Your address will show here +12 34 56 78
Economy, Geopolitics, Investment

With the world struggling to combat the spread of the coronavirus (COVID-19) pandemic, G20 countries met virtually to discuss the impacts on the global economy and health. Saudi Arabia is the current chair of the G20, and the country organized the virtual meeting at the end of March ahead of the planned G20 summit this November in Riyadh.

The world economy has been tossed upside down by the lethal spread of COVID-19 which has touched every major economy and brought many regions and industries to a standstill.

It has also thrown foreign diplomacy, with many politicians, ministers, and even world leaders testing positive for the virus. The airline industry is almost entirely shut for business with many countries closing borders or rejecting planes from coronavirus hotspots.

In the Middle East, Iran has been the biggest hotspot for confirmed coronavirus cases and deaths, but it has impacted all nations. According to Johns Hopkins University, Iran has nearly 50,000 cases with 3,000 deaths, Israel and Saudi Arabia also have 6,211 cases and 1,720 cases, respectively (as of 2 April).

In their virtual meeting, trade ministers from the G20 countries agreed to keep their markets open for essential goods and vowed to inject $5 trillion into the world economy.

In a joint press statement, G20 leaders said, “we reiterate our goal to realize a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open.”

However, with global economic uncertainty and an uneven response to the crisis around the world, many are still left with questions after G20 leaders’ assurances.

 

Will G20 Members Meet Face-to-Face?

Japan waited as long as they possibly could to postpone the 2020 Summer Olympics, and while the G20 does not create the same stream of tourists, it is still a massive event requiring international travel.

There is no consensus on what the world will look like in November, but many governments are already preparing their populations for COVID-19 to come back in the winter months even if the world manages to get it under control.

Cop26, a UN climate conference, was set to take place in November in Glasgow, but it has already been postponed until 2021 by organizers. The UK’s Secretary of State for Business, Energy and Industrial Strategy, Alok Sharma, said “the world is currently facing an unprecedented global challenge and countries are rightly focusing their efforts on saving lives and fighting COVID-19. That is why we have decided to reschedule Cop26.”

Thus far, only preliminary G20 meetings have moved online, and there has been no indication as to whether the November meeting in Riyadh will continue as planned.

Due to the 2012 MERS outbreak, Saudi Arabia was better positioned than many other countries to handle the wave of COVID-19. The Saudi government has put in stringent rules including suspending access to pilgrimage sites, but the region’s response has not gone as smoothly as South Korea, another country prepared due to recent outbreaks.

While Saudi Arabia may be able to take control of COVID-19 faster than Europe or North America, major economies are preparing for a sustained period of economic inactivity and social distancing. From where we sit now it’s hard to imagine many diplomatic meetings between foreign leaders will take place in-person for the rest of 2020.

 

Rippling Effect on Foreign Diplomacy

With governments scrambling to limit damage to public health and pump money into their national economies, much of coronavirus coverage has been focused on domestic politics. But the virus also has a clear and direct impact on foreign relations that extends to all geopolitical calculations.

In some cases countries look to, at least temporarily, mend strained relations to combat the spread of the virus, but others are hardening stances. The US-Iran relationship is perhaps the starkest example of the latter scenario.

The United States has doubled down on sanctions against Iran after calls for sanctions to be relaxed so Iran can respond to its devastating spread of coronavirus. In the midst of COVID-19 ravaging America, President Trump tweeted, “Upon information and belief, Iran or its proxies are planning a sneak attack on U.S. troops and/or assets in Iraq. If this happens, Iran will pay a very heavy price, indeed!”

The Saudi-Iranian proxy war ripping apart Yemen is also continuing unabated by the threat of coronavirus. While a ceasefire has been agreed to, conflicting reports detail continued airstrikes.

The United Nations also called for a complete nationwide ceasefire in Syria. Despite peace talks in the northeast of Syria, the UN is still worried and said, “the current arrangements are far from ideal for the front-line response demanded by the COVID-19 outbreak.”

G20 leaders have asserted that they are committed to fighting the pandemic and helping “especially the most vulnerable.” But, with diplomatic conflicts and war still raging, much more needs to be done to ensure that all people in the Middle East and the world are better protected.

Whatever form the G20 takes in November, whether it be held virtually, with smaller travelling parties or postponed altogether, its focus clearly will shift to coronavirus response. The choices individual leaders make can have a great impact, but more coordination is needed to achieve the best outcomes.

0

Economy, Geopolitics

COVID-19, commonly referred to as the coronavirus, has panicked global economic markets and precipitated a health crisis that is on the verge of going global.

What started in China in late 2019 has rapidly impacted the world economy, taken over 3,000 lives and struck fear in many citizens across the globe.

China remains the epicentre of the outbreak, but South Korea, Italy and Iran have also had to contend with swelling numbers of cases.

Iran has been particularly hard hit and has suffered the highest amount of deaths outside of China.

While the world scrambles to fight against the spread of the novel influenza strain, shocks have been felt globally, illuminating the precarity of the interconnected economy.

On February 27, the Dow Jones Industrial Average had its biggest one-day point drop and fell nearly 4.5%. It has since recovered, but with the number of cases and deaths likely to climb in the United States and across the globe, global health and the world economy are not out of the woods yet.

There have been positive signs, China has seen a decline in new cases, and as a result, they closed the first of 16 hospitals specifically constructed to fight the virus in Wuhan, the epicentre of the virus.

But the World Health Organization chief Tedros Adhanom Ghebreyesus said the world is in “uncharted territory. We have never before seen a respiratory pathogen that is capable of community transmission, but which can also be contained with the right measures.”

 

Iran: The Middle East Epicentre

Iran’s outbreak was identified February 19, but it has already rocked the country. Even an adviser to the Supreme Leader fell ill and died, and it has called the effectiveness of the government into question. Although there was a slow response, the Iranian government has now taken several drastic measures to curb the spread of COVID-19.

Iran shut down its parliament in what many citizens believed to be a delayed response that has fuelled public panic. Despite the measure, 8% of Iranian Parliament members were infected with the virus, and the country released an astonishing 54,000 prisoners to prevent the virus from spreading in prison populations.

