A demonstrator carries an Iraqi flag during ongoing anti-government protests in Baghdad, Iraq November 4, 2019.
Thaier Al-Sudani | Reuters
Iraq is descending into its most violent days since the battle against ISIS concluded in late 2017 — and the world is completely underestimating its significance, regional experts told CNBC at the Middle East’s premier oil and gas conference this week.
The second-largest OPEC producer has seen protests every summer for the last several years over economic grievances, met time and time again with empty government promises of reform that go unfulfilled. But this year’s demonstrations are different, spilling over into demands for a full-on political overhaul and attracting elements like Iranian-backed forces and other extremists that threaten to hijack the protest movement and potentially bring the U.S. into deeper involvement.
“From a security perspective, I would say that the Iraq story is the most under-covered story in the region right now,” Amos Hochstein, former special envoy for international energy affairs under the Obama administration, told CNBC on Wednesday.
“Because the forces that are outside, the external forces that have decades of interest (in Iraq) are not going to go away quietly. They will affect the economics of the region potentially, and they can affect the security beyond the region of Europe and eventually the United States.”
Some 300 people have been killed and more than 2,000 injured as protests rocking the country of 38 million draw a harsh response from state security forces and other unidentified entities. Authorities have taken extreme measures like shutting down the internet and using live ammunition against protesters in an attempt to crack down on the uprising.
Amnesty International has described the government response as “nothing short of a bloodbath.”
Protesters report plainclothes snipers shooting and killing civilian demonstrators, with many Iraqis pointing to Iranian-backed paramilitary fighters or “anonymous thugs” as some of the forces sowing further violence and confusion.
Iraqis across the country, particularly in Baghdad and cities of the country’s oil-rich south, are angry over grievances that lie at the heart of protests similarly taking place in Lebanon and Algeria: rampant state corruption, high unemployment, and a lack of basic services provision.
Iraqi cities regularly suffer power cuts, garbage is left uncollected and there is a broad consensus that the state serves the interests of the elites, not the people — and all this in a country that is a major crude oil producer, sitting on the world’s fifth-largest proven oil reserves and pumping nearly 5 million barrels per day. Its southern Basra province, afflicted with some of the worst poverty and lack of public services in the country, hosts international oil hegemons like Exxon, BP and Total.
Rocket attacks on US forces?
The comments come just days after 17 Katyusha rockets were fired at an Iraqi military base south of Mosul that houses U.S. troops. Some 5,000 American troops remain in the country, providing training and security assistance and supporting a U.S.-led coalition fighting what remains of ISIS.
Responsibility for the rocket attack has not been claimed and no casualties have been reported, but commodities expert and former CIA analyst Helima Croft sees this as a dangerous risk that could bring the U.S. into further confrontation with Iran. Hardline Iranian-backed Iraqi militias regularly threaten to attack Americans inside the country.
“If they hit that base and if you had dead U.S. servicemen, that would certainly be a red line where we could be hitting something in Iran, could we be bombing (Iranian port) Bandar Abbas? Potentially,” Croft said. “Iraq is where I think this whole thing comes to a head.”
The rocket attack, and protester anger at the corruption bred in a government system the Americans helped set up, is a sobering reminder that 16 years after its invasion, the U.S. remains tethered to the turbulent story of Iraq.
‘If you break it, you own it’
The protesters in Iraq are also fed up with foreign influence in their country’s affairs — many protest signs and chants say “No America, no Iran.” Observers say this presents a threat to Iran’s deeply held influence in the country, something that Tehran is not likely to take lightly.
“You have a battle for who is going to win the proxy war in the Middle East,” Croft said. “Think about Lebanon and Iraq, these two places where Iran has a strong foothold. The question is, are they going to want to surrender their foreign policy and strategic influence? I don’t think they will.”
For Hochstein, who opposed the 2003 U.S. invasion of Iraq, the U.S. has a serious responsibility — and the Donald Trump administration is ignoring it.
“There is a basic rule of if you break it, you own it,” Hochstein said. “It was us who broke it. And the consequences of that, we are living through today.”
Demonstrators run as Iraqi security forces use tear gas during a protest after lifting of the curfew, following four days of nationwide anti-government protests turned violent, in Baghdad, Iraq October 5, 2019.
Thaier Al-Sudani | Reuters
The solution, the former diplomat believes, is engagement — but that doesn’t need to be boots on the ground.
“We have come to this dichotomy now, we’ve come to this extreme where it’s either we have to be involved, meaning troops, or the alternative is nothing. And that is not the case here. What we’re seeing now is that during the Trump administration, we’re seeing no troops and no diplomacy.”
Hochstein stressed the need for American engagement to “at least put the path of dialogue on the table so that you can see a horizon for solutions, versus a total absence from the scene that allows the protests and the violence to take on a life of its own.”
“And then you don’t know where it ends. And what we do know is that our adversaries, both groups like ISIS, al-Qaeda or Iran, thrive in chaos and a vacuum. What we’re seeing in Iraq today is vacuums being created and then occupied. And the more we retreat, both militarily and diplomatically, the more vacuums we’re creating to be occupied by our opponents.”
