Note: Today is the third in a series of posts that detail Eurasia Group's Top Risks for 2013.
The Middle East will enter a new phase in 2013. Arab Spring will give way to Arab Summer, as the region faces a series of increasingly complicated overlapping conflicts. As Americans and Europeans resist deeper involvement, rivalries among Saudi Arabia, Iran, and Turkey, competition for influence between Sunni and Shia, a lack of economic progress, and a resurgence of militant groups will each heighten tensions.
Syria remains the central arena of conflict, as Shia powers -- Iran and Lebanese Hezbollah -- on the one side, and Sunni states -- Turkey, Saudi Arabia and Qatar -- on the other compete for leverage. Jihadists have also entered the fray, and turmoil has spilled across the country's borders into Lebanon, Turkey, Jordan, and Iraq.
Emerging conflicts elsewhere are less obvious. Egypt, Tunisia, and Morocco now have moderate Islamist governments. In Jordan and Kuwait, Islamist opposition groups threaten the governing dominance of secular administrations. But while the words and actions of mainstream parties like Egypt's Muslim Brotherhood and Tunisia's Ennahda make headlines in the West, the more serious risk comes from militant organizations that threaten the ability of new leaders to govern and maintain security.
Fueling this trend is the reality that, across the region, new leaders are trying to consolidate power and build popularity at a time when complicated economic problems demand solutions that will make large numbers of people angry. New governments in Tunisia, Libya, Egypt, and Yemen will last only if they can deliver tangible economic progress for an increasingly frustrated and impatient public.
The risk that a Salafist or jihadist group can exploit these frustrations to seize power in 2013 is low, but groups like al Qaeda in the Islamic Maghreb, al Qaeda in the Arabian Peninsula, al-Shabab, and smaller affiliates continue to attract support and new followers by using resentments against local regimes to foster anger at America and the West.
But Iraq may become 2013's newest hotspot. Sunni-Shia tensions are growing, and none of Syria's neighbors is more vulnerable to the threats created inside that country by radical Wahhabi clerics, often with Saudi or Qatari support, now fueling the emergence of an increasingly radicalized and militarily experienced Salafist movement. The Kurdish regional government is becoming more aggressive in promoting its energy development agenda at Baghdad's expense, and Sunni-led violence inside the country might well encourage Iraq's Shia-led government to forge closer ties with Tehran, antagonizing the governments of Saudi Arabia and Turkey.
The Obama administration wants to focus on domestic challenges and an ongoing foreign policy shift toward Asia. But regional rivalries are heating up, and Americans and Europeans will only add to the uncertainty by keeping their distance -- in hopes that they don't get burned.
On Wednesday, we'll profile Risk #4: Washington Politics.
By Ian Bremmer
A few days ago, I took a quick, informal survey around Eurasia Group on power and global politics. The question: Who are the world's most powerful people? We're defining power as "a measure of an individual's ability to (singlehandedly) bring about change that significantly affects the lives and fortunes of large numbers of people."
Here's what we came up with:
1. Nobody -- In a G-Zero world, everyone is waiting for someone else to shoulder responsibility for the world's toughest and most dangerous challenges. The leaders you'll see named further down this list are preoccupied with local and regional problems and don't have the interest and leverage needed to take on a growing list of transnational problems.
2. Vladimir Putin -- In Russia's personalized system, this is still the person who counts. He isn't as popular as he used to be, and his country has no Soviet-scale clout or influence, but no one on the planet has consolidated more domestic and regional power than Putin.
3. Ben Bernanke -- The world's largest economy is still struggling to find its footing. To help, no one has more levers to pull and buttons to push. The world needs the U.S. economy back on its feet, and Bernanke has more direct influence than anyone else on when and how that happens.
4. Angela Merkel -- For the moment, her commitments are the glue that binds Europe. Merkel's ability to bankroll Europe's emergency funds, win concessions from the governments of cash-strapped peripherals, and maintain solid popularity at home continues to be a remarkable political and policy achievement.
5. Barack Obama -- Even at a time when Washington is focused almost entirely on Washington, the elected leader of the world's most powerful and influential country carries a lot of water. The Obama administration will watch the eurozone from the sidelines and keep commitments in the Middle East to a minimum, but America will continue to broaden and deepen security and commercial relationships in East Asia, and Obama's decisions on how far and how fast to move will be crucial.
6. Mario Draghi -- Europe's backstop. Europe's Central Bank has kept the continent's blood flowing at a crucial moment in its history, and his work is far from done.
7. Xi Jinping -- China's forward progress is the world's most important variable, and Xi Jinping is now the man behind the wheel. Over the next decade, economic and political reforms will be needed to keep China on track, and Xi will make some difficult (and profoundly important) decisions.
8 (tie). Ayatollah Khamenei -- The supreme spiritual and political authority in a country at the heart of a volatile region. Halfway through 2013, Ahmadinejad will give way to a new president, but it is still Khamenei who will decide how the international fight over Iran's nuclear program plays out -- and what the future holds for the Islamic Republic.
