Europe, Images, Middle East

Image of the Day – December 1, 2015 – The Turkish-Bulgarian Border

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The land border between Bulgaria and Turkey currently serves as the southeastern frontier of the European Union, and it also Turkey’s most vulnerable one. Whereas Turkey’s eastern borders are separated from the majority of its population by over a thousand kilometres of hills and mountains, the distance between Istanbul and the Turkish-Bulgarian border is less than 200 kilometres, and the terrain is relatively flat the whole way.

Not incidentally, it was from the area that is today Bulgaria that the Romans conquered Byzantium (today’s Istanbul) in 173 BC, and that European forces conquered Constantinople (also today’s Istanbul) during the Fourth Crusade in 1204 AD. In fact the Turks themselves conquered Constantinople from this direction, in 1453 AD, though in their case they approached the city from both east and west simultaneously.

If Turkey were to formally or informally dominate even just the southern half of Bulgaria, as its Ottoman predecessors did for nearly five hundred years between 1396 and 1885, the distance between its western border and Istanbul would double. Even more important, Turkey would then be able to anchor itself on the Balkan Mountains instead of on the flat lowlands which currently comprise much of the border between the two countries.

This would give Turkey a defensible buffer in the north, while also allowing it to outflank any theoretical threat that might emerge on its border with Greece, its long-time rival, which like Bulgaria has a border located near to Istanbul. In addition, it would allow Turkey to prevent the Russians from circumventing the Turkish Straits by sending their goods to the Mediterranean by way of Bulgaria and Greece. Obviously the Turks would find such a state of affairs to be quite beneficial, all other things being held equal.

This is important, because Turkey could probably dominate Bulgaria if it wanted to, unless the Bulgarians were receiving support from an outside power like the United States, Russia, or the Europeans. Turkey is a much larger and wealthier country than Bulgaria is. Its gross domestic product is thought to be 20 times larger than Bulgaria’s, and its population is more than 10 times larger than Bulgaria’s. There is, in addition, a large Turkish diaspora living within Bulgaria, accounting for more than 10 percent of the country’s total population and more than half of the population in two of its 28 provinces.

You can read the full article here.

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Middle East, North America

Why Iraq is Still So Important

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So, why did the United States decide to invade Iraq in 2003? There may have been some sinister or stupid reasons for the war, as an overwhelming majority of Americans believe there were, but there were also strategic motivations behind it, which are almost never acknowledged. These were, namely:

1. To weaken the position of the Sunni Arabs in general, and Saudi Arabia in particular, within the Middle East. Even though Saddam Hussein’s Ba’athist, Sunni-led government was often unfriendly towards other Sunni Arab states like Saudi Arabia and even attempted to annex Sunni-majority Kuwait, Saddam’s Iraq was ultimately aligned with the Saudi Arabian position in the region anyway.

This was a result of Iraq’s intense rivalry with the Shiite non-Arab state of Iran, which it had fought an enormous war against throughout most of the 1980s, and because of Iraq’s repression of its own Shiite Arab majority population, which its had acted with brutality toward during the 1990s. The Saudis were afraid that Shiite Iran and Iraq’s Shiite majority would one day work together to undermine the Saudi position within Saudi Arabia’s own Shiite-inhabited Eastern Province, which is extremely far away from where most Saudis live and yet is also where most Saudi energy production is located.

[Saddam Hussein’s government may have been a nominally secular Ba’athist one, but that did not stop him from engaging in religiously sectarian politics during most of his time as Iraq’s leader, or from adding the phrase “God is Great” to the Iraqi flag in 1991 in what was sometimes said to be his own handwriting. With the collapse of Iraq’s secularist patron the Soviet Union around 1990, and with the increase in worldwide pan-Islamism around the same time (as a result of various factors, such as the Islamic victory in the Afghan-Soviet War in the late 1980s, the gaining of independence for Muslim countries in Central Asia as a result of the breakup of the Soviet Union, the wars between Muslim and non-Muslim populations in the 1990s in places like Chechnya, Yugoslavia, Lebanon, Palestine, Armenia, Kuwait, Kashmir, Sudan, and East Timor, and the increased globalization of Islam as a result of the emergence of the Internet), it is not clear to what extent Iraq’s Ba’athist-style secularism — such that it was — would have survived had it not been toppled by the US invasion].

The United States blamed the Sunnis, and especially the Sunni Arabs, and especially Saudi Arabia, for 9-11, and for most Islamic extremism in general. Even as the Bush administration named Shiite Iran, and not Saudi Arabia, as one of the three “Axis of Evil” countries, it also knew that Iran’s influence was limited by the fact that 90 percent or so of the world’s Muslims are Sunni rather than Shiite, and by the fact that Iran is not an Arab country. Moreover, it knew that Iran’s state-driven brand of religiosity was far less socially conservative – and far more often ignored by its own citizens – than that which exists in several of the Sunni areas of the Muslim world, in parts of Africa, Arabia, and South Asia.

Thus the United States was not too surprised to learn that fifteen of the nineteen 9-11 hijackers, in addition to Osama bin Laden and some of the other Al Qaeda leaders, were Saudi nationals. Saudi Arabia, after all, has such an extreme political and social system that its millions of women are still not even allowed to drive a car. The US also laid a portion of the blame for Pakistan’s aquisition of nuclear weapons in 1998 at the feet of Saudi Arabia.

