Chairperson: Ms. Ruchita Beri

MENA, an acronym often used in academic and business writing for Middle East and North Africa, covers an extensive region extending from Morocco to Iran, including majority of both the Middle Eastern and Maghreb countries. This region has vast reserves of petroleum and natural gas that make it a vital source of global economic stability. However, the MENA region is on boil for quite sometime now. The recent history unfolded with developments in Tunisia and spread to rest of the region especially Egypt and now Libya. In this background, Mr. Alastair Newton tried to fine-tune recent events more widely in the MENA and beyond to find out what are the uncertainties, predicting the upheavals and analysing their origins and impact on larger issues of concern like oil supply and stability in the region. The presentation was divided into three broad segments: Key Judgments, Conceptual Frameworks, and approaching the problem from three angles important to Asia—Impact on Oil, Implications for Iran and China.

The Key Judgments as underlined by Newton are as follows:

• As contagion spreads in the MENA, the region appears to be experiencing a “1989 moment”.
• Yemen is likely to be subjected to early regime transition.
• Libya aside, currently there is no direct threat to oil/gas output nor does international military intervention in Libya necessarily become a precedent for similar action elsewhere in the region.
• Regimes which have not yet been subjected to large-scale protests are still at risk from future popular unrest if they choose not to accelerate democratic transition.
• There is no sign of contagion outside the MENA for now but one can not rule out the possibility downstream.

Given these judgments, Newton proceeded to explain the Conceptual Frameworks. Taking clue from the 1989 moment in the history of Eastern Europe to explain the present phenomenon in the MENA, Newton was of the opinion that MENA is undergoing a dramatic shift as the Central and Eastern Europe of 1989 and it may result in different political outcomes. However, there is no guarantee that liberal democracy will emerge in all cases. Another characteristic of the region is that genuine monarchies are more accepted than dynastic autocracies and therefore legitimacy does not mean free and fair elections especially in MENA. The author drew a distinction between two categories of countries in MENA: i. Countries where the head of state has lost the respect of a significant proportion of the people and which have experienced significant civil unrest, as in Egypt, Tunisia, Algeria, Iran, Syria, Libya and Yemen, and ii. Countries where the head of state still retains respect and which have experienced little if any unrest, as in most of the GCC countries including Saudi Arabia. Countries like Jordon and Morocco fall in between these two categories, i.e. unrest but not aimed at ousting the head of state.

Then, the speaker focussed on the issue of Impact on Oil Output and argued that the Libyan crisis had effectively been priced in by markets with Brent range-bound for five weeks between $112pb and $118pb – the recent spike above that band being largely a function of events in West Africa (strikes in Gabon, elections in Nigeria) rather than the ones in MENA. Indeed, Libya apart, there was no “clear and present danger” to oil output currently anywhere in the MENA. At the same time, the speaker cautioned that the speed with which contagion has spread and the al-Qaeda terrorism threat makes it unwise to rule out near-future major losses in output elsewhere in the region. On the question of Iran: the Green Shoots of Revolution, Newton explained how Ayatollah Ali Khamenei tried to consolidate his power and suppress green movement. One of the strategic moves was the ouster of Ayatollah Akbar Hashemi Rafsanjani from the presidency of Assembly of Experts, which deepened tensions within Iran’s ruling elite and potentially increased the vulnerability of the regime. At the same time, the Green Movement is back on streets despite deployment of loyalist Basij militia.

On the issue of possible implications of the crisis on China, Newton alleviates those fears arguing that Tiananmen is not Tahrir. He brought out important differences between these two incidents thus, China is stronger economically now and has been able to address most of the concerns in economic distribution of resources. Again, recent protests in China are more to do with environment, jobs/wages and land rights and not over democracy. Conversely, MENA offers great opportunities for China as a potential investment area, example Egypt because of the size of its domestic market and its proximity to Sudan where China is extensively involved in oil exploration. Also, stability around the Suez Canal is of major strategic importance to China given its significance as an export route to Europe. Newton concluded by posing the question of what this might imply for Indian policy and interests in West Asia in particular.

The presentation was followed by a lively and rigorous Q&A session actively participated by the researchers of the Institute. The questions were put from a variety of points of views like opportunities for India, especially in institutional building capabilities; role of democratic revolutions in West Asia in improving situation for India’s increased presence and influence in MENA; repercussions on Palestine-Israel peace process; and influence on similar regimes in other regions to grant concessions for popular participation etc. In response, Newton clarified that changes in MENA would accelerate the process of China’s involvement as China would be quick to seize opportunities to expand its influence. “The protests in MENA are not for democracy per se, it is for economic opportunities and China is able to give those benefits, whereas in case of India, it takes time to respond and react because of the kind of political system it has”, he answered.

One of the comments raised in the session was that regime change is not what people want suddenly and hence it is going to take time in Iran. At the same time, the game-changer in the current situation is what happens in Syria. Other comment pertained to the point that monarchs are not vulnerable across the region and the case in study is the situation in Saudi Arabia. On the question of responses of American and British systems to China, Newton answered that US and UK are not doing much additional in MENA in terms of economic assistance and policy dilemmas persist. Furthermore, southern Europe in particular is principally worried about illegal migrants from these countries because large numbers of locals are migrating outside their country because of uncertainties in their respective countries. In case of Saudi Arabia, King Abdullah would continue to pursue his reform agenda but Saudi society remained conservative. In Syria, though Bashar al-Assad enjoys popularity at the moment among the urban middle classes, he may be vulnerable as deep-rooted internal tensions are inflamed by the regional situation. For Libya, there are limits to external intervention and it was by no means clear that the fall of Qaddafi was imminent; indeed, some sort of protracted stand-off currently seemed the more likely scenario. Towards the end, the session focused on the role of Al Jazeera in the current developments in the MENA.

The discussion ended on the broad conclusion that liberal democracy had failed to take hold in that part of the world; pressure on oil prices will be upward rather than downward for some time in near future; Monarchies have survived despite opposition in some cases because of some reforms introduced and concessions announced, the key thing being to sustain reform momentum; in case of Iran, the regime appears increasingly unstable but change may not be imminent. For India, there are opportunities in institutional building and India is catching up in the same.

Report prepared by Mr. Babjee Poturaju, Research Assistant, IDSA.