Eni Enrico Mattei Chair in Middle East and Africa Studies: The Arab Uprisings: Initial Observations

RICHARD N. HAASS: Good evening. I'm Richard Haass, the president of the Council on Foreign Relations, and I'd like to say a word of welcome for tonight, "benvenuto" -- (inaudible) -- to all of you here on what is a very proud and important evening for all of us associated with the Council on Foreign relations, and the reason is simple: We are celebrating the formal investiture of the Eni Enrico Mattei chair in Middle East and African studies.

As many of you know -- and indeed, as I expect all of you know -- Mr. Mattei was the driving force behind not just the development of one of the world's great corporations, but also the source of Eni's deep relationships in the Middle East and North Africa. He was Eni's founding president, and expanded Italy's national capacity in the realm of energy and petrol chemicals. And due in large part to Mr. Mattei's work, Eni was in a position to play an important, indeed pivotal role in the post-war reconstruction of Italy.

Mr. Mattei was also instrumental in expanding ENI's reach around the world. And he established a remarkable stream of personal relationships with leaders in Egypt, Iran, Algeria and elsewhere. And he also was someone who gave a great deal of thought and time to promoting cultural understanding and to really -- was one of the early people who understood, I think, the importance of corporate branding and corporate identity in forging relationships that were important in their own right but also obviously had consequences for business. And through all this and more, that -- this gift is so important to those of us here at the Council on Foreign Relations. And we are obviously extraordinarily grateful for the generosity of those associated with Eni and for their faith in what we in the Council on Foreign Relations can and will do.

And I'm not just speaking of people in the abstract. I'm speaking about one people in particular, Paolo Scaroni, who is the chief executive officer of Eni. And he's a long friend of this institution, and he's also a personal friend now for some time. Paolo has been CEO of Eni since 2005 and he -- it's large part because of him that Eni became a corporate member of the Council on Foreign Relations in 2007.

That's not the only thing he does, though I'd like to think how he spends most of his time worried about his relationship with the Council on Foreign Relations, but Paolo is also the nonexecutive deputy director of the London Stock Exchange Group, and he's nonexecutive director of both -- oh dear, my Italian now is going to be challenged -- (inaudible) -- no? -- (inaudible) -- OK, yeah. (Laughter.) It's good my wife isn't here, particularly given my own personal background in questioning the wisdom of the fact -- I probably shouldn't go there -- about how many people are studying Italian in the United States compared to some other languages, so I of all people are not in a position to criticize, given my own difficulties. Paolo is also on the board of overseers at Columbia Business School and at the Fondazione Teatro alla Scala.

So I think it's also the second time that you've been here, at the -- here at the Council on Foreign Relations, and we are truly delighted to have him with us all tonight so we can thank and honor him and really pay the acknowledgment for what we've been able to establish here through the help of Paolo and Eni.

And with that, let me, for a few minutes, turn the microphone over to Mr. Scaroni. (Applause.)

PAOLO SCARONI (CEO, Eni): Thank you, Richard. Thank you, Richard, and good evening, ladies and gentlemen. It is a real pleasure for me to be here tonight to celebrate the chair Eni Enrico Mattei -- E-N-I, if you prefer -- Enrico Mattei chair for Middle East and Africa studies. We have chosen to support this chair and this institution because we believe that politics and energy are very much linked together and therefore, to understand politics means to understand energy.

This is true everywhere, but it's particularly true in the Middle East and in Africa, which, as you probably know, holds 70 percent of the oil reserves of the world and 50 percent of the gas reserves of the world. And, by the way, Africa is home for my company, because Eni is the first producer of hydrocarbons in Africa.

The so-called Arab Spring, which I think Robert Danin will speak today, is really an example of how energy and politics are linked together. We attribute it to what has happened in Libya and to what happened in the other Arab countries, in addition to oil prices between 15 (dollars) and $20 since the beginning of the year, creating some fears about the recovery in the world nowadays.

But the relationship between energy and politics dates back a long time. Almost a century ago, Winston Churchill -- it was 1912 and he was the first lord of admiralty, I think you say. Well, Winston Churchill at that time took a big gamble. He was sniffing the air to understand what was -- what was happening in the world and was already some winds speaking about the First World War.

And he discovered with horror that the German fleet was sailing at two knots faster than the British fleet. Why? That is simply because the German fleet was running on fuel oil, while the British fleet was still running on coal. Well, he took a sudden decision and he decided immediately to shift all the ships of the -- the warships of the navy from coal to fuel oil, which, at that time, came mainly from Persia -- from what is today Iran.

Now, in practice, from a political point of view, he took a bet. He said, I bet the speed of my navy and therefore the power of the British navy against Middle East politics. Am I good enough to run the Middle East policy to be sure that I can give up my domestic coal for foreign imported oil? This was the decision he took.

And in order to make his bet more sure, he nationalized -- which was very strange at that time -- the Anglo-Persian Company, which became -- which today is BP. At the end of the day, it became -- after many changes, BP -- so just to show you how linked have been since that time politics and energy.

Now, the reason why we have decided to dedicate this chair to Enrico Mattei is because Enrico Mattei was a real innovator. In the '50s, he was fighting the competition of the large Anglo-Saxon corporations in oil. And in order to compete with them, he took the decision not only to offer better terms to the oil-producing countries, but to be ready to participate in their development. Now, this was the only way he had to get his foot into the door of the oil-producing countries.

But that strategy that he adopted at that time is still our strategy today. And today it has become our competitive advantage. You might not know -- not know that, but ENI has been growing more than any other large international company in the last 10 years, doubling our production, mainly in Africa.

And we owe this growth, which is so important to us, on the fact that African countries in particular perceive us as partners. We usually say that we sit next to them and not in front of them, try to help them in developing their countries. And we are perceived as a partner and not as a commercial counterpart. And with these times, in which it's so important to have access to natural resources, to be perceived as a partner, to be welcome is really a great competitive advantage.

Now, we are happy to recognize Enrico Mattei's contribution by remembering him with this chair. And I'm sure that Robert Danin, who will now take the floor, I think, will add luster to his and to our reputation. Thank you. (Applause.)

HAASS: Well, as Paolo said, the time has come to turn the microphone over to the inaugural Eni Enrico Mattei senior fellow for Middle East and Africa studies, none other than our very own Rob Danin.

Rob came to the council a year ago, 2010, after two years of heading the Jerusalem mission of the Quartet representative, Tony Blair. And prior to that, he had a number of extraordinarily difficult assignments in that several of them involved working for me. A glutton for punishment, he is now back here.

Rob though worked at both the State Department and the National Security Council as one of the people who, to me, represents what we really try to bring to the council, which are scholar-practitioners. And we couldn't think of anyone with a better background to start this important position.

He has participated (in here since ?) he's been here, about -- more than a dozen meetings or events on the Middle East since the uprisings began six months ago. He has written and spoken extensively on both the causes and consequences of what many describe correctly or perhaps not as the Arab Spring. (Since ?) he's set a very high bar for this chair -- (inaudible) -- and he has been good enough to establish.

Before we begin, one or two pieces of housekeeping. If people would please turn off things electronic, that would be ideal, so we are -- does not interfere with the sound system. This meeting is on the record, so anything said can and will be used against those speaking.

Rob is going to speak for a few minutes to set a broad overview about his take on what is going on in the Middle East and North Africa, consistent with the -- what has motivated this chair. And he and I will kick a few questions around and then we'll open it up to you, our members. So with that, Professor Danin. (Applause.)

ROBERT DANIN: Thank you, Richard, for that introduction. Good evening, everybody. I'm deeply honored to serve as the first holder of the Eni Enrico Mattei senior chair for Middle East and African studies at the Council on Foreign Relations. I wish to thank Eni for generously endowing this chair, and I particularly want to thank Paolo [Scaroni] for his support and for traveling here tonight from Rome to be with us. I also wanted to thank Enzo Viscusi for his sustained interest and friendship, and lastly, I want to thank Richard Haass for providing me with this tremendous opportunity.

Given the dramatic developments taking place throughout the Middle East, I don't think the timing could be more appropriate for the chair's establishment. Never has the Middle East appeared more chaotic, more uncertain, more fluid. So as we officially inaugurate the Eni Enrico Mattei chair tonight, let us look closely at the causes and implications of the Arab uprisings.

Last December 17th, a Tunisian street vendor, publicly humiliated by a corrupt policewoman, doused himself in gasoline, lit a match and set himself on fire. In immolating himself, Mohamed Bouazizi sparked an outpouring of Tunisian protest that rapidly spread to Egypt and ultimately, from the Atlantic to the Gulf. Since then, we have seen sustained popular unrest, two governments toppled, several incipient civil wars, and brutal government backlashes. Few Arab countries have been untouched.

Now, throughout the past century, there have been numerous Arab uprisings. These have been generally in one specific country or locale. What we have now is an entire region undergoing profound unrest all at once. Not even the Great Arab Revolt was as widespread geographically or demographically as this revolt is.

This is an effort at what I call Arab self-empowerment. These are Arabs revolting against Arabs, not against foreigners. What unites them is a desire for dignity, for participation in public life, and a deep resentment of long-standing political paralysis. People are reacting to local conditions and grievances, but taking their inspiration and encouragement from developments throughout the region.

Analysts of the region have argued for years that the status quo was unsustainable. In 2002, then-Ambassador Richard Haass, addressing this same forum, spoke of a youth bulge combined with youth unemployment portending what he then called potentially explosive social conditions in the Arab world. Indeed, 60 percent of today's 300 million Arabs are under the age of 25, and unemployment for them nears 40 percent -- among the highest in the world. Meanwhile, efforts to prevent change by the region's leaders, usually in the name of stability, has only engendered alienation and discontent.

