East Asia

Oil and the Ouroboros

Today, at $45-50 a barrel, the price of crude oil has risen significantly from the $30 lows it reached around the start of 2016. Still, it remains quite far below the $80-110 range in which it resided during most of the past decade, prior to its crash in mid-2014. Gas and coal prices, meanwhile, have in most areas of the world fallen even more than those of oil has. China, because it is the world’s largest net importer of oil and of fossil fuels in general, has often been viewed as a country that is likely to benefit from these cheaper prices.

This view may be incorrect. Not only do China’s energy imports not equal a large share of its GDP, but the growth of China’s energy imports going forward may be slower than many predict. Moreover, there is an enormous discrepancy in the amount of fossil fuels produced by various regions and provinces within China. As such, the crash in energy prices may excacerbate, or at least influence, some of China’s preexisting geo-political divisions.

Energy Imports

China may be the world’s largest energy importer, but it is has also become its second largest energy producer, and as such only relies on energy imports for an estimated 15% of its total energy consumption, in contrast to 94% in Japan, 83% in South Korea, 33% in India, 40% in Thailand, and 43% in the Philippines. In 2014 imports of oil were equal in value to just around 2.4 % of China’s GDP, according to the Wall Street Journal, compared to 3.6% in Japan, 6.9% in Korea, 5.3% in India, 5.4% in Thailand, 4% in the Philippines, and 3.3% in Indonesia.

South Korea and Japan also imported more than two and four times more liquified natural gas, respectively – the prices of which tend to track oil prices more closely than conventional natural gas prices do – than China did. China’s LNG imports barely even surpassed India’s or Taiwan’s. China’s imports of natural gas in general, meanwhile, were less than half as large as Japan’s and only around 20% percent greater than South Korea’s.

China, furthermore, tends to import energy from the most commercially uncompetitive, politically fragile, or American-hated oil-exporting states, such as Iran, Russia, Iraq, Angola, and other African states like Congo and South Sudan. In contrast, Japan and South Korea get their crude from places that will, perhaps, be better at weathering today’s low prices, namely from Kuwait, Qatar, the UAE, and Saudi Arabia. (Granted, China gets an enormous amount of oil from Saudi Arabia too; however, Saudi oil does not count for nearly as large as share of China’s oil imports as it does for Japanese or South Korean oil imports). Similarly, China gets much of its natural gas from Turkmenistan, Uzbekistan, and Myanmar, whereas Japan imports gas from Australia and Qatar and South Korea imports gas from Qatar and Indonesia. China’s top source for imports of high-grade anthracite coal, and its third largest source for coal in general, is North Korea.

China has, in addition, invested capital all over the world in areas hurt by falling energy and other commodity prices, both in developed countries like Australia and developing economic regions like Africa. With energy prices cheap, it may get low returns on these expenditures.

Energy, History, and Politics

Another mistake the financial media makes is looking at China as if it were a country, rather than what it really is: both a country and a continent. Continents contain deeply-rooted divisions along regional, linguistic, and ethnic lines. China is no exception. China’s main division, roughly speaking, is between  areas south of the Yangtze River, which tend to be mountainous, sub-tropical, and dependent upon importing fossil fuels, and areas north of the Yangtze, which tend to be flat, more temperate, and rich in fossil fuels.

China’s Physical Topography                     China’s Population Density

Northern China, stretching over 1000 km from Beijing southward to Shanghai on the Yangtze, is the country’s political heartland. It is densely populated and home to most of China’s natively Mandarin-speaking, ethnically Han citizens. When compared to southern China, the north has historically been somewhat insulated from foreigners like the Europeans, Americans, and even Japanese. Beijing’s nearest port is roughly 5000 km away from Singapore and the Strait of Malacca; Hong Kong, in contrast, is only around 2500 km from Singapore and Malacca. Beijing is rougly 2600 km from Tokyo by ship, whereas Shanghai is 1900 km from Tokyo and Taipei (in Taiwan) is 2100 km from Tokyo.

Japan’s Ryukyu island chain and the Kuroshio ocean currents historically allowed for direct transport from Japan to Taiwan and the rest of China’s southeastern coast; the Japanese controlled Taiwan for more than three and a half decades before they first ventured into other areas of China in a serious way during the 1930s. Even today, Japan accounts for a larger share of goods exports to Taiwan than do either China or the US.

Southern China has often depended on foreign trade, since much of its population lives in areas that are sandwiched narrowly between Pacific harbours on one side and coastal subtropical mountain ranges on the other. In northern and central China, in contrast, most people live in interior areas rather than directly alongside the Pacific coast.

People in the northern interior often did not engage in as much foreign trade as those on the coast, as, in the past, transportation in the interior was often limited by the fact that northern China’s chief river, the Huang-he, is generally unnavigable and prone to flooding northern China’s flat river plains, destroying or damaging roads and bridges in the process. In southern or central China, by comparison, even people living far inland could engage with the coast by way of the commercially navigable Yangtze and Pearl Rivers, which meet the Pacific where cities like Shanghai, Guangzhou, and Hong Kong are located.

Northern China, however, was most directly exposed to the land-based Mongol and Manchu invaders who ruled over the Chinese for most of the past half-millenium or so, prior to the overthrow of the Manchu-led Qing Emperor in 1912. Today, of course, the north continues to retain China’s political capital, Beijing, and a disproportionally large majority of Chinese leaders were born in northern China — including Beijing-born Xi Jinping and Shandong-born Wang Qishan, a former mayor of Beijing). This is in spite of the fact that most of China’s leading political revolutionaries in the twentieth century, including Mao Zedong, Deng Xiaoping, Sun Yat Sen, Chang Kai-Shek, Zhu De, Ye Jianying, Hong Xiuquan, and the writer Lu Xun, hailed from southern or south-central China.

At present, out of China’s seven Standing Comittee top leaders, only seventh-ranked Zhang Gaoli was born in southern China; whereas five of the seven were born in northern China and one, Premier Li Keqiang, was born in central China. Zhang Gaoli may in fact be the first person born outside of northern or central China in thirty years to have made it to the Standing Committee. He is also the only person currently in the 25-member Politburo born outside of northern or central China. Meanwhile, among the 11-man Central Military Commission, seven were born in northern China, while two were born in north-central China and two in south-central China. By my count, out of the 205 active members of the Party Central Committee, fewer than 15 seem to have been born south of central China.

Indeed, the southern half of China, stretching from islands in Taiwan, Hainan, Hong Kong, Xiamen, and Macau in the east to the plateaus of Yunnan, Sichuan, and Tibet in the west, seems to be politically peripheral. It is home to a majority of China’s 120 million or so non-Han citizens (most of whom are not Tibetan or Uyghur, though those two groups recieve almost all of the West’s attention), as well as home to China’s 200-400 million speakers of languages other than Mandarin, and to China’s tens of millions of speakers of dialects of Mandarin that are relatively dissimilar to the Beijing-based standardized version of Mandarin, and to most of China’s 50-100 million recent adopters of Christianity, and, finally, to most of China’s millions of family members of the enormous worldwide Chinese diaspora.

Southern China is closer to Southeast Asia, a region with an enormous, economically active Chinese population (many of whom speak southern Chinese languages like Cantonese), than is northern China. Southern China’s Fujian province, in particular, is both linguistically and economically close to Taiwan, and southern China’s Guangdong province—the largest province in China—to Hong Kong. A large share of China’s GDP comes from the coastal areas of China from around Shanghai south to Guangdong, particularly if you include Taiwan as part of the country. Guangdong alone accounts for an estimated 10% of mainland China’s GDP and over 25% of its exports. This creates, arguably, an unbalanced dynamic: China’s political periphery is also its main economic engine.

Fossil Fuels

As it happens, northern China produces almost all of China’s fossil fuels. Most Chinese energy is, in fact, produced in and around the province of Shanxi, 300 km or so west of Beijing, where a tremendous share of China’s (and, indeed, the world’s) coal is mined. Shanxi has also seen the biggest political shakeup of any province from Xi Jinping’s anti-corruption campaign thus far. When combined with the northern “Autonomous Regions” of Inner Mongolia and Xinjiang, as well as China’s north-easternmost province Heilongjiang, Shanxi produces a gigantic of China’s fossil fuels in general. Other northern areas, such as Shandong, Liaoning, and Tianjin, are also significant oil producers.