“The more the officials are scared of scaring people, the more the virus will spread and the country will be further paralysed,” an Iranian doctor told the Financial Times.

Iran is also not positioned well in geopolitics to handle such an outbreak, considering heavy American economic sanctions and strained ties with regional partners.

Many countries have closed their border with Iran and restricted travel from the country, causing a large economic impact that will not be solved quickly.

While the Iranian economy looked to be rebounding after a poor 2019, early signs point to a devastating long-term impact on Iran.

“The virus outbreak will keep people from making unnecessary trips, purchases, and transactions, aggravating the downturn in the Iranian economy,” said Zahra Karimi to Bloomberg News.

Similar restrictions on air travel in the Middle East and across the globe will hurt the entire region, with economies built on air travel and oil.

 

Air Travel

Perhaps the biggest threat to multiple economies in the region is not the virus itself, but the fear it has raised in many travellers across the globe.

The International Air Transport Association (IATA) announced COVID-19 has already resulted in a $100 million loss to airlines in the Middle East.

The United Arab Emirates and other Gulf countries have cancelled all flights to Iran, and many countries have limited commercial travel to China.

Various airports across the Middle East serve as a key connection for travellers between East and West and with uncertainty in many different countries and announcements from airlines about cancelled flights, the loss could grow much larger.

Travel to Asia has been severely restricted which has had a big knock-on effect, impacting routes between countries with no virus outbreak.

Several weeks ago, the IATA released a report that projected a loss of $30 billion in revenue for the airline industry, but a spokesman told The Guardian that the projection was outdated and likely to get much higher.

Oil prices have also rubber-banded with both bleak and positive reports. Oil prices dropped heavily in mid-February, but they have been recovering after positive reports out of China.

OPEC has hinted at cutting output in order not to flood the market at a time of uncertainty and less demand for oil.

The outbreak may be a temporary blip for the oil and air travel market, but it does reveal the precarity of economies reliant on the industries.

 

Beyond Iran

While Iran remains one of the hardest-hit and the country most in need of containment, the virus has spread across the region.

Saudi Arabia, Jordan, Tunisia, and Morocco recently announced their first COVID-19 cases, and Egypt, Iraq, Kuwait, Lebanon, and Qatar said they have additional cases.

Extensive precautions have already been taken including Saudi Arabia taking the unprecedented step to forbid foreigners from going to the holy city of Mecca ahead of the annual Hajj pilgrimage.

Other major events across the Middle East have also been cancelled in fear of the spread of the virus, signalling that other industries will feel the ripple effects of cancellations.

The airline and tourism industry will be hit hard by Saudi Arabia restricting foreign travel to Mecca, and other smaller business and entertainment events will start to add up.

Countries in the Middle East have displayed a willingness to shut down events and businesses in an attempt to contain the spread of COVID-19. These precautions mixed with global economic impacts will have a large knock-on effect that could potentially damage the regional economy in the short-term.

But due to the extreme measures, other countries may be able to contain the virus better than Iran and be better positioned when the world gets a handle on the global health crisis. Regardless of the outcome, the health crisis has shined a light on many of the risks built into the global economy, some of which disproportionately impact the Middle East.

0

Geopolitics

President Donald Trump announced his long-awaited peace plan between Israel and Palestine last week alongside Israeli Prime Minister Benjamin Netanyahu. In terms of a functioning peace deal, it was dead on arrival with the Palestinians noticeably absent from any negotiations or planning.

 

Palestinian President Mahmoud Abbas called the deal a conspiracy after the plan was announced and said in a televised address, “I say to Trump and Netanyahu: Jerusalem is not for sale, all our rights are not for sale and are not for bargain. And your deal, the conspiracy, will not pass.”

 

Further than just rejecting the deal, the Palestinians cut ties with both Israel and the United States, including all security ties.

 

Likely the Americans and Israelis knew this peace deal was never about getting an actual workable solution on the table. For the Trump White House, it reconfirms their ardent support for Israel, and likewise, for Israel, it secures the United States as a strong supporter.

 

Furthermore, it allows both the Americans and Israelis to push the boat out a bit further and see how America’s regional partners in the Middle East react to a provocation against Palestine.

 

Divided and Slow Response

 

While the Palestinians were quick to reject the deal, many of its traditional defenders were slow to respond.

 

Even worse in the eyes of the Palestinians than a slow response, ambassadors from Bahrain, the UAE, and Oman were all present at the unveiling of the peace deal.

 

Israel has been re-establishing relations with several Arab countries, including Saudi Arabia, in recent years in what many view as a concession on the part of both sides in order to tackle the perceived threat of Iran. Netanyahu also made Israel’s first official state visit in decades to Oman to meet the former Sultan Qaboos bin Said al Said.

 

Palestine’s allies in the region have increasingly adopted a more delicate balancing act between protecting the rights of the Palestinian people and appeasing America for economic benefits.

 

Egypt, both and American ally and staunch defender of Palestine, offered a muted response directly after the announcement calling for “a careful and thorough examination of the US vision” rather than a full-throated defence of Palestine.

 

Jordan, a country with 2 million Palestinian refugees, also is largely dependent on American aid and closed a deal with Israel at the beginning of 2020 that will supply the country with Israeli gas.

 

While many in Jordan protested the gas deal and the proposed Israel-Palestine peace plan, prior to the announcement of the deal Jordanian King Abdullah II said, “I’ve had numerous discussions with President Trump on this issue. I think he understands what is needed to bring Israelis and Palestinians together.”

 

Palestine is increasingly being squeezed out as its Arab defenders opt to forgo staunch defence in favour of keeping their economy going aided by American and Israeli business.

 

The silver lining for the Palestinians is that while the support from allies was slow, it has finally come on this deal as the Arab League called to reject the deal. But, thanks to economic incentives and the hawkish stance of many in the region against Iran, the peace deal is another chink in the armour of the Palestinian people, and one that sets the table for future struggles.

