Tag: United Arab Emirates
Micah Zenko last week in the New York Times obliterated not only Trump’s proposed “new” strategy in Afghanistan but also the entire military-heavy approach to counter-terrorism that has dominated American efforts since the inauguration of Barack Obama. It simply doesn’t work well to just kill people you think are terrorists: there are always replacements, the civilian collateral damage is enormous, and the ungoverned spaces that result are breeding grounds for more recruits. While ISIS may be going down to defeat in the territory it once controlled, it will reemerge as a guerrilla group using terrorist tactics rather than the more conventional military approach it has so successfully employed the past few years.
So what is the alternative?
Max Boot and P.J. Crowley have already named it loud and clear: nation-building. Regular readers of peacefare.net, and those few who have picked up Righting the Balance advertised on this page, will not be surprised that I think them correct. There are, however, two big problems with this answer:
- Presidents don’t want to do it.
- Americans are convinced it doesn’t work.
The only civilian nation-building assistance effort Americans think successful is the Marshall Plan, launched almost seventy years ago to aid US allies in Europe in the aftermath of World War II. Civilian efforts during the Vietnam war are generally regarded by non-experts as a failure, because we lost the war, even though CORDS (Civil Operations and Revolutionary Development Support) is regarded by some experts as somewhat successful. Americans generally disregard the modestly successful UN and other efforts since the fall of the Berlin wall.
American presidents are as adverse as public opinion, but often change their minds. Bill Clinton told Americans he was sending US troops to Bosnia for a year. They stayed for 9 years, largely to ensure peace and stability during the nation-building enterprise. US troops deployed to Kosovo in 1999 and are still there, because its sovereignty is still incomplete. George W. Bush famously derided nation-building during his first campaign, and then launched two enormous efforts: in Iraq and Afghanistan.
Barack Obama, as in many things more disciplined than most, withdrew from Iraq but extended the US presence in Afghanistan, largely because the nation-building effort there was still incomplete. President Trump has said we won’t be nation-building in Afghanistan, but he may be the only one left in the US government who believes that is in fact the case.
“Nation-building” is of course a misnomer. I would call what is needed “state-building.” Nations are groups that self-identify. States are institutional structures that can be constructed in particular social contexts that include the existence, or not, of a nation. From this perspective, there are successful multi-national states, including the US, but also less successful ones, like Bosnia or Iraq. But both Bosnia and Iraq are illiberal electoral democracies arguably, even if many will not agree, improvements over the autocracies that preceded them.
Today the question of state-building in the greater Middle East arises not only in Afghanistan but also in Syria, Libya, Yemen, and still in Iraq because of the scheduling of a Kurdistan referendum for September 25. There are basically two ways to go: allow the autocracies to be restored in Syria, Libya and Yemen, or try (as in Afghanistan and Iraq) to preserve some modicum of popular sovereignty. Tunisia is perhaps the best example of success in the latter enterprise.
I think it will be hard to re-impose the autocracies, but President Sisi has mostly done it in Egypt. It isn’t pretty, and it isn’t stable, but it kills a lot of people Sisi defines as terrorists. President Assad would obviously like to do the same thing. In Libya, General Haftar is of the same mind, and in Yemen former President Saleh would presumably like his son to restore the old regime, which was an illiberal democracy in form but an autocracy in practice.
I’d prefer the more democratic route, even if the results are illiberal. Admittedly the preference is more a subjective than an objective one. While you can read in many places, including on peacefare.net, that what is needed to fight terrorism is inclusive states that treat their populations in accordance with international human rights standards, we’ve got precious few recent examples of success. But I am quite certain that the purely military approach simply will not work, and I’d prefer my tax dollars not support the restoration of autocracy.
Much lower I fear. While he has given a couple of half-sane, scripted speeches prepared with Chief of Staff Kelly’s approval, President Trump is still doing what he can to offend as soon as he is off the Teleprompter. Those who don’t approve of him are at this point about 60% of Americans and far higher percentages in most other countries. Russia and Israel are the exceptions. He is still launching ferocious attacks on the American media, retweeting anti-Semitic and racist tweeps, and slamming both Senate supporters and antagonists.
With August waning and an early Labor Day (September 4) looming in the US, prospects are for a difficult fall. The first item of business in the US Congress will be raising the debt ceiling and passing some sort of budget resolution. Trump has made that more difficult by insisting that the budget include money for the wall on the border he has promised the Mexicans would pay for. That’s a non-starter for the Democrats, who have some say in the Senate because 60 votes are needed on the budget issues. Tax reform, which so far means a big tax cut to businesses like Trump’s own, will have to wait. Never mind the promised trillion-dollar infrastructure program.
