Overview
US foreign policy in the Middle East dates from its post-WWII Cold War with the USSR over spheres of influence. Throughout the second half of the 20th century, Israel was central to this policy.

Today, US policies are heavily influenced by economic interests. Despite now sourcing only 10% of its oil from the Gulf, the US continues to benefit from Saudi arms acquisitions and regional trade and industry, which run to many tens of billions of dollars. It is unclear how the US aims to secure these interests in the fast-developing chain of events in the Arab world.

The Israeli economy and military are heavily influenced by the US alliance. Coupled to this is Israel’s own agenda of territorial expansion, together with a pursuit of racist and exclusionist policies toward Palestinians under its control. Cast as an international pariah, Israeli society is permeated by a sense of moral victimhood, generating a national mindset of aggression and violence.

The Israeli government, lacking any peace agenda, is unsure how to respond to the current shifts in the balance of power, and is exhibiting a growing sense of panic. Israeli politicians have threatened various measures, from another Cast Lead to full annexation of the West Bank. Breakaway Jihadist groups could provide Israel with pretexts for such steps.

The US has recently announced yet again that the Israeli-Palestinian status quo is untenable and that it will now push for a settlement. Faced with the wave of revolutions for democracy, will the developing instability spur Obama to seize this moment in the tide of affairs?

1. Spheres of influence

In the years following World War II, Pan-Arabism gained influence in the Middle East and North Africa. Led by Gamal Abd el-Nasser’s Egypt, backed by the USSR, and inspired by the FLN’s anti-colonial revolt against the French in Algeria, this movement was seen by some as a potential for revolution across the Middle East and North Africa. The USA, UK and France responded by backing specific autocratic regimes in the region, in a bid to secure their military and oil-related interests in the gulf region.

Even before Israel’s overpowering victory in the 1967 war it became a key ally in this policy, serving as a strategic local foothold for NATO against the USSR and its allies, as well as directly supplying ‘special forces’ to aid the French against the FLN and against the liberation movement in the Congo. France supplied Israel with nuclear weaponry, which, along with US military aid and funding, turned Israel into a leading global military power.

In addition to providing armed support for French imperial interests, Israel joined the British-French military action against Nasser’s Egypt in the 1956 Suez crisis, attacked Syria in 1966 and continued to act on behalf of NATO interests in the region.

The aftermath of the 1973 Israeli-Arab war brought a shift in political alignments in the region, led by post-Nasserist Egypt. Sadat’s Egypt turned from the USSR to the US and, gaining $1.5 billion per annum in US aid to the Egyptian military (the largest sum after Israel), the way was short to a peace agreement with Israel. A re-alignment in Arab attitudes to the US and to Israel ensued; Pan-Arabism declined and several Arab states joined the US-led bloc.

Following the collapse of the USSR Jordan joined the trend started by Egypt, signing a peace accord with Israel in 1994, thus securing two out of four of Israel’s borders with its neighbours.

2. Boosting Israel

The US has lavished its ally with $27bn aid over the past decade, with a total of $110bn from 1949 – 1997. The annual amount of aid granted to Israel is $3.5bn, and this year, in response to the wave of democratic revolutions, Israel has requested a further $20bn. In addition the USA boosts Israel’s foreign reserves, which by 1977 had totalled $10bn. Still to be added is a further $50bn as Israel lends the US large sections of these grants in the form of bonds until they are called on, and on which the US pays commercial rates of interest.

The EU’s association with its neighbours became the European Neighbourhood Policy (ENP) in 2004,“offer(ing) political association and deeper economic integration.” The nature of this ‘political association’ was indicated in March 2010, by Stefan Füle, the EU’s Commissioner for Enlargement and the European Neighborhood Policy, who declared that Tunisia was “in many respects, an example for the region,” just a few months before the uprising that ousted the Tunisian autocratic leader Ben Ali. Indeed it was, but not as meant. The EU is the primary trading partner for both Israel and Egypt. Israel is tightly integrated into the EU economy and equally embedded in the US economy. The volume of Israeli trade with the EU was 26 billion Euros in 2008/9.
In arms trade, eleven of the top twenty weapons dealers to Israel are EU states.

