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MENA region - Assessing the political and commercial risk

Global Arab Network - The Middle East Association

Tuesday, 06 April 2010 09:22

The start of 2010 and a new decade found the MENA region facing challenges both old and new. These will require solutions equal to the ever-more complex balancing of interests at stake. Claire Spencer reports

For many in the region, the first half of 2009 represented a waiting game to see what changes the new Obama administration would bring about in US regional policy. Notwithstanding the change in presidential tone, captured in Barack Obama’s well-circulated Cairo speech of June 2009, very little of substance subsequently emerged to demonstrate how, or indeed whether, the US could help the Middle East and North Africa (MENA) region face up to its varied tensions and conflicts.

The real problem is that the MENA region is far from static. On the immediate horizon is the unresolved fate of Gaza a year after the Israeli invasion. Related to this are the regional and international ramifications of where Iran ‘goes next’, not only in terms of its nuclear and regional strategy, but also its internal stability following the disputed elections of June 2009. Finally, the fate of Iraq is far from resolved for its different factions or its immediate neighbours. In all of these spheres, the US is still deemed to be a key actor, with regional actors reacting according to whether or not they wish to see US influence in the region prevail.

More complex for the MENA states to resolve are the internal challenges looming large on their respective domestic horizons. The prospect of generational change is facing a number of MENA states simultaneously, with a series of potential succession issues over the next few years. Attempts to secure dynastic successions in one or more of them may provoke local resistance and instability.

In the business communities of the Gulf and beyond, the issue of corporate management is coming to the fore in the wake of the global slump that has exposed the inadequacy of informal business practices. Many of these establishments are reaching a size where they need to raise funds on capital markets. The personalised and family-based nature of many business relationships in the Gulf, in particular, will come under pressure to formalise the way they do business, opening the way for a new generation of business leaders to take the helm.
Many MENA governments may, therefore, be preoccupied with domestic issues at a time when regional dynamics need greater attention. While the international community and Israel itself have been exercised over the UN-commissioned Goldstone Report, which called for all alleged war crimes to be investigated, Egypt’s interdiction of smuggled supplies reaching the besieged inhabitants of Gaza, via the Rafa tunnel network, has not gone down well with Arab popular opinion. It has also complicated its attempts to broker peace between Hamas and Fatah. However, developments on the ground are now in danger of overtaking such initiatives.

In Jerusalem’s Old City, for example, Israeli settler groups have prised yet more land and property out of Palestinian hands, provoking renewed local protests and riots over access to and control of the city’s holy sites. Given the Obama administration’s ill fated attempt, in early 2009, to tackle the wider issue of halting Israeli West Bank settlement-building as a way to move negotiations forward, the very notion of negotiations in 2010 may prove to be out of synch with fast-moving events on the ground. President Obama’s Special Envoy to the Middle East, George Mitchell, and National Security Advisor James Jones were both back on the European and regional consultation circuit in early 2010, with Mitchell hinting that ‘fast-track’ results based on previously mapped-out agreements could be envisaged within two years. The problem is that we have heard all this before.

Speculation about how soon and under what circumstances Iran would, or could, become a weaponised nuclear state was also back centre stage by late 2009, with an added twist: the aftermath of the widely contested Iranian general and presidential election results of June 2009 now complicates the whole equation. Direct negotiation with the Ahmedinejad presidency was the Obama team’s approach up to December 2009. By early 2010, behind-the-scenes talk had reverted to whether and/or when Israel might launch airstrikes against Iran’s nuclear facilities. The US and EU have preferred to push for a new set of UN Security Council ‘smart sanctions’ – to mitigate the impact on Ahmedinejad’s opponents – but they have received tepid support from Russia and China.

As ever, the ramifications of these stalemates are far from being confined to Iran’s international standing or its immediate neighbourhood. The Gulf States, having perhaps unrealistically put their faith in Obama’s diplomacy, now face the prospect of nuclear breakout, deterrence and retaliation extending to Pakistan and Afghanistan.

In Lebanon, where successful elections were held in June, protracted political infighting over the composition of the new government effectively strengthened the hand of Hizbollah, Iran’s close Shi’ia ally, which is reported to be preparing for another round of hostilities with Israel should the latter attack Iran.

Iraq is now looking less stable than when the staged withdrawal of US combat forces by July 2010 and military advisers by December 2011 was announced in early 2009. Following a series of large-scale bomb attacks in central Baghdad in the autumn of 2009, and raised tensions over the barring of (largely Sunni) candidates from the March 2010 elections, Iran is closely monitoring how its Iraqi Shi’ia allies manage their continuing dominance of state institutions and resources. Central to this is how (and if) Iraqi Arabs and Kurds resolve the share-out of oil revenues.

Yemen has emerged as a new theatre of instability, following the eruption of the Houthi rebellion in the north and the revival of the secessionist movement in the south. For the first time, in late 2009, Saudi Arabian security forces crossed into Yemen to contain the overspill effects of the Houthi conflict. At the end of the summer, they failed to prevent an al-Qaeda affiliated suicide-bomber getting close to assassinating the son of the Saudi Interior Minister. Al-Qaeda’s penetration of Yemen may be limited but as the failed Christmas Day bombing in Detroit illustrated, the perceived threat posed to the US and its Gulf allies cannot be measured in the numbers of adherents alone.

The actor to watch in 2010 may well be Turkey. Following a marked deterioration in relations with Israel over its invasion of Gaza, Turkey appears embarked on a largely commercially-driven set of realignments in which Russia, as an actor keen to exert influence in MENA and Central Asian energy markets and a strategic trading partner, is a key element. Unlike the zero-sum games engaged in by the Arab states, Syria excepted, in countering Iran – with whom Turkey has improving relations – the strategy appears to be to maximise regional leverage, including with the EU over Turkey’s unresolved membership. Its ability to make this strategy work hinges on energy politics and the current and projected routes of gas pipelines through Turkey.

The changing dynamics of regional energy markets could well be reshaping the region’s political balance in unforeseen ways. If Turkey succeeds, others may follow. Add to this the fresh thinking a new generation of younger leaders will bring to the table over the next few years and the MENA region could well witness some fundamental shifts in direction. But it is unlikely to be a smooth journey.

Global Arab Network

Dr Claire Spencer is head of the Middle East and North Africa Programme, Chatham House.
This article is published in partnership with the Middle East Association and produced by Newsdesk Media

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Last Updated on Tuesday, 06 April 2010 09:30

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