Obama Speech to Test Extent of U.S. Influence in a Fast-Changing Mideast

When President Barack Obama outlines his vision of U.S. policy in the Middle East today, his challenge will be to get people in the region to care.

The excitement generated by Obama’s call two years ago for a “new beginning” in U.S.-Arab relations evaporated as people waited for changes that haven’t come, said Robert Danin of the Council on Foreign Relations and others who study the region.

As protests have swept the Arab world, toppling some leaders and challenging others, U.S. influence has been diminished by a response seen as cautious and inconsistent, Danin and other analysts said. And the U.S. has suffered some public diplomatic setbacks in dealing with Bahrain, Yemen, Syria, and the Israelis and Palestinians.

“It’s not clear what the United States says right now matters to the people of the Middle East,” Danin said. “The people of the Arab world are more interested in seeing what the United States does, not what it has to say.”

To be sure, the Obama administration had an impact in urging the Egyptian army leadership not to crush protests and ended up playing a leading role in sending NATO to protect Libyan rebels. Still, analysts said, many in the region are skeptical of U.S. pronouncements at a time when they are taking events into their own hands.

People in the region will be listening for what specifics Obama offers on the Israeli-Palestinian conflict and on his administration’s position on the Arab Spring, said several analysts.

Influence ‘Fading’

“U.S. influence was already fading in a lot of places” before the Arab Spring movement erupted, said Marina Ottaway, Middle East program director at the Carnegie Endowment for International Peace in Washington. “The U.S. has had very limited capacity to determine what was going on inside these countries, and very often it has found itself having to follow the lead of these countries.”

Ghaith al-Omari, a former Palestinian negotiator, said “expectations for this speech in the Arab world are so low.”

“Arabs are skeptical about this speech,” he said in a telephone interview. “They do not have their hopes up. More importantly, the U.S. has not figured highly in the Arab revolts.”

Aid has long been one lever of influence in the region. Obama will announce a series of economic measures intended to help nations in the Middle East and North Africa, such as Egypt and Tunisia, that are going through a transition to democracy, according to administration officials who briefed reporters on the condition of anonymity.

$1 Billion

The aid for Egypt includes $1 billion in loan guarantees through the Overseas Private Investment Corporation and cancellation of $1 billion in debt, about a third of what Egypt owes the U.S. An additional several billion dollars’ worth of financing for Egypt and Tunisia would come from multilateral development banks, the officials said, without providing details.

The new proposal is on top of the $2 billion that Secretary of State Hillary Clinton in March pledged through OPIC for the region. The officials said Obama will also reiterate his administration’s support for a U.S.-Egypt Enterprise Fund, which, pending approval by Congress, would be created with $60 million to stimulate private-sector investment and provide businesses with access to low-cost capital.

Obama said this week after meeting with Jordan’s King Abdullah II at the White House that it is critical that economic reforms accompany political changes.

Seize the Opportunity

The assistance is one element of Obama’s speech at the State Department, scheduled for 11:40 a.m. local time, in which he will outline how the U.S. can seize the opportunity from the changes that have swept across the Middle East and North Africa over the past five months.

The unrest in the region has sent the Bloomberg GCC 200 Index (BGCC200) of Gulf shares down 2.3 percent this year and helped drive the price of oil up 43 percent the past year on concern that it might spread to major oil producers. Crude for June delivery was at $100.35 a barrel, up 25 cents, in electronic trading on the New York Mercantile Exchange at 12:38 p.m. Sydney time.

Obama will outline several areas that form a long-term vision for the region’s economy. The initiatives focus on supporting institutions -- such as non-government organizations and universities -- that contribute to economic policy making; providing international support to modernize and promote the stability of local economies and financial institutions; and creating frameworks for regional and global trade opportunities.

U.S. Setbacks

The administration has seen that there are limitations on its influence, as well as opportunities.

Longtime ally Saudi Arabia recently signaled its intent to pursue foreign policy goals that at times will go against U.S. interests in the region. In a May 15 opinion article in the Washington Post, former Saudi adviser Nawaf Obaid wrote that the oil-rich kingdom is breaking its lockstep with “misguided” U.S. policy in the region, including its “unconscionable refusal to hold Israel accountable for its illegal settlement building.”

Bahrain’s Sunni Muslim monarchy has ignored Obama administration calls to respect human rights and negotiate with the Shiite-majority protesters. Instead, it has put doctors and activists on trial and has torn down some Shiite mosques.

Defying U.S. warnings against unilateral action, Palestinian Authority President Mahmoud Abbas is intent on a United Nations vote in September to recognize a Palestinian state. In a recent opinion article in the New York Times, Abbas highlighted the U.S. failure to stop Israeli settlement- building, even using political pressure and “promises of rewards.”

Saying ‘No’

Yesterday, Yemeni president Ali Abdullah Saleh rebuffed an appeal by John Brennan, Obama’s top counterterrorism adviser, to step down and implement a political transition agreement. And Syrian President Bashar al-Assad continues to ignore U.S. calls to address the demands of protesters.

Another lever of U.S. influence, American military power, has proven disappointing so far to Libyan rebels, as Muammar Qaddafi continues to withstand military attacks and defy U.S. demands that he leave office.

The success of the U.S. and NATO involvement in Libya will be “evaluated against the regime’s survival or its collapse,” Obama’s former national security adviser, retired Marine Gen. James Jones, said at the National Press Club on May 16. “That may be unfortunate, but it happens to be the reality.”

Ottaway said that one factor in the decline of U.S. influence in the region was the invasion of Iraq, which many in Persian Gulf nations saw as benefiting their rival, Iran. “There was a lot of anger at the United States in the Persian Gulf for changing the balance of power, for serving Iraq to Iran on a platter,” she said.

Inconsistency

Another factor has been the administration’s seeming inconsistency, Ottaway said. While the U.S. and allies bombed Libya in order to protect civilians from attacks by government forces, they have not been nearly as assertive about Syria or Bahrain, home to the U.S. Navy’s Fifth Fleet.

“The reality is that even as freedom is more popular, as individual freedoms and rights are more popular, U.S. direct influence may diminish,” said Robin Wright, a senior fellow at the U.S. Institute of Peace, a nonpartisan policy center that serves Congress.

That could be inevitable in places like Egypt, where Hosni Mubarak, during his three decades as president, got aid and political support from his alliance with the United States.

“If you open up political systems, you clearly are going to have more complicated relationships and possibly less sway because you’re dealing with lots of different parties,” Wright said. “You’ve got to accommodate more than just one man.”

Marwan Muasher, a former foreign minister of Jordan, said that if Obama’s approach fails to impress, “the U.S. will lose influence in this process.”

“This is a new Arab world, and you cannot address new realities by applying old policies,” he said in a May 17 telephone interview. “People are not looking for a lesson on democracy; people are looking for action.”

To contact the reporters on this story: Nicole Gaouette in Washington at ngaouette@bloomberg.net; Julianna Goldman in Washington at jgoldman6@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.