 

Palestinian Defence

 

While Palestine might not be too pleased with the speed, both the Arab League and The Organization of Islamic Cooperation (OIC) called on all its members to soundly reject the American deal.

 

The Arab League met in Cairo, Egypt at the behest of the Palestinians, and it announced it rejected the deal as it “does not meet the minimum rights and aspirations of Palestinian people.”

 

Later, the 57-member OIC held a summit in Jeddah, Saudi Arabia and said in a statement that all member states should not engage in or cooperate with the American administration in regards to the plan.

 

The OIC spans much more than just the Arab region and includes several non-majority Muslim countries. Noticeably absent from the summit was Iran, who claimed its officials were barred from entry to the meetings.

 

Despite the multiple rejections of the deal, key players have given credit to the Americans, including Saudi Arabia’s foreign ministry.

 

In a press release directly after the peace deal was announced, the Saudi foreign ministry said, “the Kingdom appreciates the efforts of President Trump’s administration to develop a comprehensive peace plan… and encourages the start of direct peace negotiation between the Palestinian and Israeli sides, under the auspices of the United States.”

 

The press release does clarify that all negotiations should achieve the “legitimate rights of the Palestinian people,” but the mixed messaging, followed only later by a rejection of the deal, spells trouble for the future of Palestine.

 

Reports said Saudi King Salman called the Palestinians to reassure their commitment to Palestinian rights, but the public acceptance of the Americans’ work tells us much about the current triangulation of the Saudi government.

 

Trump’s peace deal may have never got off the ground, but it has exposed weaknesses in the Arab alliance in regards to protecting Palestine, and it shifted the conversation to its side.  While much of the world has condemned the deal, Palestine does appear to be in an increasingly difficult position in which its allies have to choose between the protection of their rights and the pursuit of more business ties.  At this stage, it looks like its Arab partners are willing to sacrifice increasingly more for short-term economic benefits.

0

Geopolitics

The United States and President Donald Trump’s decision to assassinate Qassem Soleimani, Iran’s top military commander, on January 3 sent shockwaves through the international community.  The brazen political assassination of Soleimani, the commander of the Quds Force and second most important political figure in Iran, has massive implications for both world politics, the Middle East region, and Iran.

 

President Trump’s predictably unpredictable foreign policy decisions persist, making any predictions about the United States’ short-term actions on Iran immensely difficult. 

 

Before Iran responded with force to Soleimani’s assassination, Trump tweeted, “Let this serve as a WARNING that if Iran strikes any Americans, or American assets, we have targeted 52 Iranian sites… at a very high level & important to Iran & the Iranian culture, and those targets, and Iran itself, WILL BE HIT VERY FAST AND VERY HARD.”  However, after Iran’s formal response in the form of two ballistic missile attacks against American military bases in Iraq, Trump responded with further economic sanctions in favour of further military action.

 

This historical incident has left pundits, analysts, politicians, and citizens flat-footed, and it serves as the perfect example in the difficulty of precisely predicting current American foreign movements.  Trump’s unpredictability is his most reliable trait, and while it seems he was persuaded by the extremely hawkish and warmongering action of killing a foreign country’s top military commander at the international airport of an American ally, he has also in the past spouted the rhetoric of anti-war American isolationism.

 

Surprisingly, what is perhaps easier to read into is what Iran’s plans and next moves may be.  The increased economic sanctions and American military blustering throw the Iran nuclear deal, an agreement Trump already left, for all intents and purposes in the bin.

 

European allies insist that they remain committed to the deal, but it is hard to imagine Iran will be too happy considering NATO’s and many European leader’s responses.

 

Iran not pursuing nuclear arms would seem counterintuitive at this point.  Iranian officials supportive of developing nuclear weapons will feel galvanized, and those against will likely either be convinced or sidelined.

 

Of course, Iran still has a delicate game to play when it comes to domestic, regional, and global politics.

 

Internal Iran

 

With the Iranian military on high alert after responding to the Soleimani killing, Iran shot down a Ukrainian passenger plane and killed 176 civilians including 82 Iranians.

 

Iran’s initial denial and the action itself will damage its reputation internationally, and perhaps more importantly, it increased civil unrest around the regime.  Media across the globe reported that thousands of protestors took to the streets to protest the Supreme Leader and the downing of the passenger plane.

 

Add the unrest to another potential economic downturn at the hands of further American sanctions, and the Iranian government faces a difficult short-term future.

 

Iran initially reported that its missile attack against the United States caused deadly damage, likely to shore up support.  However, the United States and its allies later reported that no injuries or deaths were suffered.

 

Domestic unrest may pull Iran to make different calculations about regional partners and what economic and military possibilities exist in the Middle East.

 

Deepening of Regional Conflicts?

 

Leading up to the Soleimani’s assassination, Saudi-Iranian tensions had been changing course.  Saudi Arabia was showing more openness to exploring diplomatic channels to reduce hostility between the two most powerful countries in the region.

 

Saudi Arabia has been enjoying strong ties with America under a Trump White House, and the Saudis have played a pivotal role in America’s strategy vis-à-vis Iran.  Proxy wars between the Saudis and Iranians have devastated neighbouring countries and generally destabilized the Middle East.

 

A thawing of tensions between Saudi Arabia and Iran should have been a welcome opportunity to bring more stability and peace to the region.  However, America’s actions will change triangulations from both sides.

 

In fact, Iraqi Prime Minister Adil Abdul-Mahdi said Soleimani was on a diplomatic mission in Iraq when he was killed.  Abdul-Mahdi, serving as the mediator between the two regional powers, said Soleimani was delivering a message for the Saudis.  American Secretary of State Mike Pompeo rejected the idea that Soleimani could have been serving diplomatic ends.

 

Iranian officials may now be extremely wary of Saudi Arabia and any further diplomatic option.   And while Iran’s military response to America was measured, Iran will likely view American allies in the region as a more attainable target for retribution if they are so inclined.

 

Increasing tensions may spell profits for arms dealers, but further proxy wars and conflicts between the two regional powers could damage Saudi Arabia’s economy, along with wreaking havoc on wherever the conflict may take place.

