The Turkish government's strategy for a role in the region might be costly because the Islamic State of Iraq and the Levant (ISIL, also referred to as Da'ish) is not easy to control and Turkey might become hostage to ISIL, according to this week's guest for Monday Talk.
“I was there at that time. [Muhammad] Zia-ul-Haq was a strong, Muslim Brotherhood-oriented leader, and he rejected any notion of blowback. For 25 years, I have seen political leaders who believe that they can control and use the Salafists for their own ends, but who subsequently find it is they who have been used by the Salafists,” said Alastair Crooke, director and founder of Conflicts Forum based in Beirut and formerly adviser on Middle East issues to EU Foreign Policy Chief Javier Solana.
Crooke, who was in Turkey for the İstanbul Forum, has answered our questions in this regard including the question as to where Turkey stands in the world.
Would you tell us about your ideas in regards to the “financialization of the global order"?
For some time, the international order was structured around the United Nations and the corpus of international law, but more and more the West has tended to bypass the UN as an institution designed to maintain the international order, and instead relies on economic sanctions to pressure some countries. We have a dollar-based financial system, and through instrumentalizing America's position as controller of all dollar transactions, the US has been able to bypass the old tools of diplomacy and the UN -- in order to further its aims.
But increasingly, this monopoly over the reserve currency has become the unilateral tool of the United States -- displacing multilateral action at the UN. The US claims jurisdiction over any dollar-denominated transaction that takes place anywhere in the world. And most business and trading transactions in the world are denominated in dollars. This essentially constitutes the financialization of the global order: The International Order depends more on control by the US Treasury and Federal Reserve than on the UN as before.
When did this start?
It started principally with Iran and it has been developed subsequently. In a book, “Treasury's War,” the tool of exclusion from the dollar-denominated global financial system is described as a “neutron bomb.” When a country is to be isolated, a "scarlet letter" is issued by the US Treasury that asserts that such-and-such bank is somehow suspected of being linked to a terrorist movement -- or of being involved in money laundering. The author of "Treasury's War" [Juan Zarate], who was the chief architect of modern financial warfare and a former senior Treasury and White House official, says this scarlet letter constitutes a more potent bomb than any military weapon.
This system of reliance on dollar hegemony no longer requires American dependency on the UN and hands control to the US Treasury overseen by Steve Cohen -- a reflection of the fact that the military tools have become less available to the US administration, for domestic political reasons.
But with Ukraine, we have entered a new era: We have a substantial, geostrategic conflict taking place, but it's effectively a geo-financial war between the US and Russia. We have the collapse in the oil prices; we have the currency wars; we have the contrived "shorting" -- selling short -- of the ruble. We have a geo-financial war, and what we are seeing as a consequence of this geo-financial war is that first of all, it has brought about a close alliance between Russia and China.
China understands that Russia constitutes the first domino; if Russia is to fall, China will be next. These two states are together moving to create a parallel financial system, disentangled from the Western financial system. It includes replicating SWIFT [Society for Worldwide Interbank Financial Telecommunication] and creating entities such as the Asian Development Bank. One of the principal tools in the hands of Washington to control the global system was always the International Monetary Fund [IMF].
Nations have to go to the IMF to ask for financial help, when in difficulties, but recently it was China -- and not the IMF -- which bailed out Venezuela, Argentina and Russia as their currencies crashed. China became concerned when the ruble crashed on Dec. 16-17, and intervened to halt a run on the currency. The IMF and the World Bank were no longer at the center of the global financial order. They had been displaced by China.
‘Oil and currency wars are influencing other countries'
What would you say about the prospects of success of this new order?
It is too early to say that it will be successful, but it is a very important shift that is taking place. It has already started to have an effect. Take Russia: European and American leaders thought that Russia would weaken because of sanctions and the fall of the ruble, but China intervened and stopped the collapse in the ruble. In short, China is operating as a backstop to a financial system that is in the process of shifting dramatically away from Western control. And it affects the Middle East.
Why does it affect the Middle East?
Because the consequences of these oil and currency wars are influencing other countries -- many energy producers in the Middle East and elsewhere and emerging markets have seen their currencies crash as the dollar gets stronger. There is a huge move of capital out of emerging markets and out of Middle Eastern states whose currencies consequently have been adversely affected. For the first time, too, we see the end of the petro-dollar as a system for recirculating oil revenues to Wall Street.
