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By Gary D. Halbert
February 3, 2004



1.  Stratfor’s Latest Analysis On The War On Terror.

2.  Northwest Pakistan Is Major Al Qaeda Stronghold.

3.  War On Terror On Hold Until After The Election?

Stratfor On The Next Phase Of The War On Terror

Despite the unending depictions in the media, and the continuing controversy over WMDs in Iraq, the US has made significant progress in Iraq over the last 2-3 months.  The guerilla war, which was always limited in scope, has now been largely marginalized.  While a US military contingent will almost certainly be maintained in Iraq, perhaps permanently, the end may actually be in sight for the initial military campaign that began last spring in Iraq.  All of which raises the question: What’s next in the War On Terror? 

STRATFOR.COM, the highly respected geopolitical/intelligence organization, believes the next major phase in the War On Terror will be in PAKISTAN.  Specifically, in the northwestern region known as the “Afghan-Pakistani theatre.”  This is where the US believes one of the largest remnants of al Qaeda leaders, perhaps including Osama Bin Laden, and followers are hiding out.

According to Stratfor, the question is more WHEN not IF our forces will mobilize and attack al Qaeda in Pakistan in the areas around the Afghan border.  On the one hand, the Bush administration would like nothing better than to capture Osama Bin Laden during this year’s election season.   On the other hand, starting another major military operation during the election season would be very risky.  Were the operation to be anything short of a quick, decisive and major victory, Bush would almost certainly lose his job.  

In the sections that follow, you can read some of Stratfor’s analysis leading up to their conclusion that Pakistan is the next target in the War On Terror.

“The Bush Administration never saw the war in Iraq as either a stand-alone operation or as distinct from the generalized war on the Islamist movement that al Qaeda was part of. As clumsy and, at times, devious the public presentation of the war was, it had a clear logic. Despite ongoing tactical problems in and around Baghdad, the broad strategic goals of the Iraq campaign are being realized. Therefore, the question now is: What will the next stage of the U.S.-Islamist war look like?
In order to project forward, it is important to recall the strategic purpose of the Iraq war. This was two-fold. First, the United States had to establish its ability to carry out extensive military operations to the conclusion, despite casualties. The perception in the Islamic world -- a perception that al Qaeda attempted to systematically exploit -- was that the United States was unwilling to undertake the level of effort and endure the level of pain needed to impose its will on the region. The war in Afghanistan, rather than proving American will, was seen as the opposite -- another demonstration that the United States is averse to casualties and unable to bring a campaign to a definitive conclusion.
The second goal was geopolitical. The United States knew it could not defeat al Qaeda on the retail level. They were too well dispersed, too few and too secure. Defeating al Qaeda meant inducing several enabling countries -- particularly Saudi Arabia. These countries had little interest in the internal destabilization that engaging al Qaeda would entail, and in some cases, they sympathized with al Qaeda. The United States had no direct means for inducing these countries to change their behavior. Iraq -- bordering on Kuwait, Saudi Arabia, Jordan, Syria, Turkey and Iran -- was the single most strategic country in the region, and a base from which to exert intense [US military] pressure throughout the region.
