Issue 1554 • July 2010

Beyond Oil
and Security
As many regional variables
begin to play into the future
definition of Saudi-US ties,
the formula that was once
used to characterize their
rapport no longer applies
writes Caryle Murphy

07

9 771319 087105
The Majalla Issue 1554

The Art of War Candid Coversations On Politics

Somali piracy has opened the doors to US Ambassador to Riyadh James B. Saudi Liberals claim to speak for a
great power competition, and The Gulf Smith speaks about what is one of the “silent majority,” but these activists
of Aden is the first place where a new most important bilateral relations for continue to represent an elite group
geopolitical game is being played out the United States of America with no strong connections to society

TM1554_01_Cover v4.indd 1 13/7/10 15:18:15

TM1554_02-03_Ad.indd 2 5/7/10 16:29:40
TM1554_02-03_Ad.indd 3 5/7/10 16:29:46
 • EDITORIAL

Established in 1987 by
Prince Ahmad Bin Salman Bin Abdel Aziz

Al-Majalla Established by
Hisham and Ali Hafez
Editor-in-Chief
Adel Al Toraifi
Editors
Paula Mejia
Wessam Sherif
Jacqueline Shoen
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Jan Singfield
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Markus Milligan

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Editorial
Disclaimer
The views expressed in this magazine are those of the authors alone and do
not necessarily reflect the opinion or views of The Majalla and its editorial team.

Al Majalla © 2009 HH Saudi Research and Marketing (UK) Limited.

All rights reserved. Niether this publication nor any part of it may be This issue of The Majalla brings to you an anlysis of the
reproduced, stored in a retrieval system, or transmitted in any form or by
evolution of the Saudi-US bilateral relationship. In this
any means, electronic, mechanical photocopying, recording or otherwise,
without prior permission of HH Saudi Research and month's feature, Beyond Oil and Security, Pulitzer prize
Marketing (UK) Limited. For digital subscription inquiries please visit winner Caryle Murphy notes that after some tensions during
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the 1990s, the Saudi-US bilateral relationship suffered
an almost fatal blow with 9/11 and its aftermath. Yet, this
relationship survived, changed and diversified, and today the
formula “oil and security” that was used to characterize the
Saudi-US rapport no longer does it justice. Many regional
variables, she argues, will play into the future definition of
Saudi-US ties, among them the Israeli-Palestinian quagmire
and Iran’s nuclear ambitions.
In an interesting evaluation of the dynamics of geopolitics,
Steve Clemons of the New America Foundation, looks at how
relations between US, China, Israel and Japan demonstrate the
London Office Address leverage their respective leaders have and the pressure they can
HH Saudi Research & Marketing (UK) Limited
Arab Press House 182-184 High Holborn,
exert over one another. In Jan Ken Pon: Obama Takes Down
LONDON WC1V 7AP DDI: +44 (0)20 7539 (Wrong) Prime Minister, Clemons explains how Netanyahu and
2335/2337, Tel.: +44 (0)20 7821 8181, Hu Jintao have played their hands best, while Obama has been
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E-Mail: editorial@majalla.com beaten, constrained, but still has global leverage, and finally why
Yukio Hatoyama was constantly on the losing end.
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Editor-in-Chief

TM1554_04-05_Editorial.indd 4 5/7/10 18:16:21

 Contributors
Caryle Murphy
Caryle Murphy is an independent
journalist based in Saudi Arabia. A long-
time reporter for the Washington Post,
Ms Murphy was awarded the Pulitzer
Prize for International Reporting (1991)
and the George Polk Award for Foreign
Reporting (1990) for her coverage of
Iraqi-occupied Kuwait and subsequent
1990-91 Gulf War. She is the author
of Passion for Islam, which explores Islam’s contemporary
revival and the roots of religious extremism in the Middle East.
Published by Scribner, the book examines Islam’s resurgence
through the prism of Egypt, where Murphy lived for five years.

Steve Clemons
Steve Clemons is a Senior Fellow and
Director of the American Strategy
Program at the New America
Foundation which aims to promote a
new American internationalism, that
combines a tough-minded realism
about America's interests in the world,
with a pragmatic idealism about the
kind of world order best suited to
America's democratic way of life. Publisher of the popular
political blog The Washington Note, Mr Clemons is a long-
term policy practitioner and entrepreneur in Washington, DC.

Stéphane Lacroix
Stéphane Lacroix is an assistant
professor of political science at
Sciences Po in Paris. His work has
focused on Islam and politics in the
contemporary Middle East, particularly
the Gulf region. He has published
articles on Saudi Arabia in academic
journals such as the Middle East
Journal and the International Journal of Middle East Studies.
He is the author of the 2008 book Awakening Islam: A
History of Islamism in Saudi Arabia. Lacroix is also a former
consultant on Saudi Arabia for the International Crisis Group.

Julian Gardner
Julian Gardner is a Director of the Royal
Bank of Canada (RBC) Corporate
Employee & Executive Services (‘RBC
cees’) based in Geneva. Julian joined
RBC in 1995 and in 2000, took up
a client management and business
development position within RBC
cees. Julian moved to Geneva in 2006
to establish a European base for RBC
cees, where he is involved in developing RBC cees globally. He
sits on the Standards Board for EMXco. The board consists of
leading fund managers and investors who are standardizing the
development of electronic trading of funds.

Issue 1554 • July 2010 5

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 • CONTENTS

48

30

40

TM1554_06-07_Contents.indd 6 5/7/10 16:28:51

 Contents
Quotes of the Month 8
The Art of War 10
• Blind Spots to Peace: America’s
counterinsurgency strategy in Afghanistan
• Fighting Piracy: The Gulf of Aden and the
Quest for Great Power Status
• What’s New in Al-Qaeda’s Suicide Bombings?

On Politics 18
• Saudi Liberals: Elitist ambitions and
the reality of Saudi society
• A Law Unto Himself: Ramzan Kadyrov –
President of Chechnya
• Jan Ken Pon: Obama Takes Down
(Wrong) Prime Minister

Beyond Oil and Security 26

As many regional variables begin to play into
the future definition of Saudi-US ties, the formula
that was once used to characterize their rapport

26
no longer applies

The Wealth of Nations 30

• Return of the King? The state of gold markets
• The Crumbling of Global Solidarity

18 • The Quest for Talent

• Save Money as you Save the Planet:
Mitigating climate change
• News Behind the Graph

The Human Condition 40

• A Home Away From Home?
The UK’s detrimental asylum policy
• PIn the Lead: Kuwait’s Development Fund

A Thousand Words 46
Candid Conversations 48
• US Ambassador James B. Smith
• Jeremy Ben-Ami

Country Brief 54
The Critics 58
The Final Word 62

TM1554_06-07_Contents.indd 7 5/7/10 16:28:52

 • QUOTES OF THE MONTH

Quotes of the Month Images © Getty Images

“Nuclear states “Our goal is not to punish Iran; our

do not allow goal is not to sanction Iran; our goal
others to even is to end any doubts or questions
peacefully use about the purpose of Iran’s nuclear
nuclear energy program, and to prevent Iran from
… They want to obtaining nuclear weapons.”
monopolize science Hilary Clinton discusses US policy towards Iran in
light of the recent sanctions resolution
and technology for themselves to
protect their material interests.”
Mahmoud Ahmadinejad speaking at an Iranian “My task is to rebuild
cultural event at the Shanghai Expo, where he this nation. What
labeled Iran sanctions “worthless”.
I want to tell
voters in the
“The European economy is in the upper house
midst of its deepest and most election is that
widespread recession in the post- our reforms are
war era.” becoming more
Joaquín Almunia, EU commission
concrete,” he said
this evening. “The
“For some countries,
hopes voters had for the
aid is a vital safety
Democratic Party will not end up as
net that saves
a mere dream. They will be realized.
lives every day.
That is what I want people to know.”
UK money Newly appointed Japanese PM Naoto Kan
should be spent
helping the “The government decision will
poorest people make it clear to the world that Israel
in the poorest is acting legally,
countries, with every responsibly, and
penny making a real difference with complete
by giving families the chance of a transparency,”
better future.” Israeli PM Netanyahu on
Development Secretary Andrew Mitchell explains the decision to launch
the UK’s decision to terminate development aid to an inquiry into the Gaza
Russia and China convoy raid

TM1554_08_Quotes of the Month.indd 8 5/7/10 14:46:47

TM1554_09_Ad.indd 9 5/7/10 14:47:08
 • THE ART OF WAR

Blind Spots
to Peace
America’s counterinsurgency
strategy in Afghanistan

It is no coincidence that Afghanistan’s first major

peace conference did not go well. The central
players involved are geared for more war, and all
the incentives point that way. Even the withdrawal
of foreign troops, publicly pointed out by Karzai
as a preliminary and essential condition for peace,
is not going to happen by 2011. The Afghan
president more than anyone else needs the NATO
and US troops to stay.

Michael Hastings

L
ast week, Afghanistan held its first major peace confer-
ence. It didn’t start out well. The Taliban fired a cou-
ple of rockets at the venue in Kabul during President
Hamid Karzai’s opening speech, and a Taliban suicide
bomber blew himself up nearby. Afghan security forces killed
two other suicide bombers; one of Karzai’s guards was severely
injured in the attack. The security breach forced two Afghan gov-
ernment officials out of office: in the wake of the attack, Karzai
accepted the resignations of the interior minister (not coinciden-
tally, a political rival) and the director of national security. In the
end, the three day conference produced around 200 recommen-
dations to put Afghanistan on a path towards peace.
Don’t get your hopes up. The country has been in a nearly
continuous state of war for three decades, and the smart money
is on years more of the same. Sadly, in the aftermath of the
peace conference, these feelings are just confirmed. Despite
its perhaps noble intentions, critics viewed the conference as
a way for the Karzai government to suck yet more aid money
out of the international community. Abdullah Abdullah, the
former presidential candidate and reformer called the whole
thing a “PR exercise.” The conference ended up exposing all
the reasons why a lasting peace appears to be an impossibility,
at least for now. Mainly: the major players don’t really want it.
The incentives are all towards more war.
Karzai’s claims of peace appear particularly dubious. Most
at the conference agreed that as long as there are foreign troops
in Afghanistan, peace will be elusive. Yet Karzai relies on the
NATO forces for both his survival, and his cash. He wants
them there, despite his regular criticisms of them for killing ci-
Image © Getty Images

vilians, which allows him to score political points at home. One

of the 200 recommendations to emerge was to put a timeline
on foreign troops in Afghanistan, which Karzai appeared to
endorse. Yet Karzai really doesn’t want a timeline. The Obama
administration’s attempt at putting even a wishy-washy dead-

10

TM1554_10-17_The Art of War.indd 10 5/7/10 14:53:04

 line on American involvement—Obama said he would start
withdrawing combat troops in July 2011, which he has since
backed away from —sent Karzai’s government into a panic.
Last month, Karzai went to Washington to make sure Obama
wasn’t really serious about leaving in 2011. Karzai was publicly
assured that the troops would be there well past 2011—perhaps
even to the earliest date that Karzai has said he’ll need foreign
troops to stick around, 2024. And though Karzai would like to
see his enemies lay down their arms, US officials privately say
that he’s not keen on giving them any real political power that
could threaten his own.
For America, peace doesn’t appear to be a priority either.
Obama’s strategy—now about one year old—has ensured at least
two or three more years of bloody fighting, with the tripling of
Western forces in Afghanistan to almost 150,000. And while it’s a
favorite talking point of American and Afghan officials to say that
there’s no “military solution” to Afghanistan, only a “political solu-
tion,” the vast majority of our resources are spent on making-war
there. The US State Department tripled the number of civilians
it had in Afghanistan as well—to a paltry 1,000, utterly dwarfed
by the US military’s troops and private contractors. The US is go-
ing to spend about $120 billion in Afghanistan this coming year—
only a fraction of that will be for diplomacy and aid.
Furthermore, while there’s a single military commander of US
and NATO forces—making it easier to command the effort, and
giving his singular voice credibility—there are at least five US
and British diplomatic roles. The latter often seem to be fighting
amongst themselves, trying to figure out who’s in the lead. That
makes each diplomatic voice less credible. Our diplomatic effort,
writes counterinsurgency expert Andrew Exum, has been on an
“ad-hoc” basis. “Politics is the blind spot in America’s counterin-
surgency strategy in Afghanistan,” he wrote in a paper released last
month. If we're blind in politics, then we’re also blind to peace.
Then are the folks the Americans and the Afghan govern-
ment are fighting: the Taliban, in reality an assortment of
home-grown fighters and militant factions, with the occasional
connection to international terrorist networks across the border
in Pakistan. The Taliban’s appetite for peace appears sketchy
at best, especially since almost all the factions have said there
won’t be peace until America leaves. Many have made fighting
their business; other younger fighters take pride in their role as
mujahedeen, and they don’t see any actual incentives for laying
down their arms. Even if the Taliban wanted to quit fighting,
the reception they’ve gotten in the past from Kabul has been
extremely hostile. In 2007, two Western diplomats were ex-
pelled by Karzai’s government for just talking to the Taliban.
Another recommendation that came out of the peace process
was to take Taliban leader Mullah Omar’s name off the US
and UN blacklist—which is something the Americans would
never go for. And since Omar would have to adopt the Afghan
constitution, embrace a Western view on human rights, and
renounce violence, it appears unlikely that he’d bite either.
Which leads us to where we are now, and where we're head-
ed: Afghanistan as a battlefield, where the fighters are gearing
up for more war, not peace.

Michael Hastings – regular contributor to GQ magazine. He recently

returned from a trip to Afghanistan.

This article was first published in The Majalla 22 June 2010

Issue 1554 • July 2010 11

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 • THE ART OF WAR

Fighting Piracy
The Gulf of Aden and the Quest
for Great Power Status

Somali piracy has opened the doors to great power

competition off the Horn of Africa. Military clashes
between the navies present in the waters in and
around the Gulf of Aden are almost unthinkable. In
fact, coordination among them has been remarkably
smooth. Operating independently, they are
obtaining valuable war-like experience far away from
their waters. Maritime power is one of the essential
elements for any country harboring great power
ambitions. The Gulf of Aden is the first scenario
where a new geopolitical game is being played out.

Ramon Pacheco Pardo

P
iracy off the coast of Somalia has become a major
issue. Over 250 attacks on bulk carriers, oil tankers,
fishing vessels and other ships have taken place since
a spike in piracy began in 2007. At least 60 of these
attacks have resulted in successful seizures. Tens of millions of
dollars have been paid in ransom to pirate groups. The dangers
associated to crossing the Gulf of Aden, nicknamed “Pirate
Alley,” have increased premium costs for ship owners. The gulf
is one of the major trade routes in the world, meaning that
expenses related to dealing with this problem translate into
greater costs for the world economy.
A look at the piracy map provided by the International Mari-
time Bureau’s Piracy Reporting Centre reveals the scope of the
problem. Around two thirds of all actual and attempted attacks
on ships have occurred off the coast of Somalia. Therefore, it
is not surprising that all major powers answered a call from the
UN in October 2008 to work jointly to deter piracy, by force if
necessary. The US, China, the EU, Russia, Japan, South Korea
and Australia are using their fleets to fend off the threat from
Somali pirates. In the absence of a proper central government
in Mogadishu, countries around the world have mobilized to
protect their commercial interests.

A look at the piracy map provided

by the International Maritime
Bureau’s Piracy Reporting Centre
reveals the scope of the problem.
Around two thirds of all actual and
Image © Getty Images

attempted attacks on ships have

occurred off the coast of Somalia
12

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 Issue 1554 • July 2010 13

TM1554_10-17_The Art of War.indd 13 5/7/10 14:53:09

 • THE ART OF WAR
Somali piracy has therefore produced a welcomed effect in the
form of cooperation between the navies of powers that never be-
fore had cooperated. However, cooperation between these coun-
tries to defend one of the busiest transport routes in the world
is only one reason why all of them were quick to heed the call
from the UN. Equally important has been the interplay of inter-
ests that make the Gulf of Aden a playing field for competing
great powers seeking to test their influence. For the US, Somali
piracy serves to reinforce its commitment to maintain an active
presence in the region, as well as to underline its position as the
hegemonic maritime power. For China and the EU, their respec-
tive missions to fight piracy represent a new development in their
military strategy. For Russia, it signifies a return to the heyday
of the Soviet days when only the US had a stronger navy. The
waters around the Gulf of Aden have therefore become one of
the first centers in which the battle for influence between exist-
ing, rising and willing great powers is being played. Beyond eco-
nomic considerations, the US, China, the EU and Russia also see
their presence in Pirate Alley in terms of power and prestige.
The Fifth Fleet of the US has been sailing the waters from
the Persian Gulf to the East African coast since 1995. No
other navy can match the overwhelming power of the most
technologically advanced and materially endowed fleet in the
region. Hence, the Bahrain-based Fifth Fleet has been heading
the multinational Combined Task Force (CTF) 151 anti-piracy
force since January 2009. A total of 24 partners, including sev-
eral Arab and Southeast Asian countries, are working together
and making use of the Fifth Fleet’s headquarters in Manama.
CTF-151 could be perceived as an exercise mixing soft and
hard power from the US. On the one hand, Washington allows
third parties to make use of their resources in the region. On
the other hand, it is a demonstration of American naval supe-
riority. No other country can compete with its well-equipped
vessels, surveillance know-how or coordination experience.
Russia’s Pacific Fleet has
remained a constant presence
off the Horn of Africa throughout
the years
The presence of the Chinese fleet in the Gulf of Aden is a
historic event. It marks the first time since the founding of the
People’s Republic of China in 1949 that the country has dis-
patched its navy in a combat mission overseas. Moreover, in
January 2010 China gained approval to co-head Shared Aware-
ness and Deconfliction, or SHADE, the mechanism to provide
coordination to anti-piracy efforts. Chinese warships are also in
charge of permanently patrolling one of the most dangerous
sectors in the Gulf of Aden. Therefore, in less than two years
the Chinese navy has gone from having no recent experience of
deployment overseas to sharing the responsibility for coordinat-
ing what essentially is a war mission. As expected, some Western
policy-makers and analysts have expressed uneasiness at the new
role being played by the Chinese army. For Beijing, its mission
off the Horn of Africa is an expression of its increasing power.
As deputy chief of staff of the navy force of the People's Libera-
tion Army, Xiao Xinnian, puts it, the mission “shows the positive
role of the PLA in maintaining world stability and peace as well
14
TM1554_10-17_The Art of War.indd 14
Pirate Attacks in 2009
as the PLA navy's confidence and capability of handling mul-
tiple security threats and fulfilling diverse military tasks.”
Yet, it is the EU’s new-found readiness to engage in a war
mission that could prove of most interest. It is not surprising
that the US has sought to display its military power, nor that
China harbors the ambition to transform its economic rise into
a greater say in international affairs. However, the EU had
hitherto emphasized its civilian power, distancing itself from
the alleged bruteness of American displays of military power.
Not in this case. Launched in December 2008 to fight piracy
off the coast of Somalia, EUNAVFOR is the first-ever EU-
managed non-peacekeeping operation, as well as the EU’s first-
ever naval mission. EUNAVFOR operates independently from
CTF-151, thus showing the willingness of European leaders to
conduct military operations without relying on the US. In fact,
the EU is one of the co-heads of SHADE. David Miliband,
when he was UK foreign secretary, called for the EU to speak
with a common European voice to become as influential as the
US and China. EUNAVFOR is a step in this direction.
Russia is the other power using its presence in the Gulf of
Aden to announce its renewed military power. Albeit smaller
than during the Soviet era, Russia’s Pacific Fleet has remained a
constant presence off the Horn of Africa throughout the years.
Operating independently from all other navies, the Pacific Fleet
has been one of the most effective in deterring pirate attacks and
freeing seized ships. Following the approval of China’s candida-
ture to co-head SHADE, Moscow now seeks to emulate Beijing
and participate in running an international military operation
for the first time since the fall of the Soviet Union.
Somali piracy has opened the doors to great power competi-
tion off the Horn of Africa. Military clashes between the navies
present in the waters in and around the Gulf of Aden are al-
most unthinkable. In fact, coordination among them has been
remarkably smooth. Somali pirates might have even helped to
increase confidence between military officials of the US, China,
the EU and Russia. However, the last three are benefitting from
their presence off the coast of Somalia to an extent they could
have never imagined. Operating independently, they are obtain-
ing valuable war-like experience far away from their waters.
Maritime power is one of the essential elements for any country
harboring great power ambitions. The Gulf of Aden is the first
scenario where a new geopolitical game is being played out.
Ramon Pacheco Pardo – Researcher in counter-proliferation and East
Asian politics.
This article was first published in The Majalla 27 June 2010
5/7/10 14:53:10
TM1554_15_Ad.indd 15 5/7/10 16:30:50
 • THE ART OF WAR

What’s New in Al-Qaeda’s

Suicide Bombings?
Exploring Al-Qaeda’s unique terror tactics
Suicide bombings as a tactic can be traced back to the early 1980s. If one takes into consideration suicidal
actions in combat that are very similar in nature to suicide bombings, then they can be traced back to the
Second World War, and even to the eighteenth century. However there seems to be something exclusively
characteristic of the suicide bombings carried out by Al-Qaeda and affiliated groups.