Southern and central China, in contrast, account for most of China’s imports of fossil fuels—especially if you include the economy of Taiwan as being part of southern China. Taiwan, in fact, may be more dependent on oil imports than any other significant economy in the world, according to data from the Wall Street Journal. Falling energy prices may weaken the historical political heartland of China relative to its periphery, in that case. Whether or not this will generate political instability going forward remains to be seen.

Looking Ahead

If (a big if) energy prices remain low for a sustained period, then the question of China’s future dependence on imported energy also becomes relevant, as does the question of the future dependence on imported energy of China’s most important neighbours. In that case, how dependent on energy imports will countries like China, Japan, and India be in a decade or two from now?

While it is impossible to know what the future will be like, it is not difficult to imagine that China will remain less dependent on energy imports than India and/or Japan during the years or decades ahead, as a result of India’s still-emerging economy and Japan’s still-roboticizing economy.

China is not likely to be a major adopter of energy-intensive robots, in per capita terms, because China has a far larger cheap labour force than any country in the world apart from India. Japan, in contrast, will likely help lead the robot revolution, as its labour force is expensive and aging rapidly. This could make Japan even more dependent on importing energy, as machines that are both highly mobile and capable of sophisticated computation require an enormous amount of energy to run — and indeed, one of their main advantages over human labour is that they can and frequently will be tasked to run 24-7, without even taking any time off for holidays or sick days.

China is not certain to increase its energy imports nearly as much as less-developed economies like India, meanwhile, as the Chinese inudstrial sector is facing challenges as a result of its past generation of energy-intensive growth. China faces rising labour costs in many of its cities; a pollution problem; a US that is concerned with Chinese industrial power; and countries throughout the world afraid of China’s world-leading carbon emissions.

In addition, China is located much further away from the Persian Gulf and Caspian Sea oil and gas fields than the Indians and other South Asians are, and so might have difficulty accessing them in a pinch.

China may also, for the first time, have to face industrial competition from resource-rich economies such as Australia, Norway, Canada, Texas, or even the Gulf Arab states,which may be able to use energy-intensive robots of various kinds to build up their manufacturing sectors in spite of their small, expensive domestic labour forces.

All this could make China’s industrial growth rate slip, which in turn might reduce China’s resource imports and thus prevent China from becoming the leading beneficiary of low energy and commodity prices.

Such a shift will be especially likely if the United States or European economies decide to enact tariffs on goods coming from places that generate power by using coal in inefficient ways, a prospect that has become increasingly likely as a result of America’s triple-alliance between environmentalists opposed to coal consumption, shale gas producers competing with coal miners, and energy companies trying to pioneer more expensive but cleaner ways of consuming coal and other fossil fuels. China may then have to focus on growing its service sectors instead of its energy-intensive industrial sectors.

China, Japan, and Siberia 

Japan, lastly, might benefit from Russia’s energy-related woes more than China will. This is not only because the Chinese have to a certain extent often looked to Russia as an ally against the West, but also because the areas of Russia that China is close to are mostly irrelevant to China: they are landlocked, Siberian, and for the most part located far from China’s population centres.

Pacific Russia, in contrast, which is located next to the Sea of Japan on the East Asian side of Russia’s Pacific mountain ranges, has a far more liveable climate than does most of the continental Siberian interior. It is home to several small or medium-sized port cities, such as Vladivostok and Petrapavlovsk-Kamchatsky, which are very, very far away from Moscow. This region accounts for much of the oil and nearly all of the Russian gas exports to Asia—especially energy-rich Sakhalin Island, which is just 40 km away from Japan and was half-owned and inhabited by the Japanese prior to the Second World War.

Russia may, in fact, be somewhat better prepared to fight another border war with China like it did in 1969—which might not be too different than the many other wars Russia has fought within or near its borders both prior to or since then—than it would be to face off against Japan again within the far-eastern, mountainous, archipelagic and peninsular Pacific Russian region, as it did in 1905 and then again during the 1930s and WW2. Of course this does not mean Japan will attack Russia — though it has certainly toyed with the idea of eventually making some bolder moves in the Southern Kuril Islands, which both countries claim as their own. Even the remote, unstated possibility of conflict, however, may help grant Japan leverage in any negotiations with Russia regarding commercial or political issues.

Conclusion

All of this is not to be bearish on China’s future. Energy-intensive industrial growth, after all, woud not necessarily mean an improved quality of life for Chinese citizens. Ideally Chinese standards of living will rise at a considerably faster pace than its energy usage. It does seem, though, that China’s economy may not turn out to be a major beneficiary of the fall in energy prices. The PRC’s neighbours on the other hand, such as Japan and Taiwan, which are less rich in fossil fuels or in labour, may benefit greatly. So too might the poorer countries that depend on energy imports, like India and the Philippines. Just as important, however, yet often overlooked, are China’s domestic geopolitics. Internal Chinese divisions—including along north-south and east-west lines—have been, and might remain, of paramount importance. Energy prices could impact them too.

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North America

Ontario: The Borderland Economy

Source: RBC, predictions from March 2015

Source: Royal Bank of Canada, predictions of provincial economic growth for 2015, published March 2015

With the economy of Western Canada hit hard by the fall in oil and other commodity prices that began last year, Canada’s most populous province, Ontario, has begun to account for quite a large share of the country’s economic growth. Many Canadian economists – most of whom live in Ontario, as I do – assume this economic resilience is the result of Ontario’s economic diversity and size. Ontario’s population is much larger than that of any other Canadian province (see graph below), and its economy is mixed between services (in Toronto),  government (Ottawa), industry (southwestern Ontario), and commodities (northern Ontario). Ontario’s economy is also more oriented toward the auto sector than other provinces are, and so may be benefiting more than others from the fall in oil prices.

the provincials

Ontario accounts for around 38 percent of Canada’s population, compared to 23 percent for Quebec and 13 percent for British Columbia. Most other countries do not have provinces/states that are as large as this. California, for example, is the largest state in the US but has just 12 percent of the US population; source: Future Economics

Still, this may be missing the point to a certain extent. What really sets Ontario aside from other Canadian provinces is the proximity of large population centres in Ontario to large population centres in the United States. This is unique among Canadian provinces (see graph below), particularly if you ignore Quebec (which is separated from US populations by a language barrier as well as a political one) and British Columbia (which, perhaps not incidentally, is the other major province that has decent economic growth right now, in spite of the fact that it is a significant commodity exporter and has close ties to oil-rich Alberta). Ontario is the only province to have a handful of cities which straddle the US-Canada border. These include Detroit-Windsor, Buffalo-Fort Erie, Niagara Falls, Sault St Marie, and Sarnia-Fort Huron.

US-Canada 15

on_e

Since the US economy has remained relatively strong in recent years, unlike those of Europe, East Asia, or much of the developing world, Ontario’s ties to the US may be what is driving Ontario’s economic growth. This should make Ontario concerned; the US economy has not had a recession for almost eight years now, so, in a certain sense at least, it is due for one soon.

Below, I have tried to show some of the ways in which Ontario’s proximity to the US is unique. I’ve gathered all the data myself using Google Earth and recent Canadian and American censuses, so if you think you’ve found any errors in the following graphs please let me know.

us-can 50.pngcan-us 50 land:water.pngus-can 100.pngus-can 200 .png

us-can neighboursus-can 1st and 2nd degreelength us-can

US-Can real gdp.png

us-can gdp growth

[New Brunswick had zero in this category because Maine’s economy has been neither growing nor shrinking in the past year or so. Alberta and BC are high in this category because of the growth of Washington state and Montana, respectively. Saskatchewan and Manitoba were doing great in this category before the oil crash caused their shared neighbour North Dakota to go from the fastest-growing US state into a serious recession. Ontario and Quebec are roughly equal in this category because of the huge size of New York state, which they both border. However if you were to ignore New York state, then Ontario’s border states, namely Michigan and Minnesota, are growing much faster than Quebec’s border states, namely Maine, Vermont, and New Hampshire. Minnesota’s growth, meanwhile, is also why Manitoba is relatively high in this category in spite of North Dakota’s recession — as Minnesota’s  GDP is nearly seven times higher than North Dakota’s]

Ontario’s ties to the US have also meant that it is less dependent on inter-provincial trade of goods than other parts of Canada are: in recent years Ontario has conducted 2.5 times more trade with other countries (led by the United States, of course) than it has with other provinces. This is compared to just 1-1.5 times more for Quebec, Alberta, and British Colombia.