The occupation of Iraq was intended to solve both problems. By invading, occupying and pacifying Iraq, the United States would be able to reverse the perception of American weakness. In addition, U.S. forces based in the Iraqi pivot, would force fundamental reconsiderations of national strategies in Saudi Arabia, Iran and Syria -- and in other countries also. The strategy ran into a major challenge with the discovery that the Iraqi government had planned an extended resistance after the collapse of Iraq's conventional forces and the fall of Baghdad. The United States miscalculated the extent and intensity of Iraqi resistance and the extended difficulty in suppressing that resistance. This created a situation…in which the United States appeared to have failed to achieve either of its strategic goals. It appeared unable to bring the conflict to closure, and its forces appeared incapable of threatening any neighbor.
The perception had a kernel of truth to it, but only a kernel. Most of Iraq was not involved in the guerrilla war. Neither the Kurdish nor the Shiite regions were involved. The war was confined to the Sunni regions and, when compared to guerrilla wars in Vietnam or Afghanistan, was neither particularly intense nor particularly effective. Its significance was magnified by the Bush administration's consistent and curious inability to manage public perception of the war's status. The loss of credibility the administration suffered over weapons of mass destruction and its inability to express a coherent strategic sensibility made benchmarking the war impossible for the administration [and created a field day for the media, which continues even now].
In spite of this, the behavior of regional powers began to shift. Saudi Arabia began shifting its behavior before the Iraq war began, once it realized it could no longer prevent it. Iran began shifting its behavior by the fall, when it became apparent to it that the United States was prepared to create a Shiite-dominated government [in Iraq]. All of these processes accelerated in December 2003, when the United States succeeded in penetrating the Baathist guerrillas' security system and began making headway in shutting down that segment of the insurrection. Attacks today are, in spite of headlines, a small fraction of what they were in October-November 2003.
The situation in January 2004 is startlingly different than it was in November. The guerrilla movement is contracting, and the core problems in Iraq have become primarily political, involving the transfer of power. The Saudis are intensely involved in an internal conflict with Islamists… The Iranians are discussing the public price of reconciling with the Americans while privately collaborating. The Libyan government has reversed policies dramatically, while the Syrians have also begun to search for a path to policy reversal, having massively miscalculated the course of the Iraq war in the summer of 2003.
Finally -- and this may be the single most important fact -- threats that an explosion in the Islamic world would follow a U.S. invasion of Iraq proved to be in error. The single most important fact is that the genuine anger in the Islamic street has not had any political repercussions [as al Qaeda had hoped]. Rather than trending away from the United States, the political behavior of Islamic states has been toward alignment. This tendency has accelerated… until it is difficult to locate an Islamic state that overtly opposes the United States. When even Syria is asserting its desire to cooperate with the United States, the situation is utterly different than what some expected in February 2003, before the war began.” [Emphasis added.]