Manuel Almeida

L Most experts on the subject seem

ast month in Kabul, a suicide bomber drove a van
full of explosives into a NATO convoy, killing five US
troops, one Canadian soldier, plus 12 civilians. Dis- to agree that the unique nature
sipating doubts about whether Al-Qaeda or the Tali-
ban were behind the attack, the latter claimed responsibility, of Al-Qaeda lies in the highly
even stating in a declaration the quantity of explosives carried
inside the van—750kg.
publicized battle of ideas that
The use of suicide bombings by the Afghan Taliban is rela- the organization and its suicide
tively recent. It derives from the close ideological views and
personal ties, especially at the leadership level, between the Af- bombings are part of
ghan Taliban and Al-Qaeda, reflected in an increasingly simi-
lar modus operandi after 9/11. Although suicide bombings in
Afghanistan during the 1990s were rare or non-existent, Al-
Qaeda used them elsewhere during that decade, namely; the
attacks against the US embassies in Kenya and Tanzania.
Albeit the most notorious suicide bombings are those of Al-
Qaeda, who seek such notoriety, they are not an exclusive feature
of Al-Qaeda and associated groups, nor were they invented by
Al-Qaeda. Among others, Mahdi Hassan from New Statesman
remembers how this tactic can be traced back in time to Sri Lan-
ka’s Tamil Tigers in the 1980s, and prior to that to the Japanese
kamikaze pilots during World War Two. Other famous examples
are the suicide bombings carried out during the Lebanese civil
war against US, French and Israeli forces; an issue of debate as
to whether Hezbollah were involved in these attacks. Yet another
case is the Iran-Iraq war, to which the TV documentary The Cult
of the Suicide Bomber attributes the origin of suicide bombings.
Suicidal actions in combat have been traced further back in
time. At the end of the eighteenth century, John Paul Jones, a
US naval officer known as the “Father of the American navy,”
was hired by Catherine II of Russia to take part in the naval
campaign in the Black Sea against the Turks. In his chronicles,
Jones wrote about how Ottoman captains would set their ships
on fire and sail them towards the Russian ships. With the wood-
en ships loaded with gunpowder for the canons, this meant cer-
tain death for the Ottoman crews.
What then differentiates Al-Qaeda’s suicide bombings from all
the other cases? At first sight, all the examples stated above, includ-
Image © Getty Images

ing the Taliban in Afghanistan, took place in a war context, where-

as Al-Qaeda is not a state actor and thus its terrorist activities can
hardly be framed as war. However, the face of war has changed,
and while the number of inter-state wars has declined substan-
tially, the rise in number and profile of unconventional and intra-

16

TM1554_10-17_The Art of War.indd 16 5/7/10 14:53:12

 state wars is one of the most important features of the post-Cold
War world. The Al-Qaeda leadership certainly believes that it is at
war with the US, plus a few other governments in the West and in
the Middle East. What is more, the whole US reaction to 9/11 was
framed—wrongly—around the expression “The War on Terror”,
and the enemy combatants, i.e. suspect Al-Qaeda members, that
were captured were treated under the laws of war.
Another possible claim to differentiate Al-Qaeda’s suicide
bombings could be that it does not fight for a particular ter-
ritory, whereas all the examples named above, including the
Afghan Taliban case, directly or indirectly involve the struggle
for a specific territory. Again, this does not stand. The World
Islamic Front Statement (1998), probably the most symbolic
statement by Al-Qaeda and affiliated groups to date, clearly
states that striking the West is motivated by grievances caused
by the aggressive presence of foreigners in the Arabian Penin-
sula, in Iraq, and in Jerusalem. This claim is one of Al-Qaeda’s
most important rhetorical weapons.
While the magnitude of the destruction and the number of
civilian victims of Al-Qaeda’s suicide bombings is surely un-
precedented, the indiscriminate targeting of civilians is also not
an exclusive feature of Al-Qaeda and affiliated groups. The
Tamil Tigers carried out numerous such attacks in Sri Lanka
that targeted civilians exclusively, and with high casualty rates.
An indication to what is truly exclusive of Al-Qaeda is given
by its own leaders. In 2005, Ayman al-Zawahiri stated that “We
are in a battle, and more than half of this battle is taking place
Issue 1554 • July 2010
TM1554_10-17_The Art of War.indd 17
in the battlefield of the media…[and we] are in a media battle
for the hearts and minds of our umma.” According to Faisal
Devji, author of Landscapes of the Jihad, contemporary mar-
tyrdom “only achieves meaning by being witnessed by the me-
dia.” Most experts on the subject seem to agree that the unique
nature of Al-Qaeda lies in the highly publicized battle of ideas
that the organization and its suicide bombings are part of.
As Peter Bergen from the New America Foundation wrote
in The New York Times, Al Qaeda today “lives on as an orga-
nization as much virtual as it is real, releasing videotapes and
audiotapes while its members communicate with one another
from untraceable Internet cafes. Truly Al-Qaeda 2.0.” As nihil-
istic or barbarian Al-Qaeda’s suicide bombings might be, they
are a product of our times.
This article was first published in The Majalla 18 June 2010
Dying to Win
In Robert Pape's book Dying to Win: The Strategic
Logic of Suicide Terrorism, the author undertakes
an analysis of suicide terrorism form a strategic,
social and pshycological perspective. Based on a
databased he compiled at the University of Chicago,
the book bases its conclusions on suicide bombings
around the world from 1980-2003, comprising over
400 attacks.
In this critically acclaimed analyisis, Pape argues that
various misrepresentations about suicide terrorists
harm our ability in creating effective counterinsurgency
programs. For one he argues that at the root of
suicide terrorism is nationalism and not religion,
and instead explains that it is an extreme form of
national liberation. “The data show that there is little
connection between suicide terrorism and Islamic
Fundamentalism, or r any one of the world’s religions.
... Rather, what nearly all suicide terrorist attacks have
in common is a specific secular and strategic goal:
to compel modern democracies to withdraw military
forces from territory that the terrorists consider to be
their homeland” (4).
Pape analyzes specifically multiple campaings to
demonstrate that sucide terrorism and religion do not
have a causal relationship. His looks into instances in
Lebanon, Sri Lanka and the Sikhs in Punhap, as well
as the PKK Kurdish party in Turkey, to examine the
role of religion. He notes that “Religion plays a role in
suicide terrorism, but mainly in the context of national
resistance” and not Islam per se but “the dynamics of
religious difference” are what matter (166-67).
Unlike his critics, Pape believes that Islamic terrorists
are not fundamentally against modernity and the
West. Pape on the other hand demonstrates that it
is the West's actions that determine the mobilization
of suicide attacks, and the implications of his finding
could prove extremely effective in undermining the
capacity and willingness of terrorist organizations to
resort to such measures.
17
5/7/10 14:53:15
 • ON POLITICS

Saudi Liberals
Elitist ambitions and the
reality of Saudi society

Saudi Liberals, one of the two competing factions

in Saudi society, remain an understudied group.
The term liberal is relatively new in Saudi parlance,
although there had been earlier occurrences
of secular activism in Saudi Arabia. The liberal
movement was born in opposition to the Sahwa
movement and, for years, it had no clear project of
its own. In the early 2000s, a split occurred between
what can be referred to as social liberals and political
liberals. Today, although claiming to speak for a
“silent majority,” these activists continue to represent
an elite group with no strong connections to society.

Stéphane Lacroix

C
ontemporary Saudi society is usually described as
torn between two competing factions—the Islamists
and the Liberals. Yet, while the first group has been
the subject of numerous studies, the second group
remains paradoxically much more mysterious, in terms of who
those Saudi “liberal” voices are, what their background is and
what they want.
The term liberal is relatively new in Saudi social parlance. By
all accounts, it wasn’t used before the 1990s. This doesn’t mean,
however, that there was no secular activism in Saudi Arabia be-
fore that period. In the wake of World War II, some Saudi stu-
dents who had traveled to Egypt, Lebanon or Iraq for their stud-
ies came back to the Kingdom under the influence of the leftist
and Arab nationalist ideologies that were so popular in the re-
gion. Unintentionally, ARAMCO also played a major role in this
movement of secular politicization, because it hosted Arabs from
all neighboring countries, many of whom were under the influ-
ence of those same ideologies. As a consequence, Marxist, leftist,
Nasserite and Arab nationalist clandestine groups appeared in
Saudi Arabia. It is true that they were confined to the elite, and
never represented a mass movement—and yet, they were seen
as a threat, especially after some of their members attempted a
series of coups against the authorities.
The government reacted strongly against those activists who
had crossed the line, while limiting their potential social base by of-
fering graduates from abroad high-profile jobs in an ever-expand-
ing administration. They were soon found at key positions in the
ministries—to the extent that some of them later, and obviously
after having demonstrated their loyalty, became ministers—and in
some media institutions. As a consequence, from the mid-1970s,
most secular activists maintained a distance from politics. A few of
them, however, became active in a new field, which was developing
quickly at the time: the literary scene. There, they started calling
for the modernization of Saudi literature—a modernization that

18

TM1554_18-25_On Politics.indd 18 5/7/10 15:01:48

 would not only involve form, but also content. Simultaneously, the
critique was directed, implicitly, at Saudi social norms, which they
aimed to liberalize. They were soon joined by a number of novel-
ists, poets and literary critics, the most prominent of whom were
Abdallah Al-Ghadhdhami and Sa‘id Al-Surayhi. An intellectual
trend was born, known as modernism.
Again, this was a development that mainly had to do with a
certain intellectual elite and remained at the surface of society.
At the same time, however, a much deeper-reaching evolution
was taking place in the Kingdom. From the 1960s, the Sahwa
(from Al-Sahwa Al-Islamiyya, the Islamic Awakening), a grass-
roots Islamist movement, had been growing as a result, among
other things, of the influence of the Muslim Brotherhood activ-
ists who had found shelter in Saudi Arabia. The Sahwa’s base
was the educational system, through which it had access to all
layers of society. More importantly, in a conservative society,
the Sahwa’s discourse was well-understood—and well-received.
By the mid-1980s, the Sahwa had reached a critical mass, and
it started seeing the modernists’ monopoly over certain media
outlets, especially the literary supplements of the major Saudi
newspapers, as a provocation. A wide-ranging campaign against
the modernists was organized, and many of them were soon dis-
missed from their positions. The Sahwa, apparently, had won.
In August 1990, the threat of a potential invasion of Saudi Ara-
bia by the Iraqi army, right after the latter had invaded Kuwait,
convinced the Saudi rulers to request the assistance of Western
troops. This prompted a wave of unprecedented debates in the
Kingdom—with demands coming from all sectors of society. The
first individuals to take action were a group of women’s rights ad-
vocates, who organized a spectacular event: In November 1990,
49 women drove cars in the streets of Riyadh, explicitly chal-
lenging the ban imposed on women’s driving. From early 1991,
however, the Sahwa members—who had been outraged by the
women’s demonstration—became the most salient voice in Saudi
society. Through a series of petitions and sermons, they called for
the implementation of their social and political project, which
aimed, among other things, at increasing the control of the reli-
gious establishment over Saudi society, and at giving religious fig-
ures a more prominent role in the political system.
However, both the authorities and the liberals saw the momen-
tum gained by the Sahwa as a threat. The authorities reacted
by silencing the most prominent figures of the Sahwist oppo-
sition, while secular activists of all backgrounds—leftists, com-
munists, modernists, advocates of women’s rights, etc.—started
to coalesce in a group, which, soon after, informally took the
name liberals (libaraliyyun). These liberals had a very simple
program: countering the Sahwa’s project and worldview. This
would remain the main weakness of the Saudi liberal trend for
the years to come: It was born in opposition to the Sahwa, and
had no real—and, even less so, coherent—project of its own. It
is true that, in the 1990s, some brilliant thinkers such as Turki
Al-Hamad attempted to inject intellectual flesh into the liberal
project. But Al-Hamad’s effort was relatively isolated, and many
of those claiming the liberal label didn’t even identify with it.
The weakening of the Sahwa, however, gave the liberal trend a
first impulse: Liberals soon reclaimed the positions that some of
them had earlier occupied in the media, and they re-established
their influence at the elite level. The emergence of salafi-jihadi
terrorism, and the events of September 11th gave liberals a sec-
ond impulse: The fact that 15 of the 19 hijackers were Saudi and

Issue 1554 • July 2010 19

TM1554_18-25_On Politics.indd 19 5/7/10 18:18:54

 • ON POLITICS
the media campaign against the Kingdom in the West opened a
phase of self-introspection in Saudi Arabia. Presenting themselves
as an alternative to the Islamists—while explicitly assimilating
Sahwis and jihadists—the liberals undoubtedly took advantage of
the situation. Another factor played in favor of the liberals; the
emergence of a group of mutahawwilun (literally “those who have
changed”), former Islamists who had become extremely critical of
the Sahwa and other forms of Islamic activism. For the liberals,
these mutahawwilun were a key asset, first because they spoke out
of personal experience, and second because they had a mastery of
the language of Islam that was sorely lacking among the liberals.
While the first group has been the
subject of numerous studies, the
second group remains paradoxically
much more mysterious
This is an important point: in the 1990s, most of the liberals had
no discourse on Islam. They claimed to represent universal values,
and acted as if it were obvious that those values were compatible
with Islam. In the wake of 9/11, and with the help of some of the
mutahawwilun such as Mansur Al-Nuqaidan or Muhammad Al-
Mahmud, the liberals would increasingly attempt to justify their
positions through Islam. This intrusion in a sphere considered
alien to them reinforced the Sahwa’s hostility towards the liberals.
This was especially so when, for instance, Al-Nuqaidan went so
far as to call for a revival of irja’, a medieval group known for its
tolerance of all religious opinions but considered deviant by the
Sahwis, who had spent considerable efforts refuting their ideas.
This gave the liberals an increasing visibility, especially on the
Internet where they established a significant presence. Liberal
forums were created: first, Tuwaa, until 2004, then Dar Al-Nad-
wa, until 2006, and finally, and since then, Minbar Al-Ibda’ wal-
Hiwar and Muntadayatuna Al-Shabaka Al-Libaraliyya. This is
a remarkable development: for the first time, the term liberal is
used here in a formal way, marking the increasing assertiveness
of its proponents. This development coincided with the increas-
ing use of the same term by the liberals’ foes, as in the 2009 book
published by the Sahwis of Al-Bayan magazine under the name
Naqd Al-Libaraliyya (“critique of liberalism”).
However, the increasing visibility of the liberals also exposed their
contradictions. The liberal trend grew out of its opposition to the
Sahwa, but lacked a coherence of its own. Liberals wanted reform,
but they disagreed on what should be reformed, and how. This pro-
duced an important split in the early 2000s, which led to the emer-
gence of two groups, representing two radically distinct options—
those who may be referred to as social liberals and those that I would
refer to as political liberals. For the first group, the main problem
in Saudi Arabia is social and cultural, and what is needed primar-
ily, then, is social and cultural reform. Many of those liberals even
oppose the idea of democratization, because, according to them,
any opening in this direction while society isn’t ready would only
benefit their Islamist foes. They are very loyal to the regime, which
they see as an ally and protector against the influence of the Sahwa.
The political liberals, on the contrary, believe that no change can be
achieved without an all-encompassing effort at political reform. For
them, social and cultural reform is also deeply needed, but it will
not happen if the political issue is not addressed first. To make this
20
TM1554_18-25_On Politics.indd 20
happen, some of those “political liberals” have proven ready to col-
laborate with any other social group, including Islamists, as long as
they agree on common goals.
The resulting Islamo-liberal alliance prompted heated debates
between the different groups of liberals: While the political liber-
als insisted on the fruitfulness of their approach, others, especial-
ly the social liberals, reproached them for becoming tools in the
hands of the Islamists. As Turki Al-Hamad, who may be consid-
ered as part of the social liberal group, once put it in an interview
he gave me, “Those ‘liberals’ are being fooled by the Islamists
the same way Iranian liberals were fooled by Khomeini. The
Islamists claim to be democrats, but if they get to power, they’ll
establish a regime of the kind of what is found in Iran.”
The debate between the different groups of liberals about what
liberalism truly means continues today—as does the debate be-
tween Islamists and liberals on what social and political project to
implement. The latter, however, remains an uneven debate: De-
spite the visibility that the media boom and the post-9/11 context
have provided to the liberals, these activists continue to represent
an elite group, with no strong connections to society. They do
claim to represent the “silent majority”; but, even if this were true,
the main characteristic of the silent majority is precisely that it
remains… silent. In contrast, the Islamists control thousands of in-
stitutions and associations, and are found in every sphere of Saudi
society. In the debate, they are—and will without a doubt continue
to be in the years to come—the strong side.
Stéphane Lacroix - Assistant professor of political science at Sciences Po in
Paris. His work focuses on Islam and politics in the contemporary Middle
East, with a particular focus on the Gulf region.
This article was first published in The Majalla 2 June 2010
Women in Saudi Arabia
During the past few years, reform efforts in Saudi
Arabia have made significant strides in the field of
women's rights. Recent studies show that 40% of
articles in printed and electronic media have tackled
women empowerment through different angles.
King Abdullah has adopted a reformist approach
in supporting the role of women through the
implementation of several intiative. Speaking to this
accomplishment, was the appointment of a woman,
Norah al-Faiz, as deputy minister of education.
Saudi business women have also achieved significant
improvements in the social and religious barriers that
limited the business environment. In response to these
efforts, the governor of Mecca, Prince Khalid Al-Faisal,
has modified the article in the Labor Law which used
to prohibit the interaction of men and women in a
business environment.In addition, feminist activism
has risen significantly led by the “Where are my rights”
campaign that aims at educating women about their
rights and promotes gender equality.
Despite the influence of conservative religious
sheikhs in the Kingdom, growing activism influenced
by the King’s reforms, has created an important and
growing debate within Saudi society.
5/7/10 15:01:52
TM1554_21_Ad.indd 21 5/7/10 15:02:21
 • ON POLITICS
A Law Unto Himself
Ramzan Kadyrov –President of Chechnya
Over the past three years Putin’s man in Grozny has consolidated his power, ruling Chechnya with an
iron fist, and Russian roubles. Between rebuilding the country and terrorizing human rights workers
Ramzan Kadyrov has been making overtures to the country’s Sufi leaders and brandishing his own
credentials as a devout Muslim and former mujahedeen.
A Century of War
1858 Chechnya is conquered by Russia following the
defeat of Imam Shamil's resistance, who had aimed
to establish an Islamic state.
1922 Chechen autonomous region is established.
1944 Stalin deports the entire Chechen and Ingush
populations to Siberia and Central Asia, citing alleged
collaboration with Nazi Germany. Many thousands die
in the process.
1957 Khruschev restores the Chechen-Ingush
Autonomous Soviet Socialist Republic.
1991 Following the collapse of the Soviet Union
Dudayev wins a presidential poll and proclaims
Chechnya independent of Russia.
1994 Russian troops enter Chechnya to defeat the
independence movement.
1995 Chechen rebels seize a hospital in Budennovsk,
southern Russia.
1996 Dudayev is killed in a Russian missile attack.
1996 May - Russian President Boris Yeltsin signs a
short-lived peace agreement with Chechnya.
1996 Chechen rebels attack on Grozny.
1997 Yeltsin and Maskhadov of Chechnya sign a formal
peace treaty, but the issue of Chechen independence is
not resolved. Violence and hostage-taking continues.
1999 Maskhadov imposes Sharia law in Chechnya.
Chechen fighters then stage armed incursions into
Dagestan in an attempt to create an Islamic state.
2000 Russian troops capture Grozny, and President
Putin declares direct rule from Moscow. Putin then
appoints former Chechen cleric Akhmat Kadyrov as
head of its administration in Chechnya.
22
TM1554_18-25_On Politics.indd 22
Filipe Avilez
I
n 2005, Ramzan Kadyrov, the then prime minister of
Chechnya famously declared that the republic was “the
most peaceful place in Russia”, and would soon be “the
wealthiest and most peaceful place” in the world.
Most Chechens would beg to differ, although they might do
so discreetly so as not to invite the same reaction that Kadyrov’s
men allegedly handed down to Zarema Sadulayeva and her
husband. Their bullet riddled bodies were found in the trunk
of a car. Sadulayeva’s crime, it seems, was to run an NGO
called Save the Generation, an organization aimed at helping
the children who had been maimed and traumatized during
the two savage wars which raised, and then brutally dashed,
Chechen hopes for independence.
Kadyrov evidently denies any link to this or other murders,
but international watchdog organizations such as Human
Rights Watch and the Memorial Society have produced long
lists of damning reports. One of Memorial’s main figures in
Chechnya, Natalia Estimarova, was murdered just weeks be-
fore the Sudulayeva killing.
Former allies have been equally critical. Movladi Baisarov,
a fighter who was a close ally of Kadyrov’s father, described
Ramzan as a “medieval tyrant” and ominously claimed that:
“If someone tells the truth about what is going on, it's like sign-
ing one's own death warrant. Ramzan is a law unto himself.”
Baisarov was shot dead in Moscow by Chechen police forces
loyal to Kadyrov, shortly after suggesting he had information
linking Kadyrov to the murder of Anna Politkovskaya, a jour-
nalist who had uncovered many cases of government sanc-
tioned brutality in Chechnya.
The current president of Chechnya seems in two minds as
to what he would have you believe about him, his past and his
involvement. His hasty dismissals of any misconduct smack of
arrogance and sarcasm; he openly mocks such institutions as
democracy and shows no qualms in threatening his, or even
Russia’s perceived enemies, such as Ukraine and Georgia.
So who exactly is Kadyrov, and how did he get where he is? The
easiest answer is that he is Putin’s man. Putin personally placed
him in charge of Chechnya and makes sure he stays there. Kady-
rov admits as much. The man who famously travelled to Moscow
to receive his “Hero of Russia” medal wearing a light blue track-
suit, also describes himself in the following terms: “I am not any-
one’s president; I am not a man of the Russian security services. I
am Putin’s man... Putin is God’s gift, he gave us freedom.”
As long as Putin is in power, therefore, Kadyrov appears to
be safe. Within Chechnya he has little opposition left. Pockets
5/7/10 15:01:52
 of rebels continue to fight for independence, but according
to Wojciech Jagielski, a Polish journalist who is an expert on
the region and author of “Towers of Stone – The Battle of
Wills in Chechnya”, the president’s main threat comes from
other Moscow loyalists who try to manoeuvre influences in
the Kremlin to weaken his hold on Grozny. “It is even pos-
sible that somebody in Moscow, trying to fight Putin, might
overthrow Ramzan Kadyrov just in order to weaken Putin’s
power”, adds Jagielski, who has travelled covertly to the re-
gion several times over the years and has since been black-
listed in all CIS countries.
The fate of these two men is therefore closely intertwined.
As long as Kadyrov maintains peace in Chechnya, Putin can
boast of having put an end to a bloody and exhausting war. In
exchange he seems to be more than willing to funnel in cash
and keep federal interference to a minimum.
Exactly where the money goes is anyone’s guess, but the
country has steadily been rebuilt. This has done more to en-
dear Kadyrov to his countrymen than any personal charm or
charisma: “I do not think they admire him. But I am 100%
sure they are afraid of him. However, they also appreciate
he rebuilt the country with Russian money. The Chechens
always liked and somehow respected leaders who suc-
ceeded in seducing and cheating Russia. No-
body can deny that Grozny and Chechnya
were rebuilt, and normal life restored un-
der Ramzan. But the price was accept-
ing the real tyranny of Ramzan and
his men”, explains Jagielski.
With reconstruction comes pro-
paganda. Giant posters of Kadyrov
cover many of the largest buildings in
Grozny, and the city now boasts one of
the world’s largest mosques.
Kadyrov’s relationship with Islam is
characteristic of his overall personality. The
son of a mufti, who was president of Chechnya
until being blown up in 2004, Ramzan plays the part
of a devout Muslim. One of his first acts as president was to
order Chechen women to wear headscarves, and many non-
Islamic activities have been banned, such as gambling. Ramzan
himself, however, has been filmed cavorting with prostitutes
and owns racehorses.
More than an act of personal piety, it seems that Ramzan is
intent on promoting the indigenous Sufi strands of Sunni Islam,
in order to weaken the Salafi influence which was brought into
the country by foreign mujahedeen: “Of course, these militants
were not interested simply in restoring Chechen national integ-
rity but wanted to "use" Chechnya as battleground for a global
conflict against infidel forces,” explains Paul L. Heck, professor at
Georgetown University and editor of “Sufism and Politics”. “For
this reason,” according to Heck, “in the second Chechen war,
the traditional (Sufi) religious leaders turned against the militant
groups (now including Chechen elements), realizing that it was
in fact better to side with Russia than with Jihadism”.
All over the Muslim world, Sufism and Salafism are engaged
in what this professor terms a low intensity conflict and power
struggle. Being more prone to the idea of a nation-state and
strong government, Sufism, in its many different forms, tends
to be promoted by states over and against Salafism.
Issue 1554 • July 2010
TM1554_18-25_On Politics.indd 23
“Sufi leaders will have to be careful not to appear to be too
close to him, otherwise they will compromise their spiritual au-
thority. If they are intelligent they will cultivate a relationship
discretely,” says Professor Heck. Ramzan’s self-made image of
a pious leader might help bring in cash from Muslim countries,
but it has little to do with the truth.
The tendency to add colourful details to one’s biography is
common among dictators, but with Kadyrov it might not end
with religion. Jagielski claims that the Chechen leader’s warrior
past might not be all that it seems either: “Ramzan was never a
fighter; he never fought the Russians, although now he’s telling
naive Western journalists what a brave mujahid he was.”
This article was first published in the Majalla 14 June 2010
2001 Following 9/11 attacks, Putin urges rebels to
"halt all contacts with international terrorists".
2002 Chechen rebels seize a Moscow theatre and
hold about 800 people hostage. Most of the rebels
and hostages are killed when Russian forces storm
the building.
2003 Chechen referendum votes in favour of a
new constitution stipulating that the republic
is part of the Russian Federation.
2003 Akhmad Kadyrov elected
president. He is killed a year later
following a bomb blast in Grozny.
2004 A school in Beslan, North Ossetia,
is seized by rebels resulting in the death
of hundreds of civilians, mostly children.
2005 Separatist leader Aslan Maskhadov
calls ceasefire and urges the Russian
authorities to agree to peace talks. The official
Chechen leadership dismisses his overtures and says
he should give himself up. He is killed later that year
and his successor, Abdul-Khalim Saydullayev, ends
peace talks with Moscow.
2006 Ramzan Kadyrov becomes prime minister after
Sergey Abramov resigns.
2006 Separatist leader Abdul-Khalim Saydullayev
killed by government forces. He is succeeded by
Dokka Umarov.
2006 Warlord Shamil Basayev is killed in Ingushetia.
2006 Russian journalist Anna Politkovskaya, a fierce
critic of the Kremlin's actions in Chechnya, is killed
in Moscow.
Image © Getty Images
2007 President Alu Alkhanov is moved to a post
in the Russian government by Russian President
Vladimir Putin who names Ramzan Kadyrov as
his successor.
23
5/7/10 15:01:54
 • ON POLITICS

