You need to travel back in time and place to get a fresh perspective on the situation in the Middle East. In the mid to late 1970s, an observer of Southeast Asia would see hardcore militias overthrowing military regimes in Indochina; millions dying in labor camps or executed at the hands of the Khmers Rouges; some two and a half million refugees having to resettle around the world, and hundreds of thousands of boat people dying trying to escape.
Countries like Malaysia, Indonesia and the Philippines, reeling from decades of insurgency and ethnic violence, were held together by military or autocratic regimes. In 1978, border clashes between Cambodia and Vietnam escalated into a full-fledge Vietnamese invasion, followed a few months later by a brief border war between Vietnam and China. Speaking of China, a nuclear power, it was then going through a tense succession struggle following the death of Chairman Mao, and had massed one and a half million troops at the northwestern border, in anticipation of a war with the Soviet Union.
In narrowing our focus on crises and threats, we would have missed less dramatic but more consequential developments. At the time, South Korea and Taiwan were about to emerge on the global stage as industrial powers, which would be followed in short order by democratization. Singapore was reinventing itself from a British base to a global commercial and financial gateway. China, after teetering on the edge, embarked on a transformative journey toward becoming an economic superpower. By 1990, many of the systemic risk factors in Southeast and East Asia would have evaporated.
A similar dichotomy between the visible and the hidden applies to the Middle East today. Slow shifts of great magnitude disappear behind the micro-turbulence created by agitators, which are amplified by hysterical reports and analyses about the condition of the region. It is not the Iraqi city of Mosul that the “Islamic State” conquered in June 2014; it is the whole Western psyche. Even yesterday’s monsters—Al Qaeda and the Iranian nuclear program—were eclipsed by the few thousand jihadists making the law over a barren stretch of Mesopotamia.
There are several explanations for this blind obsession. Al Qaeda did the groundwork with 9/11, sensitizing Western audiences to the threat of Islamic terrorism. The gift of Bin Laden to the new generation of Jihadists is that any minor, half-baked operation can throw the Western body politic into anaphylactic shock. ISIS knew that, and its performances were staged for maximum impact. The scheduled beheading of Western hostages amplified reports of mass rape and ethnic cleansing which, in another context, would have gone unnoticed. ISIS is a global sensation, but the capitals of rape, mutilation, and murder are to be found in Mexico and Central Africa, not in the Muslim world.
In an age when science focuses on the quantifiable, few seem to pause to do the body count of Jihadist crimes. However tragic, on a historical scale, those atrocities fit in the range of accounting error. But ISIS found its voice through the inflamed narratives of Western media, and through apocalyptic analyses from a cottage industry of experts in think tanks and academia whose livelihood depends on the intensity of the risk they have to assess. In turn, the warnings of security analysts have translated into new business for a drone program in abeyance after previous targets in Somalia and Yemen came apart.
ISIS also rescued the Administration’s Middle East policy, which had recently erred in pursuit of a peace agreement between the Israeli and Palestinians, and a negotiated a settlement to the Iranian nuclear program. If there are two fronts that are rock solid in the Middle East, it is the Irano-American and the Israeli-Palestinian enmities. It is not nuclear weapons that would change Iran’s strategic position—active Sovietologists may have a thing or two to say about deterrence—it is the process of obtaining them that makes the country relevant. The negotiations, if they deliver anything, will trade a bit of sanction relief to Iran against a bit of diplomatic luster to Obama’s Nobel Peace Prize. The world will be neither better nor worse off from where it is today.
The Israeli-Palestinian dynamic is similarly poised. Both parties are playing the clock, confident that the status quo works in their favor. Micro-clashes, which come and go with regularity, help to make adjustments in the relationship, and remind financial backers that donations are due. This may be a suboptimal equilibrium, but it is as stable as it gets, and the last thing an American President should expect is to be able to make a difference.
ISIS is a legitimate but low risk villain. The threat from homebound terrorists is marginal, but like the yellow and red perils of the not-too-distant past, it titillates pandemic phobias about fifth columns and invading hordes. The probability that ISIS’s caliphate will become one day a Mesopotamian superpower is statistically insignificant. Even in the odd chance that it did, it is worth remembering that it took 80 long years and numerous ideological conversions for the ragtag fighters of the Chinese Communist party to rise from the nadir of the Long March (1934) and command the world’s largest economy (2014).
The low risk is precisely what makes ISIS an attractive target for airstrikes. ISIS is the low hanging fruit; the war that can be waged while the meaningful fights are dodged and serious enemies are accommodated. ISIS is the fig leaf that covers impotence. We will never know if America could have made a difference opposing Russia and the criminal regime in Syria, or if sanctions could have brought down the Iranian regime. Defeating ISIS is the one pursuit that magically brings together Assad, Putin, Khamenei, Netanyahu, and the monarchs of Jordan and Saudi Arabia. Obama finally built a consensus with some questionable characters around a meaningless chase for ghouls in Mesopotamia; all the while the world order is changing in profound and frightening ways.
