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Getting the Saudi fight against corruption right

Dr. James M. Dorsey

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Kuwaiti billionaire Maan al-Sanea should have seen it coming after Saudi Crown Prince Mohammed bin Salman vowed to root out corruption.

Embroiled in one of the kingdom’s largest financial scandals and collapses that involved a bitter $22 billion battle with a prominent Saudi merchant family, cost some of the world’s biggest banks billions of dollars, and is being slugged out in courts across the globe, Mr. Al-Sanea was low hanging fruit. He was arrested in October when police raided his Saudi mansion two weeks before Prince Mohammed’s frontal assault on the kingdom’s political and economic elite.

Mr. Al-Sanea’s arrest failed to set off alarm bells. Members of the ruling family and business community as well as senior officials likely saw it as a one-off incident. Together with Mr. Al-Sanea, they also grossly underestimated Prince Mohammed’s brashness and ruthlessness and ignored his warning in June that “no one who got involved in a corruption case will escape, regardless if he was a minister or a prince.” 

Mr. Al-Sanea, the ruling family and business community had good reason to be complacent: they, like the crown prince and the Salman branch of the family, were all part of a system and a way of doing business that went back to the founding of Saudi Arabia.

That is why rather than creating a large number of enemies and opening himself up to accusations of selectively targeting people in a bold move that appeared to be more about grabbing power than rooting out corruption, Prince Mohammed may have been well-advised to make his anti-corruption stand differently.

The crown prince’s anti-corruption committee, established hours before the first arrests and announcement of dismissals of prominent princes, officials and businessmen were made, has projected itself as an enforcement agency with the powers to arrest, freeze assets and impose travel bans rather than a regulatory body that would introduce legislation designed to fundamentally alter an ingrained system.

Rooted in a system that until the late 1950s made no distinction between the budgets of the state and the ruling family, Saudi laws still only barely delineate the dividing lines between them nor do they contain anything that would amount to a code to prevent conflict of interest or regulate the way members of the ruling family do business with the state. In fact, business deals often amount to insider baseball in a country in which the family’s finances and sources of revenue are a closely held secret. In fact, if revealed, the Fortune 500 billionaire’s list could well look very different.

Members of the ruling family and associated businessmen initially often made their money by representing foreign companies and receiving huge commissions on government contracts. They often took loans from banks which they failed to pay back. National Commercial Bank, where numbered accounts of princes were managed by senior management, nearly collapsed at the beginning of this century because of unpaid loans.

Life magazine editor Noel F. Bush on a visit in 1943 during which he travelled in the country with its first king, Ibn Saud, portrayed a ruler who operated on the principle of ‘the state is mine’ and doled out welfare to his subjects. It is a system that has since repeatedly been upgraded but whose fundaments remain in place.

“Our unemployment rate would drop rather significantly if the billions we squandered on kickbacks and lavish personal enrichment schemes dressed up as public-works projects were spent instead on the development of small to medium enterprises, vocational training and 21st-century education reforms… In Saudi Arabia, senior officials and princes become billionaires as contracts are either enormously inflated or, at worst, a complete mirage,” wrote Jamal Khashoggi, a Saudi journalist who recently moved to the United States in anticipation of the crown prince’s crackdowns.

Mr. Khashoggi cited the example of an airport built “in the wrong location simply to benefit the princes who own the land. They received the land for free from the government and then got extravagant compensation for the property.”

Prince Mohammed’s plans to diversify and streamline the economy, loosen strict social codes to further his economic reforms, and, in a world in which autocracies can no longer primarily rely on repression, cater to social and job aspirations of an in majority young population while avoiding political change and tightening his grip on power, may well be the most far-reaching upgrade of the system.

No doubt, Prince Mohammed’s tackling of corruption and targeting of prominent people strikes a popular cord with many Saudis who have long been unhappy with arbitrary privileges members of the ruling family were able to accrue to further their business and financial interests.

Nonetheless, the impression that the most recent wave of arrests constituted a power grab rather than a systemic tackling of corruption is reinforced by the fact that the crown prince’s dealings as well as that of his tack of the ruling family remain beyond scrutiny.

The $500 million purchase by Prince Mohammed of the Serena, the world’s 15th largest yacht, raised eyebrows when it was disclosed in 2016 by The New York Times at a time that the crown prince had imposed austerity measures as a result of which many in the kingdom were struggling to make ends meet. The 32-year old crown prince never clarified how he had amassed his wealth.

Nor is it clear how his father, King Salman, funded the use of two offshore companies in the British Virgin Islands to take out mortgages on his London homes worth $34 million and manage a yacht. Similarly,  this week’s publication by the International Consortium of Investigative Journalists (ICIJ) of the Paradise Papers disclosed offshore holdings by several other members of the monarch’s branch of the family.

