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Geopolitics of Energy

Volume 33, Issue 7

July 2011
Editor-in-Chief Jon Rozhon Editorial Committee Alberto Cisneros Lavaller Napier Collyns Antoine Halff Vincent Lauerman Julian Lee Michael Lynch Sulayman al-Qudsi Editorial Board Peter Adam Anis Bajrektarevic Preety Bhandari Fatih Birol Ged Davis Robert Ebel George Eynon Herman Franssen Seyed Jazayeri Wenran Jiang Tatsu Kambara Alex Kemp Walid Khadduri David Knapp Michal Moore Edward Morse Francisco Parra Robert Priddle John Roberts Adnan Shihab-Eldin Robert Skinner Subroto Paul Tempest Wu Lei

Inside This Issue...

What Really Springs in the Arab World? (Of the Arab Spring and Oil) by Anis Bajrektarevic It has been more than seven months since street vendor Mohammed Bouazizi set himself alight in a Tunisian town square, his suicide a protest against a heavy-handed policewoman who had confiscated his vegetable cart. That isolated event was a catalyst for the dissent, uprisings, revolutions, and civil war that are ongoing today throughout the Middle East and North Africa. Geopolitics of Energy Editorial Board member Anis Bajrektarevic has been watching events closely. In this months issue, Dr. Bajrektarevic offers his observations on the nature of these uprisings: are they the mark of a budding democratic movement in a part of the world dominated almost without exception by repressive regimes? If this is indeed the case, why then have the protests spread to some nations in the region and not to others? Also considered is the larger geopolitical context with so much of the world dependent on the continued free flow of the regions oil, what are the concerns today of leaders in Washington, Moscow, Tehran, Tokyo, and Beijing?

Geopolitics of Energy was founded by the late Melvin A. Conant of Washington, DC in 1979. Since 1993, it has been published under the auspices of the Canadian Energy Research Institute.

Relevant Independent Objective

What Really Springs in the Arab World? (Of the Arab Spring and Oil)
by Professor Anis Bajrektarevic*

The months-long reporting on the unrest in the Arab world misses one important point: each and every country engulfed by the popular revolt is a republic, while monarchies (situated predominantly on the Arabian Peninsula and the GCC) remain largely intact. The difference between countries like Libya or Tunisia and nations such as Saudi Arabia or the UAE is not only geographic it is fundamental. The first are formal democracies of a republican type (traditionally promoting a secular pan-Arabism) and the latter are real autocracies of the hereditary monarchy type (closer to the rightist Islamic than pan-Arabic ideology). Since independence, Tunisia, Libya, and Egypt have formally kept democratic election processes and the institutional framework of executive, judicial and legislative branches. However, in reality these countries have often been run by the alienated power structures of over -dominant party leaders (so-called guardians of the revolution, or some other father of the nation designation). Authoritarian monarchies have been, and still are, ruled by direct royal decree without even formally electable democratic institutions. Modern political history analyses provide us with a powerful reminder that the most exposed and most vulnerable states are countries transitioning from a formal to a real democracy. Despotic, absolutist regimes are fast, decisive, and brutal in suppressing popular revolt (some of them even declining over decades to observe the United Nations Universal Declaration of Human Rights). After all, the source of their legitimacy is an omnipresent and omnipotent apparatus of coercion (police, royal guard, army), not free and fair, democratically-contested, multi-party elections. Real democracies with well-consolidated institutions, civil society, and mature political culture enjoy larger system legitimacy. They are electable and able to channel any popular grievances into the mainstream political process. Democratic institutions with a large participation base also increase the transparency of particular political decisions and are capacitated to place necessary constraints on any eventual alienation of the executive branch. Notably, the consolidated real democracies can translate mass protests from a street event into a democratic, participatory, institutionalized process of socio-economic compromise and political reform for the lasting benefit of all societal segments and an acceptable, enduring outcome for most, if not all, stakeholders. An authoritarian regime will brutally crack any protest and deploy army and police without any hesitation, in order to preserve the status quo (e.g., Bahrain). Even if the street prevails over the regimes forces, transformation will be a personal, not a structural change (and often only when the armed forces decide to tilt their support and back another leader). For the fragile systems that are transitioning from formal to real democracies with developing, but still weak institutions and evolving political culture, the street revolts are posing a particular challenge. They neither can turn the street events into a viable institutional process nor can they brutally suppress the popular revolt.
*Anis H. Bajrektarevic is Professor and Chairperson of International Law and Global Political Studies at IMC University of Applied Sciences, Krems, Austria and a member of the editorial board of Geopolitics of Energy. He can be reached at GEOPOLITICS OF ENERGY/JULY 2011 2

