President Obama’s Last State of the Union Speech: An FPRI Primer

Tonight, President Obama will deliver the last State of the Union Address of his presidency. This prime time speech offers him an opportunity both to celebrate his accomplishments and to sketch his priorities as his presidency enters its final year. News leaks suggest that the speech will not include many policy specifics, since the president has no plans to present any new initiatives to Congress. Presidents often spend their last years in office focusing on foreign affairs and international travel, where they still enjoy some possibilities for independent action, and reports of President Obama’s upcoming travel schedule indicate that will be the case for him as well.  That doesn’t mean that he will offer foreign policy specifics either, but it will certainly come up in the speech.

The world remains unpredictable, though State of the Union addresses are generally much less so.

  • ​The President will certainly highlight his efforts to break out of previously frozen relationships, such as with Cuba, where the U.S. Embassy has been reopened in the past year. Look for him to mention, if not insist upon, the need for Congressional action to reduce further political and economic barriers to trade, travel, and communications with the island.

What he will likely leave out: any discussion of Cuba’s continued imprisonment of political dissidents, or the Castro regime’s tight control on trade and economic benefits for the Cuban people.

  • This also means the President will accentuate the positive of the nuclear deal with Iran. It may be difficult for him to be too specific in his positives, considering the ongoing tension in the gulf between Iran and Saudi Arabia, and Iran’s recent missile tests, but we can expect that the President will paint the agreement, which he and his staff have already called one of the landmarks of his administration, as an important first step in reducing tensions in the Middle East. That will also likely include vague but hopeful words about how Iran can be induced to play a more constructive role in resolving the conflict in Syria.

What he will likely leave out: specific references to Iran’s missile program, or its irresponsible encouragement of the mob that attacked the Saudi embassy, not to mention today’s Iranian seizure of two US Navy ships.

For a more in-depth analysis of the Iran deal and its implications, see our recent E-Note by Oded Brosh, “The Problem with the Iran Nuclear Deal: It’s Not that Iran Will Violate It but that Iran Will Comply

  • He will also emphasize his commitment to improving the terms of global trade, which will include positive evaluations of the Trans-Pacific Partnership (TPP), the major trade deal with a dozen Pacific Rim states that has been negotiated and is now before Congress for ratification. This will require an uneasy balancing act between the President’s desire to cite TPP as a diplomatic success and his recognition that all three of the Democratic presidential candidates, not to mention the majority of Democrats in Congress, have expressed deep skepticism about free trade in general and the TPP in particular.

What he will likely leave out: in addition to his party’s ambivalence, he will also likely soft pedal his own dilatory handling of the equally important Transatlantic Trade and Investment Partnership (TTIP) with Europe, which was also supposed to be ready for ratification by now.

For some more background on the Trans-Pacific Partnership, see William Krist’s E-Note, “Why We Need the Trans-Pacific Partnership and How to Get It Right;” Felix Chang’s blog post, “U.S. Foreign Policy Aspirations and the Trans-Pacific Partnership: Economic Integration and Political Alignment?” and (re)watch our Google Hangout “The Trans-Pacific Partnership Debate: Prospects, Problems, and Implications” featuring Jacques deLisle, Shihoko Goto, and Minyuan Zhao

  • On ISIS and terrorism, the President will both reaffirm his resolve to defend the homeland and warn against allowing fear of terrorism to paralyze America’s relations with the world. As he links this general topic to the specific attacks in San Bernardino and Istanbul, as well as to the disturbing reports of migrant behavior in Germany, it is very likely that this discussion will lead into an effort to explain why legal and properly regulated immigration is important for the future of the United States, allowing him to place himself and his party on the side of immigration reform and to paint critics as alarmists and nativists.

What he will likely leave out: the security lapses that led US officials to miss the radical background of Tashfeen Malik, the female San Bernardino attacker, or his administration’s halting and uneven strategy against ISIS.

For the latest FPRI commentary on ISIS, read our Robert A. Fox Fellow Clint Watts’ essay “5 Questions on the Islamic State for GOP Presidential Candidates” from War on the Rocks, and John Haines’ recent E-Note “What Would Kennan Do? George Kennan, the Containment Doctrine, and ISIS.”
One should also expect certain international issues will be touched upon more lightly, such as:

  • China: the current economic upheaval will likely come up, though the President is likely again to accentuate the positive, holding up cooperation with China as crucial for global stability and prosperity.