The New York Times moreover reported that a major Saudi investment firm founded by one of the king’s sons, and now chaired by another, owned a significant stake in a conglomerate that does extensive government business, including in a shipbuilding partnership with a French defense contractor. A smaller firm founded by another of King Salman’s sons operated in sectors regulated and/or funded by the state such as health care, telecommunications and education.

To be clear, offshore assets are not illegal nor are members of the ruling family barred under Saudi law from benefitting from doing business with a state that was named after the family. Equally clear, however, is that Saudi Arabia may benefit more from a reformer who exudes transparency, lives up to his vow that all are equal under the law, and tackles corruption structurally rather than punitively.

To achieve that, Prince Mohammed may be better served by an anti-corruption committee that is less vindictive and more focused on developing and enforcing a set of laws, rules and regulations that ensures rule of law by institutionalizing anti-corruption norms, policing conflict of interest, and introducing transparency into the finances of the state as well as the ruling elite.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog, a book with the same title, Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario and three forthcoming books, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africaas well as Creating Frankenstein: The Saudi Export of Ultra-conservatism and China and the Middle East: Venturing into the Maelstrom.

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The Turkish Gambit

Dr. Arshad M. Khan

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The only certainty in war is its intrinsic uncertainty, something Turkish President Recep Tayyip Erdogan could soon chance upon.  One only has to look back on America’s topsy-turvy fortunes in Iraq, Afghanistan and even Syria for confirmation.

The Turkish invasion of northeastern Syria has as its defined objective a buffer zone between the Kurds in Turkey and in Syria.  Mr. Erdogan hopes, to populate it with some of the 3 million plus Syrian refugees in Turkey, many of these in limbo in border camps.  The refugees are Arab; the Kurds are not.

Kurds speak a language different from Arabic but akin to Persian.  After the First World War, when the victors parceled up the Arab areas of the Ottoman Empire, Syria came to be controlled by the French, Iraq by the British, and the Kurdish area was divided into parts in Turkey, Syria and Iraq, not forgetting the borderlands in Iran — a brutal division by a colonial scalpel severing communities, friends and families.  About the latter, I have some experience, having lived through the bloody partition of India into two, and now three countries that cost a million lives.   

How Mr. Erdogan will persuade the Arab Syrian refugees to live in an enclave, surrounded by hostile Kurds, some ethnically cleansed from the very same place, remains an open question.  Will the Turkish army occupy this zone permanently?  For, we can imagine what the Kurds will do if the Turkish forces leave.

There is another aspect of modern conflict that has made conquest no longer such a desirable proposition — the guerrilla fighter.  Lightly armed and a master of asymmetric warfare, he destabilizes. 

Modern weapons provide small bands of men the capacity and capability to down helicopters, cripple tanks, lay IEDs, place car bombs in cities and generally disrupt any orderly functioning of a state, tying down large forces at huge expense with little chance of long term stability.  If the US has failed repeatedly in its efforts to bend countries to its will, one has to wonder if Erdogan has thought this one through.

The Israeli invasion of Lebanon in 1982 is another case in point.  Forever synonymous with the infamous butchery at Sabra and Shatila by the Phalange militia facilitated by Israeli forces, it is easy to forget a major and important Israeli goal:  access to the waters of the Litani River which implied a zone of occupation for the area south of it up to the Israeli border.

Southern Lebanon is predominantly Shia and at the time of the Israeli invasion they were a placid group who were dominated by Christians and Sunni, even Palestinians ejected from Israel but now armed and finding refuge in Lebanon.  It was when the Israelis looked like they were going to stay that the Shia awoke.  It took a while but soon their guerrillas were harassing Israeli troops and drawing blood.  The game was no longer worth the candle and Israel, licking its wounds, began to withdraw ending up eventually behind their own border.

A colossal footnote is the resurgent Shia confidence, the buildup into Hezbollah and new political power.  The Hezbollah prepared well for another Israeli invasion to settle old scores and teach them a lesson.  So they were ready, and shocked the Israelis in 2006.  Now they are feared by Israeli troops.   

To return to the present, it is not entirely clear as to what transpired in the telephone call between Erdogan and Trump.  Various sources confirm Trump has bluffed Erdogan in the past.  It is not unlikely then for Trump to have said this time, “We’re leaving.  If you go in, you will have to police the area.  Don’t ask us to help you.”  Is that subject to misinterpretation?  It certainly is a reminder of the inadvertent green light to Saddam Hussein for the invasion of Kuwait when Bush Senior was in office. 