8 (tie). Christine Lagarde -- The world's fire marshal. Here is that rare leader whose contribution will be crucial in multiple regions at once. But nowhere will the IMF's work be more important than in keeping Europe on track.
10. King Abdullah Bin Abd al-Aziz -- King of a kingdom with a unique power to move markets. The Saudi monarch is not in the best of health, but the choices he makes in determining who lead the world's hydrocarbon powerhouse into the next generation will help shape the entire global economy for many years to come.
What do you think?
Ian Bremmer is president of Eurasia Group.
ALEXEI NIKOLSKY/AFP/Getty Images
By Crispin Hawes
There are a growing number of signals from Saudi Arabia that the question of when the younger generation of princes will be included in the formal line of succession has been resolved. On 5 November, Prince Mohammed bin Nayef was appointed to succeed his late father as the minister of interior, a decision that is likely the result of a deal between King Abdullah and different branches of the ruling family. As a result of that appointment, an announcement on who will take the second spot in the succession is likely to come soon.
Mohammed's appointment to head the Ministry of the Interior is the latest move in an extended process aimed at setting out the ruling family's plans for the long-term succession. Prince Mohammed replaces his uncle Prince Ahmed at the ministry after a truncated term. Prince Ahmed was likely moved aside, despite official statements that he had asked to relinquish the post, and that hints at a decision on the succession. Defining the long-term line of succession requires public consensus among senior family figures, and Ahmed's recent public statements suggested that he was pushing to succeed Crown Prince Salman, who is set to take the throne on Abdullah's death. Saudi Arabia's opaque internal politics make interpreting what is happening behind the scenes very difficult, but Ahmed's replacement as interior minister could well have been triggered by his opposition to developments in the line of succession. If Abdullah has decided to appoint Prince Khaled al-Faisal as second deputy prime minister, the position occupied by the second in line, Ahmed's opposition would be enough to force his departure.
Abdullah seems intent on defining a long-term plan for the succession in an effort to prevent the kingdom from instability if, as is possible, there is a rapid series of deaths among the current and elderly ruling generation. The transition to the generation of Mohammed and Khaled al-Faisal, grandsons of Abd al-Aziz Ibn Saud and modern Saudi Arabia's founder, has been the subject of speculation for years. Faisal is in his early 70s, only a few years younger than Salman, but the move is a very significant one.
Mohammed's promotion is likely part of a broader compromise between the king and the dominant Sudairi branch of the family. Again the details are impossible to confirm, but it is likely that the Sudairis have retained the interior ministry in return for agreeing to allow the insertion of the moderate Khaled al-Faisal (and not a Sudairi) in the line of succession. If that is indeed what is happening, there will almost certainly be a number of other deals emerging in coming weeks and months that will set the stage for other members of the next generation, including King Abdullah's son Mitaeb, to move into more prominent positions.
Crispin Hawes is the director of Eurasia Group's Middle East practice
JIM WATSON/AFP/Getty Images
By Ayham Kamel and Willis Sparks
When a Tunisian vegetable vendor's act of suicidal despair ignited fury and demands for change across the Arab world last year, the rulers of Saudi Arabia, the wealthiest and most influential of Arab states, went on high alert. Saudis have grown used to trouble across their southern border in Yemen, and when protests swelled in tiny Bahrain last spring, Saudi troops moved quickly across the 16-mile-long King Fahd Causeway to save Bahrain's ruling family from angry Shia protesters. These exceptions aside, the oil-rich Persian Gulf monarchies have so far avoided the worst of the region's unrest.
There are signs that may change. In Kuwait -- a member of OPEC and the Gulf Cooperation Council, home to 3.6 million people, and a base for thousands of U.S. troops -- a long-simmering conflict between an opposition-led parliament and the ruling Al Sabah family has reduced Kuwaiti politics to an increasingly bitter stalemate.
The government, led by Emir Sabah al-Ahmed al-Sabah, appoints the prime minister and claims the final word on policy. Reform-minded opposition leaders now say a majority of the 50 members of parliament should be able to appoint the prime minister and that appointees should answer for their performance to elected legislators. Public protests, fueled by uprisings in other Arab countries, have upped the stakes in the battle for control of policy, and in recent months, things have gotten much hotter.
In November, demonstrators stormed parliament and forced the resignation of Prime Minister Sheikh Nasser al-Mohammed al-Sabah, the emir's nephew. In December, the emir responded by dissolving parliament. In February, new elections were held and, much to the ruling family's dismay, the Islamist-led opposition won a majority of seats.
In the last few months, opposition leaders have summoned several ministers to answer corruption and mismanagement charges. While the emir did not respond by dissolving parliament, the country's constitutional court then entered the fray by annulling the results of the February elections and ordering reinstatement of the previous (less confrontational) legislature. Kuwait's cabinet resigned on Monday. The emir will probably call for new elections to avoid a confrontation with opposition groups, but public tolerance for this pattern of confrontation and reformation is now more limited.