What he will likely leave out: discussion of China’s provocative island building in the South China Sea, or their failure to live up to their commitments to monitor and rein in the North Korean nuclear program. For that matter, he is likely to avoid discussing how the failure of the North Korea nuclear deal might reflect on the deal with Iran.

For the latest FPRI commentary on China, see June Teufel Dreyer’s recent E-Note “China and Russia: The Partnership Deepens” and Felix Chang’s recent blog post “China’s “One Belt, One Road” to Where?

  • Russia: although significant differences remain over issues ranging from Ukraine and Crimea to Syria, the President will confine comments on Russia and President Putin to hopes for more constructive cooperation.

What he will likely leave out: the relationship between Russia’s aggressive behavior and his own failed “reset” with Moscow.

For an unusual take on Putin’s motivations, see Mitchell Orenstein’s E-Note “Vladimir Putin: An Aspirant Metternich?” from 2015.
One last thing. The President is unlikely to offer a coherent statement on American policy toward the EU. In this, he will be like too many Presidents, who have not made an effort to explain why the unity of our most important allies and trading partners is good for us as well as them.

Readers are welcome to follow the speech with us on Twitter, @fprinews and @RonaldGranieri to see how well these predictions hold up.

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Playing the Long Game: Unrest and Changing Demography in Xinjiang

The latest bout of violence between Muslim Uighurs and Han Chinese erupted in Lukqun, a township in China’s far western province called the Xinjiang Uighur Autonomous Region.  There, about 35 people died last week when, according to Chinese accounts, Uighur protesters attacked a police station, a local government building, and a construction site—all symbols associated with the Han Chinese.  In April a similar incident occurred near Kashi (or Kashgar), Xinjiang’s second largest city; 21 people died.  In fact, almost every other year since the 1990s, Xinjiang has experienced at least one incident in which a dozen or more people are killed.  The most notable case in recent memory happened in 2009 when 197 people perished in ethnic strife that engulfed the provincial capital of Urumqi.


With such recurring violence, little wonder that tensions between the two ethnic groups in the region run high.  Even so, Han Chinese have continued to migrate to Xinjiang since the 1950s.  At first, they came as part of official Chinese government efforts to build a reliable local workforce and defend the country’s western borders.  But since the 1990s, many Han Chinese have willingly moved to the region to take advantage of the economic opportunities created by government spending on infrastructure and commercial investment in the energy and mining industries.  As a result, the province’s cities have boomed and new towns have sprouted from the grasslands that ring the Taklimakan Desert.

So many Han Chinese have migrated to the region that many Muslim Uighurs fear that they could soon become a minority in their ancestral homeland.  Chinese censuses chronicle the rise in Xinjiang’s Han Chinese population from 6 percent in 1945 to 40 percent in 1980.  And though the proportion of Han Chinese living in the region has held fairly steady since then, the population of Xinjiang has risen dramatically, from 13 million to over 21 million.  Plus, one must add the tens of thousands of Han Chinese who travel to the region in search of seasonal or temporary work.  Historically, the vast majority of the Han Chinese in Xinjiang dwelled in its northern part, where most of the energy and mining industries are clustered, while the vast majority of the Uighurs lived in the largely agricultural southern expanse.  But since the new railway to Kashi was completed in 2000, ever more Han Chinese have settled in not only Urumqi, but also southern areas once dominated by Uighurs.  Aware of the new tensions that would be raised, Chinese leaders have focused on economic development as the central way to pacify the local population.

Just one month ago, Yu Zhengsheng, a member of the powerful Standing Committee of the Political Bureau of the Communist Party of China, went on a fact-finding tour of Xinjiang in the wake of April’s unrest.  He travelled extensively across the province, visiting Uighur villages as well as settlements of the Xinjiang Production and Construction Corps (XPCC).  The quasi-military XPCC has long been Beijing’s vehicle for Han Chinese migration and instrument of control in Xinjiang.  Apart from its farming and industrial work, it maintains a well-armed militia capable of containing local unrest.  When Yu addressed a regiment of the XPCC’s 4th Division, he urged its members to interact with minority groups to locally resolve differences.  Then, he said, provincial authorities could take full advantage of Beijing’s support to further the region’s economic development and ultimately curb the “three evil forces” at work there: separatism, extremism, and terrorism.