Trump wants the budget resolved by eliminating the filibuster and allowing bills to pass in the Senate with a simple majority. That is a proposition even more controversial than the wall, so he is publicly hounding Senate Majority leader McConnell into changing Senate rules to allow it. That’s not a way to make friends in the Senate, but so long as the Republicans control the House Trump can be sure it won’t impeach him (which has to precede sending him to the Senate for trial).
While America tries to sort out its internal political mess, the rest of the world is trying to make do without much clarity from Washington. In Asia, China is seizing the initiative on trade and finance, pushing its “belt and road” projects all the way to the Middle East and Africa. North Korea hasn’t tested a missile lately, and there seem to be talks about talks going on behind the scenes with the US, but the prospects of denuclearizing Pyongyang have dropped to zero.
In the Middle East, Syria’s President Assad is still advancing, as are the US-supported, Kurdish-led forces trying to take Raqqa from the Islamic State. The Syrian opposition is being pressed by the UN and everyone else to drop its demand that Assad step aside. Civilian casualties from American and other air attacks in the battle for Raqqa are mounting.
Defense Secretary Mattis is promising Turkey the US will help fight against Kurdish rebels inside Turkey and in Iraq, even as it supports their affiliates in Syria. That’s going to be a hard circle to square. Iraq is also making progress against the Islamic State, but Baghdad still hasn’t convinced its own Kurdistan to call off its independence referendum, scheduled for September 25 but increasingly in doubt.
Jared Kushner is plugging away at the Israel/Palestine issues, in visits to Ramallah, Cairo and Jerusalem. No one is expecting much to come of his efforts. The State Department has refused to reiterate US commitment to a two-state solution, which (as Matt Duss pointed out on Twitter) represents the single largest concession the Palestinians have made to date. Not that anyone had much doubt about which side the Trump Administration was on. We’ll presumably now be treated to the spectacle of Israel and the US proposing various confidence-building measures meant to make life and the economy more palatable for the occupied territories on the West Bank, while Jewish settlements expand and kill off any remaining hope for a two-state solution.
This is enabled in part by some Arab states coming to the conclusion that they care more about countering Iran than supporting the Palestinians. The Saudis and Emiratis seem prepared to collaborate with Israel against Iran, even if Qatar, Iraq, and Oman are headed in the opposite direction. Yemen no longer counts, since it is being obliterated in the Gulf-led war against the Houthi rebellion. Libya, Tunisia, and Morocco are likewise out of the game for now. Egypt and Jordan have made their peace with Israel and have no choice but to keep it.
Trump is increasingly marginalized from all these developments. Weakness at home leads to weakness abroad. His only major push on foreign policy lately has been the renewal and expansion of the American military push in Afghanistan. This allegedly new strategy closely resembles his predecessor’s effort to bring the Taliban to the negotiating table. Like Obama, Trump doesn’t want to be blamed for losing Afghanistan, even if it proves impossible to keep his promise to win there.
We can still sink lower: North Korea could test another missile, the Palestinians could tell Kushner where to go, Trump could renounce the Iran nuclear deal, and the country’s long recovery from the financial crisis of 2007/8 could end. But most of all: we could continue to fail to deal with a president who is unqualified, mean-spirited, incompetent, and divisive. Let’s hope Special Counsel Mueller comes up with something compelling, sooner rather than later.
The humanitarian situation in Gaza is dire: more than 90% of tap water is undrinkable, youth unemployment is at an estimated 65%, and electricity blackouts consume 20-22 hours per day. UNRWA, the largest humanitarian agency operating in Gaza, faces a deficit of $126.5 million on a budget of $715 million.
On Thursday, the Middle East Institute hosted a panel entitled “Is Gaza Reaching a Boiling Point?” to investigate the political and social pressures ravaging the strip. The panel featured Tareq Baconi of Al Shabaka, Lara Friedman of the Foundation for Middle East Peace, Acting Director Christopher McGrath of the UNRWA Washington Office; and Natan Sachs of Brookings. MEI’s Paul Salem moderated.
In June of this year, Gaza suffered an electricity crisis as the Palestinian Authority, headed by President Mahmoud Abbas, reached an agreement with Israel to reduce Gaza’s supply by 40 percent. This move, explained Baconi, was part of an attempt to exert pressure on Gaza’s Hamas government and consolidate control in the hands of the Palestinian Authority.
