Saudi Arabia will remain close to the United States out of necessity, but it knows it cannot always count on the United States to be in sync with the Gulf Cooperation Council's agenda. Riyadh will attempt to consolidate a Sunni regional alliance to address regional threats, and the United States will not always be able to police such actions. Riyadh will also coordinate with its Gulf partners on its longer-term economic security. With low commodity prices delivering the latest reality check to Gulf monarchs on the importance of diversification, questions over the stability of Saudi succession will rise as Saudi economic and potentially political policy becomes more experimental.
A close eye will need to be kept on Iran as well. The Iranian presidential election is tentatively set for June 2017, less than six months after the inauguration of the U.S. president. Even as recent parliamentary elections in Iran favored the moderate camp led by President Hassan Rouhani, a slow economic recovery and growing resistance from political hard-liners threatened by Rouhani's political and economic opening have the potential to upset Iran's political path and raise more complications in the fledgling U.S.-Iran relationship.
A Credible U.S. Pivot to Asia
China is still massive and growing, but a slower rate of growth for a country as large as China puts the world in a whole new paradigm. As that painful adjustment continues to play out, we must bear in mind that Beijing understands the existential need to build up a large consumer class and move its economy up the value chain to rebalance. China intends for its tech industry to be a major driver for growth but also wants to move beyond just the assembly and production of electronic products into designing and fabricating components that it currently has to import. Government subsidization, corporate espionage and the direct purchasing of foreign tech companies will all be geared toward gaining the know-how needed for China to develop a more indigenous tech industry. This will be a key driver of Chinese espionage in the cyber realm, where the best options for defense by the United States are political rather than technical, given the rapidly shifting threat environment. Nonetheless, though cybersecurity may be a high-profile campaign issue, any future White House will have limited success in persuading China to take action against hackers except those outside its command.
While it is tempting to manipulate currency values in a prolonged period of economic stagnation to boost growth, the cost to the Chinese consumer will weigh heavily on Beijing's mind and shape a more cautious approach to managing the yuan. The daunting amount of structural reform needed to tackle industrial overcapacity and rebalance the Chinese economy will occur at a highly uneven and volatile pace as authorities face growing resistance on the central and local levels. Foreign and domestic calls for Beijing to allow freedom of communication and expression will fall on deaf ears as President Xi Jinping will work in overdrive to nip emerging factions in the bud as party competition escalates.
As China's economic and political challenges grow, the country can be expected to be even more assertive abroad. Both Beijing and Washington will court countries in Southeast Asia with the potential for robust economic growth as they take advantage of the Chinese slowdown over time. But the states in Southeast Asia will refuse to be drawn in a zero-sum game. On the security front, China is not looking to pick a fight with the world's military superpower, but it is serious about defining a naval sphere of influence and protecting and creating redundancy in its supply lines. Chinese efforts to project power into the wider Indian and Pacific oceans will rub against a U.S. imperative to maintain naval dominance in these theaters.
North Korea's nuclear advances will only further complicate the security climate in the Asia-Pacific theater. A replication of the Iran or the Libya strategy will not work in trying to contain North Korea's nuclear ambitions. Pyongyang is aiming for a viable nuclear deterrent, and sanctions and military threats will only reinforce this goal. The United States will deepen its security ties with Japan and South Korea to mitigate the developing North Korean threat, an alliance that will also heighten frictions with China. Even as Beijing tries to leverage cooperation on dealing with North Korea to place boundaries on U.S. security enhancements in the region, China's influence on Pyongyang's actions are visibly limited, and Beijing will avoid rocking the boat too hard for fear of creating a bigger conflict on its border.
Debates in South Korea and Japan over whether they should take the relatively short leap into activating their own nuclear weapons programs predate by at least a couple of decades Donald Trump's remarks that Japan and South Korea will pursue nuclear weapons. The U.S. focus on its allies in the Asia-Pacific theater and the strength and credibility of its nuclear umbrella will be the main deterrents to Seoul and Tokyo pursuing an independent nuclear path. At the same time, the United States will develop a stronger watch on the nuclear ambitions of its own allies and will wield sticks when needed to dissuade strategic partners from unilaterally making a nuclear jump.
A Silver Lining in the Commotion over Commodity Prices
While political volatility is a given for countries overly reliant on extractive industries and foreign credit for growth, the global commodity bust and credit crunch can be a boon to U.S. foreign policy. From Latin America to Africa to Asia, economic cycles have reached a point where political leaders can no longer binge on credit-fueled growth to sustain populist measures. As credit gets squeezed, it becomes much harder to keep the public content through subsidies and to reward political allies through kickbacks from mega projects. Economic belts are tightened, corruption allegations have the potential to mobilize the public, and social unrest ensues. Once the storm passes, some (but not all) countries will come out stronger as populist measures are reined in and stronger regulatory environments develop. The United States can also continue a policy of quietly supporting the creation of credible anti-corruption bodies to stabilize governments over the long term as it works to create a more dependable network of allies.