It's unclear what happens next, but in months to come, Kuwait may be headed for the kind of trouble that its fellow oil-producing Gulf neighbors have worked hard to avoid.
The most obvious risk to Kuwait's stability could come from within the country's ruling family. By tradition, the post of emir is meant to pass back and forth between the family's Al Jaber and Al Salem branches. But with the death of the previous emir, an Al Jaber, in January 2006 following a nearly 30-year reign, a member of the Al Salem branch held the post for just nine days. The current emir, another Al Jaber, elbowed him aside. He is now 83 years old, and there is no clear plan for succession. When he dies, the Al Salems will probably become more assertive to ensure that their branch of the family is not reduced to permanent second-class status within the ruling elite. The Al Jabers will push back.
In addition, as in Saudi Arabia, some within the family worry that the current ruler has moved too quickly on reform, and there is a generation of younger royals who are already competing against one another for access, influence, and power. With every hint that a formal transfer of authority will soon begin, behind-the-scenes fighting will intensify as dozens of power players move to protect and enhance their positions. The resulting conflict could spill into the open -- and at a moment when determined opposition politicians and an increasingly restive public are ready to test their leadership.
Kuwaiti security forces can handle moderate levels of unrest. They've done it before. But an unexpected surge of demonstrations in a moment of divided leadership could provide them an unprecedented test.
That, in turn, could spook investors already worried about the impact of potential Middle East turmoil on the region's oil supplies. It could also bring higher levels of public anger into other Gulf states -- maybe even into Saudi Arabia. Kuwait is not Syria or Libya or even Egypt. It is a wealthy country unused to large-scale public unrest. But like regional heavyweights Saudi Arabia and Iran, Kuwait is an authoritarian country facing the medium-term prospect of generational change within the leadership in a volatile historical moment for the region.
That's why it will certainly bear watching in months to come.
Ayham Kamel is an analyst in Eurasia Group's Middle East and North Africa practice. Willis Sparks is an analyst in the firm's Global Macro practice.
By Crispin Hawes
The death of Saudi Arabia's Crown Prince Nayef bin Abd al-Aziz, though unsurprising, highlights the risk of policy stagnation, an issue of some significance for the Kingdom given its domestic challenges.
As expected Nayef's full brother and appointed successor, Minister of Defense and Aviation Salman bin Abd al-Aziz, has been anointed as Crown Prince. But the current generation of princes-the sons of the kingdom's founder, Abd al-Aziz Ibn Saud-is facing the end of its period in power, which has lasted since their father's death in 1952. There are a few potential candidates to succeed Salman, but the most obvious choices are the Deputy Interior Minister Ahmed (a full brother of Salman and Nayef), Muqrin, a longtime ally of King Abdullah and the General Director of the Saudi Intelligence Agency, and Sattam, Governor of Riyadh.
In broader policy terms, the government will delay any potentially controversial legislation or regulatory reforms. Moreover, there are unlikely to be any significant external or internal policy changes in the coming months. The Saudi regime will want to consolidate power and send a strong message (to both supporters and enemies) that stability will be maintained.
The longer-term danger is that more frequent changes to the succession driven by the age of the current princes will make policy stagnation more likely, creating significant political and economic risk. The Saudi Arabian economy faces considerable challenges and social discontent over economic issues, such as growing unemployment. The current response relies on spending to drive growth and legislative changes aimed at forcing employers to hire more Saudi nationals. These policies are unlikely to address the Saudi economy's significant issues. And as age claims more of the princes in coming years, the likelihood of successive policy freezes makes the adoption of more effective policies even less likely. That outcome would likely open the door to growing social tension and stresses in Saudi Arabia, a regional lynchpin and a vital source of energy for the global economy.
Crispin Hawes is the director of Eurasia Group's Middle East practice.
HASSAN AMMAR/AFP/Getty Images
By Ayham Kamel
The recent failure of Saudi King Abdullah's proposal to turn the Gulf Cooperation Council (GCC) into a confederation of states illustrates Riyadh's recurring inability to integrate Gulf nations into a counterweight against Iran. As wary as the Gulf states are about Iran's influence, they aren't ready to turn any of their independence over to Riyadh. It looks increasingly likely, however, that Saudi Arabia and Bahrain will establish a mini-confederation of Sunni-ruled states, an alliance that is sure to make Shia Iran uneasy. Heightened sectarian tension and the Gulf states' continued reliance on the US security umbrella will, in turn, make it difficult for the US and other Western powers to disengage from the region.
Abdullah had originally proposed a political union for the GCC, but stepped back in response to negative reactions from fellow Gulf states. Saudi Arabia then pushed for a less ambitious confederation at last week's GCC summit in Riyadh, but even that was anathema to other Gulf states. Both in private and public meetings, GCC leaders had expressed deep reservations about an immediate and broader process of creating a political union. This led Saudi Arabia's foreign minister, Saud al Faisal, to clarify that the new framework for integration would preserve sovereignty over domestic issues. Still, there was no traction.
