A Good Neighborly The Institutionalization Investing

Idea of Reform in Foreign Land

Andrés Cala Dr Rob Sobhani, author of Valentin Zahrnt
“King Abdullah of Saudi Arabia:
A Leader of Consequence”

Enter
Issue 1550, 22 March 2010
the Dragon
By Daniel Freifeld
 Editorial

Cover

Established in 1987 by
Prince Ahmad Bin Salman Bin Abdel Aziz

Established by
Hisham and Mohamad Ali Hafez

Editor-in-Chief
ADEL Al TORAIFI Dear Readers,

Managing Director
W elcome to The Majalla Digital, this week Daniel
Freifeld’s feature article Enter The Dragon looks at the
situation where Iran’s nuclear plans and its economic dependency
TARIK ALGAIN on oil exports have made China emerge as a key player in the
region’s security. The oil-for-cooperation proposals attest to
this emergence, and independently of whether or not they are
accepted, these proposals mark a turning point in China’s rise
over the past two decades. Freifeld posits the question now is: will
China be a responsible player or will it continue to narrowly focus
Published by on its energy interests?

In addition to this feature, regular contributor to The Majalla,

Andres Cala, shares his thoughts on The Union of the
Mediterranean, the first summit of which is scheduled for next
June.

We invite you to read these articles and much more on our website
at Majalla.com/en. As always, we welcome and value our readers’
feedback and we invite you to take the opportunity to leave your
comments or contact us if you are interested in writing for our
publication.
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Cartoon

Issue 1550 05
Contents
08 Geopolitics
A Good Neighborly Idea

11 In Brief
Around The World
Quotes Of The Week
Magazine Round Up
Letters

18 Features
Enter the Dragon

25 News Analysis
House of Representatives Passes
Health Care Reform Bill

28 Ideas
Sanctioning Iranian Narcissism

THE MAJALLA EDITORIAL TEAM

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Ahmed Ayoub
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22 March, 2010 06
 33 33 People
Profile
Yemen’s Little Giant
Issue 1550,
Interview 22 March 2010

The Institutionalization of Reform

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41 Economics
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Issue 1550 07
 Geopolitics
A Good Neighborly Idea
The Union of the Mediterranean
When the first summit of The Union of the Mediterranean takes place next June, Israel’s Benjamin Netanyahu,
Syria’s Bashar al-Assad, Palestine’s Mahmoud Abbas, Turkey’s Tayyip Erdogan, Greece’s George Papandreou,
to name a few, will be taking a family picture together. The very fact this union exists is nothing short of
miraculous, although most of the 800 million people it represents don’t even know about it.
I magine yourself in 1945 looking
into the future. Who would have
bet that Germany, Italy, and Japan
would eventually forge a military,
economic, and social alliance with
France, the U.K. and the U.S?
That’s what comes to mind when I think
of The Union of the Mediterranean,
the heterogeneous community of 43
countries that includes Syria, Lebanon,
Palestine and Israel, Turkey and Cyprus,
the Balkans, and Algeria and Morocco,
just to name a few hatchets waiting to be
buried.
I don’t mean to draw simplistic
parallels. This is not 1945 and the
context is completely different, from
the starting point, to historic bonds,
economic structures, and political
systems. So how could this union—
which will finally start functioning
in April—conceivably be more than
another useless, bureaucratic, excuse
for political leaders to take fieldtrips?
Europe has very little in common with
its Southern, Arab or Turkish neighbors,
from political systems, culture, to
economic models. Indeed, the last time
the Mediterranean even remotely acted
in unison was during the Roman Empire,
almost 2000 years ago (when by the way
none of the prevalent religions today
were mainstream).
But that is precisely what makes this
reverie a good idea. Diplomacy works
only when you intertwine destinies. What
allowed post-Second World War enemies
to eventually work as allies was the
myriad of venues they created to exchange
commonalities, instead of succumbing to
differences, such as the OECD, NATO,
the European Union, the World Bank,
and the International Energy Agency.
I’m not optimistic that I will see 43
European and Mediterranean countries
acting as allies any time soon. But I
will put money on that many years from
now the Union of Mediterranean will be
remembered as a bold, visionary idea
that put the ball rolling.
22 March, 2010
Andrés Cala
Here’s why. The very fact this union
exists is nothing short of miraculous,
although most of the 800 million
people it represents don’t even know
about it. It was conceived 15 years ago
in a completely different form. Then
President Nicolas Sarkozy of France
came along and tried to make it his in
2008, but Germany’s Angela Merkel
stopped him short and demanded that the
rest of the EU be included. As could only
be expected, it took an additional year
and a half for its members to agree on a
headquarters and top posts.
But it actually happened against all
odds. Diplomats finally brokered a deal
to sit all apparently irreconcilable sides.
It’s headquartered in Barcelona, Spain;
its secretary general is Arab (Ahmad
Masa’deh of Jordan); the Arab League
gets full representation, and both Israel
and Palestinian each get one of six
deputy secretary posts. The other four
will be Italy, Greece, Malta, and Turkey.
The names of the six secretaries will be
announced by the end of March, although
some of the names have already been
filtered. With the names in hand, each
of the six deputies will steer one of the
six common policy areas: cleaning the
Mediterranean, land and sea highways,
civil protection, renewable energy,
university and research exchanges, and
business promotion. And Libya still
needs to be convinced to join.
But all those so-called policies are just
the excuse. The accomplishment is
simply that Israelis and Palestinians
will share leadership roles, along with
Turkey and Greece, and that the Arab
League will be represented along with
the European Union. These are by no
means the only divisions that have to
be overcome in the region, but they are
certainly the deal-breakers.
The first test will come in June when
the first summit is scheduled. Imagine
Israel’s Benjamin Netanyahu, Syria’s
Bashar al-Assad, Palestine’s Mahmoud
Abbas, Turkey’s Tayyip Erdogan,
Greece’s George Papandreou, to name a
few, taking a family picture together.
Indeed, it is likely Arab countries will
boycott the nascent summit if Israel
continues undermining the Palestinian
Authority. On top of that, France and
Greece have no intention of allowing
Turkey into the EU, and Algeria and
Morocco refuse to settle on the Saharawi
issue, not to mention the broader
Arab-Israeli conflict, the Syrian and
Israeli bellicose talk, ongoing Syrian
intervention in Lebanon, and more.
But even if this summit fails, the
secretariat and its six mélange of
deputies will continue to exist, however
off the radar they remain. That’s how
diplomacy works. In order for there to be
peace, a channel needs to exist. Even if
war lies ahead, there needs to be a vision.
This is what is remarkable and promising
about the Union of the Mediterranean.
However useless the bureaucracy will be
for years, enemies will share objectives
and intertwine their futures.
After all, it doesn’t matter how long the
feud lasts or even if shouting evolves
into punches. At some point, disputes
are inevitably resolved. History has
shown us that. And there’s nothing like a
neighborhood association to catalyze an
agreement.
Madrid based freelance journalist
08
Issue 1550 09
In Brief
Around The World Quotes Of The Week
Lasting truce in Yemen
Yemen’s government fought six
wars with the Houthis, the most
recent of which having come to a
halt after a cease-fire and a truce
agreement between the government
and the rebels.
Many signs confirm that the truce
will not be temporary. According
to Yemen’s President Ali Abdullah
Saleh, the truce will be the prelude
to a final end to the war. He noted
that the Houthis have cooperated
with the government after the
recent conflict more than ever
before, releasing 175 war prisoners,
clearing mines, opening roads and
the handing over of administrative
buildings to local authorities.
Issue 1550
Magazine Round Up
Analysts however, believe that
the truce will not bridge the
gap between the rebels and
the government that has been
ongoing since 2004. The Yemeni
government on the other hand,
believes that the armistice will
continue.
Meanwhile, Yemen’s Foreign
Minister Abu Bakr al-Qurbi
has revealed that there is a
US initiative to reconcile the
country’s ruling General People’s
Congress with opposition
parties in a gathering to be held
in Beirut. He noted that the
initiative was being examined
by Yemen’s ruling party.
Letters
In response to the US initiative,
militant Yemeni Islamic preacher
Anwar Al - Awlaqi has called upon
Yemenis and Muslims in general
to launch Jihad against the US.
Yemen’s President, meanwhile,
said that the number of Americans
in Yemen did not exceed 40
personnel conducting training
operations.
Yemen, however, is not facing the
Houthis alone. There are also the
separatists in south of the country,
which has led the Yemeni President
to emphasize that he only supports
dialogue with Yemeni parties that
do not endanger the country’s
unity.
11
 In Brief - Around The World

Around
The World 8

2
4
6

1 Palestine
The UN chief has said Israel's
blockade of Gaza is causing
"unacceptable suffering," during a
Middle East visit to reinvigorate the
peace process. Ban Ki-moon told
Gazans that "we stand with you"
as he visited an area damaged by
Israel's offensive 14 months ago.
His visit to the region comes amid
tension over Israel's plans to build
more settlements in East Jerusalem.
3 Afghanistan
Afghan officials say a suicide
bomber has killed ten people and
wounded seven in Helmand province
in southern Afghanistan. Local
authorities say the bomber may have
been targeting an army vehicle, but
set off his explosives in an area where
civlians were attending Nowruz
gatherings to celebrate the new year.
Separately, two people were killed
and at least two other were injured
in an explosion in Khost province in
southeastern Afghanistan.

2 Germany
German Chancellor Angela Merkel
said that Greece does not need any
financial support and European Union
leaders should not make the question
of aid for the indebted country a focus
of their summit this week in Brussels,
In an interview with Deutschlandfunk
radio, Merkel said she feared causing
turbulence in financial markets by
raising "false expectations" about aid.
She reiterated Greece has to sort out
its own debt problems for the good of
the euro single currency.
4 USA
U.S. President Barack Obama
has told the Iranian people the
United States is committed to a
more hopeful future for them,
despite differences with their
government. Mr. Obama directly
addressed Iranians in an Internet
video message to mark the Persian
New Year, or Nowruz. President
Obama said the United States would
like to increase opportunities for
educational exchanges and help
ensure uncensored Internet access in
Iran.
5 Israel
Israeli Prime Minister Benjamin
Netanyahu said he would not restrict
construction in east Jerusalem,
a step requested by the U.S., but
would upgrade upcoming indirect
talks with the Palestinians to include
the main issues dividing them.
Netanyahu originally had wanted
to put off a discussion of issues
like the status of contested east
Jerusalem, final borders and the fate
of Palestinian refugees until direct
talks are launched.

22 March, 2010 12
 In Brief - Around The World
6 did not immediately record any
3 the volcano could melt the glacier
5 7
1 and cause floods in the surrounding
10
9 9 Somalia
6 Vatican
Pope Benedict apologized to
victims of child sex abuse by clergy
in Ireland and ordered an official
inquiry there to try to stem a scandal
gripping the Catholic Church which
has swept across Europe. The
pope's pronouncement on abuse at
Irish dioceses and seminaries was
the most concrete step taken since a
wave of cases hit Ireland, Germany,
Austria and the Netherlands.
Issue 1550
7 China
China's commerce minister warned
the United States against imposing
trade sanctions over Beijing's
currency controls, and said his
country was likely to report a trade
deficit in March. Washington and
other trading partners are pressing
China to ease controls that have
kept its yuan currency steady against
the dollar for 18 months to help its
companies compete amid weak global
demand. Some U.S. lawmakers have
demanded to have China declared
a currency manipulator in a U.S.
Treasury Department report due out
next month, which could precede
possible trade sanctions.
8 Iceland
A volcano erupted beneath a glacier in
south Iceland, forcing the evacuation
of hundreds of people. It was the first
time since 1821 -- almost 200 years
ago -- that the volcano under the
Eyjafjallajokull glacier has erupted.
The country's civil protection agency
injuries or damage. But the heat from
area.
A senior commander of the Somali
Islamist group, al-Shabab, has been
shot dead at close range as he left
a mosque in the city of Kismayo.
Unidentified gunmen shot Sheikh
Daud Ali Hasan several times, inside
an area of Somalia held by his own
forces. Sheikh Hasan was in charge
of front-line operations in the town
of Dhobley, near the Kenyan border.
10 Iraq
Iyad Allawi, the narrow leader in
the race to become Iraq's next prime
minister says poll results are taking
too long to declare. Allawi, who
headed the country from 2004 to
2005, told the BBC full results from
the 7 March election should have
been released days ago. Mr Allawi
has a slim lead over current Prime
Minister Nouri Maliki. With more
than 90% of the votes counted, Mr
Allawi's Iraqiya political bloc is
ahead by nearly 8,000 votes.
13
In Brief - Quotes Of The Week Magazine Round Up

Quotes
Of The Week
"The US wants brighter
future for you "
Magazine
Round Up
President Barack Obama
addressing Iranians in an online
video message

"Israel won't change its

policies"
Prime Minister
Binyamin Netanyahu

"The most important

thing is to forget the
past and
open a new page"

Walid Jumblatt, leader 1

of Lebanon's Druse sect,
addressing Syria's Al-Watan 1 Newsweek
Newspaper on Syrian-
Lebanese relations. Slow-motion Merkel
With cracks starting to show within the EU’s
economic and political stability, Brussels is
looking for someone to take the helm. Their
prime candidate is Germany’s Chancellor
“We will make it, Angela Merkel. But Merkel seems hesitant
provided that our to take up the offer, more concerned with
domestic policy than getting involved in
country can borrow on the EU’s mess, especially when it comes
reasonable terms” to providing financial aid to Greece. Yet
Germany has invested interests in EU stability,
its own economy significantly bolstered since
Prime Minister the introduction of the euro currency. It is
George Papandreou of time for Germany to get out of the back seat
Greece, addressing his and pull some weight in the EU as Europe’s
cabinet on s most prosperous nation.
eeking financial aid.

