Mideast "W"ilsonianism Gregory Fossedal February 20, 2005 Copyright © United Press International WASHINGTON, DC -- A recent opinion survey indicates most Europeans oppose George Bush's secular crusade to bring democracy to the Greater Middle East. Wealthy Arabs and Asians, and even a narrow majority of Americans and Brits expressing an opinion, likewise have grave doubts. Yet when casting votes with their investment dollars, someone around the world is giving Mr. Bush's "W"-ilsonian vision more than a fighting chance. Egypt, Palestine, Israel, Turkey, Pakistan, and Iraq have generally ranked among the top-10 performing markets over the last month, three months, and 12 months. "These notions of freedom and equality that are weakening or destroying servitude everywhere: who spread them throughout the world?" (Alexis de Tocqueville on France's role in the democratic revolution.) There is always room for realism and gloom over the Middle East. Is the hope, even after Iraqi and Palestinian elections, and a unilateral Gaza pullout by Ariel Sharon, still being under-appreciated? The last 10 days may have been the best week for W-ilsonianism in its three year history. Consider: Lebanon is in a state of growing revolt following the assassination of former Prime Minister Rafik Hariri. More than 12,000 Syrian occupation troops are regularly pelted with stones and bottles, according to a Beirut businessman who spoke to me recently. The French, seeing an opening to rebuild prestige in their former colony, agreed to a joint text with the United States denouncing Syria's continued hegemony. Lebanon thus, in a true sense, becomes one of the first true dominoes, to build on the Wolfowitzian metaphor. Libya does not fully count because it was backpedaling for some time, and in any case, has only become (generally) less hostile to U.S. policy, not an emerging democracy. Mr. Bush, in Europe, has already usefully corrected his Secretary of State, Condoleeza Rice. Ms. Rice went a little too far in dismissing reports of early U.S. preparations for strikes on emerging iranian nuclear facilities, calling such speculation ridiculous and insisting there are "no such preparations." By contrast, the president denied that there were any "imminent" plans, suggesting by its narrowness that strikes on Iran might be in the offing for some non-imminent month like (Bottomline's best guess) September. Just to make sure this feint was not misinterpreted, the president added that, of course, in the long run, "all options are on the table." Bush thus returned strategy to the Rice-violated dictum, as Richard Nixon put it: "Never tell 'em what you're not going to do." That Mr. Bush's low-key swipe came during his Eurotrip may signal good things. In recent days, when it comes to Iran, even Germany and France have been using phrases like "the need for American involvement." The obvious implication is that Mr. Bush was egged on by his European counterparts, who are finding Iran a stubborn camel when only carrots are on the table, and contemplate with longing the possibility of having a stick. Similar pamplisets pervade. Saudi Arabia voting is holding municipal elections. Not enough seats are at stake to matter in terms of short-term governance. But the exercise, the concomitant debate, and the formation of at least some organized opposition matters. Meanwhile, Egypt has opened expanded trade talks with the U.S. and, along with Jordan, re-established embassy relations with Israel. Axis of Mean-well:  David Lloyd George, Georges Clemenceau and Woodrow Wilson arrive at the Versailles Peace Conference in 1919. Back then, as Bush advisor Karl Rove noted in a 2005 speech, Democrats were the dewey-eyed idealists, Republicans the cynics. Wilson's real failing, however, may have been in playing the kind of backroom politics he abhorred, breaking promises to the Germans for fair treatment, and collaborating in establishing a punitive economic peace that helped lay the groundwork for World War II. (Library of Congress photo.) The beauty of much of this is that it isn't being orchestrated by Mr. Bush. Indeed, if he had tried, much or all of it wouldn't have happened. Potential pitfalls abound; this is still the Middle East. Afghanistan is talking about further delays in holding the first truly contested election, for seats in the national legislature -- last fall's truly impressive turnout coming in a presidential vote that appeared destined not to be close. Israel could go too far in offering both land and ceasefires for peace, or not far enough in helping the new Palestinian regime to take root. Palestine's new government leaders could allow terrorism to flourish. Mr. Bush himself could set expectations too high -- or, to be more precise, set the expectations of pace too fast. In much the same way, the first "W," Woodrow Wilson, employed inspiring but excessive rhetoric that ultimately undermined his own vision. THE BOTTOM LINE Still, the smart money knows we may still be in the early phase of a Middle East economic miracle -- the unleashing of creative and productive forces represented by a couple billion Moslems from Morocco to Malaysia to the Philippines. With earnings ratios on most Middle East stocks in the mid-single-digits, companies are still a bargain. With the potential for 20 years of 1980s-China-style growth, and a strong oil price to fuel and lubricate the region via its leading commodity, there's plenty of room for growth. Still in. (Gregory Fossedal is an advisor to international investors on global markets and ideopolitical risk, and a research fellow at the Alexis de Tocqueville Institution. His clients may hold long and short positions in many of the investment securities and opportunities mentioned in his reports. Investors should perform their own due diligence and consult their own professional advisor before buying or selling any securities. Mr. Fossedal's opinions are entirely his own, and are not necessarily those of his clients, UPI, or AdTI. Furthermore, they are subject to change without notice.)