Category Archives: Middle East

Why Trump presidency is radically different for the Middle East

Introduction: The world has actually changed

Far too often, modern political risk analysts cleave to the intellectual shore in a desperate search for analytical safety, when events have already shaken up the comfortable world they have grown used to describing. Knowing when a game-changing event has occurred (for instance the recent, decades-long economic rise of China), and how it changes the old rules, is invaluable for any world-class political risk analyst.

With the election of Donald Trump now is such a time. For rather than playing the old strategic game of favouring either Iran or Saudi Arabia, a Trump administration will clearly favour neither, either in terms of Congress’s adoption of the JASTA law or the Iran nuclear deal. The world has truly turned upside down.

But hold on a minute, will bleat every self-satisfied, mediocre risk analyst, surely Trump’s rhetoric is just hot air. In the end, the realities of American interests and longstanding commitments will make a Trump foreign policy in the Middle East much like that of any other US President. But such nonsense is lazy, wrongheaded analytical whistling by the graveyard.

For Trump’s ideology is not an act. Better than pretending the world has not changed, it would be far more useful to analyse the new president’s worldview, particularly over the Middle East, rather than pretending his election did not matter.

Trump’s Jacksonian Nationalism

Donald Trump’s overall foreign policy views are not the mystery the highly-discredited commentariat presently make them out to be. He largely hews to what Walter Russell Mead calls the Jacksonian nationalist strain of American foreign policy, long a minority (if important) view in both American political parties.

Espousing a form of realism, the Jacksonians believe that the US should pursue a very limited but overriding view of the American national interest, seeing that every US foreign policy initiative furthers American interests to the exclusion of all other competing imperatives.

The idea that America is somehow impelled to ‘lead’ over any specific issue such as the Middle East as the global ordering power strikes Jacksonians as dangerous claptrap of the highest order, just another example of global elites caring about esoteric issues (global warming, pandemics, nuclear proliferation), all the while ignoring the concrete economic plight of their own workers, the Springsteen Democratic base which actually elected Trump president.

As such, Jacksonians are deeply distrustful of alliances, fearing the US too often allows itself to be shackled to the wishes of others, who may have quite different interests from those of America. While Jacksonians are not against NATO or any other bi-lateral alliances in the Middle East per se, they are only for such commitments in transactional terms, if America ‘gets a good deal’ out of them.

Jacksonians are not isolationists; they will do things in the world that they believe suit them and their interests. To ask them to do anything beyond that—as America regularly has as the global ordering power for the past 70 years—is not going to happen anymore. At its essence this is what Trump means when he talks about ‘America First’, a laser-like focus on American national interests to the exclusion of all else.

Jacksonians favour using force, but only when it is clear that a winning strategy is at hand, and never in the interests of esoteric goals, such as ‘upholding the international community’, ‘humanitarian intervention’, or to ‘nation-build’ others. Any nation building that occurs ought to be for the Springsteen Democrats, rather than (rightly in my view) wasting literally trillions of desperately-needed dollars in swamps like Iraq around the world. Again, with his focus entirely on American nationalism, Trump—weirdly echoing the very different Barack Obama—wants nation-building to begin at home

However, should America decide that the use of force is in its interests, Jacksonians are for prosecuting war, regardless of what others—including international institutions like the irrelevant UN or the smug and hopeless EU—might say. As Jacksonians believe so fervently in American nationalism, they readily accept that other countries might also wish to use force, and are not over-worried by that reality, as long as American interests are not threatened.

Hence, Trump’s blithe unconcern for whatever President Putin gets up to in either eastern Ukraine or Syria. America has no primary interests in either place so Jacksonians like Trump—to the horror of the international rules-loving Wilsonian elite—simply don’t care.

To put it mildly, this Jacksonian tilt will force the rest of the world to think about America again, in a way few have bothered to do over the past several generations, as Jacksonian precepts, world view and policy prescriptions are so entirely novel to foreign eyes.

Jacksonianism in the Middle East

What this means is that after seventy years, American foreign policy will decisively shift, as we have never had a Jacksonian-inspired presidency in the modern era. Not seeing primary American interests at play in Syria—and more determined than even President Obama to stamp out ISIS—Trump will find tacit common cause with Russia, Iran and the puppet Assad regime it supports, tilting the conflict strongly in their favour. In turn, he will work with Moscow to decimate what is left of the dwindling would-be caliphate.

