Tag: Gulf states
Uncharted territory
I did a quick interview today for Tomasz Zalewski of the Polish national press agency on the dramatic developments in Yemen. Maybe others will find it of interest:
Q: How serious – and why – is this Houthis rebellion?
A: It is very serious, because it has now collapsed the Yemeni state, whose president and prime minister have resigned. The Houthis cannot hope to govern all of Yemen, so if they take power it is more than likely that southern, and perhaps other, secessions will follow. If they don’t take power, chaos may reign.
They can however be relied upon to fight Al Qaeda in the Arabian Peninsula (AQAP), since they are Shia-affiliated and will have no use for extremist Sunni group. It is also important to say that the state in Yemen may have collapsed, but the society has many other mechanisms for maintaining stability. I expect some of the inclination of Yemenis towards dialogue and away from the worst brutal violence to be in evidence, though it may not prevail.
Q: What international implications can this crisis have, especially in terms of balance of power in the region, considering that the rebels are Shiite Muslims fighting with a Sunni government?
A: The success of the Houthi insurgency is certainly a blow to Saudi Arabia and its Gulf partners, who had sponsored the peace process in Yemen and view the Houthis as sponsored by their adversary, Iran. But the Houthi success does not immediately alter the balance of power in the region, to which Yemen has never contributed much. The Saudis will be very concerned, but Yemen is a small part of the overall Gulf picture.
Q: How can this upheaval impact a broader war with Islamist terrorism, given the fact that Yemen is one of the strongest Al-Qaida center?
A: The Houthis will oppose AQAP, with which they have already been fighting. What is not clear is whether the US will be able to continue its engagement in the fight against AQAP if the Houthis take power in Sanaa, or if chaos prevails. We’ll have to wait and see.
Q: How can the situation develop there?
A: It can develop in many ways, but I imagine we will see things getting worse before they get better. We could see a move by former President Ali Abdullah Saleh to return to power. He is thought to be backing the Houthis. Rebellion and chaos could spread, with some in the southern Hiraak movement wanting to secede and AQAP taking advantage of the situation to recruit young Sunnis and attack critical infrastructure. As UN envoy Jamal Benomar puts it, “we are in uncharted territory.”
PS: If you want more and deeper on Yemen’s crisis, read Danya Greenfield’s Yemen’s Coup in All But Name and Charles Schmitz’s The Huthi Ascent to Power.
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Nothing new
President Obama said a lot more about foreign policy in last night’s State of the Union message than many of us expected. But did he say anything new?
His first entry point to international affairs was notable: he got there via exports and trade, pivoting quickly to TTP, the Trans-Pacific Partnership and TTIP, the Trade and Investment Partnership with Europe. Though he didn’t name them, that’s what he was referring to when he appealed for Congress to provide him with what is known as trade promotion authority to negotiate deals with Asia and Europe that are “not only free, but fair.” Nothing new here, just an interesting elevation of economic diplomacy to pride of place. Ditto the plea to close tax loopholes that encourage American companies to keep their profits abroad.
But after a detour to the internet and scientific research, the President was soon back on the more familiar territory of national security. He plugged smart leadership that builds coalitions and combines diplomacy and military power. He wants others to do more of the fighting. But there was little or no indication of how collapsed states like Syria, Yemen and Libya might be governed in the future.
Leaving it to their own devices hasn’t worked out well, but this is a president who (like all his predecessors) doesn’t want to do nationbuilding abroad and who (unlike many of his predecessors) has been disciplined enough to resist it. He talks non-military means but uses force frequently and says he wants an authorization from Congress to use it against the Islamic State, which he is doing anyway.
Russia is isolated and its economy in tatters, the President claimed, but it also holds on to Crimea and a large part of Donbas in southeastern Ukraine. He offered no new moves to counter Putin but rather “steady, persistent resolve.” On Cuba, the Administration has already begun to restore diplomatic ties. The President reiterated that he wants Congress to end the embargo, which isn’t in the cards unless Raul Castro gets converted to multi-party democracy in his dotage.
Iran is the big issue. The President naturally vaunted the interim Joint Plan of Action and hopes for a comprehensive one by the end of June. He promised to veto any new sanctions, because they would destroy the international coalition negotiating with Tehran and ruin chances for a peaceful settlement. All options are on the table, the President said, but America will go to war only as a last resort. Nothing new in that either, though I believe he would while many of my colleagues think not.
Trolling on, the President did cybersecurity, Ebola, Asia-Pacific, climate change and values (as in democracy and human rights), stopping briefly at Gitmo and electronic surveillance along the way. Nothing new here either, just more of that steady, persistent resolve.
