Articles

From Technological Revolution to Armageddon and Back: Unbreakable Vicious Circle

On September 4, 2017 Elon Musk, founder of Tesla and Space X, has said again that artificial intelligence could be humanity’s greatest existential threat, this time by starting a third world war.[1] About a month before that the ATM (automated teller machine), which was initially viewed as a “killer” of bank tellers and a harbinger of mass technological unemployment, celebrated its 50th anniversary.[2] And a bit earlier, on June 27, it was fourteen years since Air France’s final Concorde flight took place (Concorde was the fastest passenger plane alongside the Soviet-built Tupolev 144, which was grounded in 1983).

What is common between the three? They are all technologies …. but each offering a unique glimpse of us and our world. The first is the manifestation of our ever-present fear before the unknown future, and technologies of the future in particular. The second is just one of many examples when the fear never materialized. And the third is the illustration of the economic model, which we are living in, where even the most advanced inventions can perish because of their economic unviability.

Speaking about the economic model and the future, it is worth mentioning what Bank for International Settlements (BIS), central bank of central banks, identified in its 2016 Annual Report as global economic risks: “One could speak of a “risky trinity”: productivity growth that is unusually low, casting a shadow over future improvements in living standards; global debt levels that are historically high, raising financial stability risks; and a room for policy manoeuvre that is remarkably narrow, leaving the global economy highly exposed“.[3]

This autumn we are also “celebrating” the tenth anniversary of the financial crisis, which is now often referred to as the Great Recession, and the consequences of which we still cannot overcome, i.e. no solid productivity gains and healthy sustainable economic growth.

As a consolation prize, over the same ten years, we lived through several generations of ever-bigger iPhones, massive proliferation of all sorts of digital gadgetry and introduction to mesmerizing world of the “internet of things”, which left many around the world with the strong sense that the fascinating future we’ve been told about for so long has arrived at last.

And finally, …. for those who did not notice, ….. over the same period of time we have been introduced to the whole two Industrial Revolutions. The first came from Jeremy Rifkin, famous American economist and theorist, who in 2011 published his best-selling The Third Industrial Revolution. Mr. Rifkin served as an advisor to three EU Commission Presidents – from Prodi to Juncker – as well as many heads of states around the world including governments of Germany, France and China. The principal ideas of his Third Industrial Revolution have been endorsed by the European Parliament, and represent the basis for a long-term sustainability plan, which addresses the trinity of the global economic crisis, energy sustainability and security, and the climate change. Mr. Rifkin was pronounced by many as visionary who leads us into the low-carbon future.

But before the dust settled over the Third Revolution, the Fourth was already storming in. This time Charles Schwab, founder of the World Economic Forum, released a book The Fourth Industrial Revolution, where he describes how this fourth revolution is fundamentally different from the previous three, which were characterized mainly by advances in technology. Some call it industry 4.0, but whatever you call it, it represents the combination of cyber-physical systems, the Internet of Things, and the Internet of Systems. In short, it is the idea of smart factories in which machines are augmented with web connectivity and connected to a system that can visualize the entire production chain and make decisions on its own. In this fourth revolution, we are facing a range of new technologies that combine the physical, digital and biological worlds. These new technologies will impact all disciplines, economies and industries, and even challenge our ideas about what it means to be human.[4] Mr. Schwab reckons we should fasten the seat belts and get ready for a ride because this future is just around the corner.

This created a heated debate and anxieties of several sorts. The talk about “inevitable revolution” immediately got accompanied by the talk about “inevitable Armageddon”. The latter camp is made of two main groups: those who fear mass unemployment caused by robotization, and those who fear that robots powered by advanced AI will take over the planet, and the human race is facing the risk of extinction either by the means of transhumanism or Third World War with robots.

A breath of fresh air of realism came from historians and economists, who reminded us about multiple failed predictions of both inevitable technological revolutions and fears of what revolutions could bring. Renowned Canadian scientist Vaclav Smil says: “The fast breeder reactor is one of the most remarkable examples of a prolonged and costly innovation failure. In 1974 General Electric predicted that by 2000 about 90 percent of the United States’ electricity would come from fast breeders. Other promised fundamental innovations that still are not commercial concerns include supersonic passenger flight, magnetic levitation trains, and thermonuclear energy.”[5]