Several factors determined the timing of this play. In the wake of President Donald Trump’s election, the possibility of another Israel-Palestine deal looms on the horizon. As the Qatar crisis continues, it has become clear that President Trump intends to take a hardline stance against US-designated terrorist organizations. Abbas’s strategy of consolidating authority over Gaza and the West Bank by crippling Hamas—even if it entails exacerbating Gaza’s humanitarian crisis—serves both these objectives. The Palestinian Authority president is trying to position himself as a secular, antiterrorist strongman and key interlocutor in any negotiations.
This is a key moment for Abbas in part because Hamas is increasingly isolated, and in part because it marks the return to Palestinian politics of Abbas’s former Fatah rival Mohammed Dahlan. Hamas’s relationships with Iran and Saudi Arabia are on the rocks, while Egyptian President Sisi’s attack on the Muslim Brotherhood has also marginalized the Gaza-based organization. In addition, the Egyptian military’s 2013-14 destruction of most of the smuggling tunnels between Egypt and Gaza has decreased Hamas’s income from taxes on smuggled goods. With Egypt and the UAE backing the Palestinian Authority, and Qatar scrambling to prove that it does not finance terrorism, now appears a strategic time for the Abbas government to squeeze its rival and potentially court new friends.
Dahlan’s re-emergence on the Palestinian national scene is also partially responsible for the Palestinian Authority’s decision to deny power to Gaza. Gaza remains a critical element of the Palestinian political establishment. Dahlan’s opportunistic alliance with Hamas—from which he gains a political entry point, and Hamas gains Dahlan’s funding and UAE—poses a real threat to Abbas’s authority.
However, it appears that Abbas’s attempt to exert pressure on Hamas in Gaza is going to backfire. Starving Gaza of electricity has not prevented several “hot wars” between Gaza and Israel. Younger Palestinians already see Abbas’s government as ineffective and authoritarian. Now, the Palestinian Authority has bought into the logic of the Gaza blockade—collective punishment to curtail Hamas.
From the Israeli side, elaborated Sachs, a basic dilemma exists: the long-term solution to the problem of Hamas is to bring Gaza under the fold of the Palestinian Authority, but in the short term, Gaza’s suffering must be alleviated. Why, then, has Israel failed to come to a short-term truce with Hamas? Israeli mistrust of Hamas is profound. Those who support the Ramallah-based Palestinian Authority are likely to be the most hawkish on the blockade and matters involving Gaza. Moreover, it is not clear that Hamas speaks with one voice—its political wing may understand the value of avoiding war, but its military wing may not.
Ultimately, opined Friedman, the international community may need to insert itself into the complex dynamic among Israel, Hamas, and the Palestinian Authority. The Israeli approach is tactical, not strategic. Humanitarian arguments are denounced as risks and sacrifices in a zero-sum game. Yet conflict in Gaza can’t be allowed to fester to the brink of war.
“You do not get a peace agreement with the Palestinians without Gaza,” noted Friedman.
Hassan Hassan ( @hxhassan) offers this Twitter-published translation of what purports to be the Saudi, Emirati, Bahraini and Egyptian demands of Qatar (I’ve made a few minor editorial adjustments to ease readability):
2. Qatar must immoderately [quickly?] shut down the Turkish military base that is being established, and halt any military cooperation with Turkey in Qatar.
3. Qatar must announce severance of ties with terrorist, ideological & sectarian orgs: MB, ISIS, AQ, HTS, Hizbollah; designate as terrorists
4. Qatar must cease any funding activities to extremist and terrorist individuals, entities & orgs, including US/international designation lists.
5. Qatar must hand over all designated terrorists, wanted by the four countries; freeze their assets; stop hosting others in the future.
6. Qatar must shut down Al Jazeera and all affiliated channels
7. Qatar must stop interference in these countries’ domestic+foreign affairs; stop naturalization of their citizens; extradite such citizens
8. Qatar must provide reparations to these countries for any opportunity costs incurred over the past few years because of Qatari policies.
9. Qatar must become in sync with its Gulf & Arab neighborhood on all levels, and to activate Riyadh Agreement 2013 + 2014
10. Qatar must provide all databases related to oppositionists that it provided support to & clarify what help was provided.
11. Qatar must [close?] all media outlets backed by it directly or indirectly, like Arabi21, Rasd, New Arab, Middle East Eye, Mkamlin, Sharq etc
12. These demands must be agreed within 10 days, otherwise they would be invalidated.
13. Agreement will involve clear goals and mechanism, monthly reports in the first year, every three months the next & annually for 10 years
Here is the Arabic, for those who want to check the translation:
So what is this about?