‘All of them out’
Former Secretary of State Condoleezza Rice, speaking at the Abu Dhabi International Petroleum Exhibition & Conference (ADIPEC) this week, told CNBC, “We certainly have a responsibility in Iraq.”
“The Iraqi situation is one I have great sadness for because I think the Iraqis have a chance to govern wisely. Unfortunately they’ve not really delivered the services the people expect, the jobs people expect,” she said.
Rice was a leading proponent of the 2003 Iraq invasion, and remains a controversial figure from the Bush administration. Critics of the Iraq War say the former diplomat remains responsible for the chaos and violence that engulfed the country as a result.
Iraqi Prime Minister Adel Abdul Mahdi, who came to power only a year ago, has promised more public sector jobs and limited economic reforms, but the pledges have failed to satisfy popular anger. The U.S. embassy in Baghdad on Sunday called for new elections, but Iraqis protesting say that will only result in the same faces reappearing in power. The leaderless movement has seen demands ranging from a new generation of leaders to a return to military dictatorship.
“It reminds me of what we saw in Lebanon — protester demands have morphed into ‘all of them out’,” Croft said, referring to the mass protests sweeping neighboring Lebanon where citizens are calling for the removal of the entire political class. She noted the same happening in Algeria, where popular protests have endured since last spring.
“‘All of them out’ seems to be a movement sweeping across the region. And I think this is an under-reported story,” Croft said. “A movement sweeping across the Middle East.”
I’m sorry for election defeat
Opposition Labour party leader Jeremy Corbyn leaves his house in north London on January 16, 2019.
DANIEL LEAL-OLIVAS | AFP | Getty Images
Labour Party leader Jeremy Corbyn apologized Sunday for this party’s crushing defeat in the British general election but defended his campaign, which failed to resonate with the party’s working-class base, as “one of hope rather than fear.”
British Prime Minister Boris Johnson’s Conservative Party won 365 of the 650 seats in the House of Commons in Thursday’s landslide election. Labour took 203 seats, its worst total since 1935.
“I’m sorry that we came up short and I take my responsibility for it,” Corbyn wrote in a letter published in the left-leaning Sunday Mirror newspaper.
Corbyn, who has faced fierce criticism from within his own party in the aftermath of the electoral carnage, has said he will step down as Labour leader after a “period of reflection.” The process of choosing a replacement will begin early next year, but some have called for Corbyn’s immediate resignation.
“I remain proud of the campaign we fought. I’m proud that no matter how low our opponents went, we refused to join them in the gutter,” Corbyn wrote. “And I’m proud that our message was one of hope, rather than fear.”
Corbyn’s policies failed to energize voters weary of more than three years of political wrangling over Britain’s divorce from the European Union. Johnson’s campaign, meanwhile, revolved around three words: His pledge to “get Brexit done.”
Britain is scheduled to leave the EU on Jan. 31.
Boris Johnson can turn his victory into history if he can save the UK from division
Prime Minister Boris Johnson leaves Downing Street for Buckingham Palace where he will seek permission to form the next government during an audience with Queen Elizabeth II at Downing Street on December 13, 2019 in London, England.
Dan Kitwood | Getty Images News | Getty Images
It is just the sort of script one might expect from Boris Johnson, one of the most enigmatically fascinating personalities of our times.
Prime Minister Johnson – who famously craves both public attention and a place in history – won the former and a shot at the latter through a British election victory this week that was the most convincing conservative victory since Margaret Thatcher in 1987. To save the United Kingdom itself, however, he must reverse course, or at least amend direction, on much of what he has said and done to win in the first place.
I opposed Brexit on economic and political grounds yet, at the same time, Johnson might have the political flexibility, the intellectual chops and the Churchillian ambition to confound his critics along the five lines of action he must simultaneously pursue to find his historic place.
- Most importantly, he’ll have to negotiate a “no-tariffs, no-quotas” trade deal by end-2020 with a European Union that he has disparaged, knowing that it by some distance is the U.K.’s major trade partner.
- Second, he will have to rapidly restore external economic confidence in a country that has been suffering disinvestment, an economic slowdown, and doubts about its continued role as a European and global financial hub.
- Third, he should still aspire to get a trade and investment deal with an impeachment-distracted President Trump. At the same time, he should share with voters how unlikely that will be and embrace what might be faster and easier opportunities in Asia, namely negotiating his way into the 11-country Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
- Fourth, he’ll have to abandon much of the populist rhetoric that got him elected and embrace his encouraging “One Nation” message of this week that could heal the country’s divisions – and perhaps also slow a European-wide and global populist trend.
- Finally, he’ll need save the United Kingdom from unraveling by convincing Scotland and Northern Ireland of their future place – while heading off another Scottish independence referendum. A successful EU negotiation will help that.
Media pundits in recent months have compared and associated the rise of Boris Johnson and Donald Trump as populists who have turned their countries’ politics upside down. Yet the comparisons only go so far, given Boris’ bookish, multilingual, multicultural background and intellectual passion.