Economists and financial journalists in Ontario need to be more careful than they have been in the recent past. During the 2007-2009 economic crises they ascribed the relative success of Canada’s financial system (which is centred in Toronto, Ontario) to the fact that Canadian bankers and regulators were more prudent and conscientious than their peers in other countries, rather than to the fact that Canada was flush with capital at the time as a result of the sky-high commodity prices that existed just before and just after the financial crisis, and as a result of the fact that Canadian Baby Boomers  were then in the prime of their financial lives (as Canada, unlike the younger US or older Japan, is dominated by the Baby Boomer generation).

But instead of acknowledge these facts, much of the Canadian media decided instead to help create a cult of personality around Canadian bankers and Bank of Canada leader Mark Carney — a cult of personality they have since exported to Britain, where Carney has become a figure of great importance (especially since Brexit and the resignation of Prime Minister David Cameron) and the first non-Briton to ever become the central banker over the British financial system, a system that is far larger, far more worldly, and far less dependent on  commodity sectors than the Canadian financial system is. Similarly, Ontario’s economic resilience is now being described (by some people) as if it was basically an inherent condition of the Ontario economy, rather than a result, at least in part, of Ontario’s unique ties to the growing US economy.

Don’t get me wrong: I am not saying that Ontario is not a resilient place or that bankers and regulators in Toronto and Ottawa are not prudent and wise. And certainly I would like Ontario’s economy to continue growing, since it is my home. However, believing either one of these stereotypes about Ontario too much could be a dangerous mistake for investors or governments to continue to make.

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Middle East, South Asia

Robots and the Middle East 

It used to be, roughly speaking, that cheap labour + energy = industrial output = military power.

This made Iran the natural power in the Middle East. Iran had far more energy than countries like Turkey, Egypt, Israel or Pakistan, and far more labour than the Gulf Arab countries or Libya.

Robots in the Middle East, graph 2.png

X-axis is population size, Y-axis is the value of energy reserves as estimated by Business Insider in 2014

 

Robots in the Middle East, graph 1.png

X-axis is population size, Y-axis is energy production in 2014 as estimated by Shift Data Portal. Saudi Arabia leads Iran in energy production, but the Saudis have had the benefit of having an alliance rather than a rivalry  with the United States

The Gulf Arab monarchies have tried to overcome their relative deficit in labour by importing workers from Asia. However there are limits to such immigration, not only because of the fear that the immigrants could cause political  instability (they are mostly men, and tend to be poorly treated), but also because it is not cheap to provide food and water in the desert.

UAE 2014 .png

The US has often worked to influence or contain this Iranian potential. It pressured the Soviets and British to withdraw from Iran following World War Two, helped to overthrow Iran’s Prime Minister in the 1950s, helped to unleash the Arabs on Iran in the Iran-Iraq War of the 1980s, and in recent years has opposed the Iranian-allied regime in Syria and played Good Cop-Bad Cop along with the Israelis in threatening to carry out airstrikes on Iran’s nuclear and military infrastructure.

Going forward, however, the traditional relationships between labour, industry, and military power may be breaking down.

Labour may no longer be so important to industry, as industrial labour will in many cases be replaced by machines or, in the case of skilled labourers like engineers and computer programmers, may sometimes be outsourced using high-quality digital communications. Having a large labour force may perhaps even limit the ability to industrialize, since countries with large populations could have to deal with robot-caused unemployment, competition for energy between the residential, commercial, and industrial sectors of the economy, and protests against local industrial pollution. This could put the Gulf Arab states at less of an industrial disadvantage when compared to countries with larger labour forces, like Iran.

Meanwhile, industrial output and labour are both less likely to translate into military power than they once were. In past wars, like the Iran-Iraq War or the Israeli-Arab Wars, wars were fought by giving lots of soldiers lots of weapons. This is, for example, one reason why the Israeli-Arab wars never lasted long. Israel did not have a large enough population to run its military and factories at full capacity simultaneously, so it had to end wars quickly in order to avoid running short on supplies. Otherwise it would risk becoming too dependent on US supply lines, as occured when it was attacked by Egypt and Syria during the 1973 Yom Kippur War.

In the future, though, human soldiers may be replaced by machines in some cases, rendering population size less important in war. In addition, the quantity of weapons produced could continue to become less significant than their quality, given that weapons can now be destroyed by precise satellite-guided missiles. As a result, if the Gulf Arab states and Iran were to use their oil and natural gas reserves to become industrial powers, it would not have to translate into their becoming military powers. This could make existing Middle Eastern military powers like the US, Turkey, or Israel more likely to tolerate the industrialization of the Gulf.

The machine-driven industrialization of the Gulf Arab states and Iran could make sense for a number of other reasons as well:

— The Gulf region is even less populous than it may seem at first glance. This is because the vast majority of the populations of Iran, Saudi Arabia, and to a lesser extent Iraq live hundreds of kilometers away from the Gulf, and separated from the Gulf by mountains and desert. If you count only the provinces of Iran, Saudi Arabia, and Iraq that border the Gulf, the entire population of the Gulf region (including the smaller Gulf Arab states) is only around 30-35 million. It is also very hot there during the day, making physical labour difficult.

Saudi_Arabia_population_density_2010iran

(Population Density of Saudi Arabia and Iran)

PersianGulf-Map-Topography03

Topography of the Gulf (Iran is on the right-hand side); many of these mountains are as high as the Alps

— The Gulf region is rich not only in oil, but also in natural gas. Iran in particular is the world’s third largest producer of natural gas, and is thought to have the second largest reserves (the largest by far if you do not count Siberia). Iran also directly borders landlocked Turkmenistan, which is thought by some to have the world’s fourth largest gas reserves.

Natural gas, however, is very difficult to transport long distances or to store up in large quantities. Qatar has managed to become rich from exporting its gas in liquified (LNG) form, but this only works because Qatar has a tiny population (2.3 million people) and as LNG prices in Asia and Europe have been high. For the rest of the Gulf’s gas, it would be difficult to replicate Qatar’s success. It might make more sense, then, for the gas to be kept within the Gulf, used there to produce energy for industrialization.

Shift Data gas.png

shift data oil

Gas-fired power plants tend to be the cheapest types of power plants to build, and have efficiencies considerably higher than coal plants. Gas is also a feedstock in petrochemical industries like plastics. The Middle East already accounts for an estimated seven percent of global petrochemicals production.

Saudi Arabia

— The Gulf region is located at the centre of Eurasian and African trade routes, both by land and by sea. While all of the Gulf’s trade routes are politically fragile, this may actually make industrialization sensible, because it is easier to stockpile large amounts of manufactured goods or industrial raw materials for use during a crisis than it is to stockpile oil or especially gas. Industrialization would also give the region more economic autarky, which would be useful if its trade routes to the outside world were ever imperilled or cut. And the Gulf already possesses large industrial port areas as a result of its energy exports.

— Industrial areas which use machines can be clustered in ways that traditional, labour-based industrial areas cannot. Machines, after all, do not need lodgings, and are not bothered by pollution. Moreover, the Gulf itself could be a mega-industrial cluster, given that it has the world’s largest concentration  of cheap-to-produce oil and gas by far. In other words, you might be able to have a bunch of local industrial clusters forming a huge, region-wide industrial cluster.