[In fact, less than a year before 9-11 an airplane flying from Saudi Arabia to London was hijacked by four Saudis and taken to land in Iraq, which sent both the passengers and hijackers back to Saudi Arabia. A month before that, a Qatari plane was hijacked and flown to Saudi Arabia. And only six months before 9-11, a Russian plane was hijacked by Chechens and flown to Saudi Arabia, where it was stormed by Saudi special forces. Airplane hijacking has a long history in the Arab world; the Popular Front for the Liberation of Palestine in particular hijacked many planes during much of the Cold War, and was able to pass on its experiences because its hijackers were often never arrested or killed. Most notably, on September 6, 1970, the PFLP hijacked four airplanes simultaneously – three of them successfully, one, an El Al plane, unsuccessfully – and landed two of them on a Jordanian airstrip. Yet another plane was hijacked two days later and also taken to Jordan, together triggering the Black September war a week later. The hostages from the hijacked aircraft, with the exception of Jewish hostages, were freed on September 11].

The US did not feel it could invade Saudi Arabia, however, because Saudi Arabia was too large and rugged (it has the seventh largest territory in the world, and is covered mostly by deserts and mountains), too rich in oil and natural gas infrastructure (unlike Iraq, where the energy sector had been severely underdeveloped as a result of decades of sanctions and war), too conservative and internally fractious (the US fears what would become of Saudi Arabia and Yemen if the Saudi royal family were overthrown), too strategic (the US worries that, absent the Saudis, Iran would become too influential within the Shiite-majority Persian Gulf region, and also that instability in Arabia might endanger global trade routes through the Red Sea to Suez), and too sacred (the US does not want to put its soldiers anywhere near the Saudi-controlled holy cities of Mecca or Medina, particularly given the ongoing American support for Israel’s control of Jerusalem).

As such, the Bush administration saw the de-Baathification of Iraq – i.e. the disempowerment of Iraq’s Sunni Arab minority, and by extension the empowerment of Iraq’s Shiite Arab majority and Sunni Kurds –  as the next best way to weaken the regional position of the Sunnis and Sunni Arabs in general and both Iraq and Saudi Arabia in particular. Indeed, the United States had already spent the decade prior to 2003 helping to build up the strength of Iraqi Kurdistan in defiance of Saddam Hussein’s government, and wanted to ensure that this work would not be undone by the Sunnis in Iraq and neighbouring Turkey who most fear Kurdish separatism.

2. To turn the United States into the dominant power in the Middle East over the short-to-medium term, by temporarily taking control of Iraq and its massive conventional oil and gas resources (the world’s third and seventh largest, respectively, according to the US Energy Information Agency), and by using Iraq as a platform from which it could put pressure on neighbouring countries like Saudi Arabia, Iran, Syria, and Turkey. There are a number of reasons why control of Iraq seemed necessary, or at least useful, for this purpose:

– eastern Saudi Arabia, which borders Iraq, is where most Saudi oil and gas is located, yet it is a Shiite-majority region in an otherwise Sunni-majority country

– western Iran, which borders Iraq, is where much of Iran’s oil and gas is located, yet it is a majority Arab, Kurdish, Azeri, and Lur region in an otherwise Persian-majority country. (Ethnic Persians only make up an estimated 50-65 percent of Iran’s population). The Arab region of Iran, Khuzestan, is particularly energy-rich and vulnerable to Iraqi intrusion.

– eastern Syria, which borders Iraq, is where most of Syria’s oil is located, yet it is a majority Sunni Arab and Kurdish region in a country ruled by the non-Sunni government of the Assad family

– Kuwait, as the events leading up to the First Gulf War in 1990 showed, is incredibly vulnerable to external Iraqi pressure. Kuwait is the world’s eighth or ninth largest oil producer. Though it is majority Sunni country, it also has a large Shiite minority – perhaps 20-25 percent of its total population – most of whom live in the areas where most of Kuwait’s oil is extracted or exported from. In addition, Kuwait’s population of non-Arab, and often non-Muslim, foreign workers now outnumbers its own citizens by a decent amount.

– Qatar and the United Arab Emirates, both of which also share the Persian Gulf with Iraq and are also among the world’s leading oil or natural gas producers, are in a somewhat similar position to Kuwait, albeit with less direct exposure to Iraqi influence

– Jordan, which borders Iraq, has in effect a Palestinian-majority population, yet is ruled over by a royal family that was brought in from faraway Mecca by the British in the 1920s. The Jordanian royal family has survived mainly via an alliance with the US, Britain, Israel, and the Gulf Arabs. It shares a long border with Israel, from which Jerusalem is only 25 km away, and with Syria, from which Damascus is only 75 km away. Back in 2003, Jordanian politics were crucial to Israel and its allies within the United States, as Israel was then in the midst of the Second Intifada (from 2000-2005), a guerilla war which was many times more deadly to Israelis than any of the Gaza or Lebanon wars since have been

– eastern Turkey, which borders Iraq, is where most of the dams on the headwaters of the Tigris and Euphrates Rivers, from which Iraq and eastern Syria derive most of their freshwater, are located. It is also where the Turks hope to build energy pipelines linking both the Middle East and Central Asia to Istanbul and Europe. It is, however, a majority Kurdish region, in an otherwise Turkish-majority country. Kurds in Turkey account for an estimated 20 percent of Turkey’s overall population, and for more than half of the overall Kurdish population that spans Tukrey, Iraq, Iran, and to a lesser extent Syria.

