Let's peel our eyes away from the eurozone disaster momentarily and take a look at another crisis – one with just as much potential to impact our global financial system.
As we've discussed in Outside the Box before, Iran's trump card is not its nuclear capability but rather its opportune location next to the very narrow, very important Strait of Hormuz ... through which no less than 40% of the world's seaborne oil passes.
As the US leaves Iraq, Iran is ready and waiting to fill the void and extend its regional influence. So where's the next turf war? A shaky Syria, where the Iranian-Saudi-US balance of power will continue to play out.
If you haven't been following the newest developing crisis in the Middle East, I recommend you spend some time with this piece by my friend George Friedman, CEO of STRATFOR. I'm also including a great background video from STRATFOR on the history of the Sunni/Shia divide. It's something you hear referenced all the time, but you may not know how it got started ... or what it really means.
If you're interested in more than the infrequent freebie from me, you should consider subscribing to their service. As an OTB reader you get a great discount and a free book when you join. There's nothing quite so enriching as getting a daily dose of what's really going on in the world. It's the intellectual equivalent of a Thanksgiving meal.
Your thinking about the turkey-mashed-potatoes-and-gravy balance of power analyst,
John Mauldin, Editor
Outside the Box
Syria, Iran, and the Balance of Power in the Middle East
November 22, 2011
U.S. troops are in the process of completing their withdrawal from Iraq by the end-of-2011 deadline. We are now moving toward a reckoning with the consequences. The reckoning concerns the potential for a massive shift in the balance of power in the region, with Iran moving from a fairly marginal power to potentially a dominant power. As the process unfolds, the United States and Israel are making countermoves. We have discussed all of this extensively. Questions remain whether these countermoves will stabilize the region and whether or how far Iran will go in its response.
Iran has been preparing for the U.S. withdrawal. While it is unreasonable simply to say that Iran will dominate Iraq, it is fair to say Tehran will have tremendous influence in Baghdad to the point of being able to block Iraqi initiatives Iran opposes. This influence will increase as the U.S. withdrawal concludes and it becomes clear there will be no sudden reversal in the withdrawal policy. Iraqi politicians' calculus must account for the nearness of Iranian power and the increasing distance and irrelevance of American power.
Resisting Iran under these conditions likely would prove ineffective and dangerous. Some, like the Kurds, believe they have guarantees from the Americans and that substantial investment in Kurdish oil by American companies means those commitments will be honored. A look at the map, however, shows how difficult it would be for the United States to do so. The Baghdad regime has arrested Sunni leaders while the Shia, not all of whom are pro-Iranian by any means, know the price of overenthusiastic resistance.
Syria and Iran
The situation in Syria complicates all of this. The minority Alawite sect has dominated the Syrian government since 1970, when the current president's father — who headed the Syrian air force — staged a coup. The Alawites are a heterodox Muslim sect related to a Shiite offshoot and make up about 7 percent of the country's population, which is mostly Sunni. The new Alawite government was Nasserite in nature, meaning it was secular, socialist and built around the military. When Islam rose as a political force in the Arab world, the Syrians — alienated from the Sadat regime in Egypt — saw Iran as a bulwark. The Iranian Islamist regime gave the Syrian secular regime immunity against Shiite fundamentalists in Lebanon. The Iranians also gave Syria support in its external adventures in Lebanon, and more important, in its suppression of Syria's Sunni majority.
Syria and Iran were particularly aligned in Lebanon. In the early 1980s, after the Khomeini revolution, the Iranians sought to increase their influence in the Islamic world by supporting radical Shiite forces. Hezbollah was one of these. Syria had invaded Lebanon in 1975 on behalf of the Christians and opposed the Palestine Liberation Organization, to give you a sense of the complexity. Syria regarded Lebanon as historically part of Syria, and sought to assert its influence over it. Via Iran, Hezbollah became an instrument of Syrian power in Lebanon.
