Feature: The Decline of Western Global Institutions In the Middle East

Published April 26th, 2018 - 11:00 GMT
The IMF, NATO and the U.N.—fading into the desert (Rami Khoury/Al Bawaba)
The IMF, NATO and the U.N.—fading into the desert (Rami Khoury/Al Bawaba)

 

  • The West is slowly departing from the Middle East
  • The IMF is facing stiff competition from China to finance the region
  • NATO as a military power is losing in a war of influence with Russia
  • And the U.N. is losing the ability to mediate conflicts

 

By Ty Joplin

 

A little over 100 years ago, Britain and France teamed up secretly to take over the Middle East, dividing it into colonial parcels that later became states, and devising a plan to ensure that no other power, internal or external, could govern the region.

That agreement, named Sykes-Picot, established the basic power relationship between the Middle East and the West—one that still lingers today and is enforced by a range of formal and informal agreement. By a mix of cataclysmic and slow-churning developments and crises, that arrangement is slowly changing.

The political institutions that represet Western interests in the world are struggling to do so in the Middle East. There, they are risk obsolescence and are being threatened by parallel institutions from China, Turkey and elsewhere.

As such, political possibilities to renegotiate the Middle East’s place in the world are opening up.

To document this process, Al Bawaba looked at the power of three critical Western institutions to influence politics in the Middle East. The International Monetary Fund (IMF); the economic institution, the North Atlantic Treaty Organization (NATO); the military institution, and the United Nations (U.N.); the political institution.

For all three institutions, Al Bawaba found that their power was either waning or being actively contested by third party countries with their own parallel entities.

If the Middle East could be viewed as a marketplace of power and influence, Western institutions had the market cornered for decades. But now, countries are able to turn to China, Turkey or Russia for strategic backing and trade.

The marketplace has been pried open. 

The IMF, NATO and U.N. were all created from the ashes of WWII, and were intended to stabilize world politics and base it in supposedly universalist values of liberalism, equality and democracy.

But now, the Western experiment in post-colonial global governance may be reaching the beginning of the end with regards to the Middle East. 

 

The International Monetary Fund and Its Dissidents

The IMF's logo on top of civil unrest (Rami Khoury/Al Bawaba)

 

The IMF is an international banking organization founded in 1945 that lends developing countries money on the condition that such countries adopt policies that the IMF feels stimulate economic growth and sustainability the best.

In the IMF’s own words, “The IMF's primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other.” Another one of its stated core goals is to make the state as small as possible so it cannot meaningfully intervene in the economy.

As the IMF puts it, they want to “curb the size of the state.”

The IMF is intricately tied into a web of neoliberal policy makers and advisors, including top advisors to several dictatorships including Chile’s Pinochet—an infamous ruler who led the government of Chile from 1973 until 1990. During that time, he transformed a socialist economy into a neoliberal dream of open markets using a mix of government cuts and military force.

What pushed Pinochet to radically alter Chile was the influence of his economic advisors, who put the neoliberal philosophy of the IMF into practice. In the years to follow, the IMF would press neoliberal policies onto tens of countries, prying them open to global competition while shutting down as much of the states as it can in the quest to achieve ‘pure markets.’

What the IMF call ‘tighter monetary policy,’ many others called extortion.

While governments were happy to take billions in loans from the IMF, the subsequent cutting of subsidies and dismantlement of the public sector has consistently caused public outrage and instability.

Because of this, many IMF policies are implemented with violent force.

In 1977, Egypt accepted the recommendation of the IMF to raise the price of bread in order to receive loans.

As a result, the cost of living for many became untenable and hundreds of thousands took to the streets of Cairo to protest the price hike. Egypt, seeking long-term partnerships with Western institutions like the IMF, was not about to let its people get in the way of global integration.

The army intervened, and in the violence, almost 100 died and hundreds more were injured. The Egyptian government was forced to re-implement the subsidies they sought to remove.

A few years later, the IMF recommended to Tunisia exactly what had led to rioting in Egypt: lift bread subsidies. The Tunisian government complied, and again, rioting broke out by those who could no longer afford to provide for themselves or their families.

Again, the army was deployed to neutralize opposition to the IMF’s policies, and over 150 were killed over the course of a week of unrest. The Tunisian president was forced to re-implement the subsidies of bread.

 

The New Chinese Piggy Bank (Rami Khoury/Al Bawaba)

 

In tying Middle Eastern economics to Western powers, the IMF has claimed it has adapted its approach. But experts say that it has merely re-packaged the same neoliberal content, which makes Middle Eastern countries just as unstable and dependent on the IMF as ever.

