Pepe Escobar, David Samuels and David Goldman

Key takeaways

  1. No-one will win in Syria because none of the external actors wants any side to win – except for the Obama administration, which is ineffectual. The Saudis, Turks, and others will use the Muslim Brotherhood as cannon fodder in Syria but will never let them get close to real power. In Egypt, the armed forces are seeking to put the burden of a worsening economic crisis on the Muslim Brotherhood government. The only real friend the Muslim Brotherhood has is Barack Obama, and he isn't in charge.
  2. Washington's much-vaunted reliance on Turkey as an ally in the region is delusional. Turkey's position is inherently weak. Saudi Arabia and Russia are promoting the image of a strong Turkey to cover their own weakness. The position of the Syrian Kurds has become a major embarrassment and potential threat to Turkey.
  3. America's energy policy in the region has failed because America doesn't have an energy policy. China is the big winner in Africa and Central Asia at America's expense.
  4. What it means that no one on the call knows the name of the US Secretary of Energy.

Syria Update: Who Wants the Muslim Brotherhood To Have Power?

Pepe Escobar: The Syrian government has cleared one of the key neighborhoods where the rebels were in control. The rebels said they were controlling 20% of the city, which doesn't make sense to me. Aleppo has 2.5 million citizens, the suburbs are very spread out, this means they were controlling 400-500,000 thousand people, in different neighborhoods – and that's very hard to do.

The government's strategy is to clear one neighborhood at a time. It's going to be very bloody because they are going to use tanks and helicopters gunships. At least 200,000 people already left, some people went to the border and some went to the Sunni heartland. There is a mixed population living in Aleppo – composed of Alawites, Kurds and Christians. If the rebels continue to advance at the pace they have been for the past five to six weeks, and they keep receiving more anti-tank RPGs (effective Russian ones) in large quantities, the Syrian government is not going to able to clear the neighborhoods of rebels in a few days like they say they will.

David Samuels: There isn't any functioning civil authority in these places. So what does it mean to "win the battle of Aleppo"? You send in tanks, they shoot some people, you blow up some houses, 20 fighters get killed, the other 60 pull out and so then you've "won" the battle of Aleppo– except the city is in ruins and the population has fled, there is no functioning civil authority, and the moment you pull out the tanks, more people are going to form themselves into some entity with a flag and say they control the city. People have been saying for months "oh this is going to be dominated by Al-Qaeda, the Salafists are coming in," and people have been discounting that. But now The New York Times seems to be signing-off on the thesis that this is actually happening, in part because that's what the Saudis and the Qataris are paying for: They're paying for Salafists to have weapons, they're not paying for secular socialist Kurds to have weapons.

Goldman: Syria looks like it's becoming a dumping ground for all the unwanted militants hanging around everywhere else in the world. It's the Russian front for jihadists.

Escobar: That's why the Iraqis aren't letting the Syrians into their country.

Goldman: No, they're sending the people they don't want to Syria. This is consistent with the presumption that the Saudis, Qataris, and Turks want to make it impossible for Assad to govern but without actually making it possible for anyone else to govern. If any of those people were to form a government they wouldn't like them.

Escobar: The elements of the FSA are very good at bickering among themselves, but their only platform is "we want regime change now". There isn't any hint of a political debate about the future of the country or what kind of government they're going to have, if there are any qualified people they would appoint to be ministers, nothing, absolutely nothing. And I'm sure if there was a Gallup Poll in Syria tomorrow, with everybody, in the big cities, in the Sunni plain, in the Alawite mountains, along the border with Turkey, you would probably get like 90 percent rejection of the Syrian National Council. The secular parties are wacko Marxists. The only ones who talk to the so-called "international community" or even to Kofi Annan for that matter are the Syrian National Council, which is distrusted by the majority of the population.

Samuels: But this points to a larger problem in the concept of Arab Spring, which was presented in the West as a positive set of revolutions. But what if it was simply,the decay of these existing autocratic, kleptocratic, hereditary regimes that are ruling half these countries? Those things collapse; there is no real civil society underneath. There is no set of ideas that impelled a revolution, but simply a profound dissatisfaction with being stolen from, with stagnation and with the lack of jobs. People say "revolution" "Arab Spring" it all sounds pretty hopeful, but it looks like what you actually see in many of these countries is a continuing process of social fragmentation and atomization.