Jan Ken Pon

Obama Takes Down (Wrong) Prime Minister

How is geopolitical power expressed at a global scale? Relations between US, China, Israel and Japan
demonstrate the leverage their respective leaders have and the pressure they can exert over one
another. Netanyahu and Hu Jintao have played their hands best. Obama has been beaten, constrained,
but still has global leverage, and Yukio Hatoyama was constantly on the losing end.

Image © iStockphoto Steve Clemons

U
nwilling to yield international real estate under the
control of the Pentagon, President Barack Obama
has just crushed the political life of Japan Prime
Minister Yukio Hatoyama, who this week resigned
from Japan’s top government job. This is all the more impor-
tant because Hatoyama and the spectacular success of his
Democratic Party of Japan over the long-ruling LDP had an
Obama-like “yes we can” momentum that was giving Japan a
“Democracy 2.0” opportunity.
On the other hand, Israel’s prime minister Benjamin Ne-
tanyahu has been provoking, rebuffing and constraining
Obama. The recent US-Israel collision over expansion of Is-
raeli settlements in East Jerusalem and the provocative Israeli
Defense Force raid that killed 9 and injured scores more on
a politically motivated flotilla of Turkish ships carrying hu-
manitarian supplies to the blockaded Gaza are also tests of
American power and Obama’s resolve. So far, Netanyahu is
clearly winning.
Then on the US-China front, Obama and China’s Hu Jintao
seem to be stalemated, playing jan ken pon over and over and
over again.
“Defining challenges” for leaders and nations are those that
represent the highest stakes wins and most consequential loss-
es. The United States, for example, invested enormous blood
and treasure in triggering change in Iraq and the region and
thus the Middle East today is a self-chosen defining challenge
for the country. For Barack Obama, there were other defining
challenges that he promised to stand by – including closing the
Guantanamo Bay detention facility, “stopping” climate change,
ending the war in Iraq, achieving Israel-Palestine peace and
delivering the opportunity of universal health care coverage to
American citizens.
Yukio Hatoyama also articulated his own defining challeng-
es – including ending bureaucratic control of government
and restoring genuine political leadership, opening up Japan’s
official records of secret deals done with the U.S., enhancing
There is general stalemate
– jan ken pon, jan ken pon –
as they sort out the realities
of emerging Chinese power in
an international system over
which the US is not willing to
forfeit control
the quality of life for average Japanese citizens, closing the
Futenma Marine Corps Air Station in Okinawa, improving
Japan’s position and sovereignty within the US-Japan Secu-
rity Relationship and building stronger relations with China
among other challenges.

24

TM1554_18-25_On Politics.indd 24 5/7/10 15:01:54

 For Netanyahu, the defining challenge has been to simulta-
neously protect Israel’s security interests and expansion in the
Occupied Territories while rallying support to thwart Iran’s
nuclear pretensions.
For Hu Jintao, it has been to incrementally increase China’s
global economic and geostrategic position while maintaining high
economic growth and not destabilizing the country or creating
new costly burdensome international responsibilities for China.
The interactions between these leaders show how power is
deployed and measured, created and destroyed. Netanyahu
and Hu Jintao have played their hands best. Obama has been
beaten, constrained, but still has global leverage, and Yukio
Hatoyama — despite his promise — was constantly on the los-
ing end of jan ken pon.
While the United States and China have been testing each
other from the earliest days of the Obama White House, with
the relationship moving from global economic crisis-focused
harmony to tensions recently over the Dalai Lama, Taiwan
arms sales, and how to deal with Iran, fundamentally the US
and China have moved into a de facto G2 arrangement that
doesn’t necessarily mean that the US and China run the world
but does mean that nearly every major global challenge re-
quires consultation and policy coordination between these two
global behemoths. China can veto America’s global efforts and
the US can veto China’s. So far, there is general stalemate – jan
ken pon, jan ken pon – as they sort out the realities of emerging
Chinese power in an international system over which the US is
not willing to forfeit control.
Obama and Hu Jintao are for the moment tied, which his-
torically speaking, represents a substantial moving up in the
ranks for China and diminished power for the U.S.
When it comes to US-Israel relations, Barack Obama started out
strong, appointed distinguished former US Senator and Northern
Ireland peacemaker George Mitchell to go to work on achieving
the same between Israelis and Palestinians, and indicated that
Arab states would kick in some normalization-tilting gestures with
Israel if Israel would cease all settlement expansion.
Obama’s equation for moving Middle East peace forward was
just too quaint and simple. Even though Israel is completely de-
pendent on American security guarantees and aid and is genu-
inely a client state of the United States, the pugnacious prime
minister of Israel, Benjamin Netanyahu, flamboyantly rebuffed
Issue 1554 • July 2010
TM1554_18-25_On Politics.indd 25
Obama’s call to stop settlements. Obama, with some twisting
and modification of his position, has essentially forfeited the
match to Netanyahu.
During the early part of the John F. Kennedy administra-
tion, Soviet leader Nikita Khrushchev beat Kennedy in similar
challenges and began to doubt Kennedy’s resolve and strategic
temperament – leading to the Cuban Missile Crisis. Today, Ne-
tanyahu has become the Khrushchev of the Obama adminis-
tration – and one wonders if a crisis lies ahead in which Obama
will have to reassert his primacy lest the world think that Israel
runs the United States and the Obama presidency.
The Gaza flotilla strategy is yet another tilt in the direction
towards a high stakes showdown.
But while the Israeli Prime Minister is beating Obama,
Obama has smashed the political viability of the democracy-
revitalizing Japan Prime Minister Yukio Hatoyama.
Hatoyama conceded on a key campaign promise to move
Futenma Marine Air Station off of the heavily US-base cov-
ered island of Okinawa. Now, some minor functions of Fu-
tenma will be transferred off island, but the bulk of the facility
will simply be moved to the northern end of Okinawa.
Barack Obama applied huge pressure on Hatoyama, asking
him personally and sternly, “Can I trust you?” The U.S. Presi-
dent maintained an icy posture towards Hatoyama, hardly com-
municating with him or agreeing to meetings. Hatoyama wilted
in the ice storm. Contrasting this with the warm invitation to for-
mer Prime Minister Taro Aso to be the first official head of gov-
ernment to visit the White House and Secretary of State Hillary
Clinton’s decision to make Tokyo her first foreign destination,
one can see that while America seems unable to muster pressure
to achieve a “win” with Israel, it is more than able to dominate
the leader of a rich nation of 127 million people.
Hatoyama did not survive this rebuke by the United States
and this policy reversal that made him appear dithering and
weak before Japan’s voters. But this isn’t over. Obama’s han-
dling of the Futenma fiasco will have ongoing consequences
— reminding Japan’s citizens that they are not really in control
of their own circumstances, that they are to some degree still
occupied by the US military and unable to tell America “no” in
the matters that the US doesn’t want to accept.
Like Hatoyama, Obama made promises he had to renege on
and couldn’t keep — but he didn’t lose his job over it. Obama
promised to close Guantanamo Bay within one year of his
presidency. This was a major commitment, and the adminis-
tration failed to achieve it. But the US is not a parliamentary
democracy where executive leadership can rise and fall over
a single issue at any moment. Presidents get a time period to
stack up their wins and their losses so that when re-election
comes around, they are measured on a combination of issues.
Japan, despite all of its considerable strengths and what could
have been exciting, visionary new leadership from Hatoyama
and his Democratic Party colleagues, is still a vassal of the
United States – whereas the United States appears more and
more a vassal of Israel’s interests – and on China, we’ll just
have to wait and see how history tilts.
Steve Clemons directs the American Strategy Program at the New America
Foundation and publishes the popular political blog, The Washington Note
This article was first published in the Majalla 14 June 2010
25
5/7/10 15:01:55
 • BEYOND OIL AND SECURITY

After some tensions during the 1990s, the Saudi-

US bilateral relationship suffered an almost
fatal blow with 9/11 and its aftermath. Yet, this
relationship survived, changed and diversified, and
today the formula “oil and security” that was used
to characterize the Saudi-US rapport no longer
makes it justice. Many regional variables will play
into the future definition of Saudi-US ties, among
them the Israeli-Palestinian quagmire and Iran’s
nuclear ambitions.

All images © iStockphoto Caryle Murphy

P
rince Turki Al Faisal holds no official position in the
Saudi government. But as ex-intelligence chief, former
ambassador to Washington and London, and the for-
eign minister's brother, he commands influence. When
he speaks, people listen. Recently, Turki let go a cannon blast at
US policies in the region before an audience of diplomats and
high-powered Saudis. An “inept” US Administration is mess-
ing up in Afghanistan, he said. US Secretary of State Hillary
Clinton's "confusing signals" on nuclear non-proliferation in
the Middle East are "unacceptable." Washington should rec-
ognize a unilaterally-declared Palestinian state if current talks
don't produce a breakthrough by the fall. And by the way, the
prince scolded, the US has lost its moral authority because of
"negligence, ignorance and arrogance."
The all-encompassing, public litany of complaints was not
unusual for Turki, who has never been shy about criticizing
US foreign policies. But some might wonder: Was he talking
about a close ally that Riyadh has had a so-called “special re-
lationship” with for years? Or was he talking about a country
that Saudi Arabia views as a problem to be managed? The an-
swer seems to be 'both.' And Turki's remarks attest to just how
much US-Saudi bilateral relations have changed in the last two
decades due to shifts in the stature of both countries amid a
changing global environment.
Washington's financial woes and soaring debt have cratered
its economic influence around the world. And its often ill-ad-
vised reactions to the 2001 terrorist attacks in New York and
Washington—the occupation of Iraq, the Abu Ghraib prison
scandal, the detention camp at Guantanamo, the use of tor-
ture, and the mishandling of Afghanistan—all have cost the
United States dearly in diplomatic prestige.
Meanwhile, Saudi Arabia's position has been enhanced with
its entry into the World Trade Organization and G-20 club of
economically significant countries. The world's largest petro-
leum producer also rests on a solid economic base, thanks to
several years of high oil prices and conservative fiscal policies.
And despite its own societal challenges, Riyadh has designed
a rehabilitation program for jailed extremists that has drawn
international praise.
The result is a more mature, independent Saudi Arabia that
no longer is a quiet, compliant junior partner of Washington,
making its points only in private and walking lock-step with the
United States on controversial issues. President Barack Obama
discovered this first-hand during his initial encounter with King
Abdullah bin Abdul Aziz a year ago, when the Saudi monarch
rebuffed Obama's request for a Saudi 'gesture' of goodwill to
Israel even before Israeli concessions to the Palestinians. The
decades-old formula of oil-for-security no longer adequately
describes US-Saudi bilateral ties. For sure, these remain impor-
tant. But as the Saudi share of US oil imports has shrunk, and
as Riyadh makes a concerted effort to both diversify its bilateral
relationships and boost the independence of its defense forces,
these foundations have weakened.
Once giant anchors at both ends of a bridge, oil and security
now are more like cornerstones in a multi-layered edifice still un-
der construction. The two nations are bound by a set of shared
concerns and goals. But their partnership is often plagued by dis-
agreements on how to reach those goals. Shall we put a parapet
here? Or would a dormer window be just as good?
David Ottaway, author of The King’s Messenger: Prince Bandar
bin Sultan and America’s Tangled Relationship with Saudi Arabia, has
observed that the two countries “speak of a ‘strategic dialogue,’
a diplomatic term of art that obscures whether the two gov-
ernments think of themselves as friends or foes.” Perhaps the
“special relationship” is now more “normal” than “special.” It
is worth recalling how this came about.
From the Gulf War to 9/11: a not so special relationship
In the early 1990s, the Saudis were recovering from two big
shocks. One was the betrayal of Saddam Hussein. Iraq’s inva-
sion of Kuwait and subsequent menacing of the Saudi king-
dom was regarded by Riyadh as an unfitting response to years
of Saudi financial support to Iraq during its eight-year war
with Iran in the 1980s. The second shock was having to rely

26

TM1554_26-29_Cover Story.indd 26 5/7/10 15:10:33

 Beyond Oil
and Security
The Saudi-US bilateral
relationship in the new age
on foreigners for military
assistance. The Americans
came to help do the job
and demanded to be re-
imbursed for their costs.
In a difficult post-war fi-
nancial environment, the
Saudis struggled to pay
the $16 billion they owed
the Americans, much less
their total war bill of about
$60 billion.
Meanwhile, the common cause
that had bound Riyadh and Washing-
ton for decades, drawing them into jihad
in Afghanistan, had evaporated: The Soviet Union's implosion
made the communist threat a memory. The bilateral warmth
of the Desert Storm years under President George H.W. Bush
was followed by drift during two-term President Bill Clinton.
“By the end of the 1990s, the relationship was sort of on auto-
pilot. There wasn't that much going on,” said Tom Lippman,
author of Inside the Mirage: America’s Fragile Partnership
with Saudi Arabia. But signs of trouble were brewing.
In the second half of the 1900s, Crown Prince Abdullah,
who assumed the country’s foreign files due to King Fahd’s long
illness, was disturbed by US inaction on the Saudis' top re-
gional priority, the Israeli-Palestinian conflict. Clinton's failure
to address this issue until too late in his presidency, followed
by President George W. Bush's pro-Israeli stance, brought rela-
tions to a low point. But the lowest was still to come.

Issue 1554 • July 2010 27

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 • BEYOND OIL AND SECURITY

US Crude Oil Imports (Top 15 Countries)

(Thousand Barrels per Day)
Country Apr-10 Mar-10 YTD 2010 Apr-09 YTD 2009
CANADA 1,883 2,020 1,921 1,854 1,889
SAUDI ARABIA 1,245 1,149 1,061 1,021 1,101

MEXICO 1,134 1,086 1,063 1,177 1,196

NIGERIA 1,092 939 982 673 623
VENEZUELA 851 984 894 803 973
ANGOLA 508 490 396 450 572
IRAQ 490 475 502 479 548
COLOMBIA 364 216 309 320 257
ALGERIA 292 276 295 398 281
BRAZIL 289 299 264 269 341
RUSSIA 288 248 221 390 227
KUWAIT 278 218 196 105 190
ECUADOR 179 183 181 236 240
UNITED KINGDOM 137 142 167 294 116
CONGO (BRAZZAVILLE) 116 124 90 35 42

Source: US Energy Information Administration

The discovery that 15 of the 19 terrorist hijackers on Sep-
tember 11, 2001 were Saudi nationals—and the Saudi public
refusal to formally acknowledge this for almost a year—sent the
bilateral relationship into a nosedive. Hostility to everything
Saudi became rampant among Americans and the US media.
US visas that had been easy to get now required months-long,
pain-staking procedures. Saudis were often mistreated by im-
migration officials at US airports. Saudi businessmen, students
and tourists shifted to Europe and Asia.
“A lot of people thought Saudis had become the new ter-
rorists on the block,” said Saleh Al Mani, who holds the King
Faisal Chair for International Studies at King Saud University.
The attacks “turned out to be a real turning point in the rela-
tionship,” said Ottaway, “Americans had never really focused
on Saudi Arabia except as our gas tank.”
The Saudis were equally shocked to find Americans turning
against them. But it was not until they had their own 9/11, when
terrorist bombings in Riyadh and Dammam killed scores of ci-
vilians in 2003 and 2004, that the Saudi society began a serious
debate about domestic causes of radicalization. This was also ac-
companied by accelerated Saudi cooperation with US counter-
terrorism efforts and the bilateral relationship began to regain its
balance. “We also became victimized by terrorism [and] somehow
this realization sets in that there was a common enemy of the two
countries,” said Al Mani. But another breech was forming.
From the kingdom's perspective, Washington's misguided
and mangled occupation of Iraq, which Riyadh had strenu-
ously opposed, and which King Abdullah once described as
“illegal,” had disastrous consequences. Namely, a distracted
United States failed to finish its job in Afghanistan, allowed
the Israeli-Palestinian conflict to fester, gave Iran a foothold in
Iraq, and generated an historic shift in Sunni-Shiite political
competition that has fueled sectarian conflict. The Bush ad-
ministration's post-invasion calls for democratic change in the
Middle East increased Saudi discomfort.
Awadh al Badi, a scholar at the King Faisal Center for Re-
search and Islamic Studies, recalled that the US occupation of
Iraq undercut Saudi perceptions of the United States as “an
ideal and principled country.” For many, it was no longer “nec-
essarily [true] that all that comes from the United States is good
… That everything the United States wants from you is with a
warm and good heart.”
Recovering from 9/11 and its aftermath
Today, the US-Saudi relationship is recovering from its post-
9/11 crash. One indication is the shorter lines outside the US
Embassy in Riyadh because Washington has improved its visa
delivery system. The long waits that Saudis used to have are
mostly over, and US ambassador James B. Smith predicts that
at current rates, a record number of Saudis will get US visas
this year. Students are setting another record. Thanks to King
Abdullah's scholarship program, about 25,000 Saudis are pur-
suing degrees in the United States. This is an all-time high, and
well above the 3,000 during the years right after 9/11.
There also has been progress on counter-terrorism coopera-
tion. Some minor parts of the Saudi population still express
support for extremist ideas, and it took the kingdom's most
senior religious body until May of this year to declare terror
financing a violation of Islamic law. Nevertheless, intelligence
officials on both sides now routinely share information. In addi-
tion, the Saudi government has put controls in place to stop the
unfettered flow of financial support to extremist groups from
Saudi individuals and charities.
On a recent visit here, Assistant Secretary of State for
Near Eastern Affairs Jeffrey Feltman told local reporters that
Saudi Arabia has "worked tirelessly to fight terrorism and

