(FORTUNE Magazine) – Oh, those foolish optimists! Had anyone said three months ago that the 28- nation coalition would steamroller Saddam, that Wall Street's bull would be roaring, interest rates still falling, and the economy showing signs of recovery -- that person would have been laughed out of the bar. Yet the optimists (and George Bush, Dick Cheney, and Colin Powell) have been proved right. The other winners include women, who were so well represented in the Gulf and who flew into combat for the first time. What porcine neo-male chauvinist now will dare discriminate against a woman? This was also a victory for racial amity. Blacks and whites, serving together, paid scant attention to the talk- show babble back home that too many minorities were in the Gulf. To the contrary, General Powell -- who is neither a West Pointer nor an Ivy Leaguer -- served as an example to all races. He showed that in this man's (or woman's) Army (or Navy or Air Force or Marine Corps) anyone with talent and brains can make it to the top. As the euphoria of winning on the desert fades, now comes the hardest part: winning the peace. The political and economic obstacles are large and challenging, as this and following stories show, but if the recent past is a guide, those problems may prove more manageable than some predict. President Bush at this moment has more support -- and plain old clout -- than any predecessor since World War II, and just possibly the newfound vision to do something with it. The economy isn't surging yet, but uncertainty over the war, one of its biggest impediments, is gone. Oil prices will be stable for quite a while now that the conservative Saudis practically own OPEC. Rebuilding war damage will give Bechtel, Dresser Industries, and similar firms more opportunities in the Mideast than they have seen since the 1970s. And the U.S. defense industry now knows that its next generation of weapons can't be just smart but must be brilliant. The first lesson of the war is that air power has reached a new order of magnitude, more lethal and more precise than ever before. So great was the * cataclysm of bombs that the war was all but over before Iraq even faced allied ground troops. For its part, the Army performed miracle after logistical miracle: ferrying half a million troops and their gear to the Gulf in record time; then, just before the ground war, rushing tens of thousands of soldiers hundreds of miles under the enemy's nose; and setting up a huge resupply base 50 miles inside enemy lines in a matter of hours. Sure, Iraq is a Third World country and the U.S. prosecuted this war with almost no diplomatic opposition, but it's not romanticizing the war to be startled by the scale and speed with which the U.S. projected force. These feats will keep professors at West Point and Sandhurst up late revising their syllabuses. Moreover, says Stanley Hoffmann, professor of European studies at Harvard, the military success ''is very important because it will restrain others'' -- that is, expansionist nations anywhere in the world. But the demonstration of the might of American forces is by no means the sole result of the war. The U.S. emerges as the world's only superpower -- politically as well as militarily. President Bush's accomplishment in forging and maintaining the unity of the coalition against Iraq has been every bit as remarkable as the performance of allied arms. Words of gratitude to Mikhail Gorbachev notwithstanding, the failure of the Soviet Union's peace initiative -- despite its being, as Hoffmann says, ''a brilliant effort, brilliantly managed'' -- confirms that Soviet power is in retreat. It doesn't matter whether the Soviets brought Tariq Aziz to Moscow in a mischievous attempt to save Saddam's skin, in a gambit to preserve Soviet influence in the region, or in a sincere effort to attain United Nations goals without more bloodshed. When it suited George Bush to sweep it aside, he simply did so, however politely. As if to underscore the Soviet retreat, just two days after coalition forces vaulted into Kuwait and Iraq, the nations of Eastern Europe met in Hungary as scheduled to sign an agreement ending the military functions of the Warsaw Pact. This was the final official act of the Cold War -- and what a victory for free nations that represents. Yet it would be a mistake to conclude that this is 1945 all over again, that the world's superpower can be its Superman, flying off with arms or aid to fight injustice wherever it is found. Then the U.S. was so rich and the Soviet Union so scary that the rest of the non-Communist world had to follow America's lead. Now military missions will have to be both right and winnable in order to attract allies. Iraq's invasion of Kuwait presented a clear-cut task that wasn't found in Vietnam. This was naked aggression by a central-casting villain in an unarguably vital part of the world. It allowed the coalition to fight to win -- and exorcise at least some of the demons of Vietnam that have haunted a whole generation of Americans. Don't worry about filling the volunteer army. Only America can lead an effort like the Gulf coalition, says Philip Robins, head of the Middle East program at the Royal Institute of International Affairs in London, but ''the U.S. doesn't necessarily have the right to lead unilaterally.'' Or the means. That's why President Bush speaks of a new world order, not a Pax Americana. Even a just war has to be paid for, and it helped that America could sign up lots of sponsors. All the supporters of the coalition had a direct stake in stopping Saddam. For Arabs, it was security; for Europeans and Japanese, oil. The Saudis and Kuwaitis are kicking in around $16 billion each, the Japanese $10.7 billion, the Germans $6.6 billion. If all the contributors make good on their pledges, the U.S. could collect several billion more than the $47.5 billion it spent on the war. In the new world order, America will find itself in a shifting pattern of close working relationships. Thus Germany, which was the main partner of the U.S. as the Soviet bloc broke up in 1989, ceded the spotlight to Britain and France during the Gulf crisis, and will likely return to the fore when world attention refocuses on instability in the Soviet Union, the probable breakup of Yugoslavia, and the economies of Eastern Europe. This flexible diplomacy requires a sophistication that has not always been a hallmark