Could 2011 be Middle East's 1989? Global Consequences: de Carmoy

London, UK - 30th January 2011, 23:45 GMT

Dear ATCA Open & Philanthropia Friends

[Please note that the views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. ATCA conducts collective Socratic dialogue on global opportunities and threats.]

Domino effects triggered by Tunisia's Jasmine revolution are now convulsing several Arab nations much like the massive impact of Berlin wall’s collapse on Eastern Europe in 1989. How many old leaderships are about to give way? If 1989 is a guide, too many. Fasten your seat belts, it could be a very bumpy ride. On this occasion, most of the world’s critical energy needs are somehow connected to the Middle East, so the consequences are going to be truly global and large-scale. As Victor Hugo observed: "Even armies can't stop the invasion of ideas whose time has come!" or "On résiste à l'invasion des armées on ne résiste pas à l'invasion des idées!"

Collapse of Berlin Wall, Germany, November 9th, 1989

We are grateful to Hervé de Carmoy, a distinguished and long-serving member of the Trilateral Commission, based in Paris, France, and its former European vice-chairman, for his submission to ATCA in response to our eight questions:

Global Consequences

The Middle East may be on the eve of several generalised insurrections caused by a mixture of poverty, hunger, a high level of unemployment and often inadequate leadership. This situation could reverberate on all economies of the world. If this diagnosis is accurate, we must ask the question, who can help? The US and Europe have the knowledge to promote economic development and create jobs but their image is tarnished and they have little surplus money. China has the surplus money and some of the business knowhow, but they are in a tense power duopoloy with the United States and they may be disinclined to intervene. Most oil countries in the Arab world are experienced at disbursing large amount of funds but not at generating sustainable economic growth.

Response to ATCA's Eight Questions

Q1: Financial markets appear not to have fully connected the dots despite spreading revolutions in the Middle East? Why?

A1: It is accurate to say that the financial markets have not yet fully assimilated the increasingly high probability of youth upheaval throughout the Middle East and its impact on the price of oil and on liquidities. They have not done so because they have not given the proper weight to the far reaching implications of tens of millions of Arab citizens arriving on the labour market looking for a job and not finding any. So, the key issue as always is demographics and the world wide quasi freeze on immigration. Immigration was the safety valve for overpopulated areas and as that faucet has been turned off, desperation is on the rise.

Q2: Is this the beginning of a New Age in the Middle East? Tunisia. Algeria. Egypt. Yemen. Jordan? What about the petro-regimes?

A1: It is the beginning of a period where the population explosion of the 1990s to this day is causing young adults to question what they inherit from their fathers by way of opportunities. When confronted with the prospect of a blind alley, where are they going to go? If there is almost no hope, they are going to revolt. We are moving inexorably from mass protest to insurrections. Why is this dangerous? Because extreme poverty breeds extreme violence and hence extremists can infiltrate the insurrection movements and use it to their advantage. This may already be taking place in certain countries in North Africa.

Short term, the petro-regimes may not be as much at risk as the others for they can meet immediate demands for food and fuel. Having said that, there is going to be a general climate of unrest. The young people from the petro-regimes may identify themselves with the young people from North Africa and question whether they ought to be run by their very old and out-of-touch monarchs.

Q3: Is it possible that protests at present will be tolerated to a point, but not allowed to result in any real change, certainly no New Age?

A3: If there is an acceleration of the insurrections one of the key factor will be the quality and loyalty of the police and military to stabilise the situation so that there is enough time for new quality elites to emerge. Time may not be on the side of the public interest if broad based violence prevails taking us towards irrecoverable chaos.

Q4: À la Tunisia, even if we see governments fall, will they be replaced largely by members of the same establishment and little of substance will have changed?

A4: No two countries are the same. Hence any judgment must take into account the specific political, religious and economic parameters of the country. However the critical country appears to be Egypt. If Egypt shows the way and acquires, possibly by phases, but fairly rapidly a leadership that is more modern this will have a stabilising effect on the Middle East. Let us hope that this happens swiftly and without too much bloodshed.

