Sanctions in the Geopolitical Landscape

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Laura Porter
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1 Sanctions in the Geopolitical Landscape Truth and Consequences Frankfurt, 11 May 2016 Pascal Aerens Head of Innovation Sanctions and embargos are the future of foreign policy. 1

2 The cost of war $2.1M per year $18,000 per hour $2Tn est. total cost Source: Congressional report The Cost of Iraq, Afghanistan, and Other Global War on Terror Operations 2

3 The cost of war Source: US Congress, General Accounting Office, 2011 The cost of war Bush administration Obama administration Source: Summary of Costs for the U.S. Wars in Iraq, Afghanistan and Pakistan, Pr. Neta C. Crawford, Boston University 3

4 The global cost of war 12.2Tn Spent in conflicts during 2014 Source: Institute for Economics and Peace report, 2015 The global cost of war 13.3% of World GDP DE UK FR Source: Institute for Economics and Peace report,

5 Sanctions will remain the favorite tool to pressure hostile groups. Banks remain a critical point to implement them. Between condemnations and war 5

6 tomorrow s sanctions are influenced by today s events. Between condemnations and war 6

7 UN Security Council Executive order 7

Goals: Disengage from costly conflicts (M-E), focus on Asia, prevent Russia from getting superpower status again Strategy: Troops withdrawal, avoid action without an exit plan, indirect involvement

8 Goals: Disengage from costly conflicts (M-E), focus on Asia, prevent Russia from getting superpower status again Strategy: Troops withdrawal, avoid action without an exit plan, indirect involvement (e.g. training, intelligence, logistics support), focus on Sanctions Outcome: More specific, targeted and flexible sanctions. à No slow down in Sanction programs à Velocity: Less reliance on UN to enact sanctions à More fines Between condemnations and war 8

9 Source: BBC News 9

10 Leaked Report The press 10

11 Yemen Yemen 11

12 New US-Saudi-Iran relation dynamics Source: NPR News New US-Saudi-Iran relation dynamics Source: New York Times 12

KSA now a target Top locations of Twitter users supporting ISIS in 2015 EXECUTIVE BRIEFINGS 70% 73% 1/3 #1 29% 90%

Mobile Planet Highest number of active Twitter users in the world.

Source: PeerReach Study 90 million daily YouTube views making it the country with the highest viewership in the world per

13 KSA now a target Top locations of Twitter users supporting ISIS in 2015 EXECUTIVE BRIEFINGS 70% 73% 1/3 #1 29% 90% EXECUTIVE BRIEFINGS Of population is under 30 Smart phone penetration rate (number 3 in the world) Source: Google's Our Mobile Planet Highest number of active Twitter users in the world. One-third of the country s online population are active monthly Twitter users. Source: PeerReach Study 90 million daily YouTube views making it the country with the highest viewership in the world per internet users 50% of Saudi Arabian YouTube users are women 36% of YouTube users have a university degree Source: Arabnews Unemployment rate for men under 30 (34% for women) of Saudis in work are employed in Government jobs 13

14 Goal: Remain a relevant stakeholder in M-E. Counter Iran s ascend to become a regional power broker Strategy: use oil price as an influencer (backfired and now OPEC itself could disintegrate), engage in direct military action (against Yemen) Outcome: Influence weakening, possible end of Reign Currently attempt to kickstart a countrywide post-oil initiative (dubbed vision 2030 ) by young and inexperienced leader Consequences: State could collapse when they can t subsidy social peace, risk of Arab spring (70 percent of the population is under 30), two main Islam s sanctuaries are in KSA, therefore risk of open or civil conflict is high if the power s grip loosens. à Country/Counterparty Risk à US/UN sanctions à Large regional conflict 14