James Bessen of Boston University points out that the ATM did not, in fact, replace bank tellers — there are more bank teller jobs in the US now than when the ATM was introduced. The ATM is no outlier here. Economists say that our chief economic problem right now isn’t that the robots are taking our jobs, it’s that the robots are slacking off. We suffer from slow productivity growth; the symptoms are not lay-offs but slow-growing economies and stagnant wages. In advanced economies, total factor productivity growth — a measure of how efficiently labour and capital are being used to produce goods and services — was around 2 per cent a year in the 1960s, when the ATM was introduced. Since then, it has averaged closer to 1 per cent a year; since the financial crisis it has been closer to zero. Labour productivity, too, has been low. Tempting as it may be to blame the banks, productivity growth stalled before the financial crisis, not afterwards: the promised benefits of the IT revolution petered out by around 2006.[6]

Robert Solow, the Nobel laureate economist, who since 1980s was researching impact of computerization on the economy, insists that the internet has not had much impact on productivity. Studies have struggled to find the positive impact of the internet on overall productivity – the evidence is everywhere but in numbers.[7]

However, inability of the global economy to overcome the effects of the financial crisis of 2007-08, hit the economist camp with the fears of “Armageddon” of their own. It bears the name of secular stagnation, which means that the world reached the peak of its growth and stagnation is the “new norm” (another popular term nowadays!). The funny thing is that many trained economists believe that it is a new phenomenon.

So, the society today got trapped under the barrage of all sorts of extreme emotions ranging from imminent technological revolution and bright future just around the corner to fears of the end of economic growth and human race. At times like this, it is always wise to look at ourselves from historical perspective.

Here is the abstract from the paper called “The History of Technological Anxiety and the Future of Economic Growth: Is This Time Different?”: “Technology is widely considered the main source of economic progress but it has also generated cultural anxiety throughout history. From generation to generation, literature has often portrayed technology as alien, incomprehensible, increasingly powerful and threatening, and possibly uncontrollable.

In fact, these worries about technological change have often appeared at times of flagging economic growth. For example, the Great Depression brought the first models of secular stagnation in A.Hansen’s 1938 book Full Recovery or Stagnation?. Hansen worried that economic growth was over, with population growth and technological innovation exhausted.

Anxieties over technology can take several forms, three of which are the most prominent. The first two worries are based on “optimistic” view that technology will continue to grow and perhaps accelerate. First, is that technological progress will cause widespread substitution of machines for labour, which in turn could lead to technological unemployment. Second, there has been anxiety over the moral implications of technological process for human welfare (greetings to Elon Musk! M.Y.). And third concern, cuts in the opposite direction, suggesting that the epoch of major technological progress is behind us. In recent years, pessimists argued that our biggest worry should be economic and productivity growth that will be too slow because of insufficient technological progress in the face of “headwinds” facing western economies. Some of these so-called “headwinds” including slow productivity and population growth, formed the basis of Hansen’s (1939) secular stagnation hypothesis.”[8]

In other words, we’ve been there and we’ve seen that before.

It is important to remember that large-scale technological changes take time. They do not occur overnight, not least because they require a suitable combination of social, organizational as well as technical conditions.

Central to such an evolutionary perspective is the idea that economic growth occurs in series of cycles or “waves”. The best-known version of this idea is the Kondratiev wave, a long wave of roughly 50 years duration. We are now well into a fifth, though precisely how far in, what its precise trajectory will be is not yet clear.

Each wave can be divided into four phases: prosperity, recession, depression and recovery. Each wave tends to be associated with particularly significant technological changes around which other innovations – in production, distribution and organization – swarm or cluster and ultimately spread though the economy. Although such diffusion of technology stimulates economic growth and employment, demographic, social, industrial, financial and demand conditions also have to be appropriate. In other words, it is “the total package” that counts.[9]

It is ten years this fall since the beginning of the financial crisis of 2007-08, and the global economy still cannot overcome its effects: central banks in Europe and Japan keep printing money, many other countries continue stimulus programs in the hope to push their economies to the trajectory of healthy growth, which is not happening. As BIS points out, we are still facing sluggish productivity growth, big debts and narrow room for monetary policy manoeuvring.

Generation of baby boomers began retiring this decade. Fertility rates in the Western world, Russia and China keep falling, and population is aging fast in many parts of the world, which directly affects the scale and patterns of consumption and demand, which in turn, has direct effect on profitability of service and manufacturing companies, and overall economic growth.

Core technology of the fifth wave is microchip (with core sectoral branches spreading to computers, digital IT, internet, software etc), which is widely believed has reached saturation stage, and therefore we have no productivity gains in the economy. In other words, new iPhones, gadgets and internet apps no longer represent a technological progress but rather an attribute of stagnation, since all the telecommunication and internet revolution was driven by microchip-based technological platform, which has already exhausted itself and reaching the peak of its 50-year cycle.

