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The New Middle East: Part II

With Gideon Rose, Dan Byman, Cyrus Amir-Mokri, and Hamid Biglari

Part II of a two-part series on the new Middle East. Gideon Rose, Dan Byman, Cyrus Amir-Mokri, and Hamid Biglari chime in on the United States’ response to ISIS after the Paris attacks, counterterrorism in the Middle East, and Iran’s post-sanction economy.

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To learn more on the subject, check out these related articles on the new Middle East:

Coverage of the Paris Attacks

Beyond Counterterrorism by Dan Byman

A Windfall for Iran? By Cyrus Amir-Mokri and Hamid Biglari 

This podcast has been edited and condensed. A rush transcript is below. Music credit: FreeMusicArchive.org / The Stealing Orchestra & Rafael Dionisio, Podington Bear

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Allawala: I’m Katie Allawala, and this is Foreign Affairs Unedited.

Allawala: Today we’re bringing you the second in a two-part series on the post-American Middle East. Since we broadcast our last episode, Islamic State militants have killed 129 people in seven coordinated attacks across Paris. Russian investigators, meanwhile, have confirmed that October’s downing of a Russian plane in Sinai that killed 224 people was caused by terrorists, presumably affiliated with ISIS.

The events of the last two weeks have raised new questions about the strength and goals of ISIS, and the role of the United States in the war in Syria and the region more broadly.

First, we go to Foreign Affairs Editor Gideon Rose.

Gideon Rose speaks briefly on ISIS and Paris.

Allawala: Stay on top of all of these issues with the Foreign Affairs Anthology The ISIS Crisis. It’s the best primer around for understanding who the group is, what it wants, and how the world should respond. Visit ForeignAffairs.com/ISISCrisis for more.

Allawala: From its targeting of al Qaeda to its campaign against the Islamic State, US policy in the Middle East has been largely focused on counterterrorism. For Brooking’s Dan Byman, though, that isn’t enough. He sat down with Nikita Lalwani.

BYMAN: If you look at where the Obama administration has been aggressive, for example, the Bin Laden raid was a very risky operation, but it was done in the name of counter-terrorism and was seen as necessary.

BYMAN: But it's probably more visible if you look at where we haven't intervened. There's been a lot going on in the Middle East and, for the most part, the administration has preferred to try to stay on the sidelines believing, often correctly, that US intervention might fail. It might even backfire. There was a brutal civil war going on in Syria, but it wasn't till the Islamic State emerged as a major threat that the United States began military intervention. So, I think that we primarily look at a region, from a terrorism point of view. Now, there are exceptions, the Iran nuclear deal being the big exception, but nevertheless I would say that's the dominant lens.

LALWANI: So, you've argued that this sort of single-minded focus on counter-terrorism in the Middle East is counter productive. Why is that?

BYMAN: Well, first of all, the United States has a lot more interest than just counter-terrorism. In general, we have close allies, Saudi Arabia, Israel, others whose security we care about. But to even go beyond that, I would say that perhaps, ironically, you don't always fight terrorism best by doing counter-terrorism. One of the breeders of terrorism in the Middle East has been the extensive civil wars and collapse of regional governments. And this has radicalized populations, it's created sanctuaries, where terrorist groups and violent groups can operate. And so, a lot of what you wanna do is eliminate or shrink these sanctuaries and prevent them from occurring in the first place. And as a result, you need things like conflict mediation. You need a range of policies that involve trying to affect the civil war and so on. And so, going after terrorism isn't always as simple as using a mix of drone strikes and other covert operations.

LALWANI: Can you talk a little bit more about the alternatives that you mentioned, How specifically might the United States go about doing something like that?

BYMAN: Well, let's be clear. Stopping a civil war is exceptionally difficult and as it gets rolling, as it's happened in Syria, it gets harder and harder. Let's look at Egypt as a good example. When there was a coup in Egypt and the Muslim brotherhood government was overthrown, it was clear to me that the relatively limited terrorism problem was going to get worse. The government in Egypt was cracking down on the brotherhood, it was driving it towards violence. And a lot of what the United States might have been, should've been trying to do then was to try to push the government of Egypt to work more with the brotherhood, not drive it towards the extremes. And this would require political dialogue with an opposition.  

LALWANI: All right. Given political realities in Washington and especially, waning public support for interventions abroad, do you think it will be difficult to sell that sort of approach in Washington?

BYMAN: Absolutely. I think the Obama administration is correctly reading the mood of the American people, which is that the American people are very reluctant to intervene in the Middle East, in general, with the important exception of the Islamic State where the American people believe it's a major threat and support fairly dramatic intervention, in fact. So there's a question here, which is almost an internal question between how much the administration of any sort should be following public opinion versus leading. What I worry about, is that there'll be crises that happened, and the United States will wish it would have done this.

LALWANI: You've highlighted instances in which US counter-terrorist policies have worked particularly well against Al-Qaeda, for example, and instances in which they haven't been as successful. What determines that success or failure?

