Mr. Zanoyan is the president and chief executive officer of PFC Energy, a strategic advisory firm in global energy, based in Washington. The following study was written by Mr. Zanoyan on commission from the Kuwait Center for Strategic and Future Studies (CSFS). The ideas and opinions expressed in this study do not necessarily represent the views of CSFS, its Board of Trustees or Kuwait University.
It has become common knowledge that, after September 11, the geopolitical landscape changed to the detriment of the Gulf region in general and of Saudi Arabia in particular. However, the depth of the implications of this reality for the future of the Middle East region has not been properly understood. The region is going through a critical period in its history, in which the decisions, policies and events of today will set a course that will determine the fate of the people of the region for at least several generations. What makes the situation even more serious is that it is not the region itself that is driving this process.
A year after September 11, the conventional wisdom in the United States is that Osama bin Laden is not an isolated phenomenon, but represents a fundamental failing of the Arab system. The internal responsibilities and challenges of Saudi Arabia have come under sharp focus, with the overall perception being that the status quo is too weak and vulnerable to cope with the threat of terrorism. This perception is constantly reinforced by what Washington justifiably views as a weak, ambiguous, unconvincing and delayed official reaction to September 11 from the Arab Middle East in general and Saudi Arabia in particular. This, in part, is responsible for the deterioration in U.S. Saudi relations.
In the perception of the American public, the “downgrading” of Saudi Arabia by U.S. officials and media has been extended to the Gulf region in general. The significant differences among the GCC states often get lost as irrelevant details.
At the most senior levels of the U.S. administration, the strategic value of the relationship with the Gulf and some of the nuances of U.S. relations with various Gulf states continue to be recognized. Nevertheless, in the absence of active and credible regional efforts to bolster this perception, a vacuum has been created that has allowed the ultra-radical elements within the conservative intelligentsia in Washington to gain sway and promote both perceptions and policy initiatives that can have more potential impact on the future of the region than any external interference in the post-war period. The agenda of this newly empowered radicalism will be discussed in more detail below.
Parallel with the downgrading of the Gulf region, the relative bargaining power of the main political and economic competitors of the Arab Gulf have increased.Israel, Russia and Turkey have emerged as “winners” in the post-9/11 world. Other countries of the FSU, Pakistan and India have the potential to emerge as well. Iran is in a highly uncertain situation, with a host of domestic tensions complicating an increasingly hostile environment in its immediate neighborhood.
HOW IS THIS CHALLENGE DIFFERENT?
The Gulf has weathered many political and military storms in the past. It has dealt with Arab nationalism, four Arab-Israeli wars, the Iranian Revolution, the Iran-Iraq War, Iraq’s invasion and occupation of Kuwait and the subsequent Gulf War, just to name a few. At the same time, the region has gone through a formidable socioeconomic transformation and managed wide swings in its financial position. What is different this time? There are several critical differences that make it imperative to adopt bold new policies.
- This is the first time in recent history that Saudi Arabia’s role (and the region in general) as the most important strategic supplier of oil is being questioned by U.S. policy makers. Even in 1973, when the kingdom used the “oil weapon,” unleashing a series of countermeasures from the industrialized world, this role was not questioned. The world’s reaction then was defensive. Today, even without there being any direct threat to oil supplies, it is offensive.
- This is the first time in the post-Cold War period that U.S.-Saudi and U.S.-Gulf relations have come under severe strain. The absence of the Cold War gives this encounter an entirely different strategic significance. The United States has no geopolitical counterpart. Russia is not a direct competitor for regional influence; rather, it is open for business and poised to cash in. The fact that all major powers are willing and able to deal with the United States rather than oppose it in principle makes this situation unique.
- The domestic challenges in individual countries of the region, although not necessarily new in substance, are new in degree: demographics, structural economic weaknesses, the absence of key economic drivers for growth and employment, the burdensome size of the ruling families, a weak private sector, and the need to carefully balance the demands of conservatism with those of the twenty-first century.
- The critical derailment of the Palestinian-Israeli peace process and the subsequent escalation of violence, and, since September 11, the new boldness of the Israeli government in conducting military operations into the West Bank and Gaza have elevated the sense of helplessness and frustration in the Arab world to new heights.
- At no other time in recent history have the region’s internal weaknesses come under such widespread and public scrutiny. The world is more open than ever before, and issues are aired more frequently and widely than ever before. This, at the very least, adds a measure of urgency and takes away the luxury of time that regional policy makers have enjoyed in the past.
- Finally, the emergence of an ultraconservative militant agenda in the United States gives all of the above concrete significance. The weaknesses of the region can be (and are being) exploited to the fullest to promote a bold new vision, where the current status quo has no relevance and is dispensable.
THE NEWLY EMPOWERED RADICALISM IN AMERICA
September 11 achieved what the controversial election of President George W. Bush alone could not achieve in the United States. It empowered a group of conservative thinkers and, given the context of the war on terrorism, lent a credibility to some of their ideas that would not have been acceptable to the American public before September 11. The most vocal and visible advocates of the new radicalism in the United States come from what is generally known as the “neoconservatives.” These include a group of former Democrats who broke with their party in the 1970s and 1980s because they believed that the United States should pursue a more hard-line policy toward the Soviet Union. After the end of the Cold War, these “neocons” turned into a vocal activist group on foreign-policy issues. They saw an opportunity to establish the United States, with its superior military and technological prowess, as the sole superpower. September 11 gave them the opportunity to act on their convictions, even though it also created different trends within what can generally be described as a neoconservative agenda, and gave them the means to engage and widen their support base in the United States.