ME_9__Box2_GiantFieldsMap_MikeHorn

Industrial clustering could have a number of advantages. First, it could be easier to defend militarily, which, given the enormous expense and difficulty of missile defence systems,
could be significant. In the Gulf, the energy fields, power plants, factories, and ports could all be concentrated in a fairly small, defended area. If you ignore coal, there is nowhere else in the world that comes even close to being able to have this. (Texas is probably the closest…).

oil costs.png

Second, clustering could perhaps help to allow for carbon capture and storage. Carbon capture and storage has thus far proven to be far from economical in most cases, and yet it is also necessary if the world wants to limit carbon emissions without ending consumption of fossil fuels. It could be that the way to make it economical is to cluster many power plants together in order to allow for economies of scale to form. Moreover, the only type of carbon capture and storage that has proven economical thus far is when carbon is used in Enhanced Oil Recovery (EOR), being sent down oil and gas wells in order to increase oil and gas productivity. The Gulf already uses EOR in some cases, and has huge EOR potential as a result of the size of its oil and gas fields.

US Oil Demand

One factor that could help spur the industrialization of the Gulf would be if people in the rich world, particularly in North America, would stop driving alone in their cars so much. By switching to alternative forms of transport — whether carpooling, taking public transport, UberPool-ing, e-commuting, shopping online, taking a self-driving bus or self-driving electric car, etc. etc. — it may leave Gulf oil available for industrial use within the Gulf.

Regional Political Triangle

This article has been a bit of a theoretical ramble, I know. But if we assume for a moment that the Gulf does manage to use its energy resources and robots to become a industrial powerhouse, what would happen to the politics of the wider region? India and Pakistan, after all, are located very close to the Gulf, putting a billion and a half people within its reach.

I think you might see something like a US-Gulf-South Asia political triangle emerge. The US has already been allies with the Gulf Arab states and Pakistan for many decades now (though of course, it is often a tortured alliance), so this would require only bringing Iran and India into the fold as well. India is already well on its way in this regard; Iran may perhaps be following behind it, given the recent warming of relations between the US and Iran during Obama’s second term.

In such a scenario, the Gulf would provide goods and oil to South Asia, South Asia would provide skilled outsourced labour to the Gulf, the US would provide food and military protection to both the Gulf and South Asia, and the Gulf and South Asia would help the US to put a lid on regional chaos and contain any European, East Asian, or Eurasian powers that may emerge over time.

Then again, maybe none of this will end up happening. The Gulf may be ludicrously rich in easy-flowing oil and gas, but translating that energy wealth into industrial success will be no easy feat, with or without robots.

 

 

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Europe

Satellite Geopolitics in Eastern Europe

During the past year, the primary focus of the US-Russian rivalry has centred around Iran. The United States put an end to Western sanctions against Iran, and also chose to keep American troops in Afghanistan who support, among others, many of the tens of millions of Afghans who are Shiite Muslims or who can speak Farsi (as opposed to the Taliban, who are Sunni and typically Pashto-speaking). Russia, meanwhile, intervened to aid Bashar al-Assad in Syria, who’s survival diverts Sunni attention away from Iran’s Shiite allies in Iraq.

With Russia now withdrawing some of its forces from Syria and the US hoping to do so from Afghanistan, the focus of the US-Russian rivalry could revert, perhaps, to Ukraine. By comparison to the Middle East, Ukraine has appeared to be very quiet of late.

Russia may have dialed back the conflict in Ukraine partly in order to shift the West’s focus to the Middle East. This of course has not been very difficult to accomplish, given Europe’s influx of Syrian migrants and  America’s election-season rhetoric on issues like ISIS, the conflict in Libya, and Donald Trump’s proposal to ban, for an unspecified amount of time, all Muslims from travelling to the United States.

If the US-Russian focus does move back towards Eastern Europe, one can perhaps guess the rough outlines of any geopolitical contest that may occur there.

Poland will likely be the chief ally of the United States in the region. Unlike any of the five other former satellite nations of the Soviet Union, Poland borders the Atlantic Ocean (via the Baltic Sea). This provides it access to English-speaking countries like Britain, the United States, and Canada, as well as to countries where proficiency in English as a second language has become particularly widespread, most notably in Scandinavia, the Netherlands, and to a lesser extent Germany.

Poland, indeed, tends to be relatively Atlantic-oriented. It conducts a larger percentage of its trade with economies like Britain, France, the Netherlands, Belgium, and the United States than do any of the other ex-satellite countries in Eastern Europe. More than 10% of Poland’s modern-day labour force has worked at one time or another in Britain or Ireland, whereas Hungarians, Czechs, and Slovaks have more often gone to Germany or Austria and Romanians have more often gone to Germany, Austria, Italy, or Spain.

poles in britain

1/60 Poles are living in Britain, according to this source

Poland is not an Eastern Orthodox country, like Romania, Bulgaria, Serbia, Russia and several others in the region are. Rather, its population is predominantly Roman Catholic.

us ancestry

Poland also remains by far the largest “country of origin” in the United States among Eastern European nations, at a time when Americans may be becoming much more informed of their ancestry as a result of increasingly cheap gene-sequencing and genealogical services 

Much more important than Poland having Western ties, however, is that it may be the only state in Eastern Europe large enough to lead a US alliance. Poland’s GDP is estimated to be 80 percent as large as those of its fellow ex-satellites – Bulgaria, Romania, Hungary, the Czech Republic, and Slovakia (formerly Czechoslovakia) – combined.

Among other things, this economic size has allowed Poland’s economy to become relatively self-sufficient: Poland’s imports and exports are thought to be equal in value to just 80% or so of Polish GDP, compared to 110-170% of GDP in Hungary, the Czech Republic, Bulgaria, Slovakia, and Lithuania (though just 75% in Romania). This could make Poland somewhat less susceptible to the whims of its (largely European) trading partners than the other countries in Eastern Europe might be, and so perhaps also a more dependable ally of the United States.

eastern europe satellites

Poland, finally, is the only one of the ex-satellites to border the northeastern Baltic region, which consists of the “Baltic states” of Lithuania, Latvia, and Estonia, the Russian enclave of Kaliningrad (which is situated between Poland and Lithuania), the Russian city of St Petersburg, and southern Finland.

Lithuania, Latvia, and Estonia in particular have become the object of worldwide geopolitical speculation. They are the only former members of the Soviet Union to have joined the European Union and NATO, and, along with Slovakia, Finland, Greece and Cyprus, are the only countries east of Central Europe to use the Euro in place of their national currencies. They are home to six million people, about the same number of people as live in St Petersburg.

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While Poland will probably be the foundation of American influence in Eastern Europe, Romania may become its capstone. Though Romania’s per capita income is still considerably lower than other countries like the Czech Republic, Slovakia, or Poland, its population is significantly larger than any of the other former satellites apart from Poland, as is the size of its territory.

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Romania has Western ties because its language is close to Latin, rather than being a Slavic language like Russian, Polish, Czech, Slovak, Bulgarian, Serbian, or Croatian. This has resulted, among other things, in substantial Romanian diasporas having formed in Spain and especially in Italy. A Romanian living in Italy can arguably become near-fluent in Italian within just a month or two, without much difficulty.

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The Romanian Diaspora, according to Wikipedia

Crucially, Romania may also be able to exert influence in Ukraine. Romania shares a roughly 800 km frontier with the former Soviet Union (by comparison, Poland has a 900 km or so border with the former Soviet Union, Hungary and Slovakia have 70 km ones, and the Czechs and Bulgarians have none), and both Romania and Ukraine are economically oriented toward the Black Sea.

Romania and Ukraine both also surround Moldova, which is a mostly Romanian-speaking country but home to Ukrainian, Russian, and Turkic Gaguaz minority populations. This is a particularly contested region; Russia has troops stationed in Moldova’s secessionist province of Transnistria, while the Black Sea coast, which includes Ukraine’s second city Odessa (just 140 km from Romania),  is the only part of western Ukraine in which politically “pro-Russian” Ukrainians and “ethnic Russians” may still be prominent.