Riyadh and Tehran could not espouse more different ideals, but Gulf states fear Saudi Arabia's Sunni dominance as much as Iran's power. The rulers of Qatar, Kuwait, the UAE, and Oman have built the foundations of their polities on the principle of remaining independent from Riyadh. In the past 40 years, they sought to reinforce their independence by developing security pacts with Western powers and pursuing policies that distinguish them from Saudi Arabia. Even Kuwait's Emir Sheikh Sabah al Ahmad al Sabah, the father of the GCC proposal in the 1980's, is not particularly enthusiastic about the trajectory of Saudi Arabia's union plan. The Arab Spring and shared perception of Iran's aggressive intent are creating a new environment, but common fears will probably not translate into the creation of a common polity.
In the meantime, it is increasingly likely that Saudi Arabia and Bahrain will
establish a mini-confederation. While formally labeled as a GCC union, there
are few indications that other states are currently interested in joining under
the new structure. Riyadh has long contemplated a union with the al Khalifa
regime as a means to resolving the perceived problem of Bahrain's
Shia majority. Saudi Arabia continues to believe that Bahrain represents a
strategic challenge to the kingdom, and a collapse of the al Khalifa ruling
family could prompt an uprising in Saudi Arabia's oil rich Eastern Province
where the Shia population is believed to represent a solid majority. There is
an emerging realization in the palaces of the al Saud that Bahrain's political
challenges are here to stay and that a proactive policy to contain threats from
the small gulf island is more of a necessity than a choice.
Last year's uprising in Bahrain prompted Saudi Arabia to reassess its strategy. Despite the Bahrain regime's uncompromising stance with the Shia population, Saudi Arabia still worries about the long-term stability of its Sunni allies. These worries are reinforced by Saudi suspicion of active Iranian interference in Bahrain. Last month's visit by Iran's president to Abu Musa, the first by a head of state to an island claimed by both Iran and the UAE, increased Saudi fears of Iran's disruptive role in the region. Riyadh probably believes that visit signals Iran's willingness to infringe on the internal affairs of Gulf countries and that Tehran could once again claim that Bahrain is part of its historical territories.
A Saudi Arabia-Bahrain confederation would do little more than formalize Riyadh's leverage in Bahrain's affairs. Most importantly, a confederation would almost definitively put an end to prospects of a negotiated compromise with Bahrain's Shia population. Iran would consider the mini-confederation as Saudi Arabia's de facto annexation of Bahrain, and would feel that it needs to be more proactive in confronting Sunni monarchies in the Gulf. Meanwhile, the failure of the broader confederation means that other Gulf states must continue to rely on the US security umbrella. None of this fits nicely with US aspirations to extricate itself from the region, or with hopes for a calmer oil market.
Ayham Kamel is an analyst in Eurasia Group's Middle East and North Africa practice.
By Crispin Hawes
The Saudi succession process seems secure, if the major participants remain healthy. However, recently-appointed Crown Prince Nayef bin Abdul-Aziz al Saud is encountering some opposition from within his own Sudairi branch of the ruling Saudi royal family with three of his brothers lobbying for advancement. These internal arguments are likely to become more vocal in the coming weeks.
The appointment of Interior Minister Nayef bin Abdul-Aziz al Saud as crown prince and his full brother Prince Salman to succeed him has clarified the immediate succession to the Saudi throne in the event of King Abdullah's death. In reality, the Saudi state remains extremely stable. Not only is the immediate succession secure, but the primacy of the Saudi royal family remains guaranteed by continued support from a number of important groups. There is discontent within Saudi Arabia, without doubt, but the core social compact between the Saudi royal family and central and western Saudis is solid, bolstered by the support of key clerical and commercial communities, tribal ties, and the state's ongoing ability to fund domestic development, economic growth, and welfare provision.
There is, however, an ongoing debate within the royal family about the role of the next generation of princes. The Sudairi branch has been the most powerful clan for the past three decades. The late King Fahd, who succeeded to the throne in 1982, was the oldest of the group of full brothers known as the Sudairi Seven-the seven sons of the kingdom's founder and Princess Hassa bint Ahmed al-Sudairi, a member of a powerful Nejdi family. The crown prince has four remaining full brothers, one of whom, Salman, is the current defense minister and Nayef's successor as noted above. The other three, Ahmed, Abd al-Rahman, and Turki, are currently agitating for promotion. Abd al-Rahman was deputy minister for defense until November 2011, but was relieved when Salman was appointed. He argues he should have been promoted. Meanwhile Ahmed, who is Nayef's deputy at the Ministry of the Interior, has complained that Nayef is actively promoting the interest of his own son, Mohammed. Lastly, Turki, who returned to Riyadh in early 2011 after a long and at least partly-voluntary exile in Cairo, is also agitating for a more senior position.
These disputes are an indication that the slow transition of power to the next generation is under way. At this point Mohammed bin Nayef, King Abdullah's son Mitaeb, and Mohammed, the son of the late King Fahd and current governor of the Eastern Province, are the most likely to move into the regime's highest echelons. All three are gaining plaudits in their current positions and seem to have the support of the current king, as well as Princes Nayef and Salman.