For the time being Erdogan is holding fast and Trump has signed an executive order imposing sanctions on Turkish officials and institutions.  Three Turkish ministers and the Defense and Energy ministries are included.  Trump has also demanded an immediate ceasefire.  On the economic front, he has raised tariffs on steel back to 50 percent as it used to be before last May.  Trade negotiations on a $100 billion trade deal with Turkey have also been halted forthwith.  The order also includes the holding of property of those sanctioned, as well as barring entry to the U.S.

Meanwhile, the misery begins all over again as thousands flee the invasion area carrying what they can.  Where are they headed?  Anywhere where artillery shells do not rain down and the sound of airplanes does not mean bombs.

Such are the exigencies of war and often its surprising consequences. 

Author’s Note:  This piece appeared originally on Counterpunch.org

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Could Turkish aggression boost peace in Syria?

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On October 7, 2019, the U.S. President Donald Trump announced the withdrawal of American troops from northeast Syria, where the contingent alongside Kurdish militias controlled the vast territories. Trump clarified that the decision is connected with the intention of Turkey to attack the Kurdish units, posing a threat to Ankara.

It’s incredible that the Turkish military operation against Kurds – indeed the territorial integrity of Syria has resulted in the escape of the U.S., Great Britain, and France. These states essentially are key destabilizing components of the Syrian crisis.

Could this factor favourably influence the situation in the country? For instance, after the end of the Iraqi war in 2011 when the bulk of the American troops left the country, the positive developments took place in the lives of all Iraqis. According to World Economics organization, after the end of the conflict, Iraq’s GDP grew by 14% in 2012, while during the U.S. hostilities the average GDP growth was about 5,8%.

Syria’s GDP growth should also be predicted. Not right away the withdrawal of U.S., French, British, and other forces, but a little bit later after the end of the Turkish operation that is not a phenomenon. The Turkish-Kurdish conflict has been going on since the collapse of the Ottoman Empire when Kurds started to promote the ideas of self-identity and independence. Apart from numerous human losses, the Turks accomplished nothing. It is unlikely that Ankara would achieve much in Peace Spring operation. The Kurds realize the gravity of the situation and choose to form an alliance with the Syrian government that has undermined the ongoing Turkish offensive.

Under these circumstances, Erdogan could only hope for the creation of a narrow buffer zone on the Syrian-Turkish border. The withdrawal of the Turkish forces from the region is just a matter of time. However, we can safely say that the Turkish expansion unwittingly accelerated the peace settlement of the Syrian crisis, as the vital destabilizing forces left the country. Besides, the transfer of the oil-rich north-eastern regions under the control of Bashar Assad will also contribute to the early resolution of the conflict.

It remains a matter of conjecture what the leaders of Saudi Arabia, the United Arab Emirates, and Russia agreed on during the high-level talks. Let’s hope that not only the Syrians, but also key Gulf states are tired of instability and tension in the region, and it’s a high time to strive for a political solution to the Syrian problem.

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Turkey and the Kurds: What goes around comes around

Dr. James M. Dorsey

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Turkey, like much of the Middle East, is discovering that what goes around comes around.

Not only because President Recep Tayyip Erdogan appears to have miscalculated the fallout of what may prove to be a foolhardy intervention in Syria and neglected alternative options that could have strengthened Turkey’s position without sparking the ire of much of the international community.

But also because what could prove to be a strategic error is rooted in a policy of decades of denial of Kurdish identity and suppression of Kurdish cultural and political rights that was more likely than not to fuel conflict rather than encourage societal cohesion.

The policy midwifed the birth in the 1970s to militant groups like the Kurdish Workers Party (PKK), which only dropped its demand for Kurdish independence in recent years.

The group that has waged a low intensity insurgency that has cost tens of thousands of lives has been declared a terrorist organization by Turkey, the United States and the European Union.

Turkish refusal to acknowledge the rights of the Kurds, who are believed to account for up to 20 percent of the country’s population traces its roots to the carving of modern Turkey out of the ruins of the Ottoman empire by its visionary founder, Mustafa Kemal, widely known as Ataturk, Father of the Turks.

It is entrenched in Mr. Kemal’s declaration in a speech in 1923 to celebrate Turkish independence of “how happy is the one who calls himself a Turk,” an effort to forge a national identity for country that was an ethnic mosaic.

The phrase was incorporated half a century later in Turkey’s student oath and ultimately removed from it in 2013 at a time of peace talks between Turkey and the PKK by then prime minister, now president Erdogan.