28

TM1554_26-29_Cover Story.indd 28 5/7/10 15:10:37

 extremism on the international level” and has
“very effective programs in this regard.”
“There’s no doubt the atmospherics are
better under Obama than they were
under Bush,” observed Lippman.
Despite the improvements,
however, the bilateral relationship
is decidedly different than in the
past. For one, the United States
now consistently buys more
oil from Canada, Mex-
ico and Venezuela than
from Saudi Arabia, and
in 2009, imports from the
kingdom were about 989,000
barrels a day as opposed to 1.5 million barrels a day in 2008. This
was due in large part to the economic downturn, but also to an
important shift in Saudi sales: Increasingly, it sees China and India
as its growth markets.
The second pillar of the former U.S.-Saudi relationship has
also changed. The US military runs training programs for the
Saudi National Guard, and the Ministry of Interior’s new
35,000-member force to protect oil installations. But their over-
all presence in the kingdom is greatly reduced and much less
high-profile than in the past, partly to avoid appearances that
the kingdom is dependent for security on the United States. It
was noteworthy that there appeared to be little or no overt US
assistance to Saudi defense forces during last year’s campaign
to oust Yemeni rebels from Saudi territory. In addition, there
are no announced major US military sales in the works. The
Saudis are buying their newest fighter jets from the Europe-
ans. There have been persistent reports of negotiations with
the Russians to purchase tanks, helicopters and missile defense
systems. And a multimillion dollar security fence on the Iraqi
border is being built by a European firm.
Diversification is also the watchword in diplomatic and trade
ties. King Abdullah “has always been concerned about putting
all the eggs in the American basket,” said Rachel Bronson, au-
thor of Thicker than Oil: America's Uneasy Partnership with
Saudi Arabia, and a vice president at the Chicago Council on
Global Affairs. “He found that very unhealthy and I think he
was probably right about that.” As a result, Saudi Arabia is
nurturing bilateral ties with such countries as Turkey, India,
Russia and China. This has led to a more competitive business
environment within the kingdom in which the United States
has lost market share. Back in 2000, US exports to the kingdom
made up 19.7 percent of total Saudi imports. By 2007, they
were down to 13.5 percent.
Despite this slump, Saudi and American business commu-
nities remain bullish on each other judging from the recent,
first-ever US-Saudi Business Opportunities Forum in Chicago,
which drew more attendees than anticipated. And trade is only
a part of the economic equation between the two countries.
The kingdom, a long-time moderate voice within OPEC, has
put a large share of its revenue surplus into US Treasury bonds.
And it has shored up the US dollar in these difficult economic
times by keeping the Saudi riyal pegged to the US currency.
As a result, the two countries more than ever have a common
interest in seeing the US economy regain its footing.
Issue 1554 • July 2010
TM1554_26-29_Cover Story.indd 29
A brighter future based on shared interests?
Looking ahead, Professor Al Mani sees Saudi-US bilateral ties
a decade from now resting on a much broader base. “The rela-
tionship of the past was based mainly on oil,” he said. “I think
the relationship in the future will have to be based on knowl-
edge, on investments, on trade, on human interaction.” His vi-
sion, however, raises the question of whether the two peoples
want to have as close ties with each other as their governments
do. It is a question that policy-makers need to explore.
Meanwhile, their major task will be to find common ground
for cooperation in order to resolve some of the huge problems
of the region. These include the Israeli-Palestinian conflict,
creating stable regimes in Afghanistan, Pakistan and Iraq, as
well as dealing with Iran's pursuit of a nuclear-weapons ca-
pability. On all these matters, Washington and Riyadh have
similar, though not exactly the same views. The disagreements
that ensue will require adroit management by both sides. For
example, The Saudis would be happy to see tough economic
sanctions on Iran but don't believe that will stop Tehran from
obtaining a nuclear weapon. That event is the Saudi top con-
cern, for it would not only boost Tehran’s hegemonic ambitions
in the Gulf, but also force Riyadh to make tough choices: Do
we get our own matching bomb or not?
Likewise, a military strike by the US or Israel on Iran would
mean the end of the Saudi peace initiative because it would surely
provoke Iranian retaliation on the GCC countries and a likely war
in Gulf. That also would frustrate the GCC countries’ attempts to
reduce its dependence on the US security umbrella. Because of
these dire possibilities, Washington and Riyadh should give prior-
ity to “forging a common policy on Iran,” said Lippman. “On the
day that the Iranians announce they've tested [a weapon] then
who does what? Who is responsible for what after that? Finding an
answer to that question is the biggest challenge.”
Caryle Murphy – an independent journalist based in Riyadh and Pulitzer Prize
Winner in Journalism in 1991. She is the author of “Passion for Islam.”
This article was first published in the Majalla 11 June 2010
29
5/7/10 15:10:38
 • THE WEALTH OF NATIONS
Return of the King?
The state of gold markets
Although historically, gold was seen as a safe asset for much of the post-Bretton Woods era, it had a
rather lackluster performance compared with the growing stock markets, booming real estate prices and
hard-charging new derivatives. However, over the past three years, gold has re-emerged as a safe haven
for investors. The memories of the economic debacle, seared in the minds of investors, are very likely to
preserve a place for gold-backed assets in the foreseeable future.
I
t has now been almost 40 years since Richard Nixon
dethroned gold and put the world on a dollar-based fiat
currency. With the ongoing economic crisis and fear of
further chaos in the world financial system, the traditional
king of the monetary system is back. Historically, gold was seen
as a safe asset compared to paper assets such as stocks, bonds
and fiat money. The proliferation of exotic paper (and electron-
ic) financial instruments in recent decades contrasted with the
steady persistence of a stable quantity of physical gold in the
world. For much of the post-Bretton Woods era, gold had lack-
luster performance compared with the growing stock markets,
booming real estate prices and hard-charging new derivatives.
Private investors shunned gold and even staid central bankers,
usually the epitome of long-term, conservative thinking began
to off-load gold reserves in pursuit of the higher performance
of interest-bearing assets. However, over the past three years,
gold has re-emerged as a safe haven for investors. Its recent
return to prominence has arrested three decades of declining
gold prices, reversed central bank sell-offs and revitalized the
investment niche of the gold market. The gold price, which
had been pressing upwards since 2005, has surged and is cur-
rently over $1,200 per ounce.
Some major shifts in the sources of both gold demand and sup-
ply have underpinned these changing prospects. The real revolu-
tion has occurred on the demand side where jewelry’s traditional
dominant role has eroded in the face of the economic crisis and
gold as an investment has reappeared (Figure 1). Jewelry, typi-
cally near 80 percent of gold demand into the early 2000s, was
down to just over 50 percent of gold demand in 2009. While the
high price of gold has kept the value of the jewelry sector high—
at around $54 billion it is the second highest annual total ever
and up from $29 billion in 2000—the 1,747 tons of gold used
for jewelry in 2009 is down nearly 50 percent from the 3,204 tons
used for this purpose in the year 2000. In contrast, the demand
for gold for investment purposes has soared in the wake of the
creation of Exchange-Traded-Funds (ETFs) beginning in 2002.
Now, investment gold constitutes 38 percent of gold demand, up
from a mere 4 percent in 2000.
These demand changes have had consequences on the supply
side of the gold market (Figure 2). The supply of gold typically
comes primarily from mining, recycling of existing gold and of-
ficial sector sales. Mine production is an extremely capital-inten-
sive process, often involving the removal of a ton of dirt from
deep underground in order to obtain a single ounce of gold.
30
TM1554_30-38_The Wealth of Nations.indd 30
Dr Mark Duckenfield
As the gold price has risen, mines have become more profitable
and production has picked up modestly. Still, given the long lead
times in bringing new mines on-line, total mine-supplied gold
has only fluctuated around 2,000-2,200 tons per annum in the
past several years. With a rising gold price, public sector gold
sales have tapered off with net gold purchases over the past three
quarters as opposed to typical annual sales of over 400 tons in
previous years. With the retreat of official sector sales, the oth-
er big movement, and the one most visible on the street, is the
growth in recycled gold. So-called scrap gold melted down from
pre-existing jewelry and other sources has risen from 23 percent
of gold supply in 2002 to 40 percent last year.
What do these trends bode for the future? On the demand
side, the growth of the Indian and Chinese middle classes with
their traditional attachment to gold continues to support both
the jewelry and investment demand; this has compensated for
a slackening of interest in ornamental gold in the developed
economies. Gold as an investment though appears to have es-
tablished itself as a major, and probably permanent, market. A
return to a more placid international economic environment
will surely lead to a re-balancing of portfolios and a decline in
gold holdings. However, many investors who had never previ-
ously considered gold a viable hedging option will now have
experience with gold as a counter-cyclical investment. That the
gold investment market in 2009 had demand for $40 billion
in gold-related investments is testament to both its desirability
and success. In terms of supply, the situation is more limited.
Current gold mines are fairly stable and the current economic
climate has reminded central bankers of the monetary advan-
tages of holding gold. How much gold can be disgorged from
people’s private holdings and from industrial scrap is uncertain,
but it will be highly contingent on high gold prices and the gen-
eral state of the world economy. Economic calamity brought
gold back, and the memories of that catastrophe, seared in the
minds of investors, will preserve a place for gold-backed assets
in the future.
Dr Mark Duckenfield - professor of International Political Economy at the
US Air War College, Maxwell Air Force Base.
The views expressed in this article are those of the author and not necessarily
those of the U.S. Air War College or the Department of Defense.
This article was first published in the Majalla 7 June 2010
5/7/10 15:25:16
 Gold To Go
Thomas Geissler is the German entrepreneur who
came up with the idea of the “gold to go” vending
machines. Built to function similarly to ordinary
vending machines, “gold to go” provides branded
gold plates and small gold gifts in exchange for
cash. The machine's computer software provides
gold price updates every 10 minutes in order to
cope with the international price fluctuations. Having
been initially tested in Germany in addition to other
European countries, “gold to go” has marked its
Middle Eastern debut at the Emirates Palace Hotel in
Abu Dhabi last May.
Geissler, who has become renowned for benefiting
from the credit crunch through this new idea, has
admitted that these machines have been created to
provide refuge to people who are dissatisfied with the
financial system. "People don't trust the banks and
Image © iStockphoto

they don't believe the Government's experiment with

its finances will be successful, they want to put some of
their wealth into a safe haven," said Geissler upon the
introduction of “gold to go” in 2009.

Issue 1554 • July 2010 31

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 • THE WEALTH OF NATIONS

The Crumbling of
Global Solidarity
Fixing global financial imbalances

If there was a clear signal sent by world leaders at the first G20 meeting in April 2009, it was that the global
economic crisis could only be solved through a coordinated response from the major world capitals.
This “going it together,” however, was quickly to unravel and was replaced by the usual “going it alone”
epitomized by increasingly uncoordinated moves in fiscal policymaking and financial regulatory proposals.
The failure of this common front is even more troublesome when one realizes that the very global
imbalances that triggered the crisis were left broadly unaddressed. While these attitudes remain politically
understandable, they are nonetheless disquieting for the future of the world economy.

Image © iStockphoto Guy de Jonquières

32

TM1554_30-38_The Wealth of Nations.indd 32 5/7/10 15:25:20

 W
hen Group of 20 leaders met in London in
April last year in the teeth of the global eco-
nomic crisis, they displayed impressive common
purpose, pledging rapid and concerted stimulus
measures to combat the downturn. Their growth revival poli-
cies worked – for a while. But barely one year later, and with
turmoil in the eurozone threatening to spread more widely, in-
ternational solidarity is crumbling.
In June 2010, G20 finance ministers abruptly reversed their
previous stance, calling for decisive action to trim budget defi-
cits. But their joint declaration could not disguise deep differ-
ences between them, with the US insisting that keeping growth
up mattered more than getting deficits down while the recovery
remained fragile. Worse still, there was no agreement on which
countries should cut by how much or when.
Since then, fear that credit markets will balk at rising levels
of sovereign debt has spurred much of Europe and Japan to
set about cutting spending and raising taxes in earnest. The
markets’ behavior so far suggests that, for most countries, the
threat remains more imagined than real. But their gadarene
rush for the exit risks turning the economic turnaround into
a double-dip recession – a danger of which the World Bank
warned last month.
It is extremely unclear how far the recovery is underpinned
by real private demand, as opposed to government pump-
priming. Hasty, uncoordinated, fiscal retrenchment would be
self-defeating if it ended up undermining growth. That would
further depress tax revenues and increase pressures on spend-
ing, prompting demands for still deeper cuts that could usher in
deflation and stagnation.
Far from placating the markets, that prospect could unnerve
them further. Indeed, when Fitch, a credit rating agency, down-
graded Spain’s sovereign rating recently, it gave as one reason
concern that deteriorating growth would make harder the ur-
gent task of reducing private and external debt.
G20 governments are not just divided over fiscal policy. They
are also increasingly going it alone on financial market regu-
lation. The US has ploughed ahead with its own legislation,
while the European Union plans a levy on banks and tighter
controls on hedge funds and Germany pursues a widely criti-
cized unilateral ban on “naked” short-selling. It does not help
that many of those measures appear designed with an eye more
to impressing public opinion at home than to seriously
reducing systemic risk.
But globally inconsistent macro-eco-
nomic policies remain the biggest worry.
Economies such as China, Germany and
Japan are looking to increased exports
to offset the impact of policy tightening
on demand at home. Pushed too far, that
could trigger a protectionist backlash and beggar-my-neighbor
policies elsewhere. It would also deepen the plight of weaker,
debt-laden economies, for which exports offer the only hope of
growth and especially of struggling eurozone members such as
Greece, Spain and Ireland, for which a declin-
ing euro offers no help in competing against
Germany’s hyper-efficient exporters.
That argues against hasty withdrawal
of stimulus in larger and stronger econ-
omies. But sustained recovery depends on
Issue 1554 • July 2010
TM1554_30-38_The Wealth of Nations.indd 33
more than just better coordination of cyclical and regulatory
policies. Without effective action to attack deep-seated struc-
tural distortions, economic and financial instability is likely to
recur and become more acute.
Those distortions are rooted in differences in national sav-
ings rates that are mirrored in persistent current account sur-
pluses and deficits. For most of the past 20 years, excess savings
in surplus countries, notably China, Germany and Japan, have
financed excess consumption in deficit economies such as the US
and Britain. By flooding the world with abundant ultra-cheap
capital, those savings contributed to the reckless western lending
and financial market practices that detonated the current crisis.
True, since the crisis, savings rates have risen in deficit
countries, while trade surpluses shrank in several big surplus
nations. But the changes may prove only temporary: China’s
trade surplus rebounded in May, while the US deficit has re-
cently widened.
Tackling these global imbalances calls for action on both
sides of the ledger: higher savings and productive investment
in deficit countries; increased reliance on domestic demand, es-
pecially from consumption, in the surplus economies. That will
be achieved, not by some magic bullet, but by often politically
difficult measures that vary between countries.
Their gadarene rush for the
exit risks turning the economic
turnaround into a double-dip
recession – a danger of which the
World Bank warned last month
In deficit economies, it will mean popular acceptance of
lower living standards for some while, along with changes in
incentives, regulation and tax policies. In surplus nations, the
solutions include structural reforms that unlock new sources of
domestic demand and, in China, greater currency flexibility,
steady relaxation of capital controls, modernization of the fi-
nancial system, improved social security and measures to cut
corporate and government savings.
This is a vast agenda, which amounts to the basic re-engi-
neering of established economic models. It is also one on which
international consensus remains distinctly lacking. No Ameri-
can politician is prepared to call an end to the American dream
of steadily rising consumption and living standards. Equally,
Germany continues stoutly to defend both its vocation as an
exporter and the virtues of fiscal stringency, while China flatly
refuses to acknowledge that its policies might have helped sow
the seeds of the crisis.
Such attitudes are politically understandable and enjoy pop-
ular support at home. But unless governments can rise above
them and start facing up to their responsibilities, efforts at se-
rious global policy coordination will remain severely handi-
capped. The whole world can only be the poorer for that.
Guy de Jonquières - Senior fellow at the European Centre for International
Political Economy. He previously worked for The Financial Times
This article was first pubished in The Majalla 27 June 2010
33
5/7/10 15:25:21
 • THE WEALTH OF NATIONS
The Quest for Talent
How can the GCC compete with the demand for global talent?
One of the main challenges for the Gulf region in the near future will be how to continue to attract skilled
workers. The emergence of the BRICs economies has not only restricted the supply of skilled labour (as
many potential migrants decide to stay home), but it has also increased the international competition for
skilled labour. A clear solution to this conundrum lies in the restructuring of payment packages offered to
expatriate workers in the region.
T
he Middle East has emerged from the recent global
economic crisis in better shape than most other re-
gions. It successfully maintained positive economic
output throughout the crisis (driven mainly by oil
exports), and is expected to sustain even higher growth in 2010.
Despite this relatively positive performance, the recession and
the subsequent recovery have highlighted the region’s ongoing
struggle to attract and retain global talent.
Historically, the region has focused on attracting two types of
foreign employees: Western and Eastern expatriates. As a gen-
eral rule, Western expatriates migrate from the US and Europe
attracted by high salaries, low (or no) taxes and the payment
of expenses such as schooling and flights. They typically arrive
and depart on a three to five year cycle. Eastern expatriates
from countries such as India, on the other hand, are typically
drawn by a far more basic package, but one that is still substan-
tially more advantageous than what they could earn at home.
Around 87 percent of employees in
the UAE are foreigners, 69 percent
in Kuwait and 51 percent in Bahrain
This simple but hitherto efficient model has been put under
growing pressure in recent years by the rapid emergence of the
BRICs economies and the consequent rise in the competition for
global talent. Traditional employee feeder countries, such as In-
dia, have seen their economies blossom, leading to an expansion
of the domestic demand for skilled labour and higher salaries.
In this context, the appeal of the GCC model has in many cases
faded relative to the option of remaining at home. Furthermore,
the discovery of more oil in Brazil is also bound to increase the
worldwide demand for oil industry skilled workers, a segment of
the global labour market in which the GCC is heavily reliant.
But why is the loss of these expatriate employees a problem?
The numbers alone are staggering: around 87 percent of em-
ployees in the UAE are foreigners, 69 percent in Kuwait and 51
percent in Bahrain. Only in Oman and Saudi Arabia do local
workers exceed the number of expatriates in the labour force. In
this context, and in an economy looking to grow on a long-term
basis, a reduction in the skilled workforce could be disastrous.
The solution to this issue can be broken down into two key
elements: how the Gulf region can continue to attract talent,
and, once this is achieved, how the region can retain it.
34
TM1554_30-38_The Wealth of Nations.indd 34
Julian Gardner
Even if traditional elements such as pay and allowances still
play an important role in attracting talent, in an increasingly
global labour market, the GCC can no longer expect to differ-
entiate itself from its competitors by these sole means. One of
the key strategies rapidly gaining acceptance in the region is the
move from a short term to a longer term (or even permanent)
employment plan, where the central factor of appeal to an em-
ployee is the prospect of a successful career path. In practice,
this approach requires a number of changes to the structure of
employment packages proposed by employers.
Firstly, companies should move from activity-specific allow-
ances (such as school fees) towards a more “Western” flexible
benefits model where employees select how and where pooled
allowances are allocated. Secondly, RBC Corporate Employee
& Executive Services (RBC cees) and other industry providers
have seen a dramatic increase in the demand for longer term
benefits such as retirement plans.
While according to the Mercer 2008 GCC Benefits Survey
only 8 percent of UAE companies offered retirement plans to
employees, the same survey in 2009 shows that not only did
these figures reach 30 percent, but also that 65 percent of UAE
companies were seriously considering the introduction of such
plans. Until now, the typical nature of these plans has been
what is called “Defined Contribution” plans, in which employ-
ees are given a range of investment options, and often the abil-
ity to make personal contributions.
Notwithstanding the clear strategic benefits that longer em-
ployment focus could bring to the region, this approach is not
without problems. As highlighted by the recent economic crisis,
longer term employment focus could significantly increase End-
of-Service-Payments in case of mass redundancies. Recent crisis-
related lay-offs in the region have epitomized the cash flow issues
that can arise when gratuity liabilities are left unfunded. As lon-
ger term employment is set to increase, turnover rates fall, and
salaries rise, this type of liability is only bound to spiral. Accord-
ing to Towers Watson’s End of service benefit liabilities in the
GCC 2009 survey, in Saudi Arabia alone such liabilities could
jump from $7 billion today to $40 billion by 2020. Funding is
therefore necessary if this strategy is to pay off in the long-run.
Given that the recruitment and training costs for an employ-
ee are a substantial investment, it is in every company’s best
interest to retain a newly recruited talent. To achieve this there
are two different approaches which are often used in tandem:
the alignment of executive remuneration on performance,
5/7/10 15:25:21
 Attracting Capital to Saudi Arabia
Saudi Arabia is positioning itself well in the global economy.
It opened its stock market to foreign investors in 2008
and thanks to strong macroeconomic fundamentals and
highly positive demographics, it is becoming an increasingly
attractive place to invest in.
The government’s $400 billion stimulus package, the
largest as share of GDP among G-20 countries, and
exceptional financial measures have led to a strong
economic recovery. Banque Saudi Fransi, one of the
country’s leading financial services providers, predicts a
growth rate of 3.9%, up from 0.15% last year. It further
predicts an inflation rate of 4.7% and a current account
surplus of 77% for this year. Moreover, oil prices at
over $70 a barrel enable the government to keep
spending aggressively and still generate a significant
fiscal surplus. Thanks to higher output and oil prices
the Saudi Arabian Monetary Agency, the country’s
central bank, was also able to bring its foreign asset
holdings back to a pre crisis level. This strengthens the
government’s commitment to a fixed exchange rate and
keeps currency risk down. Yet, while these numbers
draw a bright picture of the overall state of the Saudi
economy the question remains what to invest in?
The kingdom’s fate is still strongly dependent on oil. The
petroleum sector accounts for 45% of GDP and 90% of
exports. Major investment projects like the Aramco-Dow
Jubail petrochemical project or the Yanbu refinery show
that Saudi Arabia has great potential to not merely export
crude oil but to process it, adding substantial value to the
economy. As petroleum is likely to remain the basis of
many industrial products for years to come, this provides
very promising prospects on long term economic
growth. However, while the country’s main potential lies
in the development of the petrochemical industry, the
government is actively trying to diversify the economy.
This is an important measure if Saudi Arabia wants to
become less vulnerable to shocks in the global demand
for oil. These measures would also create employment
opportunities for their rapidly growing population.
There are two factors besides the oil wealth that
could make Saudi Arabia an interesting place for
international investors.
and the use of deferred compensation. The move towards
performance-based compensation schemes is evident from the
increased share of bonuses in total compensation packages.
In the American and European financial services industries,
allocated bonuses are typically deferred as part of the initial
contract. The bonus may either be invested for the employee
in company shares, or the employee may be given investment
control. Generally, bonuses are tied up for three years, with the
employee forfeiting it if they leave within the period. After a
few years bonuses will roll on an annual basis, but there will
always be the incentive to the employee to stay for the next vest-
ing, year on year. Such a scheme could considerably increase
the ability of the region to retain skilled workers.
Issue 1554 • July 2010
TM1554_30-38_The Wealth of Nations.indd 35
One is the government’s intent to improve the
infrastructure of the Arabian Peninsula’s largest
state. Large infrastructure projects such as the Al
Haramin high speed rail, a 444 km intercity rail system
connecting Mecca and Medina, and investments in the
Median Airport and King Abdul Aziz International Airport
offer great opportunities for the infrastructure sector and
boost employment.
The second argument to invest in Saudi Arabia—
and at the same time the biggest economic
challenge the government faces—is the country’s
demographics. 38% of Saudi Arabia’s population
are under the age of 15 compared to 30% in India
and 18% in China. The strong population growth
is great news for consumer facing companies as
domestic consumption is bound to rise significantly.
As Saudi teenagers grow up they will want to have
cars, phones and cosmetics, making Saudi Arabia
a good place for companies that provide essential
and discretionary consumption goods to invest in.
Domestic demand further decreases the country’s
dependence on the global demand for oil.
On the other hand the Saudi government will have
to make sure that this new generation entering the
work force will be able to find employment. The
strong, oil fuelled, welfare state made many Saudis
reluctant to work in the private sectors. But as
unemployment rises and many Saudis struggle to
maintain their living standard, the government has to
try hard to encourage private sector jobs. The other
demographic challenge will be to further integrate
women into the work force.
With the economic climate in Europe and the United
States getting colder, investors are moving south to find
new investment opportunities. As it opens up its markets,
Saudi Arabia’s oil wealth and favourable demographics
are likely to attract more and more international capital. To
definitely put the country on the emerging markets map,
the government needs to continue its path of economic
reform. Encouraging private sector activities, modernizing
the financial system and creating jobs will be essential
Image © iStockphoto
if the Saudi lion wants to keep up with the dragons and
tigers out there.
Joel Schoppig
To conclude, although the points discussed here form the
“human capital” planning basis to recruit and retain talent, an-
other key element to increase the competitiveness of the Gulf
region in world labour markets is the corporate governance
practices of the companies themselves. To compete on the
global stage the GCC must continue to adopt formal and trans-
parent policies for remuneration as this will act as a beacon of
credibility in a competitive market. But this is another story.
Julian Gardner - a Geneva based EMEA Director of the Royal Bank of
Canada Corporate Employee & Executive Services
This article was first published in The Majalla 17 June 2010
35
5/7/10 15:25:27
 • THE WEALTH OF NATIONS

