TheMarketForIdeas

Higher-order cognition in humans is one of the most commonly cited factors that separate us as a species from other life-forms on earth. It enables us to make sense of the patterns in our environment and the laws that govern nature, to think beyond our immediate sensory input and create art and beauty, to encode our knowledge, storing and preserving it, passing it down to further generations who would then use it to yield new knowledge as well as invent new tools and adapt the old into new, to reshape both the internal and the external world. Yet this gift does not come without its caveats, and human cognition is indeed often riddled with biases and shortcuts that, despite allowing us to simplify the complexity of our world, often dull our receptiveness to certain realities or, even more dangerously, offer the illusion of knowledge and understanding when, in fact, they are in short supply.

The recent history of the Middle East is wreathed in violence, instability and conflict, to the extent that it has nearly become a synonym for these concepts in the public mind. When we speak of a conflict in that region, it is hardly likely to evoke any surprise. Yet, it is unfortunately this very tendency that led many to gloss over some of the less salient conflicts which have only recently received media attention. One of these is the Yemeni crisis consisting of a combination of the country’s civil war and a Saudi-spearheaded military intervention, both starting in 2015. 

Anatomy of a crisis 

The civil war in Yemen is the result of a political failure that followed the initial success of the Arab Spring. While the latter led to the ousting of then- president Ali Abdullah Saleh in 2011, power was taken over by his former deputy, Abdrabbuh Manour Hadi who began wrestling with internal problems and destabilising factors, such as terrorist attacks, religious frictions and separatist movements. Hadi’s government was eventually deposed by a coup d’état orchestrated by Houthi rebels – another name for the Zaidi Shia militant faction known as “Ansar Allah” (i.e. “The Supporters of God”) – which laid siege to the country’s capital and eventually took over the government, the wind in their sails being provided by the populace’s disappointment with the transitional government, all coming to a culminating point when the cabinet announced an increase in fuel prices, which was the proverbial straw that broke the camel’s back.

The war itself is best described in the figures outlining the humanitarian disaster in its wake: over 90.000 people killed, 3 million people fled to seek refuge abroad and reports of human rights abuse.

The Houthis took over the government, which immediately drew geopolitical concerns from the neighbouring countries, thus prompting a military intervention led by Saudi Arabia in support of Hadi’s government. A grand total of nine countries have backed Saudi Arabia: the United Arab Emirates, Sudan, Qatar, Egypt, Senegal, Morocco, Jordan, Kuwait and Bahrain (though Qatar eventually withdrew in 2017 and Morocco in 2019, while the UAE began supporting separatists in Southern Yemen against Saudi Arabia). Aside from them, the military effort has received various forms of support from the United States in the form of logistic aid and a naval blockade on Houthi-controlled ports, and the United Kingdom in the form of arms sales. The country’s territory is now divided in various zones of military control held by the warring factions. The war itself is best described in the figures outlining the humanitarian disaster in its wake: over 90.000 people killed, 3 million people fled to seek refuge abroad and reports of human rights abuse. These tragic figures, however, are not what attracted the greatest media attention recently – it was a drone attack on Saudi soil, targeting two oil facilities owned by Saudi Arabia’s state-owned oil company, Saudi Aramco. The attack was claimed by the Houthi rebels. The impact took a heavy toll on Saudi Arabia’s oil supply, knocking out 5.7 million barrels’ worth of production, with international oil prices skyrocketing. Diplomatically, this sparked accusations of Iranian support for the attack on Saudi oil, prompting a terse exchange between the United States and Iran as American officials disbelieved Houthi claims on the attack. 