This austere approach, and the rise of Chinese global capital, has weakened the IMF’s hold on Middle Eastern economic policy and invited in competitor institutions to challenge the IMF.

“The IMF and World Bank definitely have a checkered history.  They are, mistakenly in my opinion, excessively agnostic towards the political realities on the ground in the countries they attempt to help,” said an economic analyst focused on the Middle East and consultant with the World Bank.

“I think the IMF and other multilaterals have learned that their recommendations need to me more closely tailored towards the countries that they are meant to address.”

As analysts inside the IMF have admitted, “Instead of delivering growth, some neoliberal policies have increased inequality, in turn jeopardizing durable expansion.”

The IMF has even sought to rhetorically distance itself from its own policies and their repercussions. An IMF blog meant to provide insight into the IMF’s thinking claims that “importantly—the IMF has strongly advised against cutting food subsidies, for example, for bread in Jordan and Tunisia.”

This is simply not true. While the IMF has re-worded its recommendations to be less blunt, it still seeks to cut subsidies for basic goods like food and fuel. Early this year, rioting broke out in Tunisia and Sudan thanks to governments complying with IMF recommendations to lift bread subsidies.

In Tunisia, hundreds were arrested. In Sudan, tens were killed and even more tortured by security forces. Jordan also witnessed unrest as the government complied with an IMF recommendation to lift bread subsidies, doubling the cost of a loaf overnight.

“Since 2011, despite the fact that there is no evidence whatsoever that the policy recommendations of the international financial institutions actually work and lots of evidence that their failure was a significant factor motivating the uprisings, the IMF and World Bank are back at it again with only cosmetic rhetorical changes in their policy recommendations,” argued Dr. Joel Beinin, professor of Middle East history at Stanford University, in an interview with Al Bawaba.

This has created an opening for competitor global banks to challenge the IMF’s supremacy as the most dependable place from which countries can seek loans.

“China is a major exporter of capital to developing countries and wants to institutionalize its role,” said senior fellow at the Carnegie Endowment for International Peace and professor of finance at Peking University.

“[China] believes, probably correctly, that the existing set of institutions such as the IMF and the World Bank are structured in ways that reinforce the existing geopolitical concerns of the U.S. and Europe, and Beijing probably wants alternatives more in keeping with its own geopolitical concerns.”

As China continues to experience unparalleled economic growth, it has set its sights on western Asian markets it perceives to be opening up due to the IMF’s obsolescence.

For countries inside the Middle East, the Chinese equivalent of the IMF, called the Asian Infrastructure Investment Bank (AIIB), is an attractive alternative, for the simple reason that each loan has far less strings attached, meaning states don’t have to radically alter their structure or policies to get them.

In practical terms, this means states don’t have to cut subsidies or limit their public sector to qualify for Chinese loans. “Privatization will not become a conditionality for loans,” an anonymous source familiar with the internal affairs of AIIB told Reuters.

“Deregulation is also not likely to be a condition… The AIIB will follow the local conditions of each country. It will not force others to do this and do that from the outside.”

A former economist for the World Bank told Al Bawaba that both the IMF and World Bank see the rise of Chinese global banks as threats rather than complements to IMF/World Bank development goals. 

China has also began building a gigantic, global infrastructural overhaul that would literally see roads in the Middle East lead to China. For the initiative, China is building seaports around all of Asia, in addition to new roads and other infrastructure. The IMF, as a mere lender, cannot compete.

 

China's increasing investment abroad (Council on Foreign Relations, Rami Khoury/Al Bawaba)

 

China’s so-called ‘One Belt One Road Initiative’ offers billions in infrastructure and development that will directly tie countries’ economy to the exports and imports of other nations— all under China’s watchful gaze. 

Although Dr. Pettis, along with other experts, are skeptical how long China can last as a viable competitor to Western institutions like the IMF, Western replies to China’s growing influence has been sluggish and reactionary.

Chinese trade with the Middle East and North Africa have skyrocketed, going up 50-fold from 1994 to 2013. Since, China has been stepping up its economic activity in the region, and promises to continue to do so as it builds new inroads through the Middle East.

In fact, China has been spending tens of billions of dollars annually to buy up foreign seaports around the world, including one in Sri Lanka that it helped to build. A part of China's strategy appears to be to hand out massive loans to developing countries to help build infrastructure, knowing that country will not be able to pay the loan back. Then, China swoops in, offering to purchase the indebted project and take it off the hands of the country.