Save Money as you Save the Planet

Mitigating climate change

As politicians prepare for the next UN Framework Convention on Climate Change, they will soon learn
that the investments they are pressed to commit to “green” their economies and mitigate climate
change have been left largely unfunded by the latest global economic crisis. This, however, does
not necessarily bode ill for the future of the planet. Cheaper and more efficient strategies are readily
available to be implemented if governments stop bickering about details and are ready to take serious
commitments to tackle global warming.

Valentin Zahrnt

1
percent of global GDP is the price tag that researcher
Nicholas Stern famously put on the level of investment
necessary to fight climate change. That was in 2006.
By 2008, he had doubled the figure. Whatever the true
costs are, climate change mitigation is bound to be expensive.
And this is only part of the story, since additional money will
be needed to cope with the consequences of climate change.
There is no need to watch science-fiction disaster movies to
get a sense of the power of nature – just look at the disaster
that Hurricane Katrina wrought on New Orleans. Maintaining
biodiversity and limiting water and air pollution will also need
further investments. The list is long, the price is steep.
As epitomized by the failed 2009 Copenhagen conference of the
UN Framework Convention on Climate Change (UNFCCC), the
difficulty of global climate change negotiations arises over the ques-
tion of “who foots the bill”. Keeping these costs low is especially
important in countries like China and India, which, albeit among
the world's heaviest greenhouse gas emitters, face a tough trade-off
between fighting climate change and alleviating poverty. The miti-
gation costs also have an important political twist: the higher the
costs, the longer we seem to wait before taking decisive action. Such
dynamics only lead to even greater costs further down the road. Top
negotiators warn that disagreements in multilateral negotiations on
climate change are unlikely to be bridged in time for the next Con-
ference of the Parties, scheduled this December in Cancun, and that
the hope for a legally binding agreement to renew the Kyoto Proto-
col now lie with the 2011 meeting in Cape Town.
Although the recent economic downturn has lowered the
costs of achieving greenhouse gas reduction objectives, this re-
lief is only short-term and concerns OECD countries more than
global economic powerhouses such as China and India. Anoth-
er effect of the economic crisis will be longer lasting, however:
empty Treasury chests. As budget deficits and national debts
spin out of control, the US, Europe and Japan cannot be relied
upon to multiply their expenditures to “green” their econo-
mies. This leads to difficult challenges: How will the research
and development for energy saving technologies and renewable
energies be financed? How will enhanced infrastructure such as
public transportation, charge stations for electric cars, efficient
energy transmission grids and well-insulated buildings be paid
for? Even more doubtful is whether rich countries will transfer
the hundreds of billions of US dollars required to rein in emis-
sion growth in developing countries.
In the quest for the magic bullet, some have argued that weak-
ening the protection of intellectual property rights would reduce
the cost of spreading state-of-the-art technologies and therefore
reduce the costs of fighting climate change. Such shortsighted
views, however, ignore the fact that this would also serve
to undermine incentives for future innovations, and,
along with it, any chance to afford a decent standard of
living for the nine billion people that will populate the
world in 2050.

In a nutshell, governments should

stop creating obstacles to the free
flow of goods and services that
help fight climate change
36

TM1554_30-38_The Wealth of Nations.indd 36 5/7/10 15:25:30

 Magic bullets are rare, but they do exist. More often than not,
they are simpler than one might think. In a nutshell, govern-
ments should stop creating obstacles to the free flow of goods
and services that help fight climate change. Trade liberalization
would make these goods and services more readily available in
every country and drive down prices. A better integrated world
market for climate-friendly products and services would also spur
innovation as successful companies would reap bigger rewards.
The 153 members of the World Trade Organization (WTO)
have been negotiating the removal of trade barriers on so-
called “environmental products and services” for almost a de-
cade. They seem to be caught in an inextricable definitional
quagmire: is a product environmentally friendly if it has been
produced with few resources and little pollution? Or if it has a
clear environmental function, such as cleaning water and air?
Or is even an energy-efficient laundry machine an environ-
mental product? The issue becomes still more intricate when
Issue 1554 • July 2010
TM1554_30-38_The Wealth of Nations.indd 37
one looks at border practicalities. Goods do not only have one
purpose. Combined heat and power plants, water treatment fa-
cilities or waste incinerators tend to be assembled at their final
destination. How can custom officials ascertain that a stack of
tubes is indeed destined for an environmental purpose?
A new approach is needed to refloat the negotiations. One im-
portant step would be to split the concept of “environmental goods
and services” into more unified themes, aiming at separate agree-
ments. One such theme could be renewable energy—or environ-
mentally friendly energy production at large. Another could be
centered on pollution, including water treatment, waste manage-
ment and air pollution control. In this way, more attention would
be paid to sorting out the technical complexities of each topic, and
solutions to the specific problems of each product group could be
found. Liberalization should also go beyond removing tariffs and
tackle regulatory barriers, such as excessively burdensome testing
and certification procedures or the non-recognition of foreign
standards that guarantee equivalent levels of safety.
Another step could be to limit the agreement to a “coalition of
the willing”. The agreement would enter into force once countries
representing 80 percent or 90 percent of the related imports and
exports have joined. The members to the agreement would
then open their markets to all members of the WTO.
The WTO has already had encouraging experienc-
es with these so-called plurilateral agreements—
for instance in civil aircrafts, pharmaceuticals
and information technology. In short, aim-
ing for less—fewer products, fewer mem-
bers—may yield more rapid and more
profound liberalization in areas crucial
to reducing the costs of environmental
protection. Climate mitigation tech-
nologies should be a priority.
Valentin Zahrnt is a Research Associate
at the European Centre for Internation-
al Political Economy (ECIPE)
and Editor of www.re-
formthecap.eu.
This article was
first published in
The Majalla
14 June 2010
Image © iStockphoto
37
5/7/10 15:25:33
 • THE WEALTH OF NATIONS

News Behind the Graph

Worldwide Securitisation issuance in 2008 & 2009 curitisation, purchases by the Bank of Canada in 2008 have
Securitisation is a financial process through which an illiquid pushed gross Securitisation to $77bn in 2008 from $45bn in
asset is transformed into a security. Securitisation divides risk 2007. Securitisation has however fallen again in 2009 to an
through aggregating assets in a pool, and then issuing new estimated $57bn.
asset backed securities that are sold to investors. The investors Securitisation in Japan has also fallen to $50bn in 2009 from
accordingly share the risk and reward from those assets. This $58bn in 2008, while in Latin America estimates indicate that
process aims at averting the risk of bankruptcy hence decreas- issuance fell from $18bn in 2008 to $14bn in 2009.
ing interest rates from lenders. Mortgage backed securities are
a good example of securitisation. In these cases mortgages Issuance of mortgage-backed securities in the US
are combined into one pool and then divided based on each
mortgage’s risk of default. These smaller divisions are then
sold to investors.
Securitisation has developed from a being a minor funding
contributor in the late 70s to one of the crucial sources of fund-
ing nowadays. The biggest share of global securitisation mar-
ket has been taken over by the repurchase operations of central
banks aimed at covering the exposures of banks during the cri-
sis. Gross securitisation issuance has increased to $2860bn in
2009 from $2764bn in 2008 due the rise in liquidity as a result
of central banks repurchases. Nevertheless, net securitisation
issuance remains lower than in 2007 due to risk-intolerant in-
vestors, credit fluctuations and relative lack of liquidity.
Source: IMF Balance of Payments Statistics Yearbook
Securitisation in the US
Since the securitisation crisis in late 2007, federal supported Securitisation issuance in Europe
mortgage backed issuance has dominated the US issuance
market activity. The US government has provided a constant
supply of affordable mortgage finance while supporting the
Federal Housing Finance agencies’ liabilities which were esti-
mated at $5000bn. The Fed purchased $1.25 trillion of Fannie
Mae and Freddie Mac’s (agencies in conservatorship) MBS in
order to supply low cost finance to the housing market. This
has in turn stabilised the agencies and decreased the risk to the
mortgage finance system. MBS increased to $1957bn in 2009,
from $1344bn in 2008 pushing MBS closer to its earlier values
of 2007, which shows slight recovery from the 2007 crisis.

Securitisation in Europe
The repurchase operations by the bank of England and the Source: IMF Coordinated Portfolio Investment survey
European Central Bank have strongly influenced Securitisation
issuance in Europe in 2008 and 2009. These operations have Securitisation in Emerging Markets
however significantly decreased in 2009, where estimates show
that Securitisation issuance has fallen from $1047bn in 2008 to
$577bn in 2009. The decrease in the funding operations of the
Bank of England is responsible for much of the issuance drop.
The Bank of England has scaled down funding from $123bn in
2008 to $400bn in 2009.
The UK comes first in Europe as the biggest issuer in Europe
in 2009, followed by Italy, Spain, and the Netherlands.

Securitisation in the rest of the world

Issuance in Australia has taken a downwards slope since mid-
2007, despite a few recovery signs in late 2009, where issu-
ance gained some momentum reaching $21bn, as opposed to
$18bn in 2008. In Canada, despite meagre investment in Se- Source: BIS Quarterly Review of Banking & Financial Market Developments

38

TM1554_30-38_The Wealth of Nations.indd 38 5/7/10 15:25:35

TM1554_39_Ad.indd 39 5/7/10 15:26:12
 • THE HUMAN CONDITION

A Home Away

Image © Getty Images

From Home?
The UK’s detrimental
asylum policy

While processing claims of asylum seekers is

undoubtedly a complicated process, and the
UK should do its best to provide a thorough
assessment of these claims, the way this process
is currently being carried out merits intense
critique. Instead of protecting their borders,
the flaws in the process do more to undermine
the cohesion of British society. Having recently
elected a new government, the UK finds itself
at an opportune moment to revaluate the way it
approaches its commitment to the UN Refugee
Convention, by putting the reform of asylum
processing on the agenda.

Paula Mejia

X
iuxiu L. is a 27-year-old woman from China.
When she was 17, she was arrested because her
father was accused of selling drugs. She was held
in a police station for a week, and was then taken
by a man she didn’t know. He took her to a bar and held her
as a sex slave for five years. When she refused to comply she
was severely beaten. One day, she befriended a customer who
helped her escape, bringing her to the UK. Her journey lasted
16 months, and upon her arrival she claimed asylum.
Unfortunately, the story of Xiuxiu first reported by Human Rights
Watch in Fast Track Unfairness is not unique. Thousands of men
women and children come to the UK each year looking for safety.
Be they victims of political, religious, ethnic persecution or family
violence, these individuals often risk their lives to seek asylum in
what they consider a democratic country committed to protecting
human rights. However, despite the trauma that forces them to
undertake such hazardous journeys, their trouble rarely ends upon
arrival to the UK. Rather, the current system in place for asylum
seekers involves a deleterious process that often leads to detention,
destitution and other traumatizing ordeals that do little to help in-
dividuals that have been victimized in the past.
Xiuxiu’s story exemplifies this ordeal. Having arrived in Lon-
don speaking very little English she was placed in detention for
having been unable to prove with documentation that she had
been a sex slave. Considering the conditions of her arrival, and
the circumstances that would accompany sexual slavery, it is
not surprising that Xiuxiu could not provide documentation
that confirmed she had been a victim of sex trafficking. None-
theless, for asylum seekers in the UK, such obstacles in their
claims are a norm rather than an exception. While processing
claims of asylum seekers is undoubtedly a complicated process,
and the UK should do its best to provide a thorough assessment
of these claims, the way this process is currently being carried
out merits intense critique. Instead of protecting their borders,
the flaws in the process do more to undermine the cohesion of
British society. Having recently elected a new government, the
UK finds itself at an opportune moment to revaluate the way it
approaches its commitment to the UN Refugee Convention, by
putting the reform of asylum processing on the agenda.
As a signatory to the United Nations Convention Relating
to the Status of Refugees, the UK is committed to protecting
individuals who "owing to a well-founded fear of being per-
secuted for reasons of race, religion, nationality, membership
of a particular social group or political opinion, is outside the
country of his nationality and is unable or, owing to such fear,
is unwilling to avail himself of the protection of that country;
or who, not having a nationality and being outside the country
of his former habitual residence as a result of such events, is
unable or, owing to such fear, is unwilling to return to it.” The
UN’s definition of a refugee, however, requires that individuals
who arrive to the UK seeking asylum undergo a legal process
to prove they in fact qualify as refugees.
Unfortunately for many, the legal process they undertake is
an uphill battle that often fails to accurately present the condi-
tions that led them to seek asylum in the first place. Because the

40

TM1554_40-44_The Human Condition.indd 40 5/7/10 15:37:18


danger that is involved in forcing asylum seekers who qualify
for refugee status to return home can really mean the differ-
ence between life and death; this is not a process that should
be taken lightly.
Nevertheless, one of the major complaints that asylum seekers
have of the UK’s system for processing their claim is inadequate
legal representation. Reports by NGOs, including Amnesty In-
ternational, Human Rights Watch, as well as local organizations
such as the Refugee Council, note time and again that the legal
resources available to asylum seekers are inadequate. In an inter-
view with The Majalla, Natasha Walter of Women For Refugee
Women noted that the greatest challenge for asylum seekers “is
getting a fair hearing on their case. The barriers range from not
having good legal representation or any representation because
of changes to legal aid, to the problems in disclosing what hap-
pened to them because of the stigma associated to their experi-
ence or because they do not know it is relevant information.”
That the response to the disclosure of events that leads individu-
als to seek asylum is met with hostility or disbelief does little to
encourage them to tell the story of what happened exactly, and
this could have detrimental affects on their claim.
Many have also complained of inaccuracies in translation, and
women in particular have a difficult time explaining their reason
for seeking asylum if it is associated to sexual abuse or gender-
related persecution. Poor representation, however, is not the only
Issue 1554 • July 2010
TM1554_40-44_The Human Condition.indd 41
Asylum Policy in Numbers
(Source: Home Office Statistical Bulletin)
The number of asylum applications received in 2008
was 25,930, 11% higher than 2007 (23,430).
The proportion of applications made in-country was
90% in 2008 as opposed to 84% per cent in 2007.
40% of the applications in 2008 were from African
nationals while 37% were nationals from Asia and
Oceania, 19% were Middle Eastern nationals, 3% were
European nationals and 2% were from the Americas
In 2008, the number of grants of asylum increased
from 2007 and combined with grants of HP and DL
accounted for more than 30 per cent of total initial
decisions compared with 26 per cent in 2007 and 21
per cent in 2006.
13,505 asylum cases were refused in 2008,
while16,030 were refused in 2007.
One of the major complaints
associated to the detention
of asylum seekers is the
psychological impact that
detention can have on individuals
challenge that the Home Office needs to overcome to improve
the fairness with which it should process asylum claims.
A number of asylum seekers are also detained while their claims
for refugee status are being processed. In a report by Amnesty In-
ternational on this issue entitled, Seeking Asylum is not a Crime,
the organization explains that the use of detention is being increas-
ingly used at both the beginning and end stages of the asylum pro-
cess, and claims that this trend undermines the UK’s obligation
to the “ right of people to be treated with dignity and humanity
under international refugee and human rights law standards.”
One of the major complaints associated to the detention of
asylum seekers is the psychological impact that detention can
have on individuals who are, presumably, already traumatized,
and that it is this trauma that has brought them to seek asylum
in the UK. This is especially true of torture survivors, whose
experience in detention can bring back memories of their vio-
lation. According to Amnesty International “detention [can
have negative] effects on their physical and mental health. De-
tainees who have survived torture or serious trauma in their
country of origin may be more at risk of self-harm, including
death, while in detention.” Their claims are supported by ac-
counts of individuals who, after having been tortured and then
detained in the UK after seeking asylum, tried to commit sui-
cide or harm themselves in other ways. One detainee said of
his experience, “It’s so terrible. I passed through many things
41
5/7/10 15:37:19
 15 and 15 year olds 24
16 and 17 year olds 47
Unknown 20
Under 14s 9
• THE HUMAN CONDITION

Applications for asylum in the United Kingdom, by location of application, 1999 to 2008
90,000

67,500

45,000

22,500

0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Applied at port Applied in-country

Initial decisions, 1999 to 2008

150,000

112,500

75,000

37,500

1999 2000 2001 2002 2003
Refused under backlog criteria (1)
Refused
Granted leave under backlog criteria (1)
Granted ELR, HP or DL (2)
Granted asylum
in my own country but nothing like this. I’ve been released but
I’m still in prison. I am walking but my soul is dead.”
The conditions of those in detention, including the practice
of detaining children, has brought the UK much negative at-
tention in recent months. This was especially true after asylum
seekers held at the Yarl’s Wood Detention Center undertook
a three-week hunger strike in response to what they called
“cruel, inhuman and degrading treatment.” The hunger strike
was followed by a legal challenge, which claims that the UK’s
detention policy breaches articles 3, 5, and 8 of the European
Convention of Human Rights.
Beyond detention, many asylum seekers in the UK will at
some point find themselves living in destitution. Although asy-
lum seekers are provided with aid while their claim is being
processed and during appeals, once appeals are rejected they
lose all financial assistance and they do not have the legal right
to work. While this is seen as an incentive for asylum seekers to
pursue voluntary return, many are unable or unwilling to re-
turn to their countries of origin and they’re often left homeless
and begging for subsistence. Like detention, the effects of desti-
tution on the well being of asylum seekers are grave. Moreover,
their presence on the street does little to promote security and
stability for British citizens. The UK government should rec-
ognize the inefficiency that this policy represents, and instead
acknowledge that it does more harm than good, not only for
asylum seekers but for the UK’s society in general.
Being aware of the negative aspects of the current asylum pro-
cess, one must wonder what has stopped the UK’s government
from pursuing reform in the past. According to Walter, three ma-
0
2004 2005 2006 2007 2008
Unaccompanied Asylum Seeking Children,
applications received for asylum in the United
Kingdom, by age at time of application, 2008
9%
24%
20%
15 and 15 year olds
16 and 17 year olds
Unknown
Under 14s
47%
(Source for graphs:
Home Office Statistical Bulletin)
jor constraints exist that undermine a process for reform. The first
is that since the home office is not fit for purpose, it is difficult to
reform, and the government lacks the political will to undertake
this change. Secondly, there is a concern of how the right-wing
press might interpret a government that appears “soft” on asylum.
Finally, there is “a genuine but misplaced fear that if you make the
process easier for asylum seekers by giving them a right to work
etc, then more people will seek asylum in the UK.” Given these
obstacles, it is not surprising that the reforms that have been called
for have not yet been made. However, they do not excuse the con-
ditions that asylum seekers are forced to live through. There are
serious and problematic implications of not dealing with asylum
seekers in a fair manner. Inclusion is a bulwark of healthy societ-
ies, and the current asylum process is storing, and even creating,
problems that the UK will have to deal with eventually.
This article was first published in The Majalla 4 June 2010