Iran and Syria, therefore, entered a long-term if not altogether stable alliance that has lasted to this day. In the current unrest in Syria, the Saudis and Turks in addition to the Americans all have been hostile to the regime of President Bashar al Assad. Iran is the one country that on the whole has remained supportive of the current Syrian government.
There is good reason for this. Prior to the uprising, the precise relationship between Syria and Iran was variable. Syria was able to act autonomously in its dealings with Iran and Iran's proxies in Lebanon. While an important backer of groups like Hezbollah, the al Assad regime in many ways checked Hezbollah's power in Lebanon, with the Syrians playing the dominant role there. The Syrian uprising has put the al Assad regime on the defensive, however, making it more interested in a firm, stable relationship with Iran. Damascus finds itself isolated in the Sunni world, with Turkey and the Arab League against it. Iran — and intriguingly, Iraqi Prime Minister Nouri al-Maliki — have constituted al Assad's exterior support.
Thus far al Assad has resisted his enemies. Though some mid- to low-ranking Sunnis have defected, his military remains largely intact; this is because the Alawites control key units. Events in Libya drove home to an embattled Syrian leadership — and even to some of its adversaries within the military — the consequences of losing. The military has held together, and an unarmed or poorly armed populace, no matter how large, cannot defeat an intact military force. The key for those who would see al Assad fall is to divide the military.
If al Assad survives — and at the moment, wishful thinking by outsiders aside, he is surviving — Iran will be the big winner. If Iraq falls under substantial Iranian influence, and the al Assad regime — isolated from most countries but supported by Tehran — survives in Syria, then Iran could emerge with a sphere of influence stretching from western Afghanistan to the Mediterranean (the latter via Hezbollah). Achieving this would not require deploying Iranian conventional forces — al Assad's survival alone would suffice. However, the prospect of a Syrian regime beholden to Iran would open up the possibility of the westward deployment of Iranian forces, and that possibility alone would have significant repercussions.
Consider the map were this sphere of influence to exist. The northern borders of Saudi Arabia and Jordan would abut this sphere, as would Turkey's southern border. It remains unclear, of course, just how well Iran could manage this sphere, e.g., what type of force it could project into it. Maps alone will not provide an understanding of the problem. But they do point to the problem. And the problem is the potential — not certain — creation of a block under Iranian influence that would cut through a huge swath of strategic territory.
It should be remembered that in addition to Iran's covert network of militant proxies, Iran's conventional forces are substantial. While they could not confront U.S. armored divisions and survive, there are no U.S. armored divisions on the ground between Iran and Lebanon. Iran's ability to bring sufficient force to bear in such a sphere increases the risks to the Saudis in particular. Iran's goal is to increase the risk such that Saudi Arabia would calculate that accommodation is more prudent than resistance. Changing the map can help achieve this.
It follows that those frightened by this prospect — the United States, Israel, Saudi Arabia and Turkey — would seek to stymie it. At present, the place to block it no longer is Iraq, where Iran already has the upper hand. Instead, it is Syria. And the key move in Syria is to do everything possible to bring about al Assad's overthrow.
In the last week, the Syrian unrest appeared to take on a new dimension. Until recently, the most significant opposition activity appeared to be outside of Syria, with much of the resistance reported in the media coming from externally based opposition groups. The degree of effective opposition was never clear. Certainly, the Sunni majority opposes and hates the al Assad regime. But opposition and emotion do not bring down a regime consisting of men fighting for their lives. And it wasn't clear that the resistance was as strong as the outside propaganda claimed.
Last week, however, the Free Syrian Army — a group of Sunni defectors operating out of Turkey and Lebanon — claimed defectors carried out organized attacks on government facilities, ranging from an air force intelligence facility (a particularly sensitive point given the history of the regime) to Baath Party buildings in the greater Damascus area. These were not the first attacks claimed by the FSA, but they were heavily propagandized in the past week. Most significant about the attacks is that, while small-scale and likely exaggerated, they revealed that at least some defectors were willing to fight instead of defecting and staying in Turkey or Lebanon.