Notable absences (but correct me if I missed something): any mention of the Israel/Palestine “peace process,” Egypt, Saudi Arabia (or the Gulf), India (where the President will visit starting Sunday), Latin America (other than Cuba), North Korea.
What does it all add up to? It is a foreign policy of bits and pieces, with themes of retrenchment, reduced reliance on US military power (but little sign of increased diplomatic potency), prevention of new threats and support for American values woven in. The President continues to resist pronouncing a doctrine of his own but wants to be seen as a moderate well within the broad parameters of American internationalism. He is wishing to get bipartisan action from Congress on a few things: trade promotion authority, the authorization to use force, dismantling the Cuba embargo, closing Guantanamo. But none of this is new ground.
He is also prepared to forge ahead on his own. As I’ve noted before, this lame duck knows how to fly.
In case you didn’t watch it last night and have more patience than I do, here is the whole thing:
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Producing more enemies than you can kill
No doubt one of the few international issues President Obama will highlight in tonight’s State of the Union speech is the threat of international terrorists associated with the Islamic State and Al Qaeda. He will cite the American military response in Iraq and Syria as vital to our national interests and claim we are making progress, at least in Iraq.
He is unlikely to acknowledge that the problem is spreading and getting worse. In Libya, there are two parliaments and two governments, one of which has ample extremist backing. In Yemen, rebels have laid siege to the government the Washington relies on for cooperation against Al Qaeda in the Arabian Peninsula. In northeastern Nigeria, Boko Haram is wrecking havoc. In Syria, moderates have lost territory and extremists have gained. Taliban violence is up in Afghanistan and Pakistan.
Fourteen years ago when the World Trade Center was attacked in New York City Al Qaeda amounted to a few hundred militants hiding out mainly in Afghanistan, with small clandestine cells in Europe and the US. Now estimates of the number of extremists change so rapidly it is hard to know which to cite, but there are surely more than 100 times as many actively engaged in extremist Islamist campaigns or recruitment efforts in close to a dozen countries, including (in addition to the ones cited above) Somalia, Egypt, Niger, Mali, Algeria, Palestine and Tunisia. Counting the numbers of sympathizers in Europe, Russia and the United States is just impossible.
The long war against Islamist extremism is not going well. It can’t, because we are fighting what amounts to an insurgency against the existing state system principally with military means. Drones and air strikes are killing lots of militants, and I am even prepared to believe that the collateral damage to innocents is minimized, whatever that means. But extremist recruitment is more than keeping up with extremist losses. We are making more enemies than we are killing. Insurgencies thrive on that.
The Obama administration is apparently prepared to make things worse, as it now leans towards supporting UN and Russian peace initiatives in Syria that are premised on allowing Bashar al Asad to stay in power. The Islamic State will welcome that, as it will push relative moderates in their direction and weaken the prospects for a democratic transition. Bashar has shown no inclination to fight ISIS and will continue to focus his regime’s efforts against democracy advocates.
President Obama knows what it takes to shrink extremist appeal: states that protect their populations with rule of law and govern inclusively and transparently. This is the opposite of what Bashar al Asad, and his father, have done. But President Obama has no confidence the US or anyone in the international community can build such states in a matter of months or even years. So he does what comes naturally to those whose strongest available means is military power: he uses it to achieve short-term objectives, knowing that its use is counter-productive in the longer term.
But producing more enemies than you can kill is not a strategy that works forever. The Union is recovering from a devastating economic crisis and can now afford to take a fresh look at its foreign policy priorities. I’ll be with the President when he calls tonight for completion of the big new trade and investment agreement with Europe (TTIP) and its counterpart in the Pacific (TTP). These are good things that can find support on both sides of the aisle, among Democrats and Republicans.
I’ll groan when he calls for a new Authorization to Use Military Force (AUMF) but says little or nothing about building the kind of states in the Greater Middle East that are needed to immunize the region against extremism. Support for restoration of autocracy in Egypt and for Gulf monarchies is not a policy that will counter extremism. We are guaranteeing that things are going to get worse before they get better.
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Ramifications
The United States is to establish diplomatic relations with Cuba. Stronger than expected economic and job growth. American companies repatriating. Russia cancels natural gas pipeline. Pro-Russian separatist push in Ukraine stalls. Iran declares its commitment to reaching a nuclear agreement. Baghdad reaches oil export and revenue agreement with Erbil
Today’s headlines may seem disconnected, but there are two common threads: oil and money, which themselves are tightly wound together.