Q5: Will these revolutions unleash anarchy and chaos? It might be that different groups seize the opportunities presented by the power vacuum?

A5: Anarchy and chaos are strong words which should not be confused with social disorders. One has to be realistic and acknowledge that it is almost impossible to change a regime without upheavals and some loss of life. The question then becomes whether the internal process of change can generate solutions that can help the country accept a new leadership better in tune with the requirements of modern times. The key to that question is the military and their inner conviction of what is in the public interest. In that respect the influence of the United States, which has trained officers from all over the Middle East, will be critical.

Q6: Egypt: Mobile networks down. Internet access stopped. Twitter, Facebook, Youtube and other social media no longer working. Protests go on. Resilience?

A6: There have been revolts and insurrections long before the internet came on the scene and they will continue regardless once the momentum is there. There was no internet around in 1776 or 1789. It did not seem to matter then, it should not matter now, once the idea of "Change" is ingrained in the mind-set.

Q7: What are the real causes of digitally driven leaderless revolutions? 1. High unemployment; 2. Food and fuel prices; and 3. Corrupt Leadership?

A7: Agreed. While the digital aspects of the current troubles are new and unique we should not lose sight of the root causes of unrest as pointed out by ATCA.

Q8: If revolutions occur like falling dominoes in Middle-East how much of this contagion will have been caused by Wikileaks, Facebook & Twitter?

A8: As ATCA pointed out in late 2010 and 2011:

a. 2011: Self-Assembling Dynamic Networks and Boundary-less Tribalism, 29th December 2010

b. Tunisia: A Digitally Driven Leaderless Revolution, 15th January 2011

c. How to Achieve Peace? Digitally Driven Asymmetric Conflict via Self-Assembling Dynamic Networks, 23rd January 2011

d. Egypt Revolt post Tunisia: Is a Dam breaking? What happens next? 26th January 2011

e. New Age of Revolutions and Lord Howell - The Edge of Now - Leadership in the New Paradigm, 28th January 2011

The digital revolution is enabling the youth to communicate and to co-ordinate. This is a major amplifier of feelings and emotions, ie, soft power, but it has little to do with hard power. With the exception of extremists, the army usually has the ultimate monopoly on hard power. It has the intelligence network, the weapons, the training and the skilled manpower. Very few successful revolutions have been led by amateurs!

So the central question remains the political maturity of the military establishment. This is demonstrated through a careful support of a new class of leaders committed to act in the public interest of the country. Clearly this is easier said than done, but after decades of lost time we should not underestimate the change-of-mindset at all levels of society.

[ENDS]

Hervé de Carmoy is a distinguished and long-serving member of the Trilateral Commission, France. He was European vice-chairman of the Trilateral Commission, between 2004 and 2010, serving as chairman of the French Group of the Commission for several years. He is presently the chairman of Etam, a 1 billion euro retailer, based in Paris, France, with 3,000 outlets in China alone; and he is also on the board of Tradition, the third largest dealer broker in the world, based in Lausanne, Switzerland. He was the chairman of Almatis, a majority-owned company by Rhône Group. He is a former partner of the Rhône Group in New York and Paris. He is a recipient of the president of France's chevalier de la légion d'honneur. Previously, M. de Carmoy was chairman of the Banque Industrielle Mobilière et Privée (BIMP) and advisor to the chairman of HR Finances in Paris. Educated at l'Institut d'Études Politiques in Paris and at Cornell University in the United States, he began his career at the Chase Manhattan Bank in 1963 and became its director for Europe in 1973. After joining Midland Bank in 1978, M. de Carmoy became director and chief executive international, London and Paris, a position he held until 1988. He was then chief executive of Société Générale de Belgique in Brussels until February 1991. He has also been a Trilateral Commission task force co-author of a 2007 report on "Israel, Iran and the United States." He has written several books on banking and business strategy, notably "La Banque du XXI ème siècle" (1995) and "Conduire le changement" (1998). He has also been professor of international business strategy at the "Institut d'Études Politiques" Paris until 2001.

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