This situation is exactly what we are witnessing in Egypt and Tunisia right now. On the other side, opposing protesters (organized or spontaneous) are inexperienced as well: freedom is more complex than the Facebook feed-news and Al Jazeera may tell. The essence of freedom is greater than free choice; it is actually to hold full responsibility for the choice made. Taking arms and blocking key city avenues for months is neither an expression of freedom nor of democratic choice; it is an autarkic anarchy holding no responsibility. Making a choice without consequence is anarchy. By the same token, democracy is more than a lame slogan from the social network site, which lately inspires and mobilizes the street protesters; it is not a one-time cool flashmobs socializing event. (After all, Facebook is just a communication tool, not a replacement for critical independent thinking.) Democracy is a procedure,1 a finely-calibrated social contract that ties all horizontal and vertical segments of society. This is a truly comprehensive and sustainable way to conceive the past, present, and future of the nation. Many protesters sweeping the streets of Arab cities and cities elsewhere are mixing anarchy with freedom. The end game offers a painful, paradoxical lesson: democracy cannot arise at the expense of the sovereign integrity of the state. Fractured social cohesion does not build up the nation. In short, the overheated spring for many in the Arab world might end up in a long, cold winter.2 Libya is losing its territorial integrity. Egypt is losing its economic sovereignty. Syria and Yemen are each on a dangerous collision course to lose both, and Tunisia is unapt to translate the wishes of the street into badly-needed political reform. One of the most evident side-effects of nation building (especially in the early, constituting years of nationhood) is the eventual alienation of the despots heading the state. Legacies are always mixed, and public opinion is, by definition, emotional when reflecting upon these leaders. In the immediate aftermath of these regimes, condemnation flies furiously, and responsibility shifts onto a handful of individuals. Nevertheless, a cult of personality appears when a leaders personal charisma meets the ringing endorsements of regime poltroons and enduring tacit supporters. Intellectuals and media in the post cult years play an indispensable role. Intellectuals and media should perform independent, yet still responsible and constructive, thinking and acting. An objective, unbiased assessment of the past regime must come from academia, while media has a mandate to enlarge the platform of such debate at the same time to discharge emotional, irrational elements from this discussion. This is the only possible way for self-realization, for emancipation of a nation. Without such reflection (and relief from the national trauma), no society can move forward to find elementary social cohesion. Current events in the Arab countries are particularly instructive for students of the geopolitics of energy. Since we are lacking a critical time-distance and sufficient information (the region is still in flux, far from being settled and peaceful), the following lines are a combination of descriptive notes and predictive claims which certainly pose a risk of inaccuracy. With this proviso, let us start with a consideration of the state of affairs in the Gulf countries. The US has a lasting geoeconomic interest in the Gulf, which is inevitably coupled with the nations extensive security interests. As is well known, oil is the most traded commodity in the world (roughly 12 percent of overall world trade), and by far the largest portion of internationally traded crude originates from the Gulf. Thus, the US imperatives in the Gulf are very demanding: (i) to support the friendly local regimes; (ii) to get, in return, their continued approval for the massive physical US military presence and their vote in international foras; (iii) to remain the decisive force in the region, securing unhindered oil flows from the Gulf; (iv) to be the principal security