Goldman: I agree with that, and your observation brings up a second order problem: who wants the Muslim Brotherhood to take power? The Muslim Brotherhood obviously does, the Saudis don't and the Turks don't, for different reasons. The biggest supporter the Muslim Brotherhood has is Barack Obama. But Obama has certain limits to what he can do because it's an election year.

Turkey and Pipelinistan

Samuels: I still have not figured out to my satisfaction the relationship between the Turks and the Obama administration. From what I hear, Hillary Clinton at least, supposedly thinks her opposite number [Foreign Minister Ahmet Davutoğlu] is a moron. And it doesn't seem like they're deluded that Erdogan is someone that he's not. Everyone knows that Erdogan is prone to these fits of rage, that the Ergenekon scandals were a bunch of trumped up hooey, and that the Ottoman Empire won't be restored anytime soon. Everyone also knows that the vaunted Turkish economy is a bit of a bubble. So when I look at this I think there must be some larger overriding economic and strategic interest in these close ties that the US has been pushing with Turkey. What's the hard economic interest the US is pursuing there?

Escoabar: Very good question. I will try to answer from an energy point of view. Basically starting with the first Bush administration, what they wanted from Turkey is to ideally isolate Iran in terms of distribution of energy from southwest Asia towards Europe. This is practically impossible for a number of reasons. First of all, in terms of energy, Turkey depends on Iran's oil and gas as a transit country between southwest Asia or the Middle East and Europe. The Turkish energy policy basically boils down to "we are the crossroads" we are in the center of the action, in terms of the Caucasus, Asia, we don't have oil and gas, in fact Turkey imports 97% of their oil and 93% of their gas. But they are surrounded by the major powers that produce oil and gas in the region. So they need a working relationship with their rivals, even if they don't agree in political terms.

At the same time, Turkey cannot antagonize Russia, because Russia is now their number one trade partner, and they depend on the oil and gas that they buy from GazProm. What does Erdogan think in Ankara? If we can have a working relationship with both Russia and Iran, we build ourselves as a transit energy country to the Europeans, we sell to the Europeans the idea that if they want to break their dependency on Gazprom, which they are always talking about in Brussels, they can rely on us as a transit country bringing gas in from Turkmenistan and from Iran. Or even from Iraqi Kurdistan. At the same time they want to bypass Iran from a geo-political point of view. To establish a purely commercial energy relationship (not a political alliance) and this will more or less appease our friends in Washington. This is what they have been thinking and trying to apply for ten years now. The framework is the book that [Foreign Minister] Davutoglu wrote in 2000 - The Zero Problems with our Neighbors doctrine.

The problem is the relationship with Iran, especially after the sanctions this year, now they don't know where this is heading. They don't know if they try to seal some kind of deal with Iran on an energy angle and how Washington would view that. Washington already said: "we don't want any deals, at least not for the moment". Russia is telling Turkey, in terms of geo-political power play in the Middle East, in terms of regime change, we don't support you. And be very careful because if you antagonize our interests in terms of building pipelines that bypass us (GazProm from Russia), you're going to be in trouble.

This thing that happened three weeks ago in Irbil in Iraqi Kurdistan, it is very important in my opinion. Because what Turkey has been trying to organize for the past few months crumbled completely, which was the regime change story in Syria from a Turkish point of view. The Assad government basically struck a deal with the Syrian Kurds and the deal was brokered by Barzani from Iraqi Kurdistan. The deal was brokered and signed in Irbil on July 10th. So the deal was, on the part of the Assad regime: I know that you don't support us in Damascus, and at the same time we know that you don't support the opposition even though you are nominally a part of the opposition. But what we propose is we leave you alone in northeast Syria, and in return you don't interfere and you don't support the opposition in the Sunni plains, in northern Syria or even in Damascus and Allepo. And then you can have Kurdish media, you can teach Kurdish in schools, if there are any political prisoners we're going to release them, you're going to have semi-autonomy in your region. So the Kurds say "OK, Good!" Because it is exactly what they wanted from the beginning, and they don't trust the Syrian National Council. The people who control the Syrian National Council, they are hardcore Sunnis with some Salafists infiltrated among them. They don't even recognize that the Kurds are an integral part of the Syrian state.

So the Syrian Kurds they look at this and say "hmmm interesting maybe we can do the same thing" - except instead of a relationship between Syrian Kurdistan with Turkey we can do it with our cousins in Iraq, so Iraqi Kurdistan can help us as well. They can help us even in terms of building pipelines, and then depending on the next government in Damascus, we can have a cut in terms of being a transit country between Iraq and the Eastern Mediterranean. So if you build a pipeline from Kirkuk through Syria to the Eastern Mediterranean, depending on what the next government in Damascus is going to be, the central government gets a cut, but also the regional government, the Syrian Kurd government also gets a cut.