22 March, 2010 14
 2 Foreign Affairs
After Iran gets the bomb
The authors argue that Iranian nuclear capability could have a domino effect
throughout the region as nations scramble to defend themselves. There
would be a political backlash against America for not having taken a stronger
stance against Iranian leadership. But this is pure speculation, none of these
consequences are set in stone and America still holds the political and economic

2
clout to dissuade Tehran from going nuclear.

3 New Statesman
Falklands II
Islas Malvinas or the Falklands? These sparsely populated, often sub-zero
islands off the coast of Argentina are again the centre of a row between
British and Argentine interests. This time it’s about oil. Britain is busy
developing oil rigs off the Falklands coast while current Argentine President

3
Kirchner is preparing for some international arm twisting. There will be
no oil coming out of the ground under Britain and Argentina finally find a
solution to this outdated dispute.

Cover of the week

Cover Of The Week
Time 10 Ideas for the Next 10 years
In a quirky list of predictions Time looks at America’s potential evolution in the
coming decade. Proclaiming a message of hope to drown out defeatist voices
lamenting US decline, the article forecasts a distinctly ‘American century’. The
ideas explore American appetite for bandwidth exceeding supply, immigration,
the younger generation following an alternative career path to their predecessors
and a more grassroots approach to well-established institutions. Concerning the
wider world, predictions promote the power of television to transform the lives
of those in the developing world. One author suggests the need to re-draw
national boundaries by developing transportation networks across borders as
a solution to ending conflict in many of the world’s warring regions. But just
when you think you’ve mapped out the world for the next ten years, prediction
number 10 vetoes all the previous premonitions by stating that this decade will
be a stagnant one, marked by no change whatsoever. This one will certainly get
you thinking.

Issue 1550 15
In Brief - Letters
Letters
Everything
But A Game
Child poverty in Egypt is far
deeper; urbanization in addition
to the general economic dismay
both contribute to the current
situation. The rural housings
that are built illegally are by far
the biggest threat to children.
Hatem el Harairy
22 March, 2010
LAST ISSUE
Dr. Ahmadinejad: How I
stopped Worrying And
Learned to Love The Bomb
Ahmadinejad is taking his international policies a step
too far, blatant defiance to the international community
is giving the world an impression that he is more of an
eccentric person rather than a supposed state leader and
politician.
Mathew Wilkinson
16
In Brief - Magazine Round Up

Issue 1550 15
 Features

© getty images

22 March, 2010 18
18
 Enter
the Dragon
By Daniel Freifeld

Issue 1550 19
 Features

Enter The Dragon

Gulf Security and Chinese-Iranian Petrodiplomacy
Daniel Freifeld
Recent proposals to guarantee oil supplies to China in exchange for its cooperation in confronting Iran’s
suspected nuclear weapons program betray the emergence of China as a central issue in Gulf Security.
Regardless of whether these proposals are adopted, they mark a turning point in China’s rise. The question
now is: will Beijing become a constructive player in Gulf security or will it only pursue its narrow
energy interests?

W hen US Secretary of State

Hillary Clinton traveled
to the Persian Gulf in February,
high on her list of priorities was
gaining support for a new round of
sanctions against Iran’s nuclear
program, which Washington
and others suspect is geared
towards weapon development.
Clinton focused much of
her attention on the Iranian
Revolutionary Guard Corps, the
paramilitary organization with
extensive political, military,
and economic power in Iran
and the region. Warning that
that Guard’s rising influence
was moving Iran “towards a
military dictatorship,” Clinton
called for expanded sanctions
against individuals, banks, and
companies doing business with
the Iran. Less noticed was a
subtle message she delivered to
an audience sitting more than
6,500 kilometers away in China.
In more than four hours of
private talks at King Abdullah’s
desert camp outside of Riyadh,
Clinton is reported to have
nudged Saudi Arabia to use its
growing influence with China
to help persuade it to back
new sanctions against Iran.
Key to that message would be
assurances that Saudi Arabia
would make up for lost oil
supplies if China were to see
a disruption in the more than
500 thousand barrels a day it
receives from Iran. This effort to
pry China out of its burgeoning
relationship with Iran comes on
the heels of similar offers made
by the United Arab Emirates
and Kuwait.
The oil-for-cooperation
proposals revealed not only the
centrality of energy to China’s
foreign policy, but the degree
to which China has emerged
as a key issue in the region.

22 March, 2010 20
 Features
Regardless of whether the oil-
supply guarantees are accepted,
these proposals signify a turning
point in China’s steady rise over
the past two decades. China is
now a player in Gulf security.
The question is: will China be
a responsible player or will it
continue to narrowly focus on
its energy interests?
An Old Relationship with New
Dimensions
China is of course not new to
the Gulf. Long predating oil’s
emergence as a geopolitical
issue, China and the region
have enjoyed a long trading
relationship. As far back
as 3,000 years, merchants,
missionaries, and pilgrims
traversed the ancient Silk Road
routes between the Gulf and
China. Over the centuries,
deep commercial, cultural, and
technological linkages were
formed as goods were traded
and knowledge and ideas were
spread. Almost 1,500 years
ago, the Chinese Eastern Han
Dynasty established maritime
linkages with the region and
the Persian Sassanid Empire
(which ruled much of what we
refer to today as the Middle East
and South Asia). The Sassanids
exported carpets and other goods
to China and even stationed a
permanent trade mission there.
Trade between these two regions
is no less important today. In
2008, trade between China
and Gulf Cooperation Council
(GCC) countries and Iran stood
at over $100 billion, growing at
an extraordinary average of 20%
per annum over the past few
years. While Chinese exports
to the Gulf—ranging from
chemicals and plastics to textiles
Issue 1550
and electronics to aviation and
military equipment—have not
been negligible, the mainstay of
trade between the two regions
has been energy exports from
the Gulf, particularly oil. Three
of China’s top suppliers—Saudi
Arabia, Iran, and Oman—are
located in the Gulf. In 2009,
nearly half of Chinese oil imports
came from the Gulf, with more
than one-third coming from
Saudi Arabia and Iran alone.
Beijing’s deepening
energy relationship
with Iran is driven
in large part by
skyrocketing
demand at home
This growing relationship
has not gone unnoticed. King
Abdullah chose China as his
first state visit after assuming
the throne. Chinese President
Hu Jintao has since reciprocated
with two visits to Saudi Arabia,
most recently in February of last
year. In fact, Clinton’s trip was
preceded by a visit from Chinese
Foreign Minister Yang Jiechi in
January. In addition to frequent
Chinese visits to the region, the
United Arab Emirates, Kuwait,
Oman, Bahrain, Qatar, and
Iraq have all sent high-level
delegations to Beijing.
Trade and investment between
Iran and China, in particular, has
grown at a breathtaking pace
over the past few years. In 2009,
investment between the two
countries reached an estimated
$36.5 billion, up 35% from 2008
levels.
But no part of that relationship
is as strategically significant as
the energy-sector. According
to the US Energy Information
Administration, Iranian oil
exports to China shot up from
425,000 barrels per day in 2008
to 544,000 in 2009, an increase of
nearly 30%. Imports from Saudi
Arabia, although still larger in
volume, rose by only 2% over the
same period, indicating that Iran
is fast gaining ground. And no
other Gulf country has received
more Chinese energy-related
investment than Iran—Chinese
companies are estimated to have
committed close to $120 billion
to Iranian gas and oil projects,
although many of these deals will
take years to work out.
A Relationship Anchored in
Self-Interest?
Beijing’s deepening energy
relationship with Iran is driven in
large part by skyrocketing demand
at home. According to Platts, a
leading source of energy market
reporting, Chinese oil demand
grew by an astonishing 6.6% from
2008 to 2009. In fact, China’s
oil imports hit a historic high in
December 2009, as it imported
more than 5 million barrels per
day. With demand expected to
double by 2030, China desperately
must find sufficient sources of oil
to keep its economy going.
For Beijing, this is very much
viewed as a national security
issue. If it cannot sustain annual
economic growth rates of 7-8%,
the government fears its inability
to address income inequality,
poverty, and emerging social
issues will be met with popular
upheaval.
21
 Features
To satisfy this steep increase
in demand, China has engaged
in a worldwide shopping spree,
drawing from its estimated $2
trillion in currency reserves
to buy oil and gas supplies
from around the world, often
trading loans or infrastructure
projects in return for guaranteed
energy shipments. For example,
since last summer, China has
concluded a $25 billion loan to
cash strapped Russia in return
for 300,000 barrels of oil a day
over the next two decades, a $10
billion loan to Brazil in return for
200,000 barrels of oil a day over
the next 10 years, and a large
joint-venture in Venezuela’s
Orinoco Oil Belt. Since 1992,
China has in fact made an
astounding 208 oil investments
overseas, 40 of which were in
the Middle East.
All Eyes on the Gulf
The Persian Gulf is a particularly
attractive source of energy for
China. Not only are the shipping
distances back home shorter
than Latin America and Africa,
much of the world’s remaining
reserves of oil and gas are in the
Gulf: over half of the world’s
remaining conventional oil
lies in only five Persian Gulf
countries—with Saudi Arabia,
Iraq, and Iran alone holding 43%
of all remaining supplies. The
natural gas picture is not very
different. Three of the top-five
reserve holders are in the Gulf,
with Iran and Qatar holding the
world’s second and third largest
reserves, respectively.
The energy reserves in the
Middle East are also not as
22 March, 2010
technically challenging as
some other parts of the world.
Chinese national oil companies
do not yet possess the advanced
technology required to unlock
reserves in the Arctic Ocean
or offshore stakes in West
Africa. Iran offers China both
an opportunity to gain valuable
experience, and, because many
international oil companies
have either boycotted or been
sanctioned out of investing there,
a less competitive environment.
The Persian
Gulf is a
particularly
attractive
source of energy
for China
In Whose Interest?
Tehran also views its
mushrooming relationship with
China in strategic terms and
is eager to see China invest in
its decaying petroleum sector.
Years of sanctions, Iran’s
confusing and unstable business
climate, and a failure to reinvest
profits back into the industry
have resulted in steadily falling
production levels. While Iran
may be exporting more oil to
China each year, it is actually
producing less of it, potentially
10-12% less per year. The
domestic refinery sector has
not fared well either. Iran,
after failing to expand refinery
capacity when state revenues
were soaring on the back of
rising prices leading up to 2008,
is forced to rely on imports to
meet 40% of domestic demand.
This dependency is quite costly
on the Iranian treasury, as the
state must absorb the difference
between the market price it pays
for the gasoline and the heavily
subsidized rate it charges
consumers.
Even the reliability of these
imports is tenuous, now that the
U.S. has stepped up a campaign
to sanction gasoline suppliers.
In recent months, Royal Dutch
Shell, Kuwait’s IPG, and
Switzerland’s Glencore halted
shipments to Iran, privately
citing that it was not worth
jeopardizing their US business
interests. Only five companies
continue to sell to Iran, among
them Malaysia’s Petronas and
Russia’s Lukoil.
Keen to find an international
partner willing to invest in its
petroleum sector, Iran looks
to China. Iranian officials
have made no secret of this
desire. “We would like to give
preference to exports to China,”
declared former Iranian Oil
Minister Bijan Zanganeh in
2004. Ali Akbar Salehi, Iran’s
former representative to the
International Atomic Energy
Agency, speaking about China,
supported this view: “We
mutually complement each
other. They have industry and
we have energy resources.”
But in Tehran’s eyes, the strategic
value of the relationship goes far
beyond the mutually beneficial
22
 Features
development of energy, and
perhaps even beyond that which
China contemplates. If Iran can
make itself attractive enough
as an energy source for China,
which wields a UN Security
Council veto, it will have
recruited a powerful supporter
in the confrontation over its
nuclear program with the US
and many of its neighbors in
the Gulf. If China became so
heavily dependent on Iran’s
petroleum sector, the thinking
goes, it would be reluctant to
jeopardize supplies with new
sanctions, even if Iran should
construct a nuclear weapon.
Iranian President Mahmoud
Ahmadinejad betrayed Tehran’s
desire to rope China into its
geopolitical battles: “The
common enemies of the two
nations are against [the] progress
and development of both Tehran
and Beijing.”
Friend or Freeloader?
Others are starting to take
Beijing and Tehran’s deepening
relationship seriously. Not only
do the United States and many
in Europe now view China’s
involvement in the Iranian
energy sector as an impediment
to resolving the nuclear issue,
officials in the United States have
gone so far as to offer evidence
that Chinese companies have
been evading the UN ban
on selling dual-use military
technology and materials to
Iran. The UAE has also come
forward to report that it had
intercepted two shipments from
China bound for Iran containing
aluminum and titanium sheets,
Issue 1550
which can be used in missile
production.
Others are
starting to
take Beijing
and Tehran’s
deepening
relationship
seriously
And by linking China’s energy
interests in Iran with progress
on the nuclear program,
Secretary Clinton is attempting
to put the onus on Beijing to
make the next move in the Gulf.
Will it recognize, as she said,
“the destabilizing impact that a
nuclear-armed Iran would have
in the Gulf, from which they
receive a significant percentage
of their oil” or will it continue
to myopically chase after Iran’s
energy riches without abandon?
If it chooses the latter, it will
ironically have the effect of
jeopardizing its own energy
security. An Iranian nuclear
weapon would undoubtedly
increase tensions in the Gulf
as other countries move to
counterbalance Iran’s newly
acquired weapons capability.
This would directly affect
China, as roughly half of
China’s imports—and 40% of
the world’s seaborne traded
oil—pass right through the
Strait of Hormuz daily. Wedged
between Iran and Oman and
only 34 kilometers wide at its
narrowest point, shipments
from the oil producing regions
of Saudi Arabia, Iran, and the
United Arab Emirates, along
with major producers Kuwait
and Iraq, must pass through
this maritime chokepoint. Iran
has already threatened to shut
down the strait in response to
an attack on its territory, which
unfortunately becomes more
likely as tensions rise over its
clandestine nuclear program.
With Power Comes
Responsibility
While it is clear that China
has arrived as a player in the
Gulf, it is not clear how Beijing
will see its responsibility to
contribute to Gulf security. Will
Beijing choose to trust that its
GCC partners will ensure that
its oil demand is met or will
it embrace Iran, a partner that
appears to have aspirations for
a relationship far beyond what
Beijing has in mind?
The GCC should also use this
as an opportunity to evaluate
its relationship with China.
If Beijing accepts the supply
assurances, it will signal that
China is serious about becoming
a partner in Gulf security. If it
chooses to plow ahead with
its narrow interests in Iran—
even if doing so ultimately
compromises its own energy
security—the GCC should
consider whether China is little
more than a mercantilist fixated
on the region’s oil.
Daniel Freifeld - director of
international programs at
New York University’s Center
on Law and Security.
23
22 March, 2010
News
Analysis