– eastern Turkey also borders Azerbaijan and the Christian countries of Armenia and Georgia. Armenia is an enemy of Turkey and ally of both Russia and the US, while Georgia is an enemy of Russia and an ally of the US. Azerbaijan, which fought a terrible war against Armenia during the 1990s, is a significant state in its own right: it is the world’s 20th largest oil producer, borders Russia’s separatist-inclined Muslim territories like Chechnya and Dagestan, and, most importantly, borders the Azeri-majority regions of Iran. Azeris account for perhaps as much as 25 percent of Iran’s entire population; indeed, Azerbaijan has even toyed with the idea of renaming itself “Northern Azerbaijan”, implying that Iran is in direct occupation of “Southern Azerbaijan”. Iran’s Azeris are linguistically about the same as those in Azerbaijan, and not too different from Turks in Turkey.

[Azerbaijan is also the world’s only formally secular Shiite state, which means that the religious Shiite Iranian regime, which rules an Iranian population that includes an increasingly large number of modern-minded Shiites as well as many Sunni, Sufi, and secular Muslims, views the Azeris as a major social and ideological threat as well. Thus Azerbaijan, which is less than 300 km from Iraq, is strategically important in spite of having a population of just around 10 million. Azerbaijan is, finally, the only link for future Turkish-European pipelines to cross the Caspian Sea to Turkmenistan, which has been thought to hold the world’s fourth largest accessible reserves of natural gas.]

Iraq, in other words, is not just immensely energy-rich: it is also far and away the most strategically vital country in the Middle East, capable of pressuring all of the countries it borders – Turkey, Iran, Saudi Arabia, Syria, Kuwait, Jordan, and beyond – when it is internally unified or under the domination of a foreign power.

The United States hoped to exploit both of these traits in order to throw its weight around within the region and attempt to prevent a second major terrorist attack from occurring on American soil. This is, similarly, why Iraq continues to draw global attention today. The recent US decision to cut a deal with Iran was in made in part because of the gains that ISIS – representing some of the Sunni Arabs – and the Sunni Kurds have made within Iraq.

None of this necessarily changes the fact that the Iraq War was arguably a strategic mistake for the United States, and possibly a moral failure as well. Still, it may be comforting to know that, contrary to popular belief, the reasons behind the invasion were not entirely incoherent or sinister (or at least, not incoherent or sinister in the ways that people have generally assumed they were). And perhaps we should not judge Bush too harshly for concealing his true purposes. After all, Obama cloaked his support for Syria’s rebels in precisely the same anti-tyranny, anti-WMD rhetoric that Bush once employed towards Iraq, consistently avoiding the fact that the rebels’ success benefited the United States by curtailing Iranian influence in places like Syria, Iraq, Lebanon, Jordan, and Palestine.

And now that Assad has weakened, Obama finds himself again with the same dilemma as Bush, wanting to move closer to the Shiites and/or Persians in the region in order to counterbalance the dominant Sunnis and/or Arabs, yet also concerned that this will result in increased Sunni militancy, a destabilized Arabia, and an ascendant Turkey or Iran.

Of course, this is not what the (Jeb) Bush’s or (Hilary) Clintons say. With those two running for office, we could be in for yet another round of Iraq War misdirection. May the best candidate win.

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Europe, Images, Middle East

Image of the Day — November 26, 2015 — Clash of “Civilizations”

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(Eastern Christian Orthodox countries include Russia, Ukraine, Romania, Bulgaria, Greece, Serbia, etc.; Turkic Muslim countries are Turkey, Kazakstan, Uzbekistan, Turkmenistan, Azerbaijan, Kyrgyzstan, and Northern Cyprus. For Turkey, the two most important Christian Orthodox countries are Russia and Greece.           …take these numbers with a grain of salt though, it’s hard to be sure of these things, particularly when going back a few decades and looking at large closed-off economies like the former Soviet Union)

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Europe, Middle East

Europe and Arabia: A Geopolitical Perspective

As different as the Quran is from the New Testament, or the Constitution of France is from the Constitution of Saudi Arabia (which is, in fact, the Quran), these differences are arguably less important than those which seperate the geography of Europe from the geography of the Arab world.

Europe is a region of islands, peninsulas, mountains, rivers, forests, and marshes: natural barriers that have historically hindered the development of a unified European identity. The Arab world, on the other hand, is in effect an enormous coastal desert, stretching for nearly 8000 km from the Atlantic to the Indian Ocean and yet, with the exception of some notable mountain ranges around its edges, containing few internal barriers of any sort. This comparatively open landscape of the Arab world has allowed it to achieve a level of linguistic, religious, and cultural unity that Europe has rarely if ever been able to match.

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While the Desert and its coastal seas act as unifying force within the Arab world, the fact that significant supplies of freshwater can be found in just a few scattered areas within its gigantic territory (mostly in mountains, as in Morocco, Algeria, and Yemen, or in rivers, as in Egypt, Sudan, and Iraq) has meant that the pan-Arab identity it has fostered must compete with a wide assortment of intra-Arab identities, which in most cases have been far better than pan-Arabism at winning the allegiances of their inhabitantsIn addition, the geographic division between the Middle East and North Africa has led to sharp ethno-linguistic and political divisions between Arab and Berber peoples within countries like Morocco and Algeria.

The desert geography has also tended to make the Arab world relatively poor. This too is in stark contrast to Europe, which has become rich as a result of the commercial navigability provided by its numerous slow-flowing rivers, long coastlines, and sheltered seas and fjords, as well as by its luck in possessing a temperate climate and natural resources like freshwater, farmland, timber, and coal — and proximity to the natural riches of the Americas that it was able to access and exploit.