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In response to a US-Romanian axis, Russia could attempt to press Romania from all sides by building up influence in Ukraine, Moldova, Bulgaria, Serbia, and Hungary. Ukraine and Moldova are already home to Russian soldiers, while Serbia and Bulgaria are both Slavic and Orthodox countries that have historically often looked to Russia for support when fighting against their  non-Slavic, Catholic, or Muslim neighbours like Turkey, Greece, Albania, Croatia, Bosnia, Hungary, and Romania. Russia continues to have ties to Bulgaria, and especially to Serbia, in the present day.

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South of Poland, Romania is also the only place along the western frontier of the former Soviet Union in which the border with the European Union is not located entirely in the Carpathian Mountains

Hungary, however, is neither Slavic nor Orthodox. Still, Hungary would be a critical anti-Romanian ally for Russia to attempt to recruit. The large and rugged Hungarian-Romanian borderland, located in and around the region of Transylvania, has long been politically fraught. It lies on the Hungarian side of the Carpathian Mountains and is home to substantial Hungarian and Roma (who are distinct from Romanian) minority groups, yet, since roughly the end of the First World War, has mostly been part of Romania.

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“Ethnic Hungarians” in Romania

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Roma in Romania tend to live either in and around Transylvania or in and around the country’s capital city of Bucharest

While Romania holds the upper hand in this region, Hungary still has leverage over Romania because it controls the land and river routes that link Bucharest to markets in Austria, Germany, and northern Europe in general. Russia has been moving to form closer ties with Hungary, as Hungary’s Fidesz-led nationalist government has angered many of the other countries in the EU in recent years.

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 Hungary and Bulgaria are both potentially significant to Russia for other reasons as well. Bulgaria can give the Russians access to the Mediterranean Sea via Greece or the Balkans, without having to pass through the Turkish Straits. It is just 250 km from the Black Sea to the Aegean Sea via Bulgaria and Greece, and 600-700 km from the Black Sea to the Adriatic via Bulgaria and the Balkans.

Indeed, given Russia’s reliance on natural gas exports and Italy’s reliance on gas imports (Russia is the world’s leading gas exporter, and Italy the world’s third largest gas importer), this trans-Bulgarian route to the Adriatic is one that Russia may need to avoid recession and at the same time maintain its influence in Italy. In turn, Russia may try to use Italy to put pressure on Romania, given the relatively close connections that exist between the two Latin countries.

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Note that Poland, the Czech Republic, and especially Romania are not very dependent on Russian gas compared to Bulgaria, Slovakia, and Hungary

Russia may need Hungary, meanwhile, to resist interfering with Russia’s interests in Ukraine (there are an estimated 200,000 ethnic Hungarians living in western Ukraine), serve as a wedge between Poland and Romania, and ensure Russian access to Central European economies like Germany.

If, hypothetically, Russia were to cow western Ukraine into submission and then be shunned as a result by US allies like Poland and Romania and by German allies like the Czech Republic and Slovakia (The Czech Republic and Slovakia are deeply entrenched in the modern German trade network), Hungary could be left as the only land route linking Russia’s sphere of influence to potentially “neutral” European economies like Italy, Austria, Switzerland, or France.

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Moreover, Hungary is the only ex-satellite state apart from Romania that borders both the former Soviet Union and the former Yugoslavia. Hungary’s leading city Budapest is just 300 km from Serbia’s capital Belgrade, 300 km from Croatia’s capital Zagreb, 380 km from Slovenia’s capital Ljubljana, and 400 km from Bosnia and Herzegovina’s capital Sarajevo. Considering that Budapest is also only  215 km from Vienna, 160 from Bratislava, and 400 km from the outskirts of Prague, this puts seven European capital cities within a 400 km radius of Budapest. The only other EU capital which can come even close to saying the same thing for itself is Sofia, Bulgaria’s capital.

Russia might ideally like to ally itself with Germany or one of Europe’s other big economies, but if the Germans are not willing to participate in such a relationship then Hungary could be the place where a tug-of-war between Russia and America, or between Russia and Germany, or between Russia and “the West”, will occur. And if Russians do successfully win Hungary as a partner, thus potentially blocking off access to Romania from Poland, the focus of the conflict might then shift to Southeastern Europe, as the Americans could seek an alternative route to Romania.

During the Cold War the Americans involved themselves in Southeastern Europe by folding both Greece and Turkey into NATO (in spite of their intense rivalry with one another), but of late US-Turkish relations have been challenged by the wars in Syria and Iraq, while Greece has been trapped in an economic crisis and so unable to pick up the slack.

During just the past few months, though, more hopeful discussions than there have been in years have taken place regarding the possibility of the Greeks and Turks in Cyprus finally reunifying. This may perhaps portend an increasing cooperation between Turkey and the West, particularly as it has occurred around the same time as Turkey’s relationship with Russia deteriorated sharply following Russia’s entrance into Syria and Turkey’s downing of a Russian military jet there.

Then again, it is also entirely plausible that American relations with Turkey will continue to decline, and that the Greek economy will not soon recover in any meaningful way, leaving the United States to look instead to countries like Italy, Bulgaria, and the Balkan states in order to form a southern pathway to Romania and the Black Sea.

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Greece’s fall has been Turkey’s rise

Of course, nothing like this scenario is guaranteed to happen. This is just a very rough outline of what a new US-Russian political confrontation in Eastern Europe might look like. Given that the past may not necessarily resemble the future, and in particular that technological developments could perhaps render some traditionally important geopolitical imperatives irrelevant – to give just one example, air power might allow countries like the United States to access their allies without possessing a land route to reach them – this outline may not end up being very prescient. Ideally, none of the ex-satellites will have to choose between looking eastward to Moscow or westward to Washington.


For a discussion of the conflict in Ukraine in particular, see The Geopolitics of Ukraine

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Middle East

Seniors Discount? Oil Prices and Old Rulers

Today’s low oil prices are probably not the result, even in part, of elderly men ruling over the world’s major energy-exporting nations. Still, it may be worth noting that the sons of Saudi Arabia’s modern founder, Abdulaziz bin Saud, are finally nearing the end of their long royal lifespans, while the leaders of energy-endowed countries like Iran, Algeria, Angola, Oman, Kazakhstan, and Uzbekistan have now reached old age too, after multiple decades in office. Even Vladimir Putin is 63 years old, long past his judo prime. He was just 47 when he first came to power.

As Egypt’s Hosni Mubarak and Libya’s Moammar Gaddafi arguably showed in 2011, longtime aging rulers can sometimes give way to political upheaval that causes domestic oil and gas production to fall. Uncertainty over the vigour of some of the following leaders might indeed cause global energy exports to fall, and thus, perhaps, prices to rise:

Kuwait – Sabah al-Ahmad al-Jaber al-Sabah – 86 years old – In power since 2006  

Sabah’s presumed successor, Nawaf Al-Ahmad Al-Jaber Al-Sabah, is 78 years old. As recently as 2012 Kuwait was the world’s largest oil exporter outside of Russia and Saudi Arabia.

Saudi Arabia – Salman bin Abdulaziz bin Saud – 80  years old – In  power since 2015 

Salman will probably be the last king to be chosen from among the 45 or so sons of the founder of modern Saudi Arabia, Abdulaziz bin Saud. Salman’s youngest living sibling, his half-brother Muqrin, is turning 71 this year and, as of last year, is no longer the designated  Crown Prince. The Saudi Crown Prince has since become Muhammad bin Nayef, Salman’s nephew, while the Deputy Crown Prince has become Salman’s own son Mohammad bin Salman

Algeria – Abdulaziz Bouteflika – 79 years old – In power since 1999 

Bouteflika came to power during and after the Algerian Civil War of the 1990s. Today his health is in question. Algeria is estimated to be the world’s 16th largest energy producer and its fourth largest natural gas exporter.