Let’s stop for a moment.  What Stratfor has outlined for us above is a SUCCESS story.  Yes, the US made some mistakes and miscalculations (especially regarding the guerilla war).  Yes, the Bush administration did a terrible job in communicating its strategies, etc. to the public.  But despite all that, we have pulled off a major victory in the region. Yet we hear nothing along this line from the media or the Democratic presidential candidates.  The media and the Dem wannabes would have us believe Iraq is a disaster!

Now, according to Stratfor, the US is looking to refocus the War On Terror to other al Qaeda strongholds, perhaps to northwestern Pakistan in particular.  No doubt, al Qaeda will do everything in its power to prevent this.  Let’s continue with Stratfor’s analysis.

“From the U.S. point of view, therefore, the next steps are obvious. First, having changed regime behavior in Saudi Arabia, it is now in U.S. interests to stabilize the situation there and prevent the fall of the Saudi government, or facilitate a shift to a more favorable regime. Since the latter is unlikely in the extreme, it follows that the next step must be a change in policy that is more supportive of the current regime but still rigidly opposed to al Qaeda. 
Second, the United States must, at some point, liquidate the remnants of al Qaeda in the Afghan-Pakistani theater of operations. Ideally, the Pakistani army will bear the burden of moving into the tribal areas in the northwest and will do the job for the United States. In reality, it is extremely unlikely that the Pakistani military will have the ability or motivation to undertake that mission.
Therefore, it is likely that the United States will try to close out the war with a final offensive into northwestern Pakistan, preferably with the approval of a stable Pakistani government, but if that is impossible, then on its own [emphasis added].
…Al Qaeda's mission is to prevent this end game. It has three potential strategies, all of which can be used together. The first is to intensify its operations in Saudi Arabia to such a degree that regime survival is in doubt and the United States is forced to intervene. We cannot help but note that in the rotation of forces into Iraq, an excessive amount of armor for the mission remains there. It is excessive for Iraq, but not if U.S. forces should be forced to move into Saudi Arabia [emphasis added].
…The [al Qaeda’s] second strategy is to completely destabilize Pakistan. It is no accident that two attempts have been made on President Pervez Musharraf's life. There will be more. There are powerful forces within Pakistani intelligence and military that oppose Musharaf's alliance with Washington and sympathize with al Qaeda… Invading the northwest while Musharraf is nominally in control of the country is one thing. Invading in the face of a hostile government or total chaos is another. The United States does not have the forces to occupy and pacify Afghanistan or Pakistan. It has what it needs to execute a large-scale raid against al Qaeda. Therefore, it is al Qaeda's strategy to protect its redoubt by intensifying operations in Afghanistan and in Pakistan.
…Finally [the third option], al Qaeda might seek to break U.S. will by conducting extreme operations in the United States, obviously focusing on weapons of mass destruction. …if al Qaeda determines that the United States lacks the will to prosecute the war in the face of massive U.S. civilian casualties, it might try to carry out an extreme attack. Certainly, Sept. 11 did not achieve what al Qaeda wanted… It is not clear if al Qaeda can carry out a more extreme operation, or if it views such an operation as helpful, but the strategic possibility remains.”

Possible Timing For A US Move Into Pakistan

To this point, Stratfor has made the case for the US mounting an offensive to move into northwestern Pakistan.  I have read other sources this week which have also indicated increased US military activity in Pakistan. You may agree or disagree as to whether this should be our policy, especially in light of the current controversy regarding US intelligence, but it appears obvious that it is at least a serious consideration.

All of which leads to the question of timing.  I’ll offer my own thoughts on this question after we read more from Stratfor.

“We would be very surprised if the United States launched this offensive prior to its elections. The administration has no appetite for another military campaign until the election is finished. Therefore, we would expect the United States to be in a defensive mode until November 2004. It will seek to consolidate its position in Iraq and in the Egyptian-Iranian line. It will work to assist the Saudi government, while carrying out covert operations throughout the region to mop up identified remnants of al Qaeda.
Until then, the task of General John Abizaid, head of Central Command, will be to focus on developing a plan for moving into al Qaeda's homeland [Pakistan], if you will, and terminating the war by liquidating the final command centers. Assuming that the preference is not to launch this campaign during the winter -- not necessarily a fixed principle -- the offensive would take place in spring 2005.
We would, therefore, expect that between now and the U.S. elections, it will appear that Islamist forces have the initiative. They will press hard in both Saudi Arabia and Pakistan, and the United States will appear to be in a passive and defensive mode [assuming we wait until after the election]. In fact, during the next nine months, in our opinion, the United States will be engaged in intense preparations [for an offensive in Pakistan], coupled with defensive actions designed to shore up the Saudi and Pakistani regimes.
The fundamental issue now is what al Qaeda and its Islamist allies can achieve between now and November. This is their open window and the period in which they must reverse the direction the war has taken. If the current trend continues, and the Saudi and Pakistani regimes survive, the United States will attack in Pakistan…
[Conclusion:] the United States has had an extremely good few months. It has recovered from its imbalance in Iraq -- and although the resistance has not been destroyed, it is in the process of being contained. The U.S. strategic position has improved markedly, to the point that it is actually possible to begin glimpsing the end game [a final offensive in Pakistan to wipe out al Qaeda leadership]. But between the glimpse of the end game and the end, there is al Qaeda, which must move vigorously now to reverse its losses and regain the initiative.”

Can We Afford To Wait?

As a conservative and one who supports the war in Iraq and the ongoing War On Terror, I find Stratfor’s latest analysis troubling on several fronts.   First, ever since the war in Afghanistan, we have known that some of the al Qaeda leadership fled into Pakistan.  If there is evidence that their command and control center is in northwestern Pakistan, why would we wait over a year (spring 2005) to take them out?  Why wouldn’t we attack them this spring or summer?

