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 Situation on the Arabian peninsula

Five years after the uprisings that broke the mold of the old Middle East, every new year promises to be another year of tumultuous change. The eruptions of 2011 unleashed decades of pent-up tensions and dysfunction in the political, socioeconomic, and cultural spheres; these dynamics will take many years, if not decades, to play themselves out and settle into new paradigms and equilibrium. In 2014, four Arab countries - Syria, Iraq, Libya, and Yemen - sank decisively into the ranks of failed states with no longer any effective central authority over the expanse of national territory. ISIS arose as the largest radical threat in the region’s modern history, challenging political borders and order and proposing political identities and governance paradigms. Sunni-Shi'i conflict intensified throughout the Levant and reached Yemen.

Impoverished, but strategically important, the tussle for power in Yemen has serious implications for the region and the security of the West.Yemen faces its biggest crisis in decades with the overthrow of its government by the Houthis, a Zaydi Shia movement, which prompted a Saudi-led counteroffensive. The fighting has had devastating humanitarian consequences, and while the Saudi-led coalition and pro-government forces have rolled back the Houthis, they are no closer to reinstating the internationally recognized government in the capital of Sana’a. While the persistence of terrorism is regarded as the main defining feature of the contemporary Middle East, it is true that terrorist group al-Quaida has benefited from the current chaos, establishing what Reuters calls a “mini-state” that spans more than 350 miles of coastline and draws profits from the national oil company and port trade. The conflict between the Houthis and the elected government is also seen as part of a regional power struggle between Shia-ruled Iran and Sunni-ruled Saudi Arabia, which shares a long border with Yemen. Conditions appear daunting for a negotiated settlement. The Houthis’ assertion of power and the Saudi-led air campaign have militarized the divisions between the parties.

Furthermore, the Saudi Arabian economy has been jolted by a severe oil shock. Crude oil that sold for over $100 per barrel in 2014 sold for only $26 per barrel in February 2016. The price rose to $50 by June 2016, but it remains half of what it was two years ago. Cheaper oil is a major shock to the Saudi economy. However, the simultaneous occurrence of the oil shock and a new government provides an unusual opportunity for fundamental economic reform. Barriers to reform include the presence of powerful interest groups that benefit from subsidies, the continued appeal to seek food security at high cost, and the objection of Wahhabi leaders to many aspects of modern economies. Uncertainty about the future political/military relationship with the United States makes it difficult to reduce the large military budget.

Moreover, rivalry between Iran and Saudi  Arabia is escalating over the Saudi execution of leading Shia cleric Sheikh Nimr al-Nimr. And while religious divisions are a factor, it is important not to overstate the division. Sunnis and Shia share fundamental beliefs, and have co-existed for centuries - the animosity between Iran and Saudi Arabia is better understood in terms of a power struggle in the Middle East and beyond. Iran and Saudi Arabia's status as leading exponents of Shia and Sunni Islam respectively have informed their foreign policies, with both sides forming alliances with countries who share their theologies - and backing militant groups in those that don't. Perhaps the only thing we can be certain about is that hostile Iranian-Saudi relations will only prolong the misery of Yemen and Syria, with a diplomatic solution unlikely and both sides keen to prevent the other gaining influence.

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