Another part of technological problem is that the next technological wave based on AI and robotics is only in the process of birth, and it will take another ten to fifteen years before new technologies start producing economy-wide positive productivity effects generating new jobs and growth.

All these demographic, economic and technological problems find their direct reflection in political arenas across the globe: from Great Recession, Brexit, migration crisis and Trump to Catalonia and geopolitical tensions between regional and global powers.

The main challenge and danger we all should worry about is not that technological progress is over or robots will take over the planet. At the end, we will shift to the new technological wave and we will successfully adapt to AI, and robots will eventually become an integral part of our life. We will adapt as we always did.

The main danger is how to survive the transition period and not to plunge into the chaos of global destabilization before we make it to the other side of the river.


References

[1] Hern, A., Elon Musk says AI could lead to third world war, The Guardian, September 4, 2017.
https://www.theguardian.com/technology/2017/sep/04/elonmusk-ai-third-world-war-vladimir-putin/
[2] Harford, T., We Still Waiting for the Robot Revolution, August 4, 2017.
https://www.timharford.com
[3] Bank for International Settlements, 86th Annual Report BIS 2016.
https://www.bis.org/publ/arpdf/ar2016e1.htm
[4] Marr B., Why Everyone Must Get Ready For The 4th Industrial Revolution, Forbes, April 5, 2016.
https://www.forbes.com/sites/bernardmarr/2016/04/05/why-everyone-must-get-ready-for-4th-industrial-revolution/
[5] Smil, V., When innovations fail, August 2015, IEEE Spectrum.
[6] Harford, T., We Still Waiting for the Robot Revolution, August 4, 2017.
https://www.timharford.com
[7] Chang, H-J., 23 Things They Don’t Tell You About Capitalism, Penguin Books, 2011, p. 37.
[8] Mokyr J., Vickers C., Ziebarth N. L., The History of Technological Anxiety and the Future of Economic Growth: Is This Time Different?, Journal of Economic Perspectives, Volume 29, Number 3, Summer 2015, pp. 31-50.
[9] Dicken, P., Global Shift: mapping the changing contours of the world economy, Sage 2015, Seventh edition, pp. 77-79.


Marat Yuldashev

Consultant with Experience in Cyprus
Russia/CIS
Eastern Europe and the Middle East, Research Associate

Cyprus Center for European and International Affairs

First Published at “In Depth Volume 14, Issue 5, November 2017″

Security Equation in Eastern Mediterranean: Global and Regional Contexts

Eastern Mediterranean as a crossroads, where West and East meet, has traditionally had strategic significance. Nowadays, the emerging strategic landscape in the region is getting more and more complicated and unpredictable. The global context is characterized by two crises – the Russia-West crisis after Ukraine and the EU-US crisis after the election of president Trump. It is widely recognized that relations between Russia and the West are on decline and Russia is steadily drifting away from EU, NATO or US. It will not be an exaggeration to say that these relations have reached their lowest point in the past 25 years. There have been many disagreements between Russia and the West in the past – Kosovo problem, Iraq, Caucasus crisis, Libya, human rights, energy deals etc, but it is security orientation of the post-Soviet states and the Russia-NATO/EU rivalry in this space that constitutes the crux of the fallout.

The divide on the macro level of the international relations has a strong impact on the regional cooperation, which is why there is a strong dialectical link between Ukraine and Syria or security in Eastern Mediterranean at large. Russia’s strategy in the region as its foreign policy at large is defined by three factors – post-imperial syndromes, security concerns and negative experience of the Russia-West cooperation after the collapse of the USSR. With the loss of the great empire and status equal to the US status rebuilding has become the guiding star of the Russian foreign policy. As for security concerns, the biggest threat to Russia, as it seen in Kremlin, is regime change through the so-called export of democracy and orange revolutions. Sovereignty in its traditional Westphalia meaning has become a sacred cow for Moscow, which is why Russia’s support of Assad is not so much about Assad himself but rather a matter of principle – no regime change for the sake of democracy. And which is why the mess in Libya is a reminder of the evils of the regime change policy.

The conflict in Ukraine resulted in the sanctions war and Russia’s exclusion from the main international forums. Russia’s isolation from the West left her no choice but to seek new allies and exploit any gap or flaw in the regional strategies of her opponents. Nowadays Russia is present in the Mediterranean region on an extended scale. It is enhancing its political, economic and military involvement both in Eastern and Southern Mediterranean through regular political contacts with the authorities of the largest countries in Levant and North Africa, arms sales, trade and energy cooperation, renting military bases and conducting military exercises.