House of
Representatives
Passes Health
Care Reform Bill

Issue 1550 25
 News Analysis
House of Representatives
Passes Health Care Reform Bill
Democrats win the health care round
Wessam Sherif
T he American health care reform
chronicles have finally come to the
concluding chapter with the passing of
an astounding $940 billion health care
reform bill. The new bill should stretch
health insurance to reach 32 million
uninsured Americans and allow people
with preexisting medical conditions to
be covered by insurance companies.
Moreover, the bill is expected to cut
federal deficit by $138 billion over the
next ten years. The bill stands as the
biggest social legislation passed since
the 1960's that marked the Great Society
Programs. The final count of the votes has
shown that the bill received 219 approval
votes, none of which republican, while
212 representatives voted against the
reform agenda.
The passing of the bill however was
not always guaranteed. A number of
conservative democrats have expressed
their fear that the bill would allow the
holding of abortions, only to be reassured
22 March, 2010
by Obama who promised issuing an
executive order "to ensure that federal
funds are not used for abortion services".
Much light has been shed on the health
care reform issue during Obama's first year
of presidency resulting in a heated debate
between Democrats and Republicans.
On one hand the Democrats view the
reform initiative as more than just a civil
right but a moral issue, bearing in mind
that the concept of health care reform
has been very elusive to many presidents
preceding Obama. On the other hand, the
Republicans view the bill as an intrusion
by the federal government into health
care which would slash Medicare and
increase taxes by an estimated $1trillion.
Republican Congressman David Dreier,
who was against the Democrats' policies,
said "the greatest outrage has always been
for the bill itself".
Despite critique, Medicare cuts should
force hospitals to work more efficiently in
order to stay in business, in addition, the
bill takes credit for the penalties it should
impose on businesses that don't provide
coverage to their workers.
The senate, having signed a similar health
care bill last December, shall sign off a
package of House-approved changes to
its December bill which needs a simple
majority to pass. Consequently, Obama
is expected to sign off the final bill early
on this week. Obama, having come
to office with the prospect of change,
has expressed pride in what democrats
consider as an overdue achievement, "this
is what change looks like, we proved that
this government, a government of the
people and by the people, still works for
the people."
The bill is considered by many optimists
a step in the right direction. Nevertheless,
skepticism still looms about its
implementation and its in-house political
consequences.
26
27
 Ideas

© getty images

22 March, 2010 28
 Sanctioning
Iranian
Narcissism
By Gregorio Bettiza

Issue 1550 29
 Ideas

Sanctioning Iranian Narcissism

Or Why Iran is Not A Rogue State
Gregorio Bettiza

Iran is not a rogue state. It is concerned, more than one gives it credit, with its position in the international
community, and by how it is perceived by great powers. This is one of the fundamental motivations behind its
nuclear program, and as such an important one to take into consideration when debating the possible efficiency
of sanctions against Iran. As such, a fourth round of sanctions against Iran is likely o succeed if they are able to
target this nerve.

Members of the United Nations Security Council vote to slap UN

sanctions on Iran
© getty images

C ontrary to conventional
wisdom, Iran is not a rogue
state. It cares deeply about its
standing in the world and daily
seeks to legitimize its government
in the eyes of the international
community. In many ways, Iran is
more like Soviet Russia or Maoist
China than it is a pariah state, such as
Communist North Korea, militarized
Burma or post-1991 Iraq. Indeed
its nuclear program is driven not
solely by calculations of security or
regime survival, but is in great part
motivated by the desire to achieve
international status and prestige.
This is worth keeping in mind, as
the world debates how to go about
solving the nuclear impasse.
In fact, if a fourth round of sanctions
is slapped on Iran in the coming
months, these are likely to succeed
only if they touch on this sensitive
nerve. While Teheran’s desire for
international recognition seems
to be one of the driving forces
behind its intention to go nuclear,
it may also be its weakest spot. The
argument that Iran is not a pariah
state may appear counterintuitive,
yet much in Iran’s behavior on the
nuclear issue suggests that it does
care about what other countries
think of it. Three issues particularly
stand out.

22 March, 2010 30
 Ideas
First, Iran constantly seeks to
legitimize its nuclear program within
the Non Proliferation Treaty (NPT)
framework, rather than rejecting the
treaty altogether—as other countries
have done in the past. India, Pakistan
and Israel are all non-signatories to
the treaty and have gone nuclear.
North Korea pulled out of the NPT in
2003 when it decided to press ahead
with nuclearization. Iran could do
the same.
Yet, whether sincerely or not,
Teheran continues to claim that its
nuclear program is for legitimate
peaceful means and hence within the
legal boundaries of the NPT. While
the cynic may argue that this buys
Teheran time, it also appears to buy
Iranians the international support
which they desperately crave for.
Secretary of State Hillary Clinton
recently visited Brazil, which
currently holds a non-permanent
seat in the UN Security Council
(UNSC), seeking to build consensus
for sanctions against Iran. Her efforts
were rebuffed by President Lula
who argued Brazil would back Iran’s
nuclear program, particularly as long
as it remained for peaceful purposes.
Second, unlike rogue regimes,
Teheran deeply fears international
isolation. In fact, through strategic
diplomatic moves, Iran frantically
searches for allies not only within
the region, but world-wide.
Ahmadinejad has been particularly
active in visiting African and Latin
American countries with the dual
intention of opening up alternative
economic channels (which can
shield Iran from Western unilateral
sanctions) while also gathering
diplomatic support for its nuclear
ambitions.
In the last year, according to The
Economist, Iran conducted at least
20 ministerial or higher level visits
to Africa. While it has sought to
strengthen economic and diplomatic
ties with predominantly Muslim
countries such as Sudan and Senegal,
Issue 1550
it has also invested time and resources
in Nigeria and Uganda, for example,
both of which are current UNSC non-
permanent members. In his visit to
Latin America last November 2009,
Ahmadinejad reinforced ties with
Bolivia, Nicaragua and Venezuela
by exploiting the fertile ground of
anti-American sentiment. His visit
to Brazil, in the same period, seems
to be yielding the desired diplomatic
fruits at the moment. Teheran has
also lured in China in the past years
by giving it access to considerable
oil resources. According to CNN
figures, China relies on Iran for 15%
of its oil imports. No wonder Beijing
has become the most reluctant
UNSC member to slap sanctions
on Teheran. Iranian leaders are
regularly seen at the most important
international summits. Its Foreign
Minister, Manouchehr Mottaki,
recently mingled with the rest of the
globalized elite in Davos during the
World Economic Forum this January
2010. So did Ahmadinejad gleefully
accept to give a talk at Columbia
University in New York when
invited in 2007.
Third, when concrete and sustained
multilateral pressure is enforced—
through sanctions and UN
resolutions—Iran has shown that it is
willing to enter into agreements that
limit its capacity to proliferate. Under
growing international pressure last
October, Teheran agreed to ship parts
of its known uranium stockpile to
Russia for conversion into peaceful
nuclear fuel. Similarly, Teheran
has, on multiple occasions, been
sensitive to the International Atomic
Energy Agency’s (IAEA) calls for
inspections. In 2003 Iran appears to
have also halted its nuclear program
for an uncertain period of time.
A 2007 U.S. National Intelligence
Estimate report—a document
representing the consensus view
of all 16 American intelligence
agencies—argued that Iran had
suspended its enrichment program
at the time “primarily in response
to increasing international scrutiny
and pressure.” A key conclusion
of the report was that, rather than
being a rogue and irrational actor,
“Tehran’s decisions are guided by
a cost-benefit approach rather than
a rush to a weapon irrespective of
the political, economic, and military
costs.”
Washington DC, Beijing, Tel Aviv,
Moscow and Teheran itself, all know
that the military option is unpalatable
and without any guarantees of
success. This does not mean that
the international community should
accept a nuclear Iran at the heart of
one of the most volatile regions in the
world. A possible alternative seems
to emerge when looking closely
at Iranian behavior throughout the
years.
Teheran’s reluctance in pulling out
from the NPT, its relentless effort
at reaching out to countries across
the world, and its susceptibility to
changing course when under intense
international pressure, are revealing
of Iran’s desperate fear of diplomatic
isolation. Unilateral Western
sanctions, no matter how targeted
they are, will not have enough
muscle to pressure Iran, which
could ultimately survive so long as
its economic and diplomatic ties to
the East and the South are intact. A
fourth round of sanctions may have
a better chance of succeeding if they
are able to cement a great-power
anti-proliferation coalition among
the U.S., EU, China and Russia
that places genuine multilateral
political and economic pressure on
Teheran. It would send the message
that nuclear technology would give
Iran no privileged status among the
international community, but lead
down the path of further isolation
and harsher punishments. A costly
price Iranians may not be willing to
pay.
London-based researcher.
31
22 March, 2010 36
People

Yemen’s
Little Giant

Issue 1550 33
 People - Profile

Yemen’s Little Giant

Nujood Ali
Nujood Ali is a published author, a divorcee, and only ten years old. The story of her life, her
marriage and her divorce, provide great insight into the development challenges that Yemen
faces. More importantly, her story attests to the negative impact that the continued oppression of
women’s rights have on the prospects for stability in Yemen.

© getty images

C overage of Yemen tends to

focus on the country’s ongoing
conflicts—from the separatist
movement in the South, to the civil
war in the North. Good news is
difficult to find in a country ravaged
by war, yet one woman in Yemen, a
little girl rather, has made international
headlines for her bravery.
Nujood Ali, recently became Yemen’s
first child bride to legally divorce
her husband. Nujood’s courageous
actions have not only allowed her
to save herself, they have set the
precedent for other child brides to
defend their rights in Yemen. At 10
years old, Nujood has also written an
international best seller. I am Nujood
age 10 and Divorced has been
published in 18 languages, including
her native Arabic, and its international
success has allowed her to become her
family’s main breadwinner. Nujood’s
accomplishments, needless to say, are
great. Hilary Clinton even described
her as “one of the greatest women she
had ever seen.”
Yet, Nujood’s story is about more
than just one child bride and her
accomplishments. Rather, her
story provides great insight into
the practices that shape Yemen
and hinder its development. The
problem of child brides and the
repression of women more broadly
is more than a cultural difference
that Yemen has with say Western
countries. It is a problem of its
underdevelopment, and a problem
that is largely responsible for
the many types of insecurity that
Yemeni’s have grown accustomed to.
Although, Nujood’s story has a
happy ending, her childhood is a sad
reminder of the harsh reality that
many girls in Yemen live to this day.
Nujood is remarkable for having given
a rampant problem in the country a
voice, but she is also remarkable for
how commonplace her situation as a
child bride is, and that is why her life
story is worth recounting.
The nightmare for most girls in Yemen
begins in very much the same way as it
did for Nujood. When she turned nine,
her family told her that she would
marry a deliveryman in his 30’s.
She had previously made her father
promise her that he would not force
her to marry and drop out of school
for she was especially interested in
Math and the Koran. Although Nujood
was at first impressed by the gifts she

