I’ve been watching the events in the Arab world with interest. My knowledge of the region is, at best, that of an informed amateur. I studied some medieval Arab history at university and I read quite a lot when I worked in the Arab world. It’s always worth doing some research before you go to a country. Being able to discuss the exploits of King Abdulaziz with a Saudi businessman does wonders for building client relationships. I was often shocked by the ignorance of westerners who worked in the Middle-East. Someone who had worked in the region for a while once asked me which were the more extreme, Sunnis or Shiites. That’s like asking whether Catholic or Orthodox Christians are more extreme. It depends on the Sunnis or Shiites in question. Al-Qaeda are Sunni but so is Jordan’s King Abdullah. Hezbollah are Shia but so is the Aga Khan. Surely, taking the trouble to learn something about the people among whom you are working is just good manners.
But things have become uglier as the unrest in the Arab world has spread to Libya, with a level of murderous violence on a completely different scale. An HR manager I spoke to yesterday told me that the people she pulled out of Tunisia and Egypt a few weeks ago are now back at their desks. She doesn’t expect the people she is now evacuating from Libya to be going back any time soon.
Libya will also have a much greater impact on the rest of the world. Until now, the protests have taken place in countries with no oil. Libya and Bahrain, however, are both oil producers and the unrest there has sent prices shooting upwards. Oil companies are starting to pull their people out of Libya so, even if the situation calms down, there will inevitably be some disruption to supplies.
All eyes are now on Saudi Arabia. The kingdom has a significant Shia minority. Although only around 15 percent of the total population, the Shias are concentrated in the Eastern Province, where most of the oil fields are. They have long been persecuted by Saudi Arabia’s rulers. The province has a history of Shia rebellions against Sunni authority. Last week, a member of the Saudi royal family warned that the predominantly Shia protests against the Sunni ruling elite in neighbouring Bahrain may spill over into the Sauds’ Eastern Province. If the unrest does spread to Saudi Arabia it will almost certainly start among the Shia. So far, though, the recent Shia protests have been relatively low-key.
Trouble in this province has the potential to seriously mess up the Saudi economy and the word’s oil supplies. Over the last few days the cost of insuring Saudi government debt against default has risen to 144 basis points. To put that in perspective, it now costs more than twice as much to insure £10k of debt from the relatively debt-lite Saudi government as it does to insure £10k of debt from the heavily indebted British government. CDS prices don’t just measure the level of a government’s debt, they are an indicator of its perceived stability too. Some investors have clearly been spooked by recent events and fear for the desert kingdom’s future.
The upheaval in the Arab world may well get worse before it gets better. It is probable that more people will be hurt and the knock-on effect from oil price rises will cause hardship for many others around the world.
Having said all that, it is easy to get too pessimistic. Unrest in the Arab world is a gift for doom merchants. Some sections of the media and their mini-mes in the blogosphere are loving every minute of it. The liberal-sounding protests will, we are told, give way to mad mullahs and Islamist regimes. Failing that, Iran will establish a Shia hegemony in the Persian Gulf, choking off the West’s oil supplies.
Former CIA man Emile Nakhleh thinks they should all calm down. Writing in the FT he said:
Whatever happens, the west must be sceptical of talk about a rising Shia crescent. Iran’s influence has increased since the invasion of Iraq. But few Shia groups in Bahrain, Saudi Arabia and Lebanon have turned to it for guidance. Instead, they focus on domestic grievances. If there is a Shia revival, it is country specific. Iran’s influence in these places is no larger than it ever was.
The Independent’s Robert Fisk is equally dismissive about the Islamist threat. He also points to the differing nature of the conflicts in each of the countries affected. Westerners, even liberal ones, have a tendency to lump all Arabs together. In reality, Arab countries are as different from each other as European ones. There may be overarching themes but the conflicts will have a slightly different dynamic in each country. To say its ‘all tribal’ or ‘all religious’ is a massive oversimplification.
The upheaval in the Arab world shares two characteristics with the global financial crisis. Firstly, no-one saw it coming. The intelligence agencies, multi-nationals, academics and pundits who were supposed to have their ears to the ground were as surprised as anyone. Secondly, once it had happened the world was suddenly full of experts. As Robert Fisk wryly suggests:
Better perhaps to ignore all the analysts and the “think tanks” whose silly “experts” dominate the satellite channels.
Perhaps it is better at times like these to look beyond the sources from which we usually get our news. Opinion from many in the region is more optimistic. Ömer Taspinar from Turkey’s Zaman believes that the combination of a rising middle-class and the Arab world’s youthquake will create a movement for lasting change. Al Jazeera’s Marwan Bishara also believes that “the Arab moment has come” but concedes that the revolution is still “work in progress” – “the genie is out of the bottle” he says, but no-one is really sure what is going to happen next.
Even those close to the action, then, don’t know where this is likely to lead. The unrest could die down as quickly as it started or it could continue on its rolling journey, spreading from country to country. Anyone who reckons he knows what is going to happen next is probably talking rubbish. Governments and businesses can do little but watch and wait. Even in our high-tech, wired, control-freak world, there are some things you just can’t plan for.