BICOM Forecast: The Middle East in 2017

Executive Summary:

  • Twelve months ago, BICOM’s 2016 Forecast: The challenges of a disintegrating Middle East identified a series of interlocking regional trends: these included fractured, dysfunctional, weak states with eroding borders; the rise and strengthening of sub-state actors; US retrenchment; Russia’s return to the region; Iran’s post-nuclear deal regional ambitions; mass refugee movements; and long term structural challenges surrounding issues of demography, water and energy. Twelve months on, many of these trends have persisted and become exacerbated, creating a highly dangerous security environment.
  • These alarming regional trends coalesce with a Western world with serious challenges of its own and a desire to focus on domestic priorities. Much of Europe’s energy will likely be taken up with elections in the Netherlands, Germany, France, Czech Republic and possibly Italy, the continuing refugee crisis, negotiations over Brexit, and potential Russian actions seeking to destabilise the EU.
  • The coming year will likely see the territorial defeat of ISIS in Iraq and the strengthening of Bashar al-Assad in Syria. These events raise a number of challenges for the UK and the West, namely the rising threat of terror attacks in Europe, the return of foreign fighters, governance and reconstruction in former ISIS-held areas, greater numbers of refugees, and the encouragement of the Islamic Republic of Iran in its search for regional influence.
  • Other potential scenarios could create serious security challenges for Israel and its neighbours Jordan and Egypt. If the Iranian-Hezbollah axis were to take over the area in southern Syria bordering Israel and Jordan, it would pose a significant threat to both countries. In addition, ISIS fighters relocating to the Sinai Peninsula following the group’s territorial defeat in Iraq would constitute a grave national security challenge to both Israel and Egypt.
  • The policy direction of the Trump administration in the Middle East is the big unknown but certain themes will likely characterise Trump’s Presidency. He will be open to Israel’s concerns and reject any efforts to exert pressure on it; he will seek common ground with Russia although it remains unclear whether a grand bargain will be achievable over Syria; he will be inherently sceptical regarding the Joint Comprehensive Plan of Action (JCPOA) nuclear deal with Iran; and he firmly oppose Islamism in all its shades, which bodes well for US-Egyptian relations under Abdel Fattah al-Sisi.
  • Additional issues and challenges in 2017 and beyond are the economic and security challenges facing Egypt, the significant reforms underway in Saudi Arabia, the challenge of maintaining the viability of the two-state solution, and preventing the issue of Palestinian succession from turning into a crisis for the Palestinian Authority’s (PA) existence. Israel’s warming ties with many Sunni states – with which the UK already has strong relations – provide an opportunity for building a new pillar of regional stability and should be encouraged.

The full Forecast is available as a PDF below.

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