The EU-NATO-US relations are also in flux although the nature and substance of the crisis between Europeans and Americans differ from the former. “There is no doubt that the election of Donald Trump not only sent shockwaves around the world but has increased the risk of an unsettled future US relationship to the world and its European allies. Europeans and Americans alike worry about the future transatlantic relationship …”.[1] The US as a main security provider of the West is rethinking its foreign policy becoming a less reliable and predictable partner for Europe, which has strong implications for security in Eastern Mediterranean, first and foremost for Syria. Although it is not clear what will happen in the Mediterranean with Donald Trump as president of the United States, some of the American analysts argue that despite the different style of the new administration, it is unlikely to see a radical change in US policy to date in the Mediterranean. A US withdrawal from the Mediterranean in terms of politics and security would not even be possible. The Mediterranean region remains an important asset, even essential for the United States especially with the IsraeliPalestinian conflict, Turkey or Egypt. The key question is not whether the US will be active – it will be – but whether this activism, and the strategy behind it, will be pursued in a more unilateral way.[2]

The possibility that the European allies in NATO or the European Union will fill the American role in the East Mediterranean is not feasible. EU is not a real strategic actor, it is in the process of rethinking its strategic autonomy and presently it lacks the necessary military assets, a clear strategic vision, as well as the political will to take a lead as a security provider for the East Mediterranean.

China is asserting herself as a new global power, although her global ambitions are more about economics than politics at least for the time being. China is “neither a missionary culture nor a values superpower… Clan-focused Confucianism and the fear bred by communism have persuaded the Chinese to mind their own business”.[3] However the very fact that Chinese are showing their flag in an area far from their traditional area of operations undermines the wide spread assumption that the Mediterranean will became a purely Western sphere of influence.

The regional balance is even more complicated due to the fact that the main regional actors – Turkey and Iran – are reconsidering their regional strategies on the basis of big-power nationalisms. And even within the socalled allied coalitions like the Astana peace process on Syria there exist differing interests and competing regional strategies of the actors – Russia, Iran and Turkey.

Despite the complexity and multidimensionality of the security landscape in the Mediterranean, the main challenge to the regional security is the deep divide in the relations between Russia and the West, since neither Russia, nor the West can stabilize the region without each other. Russia‘s expansion in the region is widely perceived in the West as a threat to the global and regional stability. However it is not Russia’s expansion but rather her isolation that presents a threat to the regional and global security.


Nadia Alexandrova-Arbatova

Head, Department of European Studies
Institute of World Economy and International Relations (IMEMO)

Russian Academy of Sciences

First Published at “In Depth Volume 14, Issue 5, November 2017″

The Clash of the Titans on the Energy Field

The Energy Sector reemerged as a theater of intense political antagonisms in the early 2000s. Since then, Putin’s Russia has revived its economy and regained national self-confidence by using energy resources as a cornerstone of its national power.[1] For many scholars, after the demise of the USSR, Russia’s energy sector has become the catalyst for the country to inaugurate a new era of kingpin global actorness.[2]

In strict economic terms, “hydrocarbons play a large role in the Russian economy, as revenue from oil and natural gas production and exports accounts for more than half of Russia’s federal budget revenue”.[3] This dependence seems to be analogous to Putin’s domestic strength as well.[4] Being in power for almost two decades, Putin’s leadership and his personal views about Russia’s place in world politics, has determined nation’s course.[5]

Scarcely surprising, the energy sector turns out to have become Russia’s “muscles” in the 21st century. It is because of these muscles that today’s Russia feels more confident to take action in the international field. Oil and gas pipelines, potential new resource fields, uninterrupted and seamless access to markets, profitability, production control are no longer just part of national infrastructure or mere factors of economic policy and management. They have been evolved into indispensable elements of Russia’s national interest and power.

Putin has built the Russian national power on three basic pillars: a strong and compelling leadership, availability of natural resources and energy exports. This pattern is, the same time, the main lens through which Russia gauges developments in international system. By this assumption should anyone, or any element of the international system, attempt to meditate on Putin’s Russia.

The aforementioned composition of Russia’s national power, was logically projected to the International System, affecting relations, actions and decisions. And this was a conscious choice by the country’s side, trying not only to reestablish itself as a strong actor in the system, but also to claim and regain a high place in it, in terms of power, influence and respect from the others.

