The End of an Era.
When the first World War came to its end, intimations of an end to the European Era were already evident in symptoms: aching diplomatic joints, straitened perceptual political vision and the general financial health of the patient about to turn acute, as the constipated monetary policies of the Central Banks ushered in the Great Depression. But ‘life’ went on: European men and women wildly danced the Cancan throughout the 1920s; It was Cabaret, party time. No one wanted to acknowledge the omens of what lay afore them.
Last month, an Israeli academic opined that the future shape of the Middle East lies in the hands of three ‘insider’ states: Iran, Turkey and Israel.
It was an interesting observation. None are Arab; and it implied an incremental US disengagement, and a modest ‘king-maker’ role for Russia.
What makes this statement intriguing is the focus on just three states and the downplay of external intervention as the key ‘shaper’ of the future strategic ‘map’. Implicit here is that all three are flexing their military muscles. But diplomats and political analysts usually prefer to stay at the plane of politics and national interests. They dislike the fact that the outcome of military contestation, per se, can determine political outcomes, and thus validate or negate national interests. It is offensive to diplomacy. But often, it is just so. The region at this time is not really susceptible to a direct conceptual approach: So, the focus on the outcome of military contestation, trials of strength, and then on the other – quite different dynamic – of Covid-19 and its economic effects, makes more sense than traditional purely political calculus of interests.
And, of course, none of us find it easy to mix into this ‘pudding’ of the three powers’ military trials of strength, the possible effects of some extraneous occurrence – such as a Coronavirus outbreak, about which all is guesswork. Nonetheless, let’s try …
Let us consider Turkey: It’s leadership has tossed aside its mask. Ah yes, Turkey has been supporting (moderate?) Islamist opponents to President Assad? But, suddenly, the mask is gone — “Idlib is ours” (i.e. is Turkish). “Aleppo like Hatay, is Turkish too”. Neo-Ottomanism; pan-Turkicism. Yes, the Arab world has noticed, and Gulf States are quickly making good with Damascus against this neo-Ottomanism.
And, just as the moment this explicitly revanchist project seemed at risk of failing – under direct military pressure from Syria and its allies – Ankara simply threw its own troops in support of the al-Qaida forces, and even called down Uyighur and Chechen Jihadist reinforcements from Jisr al-Shagoor (the worst of the worst, extremists). Let us then hear no more from certain western circles of those ‘moderate’ forces with which Turkey is linked.
Some Turkish soldiers (34+), mixed in with these extremist forces, were killed, as they tried to exfiltrate from Saraqib, when it fell again to Syrian and allied forces. Turkish leaders went nuts with emotion and anger. The rhetoric of ‘betrayal’ went off the scale; and then, in defiance of their agreement with President Putin, they unleashed a barrage of ‘suicide’ attack drones on Syrian forces (and military installations) – and separately killed a fair number of Iranians and Hizbullah, by-the-by.
What has this to do with the strategic future of the Middle East? Well this: Turkey’s vastly larger army got a bloody nose (well beyond the Turk’s 34+ dead after Saraqib), from the asymmetric warfare strategy turned on them. Let that sink in: NATO’s second largest standing army effectively was trounced by smaller, irregular (but experienced) forces.
And worse, after 24 hours of Turkey beating its chest about the extraordinary success of its armed drones (launched during an unfortunate ceasefire called by Russia) that were to tip the balance of power in the Middle East, no less, Syrian air defences and (probably Russian) electronic warfare, fully neutralised the Turkish drone threat.
Let’s add up: Turkey has been exposed as having been using Islamism (and Al-Qaida Jihadists) as mere cover for its true neo-Ottoman and Pan-Turkic revanchist ambitions. The mask has fallen. It cannot be replaced. Neither its army, nor its armed drones, have turned out to be the game-changers that the Turkish leadership imagined them to be. Turkey too, has alienated Europe by its refugee blackmail (didn’t Erdogan take into account the impact of ‘the virus’ on European migration sentiment?).
Erdogan has infuriated the Russian military; and in an unprecedented joint warning, Iranian and Hizbullah militaries said that Turkish troops would become vulnerable, were Turkey to continue in this mode. This time, Turkey has ‘ticked off’ just about everyone.
But that is not the end of it. The virus affects another calculus, too: Debt – especially sovereign debt – suddenly is being viewed in highly sceptical way, following the sudden global ‘supply-shock’. Turkey’s economy is in deep trouble – but unlike earlier episodes, when the Chinese helped the Turkish Lira stay afloat, they too have been unimpressed by Erdogan’s trying to protect and use (some 3,000) Uyighur jihadists as a handy Turkish tool. The troubles mount up … and there are signs that Erdogan’s domestic political support is fragmenting (even within his own ruling party).
Putin saw the situation: Conflict between Russia and Turkey is only to the benefit of America. He smoothed Erdogan’s ruffled feathers, caressed his ego – and took ‘off the board’ the M4, the M5, and (ultimately) Idlib too. The 5 March “cease-fire” is a temporary agreement. It won’t last, but it puts the writing on the wall. Idlib is the pin that has popped the Turkish balloon. This represents a major regional strategic shift.
So, let’s visit the other pole to the strategic military equation: Iran has amply demonstrated an effective military prowess – both in terms of missile, drone and electronic warfare technology, as well as by its adoption of a radically de-centralised, amorphous and ambiguous, offensive capability. It is not perfect: it is not intended for going head-to-head with the US or Israel; but it can impose asymmetric costs on any adversary, and spread them across the region.
