Jon Alterman: Ayham Kamel is the head of the Middle East and North Africa practice at the Eurasia Group, a risk consultancy, a job he's held since 2017. Ayham, welcome to Babel.
Ayham Kamel: Thank you.
Jon Alterman: It's been quite a tumultuous year in the Middle East. Oil prices have gone up and oil-importing states are feeling squeezed. The region is also navigating its way through the Great Power competition in Ukraine. You spend a lot of time studying, visiting and talking to people from the Gulf. What do you think the mood is in the Gulf right now?
Ayham Kamel: We've gone through several stages, Jon. The initial phase was one of shock that the United States is doing less in the region. The refreshing side of it is that regional powers, Saudi Arabia and the UAE, have begun to think about stage two. There is a new energy in the region that we're empowered. The region sees Great Power competition not just as a threat, but also as an opportunity for the region to gain more influence. As a result, we are seeing a lot of regional initiatives including the UAE’s relations with several states in the region and Saudi Arabia’s relations with Iran and Syria. Saudi Arabia’s relations with Iran and Syria would have been very difficult to imagine just 10 years ago when these relationships would have been very closely coordinated with the United States.
Jon Alterman: Is that a consequence of being disappointed with the United States? Is it a consequence of seeing more opportunities? Is it a consequence of conceptualizing the region's role differently in terms of Great Power competition?
Ayham Kamel: In the initial phase it was a level of discomfort and lack of direction that resulted in the region scrambling to find alternatives to deal with this new environment. It is a fundamentally different situation today, and it is more tilted towards the opportunity side. Leaders in the region are spending a lot of time on the Middle East’s role in global geopolitics. They are thinking about how to position the region as a whole in a global order that is certainly evolving.
There are more concrete ideas that you see in the UAE and Saudi Arabia. The framework is that power is going to be much more diffused; it isn't just the United States and China. It's going to be the United States, China, and a host of countries that have influence in certain spheres. This is where the Gulf countries would like to play a role.
Jon Alterman: I've been struck that the Indians have talked about middle powers and their role in global affairs. Do you see Middle Eastern governments thinking of how they act as middle powers, what their role as middle powers should be, and how they should relate to other middle powers?
Ayham Kamel: To the last part of your question, yes. They've begun to think about how to interact with countries like India, Brazil, and Israel, and less so when it comes to Russia. Do they have a very clear idea of how they would act as middle power states in a global environment? I don't think we're at that stage yet, but the policies are evolving. You can see from some of the behavior, a lot more maturity than what you would've gotten two decades ago in terms of willingness to accept that they need to build long-term relationships with different countries that they might not agree with them on many issues.
It's going to be a journey, to be honest, and it's going to take them time to evolve into middle powers status but they're certainly taking the first steps in that direction.
Jon Alterman: You talked about them thinking about the region broadly. For the oil importing states in the region, conditions are turning quite scary, partly because they were hurt by COVID and partly because they’re now paying more for commodities like oil and food, a lot of them don't have the budgets that they were hoping for and have a harder time accessing debt given the global financial environment. We are also seeing the Gulf states being much more reluctant to give easy assistance to states like Jordan and Egypt and Lebanon. How does the Gulf think about the broader regional environment now? As the Gulf is thinking about its own role, is it rethinking its relationship to the other countries in the Middle East as well?
Ayham Kamel: The Gulf has become comfortable with the position it has in Arab and MENA politics. There's really a shift in the center of gravity, at least in the Arab world, away from North Africa and the Levant and towards the Gulf. These countries have become much more comfortable assuming that leadership role. Initially, there was a bit of confidence that we control everything and have strong financial power and military power. Additionally, monarchies have survived the Arab Spring and other countries have not. The Gulf now begins to engage with North Africa and the Levant differently. In some ways, that's positive and in others, it is going to be challenging. The fundamental problem for the Gulf leaders, like MBS, is that a lot of the countries that they are supporting have not changed their governance model or economy to make them more viable long-term. In this way, Egypt, Tunisia, Libya, Syria, and Lebanon they have structural issues that leaders there have not dealt with. The funding issue becomes a- a core part of how they view that relationship. The era of no strings attached is done.
Jon Alterman: I also remember when Egypt was in revolution, there was tremendous concern in the Gulf that we only have a few million people. The Egyptians have more than 100 million people. In fact, we have a few million Egyptians in our country, and if Egypt goes, the whole place goes up in flames. There seems to be less risk aversion about things going bad in Egypt and other places, or maybe there's less concern that Egypt is on the brink. How would you assess that?
