America's incredible shrinking man (page 1 of 3)

By Gerald Butt ABU DHABI

George W. Bush's Middle East advisers must be burning the midnight oil as they try to figure out what, if anything, to do about the crises in the region. The new president's preference is to be less involved than Bill Clinton in seeking a solution to the Arab-Israeli conflict, concentrating instead on formulating new policies towards Iraq and Iran. In doing so, the Bush administration is acutely aware of America's massive dependence on oil from the Gulf and, therefore, is keen to take whatever steps necessary to maintain security in the region.

Increasingly, however, doubts are being raised in the Middle East and, significantly, among a number of respected analysts in the United States about the effectiveness of current American policies - towards both the Arab-Israeli conflict and the Gulf. Equally, observers are becoming more and more skeptical about the ability of the United States to disentangle the two crises.

Whether or not Bush decides to put as much effort as his predecessor into trying to restart the Middle East peace process, he will not be able to ignore that conflict, even if he wants to, while concentrating on Iraq, Iran and the Gulf. The tentacles of the Arab-Israeli dispute have reached the furthest extremes of the Gulf, as they have the most distant corners in the rest of the region.

Some of these issues have been discussed in two recently published studies in the United States. The first is the product of an independent task force co-sponsored by the James A. Baker III Institute for Public Policy of Rice University, Houston, and the New York-based Council on Foreign Relations. The study, entitled "Strategic Energy Policy Changes for the 21st Century," examines the implications of America's dependence on oil imports - particularly those from the Middle East. The report says that recent US policies - influenced by increasingly stringent environmental legislation - have led to a chronic shortage of investment in the country's own oil industry, leading to a greater reliance than before on other oil sources.

The study warns that "reliance on volatile Middle East oil resources could increase dramatically over the next two decades unless policies are put in place to promote oil development in other regions, to shift to alternative sources, or to rein in unbridled or wasteful consumption. In practice, a hands-off US policy towards energy markets has increasingly led to a dangerous complacency about energy supplies."

Complacency is a constant theme as the report moves on to examine recent US policies towards the Middle East as a whole and their impact on America's relations with the strategically important Gulf states. It notes, for example, that the Gulf states have thus far been willing to provide replacement supplies of crude oil to the global market at times when production from Iraq has been reduced or cut for one reason or another. But the study also warns the Bush administration against complacently assuming that this state of affairs will continue - especially given the anti-American mood in the Arab world as a whole. The Gulf states' role "needs to be preserved, and should not be taken for granted. There is domestic pressure on the Gulf Cooperation Council (GCC) leaders to reject cooperation to cool markets during times of a shortfall in Iraqi oil production. These populations are dissatisfied with the 'no fly zone' bombings [of targets in northern and southern Iraq] and the sanctions regime against Iraq, perceived US bias in the Arab-Israeli peace process, and lack of domestic economic pressures."

Looking ahead, the report says that "a diplomatic dialogue that emphasizes common US-GCC goals and programs should be pursued at the highest levels to minimize the potential over these issues [listed above].