These opposing geographies have underlain the great historical contest between the “civilizations” Europe and the Arab world have cultivated for themselves. The advantage was first with Europe, arguably, as Italy, led by Rome, was able to conquer the entire Mediterranean basin as well as Mesopotamia, defeating the Carthaginians (a powerful Semitic empire based out of what is now the Arab state of Tunisia, which had controlled much of North Africa and Spain and was ethnically linked to the Phoenicians in the Eastern Mediterranean) and other African and Middle Eastern groups in the process. Even following the decline of the Christian Roman Empire, most of the inhabitants of the Middle East and North Africa continued to be ruled by Rome’s successor, the Greek-led Byzantine Empire (which was also Christian), for several hundred years.

Eventually the tables turned, however, and around 600 CE the Arabian Peninsula united under Muhammad and then expanded its control outward during the rule of his immediate successors, quickly conquering Spain, most of France (for a very brief period), and a large part of Asia. In turn, the Arabs were invaded and occupied by Central Asian groups like the Mongols and Turks; however, in a sign of Arab influence, most of the conquering Turks ended up adopting the religion of the conquered Arabs, and long outlasted the Mongols.

While the Arabs then lost their beloved Spain after a more than 700 year long struggle with Christian forces to keep hold of it, the Muslim Ottoman Turks made up for the loss by conquering all of southeastern Europe as far as the Austrian capital of Vienna, which they besieged in 1529 and again in 1683. Muslims also continued to spread the faith into Southeast Asia: many of the ancestors of people living in what is now Indonesia, which today has the largest Muslim population of any country in the world by far, adopted Islam during the 1400’s, almost a millennium after the death of Muhammad.

Of course, the Europeans ultimately regained the advantage over their Muslim neighbours. During the late 1400’s the Portuguese first sailed a route to India which avoided passing through Turkish or Arab-held territory, while, around the same period, the Spanish reached the Americas and the Russians surged into Muslim Turkic Central Asia, conquering territory they mostly continue to hold today. The greatest blow to Islam then fell in the 1700’s and 1800’s, as the Muslim Mughal Empire, which at its height had governed over almost a quarter of the world’s population, lost its hold on the Indian subcontinent to the British. The colonizing Europeans also took over Muslim populations in places like Africa and Southeast Asia.

During the 1800’s and early 1900’s, the Ottoman Turks forfeited southeastern Europe and the Arab world in a series of assaults aimed at them by European powers like the British, French, Russians, and Austrians. The Persian empire was heavily intruded upon by both the British and Russians. Finally, in the 1970s, the last super-sized Islamic state, Pakistan, was divided into two separate countries, Pakistan and Bangladesh, which do not even border one another anymore since India lies between them. Today Pakistan and Bangladesh are the world’s sixth and eighth most populous countries, respectively.

For many people, the battle between Europe and Arabia, or between the West and Islam, continues to this day. After losing its main source of wealth when Europe stole the control of trade with India and China away from it, most of the Middle East seemed likely to become somewhat irrelevant to global politics. Instead, it gained a new source of wealth in the modern era: oil. As recently as 2010, more than 15 percent of world oil production occurred in Saudi Arabia alone, while an additional 15 – 20 percent occurred in other Arab countries and 40-50 percent occurred in the Muslim world as a whole.

The Muslim world also accounts for close to a third of world natural gas production (led by Iran, Qatar, Saudi Arabia, and Algeria), and is estimated to possess over 60 percent of the world’s “conventional” proven reserves of natural gas (not including gas from shale) as well as over 50 percent of non-shale oil reserves and over 75 percent of oil reserves that are neither from shale nor from oil sands.

Today, partly as a result of the energy wealth it has gained during the past century, the Arab world has a population of approximately 380 million (in contrast to a century ago, when its population was significantly smaller than even any of the major European nation-states were at the time, without even counting the Europeans’ overseas empires) and a nominal gross domestic product of just under 3 trillion dollars. This means that, if the Arab world could somehow reunite politically, it would have the third largest population and fifth largest economy in the world. It would, in other words, become a Great Power again.

Needless to say, few of the Arab world’s neighbours want to see any serious pan-Arab union come into being. Arab unification was in fact very briefly attempted in modern times, in a formal sense, with the joining of Egypt and Syria to form the United Arab Republic, which lasted from 1958 to 1961. From a purely geopolitical perspective, the potential of such cooperation between Arab countries is especially worrying to regions like Europe because of the Arab world’s shared religious identity – and to a lesser extent, shared cultural traditions and linguistic affiliations – with other parts of the Middle East and Muslim world.

(The “classical” version of the Arab language, which is understood by scholars and clerics in every country of the Islamic world –  and by many other people too, to varying extents – because it is the language of the Quran, is one potentially important example of a unifying factor throughout the Middle East).

If combined with non-Arab Middle Eastern neighbours Turkey and Iran, the population of the Arab world would rise to more than 530 million and its GDP would rise to more than 4 trillion dollars. The states that comprise the Organization of Islamic Cooperation, meanwhile, have a combined population of approximately 1.6 billion and a GDP of approximately 7 trillion dollars — and they do not even include the estimated 180 million Muslims living in India, 25 million living in China, 16 million in Russia, or 20 million living in the European Union.

While in the West there is much talk of the Muslim world being stuck in an economic decline, Muslims actually continue to have a higher per capita income than Hindus do, or than Christians in Sub-Saharan Africa do. Many Muslim countries have a higher per capita income than China does, even today following decades of rapid Chinese economic growth. The past decade has in fact been a terrific one for most Muslim economies, with oil and gas prices rising sharply, the developing world as a whole growing solidly, and a number of countries with large Muslim populations, most notably Indonesia, Turkey, India, and Nigeria, growing very quickly.