Uzbekistan – Islam Karimov – 77 years old – In power since 1991  

Karimov first came to power at the end of 1980s, when he became President of the Uzbek Soviet Socialist Republic

Iran – Ali Khameni – 76 years old – In power since 1989 

Kazakhstan – Nursultan Nazerbayev – 75 years old – In power since 1991 

Oman –  Qaboos bin Said al Said – 74 years old – In power since 1970

Qaboos first became ruler  after overthrowing his father in a palace coup in 1970. He has no children or clear successor

South Africa – Jacob Zuma – 74 years old – In power since 2009 

Zuma was Deputy President of South Africa from 1999-2005. South Africa is a major producer of energy, and a net exporter of energy, because of its coal reserves, though it is a net importer of oil

Nigeria – Mohammadu Buhari – 73 years old – In power since 2015 

Buhari was previously Nigeria’s head of state during the 1980s

Angola – Jose Eduardo dos Santos – 73 years old – In power since 1979 

Angola, one of the fastest-growing economies of the past decade, is now the world’s third or fourth largest oil exporter outside of the Middle East

Equatorial Guinea – Teodoro Obiang Nguema Mbasongo – 73 years old – In power since 1979 

Equatorial Guinea is the 30th-40th largest oil producing country, but may have the world’s third highest per capita oil production, the highest outside the Middle East.  Both the age of its leader and the number of years he has been in power are exactly the same as in Equatorial Guinea’s relatively nearby neighbour Angola

Sudan – Omar al Bashir – 72 years old – In power since 1993

Brunei – Hassanal Bolkiah Muiz’zaddin Wad’daulah — 69 years old – In power since 1967

Brunei is the world’s 40th-50th largest oil producing country, but may have the 6th highest per capita oil production

Brazil – Dilma Roussef – 68 years old – In power since 2010

Her predecessor, Louis Inacio Lula da Silva, who literally as of today was selected to  become Roussef’s new chief of staffwas 65 years old when he left office in 2011 at the end of an eight-year term. Roussef has been facing an impeachment attempt, while Lula has been under investigation in a corruption scandal. 

United Arab Emirates – Khalifa Al Nayhan — 68 years old  – In power since 2004

The Emir of Dubai is 66 years old, meanwhile

Colombia – Juan Manuel Santos – 64 years old – In power since 2010 

South Sudan – Salva Kiir Mayardit – 64 years old – In power since 2011

Iraq – Haider al Abadi – 63 years old – In power since 2014 

Masoud Barzani, meanwhile, who has been president of oil-rich Iraqi Kurdistan since 2005 and leader of the Kurdistan Democratic Party since 1979, is 69 years old. Foud Massoum, a Kurdish politician who is Iraq’s president (a more ceremonial role than prime minister), is 78 years old and has been in office since 2014. Nouri al Maliki, who was Iraq’s prime minister from 2006-2014 and is now Iraq’s vice president, will turn 66 this June. Saddam Hussein was 42 years old during his purge of 1979 and 66 years old when the US invaded in 2003.

Russia – Vladimir Putin – 63 years old – In power since 1999

Malaysia – Najib Razak — 62 years old – In power since 2009

Mahatir Mohammad, meanwhile, is 90 years old. Malaysia is thought to be the world’s 25th largest oil producing country

Turkey – Recep Tayyip Erdogan – 62 years old – In power since 2003

While Turkey is a significant net importer rather than exporter of energy, it is nevertheless capable of impacting the rest of the Middle East, and it has hopes to become a major energy nexus at the centre of the Middle East, North Africa, and Caspian Sea region. (Similarly, Israel’s Benjamin Netanyahu, who has been prime minister since 2009 and was previously prime minister from 1996-1999, is 66 years old)

Australia – Malcolm Turnbull – 61 years old – In power since 2015

Egypt – Abdel Fathah al-Sisi — 60 years old –  In power since 2014 

Sisi was also highly influential for at least a few years before 2014, following Hosni Mubarak’s departure from office in 2011

The following graph shows how old these countries’ rulers were in any given year between 1970 and 2015, and how old they will be in 2020 if today’s rulers remain in power for the remainder of the decade:

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In the graphs below, the y-axis indicates the age of today’s rulers, the x-axis indicates the number of years they have been in power, and the size of the circles indicates the relative amount of energy that is produced by their country.

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East Asia, Images, North America

East Asian Trade – Image of the Day

From Finally Passing Gas: 10 Winners and Losers of the Panama Canal Expansion:

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A typical assumption has been that China and Japan will be the primary beneficiaries of the canal. China, after all, leads the world in importing commodities and exporting bulk goods, and Japan has accounted for 40% of the world’s LNG imports – far more than any other country – in recent years.

Yet while China and Japan lead the pack in terms of the value of their absolute trade, they lag far behind both South Korea and Taiwan in the more relevant category of relative trade; that is, the value of their trade relative to the overall size of their economies. As can be seen in the chart above, the economies of China and Japan are generally not as trade-oriented as those of South Korea and Taiwan. As such, they might not benefit as much from the canal, which is intended to ease trade — in particular LNG trade, which the pre-expansion canal could not facilitate.

Of course, none of this means that South Korea and Taiwan are risk-free investments. They are not. Both, for example, have significantly more exposure to China’s economy, which has been struggling of late, than Japan does. All else being held equal, though, South Korea and Taiwan appear likely to be two of the greatest beneficiaries of the new canal.

 

 

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Images, Middle East

Iraqi Geopolitics

Iraq’s population is thought to be just under 35 million, roughly the same as that of Canada and greater than any other Arab country apart from Egypt, Algeria, and possibly Sudan.

Most Iraqis, and almost all Iraqis who identify as Shiite Muslims, live in the low-elevation Mesopotamian plain, the part of the map below that is coloured in the darkest shade of green.

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The only significant city to have a considerable Shiite population outside of this area is, perhaps, the city of Samarra, which is holy to Shiite Muslims. Yet Samara lies just barely beyond this Iraqi Shiite heartland, and is relatively small. It had 350,000 or so inhabitants prior to the US invasion of the country in 2003. In 2006 and then again in 2007 the Al-Askari Shrine, a mosque that was built in Samarra in 944 AD,  was bombed, leading Shiite groups in Iraq to retaliate by forcing many Sunnis to leave their homes in Baghdad.

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The largest cities in Iraq’s Shiite region are not located in the region’s centre, but rather around its outer edges. The largest by far is Baghdad, located in the north of the Shiite core region. Baghdad is perhaps 3-5 times more populous than any other city in Iraq; it may be home to nearly one in four Iraqis. It is maybe the most populous city in the entire Arab world, outside of Cairo. Historically it was the capital of an enormous caliphate, stretching from Central Asia nearly to the Atlantic Ocean, during most of the years between 762 AD and 1258 AD. Even as recently as the 1970s, before Iraq fought three major wars between 1980 and the present day, Baghdad was one of the leading cultural and commercial cities in the Arab world. 

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Baghdad has historically been the place where Iraq’s Shiite and Sunni areas meet, and where minority populations like Kurds, Christians, Jews, and Turkic peoples have all lived in significant numbers as well. Though the conflicts in Iraq during recent years and decades has changed this to a great extent, with many minorities leaving (the Jewish population, for example, has dropped from around 50,000 in 1900, which was perhaps a quarter of the city’s total population at the time, to nearly zero today) Baghdad remains the heart of the country.

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Baghdad’s existence has probably been one of the main impediments to, and arguments against, splitting the country into three separate states as many have recently been advocating for. However because of its diversity and centrality, it was also the site of many of the violent deaths during the (in some ways ongoing) civil war. Since 2003 the city’s neighbourhoods have become more divided by sect, while the share of its population that identifies as Sunni has shrunk in size due to the fleeing of Sunnis and the inward migration of Shiites from southern Iraq.

         Baghdad in 2003                    Baghdad in 2007

Baghdad_Ethnic_2003_sm   Baghdad_Ethnic_2007_late_sm

Baghdad’s geographic significance comes from being located in the only spot, apart from the swampy southern coastlands of Iraq, where the Tigris and Euphrates rivers come close to meeting one another. Around Baghdad the Tigris and Euphrates are just 30-40 km or so apart from one another, compared to about 150-200 km apart in most of southern Iraq, 120 km or so apart in the area to Baghdad’s immediate north, and 220-300 km apart in the northern Iraq-Syria region.