22 March, 2010 34
 People - Profile
received for the marriage—dresses, a
perfume, two hijabs, a hair brush and
a ring—she was very unhappy at the
idea of marrying and leaving school.
But the arranged marriage took place,
despite her incessant pleading.
Nujood’s father had agreed with her
husband that although the marriage
would take place, he was not to touch
her until she was “ready”, as the vague
Yemeni legal system stipulates with
regards to child brides. However, as
in most other cases, Nujood’s former
husband did not comply with these
demands, raping her daily and beating
her when she tried to escape him.
The extent of Nujood’s fear and
unhappiness grew unbearable, and two
months after her wedding Nujood ran
away to Yemen’s capital, Sanaa. On
her own, the little girl took a bus and a
taxi to the main court of the city where
she remained until a judge granted
her a divorce. Although the judge did
grant her the divorce, Nujood was
ordered to pay her former husband
$200 USD, an incredible amount
in Yemen where the majority of the
population lives under the poverty line.
In fact, poverty stands to explain much
in Nujood’s story, although it excuses
none of the injustice women like
her suffer regularly. At first glance,
it is easy to take Nujood’s story and
categorize her male relatives, her
husband and her father particularly, as
first rate antagonists. But the problem
of gender inequality in Yemen, and
the exploitation of young girls like
Nujood, is more complex and more
expansive than the two men that
defined this story might lead one to
believe.
Nujood’s father, Ali Mohammed
Ahdal, is a former street sweeper.
He has 16 children, two wives and is
unemployed. Ahdal found marrying his
9 year old solved two of his problems:
insecurity and poverty. Ahdal had
immigrated to Sanaa with his family
to look for work but instead found
himself poorer than before. Unable
to provide for his family, the prospect
of a dowry and of one less mouth to
feed made marrying his daughter a
Issue 1550
partial solution to this problem in his
eyes. Perhaps what convinced him
was that one of Nujood’s sisters had
already been kidnapped and another
raped. Marrying Nujood, might save
her from being dishonored, kidnapped
and raped like the other girls.
The nightmare for
most girls in Yemen
begins in very
much the same
way as it did for
Nujood. When she
turned nine, her
family told her that
she would marry a
deliveryman
in his 30’s
In these conditions, some Yemenis
might interpret child marriage as a
solution to the types of insecurities
they regularly face. But as Nujood
showed the world, the insecurity that
girls face as a result of early marriage
only continue to grow. More strikingly,
because her story has a happy ending,
it does not show how negatively these
practices affect this underdeveloped
and conflicted country if children stay
married.
As Nicholas Kristof of The New York
Times explains, “it is no coincidence
that Yemen abounds both in child
brides and in terrorists. Societies that
repress women tend to be prone to
violence.” Although it might appear
as an all-encompassing explanation
for a complex problem, various
human rights NGOs and international
organizations support his view.
The reason countries with child brides
can be unstable, they argue, is because
these conditions result in unusually
high birth rates, which cause a youth
bulge in the population. The high
proportion of young men aged 15-24
increases the likelihood of violence.
This tendency increases even further
in countries like Yemen where there
are very few economic opportunities.
In fact, 70 percent of men in this age
group in Yemen are unemployed.
To make matters worse, because
polygamy and child marriage are
practiced in Yemen, and these two
factors correlate with a higher death
rate in women, more men are likely to
be single than married. This is another
factor that has proved to increase
the tendency of men to participate in
conflict, as “frustrated bachelors” are
more easily recruited by extremists. (In
fact, Saudi Arabia’s counterterrorist
strategy supports this view, as many
of their demobilized combatants are
encouraged to start families to prevent
them from rejoining militant groups).
Rachel Cooke of the guardian wrote
that Yemen is the worst place in the
world to be a woman. Citing the the
Human Development Index, she
shows that 71 percent of Women in
Yemen are illiterate, as opposed to
31 percent of men, and 35 percent
of women in most other Middle
Eastern countries. Women in Yemen
also have a 1 in 39 chance of dying
in pregnancy or childbirth throughout
their lifetime. Because the law in
Yemen does not have a minimum
marrying age, there is also larger
proportion of younger girls who are
especially vulnerable to maternal
mortality and health complications.
As Nujood’s lawyer, said “Yemeni
women have few rights, and they
don’t know those they do have.”
Although calls to raise the legal age
of consent in Yemen to 18 have failed,
Nujood has inspired other young
girls to seek divorce. Women like
Nujood and her lawyer, Nasser, have
undertaken a gargantuan task, and
they are successfully opening doors
for gender equality in Yemen as a
result. Their case is raising awareness
of the problems that child marriage
and the oppression of women lead to,
not only for women but for Yemen’s
future as a whole.
35
 People - Interview

The Institutionalization of Reform

Dr Rob Sobhani, author of “King Abdullah
of Saudi Arabia: A Leader of Consequence”
In this interview with The Majalla, Dr Rob Sobhani talks about his recently launched book “King
Abdullah of Saudi Arabia: A Leader of Consequence”. Sobhani explains the reason why he decided
to embark on this project, and why he thinks this is a crucial book for the Western audience to
better understand King Abdullah and his country Saudi Arabia.

Drconsultant
Rob Sobhani is a business
who specializes in
corporate and government relations,
and is the President and founder
of Caspian Energy Consulting,
a firm that deals with projects
in the Middle East. Dr Sobhani
is also an academic, and was
Adjunct Professor at Georgetown
University, Washington DC. Dr
Sobhani spoke with The Majalla
about his recently launched book
“King Abdullah of Saudi Arabia:
A Leader of Consequence”.
Sobhani explains the reason why he
decided to embark on this project,
and why he thinks this is a crucial
book for the Western audience to
better understand King Abdullah
22 March, 2010
and his country Saudi Arabia. He
spoke about several of the crucial
issues that concern Saudi Arabia
today—education reform, Saudi
nationalism, Iran’s nuclear projects,
China’s presence in the Gulf, and
Saudi-US relations in the post-Bush
era.
The Majalla: Why a book about
King Abdullah?
Because I believe, number one, that
the American public needs to know
who the ruler of Saudi Arabia is,
because the ruler of Saudi Arabia
today is a leader of consequence,
much the same as the President
of the United States, the President
of Russia, and the President of
China. King Abdullah is equal to
all these leaders because what King
Abdullah does matters to the people
of Saudi Arabia, but it also matters
to the region, and it also matters to
the world.
So I wrote this book because I
wanted the American public, but
also people in the Western world
beyond the American public, to
know there is a man called King
Abdullah, and if the world wants
to solve its problems, it has to work
with King Abdullah.
Q: Do you believe your book
can help to confront some
36
 People - Interview
misconceptions in the US about
Saudi Arabia?
I believe in my heart that the
American people who are also very
generous, and very kind people, if
they get this book, if every American
receives a copy of this book, it will
change their heart, it will change
their mind, it will have a significant
impact on the way Americans
see Saudi Arabia, because they
will see the ambassador which is
King Abdullah, they will see the
representative of Saudi Arabia who
is an honest man, they will see
Saudi Arabia through the lens of a
religious person, of a person that
is fighting extremism, of a person
who is a peacemaker. This is what
the American people will see. So I
am convinced, with all my heart, if
every American has a copy of this
book, it will change their heart, it
will change their mind.
Q: How deeply was the US-Saudi
relationship affected during the
Bush era?
The Bush era obviously was a
very tense era. The Bush era was
an era where we had the war in
Afghanistan, we had the war in
Iraq, and we had a war against
extremists, and I think this created
much misunderstanding, it created
a lot of tension, and I believe
some of these tensions may still
exist. But, in the end, we are
responsible, as children of God, to
solve problems and King Abdullah,
as the custodian of the two holy
mosques, and the president of the
United States, whether its Clinton,
Bush, or Obama, have an obligation
to honestly solve problems. And
therefore, if we look at it from
the perspective where we have a
leader like King Abdullah, who
will honestly shake your hand and
honestly solve a problem, then this
is a once in a life time opportunity
for America to address some of
the key issues in the Middle East,
and also some of the broader
issues like climate change, like
global warming, or homelessness
overseas.
King Abdullah
wants to move
Saudi Arabia
forward with
dialogue, with
dignity, with the
basics of Islam,
true Islam
Q: Traditionally, the idea of Saudi
nationalism has been greatly
absent. Why is King Abdullah
trying to alter this tendency?
Because I believe that the narrative
of Saudi Arabia has always been
tied to Islam, which is true, which
is the fundamental foundation, but I
believe in the West, as the narrative
has shifted from a more traditional
point of view, to a more patriotic—
instead of religious—a more
patriotic theme, it has changed
the image of Saudi Arabia, and I
believe that it is absolutely correct
that King Abdullah is emphasizing
the patriotism, the nationalism,
of Saudi because, first and
foremost, we are all the children
of God, Saudis as children of God,
Americans are children of God, but
then we live within borders, and
within the borders of Saudi Arabia
live the people of Saudi Arabia.
And I think King Abdullah, because
he loves the Saudi people so much,
because he loves the history of
Arab culture, because he loves the
history that was at one point the
envy of the West, that he sees Arab
nationalism as going back to the age
of wisdom, going back to the age of
construction, going back to the age
of a Jihad to build and not a Jihad
to destroy, and I think this is what
King Abdullah wants to achieve to
Saudi Arabia.
Q: You use the following quote
“Saudi Arabia is probably the
only country in the world where
the government is pushing for
reforms and the people are
pulling back”. How has King
Abdullah dealt with this?
King Abdullah is facing tremendous
obstacles, but he also has the
people of Saudi Arabia with him.
When I was in Riyadh, and the
announcement that Noura Al-
Fayez was the Deputy Minister
of Education, the joy in the eyes
of the women I saw was, for me,
unbelievable. And this is only
because of King Abdullah. So
we have narrow-minded people,
not just in Saudi Arabia but in the
United States, in the Middle East,
everywhere in the world we have
narrow minded people, and narrow
minded people sometimes they use
guns, sometimes they use violence.
King Abdullah wants to move Saudi
Arabia forward with dialogue, with
dignity, with the basics of Islam,
true Islam, and that is why he is
being opposed by these narrow
minded people, because King
Abdullah is using the true Islam, the
Islam of the prophet, to move Saudi
Arabia forward, but his opponents
are miss-using and keeping Islam
as a hostage, because they do not
want to give up power, because for
them it is important to keep all their
power, and King Abdullah is trying
to change that.
Q: There is a deep conservative
line amongst Saudi clergy. Do
you think they can pose an
obstacle towards the reforms
King Abdullah wants to
implement?
37
 People - Interview
Saudi King Abdullah bin Abdul Aziz
They will try, the conservative
element will always try, the
conservative element in Saudi
Arabia, the conservative element in
Iran, the conservative element in the
United States, they will always try
to stop progress, they will always try
to stop modernity. But I go back to
my earlier point—King Abdullah’s
vision of Arab modernity and
Arab nationalism, where the past
of Islam and the Arab world is a
glorious past, as a past to now in
the 21st century to be repeated.
So King Abdullah wants a Jihad
in building airplanes, not to take
airplanes hostage, King Abdullah
wants a Jihad to build universities,
not to destroy universities, he wants
to have a Jihad where every Saudi
citizen plays a part in building
Saudi Arabia. The conservatives
will try to oppose him but I think
the people of Saudi Arabia are
behind their king.
Q: What makes King Abdullah’s
University for Science and
Technology such a unique
project?
Because it has the blessing of King
22 March, 2010
© getty images
Abdullah, because as he himself
said, it is the house of wisdom, the
wisdom to be shared by everyone,
but also because it is backed by
real financial support, number one.
And number two, because it is
being ruled by professionals who
have built the MITs of the world,
the Harvard’s of the world, they
have built the Oxfords and the
Cambridges of the world, they have
built the Georgetown universities
of the world, so it is being run by
people who truly are interested in
modern thinking, in science and
in technology. That is why this
institution will be the MIT of the
region and if not the whole Middle
East
Q: Saudi students in the US
went from roughly 3,000 to
20,000 in just a few years thanks
to King Abdullah’s fellowship
programme. How will this change
Saudi Arabia?
I believe that the United States still
is the greatest economy, it’s one of
the greatest countries, and it’s one
of the greatest countries because, in
America, you still have innovation,
you still have people who will find
the next cure for cancer, the solution
for a solar energy world, the solution
to address key issues that many
other countries don’t. The fact that
King Abdullah has the vision to
send Saudi students to America,
to learn from what America has to
offer, the good things that America
has to offer, and take it back to Saudi
Arabia so that they can build Saudi
Arabia shows the long-term vision
of Saudi Arabia. But I would also
like to point out that these students
will also be the ambassadors, they
will also be each one of them, the
bridge between my country and
Saudi Arabia.
Q: In your book, you
characterize King Abdullah’s
speech in the December 2005
Summit of the Organization of
Islamic Conference as “his most
groundbreaking speech”. Why is
that?
Because for the first time a king
in the region stood up and said
honestly what the problem is, and
how to solve the problem. Very few
leaders in the world are as honest
as King Abdullah. King Abdullah
stated that Jihad has been taken
hostage, but that this is not the true
Islam. And that it is important for
the true Muslim to stand up, and the
only reason why King Abdullah can
stand up to the deviant is because
he himself is a religious person,
he himself is a pious person, and
when you are a pious person, when
you believe in God, you can stand
up to the deviant. And that is why
the deviants are afraid of King
Abdullah, because he is one ruler
who can stand up to the deviants
and say “you are wrong, you have
to correct yourself, or else”, and no
other leader can do that.
Q: In your book you look at King
Abdullah’s empowerment of
women. How do Saudi women in
38
 People - Interview
general perceive King Abdullah’s
reforms?
I think that every woman who will
want to have a share in the building
of Saudi Arabia is excited about
King Abdullah, the issue isn’t all
boiling down to women’s rising,
for my conversations with Saudi
women, for my conversations with
members of King Abdullah’s family,
the women in his family, I got the
impression that there is really a full
desire on the part of Saudi women
to be a partner, an equal partner, in
building Saudi Arabia, and that is
why they were so happy when they
appointed a woman as a Deputy
Minister, they were so happy to see
Prince Faisal be appointed as the
Education Minister, because these
are reform-minded people, and it
shows that King Abdullah cares
about the women of Saudi Arabia,
wants the women of Saudi Arabia
to be partners in building a better
Saudi Arabia for everyone, because
I believe firmly that King Abdullah
also thinks that an educated mother
is the most important gift you can
give to society.
Q: King Abdullah has stated
that Iran should by no means be
attacked. How do you think Saudi
Arabia is handling the Iranian
nuclear threat?
I believe that the issue of Iran’s
nuclear ambitions is an issue
that the whole world should be
concerned about. When you have a
regime in Tehran that uses Islam to
kill people, uses Islam to rape and
torture its own people, then nuclear
weapons in the hands of such a
government is a very dangerous
thing, not just for Saudi Arabia but
for the world. And I believe that it is
important for the world to stand by
the people of Iran, and by standing
by the people of Iran, they will give
more courage to the people of Iran
to take matters into their own hands,
Issue 1550
because I believe that the Iranian
people are very capable of building
their own country, they will be
able to create an environment in
the Middle East where Iran truly
is a friend of Saudi Arabia. And I
think that is why King Abdullah
wisely as always left the door open
for talks, he has wisely talked about
the dangers of nuclear arms in the
Middle East. Because I believe,
from my perspective, from what
I gathered from King Abdullah,
the King is very concerned about
doing the right thing, and a nuclear
Iran isn’t good for the region. Iran
is a great country with a great
civilization, and I believe that the
King wants to see this civilization,
this people, be positive and have its
positive impact on their country and
the region.
King Abdullah
stated that
Jihad has
been taken
hostage,
but that
this is not
the true Islam
Q: Saudi oil exports to the US
are at an all-time low. How is this
related with China’s increasing
profile in the region?
I believe that the United States of
America will remain the strongest
economy in the world. The US
economy is a 14 trillion dollars
economy versus 4 trillion of the
Chinese economy. I believe that
China is a rising power, King
Abdullah, rightly, correctly, sees
China as a strategic partner, as
a country that is going to be a
consumer of energy, and I believe
we should also not read too much
into the fact that the United States
now is not importing so much
oil from Saudi Arabia. US-Saudi
relations are not only about energy,
the relation between Saudi Arabia
and America has grown deeper, it’s
a relationship between two people,
it’s a relationship that goes back
to King Abdul Aziz and President
Roosevelt, it is built on economic,
cultural, diplomatic, military, and
now it is built on solving pressing
issues like the Arab-Israeli conflict,
like addressing the issue of global
warming, and so I believe that
whatever focus is on China, there
is so much that America and Saudi
Arabia are going forward resolving,
that the relationship with the
United States will still remain a key
component of Saudi foreign policy.
Q: Next August will mark the 5th
anniversary of King Abdullah’s
rule. How would you describe his
legacy during these five years?
King Abdullah and his legacy
will be remembered by the
institutionalization of reform,
the institutionalization of reform
through the national dialogue
forum, through the building
of houses of wisdom, through
appointing Ministers who are
visionary, through giving the
private sector in Saudi Arabia
more transparency, allowing
the Saudi economy to grow at
a fast click, and to give every
Saudi citizen the chance to be a
participant in the building of a
better Saudi Arabia, that is the
legacy of King Abdullah in my
opinion.
Interview Conducted by Manuel
Almeida
39
22 March, 2010
 Economics
International Economics International Investor Markets