Since these conditions have obtained for some time, though, we must ask: Why did it happen now? One critical factor is that economic conditions became quite acute, and quite rapidly. Over the past year, food prices rose 40 percent -- 15 percent in the last quarter alone. In Egypt, the world's second-largest importer of wheat, this monthly percentage of income spent on food is over 40 percent. So rising food prices were felt quite acutely and painfully. Add to that declining subsidies and higher energy prices, that Paolo spoke about, and you have quite a combustible situation.

Now, two more proximate factors help explain why popular unrest began first in Tunisia and then quickly spread to Egypt. In Tunisia, the circulation of American documents, diplomatic cables released through WikiLeaks, showing the Ben Ali family's profligate corruption was significant. People had long known that the Ben Ali family was corrupt, but when it was documented and disseminated by credible outside sources, a tipping point was reached.
Similarly, in Egypt, last November's parliamentary elections, in which all but 15 out of 504 available seats went to Mubarak's ruling party, set off the last spark. Mubarak's abuse of power thoroughly delegitimized the notion of positive, evolutionary change.

As images of unrest spread in Tunis and Cairo to demonstrations in Bahrain, Jordan, Yemen, Libya, Morocco and eventually Syria, as well as to lesser places -- or lesser reported locales such as Algeria and Oman, we are now six months into the uprisings. Egypt and Tunisia are girding for parliamentary elections; NATO is militarily engaged in Libya; the kings of Morocco and Jordan have promised reform leading to constitutional monarchies, and Yemen is teetering near civil war, and Syria's regime is engaged in a brutal military clamp-down against its population.

Against this -- against this picture, let me posit 10 brief interim conclusions, or observations. First, while the rapidity and intensity of the recent unrest and political change have been breathtaking, what we have seen so far is really only the beginning of the unraveling and dismantling of the Arab order. These are still early days. What has been called by some an Arab Spring showed no sign of abating this summer. Indeed, I see no reason to believe it's going to let up or settle down in one dramatic denouement.

Second, in anticipating what will replace this old order, I believe that there's no historic inevitabilities. The future is not preordained. Egypt, in my opinion, could go either way. Events could continue to proceed relatively peacefully in other places, with more inclusive and open political systems.

But we may also see some truly failed states in Libya, in Yemen and potentially in Syria. In these cases, authoritarian leaders successfully ensured that core building blocks necessary for democracy, civil society and thriving institutions such as labor unions do not exist. Elsewhere, particularly in the Gulf, there still remains the possibility that greater unrest will be unleashed, particularly in the context of a succession.

Third, and if nothing else, the one change that the Arab uprisings have produced is the idea that public opinion now matters in Arab politics. The Arab people are making their voices heard and seeking to play an active role in their countries' futures. Leaders can no longer act with impunity and disregard for public opinion. This could empower the leaders in the long run. But in the short run, it will constrain them.

Fourth, Islam -- or, more precisely, Islamic politics and Islamic parties will play a greater role in the political life of many countries trying to become democratic. That appears to be the new regional consensus. One key reason is that Islamic -- Islamist parties in countries like Egypt are the best organized and were the least delegitimated by the old order. There are reasons to be concerned, particularly if democratic experiments fail or weak political structures are established.

Fifth, one effect of the Arab uprisings may be the real beginning of concerted Arab action to address regional concerns. The Saudis were uncharacteristically bold in intervening militarily in Bahrain and in their diplomatic effort to try to move Yemen's President Saleh aside.

More broadly, the GCC has been expanded into a club of monarchies. And it, and then the Arab League, led the international charge for international military intervention in Libya. Not only did these Arabs support U.N. Security Council Resolution 1973, but forces from Qatar, Jordan, and the UAE are currently engaged in the military effort in Libya.

Sixth, what is happening demonstrates that there is no Arab exception to universal yearnings for political participation and a better life. The argument that was used in Latin America, Asia, and Africa in the past and towards the Arab world, both to argue that the people don't want democracy and that it cannot take hold where it has no indigenous history, does not stand the test of history. This has been proven wrong, and we now see that these aspirations are indeed universal, encompassing the Arab world as well.

Seventh, so far, Arab monarchies are proving themselves more adept at managing the uprisings. In contrast, the Arab republics have shown themselves to be more vulnerable. One reason is that the monarchies enjoy a greater sense of legitimacy and rootedness. Also, monarchies enjoy a diffusion of power. When Jordanians took to the streets early on, the king sacked his prime minister, and this quickly defused anger in the kingdom. In Oman, Sultan Qaboos dismissed his ministers. In contrast, in places like Egypt, power was so centrally concentrated that many -- that criticism of the state and criticism of the leader were synonymous.

Eighth, the Arab-Israeli conflict is going to continue to play a role in the life of the Middle East. To be sure, the last six months have conclusively demonstrated that the conflict is no longer the central fault line in the region, if it ever was. Yet the conflict still has saliency, as we have started to see in Egyptian demonstrations. In the last month, Syria has twice dispatched Palestinians into Israel in an attempt to both deflect attention from Syria and to provoke violence. Arab states that made peace with Israel or have unofficial commercial ties with Israel will become more reluctant to actively engage as they feel increasingly vulnerable to their own popular sentiment.

Ninth, and related, the Arab uprisings have, if anything, made efforts to broker Israeli-Palestinian peace more difficult. Both Israelis and Palestinians are now focused on their internal stability and security. For Israel, this means hunkering down to see if peace with Egypt -- a central pillar in their national defense strategy -- will endure, and to watch what happens in the neighborhood.

For Palestinians, the priority has shifted towards unity as a means towards reestablishing their flagging legitimacy of their institutions, lest the Arab uprisings pose direct threats to them. With Israelis and Palestinians particularly risk-averse right now, it's hard to see how existential conflict-ending choices can be made.

Tenth, and finally, the success or failure of the Arab uprising to usher in more representative, if not democratic, governments, will depend on the ability of their governments to keep expectations and reality in alignment. This will not be easy. Mistakes are inevitable. Dictators could be replaced by autocrats or incompetents. It could take several goes in some countries, with further bloodshed along the way. Recall, the United States' first go at a Constitution, the Articles of Confederation, was hardly a glowing success.

Real leadership is required from within the Arab World; so is substantial international engagement and economic assistance from the region's allies, including the United States. This obviously will be a major challenge at a time of economic hardship and major budget constraints in the United States and among leading industrial powers.

Egypt, Syria and Saudi Arabia will be particularly critical in determining the outcomes throughout the region. Egypt has returned to its cherished place as the intellectual and political leader of the Arab world, following decades of ossification. If Egypt finds its way toward a more liberal order with real institutions, a diffusion of power, checks and balances, then other region -- then other countries in the region -- may follow suit. Should the Egyptian experiment fall prey to military or anti-democratic Islamists, then success elsewhere in the region will be difficult.

One thing is certain. The period ahead will be fascinating and critical for U.S. national interests. There is no better place to be analyzing, writing and commenting about these developments than at the Council on Foreign Relations, the world's premier think tank. I am truly honored that I will be doing that as the first Eni Enrico Mattei senior fellow. And I am especially pleased that the council and Eni will be working together closely in partnership in the future. Thank you.
(Applause.)

HAASS: (Off mic.) Well, let me thank Rob. Welcome, those of you who came a bit late. I'm going to ask a couple of questions and then we'll turn things over to you.

Let me turn to a couple of countries you didn't mention, just to add to the background. One is Turkey. Why do we use the words "neo-Ottoman," you know, reemergence of Turkey as a regional power? What's your sense about what's the dynamic there? What's the potential? What is -- what's the potential for Turkish influence and what are the consequences?

DANIN: Well, very early on Turkey was looked to as a possible intermediary. Turkey interjected itself, trying to broker political settlements in Libya, in Syria and even in Yemen, if I'm not mistaken. And all of these efforts have not proven successful. And at the same time, Turkey's relationship with Syria has deteriorated. And so if anything, I think Turkey so far, as an active broker of peaceful change in the region, has not succeeded.

Now Turkey is also pointed to as a possible model. This is because the military in Turkey has played such an important role as the guarantor of stability and ultimately of democratic institutions. And here there's a parallel to Egypt, where the military is the one institution that has played the stabilizing role. So I think Turkey is going to be important. It's going to try to exert itself. But so far, it hasn't been as successful as many have expected it to be, is my sense.

HAASS: Let's look at another country that is of the region but is also trying to both take advantage of events as well as being hammered by them, which is Iran. Obviously, it's had some disappointments with what's going on in Syria. But overall, is Iran -- if we're all going to sort of say "Who gains, who loses?" how has Iran done so far?

DANIN: Notwithstanding domestic developments in Iran, I think Iran has been -- it's had some pluses and minuses. In the Gulf, it clearly tried to play a role in helping foment unrest in Bahrain. As much as the -- what was happening in Bahrain was domestic and indigenous, there were elements that were -- that were being encouraged from Iran via Hezbollah. And that effort failed, and the Saudis sent a very clear message that this was not going to be brokered at all.

This raises a different issue about what has happened in the Gulf as a result, and we can maybe touch on that in a bit. But overall, I'd say the Iranians have not been successful in the Gulf. Their relationship with Syria has improved as a result -- in the sense that the Syrians have become more dependent on them. But at the same time, the Syrians have become weaker, so this is a -- not much of a gift. So that's why I say in a sense it's a net wash.

HAASS: The other country we haven't mentioned is Iraq. And one of the question is to what extent is anything we're seeing related or influenced by the example of Iraq? Or is that sort of historically compartmentalized: that happened then, and now is now?

DANIN: I think the analysis of Iraq sort of flows from where you come down on the overall Iraq war. Those who were pro-intervention I think will point to Iraq as a bellwether and an early tilt of what was to come. Those who thought that the intervention in Iraq was a mistake probably will argue that what happened in the region was delayed, and that what looked like it could happen when you talked about it in 2002 was put off because the whole notion of democracy was delegitimated to a certain extent by what happened in Iraq, and as democracy became something that the United States did to countries rather than did with countries.