And honestly, Ankara will freak out completely. What are we going to do? These people are going to harbor PKK guerillas, not only Iraqi Kurdistan but also but also Syrian Kurdistan. They are going to do deals with Iraqi Kurds bypassing us. And also sooner or later they are going to have guerilla cells all over the place and they're going to start linking with the PKK in Anatolia as well, and there going to dismember our country. So this is what they are thinking in Ankara.

For me the most spectacular aspect of all this is that apparently the Turks never saw it coming. But it was so obvious. Especially for the past few months. It was one of the few cards that the Assad regime had left to play.

Samuels: My question for you is, if you look at US interest in terms of equipment and pipeline materials, where are US companies most deeply involved now and what are the links to Turkey? I resist the idea that Barack Obama embraces Turkey as America's partner and the Muslim world is based solely on his sentimental attachment to the Ottoman Empire. So what's the angle?

Escobar: Look, there is something very important in terms of the NATO strategy. Turkey as the eastern arm of NATO, in trying to more or less control the region by using the Turkish military. You can see parallels with what the Bush administration was thinking about 10 years ago. Why not use NATO and especially Turkey as the Eastern arm of NATO to impose some sort of order in the neighborhood, in the Black Sea, parts of the Middle East, and Southwest Asia.

This is not going to work, first of all because the Turkish army is not competent enough to play that role. Number 2: they need the energy, and they cannot import directly from Central Asia because the pipelines go through the ancient Soviet pipeline system. If they want to buy from Turkmenistan, the only way would be through Iran because Iran and Turkmenistan have a swap agreement. So Iran could buy gas from Turkmenistan and then through a pipeline Turkey would get it; and they could use it for internal consumption or they could sell the surplus as well, which comes back to the original Davutoglu idea: we have to make a lot of money by being a transit rights country. Anyone selling energy to Europe and the rest of the world has to go through here, through our pipelines, so we can make a fortune out of this.

And even Syria in fact, we can say that their unofficial energy foreign policy was to become an energy transit hub as well. Because until the beginning of the uprising, 16 months ago, they were making some money out of it, through the Arab gas pipeline and through one of the pipelines that come from Iraq. Now, one year later, the 10 billion dollar deal was struck and is at the center of this whole discussion. This deal was sealed by Iran, Iraq and Syria a year ago. This pipeline is supposed to run from Iran, across Iraq and to Syria's coast. Why would so much money be invested? To sell a lot of gas to Europe. How is this being done? By bypassing Turkey. For me this explains a lot of the Turks' animosity. The regime changed their ties with Syria. If this pipeline is built, it would completely isolate Turkey, out of this position that they tried to consolidate for these past few years as a transit hub.

Goldman: The revenues which Turkey might derive from pipeline shipments are in the order of hundreds of millions of dollars a year, but the political repercussions of having control of the pipelines are strategically much more important. Turkey's current account deficit is in the range of 8 to 10% of GDP (70-80 billion dollars a year). And the total amount that you could imagine the Turks under any circumstance earning from pipeline revenues is two orders of magnitude smaller than that. If they earned a billion dollars it would be extraordinary. So, it is not going to make a dent. However a lot of people are willing to finance the Turks because the prospect of Turkish instability frightens them for whatever reason.

The main money financing the current account deficit of Turkey is coming from the Gulf States. It is coming through the inter-bank market, in the form of three month loans. The total of such financing is over $60 billion. The Arabs don't want Erdogan to be destabilized, but on the other hand, he is on a very short leash. These are funds that could be pulled at any moment, at which point the Turkish currency would collapse.

Now the Saudis clearly don't want the Turks to be destabilized, the Russians don't want the Turks to be destabilized and the Americans don't want the Turks to be destabilized. No one wants them to run anything but no one wants them to be unstable. Fromthe Russian standpoint, they have 10 or 11 million foreign workers from Turkey or the Turkic Republics now working in Russia, most of them organized by Turkish construction companies. The remittances of these workers are an important factor in Turkey's economy. Were it to be the case that Turkey itself became destabilized and radical elements infiltrated the foreign worker pool- this could be extremely dangerous for Russian stability. So, Russia prefers to have Erdogan there, riding herd over the Islamists. They prefer Islamists they know, to a bunch of Islamist crazies who are not in anybody's control. The Saudis want a big Sunni military to oppose Iran, which limits Iran's flexibility in the region. For the same reason they finance the Pakistanis; those are their two possibilities – the only two big Sunni armies near Iran.