But this is not a tilt towards Iran, either. The Trump White House is determined to hold Tehran’s feet to the fire over the nuclear deal, either rescinding it outright (which would cause a firestorm of controversy with America’s European allies) or just as likely harrying the Iranians endlessly over the legal details of the accord, hoping hard-liners in Tehran convince Grand Ayatollah Khamenei to walk away in disgust.

In turn, The Trump administration is bad news for Saudi Arabia as well. Trump strongly supported the JASTA legislation while running for president, and is unlikely to back-track on that populist pledge. Likewise, in the pursuit of energy independence, Trump means what he says in cutting back on Saudi energy imports to America.

Instead, look for a Jacksonian America to position itself in the Middle East as the off-shore balancer of last resort, not nearly as concerned with the day-to-day goings-on in the region as American presidents have been in the past and only roused to action when primary American interests—such as the destruction of ISIS—are in play.

Like it or not, Trump’s Jacksonianism means the Middle East will be increasingly left to its own devices in a way it has not been for several generations.

Printed in Al Arabiya online, November 21, 2016

Saudi Arabia’s gormless cheerleaders have failed to spot the looming crisis

“Some people without brains do an awful lot of talking.”

–The Wizard of Oz

Conventional political risk wisdom is falsely sanguine about yet another looming crisis. The House of Saud, bullish proponents blithely declaim without giving the matter too much thought beyond simplistic headlines, has proven surprisingly supple and enduring. Yet in reality, Saudi Arabia is so much less than meets the eye.

Investors would seem to follow the commentariat lemmings over the analytical cliff. Just a week ago, Riyadh managed a successful bond offering of $17.5 billion, a record issue for an emerging market country. With its ambitious Vision 2030 plan for a diversified economy, a new dynamic de facto ruler in King Salman’s favoured son, Deputy Crown Prince Mohammed bin Salman, and even OPEC showing signs of life, Saudi Arabia is currently a ‘buy’ in terms of conventional political risk analysis.

Continuing their almost unbroken record for getting everything of significance wrong lately (Iraq, Lehman, Brexit, Columbia), look for the global chattering classes to be off base about this as well. For once we look beneath the analytical hood in terms of the economic and political fundamentals, in every case Saudi Arabia is in worse shape than recent headlines lead us to believe.

Riyadh’s disastrous effort to drive shale from the global energy market has boomeranged, inflicting maximum damage on its own one-crop economy (90% of government revenue comes from oil). The Saudi deficit has exploded from an average of around three percent to a gargantuan 16% in 2015, hardly a symptom of health.

While still not in the danger zone, Saudi reserves have plummeted from $740 billion as recently as mid-2014 to around $550 billion in October 2016. Even a government as flush as the House of Saud can’t continue burning through its abundant reserves at the present pace forever.

Nor are the political fundamentals of the regime anywhere near as secure as they look. Prince Mohammed has no obvious credentials to be my intern, let alone the de facto ruler of one of the Great Powers of the Middle East. He is only in that position for the precarious reason that he is the favoured son of the aging, ailing present king.

Prince Mohammed has overseen the disastrous war with Yemen. He has put himself in charge of Vision 2030, the most recent plan to economically modernise the country (store rooms are littered with previous failed attempts to do so). He is running the state-controlled oil industry. A man of prodigious genius—say Alexander Hamilton—could not manage to stay on top of all these demanding positions. A man with absolutely no background in running anything is going to be in for a rough ride.

Even barring these policy realities, Prince Mohammed’s position is far from secure. Given the challenges the opacity of Saudi internal political decision-making present for analysts, my political risk firm had long believed the best way to study Saudi politics is to look at the ruling family’s decisions through the prism of Ottoman Empire harem politics. The jockeying for power between the many family factions is the best indicator of Saudi outputs. By this yardstick, Prince Mohammed would do well to perpetually look over his shoulder.

For Mohammed’s father, King Salman, has overturned ruling family precedent by leapfrogging his son over literally dozens of claimants for the throne, a shocking departure in a system that has traditionally prized stability, harmony between the family factions, and venerated age as prerequisite for ruling. Because of all this, there are a lot of people within the House of Saud who would not shed a tear should Prince Mohammed fail.

Also, given King Salman’s unsure health, and the Delphic silence of experienced, canny Crown Prince Mohammed bin Nayef, there is absolutely no guarantee that the Deputy Crown Prince will not be thrown out on his ear when his father—his sole credential for holding power—departs the scene.

Even the recent ‘success’ of Saudi-dominated OPEC is more mirage than reality. The September 28th agreement in Algiers to finally limit cartel production is underwhelming. Specific cuts from individual members have yet to be agreed on, which means the current agreement is no agreement at all. Even for this exercise in public relations, Saudi Oil Minister Khalid al-Falih had to exempt Iran, Libya, and Nigeria from participation, making the deal not worth the paper it is printed on.