Iraq has been interesting, in that there have been actually uprisings that have been taking place amidst everything else that has been happening. Over 30 people, I believe, have been killed there as the demonstrations have been taking place. But I think Iraq is important in that, as much as there's been a great deal of instability, the country has held. It's -- the worst-case scenarios did not play out. The country has held, despite the factions that exist within the country. And to that extent, I think it can probably be seen as a contributor to what has happened, because it showed that elsewhere in the region where you have multi-ethnic societies, still the state is not in danger.

HAASS: Saudi Arabia: obviously one of the critical countries of this part of the world. And a lot of us talk -- a lot of people talk about what you might call -- almost call the estrangement between Saudi Arabia and the United States. And I've heard people talk about the diversification of Saudi foreign policy. How serious is that? How much has Saudi Arabia essentially decided that the way it pushes back Iran, the way this family regime in Saudi Arabia maintains power, is by now charting a course that's quite distinct from the United States? Or is that overdone?

DANIN: I think that the anger that has -- that we saw immediately after Mubarak's demise was real, and we had a real challenge to U.S.-Saudi relations. That's why you saw a string of senior-level American diplomats make their way to Saudi Arabia. And that's why, to a certain extent, I think that the Saudis were able to intervene in Bahrain without much push-back from the United States. So the pique has been real, and I think the desire and frustration on the Saudi part has been real. But the ability, I would say, is limited.

We are both mutually dependent, whether we like it or not. This is not a relationship born of love, but one of necessity. And that necessity, I would suggest, argues for even closer cooperation today than we've had in the past. We need a new compact with the Saudis -- one that is a lot more sober, but one that's also more honest. Because if there's one thing I think that we learned in the -- from the Egyptian experience and why the Saudis were so caught off guard by what we did vis-a-vis Mubarak, and why Mubarak was so surprised himself at having lost --

HAASS: He's had time to contemplate it since, however, yes. (Laughter.)

DANIN: (Laughs.) Indeed. But I mean, clearly, leaders in the Middle East were very surprised at the rapidity with which the United States withdrew its support for Egypt, and this I think was very worrisome to them. And one of the failures I think we made over time was, we never laid out clear red lines: where the limits on our support was and what kind of behavior we would not countenance. And that's why I say, in forging a new pact with Saudi Arabia, I think we need to identify what our relationship is based on and where the red lines exist.

HAASS: Let me just ask two last questions and then I'll open up. One you've just alluded to, which is the influence of outsiders: People talk about economic aid for Egypt; there's been a NATO intervention in Libya. But when the history of this is ultimately written, to what extent is this really going to be seen as a series of Arab uprisings, where outsiders played at most a severely circumscribed role? Or are we likely to see a scenario or future unfold where outsiders become more central?

DANIN: Well, I think we have to look at the phases. I mean, if I -- if what I wrote -- if what I just said is true, and that we're in just early days, then we still have a few more chapters before we're able to sit down and write the history.

I think when we look at the first chapter of the history -- and with the outbreak of the uprisings, then we will see that outsiders mattered very little and what happened was purely indigenous. That's what I tried to describe in -- you know, was the tipping point for a number of countries. In fact, it was the frustration with the outside, benign neglect, that led to certain discontent.

But I'd argue now -- now that we moved to a new phase in which -- in which we have military engagement, where we have real bloodshed taking place, where the international community is engaged -- that what the international community does will be part of that history.

HAASS: Last question and it's, politically, a slightly loaded question, which is, when you look at what happened in Latin America, you look at what happened in parts of Africa, obviously in the former Soviet states, throughout Asia, the democratic upheavals and revolutions happened decades ago or longer.

Why has it come so late here? What is it about the Middle East? Because there's Islamic countries around the world that are democratic and so forth, so one can't, I believe, attribute it to religion. What is going on in the Middle East that democracy has come so incompletely and so tardily?

DANIN: It's hard to speak monolithically about the Middle East, given the diversity of experiences in the region. I mean, if we're talking about the Arab world, you have the Gulf, you have the Levant and North Africa. I'd say, in those countries, you know, the republics, let's say -- I mean, these were essentially autocracies, autocratic rule in which the leaders worked to gut civil society and in many ways tried to help ensure that the sort of uprisings that have taken place would not take place.

Yet what we saw was that the power of the state was not so great. Two years ago, many students of the region would have argued that Mubarak's Egypt would never see this kind of uprising, and yet it did. So even then, given all the tools at their disposal and their success for so many years at depriving the state or the institutions and society of civil society that would lead to democratic reform, nonetheless, I think we saw that the yearning could not be repressed.

HAASS: OK. I've filibustered long enough and let me open up. If people would wait for a microphone and identify themselves, and we'll try to get -- as you can see, Rob answers questions succinctly so we will get as many questions as we can.

Mr. Rampini (ph), got a microphone coming your way.

QUESTIONER: Even if you mean the most positive of the possible outcomes, that is, that most of these countries will become functioning democracies, can we assume that we mean they will be our allies and our friends? Or can we have a scenario where we have functioning anti-Western democracies in the Arab world?

DANIN: I think that's an excellent question because it's very likely that, as you have more representative government and more representative leadership, that you will have leaders move away from the West and seek to be more independent. I don't know that they'll become anti-Western, but I think they will seek a kind of traditional, more nonaligned type of orientation in their foreign policy.

And it will be more difficult for countries like the United States to build the sort of partnerships that we've built in the past to advance certain goals, especially elsewhere in the region, be it counterterrorism, be it fostering Arab-Israeli peace. That's why I mention that I thought that it was going to be more difficult in the time ahead to broker peace, because in the period ahead, these societies are going to want to distance themselves, to a certain extent, from the West.

But they'll also want to do business with the West. So I don't think they'll become anti, but I also think they will become more unpredictable and more independent.

HAASS: Sure.

QUESTIONER: I'm Alexandra Starr at the Center on Law and Security at NYU Law School. I was wondering if you could elaborate a little bit more on the comments you just made with Richard on red lines and that they should have been made more explicit with Egypt and should be made more explicit with Saudi Arabia. Where do you think they should have been when it came to Egypt, and what would you propose for our relationship with Saudi Arabia?

DANIN: The problem with Egypt was we had -- over the last 10 years, we had a very uneven policy, I would argue. On Mondays, Wednesdays and Fridays, we told the Egyptians that we wanted them to reform and to promote democracy, and on Sundays, Tuesdays and Thursdays, we told them that we needed their partnership and wanted to work closely with them to advance other regional interests, be it counterterrorism, be it Iraq, be it support for Middle East peace. So one problem was that we were -- we sent very conflicting messages to the Egyptians, and we were not successful at integrating the two. I think to be successful in the future, we're going to have to be able to do those things simultaneously.

Secondly, as I said, I think we were not credible in our -- in our democracy promotion in the sense that we were tested and we didn't really rise to the challenge. In 2005, Secretary of State Hillary Clinton (sic) went to Cairo, gave a very forward-leaning speech -- Secretary Rice gave a very forward-leaning speech about the need for democratization. This really got the Egyptians back up. And they tested the administration, and the administration essentially backed down.

Instead I think it -- you know, it need not be all or nothing. It need not be that we're going to break relations with you if you don't reform. At the same time, it means that you need to enter into a new kind of strategic relationship in which you work with governments as well as with societies to reform. I mean we'd been making the argument that the failure to reform is going to be suicidal for these regimes. They just didn't believe it. And I think now they will more so.

HAASS: Can I challenge you on that? Because you're right, you and I spent many years telling people like Hosni Mubarak that he needed to reform. He said -- he basically said, I appreciate your concerns, but get lost.

How is the -- why do you think the Saudis now are going to take our admonitions anymore than he did? Isn't it quite possible we'll see just the opposite, that they will see it as a sign of weakness and they will say, when people give way, they lose power and that we need to hang tough?

DANIN: Sure. They will argue that. And that means that it's going to be a very difficult conversation, but it needs to be part of the ongoing conversation that we have. It needs to be a new type of friendship, a tough love, if you will; a friendship that says we want to work with you, but we also believe that unless you start to change, start to be more inclusive, you're sealing your own death knell here.

And there's certain behavior that if you engage in it, we cannot support. And that's where we, I think, failed with Egypt. We did not tell Mubarak that if you start to use force against your own people, we will withdraw our support. And I think he thought he had, to a certain extent, a blank check, at least when it came to the United States.

HAASS: Just to press you on more thing. With the Saudis, they've gone into Bahrain, essentially against American desires and preferences. And I assume the Saudis have said, we need to do this, we're going to do it, and the balance of leverage vis-a-vis Riyadh or Washington is such that we the Saudis can sustain any American pressure.

DANIN: In the short term, that's right. What the Saudis did was they hyped this as an Iranian threat rather than a Shia threat, which is what they really saw it as. Although, as I said earlier, there were elements of both, but I think they overplayed the Iranian threat in order to play to our -- to their audience with us. And in the short term, there wasn't much that we could do.

But over the longer term, that has to be -- you know, there has to be some pushback, because as I suggested earlier first, it's not clear that the status quo that now stands in the Gulf will continue. We have had unrest in Saudi Arabia, and we have -- may have more, especially, you know, given when King Abdullah, you know, passes from the scene and there is a real succession that takes place in Saudi Arabia.

HAASS: Professor Shinaval (ph), Prince University there.

QUESTIONER: Robert, why do you think the military stuck with a regime in Saudi Arabia, Jordan and, at least until now, Syria, but they defaulted in Egypt and in Tunisia? And whatever your reason is, how much longer do you think it's going to last?

DANIN: I think that the reason is, you know, in each case, the social makeup is different. In Egypt, the military was a venerated institution that enjoyed legitimacy, and ultimately decided that it wanted to maintain its legitimacy when it saw that Mubarak was losing it.