When it comes to the Middle East, some of the most extreme and prominent neocons are passionately pro-Israel. As important, they are ardent supporters of a muscular and hard-line Israel. They are also influential voices within the Bush administration, particularly within the defense establishment. In addition, members of the Jewish Institute for National Security Affairs (JINSA), an organization founded more than 25 years ago, which acquired new significance and influence over the post-September 11 policy debate, work very closely with their neoconservative counterparts in the administration. The Christian Right, whose views on the Middle East have always been in tune with these extreme groups, became an added force in the post-9/11 environment.
The ideas and policies promoted by the most hard-line neocons are these:
- Israel is the only democracy in the Middle East and the only trusted strategic ally of the United States in the region. American and Israeli interests are identical, and it is in the U.S. interest to invest as much political, military and financial capital as necessary to defend and strengthen Israel. In this context, it is time for Washington to stop taking into consideration (and being bogged down by) Arab sensitivities regarding the Palestinian question.
- The United States should not shy away from exercising power unilaterally and should maintain its enormous military superiority. Strategic alliances should be cultivated only with similar-minded systems and cultures. In this context, the old “special relationship” with Saudi Arabia becomes largely irrelevant and should be reassessed.
- The United States should pursue a pro-active foreign policy and encourage regime change in countries that pose a potential threat to either the United States or Israel. In this, the United States will not tolerate any ambiguity in positions. Those who are not part of the solution are part of the problem.
These views would probably have remained within a small circle of super hawkish neoconservatives had it not been for September 11. But the active participation of this group in the formulation of George Bush’s response to the events of September 11 helped incorporate these ideas into the campaign against terrorism. Many members of the Bush administration, including some at very high levels, have become sympathetic and supportive of these views, even though the agenda has not been formally adopted as government policy.
It is in this context that the debate over military action against Iraq and the souring of relations between the United States and Saudi Arabia should be examined. The super-hawks have a bold new vision for the Middle East in which old taboos are broken and old priorities discarded. Only democracies at peace with Israel have a legitimate place in that vision – a condition that no country in the region meets today. The protection of stable and moderate regimes such as those in the GCC, which is a central part of U.S. foreign policy in the region, has been replaced by the belief that regime change even in Saudi Arabia may in fact serve long-term U.S. interests. This is a very far cry from the main premises of U.S. foreign policy in the Gulf before 9/11.
The articulation of this vision, both during internal policy debates and for public consumption, often gets coated in idealistic rhetoric: The United States invades in order to “liberate” countries, not “occupy” them; the United States leads the world into a freer, more democratic, more peaceful place; the United States has a responsibility to defend its citizens from “evil.” This approach, mixed with the solidarity that the state of war on terrorism inspires and, perhaps most important, reinforced by the very weak reaction of the Arab world to September 11, has increased the circle of supporters of the neoconservative agenda. Thus, even though this vision is not formally adopted as administration policy, it has found resonance and acceptance at the highest levels of the administration and with the American public.
There are important areas of overlap between the objectives of the administration and those of the neocons. Regime change in Iraq and the war on terrorism are two examples. But there are also some very significant differences. The neocons would take such common objectives much further than the administration. For the administration, regime change in Iraq aims mainly at eliminating Iraq’s weapons of mass destruction and putting an end to Baghdad’s harboring of terrorists. For the neocons, the objectives are much broader (see below under Regime Change in Iraq). For the administration, the war on terrorism aims at destroying threats to U.S. security and interests. For the neocons, it has become a justification as well as the vehicle to reshape political realities in the Middle East. What Arab leaders need to understand is that their continued complacency will help bring more elements of the neocon agenda closer to being accepted by the administration.
The variations within the neoconservative camp do not challenge the fundamental premises of the vision. They only involve tactics and means, some “moderates” arguing for more caution and for a larger coalition, while pursuing the same objectives. One needs to go beyond the various shades of neoconservative opinion to find a substantive difference in priorities and concepts of the national interest. (Although there are credible voices that far out, they do not have much influence on the administration’s policies.)
The objective of forcibly replacing the current regime in Iraq with a pro-Western one is a cornerstone of this vision. It is seen as critical not just for eliminating the direct threats posed by Saddam Hussein, but also for unleashing a series of desired responses in the rest of the region. The second important prerequisite for the neocon vision is less reliance on the Gulf region’s strategic role.
Undermining the Strategic Role of the Gulf Region
The erosion of the geopolitical importance of the Gulf started with a campaign aimed at undermining its role as the world’s only strategic oil supplier (the supplier of last resort, with ample excess capacity).
Although September 11 did not change the below-ground realities of oil reserves, it did change above-ground perceptions enough to challenge the region’s continued role as a strategic supplier of crude oil. This change is characterized by two distinct sets of issues: (1) Mounting concern that the region is too unstable to remain a reliable supplier; and (2) the nature of the alternatives to the Gulf that have come under focus.
