George Friedman, Mauldin Economics
Feb. 24, 2016, 9:28 AM
Most investors know what an emerging market is. Some might even be able to offer a pretty good definition of what puts the “emerge” into emerging markets. But ask about the Middle East, and no one really knows what it is.
Geographically, it’s the region that stretches from the eastern Mediterranean and southern Turkey to the Iran-Afghan border.
The region, however, is far more complex than lines on a map. It can also be defined based on ethnic and religious bloodlines.
In the modern Middle East, the Arab world stretches from Morocco to Iraq and excludes non-Arab Muslim countries like Turkey and Iran.
If we think in terms of the Muslim world, this Middle East might stretch from Morocco to Afghanistan, south into Africa, and north into Central Asia and southeastern Europe.
The Middle East is the Arab core of the Muslim world. But thinking about the Middle East as exclusively Arab doesn’t work. Doing so excludes Turkey, Iran, and a very large Kurdish population spread across Iran, Iraq, Turkey, and Syria.
Viewing it as exclusively Muslim is also deeply flawed. It would mean focusing on just a small part of the Muslim world. It also overlooks the Jews, Christians, Druze, Yazidis, Zoroastrians, Bahai, and other religious groups in the region.
The idea of the Middle East has become quite vague. To me, it’s where perhaps the world’s most complex war is raging.
Middle Eastern countries are those that are involved in this war, one way or another. The war may metastasize into neighboring regions, but this is its heart.
As we already defined the Middle East, let’s dig deeper into its demographics and history to understand the complexity of this region.
The Middle Eastern population is concentrated in the mountains
We learned from the first map that the northern region is mountainous, while the southern area is generally lowlands. Arabs mainly populated the south—save for Israel. The higher elevations of Turkey and Iran are non-Arab.
Mountainous terrain is typically less populated than lowlands due to factors like ease of making a living. Not so in the Middle East… since much of the lowlands lack water and offer a rather inhospitable quality of life.
Overall, most of the population clusters in the mountains of Iran, Iraq, and Turkey. The other most populated areas are the eastern Mediterranean coast and the southwestern and southeastern Arabian Peninsula.
The mountainous northern region has a wide ethnic and religious diversity
Religious divisions are particularly important for understanding the Middle East, notably the division between Sunnis and Shiites. Also note the Christian and Jew mix.
In our view, conflicts begin with geography, as communities strive for security within their geography. Some people achieve security in remote mountain valleys. Others, like the Israelis caught on the lowlands without any natural barriers, are always insecure.
But an understanding of these many religious factions is not enough, as religious diversity in the Middle East is complicated by an array of ethnic subgroups.
The ethnic groups of Syria and Lebanon
The Kurds are largely Sunni Muslims. They are hostile to Arab Sunnis and Shiites.
The Druze are neither Muslim nor Christian, but can find themselves allied with either. The Druze who live in Israel, are allied with Israel.
The complexity of ethnic groups is partly due to the nature of mountainous regions, but also to the policy of the Ottomans.
The Ottoman Empire left the old Middle East highly fragmented
The Ottomans dominated this region for centuries.
But unlike Muslim and Christian conquerors, they didn't pursue religious uniformity by force… as long as people pledged their allegiance to the Ottomans.
The Ottomans, therefore, left the Middle East in a chaotic jumble of ethnic groups tied to various religions after World War I. Each group had the strength to survive but lacked strength to conquer the others. The consequence is inherent instability.
The previous two maps show why all attempted conquests have failed to some degree.
The lowlands are mainly desert and relatively underpopulated, which means that aggression was limited to low-level conflicts. On the lowlands, it’s relatively easy for conquerors to come and go, transforming the population to reflect their values along the way.
The mountainous northern region has highly diversified cultures and religions, and the terrain makes it difficult to conquer completely. Aggressors may control the main roads and mountain passes, but going into every valley is impossible.
Mountains give the advantage to the defender, and unless a region is strategically critical, the conquerors will leave them alone.
The outcome is that mountain regions around the world—like the Caucasus, Balkans, or Appalachians—tend to protect unique cultures from annihilation. But cultural differences result in conflicts between them. These conflicts are ancient and repeat themselves.
Moments of peace in both the mountains and the lowlands only occurred when one of the mountain nations was militarily and economically victorious and spread its influence south into what is today the Arab world. The latest and most important from our point of view was the Ottoman Empire.
The Ottoman Empire collapsed after World War I primarily due to a single weakness. While the European and Russian empires participated in the industrial revolution, the Ottomans did not.
And World War I was an industrial war. The Ottomans could win battles, but their empire couldn’t survive the war.
The subsequent fragmentation of the empire laid the groundwork for the emergence of the modern Middle East.