 

This instability is occurring against the backdrop of Saudi Arabia’s immense push to diversify its economy by throwing money into the tourism sector.  Any disruptions in the region have the potential to tank Saudi Arabia’s most important economic move in decades.

 

The Global Future

 

While Soleimani’s assassination further restricts Iran’s options on ways to proceed, the United States and its allies, namely Saudi Arabia, can still try to change course and limit any further marching towards war.

 

This is certainly a difficult proposition considering the United States under President Trump tore up the agreement that sought to limit Iran’s access to nuclear weapons in return for opening up Iran economically to the West.

 

But the rhetoric pronouncing an inevitable march towards war was immediately proven wrong by both the relatively measured immediate military response by Iran, and Trump’s relative de-escalation of tensions after threatening to commit war crimes against Iran.

 

America’s decision to assassinate Soleimani should be viewed as a major misstep, one that derails potential diplomatic gains and heats up tensions in an undeniable manner.

 

However, diplomatic solutions are not off the table and both sides stand to gain if they set aside their immense differences.  Recent events have cast Iran-Saudi relations in doubt, but a close eye on future decisions by both sides is
0

Economy, Geopolitics

On 15 November, the Iranian government announced a 50% hike in petrol prices, and angry Iranians took to the streets to air their grievances.  Protestors blocked roads, disrupted traffic and businesses, and marched against the current government.

 

The Islamic Revolutionary Guard responded with brutal force and killed an estimated 180 protestors, with some estimates going all the way up 450 civilian deaths.  The government also responded by shutting off the internet for the majority of the country, resulting in a disruption of the Iranian economy and many people’s daily lives.

 

The unrest comes at the end of a particularly difficult 2019 for the Iranian government, a year marked by increasing international and regional tensions that have damaged the economy and the well-being of its citizens.

 

Iran continues to face challenges from Saudi Arabia and its regional allies, and the shift in American policy has thrown the Iranian economy into uncertainty.  These factors have collided with the stagnating price of oil and the difficulty Iran has had in diversifying its economy away from oil dependence.

 

Protests

 

One of the biggest questions for those observing the region will be: are the protests a bigger sign of change within the country?

 

Hawkish Western foreign policy analysts have long been hoping and praying for and often predicting that Iran is ripe for regime change, but the immense power behind the Islamic Revolutionary Guard has been able to stamp out any unrest over the years.

 

The recent protests were characterised by the New York Times as the deadliest political unrest in the country since the Islamic Revolution 40 years ago.  Also, worth noting about the recent unrest is that much of it is targeted at the supreme leader, Ayatollah Ali Khamenei.

 

However, with the concentration of power in the state and military, it is hard to imagine an organic people’s revolution rising up without massive bloodshed.  Iran has time and again shown it is willing to forcefully suppress political dissent and the step to shut down the internet indicates the government is prepared to withstand considerable economic collateral damage to consolidate power.

 

But Iran’s economy will continue to limp under American sanctions, and an inflation rate of above 40% is preventing many Iranians from saving or conducting any meaningful economic activity.

 

Europe’s Response

 

The European Union has taken quite a different line to that of the Americans in their foreign policy approach to Iran.  After President Trump unilaterally left the Iran nuclear deal, the European Union has become the staunchest supporter of the multilateral agreement that seeks to prevent Iran from making a nuclear weapon.

 

Despite misgivings about Iran’s activities with its nuclear developments, the European Union has remained committed to the deal.  Of course, this entails facilitating economic trade within the country, the greatest incentive Iran has to abide by the deal.

 

The United States’ decision to abandon the deal deeply hurt Iran’s economic forecasts and the slack has had to be picked up by the EU.  In turn, the EU has had to be more lenient in the eyes of some.

 

Embattled Israeli Prime Minister Benjamin Netanyahu took umbrage with the Union’s unwavering support of the Iran deal in the face of the recent crackdown of Iranian protestors.  Israel and the United States have been the biggest detractors of Iran, along with the Saudis.

 

It does place the Europeans in a difficult spot, one in which their relative lack of military force is made up for by their promise of economic improvement.  However, the European market may only be able to prop up Iran’s economy for so long, and Iranian citizens will be likely to take to the streets again if conditions don’t improve.

 

Furthermore, despite the European Union being one of the most important proponents of the nuclear deal, Iran is still not always thrilled about their actions.  In fact, Iran has threatened to abandon the deal if the Union triggers deeper economic sanctions.

 

Some European leaders have also expressed misgivings with the deal largely due to domestic political pressure due to what many argue has been an overreach by the Iranian government in terms of the safety of Iranian expatriates.

 

Iraq

 

Iran’s neighbour Iraq has also been plunged into civil unrest in recent weeks, with some protesters specifically targeting what they see as an outsized Iranian presence in their country. 

 

While the Iraqi government has drawn much of the attention, many protestors have been calling for not only an ousting of the current political ruling elite but also of what they view as Iranian interference.

 

Anti-Iranian protestors went so far as to storm the Iranian consulate in Baghdad and replace the Iranian flag with an Iraqi one.

 

Iran has long been a supporter of the Iraqi regime, and in its recent downfall, protestors have pointed to Iran as part of the larger political problem within Iraq.

 

The Iraqi Parliament officially accepted Prime Minister Adel Abdul-Mahdi’s resignation on 1 December, but protestors have pledged to continue their fight until all of their demands are met.

 

Iraqi unrest does not bode well for Iran in its hopes to quell unrest within Iranian borders, and while the Iranian state has more resources at its disposal to use violence against protestors, outside factors could limit the stomach the supreme leader has for killing his own civilians.

 

With the EU potentially reconsidering its nearly unconditional commitment to the Iran deal due to internal politics, Iran may have to think twice about how much violence it deploys.  On the other hand, with the United States out of the picture diplomatically, Iran could make the calculation that any negative attention it gets from the unrest outweighs losing power since American economic support or diplomacy is an impossibility.