Investing
in Foreign Land ByValentin Zahrnt

Issue 1550 41
 Economics - International Economics

Investing in Foreign Land

A food-security calculus or sound commercial logic
Valentin Zahrnt
The food crisis of 2007 has raised awareness of the potential consequences that a more potent sequel might
have. However, instead of waiting for governments to break promises regarding investment in food supplies,
developing countries stand to profit much more from opening to private investment. FDI transfers not only
bring money to the receiving country but also technology and knowledge, and productivity improvements often
spill over to local production. Investment in food supplies should therefore be handled like other investments
by independent companies looking at economic fundamentals and not by state-owned funds and companies
driven by a strategic food-security calculus.

© getty images Delegates attend the opening session of a World Summit on Food Security organized by the Food and Agriculture Organization (FAO)

S uddenly, the world food

markets spilled out of control.
Within a year, prices for wheat
doubled, those for soybean and
sugar even tripled. The drivers
behind this surge were stock
decreases during the preceding
years, a disappointing harvest
due to bad weather in several
countries and growing demand
for feedstuff. Once prices soared,
governments of exporting nations
curbed the outflow of food, thus
exacerbating the crisis. Merely
two years later, prices had
come down roughly to previous
levels—the affliction had ended.
This is not the account of the
infamous 2007/2008 price spikes;
it is the half-forgotten story of the
early 70s. At least for developed
countries, this earlier crisis
was worse than the recent one.
Real food prices—corrected for
inflation—climbed higher, and
food expenditures absorbed a
much greater share of households’
income, so that any increase was
felt more harshly. This episode
nonetheless takes a backseat in
our collective memory because
OPEC limited oil production
soon after the food prices had
started to rise. Higher oil prices
proved to be the more lasting and
pernicious impediment to global
growth.
So there is a historical precedent
of a food price surge that did not
destabilize the world economy.
Instead, it was eventually followed
by a quarter of a century of low
food prices beginning in 1980.
But the 2007/08 episode was not
perceived from this bird’s-eye
perspective. Even in emerging
and industrialized countries,
much less affected than the poorer
nations, the crisis has changed the
thinking of the powerful. The fear
was born that the next food crisis
may be waiting for us, one that
will dwarf anything the world has
seen before. The world might cast
off its multilateral, liberal veil in
the merciless scramble for food.
Under this lens, the purchase
or long-term lease of fertile
farmland abroad appears to be a
hard-nosed move of Realpolitik
without humanitarian disguise.
Non-governmental organizations

22 March, 2010 42
 Economics - International Economics
attack the neo-colonial land grab
of Arab and Chinese investors that
uproots local communities and
undermines the self-sufficiency
of poor nations. It’s smart but
contemptible, so the common
judgment goes—which may be
wrong on both counts.
The receiving countries may
actually win. Investment in
developing countries’ agriculture
is direly needed: the Food and
Agriculture Organization (FAO)
estimates that an annual US $ 30
billion of additional funds will be
required over the next 10 years.
This is hardly a sum governments
will muster. Often the significant
pledges made by donor countries
during the crisis are just that,
pledges. Making a promise is not
the same thing as signing a check.
Private investment is necessary to
fill the gap.
Foreign direct investment (FDI)
has long been considered as the
most desirable form of capital
inflow. It transfers not only
money but also technology and
knowledge to the receiving
country, and productivity
improvements often spill over to
local production. Furthermore,
FDI involves heavy transaction
costs for the investor—in this
case, selecting suitable land,
negotiating agreements, setting
up production and organizing
transportation. Direct investment
is therefore much more stable
than the billions of speculative
money that may trigger a bonanza
today and dry up tomorrow. The
very idea of farm land contracts
for food security is long-term
reliability.
What about the food security
gains of the investing country?
What happened if world food
prices skyrocketed? Pressures
in many producing countries
would be tremendous to scale
back or stop exports. Certainly,
investments are generally
protected by investment treaties
that guarantee the right to export
and prohibit expropriation
without compensation (which
would be difficult for developing
countries to pay, especially with
Issue 1550
high food prices that increase
the value of the investment).
Cynics say treaties are made to
be broken, and they are likely to
be right when it comes to food
security. If it is either do or die,
one government will inevitably
cede to popular demands, others
will find it convenient to follow
suit and the entire system will
unravel.
Arab and Asian governments
that pour billions of dollars into
farmland FDI—whether through
Sovereign Wealth Funds of state-
owned enterprises—must be
aware of the fragility of these
contracts. The market outlook
may nevertheless justify these
investments on commercial
grounds. The world population
will continue to rise during the
next decades and income growth
per capita in developing countries
will further add to the demand
for food. Also, non-food uses of
agricultural produce are expected
to expand, especially for bio-
energy.
The supply equation is more
complicated. Since the end
of the Second World War,
world food supply has grown
even more rapidly than the
population—which underwent
a growth spurt unseen in human
history. Increasing investments
into agricultural research and
development suggest further
productivity increases down the
road.
More important than new high-
tech solutions are the gains to be
had from ending the disastrous
inefficiency rampant in many
developing countries. The first
challenge here is to improve the
input, credit, land, and output
markets on which farmers rely.
It is plain to see that a farmer
who lacks clearly established
and enforced property rights will
undertake only minimal effort to
maintain or improve soil fertility
and irrigation systems. The other
challenge is to enhance farmers’
knowledge of production
techniques. Quite tellingly, the
application of organic farming
often raises farm output in
developing countries even in the
short run, though this technique
is by no means geared at quickly
maximizing yields. Still, it
performs better than the outdated
piecemeal approaches currently
found in many places of Africa,
Asia and Latin America. Taken
together, inefficient markets and
lacking knowledge go a long way
to explain why Africa produces
only 7% of world cereal supplies
on 22% of the world’s agricultural
area. A tremendous potential thus
lies untapped.
Food production will also benefit
from further trade liberalization as
agriculture is the most protected
sector of the world economy.
While the Doha negotiations of
the World Trade Organization
are deadlocked and its ambition
is watered down, more and
more countries unilaterally
lower tariffs and remove their
heavily distorting subsidies. This
facilitates greater specialization
of production: less sugar from the
EU and more from Brazil.
Climate change is the wildcard in
this market forecast. The threats
include heat stress and droughts,
soil erosion and salinization, the
spread of pests and diseases and
more frequent extreme weather
events. This will be partly
offset by greater productivity of
agriculture in colder climate zones
and higher CO2 concentration in
the air, spurring plant growth.
Most likely, we will see a reversal
of the decade-long trend of lower
food prices but no dramatic
shortages in world food supplies.
Buying farmland and ramping up
production may simply be a good
investment given this market
outlook. In this case, it should be
handled like any investment: by
independent companies looking
at economic fundamentals and
not by state-owned funds and
companies driven by a strategic
food-security calculus.
Research Associate at the
European Centre for International
Political Economy (ECIPE) and
Editor of www.reformthecap.eu
43
 Economics - International Investor
Fear the Boom and Bust… and Bust
The global economy in the medium and long run
As economies slowly emerge from recession questions arise about the economic and financial prospects in the medium
and long run. Public deficits and high inflation are bound to affect economic performance in the next 5 to ten years.
This, however, is only the good case scenario.
T he past couple of months have seen the
emergence of a surprising new internet
music hit. The hit in question is a rap entitled
Fear the Boom and Bust and is sung by the
impersonation of two enigmatic and yet
celebrated economists: John Maynard Keynes,
and Friedrich Augustus von Hayek. As far as
rap goes, the composers John Papola and Russ
Roberts’s choice of topic was also uncommon.
Instead of singing about voluptuous women
or drive-by shootings, Keynes and Hayek rap
about the mechanics behind the interaction of
economic cycles with counter-cyclical policies.
Interestingly, Fear the Boom and Bust does
something that many economic pundits have
failed to achieve so far. It efficiently identifies
the next phase of the crisis, a phase surely
less theatrical than failing investment banks
and insurance companies, but potentially as
damaging: a decade-long sluggish economic
performance created by burgeoning public
deficits and inflationary pressures.
In the US, the budget deficit reached 9.9% of
GDP and is expected to reach 10.6% in 2010,
the highest figures since WWII. The IMF puts
the fiscal deficit at 13.6% of GDP in 2009, 9.7%
in 2010 and 4.7% in 2014. The Congressional
Budget Office has estimated that, in the next
decade, the fiscal deficit will amount to US$
7.14 trillion. Public debt will likely rise from
54% of the GDP in 2009 to 68% in 2019. Close
inspection of the American budget forecast,
however, shows that little real effort has been
put in reigning in the rapidly growing public
deficit and debt. Some European countries such
as Spain, Britain, and Greece are in no better
shape with budget gaps of 11.4%, 14.2% and
12.7% of GDP in 2009 respectively.
Although already in a slight upward trend,
spending only skyrocketed in 2008 as
governments saw themselves forced to bailout
troubled financial institutions. As the financial
crisis spread to the real economy, production
fell and unemployment rose. This was the
opportunity for New-Keynesianism to test their
theoretical developments of the last 20 years.
The gist, however, has remained basically
the same from the 1930s—boost aggregate
demand.
At the time, without the benefit of hindsight,
the prospects of falling dominos in the
financial system was certainly scary enough
22 March, 2010
Daniel Capparelli
to tone down any ideological bickering. This
regardless of their analytical validity. As Ben
Bernanke, Chairman of the Federal Reserve
wisely put it: “there are no atheists in fox holes
and no ideologues in financial crises.”
Much like in the Great Depression, however,
the outcome of these policies has been a rapid
expansion of public debt. Trillions of dollars
were added to public debt by the implicit
government guarantees to mortgage lenders,
the off-balance sheet transactions carried by the
Fed and central banks throughout the world,
and the lax fiscal policies included in most
stimulus packages. Furthermore, in contrast to
the situation observed in most GCC countries,
spending has been financed overwhelmingly by
deficits and debt in most western and emerging
economies. Given that debt levels were already
high, this trend may prove extremely costly in
the future for the world economy.
The main problem with debt financed stimulus
programs is that a debt level that is manageable
for a given market interest rate, tax revenue,
and economic growth projections may not
remain manageable in the event of an external
shock. In order to take advantage of lower
interest rates, governments often opt for short-
term debt issuance. When these debts come to
maturity, lenders roll over the principal into
another short-term contract. This mechanism
works smoothly up to the point where it no
longer does. If market confidence erodes too
much, lenders may decide not to roll over
government debt, precipitating a crisis.
Even though Credit Default Swaps (CDS)
spreads have increased considerably in the
aftermath of the crisis, considering a possible
massive government default by the US and
the major members of the European Union
may be ludicrous given the extremely high
incentives for creditors not to let this happen.
This is unfortunately not the case of Portugal,
Italy, Greece and Spain—revealingly known in
the public debt market by the acronym PIGS.
Such defaults—which include substantial debt
rescheduling and restructuring—would prove
devastating for the EU and the global economy.
But this is not the end of the story.
Historically, countries have used subterfuges in
order to avoid overtly defaulting on their public
obligations. Since the advent of fiat currencies,
governments have often resorted to a sadly
efficient way of facilitating the repayment of
their obligations: inflation.
Keynesian economic policy already almost
invariably leads to higher inflation since higher
government expenditures increase demand
and, therefore, prices. As the economist Robert
Barro famously concluded in 1974, however,
these policies only work if economic actors are
unable to anticipate future inflation rates. Using
the Ricardian Equivalence, Barro explains that
consumers do not spend the additional post-
taxes income created by lax fiscal policies
because they realize that higher taxes in the
future are required to pay the debts created by
the fiscal stimulus.
The main problem with Keynesian policies
is that since the inflationary policies of the
1970s, economic actors have been well trained
to predict future inflation rates created by
government expenditures. This considerably
reduces the short-term efficiency of these
policies. What economic actors have been less
well trained for, however, is to predict inflation
rates stimulated by burgeoning government
debts. Given the striking lack of transparency in
public debt levels, this is not all that surprising.
In this context, the prospect of medium run
economic performance in western countries is
rather lacklustre. Inflation causes distortions in
the economy and particularly so in the banking
system and financial sector. It is safe to say
that governments will not pursue aggressive
inflationary policies, notably, because of the
aforementioned costs. It is also safe to say,
however, that the artificially lowly held interest
rates are bound to create over investment in
low return capital assets. When interest rates go
back to their equilibrium levels another bubble
is likely to burst.
44
Issue 1550
 Economics - Behind the Graph

Sovereign Wealth Funds

Sovereign Wealth Funds (SWFs) have
been and are likely to remain important
players in financial markets, according
to a recent study from International
Financial Services London (IFSL).
Given recent and likely developments
of market conditions—such as inflows
from trade surpluses and high com-
modity prices—SWFs’ role is likely to
increase significantly in the next dec-
ades. Although there seems to be a wide
divergence in estimates, IFSL projects
that SWFs’ assets will increase by $5.5
trillion by the end of 2012.
Reaching accurate market projections,
however, remain highly problematic
for two main reasons: first, SWFs
(particularly Middle Eastern ones) are
highly opaque institutions know for
their limited disclosure of information.
Second, estimates vary greatly due to
a lack of standard definition of what
constitutes a SWF. In this article, SWF
are defined as entities created by the
central government for special purpos-
es, such as development, stabilization,
public pension reserve, and saving.
SWF, thus, invest in national and for-
eign assets in accordance with a pre-
viously establish strategy to achieve a
special purpose. By the end of 2009,
SWFs managed $ 3.8 trillion, far be-
hind pension funds ($29.5 trillion),
mutual funds ($23 trillion) and insur-
ance funds (20.0 trillion).