Both sets of issues have been deliberately and methodically promoted by the media and by some policy-research institutes. The first has attracted international attention. The main message is simple: The special relationship between Saudi Arabia and the United States is in question because Saudi Arabia, through its antiquated and anti-West education system and dependence on religious extremism, bred the September 11 terrorists and has been in denial about their identity. The system is weak and corrupt, making Saudi Arabia unreliable as an ally in the fight against terrorism and therefore perhaps unreliable as an ally in energy security, regardless of the record of the past 25 years. Saudi Arabia and the GCC have failed to implement key economic reforms in the past ten years, exacerbating already severe unemployment problems. Thus, they are likely to become failed states anyway, through their own internal dynamics. Furthermore, the Wahhabi ideology that gives legitimacy to the kingdom stands opposed to the very values on which Western civilization is based, and no alliance can survive the absence of shared values. Finally, the super-hawks would argue that it has been the United States that has protected the oil reserves of the countries of the region from external threats, which means the “reliability” of U.S. allies in the Gulf as oil suppliers has been conditional and tentative in the first place.The second set of issues is less publicized, but equally important. Two sources of competition (“alternatives”) that would weaken the Kingdom’s hold on the role of strategic supplier have been promoted. Russia and its newly privatized oil companies, and Iraq. In order to give credence to this argument, the potential of Russia as a strategic supplier of crude oil has been blown out of proportion. The rapid increase in the output of the top Russian oil companies in the past couple of years was used as an indicator of further vast potential, and the U.S. government began to show uncharacteristic willingness to help the Russian oil companies increase their production. These companies have made major strides in improving their image in the United States – TNK is the first Russian company to join the U.S. Chamber of Commerce, and both TNK and Yukos spend substantial amounts of money for information gathering and lobbying in Washington. In fact, the information-gathering and lobbying capabilities of these private Russian companies in the United States are more significant than those of the governments of the Gulf.
The fact is that, while Russia has proved to be a formidable competitor to the Gulf producers and to OPEC in general on commercial grounds, it cannot replace the Gulf as a strategic supplier of crude oil. It would be next to impossible for the privatized Russian companies to maintain large amounts of spare production capacity or to play the role of swing producer. Without these features, Russia will remain a producer and exporter of commercial significance, but not of real strategic importance.
Iraq is a different matter.
REGIME CHANGE IN IRAQ
A regime change in Iraq is central to the neoconservative vision of the Middle East on more than one front. The aim would be not only to topple Saddam Hussein, but also to oversee the establishment of a pro-Western government in Baghdad. This would serve several purposes. First and most important, a regime change in Baghdad is seen as the only sure way of getting rid of all weapons of mass destruction in Iraq and guaranteeing that all programs for developing such weapons are abandoned.
Second, regime change in Iraq is seen as part of the war on terrorism because of Baghdad’s practice of harboring terrorists and its alleged links to al-Qaeda. While these considerations matter for the administration, for the super-hawkish neoconservatives it is less important whether Iraq had any direct links to al-Qaeda or to the events of September 11, other than the value that such a link would have in strengthening the case for military action against Iraq. A potential Iraqi threat to Israel is seen as sufficient justification to commit the United States to a unilateral military engagement with Iraq, although even the most committed neocons would face difficulty convincing the administration and the American public to attack Iraq on that basis alone.
Third, the defeat of the current Iraqi regime and its replacement with a pro-Western government is expected to “demoralize” and “de-radicalize” the Arab street, reducing the will of the Palestinians to fight occupation and forcing them to the negotiating table with Israel. While most Arab observers would dismiss this argument as pure wishful thinking, the fact remains that regime change in Iraq as a force for regional change has become generally accepted among the neocons within the administration.
Fourth, a “rehabilitated” Iraq would constitute the only truly credible competitor to Saudi Arabia as a strategic supplier of crude oil. An Iraq with huge reconstruction requirements, where Western investment can flow in both the oil sector and the general economy, would want to increase its production capacity very rapidly. This would not only weaken Saudi Arabia’s position in the global oil markets, but also depress the economies of Iran and Libya. Thus, as long as Iraq’s oil production and pricing policies remain “pro-West,” this would achieve multiple neocon objectives.
Fifth, a forced regime change in Iraq is seen as a prerequisite for similar changes or quick reforms in other “rogue” states.
The current Iraqi regime enjoys an almost mythical position as the symbol of all rogue states and the will that sustains all opposition to the United States and Israel. Thus, its destruction is viewed as a necessary precursor to victory on other fronts.
Finally, the use of force to cause regime change in Iraq will cement other alliances in the region, especially among the United States, Israel and Turkey. Also, it will convince both the domestic skeptics and potential foreign rivals like China that the United States can in fact play the role of sole superpower, and that it will not allow any other power to challenge its supremacy.
MOUNTING INFLUENCE OF COMPETITORS TO THE GULF
The major geopolitical “winners” in the post-9/11 world are Israel, Russia and Turkey. These three were the most successful in cashing in on the post-9/11 U.S. anti-terrorism campaign. Russia cashed in by making the most of its position as an indispensable part of military operations in Afghanistan and by allowing U.S. use of military bases in Uzbekistan. Turkey, a somewhat more passive winner compared to Israel and Russia, cashed in by becoming part of the military campaign in Afghanistan and by playing a critical role in any future campaign against Iraq.
