Top 10 Middle Eastern Developments To Watch (Part 2)

July 16, 2012 by Sergiusz Scheller in Middle Eastern Politics with 0 Comments

The second part of a two-part piece providing the top 10 Middle Eastern developments to keep your eye on. In this section: the Egyptian constitution, oil and gas in Cyprus and Israel, Indo-Pakistani relations, Afghanistan, and terrorism in the Yemen and the Sinai.

This piece follows on from Top 10 Middle Eastern Developments To Watch (Part 1).

5. Egyptian constitution

This issue should be at the top of Israel’s security agenda. Two important things to watch out for: the timing of the new constitution’s inception and the division of powers between president, parliament and the military. The Supreme Council of the Armed Forces (SCAF) might want to delay the passing of the constitution for as long as possible in order to buy some time and attempt to undermine Muslim Brotherhood’s legitimacy in Egyptian society’s eyes. Such efforts would ultimately prove to be fruitless, but they might just be enough to keep Egypt under control for long enough to wait for the Iranian crisis to fade away. The last thing the Egyptian military would want to deal with is a president letting Iranian warships through the Suez Canal bound for Tel Aviv to avenge bombarded nuclear facilities. Or, more likely, an Egyptian president happily letting through cargo ships loaded with guns destined for Hezbollah and Hamas. Unlike the Muslim Brotherhood or the Salafis, SCAF understands very well that Egypt cannot afford an open conflict with Israel.

The new constitution will stipulate the division of powers in Egypt – the presidential system is likely to be preserved. However some of the powers might be kept by SCAF, transforming the Egyptian system to resemble the Turkish model of division of power. Nevertheless, parliamentary control over state-owned enterprises has already had some repercussions for Egypt’s gas trade with Israel: Cairo has scrapped the deal according to which Israel would buy gas for prices below the market value and has stopped delivering gas. Israel points out, and rightly so, that the supply shutdown is in violation of the economic annex to the peace treaty of 1979.

Leaving Israel aside, the constitution of Egypt will permanently change the course of Levantine and North African politics. Egyptian society has always played the pioneering role in the Arab World, and once again it will be leading the way. The legal framework of the constitution might determine the future success or failure of the Muslim Brotherhood in mending the country’s crippling economy and society, troubled with deep sectarian divides. This success or failure will also determine whether Islamism is just another stop, after Arab nationalism, on the Arab journey to seek its identity’s final destination.

4. Oil and gas bonanza in Israel, Jordan and Cyprus

Cyprus and Israel are soon to become new gas Eldorado. The discovery of natural gas in the Israeli and Cypriot exclusive economic zone (EEZ) waters, some 50km west of Haifa, as well as the discovery of world’s second biggest reserve in of oil shale in Israel and Jordan can bring a huge cash flow to these countries and permanently change the geopolitics of the Levant. Cyprus and Israel are already working on unitization of gas extraction in Aphrodite deposit, which lies on the border between the Israeli and Cypriot EEZ. Extraction at Israel’s Tamar and Leviathan gas deposits are planned to be fully operational by 2020. Israelis intend to use the FLNG technology – a floating extraction plant – or simply put a ship, which extracts, liquefies and pumps gas onto tank ships, which then sail off to ports.

Russia and South East Asian countries are already interested in buying, but the EU might also be keen to get the goods, since now, more than ever, it seeks to diversify from its main energy source (yes, I mean Russia). Cyprus also plans to build a pipeline, starting at Aphrodite deposit, going to the Cypriot coast, then to Crete and finishing in Greece. Nicosia hopes the revenue will stabilize its economy and free it from all future economic shakedowns in Greece, to which it is currently dangerously tied.

There is, as always, a dark side to these new discoveries. History teaches us that there is a well-documented proportionate correlation between rivers of cash and rivers of blood. It would be far-fetched to claim the new gas and oil deposits will precipitate a major war, but conflicts, so far only diplomatic, have already started. Lebanon unilaterally announced that Israel’s water border should be moved 22m (!) south. Moving the border south gets Lebanon roughly 500 square kilometers extra sea territory for their exclusive exploration, and the sole rights to profits from any resources, live or fossilized. Cypriot activities are already causing irritation in Ankara, which claims that by signing EEZ agreements, Cyprus opens Pandora’s box with regard to its northern neighbours’ claims. Turkey sees no good in Cyprus bathing in gas dollars and might step up its diplomacy to limit Greek Cypriot profits.

Shale oil is a different story. Luckily enough, most of Israel’s shale oil reserves lay in Israel proper, not in the West Bank, hence no need to launch another campaign to “explain” her actions in the Palestinian territories. Israel and Jordan are in an early stage of negotiations (read: declarations were made and everybody went home) with Jordan regarding potential cooperation in oil extraction in order to increase profits. Israel is blessed in that matter, as natural gas is necessary to vaporize oil trapped in shale stones and having both resources, it makes the future Israeli industry self-sustainable and insulated from global market’s price fluctuations.