guarantor and tranquilizer, preventing any hostile takeover be it of one oil state by another or of internal, domestic political and tribe/clan workings; and (v) to monitor closely the money flow within the Gulf and to recycle petrodollar revenues, usually through lucrative arms sales and other security deals with the GCC regimes.3 The US hegemony in the Gulf, a combination of monetary control (crude is traded exclusively in US dollars) and physical control (the US navy controls all transoceanic oil transport), is essentially a confirmation of the overall US global posture.4 As long as oil remains priced in US dollars, the functional tie between the major currencies exchange rates and fossil-fuel energy cannot be derailed or delinked. Throughout most of oils short history, the prize for black gold was high profits (mostly for Wall Street besides the US military, another essential pillar of American power) but not without pricing the commodity so high as to encourage sustained and consequential investments in alternative energy sources. Basically, the main problem with Green/Renewable (non-carbon) Technologies is not the complexity, expense, or the lengthy time-line for fundamental technological breakthrough; the central issue is a geopolitical breakthrough. Oil and gas are convenient for monopolization (of extraction, international flows, and pricing) it is a physical commodity of specific locality. Any green technology (not necessarily of specific locality) sooner or later will be de-monopolized, available to most if not to all. Therefore, the geopolitical imperative for the US remains preservation not change of the hydrocarbon status quo.5 Within the OECD/IEA grouping, or better to say the G-8 (the states with resources, infrastructure, and know how to advance fundamental technological breakthroughs), it is only Japan that may seriously consider green/renewable technologies. Japan has always suffered from stark, external carbon energy dependencies. After the recent nuclear trauma, Japan will need a few years to absorb the shock but they will learn the lesson. For such a huge economy and considerable demography situated on a small land-mass which is frequently brutalized by devastating natural catastrophes, it might be that a decisive investment in new technology is the only way to revive and survive.6 The US physical presence in the Gulf represents a double threat to Iran geopolitical and geo-economic. Nearly all US administrations since the 1979 revolution, with the first Bush administration being most vocal, have formally advocated regime change in Tehran. On the international oil market, Iran has no room for maneuver, neither on price nor on quotas. Within OPEC, Iran is frequently silenced by the cordial GCC voting. Iran enjoys an excellent geographic position and formidable conventional armed force (after Turkey, the largest of the region), but it is not keen to deploy its military in any open confrontation. The Iranian imperative is rather to try to increase the economic and socio-political costs of the US military presence while avoiding direct military confrontation. Military modernization, the domestic nuclear program, missile tests, and anti-Israeli (holocaust-denial) rhetoric are all aimed at increasing the costs but not for overt military conflict with the US, Israel, or any of the GCC states. Iran is an island of Shia Persians in a sea of Sunni Arabs (also of the Farsi Pashtuns, Hazara or Turkophonic Sunni Caucasus, and Central Asians). Iran has no major territorial claims towards any of its neighbors (but has a significant minority of Azeris and some 30,000 Jews). The current Iranian regime is just trying to survive. The nuclear armament program (if any) would serve primarily for deterrence (in the absence of any credible soft powers) and also to stabilize the regime, increasing its chances for long-term survival. That is where Irans geopolitical agenda moves along in concert with the Russian and Chinese agendas. Neither China nor Russia is interested in direct confrontation with the US over the Gulf. But to see the regional US presence suffering from costly overextension would not be bad news for the oil-gas exporting Russia or for oil-gas hungry, importing China. As in the case of North Korea, neither China nor Russia is enthusiastic to witness the country going nuclear, but

