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Big Bets and Black Swans 2014

Big Bets and Black Swans 2014: A Presidential Briefing Book

Ted Piccone
Steven Pifer
Thomas Wright
Copyright Date: 2014
Pages: 87
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  • Book Info
    Big Bets and Black Swans 2014
    Book Description:

    President Obama has just three years left in office to define his legacy in world affairs. He's facing a number of critical challenges-the ongoing war in Syria, the Iran nuclear negotiations, an enigmatic North Korea and other significant crises in world affairs. The president's advisors are busy devising policy recommendations aimed at grappling with these thorny issues. From these, the president must decide which priorities to pursue and how to best exercise U.S. power and influence to manage and shape the global order.

    This book presents a set of policy analysis and recommendations from The Foreign Policy scholars at the Brookings Institution. Designed to provide the White House with innovative and actionable policy initiatives, the book is constructed as a series of memos to President Obama. This year, the memos are divided into five categories:

    • Big Bets are issues where the president should consider investing his power, time and prestige in major efforts that can have a transformational impact on America and the world. • Double Downs are derived from the Big Bets from last year's recommendations that the president should redouble his efforts on.

    • Black Swans are those low-probability but high-impact events that can divert the president and his administration's higher purposes, such as dramatic negative events that he will want to take steps in advance to avoid or to mitigate their consequences.

    • Nightmares are events that look more likely than a Black Swan and could prove particularly troublesome for U.S. interests and the global order, and for which the administration should prepare.

    • Holds are updated policy recommendations to stay the course on approaches suggested last year.

    Contents:Big Bets

    • Reassert U.S. Leadership of a Liberal Global Order by Robert Kagan and Ted Piccone

    • Secure the Future of the Internet by Peter W. Singer and Ian Wallace

    • Solidify the U.S.-Afghanistan Alliance by Michael E. O'Hanlon and Gen. John Allen (USMC, Ret.)

    • Lift the Ban on U.S. Oil Exports by Tim Boersma and Charles K. Ebinger

    • Strengthen Stability in Africa by Michael E. O'Hanlon

    Double Downs

    • Broaden the Approach to Iran by Suzanne Maloney

    • Pursue Regime Change in Syria by Michael Doran

    • Return to the Asia Rebalance by Jonathan D. Pollack and Jeffrey A. Bader

    • Reach Out to Cuba by Ted Piccone

    • Avert Conflict in the South and East China Seas by Richard C. Bush III, Bruce Jones and Jonathan D. Pollack

    Black Swans

    • Israeli-Palestinian Violence Erupts by Natan B. Sachs

    • Putin's Russia Goes rogue by Fiona Hill and Steven Pifer

    • Venezuela Breaks Down in Violence by Harold Trinkunas


    • Korean Crisis Prompts Confrontation with China by Jonathan D. Pollack and Richard C. Bush III

    • Iran Nuclear Talks Fail by Robert Einhorn and Kenneth Pollack

    • Afghanistan's Presidential Election Goes Awry by Vanda Felbab-Brown

    • Muslim Brotherhood Radicalizes by Daniel L. Byman and Tamara Cofman Wittes


    • Avoid a U.S.-Saudi Divorce by Bruce Riedel

    • Close the Deal on Free Trade by Mireya Solis

    • Manage the Impact of Climate Change by Elizabeth Ferris

    • Deepen Economic Ties to Turkey by Kemal Kirisci

    • Beyond New START by Steven Pifer

    eISBN: 978-0-8157-2606-7
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Table of Contents
    (pp. iii-iv)
  3. Acknowledgments
    (pp. v-vi)
  4. Introduction
    (pp. vii-viii)

    As President Obama prepares his 2014 State of the Union address, the United States faces a number of critical challenges—the ongoing war in Syria, the Iran nuclear negotiations, an enigmatic North Korea and other significant crises in world affairs. His advisors are busy devising policy recommendations aimed at grappling with these thorny issues. President Obama then must decide which priorities to pursue and how best to exercise U.S. power and influence to manage and shape the global order.

    Again this year, the Foreign Policy scholars at Brookings are offering President Obama and his Cabinet a set of policy analyses...


    • Reassert U.S. Leadership of a Liberal Global Order
      (pp. 1-4)
      Robert Kagan and Ted Piccone

      In the year since Brookings published its first Big Bets and Black Swans report, the global situation has become more unstable and America’s role more uncertain. The concerns we expressed then about the fraying of the liberal order, and the need for strong and effective American leadership to reverse that trend, remain. At home, Americans grow more uninterested and disillusioned by foreign policy, as indicated by the November 2013 Pew poll. Cuts in defense, foreign aid and other spending related to foreign policy continue to mount, even as the American economy shows increased signs of vitality and even though foreign...

