The MENA region faces another year of political turmoil in the aftermath of the popular uprisings that have resulted in the overthrow of three Arab dictators (soon to be four, assuming Yemen’s Ali Abdullah Saleh steps down as agreed next February) and an ongoing insurrection in Syria. The dominant theme amid the revolutionary ferment has been the desire for democratic rights. Where new political processes have got under way, Islamist political forces have come to the fore, and one of the key issues of the coming period will be to what extent they can turn their popular appeal into effective governance. The political unrest has wrought a heavy toll on the economies of the countries directly involved, and this will aggravate the difficulties facing the newly elected governments. The Gulf Arab states have by and large benefited from the turmoil, as oil prices have risen, but they face their own domestic political challenges and have cause to be anxious about the risk of an oil price crash. Developments in both Iran and Iraq will also have a major bearing on both regional political stability and the oil market.
* Redefining political Islam. For the first time in the Arab world, political parties whose basic purpose is to create a society conforming to Islamic principles will be taking charge of elected governments. This is the culmination of a long-term trend, whereby Islam had filled the space left by the stifling of meaningful political activity by corrupt and authoritarian regimes. The Muslim Brotherhood and other Islamist groups built up social networks in many countries across the region and, where possible (for example in Egypt and Morocco), took part in elections, fully aware that they would not be allowed to win. Following the 2011 uprisings, Islamist parties have used this platform of popular support and political experience to good effect, helped by their strong financial position, stemming from their extensive membership and effective fund-raising activities in Saudi Arabia and other Gulf states. The Nahda party in Tunisia and the Parti de la justice et du développement (PJD) in Morocco emerged as the largest parties in their respective elections in late 2011 (for the constituent assembly in Tunisia) and are likely to preside over coalition governments for much of the coming year. Both these parties have devoted much effort to presenting themselves as modernist and committed to democracy, while insisting that they have no intention of imposing a dogmatic Islamist agenda or interfering in areas such as women’s rights and tourism. However, these parties face pressures from within their own ranks and from more radical Islamist groups to take a harder line. The challenge to the Muslim Brother mainstream is stronger in Egypt, where an alliance led by the Freedom and Justice Party (FJP, which has a similar outlook to those of its Moroccan and Tunisian peers) will be the largest party in the new Egyptian parliament, and may even have an overall majority, but will have to cope with a resurgent Salafist movement, whose bloc, led by the Nour party, is in a strong second place. Even if the FJP manages to form a Salafi-less coalition, the preponderance of Islamist MPs in parliament will ensure that there will be a powerful Islamic tinge to the political discourse. The parliamentary election result also suggests that there is a stronger likelihood than is generally supposed that Egypt will have an Islamist president. The responsibilities of government will provide a major test of the ability of the Islamist parties to sustain popular support. Their policy programmes are broadly in favour of a free market economy, but businesses will be on the look-out for punitive taxes and retroactive legislation (for example affecting past land sales in Egypt) that could be brought in as the new governments struggle to raise sufficient revenue to match their social spending promises. Assuming the democratic systems survive, the electoral politics will look very different four or five years down the line.
* Unfinished revolutions. The revolutionary momentum created at the start of 2011 is still far from over. Even in Tunisia, which has made the most orderly start to the task of democratic transformation, there are risks that the process may yet be derailed by fresh social upheavals. The fate of Egypt’s revolution hangs in the balance following the repeated violent confrontations between security forces and protesters over the past three months. The Supreme Council of the Armed Forces (SCAF) has, in the eyes of many of Egypt’s political activists, become an instrument of oppression, seeking to preserve at any cost the privileges it has accumulated in the decades since the 1952 Free Officers coup. Both the SCAF and some of the revolutionary activists have blamed outside forces (unspecified, but presumed to include the US and Israel) for the continue turmoil in central Cairo. The Muslim Brothers, for their part, have accused the SCAF of interfering in the elections to limit the Islamist gains. We expect the Egyptian political process to continue more or less according to the periodically updated plan, but there is clearly a risk that it could unravel. Similar doubts apply to Libya, as the overthrow of the Qadhafi regime and the gruesome killing of the dictator have given way to militia turf wars in the absence of any clear direction from the National Transitional Council. The uprisings against Ali Abdullah Saleh in Yemen and Bashar al-Assad in Syria have turned into a bloody stalemate. Arab political intervention has offered a way out of the crisis in Yemen, but it would come as no surprise to see the conflict persisting throughout the coming year. The Arab League is also making an effort to tackle the Syrian crisis, but there seems to be little chance of any negotiated settlement between the Assad regime and the opposition. The Syrian regime’s strategy is based on battering its opponents into submission, enacting cosmetic political reforms and seeking to outmanoeuvre its international foes in the diplomatic sphere. The opposition will find it hard to dislodge the regime without external military help, but it stands little chance of receiving the level of support that was afforded to the anti-Qadhafi rebels in Libya.