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Baghdad is located 530 km from Iraq’s only coast (on the Persian Gulf), 450 km from Iraq’s border with Turkey, and 475 km from its western, desert border with Jordan. It is about 700 km from Tehran, 740 km from Aleppo and Damascus, 95o km from Riyadh, and 1300-1450 km from Mecca, Dubai, Cairo, Ankara, and Crimea.

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Apart from Baghdad, the biggest Shiite city in Iraq, maybe even twice as populous as any other, is Basra. Basra is located in the only other place where the Tigris and Euphrates meet, just 95 km or so north of the coast of the Persian Gulf, and just around 20 km from the Iranian border and 40 km  from the Kuwaiti border. Because it is located just 4 metres above sea level (compared to 35 metres for Baghdad), Basra’s climate is an extremely hot one, with temperatures hitting average daily highs of around 40 degrees celsius (105-ish fahrenheit) for almost five months a year.

Could Basra soon have the world’s tallest building? 

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The fact that this southernmost area of Iraq around Basra has the country’s only direct access to the sea, and that this access is funnelled narrowly and vulnerably through a strip of land that is only about 15 km wide, sandwiched between the oil-rich Arab monarchy of Kuwait and the oil-rich Arab-inhabited Khuzestan province of southwestern Iran, was probably one of the reasons why Iraq went to war against Iran throughout the 1980s and then attempted to annex Kuwait in 1990.

Grabbing Kuwait and Khuzestan would give Iraq unfettered access to the Persian Gulf, greatly increased oil resources, and a mountainous rather than wide open border with southern Iran. Kuwait alone, in spite of having a population of just 3.4 million, produces so much oil that its GDP is thought to be roughly 75% percent as large as that of Iraq itself, and 40% percent as large as Iran’s.

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Today, however, it is not clear whether Kuwait and Khuzestan have majority-Arab populations as they likely did in the past. Two-thirds of Kuwait’s population is now thought by some to be foreign workers who have come to the country mainly from South Asia. Some have estimated that 30-40% of Kuwait’s Muslim population is Shiite, though it is difficult to be certain. Khuzestan’s population of 4-5 million, meanwhile, has perhaps become majority Persian; statistics cannot really be trusted in this area, given that they can be politicized.

The other largest cities of the Shiite region of Iraq also lie along the region’s edges rather than in its centre; they are located either along the Tigris River, as for example the cities of Amarah and Samarra are, or along the Euphrates River, as the world’s two holiest Shiite cities of Najaf and Karbala are.

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The Shiite region of Iraq is divided, in a certain geographical sense, along both north-south and east-west lines. The north-south divide is between landlocked Baghdad and coastal Basra, the region’s two major cities, with Baghdad located close to its northern extreme and Basra close to its southern one.

The east-west divide is between the Tigris and the Euphrates; the two rivers were historically separated from one another by marshlands in some places, which according to Wikipedia “used to be the largest wetland ecosystem of Western Eurasia” before being drained during the second half of the 20th century — mainly by the government of Saddam Hussein, for political reasons. “After the fall of Hussein’s regime in 2003, the marshes have partially recovered but drought along with upstream dam construction and operation in Turkey, Syria, and Iran have hindered the process”. The “Marsh Arabs“, formerly half a million strong, are themselves considered to be a unique Iraqi ethnic group.

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The Euphrates directly borders the Arabian Desert (Basra, Najaf, Karbala, and Ramadi are each located on the Arabian side of the river), whereas the Tigris runs closely parallel with Iran’s Zagros Mountains, which rise to heights as great as in the Colorado Rockies or Swiss Alps. Given its topography, Iraq has rarely been able to project force into the Zagros (though Saddam Hussein tried to do so during the deadly Iran-Iraq war in the 1980s); the Iranians, on the other hand, have often been able to influence politics within Iraq and occasionally even invade Iraq directly.

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The Zagros, in Iran’s Lorestan province near the Iraqi border

The division between Basra and Baghdad (such that it is) was seen to a certain extent in 2008, just prior to the US military withdrawal from the country, when the Shiite-dominated Iraqi government of Prime Minister Nouri al-Maliki approved a significant offensive mission by the Iraqi Army aimed at  pushing what was arguably the country’s main Shiite militia, the Mahdi Army, out of Basra.

The Basra-Bagdhad divide goes back much further in history, however. Even when Iraq was ruled by the Ottoman Empire prior to the First World War, the country was divided into three administrative “vilayets”: Basra in the south, Baghdad in the centre, and Mosul in the north. The Ottoman era often saw the Europeans intrude into or make alliances with Basra, notably the Portuguese in the 17th century, and later the British. The British would return during the recent war: they were tasked with managing Basra while the Americans focused on other areas of the country.

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Ottoman vilayets circa 1900

Iraq’s Sunni Arab region also contains both north-south and east-west divisions. It’s two largest cities by far are Baghdad, which is located at the southern tip of the Sunni areas, and Mosul, which is located just 100 km from Iraq’s northern Turkish border and is currently held by ISIS fighters. This is the basis of its north-south division; its east-west division comes from the Tigris and Euphrates being located much further apart from one another north of Baghdad than in the south (where, around Shiite Arab cities like Basra, Karbala, and Kut, the waterways almost or completely converge), with desert lying in between them.

According to Wikipedia, “The Arabic of Mosul is considered to be much softer in its pronunciation than that of Baghdad Arabic, bearing considerable resemblance to Levantine dialects, particularly Aleppan Arabic. …Mosul Arabic is heavily influenced by the languages of the many ethnic minority groups which co-exist in the city: Kurmanji Kurdish, the Shengali (Ezdiki) of Yazidis, Turkmen, Armenian, and Neo-Aramaic. Each minority language is spoken alongside North Mesopotamian Arabic.”

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You might want to take this map with a grain of salt

“…Before 2014 takeover by ISIS, Mosul population comprised roughly of 60% Sunni Arabs; 25% Kurds, 10% Turkmens and 5% Assyrian. Following the takeover by ISIS, nearly all the population who were not Sunni Arabs (coreligionists of ISIS), fled or forced out, that is, 35% of the residents or just over half a million people.”

Mosul, although not at a particularly high elevation, still receives much more rain than most of Iraq. Rainfall is close to three times that of Baghdad and over twice that of Basra”. Indeed, unlike the arid cities along the Euphrates, Mosul has a relatively  populous hinterland, as it is located next to the foothills of mountains both to its east and to its north. Mosul is just 75 km from Erbil, the comparatively successful capital city of Iraq’s Kurdish autonomous region. “After the 1991 uprisings by the Kurds Mosul did not fall within the Kurdish-ruled area, but it was included in the northern no-fly zone imposed and patrolled by the United States and Britain between 1991 and 2003″.

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The Erbil Citadel

Mosul is one of the two most important cities which lie on the border between Iraq’s Sunni Arab and Sunni Kurdish areas. The other is Kirkuk, which is less populous than Mosul but is where much of Iraq’s oil is produced. The oil in this Arab-Kurdish borderland has led to conflict during the past decade; and of course ISIS and the Iraqi Kurds continue to do battle today. According to the map below, both Mosul and Kirkuk (spelled Karkuk) are surrounded on three sides by the  Kurdish-inhabited territories, near to the mountainous Kurdish border regions of Turkey, Iran, and Syria.

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Three months ago, the Turkish military entered northern Iraq and has closely approached Mosul . A month before that, according to Dexter Filkins of the New Yorker, “Kurdish forces, backed by American airstrikes, cut the highway that connected Mosul to the ISIS base in Syria. There are still a few roads leading into Mosul that ISIS can use to resupply its fighters, but the Kurds are moving to cut them, too. Very soon, the ISIS fighters inside Mosul will be isolated.” The Kurdish position has been complicated, however, by Kurdish-Turkish relations, which have partially deteriorated of late as a result of Turkish politics and the Syrian civil war’s effect on the Syrian Kurdish group the YPG/PYD.