of American statecraft in the past. A 600-pound gorilla can sit anywhere it chooses, but if it wants to sit on little gilt chairs, it had better learn to perch lightly. Says Henry Nau, a professor of international affairs at George Washington University who served on the National Security Council under President Reagan: ''The cooperation of other states remains the sine qua non of effective diplomacy. The U.S. could not have done what it did without the backing of the U.N. and, especially, the U.S.S.R.'' BUSH SET a good example for the future in the Gulf crisis. He garbed U.S. policy in clear moral, national, and international interests; he communicated well with the American people and their allies; and he didn't try to be a clever diplomatist in the patent-leather footsteps of Talleyrand or Metternich. Instead, says a surprised Stephen Hess, a senior fellow at the Brookings Institution, it has turned out that Bush ''means exactly what he says. That's why this is the first time that he has rallied the American people.'' In his plans, the President does see a revitalized U.N. Besides possibly overseeing a predominately Arab peace-keeping force in the Persian Gulf, it could function as a forum for settling regional disputes in other hot spots like Angola and Cambodia. Such high hopes for the U.N. may be too optimistic (they usually have been). Says a top Bush aide: ''The President doesn't have a blueprint. It's simply a concept, a new multinational approach to problem-solving in the post-Cold War era.'' The postwar Middle East will be the first test of the new world order. The task of ''restoring international peace and security in the area'' (as the U.N. Security Council put it) will be complicated if Saddam remains truculent and in power. But the postwar agenda is clear enough. In addition to providing security for the nations of the region, the U.S., other world powers, and local states must set in motion three efforts to make the Mideast less treacherous: arms control, economic development, and Arab-Israeli detente. Like the troops under Norman Schwarzkopf's command, peacemakers will have to use all the tools in the toolbox. While the world tries to curtail arms supplies, demand will be tamped down, at least for a while. For the first time in decades the Middle East will have to choose between guns and olive oil. Iraq has much civilian rebuilding to do and may well have to pay for its pillage of Kuwait. Israel is raising taxes to cope with the influx of up to a million Soviet emigres, which this year will cost almost as much as defense. The Saudis have had to borrow money. The Kuwaitis have a reconstruction bill of at least $45 billion. Saudi Arabia and Kuwait also paid or lent tens of billions of dollars to bolster Iraq's military machine. The oil kingdoms, shocked by the harvest their largess sowed, say they have learned better. SUCH FORUMS as the Arab League and the Gulf Cooperation Council could become channels for economic reconstruction, with the U.S. and other Western powers offering expertise and advice from a distance. That would help salve Pan-Arab feelings, which are by no means dead. Says Ishaq Nadiri, an economist at New York University: ''These economies are very small and their resources are distributed in strange ways -- oil here, water there, population someplace else.'' Thus, Nadiri hopes, ''economic interdependence can be a way for their energies to be spent with each other, not against each other.'' The West would get its share of the benefits -- not only exports but also stable supplies of oil. The biggest postwar challenge is to begin the process of Arab-Israeli disengagement. Progress will go a long way toward mollifying Arab masses in coalition countries, as well as in Jordan and elsewhere, that had backed Saddam. Israel's relations with neighboring governments are inextricably linked to the problem of the Palestinians. With Saddam Hussein defeated, the PLO will probably turn to Syria for protection and support -- which makes Damascus the key to an Arab-Israeli settlement. Coalition blood and treasure have helped both Israel and Syria. With Iraq's army vanquished and moderate Arab nations linked more closely than ever to the West, Israel is safer than it has been since 1948. Thanks to Saddam's Scuds, Israel has also won a measure of sympathy among some Arabs in the Gulf. As for Syria, it needs economic and political influence, not firepower. If the West, the Gulf states, and Egypt hold out the right economic and political inducements to it, progress is possible. It remains to be seen if Bush can find a rhetoric of reconciliation to match his words of war. ''A new world order'' is a nifty slogan, but turning it into reality requires no small measure of magnanimity. The U.S. is the world's military and political colossus, but in economics it shares top billing with two other superpowers -- Japan and the European Community. Their importance is a reminder that the post-Cold War era is a time when leaders must find fair- minded ways to share both the burdens and the rewards of influence. With Bush facing a presidential election campaign next year, there will be plenty of temptation to grandstand instead -- by Japan-bashing, for example -- or to duck tough problems like Arab-Israeli relations. The White House must show its willingness to let other nations call some tunes in the Mideast. Whatever the region's future, the war in the Gulf has accomplished much. At the very least the Mideast and the world are better off than they would have been had Saddam succeeded in annexing Kuwait. But the U.S. shouldn't emerge feeling cock of the walk. Before August 2, America faced a shrinking share of world GNP, a battered banking system, growing failures in education, and persistent poverty. All these problems remain. One need look no further than the swift collapse of Soviet power for proof of how much political power depends on economic strength. (This is a lesson Kremlin hard-liners should ponder too.) Economic difficulties forced Britain to pull back from east of Suez 20 years ago. When Britain left the field, the malign seeds of the region's current instability were free to take root. The U.S. economy is in far better shape, but it needs to be a lot stronger. Otherwise the war in the Gulf will not signal the birth of a new world order but the passing of the old one.

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