Apart from economic growth, the Muslim world’s geopolitical trajectory has also been positive in the past generation, mainly as a result of the collapse of the Soviet Union having freed about 60 – 90 million Central Asian Muslims (the exact number depends on whether or not you count  Afghanistan as part of Soviet-occupied Central Asia) from Russian rule, along with the resource-rich, centrally-located region of Eurasia they inhabit.

Since then, some Muslims have been hoping or pushing for a further Islamic geopolitical revival, which many non-Muslim countries would obviously not be happy to see. Pan-Islamic sentiments have, to varying extents, found their way into local and regional disputes between Muslims and non-Muslims throughout the world, in places like Kashmir, western China, Palestine/Israel, various African countries, various Southeast Asian countries, the Caucuses (both within Russia and without), and the Balkans. Arguably, technologies like the Internet have been strengthening pan-Islamic identities as well.

The West has, of course, generally aimed to gain influence within the Arab world, in part to prevent it from ever becoming too closely united. Europe, Russia, and the US have historically been focused on gaining influence in Egypt, for example, as Egypt has by far the largest population of any Arab country, is more internally stable and united than any other large Arab country, and is strategically located, sitting directly in the centre of the Arab world and encompassing the Suez Canal.

The West has also focused on gaining influence in the Persian Gulf, in particular by allying itself closely with the tiny energy-rich Gulf monarchies (Kuwait, the UAE, Qatar, Oman, and Bahrain), as well as with  the royal family of Saudi Arabia and, not too far away, the Israelis, the Iraqi Kurds, and the royal family of Jordan. Given that the West is in some ways more powerful today than at any time in history (largely as a result of the rise of the US, which was completed with the fall of the Soviet Union), and that the Persian Gulf region is sharply divided between Arabs and Iranians, Sunnis and Shiites, and Iraqis and Saudis, gaining influence there has not been too difficult for the West to achieve.

And so, even leaving aside social values or issues explicitly tied to religious belief, many Arabs believe the West is acting unjustly or aggressively towards them. Most believe that the current political borders of the Middle East are artificial, imposed on them a century ago by ignorant or sinister British and French politicians. There is certainly truth to this, though, in defence of the British and French, some of the borders that were drawn actually did accurately reflect some of the existing social and geographic divisions within the Arab world.

With a number of possible exceptions, such as Kuwait and Lebanon (which arguably should not have been created as independent states), Israel and Palestine (which arguably should have been created as a single state, perhaps even including neighbouring Jordan as well), and Kurdistan (which arguably should be created out of parts of Turkey, Iran, Iraq, and Syria, though even this is more complicated than it is often portrayed), it is not clear that the borders in the Middle East could actually be all that improved upon. But of course, this is a topic worth debating in much greater detail.

It is also not only the Christian world that has been responsible for messing with the “natural” borders of Arab lands. Iran and Turkey, for instance, both refuse to give up Arab-inhabited regions of the Fertile Crescent they possess; a more consistent geographic or cultural rendering of Middle Eastern borders should perhaps have included Turkey handing over its province of Hatay to Syria (as Syria still officially claims it should) and Iran handing over its province of Khuzestan to Iraq.

Yet most people who complain of Western-imposed artificiality among the borders of the Arab world are not concerned with either of these areas, even though both are significant to the politics of the region (especially Khuzestan). Indeed, while Arab bitterness toward Europe’s past imperialism remains wholly justifiable, complaints of imperialistic European map-drawing in the Arab world nevertheless tend to be somewhat exaggerated. If you want to see truly unfair and dangerously-drawn borders the Europeans were responsible for, you should not even begin to think of the Middle East, but look instead to regions like West Africa or Central Asia.

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Europe, Middle East

The Other Greek Economy

Four months ago, Greek politics dominated the news. Even the Chinese stock market downturn, in which the Shanghai index dropped by over 30 percent in the month leading up to the Greek referendum, took a far backseat to Athens on every broadcast. Greece’s own stock market fell nearly to 26-year lows at the time, was shut down for five weeks in July, and then, immediately upon reopening, set a modern record by losing more value in a day than even Wall Street had on Black Monday in 1987. Even today the Athens index remains 11 percent lower than it was during its midsummer hiatus.

(All graphs compiled by author unless otherwise stated)

The media’s focus has completely flipped since then: it is now China’s economy and its impact on commodity prices that has the world’s attention. Even the re-election of Greek Prime Minister Alexis Tsipras and his political party Syriza a month ago barely made a blip in American news coverage; it fell well behind other stories like the visits of Pope Francis and Xi Jinping to the United States, the ongoing migrant and refugee flows into Europe, and the Volkswagen emissions-hiding scandal. One wonders if the Greek economy will soon grab the global spotlight once more as it has periodically been doing for almost a decade now, or if new media and economic patterns are emerging instead.

This article is not just about Greece, however. It is also about the world’s only other Greek-speaking state, Cyprus. The Greeks and Greek Cypriots have a lot in common with one another, financially speaking. Both use the euro as their currency, both have been struggling with severe bailout-related crises, and both depend quite heavily on imported oil. (See the two graphs below; also, notice in the graph above how the Athens stock market index responded to the two US invasions of Iraq, which many investors worried would cause the price of oil to spike in the short-term).