For the first time, it has turned negative: It is sucking liquidity out from Wall Street, not putting it in. The fall in the price of oil has suddenly created huge financial turbulence, which is endangering the global financial system.
Why has the oil price dropped?
There was a decision by Saudi Arabia to reduce the price of oil for two reasons: to hurt Iran and to put pressure on Russia to change its stance and drop its support for President [Bashar al-]Assad. The Saudi determination to get rid of Assad remains extremely strong in Riyadh. They only reduced output by 100,000 barrels a day in the first month, and then it started an avalanche: The market had been artificially inflated by the oil companies lending crude oil to financial investors who want a hedge against inflation and currency fluctuations.
Investors were borrowing physical oil, which made them feel safe, and knew that the oil companies would eventually repurchase the physical oil from them in due time. With the fall of the price of oil, all of this purely investment demand vanished, and the price dropped further. One sees something similar in the gold market, where only 10 percent of gold transactions involve the transfer of ownership of actual gold. The other 90 percent are simply paper bets on the price of gold, but which never result in the purchase or sale of actual gold.
‘Turkey does not know now where it stands'
Where do you think Turkey is in that picture?
My sense is that Turkey does not know now where it stands. For about 45 years, Turkey was the frontline for NATO against Russia. That was not a very happy interlude for Turkey, and Turkey has then been snubbed and somewhat discourteously held at arm's length by the European Union. And on top of that, transatlantic relations have soured and regional relations are tense. Prospects now for Turkey to enter the EU are dim, first because the Accession Process is frozen, and second because there is a major crisis in the EU. I don't think anyone in Turkey can ignore the fact that the EU has its own identity problems, too.
Would you elaborate on this idea?
First of all, the EU is unable to provide an autonomous foreign policy. At the end of World War II, NATO was inserted into Europe, and EU foreign policy is essentially the NATO foreign policy -- it has no ability to change NATO policy and effectively is obliged to follow and implement it. For many years, the Europeans then thought that liberal economics would bring prosperity to Europe: "Bringing prosperity to all" was its mantra and principal source of credibility.
But since 2008, it has not brought prosperity; it has brought austerity and recession. So, with neither a distinct foreign policy to give the EU a common identity nor an economic policy that delivered promised prosperity for all, disenchantment has set in. People ask what it means now to be European. They cannot easily articulate its identity or, as it were, a "destiny" now.
Paradoxically, Europe too has divided itself on sectarian lines -- the Protestant north, which insists on austerity policies, and the Catholic south, which is being chastised for its alleged laziness and weaknesses, but which strongly refutes these claims, and points to the conceptual flaws in austerity policies. But the fact is that none of the monetary tools that have been used since 2008 have provided growth or prosperity -- on the contrary, there is dire poverty in many parts of Europe.
The project of Europe is deeply uncertain and this is why what happened in Ukraine is so significant. At first, it seemed that Germany, which has always been close to Russia because German politics has always looked more to Central Asia -- to the East, more than to the West -- was going to take a position to mediate in order to resolve the Ukraine issue.
But Chancellor Angela Merkel changed Germany's position and pursued a different course. Now there is great deal of unhappiness in Germany because of not doing more to resolve the Ukraine issue. But the bottom line here is that Europe had the chance to forge an independent foreign policy identity -- to step out of the NATO "box," but for whatever reason was unable to do so. So EU identity remains subsumed into the Atlantic Alliance, but many of the new parties emerging in Europe are seeking a more autonomous alignment.
You asked me where Turkey stands. Turkey sees that Europe is not a political force, and economically, may even be entering into financial crisis. We will see hotly contested elections in Europe. We may see growing violence. The mainstream parties will not do well. On the other hand, Turkey has tried to move into its backyard, after being out of it for a long time.
‘Russia has emerged with an interesting proposal for Turkey'
You mean the Middle East?
Yes, the Middle East, first, through the Muslim Brotherhood [MB]: Had the region fallen to the MB, as many expected, Turkey would have assumed real influence in the region. It would have been a new outlet, a new direction. But the MB project went wrong: It first went wrong in Syria, then in Egypt, resulting in the Middle East becoming a problematic direction for Turkey to pursue.