both nations are still far away from wishing for and permitting any regime change. North Korea as well as Iran (and Syria) on the Russian south-west flank is serving a pivotal security buffer purpose.7 Nuclear North Korea has paid a huge political price for its security self-assurance: it has alienated itself from its neighbors, isolated itself internationally, and offers a perfect pretext for keeping a considerable conventional (and non-conventional) American military contingent on its periphery all elements also present in the Iranian case. Paradoxically enough, further pressures from Iran (also the recent cooling of Israeli-Turkish relations) and American overextension in the region, puts Arabs and Israel closer to the negotiating table, which in return decreases the Iranian appeal across the Middle East to exploit anger for its own ideological and geopolitical projections. Finally, if the Israel-Palestine two-state solution succeeds one day, it will be only the threat from an increased Iranian military strength that further assists American arms sales in the Gulf. The US-influenced GCC has, so far, managed to contain the Yemeni turmoil and tribal-clan clashes from spillover deeper into the peninsula. At the same time, Bahrain has fallen relatively silent and other revolts within the GCC are not presently lurking on the horizon. Counterbalancing the GCC, the Russia-backed Iran-Syria axis (which influences Lebanon, but also stretches on to the Cypriot Greeks and the Turkish Kurds) is heavily challenged. It is not only Bashar al-Assads Baath party that has much at stake any significant change in Syria would mean encirclement of Iran, worsening of Russias modest access to the Mediterranean and its position towards Turkey on the Caucasus. It could also lead to the end of pan-Arabism.8 If the sunny Arab spring day is clouded in Tunisia by the incapability of domestic forces to turn the popular revolt into viable and badly needed socio-political reform, and if such a spring in Egypt is shadowed by the military uniforms and old faces with new rhetoric that are effectively running the country, then the spring skies over Libya are full of pelting rain, across tribal lines. The inability of the NATO coalition to bring about a fast and decisive result in the Libyan episode puts Russia and China into a very comfortable position to recapture initiative and lead moral condemnations on the international scene. Nevertheless, in practical terms there was no real difference between the affirmative vote on the UN Security Council Resolution 1973 of the US, the UK, and France and the non-blocking abstention of Russia and China both were needed for the adoption of the resolution and the rapid intervention that came along. (To complete the puzzle, Brazil and India contrary to their vocal anti-Western moralizations also casted abstentions, not negative votes, on the Resolution.) The logic of you do not touch Syria (Russia) and you do not touch Sudan (China), in exchange for a free hand (Libya) presents itself as a seductive hint to the possible bargaining of the P-5 going on behind closed doors. Still, from this short time distance with a lack of comprehensive information, it is a highly speculative hint. Admittedly, up to this writing there has been no Security Council resolution followed by concrete action to stop mass and repeated atrocities in either Sudan or Syria. International intervention in the region has so far ranged from inappropriate and disappointing to nonexistent and disastrous: a slow and weak response by the coalition in Libya to the colossal humanitarian catastrophe in the East/Horn of Africa (not to mention Bahrain and Yemen). It is not clear whether the popular revolts triggered by austerity measures and the grave socio-political situation in Tunisia and Egypt have been preempted (or diverted). One thing is certain: both societies have failed to translate the street demands and produce lasting political reform. Besides the personnel shifts within the presidential palaces, pretty much everything remains the same in both countries they are sinking further into a socio-economic quagmire.9 Young generations of Europeans are taught in schools about one single entity called the EU. However, as soon as serious security challenges emerge, the contradictory positions of the true, historic, multidimensional Europe resurface. Formerly in Iraq (with the exception of France)