Israel, which suffered a credibility blow in the early weeks after September 11, recovered very fast – helped by the PNA’s failure to contain violent attacks against Israeli civilians – and is now perceived as a partner in the fight against terrorism. Each of these countries has agendas other than fighting terrorism as defined by Washington. And each has managed to integrate various elements of its own agenda into its contribution to the war on terrorism.
As important is the close alliance among these countries, their strategic doctrines and their connection to the neocon agenda. The Turkish-Israeli alliance started in 1996 and flourished rapidly. It has evolved to include every aspect of the bilateral relations, including cooperation in the military, security, economic and energy areas. The Israeli lobby in the United States promotes Turkish interests, and the neocons have supported the strengthening of Israeli-Turkish ties from the start. Israeli-Russian “cooperation” covers two basic areas: capital markets and energy. Israel has penetrated these two sectors of the Russian economy.
Just as in the case of Israeli-Turkish cooperation, the Israeli-Russian alliance plays out in the American political arena through the neocons and the Israeli lobby. The promotion of Russian oil as a viable alternative to that of the Middle East and the high visibility enjoyed by the newly privatized Russian oil companies in Washington owe much to this connection.
Finally, Russian-Turkish “cooperation” essentially covers the energy sector. Russia aims to become the main gas supplier to the Turkish market, and Russian companies are looking at potential investments in the Turkish downstream sector and domestic market – in exchange for participating in and supporting export routes that bring Caspian oil to Turkey and to Western markets via Turkey.
In the current geopolitical environment, the potential role of other important players has been reduced and in some cases even marginalized. Most European countries, although verbally critical of American unilateralism, find themselves either unable or unwilling to oppose U.S. initiatives in any significant way. Even the most vocal critics of U.S. policies in Europe are at a loss for specific countermeasures. European allies can have an impact on U.S. Middle East policy only if they have a concrete alternative to offer or if Washington recognizes the need for multilateral action and tries to form a viable coalition. The super-hawk approach makes the latter unnecessary and thus eliminates any meaningful role for a moderating European influence.
The question remains as to the degree to which the United States should have the active support of its allies before embarking on another military offensive in the Middle East. In short, before Europe can have any meaningful impact on U.S. foreign policy in the Middle East, the neocons need to lose the domestic political battles over (a) a unilateral versus a multilateral approach to military operations; (b) the advisability of pre-emptive strikes versus the fight against direct and proven threats. Until and unless these debates are settled within the U.S. political process, European countries will remain passive observers of American political and military initiatives.
Beyond Europe, neither Japan nor China is in a position to act directly against American initiatives. Pakistan will most probably cooperate rather than oppose U.S. moves. And India, which is now positioning itself to be a U.S. ally, will support the United States when it comes to political and military issues in the Middle East. These countries, as well as Europe, will have important economic and commercial roles to play in the region. While they will fight hard to protect their commercial interests, they do not have the necessary muscle to confront a determined and unilateralist United States.
Across the Gulf, Iran faces many serious internal challenges, both in the power struggle between conservative and reformist factions and in terms of mounting economic pressures. The political stalemate at the very top has prevented any material progress in economic reform and has led to popular resentment. Externally, Iran finds itself surrounded by what it considers new American satellite states – Afghanistan, Musharraf’s Pakistan, India, Uzbekistan. At the same time, a much stronger Russia and Turkey have become as much a part of Iran’s direct post-9/11 geopolitical landscape as that of the Arab Gulf. Finally, Israeli and anti-Iran U.S. pressure has been mounting to target Hezbollah and Iran as part of the antiterrorism campaign. This combination of internal pressures and real or perceived external threats does not bode well for Iran’s likely next moves. It may lead to a further radicalization of Iran, undermining President Khatami’s reform efforts and, ironically, reinforcing and assisting the super-hawkish neocons’ positions and policies.
In the absence of constructive and proactive measures taken in the region, the stage seems to be set for non-Arab, non-Iranian interests to shape the future of the Middle East. The Israeli-Turkish alliance, with the backing of the neocon agenda and vision, may have a profound influence on the future of the region.
WHAT’S AT RISK?
It is impossible to predict the exact course of events in the Middle East, but it would not be an exaggeration to say that the potential exists for fundamental change in the status quo, with a drastic shift in the balance of power and possibly even the map of the Middle East. It would not be farfetched to foresee a partitioned Iraq, with the northern part of the country occupied by Turkey and the rest divided and in constant turmoil. This would open an entirely new “Arab-non-Arab” front, possibly as controversial and sensitive as the Arab-Israeli front has been for the last 54 years. It would present a more direct and imminent source of destabilization for the Gulf states, in addition to creating enormous new distractions for Iran and Syria. Nor would it be farfetched to foresee an expanded Israel that, amid the regional and international distraction of the war on Iraq, has effectively annexed the West Bank and forced a major new exodus of Palestinian refugees into Jordan and other Arab countries. In this environment, one could easily project a highly radicalized and frustrated Arab street, which would be impossible to contain by traditional methods. The “moderate” Gulf governments, even if they survived the initial backlash, would not be in a position to openly display any pro-Western policies, and might be forced to resort to the “oil weapon,” knowing very well that this time around such a move might invite further aggression and military intervention in the region.