In contrast, in Syria I'd say the military is so embedded with the regime that it cannot turn against Assad. The Alawites are a ruling sect in Syria. They control the military; they control the country. And they see their fate enmeshed with that of Bashar al-Assad. So they are not going to turn against him, I think. They will -- at least the leadership of the military is going to stick with him to the end. And that's why I'm not convinced that we're going to see Assad's departure, necessarily, anytime soon. Indeed, we've not seen demonstrations in Damascus; we've not seen demonstrations in Aleppo. There still is a good deal of support left for Bashar, despite all the bloodshed and despite the unrest that's taking place.

I think you can't universalize too much. You have to look at the nature of each country and the society and the role that the military plays before you try to, you know, assess whether or not the military is going to play a decisive role.

HAASS: Rita Hauser.

QUESTIONER: Oh, thanks. Paolo quite properly opened this discussion between -- the tension between energy, economy and politics. Since Fukushima, almost every country in Europe has said they forswear nuclear energy. We haven't had a new plant since the Three Mile Island business. So assuming that that continues as policy, we're more and more dependent on Saudi oil. Saudi announced today that it is developing a nuclear energy program. And further -- (inaudible) -- Turkey ominously said that if Iran gets the weapon, so, too, will they.

Now, my question is this. I personally don't believe we're going to stop Iran from getting the weapon -- with which you may or may not agree -- but assume it's correct. What then happens in the tension between Saudi and Iran, given this oil dependency of the West that will (augment ?)?

DANIN: There are a number of questions embedded there, but --

HAASS: Choose the ones you want. (Laughter.)

DANIN: (Laughs.) Very provocative.

You know, I'd say, you know, in the end, if Iran and Saudi Arabia begin a race for nuclear weapons, then I think it will only reinforce the Saudi need and desire to continue its alliance with the United States. It won't want to confront Iran alone. And that's why I believe we're ultimately fated to continue this partnership together, us and the Saudis.

But the prospect of a nuclear arms race in the Middle East is obviously very, very worrisome, very troublesome. And I don't know that an Iranian nuclear weapon is inevitable. There have been, it seems, setbacks to the efforts to -- for the Iranians to prepare nuclear weapons, and the timeline keeps getting pushed back. Nonetheless, your assessment that the move to resort to force, either by Israel or ultimately by the United States, is questionable.

HAASS: (Inaudible) -- actually think if Iran does get nuclear weapons -- to come back to something Rita said -- I should think it would put tremendous stress on the U.S.-Saudi relationship, because Saudi Arabia will not have a lot of faith in American guarantees. They're going to want their own. But it will be on a very interesting foreign policy question for the United States, whether there would be any looking the other way, or whether the United States would vehemently oppose the Saudis following suit on the basis that all proliferation is essentially bad; the more fingers on more triggers, the worse it gets. That can be a very, very difficult -- it could add tremendously, I think, to the difficulty of this relationship. Hadn't really thought of that.

Sir.

QUESTIONER: Claude Erbsen, Innovation International. Could we have your thinking on the split in the Brotherhood in Cairo between the youth wing and the older wing? Superficially, it looks like the youth wing is taking a more, quote-unquote, "liberal approach" to things, and less doctrinaire. What are the implications of this both for Egypt and for Islamic politics in the region?

DANIN: That's a good point. I think we're starting to see all sorts of, not splits, but differentiation take place within the umbrella known as the Muslim Brotherhood, as it steps out into the open.

Up until recently, it was a protest party, an opposition force. It knew what it was against, but it didn't have to articulate what it was for. The more it now is forced to articulate policies and a future and ways in which it will deliver to the people, the more that it's going to have to really flesh out things. And I think that debate is what leads to the sorts of fissures along generational lines or along different -- other lines as well.

This is one of the reasons that the move of -- you know, into the sunlight, if you will, of Islamist parties is going to be a very interesting development, and one that is not inevitably dangerous. It has dangers depending on the larger context with which -- in which it operates, but I don't think that -- now that Islamist parties have to stand up and answer to publics just as any other political parties do, you're going to see more and more challenges to the types of answers it's avoided in the past.

HAASS: One thing it argues for is slowing the clock as much as you can. Give parties, opposition parties, more time to develop; give splits more time to emerge. The sooner electoral events happen, it seems to me, the more likely you're going to have consolidated Islamists and unprepared alternatives. Time, I think, is our friend here. Just one man's opinion.

Gail (sp), you had your hand up?

QUESTIONER: Yeah. Just curious what you think the timeline is going to be in Libya. Where do you think things are going to wind up and, you know, where will the United States stand at the end of all of this?

HAASS: All right, we want the date and the hour, that -- (laughter).

DANIN: Libya today looks like, and it feels like a stalemate -- though I recall very well the period during the Bosnian air war in which it had the same feel, and I recall those 90 days in which it seemed every day there was a sense of: this policy is unsustainable; it can't continue and it's heading nowhere. And then one day, it did. So I'm arguing both ends here.

But what troubles me is that, you know, one, it's not clear what our -- well, it's clear to the observer what our strategic objective is, but it troubles me that we've never really articulated it as such. It also worries me because, as troublesome and dangerous as Gadhafi is, especially a wounded Gadhafi, I don't think we're very well prepared -- and Libya clearly is not very well prepared -- for the day after. And here the Powell doctrine: the Crate & Barrel notion of "You break it, you bought it" --

HAASS: It's the Pottery Barn.

DANIN: The Pottery Barn, excuse me. (Laughter.)

HAASS: (Chuckles.) OK -- you ought to go out and shop more. (Laughter.)

DANIN: OK. (Laughs.) You know, I don't know that we recognize what we're -- what we -- what mission creep is leading us to here.

So I don't know where we're heading, but clearly it seems that we can't live with Gadhafi, or that we don't want to live with Gadhafi. I'm troubled by the fact that we haven't allowed any sort of diplomatic exploration to take place that's serious because of this stalemate. So in short, it looks like a stalemate; it could end tomorrow, but that -- doesn't look like it's going to. And in the absence of that, I'd like to see more active diplomacy to try to find a way other than just decimating Gadhafi in his bunker.

HAASS: Right here.

QUESTIONER: Henry Jackelen. I'm fascinated by what you say about Israel and the Palestinian dynamic, right? And I think it obviously will go on for a long time. But with your direct experience in the region: the particular dynamic between Gaza and Egypt, I was wondering if you could explain a little bit. Because in the beginning there, there was a flow of people, even, happening, but now I'm informed that it's been closed down. And some people even say it's because of an American influence -- which I doubt. But anyway, any dynamic of how Egypt is going to interface with all of this?

DANIN: Well, this is the interesting thing. You know, when Egypt opened up Gaza, opened up Rafah to Gazans, many in Egypt were happy, and obviously Gazans were happy. But I thought this was actually a gift to Israel, at least for those in Israel who want to see Gaza pushed out of its own sphere of orbit and those who actually don't want to see a viable two-state -- or a viable Palestinian state emerge in West Bank -- in the West Bank and Gaza.

And I think what you're seeing now is an Egyptian recognition that: Oh, lord, what have we inherited here? I mean, over the course of the previous decade, there's been a tug of war or an effort by Israel and Egypt each to thrust Gaza into each other's sphere of orbit. It's been a hot potato that neither have really wanted and each have wanted the other to take responsibility for.

Now, I think what you're seeing is Egypt recognizing the limits of its -- of the benefit of having that relationship. So what it's allowing are people to flow, but it still wants responsibility for goods and the flow -- the flow of goods, the flow of food, the flow of services all to flow through Israel to continue its dependency on that vehicle and not push Egypt or push Gaza into Egypt's sphere of orbit.

HAASS: Maurice Sonnenberg.

QUESTIONER: Maurice Sonnenberg. I'd like to take you another area in Egypt: Social and economic unrest, because without the stability in that area, I'm not sure this revolution or whatever it is -- Arab Spring -- might not turn into a nightmare.

So we talk about things like Salafists burning down Coptic churches, crime at its -- highest it's been in almost 30 years, direct foreign investment down, tourism down and on and on. I wonder whether you could dig a little deeper -- drill, but not for oil -- and tell me where you think this might go if the economic stability does not commence or follow the political stability.

DANIN: Well, I think you rightly identified one of the core challenges. I mean, the sectarian divide that has now come out into the open over the last six months, the Coptic-Muslim divide, the fact that you have this sense of lawlessness -- when I visited Egypt recently, I mean, what I heard from Egyptians, you know, repeatedly was this sense of, it's not that it's become more dangerous, it's just that if you do find yourself in the wrong place, there's no one to call. And there's no 911 to call. And that's the danger in the short term.

Over the longer term, and that's why I said expectations need to match delivery. And here, as you rightly pointed, the tourism industry has already been decimated over what's happened. Egypt's economy is now flat and on a downward trajectory.

And that's why I believe, unless there is a rapid and massive infusion of support for Egypt as it moves along the political track, then whatever happens in the political sphere is going to be undermined by social and economic instability. And that's why there needs to be this new partnership. And when the G-8 met in Deauville, they talked about such a partnership and they pledged $20 billion for Egypt and Tunisia.

I'm skeptical at how fast that money will be delivered and whether or not it will move in a way that is -- that keeps up with the need. Obviously, the need is great. But at the same time, given that we've just freed up $100 billion a year in Afghanistan, I think there are new opportunities that may be afforded in Egypt.

HAASS: For the record, we've barely freed up $10 billion a year in Afghanistan. And also, as anyone who's spent time in Cairo knows, there's no 411 either. (Laughter.)

I want to thank Rob for setting such a high bar in getting this chair off and this whole real effort off to such a strong start. And I think what you got, in a sense, here tonight is the range which is totally fitting for a chair that's devoted to the Middle East and Africa.

Again, I want to thank Paolo Scaroni and Enzo Viscusi for all they've done to nurture this relationship. And I want to thank all of you for your willingness to brave the humidity and the rain and come out to the Council on Foreign Relations tonight. So thank you all. (Applause.)