Altogether, Israel’s combined oil and gas resources are worth a striking $717 billion, and Cypriot Aphrodite $129 billion. This fortune will undoubtedly have an impact on the Middle East for at least the rest of this century.

3. Indo-Pakistani rapprochement

Pakistan and India will have friendly and warm relations – and it’s not just a fantasy of a college student reading too many IR books on international dialogue. This April Manmohan Singh and Asif Ali Zardari met in New Delhi. Although the meeting lasted only 30 minutes, cautiously and proportionately to the current state of bilateral relations, it fairs well for the future of the two countries. Both governments have already considered opening more border crossings to encourage trade exchange (currently limited to one land border crossing in Wagah – a crossing which rather serves tourists coming to watch the odd daily show of nationalism and popular rivalry, then cargo trucks). Banks are also supposed to have exchange offices in order to facilitate investments and, most importantly, peace negotiations have finally resumed first time since their suspension following the 2008 Mumbai attacks.

One may wonder why have India and Pakistan decided right this moment to amend relations. For India, the main motivations is the potential threat from China. As Beijing becomes a global superpower, New Delhi wants to divert its efforts from the half a century old conflict with its western neighbour to counter growing Chinese influence. A similar story can be drawn from Pakistan’s rationale, but for Islamabad the threat comes from the Spin Ghar mountains and the Taliban hiding in their caves. Pakistan has virtually no authority in the Federally Administered Tribal Territories (FATT) and obviously wishes to change it. Terrorism in the FATT is raging, causing strife with the US and undermining the Pakistani government’s prestige in international arena. However, a two front conflict is beyond anyone’s capability (Germany tried it twice: it didn’t work out) and rapprochement with India seems like a natural move if Pakistan genuinely wants to step up its counterterrorism campaign.

2. Post-war Afghanistan

NATO leaves Afghanistan in 2014. It’s a fact: the decision has been made and there is no coming back. It is going to leave an Afghan government controlling Kabul’s government district and maybe few streets nearby whilst the Taliban are more powerful than ever since the invasion in 2001. This topic does not require much deliberation – post-war Afghanistan will turn into the same kind of extremist state as it did after Soviet troops left in 1989. The country has, in essence, a failed economy, lacking in infrastructure and possessing a society that has hardly developed since the initial American action.

1. Yemen and the Sinai Peninsula – new havens of terrorism

Yemen has suffered from domestic turmoil for quite some time. It wasn’t only the anti-government protests, which erupted after the Jasmine Revolution in Tunisia, but even earlier there were reports of tribal conflicts over water supplies.

Yemen is virtually on the verge of becoming a failed state. Just a couple of days ago, terrorists detonated a bomb at the Policy Academy in Saana. President Saleh might be gone, but Yemen has to face much bigger challenges than Libya, Tunisia or Egypt. The State’s authority over its territories is limited to major cities, leaving terrorists, financed by Iran, thriving in the North and the South of the country. Hadi’s new government has virtually no resources to increase its presence in rebellious provinces or to undertake reforms, which would revive the non-existent economy. And since Yemen has minute natural resources, none of the Western states is keen on entering a substantial and comprehensive development aid project. Since half of Yemen’s population already lives for less then $2 a day, the country can already be seen as a giant harvesting ground for terrorist organizations. Yemen might draw attention of the West, when it will be already infested with Al-Qaeda and Iran-backed terrorist cells. It is an extremely volatile situation right now which can go from bad to extremely dangerous within a few years if the US is not willing to step up its counter-terrorism activities in Yemen.

A threat on a different but still very serious level comes from the Sinai Peninsula. The Egyptian territory east of the Suez Canal has virtually become an outlawed territory after Mubarak’s downfall, falling into the hands of gangs of Bedouin smugglers. It is already estimated that the smuggling industry in Sinai is worth around $0,5 bln. Everything can be contraband – from food and weapons to sex slaves and drugs. Indeed, the Sinai has become one of the major human trafficking spots, where Bedouins kidnap Sudanese refugees desperate to reach Israel, and sell them to Europe and elsewhere. These gangs operate technicals – the Somali-“Black Hawk Down” type – as well as anti-tank missiles, machine guns, RPGs and many more. A development severely worsening the situation is the progressing radicalization of traditionally religion-neutral Bedouins. The culprit for this is Hamas in the nearby Gaza Strip, who trade with Bedouins and recruits operatives to mount attacks on Israel from Egyptian territory. Since Mubarak left the government, there were around 200 incidents of terrorist attacks against Israeli civilians in Eilat or the Negev desert, as well as sabotage attacks on pipelines, which supply gas to Israel. The gas flow has already been suspended a couple of times leaving Israel with gas shortages over the year. This picture indicates that the Sinai might become, alongside Yemen, another haven for Al-Qaeda and Hamas terrorists. The result might be a regional disaster – any major attack on Israel from Egyptian territory will shred the peace treaty into tatters.