    • Secure the Future of the Internet
      (pp. 5-8)
      Peter W. Singer and Ian Wallace

      The next year will be a crucial one for the future of the Internet, a technology that has driven the most change and progress in our lifetimes. Between Edward Snowden’s revelations and the resulting blowback, and upcoming international talks on global “Internet governance,” this already complex domain is quickly rising as a major challenge to your administration. While many urge you and the United States to keep a low profile, our interests are better served by actively leading the global debate on the future of the Internet.

      We recommend that Internet policy and strategy be elevated as a top priority...

    • Solidify the U.S.-Afghanistan Alliance
      (pp. 9-12)
      Michael E. O’Hanlon and John Allen

      The United States should remain steady in its Afghanistan policy—despite all the challenges associated with doing so. In the crucial years ahead, a time of great transitions, we need to sustain an adequate American Enduring Force, as well as support for a robust Afghan army and police. President Hamid Karzai’s continual introduction of hurdles to the signing of a U.S.-Afghan Bilateral Security Agreement (BSA) is surmountable. Maintaining a U.S. troop presence after 2014 is critical to Afghanistan’s ability to build on the success that we have had in recent years. But the Afghanistan mission has become unpopular domestically; sustaining...

    • Lift the Ban on U.S. Oil Exports
      (pp. 13-16)
      Tim Boersma and Charles K. Ebinger

      Under current U.S. law, crude oil produced in the United States cannot be exported without a license. Recent and expected developments in the U.S. oil market will lead to a continued increase in U.S. crude oil production: the U.S. Energy Information Administration expects U.S. domestic crude oil production and imports from Canada to be well above six million barrels per day through 2040. In addition, recent experience regarding the export of U.S. liquefied natural gas (LNG) suggests we should re-evaluate the existing legislative framework with a view to getting ahead of the curve of pending market realities.

      We recommend that...

    • Strengthen Stability in Africa
      (pp. 17-20)
      Michael E. O’Hanlon

      The United States should, with a focused effort and in partnership with other states, make a significant push to improve security in Africa. No massive deployments of U.S. troops would be needed, and in fact no role for American main combat units is required. But we should step up our game from the current very modest training efforts coordinated through Africa Command (AFRICOM).

      The continent is too big for a comprehensive approach or one-size-fits-all initiative. However, the United States could make a major difference by deploying several thousand Americans to the Democratic Republic of Congo (DRC) and several hundred trainers...


    • Broaden the Approach to Iran
      (pp. 21-26)
      Suzanne Maloney

      Your strategy on Iran has helped to create a historic opening with one of America’s most persistent and formidable adversaries. The strength of the sanctions regime and the breadth of international cooperation on Iran have generated an unprecedented opportunity to contain and curtail the Islamic Republic’s most dangerous policies. The interim agreement concluded in November accomplished the first tangible progress in nearly a decade toward thwarting the prospect of an Iranian nuclear weapons capability. However, this initial deal represents only the first step of an even more ambitious objective: a comprehensive agreement that rolls back Iran’s nuclear program; and a...

    • Pursue Regime Change in Syria
      (pp. 27-30)
      Michael Doran

      The decision to call off military strikes against President Bashir Assad’s forces and instead to work with Russia to destroy his chemical weapons deeply disappointed the Syrian opposition and its major external backers. Pro-regime propagandists have depicted this policy as a quid pro quo: as a reward to Assad for his participation in the chemical weapons deal, the United States will withhold support for regime-change efforts. In the Arab world, this interpretation of U.S. policy is widely accepted.

      Even if Assad’s chemical weapons have been taken entirely out of play (by no means certain), the regime’s goal of waging total...

    • Return to the Asia Rebalance
      (pp. 31-34)
      Jonathan D. Pollack and Jeffrey A. Bader

      Your administration’s policy of rebalancing to Asia has generated widespread support among nearly all of the countries in the region, though China views it warily and North Korea opposes it. A redirection of U.S. resources, energy, capabilities and attention away from the military conflicts of the past decade and toward the world’s most economically and strategically dynamic region remains both appropriate and overdue. We need to build on the demonstrated success of the policy, fully ensure that our actions match our words, and impart unequivocally that the rebalance reflects a long-term reorientation of U.S. policy priorities.

      Our challenge remains threefold:...