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THIS IS A RUSH TRANSCRIPT.

RICHARD N. HAASS: Good evening. I'm Richard Haass, the president of the Council on Foreign Relations, and I'd like to say a word of welcome for tonight, "benvenuto" -- (inaudible) -- to all of you here on what is a very proud and important evening for all of us associated with the Council on Foreign relations, and the reason is simple: We are celebrating the formal investiture of the Eni Enrico Mattei chair in Middle East and African studies.

As many of you know -- and indeed, as I expect all of you know -- Mr. Mattei was the driving force behind not just the development of one of the world's great corporations, but also the source of Eni's deep relationships in the Middle East and North Africa. He was Eni's founding president, and expanded Italy's national capacity in the realm of energy and petrol chemicals. And due in large part to Mr. Mattei's work, Eni was in a position to play an important, indeed pivotal role in the post-war reconstruction of Italy.

Mr. Mattei was also instrumental in expanding ENI's reach around the world. And he established a remarkable stream of personal relationships with leaders in Egypt, Iran, Algeria and elsewhere. And he also was someone who gave a great deal of thought and time to promoting cultural understanding and to really -- was one of the early people who understood, I think, the importance of corporate branding and corporate identity in forging relationships that were important in their own right but also obviously had consequences for business. And through all this and more, that -- this gift is so important to those of us here at the Council on Foreign Relations. And we are obviously extraordinarily grateful for the generosity of those associated with Eni and for their faith in what we in the Council on Foreign Relations can and will do.

And I'm not just speaking of people in the abstract. I'm speaking about one people in particular, Paolo Scaroni, who is the chief executive officer of Eni. And he's a long friend of this institution, and he's also a personal friend now for some time. Paolo has been CEO of Eni since 2005 and he -- it's large part because of him that Eni became a corporate member of the Council on Foreign Relations in 2007.

That's not the only thing he does, though I'd like to think how he spends most of his time worried about his relationship with the Council on Foreign Relations, but Paolo is also the nonexecutive deputy director of the London Stock Exchange Group, and he's nonexecutive director of both -- oh dear, my Italian now is going to be challenged -- (inaudible) -- no? -- (inaudible) -- OK, yeah. (Laughter.) It's good my wife isn't here, particularly given my own personal background in questioning the wisdom of the fact -- I probably shouldn't go there -- about how many people are studying Italian in the United States compared to some other languages, so I of all people are not in a position to criticize, given my own difficulties. Paolo is also on the board of overseers at Columbia Business School and at the Fondazione Teatro alla Scala.

So I think it's also the second time that you've been here, at the -- here at the Council on Foreign Relations, and we are truly delighted to have him with us all tonight so we can thank and honor him and really pay the acknowledgment for what we've been able to establish here through the help of Paolo and Eni.

And with that, let me, for a few minutes, turn the microphone over to Mr. Scaroni. (Applause.)

PAOLO SCARONI (CEO, Eni): Thank you, Richard. Thank you, Richard, and good evening, ladies and gentlemen. It is a real pleasure for me to be here tonight to celebrate the chair Eni Enrico Mattei -- E-N-I, if you prefer -- Enrico Mattei chair for Middle East and Africa studies. We have chosen to support this chair and this institution because we believe that politics and energy are very much linked together and therefore, to understand politics means to understand energy.

This is true everywhere, but it's particularly true in the Middle East and in Africa, which, as you probably know, holds 70 percent of the oil reserves of the world and 50 percent of the gas reserves of the world. And, by the way, Africa is home for my company, because Eni is the first producer of hydrocarbons in Africa.

The so-called Arab Spring, which I think Robert Danin will speak today, is really an example of how energy and politics are linked together. We attribute it to what has happened in Libya and to what happened in the other Arab countries, in addition to oil prices between 15 (dollars) and $20 since the beginning of the year, creating some fears about the recovery in the world nowadays.

But the relationship between energy and politics dates back a long time. Almost a century ago, Winston Churchill -- it was 1912 and he was the first lord of admiralty, I think you say. Well, Winston Churchill at that time took a big gamble. He was sniffing the air to understand what was -- what was happening in the world and was already some winds speaking about the First World War.

And he discovered with horror that the German fleet was sailing at two knots faster than the British fleet. Why? That is simply because the German fleet was running on fuel oil, while the British fleet was still running on coal. Well, he took a sudden decision and he decided immediately to shift all the ships of the -- the warships of the navy from coal to fuel oil, which, at that time, came mainly from Persia -- from what is today Iran.

Now, in practice, from a political point of view, he took a bet. He said, I bet the speed of my navy and therefore the power of the British navy against Middle East politics. Am I good enough to run the Middle East policy to be sure that I can give up my domestic coal for foreign imported oil? This was the decision he took.

And in order to make his bet more sure, he nationalized -- which was very strange at that time -- the Anglo-Persian Company, which became -- which today is BP. At the end of the day, it became -- after many changes, BP -- so just to show you how linked have been since that time politics and energy.

Now, the reason why we have decided to dedicate this chair to Enrico Mattei is because Enrico Mattei was a real innovator. In the '50s, he was fighting the competition of the large Anglo-Saxon corporations in oil. And in order to compete with them, he took the decision not only to offer better terms to the oil-producing countries, but to be ready to participate in their development. Now, this was the only way he had to get his foot into the door of the oil-producing countries.

But that strategy that he adopted at that time is still our strategy today. And today it has become our competitive advantage. You might not know -- not know that, but ENI has been growing more than any other large international company in the last 10 years, doubling our production, mainly in Africa.

And we owe this growth, which is so important to us, on the fact that African countries in particular perceive us as partners. We usually say that we sit next to them and not in front of them, try to help them in developing their countries. And we are perceived as a partner and not as a commercial counterpart. And with these times, in which it's so important to have access to natural resources, to be perceived as a partner, to be welcome is really a great competitive advantage.

Now, we are happy to recognize Enrico Mattei's contribution by remembering him with this chair. And I'm sure that Robert Danin, who will now take the floor, I think, will add luster to his and to our reputation. Thank you. (Applause.)

HAASS: Well, as Paolo said, the time has come to turn the microphone over to the inaugural Eni Enrico Mattei senior fellow for Middle East and Africa studies, none other than our very own Rob Danin.

Rob came to the council a year ago, 2010, after two years of heading the Jerusalem mission of the Quartet representative, Tony Blair. And prior to that, he had a number of extraordinarily difficult assignments in that several of them involved working for me. A glutton for punishment, he is now back here.

Rob though worked at both the State Department and the National Security Council as one of the people who, to me, represents what we really try to bring to the council, which are scholar-practitioners. And we couldn't think of anyone with a better background to start this important position.

He has participated (in here since ?) he's been here, about -- more than a dozen meetings or events on the Middle East since the uprisings began six months ago. He has written and spoken extensively on both the causes and consequences of what many describe correctly or perhaps not as the Arab Spring. (Since ?) he's set a very high bar for this chair -- (inaudible) -- and he has been good enough to establish.

Before we begin, one or two pieces of housekeeping. If people would please turn off things electronic, that would be ideal, so we are -- does not interfere with the sound system. This meeting is on the record, so anything said can and will be used against those speaking.

Rob is going to speak for a few minutes to set a broad overview about his take on what is going on in the Middle East and North Africa, consistent with the -- what has motivated this chair. And he and I will kick a few questions around and then we'll open it up to you, our members. So with that, Professor Danin. (Applause.)

ROBERT DANIN: Thank you, Richard, for that introduction. Good evening, everybody. I'm deeply honored to serve as the first holder of the Eni Enrico Mattei senior chair for Middle East and African studies at the Council on Foreign Relations. I wish to thank Eni for generously endowing this chair, and I particularly want to thank Paolo [Scaroni] for his support and for traveling here tonight from Rome to be with us. I also wanted to thank Enzo Viscusi for his sustained interest and friendship, and lastly, I want to thank Richard Haass for providing me with this tremendous opportunity.

Given the dramatic developments taking place throughout the Middle East, I don't think the timing could be more appropriate for the chair's establishment. Never has the Middle East appeared more chaotic, more uncertain, more fluid. So as we officially inaugurate the Eni Enrico Mattei chair tonight, let us look closely at the causes and implications of the Arab uprisings.

Last December 17th, a Tunisian street vendor, publicly humiliated by a corrupt policewoman, doused himself in gasoline, lit a match and set himself on fire. In immolating himself, Mohamed Bouazizi sparked an outpouring of Tunisian protest that rapidly spread to Egypt and ultimately, from the Atlantic to the Gulf. Since then, we have seen sustained popular unrest, two governments toppled, several incipient civil wars, and brutal government backlashes. Few Arab countries have been untouched.

Now, throughout the past century, there have been numerous Arab uprisings. These have been generally in one specific country or locale. What we have now is an entire region undergoing profound unrest all at once. Not even the Great Arab Revolt was as widespread geographically or demographically as this revolt is.

This is an effort at what I call Arab self-empowerment. These are Arabs revolting against Arabs, not against foreigners. What unites them is a desire for dignity, for participation in public life, and a deep resentment of long-standing political paralysis. People are reacting to local conditions and grievances, but taking their inspiration and encouragement from developments throughout the region.

Analysts of the region have argued for years that the status quo was unsustainable. In 2002, then-Ambassador Richard Haass, addressing this same forum, spoke of a youth bulge combined with youth unemployment portending what he then called potentially explosive social conditions in the Arab world. Indeed, 60 percent of today's 300 million Arabs are under the age of 25, and unemployment for them nears 40 percent -- among the highest in the world. Meanwhile, efforts to prevent change by the region's leaders, usually in the name of stability, has only engendered alienation and discontent.

