Tag: Middle East
Bi-Weekly Geopolitical Report – Middle East: Land of Fault Lines (May 6, 2024)
by Daniel Ortwerth, CFA | PDF
Conflict in the Middle East is one of the most persistent themes in current events. Not only is this true today, but Middle Eastern discord has dominated the news flow throughout most of our lives. At Confluence, we recognize that this enduring pattern of strife reveals the presence of many major fault lines that run through Middle Eastern society, politics, economics, and relations with the rest of the world.
A fault line is defined as a “divisive issue or difference of opinion that is likely to have serious consequences.” A major fault line is one in which the competing forces have both deeply embedded positions and the resources to support those positions. Many issues of this type characterize those in the Middle East, which explains why conflict in the region is so common despite repeated attempts at resolution. Investors must be prepared for this trend to endure for the foreseeable future, which will continue to meaningfully impact global affairs.
This report briefly reviews the main fault lines that define the Middle East from a geopolitical standpoint. This is not a complete list, but rather it is a selection of those we consider most enduring and impactful. Confluence does not take positions on these issues, but we will summarize and show how they produce complexity. We arrange these prominent fault lines in three layers: the ancient fault lines, the more modern ones, and the present-day issues that are currently causing “geopolitical earthquakes.” While these earthquakes do raise the risk of escalation into a broader regional war, we remind readers that the region has often witnessed this increased level of risk before without necessarily leading to further escalation. Rather than trying to predict the outcome, we recommend that investors pay attention to key implications, which we will highlight at the end of the report.
Don’t miss our accompanying podcasts, available on our website and most podcast platforms: Apple | Spotify
Bi-Weekly Geopolitical Podcast – #37 “Investment Implications of the Israel-Hamas Conflict” (Posted 10/30/23)
Bi-Weekly Geopolitical Podcast – #35 “The Oil Weapon Returns” (Posted 10/2/23)
Confluence of Ideas – #19 “The 2021 Geopolitical Outlook” (Posted 2/9/21)
Weekly Geopolitical Report – Turkey Lashing Out (August 5, 2019)
by Patrick Fearon-Hernandez, CFA
Here at Confluence, we write a lot about the rise and fall of hegemonic states – those great nations that develop enough power and influence to dominate the global economy, or at least some region of it. These superpowers use their extraordinary military might and other levers to impose order on their sphere of influence, providing the security necessary for international trade. They also provide the reserve currency that acts as a common medium of exchange for that trade. These hegemons therefore provide the foundation on which a global or regional economy can function.
During the Cold War, the United States accepted leadership of the Free World and acted as hegemon for the non-communist bloc. After the disintegration of the Soviet Union and the demise of Soviet-style communism in 1991, the United States became a global hegemon. What is now less appreciated is that the burdens of hegemony and the demise of Soviet communism have eroded the willingness of U.S. citizens to maintain their country’s leading role in the world. At the same time, the removal of the Soviet threat has encouraged other nations to once again assert their own interests and the freedom of action they sacrificed to come under U.S. protection during the Cold War. This week’s report looks at one of the best examples of that dynamic, the recent discord between Turkey and the United States, which has culminated in Turkey’s defiant purchase of a Russian air-defense system. We will review Turkey’s political dynamics and why its president, Recep Erdogan, has implemented a more assertive foreign policy that is putting the country at odds with the United States and the West, in general. As always, we conclude with a discussion of the resulting market implications.
Weekly Geopolitical Report – The Mid-Year Geopolitical Outlook (June 24, 2019)
by Bill O’Grady
(Due to the Independence Day holiday and a short summer hiatus, the next report will be published July 15.)
As is our custom, we update our geopolitical outlook for the remainder of the year as the first half comes to a close. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape for the rest of the year. It is not designed to be exhaustive; instead, it focuses on the “big picture” conditions that we believe will affect policy and markets going forward. They are listed in order of importance.
Issue #1: Deglobalization
Issue #2: Election Meddling
Issue #3: Iran
Issue #4: China
Weekly Geopolitical Report – The Mid-Year Geopolitical Outlook (June 25, 2018)
by Bill O’Grady
(Due to the Independence Day holiday, the next report will be published July 9.)
As is our custom, we update our geopolitical outlook for the remainder of the year as the first half comes to a close. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape for the rest of the year. It is not designed to be exhaustive; instead, it focuses on the “big picture” conditions that we believe will affect policy and markets going forward. They are listed in order of importance.
Issue #1: America’s Evolving Hegemony
Issue #2: Rising Western Populism
Issue #3: Rising Authoritarianism
Weekly Geopolitical Report – The Mid-Year Geopolitical Outlook (July 10, 2017)
by Bill O’Grady
As is our custom, we update our geopolitical outlook for the remainder of the year as the first half comes to a close. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape for the rest of the year. It is not designed to be exhaustive; instead, it focuses on the “big picture” conditions that we believe will affect policy and markets going forward. They are listed in order of importance.
Issue #1: The Political Fragmentation of the West
Issue #2: North Korea
Issue #3: An Unsettled Middle East
Issue #4: A Resurgent Russia
Issue #5: China’s Financial Situation