and now with Libya, Central Europe is hesitant to act, Atlantic Europe is eager, Eastern Europe is bandwagoning, and Russo phonic Europe is opposing. The considerable presence of China in Africa has successfully circumvented pipeline deals between Russia and Germany (which are eliminating any transit-related bargaining powers from the Eastern Europeans and are effectively representing joint Russo-German pressure on the Baltic states, Poland, and Ukraine). Finally, the overthrows in Tunisia and Egypt both former regimes being friendly to the EU must have triggered alarm bells across Atlantic Europe. The economically prosperous, but socio-politically spent regime that championed pan-African unity, i.e., Colonel Gaddafis Libya, emerged as an easy and appropriate target10 for the Anglo-French-led coalition to: (i) reassert their presence in the Arab world (ii) renew their presence in Africa and to slow China there; and (iii) send a bold message of prestige (past colonial glory) and strength elsewhere in the world, in particular to the Central and Russo phonic Europe to disagree essentially that Russian oil, politically and socially, is the cheapest for the EU. If all the above represents a little bit more of the same (the old geopolitical story of history surrounding the Middle East), there is still one novelty in the current events. It is Turkey.11 A growing economic, demographic, and military power of pivotal geography, Turkey has lately recaptured self-confidence by its foreign policy shift, usually coined as neo-Ottomanism. Invigorating its harmonious inter-ethnic Ottoman past, Turkey is airing a bold and appealing softpower offensive all across the Euro-Mediterranean theatre that is paralyzed by growing nationalism.12 The Turkish EU accession question is no longer a waiting-room trauma for Ankara. In fact, Brussels failed to understand Ankaras motivations. There was a tendency to falsely and dangerously simplify Turkeys strategic choices as islamization or westernization (joining the EU). Whether right or wrong, Ankara concluded that the EU accession process was an exercise in deterring Turkey rather than an eager acceptance into EU partnership. Traditionally very cordial, the relations with Israel have also deteriorated lately. The message sent to Israel was like the one sent to the EU no more exclusive relations; we are now open for all. Thus, Turkey has gained, through intense and skillful diplomatic maneuvers, a foothold deeper in the Middle East; the Turks are talking to Arabs, Iranians, and Russians. This multi-vector foreign policy (the so-called zero problem neighborhood policy vs. the selective EUs European neighborhood policy) moves Turkey from the confrontational/ deterring peripheries right into the center of political action. It increases Turkish leverage and the number of its strategic opportunities. As the last European country that maintains both solid economic and demographic growth, Turkey seems to continue its self-emancipated, independent foreign policy dynamics. This could mean that the EU has missed its historical chance as Turkey might seek a grand accommodation with one (e.g., Russia) or a combination of players in its quest for (revived) regional hegemony. After a lot of hot air, the disillusioning epilogue of the popular McDonalds Facebook revolt is more firearms and less confidence residing in the region, and a higher (moral, economic and political) carbon energy price everywhere else.13 Besides maybe Ankara, nobody has anything to celebrate for. The Arab world and the wider MENA theatre remains a hostage of mega geopolitical and geo-economic drama. One thing is certain, if anything springs from the Arab soil, it is the oil. Everything else is (still) to be determined. What is the overall international impact? The regional unrest has not eased, and it may still catalyze the ongoing OECD/IEA debates, primarily between the EU, Japan and the US (the main energy consumers). The issues discussed are fundamental: energy security and energy diversity; dependencies and transport routes; de-carbonization and anti-nuclearization; and, finally, the way out of the deadlock on the Kyoto II negotiations, and the overall global climate change consensus.


Acknowledgements I would like to thank the following individuals for their important intellectual exchange and valuable comments:

Mr. Richard Kauzlarich, retired US Ambassador Professor Murray Hunter, notable author and professor (UniMAP & Prince of Songkla universities)

However, the views expressed are solely those of the author himself. Endnotes The active and passive voting right (to vote and to be voted) is traditionally portrayed as a grand historical achievement. In this respect, to boycott elections means to refrain from exercising an elementary political right. I often explain to my students that there is a critical difference between staying at home and going to the polling station to cross-out the whole list of candidates on a ballot. It is of the same end effect, but the message is different: we are absent, disengaged and ignorant vs. we do participate, but we do not agree with the given choice. Thus, democracy offers but also obliges. 2 The present borders of Arabic states are the legacy of colonial interference a feature also evident in the SEA, Indian sub-continent and other parts of Asia. The Arab world is still absorbing the shock of the loss of its universalistic world. Notably, living in more than one state is a historical novelty for the Arabs, and the intellectual elite of the Arabic world remained divided for decades on the question of which ideological and socio-political content as well as the socioeconomic role the state should play within Arab civilization. To make matters worse, there are two additional factors currently undermining the Arab state. One is a neo-liberal dogma, which generally preaches an end to tatism and a liberated, borderless corporate world. The second, locally very important, is the so-called revolutionary appeal. The aggressive Wahhabism-powered Al-Qaida, identical to the early Bolsheviks, treats a state as a revolutionary cause, not as a geopolitical and geo-economic reality. Nowadays, fewer and fewer forces are supporting the Arab (republican) state, internally or externally. 3 Besides the typical moral condemnations and usual pacific civil sector outcries, war and similar sorts of open military confrontations (inter-state or intra-state) are in strict Machiavellian or, perhaps, commercial terms desirable occurrences. Especially in countries where arms manufacturing and supply are detached from the state-owned military complex (situated in the hands of corporations), war-related spending is usually good news for an economy. 4 The US is often criticized for its omnipresence, but frankly speaking, maintaining the security of global energy flow is silently taken for granted. 5 Thus, the stubborn American resistance to provisions of the UNFCCCs protocol (Kyoto) is logical, if not justifiable. 6 An important part of the USJapan security treaty is the US energy security guarantee given to Japan. After the recent earthquake-tsunami-radiation armageddon, Japan will inevitably rethink and revisit its energy policy and its primary energy mix composition. 7 Iran is in constant need of diplomatic cover from Russia (in return, it refrains from Islamic proselytization and it buffers the Caucasus and Central Asia, considered by the Russians as their strategic backyard, from aggressive Wahhabism) as well as the increased trade exchanges with and investments from China (to compensate the Western economic embargo). Acquiring nuclear weapons would probably secure the regime, but it would not necessarily bring significant power projection to Iran. 8 Undeniably, there were ideological complementarities between Soviet communism and the leftist egalitarian and republican pan-Arabism. However, post-Soviet and post-communist Russia remains in the same position, following its geopolitical rationale. Pan-Arabism is the only Middle Eastern counterbalance, an alternative to the Wahhabism-powered Islamism. Islamism might have an appeal among the Muslims in Central Asia, the Caucasus and within the Russian

