The Caravan

“Going Short” In The Middle East

by Samuel Helfont
Tuesday, March 26, 2019
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In finance, “going short” is a way to make money on stocks that lose value. Nassim Taleb, the author of The Black Swan, reportedly used this tactic to make millions during financial crises. He did not know exactly when or why the markets would crash, but he knew they eventually would. Then he cashed in.  In many ways, going short is the opposite of traditional investment. In traditional investments one bets on success. In going short, one bets on failure. For over a decade, the United States has been trying to find a way to declare victory in the Middle East so that it can leave. In other words, it has been betting on success. This strategy has repeatedly backfired. The U.S. may need to focus on more pressing issues elsewhere, but its strategy for the region needs to be based on the recognition that anything resembling victory will remain elusive for the foreseeable future. In the coming years, the region will likely experience more, not less disruptive crises. A stable Middle East would benefit the U.S., and Americans should not foment unrest. However, American strategists need to bet on failure so that they are positioned not only to weather the inevitable upheaval, but to take advantage of it.

Beginning with George W. Bush, successive presidential administrations have attempted to leave the Middle East to focus on more pressing issues in East Asia. The pressure to do so has only increased recently. When Patrick Shanahan became the Acting Secretary of Defense in January 2019, he outlined his priorities: “China, China, China.” More resources in the Pacific means less resources in the Middle East. As such, the U.S. has attempted to build indigenous capacity in the Middle East so local security forces can operate without American assistance. American officers have trained militaries in Iraq and Afghanistan; U.S. diplomats have ensured our partners have the right weapons and adequate economic aid. Most Americans do not want to be in these countries. Some believe (or at least hope) that if Iraqis and Afghans create solid institutions, they can learn to fend for themselves against groups such as the Islamic State in Syria and Iraq (ISIS) or the Taliban. The same capacity-building strategies have shaped U.S. relations with its Gulf Arab allies. Countless American officials have worked to integrate capabilities of the Gulf States in areas such as air and missile defense. They believe that while individually the Gulf States are vulnerable, together they can successfully balance against Iran, even without the United States.

Despite the best intentions, unforeseen crises have consistently undone this capacity-building strategy. Just as the U.S. finally withdrew its troops from Iraq in 2011, the Arab Spring erupted, throwing the region into chaos. Friendly regimes in Egypt and Tunisia were washed away by street protests. Libya, Syria, and Yemen imploded. Waves of refugees created a humanitarian disaster and destabilized the domestic politics of America’s European allies. Even states like Saudi Arabia, which avoided the brunt of the Arab Spring, became disillusioned with the American response to it. Relations between Riyadh and Washington gradually cooled. Throughout this period, the Gulf Arab states have grown more divided rather than more unified. In early 2014, Saudi Arabia, Bahrain, and the United Arab Emirates cut ties with Qatar. Relations between them recovered briefly, only to fall apart again in 2017. As of this writing the Saudis and the Emiratis have broken diplomatic ties with Doha and are imposing an economic blockade on the country. The closure of land routes to the Arabian Peninsula forced the Qataris to import goods by sea from Iran. So much for uniting the Gulf Arab states against the Iranian threat! Finally, and perhaps most problematically, in the summer of 2014, ISIS raced across northern and western Iraq. The American-trained Iraqi army simply melted away and ISIS declared itself the caliphate reincarnate.

In many of these cases, the United States was caught off guard because it was wedded to a strategy of success. Iraq provides perhaps the most telling example of this trend. Following the surge of 2006-2007, the Bush administration focused on preparing Iraqis to take control of their country. Then, prior to leaving office, Bush signed the 2008 Status of Forces Agreement that called for a complete withdrawal of American troops in 2011. President Obama, who had campaigned on ending the Iraq War, readily carried out Bush’s arrangement. Iraq was not stable, but policymakers in Washington convinced themselves that they could simply declare victory and go home. The Onion summed up the general mood with its satirical headline: “54 Iraqis Die In Not Our Problem Anymore.” At the end of 2011, as the last troops were leaving Iraq, the Obama administration declared it was “pivoting” to Asia.