BYMAN: Well, there was an excellent article in Foreign Affairs, as a matter of fact, by Audrey Kurth Cronin. I believe the title was, "The Islamic State is Not a Terrorist Group." And that title kind of says it all. This is a group that does use terrorism, but most of what it does involves conventional warfare and guerilla warfare, and trying to win the state. And so, if you focus exclusively on terrorism, you're gonna miss 95% of the threat and the capability of this group. You have to go after the entire thing in order to affect one part significantly, and so, Al-Qaeda doesn't have the wide range of capabilities. It's certainly not governing spaces. It does assist insurgencies, but it isn't, the core, at least, is not a mass of insurgency in itself. And so, you can use a counter-terrorism toolkit because it's a smaller group that employs fewer instruments to achieve its aims, but with the Islamic State, you have to be more comprehensive simply because it's a more comprehensive group.

LALWANI: I guess, lastly then, I'm curious what sort of strategy you'd propose to deal with something like the Islamic State where civil war has already broken out, the US didn't intervene before it was too late. What do we do now?

BYMAN: Well, that's an exceptionally difficult challenge. What I would think about the Islamic State is a mix of different measures. One is that, the first step is to contain the violence. Then you need to do the effort that the Obama administration has been trying to do, which is to try to work more with local allies, work both local parties, as well as use air power effectively to try to push this back. I think there are gonna be political limits in a more aggressive approach. And I think there's a broader question of we don't have any answer to what would fill the vacuum should, miraculously, the Islamic State be defeated? So, we need to be able to solve those before we go significantly more aggressive. So, my primary focus right now would be on containment.

Allawala: For years, it wasn’t the containment of terrorist groups that the United States was focused on, but the containment of Iran. With the recent nuclear deal, those days might be over. But will the lifting of sanctions save Iran’s flagging economy?

Bilgari: The conventional wisdom is that the Iranian government is gonna get this huge economic windfall as you suggested, and one hears a range of anywhere between $50 billion on the low end to $150 billion on the upper end.

Allawala: That’s Hamid Bilgari, one of the authors of an article from the recent issue of Foreign Affairs called “A Windfall for Iran”

Bilgari: Those figures are very misleading. So, of the 100 or so billion, which is the most reliable gross figure, Iran has pre-existing financial obligations particularly, to China. And given the fact that Iran will need to keep at least another half of what remains of that in foreign reserves, the likely figure that Iran will actually have access to is something closer to about $20 billion. So, I think it would be very misleading to believe that it's gonna get a windfall.

Allawala: There are other problems that will hold Iran back from an economic breakthrough as well.

Bilgari: There is a bit of a difference of view inside the country between conservative elites, who distrust the west and don't want Iran to engage with the west, in terms of economic interaction. And others, and by others I would say a majority of the population, including the current Rouhani government, who are in favor of engagement with the west. And that struggle, that internal struggle, is perhaps the most important impediment to moving forward. The reason I am cautiously optimistic is that the country is young, and the youth are highly educated and technically savvy, and look for engagement with the west.

Amir-Mokri: Iran has a history of, especially starting in the late 19th century and through the 20th century, of encounters with the West, both with Western governments and also with Western private business that haven't turned out that favorably, at least according to a particular narrative of Iranian history.

Allawala: That’s Cyrus Amir Mokri, the other author of “A Windfall for Iran”

Amir-Mokri: A couple of the examples that we cite, which we think are very significant and telling in this regard, are incidents where private individuals from the United Kingdom or Europe came in and sought concessions to develop different parts of Iran's economy, but those agreements came at a very big expense. They were very vast concessions of economic rights in return for, fairly speaking, very little.

And so those kinds of experiences provide a basis for many in the Iranian elite to think that all Western and other powers want from Iran is economic rights in return for very little and this narrative of economic exploitation

Allawala: It is unclear that Iran will ever be able to fully open itself up to foreign investment without opening up politically as well.

Amir-Mokri: in some sense, political reform has to accompany economic reform because you need a State that's strong enough to make sure that the machinery of economic growth actually works. Now whether that necessarily has to translate into a particular system of government, there are different systems of government that succeed in launching economic reform.

Bilgari: the experience of China suggests that one can have liberal economic policies, which can have dramatic influence on the livelihood of people, and yet maintain the same political system. The question is, whether that is sustainable for the long term.

Allawala: That’s Hamid Bilgari again

Bilgari: In the case of Iran, Iran has a fairly long way to go because it hasn't even opened up economically in the same sense that China has.

So the types of things that investors would look for, the most important one would be elements associated with rule of law. They would expect that investment capital would be protected, and there would be some elements of certainty and stability around free markets. That means things like sanctity of contract laws, contract enforcement, reform of the bankruptcy regime Iran has.

There needs to be true privatization, which hasn't happened. There have been some attempts of that, but they've been half-hearted, they haven't been serious. Corruption is a major challenge for Iran as it is in many emerging market countries. And finally, investors will need to be sure that the return on their capital won't be negatively offset by currency depreciation or price inflation, so they look for a strong and independent central bank, and that hasn't happened. So, there are a number of things that the country will need to address.

Allawala: In all this, Iran is running against the clock.

Bilgari: My sense is that at least the Rouhani government understands that, and is in a state of urgency to address that. The next five to 10 years are really the last major chance that Iran has to break out of the challenge that it's found itself in the last three and a half decades.

Allawala: That was Hamid Bilgari and Cyrus Amir Mokri. For more on the post-American Middle East, please check out our latest issue, on newsstands now. We’ll be back in two weeks. Until then, please leave us a review on iTunes or send us comments at editor@foreignAffairs.com. We’re excited to hear from you. 

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