3. Oil and Arms

The US now obtains only 10% of its oil needs from the Gulf States and has diversified its sources to Alaska, Russia, South America and Nigeria, as well as local resources in the US. There is significant growing investment in alternatives to fossil fuels and an increase in substitution, using US and Canadian natural gas, especially shale oil and gas. The EU is still a main Middle East oil consumer, obtaining 38% of its needs from Gulf States, whilst Italy got 28% of its oil from Libya before the recent events there.

However, oil, transacted in dollars, is still the major financer of US, UK and EU arms industries.

The United States sold more than $80 billion in military equipment to Saudi Arabia between 1951 and 2006. On 20 October 2010, the US State Department notified Congress of its intention to make the biggest arms sale in American history - an estimated $60.5 billion purchase by Saudi Arabia, “a considerable improvement in the offensive capability of the Saudi armed forces.…the arms transfer would increase ‘interoperability’ with U.S. forces”. Thus America is deeply embedded in the ME war economy, as is the EU.

4. The economic crisis

The United States’ Middle East wars have cost it a staggering $1.12 trillion to date, with each soldier costing half a million US dollars annually. Meanwhile, the recent financial and banking crisis has obliged Obama to aim for a US budget cut of $1.4 trillion.

It has been argued that armaments expenditure and war during economic expansion offset deflationary pressures (where investment outstrips demand) and boost high profits in specific sectors of the economy and society, and that during recession arms expenditure, through deficit funding (increasing the national debt) can boost the economy, in Keynesian fashion.

But armaments divert resources from productive investment and social schemes. In the current recession, national debt in the UK and the US has reached crisis proportions, and borrowing further sums for armaments expenditure is no longer an option. On the contrary, there is a need for the huge debts to be reined in.

Reduced military conflicts, the development of Western-style democracies and their economic expansion, would mean expenditure on consumer goods, creating a significant ‘peace dividend.’

The recent financial crisis had as its epicentre the EU and the USA, but the peripheral countries were hit hardest. Whilst so-called ‘second-tier countries’ (Greece, Ireland, Portugal and Spain), which were also hit hard, had sufficiently flexible political structures to contain the social reactions, the neighbouring countries of North Africa , with rigid dictatorships and high levels of poverty, experienced the highest price rises. A Tunisian slogan at the demonstrations read, “Bread is our red line, beware our hunger and our fury.”

It was this, combined with years of humiliation, which gave a final push to the uprisings across North Africa, the Middle East and the Gulf.

Their repercussions have been felt far and wide, most recently reaching also the Occupied Palestinian Territories of the West Bank and Gaza, in the form of a popular call for reconciliation, which was answered last week in Cairo by the signing of a unity accord between the two rival factions, Hamas and Fatah.

5. The Arab uprisings and US and EU options for response

The US and the EU seem to be teetering between an attempt to curb the uprisings or prevent them spreading, and an attempt to more discreetly manipulate their results, harnessing them to protect their interests.

One scenario for the western response would be to support existing regimes. This might entail approval of brutal suppression in some countries, and temporary concessions and apparent political change in others, followed by slow reversion to an authoritarian status quo, with the option of improved economic exchange and development.

The persistence of a determined movement in Arab countries that is able to overthrow oppressive regimes could lead to an alternative scenario.

It is commonly assumed by western analysts that the Moslem Brotherhood poses no immediate threat, thus the revolutions in North Africa and Egypt need not present an ‘Islamic threat’ to western interests and there is instead a prospect of social and political integration with the West, and an opportunity to develop Western-allied liberal social democracies via a new ‘Marshal Plan.’

Egypt, Tunisia and Jordan have high levels of educated populations; they also have, as do other Middle-Eastern and North African countries, a large unskilled workforce. These rich pools of labour offer a potential for investment and economic exploitation by international enterprises. The model would be Portugal 1974, when a dictatorship was swept aside by a revolutionary movement. For 18 months there existed dual power, but despite strong radical, socialist components, western financial and market interests gained the initiative, paving a similar path for Spain after the death of the fascist Franco, and both countries ended up joining the EU.