    • Reach Out to Cuba
      (pp. 35-38)
      Ted Piccone

      Your decision in 2009 to free up the flow of people, remittances and exchanges from the United States to Cuba was the right call at the right time. These steps have coincided with, and facilitated, Cuba’s own process of reform, which continues, in fits and starts, to create new opportunities for the Cuban people to live independently of the state. Bilateral cooperation on migration, counter-narcotics, the environment, Colombia’s peace talks and aviation security has improved. More importantly, potential flashpoints on issues such as the Snowden affair and arms trade with North Korea have been contained.

      Now is the time to...

    • Avert Conflict in the South and East China Seas
      (pp. 39-40)
      Richard C. Bush III, Bruce Jones and Jonathan D. Pollack

      In January 2013, we recommended that you launch a concerted diplomatic effort to mitigate the risks of conflict between Asian powers in the South China Sea and East China Sea. We suggested this be pursued both regionally, through diplomacy with directly affected parties, and internationally, by leveraging China’s significant interests in other maritime domains where it has less capacity to influence events. Since then, some modest steps were taken at the regional level, but we missed opportunities to apply pressure at the international level—for example, accepting China’s application to become an observer in the Arctic Council without conditions. We...


    • Israeli-Palestinian Violence Erupts
      (pp. 41-44)
      Natan B. Sachs

      The current peace negotiations between the Israelis and Palestinians offer a glimmer of hope for resolving the longstanding conflict between the parties. But even as the United States works diligently to ensure the success of the talks, we should start the difficult and discreet task of preparing for their possible failure.

      Failure of the talks carries a real risk—low probability but high impact—of full-blown violence between the parties. Such violence would be reminiscent of the aftermath of the Camp David negotiations in summer 2000, but it would be greatly complicated by recent upheavals in the Middle East and...

    • Putin’s Russia Goes Rogue
      (pp. 45-48)
      Fiona Hill and Steven Pifer

      Vladimir Putin seeks to secure Russia’s primacy in its neighborhood and now views the European Union as a threat to that objective. In November, EU leaders held a summit in Vilnius with the Eastern Partnership countries—Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. The EU initialed Association Agreements, including deep and comprehensive free trade area (DCFTA) agreements, with Georgia and Moldova. Azerbaijan and Belarus did not pursue agreements; Russia successfully pressured Armenia to drop its bid and Ukraine to defer the formal signature of its already initialed agreement.

      Putin will not want to jeopardize the February Sochi Winter Olympics, but...

    • Venezuela Breaks Down in Violence
      (pp. 49-52)
      Harold Trinkunas

      Economic mismanagement in Venezuela has reached such a level that it risks inciting a violent popular reaction. Venezuela is experiencing declining export revenues, accelerating inflation and widespread shortages of basic consumer goods. At the same time, the Maduro administration has foreclosed peaceful options for Venezuelans to bring about a change in its current policies.

      President Maduro, who came to power in a highly-contested election last April, has reacted to the economic crisis with interventionist and increasingly authoritarian measures. His recent orders to slash prices of goods sold in private businesses resulted in episodes of looting, which suggests a latent potential...


    • Korean Crisis Prompts Confrontation with China
      (pp. 53-56)
      Jonathan D. Pollack and Richard C. Bush III

      The latent possibilities of internal instability in North Korea or of an armed conflict between the two Korea and the attendant risks of a Sino-American confrontation persist. Quite apart from these very worrisome scenarios, the United States and China face the reality of a nuclear-armed North Korea that resists all pressures to denuclearize, is intent on expanding its nuclear arsenal qualitatively and quantitatively, and repeatedly threatens to renew provocations against the ROK. Your administration needs to redouble its efforts to pursue closer policy coordination with China, thereby reducing North Korea’s freedom of action and limiting the possibilities of an acute...

    • Iran Nuclear Talks Fail
      (pp. 57-60)
      Robert Einhorn and Kenneth Pollack

      While our negotiators are working hard to get a final nuclear agreement with Iran that meets our requirements, we must be prepared for the possibility that negotiations will fail and the Iranians will then direct their efforts toward eroding sanctions and advancing their nuclear program. The opening created by President Hassan Rouhani’s overtures would close.

      In this scenario, Iran would reject any extension of the current interim agreement, portray itself publicly as having been the reasonable side in the talks, reach out aggressively to governments and companies around the world to entice them to circumvent or ignore sanctions, and ramp...