Little explanation is needed. The Cuban regime is on its last economic legs. It needs an opening to the US to survive. Its massive subsidies from Venezuela are coming to an end, because Caracas is one of the countries most forcefully hit by the decline in oil prices. The economic upturn in the US, and return of US companies from abroad, is at least partly due to more cash in consumers’ pockets, due to lower prices at the pump, and readier availability of energy resources. Russia’s South Stream pipeline fell victim to the combination of sanctions and lower natural gas prices. Russian support for the separatists in eastern Ukraine is falling short in part because the Russian economy is in an oil-price-induced nose dive, along with the ruble. Iran needs a nuclear agreement more than it did a few months ago in order to get sanctions relief that will help it deal with lower oil prices. Both Erbil and Baghdad needed an agreement, not only because of the ISIS threat but also because of lower oil prices, which pinch their finances as much as ISIS’s.
It would be nice to hear some other good news: reduced Russian and Iranian support for Syria’s President Assad, a pickup in China’s economy, and an end to recession in Europe are all within the realm of the possible. May this icy account of an official Iranian visit to Assad is a harbinger.
There is of course a price to pay for the benefits of lower energy prices. US oil and gas production, which had been climbing rapidly at $100/barrel, will slow down at $50/barrel. Oil company stocks are down. The stock market is jittery. Kim Jong Un, his economic woes relieved, is emboldened and less vulnerable.
The balance for America’s foreign policy is however positive. It is also likely to be long-lasting. American oil and gas production may stop climbing so fast, or even fall, laying the foundation for another price rise in the future. But the new technologies that enable exploitation of “tight” oil and gas are viable at anything above $80/barrel, and likely at prices a bit lower. Nor is the US the only country in which these technologies can be used. China, the UK, Poland and many others also have “tight” oil and gas. Once they start producing it, $80/barrel or so will become a ceiling for oil prices, a level that will require serious fiscal discipline in many oil-producing countries, both friend and foe. Russia, Venezuela and Iran have all been budgeting at $100/barrel or more.
The demand side also has an impact on foreign policy. While supply has been booming in the Western Hemisphere, demand is booming in the East, especially China and India. Middle Eastern oil that used to get shipped to Europe and the US will now go to Asia. That is already true for 50% of the oil coming through the strait of Hormuz. The percentage is headed up to 90% within the next decade. US diplomats are busily reassuring Gulf oil producers that Washington is fully committed to maintaining its close relations with them, but it is hard to believe we are that dumb (or that they are).
Rapidly declining oil imports from the Gulf will eventually make the Americans reevaluate. If and when the Iranian nuclear issue is resolved, Washington will want to renew the effort to move its diplomatic and military attention even more definitively to the East, where its economic and commercial focus already lies. China and India will have to pick up more of the burden for energy security, by holding larger oil stocks (neither keeps the 90 days that International Energy Agency members commit to) and naval patrolling. The US should be welcoming them with open arms into a multilateral effort to protect Hormuz. A few extra burdens of this sort would also encourage New Delhi and Beijing to restrain their oil demand and contribute more to limiting global warming.
The ramifications of lower oil prices are profound. We would do well to start thinking hard about them and acting accordingly.
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The troubles we see
This year’s Council on Foreign Relations Preventive Priorities Survey was published this morning. It annually surveys the globe for a total of 30 Tier 1, 2 and 3 priorities for the United States. Tier 1s have a high or moderate impact on US interests or a high or moderate likelihood (above 50-50). Tier 2s can have low likelihood but high impact on US interests, moderate (50-50) likelihood and moderate impact on US interests, or high likelihood and low impact on US interests. Tier 3s are all the rest. Data is crowdsourced from a gaggle of experts, including me.
We aren’t going to be telling you anything you don’t know this year, but the exercise is still instructive. The two new Tier 1 contingencies are Russian intervention in Ukraine and heightened tensions in Israel/Palestine. A new Tier 2 priority is Kurdish violence within Turkey. I don’t believe I voted for that one. Ebola made it only to Tier 3, as did political unrest in China and possible succession problems in Thailand. I had Ebola higher than that.
Not surprisingly, the top slot (high likelihood and high impact) goes to ISIS. Military confrontation in the South China Sea moved up to Tier 1. Internal instability in Pakistan moved down, as did political instability in Jordan. Six issues fell off the list: conflict in Somalia, a China/India clash, Mali, Democratic Republic of the Congo Bangladesh and conflict between Sudan and South Sudan.
Remaining in Tier 1 are a mass casualty attack on the US homeland (hard to remove that one), a serious cyberattack (that’s likely to be perennial too), a North Korea crisis, and an Israeli attack on Iran. Syria and Afghanistan remain in Tier 2 (I think I had Syria higher than that).
The Greater Middle East looms large in this list. Tier 2 is all Greater Middle East, including Libya, Egypt, Jordan, Lebanon, Pakistan, Turkey and Yemen (in addition to Tier 1 priorities Israel/Iran, Syria, Afghanistan and Palestine). That makes 11 out of 30, all in the top two tiers. Saudi monarchy succession is not even mentioned. Nor is Bahrain.