Federation, but pan-Arabism does not hold the same allure. On the other hand, the republican pan-Arabism was felt as a direct threat to the US-backed GCC monarchies. Lately, Al Qaida has managed to self-prescribe a monopoly on Islamism. In fact, it is only a radicalized and weaponized ideology of Wahhabism (that originates from the 19th century Saudi Arabia on its anti-Ottoman emancipation quest). It has very little to do with religion per se. 9 Through the pain of sobriety, the Egyptian and Tunisian protesters are learning that free trade is not a virtue, but an instrument, that liberalism is not a state of mind but an ideology, and finally that the social media networks are only a communication tool, not a replacement for independent critical thinking. 10 As an advocate of pan-African unity, Libya was also an appropriate target for China after the collapse of the Soviet Union and subsequent loss of American strategic interest for Africa. 11 Although largely ignored or understated in contemporary literature, Turkish secularism (nearly 100 years old) is stronger than secularism in some European states. Turkey has a young population (2nd most populous European nation after Russia), vibrant trade, and technology-led growth (16th largest world economy and member of the G-20). It represents a well-working democracy in an exceptionally hard, unstable, surrounding environment. Turkey is either the founding member or a focal member of the Council of Europe, OECD, NATO and OSCE. Still, all of this background has not qualified the Turks for entry into the family of European nations. 12 One of the chief architects and promoters of this Ottoman revivalism, Foreign Minister Davutoglu, in his famous Sarajevo speech claimed that the Balkans, the Caucasus, and the Middle East were all better off under Ottoman control: peace and progress prevailed and that the region has been in subsequent divisions, frictions and war ever since the Ottoman rule ended and European powers came along. He concluded his Sarajevo speech by returning to the usual EU rhetoric: I have to say that my country is disappointed that an important religious symbol, that of a minaret, has been subjected to a referendum in Switzerland. It is a mistake to put a fundamental religious right to a popular vote and I hope that this mistake will be rectified. The spread of human rights and fundamental freedoms may not have been possible, had countries chosen to put specific freedoms to referenda. It might be useful to recall that the Franciscan Catholic Monastery in Fojnica, some 57 kilometers from here, holds the original copy of an edict issued by the Ottoman Sultan on 28 May 1463. This edict protects the religious rights of Bosnian Christians and the sanctity of their churches. It is one of the oldest documents on religious freedom. (BiH MVP Archives, 14 DEC 2009). 13 Most of the international media has confused the two: revolt and revolution. The Arab unrest started as a street revolt over high unemployment and soaring costs of living; it has so far failed to bring about structural change (revolution), and is paradoxically ending up with more unemployment and higher living costs than before. The Arab Oil Embargo of 1973 (that also included the non-petrol exporting countries of Egypt, Syria and Tunisia) was an attempt at political emancipation. In the aftermath of the Oil Shock that the Embargo subsequently triggered, the Arab countries have found themselves within ever-stronger external dependences.

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