This dependence on imported energy, like that of other struggling European countries such as Spain and Portugal – and in stark contrast to Scandinavia, Britain, the Netherlands, and most of Eastern and Central Europe, which produce a lot more of their own fossil fuels or else have less energy-intensive economies- has generally been overlooked in the popular narrative of the Eurozone crisis, which has instead tended to emphasize cultural differences that exist between northern and southern European countries. Yet while it has been much more common to explain Europe in terms of thrifty, efficient Germans and nifty (or shifty) tax-dodging Greeks, the cost of importing energy was perhaps even more significant a factor in weighing down Europe’s Mediterranean economies relative to northern Europe when crude oil was still at well above $100 per barrel.

[Even Italy, which unlike other southern European economies is a mid-sized oil producer in its own right, with a slightly higher oil production than Germany or than the combined oil production of France, Spain, Turkey, and Greece, has still been hurt by energy economics: it is the world’s third largest natural gas importer, and was a leading customer of Libya before Gaddafi was overthrown. Still, Italy’s unemployment rate has not been nearly as high as Spain’s or Greece’s in the past decade (though notably, when oil prices were low around the turn of the millennium their unemployment rates were roughly the same), and indeed, Italy’s unemployment rate has even been lower than that of southern France].

This year, in contrast, when oil and gas prices have plunged, Spain has been the fastest-growing economy in Western Europe, experiencing a bigger GDP gain than it has in any year since 2007. Portugal and France are also thought have grown by a relatively decent amount, and Italy to have avoided recession. The two Greek economies are looking at Spain and hoping for a similar much-needed bounce.

Cyprus – or, more accurately, the 63 percent of Cyprus’s territory and 76 percent of Cyprus’s population that is governed by Greeks rather than by Turks – retains close ties to mainland Greece. Cyprus and Greece tried to unite formally in 1974 under the control of a Greek military junta, prompting a Turkish invasion of the island, and today Cyprus remains dependent on Greece for an estimated 20 percent of its trade as well as  for much of its foreign investment. Had the Eurozone Grexit actually occurred as many expected it would, it could probably have triggered a “Cyprexit” as well, which doesn’t have quite the same ring to it.

Cyprus’s relations with Turkey remain poor, meanwhile, and Turkish-inhabited Northern Cyprus continues to go diplomatically unrecognized by every country in the world outside of Turkey. That said, in 2008 the wall between Greek Cyprus and Turkish Cyprus that ran through the largest city on the island, Nicosia, was taken down, and in 2014, a decade after a failed reunification referendum in 2004, reunification talks were renewed between the two sides.

Now could be a good time to think about investing in Cyprus, not only because of how un-repeatably poorly it has done in recent years or because of the “White Swan” possibility that it could surprise the world by signing a deal that would finally reunify its two estranged halves, but also because its economy could perhaps benefit more than any other in Europe from today’s lower oil prices.

Indeed, Greece too, as well as other nearby countries like Serbia, Bulgaria, Croatia and to a lesser extent Turkey, could similarly benefit from the mix of relatively low oil prices and extremely low expectations. Growth in these countries could also benefit Cyprus, particularly if technology increasingly allows Cyprus to become even closer with its fellow Greeks in Greece and Turks in Turkey.

(Cyprus is located about 900 km from Athens, where around a third of Greece’s 11 million people live, and 750 km from Istanbul, which is the world’s fifth largest city by some measures. Cyprus is, in fact, located closer even to Moscow, Lahore, or Addis Ababa than it is to its fellow Eurozone members in Dublin or Lisbon).

Cyprus’s general stock market index has already fallen by 24 percent in the past year and by over 90 percent since 2011, so it might now be possible to pick up some valuable Cypriot assets for a cheap price.

Here are ten other things about Cyprus and Greece to consider:

1. Cyprus speaks English better than most other European states (with the exception of Scandinavia, the Netherlands, Switzerland, and Austria, which are also excellent at English) because it was controlled by Britain from 1878 until 1960, maintains a British air force base today where over 8,000 Brits continue to live along with their families and thousands of Cypriot employees, and has a large international tourism sector. Cyprus’s neighbors, namely Greece, Israel, and Lebanon, are also great at English. Egypt, another former British-ruled neighbor that attracts lots of tourists, is not too bad at English either, and is getting better because its population is still extremely young.

english %

Note: Second-language statistics are difficult to be certain of, so you should take this graph with a large grain of salt.

2. Cyprus and Greece are both not too dependent on exports of goods and services, compared to other European countries. In fact, as the graph below shows, Greece is the only small economy not to be dependent on exports; the other six countries closest to the top of this list are Europe’s six largest economies. Not being too dependent on exports is probably a good thing for Greece and Cyprus right now, considering that economic growth in Europe and the world has not been strong this year.

exports
(You will notice, for example, that Ireland is by far the most dependent on exports, which may be part of the reason it was hit especially hard during the global financial crisis and recession around 2008. In contrast, Turkey, which may be the least export dependent, bounced back strongly from the global recession, notching an estimated nine percent GDP growth in both 2010 and 2011).

3. Cyprus, even more than Greece, is economically dependent on tourism. Going forward, both hope to attract aging northern Europeans – including Russians, who like Greeks are Christian Orthodox – fleeing the winter and now being able to vacation abroad more easily because of technologies like the Internet. With Russia having frigid winters, a population of 144 million (by far the largest in Europe), and a Baby Boomer cohort that is now almost 60 years old on average and mostly cannot afford to travel to more distant and more expensive summer vacations in places like Spain, Italy or France, both Cyprus and Greece are hoping for a big tourist increase in the years ahead.

tourism

One area to look to here is Turkish-Russian relations. Turkey has become the biggest destination for Russian tourists in recent years, but if the relationship between the two regional powers deteriorates again as historically it has on many occasions (in fact they have already begun to deteriorate in the past week), more Russians could be steered toward Greece, Cyprus, and the Balkans instead, as well as toward countries like Egypt which has been Russia’s second most popular tourist destination in recent years.

