1. Problem Statement
The gas attack of Syrian government to rebellion brings a new heat by the issue of US and allies attack to Bassar Al-Assad regime. By this situation, I need to put my asset portfolio into a safe state. Some of my friends told that Democrats is now governing, and Democrats seldom to make war unlike Republicans. However I should make my own analysis to put the considerations balanced. Putting the portfolio combination needs the input of the forecast of decision. Thus the question should be answered: Will there be a new war? What will be the best decision of US for this situation?
2. Identification of Feasible Alternatives
If I have to forecast the upcoming war, I should think as if I were US government on what decision to react the gas attack fact. The alternatives of reaction decisions of US government at most rational would be four alternatives which are:
- Initiate a peace talk between Assad’s regime and rebellion
- Raise supports to have an embargo on Syria
- Limited attack on Assad’s military facilities
- A full campaign on Assad’s regime
Choosing one alternative may cause some risk attributes to be a must considered which are:
- High cost and casualties
- Iran and Russia will join the war and it will initiate a World War
- Economic crisis internally and globally
- Higher internal debt
- Losing the hegemony
- Endangered security of US allies
- Assad can’t be crippled
To quantify the risks attributed to each alternative, I put magnitude level of risk with a scale from 1 (representing very low risk) to 5 (representing very high risk).
The model may be constructed as follows:
Figure 1. The Alternatives and Attributes Model
3. Development Outcomes of Each Alternative
According to Sullivan, in order to make a choice in multi attribute situation, a non compensatory models should be used which are:
- Dominance, a screening method for eliminating inferior alternatives from the analysis
- Satisficing, establishment of minimum or maximum acceptable values (the standard) for each attribute
- Disjunctive resolution, comparing the attributes of each alternative to the standard
- Lexicography, a single attribute is judged to be more important than all attributes
4. Selection of The Acceptable Criteria
I am sure a government should think more to consider how much risk impact for every decision made.The criteria of the decision outcome is rationally to have acceptable risk as minimum and as maximum as moderate risk impact.
5. Analysis & Comparison of The Alternatives
- Dominance Analysis
There are six combinations of pairing alternatives (4C2), to create the comparison among alternatives to find the most inferior one and choose the best one. From this model, alternative A is dominant to alternative C and D but not dominant to B, and B is dominant to A, C, and D. So the best is B which is raise support to embargo the Syrian.
Figure 2. Dominance Model
- Satisficing Analysis
The maximum risk acceptable is limited to moderate risk (level 3). The result shows alternative limited attack (C) and full scale attack (D) are less preferrable in this situation because they have four unaccepted risk attributes.
Figure 3. Satisficing Model
- Disjuntive Resolution Analysis
From the acceptable criteria of minimum and maximum risk, the result still shows no clue of full unacceptable alternative. All alternatives meet at least one attribute.
Figure 4 . Disjunctive Resolution Model
- Lexicography Analysis
Before using the lexicography model, the attributes should be ranked to see the risk priority. By using the attributes rank, the lexicography shows that there is indifferent situation between choosing the alternative A and B, because they have same numbers of risk result. Although B has shown to be more preferred in attribute Assad uncrippled, but the score shows zero or less important of risk.
Figure 5. Attributes Ranking
Figure 6. Lexicography Model
6. Selection of Preferred Alternatives
From all four models, it has shown that alternative raise the support for the embargo (B) is the most optimum acceptable risk according to dominance model. In my opinion, this alternative is the best to be chosen to face the situation. US government can cripple the Assad regime to be weakened by embargo likewise it has been applied to Iran and Iraq. The duration of weakening may be longer but it can prevent US government to have more risk on a new World War, high cost/casualties, global & internal economic crisis, and also higher internal debt which are more crucial to be considered. US allies perhaps will be endangered for a while because of the fear of crisis spread, but it can be overcame.
7. Follow-up result
The above result will be the input to my decision of my next portfolio strategy. By seeing the best decision result is the embargo, I believe in short or middle term, at least until the end of the reign of Presiden Obama at the end of 2014, there will be no war. Therefore, US economic crisis is not quite a serious concern and there’s no extraordinary oil & gold price hike for now.
Dan Roberts (2013). ‘We have our plans’: Vladimir Putin warns US against Syria military action . [ONLINE] Available at: http://www.theguardian.com/world/2013/sep/04/putin-warns-military-action-syria. [Last Accessed September 9th, 2013].
Patrick Wintour (2013). Syria crisis: China joins Russia in opposing military strikes. [ONLINE] Available at: http://www.theguardian.com/world/2013/sep/05/syria-china-russia-opposing-military-strikes. [Last Accessed September 9th, 2013].
SHI/SHI (2013). China warns of economic crisis if Syria is attacked – See more at: http://en.alalam.ir/news/1513730#sthash.bdJaqKdl.dpuf. [ONLINE] Available at: http://en.alalam.ir/news/1513730. [Last Accessed September 9th, 2013].
Sullivan, W. G., Wicks, E. M., & Koelling, C. P. (2012). Decision Making Considering Multiattributes. In Engineering Economy (15th ed., pp. 551-569). Upper Saddle River, N.J: Prentice Hall.
Victoria Craig (2013). Collateral Damage: Syria Strike Would Hit U.S. Budget . [ONLINE] Available at: http://www.foxbusiness.com/government/2013/09/06/collateral-damage-syria-strike-to-hit-us-budget/. [Last Accessed September 9th, 2013].