The Gulf States have come to this understanding; and so has Israel, which cannot face a multi-front war, any more than Iran can prevail in a head-to-head war with the US. (Though the US capability to mount the latter, probably no longer exists. The US can no longer credibly invade Iran in order to supress a concealed and prolonged missile assault on American and Israeli targets.) In short, Iran has acquired something of a military edge — enough to establish deterrence, at least.
And after the military dynamics, we are brought to the geo-politics and economics of the Corona virus.
The virus has brought an extraneous, sudden ‘shock’ to the real economy. The virus is not like seasonal ‘flu. It is much more infectious (the virus being in the throat, rather than lungs), and it propagates via cough and sneeze droplets that linger for many days on objects that others then touch. But unlike seasonal ‘flu, Covid-19 carriers may have the virus, but not have the disease (i.e. show no symptoms), which makes it hard to identify any chain of infection – or to take appropriate containment action. Medical experts, however, do not know the circumstances of Covid-19’s inception (presumed to be zoonotic, but lacking evidence for this); do not know its reproduction number; its fatality ratio; and do not know whether it is affected by seasons. It seems to have already mutated once, producing both a milder and a more lethal variant.
In short, anyone saying how long this virus will last simply is guessing. (Spanish ‘flu – by way of illustration of the nature of viral ‘unknowns’ – began in late 1917, processed through three distinct phases in 1918; mutated, and became more lethal in August 1918; (with the peak lethality taking place in September – November); and began to wane in 1919. It infected one-third of the global population, and killed between 50–100 million persons in Europe, North America and Asia.
So, in the face of such uncertainty, what can we say about the Middle East?
Well, the first point is that this economic shock comes toward the end to a long-term, debt and credit cycle, with the Central Banks having ‘goosed’ asset values with liquidity injections, and near zero interest rates. And here is the point: really for some decades now, all western (and Chinese) policy has been geared to demand stimulation. All the so-called ‘tools’ were monetary, and intended to make people spend and consume more.
But a sudden ‘supply-stop’ caused by a pandemic cannot be corrected by monetary or interest rate means. And factories dislocated, and supply lines cut, also implies ‘demand stop’, as merely being the obvious other side of the production ‘coin’ (as workers are laid off, or their pay is cut).
Already, trade is stalling, tourism is extinct and markets are fluctuating giddily. The virus is even putting into question globalist supply chains and western monetary policy. When the US ‘Fed’ announced an emergency 0.5% rate cut – the first since 2008 – markets fell. Of course the talk will be now of fiscal measures. But even fiscal measures cannot open factories, closed through disease and quarantine. What fiscal measures can do is subsidise otherwise failing businesses, ad interim. But that would go directly against our laissez faire culture (and in the EU, its direct rules).
How badly will the Middle East be affected? No one knows the timeline, or the final virulence of this virus. (Seasonal ‘flu has a 0.2% mortality rate of those infected; but the WHO is estimating 3.4% for Corona virus. The UK’s worst case scenario is half a million dead.) It is unlikely that regional healthcare can sustain the forecast 15-20% hospitalisation of those infected by Covid-19, who will require hospital treatment. Nor can Europe’s health system, either. Estimates (guesses really) for its peak is early summer.
Then there are the economic consequences: Tourism is dead; global markets have been crashing; and everyone is concerned about the massive overhang of corporate and sovereign debt – were the ‘supply-stop’ to be prolonged. Of course, oil producers will be the most vulnerable – for which, read the Gulf States. WTI is already trading in the mid $40s. But also, those most integrated in the New York financial system may be vulnerable to financial turbulence and bankruptcies – for which read Israel and the Gulf States.
It is unlikely that anyone will escape Corona’s effects, one way or another. Even if Covid-19 eases today, there is unlikely to be an economic snap-back. The effects will linger into the following two quarters. At the moment it is Iran that is feeling it most; but the twists and turns in the life of a virus can be capricious: Why is it that Italy has been so badly struck in Europe? No one knows (it seems it may have the more virulent ‘L’ mutation).
So to the bottom line: Strategically, Turkey has lost its game of ‘chicken’ in Syria, and may be about to experience an economic implosion – to be mitigated only by its preparedness, or not – to kowtow to Moscow and Beijing’s demands. Iran will survive – the Shi’a have a long experience of hardship – and Iran is too important-to-fail, for either China or Russia. The Lebanese, Iraqi and Jordanian oligarchs and Zaim (sectarian leaderships) were on the ‘critical list’, even before the Corona economic effects hit them, anew. They cannot reform, and refuse to adapt. Discontent will get worse, and protests generated by the virus-effects will proliferate – just as discontent in South Korea and Japan over Covid-19 already has been directed towards their leaders.
But the Gulf States, already politically undercut by the ‘new Sykes-Picot’ type humiliation on which Trump insists under his ‘deal of the century’ ultimatum – and caught between the rock of Washington’s Iran policy and the ‘hard place’ of the Iranian push-back – will suffer economically in ways for which neither its leaders, nor its stipendiary populations, are prepared.
Oil in the mid $40s (WTI), and a paralysed tourist industry for as long as Covid-19 takes, represents a new ‘shock’ worse than the September Aramco vulnerability ‘shock’.
The strategic map, it is a-shifting.