The European option at the same time was also closing, and the relations with America deteriorating. Suddenly, Russia has emerged with an interesting proposal for Turkey: to become an energy hub. China, too, has proposed a New Silk Road that would terminate here in İstanbul. It's an invitation to move politically and economically in the direction back toward Eurasia -- where Turkey always was. Will Turkey take it, or will it swing back towards the strong Atlanticist pull that has a powerful residual in Turkey? In Russia, too, there was a strong Atlanticist sentiment, and very close economic links with the West. But in the wake of events in Ukraine, the Atlanticists have been deeply wounded in Russia. It may play differently in Turkey. We shall see.
How differently?
In espousing the MB so closely, it's given the Justice and Development Party [AK Party] something of a sectarian tone. The language of the former prime minister, now president, increasingly and evidently has become Sunni, rather than Islamic -- notably at election rallies. This has drawn criticism and pushback both in the region, and domestically in Turkey. The experience of the misadventure in Syria and the perception of the adverse reaction in the region seem to have re-energized the Atlanticist or pro-EU constituency here. How then might this constituency react to a shift towards Eurasia? In Russia, the Western intervention in Ukraine radically undermined support for Atlanticism. Maybe it will be different here.
Many observers are saying there are ISIL sleeper cells in Turkey. How do you evaluate Turkey's relationship with ISIL?
The ISIL cells will remain quiet, providing that ISIL is left to their own devices. But were Turkey to change its position vis-à-vis ISIL, then Turkey is likely to be as disrupted as Pakistan has been disrupted by these jihadists. The objective of ISIL is to create God's principality on a slice of territory: to secure that territory, and to practice Shariah. Ultimately, they intend to expand. Of course, it extends beyond just Iraq and Syria; it's a much wider project ultimately, and it would include Muslims in Saudi Arabia and Turkey, and beyond, even Europe, maybe parts of Spain.
‘Will Turkey remain in the Wall Street system'
Do you think Turkey is swimming in dangerous waters by supporting Da'ish, as Pakistan did in the past?
The history of Pakistan is a clear model. Gen. Zia-ul-Haq, who Islamized the military and society of Pakistan, never believed that Da'ish would penetrate into the very arteries of Pakistan. I was there at that time. Zia-ul-Haq was a strong, Muslim Brotherhood-oriented leader, and he rejected any notion of blowback.
For 25 years, I have seen political leaders who believe that they can control and use the Salafists for their own ends, but who subsequently find it is they who have been used by the Salafists. There were not only armed attacks on Pakistan, but the Salafist "revolution" fragmented Pakistani society.
We are dealing with Salafists who have a clear agenda. I can understand if there are political leaders here, too, who may want to use elements of radical Islam, precisely because it is an old-established and very effective tool in the region -- radicalized Islamism has been such since the18th century. It creates an inflamed religious psychology, which is difficult for those targets on whom it is unleashed to counter it directly.
If you were asked for advice by the Turkish government in this regard, what policies would you suggest based on your experience?
These issues have been coming up and are being discussed in Iran, Russia and China. What sort of state should be built; how might it defend itself from a color revolution; from geo-financial predations; from globalised financial crises: how to build a strong state, how to give its people security?
Russia experienced the grasping of the oligarchs and the disintegration of their economy. In China, too, consumer liberalism has taken a hold, but the atomizing effect of neo-liberalism is tearing at the fabric of society and attenuating its values. The main thing is that we rethink things. How do we put back values into the political system? How do we reinsert moral values back into the economic fabric?
There is a strong reaction taking place against neo-liberalism -- everywhere. Every state will respond it in a different way. Russia is reaching back to Orthodox Christianity in order to re-invent what it means to be Russian -- in a new way: by emphasizing human "capital" and conservative family values. China, too, is looking afresh at its ancient masters. How do you make a state that is not vulnerable to the abuse of democracy by the West? How do you make a society that is not vulnerable to the control of economic variables in order to bring regime change? How do you withdraw from this vulnerability?
Will Turkey remain in the Wall Street system or enter into the analogue system that is being created by Russia and China? You don't really have a choice to do both, unless you set up parallel structures domestically to trade within these two spheres. Turkey will need to make some choices, before too long, in respect to the bifurcating geo-financial structure.
Isn't there a danger of falling under another dictated structure while trying to get out of one?
No, because in the parallel structure there is no intention to make a reserve currency, like the dollar -- unless it is gold, which no one can "print." It will be interesting to observe how Turkey makes its choice.