Since these conditions have obtained for some time, though, we must ask: Why did it happen now? One critical factor is that economic conditions became quite acute, and quite rapidly. Over the past year, food prices rose 40 percent -- 15 percent in the last quarter alone. In Egypt, the world's second-largest importer of wheat, this monthly percentage of income spent on food is over 40 percent. So rising food prices were felt quite acutely and painfully. Add to that declining subsidies and higher energy prices, that Paolo spoke about, and you have quite a combustible situation.

Now, two more proximate factors help explain why popular unrest began first in Tunisia and then quickly spread to Egypt. In Tunisia, the circulation of American documents, diplomatic cables released through WikiLeaks, showing the Ben Ali family's profligate corruption was significant. People had long known that the Ben Ali family was corrupt, but when it was documented and disseminated by credible outside sources, a tipping point was reached.
Similarly, in Egypt, last November's parliamentary elections, in which all but 15 out of 504 available seats went to Mubarak's ruling party, set off the last spark. Mubarak's abuse of power thoroughly delegitimized the notion of positive, evolutionary change.

As images of unrest spread in Tunis and Cairo to demonstrations in Bahrain, Jordan, Yemen, Libya, Morocco and eventually Syria, as well as to lesser places -- or lesser reported locales such as Algeria and Oman, we are now six months into the uprisings. Egypt and Tunisia are girding for parliamentary elections; NATO is militarily engaged in Libya; the kings of Morocco and Jordan have promised reform leading to constitutional monarchies, and Yemen is teetering near civil war, and Syria's regime is engaged in a brutal military clamp-down against its population.

Against this -- against this picture, let me posit 10 brief interim conclusions, or observations. First, while the rapidity and intensity of the recent unrest and political change have been breathtaking, what we have seen so far is really only the beginning of the unraveling and dismantling of the Arab order. These are still early days. What has been called by some an Arab Spring showed no sign of abating this summer. Indeed, I see no reason to believe it's going to let up or settle down in one dramatic denouement.

Second, in anticipating what will replace this old order, I believe that there's no historic inevitabilities. The future is not preordained. Egypt, in my opinion, could go either way. Events could continue to proceed relatively peacefully in other places, with more inclusive and open political systems.

But we may also see some truly failed states in Libya, in Yemen and potentially in Syria. In these cases, authoritarian leaders successfully ensured that core building blocks necessary for democracy, civil society and thriving institutions such as labor unions do not exist. Elsewhere, particularly in the Gulf, there still remains the possibility that greater unrest will be unleashed, particularly in the context of a succession.

Third, and if nothing else, the one change that the Arab uprisings have produced is the idea that public opinion now matters in Arab politics. The Arab people are making their voices heard and seeking to play an active role in their countries' futures. Leaders can no longer act with impunity and disregard for public opinion. This could empower the leaders in the long run. But in the short run, it will constrain them.

Fourth, Islam -- or, more precisely, Islamic politics and Islamic parties will play a greater role in the political life of many countries trying to become democratic. That appears to be the new regional consensus. One key reason is that Islamic -- Islamist parties in countries like Egypt are the best organized and were the least delegitimated by the old order. There are reasons to be concerned, particularly if democratic experiments fail or weak political structures are established.

Fifth, one effect of the Arab uprisings may be the real beginning of concerted Arab action to address regional concerns. The Saudis were uncharacteristically bold in intervening militarily in Bahrain and in their diplomatic effort to try to move Yemen's President Saleh aside.

More broadly, the GCC has been expanded into a club of monarchies. And it, and then the Arab League, led the international charge for international military intervention in Libya. Not only did these Arabs support U.N. Security Council Resolution 1973, but forces from Qatar, Jordan, and the UAE are currently engaged in the military effort in Libya.

Sixth, what is happening demonstrates that there is no Arab exception to universal yearnings for political participation and a better life. The argument that was used in Latin America, Asia, and Africa in the past and towards the Arab world, both to argue that the people don't want democracy and that it cannot take hold where it has no indigenous history, does not stand the test of history. This has been proven wrong, and we now see that these aspirations are indeed universal, encompassing the Arab world as well.

Seventh, so far, Arab monarchies are proving themselves more adept at managing the uprisings. In contrast, the Arab republics have shown themselves to be more vulnerable. One reason is that the monarchies enjoy a greater sense of legitimacy and rootedness. Also, monarchies enjoy a diffusion of power. When Jordanians took to the streets early on, the king sacked his prime minister, and this quickly defused anger in the kingdom. In Oman, Sultan Qaboos dismissed his ministers. In contrast, in places like Egypt, power was so centrally concentrated that many -- that criticism of the state and criticism of the leader were synonymous.

Eighth, the Arab-Israeli conflict is going to continue to play a role in the life of the Middle East. To be sure, the last six months have conclusively demonstrated that the conflict is no longer the central fault line in the region, if it ever was. Yet the conflict still has saliency, as we have started to see in Egyptian demonstrations. In the last month, Syria has twice dispatched Palestinians into Israel in an attempt to both deflect attention from Syria and to provoke violence. Arab states that made peace with Israel or have unofficial commercial ties with Israel will become more reluctant to actively engage as they feel increasingly vulnerable to their own popular sentiment.

Ninth, and related, the Arab uprisings have, if anything, made efforts to broker Israeli-Palestinian peace more difficult. Both Israelis and Palestinians are now focused on their internal stability and security. For Israel, this means hunkering down to see if peace with Egypt -- a central pillar in their national defense strategy -- will endure, and to watch what happens in the neighborhood.

For Palestinians, the priority has shifted towards unity as a means towards reestablishing their flagging legitimacy of their institutions, lest the Arab uprisings pose direct threats to them. With Israelis and Palestinians particularly risk-averse right now, it's hard to see how existential conflict-ending choices can be made.

Tenth, and finally, the success or failure of the Arab uprising to usher in more representative, if not democratic, governments, will depend on the ability of their governments to keep expectations and reality in alignment. This will not be easy. Mistakes are inevitable. Dictators could be replaced by autocrats or incompetents. It could take several goes in some countries, with further bloodshed along the way. Recall, the United States' first go at a Constitution, the Articles of Confederation, was hardly a glowing success.

Real leadership is required from within the Arab World; so is substantial international engagement and economic assistance from the region's allies, including the United States. This obviously will be a major challenge at a time of economic hardship and major budget constraints in the United States and among leading industrial powers.

Egypt, Syria and Saudi Arabia will be particularly critical in determining the outcomes throughout the region. Egypt has returned to its cherished place as the intellectual and political leader of the Arab world, following decades of ossification. If Egypt finds its way toward a more liberal order with real institutions, a diffusion of power, checks and balances, then other region -- then other countries in the region -- may follow suit. Should the Egyptian experiment fall prey to military or anti-democratic Islamists, then success elsewhere in the region will be difficult.

One thing is certain. The period ahead will be fascinating and critical for U.S. national interests. There is no better place to be analyzing, writing and commenting about these developments than at the Council on Foreign Relations, the world's premier think tank. I am truly honored that I will be doing that as the first Eni Enrico Mattei senior fellow. And I am especially pleased that the council and Eni will be working together closely in partnership in the future. Thank you.
(Applause.)

HAASS: (Off mic.) Well, let me thank Rob. Welcome, those of you who came a bit late. I'm going to ask a couple of questions and then we'll turn things over to you.

Let me turn to a couple of countries you didn't mention, just to add to the background. One is Turkey. Why do we use the words "neo-Ottoman," you know, reemergence of Turkey as a regional power? What's your sense about what's the dynamic there? What's the potential? What is -- what's the potential for Turkish influence and what are the consequences?

DANIN: Well, very early on Turkey was looked to as a possible intermediary. Turkey interjected itself, trying to broker political settlements in Libya, in Syria and even in Yemen, if I'm not mistaken. And all of these efforts have not proven successful. And at the same time, Turkey's relationship with Syria has deteriorated. And so if anything, I think Turkey so far, as an active broker of peaceful change in the region, has not succeeded.

Now Turkey is also pointed to as a possible model. This is because the military in Turkey has played such an important role as the guarantor of stability and ultimately of democratic institutions. And here there's a parallel to Egypt, where the military is the one institution that has played the stabilizing role. So I think Turkey is going to be important. It's going to try to exert itself. But so far, it hasn't been as successful as many have expected it to be, is my sense.

HAASS: Let's look at another country that is of the region but is also trying to both take advantage of events as well as being hammered by them, which is Iran. Obviously, it's had some disappointments with what's going on in Syria. But overall, is Iran -- if we're all going to sort of say "Who gains, who loses?" how has Iran done so far?

DANIN: Notwithstanding domestic developments in Iran, I think Iran has been -- it's had some pluses and minuses. In the Gulf, it clearly tried to play a role in helping foment unrest in Bahrain. As much as the -- what was happening in Bahrain was domestic and indigenous, there were elements that were -- that were being encouraged from Iran via Hezbollah. And that effort failed, and the Saudis sent a very clear message that this was not going to be brokered at all.

This raises a different issue about what has happened in the Gulf as a result, and we can maybe touch on that in a bit. But overall, I'd say the Iranians have not been successful in the Gulf. Their relationship with Syria has improved as a result -- in the sense that the Syrians have become more dependent on them. But at the same time, the Syrians have become weaker, so this is a -- not much of a gift. So that's why I say in a sense it's a net wash.

HAASS: The other country we haven't mentioned is Iraq. And one of the question is to what extent is anything we're seeing related or influenced by the example of Iraq? Or is that sort of historically compartmentalized: that happened then, and now is now?

DANIN: I think the analysis of Iraq sort of flows from where you come down on the overall Iraq war. Those who were pro-intervention I think will point to Iraq as a bellwether and an early tilt of what was to come. Those who thought that the intervention in Iraq was a mistake probably will argue that what happened in the region was delayed, and that what looked like it could happen when you talked about it in 2002 was put off because the whole notion of democracy was delegitimated to a certain extent by what happened in Iraq, and as democracy became something that the United States did to countries rather than did with countries.