Ayham Kamel: Egypt is not on the brink in the same way that they were after the Arab Spring. Things are better their military leadership is in firm control of the security environment. So, pushing Egypt towards reform could break it, but there's a good chance that it will not. That's why I think the Gulf states are taking that risk.
Jon Alterman: Do you think they would back off if there were signs of greater protests in Egypt?
Ayham Kamel: They would absolutely adjust. The challenge of 120 million Egyptians in a very unstable environment, creates a lot of challenges for the Gulf states. There is broad agreement that Egypt's collapse would be detrimental to everyone's interest. So, once we get to a crisis level, you're going to see a very different policy, which will perhaps be more flexibility from everyone. I am a bit surprised that it has gotten to this stage where there's such an aggressive push to get on the reform track, to get the Egyptians on the reform track fast. Perhaps there's a disconnect on the level of tension on the Egyptian street because when I speak to people in Egypt today, I get the feeling that there's perhaps much more risk of instability and protest, not around political reform but cost of living issues.
Jon Alterman: To drill down a little bit more in Egypt. There's an argument that some people make that el-Sisi may be open to reform, but the army is less open to reform. The army not only controls large parts of the economy, but the army also controls Sisi. If el-Sisi really tried to take away from the army some of its economic powers, the army would take political power away from Sisi. Do you think that's overblown? Or do you think that there may be some truth to it?
Ayham Kamel: There's probably some truth to that. El- Sisi controls a system until he challenges the core interests of the military and then they have enough incentive to challenge him in different places. The challenge for the Gulf is if you think about the Egyptian military coming up with an alternative for el-Sisi, then you're dealing with the same structure and vested interest in control of the system. If you think about el-Sisi and the way that he has governed Egypt, there have been economic mistakes. The Egyptian military wants its gems to be protected and el-Sisi wants to build his capital that has cost tens of billions of dollars. There are not a lot of options there. Certainly, what the Gulf countries would not want to see is a popular uprising that shifts into a democratic Egypt in the same way that we've seen in the past. They're stuck with very difficult choices.
Jon Alterman: Where else is the Gulf focused on the region? You say a lot of interest in Egypt and a lot of interest in pushing reform. There seems to be an interest on the one hand in having Tunisia not lapse into Islamist-led democracy but also not rewarding Kais Saied that much for having a less democratic, more authoritarian push. So, where else is the Gulf focused on the region?
Ayham Kamel: The Gulf is beginning to reimagine its relationship with North Africa and the Levant. There's going to be much more interest, according to new terms, but we are beyond the phase of isolationism, where the Gulf runs the show and is more focused on big power politics. The new phase is one where there is engagement in North Africa and the Levant to create a broader sea of less instability. We will see more interest in not only Tunisia, Egypt and Jordan, but also Syria and Iraq. To a certain extent, Tunisia will get more attention once it gets into a crisis environment. The foundation of all of that is going to be based on several things. One, is preventing an Arab Spring moment. It is worth nothing that oil importing countries have a difficult environment. They can't borrow. They've been hit by COVID and the war in Russia-Ukraine. So, the seeds of a regional uprising, are present, and the current generation has not necessarily seen the pains of the Arab Spring. Certainly, this is an issue in Iraq where young Iraqis do not remember the era of Saddam Hussein and are quite politically active. The second aspect is that the Gulf countries are thinking about an economic model where they diversify and there is more room to grow their economic potential. A sea of instability around these countries fundamentally weakens their attractiveness for foreign and local investors. They need a bit of stability in the places that are close to them liked Egypt, Syria, and Iraq.
Jon Alterman: How do you think they'll deal with Palestine over the next 5 to 10 years?
Ayham Kamel: The Palestinian issue is the one that they would prefer not to handle. Absolutely. First and foremost, there’s no coherence within the Gulf on how they would want to handle Palestine. Intra-Gulf competition is also playing a role. You're beginning to see a much less enthusiastic Saudi Arabia in regard to normalization with Israel, which is going to be a factor that they leverage in terms of their distinct foreign policy from the UAE. There is no uniform policy on how they would handle a post Abbas world, and that world is going to be much more unstable. The issues shift away from the trend that we've seen a few years ago where the focus was on normalization towards taking care of Palestinian interests. A key moment, coincidentally that leaders didn't think about before, is the World Cup in Qatar, which was quite important in reminding leaders that their populations are not sold on normalization. The support for Morocco and Palestinian flags across different stadiums showed that this issue still captures the hearts and minds of at least a significant portion of their populations.