A series of conflicts like the Russo-Georgian War in 2008,[6] the 2006 and 2009 Russia–Ukraine gas dispute,[7] the annexation of Crimea in 2014,[8] are undoubtedly connected to the larger view of Putin’s Russia aspiration to emerge as an “energy superpower”,[9] resuscitating by this way its status as a great (or super) power in the international system in political terms.

After many decades of efforts to keep this reality under diplomatic and political realm, the strongest pole of the system, USA, seem to change course.[10] The late Obama’s Administration with the ending of the 40-year ban on U.S. crude oil exports,[11] and the new President Trump’s declaration about “energy dominance”,[12] signify this change. The technology of hydraulic fracturing led USA to the shale oil and gas revolution,[13] topping the country as an oil producer in April 2014.[14] The technological achievement denotes many more implications than a simple economic, scientific or market fact. It becomes a decisive component of US national power.

If we consider that Energy is a factor that can operate in its absence too and provoke events, in terms of large importing countries like China, then we can see China’s recent efforts to support solar energy and its plans to invest $367 billion in renewable energy, as an also clear actorness move in the Energy Field.[15] It is more than obvious that the “big guys”, the Titans are taking positions on the international chessboard, balancing and/or competing on the Energy Field. This issue is not dryly economic, industrial or technological. It is deeply political and happening under terms of power in the International System. Political theory should address this subject as a transformation of the global power politics agenda in its entirety.


References

[1] H Balzer, ‘The Putin Thesis and Russian Energy Policy’, in Post-Soviet Affairs, vol. 21, 2005, 210–225.
[2] D Trenin, ‘Russia Redefines Itself and Its Relations with the West’, in The Washington Quarterly, vol. 30, 2007, 95–105.
[3] EIA, ‘Russia is world’s largest producer of crude oil and lease condensate – Today in Energy – U.S. Energy Information Administration (EIA)’, 2015.
https://www.eia.gov/todayinenergy/detail.php?id=22392
Accessed 28 November 2017.
[4] JED Kissi Dawn, ‘Russia’s economic reform remains elusive as oil stays weak’, 2017.
https://www.cnbc.com/2017/06/23/russias-economic-reform-remains-elusive-as-oilstays-weak.html
Accessed 28 November 2017.
[5] P Engel, ‘How Vladimir Putin became one of the most feared leaders in the world’, in businessinsider.com, 2017.
https://www.businessinsider.com/how-vladimir-putin-rose-to-power-2017-2/
Accessed 28 November 2017.
[6] SE Cornell, ‘Pipeline Power: The War in Georgia and the Future of the Caucasian Energy Corridor’, in Georgetown Journal of International Affairs, vol. 10, 2009, 131–139.
[7] M Bilgin, ‘Geopolitics of European natural gas demand: Supplies from Russia, Caspian and the Middle East’, in Energy Policy, vol. 37, 2009, 4482–4492.
[8] J Biersack & S O’Lear, ‘The geopolitics of Russia’s annexation of Crimea: narratives, identity, silences, and energy’, in Eurasian Geography and Economics, vol. 55, 2014, 247–269.
[9] P Rutland, ‘Russia as an Energy Superpower’, in New Political Economy, vol. 13, 2008, 203–210.
[10] CJ Cleveland & RK Kaufmann, ‘Oil supply and oil politics: Déjà Vu all over again’, in Energy Policy, vol. 31, 2003, 485–489.
[11] E Humiston, ‘Obama’s Surprise Economic Legacy: Energy Exports > IPI Issues > Institute for Policy Innovation’, in ipi.org, 2016.
https://www.ipi.org/ipi_issues/detail/obamas-surprise-economic-legacy-energy-exports/
Accessed 29 November 2017.
[12] T DiChristopher, ‘Trump wants America to be “energy dominant.” Here’s what that means’, in cnbc.com, 2017.
https://www.cnbc.com/2017/06/28/trump-america-energy-dominant-policy.html
Accessed 29 November 2017.
[13] J Mauldin, ‘Shale Oil: Another Layer of US Power’, in MauldinEconomics.com, 2017.
https://www.mauldineconomics.com/outsidethebox/shale-oil-another-layer-of-us-power/
Accessed 29 November 2017.
[14] EIA, ‘U.S. oil production growth in 2014 was largest in more than 100 years – Today in Energy – U.S. Energy Information Administration (EIA)’, in eia.gov, 2015.
https://www.eia.gov/todayinenergy/detail.php?id=20572
Accessed 29 November 2017.
[15] SP and M Rivers, ‘China is crushing the U.S. in renewable energy’, in CNNMoney, 2017.
https://money.cnn.com/2017/07/18/technology/china-us-clean-energy-solarfarm/index.html
Accessed 29 November 2017.


