August 28, 2013

Mideast Scenarios, or "Damn, We're Good"

Patrick Marren
Partner

It's been a couple of years since our last attempt to case out the realm of the plausible with respect to the Middle East, so let me give it a new clean-slate try.

Four NEW very rough mini-scenarios of where the Middle East could end up in twenty or thirty years, followed up by a look at what we said in early 2011:

1. Autocracy rebound. Egyptian military clamps down. Assad survives. Tunisia and Libya get new dictators. Saudi Arabia spends whatever is necessary to put down Islamists. Exploding youth population chooses money over freedom. Terrorism bubbles along. Sunni Pakistan throws in with the generally Sunni autocrats to the west. Israel and Palestine maintain uneasy status quo, with intifadas and missiles every few years. Afghanistan is ruled by various warlords, but is somewhat stable. Iran remains an Islamic state, buying off the populace with oil money. This scenario would appear to depend upon a rebound in oil prices.

2. Arab Spring rolls over all. Assad is overthrown. Egypt achieves a tenuous unstable democracy. Jordan is the next domino to fall, completely encircling Israel with revolutionary unstable democratic-like regimes in which hostility toward Israel is the popular stance. Israel is forced to negotiate a deal, especially since the majority-Palestinian Jordan is now no longer a bulwark of stability. Afghanistan's secular rulers are overthrown and the Taliban, or something very much like them, retake power. Pakistan's military regime, having succeeded in placing its client into power in Afghanistan, itself loses power to a Islamist-student-democratic revolution of the Egyptian type. American intervention to secure the nuclear weapons is expected at any moment for several weeks, but does not materialize; Pakistani military maintains enough control over missile force/channels to American military that intervention does not occur. Iran's regime is overthrown by democratic revolution; the nuclear threat fades due to disintegration of the effort in light of the attendant dislocation of government functions.

3. Sunni-Shi'a Divide. Iran and Iraq (and to a lesser extent Lebanon) are pushed together in a Shiite alliance against the rest of the Islamic world. Saudi Arabia is the most powerful Arab player in the region, though with the American withdrawal and lack of military support, and rising calls for democracy and a purer Islamist state and a restive Shiite minority internally, it is losing ground to Egypt and Pakistan. Iran's Islamist regime gets more popular support now that it feels surrounded by Sunni enemies. Iraq has great internal strife due to Sunni insurgency and Kurdish separatism. Some of the Sunni-Shi'a strife is replicated in western nations to which Muslims have emigrated, especially in Europe. Israel benefits from the shift in focus from Palestine to the sectarian divide between Muslims themselves; it attempts to use back channels to regional players (Saudi Arabia, Turkey, Pakistan) to ensure Iran remains bottled up.

4. US Withdrawal. Due to a military debacle, lack of need for petroleum products, or something else, the US withdraws from the region. Israel attempts to play its potential enemies off one against the other, seeking another powerful ally (China and/or India). China, needing petroleum, moves into the vacuum, locking up supply contracts with Islamic countries and building closer economic and political ties. Democracy is a relative loser from this; China prefers dealing with stable autocracies. Pakistan allies with China against India; Afghanistan, fallen into incoherence after the US withdrawal, has some Indian-backed insurgencies pestering Pakistan. Israel makes peace with its close-in neighbors via a deal on Palestinian statehood and back-channel promises of aid against their enemies.

Key takeaways from this extremely crude and uninformed thought experiment:

  • An Israeli-Palestinian 2-state peace deal of some sort is far more plausible than might have been expected.
  • Autocracy in the Middle East seems to depend a great deal on the price of oil.
  • Military power is a very blunt instrument with which to achieve desired political outcomes.
  • Both instability and autocracy can last far longer than most people seem to think; but at some point they do give way to their opposites.

But now that I look back at what Peter Kennedy and I wrote in March 2011, I am forced to say, "Damn, we're good." 

A wave of revolution is sweeping North Africa and the Middle East. Many people want to know what is going to happen next. Will it be good for the United States or bad? Will it result in peace-loving democracies or America-hating Islamist dictatorships? No one knows. It is important to remember at this moment that not even a single movement in a single country has yet achieved anything approaching what we would call “democracy.” The present is chaotic and fluid, and the future is literally unknowable.

Which is why we really need our imaginations right now. We can’t know for certain what will happen, but we can try to anticipate the broadest possible array of potential outcomes. Here are a few to consider:

People Power ... and the State Is in Charge. The freedom movement spreads across the region, and when the dust settles a new generation of reform-minded secular leaders is in charge. The bad news is that they are hostile to global capitalism, or at least the kind practiced by the West. Many multinational oil assets are nationalized. The mood is similar to the 1970s, but with social democrats in charge, not despots. Oil prices skyrocket, the region is less predictable, and globalization takes a big hit.

Counter-Revolution.  The freedom movement goes “too far.” Troops are called back out. There are many Tiananmen clashes across the region. A new set of strongmen is in charge; the political atmosphere is worse. Repression is harsh. The United States and allies ponder taking a hard stand, with sanctions and aid cutbacks; they also ponder tacit support for the new dictators. The Fifth Fleet is long gone from Bahrain, but we still have to be forward-deployed to keep our supply lines open.

What Was THAT All About?  Internal discord undermines freedom and reform movements as they confront the hard business of government. Reformers grow tired and disillusioned. The Muslim Brotherhood and similar movements assert their theocratic agenda, and consensus breaks down. Egypt manages to achieve a constitutionally based regime, but it’s tenuous and contentious, and not a model for its neighbors. Some outright civil wars break out, while in other places conflict is low-level but debilitating.

Burning and Looting.  It all goes south as food prices surge but energy prices fall. Armed forces become critical players in the effort to maintain stability and control. It’s “all the West’s fault,” radical mullahs say, and the slums of Cairo and Beirut are far more pernicious breeding grounds for radical activity. Trade is disrupted and oil prices are shockingly high for an extended period.

Deliverance.  Imperfectly and unevenly across the Middle East and North Africa, freedom and democracy take root, with the benefit of relatively strong global economics and open markets. Global capital floods in to take advantage of regional talent (e.g., an Israel-Lebanon-Palestine high-tech corridor), market access and new opportunities. The new governments are modern and secular in orientation. The world breathes a sigh of relief and terrorism recedes as a mortal threat.

Which of these will happen? Well, none of them – and maybe, in different countries to different degrees, all of them. Which is why each of these scenarios deserves deeper scrutiny, to flesh out their internal logics and to understand how we might end up there, and what signposts we might see that could inform us that we are headed toward something somewhat better, or something very, very bad.

(Yep, we do scenarios pretty good here. - PM)

Thoughts?