Less extreme scenarios do not provide grounds for optimism about the future stability and prosperity of the region. The fundamental fact remains that, while the last Gulf war was fought to defend the status quo in the region, the next will be fought to destroy it. A somewhat different outcome than the one portrayed above for Iraq or Israel would still not negate the fact that the underlying motivation is the desire to create a new reality on the ground. By their own passivity, the countries most affected by this have created a dangerous vacuum and abdicated the opportunity to have a say in the process of change. To take solace in the hope that the extreme scenario might not be likely, or to assume that a less extreme scenario implies a lesser risk to the status quo, would constitute a classic case of denial.
POLICY OPTIONS AND NON-OPTIONS
The current situation came about through a combination of the passivity and complacency of the Arab world in solving its regional problems, on the one hand, and the aggressiveness and activism of Israel and the American neoconservative ideologues on the other. The latter filled a vacuum created by the former and made full use of the post-September 11 political mood. But it did not create the vacuum, nor did it cause September 11. Without fully fathoming this truth and its implications, it will be impossible to even begin formulating a constructive strategy to deal with the current situation.
The Arab Middle East suffers from the very shortcomings of which it accuses the United States: a notorious double standard (most vividly demonstrated by the capacity to tolerate home-grown causes of suffering and injustice, while being outraged when lower doses of the same are inflicted by external forces); a chronically biased media (where rarely any coverage critical of the region’s status quo appears); and a profound ignorance about the rest of the world (ignorance, combined with myths and misperceptions, especially about the United States). Although Arab criticism of the United States on these issues is largely valid, it is the region’s own shortcomings that need to be addressed most urgently.
The Gulf region is faced with some painful decisions. Most of these should have been made a long time ago but were not, in large part because the favorite strategy of the Gulf region in dealing with slow-simmering problems has been to “muddle through.” In the last 30 years, the region has been busy protecting a privileged status quo and containing domestic and regional threats, ranging from Arab nationalism to the Palestinian question to the Islamic Revolution in Iran to the military threats posed by Iraq, in addition to mounting demographic and economic problems at home. In none of these cases has real strategic, long-term consideration been given to the problem. The most common tactics have been to either buy the loyalty of various actors or to buy time and hope that problems will somehow solve themselves. While the entire region seems to be shocked over the unilateral determination of the Bush administration to cause regime change in Iraq, few have expressed shock at the Arab world’s complacency regarding the status of Iraq for the past eleven years. If this is a regional problem, why hasn’t the region addressed it? Why has this not been adequate time to organize the rehabilitation of Iraq in a way acceptable to the Arab Middle East in general and the Gulf region in particular? Muddling through has become the most logical expectation of observers and analysts; it is the strategy that no one bothers to question.
The region’s initial reaction to the events of September 11 was equally passive and complacent. It was fraught with alarmingly long delays in acknowledging the enormity of the event, and even longer delays in articulating reasonable responses. The region should have showered the United States with the most elaborate diplomatic efforts immediately upon learning the first facts about September 11, and continued to escalate those efforts until today. There should have been immediate unambiguous acknowledgement of the nationalities of those involved in the hijackings and unequivocal expressions of sympathy and offers of assistance. The absence of such a response was effectively exploited by anti-Arab interests in the United States. Even after it became evident that doing nothing was not as safe as it once might have appeared to be, the official reaction from the Gulf was too little too late, and focused largely on improving a tarnished image rather than addressing fundamental problems.
And when the authorities in the region have typically responded even to the demands of the present with a long time lag, it may seem entirely unrealistic and rude to ask them to focus on the future. But that is precisely what the current situation calls for. There is no difference between short-term and long-term measures in the current critical circumstances. Today the region is experiencing the cumulative effect of delayed and incomplete responses to a long series of what were “present” dangers in the course of the last few decades. It took 30 years of neglect and complacency to reach this predicament; there is no simple prescription that can make it all go away overnight.
The long-term is nothing but a series of short-terms, and it is important to think about a package of measures, conceived as one integrated strategy, even if implemented in stages.
Some of the steps in such an integrated strategy need to be taken immediately in order to mitigate the impact of potentially disruptive events and buy time for the longer-term reforms to take effect and produce results. The immediate steps would differ from country to country. But in none of the countries of the Gulf should such steps be assumed to be adequate policies in their own right; whatever time they manage to buy would be wasted if the entire package of measures is not adopted at the same time. All aspects of the integrated strategy should be considered equally urgent.
Establish a Position of Strength from Within
Perhaps the single most important step is to strengthen the domestic political support base of each government. This would counter the imminent threats to domestic stability. In addition, unless each government enjoys considerable popularity, confidence and security internally, it will not be in a position to initiate or even participate in bold new foreign policies. It is also important to help dispel the prevalent perception that the Gulf states are internally weak and vulnerable and therefore dependent on external protection.
At the political level, major reform in the mode of governance is required. While not necessarily taking the form of full democratization, this would entail the formal establishment of civil liberties, recognition of limits on the powers of the state, and the establishment of meaningful procedures for popular political participation. An important prerequisite to all of the above is a fundamental recognition of the need to establish a consequential dialogue– one that leads to real policy changes – about the role of religion, the relationship of each society with the international community, the objectives of development, the uses of public power, and the rights and responsibilities of citizenship.
These issues, which are at the very heart of what each Gulf society is facing today, have rarely been allowed to become part of the public debate, with very notable exceptions and even then only recently.