Certainly Beijing has encouraged massive investment in the region.  That investment has produced double-digit economic growth in the province over the last decade; even as growth in China’s eastern provinces has flagged.  Both ethnic groups have been made better off.  But Uighurs continue to fare relatively worse than their new Han Chinese neighbors, who reap the biggest rewards from the Uighurs’ native lands.  Moreover, many of these new residents of Xinjiang have chosen to live in segregated communities, particularly in Uighur-dominated areas.  Entirely new Han Chinese towns have popped up adjacent to existing Uighur ones.  Together with often stringent surveillance of Uighur communities and the perception of Chinese contempt for Muslim practices, such separation has fueled resentment among many Uighurs.  They feel that they are gradually losing not only their lands and autonomy, but also their identity.

With such underlying tensions, it is of little surprise that unrest periodically flares up in Xinjiang.  Despite Beijing’s assertions that international separatist organizations are behind the violence, most of the unrest has been local, sparked by local events like an execution or a police roundup of suspected militants.  In any case, Beijing’s hold on the region remains as firm as ever.  While some have roundly criticized the government’s heavy-handed crackdowns on the Uighur population—such as the three-month long “strike hard” campaign in 2011 that entailed 24-hour police patrols, identity checks, and searches of people and vehicles—as being unproductive, they do underscore Beijing’s determination to do whatever it takes to subdue local dissent.  Altogether, the XPCC, the People’s Armed Police, and ultimately the Chinese military—arrayed as they are across the province and made increasingly responsive with new transportation links—remain well positioned to contain any recurring violence, unless of course China itself is thrown into crisis.

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Why al Qaeda Needs Donations More Than Ransoms

For several months up to the recent French intervention in Mali, al Qaeda in the Islamic Maghreb (AQIM) has been able to gain, control, and govern large swathes of the Sahel.  Towns such as Kidal and Timbuktu fell under the rule of strict forms of Sharia law and many perceived al Qaeda as resurgent.  Many rightly noted the collapse of Qaddafi’s Libyan regime provided operational space and caches of weapons emboldening AQIM’s push into Northern Mali.  

However, other analysts of the Sahel and terrorism have suggested AQIM’s growth and the proliferation of its offshoots (Ansar Dine and Movement for the Unity of Jihad in West Africa (MUJWA)) comes equally as much from the network’s ability to acquire resources through illicit schemes such as drug/cigarette trafficking and most importantly kidnapping.  Over the past several years, AQIM, more than any other al Qaeda affiliate, has been able to effectively kidnap travelers to the region (mostly Europeans) and then successfully extract multi-million dollar ransoms.  Serge Daniel in his book, “AQMI, l’industrie de l’enlèvement” (AQIM the kidnapping industry)” tried to account for the ransoms paid to AQIM in recent years:

Daniel says two French companies paid a total of 13 million euros (a little over $17 million) for the release of the hostages, Austria paid three million euros, Spain nine million and Canada three to five million. Source: Global Post

Essentially, France indirectly funded AQIM for years building up the terror affiliate to only now commit further blood and treasure to defeat the group.  Unforunately, France is not alone in falling into a vicious fund-then-fight cycle with a terrorist group.  

On the surface, kidnapping and smuggling appears an ideal financial engine for terror groups like al Qaeda and its affiliates. This assertion, however, ignores the inherent challenges encountered when any organization, whether terrorist group to criminal enterprise, undertakes illicit funding schemes.  Kidnapping and ransom operations introduce significant transaction costs which significantly devalue the gross sum of revenues.  Kidnapping operations create a series of internal costs for terror groups:

  • Networks Of Intermediaries –  Negotiations and payments for kidnapping operations require layers of middlemen with each network extracting a percentage of the overall take.
  • Transaction Time – The time between hostage taking and ransom payments can be significant requiring the terror group to maintain a solid reserve of capital to sustain its operations between transactions.  Essentially, time is money, and in the case of kidnapping operations, a cost to the terror group.
  • Hostage Deaths – The trauma of kidnapping and the harsh environments in which terrorist groups operate often result in the death of hostages.  The death of a hostage hurts the terror group directly in terms of loss revenues. But, even more damage occurs indirectly as the hostage death erodes trust for future ransom negotiations.
  • Infighting – In any business, transactions often lead to conflict.  This is particularly true in illicit industries where trust is constantly being questioned.  Kidnapping negotiations naturally generate friction between intermediaries and when negotiations become protracted parties may turn to open conflict.
  • Declines in Hostage Availability – As groups like AQIM continue to kidnap hostages, the availability of hostages naturally declines requiring the terror group to operate at longer distances to acquire captives.  This distance imposes significant logistical costs.  
  • Undermines Terror Group’s Ideology – Inevitably, in illicit schemes and even licit enterprises, business gets messy and the terror group must make choices with regards to sustaining its resource flow.  Often times, these choices result in alienation of a terror group’s local base of popular support or hypocritical conflicts of interest between the terror group’s deeds and its words.  The recent accusations of Omar Hammami, an American foreign fighter who has fallen out of favor with al Shabaab, demonstrate how al Shabaab’s turning a blind eye to Qat distribution in Somalia for the purpose of taxation has called into question the group’s committment to al Qaeda’s ideology and Sharia law.
  • Opportunity Costs – When al Qaeda is dedicating more time, manpower and resources to illicit fund generation, they are spending less time recruiting and training new operatives, planning operations and executing attacks.

All al Qaeda affiliates and terror group’s in general must participate and rely on illicit and licit funding schemes to some degree.  But what really separated al Qaeda from other terror group’s was its ability to garner donor revenues from wealthy supporters.  As Gregory Johnsen accurately noted in his recently published book on al Qaeda in the Arabian Peninsula (AQAP) entitled the The Last Refuge, what separated al Qaeda from other Sunni extremist groups was Bin Laden, his understanding of business and his command of resources. 

 “Bin Laden talked less than others, but he planned more.  And he had something no one else had: money.”

Donor resources provide essential support to global terrorist groups.  Al Qaeda or one of its affiliates, when sustained by donor contributions, can dedicate more manpower to planning and executing attacks as operatives are freed from the burdens of illicit/licit fund generation. Likewise, a donor empowered al Qaeda can more easily build local support by granting funds that embolden their ability to govern locally.  Most importantly, donor funds prevent al Qaeda groups from undermining their ideology to sustain their short-run resource needs.  As seen in this graphic, I estimate that each donor dollar equals roughly five dollars in illicit fund generation. 

Today, while there remain many ideological challenges to al Qaeda after Bin Laden’s death, the terror group and its affiliates face equally large obstacles securing donor resources to allow for significant operational expansion.  al Qaeda’s efforts to expand operations in Egypt after the fall of Mubarak have been frustrated by resource generation.  Thomas Joscelyn notes in a recent article that Muhammad Jamal al Kashef: 

“complains that he “received an amount of money from our brothers in Yemen,” a reference to al Qaeda in the Arabian Peninsula (AQAP), “but it was much less than what is required.” Zawahiri is “aware” of the “huge amounts of money” needed to purchase arms, set up training camps, move vehicles into the Sinai Peninsula, and “provide for the families of the brothers who work with us.”  Source: The Long War Journal

As I noted last summer, today al Qaeda and its affilaites are one of many rather than the only Salafi-Jihadi extremist group operating throughout the Middle East, Africa, and Asia.  The uprisings of the Arab Spring have created a plethora of ideological and financial competitors to al Qaeda.  For a terror group to break out and begin securing donor resources at a pace greater than its competitors, they must do one thing better and faster than other groups: successfully execute high profile attacks on Western targets.  Donors, like good investors, like supporting winners.  Therefore, those al Qaeda affiliates or new upstarts that pull off the most impressive attacks may find themselves more able to garner important donor revenues.  Only Mokhtar Belmokhtar has grabbed international media attention in recent years.  Will his actions garner him and “Those Who Sign With Blood” more donations in the future?  Only time will tell…

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