Samuels: Your analysis suggests that Obama's policy towards Turkey is a perfectly smart one- which is that they don't think that the Turkish government is anything other than what it appears to be, however they have an interest in saying: "Oh yeah, you're a terrific important partner, here's a phone call, the President needs to speak to you. You're the leading edge of blablablablabla." Nobody wants Turkey to become a further headache for everybody.

Goldman: Another way to put the matter is that Putin and Prince Bandar have a smart policy towards Turkey and Obama is simply following the path of least resistance by going along with them.

Samuels: I think that very well may be true but it also means that the idea of it that a lot of commentators have of Turkey as a significant arm of American foreign policy is wrong – it's an idiot child we have to humor.

Goldman: Yes, but both the Saudi and the Russian policy are expressions of their weakness and lack of strategic depth. In the case of Russia, their problem is demographic decline – they can't do without these immigrants, so they have to do the best they can in controlling the flow, but that doesn't mean they'll succeed in controlling the flow over in the long term. That's a serious problem for them. And from the Saudis' standpoint, their problem is that they want other people do to the fighting for you. So when you have a big checkbook and you want other people to do the fighting for you, there are lots of kinds of ways in which you can get into serious trouble.

And finally, there is the Turkish economic situation. You can finance a current account deficit of 10% of GDP for quite some time as Greece demonstrated but you can't do it forever. They can't sustain it forever and at some point, that economy blows up. So, all these efforts to keep things stable are across the board expression of weakness and not strength and are temporary arrangements at best. So to describe them as smart is, I think, charitable.

Escobar: David, in your scheme, how do you explain Ankara's eagerness for regime change in Syria? It's not going to change the overall picture that you painted.

Goldman: Are they in fact eager for a change? What are they doing- are they actually sending heavy weapons to the opposition?

Escobar: No they are the logistics base for the whole opposition basically.

Goldman: So when they say they are eager for regime change, are they doing things that would actually cause the Assad regime to fall by putting decisive force into the hands of the FSA? Or are they keeping the thing at a low boil, which makes trouble for Assad but doesn't necessarily force them out? That's the question.

There is a parallel to Egypt.The Muslim Brotherhood now has for the first time, a government, in Egypt. Ordinary economic life in Egypt is skating on extremely thin ice. There are endemic shortages of water, with violence associated with water distribution, including in some places a shortage of drinking water, which is obviously serious. The shortage of fuel is endemic and is the fuel shortage is reportedly exacerbated by the refusal of Egyptian banks to lend to state-owned corporations which are supposed to buying and distributing fuel, which would be very serious. We just saw a big spike in interest rates in the last bond auction by the Egyptian central bank from about 11% to 16%. This is the first time this has happened in a while, which suggests there is some problem in the banking system. There are spot shortages of food, and the country is almost out of foreign exchange. Meanwhile the price of wheat has just spiked, and there is talk about raising food prices which would cause substantial problems.

There is a parallel between the Egyptian and the Syrian situations: Nobody has an interest in creating a stable regime where the Muslim Brotherhood could or could be seen to govern. They are not going to be given, or will be able to create a situation, where they can credibly exercise power and bring about stability because nobody wants them to succeed.

Escobar: And when you say nobody you mean specially the SCAF in Egypt?

Goldman: Yes I mean SCAF, the Saudis, the Turks, the people with money, the people with guns.

Samuels: And this new pipeline which was supposedly about to be completed in the Gulf, what impact does it have Pepe Escobar?

Escobar: That is the the Habshan- Fujairah pipeline that carries oil from Abu Dhabi to Fujairah in the Gulf of Oman. It is an internal UAE pipeline, a very short one that allows them to export by the Red Sea and not by the Strait of Hormuz. The pipeline cost them basically nothing and they built it in only a few months.

This was a solution that was already there for the Emirates, it cost them practically nothing and it is a short internal pipeline. In the Big Game, if you want to by-pass the Straits, you have to do something like what the Clinton administration did, like building the BTC pipeline. So instead of having Iran sending oil and gas directly to Europe, which would cost like 800 million dollars, they spent almost 5 billion building a gigantic pipeline from Baku through Georgia and then to the Turkish Mediterranean.