Iraq has been interesting, in that there have been actually uprisings that have been taking place amidst everything else that has been happening. Over 30 people, I believe, have been killed there as the demonstrations have been taking place. But I think Iraq is important in that, as much as there's been a great deal of instability, the country has held. It's -- the worst-case scenarios did not play out. The country has held, despite the factions that exist within the country. And to that extent, I think it can probably be seen as a contributor to what has happened, because it showed that elsewhere in the region where you have multi-ethnic societies, still the state is not in danger.

HAASS: Saudi Arabia: obviously one of the critical countries of this part of the world. And a lot of us talk -- a lot of people talk about what you might call -- almost call the estrangement between Saudi Arabia and the United States. And I've heard people talk about the diversification of Saudi foreign policy. How serious is that? How much has Saudi Arabia essentially decided that the way it pushes back Iran, the way this family regime in Saudi Arabia maintains power, is by now charting a course that's quite distinct from the United States? Or is that overdone?

DANIN: I think that the anger that has -- that we saw immediately after Mubarak's demise was real, and we had a real challenge to U.S.-Saudi relations. That's why you saw a string of senior-level American diplomats make their way to Saudi Arabia. And that's why, to a certain extent, I think that the Saudis were able to intervene in Bahrain without much push-back from the United States. So the pique has been real, and I think the desire and frustration on the Saudi part has been real. But the ability, I would say, is limited.

We are both mutually dependent, whether we like it or not. This is not a relationship born of love, but one of necessity. And that necessity, I would suggest, argues for even closer cooperation today than we've had in the past. We need a new compact with the Saudis -- one that is a lot more sober, but one that's also more honest. Because if there's one thing I think that we learned in the -- from the Egyptian experience and why the Saudis were so caught off guard by what we did vis-a-vis Mubarak, and why Mubarak was so surprised himself at having lost --

HAASS: He's had time to contemplate it since, however, yes. (Laughter.)

DANIN: (Laughs.) Indeed. But I mean, clearly, leaders in the Middle East were very surprised at the rapidity with which the United States withdrew its support for Egypt, and this I think was very worrisome to them. And one of the failures I think we made over time was, we never laid out clear red lines: where the limits on our support was and what kind of behavior we would not countenance. And that's why I say, in forging a new pact with Saudi Arabia, I think we need to identify what our relationship is based on and where the red lines exist.

HAASS: Let me just ask two last questions and then I'll open up. One you've just alluded to, which is the influence of outsiders: People talk about economic aid for Egypt; there's been a NATO intervention in Libya. But when the history of this is ultimately written, to what extent is this really going to be seen as a series of Arab uprisings, where outsiders played at most a severely circumscribed role? Or are we likely to see a scenario or future unfold where outsiders become more central?

DANIN: Well, I think we have to look at the phases. I mean, if I -- if what I wrote -- if what I just said is true, and that we're in just early days, then we still have a few more chapters before we're able to sit down and write the history.

I think when we look at the first chapter of the history -- and with the outbreak of the uprisings, then we will see that outsiders mattered very little and what happened was purely indigenous. That's what I tried to describe in -- you know, was the tipping point for a number of countries. In fact, it was the frustration with the outside, benign neglect, that led to certain discontent.

But I'd argue now -- now that we moved to a new phase in which -- in which we have military engagement, where we have real bloodshed taking place, where the international community is engaged -- that what the international community does will be part of that history.

HAASS: Last question and it's, politically, a slightly loaded question, which is, when you look at what happened in Latin America, you look at what happened in parts of Africa, obviously in the former Soviet states, throughout Asia, the democratic upheavals and revolutions happened decades ago or longer.

Why has it come so late here? What is it about the Middle East? Because there's Islamic countries around the world that are democratic and so forth, so one can't, I believe, attribute it to religion. What is going on in the Middle East that democracy has come so incompletely and so tardily?

DANIN: It's hard to speak monolithically about the Middle East, given the diversity of experiences in the region. I mean, if we're talking about the Arab world, you have the Gulf, you have the Levant and North Africa. I'd say, in those countries, you know, the republics, let's say -- I mean, these were essentially autocracies, autocratic rule in which the leaders worked to gut civil society and in many ways tried to help ensure that the sort of uprisings that have taken place would not take place.

Yet what we saw was that the power of the state was not so great. Two years ago, many students of the region would have argued that Mubarak's Egypt would never see this kind of uprising, and yet it did. So even then, given all the tools at their disposal and their success for so many years at depriving the state or the institutions and society of civil society that would lead to democratic reform, nonetheless, I think we saw that the yearning could not be repressed.

HAASS: OK. I've filibustered long enough and let me open up. If people would wait for a microphone and identify themselves, and we'll try to get -- as you can see, Rob answers questions succinctly so we will get as many questions as we can.

Mr. Rampini (ph), got a microphone coming your way.

QUESTIONER: Even if you mean the most positive of the possible outcomes, that is, that most of these countries will become functioning democracies, can we assume that we mean they will be our allies and our friends? Or can we have a scenario where we have functioning anti-Western democracies in the Arab world?

DANIN: I think that's an excellent question because it's very likely that, as you have more representative government and more representative leadership, that you will have leaders move away from the West and seek to be more independent. I don't know that they'll become anti-Western, but I think they will seek a kind of traditional, more nonaligned type of orientation in their foreign policy.

And it will be more difficult for countries like the United States to build the sort of partnerships that we've built in the past to advance certain goals, especially elsewhere in the region, be it counterterrorism, be it fostering Arab-Israeli peace. That's why I mention that I thought that it was going to be more difficult in the time ahead to broker peace, because in the period ahead, these societies are going to want to distance themselves, to a certain extent, from the West.

But they'll also want to do business with the West. So I don't think they'll become anti, but I also think they will become more unpredictable and more independent.

HAASS: Sure.

QUESTIONER: I'm Alexandra Starr at the Center on Law and Security at NYU Law School. I was wondering if you could elaborate a little bit more on the comments you just made with Richard on red lines and that they should have been made more explicit with Egypt and should be made more explicit with Saudi Arabia. Where do you think they should have been when it came to Egypt, and what would you propose for our relationship with Saudi Arabia?

DANIN: The problem with Egypt was we had -- over the last 10 years, we had a very uneven policy, I would argue. On Mondays, Wednesdays and Fridays, we told the Egyptians that we wanted them to reform and to promote democracy, and on Sundays, Tuesdays and Thursdays, we told them that we needed their partnership and wanted to work closely with them to advance other regional interests, be it counterterrorism, be it Iraq, be it support for Middle East peace. So one problem was that we were -- we sent very conflicting messages to the Egyptians, and we were not successful at integrating the two. I think to be successful in the future, we're going to have to be able to do those things simultaneously.

Secondly, as I said, I think we were not credible in our -- in our democracy promotion in the sense that we were tested and we didn't really rise to the challenge. In 2005, Secretary of State Hillary Clinton (sic) went to Cairo, gave a very forward-leaning speech -- Secretary Rice gave a very forward-leaning speech about the need for democratization. This really got the Egyptians back up. And they tested the administration, and the administration essentially backed down.

Instead I think it -- you know, it need not be all or nothing. It need not be that we're going to break relations with you if you don't reform. At the same time, it means that you need to enter into a new kind of strategic relationship in which you work with governments as well as with societies to reform. I mean we'd been making the argument that the failure to reform is going to be suicidal for these regimes. They just didn't believe it. And I think now they will more so.

HAASS: Can I challenge you on that? Because you're right, you and I spent many years telling people like Hosni Mubarak that he needed to reform. He said -- he basically said, I appreciate your concerns, but get lost.

How is the -- why do you think the Saudis now are going to take our admonitions anymore than he did? Isn't it quite possible we'll see just the opposite, that they will see it as a sign of weakness and they will say, when people give way, they lose power and that we need to hang tough?

DANIN: Sure. They will argue that. And that means that it's going to be a very difficult conversation, but it needs to be part of the ongoing conversation that we have. It needs to be a new type of friendship, a tough love, if you will; a friendship that says we want to work with you, but we also believe that unless you start to change, start to be more inclusive, you're sealing your own death knell here.

And there's certain behavior that if you engage in it, we cannot support. And that's where we, I think, failed with Egypt. We did not tell Mubarak that if you start to use force against your own people, we will withdraw our support. And I think he thought he had, to a certain extent, a blank check, at least when it came to the United States.

HAASS: Just to press you on more thing. With the Saudis, they've gone into Bahrain, essentially against American desires and preferences. And I assume the Saudis have said, we need to do this, we're going to do it, and the balance of leverage vis-a-vis Riyadh or Washington is such that we the Saudis can sustain any American pressure.

DANIN: In the short term, that's right. What the Saudis did was they hyped this as an Iranian threat rather than a Shia threat, which is what they really saw it as. Although, as I said earlier, there were elements of both, but I think they overplayed the Iranian threat in order to play to our -- to their audience with us. And in the short term, there wasn't much that we could do.

But over the longer term, that has to be -- you know, there has to be some pushback, because as I suggested earlier first, it's not clear that the status quo that now stands in the Gulf will continue. We have had unrest in Saudi Arabia, and we have -- may have more, especially, you know, given when King Abdullah, you know, passes from the scene and there is a real succession that takes place in Saudi Arabia.

HAASS: Professor Shinaval (ph), Prince University there.

QUESTIONER: Robert, why do you think the military stuck with a regime in Saudi Arabia, Jordan and, at least until now, Syria, but they defaulted in Egypt and in Tunisia? And whatever your reason is, how much longer do you think it's going to last?

DANIN: I think that the reason is, you know, in each case, the social makeup is different. In Egypt, the military was a venerated institution that enjoyed legitimacy, and ultimately decided that it wanted to maintain its legitimacy when it saw that Mubarak was losing it.