* Trouble ahead in Iraq. The US troop withdrawal in December has introduced a further element of uncertainty in Iraq’s political scene. The most recent tensions, following the announcement of an arrest warrant for Tareq al-Hashemi, the vice president, raised the stakes. Mr Hashemi’s Iraqiya bloc has boycotted parliament and suspended its ministers from the cabinet. Two scenarios have arisen as a result; the government could stumble on in its current form, or the prime minister could follow through with his threat of forming a majority government centred on his Shia-dominated parliamentary bloc, the National Alliance. Both outcomes are far from ideal, and could further add to the already highly-charged sectarian climate in Iraq. Despite the deteriorating political scene, a return to full-scale sectarian civil war is not in our central scenario, partly because the memories of the last one are still fresh.
* Algerian outlier. There have been plenty of disturbances in Algeria over the past year, but they have been mainly localised and have not had the unifying theme of the protests in other Arab countries. The Algerian president, Abdelaziz Bouteflika, has brought forward some piecemeal political reforms, but has acknowledged that his country is still an “apprentice” in democracy. Algeria’s bloody recent history has provided a measure of insulation against renewed civil conflict, and the allure of Islamist politics is perhaps not so strong as in its neighbours. Although there is deep cynicism about electoral politics in Algeria, the country does have a broader spectrum of political parties than many of its peers in the MENA region, and its press allows more scope for critical comment about the country’s rulers. Algeria is scheduled to hold a parliamentary election in the spring of 2013, followed by a presidential election the following year. One of the keys to Algeria’s stability will be whether Mr Bouteflika and the remnants of the military establishment can come up with a credible succession scenario.
* Gulf Arab anxiety. The Gulf Arab states were not insulated from the spirit of revolution elsewhere in the region, as there was a full-blown uprising against the established order in Bahrain in February and March, protests in Oman and Kuwait, disturbances in Shia areas of Saudi Arabia and the suppression of dissenting voices in the UAE. The Bahraini uprising was violently suppressed, with the backing of Saudi Arabia, but the ruling family has since tried to revive representative politics through dialogue with elements of the mainly Shia opposition. Dialogue is likely to continue over the next 12 months, but its pace is unlikely to meet the expectations of the opposition, or indeed the protesters who will continue to take to the streets, particularly in the Shia villages around the capital, Manama. The crown prince, Salman bin Hamad al-Khalifa, who is widely perceived to be the leader of the royal family’s reform-minded faction and who lost considerable influence after the unrest in February, will work hard to generate grass roots support in an effort to wrestle some of the power back from the ascendent hardline prime minister, Khalifa bin Salman al-Khalifa. Sheikh Salman will also work, through the Economic Development Board, to repair some of the considerable reputational damage Bahrain has suffered, but business sentiment is expected to remain well below what it was prior to the 2011 unrest. Sultan Qaboos of Oman reacted to the protests in his country by pushing through reforms aimed at devolving more powers to parliament, and this initiative received a clear popular endorsement in the elections that were held in October. However, he has retained considerable powers in his own hands, and the efficacy of the new parliamentary system is yet to be tested. Saudi Arabia underwent a seamless succession after the death of the long-ailing crown prince, Sultan bin Abdel-Aziz al-Saud, with Prince Nayef making the expected leap to become next in line to the throne, and Prince Salman slotting in behind him in the pecking order. However, the spectacle raised fresh questions about the sustainability of the Al Saud gerontocracy. The Gulf Arab states would be hit hard in the event of a sharp global economic slowdown, which would depress oil prices, but Saudi Arabia and Qatar have sufficient accumulated wealth to continue to spend heavily on development projects, while the UAE (in particular Abu Dhabi) has already trimmed some of its spending plans in anticipation of such a downturn.
* Iranian dramas. The temperature of the dispute over Iran’s nuclear programme has risen during 2011, as the new director of the International Atomic Energy Agency (IAEA), Yukiya Amano, has been less coy than his predecessor in voicing suspicions that Iran is seeking to make nuclear weapons. The IAEA report that was issued in November stated for the first time that the agency was convinced that Iran had been working prior to 2003 on the development of nuclear weapons, although it also acknowledged that there was no evidence of any diversion of enriched uranium for military purposes. The stage has been set for a tightening of sanctions, most probably in the form of an EU embargo on importing Iranian oil. Iran will still be able to sell oil to China, India and Japan, but there is a risk that it could react to the increased financial pressure through threatening to close the Strait of Hormuz, which could set off a chain reaction of military escalation. We doubt that matters will reach this pitch, but there is a constant risk of miscalculation among the various parties involved. The next steps in the nuclear dispute will be influenced to a large degree by developments in Iran’s domestic politics. The majlis elections in early 2012 are likely to be a trial of strength between factions aligned, respectively, with the Supreme Leader, Ali Khamenei, and the president, Mahmoud Ahmadinejad. The president has lost considerable ground over the past year, and his apparent bid to preserve his influence after the end of his second and final term in 2013 appears to have been decisively checked. However, Mr Khamenei has also been damaged, as he has become increasingly associated with hardline tendencies in the Revolutionary Guards, and there is growing suspicion about the role of his second son, Mojtaba. Iran is set for another turbulent year, and its domestic political struggles will have a wider impact across the region.