They simply cannot be ignored in the current environment. Each society needs to openly debate the specific implications of these issues for the way of life it chooses to have and for its future. In short, each country needs to make peace with itself by arriving at a sustainable domestic political reconciliation, and every GCC government needs to develop a new “social contract” with its own population. The model may be different in each country – Bahrain is attempting this through the constitutional-monarchy route. But it is the government’s responsibility to initiate the process, inspire confidence in it across a wide spectrum of the population, and then see it through with all the necessary policy and structural changes.
Unleashing this process carries important risks, also largely derived from the neglect of the past few decades. The suppression of the free flow of ideas in the past, the pent-up demand for change and the frustration with both regional political conditions and domestic economic conditions will combine to give a strong initial lead to those with extremist religious or anti-modernization views. Those aspiring for civil society with liberal ideals, considerable religious and cultural tolerance and modernization are not nearly as well-organized as their opponents, simply because historically they were not allowed to be. Thus, these reforms could backfire if any single group or faction, including the religious establishment, had a monopoly (or even disproportionate access) to the means of influencing public opinion or setting the agenda for public debate. An important prerequisite to these reforms is a well-informed public and adequate and multi-dimensional forums of expression. None of these have been encouraged in the past, and many have been suppressed. Lifting barriers to the free flow of information and ideas is no longer an internal political choice that governments may consider at their leisure; it is an economic and strategic imperative.
Governments need not hide the nature of the external dangers from their populations; an understanding of these dangers will help generate moderation and support. The final objective of this process should be to encourage the private-sector elite and the population at large to support the government in the many difficult choices and decisions that each country will face. Balance and objectivity need to be introduced in the coverage of especially sensitive issues, such as religion, the plight of the Palestinian people, issues surrounding the Palestinian Authority and the policies of the United States. For example, in the current environment of extreme anti-Americanism in the Arab world, there is a keen awareness of the measures taken by the U.S. authorities to prevent another terrorist act in the United States and what these measures have meant for the civil liberties of Arabs living there. There is, however, virtually no mention or recognition of all the positive measures underway in the United States to protect the rights of Arab and Muslim Americans. Both are part of the American way. Moreover, while the Arab world is keenly aware of the pronounced pro-Israeli bias of the U.S. media, where one rarely sees any coverage critical of Israel, it takes for granted that the Arab media has an equally pronounced pro-Palestinian bias, where one rarely sees any coverage critical of the Palestinian Authority. Only through honest, objective introspection will the region be able to place its current predicament in the right perspective.
The political reforms outlined above are not only important in their own right, they are prerequisites for the even more painful economic reforms that every country in the region desperately needs. One of the most important medium to long-term strategic imperatives facing the region is the need to learn to live with lower oil prices. The continued dependence on oil revenues has turned the region’s most important physical asset into its Achilles heel. Aside from creating constraints on every part of the system, the continued dependence on oil revenues provides the global oil industry with the means to compete with the Gulf producers. For example, the $20-$25 per barrel price required by every Gulf state is more than an adequate incentive for the international oil and gas companies to discover and develop new sources, ultimately threatening the region’s market share and its strategic role. If the Gulf states could live on lower than $15 per barrel oil prices, their natural endowment in oil would be a strategic asset; today, it is a strategic liability.
Learning to live with lower oil prices embodies virtually every other type of economic reform that the Gulf countries need. In order to reduce its level of dependence on oil, every Gulf state needs to address the structural problems in its economy, meet a host of private-sector challenges, eliminate many of the well-established income-distribution channels created during the 1970s and 1980s, change the culture of dependence on public spending, start creating and supporting meritocracies in both the public and private sectors, establish transparent, fair and enforceable commercial laws, cultivate and promote a culture of accountability, and, in some countries, bring the ever-growing ruling-family costs under control. These reforms require fundamental changes in the role of women in both the society and the economy throughout the Gulf, especially in Saudi Arabia. Above all, however, each government has to have the support and trust of its population, which makes the political reforms described earlier an important prerequisite to this process.
These are not easy tasks. This is the main reason the region’s dependence on oil has not declined in the last 30 years. But achieving these objectives is no longer an option; this too is a strategic imperative.
An important step in implementing both the political and economic reforms is fully engaging the private sector, one of the most underutilized assets of the Gulf region. In the last 30-40 years, the private sector in the Gulf built substantial global capabilities – vast financial resources, business relations, access to key policy makers, highly educated young managers, commercial and strategic networks. These are assets that the Gulf states could use very well in the current environment. Not only would the reforms be impossible without the full engagement of the private sector, but the short-term economic pain and dislocations implied by these reforms could be minimized by a meaningful engagement of private-sector capital and capabilities.
Be Pro-active in Addressing Regional Problems
Armed with internal reconciliation and cohesion, the Gulf could address some of its most intractable regional problems. Specifically, this would entail a pro-active effort to forge a common front on the major outstanding issues – Iraq, the Palestinian question, Islamic extremism, a multitude of lingering ethnic and sectarian problems, and organizations such as al-Qaeda. The Gulf states do not have normal relations with Iraq, a country against which the entire region went to war eleven years ago. While abiding by the U.N. Security Council Resolutions on Iraq, most GCC countries have expressed genuine concern for the suffering of its population, and some have regularly contributed humanitarian assistance. Every government in the region is keenly aware of the fact that Iraq’s current status is simply untenable. In the late 1990s, some Arab governments tried to have a more supportive policy toward Baghdad.