Considerations and consequences 

The network of geostrategic and economic considerations and consequences is indeed as intricate as it is multivariate. One factor one would be inclined to first look at is religion. Out of the nine states that supported Saudi Arabia’s military intervention, eight are home to predominantly Sunni Muslim populations. It is true that followers of the Shiite and Sunni branches of Islam have been at loggerheads on more than one occasion throughout history, and that Islamic identity plays a generally important role in the political, cultural and societal layers of each of the countries mentioned. However, it is also true that historically, religion has been conveniently used as an excuse to initiate hostile action, and it is precisely the presence of Bahrain – a predominantly Shiite Muslim country (though led by a Sunni royal family) – among the nine that casts doubt over whether the explanation of a sectarian conflict suffices. Indeed, in a column for the BBC on the Yemeni crisis, Charles Schmitz states that the Houthi’s power lies primarily in its military and political clout, and less in its religious influence. On the one hand, one must not neglect the sectarian side of the conflict. Indeed, the tenets of the Zaidi school of thought encourage actively displacing leaders deemed as harmful for the people, which in turn leads the Zaidi to be perceived as an ideological threat by governments of countries where the Arab Spring has not yet dimmed from the memories of citizens in the Middle East and Maghreb and discontent with the current establishments may yet exist, especially where Shia minorities exist. One could, on the other hand, counter that the Zaidi ideology does not mesh well with the Sunni ideas, especially in countries where the Sunni faith is a central pillar of identity, and the various Shia minorities are far more likely to respond to ill-treatment than to solidarity with a particular denomination. In short, though the religious aspect should not be discounted as a lever to generate societal tensions, it must not be overestimated either.

Energy links and geoeconomics would be a more fruitful path of investigation. We need to understand several key elements:

• Yemen’s geostrategic positioning along one of the world’s most important oil and trade routes at Bab-el-Mandeb;
• the Iran-Saudi Arabia rivalry;
• Iran’s ongoing feud with the United States regarding the nuclear deal.

According to the US Energy Information Administration, the Bab-el-Mandeb Strait links the Mediterranean Sea and the Indian Ocean, and most exports from the Persian Gulf also transit this strait as well as the Suez Canal and the SUMED Pipeline, with about 4.8 million barrels per day of crude oil being transported towards Europe, the US and Asia. The geostrategic importance of this strait is manifold: first, there are the trade links it establishes with Europe and Africa through the Mediterranean, resulting in billions of dollars’ worth of trade passing through it each year. Then, there’s the aforementioned oil links it establishes between the Gulf and clients from three continents. Interestingly, about 15% of Saudi Arabia’s total oil exports (i.e. a little over 1 million barrels a day of crude oil) pass through this state, and bypassing this strait would increase the distance that shipments from the Persian Gulf would have to travel to their respective buyers, according to Bloomberg. Furthermore, the strait serves as a link between Yemen and the Horn of Africa, the latter having attracted increasing attention in security matters not only from the US and the EU, but also from states from the Middle East and the Gulf.

In a column for the BBC on the Yemeni crisis, Charles Schmitz states that the Houthi’s power lies primarily in its military and political clout, and less in its religious influence.

The Horn of Africa has had a troubled past. The region lies roughly halfway between the easternmost and westernmost regions of the world and is thought by some scholars to be the birthplace of the human species, with many of the earliest human fossils being discovered. As is the case with many former European colonies, it has been known for its turmoil, with the prominent and unfortunate examples of the Rwandan Genocide and the Somali crisis, both in the early 1990s, and as such has become a theatre for multilayered security operations – both against non-state security threats such as terrorism and piracy, but also for geopolitical reasons with regards to the Gulf states’ rivalry. A SIPRI analysis describes the struggle between Saudi Arabia and Iran to exert military influence upon the Horn of Africa, with Iran seeking to use the region to further extend its military clout towards the Red Sea and Syria as a counterweight to American influence, whereas Saudi Arabia sought to curb that influence. The Red Sea, according to this analysis, further serves as an arms sales link towards its allies, Hezbollah and Hamas, while Turkey is seeking to build a power base near Somalia and Qatar and has deployed peacekeeping forces in the area. The security vacuum has drawn in the attention of several others Asian countries, from India to China, Japan and Korea – ostensibly to counter piracy operations in the region, though tensions did not fail to show up as each power attempts to build a military presence in the region. 