Current Accounts and Financing

The establishment of SWFs is usually financed by the receipts of priva-
tizations, fiscal surpluses and the proceeds of commodities exports. As
such, given France’s trade deficit, the tentative ideas floated by the French
President Nicolas Sarkozy are by definition a non-starter. This is clearly
not the case of China and oil and gas exporter countries, however. The
fall of commodities prices, the collapse in world trade and the consequent
contraction of Balance of Payment surpluses in the wake of the global
financial crisis have undermined this financing mechanism to some ex-
tent. SWFs were also adversely affected by the fall in commodity and
real-state prices—the latter constituting a significant share of investment
of Middle-Eastern SWFs. As a consequence, in 2009, assets under man-
agement of SWF dropped by 3.8%, reaching $3.8 trillion.
Source: IMF, IFSL estimates

SWFs Investment Share

Asian and Middle Eastern SWFs account for almost 80% of all SWF as-
sets, with Europe accounting for the rest. Although China has the largest
country share, Middle Eastern countries account for a very large share of
the assets managed by SWFs. The three largest SWFs are the Abu Dhabi
Investment Authority, managing over $627 billion, Norway’s Govern-
ment Pension Fund ($445 billion), and Saudi Arabia’s SAMA Foreign
Holding ($431 billion), all sourced by commodities related revenues.
China’s SAFE Investment Company and China Investment Corporation
only arrive in fourth and fifth, respectively. These estimates however, re-
main speculative given the lack of transparency inherent in these institu-
tion management.

Source: SWF Institute, IFSL estimates

SWFs Investment Trends

From 2004 through 2008, the activities of SWFs increased rapidly.
The number of deals pursued by such institutions jumped from 60
in 2003, to over 170 by 2008. This just is only dwarfed by the
growth of value of these deals. While the 60 deals from 2003 did
not reach $10 billion in value, the deals from 2008 surpassed $120
billion. This trend was fuelled by the increase in liquidity of these
institutions following the sharp increase in commodity prices. Ac-
cording to McKinsey & Company, oil exporting countries assets
in SWFs jumped from just under $1 trillion in 2003 to over $2.5
trillion in 2007.
Source: Monitor Group; IFSL estimate

22 March, 2010 46
Issue 1550
Economics - Index
Markets
Page

22 March, 2010 48
Issue 1550
22 March, 2010
Reviews
Books Readings Reports

Issue 1550 51
 Reviews - Books

KingAbdullah
of Saudi Arabia
S. Rob Sobhani

Prologue:
An Outstretched Hand
King Abudllah of Saudi Arabia: A Leader of Consequence
Washington D.C. October 2009
Printed in U.S. Publisher: Caspian Publishing, Inc.©
Caspian Publishing 2008Design: Xanthus Design, Washington D.C. All rights reserved

Author S. Rob Sobhani has published the prologue to his most recent book King Abudllah of Saudi
Arabia: A Leader of Consequence in this week’s issue. His intriguing book not only provides great
insight on the accomplishments of King Abdullah, it also provides the important historical contexts
that have shaped his reign.

D uring the October 2007

Organization of Petroleum
Exporting Countries
(OPEC) heads of state summit
held in Riyadh, I watched from the
audience in an ornate exhibition
hall as King Abdullah of Saudi
Arabia stood on stage to hand out
awards to prominent researchers
and scholars whose work has
contributed to the petroleum
industry. One by one, they
approached the stage, accepted
their awards and shook hands with
the King of Saudi Arabia. One
award-winner, the respected and
aging publisher Walid Khadduri,
however, had trouble reaching the
stage. Walking gingerly with the
help of a cane, he limped toward
the stairs leading to the stage.
King Abdullah, noticing Khadurri
struggle, promptly took action.
The King stepped away from the
podium, walked down the stairs,
and offered his outstretched hand
to the aging publisher. Gently, the
King took his arm and guided him
toward the stage. The audience of
gathered delegates from around
the world, from Ecuador to
Indonesia, erupted in spontaneous
applause at the King’s touching
gesture of humanity, a trait that
has become familiar to long-time
observers of King Abdullah.
A few days later, a column in
the Saudi newspaper, Al-Watan,
suggested that the King’s move was
symbolic of his efforts throughout
the Arab and Muslim world,
the King’s outstretched hand
attempting to lift others upward.
From the Palestinian territories to
Lebanon, from Somalia to Iraq,
King Abdullah has offered his
hand to quell conflicts and find
solutions to problems across the
region. In the Muslim world, the
King continues to spearhead Saudi
Arabia’s extensive aid efforts
around the globe (The Kingdom
offers an average of 5% of its
GDP in aid, one of the highest
in the world) and has robustly
challenged the “deviancy” of
extremism, reclaiming what he
calls the “moderate and tolerant
and peaceful” soul of Islam.
Meanwhile, he has also offered an
outstretched hand to other faiths,
engaging in a historic meeting
with the Pope in November 2007
at the Vatican and calling for a
dialogue of faiths centered on his
fundamental belief in peaceful
coexistence. King Abdullah’s