Mosul is located along the Tigris River, north of the place where, in Syria, the Euphrates makes a sudden sharp turn westward towards Aleppo and the Mediterranean Sea. As such, unlike in most other cities in Iraq, Mosul sits at a spot where the Tigris and Euphrates are relatively far from one another (though still only 430 km apart). This has allowed Mosul to serve historically as a sort of oasis in the desert for east-west trade travelling between northern Iran (and Asia) and the Mediterranean (and Europe). Mosul sits almost exactly between Tehran and the Mediterranean, in fact. It is also located halfway between Basra and Russia’s southern border; in other words, between the Persian Gulf and the Black and Caspian seas.

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In late 2004 the US attack on Mosul was concurrent with the one on Fallujah, the latter battle arguably being the deadliest in the entire US-Iraq War. In 2014, six month prior to the ISIS seizure of Mosul (and Kurdish seizure of Kirkuk), ISIS “retook” Fallujah, which is just 40 km from Baghdad. ISIS also took control of the large dam upriver of Mosul, which according to Wikipedia has the fourth largest reserve capacity of any hydroelectric facility in the Middle East. Kurdish forces, with help from the US and Iraqi militaries, have since captured the dam.

Iraq’s Sunni Arab region, in spite of being relatively small in population because it is located in the desert, and also landlocked, has some advantages that Shiite Iraq does not. It has proximity to the Mediterranean, as well as access to the Mediterranean via the Euphrates which in Syria reaches as close to 200 km from it. The entire distance from the Persian Gulf  to any part of the Eastern Mediterranean coast, in fact, is only about 1300 km.
This Mediterranean access, however, is partly why the Shiite Iraqis and Iranians would prefer to keep Syria’s non-Sunni Assad government and Lebanon’s Shiite group Hezbollah in place, so as to block Iraq’s Sunni Arab minority and Syria’s Sunni Arab majority from working together to export Iraqi oil to the West via the Mediterranean and hence become powerful.

The Sunni Arab region’s upriver location, moreover, provides a potential advantage within Iraq as, especially towards the south, the country is often lacking in rainfall and dependent upon agriculture that can be devastatingly flooded by the actions of northern dams. In addition, because the Euphrates winds about a lot within the Sunni region (see map below), its cities can often be surrounded on three sides by the river and on the fourth by both the desert and the incline of the walls of the Euphrates Valley,  giving them a defensible position. A series of three lakes, finally, running 200 km from north to south, helps to divide Baghdad and southern Iraq from the Euphrates’ Sunni-inhabited northwest.

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It has become very popular to point out that Iraq’s borders, and particularly the Iraqi-Syrian border, are “artificial”, imposed on the region by the British and French in the aftermath of the First World War. This statement is not untrue, but nor is it necessarily as straightforward as many have come to believe.

Those saying that Iraq’s borders are artificial often ignore a number of facts. First is that, unless Syria, Iraq, Kuwait, and perhaps Lebanon are merged into a single state (a state which, given its position linking two oceans and containing the most oil anywhere outside of Saudi Arabia, could perhaps become the top power in the Middle East), or unless a united Kurdistan declares its independence in territories that are today part of Iraq, Syria, Turkey, and Iran (a declaration that could, and to an extent already has, led to war by those countries against Kurdish forces), then “artificial” borders must be drawn somewhere through the region.

Second, they ignore the fact that Iraq’s borders are actually not as random, geographically, as they are given credit for, as we discuss further below. Third, they ignore the fact that it is not only the West  that has been responsible for messing with the “natural” borders of Arab lands. Iran and Turkey, for instance, both refused 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.

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And fourth, they often ignore the fact that the most “artificial” aspect of Iraq’s borders is not the fact that the borders themselves are drawn improperly, but rather is that Kuwait has been allowed to exist independently of Iraq at all. Why Kuwait, with its $53,000 per capita income, its nearly-autocratic monarchy, and its position that in effect walls-in Iraq’s only direct outlet to the ocean, should be allowed to maintain its political independence from Iraq remains a question, arguably, for those claiming that the real crux of Iraq’s problem is the “artificial” international borders between Iraq and Syria, or the lack of international borders between Sunni Arab Iraq, Shiite Arab Iraq, and Sunni Kurdish Iraq.

I am not saying that Kuwait should definitely be refolded into Iraq like Hong Kong and Macau were into mainland China or like Gibraltar may be into Spain. I am saying, though, that things may be a lot more complicated where borders are concerned than they are often acknowledged to be.

Iraq-Syria: The valley of the Euphrates is generally much wider on the Syrian side of the border than  on the Iraqi side of the border. Until the river gets close to Ramadi (the capital of Anbar province, by far Iraq’s largest by territory size) and Baghdad, where the river valley widens out again, the valley generally extends less than 100 meters out from either side of the banks of the river in Iraq, whereas on the Syrian side of the border it extends around 5000 meters out on average:

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Zooming in on the border:

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It is on the Syrian side of the border that the river cities of Raqqa, the “capital city” of ISIS, and Deir al-Zour, a Syrian provincial capital that has been fought over intensely by ISIS and Syrian military forces, are located. Notably, however, the entire Euphrates valley between Baghdad and Aleppo is actually barely larger in size than Rhode Island. The maps one sometimes sees in the media of “ISIS-controlled territory” are, for this reason, somewhat misleading, as in many cases they do not differentiate between desert and non-desert areas.

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The Iraqi-Syrian border was drawn in such a way as to give Syria all of the significant tributary of the Euphrates that meets up with the Euphrates just south of Deir al-Zour (see  map below), and to give Iraq all of the large, “lonely”mountain of Sinjar (lonely in that it does not link up with any other mountain ranges), which got attention earlier in 2015 as a result of a humanitarian crisis occurring there. You can see the mountain in the image below, west of Mosul and next to Syria’s border to the mountain’s west and north. Sinjar City, in the shadow of the mountain, had a population estimated at 90,000, mainly of the Yazidi religious and ethnic minority that groups like ISIS have deemed heretical or “devil worshippers”.

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In Syria’s northeast the border with Iraq juts out eastward in order to allow the Tigris to very briefly serve as the border between the two countries. On the adjacent Turkish-Iraq border, however, the border swings back and forth from one side of the river to the other; it is a more “artificial” border, perhaps. The Iraqi-Jordanian desert corridor, meanwhile, is extremely artificial, yet it serves the useful purpose (in theory, at least) of giving Iraq a link to Jordan’s Red Sea coast or, via Israel, to the Mediterranean. Though it is across the desert, in which ISIS now has influence, Baghdad is just 785 km from Amman and 860 km from Jerusalem.

Finally, there is the Kurdish border. Though this border artificially divides Kurdish peoples from one another, with most Kurds living in Turkey (even though, from an ethnolinguistic perspective, Kurds are more similar to Iranians than to Turks or Arabs), the Kurdish borders between Iraq and Turkey and Iraq and Iran both adhere for the most part to the geographic barrier of the Zagros Mountains, as can be seen in the map below.

This does not mean that the Kurds do not “deserve a state of their own”, of course, but, given the height of these mountains, it does mean that border is hardly arbitrary. The Kurds have, in fact, many internal linguistic and political divisions themselves, reflecting the ruggedness of their mountain landscape; these internal divisions are not usually mentioned in the media outside of the Middle East, which has become generally pro-Kurdish.

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Kurdish

You might want to take this map with a grain of salt too

Still, Kurdish groups have, at least for the time being, been able to overcome their internal differences within the borders of Iraq. According to Martin Lewis of Stanford, “In constructing their own unrecognized state, the people of Iraqi Kurdistan have had to overcome deep divisions within their own society. In the mid-1990s, the region’s two main political groups, the Kurdistan Democratic Party (KDP), mostly representing the Kurmanji-speaking north, and the Patriotic Union of Kurdistan (PUK), mostly representing the Sorani-speaking south, fought a brief war. But although regional tensions in Iraqi Kurdistan persist, civil strife is no longer a threat. On both sides of the linguistic/political divide, most people have concluded that Kurdish identity and secular governance trump more parochial considerations. In the intervening years, the Kurdish Regional Government has managed to construct a reasonably united, secure, and democratic order”. 

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 Finally, here’s one last map for the road. It shows, again, just how complicated this region can be:

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