China is building its own global infrastructure under the guise of developing other countries' economies. 

Chinese trade with Middle East and North Africa from 1994 to 2013 (Wall Street Journal, Rami Khoury/Al Bawaba)

 

The IMF, as the economic arm of the Western world order, is waning as a primary influencer in the economics of the Middle East.

 

NATO’s Slow Disappearance from the Middle East

Turkish President Recep Erdogan pictured at a NATO conference (AFP.FILE)

 

In the power struggle between the Soviet Union and the West during the 20th century, the Middle East was seen as a region on the fringes of global power. But things are changing fast, and the Middle East is storming onto the scene as the center-point upon which the world’s powers balance and counterbalance.

Since the region opened with the 2011 Arab Spring, regional and global powers have surged forward to secure holdings and stake out interests.

NATO, like the IMF, is struggling to keep up with regional competitors that seek to offset the power of the West to determine what happens in the Middle East.

Turkey is NATO’s most crucial partner in the Middle East. It used to be seen as a reliable ally, but now it is weighing its options and beginning to unveil geopolitical ambitions that not only distance Turkey from NATO, but could unseat NATO as a meaningful military alliance in the region.

“NATO’s main focus is to provide security in the Euro Atlantic Area, however, it has ‘borders’ with the Mediterranean Sea and Turkey became a member in 1952,” said Boris Toucas, a Visiting Fellow at the Center for Strategic and International Studies (CSIS) to Al Bawaba.

“The need to keep the Soviet Union at bay pushed Turkey to join.”

When acting in unison, NATO member states can unleash quick and devastating military power. In 2011, NATO moved swiftly to end the civil war in Libya and topple its president, Muammar Gaddafi. After seven months of NATO airstrikes, Libya’s army was devastated, the president was killed by rebels and Libya was submerged in chaos from which it has never resurfaced.

This kind of unified military action now looks less likely as Western member-states struggle to compete with Russia as a military ally to Middle Eastern nations.

Toucas claimed in an interview that NATO’s presence in the Middle East is meant to ensure stability rather than maximize Western power. This may change however, as Russia looks to accelerate its role in the region as a powerbroker and entice Turkey as an ally.

This would inevitably draw Turkey away from NATO, thus removing NATO’s ability to determine what the Middle East’s political landscape looks like.

Russia has quickly become the leading power in Syria, setting up political mediation talks and agreements in Asatana to established supposed ‘de-escalation zones’ and develop a blueprint for postwar Syria in conferences in Sochi. Turkey’s President, Recep Erdogan, is looking to expand Turkey’s role in the region and beyond as a formidable player.

“Politically, NATO grants Turkey both the legitimacy and leverage in the West. I just don’t see that going away,” claimed Dr. Mohanad Ali, Director of Communications at the Carnegie Middle East Center.

“I just don’t see why Turkey would pull out from such a powerful military alliance given the multiple benefits that this entails,” he added.

 

Erdogan and Putin meeting to discuss the Syrian conflict (Rami Khoury/Al Bawaba)

 

A sign that the balance of power is slowly shifting away from a Turkey-NATO alliance toward a Turkey-Russia partnership is the quiet purchase of Russian-made defense missile defense systems.

Those S-400 missile defense systems were purchased by Turkey for $2.5 billion in late 2017 and are incompatible with NATO defense systems, meaning they cannot be integrated into NATO’s defense infrastructure. According to experts, this purchase is a notable move by Turkey, because it primes the country to be able to move closer to Russia and farther from NATO.

It also makes it much easier for Turkey to be integrated into a Russian bloc of defense systems.

“Turkey is playing between U.S. and Russia, especially because of the lack of hegemonic power in Syria,” said Ismet Akca, a scholar at the Carnegie Middle East Center, to Al Bawaba.

“The purchase of S-400 missiles should be seen as leverage, as a cause against the U.S. in foreign policy.”

Dr. Ali agreed, calling the purchase a kind of ‘safeguard’ for Turkey in the case of a shift in the balance of power in the region. Beyond the purchase of the systems, Turkish and U.S. relations are deteriorating fast, to the point that Erdogan is now making direct threats against U.S. troops on the ground in Syria lest they get in the way of Turkey’s regional aims to enlarge its foothold in Syria.

Turkey has been more openly hostile to German, another key NATO ally.

Turkey blocked German politicians from visiting German troops in Turkey after Germany granted asylum to several military personnel who allegedly took part in a failed coup of Erdogan.