 

Whatever choice it makes, it is fairly safe to assess the situation in Iran as deeply unstable, and as a result the government will be desperate to get the economy
0

Economy, Geopolitics

The Lebanese people have taken to the street since October 17 to protest the country’s current economic disparity and the government’s mismanagement and corruption.  What started as a protest against increased taxes on products and services ranging from tobacco to WhatsApp calls has devolved into a collective indictment against the Lebanese ruling class.

 

On 29 October Prime Minister Saad Hariri announced his resignation in an attempt to assuage the civilian uproar.  While the resignation temporarily cooled tensions, protests have reignited and citizens have demanded more reforms including some protesters calling for the entire political system and all government officials and politicians to be replaced.

 

In contrast to previous protests and revolutions, this unrest is not divided on sectarian or political party lines.  Rather, a mass grassroots uprising has formed to fight against the inadequacy and corruption of the Lebanese political class.

 

While the protestors’ demands are broad, dissatisfaction with government economic policy and deep-seated corruption have been consistent throughout the duration of the ongoing street protests.

 

Economy and Corruption

 

Lebanon’s economy has tanked and currently sits at 0% growth, precipitating a wide-reaching economic crisis.  Protesters have accused the government of stealing money from the Lebanese people and creating a pervasively corrupt economy.  This has caused a litany of problems for both the Lebanese economy and its people.

 

In the country’s second-largest city, Tripoli, unemployment has been estimated at 50%, and many citizens feel they have no future economic prospects.  Economic uncertainty and poverty have clearly deepened the distrust and anger with the government.

 

As to how the economy has got so bad, according to protesters, there are multiple answers and mistakes the government has made in recent years. 

 

One of the loudest critiques of the government has been corruption, which not only has taken money out of the hands of the average Lebanese household, but it has also frozen foreign investment into the country, only worsening the already woeful economic conditions for many Lebanese people.

 

Lebanon’s President Michel Aoun has been attempting to position himself as the solution to corruption within the country, and he had thousands of supporters in the streets trying to spread his message.  However, anti-government protests in the following days have roundly rejected Aoun’s overtures and outnumbered his supporters.

 

Without investment, Lebanon’s economic woes will only worsen as its massive debt piles up and threatens an even bigger economic and political crisis. 

 

Foreign Relations

 

Before protestors took to the street en-masse, former Prime Minister Hariri had been exploring options to increase foreign investment, specifically from the United Arab Emirates.  Hariri visited the UAE to plead for a cash injection into Lebanon’s debt-ridden economy, and the UAE agreed to lift a travel ban on its citizens to Lebanon.

 

While Saudi Arabia and Western allies of Lebanon have made fewer public announcements about the ongoing developments, UAE announced they are still mulling over projects that were proposed nearly a month ago in their meetings with Hariri.

 

However, protestor’s dissatisfaction is only mounting and outside help from UAE can only go so far.  The UAE and other foreign investors are also unlikely to invest heavily or relieve the economic problems if the uncertainty around the political future of Lebanon is not resolved.

 

Perhaps even more important than potential future UAE investment, the White House announced the United States would freeze military aid to Lebanon and hold out nearly $105 million from the Lebanese Armed Forces.  The shortfall could potentially impact the reaction of the Lebanese government to protestors on the streets and puts President Aoun in a difficult spot to form a new government.

 

Historically, the United States has supported the Lebanese Armed Forces as a vehicle to fight the Iranian-backed political party Hezbollah.  Many voices in the United States Congress, State Department, and security apparatus have condemned the move.

 

While it is difficult to read the current erratic intentions of American foreign policy, many other states in the region will likely be looking at Lebanon with bated breath.  Iran, Saudi Arabia, UAE, Israel, and more all have great interests in the small country and could potentially try to interfere in the country’s future political alignment if protests persist.

 

Political Future

 

While Lebanon’s political future is unstable and uncertain, changes are surely coming.  The country’s current economic situation and political alignment are clearly untenable.

 

With infrastructure crumbling, the Lebanese pound falling, and unemployment, inequality and unrest exploding, street protests will continue until the material conditions change.

 

Whether that takes the form of a civilian-led political revolution, technocratic policy changes, or brutal repression remains to be seen.  In the meantime, the Lebanese people will keep searching for answers and perhaps look to take matters into their own hands.

 

Until corruption within the country is tackled and the needs of protestors are met, foreign investment is unlikely to flow into the embattled nation.

0

Economy, Geopolitics

On the first day of October, thousands of Iraqis began taking to the streets to protest high unemployment numbers, corruption, poor public services, and an anaemic economy.  Iraqi security forces disbanded initial protests, but citizens began coming out in bigger numbers.  In response, the Iraqi government reacted with deadly force and brutally crushed the resurgent protests

 

From October 1st to October 6th, 108 protesters were killed and thousands more were injured at the hands of Iraqi security forces according to the Iraq Human Rights Commission.

 

It made a difficult anniversary for Prime Minister Adil Abdul-Mahdi who assumed his office in October 2018.  In addition to killing over 100 protesters, Abdul-Mahdi also announced a series of assistance packages for low-income residents to stem the tide of protesters.

 

The government also cut off internet access to limit protest organisation and any further uprisings, a move highly criticised by the UN for convening international human rights law.

 

For now, the protests have dissipated, in large part thanks to a repressive response by the Iraqi government.  But, if the protesters’ cries go unanswered, the government will soon face similar push back.

 

Source of Protests

 

The protests in Iraq originate from Iraqis’ discontent with the government’s economic policies which have marginalised the poorest  citizens.  While Iraq enjoys the fourth largest oil reserve in the world, many Iraqis have not seen that wealth trickle down to them and are expressing their anger at that fact.  

 

According to the World Bank, unemployment has only decreased by 1% in the last decade, and youth unemployment remains at a staggering 16%.  Female unemployment has also ballooned to 12%,  signaling a deepening economic divide between men and women.

 

While Iraq’s neighbours are looking to diversify their economy to meet with new demands and the inevitable decline of oil, Iraq is pumping out more than ever, over 4.6 million barrels per day.  Despite the increased production, forecasts predict the Iraqi economy will have a dip in annual GDP growth over the next several years.