The regional battle 

Given the region’s proximity and relevance to one of the world’s most important trade routes, it becomes clear that the stakes involve a significant geo-economic component. Khattar Abou Diab remarks upon the growing importance of the Horn of Africa and the Bab-el-Mandeb Strait in the context of Iran’s threats to close off the Strait of Hormuz, which ushers in item b of our analysis: the rivalry between Saudi Arabia and Iran. Though the rivalry does have a sizable sectarian side – Iran being a Shiite theocracy while Saudi Arabia is an absolute monarchy dominated by Sunni Islam – it also involves competition in terms of regional hegemony, control of key strategic points and energy competition. Both countries have had their share of internal turmoil, both are known in the Western world for widespread human rights abuse. Both are known for their vast energy reserves, and their competition for dominance is reflected in their diverging foreign policy agendas, with Saudi Arabia fostering an alliance with the United States (though not without its rough edges) whereas Iran’s relations with the West have been wary at best and strained on numerous occasions, opting in recent times for an uneasy detente with the EU and US while harbouring positive relations with China and Russia.

Iran finds itself in a rather interesting geopolitical conundrum: on the one hand, it has access to and a measure of control over the aforementioned Hormuz Strait; it holds vast energy reserves and, until 2015, a nuclear program which, though ostensibly meant to enhance the country’s energy capacity, was widely accused of being covertly used to develop nuclear weapons, which was one of the major bones of contention Iran had with Western powers and its neighbours, Saudi Arabia among them. On the other hand, its economic connections to the international markets are weak, in no small extent due to the UN-, mainly US- and EU-imposed sanctions which, accrued across decades and spanning a large range of sectors from telecommunications to insurance and finance, greatly restricted its trade options and foreign investments in its key sectors. This has resulted in Iran experiencing an economic hypotrophy, to the point where its economy is dominated by and dependent upon oil exports. The 2015 P5+1 deal, involving the five permanent members of the UN’s security council – China, Russia, France, the US, the UK – and Iran, brought some promise of revitalising its economy: in exchange for limiting its nuclear programme, the sanctions against it would mostly be lifted, opening the road to significant boons in terms of trade opportunities and increased competitiveness. Iran’s economic relief after signing this agreement – known as the Joint Comprehensive Plan of Action – was however short-lived as the United States under Donald Trump announced their withdrawal in 2018 and renewed sanctions, causing a new decline in the Iranian economy as international players feared being caught in the crosshairs of US sanctions. As such, Iran’s economy saw an increase in inflation as well as economic inequality, where citizens with lower incomes see their purchasing power diminishing even further, while the country’s economic mainstay – energy exports – plummeted this summer.

A SIPRI analysis describes the struggle between Saudi Arabia and Iran to exert military influence upon the Horn of Africa, with Iran seeking to use the region to further extend its military clout towards the Red Sea and Syria as a counterweight to American influence, whereas Saudi Arabia sought to curb that influence.

The rivalry between Saudi Arabia and Iran is, as stated, far from just a matter of bad blood on religious tenets. Without delving into too much detail, the conflict can be understood on several planes. In terms of regional hegemony, Iran is perhaps the strongest threat to Saudi Arabia’s weight in the Middle East and the Gulf: it has the energy resources to match; its geographic position to the South of the energy-rich Caspian Sea and Turkmenistan and the North of two Gulfs (the Persian Gulf and the Gulf of Oman) is strategically very relevant in terms of energy diplomacy, security issues and the development of trade routes. Interestingly, while Saudi Arabia’s energy exports give it considerable geopolitical influence and a weapon in its diplomatic arsenal, Iran needs to engage in a give-and-take diplomacy with foreign powers first before its energy can be used to tip diplomatic relations in its favour. Furthermore, Iran is known for supporting the militant Hezbollah as an extension of its foreign policy agenda in the Near East, and controls the Strait of Hormuz which is one of the world’s most important and busiest trade routes. While Saudi Arabia is closely allied with the United States, Iran’s relations with Russia are comparably close. In more recent years, Saudi Arabia signed a $460 billion deal in arms sales with the US and they have long been trade partners, while Iran is building its economic relations with the Eurasian Economic Union. Saudi Arabia manages to maintain a grudging cold peace with Israel, while Iran does not acknowledge its existence and has long been openly hostile towards it. 

