It is never the inevitable, always the unexpected, said Keynes. And few years could have illustrated that maxim better than 2011. The Arab Spring and the euro on the brink of collapse were not prominent in many pundits' predictions 12 months ago. Yet these are both major items of unfinished business. After the outpouring of grassroots-led democracy in North Africa and the Middle East, we are still uncertain where the Arab Spring is heading and what the consequences will be. Syria looks to be going from bad to worse: Islamists are set to dominate new parliaments in Egypt and Tunisia; where else will the Arab street rise up?
The only prediction one can make with confidence is that Israeli/Palestinian relations will at best be becalmed this year. With the US presidential elections due in November, no candidate will advocate pressurising the Israeli government to halt settlements or make any meaningful concessions to enable progress to be made on this most intractable and long-running of territorial disputes. The arc of instability running from North Africa to the Chinese border poses a range of other problems. Beside Syria, Iraq now unoccupied by foreign military for the first time in eight years shows every sign of descending into civil war as the majority Shia, prompted to some extent by Iran, seek to reverse the iniquities of the Sunni-dominated Saddam era. Revenge attacks can in turn be expected from al-Qaeda in Mesopotamia.
Which brings us to Iran. Israel has successfully prosecuted an undeclared war against Iran's nuclear weapon ambitions by assassinating several key Iranian nuclear scientists and sabotaging some of the key Iranian nuclear installations. Yet they are incapable of doing more than delaying Iranian plans. It will require a sustained and intense military action to destroy the whole nuclear programme. And the consequences would extend far beyond the immediate region. It would take a bolder figure than Obama to order a pre-emptive strike on Iran -- though if Iran were to attack Israel as a result of some real or imaginary offensive, that would be a different matter.
Further to the North and East in the sweep of the arc, Afghanistan and Pakistan start the year in dreadful shape. You wouldn't want to bet too much money against another military takeover in
Pakistan, though the dire state of the economy makes the prospect a particularly unappetising one. For the rest of the international community an unstable nuclear-armed Pakistan is another nightmare scenario. In Afghanistan the western allies keep lowering the bar of the definition of a successful exit. Power-sharing with the Taliban wasn't part of the original script. Certainly few women's groups will be happy at the outcome; and for the widows and families of the war dead, the inevitable question poses itself. What was it all for? For President Obama facing re-election the essential requirement will be the further drawdown of US troops as he promised two years ago in the same breath he announced a surge.
In Russia Vladimir Putin will be hoping to resume the presidency he gifted to his protege Dmitry Medvedev in 2008. Russian voters angry at the electoral fraud in the parliamentary elections in December may want to register their displeasure at being taken for granted.
Two other Security Council permanent members may see changes in their leadership in the next year or so. China's communist party will appoint a new premier, almost certainly a more orthodox conservative figure, to succeed the reformer Wen Jiabao in early 2013. While the communist party's Faustian pact with its people -- we guarantee rising living standards but will never relinquish the party's monopoly on political power -- is not at immediate risk, China's ever patient population cannot ultimately be denied their access to the Chinese Spring. Whichever year that will be; even if 2012 is not it.
And then there is the French election and its importance for the euro. Mr Sarkozy is at a low ebb in the polls. But his main challenger, the Socialist candidate Francois Hollande, suffers from an Ed Miliband-like charisma deficit. The outcome of this election is perhaps the most critical for a Europe faced with a meltdown of the euro. Hollande is unattracted by the financial treaty Sarkozy and Merkel cobbled together last month and has promised to renegotiate it. He may find an unlikely ally in David Cameron or even Enda Kenny. But the European Union and the eurozone are now in thrall to the markets and credit-rating agencies. They may not have the patience to wait for the EU's typically laborious treaty negotiations (never mind renegotiations) to conclude.
If the euro does implode, with dire consequences for both its members and its major trading partners, especially the UK, it's likely that a new hard currency will emerge from the wreckage. This time there will be no accommodation for those whose public finances are less than robust or for those who flout the new ultra-strict criteria. Ironically it is the current arch priests of financial orthodoxy, Germany and France, who were among the first to break the Maastricht criteria and being 'bigs' did so with impunity in 2005, unlike Ireland which was hauled over the coals. Unfair. But the world is unfair, which is why it's not fanciful to think of or plan on the return of the punt.
Sir Ivor Roberts is President of Trinity College, Oxford, and a former British ambassador to Ireland, Italy and Yugoslavia
Originally published in
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