 

These combined factors spell a difficult future for Abdul-Mahdi’s government and the unemployed and impoverished Iraqis demanding change.  While the current protests have been beaten back violently, an economic downturn will enlarge the fervour and protest numbers.

 

After violent suppression, Abdul-Mahdi told his countrymen and women on state television, “I will go and meet them without weapons and sit with them for hours to listen to their demands.”

 

While the protesters’ demands have been quite clear, it is unlikely that Abdul-Mahdi will be able to meet them without radically restructuring Iraq’s economy to favour the Iraqi people over oil company profits.

 

Economic Model

 

Since the US-led coalition invaded Iraq 16 years ago, the country has been ravaged and transformed.  One constant is the country’s dependence on oil, Iraq’s only noteworthy activity in the international economy over the past decades.

 

Before the 2003 invasion, Iraq suffered economic ups and downs associated with political events, oil price, periods of strict austerity and heavy lending.  But, after the invasionIraq shifted economic models from that of brutal dictator Saddam Hussein who let public spending flow to curry support from the public and politically insulate himself and build his power base.

 

Instead of the public spending and personal corruption of Saddam Hussein, Iraq has since carried out a more American neoliberal oil-dependent economy, one which lines the pockets of Western-backed oil elites and cuts public spending, allowing the free market to control Iraq’s economy.

 

As current Prime Minister Abdul-Mahdi has found this is becoming a tougher sell as many Iraqis continue to wallow in joblessness and economic despair while their country’s most valuable asset is being sold on the world market at a historical rate.

 

Future Implications for Iraq and the Region

 

The Middle East’s most powerful regional actor, Saudi Arabia has long been wary about regional unrest in its backyard.  Political conflict and calls for economic reform from angry protesters do not help the politically powerful hold on to their power.

 

But, Saudi Arabia’s opinion on unrest in Iraq largely depends on how hawkish they decide to play mounting tensions with Iran.  Some within Saudi Arabia view Iraq as intensely pro-Iran, and if relations with Iran worsen Saudi Arabia may stand to gain from destabilising a perceived Iranian ally in the form of Iraq.

 

Recent reports do indicate that Saudi Arabia is looking to cool tensions with Iran, making an aggressive role in Iraq unfeasible for the Crown Prince.  Instead, Iraq could play a pivotal role in thawing relations between the two regional powers, and the oil-dependent region might stand to gain from a ratcheting down of tension between the two.

 

In the case of increased Saudi-Iranian relations, once again the policy of stability over all else may dictate more brutal reactions to civilian uprisings.  Unfortunately for the Iraqi government and its citizens, when governments opt for the repressive route it usually increases bloodshed and while it may equal short-term economic stability, it’s often at the sacrifice of the long-term future of the country and its population.

0

Geopolitics

Iran heavily features in many conflicts between regional and world powers, and it is often central to the great political issues of the day.  While Iran may not be directly involved, other countries’ opinions and strategies toward the Shia country shape numerous geopolitical situations and conflicts across the globe.

 

From Sudan to Saudi freedom of press, EU-American relations, and even Brexit, different countries’ diplomatic strategies toward Iran have far-reaching impacts.  One often finds that triangulation on Iran strategy infiltrates far more political posturing and movement than purely news and events directly related to Iran.

 

Iran has long played an important role on the international stage and has been a major factor in domestic politics within world powers.  But, Iran’s outsized impact on world politics has only grown in recent years largely due to the United States decision under the Trump White House to pull out of the Iran nuclear deal, also known as the Joint Comprehension Plan of Action (JPCOA).

 

Regardless of one’s political persuasion or opinion on the Iran nuclear deal, the United States withdrawal from the treaty and subsequent implementation of sanctions signaled the reshuffling of power and strategy on the world stage.

 

This analysis will recap some of the latest developments surrounding this geopolitical reconfiguration and look at what impact it has had on Iran, the Middle East region, and the state of alliances across the globe.

 

The Strait of Hormuz

 

Tensions between Iran and America have only heated up in recent weeks and months.  The Strait of Hormuz has been a flashpoint and the international press has been extensively covering flare-ups between Iran and international shipping boats.

 

The United States has attempted to use these incidents as a pretext for a stronger military response to Iran, with varied success.  Recently, Australia announced it would become the third country along with the United Kingdom and Bahrain to contribute to an American-led mission to guard shipping lanes against Iranian attacks.

 

However, despite appeals from the American security and state apparatus, its European partners have expressed reluctance to jump aboard a military mission that many believe would further threaten the nuclear deal.  The United Kingdom has proven to be America’s most reliable Western partner in responding to Iran, however, this alliance may be a short-lived calculation by new Prime Minister Boris Johnson in an attempt to sweeten a potential trade deal with America post-Brexit.

 

The European Union has been one of the most vocal defenders of the Iran nuclear deal, and the United States change of heart under Donald Trump has strained ties between multiple historic alliances.

 

Impact of sanctions

 

The United States Treasury billed its re-imposition of sanctions on Iran after leaving the Iran nuclear as “the toughest U.S. sanctions ever imposed on Iran.”  Furthermore, the Treasury Department reiterated “the United States is engaged in a campaign of maximum financial pressure on the Iranian regime and intends to enforce aggressively these sanctions that have come back into effect.”

 

The contrast from the multilateral JPCOA is stark, and it has been controversial both internally within the United States and abroad amongst American partners and signatories to the deal.

 

But varying reports are emerging that contradict the United States’ loud and proud message that American sanctions are effectively crippling the Iranian economy and lessening the financial power of the top players in Iran.

 

Reuters recently reported that despite American sanctions dropping Iranian crude exports by 80%, Iran is still exporting a strong $500 million a month in oil products.  In fact, Iran’s fuel exports have immensely grown since 2015.

 

However, Iran dumping more exports on the market does not necessarily point to a strong and healthy economy.  In 2015, the Iranian GDP grew over 12% largely in response to the landmark JPCOA.  However, the Iranian economy has been contracting ever since the United States pulled out of the treaty.

