Excerpted from Paul Singer's letter to investors,
CHAOS IN THE MIDDLE EAST, PARALYSIS IN THE WEST
Weakness, indecision and unreliability are terrible characteristics in a dangerous world. Strength does not mean bombing everyone. It means having capabilities, choosing one’s spots, and doing what you say you will do.
It is not an exaggeration to say that the Middle East is in a state of head-spinning chaos.
The U.S. has been all over the place in terms of its approach to the region and the region’s large stores of energy. The Middle East has been run in the post-World War I period variously by despots, family dynasties or theocracies. There has been only one consistent democracy in the region since World War II, and that is Israel. At present, there are at least five live conflicts in the region:
(1) secularists and reformers versus Islamist hardliners;
(2) Shia Muslims versus Sunni Muslims;
(3) the Syrian civil war;
(4) the Kurds versus Turkey and Iraq for self-control; and
(5) Israel versus its enemies.
Europe has a quite limited ability (and even less desire) to assert itself in the region, having eviscerated its military forces through years of budget cuts. America is currently in the position of a reluctant hegemon, and its strategy to deal with the immediate threat of ISIS (which is ironic given that ISIS is fighting Assad of Syria, meaning that America is effectively using military force to protect Assad and also sort of partnering with Iran, an ally of Assad’s) is very likely to be doomed to failure. We (along with most experts) strongly believe that air strikes alone (the strategy du jour) will not defeat or even significantly degrade the militant group. Thus, America needs to become realistic and generate an intelligent approach or else face being perceived as having been defeated, with all of the collateral consequences that this perception entails.
You knew most or all of these facts, but there are three elements that are worth exploring further.
First is that it has taken 100 or so years to begin unravelling the artificial “countries” that were created out of the ashes of the Ottoman Empire. That process, however, is now well under way in a chaotic swirl of tribes, religions, power struggles, ideologies and opportunistic gangs. None of the new Middle Eastern struggles has resulted it is safe to say a stable, peaceful democracy, and none have a realistic prospect of doing so in the foreseeable future.
A second element concerns questions about the role of the U.S., which is leading the interventions in various regional conflicts. It is (or seems) easy for leaders at present to say that the U.S. must deal with ISIS on the theory that it is an immediate threat to the American homeland and because it is well-organized, highly-motivated and completely ruthless. But it is absurd to create national security policy, and a significant and uncertain foreign military adventure, on the basis of a series of “snuff videos,” no matter how despicable. Moreover, we hope that no American leader hangs any future intervention in the region on the hook of trying to create societies that look like America. For starters, it may actually be impossible, and in any event, it is certainly embarrassing when those efforts fail. There are plenty of reasons other than “nation-building” for America to assert itself militarily in the region.
The third element is the overall game plan (or lack thereof). We have heard a number of experts opine on the appropriate way to fight ISIS and argue over the right approach to keep Iran from becoming a nuclear power and other current aspects of the immediately viewable landscape. But we have not heard any expert or policymaker put forth a convincing explanation of what the overall strategy of the U.S. (forget the U.N. and Europe) should be, much less of what victory would look like, how long we can expect it will take to achieve, or what kinds of setbacks and challenges we will meet along the way.
Without an appreciation of those elements, we cannot understand how the U.S. government could expect its citizens to remain “onside” for what will obviously be a confusing and difficult decades-long period of sequentially rooting out and fighting those groups and leaders in the Middle East (and elsewhere) who, under the banner of Islamism, pose a serious threat to Western civilization. The West is not engaged in a “war on terror,” whatever that phrase may mean. The march of technology and the passion and brutality of Islamic radicalism have empowered small groups of highly motivated and trained fighters to do immense damage to advanced societies. It is impossible to eradicate the danger “root and branch,” and it is certainly not solely or even principally a lack of economic opportunity that produces this danger. Sometimes ideology and religion transcend what most people think of as rationality. History has demonstrated time and again that people who just want to be left alone in peace can be overrun by others who have nationalistic, theological or other passions and are willing to rampage across borders to impose their will and ideology on others, or just to destroy and murder.
If Western civilization continues being merely reactive and/or executes its sequential anti-jihad strategy stupidly (as has frequently been the case), it is going to be tough sledding for a very long time, punctuated by goodness-knows-what if the jihadis are able to mount serious and well-planned attacks.
There is no way for financial markets to handicap or take into account these potential outcomes. The actions of the West since 9/11 and the Iraq war have certainly bolstered the overall perception of governmental incompetence, but it has been people in the Middle East (especially the Syrians, Kurds and Christians) who have borne the brunt of this incompetence. If and when the struggle comes to Europe or America, perhaps Western leaders will more forcefully be held accountable for their failures. Further, if major disruptions of global energy markets cause a massive upward re-pricing of oil and gas, a greater sense of Western urgency could be triggered. What the West needs is a realistic, flexible and rapid ability and willingness to deploy an array of forces, together with a measured use of stated commitments in order to make sure that the U.S. and Europe do what they say they are going to do without becoming bogged down in massive, lengthy, expensive, unsuccessful and bloody personnel deployments. An appropriate and thoughtful amount of resolve must be paired with a careful messaging of goals and expectations to make sure that their populations are not surprised and disappointed. The West might be war-weary, but the jihadis and other combatants in the Middle East are just getting started.
