden had already become engaged in an anti-American crusade, Turki was responsible for requesting his extradition by Mullah Omar, but did not succeed in this task.

Turki's exit from the G.I.D. stirred the rumor mills since it occurred on August 31, 2001, less than two weeks before the September 11 attacks and just after his appointment had been confirmed for another four years. In 2002, he was appointed Saudi ambassador to London. In 2005, Turki was cleared of the accusation of having financed the terrorist groups responsible for the September 11 attacks.

Turki is an extraordinarily controversial figure. His appointment strengthens ties between Washington and Riyadh, and sends the U.S. someone whom the administration cannot help but appreciate; on the other hand, his appointment deprives King Abdullah of a precious advisor, a trusted confidant and a useful bulwark against the royal family's ultra-conservatives such as Prince Sultan, who would like to wrench Saudi Arabia free from Washington's sphere of influence.

For Turki, this appointment is certainly an important recognition of his career in general, and of his ability to liaise with Americans in particular, although in the present political and economic situation a figure of such significant capabilities might well act effectively in the domestic context by staying at home.

The Bottom Line

Turki's appointment in the U.S. appears likely to enhance U.S. effectiveness in the "war on terrorism" and to deprive al-Qaeda of an important target at home. The prince looks to be the right choice when considering the common U.S.-Saudi effort to manage the complex relations between the Bush administration and the new king.

Both the Saudi and the Middle East's general context will likely push Riyadh to take initiatives to counter internal fundamentalist drives and to increase the new sovereign's charisma and prestige. In order to reach these goals, the active support from Washington is needed. Therefore, Turki's role will become indispensable to elaborate and promote policies which can harmonize Saudi and American interests -- especially when discrepancies appear.

The new king might also try to obtain a new commitment from Washington for an independent Palestinian state -- especially if the evolving Iraq situation will allow such a move, which is expected by so many in the Arab world. Such a request would be of great help domestically to keep Saudi fundamentalists under control, but it would also provide the U.S. an opportunity to gain new credibility as a mediator in the Muslim world.
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The Hamas Card and the Israeli Withdrawal of Gaza

Drafted By: Jonathan Feiser

As the military phase of the Gaza withdrawal shifts into second gear, political leaderships on both sides are becoming inescapably invested in making the disengagement work. On the ground and within Palestinian society, the future of the region in general and Gaza in particular -- as well as the West Bank -- remains undeniably located within the agenda of Hamas.

Ensuring a Permanent Withdrawal

For reasons of expediency and public relations, in this phase most Palestinians want to prevent any form of direct Israeli military retaliation. They realize that it is in their direct interests to prove that they can manage the Israeli withdrawal as well as the implications of its aftermath. Moreover, it is in the interests of their primary supporter, Hamas, that no negative military or political attention is brought upon them at this very precise time of historical realignment.

Moreover, it is within the womb of Israel's "defensible borders" campaign that the "Gaza model" of good governance and fulfillment of security responsibilities can be applied. A military intervention by the Israeli Defense Forces (I.D.F.) based in retaliatory response to a Hamas intervention would most likely terminally tax the legitimacy of the Gaza model and, as an internal domestic Israeli issue, embolden those that wish to take power from Israeli Prime Minister Ariel Sharon.

The need of Palestinian Authority (P.A.) leader Mahmoud Abbas to control developments on the ground to vindicate the facts of success as they occur will remain a continuous theme of the withdrawal. Indeed, success on the ground will remain closely linked to his own authenticity and that of his domestic constituency within Palestine in general and Gaza in particular.

Nevertheless, the legitimacy of Hamas remains a powerful gravitational force. A younger generation of Palestinians -- not emotionally linked to the nationalism inspired by former Palestinian leader Yasser Arafat -- who spent their lives in refugee camps, prefers to remove the old guard of P.A. leaders that seek to tenuously hold onto power.

While one direct consequence of the Israeli withdrawal will be the temporary empowerment of Abbas, this honeymoon will not last long. Even with economic aid from the United States and the United Nations, Hamas, already extensively powerful in the hearts of a majority of Palestinians, will concisely find itself in a position of unparalleled bargaining power.

The absence of effective logistical and security infrastructure in the vacuum that will follow the withdrawal of Israeli forces remains a critical consequence in the aftermath of the overall withdrawal. At the close of the Six Day War of 1967, security on these border zones remained intimately linked to Israeli national existence. Land for peace equated to the demilitarization of the Sinai Peninsula by former Egyptian President Anwar Sadat while at present there exists no concrete alternative political or security arrangement that dictates any semblance of stability in the vacuum left by Israeli forces.

Conclusion

In the long term, the focus for Hamas will be political (indeed, every action they take from this point on will largely be political in reference to the upcoming elections). By not attacking the I.D.F. and P.A. military elements conducting the evacuation of Gaza, Hamas will gain leverage over a very critical public relations battle between themselves and the unpopular old guard establishment of Fatah and the P.A.

While biding its time, Hamas will continue its routine military tactics, techniques, and procedures of stockpiling, smuggling and proliferating weapons and ammunition. In addition, the security vacuum that will develop in the absence of I.D.F. security checkpoints will clearly enhance the opportunity for greater smuggling efforts.

While on the local level there could be sporadic clashes between Hamas "lunatic fringe" members and I.D.F. and P.A. security personnel, the overall core of Hamas will continue to restrain itself. Without a doubt, one facet of Hamas' abundant strength is found in the disenchanted majority of a younger generation of Palestinians who have spent their entire lives in refugee camps -- and therefore know, or more importantly feel, little of Arafat's vision, much less his root causes for a greater Palestinian state.

Overall, Hamas will continue its fight for the hearts and minds of the Palestinian people. In addition, the rhetoric of Abbas will mean little compared to the historically visible efforts on the ground that have continually legitimatized the vision of Hamas in contrast to the continued demonstrated helplessness and incapacity of the Palestine Liberation Organization and its political underlings.
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