But the Saudi regime is extremely risk averse. It is likely that if Abdullah were to die in the near future, the Allegiance Council (created by Abdullah to manage the succession) would delay the appointment of a successor to the new crown prince for some time. If at that time there were concerns over the health of either Nayef or Salman, the council would likely appoint another member of the current generation as a regent to prevent concerns over a potentially rapid sequence of successions.
Nevertheless, the Allegiance Council is actively discussing the long-term succession and rumors of disagreements between senior members of the ruling family are likely to emerge. In the coming few weeks, the king is likely to undergo medical treatment. Previous rounds of medical treatment have given rise to outbreaks of (by Saudi standards) sharp public disagreement between members of the ruling family. The Saudi state has a long-term incentive to ensure that the succession debate develops in a way that allows the public to become accustomed to less well-known figures; as a result the Saudis are likely to allow a level of public discussion regarding the succession that is unusual for the kingdom.
PEDRO ARMESTRE/AFP/Getty Images
By Ayham Kamel
In a much publicized television appearance on Aug. 8, King Abdullah of Saudi Arabia withdrew his country's support for the Bashar al-Assad regime in Syria, where the government has been beating back protesters for the last five months. The spilling of innocent blood was "against values and ethics," the king said. The Saudi ambassador in Damascus was recalled the same day, prompting similar steps by Kuwait and Bahrain. The developments came in response to Syria's military operations in the Sunni strongholds of Hama and Deir al Zour -- events that rankled the Saudi leadership.
Nevertheless, the militarization of the protest movement over the last few weeks has made Damascus even more assertive and less tolerant of dissent. As such, the situation in Syria is exacerbating Sunni-Shia tensions and raising the likelihood of conflict in all multi-sectarian nations in the region. And while the Gulf Cooperation Council (GCC) states' moves will not inhibit the regime's heavy handed strategy -- more than a dozen protestors were killed on Wednesday -- they presage Syria's emergence as the nexus of a regional power struggle between Saudi Arabia and Iran.
Heightened pressure on the Syrian regime will not lead to the immediate collapse of Assad's regime, but it will chip away at his power. The policy shift will leave Damascus more isolated and may lead Syria's political and economic elite, particularly Sunnis, to reconsider their allegiance to Assad. The GCC countries' change of heart likely also precedes a coordinated international upsurge of diplomatic and economic pressure. Secretary of State Hilary Clinton has already signaled a firmer U.S. stance toward the regime, and new U.S. and European sanctions are expected in the next few weeks. Today, in fact, the US Treasury imposed sanctions on the commercial bank of Syria and its Lebanon-based subsidiary, as well as Syriatel, the country's largest mobile phone operator. These moves, like those of the Arab states, seek to nudge the middle classes in Aleppo and Damascus, which so far have not joined the ranks of the demonstrators en masse. But the Syrian regime remains unlikely to rethink its strategy. The country's military and security establishments are firmly committed to confronting the protesters aggressively, arguing that any other approach would strengthen the opposition.
Saudi leaders, meanwhile, are still on the fence about what the kingdom's Syria policy should be. They know that a political transition would be problematic and could spark a regional confrontation, which is why the king's speech, while criticizing the Syrian regime, also called on Assad to be courageous and introduce reforms. If Syrian policy remains unchanged over the next few weeks, however, the kingdom's position will likely shift toward outright opposition. Iran, in contrast, feels threatened by the potential loss of the Assad regime and of Iran's strategic depth on the shore of the Mediterranean, and has therefore reinforced its support of the Syrian government.
These opposing moves by Riyadh and Tehran suggest that Syria will become the focal point of Iran and Saudi Arabia's regional tussle for power. Indeed, many in Riyadh are beginning to perceive the upheaval as an opportunity to contain Iranian influence in the Middle East. In the meantime, all eyes are on Ankara to see if Turkey's leaders will be able to convince Assad to accelerate his reform program and resolve the crisis.
Ayham Kamel is an analyst in Eurasia Group's Middle East practice group.
By Eurasia Group's Middle East practice
Predictions of coming market booms in the Middle East have a long history of proving overly optimistic, but there are reasons to believe that this year will be different. Clear positive signs are emerging in several countries and in multiple sectors. At the macro level, the region will benefit from upward pressures on energy prices and from the broader phenomenon of large-scale capital inflows into emerging markets.
Many countries in the Middle East -- including the United Arab Emirates, Iraq, Saudi Arabia, and Egypt -- are positioned to take advantage of these trends. Despite Dubai's drawn-out and still incomplete recovery, the UAE will remain the region's most dynamic economy. Investment in energy, petrochemicals, infrastructure, real estate, and education will drive its growth. Politically, Abu Dhabi has strengthened its influence and economic coordination between the emirates is now the norm. Dubai's financial troubles may not be completely over, but the economic and political situation in the UAE will continue to improve in 2011, in part because Abu Dhabi remains in a strong fiscal position.