Vasileios Balafas

PhD Canidate
Department of Political Science and International Relations
University of Peloponnese Assistant Research Fellow

Centre of International and European Political Economy & Governance – CIEPEG UoP

First Published at “In Depth Volume 14, Issue 6, December 2017″

Will IRAN Become a Regional Hegemon in the Middle East?

The recent crisis in Lebanon, with the mysterious resignation of the Lebanese Prime Minister Saad Hariri, is one more episode of the undeclared war between the two main players that take part in the contemporary power game in the Middle East: Iran and Saudi Arabia.[1] This is a Cold Warstyle conflict in the form of a struggle for influence between the two main players through their proxies. This struggle is predominantly taking place in ethnically and religiously polarized states, like Syria, Iraq, Yemen and Lebanon.[2] In that context, Saudi Arabia and its allies in the Arab Gulf, as well as Israel and Trump administration, are concerned due to the ongoing Iranian surge for increased regional influence, which has been pretty successful in Iraq and Syria.[3] Inasmuch this process is part of an Iranian agenda in pursuit of regional hegemony, namely undisputed dominance in the Middle East,[4] (and it seems that Iran’s adversaries have no doubt that this is the case) this kind of behavior could be called as hegemonism.[5] This article examines the perspectives of Iranian hegemonism and, specifically, the possibility of the development of an Iranian hegemony in the Middle East in the years to come.

Hegemonism and balancing in contemporary Middle East

As we have already noted, what is perceived as Iranian hegemonism has been expressed through the fostering of Shia proxy groups in the ongoing conflicts in Iraq and Syria (with the mobilization of Lebanese Hezbollah), as well as in Yemen and in the Gulf states during the initial stages of the “Arab Spring” convulsion.[6] This surge coincided with the intensification of the US-led multilateral talks on the Iranian nuclear program, which ended to the agreement on the Joint Comprehensive Plan of Action in July 2015. This deal signified a long-waited détente in Tehran’s relations with the West. However, both the activity of Iran’s proxy groups and the (temporary?) end of US confrontation of Iran’s nuclear program alarmed traditional US allies such as Israel and Saudi Arabia who raised concerns about Iran’s hegemonic aspirations, as well as its unexpressed ambition to act as a “nuclear free rider”, thus triggering a nuclear domino in the region.[7] Iran’s regional adversaries have been attempting to balance Iran’s influence as a form of counter-hegemonic reaction. Theoretically speaking, balancing is a strategy that seeks to prevent an aspirant hegemon from securing his hegemonic position.[8] The Saudi-led military intervention in Yemen, as well as the efforts to curtail Hezbollah’s political leverage in Lebanon, seem to consist part of such a strategy. In that sense, Iran seems to hold the advantage of initiative, while the anti-Iranian coalition is trying to undermine Iran’s position in the context of a zero-sum game.

Speaking about hegemonic attempts in the Middle East, history has shown that they have been stillborn. For example, Nasser’s efforts to embrace the Arab world and create a pan-Arab movement and Erdogan’s neo-ottoman revisionism have not been fruitful. The main reason is a systemic one: these attempts emerged in the absence of the right structural prerequisites in the region. Neither Nasser or Erdogan’s revisionism, nor contemporary Iran’s “hegemonism by proxies” were/are based on a distribution of capabilities characterized by clear-cut power superiority of the potential hegemon over the rest of the system’s units. In none of these cases did/do the aspirant hegemon enjoy significant military superiority, which would provide him with a critical comparative advantage over his regional competitors.[9] Since the right distribution of power is absent hegemonic aspirations cannot enjoy legitimacy at the regional level, which is a sine qua non element for a viable hegemonic order.[10] In other words, you cannot be a regional hegemon unless your neighbors acknowledge you as such.