Sub-Saharan Africa makes it only into Tier 3. Latin America and much of Southeast Asia escape mention.
There is a question in my mind whether the exclusively country-by-country approach of this survey makes sense. It is true of course that problems in the Middle East vary from country to country, but there are also some common threads: Islamic extremism, weak and fragile states, exclusionary governance, demographic challenges and economic failure. From a policy response perspective, it may make more sense to focus on those than to try to define “contingencies” country by country. If you really wanted to prevent some of these things from happening, you would surely have to broaden the focus beyond national borders. Russian expansionism into Russian-speaking territories on its periphery might be another more thematic way of defining contingencies.
One of the key factors in foreign policy is entirely missing from this list: domestic American politics and the difficulties it creates for a concerted posture in international affairs. Just to offer a couple of examples: failure to continue to pay Afghanistan’s security sector bills, Congressional passage of new Iran sanctions before the P5+1 negotiations are completed, or a decision by President Obama to abandon entirely support for the Syrian opposition. The survey ignores American “agency” in determining whether contingencies happen, or not. That isn’t the world I live in.
For my Balkans readers: no, you are not on the list, and you haven’t been for a long time so far as I can tell. In fact, it is hard to picture how any contingency today in the Balkans could make it even to Tier 3. That’s the good news. But it also means you should not be looking to Washington for solutions to your problems. Brussels and your own capitals are the places to start.
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Geopolitics of lower energy prices
Oil prices are down by about 20% from their recent peak (or 15% from their three-year plateau around $100 per barrel) and likely to stay low for months if not years. Downward pressure will continue unless the Saudis are prepared to rein in their production (no sign of that yet) or prices decline enough (to $70 or less) to turn off the flow of tight oil and gas in the US, which has become a major factor on world markets.
There is a lot of benefit to be seen from lower oil prices. From the US perspective, cutting revenue flow to the governments of Russia, Iran and Venezuela is a big plus. Putin, who is already feeling substantial pressure from European Union and US sanctions, faces serious financial difficulties. Iran, likewise hurt by sanctions, will find it difficult to generate anything like the revenue it needs to fund economic recovery, even if sanctions are lifted. Venezuela was already headed towards a financial crisis. Its budget is almost entirely dependent on oil revenue.
Major oil and gas producers in the Gulf will be hit as well. Saudi Arabia, the United Arab Emirates , Kuwait and Qatar as well as Iraq will feel the pinch. They are far more likely to cut their spending on various international causes than risk austerity at home. That could mean scarcer resources for the restored military autocracy in Egypt, Yemen’s besieged government and Syria’s opposition. It could also mean less revenue for Islamist extremists of various stripes, including the Islamic State in Iraq and Syria, for which oil sales are a significant portion of revenue.
Lower oil prices will also give a boost to global economic growth, particularly in the US and Europe but also in China and India. The Economist worries that the lower prices may be due to slack economic growth and that lower prices will do little for consumers, but then it gives ample evidence that the lower prices are in fact due to higher production. If past patterns hold, global economic growth could gain by a significant 1% over current 3.3% predictions for 2015.
What has happened in the past couple of weeks is part of a broader secular trend that will have profound impacts on geopolitics and economics for a long time to come. Production of oil and gas is rising sharply in the Western Hemisphere, especially in the US, Canada and Brazil. Demand is rising principally in the East, where economic growth is strong, the economies are still heavily dependent on energy, and energy resources are scarce. This trend has implications for future security risks and burden sharing: it will not make much sense for the US to carry most of the burden of ensuring the security of the strait of Hormuz when 90% or more of the oil shipped through this classic “choke point” is going to India, China and other Asian consumers.
Asian consumers should be stocking 90 days of imports, as members of the International Energy Agency are required to do. They should also be providing some of the naval assets to protect the strait of Hormuz. That will require a major rethink on the part of the US, as well as creation of a multinational force that the Asians can feel comfortable joining.
There are calls in Congress to curtail the Strategic Petroleum Reserve, which is slated for use in an oil supply disruption. That would be an unwise move, as a major disruption of oil markets anywhere means a hike in prices everywhere. The US may be much less dependent on the Middle East in the future, but it will still be vulnerable to the economic damage of an oil supply interruption.
We have tended to view the rise of Asia as a challenge. But of course it is also an opportunity. The US will soon be the world’s largest oil and gas producer. If the Washington can continue to moderate American demand and in addition decides to allow oil and gas exports, the assumption of its declining influence could soon be proven, once again, a mirage.
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