Jon Alterman: One of the other issues that's been fanning regional instability is Iran's support for proxies throughout the region. Do you expect that the resumption of diplomatic relations is going to make a distinct change in how Iran thinks about its regional proxy policy? Or do you expect the Iranians are going to continue to use whatever tools they have to remind people that they're present and need to be dealt with?
Ayham Kamel: We're probably in the pause and relax mode for regional policy. There is a pattern of Iranian behavior on the proxy side, which is to go through phases, expand, pause, rebuild, and expand. Currently, we're in the pause phase, and this stage is very different because of China's involvement in diplomacy. There are two theories on Chinese diplomatic outreach in the Middle East. China is grabbing a quick win, very nice to sign agreements between Iran and Saudi Arabia, but really it will not be able to curb Iranian proxy expansion if Iran decides to. Or, secondly, which is the theory I lean towards, is that China has a vested interest in calming down Saudi-Iranian tensions and has sufficient leverage, at this moment, because it is basically the most important economic exit foreign exchange, uh, uh, lever for Iran. So, they can influence in Iran.
Jon Alterman: Have they been willing to use that leverage?
Ayham Kamel: Absolutely. For them expanding, creating a brand of diplomacy where they have influence, not only in the Middle East, but in a lot of places where the United States had influence is important enough for them to use some of that leverage. Will they use their full power? No. Will the Iranians accept that they need to put back all the proxies back in place? No. The structural factor is what I'm hearing from negotiations in Yemen. It points to a phase where there is a bit of relaxation, a little bit of more constructive engagement.
Jon Alterman: I want to go back to the U.S. role in Great Power competition. I certainly hear a lot of skepticism in the Gulf toward the Biden administration. How much of that is about the Biden administration, how much of it is an assessment that the United States has made a decision about the energy transition and the region’s strategic value to the United States, and that as a result, Republicans or Democrats are going to be moving away from this part of the world.
Ayham Kamel: The heart says for them it's a Biden issue, the mind says it's a structural U.S. position in global politics. They're acting based on the structural factor. Initially, there was interest in finding a way for them to rekindle the relationship and get the United States to commit as evidenced by a search for strategic defense treaties from the UAE and Saudi Arabia. Today, they're not interested in that. They've come to realize that in a world where, Democratic and Republican politics is going to shift back and forth and create issues for them, where energy transition is a big headline, where the United States has to pick and choose where it needs to expand influence, which continent or theater, the Middle East is not going to be a top priority, and they're acting on it.
Jon Alterman: Do you think Gulf publics have absorbed the fact that the energy transition is coming and is going to change things? Do you think they understand the impact the energy transition will have on their lives?
Ayham Kamel: No. This is a very difficult issue for the populations to digest. We're only at the beginning of a process where the leaders are adjusting their economic models. It's going to be very difficult for a public that is not politically engaged. They were not asked on key policy issues, foreign or domestic. The transition is going to be very difficult across the Gulf because it will happen faster than governments and certainly the public expects. Secondly, the public is unwilling to give up the welfare model. The level of immigration in a lot of these Gulf economies will also create social tensions. You will still need foreign workers across the Gulf, and, increasingly, I worry that some of the pains of transition will be blamed on foreign workers, not the energy transition.
Jon Alterman: Finally, you spent a lot of time thinking about the Gulf, transitions, and changes. What do you think is the most important thing that people are missing when they think about the Gulf?
Ayham Kamel: People are missing that there's going to be a big reset. The grand reset in the Gulf’s international regional relationship might not move in the direction we are thinking about today. It might not necessarily be linear. There might be shocks in the way that leaders react to countries’ efforts to diversify their geopolitical relationships. There might be economic shocks that pose challenges to the oil-importing countries in a way that the Arab Spring created a shock for a lot of us when we observed it. The Middle East is perhaps one of the least prepared regions for digital transformation where jobs are not as readily available for your average population and you're struggling to adapt. This is a region that is beginning to think also about its relationship with Turkey, Iran, Arab countries, and Israel, in a way that was very difficult to imagine in the past. So, we are getting this bumpy reset. I'm not sure it will be a more stable one, but it certainly will be different from the world that we've witnessed in the last 50 years.
Jon Alterman: Ayham Kamel, I always enjoy talking to you, and thanks very much for joining us on Babel.
Ayham Kamel: My pleasure. Thank you, Jon.