So beneath the cheerleading, Saudi Arabia remains a one-crop economy in economic difficulties, with an untested and politically vulnerable Deputy Crown Prince temporarily at the helm, manifestly unable to resurrect a corpse-like OPEC. I think we can hold off on the champagne for now.

Published in City AM London, October 24, 2016

Islamic State’s chaotic defeat is incubating something far worse

It is the saddest, and easiest, prediction to make in global political risk analysis today: we will ‘win’ military victory in Iraq, only to lose the peace. For the dire, ghostly, maddening conclusion must be the West and its Middle Eastern allies are incapable of learning from history.

The press salivates about the imminent retaking of one of Iraq’s largest cities, Mosul, from the fanatics who run ISIS, for that is a simple story they can understand. The more complicated–and far more important–reality is that, until the political poison that led to the rise of ISIS in the first place is creatively addressed, the rest of us are merely mowing the lawn, only to have to again deal with Sunni radicalism further down the line.

Just as Al Qaeda in Iraq metastasised into the more virulent ISIS, an even more diabolical iteration of Sunni disenfranchisement in Iraq is bound to be spawned in the near future, meaning that, like the incomparable movie Groundhog Day, we will be doomed to repeat this horrendous moment again and again.

The present signs of political dysfunction are there for all with eyes to see. Ahead of the assault on Mosul, there is growing tensions between Baghdad and the Kurds, Baghdad and Ankara, and Baghdad and their restive minority Sunni subjects. ISIS is not the real problem; it is merely the ghastly symptom of these larger—and perpetually unresolved—tensions.

Part of the issue, practically excluding any chance to get the longer term politics right, is the undue haste with which the assault on Mosul is being undertaken. This is because weak but well-meaning Prime Minister Haider el-Abadi of Iraq made the ill-considered public promise that the ctiy would be retaken by the end of this year.

Strategically trapped but this silly pledge, the operation has been rushed, with the political end state that logically follows on from successful conquest being wilfully ignored. Still undecided is the role that the Shia irregular militias will play in the assault of this predominantly Sunni city. In the past, as in the retaking of Tikrit, the militias treated the local Sunni populations with contempt, hardly enticing them back into the Iraqi political fold. Often funded by Iran, more sectarian—and more effective—than Iraqi regular troops, the militias may be essential to victory, but they are a gigantic roadblock to winning the peace.

The other key operational question revealing the political chaos to come is that it has been left glaringly unanswered who will actually run Mosul after it has been taken. And as Shakespeare put it, herein lies the rub.

Mosul sits in Nineveh province, one of the most religiously and ethnically diverse areas of the country. To the north and east lies Kurdistan. As previously stated, the government controlled forces and the militias are Shia. The majority of Mosul’s inhabitants are Sunni.

Complicating matters further, however, there are large numbers of ethnic Turkmen in the region–a group closely related in terms of customs of culture with great regional power Turkey, and group which erratic Turkish President Erdogan has vowed to protect, by force if necessary. As Turkey has troops stationed in northern Iraq at Bashiqa (to the hapless fury of Baghdad), this threat is hardly an idle one.

To yet again ignore the politics, to not make clear who will run Mosul after it has been retaken, is to invite an outcome where facts on the ground will determine who practically runs the place. This will lead to a free-for-all, as the various anti-ISIS groups and factions fall upon each other the minute the city is taken.

Even if outright fighting is avoided, the bad blood and irredentist claims that naturally arise from such blockheaded confusion are bound to lead to perpetual instability, and most likely the need to repeat the taking of a city in Iraq like Mosul a decade or so down the line.

Until the government of Iraq gets serious about devolving power in a confederal arrangement to its three major ethno-religious groups—the Sunni, the Shia and the Kurds—a political outcome which reflects actual political facts on the ground, the country will remain an unstable and dangerous place.

Failure to even begin to incorporate the formerly ruling Sunni into now Shia-dominated Iraqi political life means the largest minority in the country will have no stake whatsoever in its future success. Worse, and highly likely given this hopelessness, the Iraqi Sunnis will flock to a future death cult like ISIS, perhaps even more maniacal (if that is possible).

Iraq, like the rest of the world, will only begin to crawl out of the fix it is in if creative, real world policies are devised reflecting political facts on the ground. Don’t hold your breath.

Published in City AM London, October 17, 2016