Iraq will see massive new investment in its oil sector and infrastructure building. The country's myriad challenges cannot be underestimated, and the risk of sliding back toward violence remains, but Iraq now has a viable path forward. Its new government, led by Prime Minister Nouri al Maliki, has representation from all of Iraq's ethnic, sectarian, and political groups; and project work on the country's massive southern oil fields is set to ramp up quickly.
Infrastructure and energy investment will drive growth in Saudi Arabia, which is poised for a strong 2011. Saudi officials are justifiably confident about the direction of their economy. Riyadh is attempting to manage global oil prices unilaterally and does not want prices to rise to unsustainable levels; it would not want to be blamed for contributing to a double-dip recession if the global economy slows again.
Egypt, despite political uncertainty ahead of its September 2011 presidential election, will build on years of strong growth -- buoyed by investment in the energy sector, tourism, remittances, and increased traffic through the Suez Canal. Unemployment, however, will remain one of the top socioeconomic concerns, and something that opposition parties will try to seize on in order to gain popularity.
One of the most interesting political developments in the region will be Turkey's continuing emergence as a significant economic and diplomatic regional player. Long aligned with Israel, and more politically oriented toward Europe than the Middle East, Ankara is in the midst of a significant rebalancing. The effects of a more active Turkey in the Middle East will become clearer during 2011. Economically, Turkish businesses will look to invest and work in countries and regions that Western firms view as too risky, such as Iraqi Kurdistan. Politically, Turkey could emerge as an intermediary between the West and Iran, as well as a regional counterweight to the Islamic Republic.
This post was written by analysts in Eurasia Group's Middle East practice.
KARIM SAHIB/AFP/Getty Images
By Hani Sabra and Willis Sparks
Saudi Arabia's King Abdullah continues his recovery from surgery in New York's Presbyterian Hospital -- though he's probably resting a bit less comfortably following revelations from Wikileaks that he urged the U.S. government to attack Iran's nuclear facilities. There's no reason to doubt that the monarch can head home soon. But given his age -- he's believed to be 86 -- it's inevitable that members of his (very large) family will spend a bit more time in coming weeks thinking about the future. Outsiders are thinking about it too, given the kingdom's role as a regional powerbroker and the world's leading producer of crude oil.
There's plenty to think about, because Saudi succession politics will soon become much more complicated. In most monarchies, including states like Morocco and Jordan, power is passed from king to son. In Saudi Arabia, it's passed from king to brother. The crown moves from one generation to the next only when no viable same-generation brothers remain. As the current generation of Saudi leadership ages, the kingdom will likely soon undergo just such a generational change.
The current generation has a few remaining contenders. First in line, Crown Prince Sultan, 84, spent most of 2009 recovering from surgery in Morocco -- and he returned there for an "extended vacation" in August, before heading home as a precaution when King Abdullah went into surgery.
Next is the conservative Interior Minister Prince Nayef, 77, who was named second deputy Prime Minister in 2009, a position that makes him Crown Prince in waiting. But Nayef has also had health problems. Then there is Riyadh's powerful governor, Prince Salman, who acts as a kind of royal mediator, helping to settle high-level disputes safely behind closed doors. He's well-liked, but he's also in his seventies and had back surgery earlier this year.
Not surprisingly, the third generation of al Sauds are already jockeying for position. King Abdullah's sons hold prominent positions. Prince Meteb is director of the Saudi Arabian National Guard. Prince Abdelaziz is an advisor to the King and has lately taken on some high-level diplomatic missions. Crown Prince Sultan's son, Prince Khaled, serves as deputy defense minister and has raised his profile by leading Saudi Arabia's military engagement with Yemen. Interior Minister Prince Nayef's son, Prince Mohamed, is deputy interior minister and has survived an al Qaeda assassination attempt, burnishing his image as a battler against militants bent on sowing destruction in the kingdom.
Each of these men has developed his own power base. And while the current generation of Saudi princes has generally favored stability over infighting, the process of succession for the next generation is not so clear. Soon after becoming king in 2006, Abdullah established a body called the Allegiance Council to ensure consensus in the royal succession process and to balance the competing branches of the royal family. But the council's powers remain informal at best and vague at worst. And there's no guarantee that a future king won't simply ignore or even disband it.
A third generation king will not likely bring dramatic change to Saudi Arabia. After all, the status quo has been very good to the Saudi royals. But the fight over succession could allow private feuds to spill into the open, an ugly side of Saudi politics that those outside the elite almost never see.
That might one day throw the stability of the ruling family itself into question.
Hani Sabra is an analyst in Eurasia Group's Middle East practice. Willis Sparks is an analyst in the firm's Global Macro practice.
JOSEPH EID/AFP/Getty Images
By David Bender and Jonathan Tepperman
Since last Friday's near-miss terror attack, when a Saudi tip-off revealed the presence of two bombs making their way by air freight from Yemen to the United States, much nervous speculation has focused on two issues. The first is the supposed sophistication of the sender, al Qaeda in the Arabian Peninsula (AQAP), the two year old Yemen-based franchise of the international terror group. Second is the likelihood that Yemen may be quickly collapsing into a Somalia-style failed state, which would allow AQAP to operate there unchecked.
