The proxy war between the Kingdom of Saudi Arabia (KSA) and Iran is intensifying and our fear is that it may ignite a regional conflict with far-reaching global consequences, especially if Russia and the US take opposite sites. The two Middle Eastern countries have completely divergent political and religious visions, while their struggle for power and influence is signifying the primacy of their goals to shape the region in their image. The KSA is a Sunni monarchy while Iran has a parliament but the ultimate authority is religious.
With the defeat of ISIS, Iran is seeking to expand its influence in Syria and Iraq, while the KSA is trying to restrict and counter that influence by fighting a war in Yemen while also trying to isolate Qatar. Needless to say, at this point there does not seem to be a single country in the region which has not been involved in that proxy war.
This evolving divide will intensify the Middle East’s great game of Sunni vs. Shia conflict, but this time – and given the geopolitical developments elsewhere – a conflict is brewing in which the major powers are positioned to take a stand. (The latest development is the US decision to unfreeze Yemeni assets yesterday as a sign of support to the KSA.) As power is consolidated in the KSA in the hands of the Crown Prince (Mohamed bin Salman a.k.a. MBS), regional countries such as Yemen, Qatar, Lebanon, Bahrain, Iraq are on fire (literally or metaphorically).
The KSA is using its financial and military muscle to woo Sunni allies to its side. Iran, on the other hand, is using military shipments and special forces/training to expand its influence in the region. Iran’s vision coincides with the Russian centuries-old ambition which is access to the warm waters of the Mediterranean. It envisions such a reach through its control of Syria and Lebanon (in the latter case through its Hezbollah proxy), and hence the abrupt resignation of Lebanon’s Prime Minister while visiting the KSA.
China is expanding its influence with the “One Belt, One Road” initiative. In the Middle East corridors of power, the great game revolves around oil, religious divide, and regional pushing to other countries in the form of taking sides. Our fear is that the maturity of the times is such that the world major powers will also take sides, which makes the great game much different than its previous versions.
War has been the engine of finance through the ages. This time is not shaping to be different. The overvalued markets (both equity and bonds), as well as over-indebtedness of nations and corporations along with the myriads of toxic assets and derivatives, always find opportunities to deflate in times of war. It’s called the game of eight!
At the Corridors of Power: Markets and Geopolitical Developments
Author : John E. Charalambakis
Date : November 15, 2017
The proxy war between the Kingdom of Saudi Arabia (KSA) and Iran is intensifying and our fear is that it may ignite a regional conflict with far-reaching global consequences, especially if Russia and the US take opposite sites. The two Middle Eastern countries have completely divergent political and religious visions, while their struggle for power and influence is signifying the primacy of their goals to shape the region in their image. The KSA is a Sunni monarchy while Iran has a parliament but the ultimate authority is religious.
With the defeat of ISIS, Iran is seeking to expand its influence in Syria and Iraq, while the KSA is trying to restrict and counter that influence by fighting a war in Yemen while also trying to isolate Qatar. Needless to say, at this point there does not seem to be a single country in the region which has not been involved in that proxy war.
This evolving divide will intensify the Middle East’s great game of Sunni vs. Shia conflict, but this time – and given the geopolitical developments elsewhere – a conflict is brewing in which the major powers are positioned to take a stand. (The latest development is the US decision to unfreeze Yemeni assets yesterday as a sign of support to the KSA.) As power is consolidated in the KSA in the hands of the Crown Prince (Mohamed bin Salman a.k.a. MBS), regional countries such as Yemen, Qatar, Lebanon, Bahrain, Iraq are on fire (literally or metaphorically).
The KSA is using its financial and military muscle to woo Sunni allies to its side. Iran, on the other hand, is using military shipments and special forces/training to expand its influence in the region. Iran’s vision coincides with the Russian centuries-old ambition which is access to the warm waters of the Mediterranean. It envisions such a reach through its control of Syria and Lebanon (in the latter case through its Hezbollah proxy), and hence the abrupt resignation of Lebanon’s Prime Minister while visiting the KSA.
China is expanding its influence with the “One Belt, One Road” initiative. In the Middle East corridors of power, the great game revolves around oil, religious divide, and regional pushing to other countries in the form of taking sides. Our fear is that the maturity of the times is such that the world major powers will also take sides, which makes the great game much different than its previous versions.
War has been the engine of finance through the ages. This time is not shaping to be different. The overvalued markets (both equity and bonds), as well as over-indebtedness of nations and corporations along with the myriads of toxic assets and derivatives, always find opportunities to deflate in times of war. It’s called the game of eight!