First it is about asserting preeminence. The Saudis in particular want to make it clear that they lead the Gulf (and more: the Sunni Arab countries). Qatar’s relationship with Turkey, in particular the recently reinforced Turkish base in Qatar, challenges the Kingdom’s preeminence and limits what Riyadh can do, hence its position as number 2 demand.
Second, it is about Iran, which the Emirates and the Kingdom view as a mortal enemy. Qatar has to maintain good relations with Iran, with which it shares a natural gas field. But the diplomatic and security relationship is something its Gulf partners want reduced.
Third, it is about reducing internal threats, especially from the Muslim Brotherhood or other Islamist groups as well as non-compliant media and other “oppositionists,” a term that could cover a lot of ground. The demands to stop naturalization and to extradite non-citizens should be read in this context.
Fourth, but only fourth, it is about cutting off support to terrorists, defined to include the Muslim Brotherhood as well as Al Qaeda, ISIS, Hayat Tahrir al Sham, and Hizbollah. The Saudis don’t come to this last demand with clean hands, as their Wahhabi clerics have certainly inspired some of the terrorists, and many think private funds have flowed from Saudis to terrorist groups.
Qatar will be tempted to reject this list of demands in its entirety. That I think would not be so wise. There is a whiff of regime change surrounding this document, especially the 10-day ultimatum. It seems to be saying “do these things or else.” What? The cut-off of transport and trade is already painful, but things could get worse. The bloodless coups of 1972 and 1995 in Qatar are certainly not forgotten.
Better would be to sit with the antagonists and review each point, agreeing where possible and making clear why Doha cannot agree to other points. The more Qatar can indicate cooperation on terrorism, the more backing it can expect from the United States (or at least from Secretary of State Tillerson and Secretary of Defense Mattis–the President is erratic and seems to be conducting a distinctly different foreign policy). The US is unlikely to care much about Turkey’s small military presence in Qatar or to want media shut down without good cause. But the Americans will want Qatar to make all commerce compliant with UN Security Council requirements as well as renounce ties with, and end funding of, designated terrorists.
There seems to be a growing Trumpization infecting negotiating styles worldwide. Making your position clear is desirable. Ignoring the fact that your adversary has alternatives to a negotiated agreement is not. Iran stepped in quickly to help Doha, as did Turkey. The net result of these overblown demands could be to drive Qatar further in their direction. That would be counter-productive. A coup is likewise a risky idea. Better to reach some sort of negotiated outcome.
- Report Launch: “The Other Side of the World” | Monday, April 24 | 10:30-12 | CSIS | Register Here | China’s growing interests in the Middle East, and the United States’ enduring interests in the Middle East, create challenges for two of the world’s most powerful nations. Should they seek more active collaboration? Are their goals for the future of the Middle East compatible? To discuss the implications of increasingly robust China-Middle East ties for U.S. interests, CSIS invites you to the launch of its new Brzezinski Institute Report: “The Other Side of the World: China, the United States, and the Struggle for Middle East Security,” featuring Anne Gearan, Political Correspondent at the Washington Post; Jon B. Alterman, Senior Vice President and Zbigniew Brzezinski Chair in Global Security and Geostrategy, and Director of the Middle East Program at CSIS; Michael J. Green, Senior Vice President for Asia and Japan Chair at CSIS; Matthew P. Goodman, William E. Simon Chair in Political Economy and Senior Adviser for Asian Economics at CSIS; and Christopher K. Johnson, Senior Adviser and Freeman Chair in China Studies.
- What is the Future of EU-Turkey Relations? | Monday, April 24 | 2-3:30 | Wilson Center | Register Here | This panel will address a number of questions related to the April 16 Turkish constitutional referendum: Can the European-Turkish migration deal last? How might upcoming national elections in several European countries affect European ties with Turkey? What could cause the EU to freeze or end Turkey’s accession process? Is Erdogan willing to abandon Turkey’s EU membership bid or follow through with his threat to end the migration deal? Can the EU and Turkey find a way forward? Speakers include Michelle Egan, Professor and Jean Monnet Chair ad personam at School of International Service, American University; Aykan Erdemir, Senior Fellow at the Foundation for Defense of Democracies; and Constanze Stelzenmueller, Senior Transatlantic Fellow and Director of Transatlantic Trends at the German Marshall Fund, Berlin and Robert Bosch Senior Fellow at the Brookings Institution.
