2009: Predictions and Possibilities

The following is based upon trends that are I expect to take place in the coming year. I will discuss possible outcomes of current trends and offer a few predictions. Most topics will be discussed by country located in the Middle East, but not every country or movement will be covered.

Middle East

Israel-Palestine
Since the Israeli air raids on Gaza are dominating the headlines we can start with the Eastern Mediterranean. Israel has had a temporary cease fire with Hamas controlled Gaza for the last 16 months; however rocket attacks originating from Gaza has forced the Israeli government to respond. In contrast to the 2006 Israeli-Hezbollah-Hamas war, Israel only has one front to deal with and thus little incentive to stop the current operation. Although Israel engaged in a ground invasion of the Gaza Strip, the goals of the operation have not been clearly and thus success cannot be determined. The likely outcome is that Hamas will be hurt but not completely destroyed. In the West Bank we can expect to see the Fatah movement gain strength at the expense of Hamas. Hamas is a terrorist group without any experience governing and it shows in this current crisis. Israel will continue along the status quo with a few interventions by western politicians trying to bring peace. The wildcard for Israel in 2009 will be Hezbollah; it is very possible another war with the Lebanese terror group could breakout.

Syria-Lebanon
Syria has been working with the Europeans and Turkey to hammer out a peace deal with Israel. As I have argued before, Syria has lost its most recent patron – Iran – and now must look to other avenues for economic growth. For this to work Syria must drop the rogue regime act, recognize Lebanon as an independent nation, and reign in terrorist groups (i.e. Hezbollah) that operate under Syria’s watch. Once this is accomplished a peace deal with Israel is a very real possibility in the next two to three years.

The biggest challenge for Syria is Hezbollah. Hezbollah has grown significantly and has proven it can intimidate the Lebanese government and threaten Israel conventionally. The onus is on Damascus to weaken Hezbollah to the point that is cannot threaten the Lebanese government or Israel. In the middle of all this is Lebanon. Lebanon is a country fractured by warfare from a variety of sectarian groups and only knows order when a third party intervenes. Previously that third party had been the Syrians, but that changed with the March 14th democratic movement. Unfortunately, the existence of Hezbollah and the devastation that resulted from the 2006 war with Israel has brought nothing but trouble for this experiment in democracy. For Lebanon to become a stable nation it will take the dismantling of Hezbollah and substantial outside assistance. Since this is unlikely to happen in the coming year Lebanon will be forced to continue limping along. Syria’s fortunes on the other hand are completely dependent upon third party diplomacy and the resolution of the Israeli political mess.

Turkey
Since the removal of Saddam Hussein, Turkey has managed to spread its influence in Iraq, Syria, and even Iran. Turkey has also opened the door towards reconciliation with Albania – a very sensitive topic as the U.S. congress recently found out. The reasoning behind Turkey’s diplomatic initiatives are two-fold, one is looking for alternative oil and natural gas avenues for supplying Europe to break the Russian monopoly on hydrocarbons, and two Turkey looks for any way it can to piss off the Russians despite the two nations being trading partners. Look for Turkey to come out of the global financial crisis stronger and more relevant in the Middle East and Europe.

Iraq
Throughout history the one factor that has started more wars than other is simple geography. Therefore it is no coincidence that Iraq, considered the birthplace of civilization, will be a powerful nation. In the past, wars over this piece of real estate came down to simple location. Iraq was a source of water and all major trade routes went through this area. Today water is still an important resource, but coupled with large oil reserves and other natural resources Iraq stands poised to once again become the regional power player in the ME.

The last five years in Iraq have seen shifting political loyalties with the numerous tribes throwing their lot in with whoever had the most money or guns. But as the U.S. surge went on the Iraqi government has managed to consolidate power through numerous backroom deals. The Iraqi security forces have also gained from the political progress and have become largely self reliant. Perhaps the issue that is most pressing in the U.S. – Iraqi relationship is the future role that the U.S. military will play. On the ground the Iraqis are steady improving militarily, but are still lacking a meaningful air force and have only recently begun training for casualty evacuation. What does look promising is the potential sales of the M-1 Abrams main battle tank to the Iraqi military. If the U.S. is not directly involved in security operations the sales of equipment may prove to be the decisive factor for the central government of Iraq to hold the country together.

Iraq has seen great improvement both on the economic and security fronts, but still has room for improvement. Unemployment is high and security operations are still ongoing in parts of the nation. While al-Qaeda has had its presence in Iraq diminished significantly, the organization still poses a threat. But these challenges can be overcome. The high price of oil this summer together with the increased production out of Iraq has helped boost the popularity of the government. The Prime Minister has personally walked around Baghdad handing out money on several occasions. Gestures such as this will only help to solidify the position of the government. The high price of oil may have been a positive for Iraq but the country still must meet the challenge of diversifying its economy and fostering foreign investment if it is to live up to the countries potential of being a regional powerhouse.

Iran
Iran is in bad shape economically. Inflation is around 20 percent, unemployment is in the double digits, and 18 percent of the population lives in extreme poverty. The Iranian nuclear program has increased these problems by bringing international sanctions against Iranian banks and its wealthiest citizens. Additional problems include government sponsored gas subsidies in the face of high oil prices. Now that oil prices have fallen, Iran has been forced to rewrite its budget for 2009. Iran may be a top exporter of petroleum, but is also a major importer of refined products such as gasoline. In other words, Iran is increasingly vulnerable to international pressure and possibly revolution.

With Iran as isolated as it is and with international sanctions steadily increasing over the nuclear program one would think that military action is inevitable when in fact the opposite is true. Israel has made statements that it will not allow Iran to construct a nuclear weapon and will use force to stop it, but it lacks the military capability to do so. A U.S. led operation is really the only possibility should a military confrontation with Iran take place. The Pentagon has stated that it could destroy the Iranian military in three days, but the U.S. does not see Iran as much of a threat and thus will not make a move in the near future. Even without military action taken against it and new elections coming in the spring, 2009 will be a very bad year for Tehran.

Saudi Arabia
The rapid increase and subsequent decrease in oil prices has not hurt the Saudi Kingdom. In fact, the low oil prices are working to keep Saudi Arabia’s main rival – Iran – weak. Currently the Saudi’s have a cash reserve of about one trillion U.S. dollars and is looking to put that money to use in areas such as expanding oil production or supporting Chechen rebels against Russia. If the Saudi’s are able to expand their proven oil reserves and construct new storage facilities the country will have the ability to cut oil prices overnight to hurt Iran. The biggest challenge for Riyadh in the coming year is to keep Russian adventures in the Middle East in check. The House of Saud enjoys their current situation and don’t want the Russians mucking things up. All in all expect Saudi Arabia to have a good 2009.

Arab Gulf States (sans Saudi Arabia)
The Arab Gulf States are comprised of Bahrain, Kuwait, Oman, U.A.E., Saudi Arabia, and Qatar. Saudi Arabia was considered separate because of the size of its economy and importance globally. In the case of the remaining states all have small populations and large incomes thanks to large petroleum reserves and a steady stream of foreign investment. It is unlikely that any major changes will take place in any of these nations and should continue to be safe for business development and other investment.

Yemen
The country of Yemen is in trouble. Al-Qaeda in the Arabian Peninsula has made a return thanks to the release of members from Guantanamo. Because of the complexity of Yemen a full analysis will follow.