42

TM1554_40-44_The Human Condition.indd 42 5/7/10 15:37:23

 In the Lead
Image © iStockphoto
Kuwait’s Development Fund
Aid flows from Arab countries to the developing
world are minimal, although for several decades
there has been a major exception to this:
Kuwait. Like all government based development
agencies, the Kuwait Fund both expands
economic, political opportunities and influence
for Kuwait through its development efforts while
simultaneously improving welfare and capacity
building of developing countries. The Kuwait
Fund represents a model which other Gulf States
can draw on. Its record as a pioneer in the Arab
world should be acknowledged.
Noam Schimmel
I
n the world of international development aid the major
players are the United States, the European Union, and
Japan. The bulk of funds distributed and training pro-
grams implemented in developing countries in Africa,
Asia, and Latin America originate from there, with smaller
though still significant contributions made by countries such as
Canada and Australia.
Aid flows from Arab countries to the developing world are
minimal, although for several decades there has been a major
exception to this: Kuwait. The Kuwait Fund for Arab Econom-
ic Development was started in 1961. Robert McNamara, Presi-
dent of the World Bank from 1968 through 1981 described its
exceptional mandate and origins:
When first established in 1961, the Kuwait Fund was with-
out precedent. Here was Kuwait, a tiny country, until recently
among the poorest places on earth, establishing a development
fund in the year of its political independence. While welcoming
its new-found prosperity it was declaring a willingness to share
its future wealth with its Arab neighbours.
In 1974 the Kuwait Fund expanded its role to include the
entire developing world, not only the Arab world. The over-
whelming majority of the Fund’s capital is dedicated to loans,
some of which are used by developing countries to contract
Kuwaiti companies in the planning and construction of ma-
jor infrastructure initiatives such as the recent construction of
Ethiopia’s modern Addis Ababa Bole International Airport. A
far smaller percentage of the Fund’s resources have been de-
voted to grants and technical assistance.
This makes the Kuwait Fund’s mission and programs dif-
ferent from aid agencies such as US AID (The US Agency
for International Development) and Britain’s DFID (Depart-
ment for International Development) which devote large per-
centages of their aid flows to grants rather than loans. The
Kuwait Fund rarely supports grassroots community develop-
ment to combat poverty, human rights promotion and the cul-
tivation of democratic values, and education provision which
Issue 1554 • July 2010
TM1554_40-44_The Human Condition.indd 43
are major areas of emphases of American and European aid
agencies. Its annual report explains its emphasis on large-
scale infrastructure, “such as transport, telecommunication,
agriculture, energy, industry and water and sewage sectors.”
Its prioritization of such large scale infrastructure projects
closely mirrors that of the World Bank.
Indeed it is unclear if the Kuwait Fund meets the criteria of
offering ‘Official Development Assistance’ which is defined by
the Development Assistance Committee of the Organisation
for Economic Cooperation and Development as conveying “a
grant element of at least 25%.” Salil Shetty, the director of
the UN’s Millennium Campaign to halve poverty and boost
life expectancy by 2015, has urged wealthy Arab states to give
more development aid. In an interview in Qatar in November
of 2008 he stated,
If Gulf States are serious, let’s have some cash down…
They’re doing more in terms of helping Islamic countries, which
is a good starting point… I think they need to step up a lot more
than they have and they need to become part of the global pro-
cess because right now they’re kind of isolated. They’re not part
of the mainstream discourse and they need to get there.
Shetty noted that it’s hard to know just how much Gulf States
are contributing to development because they do not make this
information public and they are not part of the OECD’s De-
velopment Assistance Committee, which tracks statistics on aid
flows. Shetty criticized Gulf States, stating, “We don’t get clear
numbers, it’s very opaque. There needs to be more transpar-
ency.” In this regard the Kuwait Fund—though not without
its own weaknesses because so little of its funds actually qualify
as development assistance—seems to release more data about
its exact aid flows than Qatar, the UAE, and Saudi Arabia. Its
website includes detailed information available to the general
public including project budgets.
Like all government based development agencies, the Ku-
wait Fund both expands economic and political opportunities
for Kuwait through its development efforts while simultane-
43
5/7/10 15:37:24
 • THE HUMAN CONDITION
ously seeking to improve the welfare and promote the capacity
building of developing countries. Its aims are both charitable
and promote the nation’s interest. As Dr. Mohammed Sabah
Al-Salim Al-Sabah, Deputy Prime Minister and Minister of
Foreign Affairs explains in his foreword to the 2008-2009 Ku-
wait Fund Annual Report, reflecting upon the previous year of
Kuwait Fund programs,
The Fund continued its cooperation with its partners in de-
velopment, providing them with advice to help them achieve
their developmental goals, while maintaining mutual respect
and friendly relations with them. This, I believe, would serve
our national objectives and promote the role of the State of
Kuwait in the international community.
What makes the Kuwait unusual in the Middle East is that
unlike other Arab countries which make occasional humani-
tarian aid donations in response to natural disasters—such as
Haiti’s recent earthquake or the consequences of war on civil-
ians and the support of refugee populations—the Kuwait Fund
has worked in a systematic way to advance development rather
than on an ad hoc basis in response to sudden catastrophes.
This makes it exemplary, a possible model for Arab countries
with similar economic resources who have not created such
government agencies devoted to development aid but who dis-
tribute funds for humanitarian relief periodically.
The diversity of peoples and issues receiving development
aid from the Kuwait Fund is extensive: from expansion of elec-
tricity in the Afar region of Ethiopia to developing the agri-
cultural sector in Lebanon and the poultry sector in Egypt, to
irrigation projects in Vietnam, Honduras, Mali, and Nepal and
environmental conservation in Ghana.
It has funded projects to expand clean drinking water in Is-
tanbul and rebuild infrastructure destroyed by the earthquake
of 1990 and subsequent earthquakes in Turkey and to improve
the sewage system and consequently overall public health in
Cairo. In the field of public health it has also contributed to
programs working to counter the diseases of river-blindness
and guinea worm which have had devastating impacts in Sub-
Saharan Africa.
The diversity of peoples and
issues receiving development
aid from the Kuwait Fund is
extensive: from expansion of
electricity in the Afar region
of Ethiopia to developing the
agricultural sector in Lebanon
The Kuwait Fund represents a model which other Gulf States
can draw upon as they expand their development programs
and integrate them within broader national foreign policies
and priorities. Its record as a pioneer in the Arab world should
be acknowledged and celebrated. The Kuwait Fund does have
a younger counterpart, the Abu Dhabi Fund for Development,
which was established in 1971 and has disbursed over 5 billion
dollars in grants and loans, like the Kuwait Fund, mostly for
infrastructure development.
44
TM1554_40-44_The Human Condition.indd 44
Development Aid
Development aid dates back to the colonial era,
where nations like Britain delivered aid to colonies in
need. However the concept was first introduced in
contemporary history after the end of WWII. During
the the Cold War, the US introduced the Marshall Plan
as global aid program aimed at strengthening bonds
with European nations in order to counter the Soviet
influence.
In time, the Marshall Plan paved the way to the
formation of aid organizations like the World Bank, which
extended the reach of aid beyond European countries.
As the Soviet threat receded, underdeveloped nations
such as Iraq and Egypt, started receiving aid. In the
period between, 1960 and 1985 varying amounts of
aid were distributed across the globe through the newly
established development banks with the purpose of
strengthening the infrastructures of recipient nations.
This initiated a new phase in which aid was aimed at
promoting the development of nations rather than using
finance to (overtly) endorse political agendas.
While the Kuwait Fund has its own challenges to address,
particularly its overemphasis on loans rather than grants, its
lack of support for grassroots community development and
outreach to the most vulnerable sectors such as women and
children, and its preference for large-scale infrastructure proj-
ects rather than projects which are often of greater immediate
need such as healthcare provision and basic education pro-
gramming, in many areas it has prioritized human welfare ap-
propriately and achieved significant successes.
In particular, its focus on provision of clean drinking water
and improved sanitation through the construction of wells, res-
ervoirs, and related infrastructure in countries like Mali and
its irrigation projects in countries like Nepal to improve agri-
cultural output and food security shows a commendable focus
on transformative development aid; aid that has far-reaching
positive impacts on impoverished populations, and an appro-
priate emphasis on supporting countries that are among the
poorest in the world with low human development. More than
one hundred countries have benefited from the Kuwait Fund’s
loans and grants – no small achievement.
In the future, should the Kuwait Fund continue and expand
upon these efforts and address some of the aforementioned
concerns it will build upon an already strong and exceptional
record that invites emulation. Countries like Saudi Arabia, Qa-
tar, Bahrain, Oman, and the emirates of the UAE besides Abu
Dhabi can learn from the Kuwait Fund and make their own
large scale investments in development aid. Should they do so,
the potential of Arab countries to promote human develop-
ment within the Middle East and globally will grow substan-
tially, bringing tangible benefit, hope, and opportunity to hun-
dreds of millions of disadvantaged individuals.
Noam Schimmel - London-based researcher and human rights practitioner
with extensive development experience in the field.
5/7/10 15:37:24
TM1554_45_Ad.indd 45 5/7/10 15:37:46
 • A THOUSAND WORDS

46

TM1554_46-47_A Thousand Words.indd 46 5/7/10 15:38:07

 London, July 7 2005:
The rear of the bus that was
destroyed by an explosion
at Tavistock Square during
a series of explosions
which ripped through
London's underground tube
and bus network

Image © Getty Images

Issue 1554 • July 2010 47

TM1554_46-47_A Thousand Words.indd 47 5/7/10 15:38:11

 • CANDID CONVERSATIONS

Saudi-US Relations
in the Post-9/11 World
An interview with US Ambassador James B. Smith

In this interview with The Majalla, US Ambassador to Riyadh James B. Smith speaks about what is one
of the most important bilateral relations for the US. Ambassador Smith discusses several dimensions of
the ties between the US and Saudi Arabia, namely how 9/11 impacted this relationship; the challenges
to both sides concerning Iran’s nuclear program; how the bilateral ties extend beyond oil and security,
and what they might look like in the future.

Caryle Murphy

J
ames B. Smith is a retired US Air Force Brigadier Gen-
Saudi field marshal Saleh al-Muhaya speaks with
eral who has served as US ambassador to Riyadh since U.S. Ambassador to Saudi Arabia James Smith (right)
September 2009. Prior to his appointment, he held a
variety of executive positions with Raytheon Company,
a US defense contractor, where he was involved in
corporate strategic planning and international business de-
velopment. Smith was an early supporter of Barack Obama’s
presidential campaign.
Before retiring from the military in 2002, he had a distin-
guished 28-year career that included flying combat missions
out of Dhahran during Operation Desert Storm. Trained as
a fighter pilot, he logged over 4,000 hours of flight time in F-
15s and T-38s. In his final assignment, he was deputy com-
mander at the Joint Warfighting Center of the US Joint Forces
Command in Virginia. Prior to that, he commanded the 94th
Fighter Squadron, the 325th Operations Group and the 18th

Image © Getty Images

Fighter Wing.
Smith is a 1974 graduate of the United States Air Force
Academy. He holds a master’s degree in history from Indiana
University, he is also a graduate of the Naval War College, the
Air Command and Staff College, and the National War Col-
lege, where he also served as a professor of military strategy. He And on the business side we’re fully supporting His Majesty’s
recently spoke to The Majalla in his Riyadh office. vision, best represented by [Commerce and Industry] Minister
Abdullah Zainal Alireza’s industrial strategy and a move to a
Riyadh, 25 April 2010 knowledge-based economy. So we find ourselves in a relation-
The Majalla: How did 9/11 impact the US-Saudi bi- ship involved in a lot of different ways.
lateral relationship, and do you think it has recovered
since then? If so, what are the signs of that recovery? The US-Saudi bilateral relationship, for a long time,
We’ve had a very long and stable relationship with Saudi Ara- was characterized as one based on oil-for-security.
bia that 9/11 impacted in a negative way. But I think to a large But the US is importing less Saudi oil now. How do
degree we’re recovered from that...and I see that relationship you see that trend affecting the nature of the bilat-
getting stronger. eral relationship in the future—I’m talking 10 years
After 9/11 we went down to about 3,000 Saudi students in or more?
the United States. We’re back up to over 25,000, and I expect I agree that the relationship has been characterized as oil-for-
by the end of the year we will have upwards of 30,000. The security, but I would argue that it’s been different for a long, long
visa process has matured. I suspect this year we will beat, by a time…[and now] is infinitely more nuanced and complicated
wide margin, our record for the most visas in a single year. The than it’s ever been. And it's involved in many more things than
economic relationship is maturing, and [There is] a long-stand- just oil and security. We will continue to have strong relation-
ing educational relationship, which is providing inspiration and ships on the mil-to-mil [military-to-military] side, strong rela-
support to a new generation of educators who are going to fill tionships on energy, not just oil. And in the business, education
these new [Saudi] universities. and medical fields, those ties are going to get even stronger.