Reports on the technical complexity of the bombs themselves -- which were disguised as printer cartridges and made it past (admittedly insufficient) cargo shipment screening -- bolster the first point. Much of the conversation has also focused on Pentaerythritol tetranitrate (PETN), the malleable military-grade high explosive used in these most recent attempts, as well as in the aborted 2009 Christmas Day underwear bombing (also attributed to AQAP in Yemen). Such components mean that "these bombs have the hallmark of a higher degree of professionalism that we've ever seen come out of al Qaeda before," according to Robert Baer, a former CIA field officer in the Middle East.
Is Yemen the next Somalia? The debate over Yemen's fragility is framed by the severe challenges facing the government of President Ali Abdullah Saleh: tribal rebellion in the north, secessionist pressures in the south, and a dysfunctional economy marred by rampant corruption and dwindling oil and water resources. On top of all that is AQAP, which is now aiming its guns on the government: the group has killed 70 police officers and soldiers in the past four weeks.
Taking a closer look at both of these concerns -- in Baer's words a "new, more dangerous wave of terrorism" in the United States and impending disintegration in Yemen -- reveals that both are overstated. It's not that AQAP isn't worth worrying about. But the danger is not quite on the level of catastrophe.
For example, while AQAP has made several attempts at striking targets abroad -- printer cartridges, explosive underwear, and in one case, a bomb stuffed inside the bomber himself -- so far, all of these plans have failed.
While all of these attacks could have had devastating consequences if they actually succeeded, they pale in comparison to the sort of mega-strikes al Qaeda central has pulled off. The Pakistan-based major league outfit is known for meticulous planning, simultaneous strikes (like the embassy bombings in Kenya and Tanzania), and monumental targets (such as the World Trade Center and the Pentagon). The Yemeni team, judging by its track record, relies on eager but untrained volunteers and luck to hit its much smaller objectives. This scattershot approach may make future attacks more difficult to uncover and stop. But it also means the organization is unlikely to succeed -- and that even if it does, the attacks won't have anywhere near the international impact of 9/11.
While Washington may not yet understand AQAP very well or its place in Yemen's complex political and tribal matrix, Saudi intelligence seems to have effectively penetrated the organization. The Saudis have been watching the group carefully since the Saudi and Yemeni branches of al Qaeda merged and started targeting Riyadh. And the Saudi efforts have paid off. The key role the Saudis played in disrupting the recent bomb attempts suggests that the kingdom's intelligence either has human assets in AQAP or at least has gained the ability to monitor its communications. As a result, Western and allied intelligence organizations have far more insight into this branch than they do into its Pakistan-based sponsor.
As for Yemen, there are good reasons not to count it out quite yet. Yes, the country's long-term prognosis is grim. But Saleh is a wily operator who has stayed in power for 32 years by relying on bribes, tribal manipulations, kidnappings, and military force. For the next few years, at least, Washington and Riyadh -- both acutely aware of the risks the country's collapse would pose -- will not abandon him. On the contrary, they'll keep supporting Yemen with generous financial and military aid. Of course, Sanaa must be careful how it proceeds. The United States and Saudi Arabia are the object of much hostility among Yemeni public. Public exposure of U.S. military counterterrorism operations killing Yemenis (as when the Bush administration leaked a U.S .operation in Yemen in 2002) could end up weakening Saleh's position and boosting AQAP's popularity.
AQAP is plenty dangerous and a failed Yemeni state is a big risk -- eventually. But Yemen is not yet in crisis and this is not the worst terrorist threat the United States has faced.
David Bender is an analyst in Eurasia Group's Middle East practice. Jonathan Tepperman is Eurasia Group's Managing Editor and a columnist at TheAtlantic.com.
MOHAMMAD HUWAIS/AFP/Getty Images
By Hani Sabra and Willis Sparks
The friction between the United Arab Emirates and Research in Motion (RIM), isn't new. Since at least 2007, security officials in the UAE have complained that the Canada-based company that makes BlackBerry devices uses encryption technology that makes it impossible to monitor the content of BlackBerry-generated messages within the country -- creating opportunities for spies, terrorists, and other anti-government militants to communicate within the emirates without fear of detection. RIM exports its data offshore, denying authorities access to its systems.
weekend, the UAE announced
that on October 11 it would suspend BlackBerry services to the country's
subscribers and visitors. A few hours later, Saudi officials followed suit. Emirati
authorities say that unless RIM lifts the veil on its messaging encryption,
allowing security officials to track threats to national security, there will
be no service inside the country. Beyond perceived threats from Iran, al
Qaeda-related groups, or other militants, Abu Dhabi would like to avoid any
repeat of the embarrassment that followed the assassination
of a Hamas leader in Dubai in January, an attack that Emirati officials blame
But the UAE will probably compromise with RIM before the deadline. The emirates have real security concerns, but they also want to build on their role as the Arab world's primary commercial and tourism hub. There are half a million BlackBerry users in the UAE, about ten percent of the total population, and blocking BlackBerry is bad for business. The UAE announced the ban to signal RIM that it's serious about security, but it gave a ten-week heads-up to allow time for a workable compromise.