6. On the ground

In Tunisia and Egypt, a Western ‘hands-off’ policy has been maintained, at least in public. On the ground there is so far no serious bid for leadership being made by Islamic fundamentalist groups. In Egypt, El Baradei, social democrat and peace prize winner, has been a clear focus, together with other moderate groups and the trade unions – which have organized very significant industrial action, increasing the power of the opposition. In Tunisia the General Trade Union branches, together with social democratic movements, have been leading the action.

But the changes there are by no means secure; there is currently something resembling ‘dual power’ in Egypt: an unstable balance between popular power combined with the trade unions on the one hand and the military, still intact and waiting in the wings, on the other.

A good litmus test is to observe foreign policy, and more specifically, security arrangements at the Rafah Crossing with Gaza. Rhetoric aside, there has been little easing of the control.

Internally, the interim government’s response to continuing youth demonstrations in Tahrir Square is also telling. Reports of prohibitions, violent dispersals, arrests and torture by the military police are persistent. When Egyptian demonstrators attempted to reach Gaza en masse via Rafah Crossing they were turned back by the Egyptian military. A mass demonstration of support for Palestinians was held in Tahrir Square on Saturday instead.

Saudi Arabia and Bahrain are two examples of a very different Western response. It would seem that at least for the time being, the US will do all in its power to maintain the Saudi leadership and power structures intact. The Gulf island of Bahrain, a regional base for the US navy and air force and a wedge between Saudi Arabia and Iran, has seen both rebellion and increasingly brutal repression by the regime. Despite reports of escalating violations there, the US and EU have given tacit approval to Saudi Arabia to send in its troops to quell the rebellion.

Reportedly, before the UN agreement on the attack on Qaddafi’s forces in Libya, Obama asked the Saudis to serve as a conduit for arms to Libyan rebels.

This support for Saudi Arabia serves as a safety-net in the event that the new revolutions develop beyond (Western) control.

And what to make of the USA, UK and French support for the Libyan opposition against an unpredictable dictator, and the UN endorsement of this action, with the unprecedented conference in London on 29.3.2011, attended by 40 bodies and countries, including the US, Canada, Australia, the World Bank, the UN Secretary General, the Arab League, the Islamic Conference, and virtually the whole of the EU?

With respect to Libya, reading between the (battle) lines, the US/French/UK NATO alliance appears to be preparing for a division, with a democratic East, and, with Qaddafi removed, an oil-producing West ruled by a compliant autocracy. In line with this scenario Admiral M. Mullen, chair of the US Joint Chiefs of Staff, appeared to be describing a military decision when he stated the conflict was “moving towards a stalemate.”

7. The Middle East and Israel before the uprisings

The Middle East became increasingly unstable in the period following the collapse of the Soviet bloc. Social deprivation and US support of undemocratic regimes have driven the growth of radical Islamic groups, creating, for example, an open door for Ahmadinejad in Iran, with its nuclear potential.

Historically Israel/Palestine has been at the core of regional tensions. By allying itself to Israel the US necessarily found itself allied to Israel’s policies towards the Palestinians. Israel’s expansionism and belligerence created its insecurity and thus its need to be heavily armed. A heavily armed and dependent ally in the region suited US policy very well whilst it was managing its relations with a variety of autocratic regimes charged with keeping the lid on popular rebellions. But the Palestinian ‘cause celebre,’ always central to Arab anti-imperialist movements in the region, took on a new role in the context of the Iraq / Afghanistan wars and the US war against Islam. The effects of this were succinctly explained to The White House by General Petraeus - previously the overall commander in Iraq and now of Afghanistan - who informed US President Obama that Israel’s treatment of the Palestinians put his men at risk in Iraq. In other words, Israel functions as a recruiting sergeant for Bin Laden.

This analysis comes as no surprise, since Israel has played a policing role for NATO for many years. It was acting not only for its own interests when it attacked Lebanon and the PLO in 1982, and Lebanon and Hizballah in 2006, and it propped up the western-friendly King Hussein of Jordan long before it signed any peace agreement with him.

Locally, many Israeli tactics have echoed those of the US in the region. For years Israel restricted, attacked and destroyed Fatah-led PLO infrastructures and leaderships, encouraging the growth of Hamas as its radical alternative. When faced with the resultant victory of Hamas in democratic elections, it responded with increasingly brutal attacks, including incursions, assassinations and drones, and fostered ‘security cooperation’ with the PA in action against its Hamas rival, thus engendering mistrust and divisions within the Palestinian body politic.