- The United Arab Emirates: Power, Politics, and Policy-Making | Tuesday, April 25 | 12-1:30 | AGSIW | Register Here | Led by Dubai and Abu Dhabi, the United Arab Emirates has become deeply embedded in the contemporary system of international power, politics, and policymaking. Only an independent state since 1971, the seven emirates that constitute the UAE represent not only the most successful Arab federal experiment but also the most durable. However, the 2008 financial crisis and its aftermath underscored the continuing imbalance between Abu Dhabi, Dubai, and the five northern emirates. Meanwhile, the post-2011 security crackdown revealed the acute sensitivity of officials in Abu Dhabi to social inequalities and economic disparities across the federation. Kristian Coates Ulrichsen, Baker Institute Fellow for the Middle East at Rice University, charts the various processes of state formation and political and economic development that have enabled the UAE to emerge as a significant regional power and major player in the post-Arab Spring reordering of Middle East and North African politics, as well as the closest partner of the United States in military and security affairs in the region.
- New Approaches to Israel-Palestine Peace Efforts: Can Regional Powers Make a Difference? | Wednesday, April 26 | 1-3:30 | MEPC | Register Here | Panelists will discuss whether there are new opportunities to work with regional powers to realize a peace settlement between Israel and the Palestinians. Speakers include Chas W. Freeman Jr., Chairman of Projects International Inc., Former Ambassador to Saudi Arabia, Former US Assistant Secretary of Defense, and Former President, MEPC; Hady Amr, Nonresident Senior Fellow at Brookings, Former Deputy Special Envoy, Israeli-Palestinian Relations at the Department of State; and Former Deputy Assistant Administrator, Middle East at USAID; Ian Lustick, Professor at the University of Pennsylvania, Former President of Politics and History Section of the American Poltical Science Association, and Member of the Council on Foreign Relations; and Riad Khawaji, Founder and CEO of INEGMA, Middle East Bureau Chief at Defense News, and Middle East Correspondent at Jane’s Defense Weekly.
- The Syrian Crisis: What Lies Ahead on the Battlefield and in Diplomacy | Wednesday, April 26 | 1:30-5 | MEI | Register Here | The Middle East Institute (MEI) Track II Dialogues Initiative and the National Defense University Near East South Asia (NESA) Center for Strategic Studies have convened three rounds of private consultations with Russian counterparts about the Syrian conflict, most recently in February 2017. Participants from those and parallel MEI Track II encounters with Middle Eastern leaders will join with other experts on the military and diplomatic aspects of the conflict in two panel discussions to consider possible ways forward. These panelists include Jennifer Cafarella, Lead Intelligence Planner at the Institute for the Study of War, Charles Lister, Senior Fellow at MEI, Andrew J. Tabler, Martin J. Gross Fellow at WINEP, LTG (ret) Terry A Wolf, Deputy Special Presidential Envoy for the Global Coalition to Counter ISIS at the Department of State, Wa’el Alzayat, CEO at Emerge USA, (ret) Robert S. Ford, Senior Fellow at MEI, Roger Kangas, Academic Dean and Professor, NESA Center for Strategic Studies at the National Defense University, and Randa Slim, Director of Track II Dialogues at MEI.
- A Story to Tell: Changing the Narrative of American Muslims with Hena Khan | Wednesday, April 26 | 6-8pm | The Elliott School | Register Here | Join us for a conversation with Elliott School alumna and children’s author Hena Khan about her experiences writing books that represent American Muslims, promote understanding, and build tolerance and compassion. She will share her newest novel, Amina’s Voice, the first publication of Simon & Schuster’s groundbreaking new imprint Salaam Reads, which focuses on books about Muslims. Amina’s Voice recounts the story of a Pakistani-American Muslim girl who struggles to stay true to her family’s vibrant culture while simultaneously blending in at school after tragedy strikes her community.
- Tunisia in Transition: Challenges and Prospects | Thursday, April 27 | 2-3:30 | POMED and the Arab Center Washington | Register Here | Tunisia, the birthplace of the “Arab Spring” uprisings of 2011, stands today as the only country undertaking a democratic transition. But despite the historic progress, daunting challenges remain, including confronting corruption, bolstering the economy, and reforming the justice sector. What are the most important steps in confronting these challenges? And what role can international actors, including the United States, play in supporting Tunisia’s fragile democracy? Speakers include Amine Ghali, Program Director at Al Kawakibi Democracy Transition Center in Tunis, Leila Hilal, Senior Fellow, International Security Program at New America, Chawki Tabib, President of Tunisia’s National Authority for the Fight Against Corruption, and Sarah Yerkes, Fellow, Middle East Program at the Carnegie Endowment.
