Welcome to the new history of the world. Since the fall of the Soviets in the early '90s, the US military machine has attempted to re-colonise the world in its own image - through financial institutions such as the IMF and World Bank and its war on terror. As Economics Prof. M. Shahid Alam explains: "Under the pretense of waging 'war against global terrorism,' the neocons launched their plan for establishing global dominance. Overnight, following the lead established by Israel, the US defined all resistance to American hegemony as terrorism. It was now licensed to carry its preventive wars to all corners of the globe. It also licensed regional powers and local despots to expand their violation of human rights under the cover of the 'war against global terrorism'."

In the early 1990s, the fall of the Soviets produced a surge of triumphalism in the US. After defeating the fascist challenge in the 1940s, liberal capitalism had trumped its last adversary, global communism. This triumphalist mood was caught pithily in Francis Fukuyama's claim that mankind - of course, led by the West - had reached 'the end of history.'

This quickly produced a global regime change. Within a few years, the capitalist centers stripped most countries in the periphery of the autonomy they had gained in stages, starting in the 1930s. In this latest wave of integration, the periphery would not be 'colonized,' but Washington would define their economic rules.

Most countries in the periphery would now be forced to open their doors to foreign capital, privatize their economy, scrap their plans, and dismantle their welfare systems. In all but name, they began to look like the Open Door economies of the 19th century.

US economic dominance, however, was not enough for two segments of the American neoconservative movement, consisting of ultra-nationalists (Cheney, Rumsfeld and Bolton) and the Ziocons (Wolfowitz, Feith and Perle), a term coined by James Petras. They wanted the US to take advantage of the unipolar moment - opened up by the demise of Soviet Union - to make its political dominance irreversible.

There were two components to the neocon plan. First, they began to work on plans to extend US military superiority to a point where no potential rival would dare to challenge its hegemony in any region of the world. In violation of international laws, the US would enforce its total hegemony by waging preventive wars against any country that acted contrary to its economic or political interests.

This military plan would first be tested in the Middle East. This is what brought the ultra-nationalists and the Ziocons together. The first wanted to take complete control of the world's oil spigot in order to destroy the OPEC and hold Europe, Japan and China at ransom. The Ziocons wanted to destroy the few remaining centers of resistance to Israeli hegemony in the Middle East - Iraq, Iran and Syria.

In the weeks after launching
their war against Iraq, the neocons
began to imagine that the world
was theirs for the taking;
the new American century had begun.
Yet how their plans have gone awry.

But these plans had to be put on hold. President Bill Clinton was not ready to fully embrace their plans, even though his war and sanctions against Iraq prepared the base on which the neocons would build later on. The neocons were back in the saddle with the election of George W. Bush in 2000. They waited for the right time to unleash their wars in the Middle East. The events of 9-11 arrived as their Pearl Harbor. The Americans could now be bamboozled to support their dreams of creating a global and everlasting American Empire.

For the Periphery, the world looked quite bleak in the 1990s. Having lost the leverage of Soviet Union, most regions of the periphery capitulated to the blackmail of IMF, the World Bank and the WTO. Those who resisted - or refused to make 'peace' with Israel - were blacklisted as rogue states. The communist economies in the former Soviet Union and Eastern Europe suffered melt down; their living standards and life expectancy plummeted. The development regimes in the Third World were dismantled, exposing them to the ravages of global financial manipulation. In 1997, even the 'miracle economies' of South-east Asia were laid low by Wall Street and the IMF.

In the aftermath of 9-11, matters appeared to get worse in the periphery. Under the pretense of waging 'war against global terrorism,' the neocons launched their plan for establishing global dominance. Overnight, following the lead established by Israel, the US defined all resistance to American hegemony as terrorism. It was now licensed to carry its preventive wars to all corners of the globe. It also licensed regional powers and local despots to expand their violation of human rights under the cover of the 'war against global terrorism.'

In the weeks after April 9, 2003, when US troops captured Baghdad, it appeared that the United States was on a roll. Iran, Syria, North Korea could count the days to their own quick demise. Israel was getting ready to complete its ethnic cleansing of all Palestinians. Pakistan would be asked to liquidate its nuclear arsenal or prepare to be bombed back to the stone age. In time, Egypt and Saudi Arabia would be dismembered into smaller client states.

At some point in this sequence, the oil resources of the region would be privatized, sold for a song to US oil corporations. Finally, with a firm American grip on the Middle Eastern oil spigot, Europe, Japan and China would take their humble stations under the shadow of American hegemony.

In the weeks after launching their war against Iraq, the neocons began to imagine that the world was theirs for the taking; the new American century had begun. Yet how their plans have gone awry. All because a few thousand damned Iraqis decided to rob the Americans of the richly-deserved fruits of their victory.

A sea change has been unfolding since April 2003, though it is not going in the directions projected by the neocons. More than three years after the invasion of Iraq, the Americans are deeply troubled by the war they are losing in Iraq. While the 9-11 attacks failed to energize the Arab street, the Americans who entered Iraq were immobilized in the streets of Baghdad, Falluja, Najaf, Ramadi, Basra and Kut. This is an earth-shaking event, all of whose consequences have yet to unfold.

Instead of falling victims to US-sponsored regime change, the Iranians are now stronger than they have ever been in their recent history. For the first time in centuries, their influence extends deep into Iraq and Afghanistan, where they now possess the ability to ramp up the costs of the US occupation. In addition, Iran has positioned a battery of missiles that can close down shipping in the Gulf, threaten oil installations in the Sheikhdoms, and strike inside Israel. Due in part to its own hubris, the US has dramatically reduced its options in the Middle East.