 

Due to the design of the sanctions, the average Iranian feeling a hit to their pocketbook with the annual household income decreasing.  The recent data uncovered by Reuters indicates that Iranian oil is still flowing into the market, but the Iran government seem to be the benefactors instead of the average family.  Whether this leads to mass political unrest that would truly impact the Iranian elite remains to be seen.

 

Regional conflict

 

Nowhere is Iran’s geopolitical position more strongly felt on foreign soil than in Yemen.  The country’s protracted civil war is effectively a proxy war between Iran and Saudi Arabia, the Middle East’s most important rivalry.

 

Both countries have shown no indication they intend to pull out of the conflict or look for peaceful resolutions with Saudi Arabia announcing it will increase its troop levels in southern Yemen.

 

Many have pointed to Trump’s decision to leave the JPCOA as the nail in the coffin that allowed Saudi Arabia to become much more emboldened and aggressive toward Iran and deepened the crisis in Yemen. 

 

Combined with the Syrian Civil War, Iran and Saudi Arabia’s political and religious differences have caused instability and bloodshed across the region.  America’s turn away from diplomacy in favor of hawkish policy has shifted the dynamic enough to deepen differences and allow for a revving up of tensions.

 

The world stage

 

Internationally, Iran has become one of the issues of the day in more countries in a much more visible manner.  Politicians have had to regularly discuss their Iran strategy and Iran has remained in the news cycle more than any other Middle Eastern country in the last several years.

 

One of the most important changes in this timeframe has been the fracture between the United States and the European Union when it comes to strategy on Iran.  While the United States has cozied up to Saudi Arabia and remained tense with Russia and China, its relation to the European Union has been remarkably different ever since President Trump assumed office.

 

Arguably, President Emmanuel Macron is now the most important state leader within the European Union, and in the eyes of many, the French president has assumed the role of unofficial figurehead for the union.  Macron favors multilateralism, but his brand of politics has seemingly fallen out of favor on the world stage in terms of the impact it has had.

 

France reportedly offered Iran a $15 billion bailout to compensate lost oil sales from American sanctions, and in return, Iran would once again comply with the JPCOA.  However, an Iranian bailout is unlikely to go down well in France considering Macron’s own struggles with internal unrest.

 

And such a bailout would only be temporary, with the European Union still in dire need of a change in American policy toward Iran in order to find a lasting solution.  Unfortunately for Macron and the EU, Iranian President Rouhani recently ruled out bilateral discussions with the United States.

 

While the European Union and signatories to the JPCOA search for solutions, any sort of diplomatic solution to rising tensions between Iran and Saudi Arabia and reducing violence in the Middle East is at the whim of an increasingly erratic American foreign policy.

0

Geopolitics

Sudan has been in political upheaval since late December 2018 when thousands took to the streets to the protest increasing cost of living and a woeful economy.  The protests continued and picked up steam resulting in President Omar al-Bashir being ousted by the military in April.

 

Pro-democracy protesters are now flooding the streets to demand the ruling Transitional Military Council (TMC) hand over power to a civilian group.  The protestors are continuing their calls for democracy in the face inhumane repression from the TMC including a brutal crackdown dubbed the Khartoum Massacre on June 3rd when TMC forces massacred 128 people and raped 70.

 

The military’s misdeeds have not stopped despite international condemnation, and on July 29th TMC forces killed four high school students and an adult participating in a peaceful demonstration.  In response, the military closed schools indefinitely.

 

The European Union has repeatedly called on the Sudanese government to cede power to a civilian group, and the United States has made similar statements.  However, America’s regional allies and geopolitical games much larger than Sudanese internal politics have impeded the democratic demands of the Sudanese people.

 

 Saudi Arabia

 

Saudi Arabia is a key player in Sudanese politics, and Saudi Crown Prince Mohammed Bin Salman has enjoyed robust support from American President Donald Trump.  Saudi Arabia plays an important role in Sudan due to its economic investment into the country and repeated intervention into the country’s economy and politics.

 

Sudan’s latest political revolution is a call back to the Arab Spring, a political movement across the Middle East which struck fear in many Arab world elites.  Saudi Arabia prefers its sphere of influence to be stable, in order to keep business flowing and lessen inspiration for any political revolutions in their own country.

 

In fact, Saudi Arabia has said as much.  The Saudi Press Agency made an official statement after the Khartoum Massacre in June that said, “The Kingdom hopes that all parties in Sudan will choose wisdom and constructive dialogue to preserve security and stability in Sudan, protect the people of Sudan from all harm, while maintaining Sudan’s interests and unity.”

 

Russia also made ambiguous comments, but they seemed to place more blame at the feet of protestors.  Russian Deputy Foreign Minister Mikhail Bogdanov said, “naturally, in order to do that, you need for order to be imposed, and you need to fight against extremists and provocateurs who don’t want the stabilization of the situation,”

 

Rather than forcefully condemning the military the Saudis focused on “all parties”.  This was the Saudi’s response in large part due to their proximity to the TMC.  Similarly to Saudi Arabia, Russia also prefers stability in the region over any democratic regime change.

 

Cooperation on Iran

 

As with many current regional concerns, the geopolitical games trace back to America and Saudi Arabia’s combined anti-Iran strategy.

 

Saudi Arabia and Mohammed Bin Salman have been in constant contact with the transitional military government ever since al-Bashir was overthrown.  In this time, Sudan has recommitted to fighting Iran with Saudi Arabia and maintains forces in the Yemen war in support of Saudi Arabia.

 

“Sudan is standing with the kingdom against all threats and attacks from Iran and Houthi militias,” Sudanese General Mohammed Hamdan Dagalo said during a meeting with Saudi diplomats.

 

The United States also plays a pivotal role in the excessive force used by the Sudanese military against protestors. Shortly before the June massacre, US Congress blocked President Trump’s plans to sell munitions to Saudi Arabia and the UAE.  However, plans were shortly leaked on how the President could get billions of dollars of arms to Saudi Arabia and its allies.

 

Saudi Arabia is a crucial military ally to Sudan and the TMC is heavily funded and armed by the Saudi government.  This arms pipeline ties the American government to the TMC, and Saudi Arabia has regularly propped up the transitional Sudanese government with cash injections to increase their stability and power.

