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Economics & Finance

Looking ahead for the Middle East

As the situation in the Middle East continues to simmer, Christian Koch, Director of International Studies at the Gulf Research Center in Dubai, discusses implications for international relations, the possibility of democratic governments, Arab-Israeli relations, radical Islamic factions and Iran.

Knowledge: At INSEAD’s “Food for Thought” seminar, you talked about the changes in the Middle East. Let’s start about why are all these changes taking place now? What are the main drivers of these protests?

Koch: Many of the drivers of the protests of course are not very new. It’s the aspect of the protests and the political change associated with it that are new in that sense. Over time, we’ve just seen greater amount of frustration been built up within societies about political processes that are not changing, about economic programs that are existing on paper but are not really being implemented in real life, and that frustration has now suddenly come to the forefront.

Knowledge: What do you think comes next and what changes are you expecting, when and where?

Koch: It’s going to be quite difficult, I think, for the way ahead because many of the problems that exist in the Arab world are not problems that are going to be solved overnight. Structured unemployment is a part of all the Arab economies basically and here in the Gulf it’s been an issue for over three decades but still we have that problem which continues to persist. So I expect a lot of volatility, a lot of instability.

Knowledge: The violence in Libya and the presence of Saudi troops in Bahrain concerns many observers. Can there be a way in diffusing the situation?

Koch: Certainly there can be ways of diffusing the situation but as the case of Libya makes very very clear, this is not going to be a solution that is home grown only. This is a solution that is going to have to be actually implemented and enforced by the international community and coming from the inside. So you have the big economic packages that have been put forward by King Abdullah in Saudi Arabia, you even have the economic programs been put forth by the governments of Kuwait, of Bahrain, you have a GCC-wide economic development program for the countries of Bahrain and Oman, you have instances of development projects also being announced here in the UAE. So there is general willingness to use many of the financial capabilities that are at hand to also try to promote reform.

Knowledge: What is the impact on international relations and foreign direct investment?

Koch: The impact on international relations is certainly that we see a diversification in place in terms of how the region itself structures its foreign relations. Certainly in the case of Northern Africa and the Levant, the regimes that will emerge will be a lot more nationalistic, they will look at international relations more from a national perspective and they will be little bit more discriminatorian in the sense of looking at where their relationships are being forged and with whom to enter into various relations with.

In the Gulf it’s a case of definitely looking for different partners that will satisfy national development priorities in each case and these are things when you are looking at specifically economic relationships, business-to-business ties, commercial and trade relationships, and political relationships that are not so much reliant on traditional sources of power, for example simple military protection, or security relationships, like have been in place with the United States.

Knowledge: Can we consider these happenings as a step towards more democratic governments in the Arab world?

Koch: Absolutely, it’s a step into the direction of greater governance and greater democracy, greater liberalization, opening up of the political processes as such, We suddenly see people rising to the forefront and voicing their demands in the streets and they are causing governments to fall. This is a whole new situation that is in place but this is what the people are looking for. They are not necessarily looking for completely different types of regimes but they are looking for a level of responsiveness, within the governing system, that allows reforms to be carried out, and allows certain reforms to be annunciated and then acted upon.

Knowledge: Where does Israel stand now from what’s happening in the region ?

Koch: Israel is going to be faced with a different Middle East in the coming years. The Arab- Israeli issue is not going to be in the forefront of every Arab state as it might have been in the past. There is going to be different little bit of focus, most specifically in terms of each country focusing on the national problems that it faces and how it brings about political change that needs to be integrated into those societies. So the focus will not necessarily be only on Israel as the main external issue that is out there but priorities will be little bit elsewhere. So Israel is going to face more questions about the policies it pursues, it might face more uproar among the Palestinians itself, to which again you are not going to have regional states necessarily being willing to accommodate Israeli interests as they have in the past,

Knowledge: Do you think that the radical Islamists are now the major threat in the region?

Koch: No, I don’t see radical Islamists as being a threat. They are still sort of at the side of society, there are not main stream organizations within the societies here in the region, you could have argued back in 2001 and 2002 that extremist groups had strong influence for examples in some countries like Saudi Arabia, here the fact that they started to carry out attacks within the country, has certainly resulted in the governments starting to clamp down and in the extremist groups itself isolating itself from Saudi society as a whole, these groups have nothing to really bring to the table, they provide no solutions for whatever to the existing political and social and economic problems that exist, and therefore they are not seen as a solution or even as an alternative to what is going on at the moment in the region, so I don’t see extremist groups playing a major role, they will continue to be active and promote some disruptive activities, that certainly can not be denied,

Knowledge: What about Iran, we seen Iran involvement in Bahrain and in many other countries, how will it change the strategy towards the region?

Koch: Iran is interesting on basically three levels at the moment, on the one hand of course Iran has its own political and economic problems to deal with, we’ve seen even in the wave of protest that have swept the Arab world, (there were protests inside Iran, and that the Gap here between the population and the ruling regime has also continued to grow, at the same time on the second level, of course, a lot of the grievances in the region are of a sectarian nature already, and Iran has masterfully, I think in the last decade, sort of played on those sectarian tensions to promote its own agenda, And there is always this potential that Iran would get involved in a country like Bahrain to promote here Shiaa grievances or even do so in Saudi Arabia as a possibility, so there is a regional dimension to this, the danger here is that Iran begins to over play its hand a little bit, the third of course is that despite all the political changes it doesn’t remove some of the key concerns that the regional and international community has about Iranian action in particular about the motives and objectives of Iranian Nuclear program.

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