Instead of falling victims to
US-sponsored regime change,
the Iranians are now stronger
than they have ever been in their
recent history. For the first time
in centuries, their influence
extends deep into Iraq and
Afghanistan, where they now
possess the ability to ramp up
the costs of the US occupation.

In July 2006, Israel made a bid to weaken Iran and Syria by destroying Hizbullah and starting a civil war in Lebanon. The gambit failed on both counts. Hizbullah was hardly scratched. Unlike three Arab armies in June 1967, Hizbullah responded by disrupting life in northern Israel, destroyed more than 40 Israeli tanks, and poking holes in Israeli intelligence gathering. Most importantly, by choosing to fight, the few thousand Hizbullah fighters destroyed Israel's myth of invincibility.

Together, these developments have seriously exposed the vulnerability of America's Arab client states. Scared of the consequences of US defeat and the imminent withdrawal from Iraq, they have been forced to ally themselves more closely and openly with Israel ambitions in the region. These client states do not now possess even a patina of legitimacy. In desperation, Saudi Arabia is pinning its hopes on using its oil wealth to incite an Islamic civil war.

With America forces caught in the Iraqi quagmire, Latin America is breaking free from US hegemony. Governments 'unfriendly' to the US have now been established in Peru, Bolivia and Nicaragua, in addition to the growing strength of the Bolivarian revolution in Venezuela. A leftist victory was missed by a narrow margin in Mexico - or more likely, stolen. Cuba is demonstrating that it can survive without Castro.

Admittedly, these changes in the political map of Latin America consummate trends that began with the onslaught of neoliberal policies in the 1980s. Moreover, this time the Latin American resistance is being led or fueled by a resurgent native population eager to overthrow the colonial-settler elites imposed on them since the 17th century. Yet, it is doubtful if the United States would have allowed these changes to occur - or to stand - if it were not bogged down in Iraq.

Unexpectedly, even Pakistan's servile ruling class is stealthily taking advantage of US troubles. More likely, Islamist elements within the army are ramping up their support for the Taliban resurgence. Once again, the Pashtuns, who had led the jihad against the Soviet occupation, are gearing up for a big fight against the US-led occupation of their country. As Afghanistan slips out of control, Americans will find it harder to sustain their challenge to Russian and Chinese ambitions in Central Asia.

A sober reckoning of all the costs
of the Iraq war - and these costs
are still unfolding - suggests that
the US bid for regime change in the
Middle East has boomeranged.
Instead, the war has been forcing
a regime change on the protagonist.

The American loss of prestige in Iraq is taking its toll in Africa too. African rulers are feeling freer to enter into long-range economic relations with China. Rapidly, China is increasing its ownership of a whole range of resources in the African continent, mostly at the cost of positions the US and Europe had built up over centuries. The Chinese have the advantage - at least now - of offering economic investments without any political strings. With the attention of the US establishment riveted on Iraqi, Africa is slowly slipping out of America's grasp and moving into the Chinese sphere of influence.

It is doubtful if the US would have rushed into its risky military adventure in the Middle East without the support of Ziocons. Empires in decline are tempted to shore up their standing with military adventurism. With their superb salesmanship, the Ziocons sold the Iraq war to the US administration and the American public as a cake walk, a historic tipping point, and America's calling in the Middle East. At least for now, Israel is happy to see Iraq disintegrate into chaos, a goal that it has long cherished for the entire Middle East. However, as US losses accumulate this could easily backfire.

Even if the war's human toll does not force an early withdrawal of American troops, it is unlikely that the Iraqi war can be sustained for long. The rising economic costs of the war - together with ascendancy of the Asian agents, escalating oil price, rising trade deficits, and sliding dollar - will force the US to reconsider its posture in the Middle East. Whenever the US reaches this point, Israel is likely to face its neighbors without the American shield. Worse, a growing number of Americans will begin to see the Israeli fingerprint over their Iraqi defeat.

Taking advantage of the tragedy of 9-11, the neocons instantly activated their plans to re-colonize the Middle East, starting with regime change in Iraq, Iran, North Korea and Syria. The US and Israel were hoping to improve upon the success achieved by the British and Zionists during World War I. At this stage, it appears unlikely that these hopes will be realized. For sure, the neocons quickly effected regime change in Iraq, but soon after, the resistance of a few thousand Iraqi insurgents also set in motion forces that are threatening to change the global regime.

A sober reckoning of all the costs of the Iraq war - and these costs are still unfolding - suggests that the US bid for regime change in the Middle East has boomeranged. Instead, the war has been forcing a regime change on the protagonist.

Click here for other articles by M. Shahid Alam:
An 'Islamic Civil War'
Pitting The West Against Islam
Not All Terrorists Are Muslim
Israel, The U.S. And The New Orientalism
The Muslims America Loves
Real Men Go To Tehran
Did Thomas Friedman Flunk History

M. Shahid Alam, professor of economics at a university in Boston, is also a regular contributor to CounterPunch.org. Some of his CounterPunch essays are now available in the book, Is There An Islamic Problem? (Kuala Lumpur: The Other Press, 2004). He is also the author of Challenging the New Orientalism: Dissenting Essays on America's  'War Against Islam' (IPI Publications: 2006 forthcoming).He may be reached at alqalam02760@yahoo.com.
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January 9, 2007