Geopolitical analysis 2017: Middle East

Shirvan (0:00)

The Middle East is on fire. Traditional borders are becoming obsolete. The region is steadily fragmenting into factions defined by religion, economic interests, and kinships. But if you thought that 2016 was a bad year, then brace yourself for 2017, as the region will undergo a geopolitical shift. My name is Shirvan, and welcome to CaspianReport. If you want to help our channel grow, please visit patreon.com/caspianreport for more information. We begin our analysis in the heart of the Middle East, Jerusalem. The election of Trump, and the fact that the Republicans control the legislative and executive branches of the American government, means that Israel has more options to pursue its interests without a political fallout. However, 2017 will be a tense year for the region. Both the Israelis and the Palestinians will prepare for a possible new conflict in June 2017, which will mark the 50-year anniversary of the Six-Day War. Usually, symbolic dates are followed by equally symbolic gestures. Some top officials within the ruling Fatah party have suggested that June 6th marks the deadline for the diplomatic talks. If no agreement is reached, Palestinian leaders may declare independence and try to secure a UN majority, including support from the Security Council. President Trump is likely to veto such an act. Therefore, some Palestinian officials are calling for more action. More specifically, they call for an armed intifada of independence if the anniversary deadline passes. The Palestinian president Abbas is still committed to the ongoing diplomatic negotiations, which focuses on the basis of the 1967 borders with East Jerusalem as the capital of a Palestinian state. However, Abbas is increasingly isolated within his party. Ultimately, he may have no choice but to move towards a unilateral declaration of statehood in June 2017

Since Trump's administration is likely to veto an independent Palestine, a violent revolt will remain a realistic possibility. Meanwhile, Iran will hold presidential elections in May 2017

A major topic in the elections will be the nuclear agreement. The current framework restricts Tehran's nuclear weapons program by limiting the production of fissile material. In exchange, a part of the economic sanctions against Iran was lifted. At the present, the European Union, which is a signatory to the treaty, must amend its sanctions through unanimous vote. Meanwhile, the United States can change the sanctions by an executive order. This makes Washington the most decisive factor in the agreement. Both Trump as well as Iranian hardline politicians have criticized the current deal. Technically, everything can happen. Yet, many nations have come to rely on the deal in order to do business with Iran. For instance, multinational companies such as Airbus and Total are seeking to invest billions of dollars in the country. Any major disruption in the current arrangement would upset regional countries as well as the European states and multinational companies.

For Rouhani, who will seek re-election in May, preserving the current deal is his primary objective. Much of his economic policy depends on the nuclear agreement. If somehow the deal is disrupted, the Iranian heartline faction could return to the presidency at the expense of Rouhani.

Ultimately, the deal is not perfect, but it's working, and it's better than the unknown alternative. For these reasons, it's unlikely that Trump would proceed with his promise to undo the agreement. Next is North Africa, where the status quo will continue. Diplomatic talks in Libya are closing in on a final resolution. However, a unified, cohesive government in Libya is still unlikely to occur in 2017

Most notably, nationalist General Heftar, who commands the Libyan National Army, will strengthen his control over eastern Libya and push towards the west of the country. As a result, sporadic skirmishes between governmental militias and radical jihadists will continue. Yet, Libya isn't the only country that will face a rough year, as the jihadist factions lose ground, terrorist attacks against Libyan civilians will increase. Furthermore, many radical fighters will seek shelter in neighboring Egypt. The leadership in Cairo will have to fortify the country against increased security threats, as well as prepare it for crucial economic reforms. Recently, the IMF approved a $12 billion bailout for Egypt, but the country needs to secure an estimated $21 billion to carry out its reforms. These additional funds could come from the World Bank, the Gulf States, and possibly even China.

The thing is, Egypt urgently needs to reorganize the budget deficit, fiscal stability, and most importantly, the social subsidy programs.

These reforms will be painful for ordinary citizens, but without them, the country will face an economic crisis. Another country that will start major economic reforms is Saudi Arabia. In 2017, the Saudis will begin the five-year National Transformation Program, or NTP for short. The NTP forms the first stage within the larger framework of the Vision 2030 initiative. The NTP aims to rebalance the Saudi budget since last year, the national budget deficit reached a record 100 billion dollars. In 2017, Rijad will cut lavish public spending. For instance, the government plans to launch a new social subsidy program which will generate about 30 billion dollars per year by 2020