Turkey does not want to do this anymore because they need Iranian energy, and this brings us back to the center of the whole game. If there were no sanctions against Iran by the Europeans, any European energy analyst would tell you, "We will go to Tehran tomorrow sit down with them, invest in their energy infrastructure and buy all the oil and gas they can produce".

I'm sure it will be in the interest of Washington, if Washington considers Western Europe a privileged ally, not to apply the sanctions. Washington should say: "Even if we do not support their geo-political goals, or their nuclear energy program, why not buy oil and energy from them for Europe, because Europe needs it. Otherwise, they are going to be hostages of GazProm. You see how the whole situation is interlinked. The possibility of a diplomatic solution on a commercial trade level is there.

Goldman: We're not here to agree about everything, and I appreciate the view.

Samuels: Again I want to have a sense from Pepe about Pipelineistan. If you look at this big spidery net of pipelines, I understand they are an important geo-strategic chip to think about. Once a pipeline network is built it is kind of hard to build a new one, and once it is in place you are also responsible for the mortgage too, so to speak. If you build a pipeline through Turkey and suddenly Turkey is in trouble, then you are responsible because need that pipeline. If you look at the areas that are unsettled now and you look at areas of big American economic involvement (whether that be building a pipeline or providing machinery), where are the areas of particular focus and concern for the US when you think about oil transit?

Escobar: Africa, because it took the West five to six years to realize that China made really good deals with at least four or five African countries in terms of supplying energy. Angola is one of them, Sudan as well (500,000 barrels of oil a day from Sudan to China). Now we don't know what is going to happen because of the dispute between the two Sudans, who is going to control the pipeline and the oil leaving Port Sudan. This is a huge problem.

The Americans were out of this picture during the first Bush administration and until the second part of the second Bush administration. The problem was that America had no counter-strategy. Now Bush's strategy in Africa was a military strategy (to set up AFRICOM). Bush did not send delegations to these African countries offering much better deals than the Chinese: "We are going to build your pipelines and you will sell your oil and gas to us, and not to China". They did not have a commercial policy.

Samuels: So you are indicting Barack Obama for neglecting US-Africa policy?

Pepe: Apparently, yes…In Central Asia as well they had a very capable diplomat in Richard Morningstar during both Bush administrations. He used to shuttle to Kyrgyzstan, Kazakhstan, virtually every month. But they never proposed anything practical to these extremely unreliable regimes, especially Turkmenistan. The only thing the Americans decided was "You have to bypass Russia" and Turkmenistan said "How? Our whole system is linked to Russia's pipelines, we cannot bypass Russia!"

The Chinese meanwhile sent a delegation to Ashkhabad, and said they wanted a certain quantity of natural gas and said they would build the pipelines for you (you won't have to do anything) but export the gas to us for a reasonable price. And then China said they would build hospitals roads, mosques, whatever you want. And the Turkmenistan government said yes.

My problem with the American energy strategy around the world is that there is no American energy strategy around the world.

Samuels: You are saying that America struck out in central Asia, so the idea of an American energy strategy in Central Asia that connects to American geo-political hopes for Turkey is two separate fantasies, and neither one is going to be realized?

Pepe: Yes, it did not work because it was not a coordinated offensive. For example, in 2005, 2006 these American delegations going to Central Asia had approached Turkmenistan and said: "We will help you build a pipeline to Turkey (Turkey is our ally, a transit country to Europe, Turkey has no gas). If you sell your gas to Turkey and Turkey transports gas to Europe, we will help you build a pipeline". The US never proposed something like this… Instead the Chinese proposed the same thing and they got the deal.

Samuels: I always imagined this was the point of American energy policy in central Asia and Africa- and you're saying it could have been a plausible policy but it never was the actual policy.

Pepe: There is another problem looming in South America, all those absurd quantities of oil that Brazil is discovering. The whole world is going to jump over there in the next 3 or 4 years to get the best plots, the best fuel for exportation. The Chinese will be there, the Russians, the American big oil will be there. But I wonder what American big oil will offer, that will be so much better than what the Chinese and Russians will offer. Obama already said he would be Brazil's first customer.

Goldman: If the US Administration doesn't care about oil supplies in Canada and lets China movein, what makes you think the US even knows where Brazil is on the map? here doesn't seem to be a coherent energy policy in the Obama administration, I doubt he's had a conversation with his energy secretary since he hired the guy. I don't remember who the secretary of energy is…

Escobar: I don't remember.

Samuels: A good fade-out for this scene, with everyone Googling to find out the name of the Secretary of Energy.

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