Another place to look is the Caucasus, both within Russia and without: any renewed militancy in that region could threaten Russia’s tourist infrastructure build-up around Sochi along the coast of the Black Sea. The same is true for the Balkans, where dormant conflicts in tourist havens like Croatia could, if they were to turn violent once again, make Cyprus and Greece more appealing alternatives.

4. It is difficult, and in a certain sense effectively impossible, to find good statistics on the length of countries’ coastlines, as a result of the coastline paradox. That being said, I have given it a rough shot, and come up with the following stats:

coastline

It shows that, along with the remote New Zealand-Australia-Papua New Guinea region in the southern Pacific, the Greece-Cyprus-Croatia region has by far the world’s longest warm-climate coastline per capita. In fact, even Turkey, with a population of 74 million, does not do too badly in this respect since it has lengthy coasts along the Mediterranean, Aegean, and Black Sea. Considering how much people like owning seaside land, this could be a good characteristic to have. Nearby Italy also does somewhat decently, because of its long peninsular shape and its islands of Sicily and Sardinia, which are the only two Mediterranean islands with a larger population than Cyprus.

5. According to the World Bank, Cyprus has one of the lowest “total age dependency ratios” in the world and, with the exception of Slovakia, the lowest total age dependency ratio in all of Europe. The total age dependency ratio measures the number of people in a country aged 15 and under or 65 and older relative to those aged 15-65. Cyprus has very few children or seniors relative to the size of its working-age population, which is arguably a very good thing to have. Greece, on the other hand, does not have this, as you will notice on the graph below.

Total Age Dependency Ratio

Cyprus also has the lowest share of its population aged 80 years old or older in Europe with the exceptions of Slovakia and Ireland. Cyprus’s neighbors – Israel, Lebanon, Turkey, and Egypt – have even smaller shares of their population aged 80 years or older. Greece, in contrast, has the highest share above 80 in Europe with the exception of Italy, which is likely part of the reason its public finances are so strained. Other troubled economies like Spain, Portugal, and France are at the very bottom of this 80-and-up list, along, interestingly, with Germany.

80+ ratio

The same is true of the “Old Age Dependency Ratio”, which is the number of people a country has aged 65 years and older relative to those it has aged 15-64.

old age ratio

6. Outside of Scandinavia or the former Soviet Union, both Greece and Cyprus have some of the most land per capita in Europe, as can be seen in the graph below. So too do some of their neighbors, like Turkey and other Southeast European countries. This relative wealth of land could be good for Greece and Cyprus, but there is also a catch: Greece, and especially Cyprus, are lacking in freshwater. Indeed as the second graph below shows, Cyprus is the most water-strained country in Europe.

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Graph Source: European Environment Agency

And of course, many of Cyprus’s Middle Eastern neighbors are in very poor shape on this front as well, though some, like Israel, are trying to come up with technological solutions for their freshwater shortages – and both seawater desalination and wastewater treatment are significantly cheaper to do when energy prices are low as they have become in the past year.

Two months ago, by the way, Turkey finished constructing a freshwater pipeline to Northern Cyprus which, at 80 km in length, is the longest underwater water pipeline in the world. It is supposed to have a significant effect upon Northern Cyprus’s agricultural production. Greek Cypriots are wary of becoming dependent on this pipeline, however, and Turkey is far from being rich in freshwater itself.

7. This graph below shows that Cyprus’ economy performed abysmally in 2014 and especially in 2013, yet is expected to finally start growing again in 2016. Greece, meanwhile, already started growing again in 2014 and is forecast to do so even more in 2016 while Cyprus’s closest neighbors, Lebanon, Israel, Turkey, and Egypt, are expected to grow quite quickly in 2015 and 2016.

gdp growth europe

Other Mediterranean economies, particularly Spain, are also expected to recover from their poor performances in recent years, and Russia is expected to start growing again in 2016 after the sharp contraction it has been experiencing in 2015. Three other countries in Cyprus’s general neighborhood, Syria, Ukraine, and Libya, have of course also been doing horribly in recent years, and will hopefully recover as well.

8. Britain has had very strong economic growth this year compared to many other countries in Europe or the developed world. This could help Cyprus since the two countries retain ties in a number of different ways, even beyond the tourist or banking sectors. Britain is in fact home to a large Greek Cypriot diaspora, most of (the first generation of) whom left the island when the Turks invaded in the mid-1970s. Today the Cypriot population in Britain is about 20-25 percent as large as that of Greek Cyprus itself. With London and Cyprus over 3,000 km apart from another, British economic growth as well as distance-shrinking technologies like the modern Internet could help the Cypriots benefit from their British connections.

Another country with potentially close ties to Cyprus, as we have already discussed, is Russia. Russia’s economy had a bad year as oil and other commodity prices fell, but it is nevertheless expected to start growing again at a fairly decent pace in the years ahead, at least relative to more developed Western European economies.

Moreover, it is not impossible that Russia’s slowdown could actually benefit Cyprus, if wealthy Russians worried about their domestic situation decide to start parking more of their assets abroad in these countries. That said, Russians may be less likely to do so than they used to be, because in 2013 the Cypriot government used the excuse “it’s just the money of shady Russians” in order to help justify its seizure of cash from Cypriot bank deposits in accounts with over 100,000 euros in order to pay off Cypriot debts.

