Middle East Security Architecture ‘Race’ Is On

The ‘negotiations’ on the future of Syria are taking place now not in the Geneva conference halls, but along the Turkish border, and near Raqa’a.

At the time of writing, it is not clear whether, or how, Turkey will respond to the successes of the Syrian 4+1 coalition and the Syrian Kurds in severing the Turkish supply to the insurgent forces encircling Aleppo to the East. The Turkish Second Army now stands mobilized at Turkey’s border. The insurgent jihadist encirclers are themselves encircled, and the Syrian army is off, racing towards Raqa’a, in a competition with American supported forces, reminiscent of the ‘race to Berlin’ after WW2. Certainly, the 4+1 is in no ‘quagmire’; the coalition has the scent of outright military in its nostrils, and the momentum of a cascade of falling insurgent-villages and towns, at its back.

In effect, the ‘negotiations’ on the future of Syria are taking place now – not in the Geneva conference halls, but along the Turkish border, and near Raqa’a (a town of minor military significance, but which could be of immense political import – were American (and their allies’) forces to take the province, and to use the occupation of it as a negotiating lever to wring political concessions from Damascus).

The "race for Raqa’a" is symbolic however of the overarching race for who will succeed in establishing the future security ‘architectures’ for the region. On the one hand there is the 4+1 coalition, and on the other, the competing American-led "coalition against ISIS”.

Or, is it still a competing force? There are increasing signs that the US Administration is internalizing the military facts being unfolded on the ground by the 4+1 coalition. Well-connected commentators in the US are suggesting that the White House increasingly is leaning toward working with Russia to stabilize Syria - and is not attracted to any thought of a Turkish, or Turkish and Saudi invasion of Syria.

And there are new contradictions becoming more apparent as the 4+1 advances proceed: Turkey, a US ally, has, in the last days, been shelling YPG forces in the vicinity of Azaz. But the YPG is America’s principal military partner in the war (but is a sworn enemy of President Erdogan). Neither is the White House at all impressed by Ankara’s attempt to inveigle NATO into any Erdogan adventure in Syria (they know that the Turkish military is firmly opposed); or by Turkey’s small ‘joke’ of introducing a Saudi ‘expeditionary force’ into eastern Syria. All in all, America’s ‘coalition’ is turning out to have too many troublesome cross-currents — and a turn toward closer co-operation with Russia seems to offer a path out from these confusions.

The other ‘hat in the ring’ as possible authors of a regional security architecture is the EU: The EU, which would prefer to be proselytising in the Middle East for democracy, human rights and ‘liberal values’, however, really understands it has little choice. Today, in its crisis of refugees and of acts of terror shaking Europe’s cities, the EU must serve a purpose, or find itself discredited entirely: It must meet the needs of its citizens by providing them with ‘security’ at home, and by stemming the flood of refugees from abroad (there are an anticipated 16.8 million displaced persons in the Middle East presently) – or else face disintegration.

The EU’s political leaders therefore, are clamouring for something ‘dramatic’ to be done against ISIS to demonstrate to their constituents their resolve to take ‘resolute’ action – in the face of widespread popular fears of jihadist acts of terror perpetrated in Europe (after the Paris attacks). The EU ‘architecture’ is centred not on Syria (though the is talk of a NATO patrol of the eastern Mediterranean), but rather on Libya.

And ISIS ‘spreading’ to Libya is a peg on which to hang a security stabilisation mission in Libya. The Europeans have convinced themselves that if there is no intervention in Libya to stabilise the anarchic warlordism, contagion will spread from the Libyan vortex to Algeria, Tunisia and Morocco. If the Europeans can only put together a token ‘unity government’ drawn from ‘parliamentarians’ from both Tobruk and Tripoli for long enough to invite Europe to invade (or bomb) Libya again – the Europeans will go for it (either collectively or as an ad hoc coalition – and will probably receive their own parliaments’ consent, too – in wake of the Paris attacks).

Libya is nothing like Syria – and the Europeans’ experience of their military intervention there is likely to diverge markedly from Russia’s in Syria. In Syria, Russia has a government and its institutions with which to work, an experienced and well-led army, and an intelligence service. In Libya, the Europeans will enjoy none of these advantages.

Looking ahead, it is likely that the sheer military and political effectiveness of the 4+1 model will be compelling for many in the region, and even beyond. I would foresee the 4+1 experience becoming a ‘pilot’ for something more durable not just for the Middle East, but for Eurasia possibly, too.

But Middle East security is not just about ‘architecture’ — it is also about geo-finance. Adjusted for inflation, Saudi Arabian light oil is trading at less than $17 a barrel. Raul Meijer sums up the consequences succinctly:

“The consequences of all this will be felt all over the world, and for a long time to come. All of our economic systems run on oil, so many jobs are related to it, in so many ‘fields’ in the economy … Squeeze oil and you squeeze the entire economic system. Entire nations will undergo drastic changes in leadership and prosperity…But more than that, Middle East nations rely entirely on oil, a dependency that won’t allow for many of their rulers to remain in office”.

What started as a crisis in oil – just as Meijer foresaw – has metastasized into a wider financial crisis:

The chairman of the OECD's review committee, and former chief economist of the Bank for International Settlements – the Central Bankers’ Central Bank, William White, said in an interview with the Daily Telegraph in Davos recently: "The situation [today] is worse than it was in 2007. Our macroeconomic ammunition [that is QE and zero interest rates] to fight downturns, is essentially all used up,”

"Debts have continued to build up over the last eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief. It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something. The only question is whether we are able to look reality in the eye and face what is coming in an orderly fashion, or whether it will be disorderly…

Stimulus from quantitative easing and zero rates by the big central banks after the Lehman crisis leaked out across east Asia and emerging markets, stoking credit bubbles and a surge in dollar borrowing that was hard to control in a world of free capital flows. The result is that these countries have now been drawn into the morass as well. Combined public and private debt has surged to all-time highs to 185pc of GDP in emerging markets and to 265pc of GDP in the OECD club, both up by 35 percentage points since the top of the last credit cycle in 2007. Emerging markets were part of the solution after the Lehman crisis. Now they are part of the problem too.”

In sum, William White is saying that that there is such a thing as a collective balance sheet and that it can get used up. Moreover, when that happens there is no more effective ‘stimulus’ to be had—-it just results in central banks pushing on a string.
What has this to do with Middle East policy? Well … everything: The EU is on the verge of throwing money, weapons and perhaps troops at the problem of instability in North Africa and the Middle East – in the hope of stemming a tsunami of refugees hitting Europe this summer, and throwing EU politics into a further spasm of internecine warfare.

But if European policy-makers assimilate the implications of what Mr White, a Central Bankers’ Central Banker and a consummate insider, is saying, then they will understand that throwing money and weapons into the type of instability Mr White and Mr Meijer are predicting - will do nothing to contain the economic/financial crisis that is likely to strike the MENA region. It will only serve to make it more combustible. Ultimately the debt will – and must – come down and economies must be de-leveraged, but the process is likely to be traumatic, entail political upheaval, and increased refugee flight.

The ‘problem’ here is not the drop in the price of oil per se; nor even a forced Chinese devaluation of the Yuan, were that to happen. These are both but symptoms of a far deeper trauma. A devaluation of the Yuan might well be the trigger for the present financial crisis to metastasize into something graver, but the economic and political instability (and deaths) that it will ensue – are entirely down to the wrong-headedness and myopia of this unprecedented attempt by Central Bankers, egged on by politicians, to solve a solvency problem through hosing it down with liquidity.
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.