'Have we witnessed merely a mirage of growth in the emerging markets?'
Who has been hurt as a result of the policy of the Saudi Arabia to reduce the price of oil?
Saudi Arabia needs to balance its budget; it has enough reserves to last at least two years at this lower oil price. But many other oil producers, including the Gulf States, don't have the size of reserves that Saudi Arabia has. This crisis hasn't been confined to just the Gulf States, but to others, like India and Brazil.
But the real question is about all that dollar investment that has flooded into countries, including Turkey, as the result of the US monetary expansion. As the dollar becomes more expensive because of the oil price collapse, so local currencies are devalued and their debts -- denominated in dollars -- suddenly rise dramatically in local currency terms.
So, as the dollar value of these loans rises against local currency investment, the question arises: Was all this "growth" truly real or was it just asset inflation -- a bubble, in other words? Have we witnessed merely a mirage of growth in the emerging markets, which was nothing more than the effect of a huge tsunami of liquidity, spreading out from the Federal Reserve that was driving up the price of assets? And when it collapses, what will be left?
Now, we see a questioning of the vulnerability of the European and the American banks who hold all these dollar-denominated overseas debts. This is causing huge turmoil in the financial markets.
So you are saying that the conflict between the US and Russia is essentially about whose economic system is less vulnerable to what's happening in the financial markets?
Yes, and President [Barack] Obama says that the US system is stronger and less vulnerable because it has a broader base of its economy than Russia does. It is not really true. In Russia, oil and gas comprise only about 11 percent of the total gross domestic product [GDP] of Russia. And because it has allowed the ruble to fall, its revenues in ruble terms are unchanged. And now, unlike in 1989, Russia is a foreign exchange creditor and not a debtor, so maybe it will survive this. Maybe Russia is less vulnerable to geo-financial war than many supposed, and maybe America more vulnerable. Time will tell.
Who will be hurt most by the financial turmoil then?
It will be Europe, because of the debts held by its financial institutions, and because Europe is teetering at the cusp of a serious economic crisis. That's why they are so desperate for the European Central Bank to print money. If Russia survives this financial onslaught and China continues to develop an analogue financial system that allows them to pull out of the Washington-controlled global system, then it will have a big impact, especially for countries like Iran, which is getting closer to Russia and China.
‘Was King Abdullah of Saudi Arabia Muslim?'
What deficiencies does the West have in its understanding of the Islamic State of Iraq and Levant [ISIL]?
First, the West is trying to assert that there is a "true" Islam, and that ISIL is a heretical deviation from this "true" Islam. This assertion is really a projection of the Christian experience: In fact, Islam wears many faces, and there is no authority -- unlike Christianity -- that can bestow on any one orientation the mantle of being the true Islam. Only one orientation makes the bold claim to be true Islam, and that is Wahhabism. When Western policymakers say that the ideology of ISIL is a "heresy" and must be de-legitimized, in this respect, they do not understand ISIL.
ISIL follows precisely the teachings of Mohammad Abd-al Wahhab. They model themselves on the first two caliphs -- particularly in their conduct of the wars against apostasy-- almost identically. If you are saying that ISIL is not Islamic or non-Muslim, then you are saying that Saudi Arabia and King Abdullah and other Wahhabist Gulf States are not Muslim, either. The leaders of the West have to accept that if you say ISIL is not Islamic or is non-Muslim, then they have to answer the question: Was King Abdullah of Saudi Arabia Muslim? ISIL is a neo-Wahhabist emergence, precisely following the works of Mohammed Abd-al Wahhab. It is true Islam, in this sense, and most Muslims know this.
You were critical of the words of Secretary of State John Kerry, who said that “we are fighting an ideology not a regime” in regards to ISIL.
Because what he was saying was that ISIL does not follow Islam. And then the Americans are surprised when Saudi Arabia does not send troops to fight it. But he is not understanding the principles on which Saudi Arabia is based. It was founded jointly by Mohammed Abd-al Wahhab and Ibn Saud in the 18th century, and these same practices were first emulated by King Abdulaziz in the 1920s -- and are now being emulated by ISIL.
The principles are the same, but the West simply calls ISIL terrorists.
A "terrorist" labeling is one that intentionally "shuts down" further thought; it polarizes into good and evil, and of course by definition it is not possible to "negotiate" with evil. So "terrorism" as a term simply precludes the bother of having to think or understand. So ISIL become just "terrorists" and Westerners cannot understand their allure, and yes, they have allure for many young Muslims.
