A fix for the Middle East?, By Uddin Ifeanyi

There was a time when the vision of peace in the Middle East included the prospect of harmoniously and profitably combining the Arab countries’ stupendous oil wealth with Israel’s innovative technologies to create a new Xanadu. The opportunities were and are still copious – in new cultivars and agricultural practices, funding research into and deployment of renewable energy, desalination technologies and plants, and advances in the new digital economy, to mention but a few. As an idea around which non-rivalrous progress in the region may be organised, it was worth considering if only in the extent to which it put a stop to the region’s limitless wars. But it was also about a new economic order, anchored on a region whose growth prospects, along with that of Asia and the Old World, should make the global economic portfolio less volatile.

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This dream lives on in the considerable advances that the Gulf states have achieved in modernising their economies. Over the years since Israel and Egypt last fought each other, most countries in the region have made inflows of products, capital, and labour into their economies relatively easier and since the end of the pandemic have been placing huge bets on the latest digital technologies through monies squirrelled away in their respective rainy-day funds. Still, what has come to be christened the “third Gulf war” – between America and Israel on one hand and Iran on the other – highlights both how far these reforms have come and their limits.

From the export of crude oil, refined fuels, helium (used in the manufacturer of semiconductors), fertiliser, through air transport, we are discovering that Gulf countries are an essential gear in the working of the global economy. But the region is also, because of its innumerable conflicts, one of the global economy’s weakest links. In defence of its access to the region’s oil exports, the United States of America has for long tried to impose an American peace in the region. Some would argue that more often than not, America’s interventions have left the region’s outlook looking grimier still. Nonetheless, with the U.S. now a major producer and exporter of crude oil and its distillates, much of that arithmetic was always going to change – and that is before you include the threat to fossil fuel exporters from the energy transition.

More than all these though, the current war in Iran upends a lot. The oil potentates of the Gulf cannot protect themselves against a determined enemy without America’s help. In the face of an adversary as determined and competent as the Islamic Republic of Iran, even the U.S.’s shield does not count for much. Neither can Israel continue its multiple military campaigns forever without hurting its economy and, as in the recent war against Hamas, tainting its very essence. Iran, on the other hand, is a kindergartener’s lesson in how no people should be misgoverned.

Incidentally, governance is the key to squaring all these circles. Because of the primal nature of the countervailing threats to the region, most solutions are nearly always couched in terms of military alliances. But the threat is to countries’ economic prospects, and their people’s wellbeing. Thus, the governance solution must be one of an economic nature. In other words, a European Union (EU) arrangement – a multilateral commitment to strengthen sub-continental peace and prosperity – for countries in the Middle East. Not a North Atlantic Treaty Organisation (NATO)-type fix.

Am I justified in arguing for a pan-Middle East political and economic entity as a panacea to the numerous pitfalls that the focus on narrow national interests have led the region into? Many will point at the EU today as a counter-lesson – sclerotic and largely backward-looking. But this is to forget how well it has succeeded in the task it originally set itself. If because of that success it has a radically different task environment, today, this is but a new higher order assignment.

Instead, I worry that whatever governance arrangement countries in the Middle East settle for, it will require a strong dose of democracy. Commentators who make light of the importance of structured opportunities for a people to veto their governments point to the successes of the Chinese Communist Party. Iran, however, is the foil to this argument in the region. An unelected government is unlikely to consistently act in the popular interest. Especially in the Middle East, where the free movement of products, people and capital is a sine qua non for the economic growth and development that its constituent players aspire to.