The “Concert of the Middle East”

The Middle East is not that kind of a regional system where the development of a hegemonic regional order is a likelihood. The existence of at least three regional peers with potential hegemonic aspirations and balancing potential (Iran, Turkey, Saudi Arabia), as well as the existence of several other pivotal players of considerable size and/or capabilities (i.e. Israel and Egypt) assure that none will be able to achieve undisputed regional supremacy, as counter-balancing alliances will always be a choice for the rest. Moreover, the balancing role of extra-regional great powers such as the United States and Russia suggests another factor that decisively limits the possibility of a future hegemonic order. Therefore, as stability through hegemony cannot be the case in the foreseeable future (except for the unlikely scenario of an unexpectedly rapid course of uneven growth that would favor one regional power over the rest), stability through balance is the most possible future form of regional order.[11] The ongoing regional instability which is characterized by multiple conflicts and power competitions could drive regional and interested extra-regional powers towards a modus vivendi similar to 19th-century’s “Concert of Europe” and an analogous form of a “complex balance of power”.[12] In that context, the main pillars of the balance of power will agree to the terms of stability and express their readiness for balancing action (either diplomatic or military) whenever these terms are disputed. Such balancing mechanisms are already in place (as the P5+1 model of negotiations for the nuclear program of Iran, or the Geneva and Astana processes for the Syrian crisis indicate). What we still lack is a new “Concert of the Middle East” that will seal this new regional order and legitimize the new balance of power. Regional systems like the Middle Eastern one naturally tend towards balance of power. Therefore, a future Iranian hegemony is a rather unlikely scenario.


References

[1] Bilal Y. Saab, “What Hariri’s Resignation Means for Lebanon,” Foreign Affairs, November 6, 2017.
https://www.foreignaffairs.com/articles/lebanon/2017-11-06/what-hariris-resignationmeans-lebanon/
Accessed on November 12, 2017.
[2] Michael Knights, “What Would a Saudi-Iran War Look Like? Don’t look now, but it is already here,” Foreign Policy, January 11, 2016.
https://foreignpolicy.com/2016/01/11/what-would-a-saudi-iran-war-look-like-dont-looknow-but-it-is-already-here/
Accessed on July 13, 2017.
[3] Jonathan Spyer, “Tehran Is Winning the War for Control of the Middle East,” Foreign Policy, November 21, 2017.
https://foreignpolicy.com/2017/11/21/tehran-is-winning-the-war-for-control-of-themiddle-east-saudi-arabia/
Accessed on November 22, 2017.
[4] John J. Mearsheimer, The Tragedy of Great Power Politics (New York: W. W. Norton & Company, 2001), 40.
[5] David Wilkinson, “Unipolarity without Hegemony,” International Studies Review 1 (1999): 141-171, 143-144.
[6] Reva Bhalla, “The U.S.-Saudi Dilemma: Iran’s Reshaping of Persian Gulf Politics,” Stratfor, July 19, 2011.
https://www.stratfor.com/weekly/20110718-us-saudi-dilemma-irans-reshaping-persiangulf-politics/
Accessed on 23 July 2011.
Jonathan Spyer, “Is it Iran’s Middle East Now?” Fathom, Automn 2015.
https://fathomjournal.org/is-it-irans-middle-east-now/
Accessed on 13 November 2015.
[7] Efraim Inbar, “Implications of US Disengagement from the Middle East,” BESA, Mideast Security and Policy Studies No. 122., 14. For alternative approaches on a potential nuclear domino and nuclear balance see Rizwan Ladha, “A Regional Arms Race? Testing the Nuclear Domino Theory in the Middle East,” al Nakhlah, Spring 2012.
https://fletcher.tufts.edu/~/media/43f8f8ef81014262ab2a119709e495e3.pdf
Accessed on 12 November 2016.
Kenneth N. Waltz, “Why Iran Should Get the Bomb. Nuclear Balancing Would Mean Stability,” Foreign Affairs 91 (2012): 1-5.
[8] Stephen G. Brooks, William C. Wohlforth, World Out of Balance. International Relations and the Challenge of American Primacy (Princeton, NJ: Princeton University Press, 2008), 22-25.
[9] Mearsheimer, The Tragedy of Great Power Politics, 40.
[10] Adam Watson, The Evolution of International Society (New York: Routledge, 1992), 17.
[11] Ross Harrison, “Defying Gravity: Working Toward a Regional Strategy for a Stable Middle East,” Middle East Institute, Policy Papers Series, May 2015. George Friedman, “The Middle Eastern balance of power matures”, Stratfor, March 31, 2015.
https://www.stratfor.com/weekly/middle-eastern-balance-power-matures/
Accessed on 11 April 2015.
[12] Hedley Bull, Anarchical Society. A Study of Order in World Politics (London: Macmillan Education, 1977), 97-98.