In contrast, in Syria I'd say the military is so embedded with the regime that it cannot turn against Assad. The Alawites are a ruling sect in Syria. They control the military; they control the country. And they see their fate enmeshed with that of Bashar al-Assad. So they are not going to turn against him, I think. They will -- at least the leadership of the military is going to stick with him to the end. And that's why I'm not convinced that we're going to see Assad's departure, necessarily, anytime soon. Indeed, we've not seen demonstrations in Damascus; we've not seen demonstrations in Aleppo. There still is a good deal of support left for Bashar, despite all the bloodshed and despite the unrest that's taking place.

I think you can't universalize too much. You have to look at the nature of each country and the society and the role that the military plays before you try to, you know, assess whether or not the military is going to play a decisive role.

HAASS: Rita Hauser.

QUESTIONER: Oh, thanks. Paolo quite properly opened this discussion between -- the tension between energy, economy and politics. Since Fukushima, almost every country in Europe has said they forswear nuclear energy. We haven't had a new plant since the Three Mile Island business. So assuming that that continues as policy, we're more and more dependent on Saudi oil. Saudi announced today that it is developing a nuclear energy program. And further -- (inaudible) -- Turkey ominously said that if Iran gets the weapon, so, too, will they.

Now, my question is this. I personally don't believe we're going to stop Iran from getting the weapon -- with which you may or may not agree -- but assume it's correct. What then happens in the tension between Saudi and Iran, given this oil dependency of the West that will (augment ?)?

DANIN: There are a number of questions embedded there, but --

HAASS: Choose the ones you want. (Laughter.)

DANIN: (Laughs.) Very provocative.

You know, I'd say, you know, in the end, if Iran and Saudi Arabia begin a race for nuclear weapons, then I think it will only reinforce the Saudi need and desire to continue its alliance with the United States. It won't want to confront Iran alone. And that's why I believe we're ultimately fated to continue this partnership together, us and the Saudis.

But the prospect of a nuclear arms race in the Middle East is obviously very, very worrisome, very troublesome. And I don't know that an Iranian nuclear weapon is inevitable. There have been, it seems, setbacks to the efforts to -- for the Iranians to prepare nuclear weapons, and the timeline keeps getting pushed back. Nonetheless, your assessment that the move to resort to force, either by Israel or ultimately by the United States, is questionable.

HAASS: (Inaudible) -- actually think if Iran does get nuclear weapons -- to come back to something Rita said -- I should think it would put tremendous stress on the U.S.-Saudi relationship, because Saudi Arabia will not have a lot of faith in American guarantees. They're going to want their own. But it will be on a very interesting foreign policy question for the United States, whether there would be any looking the other way, or whether the United States would vehemently oppose the Saudis following suit on the basis that all proliferation is essentially bad; the more fingers on more triggers, the worse it gets. That can be a very, very difficult -- it could add tremendously, I think, to the difficulty of this relationship. Hadn't really thought of that.

Sir.

QUESTIONER: Claude Erbsen, Innovation International. Could we have your thinking on the split in the Brotherhood in Cairo between the youth wing and the older wing? Superficially, it looks like the youth wing is taking a more, quote-unquote, "liberal approach" to things, and less doctrinaire. What are the implications of this both for Egypt and for Islamic politics in the region?

DANIN: That's a good point. I think we're starting to see all sorts of, not splits, but differentiation take place within the umbrella known as the Muslim Brotherhood, as it steps out into the open.

Up until recently, it was a protest party, an opposition force. It knew what it was against, but it didn't have to articulate what it was for. The more it now is forced to articulate policies and a future and ways in which it will deliver to the people, the more that it's going to have to really flesh out things. And I think that debate is what leads to the sorts of fissures along generational lines or along different -- other lines as well.

This is one of the reasons that the move of -- you know, into the sunlight, if you will, of Islamist parties is going to be a very interesting development, and one that is not inevitably dangerous. It has dangers depending on the larger context with which -- in which it operates, but I don't think that -- now that Islamist parties have to stand up and answer to publics just as any other political parties do, you're going to see more and more challenges to the types of answers it's avoided in the past.

HAASS: One thing it argues for is slowing the clock as much as you can. Give parties, opposition parties, more time to develop; give splits more time to emerge. The sooner electoral events happen, it seems to me, the more likely you're going to have consolidated Islamists and unprepared alternatives. Time, I think, is our friend here. Just one man's opinion.

Gail (sp), you had your hand up?

QUESTIONER: Yeah. Just curious what you think the timeline is going to be in Libya. Where do you think things are going to wind up and, you know, where will the United States stand at the end of all of this?

HAASS: All right, we want the date and the hour, that -- (laughter).

DANIN: Libya today looks like, and it feels like a stalemate -- though I recall very well the period during the Bosnian air war in which it had the same feel, and I recall those 90 days in which it seemed every day there was a sense of: this policy is unsustainable; it can't continue and it's heading nowhere. And then one day, it did. So I'm arguing both ends here.

But what troubles me is that, you know, one, it's not clear what our -- well, it's clear to the observer what our strategic objective is, but it troubles me that we've never really articulated it as such. It also worries me because, as troublesome and dangerous as Gadhafi is, especially a wounded Gadhafi, I don't think we're very well prepared -- and Libya clearly is not very well prepared -- for the day after. And here the Powell doctrine: the Crate & Barrel notion of "You break it, you bought it" --

HAASS: It's the Pottery Barn.

DANIN: The Pottery Barn, excuse me. (Laughter.)

HAASS: (Chuckles.) OK -- you ought to go out and shop more. (Laughter.)

DANIN: OK. (Laughs.) You know, I don't know that we recognize what we're -- what we -- what mission creep is leading us to here.

So I don't know where we're heading, but clearly it seems that we can't live with Gadhafi, or that we don't want to live with Gadhafi. I'm troubled by the fact that we haven't allowed any sort of diplomatic exploration to take place that's serious because of this stalemate. So in short, it looks like a stalemate; it could end tomorrow, but that -- doesn't look like it's going to. And in the absence of that, I'd like to see more active diplomacy to try to find a way other than just decimating Gadhafi in his bunker.

HAASS: Right here.

QUESTIONER: Henry Jackelen. I'm fascinated by what you say about Israel and the Palestinian dynamic, right? And I think it obviously will go on for a long time. But with your direct experience in the region: the particular dynamic between Gaza and Egypt, I was wondering if you could explain a little bit. Because in the beginning there, there was a flow of people, even, happening, but now I'm informed that it's been closed down. And some people even say it's because of an American influence -- which I doubt. But anyway, any dynamic of how Egypt is going to interface with all of this?

DANIN: Well, this is the interesting thing. You know, when Egypt opened up Gaza, opened up Rafah to Gazans, many in Egypt were happy, and obviously Gazans were happy. But I thought this was actually a gift to Israel, at least for those in Israel who want to see Gaza pushed out of its own sphere of orbit and those who actually don't want to see a viable two-state -- or a viable Palestinian state emerge in West Bank -- in the West Bank and Gaza.

And I think what you're seeing now is an Egyptian recognition that: Oh, lord, what have we inherited here? I mean, over the course of the previous decade, there's been a tug of war or an effort by Israel and Egypt each to thrust Gaza into each other's sphere of orbit. It's been a hot potato that neither have really wanted and each have wanted the other to take responsibility for.

Now, I think what you're seeing is Egypt recognizing the limits of its -- of the benefit of having that relationship. So what it's allowing are people to flow, but it still wants responsibility for goods and the flow -- the flow of goods, the flow of food, the flow of services all to flow through Israel to continue its dependency on that vehicle and not push Egypt or push Gaza into Egypt's sphere of orbit.

HAASS: Maurice Sonnenberg.

QUESTIONER: Maurice Sonnenberg. I'd like to take you another area in Egypt: Social and economic unrest, because without the stability in that area, I'm not sure this revolution or whatever it is -- Arab Spring -- might not turn into a nightmare.

So we talk about things like Salafists burning down Coptic churches, crime at its -- highest it's been in almost 30 years, direct foreign investment down, tourism down and on and on. I wonder whether you could dig a little deeper -- drill, but not for oil -- and tell me where you think this might go if the economic stability does not commence or follow the political stability.

DANIN: Well, I think you rightly identified one of the core challenges. I mean, the sectarian divide that has now come out into the open over the last six months, the Coptic-Muslim divide, the fact that you have this sense of lawlessness -- when I visited Egypt recently, I mean, what I heard from Egyptians, you know, repeatedly was this sense of, it's not that it's become more dangerous, it's just that if you do find yourself in the wrong place, there's no one to call. And there's no 911 to call. And that's the danger in the short term.

Over the longer term, and that's why I said expectations need to match delivery. And here, as you rightly pointed, the tourism industry has already been decimated over what's happened. Egypt's economy is now flat and on a downward trajectory.

And that's why I believe, unless there is a rapid and massive infusion of support for Egypt as it moves along the political track, then whatever happens in the political sphere is going to be undermined by social and economic instability. And that's why there needs to be this new partnership. And when the G-8 met in Deauville, they talked about such a partnership and they pledged $20 billion for Egypt and Tunisia.

I'm skeptical at how fast that money will be delivered and whether or not it will move in a way that is -- that keeps up with the need. Obviously, the need is great. But at the same time, given that we've just freed up $100 billion a year in Afghanistan, I think there are new opportunities that may be afforded in Egypt.

HAASS: For the record, we've barely freed up $10 billion a year in Afghanistan. And also, as anyone who's spent time in Cairo knows, there's no 411 either. (Laughter.)

I want to thank Rob for setting such a high bar in getting this chair off and this whole real effort off to such a strong start. And I think what you got, in a sense, here tonight is the range which is totally fitting for a chair that's devoted to the Middle East and Africa.

Again, I want to thank Paolo Scaroni and Enzo Viscusi for all they've done to nurture this relationship. And I want to thank all of you for your willingness to brave the humidity and the rain and come out to the Council on Foreign Relations tonight. So thank you all. (Applause.)

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