Since the fall of the Berlin Wall, the collapse of the Soviet Union, and the 1990/91 Gulf War to expel Iraq from Kuwait, the over-riding geopolitical calculus among GCC countries has been to consider the position of the United States on any given issue, and for the most part, to quietly follow Washington’s lead.
Several factors have conspired to upset the geopolitical construct that has prevailed in the Middle East over the last 30 years. Not least among them, has been the increasingly diverse policy stances taken by Washington with the Trump Administration seemingly determined to overturn key policy stances of its predecessor, particularly as it related to the Iran Nuclear Deal (JCPOA), and the re-reversal of many positions by the Biden Administration and the policy pivot towards Asia.
Add to this the destabilizing effect of Russia’s invasion of Ukraine, the continued rise of Iran as regional power, the associated ‘alliance’ with Russia, and the increasingly robust diplomatic and military posture of China, and it becomes clear that the established policy patterns and diplomatic approaches no longer apply.
These shifts in the international geopolitical fabric have impacts on a variety of fronts, however, for the countries of the Middle East, two of the most important are diplomatic and business.
Firstly, the approach to diplomacy, particularly in the multi-lateral environment is changing, and will require further evolution on the part of Foreign Ministries in the region. No longer will it be feasible to simply apply the maxim of ‘what does Washington say’, rather it will be necessary to develop more nuanced approaches that seek to balance interests and find a space to play between the global heavy weights.
In many cases this will mean a much more integrated approach to policy thinking and formulation in GCC governments. Consider issues such as health, telecoms, aviation, tourism etc. These policy environments, among a number of others, have both a domestic and an international component, and its essential that the policy making process in such ministries take the international dimension into account. It is necessary that the inter-agency process be made more robust if it already exists, or established if it does not.
Such coordination and consideration sounds simple enough, however, as governments around the world have found to their cost, it is not simple at all. Such a process requires carefully constructed structures and equally carefully managed processes. The establishment of a policy hierarchy, determining who leads and who provides subject matter expertise is crucial. Also, its important to develop a level of integration between ministries at home and the Foreign Ministry which provides the representative service in various international fora.
These are challenging issues and GCC Governments need to ensure they have the best information and advice available to develop a diplomatic posture that best represents and balances their sovereign interests in an increasingly unstable geopolitical environment.
The second area of key impact arising from the new international landscape, is for business. It is no longer a given that western CEO’s
will have the inside track on business engagement and opportunities in the region.
Middle Eastern governments and business are seeing a G20 no longer dominated by the West. The BRICS grouping, albeit a little tarnished by the current position of some of its members, represents a desire to shake up the traditional global economic structure in favour of something that represents the interests of the ‘others’, and while business interests rarely trump national interests, it is worth noting that geopolitical rivals China and India are willing to cooperate in an endeavour to offset American and European dominance in the business and economic field.
For Fortune 500 CEO’s it is essential to have a clear and comprehensive view of the political factors, understand the risks and the competitors in the landscape in which they are seeking to do business and to develop and nurture the relationships that are an essential ingredient of business success. Having on the ground expertise, which understands the nuances of the region and the strategic and operational imperatives at play in countries where one or two industries are dominant and in most cases are wholly or partially owned by the government, is essential.
Having the right access is one thing, understanding what the thinking of your interlocutor is, on a given issue is quite another. Integrated political and economic analysis and briefings are key success factors for doing business in the region.
The countries of the Gulf are having to navigate new and unknown seas. It’s a more complex world and powerful forces are at work that will make their calculus more challenging.
Government and business need to work to ensure that the decisions they take, and the deals they make, are based on the very best information and advice available, and that they are going to benefit all parties in the long term.
Comments