The question is, what is the optimal mode of rehabilitating Iraq from the GCC perspective? What type of government and political structure would represent the most realistic and constructive “neighbor” for the GCC? What specific steps can be taken to promote such a solution, first in the Middle East and later internationally? These were the right questions to ponder and act upon right after the liberation of Kuwait. If there had been a coordinated effort in this direction in the past decade, not only could the current impasse have been averted, but the eventual outcome would have been much more in line with the interests of the Gulf states. In the last decade, however, much damage has been done to the prospects of such a strategy by inaction. It may even be too late to avert an American military intervention to bring about change in Iraq. But it is not too late for the Gulf region to have a pro-active, constructive involvement in shaping the future of Iraq, even in the aftermath of an external military intervention.
The Palestinian question needs the same hands-on attention from the Gulf. Far too much reliance was put on exerting pressure on the United States to exert pressure on Israel, and not enough attention was given to what the Gulf, in cooperation with Syria, Jordan and Egypt, could do to help the Palestinian Authority get its own act together and then deal with Israeli aggression. It should be clear by now to every Arab that the United States cannot and will not rescue Palestine. But, in general – the post-September 11 mood notwithstanding – it will support positive initiatives from the region. In the past decade, the credibility of the Palestinian leadership has steadily declined in the Gulf region. Recently publicized revelations about corruption and the need for reform have been known to the Gulf leadership for well over a decade. It should have been clear that unless those problems are resolved, it would not be possible to meet the aspirations of the Palestinian people.
The message here is similar to the one for the Gulf States: get your own house in order first, in order to tackle the formidable external challenges that you face. This does not imply that the region should not use all the means available to it to influence international public opinion and bring pressure on Israel to end the occupation of Palestinian lands. It does mean, however, that such pressure would have more credibility if it were combined with parallel attempts at internal reform.
An important part of the regional agenda of the Gulf states has to remain relations with Iran. The geostrategic interests of the Arab Gulf and Iran are more aligned than ever. As described above, Iran finds itself surrounded by newly formed American satellite states and under the direct focus of an Israeli offensive campaign to make it one of the targets of the war on terrorism. At the same time, it remains deeply divided internally, with no easy end in sight for its many domestic, economic and political difficulties. It would be a grave mistake to allow the potential radicalization and isolation of Iran to spoil the improvement in Iran-Arab relations of the past several years. Although the options of the Arab countries to assist Iran with its ongoing domestic power struggle are very limited, the GCC can reassure Tehran on regional security and oil policy. Specifically, this would mean engaging Iran actively on major regional issues such as Iraq, the Levant, Afghanistan and Pakistan.
In addition, this could entail addressing some of the longstanding ethnic and sectarian problems throughout the region. In the twenty-first century, with enormous other challenges and pressures to overcome, it is self-defeating for the region to remain handicapped by outstanding political tensions between sects of Islam and various ethnicities within the Arab world.
In this respect, the economic and political reforms outlined earlier gain an added significance. Only through the creation of a common economic base will the region be able to gradually defuse the ethnic and sectarian tensions that plague it.
Admittedly, the pro-active, hands-on approach to regional foreign policy advocated above is alien to the Gulf states and goes against a very well-established tradition. But that does not make it wrong. The traditional approach has not helped resolve regional conflicts. Much worse, it has invited unwelcome intervention, has become a point of vulnerability for the Gulf, and has promoted the geopolitical and economic interests of competitors. There is a cost to not being pro-active, to not taking direct charge of one’s vital interests, and to being over-reliant on third parties for addressing regional problems. The current experience in the Gulf vividly demonstrates that cost.
The pro-active approach to foreign policy should be extended to regional economic relations as well. Just as the domestic reforms need both the economic and political dimensions to go hand in hand, so do regional relations need to evolve at both levels. But here, too, the old norms need to be cast aside. Economic cooperation should mean more than flows of financial aid from one capital to another, driven entirely by political considerations. Authorities have to start thinking beyond the micro-level and focus on macro-level strategic concerns. The ultimate economic objective has to be macroeconomic viability, competitiveness and sustainable growth – not short-term revenue needs and allocations. Financial relief caused by a sporadic increase in oil prices is not the same as an improvement in the economic health of any country or the region in general. The political economy of unearned income, which put down roots in the region in the 1970s, has long been rendered unaffordable. But here, too, the official response has generally been to muddle through, rather than make necessary, albeit painful, decisions.
Re-engage the World
Only with a stronger and more credible political base at home and clearer vision for a regional political and economic order will the Gulf states (and the Middle East in general) be ready to re-engage the world in a more comprehensive and constructive way. The ultimate objective should be to offer the region and the world a vision that rebuilds the Middle East economically and rehabilitates it politically, rather than destroying it through war. The Euro-Med initiative is a good example of cross regional economic engagement. This can be extended into the rest of the Middle East and combined with a “Marshall Plan” equivalent, initially perhaps not through the United States, but through Europe and Asia. The strategy would be to create an environment and the incentives conducive to a meaningful economic engagement with Europe, China, Japan and possibly even Russia. Ultimately, the challenge is one of reconstruction of the entire region from Morocco to Pakistan. As the past two decades have demonstrated, leaving any part of the region a festering sore – whether Lebanon or Algeria or Afghanistan – leaves the entire region open to revolution, terrorism, economic disruption and external interference.