Security in Iraq gradually devolved, but the Obama administration refused to see it. America was wedded to a strategy in which success in the Middle East would allow it to “rebalance” its resources. This approach came undone in June 2014 when ISIS sacked the Iraqi city of Mosul and raced south toward Baghdad. Iraq is an oil rich country strategically located at the top of the Persian Gulf. If it fell to ISIS, a terrorist organization that made al-Qaida look moderate, would suddenly gain the resources of a nation-state. ISIS would have threatened U.S. allies in the region, and through its terror networks, the American homeland itself. However, going back into Iraq meant acknowledging that the strategy of success had failed. The U.S. dragged its feet for as long as it could. It did not begin air strikes until August, and in what could only be described as denial, it refused to even name the operation against ISIS until October. By the time the U.S. reengaged in Iraq, it had lost almost all its institutional knowledge about the country and its military. American military officers and diplomats had to renegotiate political agreements as well as work out technical matters such as air space control almost from scratch. As Americans stumbled over themselves in the summer of 2014, Iranian advisors moved in to fill the void. Iranian backed militias formed to defend Baghdad, and following the eventual defeat of ISIS, they predictably refused to lay down their weapons. They now wield considerable power in the country. Not only do they work against American interests there, they are responsible for countless human rights abuses and they represent one of the greatest threats to peace and stability in the country.

The Trump Administration is repeating many of the same mistakes as its predecessors. It wants to pivot to Asia, but it is tied down in the Middle East. The administration has already signaled that it intends to declare victory in Syria and Afghanistan, at times threatening a complete withdrawal of troops from those countries. Recently in Baghdad, members of parliament began gathering signatures demanding a full withdrawal of U.S. troops from Iraq as well. In many ways, this mirrors the political pressure that pushed Bush to agree to the complete troop departure as part of the 2008 Status of Forces Agreement. Under these circumstances, it is easy to see how policymakers in Washington could convince themselves to declare victory in the Middle East and move on. Having retrained the Iraqi Army as well as the Kurds, and having armed the Saudis and other Gulf Arab states with the latest and greatest weapons, American strategists concerned about China and the return of great power politics have an interest in believing that the Middle Eastern regimes they are leaving behind can fend for themselves.

That would be a mistake. The Middle East remains in turmoil. Iranian actions continue to foment sectarianism and civil war across the region. In places like Iraq, Syria, Yemen, and Libya an entire generation of children has not received a formal education. They will be ripe recruits for militias, criminal networks, and transnational terror networks. In strategically important states such as Saudi Arabia and Egypt, political repression is fueling unrest just below the surface. It is impossible to know what the next crisis will be in the Middle East, but like Nassim Taleb’s bets on failure, one can be certain that conflict and strife will erupt somewhere soon. The U.S. will almost definitely be drawn back in when it does. Oil markets are fungible, meaning that no matter how much oil the U.S. has, a crisis in the Middle East will cause American gas prices to rise; refugees and terrorists have the potential to aggravate politics far from their home countries; and whether hard-nosed realists like it or not, humanitarian disasters will put considerable pressure on Western governments to intervene.

Considering the strategic imperatives in Asia, the Middle East is going to lose American resources. Anyone thinking about a realistic U.S. strategy in the region needs to work within that constraint. However, bets on success in the region are not likely to pay off. When states fail, militaries defect, or alliances breakdown, all the hard work of building capacity can fade away overnight. The U.S. needs a strategy that bets on failure in the Middle East. Such a strategy will require Americans to remain engaged, even if it is behind the scenes. While a large American troop presence may not be possible, the U.S. should ensure that when upheavals occur and states fail, local actors know that they can turn to Washington for help the way that Iraqis knew they could turn to Tehran. If the U.S. positions itself right, it can actually benefit from a crisis. When local actors who are dependent on American support respond fastest and most effectively to a crisis, they will be more likely to seize the initiative, act in American interests, and marginalize hostile elements. The U.S. needs to develop networks of local actors on the ground – people who know that they can turn to the U.S. in times of upheaval. American strategists should have crisis plans worked out and be able to execute them quickly. Preserving access to key bases, air spaces, and ministries is critical. Most of all, while the U.S. may pivot many of its resources to the Pacific, it should not create a political narrative of withdrawal from the Middle East. This creates needless cognitive hurtles when it becomes necessary to reengage in the region to defend American interests. At best the Middle East is going to be a generational problem. In the short term, American strategists concerned with the region need to bet on failure.