All I am saying is that one needs to understand them more deeply. ISIL use terror as a deliberate military strategy, but that is not the end of it: They are deeply embedded in one orientation of Islam: Their doctrines are pure Wahhabism, original Wahhabism. And their methodology is derived from the wars of the Ridda [A.D. 632 and 633].
Do you think the West can be successful in its fight against ISIL?
I don't think the West can be successful in fighting ISIL. They don't have the troops and an air campaign alone will not defeat them. The West needs to understand the history of this phenomenon. It did not begin out of the blue in Iraq in 2007. The firing up of radical Wahhabi Islam was originally part of the British agreement with Abdulaziz from the 1920s, by which Abdulazziz was to become king of Arabia. These original understandings that gave the green light to the spread of Wahhabism were later transferred to the Americans in 1947.
Since that time, the West has piggybacked on Saudi Arabia's ability to create a psychologically charged Sunni radicalism in pursuit of Western -- and Saudi -- interests. Firstly, radical Islam was deployed to confront Nasserism, to confront Ba'athism, to circumscribe the influence of the Soviet Union and then Iran, and to fight the Soviet Union in Afghanistan. Time after time the West has come to an understanding with Saudi Arabia to use its forces for the pursuit of Western interests, and the latest example has been that of Syria.
The West knew that Saudi Arabia had introduced ISIL to Turkish intelligence with the idea of deploying ISIL into Syria. But the West preferred to look the other way. In short, the West has been deeply implicated in the rise of ISIL in many different ways. The Syria conflict is -- in a certain important respect -- a repeat of what happened in Afghanistan: using fired-up Islamic radicals as the means to inflict political defeat of the Soviet Union -- or in today's context, to oust President [Bashar al-]Assad and hand a political defeat to Iran and Russia.
Why did Saudi Arabia encourage or facilitate the coming into being of ISIL?
Because it wanted to counter Iran: It was pitching -- if you like -- blood for blood against Iran. But, as you may gather, there is quite a lot of history to the whole Western involvement in the firing up of radical Sunnism. It's hard to let go of these things. Now we have a competition between Turkey and Saudi Arabia for influence over these movements. This is why there is such tension between Turkey and Saudi Arabia. Turkey is the only state that can negotiate directly, state to state, with Da'ish for the release of its hostages; it enjoys a relationship with ISIL.
This might give Turkey influence in parts of Iraq and Syria in the future. However, at the same time, just as happened with ISIL in Pakistan, Turkey inevitably becomes also hostage to ISIL. They use ISIL, but ISIL can use Turkey, too.
‘Paris attacks not planned and organized directly by ISIL'
Do you see the Paris attacks as the job of ISIL?
It's created a mass psychological impact in the West, but I have seen no evidence that it was planned and organized directly by ISIL. It seems that some individuals may have read about ISIL thinking and methodology and acted on that basis: Copycat phenomena perpetrated by a few individuals, perhaps?
Some people immediately think that they must have training and instructions to conduct such attacks, but this is not necessarily so. You can learn a lot on the Internet and individuals can read the speeches of ISIL leaders and surmise what they should do. One aspect of fired-up radicalism is that it involves mass psychosis; you can't contain it. It travels with the wind. Turkey or Saudi Arabia won't be able to control it. That's why Saudi Arabia is building a big fence -- like Israel -- around the state to keep it out. But it cannot just be fenced off.
PROFILE
Alastair Crooke
Crooke is the director and founder of Conflicts Forum based in Beirut. He was formerly an adviser on Middle East issues to Javier Solana, the EU foreign policy chief. He also was a staff member of Senator George Mitchell's Fact Finding Committee that inquired into the causes of the Intifada (2000-2001) and was adviser to the International Quartet. He facilitated various cease-fires in the Occupied Territories and the withdrawal of occupying forces on two occasions. He has had 20 years' experience working with Islamist movements and extensive experience working with movements such as Hamas, Hezbollah and other Islamist movements in Afghanistan, Pakistan and the Middle East. He was a ranking figure in the British intelligence, MI6. He is a member of the UN's Alliance of Civilization's Global Experts. His book, "Resistance: The Essence of the Islamist Revolution," was published in 2009.