48

TM1554_48-52_Candid Conversations.indd 48 5/7/10 15:38:50

 There are no major US arms sales to Saudi Arabia
on the docket, and Riyadh’s latest import of military
planes will be the [Euro-made] Typhoon. The US is
training a 35,000-man security force for key Saudi in-
stallations, but overall its military relationship with
the Kingdom appears to be less all-encompassing
than previously. How has this aspect of the bilateral
relationship changed in the last decade?
It changed 25 years ago. And understand that the Typhoon is
a replacement for the [Euro-made] Tornado. The Saudi Air
Force has always had a mix of US and British airplanes...[as
part of] a balanced portfolio. And on major acquisitions it does
not appear that that is shifting fundamentally. We maintain a
strong mil-to-mil partnership, not just in acquisition of equip-
ment but in the training of Ministry of Defense and Aviation,
and the Saudi National Guard, and now the Interior Ministry.
And as they move to upgrade [military] systems where we re-
quire interoperability, I'm confident that we will still have an
American footprint there.
Iran’s ambition to become a nuclear weapons power
is one issue on which the United States and Saudi Ara-
bia share similar views, that is, neither wants to see
Iran possess a nuclear weapon or acquire the capa-
bility to make one. And yet, there appears to be some
disagreement on how to deal with Iran’s nuclear am-
bitions. Is this accurate, and if so, how do the two dif-
fer on this matter?
I don’t see any daylight between Saudi Arabia and the United
States on the issue. We’re both concerned with Iran’s failure to
come to terms with its international responsibility, its flagrant
dismissals of IAEA [International Atomic Energy Agency] and
Security Council responsibilities. I actually see that we’re very
much in agreement on the challenge that Iran presents to the
region and the Saudis are equally concerned about the possibil-
ity of proliferation.
If Tehran were to announce tomorrow that it had
acquired the capability of manufacturing a nuclear
weapon, what would that do to the US-Saudi bilateral
relationship?
Nothing. We’re about as close on this, I think, as two part-
ners can be. The challenge of course is how do you get the
government of Iran to come to terms with its international
responsibilities?
Many people think that if Iran announced it had a nuclear
weapon then Saudi Arabia would be under a lot of internal
pressure to acquire the same. But the United States doesn’t
want to see an arms race in the Gulf.
We are not just singling out Iran on the nuclear issue. Presi-
dent Obama has made a commitment to pursue a nuclear-free
world. So you see the new strategic arms limitation talks with
the Russians, the world leaders' summit on nuclear material…
If your goal is nuclear disarmament then the proliferation of
any number of countries runs against that objective. So not
only do we see a nuclear weapons capability in Iran destabiliz-
ing to the region, [but also] the potential for other countries
to acquire nuclear weapons runs counter to the objective of a
nuclear-free world.
Issue 1554 • July 2010
TM1554_48-52_Candid Conversations.indd 49
The failure of the United States to take more seri-
ously and effectively its role as honest broker in the
Israeli-Palestinian conflict has long been a major
thorn in the Saudi-US relationship. But unlike previ-
ous US administrations, the Obama administration
has made clear that it regards this conflict as a threat
to US national security. Do you believe that this is a
permanent shift in Washington and if so, how might
it affect US-Saudi ties?
The short answer is that it’s very clear from [US Centcom Com-
mander Gen. David] Petraeus' remarks and other comments that
the President and the Secretary [of State Hillary Clinton] have
made that the administration sees this as a strategic problem, not
just an issue of being an intermediary. That in Gen. Petraeus'
words, the absence of a settlement puts American soldiers at risk.
When you live over here, you come to terms with the commonly
held belief that the absence of a settlement gives legitimacy to
every extremist group around—even though they may or may
not have ever done anything in support of the Palestinians. So
it is clearly in the United States’ strategic interests to focus on a
settlement. And the fact that the President made a commitment
early in his administration, that this was going to be a center-
piece in terms of [his] international agenda, I think speaks for
four or eight years that it certainly is a shift in our thinking.
There seems to be a consensus both in Israel and the United
States and other places that it’s time [for Israelis and Palestin-
ians to hold serious peace talks]. The fact that His Majesty put
so much energy and political capital into an Arab peace initia-
tive suggests that it’s time.
I agree that the relationship has
been characterized as oil-for-
security, but I would argue that
it’s been different for a long, long
time…[and now] is infinitely more
nuanced and complicated than
it’s ever been
So I’m encouraged and hopeful. There is a window of op-
portunity I believe within the next few years where we can
make a difference. The worry on all of our parts is if we miss
this opportunity then we’re destined to another generation of
conflict and missed opportunities.
In the US view, has Saudi Arabia done enough to halt fi-
nancial support that was flowing from some individu-
als and groups to violent Islamic extremists abroad?
They’ve worked very, very hard at that...We have partnered
with them and I can attest to the fact that they have been very
serious about closing the funding for extremist activity, as well
as cracking down on it here in the Kingdom...[Assistant Secre-
tary of State for Near Eastern Affairs Jeffrey] Feltman when he
was here...called the Saudis our strongest partner in counter-
terrorism...I would say the Saudis have shown a very strong
commitment to closing the loop on terror financing...It’s in
their interest. They were threatened as well as us.
49
5/7/10 15:38:51
 • CANDID CONVERSATIONS
How would you characterize US-Saudi cooperation
in the counter-terrorism sphere? Is the battle against
Islamic extremism an important aspect of the US-
Saudi bilateral ties?
We have a very strong relationship on the counter-terrorism
front, both countering extremism here in Saudi Arabia and
working in partnership against Al-Qaeda in other places. I take
issue with the term Islamic extremism because I do not believe
that the extremist violent element has any root in Islam. It is
violent, aberrant behavior, which is not Islam.
Under King Abdullah Saudi Arabia has been diversifying
its basket of bilateral ties, forging closer strategic and business
ties with India, Turkey and, in particular, China. How does the
United States view this diversification and how will it affect the
US-Saudi relationship?
We don’t view it negatively. I mean, as Saudi Arabia has ma-
tured on the international front it is natural for them to estab-
lish commercial and diplomatic ties [with other nations]. I do
not believe that [this] signals on their part a weakness in our
relationship.
Certainly when you look at the way that China and India
have been growing they become the much more dominant
economic partners for oil. Arguably the United States is show-
ing a reduction, [and now] our largest oil provider is Canada.
So that relationship has changed but it hasn’t fundamentally
changed our bilateral relationship.
Saudi Arabia also is seeking to modernize its econo-
my, education system, court system and even some
social traditions that restrict women’s participation
in public life. Should the United States help Saudi
Arabia advance this process and if so, how can it do
that without being accused of interfering in the King-
dom’s internal affairs?
You ask ‘How can I help?’ It’s very simple. I’m actually not
looking to interfere. I have made a conscious decision to take
a positive approach and look for, what I would call, positive
vectors, and support His Majesty’s modernization effort. So on
the legislation for trafficking in persons, certainly we celebrated
that and have offered our assistance for training in the judi-
cial system. With the reorganization of the judiciary, we have
brought in some legal training for contracts.
We certainly are involved in a positive way with the emer-
gence of a magnificent generation of young women. Sixty per-
cent of the college students this year are women. The first thing
you can do is be a cheerleader for them. The next thing you can
do is help female entrepreneurs be successful, and you do that
by bringing in e-commerce so that their storefront is a website
and you connect them with the global economy. And let them
work the social agenda at their speed.
So we’re actually playing a supportive role in the success of
their strategy [of moving toward a knowledge-based economy]
as opposed to imposing a Western model.
Some things in Saudi society are counter to what the
United States considers universal values when it comes
to women and religious minorities. Are these practices
a problem for the US-Saudi bilateral relationship?
They will always be a source of challenge as long as they exist.
If you go back to President Obama’s Cairo speech when he
50
TM1554_48-52_Candid Conversations.indd 50
laid out a new beginning with the Islamic world, at the end of
the speech he said there are still three things that are important
to us: freedom of religion, women’s rights, and democracy. He
defined democracy in a different way: as those states where the
voice of the people is heard as being more stable.
Certainly we want to encourage those initiatives here in
Saudi Arabia that give a voice to the people. We are sup-
portive of the Shura Council. We look for expanded partici-
pation in the Shura Council. We’ve seen widespread media
coverage of the Chamber of Commerce elections in both
Jeddah and the Eastern Province. We see some movement
on human rights issues like trafficking in persons. On reli-
gious freedom, there has been a gradual acceptance of re-
ligious freedom in private. But we would still continue to
support religious freedom.
So are there problem areas? These are the areas where our
government will continue to support positive change.
Apart from government-to-government dealings,
an important aspect of any bilateral relationship
is people-to-people. But since 9/11 there has been
a surge of Islamophobia and specifically Saudi-
phobia in the United States. Do anti-Saudi feelings
among Americans limit how close the two countries
can be?
That is a challenge for a couple of reasons. The first one is
that the Saudis know so much more about our country than
we know about theirs. I have great hopes for the [Saudi] Com-
mission on Tourism and Antiquities and their ability to expand
tourism, because we need to get Americans here to see what’s
positive in this country.
The challenge we’ve got in the United States is we’re locked
on this number of 15 out of the 19 extremists [on 9/11] being
Saudis. I think it’s time to rethink if you’re an American who
formed an opinion about Saudi Arabia based on that. And
if you’re a Saudi who formed an opinion about the United
States based on our reaction to 9/11 it’s time to reconsider.
There was a strategic objective by Osama bin Laden to drive
a wedge between the United States and Saudi Arabia. And
the way you do that is highlight Saudi Arabia as an extremist
country. He succeeded.
I spend a lot of time encouraging businessmen and women
in the US to come and do business, encouraging elected offi-
cials to come visit. But this will be a long-term challenge.
Finally, how do you see the bilateral relationship
evolving over the next 10 years?
I don’t see it atrophying at all. I see it getting stronger. The mil-
itary-to-military relationship is important but it doesn’t stand
out as [the most] important. I look at business, commerce, the
trade we’re doing, the social exchanges, the education, the in-
volvement of Americans inside the technocracy of Saudi. All
of that together is much more important to me than a military-
to-military relationship.
Interview conducted by Caryle Murphy – an independent journalist based
in Riyadh and Pulitzer Prize Winner in Journalism in 1991. She is the
author of “Passion for Islam.”
This article was first published in The Majalla 10 June 2010
5/7/10 15:38:51
 The Struggle Against a
Manichaeist World View
An Interview with Jeremy Ben-Ami
In this interview with The Majalla, Jeremy Ben-Ami, the founder of J Street, speaks about the rise of the
religious right in both Israel and the Jewish community in America, and the consequences of not acting
aggressively to forge a peace deal while moderates in both camps still have a stake in Israel’s survival.
J
eremy Ben-Ami is the founder of J Street,
a pro-peace, pro-Israel lobbying group
that has positioned itself as a lead-
er of liberal American Jews who
have been denied a strong voice in
a debate dominated by hardline agencies
like the American-Israeli Political Affairs
Committee. In a mere two years since
it was launched, J Street has “created
space,” as its members like to say, for
those who oppose the Israeli occupation of
the West Bank and its incarceration of Gaza.
Though outgunned by its larger rivals, accord-
ing to Ben-Ami, J Street’s appeal for “passionate
moderation” is beginning to resonate with the US Congress.
The liberal Ben-Ami is himself the product of an expan-
sionist Zionist vision; his father, Yitzhak, was a member of
the Irgun Zvai Leumi, the underground group that em-
ployed terrorist tactics to drive the British from Mandate
Palestine and sought a Jewish state stretching from modern
day Israel to what is now Jordan. Today, the younger Ben-
Ami is struggling to extricate Israel from an occupation that
threatens to undermine its very identity as a Jewish state.
He spoke with The Majalla about the rise of the religious
right in both Israel and the Jewish community in America,
and the consequences of not acting aggressively to forge a
peace deal while moderates in both camps still have a stake
in Israel’s survival.
To what do you attribute J Street’s success: luck, tim-
ing, hard work, or a little of all three?
First and foremost, it’s being in the right place at the right time.
There was an enormous vacuum in the American Jewish com-
munity and J Street is filling it rapidly because it was such a
deep and powerful vacuum. Plus, the times couldn’t have been
more critical and that had a multiplier effect on the pace at
which we’ve grown.
The awareness of many different parts of the world–whether
that be American foreign policy and security establishment or
the awareness of the leadership of the American Jewish com-
munity or other international actors–that the status quo is un-
sustainable is probably higher than ever. It is taken for granted
by both our countries’ leadership but also by leaders around
Issue 1554 • July 2010
TM1554_48-52_Candid Conversations.indd 51
Stephen Glain
the world and the leaders of nongovernmental or-
ganizations that something will have to give if we
don’t take a positive direction in search of a
solution. Otherwise it’s going to break in an
unpleasant and unproductive manner and
it’s going to hurt a lot of people’s interests
in the process.
How much of this has to do with the
arrival of the Obama administration
and a hardline government in Israel?
I think the White House is reacting to the un-
sustainability of the situation, which is being en-
hanced by this government in Israel. The provocative
conduct of what is going on in East Jerusalem, the manner in
which the Gaza siege is being managed, the way in which Israel
is conducting foreign policy are all exacerbating the tensions
and bringing the pot to a boil.
Are you surprised by the pushback you’re getting
from the more established members of the Jewish
community?
I’m not at all surprised. One of the reasons we started J Street
was because there has been for so long such a gap between
the views in the broader community of America’s Jewish com-
munity and the voices of those who purport to speak for that
community. We’re stepping forward and providing a different
voice for that community, so it does not surprise me at all that
there’s tough pushback. There are very fundamental argu-
ments at stake.
One of the surprises is how fast we have been able to create
a sense of a new and alternative voice being heard. It’s only
two years since we launched this from scratch and in two years
we’ve become an established institutional player and that’s what
is so surprising. The challenges are not surprising because that
is exactly why we started J Street. The political playbook as I
call it, the handbook by which those who practice politics in the
United States play the game by is very well known. There is an
understood way in which you’re supposed to talk about Israel
and an understood way in which you’re supposed to talk to the
Jewish community and that is what we’re up against. We are
trying to change the rulebook and that is a difficult challenge,
but it was not unexpected.
Image © J Street Project
51
5/7/10 15:38:52
 • CANDID CONVERSATIONS
You’re in the business of promoting nuance and in
the game of politics in Washington it is always easier
to play to extremes. What you’re saying is that people
are actually more responsive to nuance than they are
to those extremes.
I think the majority of people in both Washington and the
leadership of various Jewish institutions really know this sub-
ject in more depth than people give them credit for and once
you know this topic you know that nothing is black and white.
That’s the first thing you really learn. There is an appeal to
those who are thoughtful, to an organization that appreciates
the nuance and appreciates the shades of gray. The world-
view of the prior administration and the worldview of many
of the neocons who run think tanks or who help guide the
traditional organizations is very much a good versus evil, a
black and white view of the world. That’s why so much of the
polling done by [conservative groups] like The Israel Project
is “Do you like the Palestinians or do you like the Israelis?”
you’re either with us or against us, that’s the simplistic ap-
proach. When you spend time to really know the subject mat-
ter, you know that is not the way to approach this. So to hear a
group that supports Israel and cares about its survival and its
character and its soul and its security, all those things, to hear
a group that come at the question with a more nuanced and
thoughtful approach is more refreshing to the political and
policy leadership in this town.
A lot has been made of your background, your upbring-
ing and your father’s experience in the Irgun. How do
you think he would perceive or regard your work?
My hope is that he would be thrilled that I care. The real chal-
lenge for people who are my age or much younger is that they
don’t care and that there isn’t the connection between Jewish
Americans and the state of Israel that there used to be and I’d
like to think he would appreciate the engagement and passion
that I’m bringing to it, he’d be happy to know that I am trying
to complete the work that he started, which is to have a safe,
democratic and Jewish Israel. On the other hand I’m sure he
would disagree violently [laughter] with the position I’ve taken
and the avenue I am outlining for getting to that goal, so I’m
hoping it would be a mixed reaction.
How significant is that demographic, about the
younger generation not caring about these issues?
As a matter of generality, and it’s always dangerous to get into
generalities, there are two camps emerging in the American
Jewish community. One is much more religious and traditional
and conservative in its view and more deeply tied to Israel, and
the other is a reform or non-religious, cultural Jewish commu-
nity that is both less connected to Israel and more liberal in its
overall politics. The real challenge is how to bridge the gap be-
tween the two, not just over Israel but on a whole host of issues
and how you maintain a cohesiveness to a community that has
significant cultural, religious, political and identity differences.
The findings from the polling you’ve done are very in-
teresting. Were you at all surprised by the conclusions?
One thing that I didn’t expect but which makes sense when
I look at it is how, as the number of Orthodox Jews increase
among the younger generation, you find a larger number of
52
TM1554_48-52_Candid Conversations.indd 52
younger Jews who are conservative on Israel. I did find that
surprising and a lot of people say “Isn’t J Street a generational
phenomenon and part of the Obama phenomenon and isn’t
it led by, and speaks for younger people?” But you have to be
careful to recognize that younger American Jews are more or-
thodox and more conservative than their older counterparts.
We have these two different camps within the American Jewish
community and we as J Street are certainly speaking more for
the box that is younger and less orthodox.
This is very much reflective of the changing demo-
graphics of Israel itself. The country seems to be
drifting towards the right and religious parties are
very influential. You could also say this is happening
throughout the Middle East, this empowerment of
the orthodoxy.
Yes. I like to think of J Street as passionate moderates, and this is
the broader challenge for moderates everywhere, this whole abil-
ity to understand the narrative of the other, the ability to find the
shades of gray between black and white, to say this isn’t us versus
them on every issue. All of that is at stake. If the moderates who
are still leading, in Jordan, for example, and among the Fatah
leadership and the Tzipi Livni and Edward Omert world in Is-
rael, if that generation of moderates doesn’t seize this moment,
to resolve this conflict, then that moment of history will pass us
by and whether the moderates can ever regain the initiative be-
fore things get out of hand is a real open question.
You have certainly made a difference, but if you look
at things from the Palestinian perspective, talking
about a settlement freeze and investing a great deal
of political capital in it is unsatisfactory when Pal-
estinian independence is predicated on settlement
evacuation, and we’re obviously a long way from that
point. How are we going to reconcile this and what
will J Street’s role be in that process?
We are not under any illusion that the settlement “chill,” as
I prefer to call it, in any way begins to treat the underlying
disease here. At best, trying to stop the growth of settlements
is treating the symptom of the underlying disease and that
is the occupation. The only treatment that will prevent the
patient from fatal consequences is treating the disease. You’ve
got to deal with the fundamental issues and get to the final
status questions that have been deferred for too long and start
putting clear answers on the table so that people understand
what the endgame is, not “we’re going to take one step along
a hundred-step road.” What is the end of the road? You can’t
navigate if you don’t know where you’re going and there’s no
roadmap without a destination. This step-by-step confidence-
building measures and interim agreements is a recipe for fail-
ure at this point because people have lost confidence that the
ship has a destination.
Interview conducted by Stephen Glain – former correspondent for News-
week and covered Asia and the Middle East for the Wall Street Journal for
a decade. Now based in Washington as a freelance journalist and author
he is currently working on his forthcoming book about the militarization of
US foreign policy.
This article was first published in The Majalla 24 June 2010
5/7/10 15:38:53
TM1554_53_Ad.indd 53 5/7/10 15:39:17
 • COUNTRY BRIEF

Iran
Iran Since the Revolution
1979 The Iranian Monarchy is overthrown with Shah
Mohammad Reza Pahlavi fleeing to Egypt. Ayatollah
Khomeini returns from exile in Iraq and establishes
a new political system based on an Islamic model,
creating The Islamic Republic of Iran.

1979-1981 Islamic militants take 52 Americans hostage

and demand the extradition of the Shah from the U.S to

Image © iStockphoto
face trial in Iran.

1980 Abolhasan Bani-Sadr is elected the first President

of the Islamic Republic.
1980 Iraq invades Iran. The conflict is devastating to
both countries and causes extensive regional instability.
In 1988, with Iran economically crippled, Khomeini
reluctantly agrees to a ceasefire.
2009 Tehran admits to pursuing a nuclear programme
and says that it is building uranium enrichment plants.
The government insists that the programme is for
peaceful purposes.

1989 Ayatollah Khomeini dies and President Khamenei
is appointed Supreme Leader.
1997 Reformist politician Mohammad Khatami is
elected President after defeating 3 other candidates.
Many hope his victory signals the beginning of a more
liberal period in Iranian politics, but these expectations
are soon abandoned.
2010 Defiant opposition leader Mir Hossein Mousavi
says the Green Movement will continue its struggle
against Ahmedinejad’s regime.
2010 UN Security Council votes in favour of a fourth
round of sanctions against Iran. Sanctions allow UN
members to inspect vessels in Iranian waters suspected
of transporting prohibited items to the country.

2002 US President George Bush accuses Iran of plans

to develop long-range missiles. He equates Tehran to
Baghdad and Pyongyang and labels them collectively
as the "axis of evil."

2003 Iran announces that it has halted its uranium

enrichment programme. IAEA concludes there is no
evidence of a weapons programme.

2005 Mahmoud Ahmadinejad wins the 9th presidential

elections. He defeats cleric and former president Akbar
Hashemi Rafsanjani.

2007 US announces sweeping new sanctions against

Iran. They are the toughest since the first imposed
sanctions almost 30 years earlier.

2009 Mahmoud Ahmadinejad is declared victor in the

June’s presidential election. His rivals challenge the result,
and accuse the Iranian establishment of vote-rigging.

2009 The election result provokes the largest popular

uprisings since 1979, in what is now known as the
Image © Getty Images

Green Revolution. Supporters of rival candidates took

to the streets, Ahmadinejad’s regime responds with
mass arrests and crack downs creating the worst
scenes of state violence in 30 years.