22 March, 2010 52
 Reviews - Books
meeting with the Pope was the first
such visit for a Saudi monarch.
The World Conference on
Dialogue, sponsored by King
Abdullah and hosted by King
Juan Carlos of Spain in the
summer of 2008, brought together
hundreds of faith leaders from the
Muslim, Christian, Jewish, Hindu,
Buddhist, and other faiths together
in a historic gathering that broke
barriers and promoted greater
understanding. King Abdullah
literally offered an outstretched
hand to all of the five hundred or
so delegates, shaking hands and
listening to their views in a sun-
filled Spanish government palace
for hours. In a speech to the
Madrid delegates, King Abdullah
said:
“I come to you from the place
dearest to the hearts of all
Muslims, the land of the Two
Holy Mosques, bearing with me
a message from the Islamic world
representing its scholars and
thinkers who recently met in the
confines of the House of God.
This message declares that Islam
is a religion of moderation and
tolerance; a message that calls
for constructive dialogue among
followers of religions; a message
that promises to open a new page
for humanity in which – God
willing – concord will replace
conflict.
King Abdullah went on to
denounce extremism and
violence as anathema to all
religions, called for a vigorous
effort to reach common ground,
and urged conference attendees
to “let our dialogue be a triumph
of belief over disbelief, of virtue
over vice, of justice over iniquity,
of peace over conflicts and wars,
and of human brotherhood over
racism.”
Issue 1550
A few months later, in November
2008, King Abdullah co-hosted
a dialogue of faiths at the New
York headquarters of the United
Nations that was attended by
heads of state, religious leaders,
and civil society activists.
Officially titled the “Culure of
Peace” conference, former British
Prime Minister Tony Blair called
the King’s decision to spearhead
the dialogue at the UN “bold,
courageous and potentially far-
reaching.” In an article published
in the International Herald Tribune
on November 12, 2008, entitled
“King Abdullah and the Skeptics”,
Blair argued forcefully that the
King’s dialogue initiative has the
enormous potential to undermine
the appeal of extremists who only
seek confrontation. He described
King Abdullah’s efforts as “a
major step forward in the long
march to a relationship between
Islam and other faiths that is not
one of confrontation or distrust
but of peaceful co-existence.”
In February
2009, the King
initiated the
most significant
cabinet shake-up
since assuming
the throne
At the United Nations, King
Abdullah reiterated his
denunciations of extremism and
his urgent pleas for tolerance and
dialogue. “In front of the whole
world, we state with a unified
voice that religions through which
Almighty God sought to bring
happiness to mankind should
not be turned into instruments to
cause misery,” he said. “Human
beings were created as equals
and partners on this planet; either
they live together in peace and
harmony, or they will inevitably
be consumed by the flames of
misunderstanding, malice and
hatred.”
King Abdullah later met privately
for two hours with a small group
of American religious leaders,
ranging from Baptist preachers to
Jewish rabbis, Muslim imams and
heads of Sikh Indian communities,
to Greek Orthodox clerics and
Catholic priests. As one attendee
put it: “I never thought I would see
this in my lifetime: the Custodian
of the Two Holy Mosques here,
meeting all of us, listening, and
searching for common ground.”
Emotions filled the room, as
King Abdullah told the attendees:
“we are all brothers and sisters
in humanity. Let us join hands
to fight the ‘deviants’ who cause
violence and sow hatred in the
name of our peaceful religions.”
In fact, it should also be noted
that King Abdullah’s outstretched
hand is also relevant at home as
he embarks on a series of reform
initiatives that have the potential
to transform the Kingdom and
dramatically lift up millions of
Saudis. In February 2009, the
King initiated the most significant
cabinet shake-up since assuming
the throne. He installed reform-
minded figures in key religious,
judicial, communications and
education positions, appointing a
new Head of Judiciary, Minister
of Education, Minister of
Information, and leader of the
“religious police,” known as the
Committee to Promote Virtue and
Prevent Vice. These appointments
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 Reviews - Books
underscored the reformist vision
that King Abdullah has displayed
in his rule, and were hailed by
some of the Kingdom’s leading
intellectuals and modernizing
voices.
The move also won praise from
many Western commentators
and long-time observers of Saudi
Arabia. Pulitzer-prize winning
journalist and former Wall Street
Journal publisher Karen Elliot
House wrote on February 23,
2009: “in a country where the
norm has been one tentative
step forward and two back, this
time the King has reversed that
pattern to take at least several
serious steps in the direction
of real reform.” Meanwhile,
veteran Newsweek Middle
East correspondent Christopher
Dickey, in an article on March
30, 2009 about King Abdullah
entitled “The Monarch Who
Declared His Own Revolution,”
described the cabinet shake-up
and the King’s reform initiatives
as part of a broader vision to
transform and modernize Saudi
Arabia.
In a hugely symbolic gesture,
King Abdullah also appointed
the first female Deputy Minister,
Noura Al-Fayez, to the Education
ministry. In the Saudi context,
amid a deeply conservative and
patriarchal society, this proved
to be a stunning appointment
that captured world headlines
and earned the praise of Saudi
women’s rights activists. Though
Saudi society still has a long
way to go before women’s rights
are fully enshrined, the King’s
move brought hope to millions of
Saudi women equally searching
for opportunities to serve their
country. In a sign of tangible
progress, more Saudi women
have been granted government
22 March, 2010
scholarships for graduate
studies abroad than men, at
approximately a 60-40 percentage
ratio, and King Abdullah has
made women’s education at
home a top priority. Several new
women’s universities have been
launched and King Abdullah’s
most ambitious education
project – the multi-billion dollar
King Abdullah University
of Science and Technology
launched in September 2009 and
expected to become the MIT
of the Middle East – is open to
both women and men and the
campus will be co-educational.
In a hugely
symbolic gesture,
King Abdullah
also appointed
the first female
Deputy Minister,
Noura Al-Fayez
King Abdullah also displayed
his outstretched hand to the
world in May 2008 when he
announced a $500 million grant
to the World Food Program of
the United Nations to help the
world’s poor cope with rising
food costs, helping the more than
130 million people who had been
pushed into hunger and the some
two billion people affected by the
crisis. United Nations Secretary
General Ban Ki Moon said “This
contribution of an unprecedented
size and generosity comes not
a moment too soon, given the
needs of millions of people
dependent on food rations.”
The World Food Program
Chairperson Josette Shearan said
that the “extraordinary” Saudi
donation helped it reach its goal
of $755 million and “will keep
many people from dying, others
from slipping into malnutrition
and disease, and will even
help to stave off civil unrest.”
Shearan added that the Saudi
donation would allow the WFP
“to continue to provide food for
millions of children enrolled in
school and therapeutic feeding
programs in Kenya, Yemen,
Ethiopia, and Somalia and in
many other critical hunger
zones.” She described it as an
extraordinary act that links the
King to “humanitarians around
the world.”
In February 2009, at the
prestigious World Economic
Forum conference in Davos,
Switzerland, the WFP awarded
King Abdullah its most
prestigious prize: Champion
in the Battle Against Hunger.
Josette Shearan told the Davos
crowd that witnessed the award
ceremony that “King Abdullah’s
generosity has not only moved
the world but has saved many
lives in this year of challenge. For
this reason he is recognised, not
only by us, but by many others.”
Minister of Industry and
Commerce Abdullah Zainal
Ali Reza accepted the award on
King Abdullah’s behalf. During
the ceremony, World Food
Program officials noted that King
Abdullah’s generous donation in
response to the crisis of rising
food prices has had an impact
beyond that moment of trouble.
King Abdullah’s donation has
aided an additional 23 million
beneficiaries in 24 countries
in programmes which include:
extending school feeding to 2.6
million children in six countries:
Haiti, Liberia, Pakistan, Senegal,
54
 Reviews - Books
Sierra Leone and Tajikistan;
providing supplementary rations
of nutritious food to malnourished
children and women – 130,000
malnourished children in seven
countries: Djibouti, Ghana,
Guinea, Haiti, Liberia, Senegal and
Tajikistan, with another 11 countries
about to start implementation; and
accelerating cash and voucher
programmes to enable people to
access food through markets in
countries from Malawi to Nepal.
King Abdullah’s sense of
responsibility and outstretched
hand to the poor has been well-
known throughout the Kingdom.
A well-known episode recalls
a time when King Abdullah
heard about a particular area in
Riyadh, the Saudi capital,that was
home to several dozen families
who barely had enough food to
eat. According to many Saudi
insiders with knowledge of that
day, King Abdullah grew angry
and demanded that he proceed
immediately with his driver to
the designated areas. His security
detail had to scramble to keep up
with him as the King and the driver
left the palace. Upon arrival, King
Abdullah listened to their stories
and provided them with some
temporary relief, but he knew that
he needed a long-term solution.
Shortly thereafter, the King
announced a new organization:
The King Abdullah Housing
Foundation. This organization
would provide low-cost housing
to all Saudis who could not afford
their rents or a home.
Saudis also often describe
encounters with King Abdullah that
reflect on his humility and genuine
interest in his people. Once, while
on a visit to a shopping mall, King
Abdullah caused a stir when he
sat down in a food court near a
McDonalds and chatted with all
Issue 1550
who were nearby. As the crowds
gathered, King Abdullah engaged
in conversation with a group of
young Saudis, a few older women,
a janitor, and anyone else who
happened to be sitting in his direct
vicinity. Once again, his security
detail scrambled to ensure that the
King was safe, but King Abdullah
was clearly relishing this moment
of spontaneous interaction with
ordinary Saudis, reaching out his
hand to his people as they reached
back.
Saudis also
often describe
encounters with
King Abdullah
that reflect on
his humility and
genuine interest
in his people
King Abdullah’s oil policy also
represents an outstretched hand
to the world. With 25% of the
world’s oil reserves and the only
meaningful excess capacity among
major oil producers, Saudi Arabia
is, by far, the most powerful state
influencer of oil prices in the world.
While a myriad number of factors
influence the price oil from rising
demand in Asia to speculators
in New York and London to
weather patterns and civil conflict
in Africa, and individual states
matter less in this equation, a
country like Saudi Arabia still
plays a vital role in stabilizing oil
prices. King Abdullah’s policy has
been clear: Saudi Arabia seeks a
stable, fair, moderate price that
allows consuming countries to
purchase oil, does not bankrupt
poor countries, and yet still allows
producers enough of a cash surplus
to re-invest in their oil industry for
future sales. In fact, in a July 2009
report, the International Monetary
Fund praised Saudi Arabia for
its wise policies that promoted
oil market price stability and
moderation. Often, Saudi Arabia
pushes back against OPEC price
hawks who seek to dramatically
spike prices. Perhaps even more
importantly, Saudi Arrabia under
King Abdullah has engaged in an
ambitious production expansion
program, which will bring more
crude oil on line to world markets,
thus satisfying growing demand
and tempering prices.
As I reflect on King Abdullah’s
rule, it occurs to me that his
outstretched hand may, in the end,
become an important symbol.
From reaching out to the poor to
shaking hands in peace-making
diplomacy to lifting up Saudis
with wide-ranging education and
economic initiatives to bringing
together moderate voices of Islam
and reaching out to other faiths to
ensuring stable and moderate oil
prices to actively participating in
G-20 discussions on the future of
the global economy, King Abdullah
bin Abdulaziz is changing his
country and the world. The key
question faced by other world
leaders and even other senior Saudi
officials will be this: will they, too,
offer an outstretched hand to meet
the King halfway to resolve some
of our common global challenges?
The reign of King Abdullah offers
the world a unique opportunity.
The world’s foremost oil producer,
the home of the two holiest sites
in Islam, and the Arab world’s
diplomatic heavyweight is ruled
today by a man with a strikingly
forward-looking, global and
55
 Reviews - Books
inclusive vision for the future. In
King Abdullah, the world has a
reliable, powerful partner to help
tackle some of the planet’s most
pressing challenges from global
warming to nuclear proliferation,
from transnational terrorism to
chronic underdevelopment and
poverty. Too often, the world sees
the King of Saudi Arabia as only a
regional player, but King Abdullah
has the means and vision to be a
consequential global actor with
positive influence for the world.
In many ways, he has already
lived up to that promise, with
global peace-making diplomacy,
bridge-building dialogue, stable
oil policies, and wide-ranging
humanitarian assistance.
Reflecting on Saudi Arabia and
the rule of King Abdullah is not
merely an academic exercise.
In so many senses of the word,
Saudi Arabia matters, and matters
deeply. As home to Islam’s
two holiest sites, in Mecca and
Medina, the Kingdom often serves
as a bell-weather for the Muslim
world, a world that faces severe
turmoil and major challenges. As
the holder of the world’s largest
proven petroleum reserves, Saudi
Arabia’s oil policy - one that
has consistently favored price
moderation - affects the lives
of billions on our planet. Given
its enormous influence in Arab
affairs (and under King Abdullah
the leading regional power by
far), Saudi Arabia will play a
vital role in shaping the future
of a troubled but potential-filled
region. At a time when regimes
like that in Iran actively promote
instability and crisis in the region,
the role of King Abdullah’s vision
in creating an “arc of stability”
becomes ever more vital. That is
why the world needs to pay close
attention to what happens in Saudi
Arabia and needs to understand
the thinking, vision, and policies
22 March, 2010
of King Abdullah.
Saudi monarchs are, by their
nature, influential leaders, but
some have been more influential
than others. The Kingdom’s oil
reserves, custodianship of the
two holiest sites in Islam, and its
strategic alliances with influential
states from China to the United
States, make the work of any Saudi
king both challenging and vital
to world peace and prosperity.
With King Abdullah, however,
the role of the Saudi King on the
world stage has been enhanced to
its highest level ever in history,
partly due to changing global
dynamics but more importantly,
due to the personality and vision
of King Abdullah himself. His
international stature as a man of
integrity and a peacemaker has
positioned him to play a key role
in global affairs and his domestic
stature as a popular King and
“man of the people” has positioned
him to lay out domestic policy
initiatives that are transforming
Saudi Arabia and unleashing the
latent potential of its people.
When King
Abdullah was
officially announced
the monarch of
Saudi Arabia in
August, 2005, he
pledged “to uphold
the truth” and “to
ensure that justice
takes root,”
Saudi Arabia today is widely seen
as the pivotal state in the Arab and
Muslim world. Former Lebanese
Prime Minister Fouad Siniora
called King Abdullah “the savior
of the situation in the Arab world,”
Newsweek magazine called him
“a regional elder statesman” and
“wise man of Arab politics,” United
Press International referred to him
as “the Arabian peacemaker,”
and a commentator for the Dallas
Morning News commented that
the King has ushered in a “Saudi
renaissance.” King Abdullah
has been a vigorous promoter
of Arab unity and initiated and
nurtured the historic Arab Peace
Initiative, a comprehensive peace
offer with Israel, first offered in
2002. In the often fractious world
of Arab politics, the King has
served as an anchor of unity to
achieve this historic initiative.
Meanwhile, world leaders from
President Hu Jintao of China to US
President Barack Obama to United
Nations Secretary General Ban
Ki Moon offer high praise for the
Saudi monarch. In fact, President
Obama visited with King Abdullah
in Riyadh for consultations before
he delivered his landmark address
to the Muslim world in Cairo on
June 5, 2009. While they discussed
pressing regional issues such as
the Palestinian-Israeli conflict,
Afghanistan and Pakistan, US
troop withdrawals in Iraq, and
Iran’s nuclear program, Obama
listened attentively, according to
aides, as the King spoke about his
vision for a moderate Islam that
stretches back to the roots and
spirit of the faith.
Indeed, in the entire speech
delivered in Cairo, President
Obama only mentioned one leader
from the Muslim world: King
Abdullah. He said: “faith should
bring us together. That is why
we are forging service projects
in America that bring together
Christians, Muslims, and Jews.
That is why we welcome efforts
like Saudi Arabian King Abdullah's
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 Reviews - Books
Interfaith dialogue.”
When King Abdullah was
officially announced the monarch
of Saudi Arabia in August,
2005, he pledged “to uphold the
truth” and “to ensure that justice
takes root,” while managing
a government that “serves all
citizens without discrimination.”
Subsequently, he went on a tour of
all regions across Saudi Arabia to
reach out to people, listen to their
concerns, and engage in dialogue.
During one of his visits to the city
of Asir, he said: “Building a nation
does not stop at the completion of
one stage. Our past and present
are the strong foundations for
our future, but a nation must not
content itself with pride at daily
accomplishments, but rather must
look forward to the future.” In
a few other regions, the King
spoke honestly, noting that the
Kingdom’s rapid development had
been uneven and some regions had
been neglected, and he pledged to
change that (several underserved
regions have been the recipient of
government largesse in the past
few years since he made those
tours, with new universities, better
infrastructure, and more incentives
for private business).
A few months later, in a historic
speech in Mecca before fifty-seven
Muslim leaders at an Organization
of Islamic Conference (OIC)
meeting, King Abdullah delivered
a similar message to his fellow
Muslim leaders: honest, visionary,
heartfelt, critical, and forward-
looking. While praising Islam’s
Golden era that spawned “singular
achievements in jurisprudence,
intellectual endeavors, the
sciences, and literature and
provided the decisive catalyst
in bringing enlightenment to the
dark ages,” he offered an honest
assessment of the ills affecting
Muslim states today, and called for
his fellow leaders to look toward a
Issue 1550
better future, a Muslim renaissance
that is prosperous, educationally
advanced, and moderate.
This book seeks to
reflect on the nature
of King Abdullah’s
rule and its effects
on Saudi Arabia,
its fellow Muslim
states, and the
wider world
as a whole
It was an extraordinary speech,
one of dozens of such speeches the
King has delivered on a domestic
and international scale that have
laid out an inspiring vision of the
future, provided an honest and
unflinching lament of the ills of the
world, and called for practical steps
to achieve peace and development.
Most importantly, King Abdullah
has backed his words with wide-
ranging actions from peace
summits to development aid to
robust diplomacy toward solving
conflicts. Within Saudi Arabia, he
has launched ambitious economic
modernization initiatives, overseen
a cultural renaissance, taken
substantive steps to transform
the education and the judiciary
sectors, pushed back successfully
against Islamic extremists whom
he refers to as “deviants” whose
exploitation of the “peaceful and
moderate nature of Islam” puts
them at war with Islam itself, and
generally launched the Kingdom
into a new direction that embraces
modernization without threatening
authentic traditions and culture.
As a result of all of this activity, he
has been an extraordinarily busy
man. From foreign visits to tens
of countries, to receiving hundreds
of envoys and heads of state who
want to consult with the King to
regular tours of new industrial,
commercial, educational, and
cultural centers spawned by his
rule across Saudi Arabia, King
Abdullah has presumably had
little time to stop and reflect on the
extraordinary nature of his rule as
he continues to make history.
This book seeks to reflect on the
nature of King Abdullah’s rule
and its effects on Saudi Arabia,
its fellow Muslim states, and the
wider world as a whole. This
book contends that King Abdullah
is one of the four most important
world leaders today and the most
important and transformative
Saudi head of state since his father,
King Abdulaziz al-Saud.
This book is not a detailed account
of the life of the King, but rather
an attempt to understand King
Abdullah’s thinking and policies
and put them in a global, regional,
and domestic context. To achieve
this goal, I visited Saudi Arabia five
times in the last two years and spoke
with a wide variety of government
officials, academics, journalists,
intimates of the King and other
Saudi citizens. I also sought to draw
extensively upon King Abdullah’s
own words, in private and from his
speeches and interviews.
It will be clear from these pages
that King Abdullah is truly a leader
of consequence, and, historians
will look back on him as one of
the most important leaders of the
late twentieth and early twenty first
centuries. Saudi historians might
see King Abdullah as the King
that most closely resembled King
Abdulaziz, the founder of modern
Saudi Arabia and one of the most
visionary leaders of his era.
57
 Reviews - Readings

Readings
Books
War Games: The Story of Aid and War in Modern Times
Linda Polman
As a follow up to a compelling account
of UN failings in Rwanda, Somalia and
Haiti; ‘We Did Nothing’ introduces the
reader to the follies of the key players
in the world of humanitarian aid. Linda
Polman, the author of this controversial
and at times darkly humorous work of
reportage, is widely regarded as one of
the most intrepid journalists of recent
times. Accordingly, she is able to draw
upon her decades of first hand experience
in war torn countries around the world to
bring us this work. She illustrates how
the media, aid workers and even the war
mongers are locked in a twisted cycle of
mutual support which impinges on the
support the needy receive. The recent
earthquake in Haiti has become notorious
for the slowness with which aid reached
the victims. This book is thus a timely
reminder of the inherent flaws in the
system of aid.