Iranian covert operation to assassinate the Saudi ambassador to the United States had been uncovered, followed by allegations by the Bahraini government of Iranian operatives organizing attacks in Bahrain. It proceeded to an International Atomic Energy Agency report on Iran's progress toward a nuclear device, followed by the Nov. 19 explosion at an Iranian missile facility that the Israelis have not-so-quietly hinted was their work. Whether any of these are true, the psychological pressure on Iran is building and appears to be orchestrated.
Of all the players in this game, Israel's position is the most complex. Israel has had a decent, albeit covert, working relationship with the Syrians going back to their mutual hostility toward Yasser Arafat. For Israel, Syria has been the devil they know. The idea of a Sunni government controlled by the Muslim Brotherhood on their northeastern frontier was frightening; they preferred al Assad. But given the shift in the regional balance of power, the Israeli view is also changing. The Sunni Islamist threat has weakened in the past decade relative to the Iranian Shiite threat. Playing things forward, the threat of a hostile Sunni force in Syria is less worrisome than an emboldened Iranian presence on Israel's northern frontier. This explains why the architects of Israel's foreign policy, such as Defense Minister Ehud Barak, have been saying that we are seeing an "acceleration toward the end of the regime." Regardless of its preferred outcome, Israel cannot influence events inside Syria. Instead, Israel is adjusting to a reality where the threat of Iran reshaping the politics of the region has become paramount.
Iran is, of course, used to psychological campaigns. We continue to believe that while Iran might be close to a nuclear device that could explode underground under carefully controlled conditions, its ability to create a stable, robust nuclear weapon that could function outside a laboratory setting (which is what an underground test is) is a ways off. This includes being able to load a fragile experimental system on a delivery vehicle and expecting it to explode. It might. It might not. It might even be intercepted and create a casus belli for a counterstrike.
The main Iranian threat is not nuclear. It might become so, but even without nuclear weapons, Iran remains a threat. The current escalation originated in the American decision to withdraw from Iraq and was intensified by events in Syria. If Iran abandoned its nuclear program tomorrow, the situation would remain as complex. Iran has the upper hand, and the United States, Israel, Turkey and Saudi Arabia all are looking at how to turn the tables.
At this point, they appear to be following a two-pronged strategy: Increase pressure on Iran to make it recalculate its vulnerability, and bring down the Syrian government to limit the consequences of Iranian influence in Iraq. Whether the Syrian regime can be brought down is problematic. Libya's Moammar Gadhafi would have survived if NATO hadn't intervened. NATO could intervene in Syria, but Syria is more complex than Libya. Moreover, a second NATO attack on an Arab state designed to change its government would have unintended consequences, no matter how much the Arabs fear the Iranians at the moment. Wars are unpredictable; they are not the first option.
Therefore the likely solution is covert support for the Sunni opposition funneled through Lebanon and possibly Turkey and Jordan. It will be interesting to see if the Turks participate. Far more interesting will be seeing whether this works. Syrian intelligence has penetrated its Sunni opposition effectively for decades. Mounting a secret campaign against the regime would be difficult, and its success by no means assured. Still, that is the next move.
But it is not the last move. To put Iran back into its box, something must be done about the Iraqi political situation. Given the U.S. withdrawal, Washington has little influence there. All of the relationships the United States built were predicated on American power protecting the relationships. With the Americans gone, the foundation of those relationships dissolves. And even with Syria, the balance of power is shifting.
The United States has three choices. Accept the evolution and try to live with what emerges. Attempt to make a deal with Iran — a very painful and costly one. Or go to war. The first assumes Washington can live with what emerges. The second depends on whether Iran is interested in dealing with the United States. The third depends on having enough power to wage a war and to absorb Iran's retaliatory strikes, particularly in the Strait of Hormuz. All are dubious, so toppling al Assad is critical. It changes the game and the momentum. But even that is enormously difficult and laden with risks.
We are now in the final act of Iraq, and it is even more painful than imagined. Laying this alongside the European crisis makes the idea of a systemic crisis in the global system very real.