He was born in Manhattan as Alexander, then raised in Brussels until age 11, before being shipped to British boarding a year after his mother’s breakdown, a life richly chronicled by Tom McTague in The Atlantic last July. Somewhere along the way the quiet child became the boisterous, eccentric British Boris. He developed a comic demeanor, a disheveled mean (and mane), a rapier intellect with a taste for the classics, and an insatiable desire to be liked.
From all of this grew his self-proclaimed ambition to be “world king.”
“I often thought that the idea of being world king,” said his mother of her illness’ impact on Boris, “was a wish to make him unhurtable, invincible somehow, safe from the pains of life, the pains of your mother disappearing for eight months, the pains of your parents splitting up.” The biographer Sonia Purnell says Johnson told girlfriends that his way of coping was to make himself invulnerable “so that he would never experience such pain again.”
The Brexit referendum and— three years later— his election vote are part psychological and part political drama for Boris Johnson, the stuff of a West End musical. His Friday speech on the steps of 10 Downing Street showed how quickly he can change his tune from that of the campaign to one of governance.
Speaking to those voters who opposed him and wished to remain in the EU, he said, “I want you to know that we in this One Nation Conservative government will never ignore your good and positive feelings – of warmth and sympathy toward the other nations of Europe.”
He went further.
“As we work together with the EU as friends and sovereign equals in tackling climate change and terrorism, in building academic and scientific cooperation, redoubling our trading relationship…,” he said, “I urge everyone to find closure and let the healing begin.”
That will be easier said than done as Johnson will now have to decide what kind of U.K. he wishes to build – one more akin to its neighbors in the EU or one more resembling a low-tax, deregulated Singapore-on-Thames.
“Brexit will formally happen next month, to much fanfare,” writes the Economist, “but the hardest arguments, about whether to forgo market access for the ability to deregulate, have not begun. Mr. Johnson will either have to face down his own Brexit ultras or hammer the economy with a minimal EU deal.”
French President Emmanuel Macron, enamored by his colleague’s intellect and linguistic skill, has called Boris Johnson “a leader with genuine strategic vision” who should be taken seriously. This week he extended an olive branch while in Brussels, telling “British friends and allies something very simple: by this general election, you confirmed the choice made more than three years ago, but you are not leaving Europe.”
On the other hand, he has warned, the best way to reach the most ambitious trade agreement with the EU would be if the U.K. essentially says “we don’t want to change very much.”
So, the drama will continue. If the U.K.’s economy emerges as robust and healthy, other European countries might wonder about the value of staying in. If Johnson defines his country as too close to the European Union, irrespective of economic logic, his base may well ask what the past three years’ drama has achieved other than serving Johnson’s own political ambitions.
It’s time to raise the curtain on the next act.
Frederick Kempe is a best-selling author, prize-winning journalist and president & CEO of the Atlantic Council, one of the United States’ most influential think tanks on global affairs. He worked at The Wall Street Journal for more than 25 years as a foreign correspondent, assistant managing editor and as the longest-serving editor of the paper’s European edition. His latest book – “Berlin 1961: Kennedy, Khrushchev, and the Most Dangerous Place on Earth” – was a New York Times best-seller and has been published in more than a dozen languages. Follow him on Twitter @FredKempe and subscribe here to Inflection Points, his look each Saturday at the past week’s top stories and trends.
For more insight from CNBC contributors, follow @CNBCopinion on Twitter.
‘Historic’ deal with China will be good for global growth: Steven Mnuchin
Treasury Secretary Steven Mnuchin speaks to the news media after giving a television interview at the White House in Washington, December 3, 2018.
Leah Millis | Reuters
The “historic” phase one trade agreement reached Friday between the U.S. and China will boost global growth, according to U.S. Treasury Secretary Steven Mnuchin.
Speaking to CNBC’s Hadley Gamble at the Doha Forum on Saturday, Mnuchin said the partial deal would address a host of issues central to Washington’s trade agenda.
“This deals with intellectual property, this deals with technology transfer, it deals with structural agricultural issues, financial services are opening up, currency understandings, as well as a commitment to purchase U.S. agriculture and U.S. goods,” he said.
Mnuchin also dismissed the notion that the U.S. was pushing back on the rules-based trading system, arguing that a level playing field with China would benefit the global economy.
“For a very long period of time the U.S. was open to China, China was not open to the U.S. There were very strong restrictions and for the first and second largest economy in the world, there should be more trading back and forth and that’s what we’ve been working on, and I think these agreements will not only be good for the U.S., but will be very good for global growth,” he added.
Global stocks surged Friday as Washington and Beijing announced that the partial accord had been reached, averting the next round of U.S. tariffs after a bruising 18-month trade war.
U.S. and Chinese negotiators will now work toward setting a timescale to sign the agreement, which is still subject to legal procedures, with U.S. Trade Representative Robert Lighthizer telling reporters Friday that the two sides would aim to ink the deal in January in Washington.
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