Complicating factors 

Opposing geostrategic axes thus emerge between a Western-affiliated energy superpower and an actor aspiring to become a superpower that fosters relations with Russia and its affiliated Eurasian Economic Union and has at best a strained and distrustful relationship with the West, but has yet to grow into a position where it can use its vast energy reserves as leverage. Whereas Saudi Arabia has a marked presence on the international energy market and as such can proactively use it to promote its interests if need be, Iran’s economic woes somewhat limit its ability to engage in such tactics. Saudi Arabia’s hefty arms trade with the US and UK has given it enough muscle to influence regional security, either through its own military or by supplying others with weapons. Iran’s position in a rather tense security climate, being in the neighbourhood of the militarily powerful Saudi Arabia, Turkey (itself with high ambitions for the Near and Middle East) and Pakistan (the only Muslim state known to have developed a nuclear arsenal) as well as troubled states such as Iraq and Afghanistan, surrounded mostly by Sunni Islam states, has led Iran on a quest to attempt to ensure its own security.

Through this gateway, we reach the third item on our list: the United States’ interest in containing Iran. At first sight, it would seem Donald Trump’s reaction is a knee-jerk reflex at a time when things appeared to be straightening themselves out. Yet, this decision to keep laying a heavy hand down on Iran stems from several strategic considerations. For a start, it is an action that largely satisfies the United States’ traditional allies in the Middle and Near East: Saudi Arabia and Israel. For Israel, it keeps a nuclear threat in check. For Saudi Arabia, it keeps an energy competitor from both posing a threat to its status and damaging its economy in the long run – New York Times’ Clifford Krauss wrote that, at the time the Joint Comprehensive Plan of Action came to light, Iran’s energy resources would have brought down oil prices in the medium-long run; keeping in mind Saudi Arabia’s dependence on oil exports, this would have been an economic security risk. An interesting remark by CNBC indicates that the US seeks to counter Iran’s potential energy influence to this purpose, and with the expiration of waivers that allowed a small circle of countries to buy crude oil from Iran, international oil prices began to increase. Here, we should mention that the United States is very close to being energy independent and became a net energy exporter in 2018, and although the Peterson Institute for International Economics (PIIE) warns about the potential dangers of energy independence, it remains one of the United States’ most important objectives.

Iran’s economic connections to the international markets are weak, in no small extent due to the UN-, mainly US- and EU-imposed sanctions which, accrued across decades and spanning a large range of sectors from telecommunications to insurance and finance, greatly restricted its trade options and foreign investments in its key sectors. This has resulted in Iran experiencing an economic hypotrophy, to the point where its economy is dominated by and dependent upon oil exports.

By imposing hard sanctions on Iran, a monopoly is maintained on the oil market as opposed to a monopsony. It would also minimise Iran’s status among the OPEC member states and constrain the oil supply even tighter. As CNBC points out, this move creates uncertainty in the market, even among the OPEC member states, whose collaboration is being threatened by internal disputes and Russian interference, according to Dan Eberhart for Forbes and Faucon, Said and Griffin for the Wall-Street Journal. The United States uses this opportunity to showcase the benefits of its large degree of energy self-sufficiency: it is neither at the mercy of international oil prices to satisfy its demands, nor is its economy dependent upon energy exports. On the other hand, its competitors have a lot to suffer from market fluctuations: Russia is dependent upon energy exports and is especially vulnerable there, as are the Central Asian economies that have strong ties to it. While Russia benefits from increased oil prices as it enhances its revenues, Iran is its ally in the Middle East, with whom it collaborated on the matter of Syria alongside Turkey and, as the Security Studies Group further enunciates, can benefit from the effects of Iran using its energy resources against American allies in Eastern and South-Eastern Asia, which is also likely to award China greater influence at the cost of the United States’ reach and credibility. As a result, a weakened Iran leaves Russia without a key ally in the Middle East and the Far East.

On the other hand, China seeks reliable oil partners in order to fuel its economic growth and ensure a steady oil and gas flow into its Belt and Road Initiative. Fluctuations on the energy markets can thus slow down China’s efforts or at the very least make them more costly, though it would take a powerful shock to the Chinese economy to bring it to a halt. This is where the United States’ position on the recent events becomes relevant: the Belt and Road also passes through the Bab el-Mandeb Strait, and the United States has already been engaged in a trade war with China for some time. 