Last Tuesday the Middle East Policy Council held their 85th Capitol Hill Conference on “Economic Reform and Political Risk in the Gulf Cooperation Council (GCC).” Speakers were Aasim M. Husain, IMF deputy director of the Middle East and Central Asia; Ford M. Fraker, president of the Middle East Policy Center and former US ambassador to Saudi Arabia; Edward Burton, CEO and president of the US-Saudi Arabian Business Council; and Karen E. Young, senior resident scholar at the Arab Gulf States Institute. Richard Schmierer moderated.
Husain presented data on how different countries of the GCC are adapting to cheaper oil. Prior to the dramatic decline in oil prices in mid-2014, Gulf governments had been raising their spending by expanding energy subsidies, increasing government payrolls, and raising wages. Non-oil sectors were growing at an average of 7 percent throughout the GCC. When oil prices suddenly dropped from $110/barrel to $40/barrel in mid-2014, a GCC average 10% budgetary surplus turned into a 9% deficit overnight. Spending, which had been increasing by an average of 8-10% since 2011, is expected to contract by over 10% in coming years.
Most Gulf states are cutting back their capital spending by starting fewer new projects and slowing and canceling current ones. Many are raising subsidized energy prices—ending the longstanding policy in some countries of providing essentially free energy to their citizens. Some GCC members are also considering a value added tax. Even with these reforms, in the next five years we can continue to expect deficits of 7-10% of GDP. It’s a grim picture, even before you consider how cuts in spending will impact economic growth.
Over the next five years, 2 million youth will enter the workforce across the GCC. Husain predicts that 2/3 of those will find jobs. That optimistic figure relies on the necessity of non-oil sector growth in next five years generating more jobs than in the past.
Fraker emphasized just how dramatic recent changes in Saudi policy have been. He identified the main goals of Vision 2030—diversifying the Saudi economy and eliminating government inefficiency—and added that the biggest change brought about in the months since Salman bin Abdulaziz Al Saud’s assumption of the throne has not been any particular economic policy, but rather an “unprecedented” opening of Saudi government.
Decision-making had always happened behind closed doors without transparency or outside input. The rise to prominence of the Deputy Crown Prince Mohammad bin Salman changed that. He has opened government, for example by putting all government ministers on stage for unprecedented public questioning. Fraker wants the US to welcome these changes. Washington has a strategic interest in a stable Saudi Arabia and should therefore support its allies politically and economically.
Burton elaborated on business opportunities for American investors. Saudi Arabia is the third biggest spender on military equipment in the world. Mohammed bin Salman’s goal to divert 50% of Saudi military spending to domestic contractors would create major opportunities for job-rich growth. Burton also foresees healthcare as a potential growth sector. Saudi Arabia suffers from high rates of obesity, diabetes, and other health challenges. The Kingdom is the Middle East’s largest information and communications technologies market, particularly with its growing youth population.
Young analyzed GCC strategies and policies to make ends meet. Across the region, there has been a dramatic rise in bond issues. In the short term, there is no problem. Gulf countries are not heavily indebted and currently have access to the capital they need. Continued reliance on credit for the next five years could get dicey. This oil crisis is different from the 1970s crises. Over the course of the 2003-2014 oil boom, the Gulf invested in building lasting institutions, which enabled Kuwait and the UAE to adapt to the drop in oil price. The GCC is also much more integrated into the MENA region than it was previously. Egypt and Lebanon are dependent on Gulf foreign direct investment. Jordan and Morocco rely on foreign aid from the GCC to balance their budgets.
All the panelists managed to neglect the economic and political ramifications of GCC involvement in two regional conflicts. Husain talked about massive cuts in capital and social spending to ease the sting of deficits, but ignored the continued climb in Saudi defense spending since 2011, starting with Saudi involvement in funding and training opposition fighters in Syria.
Saudi Arabia will be running up against its biggest planned budget deficit in 2016, despite the slight uptick in oil prices and domestic fiscal reforms. GCC members are heavily involved in proxy wars in Syria and Yemen, so military spending is continuing to rise at an alarming rate. In 2016, Saudi Arabia surpassed Russia as the third biggest military spender, spending $87.2 billion. Qatar and the UAE have also increased their military spending while drastically cutting other spending.