It took the influx of hundreds of thousands of Iraqi Kurds in the late 1980s and early 1990s as well as the 1991 declaration by the United States, Britain and France of a no-fly zone in northern Iraq that enabled the emergence of an autonomous Iraqi Kurdish region to spark debate in Turkey about the Kurdish question and prompt the government to refer to Kurds as Kurds rather than mountain Turks.

Ironically, Turkey’s enduring refusal to acknowledge Kurdish rights and its long neglect of development of the pre-dominantly Kurdish southeast of the country fuelled demands for greater rights rather than majority support for Kurdish secession largely despite the emergence of the PKK

Most Turkish Kurds, who could rise to the highest offices in the land s long as they identified as Turks rather than Kurds, resembled Palestinians with Israeli citizenship, whose options were more limited even if they endorsed the notion of a Jewish state.

Nonetheless, both minorities favoured an independent state for their brethren on the other side of the border but did not want to surrender the opportunities that either Turkey or Israel offered them.

The existence for close to three decades of a Kurdish regional government in northern Iraq and a 2017 referendum in which an overwhelming majority voted for Iraqi Kurdish independence, bitterly rejected and ultimately nullified by Iraqi, Turkish and Iranian opposition, did little to fundamentally change Turkish Kurdish attitudes.

If the referendum briefly soured Turkish-Iraqi Kurdish relations, it failed to undermine the basic understanding underlying a relationship that could have guided Turkey’s approach towards the Kurds in Syria even if dealing with Iraqi Kurds may have been easier because, unlike Turkish Kurds, they had not engaged in political violence against Turkey.

The notion that there was no alternative to the Turkish intervention in Syria is further countered by the fact that Turkish PKK negotiations that started in 2012 led a year later to a ceasefire and a boosting of efforts to secure a peaceful resolution.

The talks prompted imprisoned PKK leader Abdullah Ocalan to publish a letter endorsing the ceasefire, the disarmament and withdrawal from Turkey of PKK fighters, and a call for an end to the insurgency. Mr. Ocalan predicted that 2013 would be the year in which the Turkish Kurdish issues would be resolved peacefully.

The PKK’s military leader, Cemil Bayik, told the BBC three years later that “we don’t want to separate from Turkey and set up a state. We want to live within the borders of Turkey on our own land freely.”

The talks broke down in 2015 against the backdrop of the Syrian war and the rise as a US ally of the United States in the fight against the Islamic State of the PKK’s Syrian affiliate, the People’s Protection Units (YPG).

Bitterly opposed to the US-YPG alliance, Turkey demanded that the PKK halt its resumption of attacks on Turkish targets and disarm prior to further negotiations.

Turkey responded to the breakdown and resumption of violence with a brutal crackdown in the southeast of the country and on the pro-Kurdish Peoples’ Democratic Party (HDP).

Nonetheless, in a statement issued from prison earlier this year that envisioned an understanding between Turkey and Syrian Kurdish forces believed to be aligned with the PKK, Mr. Ocalan declared that “we believe, with regard to the Syrian Democratic Forces (SDF), the problems in Syria should be resolved within the framework of the unity of Syria, based on constitutional guarantees and local democratic perspectives. In this regard, it should be sensitive to Turkey’s concerns.”

Turkey’s emergence as one of Iraqi Kurdistan’s foremost investors and trading partners in exchange for Iraqi Kurdish acquiescence in Turkish countering the PKK’s presence in the region could have provided inspiration for a US-sponsored safe zone in northern Syria that Washington and Ankara had contemplated.

The Turkish-Iraqi Kurdish understanding enabled Turkey  to allow an armed Iraqi Kurdish force to transit Turkish territory in 2014 to help prevent the Islamic State from conquering the Syrian city of Kobani.

A safe zone would have helped “realign the relationship between Turkey’s Kurdistan Workers Party (PKK) and its Syrian offshoot… The safe-zone arrangements… envision(ed) drawing down the YPG presence along the border—a good starting point for reining in the PKK, improving U.S. ties with Ankara, and avoiding a potentially destructive Turkish intervention in Syria,” Turkey scholar Sonar Cagaptay suggested in August.

The opportunity that could have created the beginnings of a sustainable solution that would have benefitted Turkey as well as the Kurds fell by the wayside with Mr. Trump’s decision to withdraw US troops from northern Syria.

In many ways, Mr. Erdogan’s decision to opt for a military solution fits the mould of a critical mass of world leaders who look at the world through a civilizational prism and often view national borders in relative terms.

Russian leader Vladimir Putin pointed the way with his 2008 intervention in Georgia and the annexation in 2014 of Crimea as well as Russia’s stirring of pro-Russian insurgencies in two regions of Ukraine.

Mr. Erdogan appears to believe that if Mr. Putin can pull it off, so can he.

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