Second, if Stratfor’s analysis is correct, that the US is planning such an attack, then al Qaeda either knows this already, or will know it soon enough.   If such an attack isn’t going to happen for over a year, that gives al Qaeda: 1) time to regenerate and prepare; and 2) the green light to plan and carry out more destructive acts in the meantime. 

Third, does this suggest that the Bush administration has placed the War On Terror on the back burner until the election is over?  I would hope not, but what else can we assume if Stratfor’s suggested timeline is remotely accurate? 

Fourth, and most troubling of all, what if the US does nothing this year and Bush is not re-elected?  None of the Democratic wannabes have any use for continuing this war.  As far as I can tell, any of the contenders at this point would get bring our troops home as soon as possible.  And the War On Terror would once again become just so much verbiage, as it was under Clinton. 

President Bush is in a tough situation.  If he were to launch a serious military operation in Pakistan, he would be roundly accused of doing it only for political purposes (“wag the dog”).  The Democrats and the media would also immediately pounce on the intelligence question – ‘They were wrong about WMDs in Iraq, and they’re probably wrong about al Qaeda in Pakistan.’  And as noted above, if anything were to go wrong in such a mission, it would be political suicide for Bush.

If I had to bet, I would wager that Stratfor is correct and there will be no major military campaign into Pakistan until after the election, perhaps not until 2005 as they suggest – and most importantly, not at all if Bush is defeated in November. 

There is no question that the last option – Bush’s defeat – is exactly what the terrorists hope for.  I believe Stratfor is correct that between now and the election, the terrorists will pull out all the stops in an effort to attack the United States, on our own soil if possible.  If that were to occur, Bush would be blamed for not doing enough.

Late Note:
Pakistan Sold Nuclear Secrets To Rogue Nations

As this E-Letter was prepared, news was breaking everywhere that Pakistan sold sensitive nuclear technology to Iran, North Korea and Libya during the late 1980s and up until 1997.  President Musharraf has arrested Abdul Qadeer Kahn, a Pakistani scientist who is revered as the father of that nation’s nuclear program.  Khan has reportedly provided a written confession to selling nuclear secrets.

In an intelligence report issued late Monday, Stratfor contends that Khan was arrested by Musharraf to be the “fall guy” in the nuclear secrets scandal.  Stratfor suggests that the Pakistani military, headed by Musharraf, is really responsible for the nuclear sales.  This from Stratfor’s latest report:

“It is no secret that the Pakistani military has enjoyed ultimate power in the country, including absolute control over Pakistan's nuclear program. The military is trying to avert accusations that it is responsible for leaking sensitive nuclear weapons information. Hence, the military needs scapegoats, and rogue scientists conveniently fill the role.”

It will be particularly interesting to see how this nuclear secrets scandal plays out in the weeks ahead, especially given that the US is already targeting Pakistan in the hunt for al Qaeda.  But as usual, don’t expect to see a lot of coverage on this in the major media since it would give Bush more justification for military action against Pakistan.

Best Wishes,

Gary D. Halbert



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Forecasts & Trends E-Letter is published by Halbert Wealth Management, Inc. Gary D. Halbert is the president and CEO of Halbert Wealth Management, Inc. and is the editor of this publication. Information contained herein is taken from sources believed to be reliable but cannot be guaranteed as to its accuracy. Opinions and recommendations herein generally reflect the judgement of Gary D. Halbert (or another named author) and may change at any time without written notice. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. Readers are urged to check with their investment counselors before making any investment decisions. This electronic newsletter does not constitute an offer of sale of any securities. Gary D. Halbert, Halbert Wealth Management, Inc., and its affiliated companies, its officers, directors and/or employees may or may not have investments in markets or programs mentioned herein. Past results are not necessarily indicative of future results. Reprinting for family or friends is allowed with proper credit. However, republishing (written or electronically) in its entirety or through the use of extensive quotes is prohibited without prior written consent.

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