The UAE will probably do most of the compromising, since RIM, which operates in more than 170 countries, won't live or die based on access to the Emirates. The UAE simply doesn't represent a large enough piece of RIM's business to persuade the company to set a precedent which other governments will insist on following. RIM can make modest concessions without altering the company's security model, and that's probably what it will do.
also possible, though much less likely, that several other countries will
follow the UAE's lead, forcing RIM to either fundamentally alter its security
model or surrender access to some especially lucrative markets.
The Saudis, who say they will flip the switch later this month, will face much less pressure to compromise. Saudi Arabia remains an oil-based economy, and its leaders have no ambition to compete with the UAE for the chance to host more corporate or financial leaders -- or foreign tourists. And though its population is four times larger than the UAE's, Saudi Arabia has fewer BlackBerry users. Closing the door on RIM will have little impact on the country's business and generate little if any domestic opposition.
But this is not simply a story of authoritarian governments and their drive for control. The world's leading democracies have their own communications-related security concerns. In July, India threatened to ban Blackberry use unless RIM provided Indian security officials with access to data transferred by its secured messaging system. RIM reportedly promised to work toward compromise, and talks continue.
And what would happen if militants coordinated a successful terrorist attack inside the United States using BlackBerry's encrypted technology? Remember the phrase "warrantless wiretapping?" If American media reported that the U.S. government had no access to the communications that terrorists use to kill Americans on U.S. soil, how fast would lawmakers of both parties rush to force open BlackBerry's coded communications?
There are many forms of government, but fear is universal. This is a conflict that political officials and technology companies will be fighting on many fronts and for many years to come.
Hani Sabra is an analyst in Eurasia Group’s Middle East practice. Willis Sparks is an analyst in the firm’s Global Macro practice.
By Greg Priddy
It might seem premature to address how the world oil market and other regional powers will accommodate rising Iraq oil production capacity -- considering that the outcome of Iraq's recent election remains unresolved, and the process of putting together a governing coalition has barely begun. But some of the broad dilemmas that more Iraqi oil will create are structural in nature, and not terribly dependent on the new government's makeup. One thing's for sure: Both Saudi Arabia and Iran will face major challenges to their interests if this scenario plays out.
The Saudi-Iraq axis is simpler than the Iran-Iraq one. If Iraq's production capacity rises to even half of the clearly unrealistic 12 million bpd by 2020, which was a goal cited by Oil Minister Hussein al Shahristani, it will likely serve to maintain some of the current overhang of spare capacity for longer than would have otherwise been the case. This would prevent a retightening of the world oil market that may have put upward pressure on prices. Saudi policy will have to confront how to deal with this situation -- both in terms of whether to delay investment in their own capacity, and how to accommodate what has the potential to be a much stronger second-place producer within OPEC. At some point, Saudi Arabia may approach the new Iraqi government for a discussion about how to renegotiate the system of OPEC quotas in order to accommodate Iraq's increasing oil production with both countries' interests in mind. But depending on how the bilateral relationship evolves, achieving this sort of cooperation may be problematic. Iraq has already added written provisions into its service contracts with foreign oil companies dealing with government-mandated output cuts. This demonstrates that the Iraqi side is beginning to grapple with the idea that it may at some point be adding capacity to an oversupplied market and need to exercise restraint.
The implications of increasing Iraqi oil are even more complicated when it comes to Iran. US secondary sanctions under the Iran Sanctions Act (ISA) have been reasonably successful at hindering development of additional Iranian oil and gas production capacity. While they haven't stopped activity altogether, they've kept it at a level where the volume of oil available for export is likely to continue its gradual slide over the next decade as production declines and domestic demand continues to grow. In this scenario, an eventual retightening of the world oil market with attendant higher prices would clearly be in Iran's national interest, helping it to maintain revenues even while volumes fall a bit during the next several years. The increase in Iraqi capacity, however, could prevent this from happening -- taking a toll on Iran's government finances, and potentially creating tension between the two Gulf neighbors. Given the substantial amount of Iranian influence within Iraq, and the still-latent disputes about the border and control over the Shatt al Arab waterway, this market-driven tension could potentially spill over into the geopolitical realm.
All of this, of course, is dependent on whether Iraq's internal stability permits large-scale oil development to move at a rapid pace, which remains a big "if" at this point. Still, it's not just a matter for the oil market. This situation has the potential to substantially redraw the map of state finances and national power in the Gulf.
Greg Priddy is an analyst in the Global Energy and Natural Resources practice at Eurasia Group.
ESSAM AL-SUDANI/AFP/Getty Images
The Call, from Ian Bremmer, uses cutting-edge political science to predict the political future -- and how it will shape the global economy.