Since news feeds are limited, more focus on ISIS means less focus on other foreign policy issues, and this reductionist approach misses the meaningful transformations the Middle East is going through. Jihadism is only a symptom of the single most important dynamic of the last few decades: the demographic transition. This transition happens once in the life of a society. It is the transition from an agrarian, rural population to one that is urbanized, one that can—that should—be employed in the industrial and service sectors. It is this transition that pushed the growth of Asia’s new tigers and of China, leading to social and economic modernization and to some form of democratization there.
In 1950, the population of the Arab world was about 100 million; it passed 250 million in 1990; today it exceeds 400 million, to reach about 700 million by 2050. This expanding human mass has put extreme pressure on the social system. Stress fractures started to appear back in the 1970s, with the Lebanese civil war, the recurrent riots following IMF adjustment programs, and the emergence of radical Islamist movements. With the Arab spring, the system underwent a major tectonic shift. Some countries resisted, while others caved in. The only significant difference between them was the degree to which the states had put forward, in the previous decades, a social and economic model that could accommodate the demographic transition.
The central challenge for the Middle East is not Islamism. It is to find a niche in the global economy, to adopt a sustainable developmental model that is operational in the modern context. The year 2014 is not 1980, when China modernized, let alone 1880, when America industrialized, or 1780, when Britain and France pioneered the transition to modernity. The existence of China in today’s world means that it is hard, if not impossible, to develop on the basis of cheap labor. China will almost always be more competitive, and Arab nations have to work their way around that, as they contend with their own demographic transition.
The region does have assets, starting with its geographic location between Europe, East Africa, and Asia. Regional businesses and governments with an eye on the future are anchoring themselves in south-south relationships, an Indian Ocean economy destined to complement, if not supplant, the Mediterranean economy. Commerce between the Arab World and the European Union, traditionally the region’s main trading partner, has had flagging prospects since the onset of the Euro crisis. But Arab countries have plans instead to ride the wave of hundreds of millions in Africa and South Asia reaching middle class status.
The Arab world can also count on its vast sources of energy and capital. The proceeds of the sale of oil and gas have built up significant financial reserves that can be transformed in investment capital. Those assets have already been pulled together successfully in specific sectors, like transport, where Arab companies like Emirates Airlines and DP World are becoming global players.
The weakness is human capital, which is either unproductive for lack of adequate education, or uncompetitive, because wage expectations are relatively higher than in other emerging economies. The richer countries have worked around the problem by importing cheap, low-skilled foreign labor—immigrants from the East who notoriously toil for little pay and even less protection. In parallel, they have made massive investments in higher education, so that the productivity of their native workforce eventually reaches the compensations they expect. This effort is still a work in progress, but the model is theoretically viable.
For lack of capital, the poorer Arab countries could not follow that route. Faced with low capitalization, sticky wages and high unemployment, they have instead allowed a shadow economy to grow. The arrangement keeps people employed, if at low levels of productivity, and in a manner that brings no tax revenue to the state. Those countries have also lived off remittances from surplus labor, exported mostly to the European Union and to the richer, oil-producing countries. Some of the excess labor has found employment in the jihadist sector, a high-risk but up and coming industry which pays decent salaries. For the poorer states of the region, the jihadists are the ticket to foreign strategic rent.
Foreign strategic rent is nothing new. Arab countries got a taste for it in the early days of the Cold War, when they received aid from either superpower simply to anchor themselves in their camp. Foreign strategic rent comes in many forms: from direct military aid to preferential trade agreements, from financial assistance to balance a budget to aid programs to cater to refugee populations—a major industry in Jordan since 1948. Foreign strategic rent is difficult to quantify, but in most cases a few percentage points of GDP seem like a reasonable estimate. The problem with foreign strategic rent is the moral hazard. It rewards chaos. Pirates and jihadists, famine and refugees, all bear promises of aid to come from concerned distant powers.
Aid also encourages a short-term mindset. Foreign strategic rent is limited to keeping states afloat and maintaining law and order, without real ambition to push the country forward. Only sustainable development would both solve chaos for good, and make further aid unnecessary. The richer countries of the Arab world have long understood that. Their standards of living are high enough for them to be indifferent to the paltry payments of foreign strategic rent. Their future when oil runs out lies in finding a productive place in the global economy, at which point they will no longer need to worry about the jihadists of ISIS, any more than they would need American support. This is an ambitious and respectable project that they have, and their success may in turn transform the rest of the region, in the same way that the success of Japan spread to the rest of East Asia.
The region is being transformed. The 1916 Sykes-Picot agreement, between France and England, created in the Levant states that are all but gone, collapsed under the weight of their own ineptitude. The Kurds, and now ISIS, are putting forth competing claims in the region. Their advent will assuredly bring human tragedies, but the prospect of new atrocities does not to redeem the ancien régimes, who have their own baggage of atrocities.
The United States—by bailing out political systems that have long track records of inefficiency, corruption, and murder, and doing so in the name of defeating jihadism—is undermining the mechanism of competition that is at the very core of the American social model. Failed states are meant to go away. Injections of aid, in whatever form, keeps them going. Their dereliction will give jihadists new missions to fulfill. The wars of the Middle East would not be so intractable if they were not so subsidized.