The Europeans divided the region into new, artificial states after WWI
After World War I, the victorious powers divided the Middle East region under the Sykes-Picot Agreement. But they did not simply divide the prize; the area was consolidated in a configuration that had never existed before.
Compare the map of the Ottoman provinces with the map the Europeans imposed. There were far fewer entities.
The Europeans believed in the European-style nation-state as devoutly as if it were a religion. They divided the region into five states: Iraq, Syria, Palestine, Transjordan, and Lebanon.
It is important to understand how artificial these entities were. The French took the northwest portion and consolidated it into one large state, Syria.
However, they had backed the Maronite Christians in a prior civil war and wanted them to have their own state. So they carved out the southwestern portion of Syria and named it after the major mountain there, Lebanon.
The British had supported an Arab insurgency against the Ottomans in the Arabian Peninsula. When the Sauds defeated the Rashidis shortly after World War I, two major tribal confederations remained in the peninsula led by Sauds and Hashemites.
The Sauds sought to reconquer them to establish their dominion over as much of the peninsula as possible.
The British had a relationship with the Hashemite patriarch, Sharif Hussein, and they gave his elder son, Faisal I, the kingdom of Iraq.
Sharif Hussein’s younger son, Abdullah, was sent to Amman, a small town on the east bank of the Jordan River. Lacking a name for the region surrounding Amman, the British called it Transjordan and arbitrarily drew border lines in the desert. “Trans” was later dropped from the name, and it became simply Jordan.
The British also promised the Jews a state on the other side of the Jordan—while promising the Arabs there would be no Jewish state.
They tried to solve the problem by creating a Jewish state in a place no state had existed for almost 2,000 years and giving Jordan authority over the Palestinian-majority West Bank.
Now the modern Middle East can’t hold together
The point is that there is nothing natural about any of the Middle Eastern borders.
Some of the states were created on a more solid foundation than others, but they were all invented over the last century. In fact, Sunni, Shiite, Arab, Kurdish, Persian, and Turkic dynasties have been competing in the Middle East since the 10th century.
It’s no surprise that dynastic, secular tyrants ruled Syria and Iraq while Lebanon collapsed into civil war. Or that Syria and Iraq fell into chaos when one tyrant was removed by the Americans and the other was backed into a corner during the Arab Spring.
Or that the most European of countries, Israel, easily adapted to life as a nation-state and created a modern military based on the European model in ways the Arabs have not been able to.
Indeed, the forces that shaped the Arab-majority Middle East are all non-Arab. Israel, Turkey, Iran, and Saudi Arabia are the major powers that frame the region. Saudi Arabia, the one Arab state that arose out of Western rule over the Middle East, is the weakest of the four.
The center of the frame—Iraq, Syria, and occasionally Lebanon—has collapsed. Iraq exists in theory only, as the Shia-dominated government is merely one faction among several.
The same is true for Syria, where Bashar al-Assad is simply a warlord battling other factions. And no one wants to assert power south of the mountains. The Turks now are far more cautious than their Ottoman predecessors.
The Iranians have significant influence in Iraq and Syria, but they lack the strength to impose their will or the appetite for a larger commitment. The Israelis see the Jordan River as the limit of their power and confine themselves to supporting the Hashemite kingdom of Jordan (as artificial a state as any) as their buffer.
As for the Saudis, they also try to shape events, but given internal economic problems and vulnerability to the Islamic State, there is little that they can do.
But the center of the Middle East can’t hold. External powers created an arbitrary framework, one that is fragile at best.
The American invasion in 2003 dissolved the glue that bound Iraq together. But a state that required a dictator like Saddam Hussein to hold it together would have failed with or without invasion, as we have seen in Syria.
Given economic conditions, the alternative to dictatorship is clan-based relations, which constantly fragment the Arab heart of the Middle East and can occasionally create an explosive situation.
The non-Arab countries that surround this region meddle in the situation but are not willing to mount a massive intervention. In some instances, distant powers like Britain, France, and the US have been more interested in the stabilization of the region than its neighbors were.
Or to be more exact, the neighbors had more at stake than the distant powers, which could cut their losses and leave when the need arose.
In this context, the rise of the Islamic State in the Middle East’s Arab heartland was unexceptional—as was the emergence of a new invented state.
Nothing new here, as almost all the states in this region were invented. IS is reshaping a shapeless area, and no one from outside will directly engage them.
But IS is also limited by geography, by economics, and by the inherent weakness of its territory. It doesn’t grow stronger, and its enemies don’t either.
The regional strategies boil down to the three non-Arab powers trying to avoid excessive involvement in the Arab region. Saudi Arabia will also try to avoid being drawn into conflicts that are beyond its capability to manage.
As for the United States, it at least recognizes that trying to craft nations and states out of this region is not going to work.