    • Afghanistan’s Presidential Election Goes Awry
      (pp. 61-64)
      Vanda Felbab-Brown

      As the 2014 departure deadline for U.S. and international forces in Afghanistan approaches, structural weaknesses and deep worries about the country’s post-2014 future persist, imperiling a successful transition to a stable Afghanistan. As I described in last year’s memo, these deep-seated challenges include a precarious security situation, a severe economic decline and a profound legitimacy crisis of politics and governance. As these damaging dynamics continue, hedging behavior on the part of Afghan powerbrokers as well as ordinary people has intensified. The specter of another civil war looms, all the more so given the ongoing lack of clarity about a continuing...

    • The Muslim Brotherhood Radicalizes
      (pp. 65-70)
      Daniel L. Byman and Tamara Cofman Wittes

      Egypt has long been a U.S. ally, and its stability an important U.S. interest. The military’s forcible removal of Mohammed Morsi and the Muslim Brotherhoodled government in July 2013 and the brutal crackdown that ensued are likely to further destabilize Egypt. The Brotherhood’s exclusion from politics could lead its members to give up on peaceful politics, radicalize and return to terrorism, which would pose a major setback for U.S. interests in Egypt. The negative effects could spill outside of Egypt’s heartland to Sinai and beyond its borders to Gaza, further threatening U.S. interests.

      American policy probably cannot prevent the radicalization...

  9. HOLDS

    • Avoid a U.S.-Saudi Divorce
      (pp. 71-72)
      Bruce Riedel

      As I wrote a year ago, revolutionary change in Saudi Arabia remains possible but unlikely. The Saudi-American bilateral relationship has been seriously strained in the last year by the tensions underlying the Arab Awakening and by differences over Iran’s nuclear program. Saudi Arabia’s resources are also increasingly strained by the costs of countering the uprisings in the region. The United States has no serious option to head off a revolution in the Kingdom, if it is coming, because we are too deeply wedded to the House of Saud. The Saudis have no realistic alternative to the American alliance either.


    • Close the Deal on Free Trade
      (pp. 73-74)
      Mireya Solis

      Last year, Justin Vaisse and I recommended that you pursue a proactive trade policy by negotiating trade agreements in the Asia-Pacific region and Europe. Sealing these deals (the Trans-Pacific Partnership and Trans-Atlantic Trade and Investment Partnership trade agreements) would enable the United States to tap into off-budget sources of growth, improve the international competitiveness of the U.S. economy, craft cutting-edge rules on trade and investment, secure America’s role in the dynamic Asian region, and consolidate the trans-Atlantic partnership. To achieve these goals, we recommended that you work with Congress to secure renewal of trade promotion authority, engage in a public...

    • Manage the Impact of Climate Change
      (pp. 75-76)
      Elizabeth Ferris

      In my memorandum to you one year ago, I noted that global warming is occurring faster than predicted with potentially catastrophic long-term results and that urgent action was needed or the advance effects of climate change on life on the planet and the United States would increase. Over the course of the past year, scientific evidence has accumulated that global warming is occurring and that sea levels will rise faster than predicted. For example, the latest Intergovernmental Panel on Climate Change predictions for sea level rise by the end of the century are 50 percent higher than its previous estimates...

    • Deepen Economic Ties to Turkey
      (pp. 77-78)
      Kemal Kirişci

      In January 2013, I recommended that your administration pursue a more ambitious agenda for U.S.-Turkish relations, given the importance for U.S. interests that Turkey be permanently anchored to the West. Turkey straddles an often turbulent region where the trans-Atlantic model based upon democratic governance and free markets competes with the model of autocratic governance and state-dominated economies. In such a neighborhood, the U.S.-Turkish relationship can best be cemented with common long-term economic interests. I thus recommended that your administration include or at least closely associate Turkey with the Trans-Atlantic Trade and Investment Partnership (TTIP).

      Inclusion of Turkey would contribute to...

    • Beyond New START
      (pp. 79-80)
      Steven Pifer

      In January 2013, I recommended that you build on the New Strategic Arms Reduction Treaty (New START) by engaging President Putin on a new round of bilateral nuclear arms cuts, to include non-strategic nuclear weapons; seeking a cooperative NATO-Russia missile defense deal; and testing the possibility for Senate approval of the Comprehensive Test Ban Treaty (CTBT). Unfortunately, Moscow has shown no enthusiasm for further nuclear reductions and has not responded seriously to our offer of a transparency agreement that would assure them that U.S. missile defense plans pose no threat to Russian strategic forces.

      You have offered solid proposals on...

  10. The Authors
    (pp. 81-87)
  11. Back Matter
    (pp. 88-88)