A little over a week after NATO’s announcement, Germany told the world that it would be moving its Middle East operations from the  Incirlik airbase in Turkey to a new base in Jordan.

If tensions continue to rise and the partnership with Turkey to other NATO member countries becomes more fragile then, “Turkey would like to establish closer ties with Russia,” something that Russia would likely incentivize, said Akca.

Though no calamitous divide has happened yet, and indeed may never happen, the pieces are currently being laid to undercut NATO members’ influence in the Middle East and be replaced by Russian interests.

 

The United Nations and Its Parallel Competitors

What has tied much of the globe together into one world order has been the United Nations. Designed to safeguard the world from massive human rights abuses and tyrannical, war-mongering government like Nazi Germany during WWII, the United Nations is the political arm of the West.

Despite its size and scope as the biggest international institution ever made dedicated to preserving human rights, its ability to meaningfully engage in crises is visibly ailing.

The U.N. has consistently failed to bring an end to conflicts in the Middle East. Its ability to bring peace to wartorn nations via mediated negotiations or even sending peacekeepers to conflict zones, is happening less often.

While the U.N. Security Council stumbles and hesitates on meaningfully enforcing resolutions designed to make peace, regional powers like Russia and Turkey are now leading parallel mediation processes that have far more of an impact on the ground.

Geneva talks are being replaced with Sochi, Astana and Istanbul talks.

 

The Failure of Syria

An airstrike in Douma of Eastern Ghouta, Syria in 2015 (AFP/FILE)

 

When the war in Syria began, the U.N. immediately set out to establish an observer force to try and regulate the conflict. It didn’t work, and after a few months they were forced to pull out due to escalating violence.

Then, they worked to rid the Assad regime of its chemical weapons, a task that also proved impossible as chlorine gas attacks regularly occured in Idlib and Eastern Ghouta. The U.N. has held several meetings to discuss investigating the use of chemical weapons, but for Syrians on the ground, these conversations may well have never occurred.

The United Nations Security Council (UNSC) has passed numerous resolutions calling for the establishment of humanitarian corridors to deliver aid to besieged civilians in addition to ceasefires.

These too, are not panning out.

“The UNSC cannot exert any form of enforcement mechanism as part of any ceasefire resolution. Without such a measure of objective enforcement, UNSC attempts to the end or even lessen the conflict are not durable,” said Jesse Marks, a Scoville Fellow and Middle East analyst, to Al Bawaba.

Most recently, the UNSC attempted to enforce a 30-day ceasefire in Syria to allow aid into Eastern Ghouta, a suburb of Damascus that was relentlessly bombed by Assad and Russia air forces. The ceasefire was announced on Feb. 24, and just hours later, reports flooded in that Assad was continuing his bombing campaign of Eastern Ghouta. The ceasefire not only collapsed immediately, it never appears to have existed in practice.

The one tangible attempt at mediation have come not from U.N.-sponsored talks, but from joint sessions held by Russia, Turkey, Iran and Syria in Sochi and Astana, Kazakhstan. In Astana, the major powers acting in Syria agreed to establish four de-escalation zones to begin mediating the conflict. Though analysis points out that these zones may have been created to regulate different frontlines and serve the self-interests of the parties involved, their very implementation points to a fault in the U.N.’s ability to do the same.

According to Marks, Russia “hijacked Syrian negotiations from Geneva and attempted to bring together a new coalition.” This coalition, periodically meeting without influence from the U.N., is likely to draw the postwar map of Syria and determine the fate of Assad, with or without the U.N.’s consent.

While the U.N.’s Charter explicates its role to be solely in peacemaking, those involved in the Asanta talks are now in the process of dividing up Syria amongst themselves, trading strategic points and opening new frontlines in various grabs at regional power.

Russia has secured a permanent military presence in Syria and a reliable weapons trade client. Iranian militias are flowing freely throughout the entire country, and are working to cement Iranian influence. Turkey and its allied militias in the Free Syrian Army are creating a foothold in Afrin, in addition to maintaining their grip on Manbij to the east and Idlib province.

They, in other words, are not in the peacemaking business, and to them, the U.N. has no answer.

The U.N. Secretary General, unable to contest the Astana players, have only offered general words of encouragement, in addition to stressing the importance of humanitarianism.

In legally justifying their particular intervention, they used the logic of UNSC Resolution 2254 calling for a humanitarian ceasefire, ironically using the U.N.’s own jurisprudence as a launchboard to continuing the war in Syria.

For Syria, the U.N. has retreated and been replaced.