At the crossroads 

This is, perhaps, a crossroads for several geostrategic interests. For instance, there is a security issue regarding arms trafficking. As Yemen is under assault, the strait offers a passageway for illegal arms to and from countries in the Horn of Africa, which could further prolong the conflict in Yemen and fan the fires of conflict in the Horn. It may also allow the arms to be acquired by militant factions to perform terrorist attacks, especially as the local countries’ social, political and economic environment unfortunately predisposes the region to such phenomena. Then, there is the issue of trade routes and networks that link the Arabian Sea to international waters as well as the power vacuum in the Horn of Africa that draws in competing interests on military and economic matters.

Another topic, as already mentioned, is China’s interest in the region for expanding its economic reach and developing its BRI, against the United States’ interest to prevent China from augmenting its geoeconomic influence, especially over the US allies in the region such as Saudi Arabia. Finally, we have the matter of Iran’s security needs: Eleonora Ardemagni notes that, despite having a good deal of control over the Hormuz Strait, closing it down would be the equivalent of Iran shooting itself in the foot, as it is itself dependent upon keeping the strait open to export its oil, in addition to the neighbouring, Shia-dominated Southern Iraq. Following the imposition of the US sanctions and the lacklustre response from the other 4 countries of the P5+1 deal which embittered Iran, and by backing the Houthi rebels as well as the Hezbollah militias, Iran is basically adopting a guerrilla strategy as its means to promote its foreign policy agenda, and the Horn of Africa is part of its plans to establish naval bases abroad, according to SIPRI. Thus, we can infer that, by instating an Iran-friendly, Houthi-led Yemen, and by establishing a military presence in the Horn of Africa, Iran hopes to gain influence over the Bab el-Mandeb Strait as a means to improve its position in its security and economic environment. 

Truth in poetry 

In the end, we can reflect upon the meaning of Bab el-Mandeb in Arabic – “the gate of tears”. The name also happens to appear in a Romanian-language poem by George Coşbuc, „El-Zorab”, where an Arab of Bedouin origin from Bab el-Mandeb visits the pasha to sell him his beloved horse in order to feed his family, only to later regret his decision and try to recant the deal; in anger, the pasha refuses, but the Arab would rather kill his horse by his own hand than suffer to see it taken away, and defies the pasha once more after the deed is done. The name of Bab el-Mandeb in this poem is thus best described as the origin of a series of contrasts and convergences: the contrast between the Arab’s poverty and the pasha’s wealth, as well as between the significance of the titular horse to the Arab and the pasha’s near-indifferent attitude to the amount it spends. There is the contrast between the Arab’s poverty and pride when owning his horse, as his poverty compels him to sell it, and then his pride and attachment to El-Zorab overcome his financial needs after the deal is sealed; lastly, there is the convergence of both the Arab’s and the pasha’s wills to gain / maintain ownership of El-Zorab.

Opposing geostrategic axes thus emerge between a Western-affiliated energy superpower and an actor aspiring to become a superpower that fosters relations with Russia and its affiliated Eurasian Economic Union and has at best a strained and distrustful relationship with the West, but has yet to grow into a position where it can use its vast energy reserves as leverage.

At present, there is the contrast between the commercial links the Bab el-Mandeb Strait enables between the Gulf States and the Mediterranean, on the one hand, and Iran’s restricted trade options after being the subject of the United States’ recent sanctions, on the other. Optimistic prognoses indicate that the Yemeni war is making promising steps towards its end, with talks being hosted by Saudi Arabia, as Yemen’s government reached an agreement with the UAE-backed separatists operating in the country (although the day after, a new drone attack was reported, this time in Yemen’s western coast, the target being government-friendly forces). This only further demonstrates the nature of the conflict as a proxy war: Saudi Arabia as supporters of the government made their peace with the UAE backed separatists, but Iran and the Houthi faction it supports have yet to reconcile with either. Whereas Saudi Arabia and the UAE seem to converge, Iran dissents, and their powerful economies contrast greatly with that of war-torn Yemen as deals are cut and missiles are launched under the silent gaze of the gate of tears.