Michalis Kontos

Assistant Professor of International Relations
Department of Politics and Governance
University of Nicosia

First Published at “In Depth Volume 14, Issue 6, December 2017″

The Future of Gulf-Asia Relations

In the first semester of 2017, Gulf politics were marked by numerous international events. Among them, three had a distinct significance. First, Sheikh Mohamed bin Zayed Al Nahyan, crown prince of Abu Dhabi, travelled to Delhi at the end of Januarywhere he was invited as guest of honor to the celebration of India’s Republic Day, a privilege given in the recent past to the former US and French Heads of State, Barack Obama and Francois Hollande. Four weeks later, the ruler of Saudi Arabia, King Salman, embarked on a historical month-long Asia tour that brought him to Indonesia, Brunei, Malaysia, Japan, and China. Lastly, in June, in the midst of the biggest diplomatic crisis within the Gulf Cooperation Council opposing Qatar to Saudi Arabia and others, Turkish President Erdogan announced the speeding up of Turkey’s military base in Doha, its first overseas military permanent deployment since the fall of the Ottoman Empire.

These three episode highlight one common development: Gulf strategic partnerships are no longer exclusively looking at the US and Western traditional powers and eye increasingly towards Asia. These new ties do not serve as a substitute but have a pragmatic purpose: to send a signal to Washington. In other words, this Gulf-Asia rapprochement can be understood as a way for Arab rulers to hedge against the declining influence of the US.

This new geopolitical landscape is the result of two separate trends from the last decade. First, from the chaotic reconstruction of Iraq after the fall of Saddam Hussein to the inconsistencies of the Obama policy in the Middle East, the unpredictability of US policy in the region grew and caused local actors to diversify their strategic options.

Second, the growth of Asian economies – in particular India, China, Japan, and South Korea – is now driving oil markets. This means by extension that Asia’s economic ties to the Gulf are becoming more consequential than those of Western powers with Arab oil producers. If we exclude the US, the four biggest importers of oil in the world are today in Asia: China, India, Japan and South Korea which total 40.6% altogether of oil purchases in 2016. Over the next fifteen years, China, India and the members of the Association of Southeast Asian Nations (ASEAN) will define the global energy consumption, leaving the countries of the OECD far behind.

The conjunction of these two trends has several ramifications. To start with, economic interdependence begets common security interests. The flow of commodities from the Arab peninsula to the Asia Pacific region relies on regional and maritime stability. Any trouble onshore (e.g. failed State, civil war) or offshore (piracy attacks) can disrupt this movement. This is why the last years have been marked by an increased role of Gulf and Asian navies in counterpiracy operations in the Indian Ocean. Likewise, Gulf stability is becoming a security priority for Asian countries, as evidenced by documents such as China’s Arab Policy Paper.

This interdependence may rely on Gulf oil supplies but it is widening its scope to include other sectors. A South Korean consortium has been building the UAE’s first nuclear plants since 2009. Saudi Arabia aims to follow the same path as it signed partnerships for its own nuclear program with South Korea and China. Investments in infrastructures also play a central role in Gulf relations with India and China, especially as countries like Saudi Arabia aim to position them as regional hubs for China’s Belt and Road Initiative. In addition to these economic indicators, Gulf-Asia ties are also visible in the military domain. High level visits between military commanders increased, multiple defense agreements were signed and followed by numerous cooperation programs in the field of military education or joint training.

If this rapprochement is significant, does it mean a geopolitical revolution in the Gulf? One has to remain cautious: as of today, it does not mean a realignment of Gulf countries between the US and Asian powers. At the military level, it is unlikely that any country – be it China or India – could and would replace both the resources and the security guarantees provided by the US to the Peninsula. Moreover, the strategic rapprochement between Gulf and Asian countries may also be impeded by the way it impacts – as well as is impacted by – the local competitions. For instance, it is not clear how Gulf countries, which historically have had a strong military relationship with Pakistan, could strengthen their strategic dialogue with India without challenging their ties to the former. This is why this new geopolitical landscape should neither be ignored nor overestimated. In any event, given the current foreign policy style of the Trump presidency, the logic of hedging – meaning for Gulf countries to diversify their international relations and to cover against the US unpredictability – is likely to become the new pattern of Gulf strategies but it remains to be seen how much it will affect the regional security system on the long term.

* The views expressed in this paper are strictly those of the author. They do not reflect the views of the UAE National Defense College, or the government of the United Arab Emirates.

Jean-Loup Samaan
Associate Professor in Strategic Studies
UAE National Defense College

First Published at “In Depth Volume 14, Issue 6, December 2017″