U.S. Treasury presses Qatar on terror finance

Qatar Qatar has committed to spend $35 billion

Acquire global influence Strategy: use funds

companies (mainly in Europe) and to attract

Become a travel and business hub for the

Outcome: Uneasy relation with US and EU allies

15 U.S. Treasury presses Qatar on terror finance FIFA Corruption Scandal: Follow The Money To Qatar Qatar has committed to spend $35 billion in the US over the next five years Goal: Acquire global influence Strategy: use funds generated by oil and gas to invest in companies (mainly in Europe) and to attract world-class events. Become a travel and business hub for the region. Outcome: Uneasy relation with US and EU allies due to links terror organizations, weak enforcement against terror financing and poor human rights record. à Individual/companies sanctions 15

16 Goal: prevent establishment of a Kurd-controlled border area, increase international influence Strategy: use any direct and indirect means to weaken/destroy Kurdish groups, leverage migrant crisis (and let it evolve) to negotiate EU bargain Outcome: Probably no actions from EU, but US relations possibly deteriorating, NATO membership questioned, possible US sanctions on entities 16

17 A message from NATO to Turkey? MOSCOW (Reuters) - The director of the U.S. Central Intelligence Agency, John Brennan, raised the issue of Syrian President Bashar al-assad leaving power when he visited Moscow at the start of March, RIA news agency cited the U.S. embassy in Russia as saying on Monday. Brennan also discussed the observance of the ceasefire in Syria, the agency said. 17

(trucks convoys) Destroyed infrastructure

18 ISIS financial resources Airstrikes effects Destroyed transports (trucks convoys) Destroyed infrastructure Stopped most of smuggling at Turkish border Lost revenue $2-3M/day EXECUTIVE BRIEFINGS source: FATF report ISIS and human trafficking Creating the problem then turning it into a business model EXECUTIVE BRIEFINGS 18

19 Syria crisis 19

Boko Haram attacks 2011-2016 Burkina Faso Mohamed Ibn Chambas,

refuses to transfer power "the consequences are pretty clear".

20 Boko Haram attacks Burkina Faso Mohamed Ibn Chambas, the UN envoy for West Africa, issued a warning that if the army refuses to transfer power "the consequences are pretty clear". "We want to avoid having to impose sanctions on Burkina Faso," he said. 20

21 Burundi U.S warns of possible Burundi sanctions EXECUTIVE BRIEFINGS North Korea Recurring economic aid racket à More sanctions 21

22 Myanmar Democratic transition support à Cautious sanctions lifting Cuba embargo lifted EXECUTIVE BRIEFINGS 22

23 Russian sanctions : what next? 23

24 EXECUTIVE BRIEFINGS Will Iran become a stabilizing force? 24

Three groups within the Iranian elite Want an agreement Rebuild economy End Iran isolation Think Iran will have greater influence Don t need an

acceptable / humiliating Don t want an agreement Ideological reasons (the West cannot be trusted / seeks regime change) Self-interest (directly

are under 25 Source: wikipedia Of population has a mobile phone (thight government control on operators) 68% Source: wikipedia 69% 25% Of Iranian

25 Three groups within the Iranian elite Want an agreement Rebuild economy End Iran isolation Think Iran will have greater influence Don t need an agreement Iran can manage its economy (economy of resistance) Iran influence increased by weakness of surrounding countries Western terms are not acceptable / humiliating Don t want an agreement Ideological reasons (the West cannot be trusted / seeks regime change) Self-interest (directly profits from sanctions) EXECUTIVE BRIEFINGS Population has grown from 40M in 1980 to 75M in M Source: CIA World Fact Book 42% Of population are under 25 Source: wikipedia Of population has a mobile phone (thight government control on operators) 68% Source: wikipedia 69% 25% Of Iranian youth uses a VPN to bypass social media filtering Source: techrasa Unemployment rate for people under 30 (12% average) Behrouz Mehri AFP/Getty Images 25

26 Pasdaran control EXECUTIVE BRIEFINGS Meanwhile, competition already starts EXECUTIVE BRIEFINGS 26

27 EXECUTIVE BRIEFINGS 27

The United States and Russia in the Greater Middle East

MARCH 2019 The United States and Russia in the Greater Middle East James Dobbins & Ivan Timofeev Though the Middle East has not been the trigger of the current U.S.-Russia crisis, it is an area of competition.