This is not to exclude the United States; re-engaging the United States should be a key part of re-engaging the world. But this re-engagement should proceed through a much wider U.S. audience than has been attempted so far. The region needs to get its message to the American people first; only then will Washington listen. In this period of heightened interest and curiosity about the Middle East, Arabs and Muslims, the American people have heard the views of mostly anti-Arab commentators and received the answers to their questions largely from them. Given the current mood in Washington, any direct invitation of American participation in the economic rebuilding of the region would require genuine reform and openness. A constructive strategy in this case would be to fill the vacuum – create and present positive ideas of economic reconstruction and regional partnerships to replace (and better expose) the more negative views advocated by the neocons. Complaining about rising anti-Americanism in the Middle East is not sufficient to trigger change in the United States; only by constructing and articulating an alternative vision of the Middle East to the world and to the United States will the region turn the current tide in its favor. In the process, it can also help re-establish strategic alliances with Washington that will eventually be beneficial to the United States as well.
Re-engaging the world also requires some difficult choices and decisions. Most of the domestic reforms outlined earlier are prerequisites. In addition, however, the region needs to truly open up. With few exceptions and in spite of all sorts of appearances to the contrary, the Gulf region is not really open to direct foreign investment. Some of these economies are closed through laws and regulations, others through non-regulatory (procedural, bureaucratic, competitive) barriers. Opening up does not necessarily mean privatizing, nor does it necessarily mean offering equity ownership of oil and gas reserves to foreign companies. It does mean, however, that the promotion of a vibrant commercial environment where foreign companies actively seek participation becomes an explicit aim, and all rules and regulations governing foreign investment directly recognize this aim.
By remaining closed, the region only isolates itself. At a time when virtually the entire rest of the world is open, and companies have the option to go anywhere, keeping a country closed simply excludes that country from the global business traffic in capital, technology, management skills, business innovation, competitive advantages, best practices, etc. Qatar is open in its hydrocarbon sector, but relatively closed in all others. Bahrain and Dubai, which have extremely small hydrocarbon sectors, have had the incentive to be more open in other sectors. The Saudi gas initiative that started before September 11, and that suffered major setbacks recently, should be reinstated in a more workable form and freed from a host of bureaucratic and procedural bottlenecks that plagued the first round. In addition, a broader and more meaningful opening up of every country in the Gulf region should be planned and implemented, going beyond the hydrocarbon sector and covering other industries, finance and tourism.
Re-engaging the world also requires understanding it better. Every country in the region can use the current setback as an opportunity to enhance its information gathering and analytical skills. This requires monitoring and understanding the deep, underlying shifts in geopolitical and commercial interests that cause tremors at the surface. At the very least, the governments of the region should have an ongoing analytical capability in several key areas:
(a) the structural and strategic aspects of the global energy business – as opposed to the commercial and market aspects, which the appropriate authorities in each country understand; (b) the geopolitical drivers of key bilateral relationships in the region, including, but not limited to, Israel-Turkey, Russia-Israel, Russia-Turkey, Iran-Russia, Pakistan-Afghanistan; (c) the prospects and benefits of closer political and economic ties between the region and various European countries, China and Russia; (d) the United States, its political system and values.
Understanding the world better is not a requirement just for governments, but also for the populations. In the context of the political debate and broader participation advocated in this paper, it is critical that the citizenry at large be better informed about world affairs. This brings us back to two controversial issues: education and the media. There is very little of substance taught at Gulf universities about the West and about the United States in particular.
Given the impact that the United States has on the region, it would seem that every university should have at least one “American Studies” course, covering history, culture and current politics. This is the most basic first step toward getting rid of some of the ignorance that visitors to the region constantly run-up against. Understanding the United States is important regardless of whether one views it as the arch enemy, a potential strategic ally, or a country that needs to be re-engaged. The ignorance in the Arab World of what America is really about and how it functions is at least as great as the ignorance of the average American about the Middle East – but the Middle East citizen pays much more for his ignorance than the average American pays for his.
Finally, re-engaging the world requires better communication skills and a strategy for reaching a much broader audience than has been the case so far. The vast majority of commentators and public-opinion makers that the American people listen to are non-Arabs and non-Muslims, giving views to the American public on Islam, anti-Americanism in the Arab world and the threat of terrorism from militant Islam. The Arab presence is not much more impressive in the media outside the United States. European public opinion, while less influenced by the Israeli lobby or neoconservative commentators, does not receive any more direct input from the Arab side than does American public opinion.
Most of the policies recommended in this paper represent a fundamental departure from the traditional modus operandi in the Middle East in general and the Gulf region in particular. Some require that very basic sociopolitical structures be reconfigured. Most imply short-term pain. But the region is at a historic crossroads that calls for historic decisions. Drastic as some of these recommendations might appear, they are by no means out of reach. What’s at stake is for the leadership and the people of the region to have an opportunity to shape their own destiny. By far the most dangerous enemy is complacency. In the current geopolitical environment, every missed opportunity to act has direct and immediate risks associated with it. And every missed opportunity to formulate and promote a positive vision makes room for a competing vision to gain sway.