The Weight of a Mustard Seed: The Intimate Story of an

Iraqi General and His Family during Thirty Years of Tyranny
Wendell Steavenson
In the ever increasing pile of books on Iraq,
Wendell Stevenson’s stands out as one of
the few which goes back to the time before
the U.S invasion. This is not only a gripping
account of one man’s rise and fall but is a vivid
portrayal of the Iraqis behind the headlines.
General Kamel Sachet was a favourite of
the Ba’athist regime and Stevenson looks at
his participation in the terror regime and the
choices he made. Her journey to uncover
the motivations of those who were loyal to
the regime took five years as she sought to
accumulate opinions and facts from those
closets to Sachet. This book tells the reader
much about the tensions of living close to
power in Saddam’s dictatorship.

The Media Relations Department of Hizbollah Wishes You a Happy Birthday:

Unexpected Encounters in the Changing Middle East
Neil MacFarquhar
Neil MacFarquhar is a rare find in jounralism,
a Middle East correspondent who not only
speaks Arabic but has also spent most of his
life in the region. His childhood in Libya and
his position as the Cairo bureau chief for the
New York Times means he is well placed to
share the extensive knowledge gleamed from
his travels. His book is an intelligent and
entertaining overview of the region which
maintains that the portrayal of seemingly
constant, bloody upheaval which captures most
attention in the West has become a barrier to
understanding to the Middle East. Accordingly
the author eschews the predictable obsession
with violence which has characterised many
Western writings on the region. Most of all,
though, the author succeeds in illustrating the
multiple facets of the Middle East and gives
an accurate impression that there many more
stories left untold than told.

22 March, 2010 58
 Reviews - Readings

Reports
Khomeini's Ghost: The Iranian Revolution
and the Rise of Militant Islam
Con Coughlin
From the bestselling author of ‘Saddam’
comes an authoritative biography of Ayatollah
Khomeini. Khomeini's Ghost is the account of
how an impoverished young student from a
remote area of southern Iran became the leader
of one of the most dramatic revolutions of
modern times. Con Coughlin looks at how his
fundamentalist legacy has shaped the course
of Iran’s relationship with the West. As one
of Britain's leading journalists and a world-
renowned expert on the Middle East Coughlin
is well placed to draw on a wide variety of
Iranian sources; including religious figures
that knew and worked with Khomeini both
in exile and in power. The author provides
abundant evidence that the Ayatollah’s agenda
has always been radical but doesn’t always
provide in-depth information as to why his
ideology struck such a chord for so many
Iranians.

The Threat from Jamaat-ul Mujahideen Bangladesh

Asia Report N°187
International Crisis Group has
produced a report which calls for an
increased focus on the possibility that
Jamaat-ul Mujahideen Bangladesh
(JMB), a terrorist organisation, to
wreck more destruction in Pakistan.
The report shows that despite the
state’s counterterrorist efforts, which
have been quite successful in tacking
Islamist extremism, recent events have
demonstrated that JMB is currently
able to regroup, recruit and raise funds.
The arrest of 95 JMB operatives since
October 2008 and the uncovering of
huge stores of explosives are testament
to the concern displayed by the ICG.
The report cites internal wrangling
and a lack of co-ordination between
security agencies and government as
contributing factors which undermined
efforts to dismantle the organisation.
Accordingly the concluding remarks
of the report highlight the need for
Pakistan’s government to better focus
on the potential dangers posed by the
JMB and similar organisations.

Reforming Pakistan's Civil Service

Asia Report 185
The presence of terrorists
organizations and their ability to
thrive is better understood following
a reading of this report on the civil
service of Pakistan. The report argues
that the decades of mismanagement
and corruption which has long
plagued government and public
services has undermined the ability
of government to do its job. There
is a widespread perception that
this dysfunctionism has allowed
extremism to grow in influence. The
report presents guidelines as to how
the international community can
better assist in helping to improve
governance as it seems that previously
international developments funds
have been directly channelled to
inefficient institutions and have
actually undermined efforts to
improve accountability and function.
With hundreds of millions of
international aid money committed to
Pakistan’s development an appraisal
of how this money could be best
spent is timely and worth-while.

Issue 1550
59
 Reviews - Reports

Neither Angels nor Demons

Turkey: Regime in Crisis
Henri Barkey
Carnegie Endowment for International Peace
March 3, 2010

What implications do the arrests of senior military officials over an attempted coup have on Turkish
democracy? The Carnegie Endowment report evaluates why the military, long-time defender of
democracy and secularism, has found itself discredited and increasingly excluded from politics.
Interestingly, their exclusion from politics might do more than one imagines to undermine the
government’s stability. Barkey suggests that abandoning the military-imposed constitution is one
way to avoid disaster.

F ollowing the scandal over the

attempted military coup in
Turkey, The Carnegie Endowment
for International Peace has analyzed
the impact that this crisis will have
on the future of Turkish democracy.
That the Turkish military, a
historically powerful political group
in the country, apparently no longer
operates under impunity ironically
brings into question the future of the
democracy for Turkey. “The arrests
of forty-nine high-ranking former
Turkish military officers, including
former service chiefs of the navy
and air force, as well as a deputy
chief of staff, heralds the latest and
perhaps final stage in a confrontation
between Turkey’s powerful military
establishment and society” says
Henri Barkey in his article Turkey:
Regime in Crisis.
The extent of the damage, for the
military’s public image at least, is
severe. By arresting high ranking
officials, the government made sure
to humiliate the army. A tactic, no
doubt, used to demonstrate that
their influence in politics—with a
penchant for opposing the AKP and
its policies—is no longer acceptable.
A discussion mediated by the
Carnegie Endowment between
Barkey and Zeyno Baran, the director
for Center for Eurasian Policy at
the Hudson Institute, added that in
addition to exhibiting unprecedented
behaviour, the arrests have also

22 March, 2010 60
 Reviews - Reports
fostered a concern as to whether
tension between the government and
the military will increase.
However, to understand the weight of
the events taking place, the Carnegie
Endowment does well by providing
its readers with important background
information on the detailed way in
which the military influenced politics
in the past. In the article Barkey
notes that, alongside the judiciary,
the Turkish military protected
Turkish democracy by any means
necessary, amounting to four coups
and imposing on the government
its current constitution. They prided
themselves on defending the secular
foundation of the government. Since
the AKP’s rise to power, they have
grown increasingly disturbed by the
influence of Islamism in Turkey—
going as far as saying that President
Gul should not have been elected
because his wife wore a burka.
Yet, Turkish society, the report
argues, has been undergoing
significant changes. These changes
have allowed Turks to increase
their resistance to the military
apparatus’ vision of Turkish politics.
Nevertheless, the military is not the
only group to blame. The AKP has
not yet fully come to represent the
values of democracy. Rather, many
of the party’s practices replicate
the ills of past Turkish parties
“including one-man domination,
the use of government power to
squelch the opposition, and the
lack of a comprehensive vision that
transcends the immediate concerns
of its own pious core constituency.”
Given these conditions, the attempted
coup and the consequent arrests
imply instability for the country’s
democracy.
Why, though, have tensions risen
to this point? Baker explains that
the emergence of the conservative
business elite managed to buttress the
AKP party. While secularists—the
military included—have interpreted
Issue 1550
the AKP’s majority as a significant
political threat. The problem that
arises, however, is that the military
has not accepted the social change
that has occurred in Turkey. Their
values no longer represent the
majority of Turkish voters who are
supportive of the AKP. Whether
Barkey is correct, that the military’s
fears of Erdogan’s government are
exaggerated, is in a sense a moot
point as it is their perception of this
threat that is leading them down
a road of confrontational political
tactics that might undermine Turkish
stability.
Carnegie
Endowment raises
timeless issues
about the difficult
relationships
younger democracies
have between civilian
governments and the
military apparatus
What then, could we expect from
this potentially volatile situation?
The Carnegie Endowment’s report
argues that unless Turkey manages to
devise a new constitution to replace
the one imposed by the military, the
instability already present will likely
increase. These conditions will
cause a schizophrenic foreign policy
development for the country, as the
two political poles tend to direct the
country in different directions on the
international arena.
More specifically, they explain
that as a result “… a new Turkish
constitution remains both a distant
dream and an absolute necessity.
Turkey needs to overhaul its
archaic political institutions that
have prevented the evolution of
dynamic and responsive politics.
The resulting paralysis has always
been an invitation to greater military
involvement.”
These recommendations, although
undoubtedly true, are difficult to
accept as given. That is, the report
itself acknowledges that despite
necessity there is an important
disconnect between what Turkey
can do and what it should do to
protect its democracy. While a
new constitution would be ideal,
its unlikely to be implemented
under the current constraints. A
more practical, or at least a further
outlined recommendation, on what
Turkey’s options are would have
proved useful in this context.
Nevertheless, the insight provided
on the military’s historical link to
democracy in Turkey is fundamental
for contextualizing the crisis the
arrests signify. Although beyond the
scope of this report, the Carnegie
Endowment raises timeless issues
about the difficult relationships
younger democracies have between
civilian governments and the
military apparatus that is meant to
protect them. The case of Turkey
actually suggests that instead of
wondering why coups occur in the
first place, one should ask why they
don’t occur more often given the
military’s resources and their clear
discontent with the government in
place. While this is not to imply that
the Turkish government is safe from
all political threats, it does suggest
that while the situation is precarious,
that all is not lost. After all, the coup
did not take place, and so one can
gather that the Turkish government
has at least the power to maintain
democratic institutions in place even
if the secular nature of Turkey’s
democracy has lost headway.  
For the full report please refer to:
www.carnegieendowment.org
61
 The Political Essay
An EU Like Solution
Negotiations for Yemen to join the GCC started several years ago, but there is a feeling that, after 2008, this
process slowed down. The problem is Yemen can hardly afford to wait a minimum of six years to join the GCC.
Yemen should be offered a conditional and phase-by-phase integration into the GCC, much in the light of what
the EU has done with its most problematic candidates.
O ver the last year, Yemen caught
the attention of Gulf countries
and Western countries alike. In the
debate around why the situation
in the southern Gulf country has
deteriorated to this point, two things
seem consensual. First, the root of the
problem is Yemen’s poor economic
situation. Even the so-called “three
rebellions”—the Houthis in the
north, the separatist movement in
the south, and the eastern tribes
that currently harbour the Al-Qaeda
members that have been returning to
Yemen—are closely related with the
failure of the government in Sanaa
to provide socioeconomic welfare.
Secondly, it is widely accepted, even
by the Yemeni government, that
the country will not get out of this
quagmire without external support.
Gulf countries in general and Saudi
Arabia in particular have long
understood the need to face Yemen’s
economic collapse, as demonstrated
by the millions of dollars in aid to
Abdullah Saleh’s government. Most
importantly, negotiations for Yemen
to join the GCC were initiated several
years ago. Yemen’s accession to
various GCC bodies/institutions has
already been approved. Yet, there
is a feeling that, since 2008, the
process suffered a delay, to which
the deteriorating security scenario
in Yemen certainly contributed. And
now the central issue about Yemen’s
accession is likely to become timing.
Yemen might not be able to afford
waiting until 2016 or 2017—the
date that has been put forward—to
join the GCC.
Not to argue that Yemen should be
integrated into the GCC in the short
22 March, 2010
Manuel Almeida
term as an equal member. GCC
members naturally fear Yemen’s
big—roughly 23 million—young
and poor population, and there might
also be some reservations regarding
Yemen’s different political system.
As Dr Joseph A. Kechichian, an
expert on Gulf affairs explains,
“the question that faces the alliance
[GCC] is whether such participation
can be channelled to serve all
member-states, or whether it will
drag the region down.” In very crude
terms, one might ask what has poor
and conflict ridden Yemen to offer to
rich and stable Gulf countries? Yet,
the real issue is how threatening a
potential collapse of order in Yemen
can be to the GCC countries.
Take the EU case. It first integrated
both politically and economically
stable countries such as Czech
Republic, Slovakia or Malta.
And today, recently conflict-
ridden countries like Croatia and
Bosnia Herzegovina are official
candidates. The EU strategy is the
adoption of a conditionality policy,
the “Copenhagen Criteria” that
candidates have to meet before
joining. It includes being a stable
democracy, the respect for human
rights and the rule of law, and a
functioning market economy. What
is more, the stability and prosperity
of most of the European continent
and not only of EU members lies in
the crucial role the EU has played
not only through integrating new
members, but in the stabilization of
the so-called EU neighbourhood,
particularly in the Balkans.
Parallels aside, there are obviously
huge differences between Yemen’s
potential accession to the GCC and
the EU case. One of these differences
lies in the fact that Yemen can hardly
afford a long dragging Turkey-like
process and take a decade or more to
join the GCC—its oil reserves will
likely run out before that. There is,
however, a mid-way between not
joining and being a full member
of the GCC. Going back to the EU
case, the new member states do not
join the Schengen space or the Euro
currency zone immediately if they
are not prepared to do so. In the
same way, Yemen could be offered
a conditional and phase-by-phase
integration into the GCC.
What should then be the priority
of GCC countries in Yemen:
stabilize the security situation first,
or place the efforts on economic
reconstruction? The most sensible
answer is plenty of both. Security in
Yemen will not make any significant
progress until the real sources of
instability—particularly poverty
and unemployment—are met. At the
same time, a more stable climate is
needed to address Yemen’s economic
collapse, for which the truce agreed
early this year between the Houthis
and the Yemeni government is an
important start.
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