 

Protestors to Foreign Influence: “Stay Away”

 

For their part, Sudanese protestors and civilian groups are on top of the impact that many Middle Eastern countries have on their internal politics.  Already in April, protestors were recorded chanting in the streets urging Saudi Arabia and the UAE to “please keep your money” a day after the governments sent Sudan a $3 billion aid package.

 

The protestor’s suspicions are well-warranted considering the Saudis’ crushing response to protest movements in neighbouring countries during the Arab Spring.

 

Egypt and the African Union have also played an important role and drawn the ire of protestors for extending the transitional deadline at the behest of strongman Egyptian President el-Sisi.

 

As Sudanese protesters and civil society build distrust for foreign intervention, more needs to be done to ensure that actors with ulterior motives are limited in their impact on the future of Sudanese political and civil life.

 

The European Union has made strong comments, but more needs to be done to hold the United States to account for their abetting strategy of Saudi Arabia.  Unfortunately for the Sudanese, they seem to be caught in the crosshairs of a hawkish anti-Iran strategy that is spilling out all across the globe and further destabilizing countries such as Sudan.

 

Recent Constitutional Declaration

 

Despite the odds against the pro-democracy movement, the Sudanese people did achieve a huge victory on August 4 when the TMC agreed to a constitutional declaration with the opposition coalition which will form a three-year transitional government.

 

The former power of former leader al-Bashir still has deep roots in the country’s political system, and the military will still get to decide the minister of defence and interior.  But it is viewed as a positive step in the drawn-out battle for democracy.

 

Unfortunately, it is unlikely that the military will change its foreign policy strategy, and Sudan will likely still rely on contributions from their allies including Saudi Arabia and Egypt.  And despite the positive moves, the pro-democracy protestors and the international community will still have to keep an eye on proceedings to assure that the military does not cross the line once again.

0

Geopolitics

Libya has been locked in a civil war since 2014 leaving the country in turmoil and regional partners scrambling for power in the fragile nation.  Fighting has ramped up in 2019, and General Khalifa Haftar’s anti-government LNA forces began an aggressive offensive against the Libyan government in April.

 

Haftar’s forces are sieging Tripoli, where the government led by Prime Minister Fayez al-Sarraj is based.  Haftar is not popular in the West due to his aggressive tactics, but he is backed by the UAE and Egypt, and he enjoys tepid support from some Western powers.  Haftar also met with Mohammed bin Salman in the Saudi capital shortly before launching the offensive on Tripoli.

 

With Russia attempting to play multiple sides and the United States offering a muddled policy on the conflict, Turkey and Qatar have emerged as the main actors fighting against Haftar and both have provided resources to militias fighting the LNA.  The United Nations is the biggest player in support of the interim government.

 

With the UAE, Egypt, and Saudi Arabia on one side and Turkey and Qatar on the other, Libya could devolve into a proxy war on a scale similar to Syria or Yemen.  If other global and regional powers do not step up to deescalate the violence, Libyans will continue to suffer at the hands of military force from within and outside of the country.

 

Migrant Centre Attack and European Migrant Deal

 

On July 3, a migrant detention centre in Tripoli was hit by an air strike resulting in over 60 deaths and more than 100 injuries.  Most of the migrants were Africans in route to Europe but caught and detained by Libyan forces.

 

The United Nations forcefully condemned the attack and the UN-backed GNA, led by Sarraj, accused Haftar of being behind the air strikes with help from the UAE.  The government alleged a UAE fighter jet made in the United States carried out the deadly attack.

 

The European Union struck a deal with Libyan authorities in 2017 to stem the flow of migrants into Europe, but the UN and other political organizations have come out against the EU’s policy.  Reports have linked the EU-Libya migration deal with migrants being traded on open slave markets and many migrants living in appalling and inhumane conditions.

 

The latest attack will put further pressure on European governments to take a concrete position on the Libyan Civil War and deescalate tensions in the region.  If it wants to save the controversial migrant deal then the Union may have to do more than stay on the sidelines when it comes to Libya.

 

The European Union has struggled to develop a united front on Libya due to France’s mild support for Haftar in contrast to other European nations.  When the LNA offensive began in April, France blocked an EU statement calling for Haftar to halt the military offensive.

 

President Emmanuel Macron, quite similar to American President Donald Trump, sees Haftar as an ally in fighting Islamic extremism in Northern Africa, despite Haftar’s recent overtures to religious elements at the behest of the Saudi government.  France’s position cripples any European Union play at peacekeeping, and locks the Europeans out of a seat at the table.

 

The tension between southern European countries fervent support of the Libya migrant deal and Macron’s focus on Islamic extremism is a major flashpoint when the European Union discusses Libya.

 

One would expect Haftar to be under increased pressure after his forces were accused of committing the attack.  However, survivors of the migrant centre attack have reported they can still hear air attacks and fear for their lives.

 

Before the offensive on Tripoli, one of Haftar’s key allies, Egypt, was looking at alternative solutions including supporting the government.  But, Haftar’s offensive forced Egypt’s hand to double down its commitment to the LNA.  If Haftar’s forces are connected to the attack then Egypt may be forced to reconsider its position once again.

 

Proxy War?

 

The United Nations is the biggest international actor supporting the interim government of Prime Minister Sarraj.  The United States has wavered in its position, Russia has been talking with all sides, and the European Union has failed to provide a united front.

 

In turn, this has led to countries in the region with hardened stances having the greatest role in the continuation of the war.  Egypt, the UAE, and Saudi Arabia all have economic and political interests in Haftar seizing more control of Libya.

 

However, with the interim government holding out in Tripoli, neither side looks to be the outright winner in this conflict any time soon.  Instead, the fighting is at risk of turning into a protracted proxy war that will devastate the Libyan people and further destabilize the region.

 

Without a firm position calling for a ceasefire, the conflict will wage on and increase in its bloodiness.  Rather than concern itself with resolving the conflict, the international community is divided on the issue and fighting over political and economic control of the war-torn region.
0