9. Cyprus has resources it can use to play a role in the global battle against coal production. As of 2011, it generated more solar power per capita to heat space or water than any other European country: 611 W per capita, compared, for example, to 385 W for Austria and 253 W for Greece, and 120 W for Germany, which were some of the other top solar producers in the region. Cyprus and Greece also potentially have wind power because of their long coastlines per capita and because of their many windy cliffs and hilltops.

Cyprus, and perhaps Greece as well, may also have large reserves of offshore natural gas. The Eastern Mediterranean around Cyprus has been the site of some of the world’s largest discoveries of late, not only in Cyprus, but also in neighbouring waters off the coast of countries like Israel. Less than a month ago, in fact, the Italian energy company ENI may have found the Mediterranean’s largest discovery ever in Egyptian waters not too far from Cyprus’s. The Egypt gas find could put Cyprus’s gas production dreams at risk, though in theory it could also help justify the construction of an underwater pipeline to Europe that both countries could feed their gas into.

Gas-Claims-in-the-Eastern-Mediterranean468x351

At present, Cyprus faces logistical challenges in exporting its gas to Europe, particularly if it does not want to be dependent on exporting via a yet unbuilt pipeline that would run underwater to Turkey, which has an estimated construction cost of 3 billion dollars, in comparison to the estimated 10 billion dollar gas liquefaction and export terminal that it has been considering building instead.

Still, its gas could ultimately prove valuable if, for example, Western Europe’s relationship with Russia continues to deteriorate, if gas production in fields in the North Sea continues to drop, if its gas supplier Algeria undergoes any political instability like it faced in the 1990s as its leader Abdelaziz Bouteflika (who has ruled since 1999 and is now thought to be 78 years old) continues to age or passes away, or if government pricing of carbon emissions rise a lot and thus make gas ever more desirable when compared to coal.

10. Cyprus’s position next to the Suez Canal, which was expanded this year, puts it in a position astride some of the world’s major shipping lanes. By sea, Cyprus is halfway between Mumbai and London, and halfway between New York and Kuala Lumpur. Cyprus’s ability to leverage its central shipping position to become a significant manufacturing economy has thus far been limited by its lack of a sizeable labour force, as its population is barely more than a million. Going forward, however, as machines become used more and more in industry in place of human labour, Cyprus’s manufacturing output could perhaps take off, if – a very big if – it can produce a skilled workforce to run its industries and cheap energy to power them.

Greece, similarly, has an enviable position near Suez and at the point where the Black, Adriatic, and Mediterranean seas converge, and has more natural harbours and sheltered seas than perhaps any other country in the world. It is in fact these protected coasts which allowed its city-states and kingdoms to dominate regional commerce throughout most of antiquity, and to have more registered merchant vessels in the present day than any other country in the world apart from China.

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In theory, Greece could save ships traveling between Asia and Europe from taking their usual lengthy detour through the western Mediterranean and northern Atlantic. The Greek port of Piraeus next to Athens already handles more containers ever year than all but three other ports among Mediterranean EU countries and eight other ports in the EU as a whole. By 2016 it may become the Mediterranean’s largest port. As of 2013, according to Eurostat, Greece handled approximately 5 percent of the European Union’s “gross weight of seaborne goods handled”, which is a lot considering that Greece only accounts for an estimated 1.3 percent of the EU’s overall GDP.

mediterranean-relief-map-4578708

Similarly, Russia could be likely to look to Greek ports as a way of carrying out trade that bypasses the Turkish Straits that separate the Black and Mediterranean seas and the Skagerrak Strait that separates the Atlantic from the Baltic Sea. Given Russia’s escalating involvement in the Syrian civil war, which is hurting Russia’s relationship with Turkey while at the same time making it need to send supplies into the Mediterranean through Turkish waters, Russian access to Greek ports could become especially important.

In order to do this, however, Greece would need to overcome the political and geographical challenges of transporting goods overland between Greek ports and European (or Russian) markets via Southeastern Europe. In addition to logistical challenges, doing so would also represent a direct challenge to the established megaports of the Netherlands and Belgium, as well as to the hopes of Italy which would like to achieve a similar goal for the coast along its own southern heel.

That said, there may actually be some reasons for Greece to be hopeful in this area. Greece’s ports are roughly 20-40 percent closer the Suez Canal by ship than southern Italy is, and Greece has far more and better sheltered harbours than southern Italy does. What Greece really needs, however, is a much cheaper way of transporting goods via its rugged mountain roads, as well as a cheaper way of transporting goods intermodally so that it would not be too expensive to unload goods at Greek ports, take them by land to the Danube River (which is 400 km from Thessaloniki and 850 km from Athens), and then load them back on to barges or trains in order to get them to their final destinations in Europe. (The Danube-Main-Rhine canal was completed in 1992, and can handle barges up to 190 metres long and 11.5 metres wide, with a depth of 2.7 metres).

I don’t want to dig in to this topic here, but I suspect there are technological reasons to think that both of these challenges might actually be overcome in the not-too-distant future. In fact it may wind up being the political factors, rather than the purely logistical ones, that are more difficult for Greece to get past. In particular, Bulgaria, Romania, or Hungary could put up formal or informal trade barriers that make it difficult for such a trade corridor to become prominent, and the former Yugoslavian countries in the Balkans could be too unreliable to provide alternative overland routes.

Europe-map

 

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