 

The Catastrophe of the War in Yemen

Mohammad bin Salman (Rami Khoury/Al Bawaba)

 

The U.N.’s role in Yemen tells a similar story to Syria.

When Saudi crown prince Mohammad bin Salman ordered Saudi forces to intervene in Yemen, he did so with a coalition of Arab states, the U.S. and U.K. backing him. One of his first targets was the agricultural infrastructure of Yemen, striking it until Yemen, as a whole, was crippled and totally dependent on importing food, fuel, water and medical supplies.

Then, bin Salman implemented a naval and air blockade over the country, choking off civilians from critical resources.

After about a year, it was clear the coalition had effectively starved one of the world’s poorest countries and created what is perhaps the worst humanitarian crisis of the 21st century. 22 out of 28 million civilians are in need of humanitarian assistance, eight million are on the brink of famine, two million have been displaced, and over a million had at one point contracted cholera.

In response, the UNSC has met continuously but failed to implement an actionable resolution.

Most recently Feb. 26, the UNSC met and unanimously passed Resolution 2402 on Yemen renewing sanctions against the country and re-iterate the requirement that humanitarian aid should flow into the country unhindered.

As the UNSC is the only U.N. body with supposed binding power, it would be assumed from such a resolution that countries would have a legal obligation to service the opening of Yemen’s ports to allow aid to flow in.

However, this is not the case.

Bin Salman periodically closes off and eases Yemen’s ports but has never fully allowed a humanitarian aid route to form, meaning Yemeni civilians are stuck relying on the Saudi prince rather than the U.N.

 

Smoke billows following a strike in Yemen (AFP/FILE)

 

Like the Astana signatories in Syria, the Saudi-led coalition has no interest in ensuring peace in Yemen. They are preoccupied with destroying the Houthi rebels, who receive logistical and arms support from Iran.

Resolution 2402 is an example of the U.N.’s inability to meaningfully act for peace in Yemen.

The resolution, already vague and unenforceable, is a watered down version of a previous draft introduced by the United Kingdom.

In the first draft, the UNSC would have recognized intentional targeting of civilians in Saudi’s relentless campaign, which is supported by UNSC permanent members like the U.S. and U.K. Russia vetoed the resolution and forced the council to stay silent on civilian deaths.

While the U.N. eventually adopted resolution 2402, its adoption was meaningless from the perspective of embattled Yemeni civilians, and counter-intuitively naturalizes the Saudi offense in Yemen to being just another offensive against militants rather than a concerted effort against civilians who are already counted as being the poorest in the Middle East.

“The UN seems helpless to stop the carnage in Syria or Yemen yet it can identify wrongdoing and mobilise public opinion on behalf of the victims,” argues Richard Falk, a professor of International Law at Princeton and former expert for the U.N.

While international pressure has certainly built on Saudi to ease its restrictions and bombings in Yemen, it only appears to be tangentially and temporarily effective.

Like in Syria, the U.N.’s directives on Yemen exists more as a voice of discontent than a force capable of directing the political landscape. In its place is bin Salman, a man hellbent on obliterating Yemen before seeing Iran gain power in his backyard.

 

Where Does this Leave the Middle East?

Residents of Kobane, Syria return to the rubble (AFP/FILE)

 

The region stands at a crossroads, shifting in between Chinese, Russian, Turkish, and Western influence. Economically, countries can seek loans from China or the IMF. Militarily, states can align with Turkey, Iran or NATO. Politically, governments can go to Russia or Iran to seek legitimacy and mediate conflicts.

There are options now for whom to rely on for international backing, making the Middle East a testing ground for international power. This is especially true since the West’s departure from the Middle East is being replaced by a patchwork of divergent and disparate powers that have their own agendas for the region.

Turkey could become a serious regional hegemon if proves a capable military power. China could tether the Middle East’s economy to itself if its ambitious plan to challenge the IMF and build a new network of global infrastructure around it proves successful. Russia may outright replace the U.S. and the U.N. as political mediators if it continues to make gains in Syria and beyond and become a dealmaker in other countries.

These shifts are subtle and at-times intangible, and have caused seismic shocks that have only registered with a few experts, policy makers, and analysts. Major media outlets have thus far largely not picked up on the trend.

However, these tectonic and largely structural moves will inform the landscape of the Middle East for the foreseeable future and help to explain why it is seemingly engulfed in a chaotic whirlwind.

 

This article is a curated and edited compilation of a series of investigate analyses Al Bawaba has done on global institutions’ waning power in the Middle East. You can read individual analyses used in this article below:

 


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