54

TM1554_54-56_Country Brief.indd 54 5/7/10 15:41:09

 T
hree decades after Ayatollah Khomeini realized his
Islamic revolution, the Iranian street is still a lively
arena of political contestation. However, unlike in
1979, popular sentiment now challenges rather than
supports the revolution’s Islamic agenda. Last year’s Green Rev-
olution has been described by many analysts as the end of the Is-
lamic republic. At the very least, the outpouring of public anger
following the 10th presidential elections has been deeply damag-
ing to the legitimacy of Ayatollah Khamenei’s establishment.
The 1979 revolution in Iran constitutes the only popular rev-
olution in the region. In the years leading up to the revolution
the Shah’s unpopular and often brutal regime had fallen out of
favour with a wide cross section of society. Students, religious
conservatives and even the middle class were growing tired of
the Shah’s policies.
The tradition of Shi’a quietism, where the clergy remained
neutral in matters related to politics was broken. Ali Shariati and
Ruholla Khomeini were amongst those who openly criticised the
Shah’s regime and began touting Islamism as an alternative ide-
ology. Khomeini’s sustained and virulent criticism saw him exiled
from Iran for 14 years. Towards the end of the 70s grievances
spilled into the streets, the Shah fled to Egypt and Khomeini
returned from exile in Iraq to lead the disgruntled masses.
Khomeini and his supporters were quick to step in and fill the
power vacuum caused by the Shah’s exodus. They denounced
the standing government as illegitimate and proposed an alter-
native form of governance based on Islamic principles. This re-
sulted in the adoption of a highly complex political system which
combined elements of Islamic theocracy and democracy.
The system is comprised of two blocs; an unelected clerical
government, and an elected popular government. Until the late
1990s both blocs were dominated by conservative forces. This
state of affairs helped Khomeini and his supporters to realize
their pre-revolution ambition that Islam play a more dominant
role in Iranian society.
In the late 1990s and early 2000s however, Iranian politics
became somewhat more competitive in nature. Reformists
chipped away at conservative dominance in parliament and
sometimes also succeeded in winning the Presidency.
This was the case in 1997 when the reformist Mohammad
Khatami was elected President with 70% of the popular vote.
The overwhelming victory of reformists in the parliamentary
elections raised popular expectations that Iran was entering a
period of political and social transformation.
However, conservatives utilized unelected political and religious
institutions to block more than 90% of the legislation adopted by
the reformist-dominated parliament. The resulting political grid-
lock left many Iranians disappointed by the political process.
The illusion of a lively political environment was broken in
2004 when hardliners' regained control of parliament. And in
2005, the fate of the reformists was sealed with Ahmadinejad’s
victory in the Presidential elections. For the last five years both
the unelected and elected organs of government have been
dominated by conservative forces.
A turbulent year in Tehran
Iran’s controversial president Mahmoud Ahmadinejad was re-
elected in June 2009 to serve a second four year term amidst
widespread accusations of electoral fraud. Supreme Leader Ali
Khamenei announced the result of the elections, in which 40
Issue 1554 • July 2010
TM1554_54-56_Country Brief.indd 55
Key Facts
Image © iStockphoto
Capital: Tehran
Supreme leader:
Ayatollah Ali Khomeini
President: Mahmoud
Ahmadinejad
Geography
Area: 1.65 million sq km (636,313 sq miles)
Border countries: Afghanistan 936 km, Armenia 35
km, Azerbaijan-proper 432 km, Azerbaijan-Naxcivan
exclave 179 km, Iraq 1,458 km, Pakistan 909 km,
Turkey 499 km, Turkmenistan 992 km
PEOPLE
Population: 67,037,517
Ethnic Groups: Persian 51%, Azeri 24%, Gilaki and
Mazandarani 8%, Kurd 7%, Arab 3%, Lur 2%, Baloch
2%, Turkmen 2%, other 1%
Religions: Muslim 98% (Shia 89%, Sunni 9%), other
(includes Zoroastrian, Jewish, Christian, and Baha'i) 2%
Languages: Persian and Persian dialects 58%,
Turkic and Turkic dialects 26%, Kurdish 9%, Luri 2%,
Balochi 1%, Arabic 1%, Turkish 1%, other 2%
Refugee Population: 1,070,488
ECONOMY
GDP: (ppp) $876 billion
GDP composition by sector: agriculture 10.9%,
industry 45.2%, services 43.9%
Inflation rate (consumer prices): 16.8%
Unemployment rate: 11.8%
Population below poverty line: 18%
million votes were cast, just two hours after the polling stations
closed. The incumbent, Ahmadinejad was awarded victory
with a surprising 63% of the vote, in what had been a hotly
contested election.
The opposition led by former Prime Minister Mir Hussein
Mousavi and former speaker of parliament and senior cleric,
Mehdi Karroubi quickly labelled the elections as unfair. They
suggested that Ayatollah Khamenei had intervened in the elec-
tion process to secure the victory of Ahmadinejad.
Khamenei responded saying that the Islamic Republic of
Iran "would not cheat" and singled out western politicians and
media - particularly Britain and the United States - to blame
for fanning the flames of anti-government anger.
The Green Revolution
In the aftermath of the election, the world's attention was fo-
cused on one of the largest mass protests Iran had ever witnessed.
The decisive victory claimed by Ahmadinejad was immediately
challenged in Tehran’s streets. Mir-Hussein Mossavi and Mah-
di Karroubi were cast as leaders of the nationwide opposition
movement, otherwise known as the Green Revolution.
The state took a hardline stance against demonstrators with
brutal crackdowns on opposition figures, journalists and or-
55
5/7/10 15:41:10
 • COUNTRY BRIEF
dinary demonstrators. However, in spite of these efforts the
Green Revolution maintained its early momentum. Tens of
thousands of opposition supporters clashed with the security
forces and members of pro-government militia on Quds Day
in September of 2009, the 30th anniversary of the storming
of the US embassy in Tehran in November, and on National
Students Day at the start of December.
Acts of open repression and brutality undertaken by the
government, particularly by the notorious basij militia were
captured by "citizen journalists" armed with camera phones.
Video footage of the death of an young Iranian woman called
Neda, was uploaded onto youtube and became the defining
image of the uprising and its brutal suppression.
Ahmadinejad was awarded
victory with a surprising 63%
of the vote, in what had been a
hotly contested election
However, in the year that has passed since the elections, the
brute force of state power has overwhelmed the opposition
and a semblance of calm has returned to Tehran’s streets. For
the time being, the state has re-established its control. On June
12th 2010, the anniversary of the election, a massive security
presence prevented large gatherings, and leaders of the oppo-
sition called off planned protests out of fear that more blood
might be spilt. After a year long struggle, the Green Revolution
appeared to have failed.
56
TM1554_54-56_Country Brief.indd 56
Iran's nuclear program.
With the spotlight off domestic politics, attention shifted towards
Iran's controversial nuclear program. Tehran was lambasted by
the West for its extensive plans to build uranium enrichment
plants. The U.S. and other nations believed that the technology
may be used to develop nuclear weapons. Officially, Iran denied
such plans. However, Ahmadinejad’s hawkish foreign policy and
his insistence on Iran’s right to develop a nuclear programme led
to increasing tensions in the international community.
The most recent efforts to curb Tehran’s nuclear ambitions came
in June when the United Nations Security Council passed new sanc-
tions against Tehran. The sanctions called for UN members to in-
spect vessels suspected of transporting prohibited items to and from
Iran. No stranger to sanctions Iran has been subjected to various
economic and political sanctions since the 1979 hostage crisis. In
January 1984 sanctions were imposed when Iran was implicated in
the bombing of the U.S. Marine base in Beirut, Lebanon. In the
1990s deteriorating relations between Washington and Tehran
prompted the United States to ban exports to Iran on a host of
products, from airplane and helicopter parts to scuba gear.
What next for Iran?
The last year has been particularly tempestuous for Tehran.
Ahmadinejad’s controversial re-election prompted a massive
public backlash. Although Tehran has stymied the Green Rev-
olution the regime is undeniably vulnerable. Its disproportion-
ate use of violence has merely forced opposition underground.
Iranian judge and Nobel Prize winner, Dr Ebadi, has suggested
that ‘there is fire beneath the ashes’ and it would take little to
fan opposition flames again.
Image © Getty Images
5/7/10 15:41:11
TM1554_57_Ad.indd 57 5/7/10 15:41:31
 • THE CRITICS
Forgive and Forget?
A review of Legal Institutions and
Collective Memories by Susanne Karstedt
Onati International Series 2009
In Karstedt’s latest book, Legal Institutions and Collective
Memories, the author explores the importance of the past on
the prospects for reconciliation and stability, especially after
traumatizing periods in history. Given the complicated, and often
bellicose nature of most of the world’s history, Karstedt’s book is
a timely philosophical analysis of how the past can be adequately
dealt with so that communities may coexist peacefully.
We are taught that history
is important to study, be-
cause nations, like people,
can learn from the past.
What is often left out of
such advice is the possibility
that history is not necessar-
ily a fact. Although there is
certainly a string of events
that compose history, his-
tory is rarely remembered
as an objective sequence of
events. Rather, the history
of communities, from na-
tions to religious groups, is
often remembered in a very
specific way and it serves an
important function to the
group it pertains to. This normative history, or collective memo-
ry, defines not only a group’s past but also its values and aims.
The establishment of collective memory, the shared past and
values of a group, is the subject of Susanne Karstedt’s latest
edited volume Legal Institutions and Collective Memories.
This compilation of articles draws from international history
to demonstrate how specific readings of the past can come
to shape the identity of groups. Examples abound, from the
Holocaust to the Rwandan genocide as well as the legacy of
communism in Eastern Europe; this book addresses how these
traumatic periods of history are dealt with by the communities
that experienced them. More importantly, the book evaluates
the relationship between how such events are remembered and
the ability of communities to come to terms with the past.
The relationship between reconciliation, justice, remember-
ing and forgetting are eloquently explored. Does forgiving im-
ply forgetting? Can a community forget the injustices of the
past? Can remembering be dangerous, could it encourage re-
venge? Practically, is it possible to obtain justice when entire
communities are guilty of discriminating each other? Can a
country transition from a phase of authoritarian oppression to
one of democracy without dealing with the past?
Frustratingly, many of these questions have indefinite answers.
However, the book is more than a philosophical inquiry into the
relationship between the past and the present. Legal Institutions
and Collective Memories is able to distil important trends in rec-
onciliatory process, and thus provides important lessons for those
58
TM1554_58-60_The Critics.indd 58
interested or implicated in transitional phases of history. One
founding principle of the book is the role that legal institutions—
from courts to truth and reconciliation commissions—play in the
creation of a dominant narrative of the past.
While legal institutions are usually interpreted as a source of
justice, they are rarely understood as the framework on which
history is grounded. However, Karstedt’s work is convincing in
demonstrating that, in fact, legal institutions are fundamentally
related to the collective memory of communities.
Legal institutions allow witnesses to bring to “the court room
experiences and memories of terror and violence that were at-
tached to cities, streets and houses but had been eradicated from
the normal spaces in which memory is exercised and sedimented
in society. They recreated a space for such memories for the first
time, even within the restrictive boundaries of the law.”
Legal institutions are powerful because they not only give
a voice to victims and perpetrators; they also determine how
those accounts are remembered. In declaring guilt and inno-
cence, legal institutions imbue the past with normative values,
and thus express the values of the communities they represent.
“Simultaneously they set the stage for all types of forgetting, for
individual denial of guilt and repression of memories, amount-
ing to social amnesia of a terrible past, for amnesties as lawful
amnesia… and equally for those kinder versions of forgetting
like reconciliation and forgiveness.”
In terms of nation building, perhaps no other country’s col-
lective memory is so linked to legal institutions as South Africa.
Following Apartheid, the Truth and Reconciliation Commis-
sion was brought in to deal with the country’s troubled past,
but also to create the foundations for a future nation that would
be based on racial equality. How was the Truth Commission
capable of creating the idea or the collective memory of a
country that stands for equality if its past was founded on ra-
cial discrimination? In remembering past events as wrong, and
acknowledging that the values of a “new” South Africa were
based on equality, the Truth Commission created a national
identity. Although such mechanisms are far from perfect, and
other narratives of the country’s past have not been eradicated,
South Africa’s example shows that institutionalized readings
are by default the most dominant interpretation of the past.
As Krastedt explains, this is because law “…as it defines prop-
erty rights or relations of domination and subordination with-
in a society and between its different groups, leaves its visible
stamp on social space and thus shapes the collective memory of
groups and society as a whole.”
The depth and breadth with which collective memory is ex-
plored in the book is impressive. In highlighting the advantages
and disadvantages of institutionalizing collective memories,
Karstedt’s book stands to impact many of the ongoing con-
flicts that shape the world today. For example, the question of
Afghanistan’s future relationship with the Taliban is inextrica-
bly related to the numerous issues that are raised in the book.
Those interested in seeing stability and peace in the country
restored will inevitably have to deal with collective memory
of past violence. Although, each conflicted past differs, and
Karstedt makes no claim to offer solutions to such troubled his-
tories. This book instead exposes how much memories of the
past impact future relationships.
This article was first published in The Majalla 1 June 2010
5/7/10 15:41:46
 Inside the Green Revolution
Death to the Dictator!: Witnessing Iran's Election
and the Crippling of the Islamic Republic
by Afsaneh Moqadam
Bodley Head, 2010 (Paperback £10.99)
Death to the Dictator! is a brave and moving eye witness
account of last summer’s “Green Revolution” in Iran. The author
takes the reader down Iran’s crowded streets and behind its
notorious prison bars in a shock tactic to raise awareness of the
regime’s horrific human rights abuses.
Last June the world watched,
transfixed, as thousands of dem-
onstrators took to the streets across
Iran in opposition to the contested
election results. Afsaneh Moqa-
dam’s book Death to the Dictator!
allows the reader a peak behind
the headlines into the foray of
mass protests in Tehran, engag-
ing in both the disillusionment but
also inspiring resilience of Iran’s
reformist movement.
The Green Revolution, as the
movement became known was
characterised by its non-violence
and the disproportionate reaction of Ahmadinejad’s henchmen:
the Revolutionary Guard and the despised paramilitary Basijis.
The story is based on real events, witnessed by the author, a dem-
onstrator himself, and expressed through the eyes of the pro-
tagonist Mohsen Abbaspour. That both the author’s name and
the names of the characters are pseudonyms attests to the fear
instilled in a population living under a military dictatorship.
The scene opens on the emaciated, broken body of Mohsen,
lying at the roadside, abused so horrifically he can barely move
or speak. It gradually emerges that Mohsen, a keen supporter
of the reformist candidate Mir-Hossein Mousavi, and active
participant in the post-election demonstrations, was imprisoned
and subjected to unspeakable torture by the incumbent’s mili-
tia. Mohsen has been continually raped and brutally beaten,
his wounds are not only physical but psychological. He feels ut-
terly humiliated, having caved in under torture and given away
the names of his fellow protestors.
The mood is decidedly defeatist at the book’s conclusion as
Mohsen is preparing to move abroad, when earlier in the sto-
ry he “vows never to leave this country.” His mistreatment in
prison leads him to abandon his hopes and dreams. The cruel
irony is that, like the reformist leaders in the elections, Mohsen
“had been defeated by Ahmadinejad.”
Despite the dark subject matter the story still manages to
have an intimate, amateurish appeal with its anecdotal style and
humorous cultural insights. In typical Iranian spirit the author
makes light of some of the hardships Iranians face in everyday
life. The stigma of holding an Iranian passport is described as
eliciting “the same reaction as a warm, dead bird” when it lands
on the desk of an immigration official. Mohsen’s character is
portrayed as very ordinary. He is representative of many Irani-
Issue 1554 • July 2010
TM1554_58-60_The Critics.indd 59
ans: still living at home with his parents, searching for a job and
a prospective wife. The author deliberately creates his character
as an embodiment of the Iranian people with their reasonable
demands for democracy and a life without fear and harassment.
The Green Revolution encompassed Iranians from all strata
of society, “young and old, students and wasters, housewives,
addicts, clerks…” the list goes on. The scale and popularity of
the demonstrations had a striking resemblance to the Iranian
Revolution of 1979.
Moqadam draws parallels between the 1979 Revolution and
the demonstrations that took place thirty years later. There are
clear differences: unlike the earlier generation, those who took to
the streets last June didn’t want a revolution, they wanted consti-
tutional reform. This generation of demonstrators are better edu-
cated than their predecessors; they used brains not brawn in the
fight for change. The author explores the irony and significance of
the call “Allahu Akbar!” (God is Great). Originally chanted from
the rooftops during the Islamic Revolution in 1979, it was again
shouted in defiance of the contested election results in 2009: “No
longer is it a call for religion. It has become a call for truth.”
Moqadam discredits Khamenei, Iran’s spiritual leader who
has ultimate authority under Iran's constitution. Reverence
of Khamenei is almost innate to Iranians, but following his
reaction to the elections the author describes the Islamic Re-
public and its religious leaders as having taken on a “milita-
rised, neo-fascist guise.” It is interesting to note that even the
reformists wanted to believe in Khamenei, in his impartiality
concerning the disputed election results. In the days following
the election the people looked to Khamenei for answers, the
reformists hoped he would call for a recount. Their hopes went
unfulfilled; Moqadam asserts that Khamenei is nothing more
than Ahmadinejad’s puppet. Mohsen, who initially had faith in
Khamenei loses all respect for him. Khamenei is described as
being “framed by a flimsy arch with prayers inscribed on it.”
The Green Revolution was also popularly known as the “Twit-
ter Revolution.” Twitter and other online networking sites were
used by demonstrators to communicate in secret to organise
meetings and protests away from eagle-eyed state censorship.
Mohsen is constantly trying to outsmart the state’s internet fil-
ter to access Facebook, BBC Persian and the Voice of America.
The internet is where he finds freedom away from his oppressed
reality. Boxed into his apartment, he sits glued to the screen to
find out what is taking place on his very doorstep. The internet
proved to be an invaluable tool in linking Iranians both to each
other and the outside world. Without the internet Iranians’ as-
tonishing mobilisation would have been kept firmly behind the
Islamic Republic’s closed doors.
The sad truth is, that after the media frenzy died down, the world
forgot about Iran’s brave protestors, whilst people like Mohsen con-
tinue to be abused under the military dictatorship everyday. Death
to the Dictator! is a moving testimony to those who participated
in Iran’s Green Revolution, a story that, despite the regime’s best
efforts to conceal it, has now reached a Western audience through
the pen of one of its victims. Moqadam’s book is necessary in giv-
ing a voice to those who strive for human rights and democracy
under Iran’s despotic leadership. The reader cannot but wonder
what the fates of the characters may be, real people, who continue
to suffer long after the final chapter was written.
This article was first published in The Majalla 25 June 2010
59
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 • THE CRITICS
Victors’ Justice
From Rome to Kampala: The U.S. Approach to the
2010 International Criminal Court Review Conference
Council on Foreign Relations, April 2010
A recent report by the Council on Foreign Relations discusses
the future of America’s relationship with the International
Criminal Court (ICC) in ensuring immunity from prosecution
for US nationals. Its suggestion, however, that the US refuses
to play by the ICC’s rulebook, are questionable, particularly
given the importance of the ICC’s universal jurisdiction to its
ability to fairly account for injustice world wide.
When Churchill, Truman and Sta-
lin sat around the negotiating table in
1945 discussing the fate of Nazi war
criminals, they established the world’s
first international war crimes tribunal.
The Nuremberg trials were heralded
for bringing a country and its lead-
ers to justice for committing crimes
against humanity. Sadly, the trials also
came under heavy criticism for their
hypocrisy and self-serving restrictions,
compromising the trial’s fairness. Allied
crimes, often equally atrocious to the defendants, were exempt
from prosecution, leading some observers to label the Nurem-
berg trials, show trials based on a ‘victor's justice.’
A recent report published by the Council of Foreign Relations
reads as a classic case of victor’s justice. The report discusses the
future of America’s relationship with the International Crimi-
nal Court (ICC) in ensuring immunity from prosecution for US
nationals. This spring, nations from around the world will be
discussing the international jurisdiction of the ICC at the ICC
Review Conference to be held in Kampala, Uganda. The report
broaches the uneasy relationship between the ICC and the US
and makes recommendations for its approach at the conference
to protect US interests.
More than 50 years after Nuremburg, in 2002, the Interna-
tional Criminal Court was established under the treaty of the
Rome Statute. The ICC, with its seat in The Hague, The Neth-
erlands, is responsible for prosecuting those who violate human
rights and take part in international war crimes. Since its creation
consecutive US administrations have been reluctant to ratify the
Statute and become a formal member. The US objects to several
aspects of the court’s authority and jurisdiction. The ICC oper-
ates independently of the United Nations, free to accuse suspects
without the permission of the UN Security Council. This leaves
the US more exposed to prosecution without the vetoing power
it holds in the UN. In addition, Washington has concerns over
the court’s authority to prosecute nationals of a non-member
state if crimes occur in a member state’s territory. This stipula-
tion exposes US military and peacekeeping personnel in military
interventions abroad to prosecution.
The United States appears even less likely to join the ICC
if certain changes are made to the Statute in Kampala. In
particular, the ICC is hoping to agree on a definition of “ag-
gression” and activate jurisdiction over crimes of aggression.
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The report makes clear that the US administration regards this
stipulation as a political issue and not solely a legal one. Ac-
cording to the report, the inclusion of the crime of aggression
as an offence would delegitimize ICC jurisdiction. The author
notes, “It places U.S. and allied leaders at risk of prosecution
for what they view as necessary and legitimate security actions.”
Read: Iraq. This change could potentially put the US in a very
uncompromising position concerning its military escapades
abroad. If aggression is added to ICC jurisdiction the US will
certainly not join. Yet isn’t that the way justice works, shouldn’t
every nation be held equally accountable for their actions?
Demonstrators waving banners condemning the war in Iraq
as illegal would welcome the inclusion of aggression under
ICC jurisdiction. It is of considerable note that the author has
mentioned the prosecution the US might face were it to wage
war on Iran should tension over nuclear weapons escalate. It is
precisely this concern that makes the ICC so important in reg-
ulating international justice. The ICC’s jurisdiction can inad-
vertently act as a deterrent to future US military intervention.
Before alarm bells start ringing in the Senate, US politicians
should remember that the ICC is a court of last resort. Cases
will only be referred to the ICC if national courts are unable or
unwilling to prosecute.
This all amounts to a nation evidently unwilling to play by
someone else’s rulebook. The United States has continually
undermined the ICC, particularly during the Bush administra-
tion. Several Acts were passed through Congress to prohibit
information sharing with the ICC and ensure exemption from
ICC jurisdiction for US personnel. Since then, relations have
thawed a little with the US strongly supporting the ICC cases
for Sierra Leone and Sudan. The report offers the upcoming
conference as an opportunity for the US to influence the ICC
without committing or being held accountable to it.
The author presents a defensive strategy in its negotiations with
the ICC at the Review Conference. The US will attend as an
observer but hopes to make its voice heard by sending a cabinet
level representative. The author recommends that the US push
to prevent activation of the crime of aggression whilst providing
constructive feedback on the Court’s performance. The Obama
administration will find it hard to maneuver between advancing
US interests amongst weary members without a peace offering
of support. The author suggests that the US provide financial
and practical support if its demands are met. He further recom-
mends that representatives support initiatives, such as victim out-
reach, to ensure greater inclusion of victims’ accounts in court
proceedings. Finally, he argues that the US should show com-
mitment to maintaining the court by apprehending suspects and
improving the capability of national courts to deal with cases,
especially in Africa, so the ICC does not have to.
The US should not hope to get a free out of jail card; jus-
tice should apply equally to everyone without exemption. As
the author notes, the ICC works on a principal of universal-
ity. How can he then suggest that it bends its principals to ac-
commodate US security interests? When representatives from
around the world gather in Kampala they should not make the
same mistakes as their predecessors in 1945, but should allow
the ICC to function as a neutral court, thereby avoiding accu-
sations of a victor’s justice.
This article was first published in The Majalla 2 June 2010
5/7/10 15:41:48
 Rachid Koraïchi
Ecstatic Flow 11th June - 10th July 2010

Rachid Koraïchi Ibn El Arabi, 2009 (detail). Lithograph, 61 x 40 cm, ed. 70 + 5AP
AN EXHIBITION OF NEW WORKS CELEBRATING THE LIVES AND TEACHINGS OF SUFI MASTERS

Saturday 12th June at 3pm.

GALLERY TALK: Rachid Koraïchi will talk about his art at October Gallery. Admission Free.

October Gallery, 24 Old Gloucester Street, London WC1N 3AL

art@octobergallery.co.uk Tel: + 44 (0)20 7242 7367
Tues - Sat 12.30-5.30 or by appointment
October Gallery Trust Registered Charity No. 327032 www.octobergallery.co.uk
TM1554_61_Ad.indd
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25/05/2010 15:47
 • THE FINAL WORD
Fire Under the Ashes
A Year After Iran’s Troubled Elections
While the neo-conservatives in Iran enjoy their victory over the internal opposition, Iran has become
internationally isolated similar to the post-revolution years; the major countries passed a fourth package
of sanctions with the concurrence of Iran's friends: Russia and China. Though the Iranian government
appears negligent to these strategic losses, the country may face major economic challenges domestically.
A
s some analysts expected, the anniversary of the Ira-
nian elections passed with neither huge protests in
the streets nor any prominent events taking place.
Except for some student arrests and an individual
attack against the former presidential candidate Mehdi Kar-
roubi, the Iranian regime proved that it is the master of the
situation. This reality was made clear when leaders of the op-
posing green movement backed down from organizing protests
days before the anniversary and instead apologized out of fear
of security measures taken by the Iranian regime. Perceived as
a serious weakness by their supporters, members of the opposi-
tion have decreased in number.
Some attribute reasons for the green movement's retreat to
the success of the Iranian authorities backed particularly by the
revolutionary guard and the Basij militia in the forced reelection
of President Mahmoud Ahmadinejad. Also, a series of trials,
sentences and executions against supporters of the opposition
under the noses of its leaders—Rafsanjani, Mousavi, Khatami,
and Karroubi—proved that opposition to the existing regime is
still weak and ineffective in changing the situation in the Iranian
political arena. In this context, the political analyst Reza Esfan-
diari commented in the Telegraph (12 June), "Despite the claims
of a rigged poll, all of the available evidence indicates to [the
election] being authentic and that a majority of Iranians support
the current government.” He went on to say that "The failure of
the Green (reformist) movement one year on is largely down to
the fact that it could not draw among ordinary Iranians outside
of the political elite and cosmopolitan social base."
However, others see that the apparent calm conceals much an-
ger and internal congestion, or as The New York Times called
it in a 12 June report, “fire under the ashes." The report indi-
cates that the Supreme leader Ayatollah Khamenei and Presi-
dent Ahmadinejad may appear victorious at this stage, but many
people in Iran today feel that—despite the apparent retreat of
the green movement—underground opposition not directly as-
sociated with the movement is growing, and it is distinguishing
itself from both the existing political regime and its opponents. If
this is true, then the conservative and reformist parties have lost
their chance to challenge the serious imbalance of power in the
Iranian political system. In effect, the revolution that represented
the people has become a regime that forcefully controls a youth
nation that was born after the revolution.
While the neo-conservatives in Iran enjoy their victory over
the internal opposition, Iran has become internationally isolated
similar to the post-revolution years; the major countries passed a
62
TM1554_62_The Final Word v2.indd 62
Adel Al Toraifi
fourth package of sanctions with the concurrence of Iran's friends:
Russia and China. Though the Iranian government appears neg-
ligent to these strategic losses, the country—according to some
observers—may face major economic challenges domestically.
During 2007 and 2008, Iran gained significant income from its
oil returns, and the peak of the oil prices ($150) helped the cen-
tral government cover its gross expenditures in projects support-
ing the poor who, in fact, form the public base of President Ah-
madinejad. However, Iran is facing an economic blockade that
may harm its foreign trade. In 2008, Tehran's trade with its five
biggest Asian trading partners reached about one billion dollars.
The majority of Iran's exports go to countries such as the United
Arab Emirates, Iraq and Afghanistan, but the value of this trade
is likely to decrease to 2001 rates, less than $500 million, if these
sanctions are implemented more strictly than before.
In his important book Forces of Fortune (2009), Vali Nasr ar-
gues, "The great battle for Iran's soul –and the future of the
whole region – will be fought not over religion or sects, but
over the freedom of trade and capitalism." Thus, the economic
sanctions imposed on Iran will have significant consequences.
Iran's gross domestic product, now, is similar to that of Mas-
sachusetts. Experts argue that Iran’s economic status prevents
Iran from being a major player regionally, let alone confronting
countries such as the United States or the European Union.
The neo-conservatives in Iran argue that acquiring nuclear
technology – not necessarily possessing a nuclear weapons ar-
senal – is essentially a response to the foreign threats they face,
and that the western countries, especially those in the region,
will have to correct their stances and acknowledge Iran's status
as a major country. It is true that reaching a nuclear capability
may change the balance of power in the region. Nevertheless,
it will change nothing in the balance of the internal dispute.
Ray Takeyh (Guardians of the Revolution, 2009) points out
that the extreme rightist policies of the Mullahs in coalition
with the guards [Iranian Revolutionary Guard Corps] may
have ensured their success in the regional conflict with the in-
ternational community, but the domestic challenges might be
the greatest threat to their existence in power. Eventually, fail-
ing to solve domestic problems was the main reason behind the
fall of countries such as the Soviet Union.
The neo-conservatives may have succeeded in this round,
but as a Persian proverb states, "Forgiveness hides a pleasure
not found in revenge." It is a lesson they don’t realize clearly;
Iran will never be as it was before, as anger and revenge are still
burning under the ashes.
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