8. Israeli response to the uprisings

Israel has failed so far to formulate a strategic response or policy regarding the emerging Middle East order. Panic has characterised most of its short-term response, as well as increasing aggression, at least in rhetoric, regarding Palestinians.

Israel has for some time been threatening another Cast Lead attack on Gaza. As a possible response to the Palestinian Authority’s plan to obtain UN recognition of a Palestinian State this September, some members of the coalition have suggested a full annexation of the West Bank.

The total absence of any easing of the repressive measures either in Gaza or in the West Bank has offered nothing to Hamas, who are under pressure from Jihadist breakaway groups to resume hostilities with Israel. If this provides Israel with a peg on which to hang a second Cast Lead it could well backfire, igniting the whole region and possibly spurring the US into pre-emptive action with a push for a Palestinian settlement.

Targeting moderate Jewish supporters of Israel in the US, members of the US administration have been at pains to point out how misguided this approach is. During the J Street conference in March 2011, Dennis Ross, Special Assistant to the President and Senior Director of Central Regional Policy, stated that the US had made a strategic miscalculation in backing the authoritarian regimes in the ME, that the nature of the rebellions is characterized by joint Christian/Moslem programs, and that the US has therefore allocated $150million to assist institution building among civil society.

Ross stated that ‘Repression does not pay’, that each and every government in the Middle East has responsibility for political freedom and human rights, and that the White House has been looking at regional reform over the last 6 months. He reiterated firm support for Israel, but stated that ‘it is not acceptable to get stuck in an unacceptable status quo’ and that the longer the impasse lasts the more difficult it becomes to solve, for example, the possibility of a two state solution in the context of demographic changes. He stated that reform and peace go hand in hand. He repeated that the status quo is unsustainable, that the Peace Treaty between Israel and Egypt did not aid peace with the Palestinians and concluded by saying that genuine democracy in Egypt combined with a genuine peace with Israel will significantly aid a resolution with the Palestine Authority.

Clearly, this was intended for Israel’s ears, but in case it didn’t register Hilary Clinton has just repeated it, “The status quo between Palestinians and Israelis is no more sustainable than the political systems that have crumbled in recent months…. the only way to meet both people’s aspirations was through a two-state solution.”

9. The US, the Middle East and Israel today: realigning interests?

The US has had to recognize the powerful movements for democracies.

Repressing the revolutions across the region would entail commitments on the scale of the Iraq/Afghanistan interventions, and this is neither economically nor politically an option.

At the same time, the establishment of even the tentative forms of democracy in the region are having a major impact on the Palestinians, including the Fatah-dominated Palestinian Authority, Hamas authorities in Gaza, and Palestinians both in the OPT and in Israel.

Egypt has stated it will open the Rafah crossing. If this happened, the Gaza economy and Hamas’ influence could expand exponentially, presenting both an internal and external threat to Israel, which, concerned about arms imports, could well (re)occupy the Philadelphi corridor along the Gaza-Egypt border. This would shut down the tunnels and much of Hamas’ income, who, driven to extreme policies could ignite the whole region.

A genuine process for a just settlement of the Palestinian question would pre-empt such a scenario. If achieved it would, combined with modest democracies in the Middle East and North Africa, weaken the rationale for the current sabre-rattling regime in Iran, where there have been significant street demonstrations (brutally suppressed) and where the forces of social democracy might eventually gain the ascendancy.

Such calming of the Middle East political environment would assist the eventual withdrawal of the US military from Iraq and Afghanistan, and the consequent release of war expenditure would afford the west the opportunity to provide support for the new democracies and USA and EU growth, particularly in the form of investment in and trade with the region.

It remains to be seen whether this vision is on Obama’s agenda. US Middle East envoy George Mitchell has just tendered a dramatic resignation ahead of a key meeting on 20 May between Obama, Jordan’s King Abdullah and Israeli Prime Minister Benjamin Netanyahu in Washington.

The US has played a central role in building fortress Israel. It is going to be a tough nut for Obama to crack. Does he have the will and the political resources to take “the tide of affairs on the flood” and to achieve a historic re-shaping of US foreign policy?

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