Fantasies never fail to succeed. Superman, Spiderman, Batman and Star Wars, no matter which sequel it is, still capture the imagination of audiences across countries, across cultures, across age groups and across continents. They touch the basic human instinct to supersede human boundaries and control and subjugate many forces in the world. That instinct in real life is best seen in politics where politicians act as supermen and try to fight star wars with other countries to become the super power controlling the planet. The US has coined these fantasies but has also envisioned itself as the super power of the world by claiming to suppress the evil forces trying to destroy the universe. Since the definition of evil forces is highly tilted towards the stereotyped figure of a Muslim state with rebels turning into terrorists trying to fight for their own definition of religion, the last two decades have seen wars in South Asia, i.e. Afghanistan and Iraq, spilling over in the region with disastrous effect. Somehow, without peace being restored and without a war being won, the US does turn out to be the victor and retain its super power status.
The super power brand in politics is now also being franchised in Asia where the fight between China and India is on to win this race. This trend has also reached the Middle East. Saudi Arabia and Iran have always competed and contested on religious views, political philosophies and oil economics. The Saudis traditionally have played caddy boys to American politics and Iran has preferred tilting towards the Russians due to its revolutionary leader’s bias towards anti-capitalism. However, Obama /Rouhani politics have shaken the regional balance and that, coupled with the oil price consistent crash, will make the new round of power struggle in the region a very important factor in the future of the new world order. This new world order has seen a shift of power by the super power from a pure reliance on the House of Saud to a more balanced tilt towards the house of the Ayatollahs. This tilt needs to be understood by all countries and very careful foreign policy postures need to be adopted.
Saudi Arabia and Iran are the two biggest economies in the region. Iran, battered by sanctions, had been faring poorly according to all economic indicators till 2014 when Rouhani changed its policies of confrontation practiced by Ahmadinejad to those of collaboration. The impact of this renewed dialogue resulted in a much better economic dividend than in the previous many decades. The economy expanded by three percentin 2014, on the heels of annual economic contractions of 6.6 percent and 1.9 percent in 2012 and 2013, respectively. As of August 2015, the official and parallel market rates were trading at 29,797 Iranian rials per dollar and 33,400 Iranian rials per dollar, respectively, thereby representing a difference of about 13 percent, down from roughly 190 percent in the second quarter of 2012 when sanctions were tightened. The inflation rate declined from a year-on-year peak of 45.1 percent in 2012 to 15.6 percent in June 2015 in line with the lifting of sanctions and the tightening of the monetary policy by the Central Bank of Iran.
On the contrary, in 2014, the Saudi Kingdom ran its first budget deficit since 2009 and faces budget deficits for the foreseeable future because it requires an oil price greater than $ 100 per barrel to balance its budget. The petroleum sector accounts for roughly 92.5 percent of Saudi budget revenues, 90 percent of export earnings and 55 percent of the GDP. That is where the problem lies. Oil prices are nose-diving as the demand and supply have become skewed to favour buyers. Shale oil production by the US as its substitute and now the lifting of sanctions from Iran are all indicators to make Saudis vulnerable to economic shocks. There have been six plans to diversify the economy since the 1970s but little implementation on them.
The problem with being the franchisee of a brand is that you have to take the good and bad in the same plate. As the super power brand built by the US has shown that you become a super power by suppressing smaller powers around you, the franchisee of Saudi Arabia has tried to follow the same route. Its clash with Yemen on the pretext to suppress Houthi rebels and its intervention in Syria to counter Islamic State (IS) threats is a brand emulation of US interventions in Iraq and Afghanistan to counter terrorism. Iran has been raising the anti-American ante but siding with the opponent, Russia, whose intent and strategy is not very different from that of the US. However, these two countries forget that they do not possess the intellectual or the military sophistication of their role models. Thus, the damage that they can create for themselves and the region may actually benefit the other contenders for super power status like China and India.
There has been a change of command in Saudi Arabia and Iran. The young Mohammad bin Salman with all his exposure to western economics has so far the same fear as his elders, i.e. of Iran forming a Persian empire. The latest series of executions, including that of Iranian scholar Nimr al-Nimr, are not indicators of much difference in the style of leadership. Similarly, though Rouhani has put Iran on the path of openness, he is still a messenger of Ayatollah Khamenei. Thus, their philosophies are very much the traditional mode of fighting proxy wars and supporting opposing sides to establish their regional supremacy. The flaw of being a franchisee is that the local context is compromised. In any case, what has been successful in the past or anywhere else in the world may not be successful in the future or in all countries. Americans have learned that religion for or against is the most emotional way of manipulating public support. This has been followed by Saudi Arabia and Iran, which have exploited sectarian feelings to create public sentiment in their favour.
However, the lesson to be learned from the American experience is that wars or religious phobias are not sustainable political anchors. The US economy has witnessed one of the longest and deepest recessions in history while losing nearly all battles they have fought. Saudi Arabia has plunged into a depression while Iran has a golden opportunity to come out of one. But for this they have to understand and wean away from being part of the age-old strategy of British colonialism or American imperialism and that is divide and rule. The obvious opposing strategy is unite and rule but for that you need visionary leadership, which cannot be rented out from borrowed franchises.
The writer is a columnist and analyst, and can be reached at [email protected]