Diplomacy & Crisis News

During his visit to Saudi Arabia in early December, Chinese president Xi Jinping attended the inaugural China-Gulf Cooperation Council (GCC) summit. The summit focused on improving China-GCC relations and forming security ties between the parties. In his speech at the summit, Xi called on the two sides to be “natural partners” for cooperation and proposed five major areas for cooperation: energy, finance and investment, innovation and new technologies, aerospace, and language and cultures. Nevertheless, a glance at the engagement shows where the focal point of each partnership lies: energy, technology, and trade. For the Gulf monarchies, trade ties with China will diversify their economies away from the oil that provides most of their national income. More importantly, in the context of global competition, the summit delivered no concrete commitments to deepen the China-GCC strategic partnership, and nothing new was announced in the realm of security.

The China-GCC Strategic Partnership

In the Gulf—where the United States has been the predominant external actor for decades—China has sought to forge close political ties with emerging powers to secure access to vital energy resources, expand its commercial reach, and enhance its strategic influence. While China believes U.S. hegemony in the Gulf is in decline, its approach to achieving great power status and influence has been cautious and hesitant. Fomenting instability does not benefit China, which has neither the will nor the capacity to fill the regional security role held by the United States. Instead, China has developed strategic partnerships with key GCC countries whose support can bolster its great power status and allow it to project its influence into new arenas.

This suggests that China is determined to avoid confrontation with the United States and does not want to be sucked into the region’s multiple conflicts. Beijing prefers to take a position of non-interference, allowing it to remain neutral in most inter-regional disputes and take advantage of strategic and economic opportunities. As a result, Belt and Road Initiative (BRI) projects in the Gulf are primarily a means to strengthen Beijing’s great power status in the region. This non-interference policy is essential for guaranteeing the success of the BRI framework by maintaining neutrality and alienating no one. At the same time, the Gulf monarchies see China as an exemplary trading partner that does not interfere in domestic affairs and as a great power with significant political influence in the international arena.

China carries out its relations with the Gulf monarchies through partnership diplomacy rather than alliance politics (these relationships are not alliances, as Beijing has typically shied away from forming alliances). China has signed strategic partnership agreements with the GCC states detailing significant economic investment and trade within the BRI framework, including comprehensive strategic partnerships with the United Arab Emirates (UAE) and Saudi Arabia, two of the region’s most powerful and resource-rich countries, and strategic partnerships with Kuwait, Oman, and Qatar. It is important to note that China’s partnership diplomacy in the Gulf hinges on deepening bilateral relations and partnerships with existing U.S. allies to expand its influence and access to energy while simultaneously avoiding confrontation with Washington.

Nevertheless, the relative decline of U.S. hegemony and influence in the Persian Gulf, which is taking place alongside China’s growing role, affects the region’s balance of power. While maintaining their strategic partnerships with the United States, some GCC states—Saudi Arabia and the UAE, for instance—are also seeking to hedge against threats and the rapidly shifting balance of power by establishing ties with other powers. This hedging policy aims to use China as an additional source of political, economic, and even military support, as well as to use ties with Beijing to pressure Washington to adjust its policy.

Great Power Competition

Great power competition between the United States and China has reached new heights, becoming the most important dynamic on the world stage, and shaping the international order as it unfolds. Between an increasingly alarmed Washington and an emergent, assertive Beijing, the GCC states find themselves in a choice between their major strategic ally and an important economic partner. Nevertheless, the China-GCC partnership’s future will not be determined by what the great powers desire to gain from the Gulf monarchies but by what the Gulf states expect to earn from the great power rivalry. This expectation highlights the strange, complex China-GCC relationship.

Although the China-GCC summit emphasized intra-GCC unity, the Gulf states do not have a unified, coherent vision for a regional approach to great power rivalry. The Gulf monarchies share a common skepticism of Washington’s future commitment to the region, but their attitudes vis-à-vis China and great power rivalry differ significantly. These varying views can be divided into three groups. The first group, the “hedging states,” includes Saudi Arabia and the UAE. Both are openly hedging against Washington’s withdrawal from the Gulf. Thus, they have incorporated a comprehensive strategic partnership element into their engagement with China. Riyadh and Abu Dhabi are actively looking to diversify their supply of weapons, with China now considered a top alternative for essential military equipment that the United States refuses to sell to them.

The second group is the “balancing states,” Qatar and Oman. Both cultivated closer ties with China by opening up their national infrastructure and digital networks to Chinese investment. However, they have been more cautious regarding great power rivalry and maintaining their close military ties with Washington. Qatar deepened its relationship with the U.S. military—recently upgraded to the status of a major non-NATO ally—through its vital role in the evacuation from Afghanistan in 2021. Oman has been careful not to buy Chinese military equipment—unlike Qatar, which purchased ballistic missiles from Beijing—and signed a new strategic framework agreement with Washington in 2019 that gave the U.S. Navy access to the Port of Duqm.

The third group is the “cautious states,” including Kuwait and Bahrain. Both nations have opened up their countries to Chinese investment and construction projects but refrained from turning commercial ties into strategic ties. Kuwait and Bahrain have the most limited military capabilities among the GCC states and see U.S. protection as vital for their security. Indeed, approximately 13,500 U.S. forces are based in Kuwait; only Germany, Japan, and South Korea host more U.S. forces. Bahrain hosts the U.S. Navy’s Fifth Fleet and U.S. Naval Forces Central Command and participates in U.S.-led military coalitions. Both states have far more to lose from engagement with China than their neighbors.

While great power competition has revealed the various strategies pursued by each of the GCC states regarding China, their different approaches make it difficult to predict the future of GCC-China ties.

Amid great power competition, the war in Ukraine, and the struggle for technological-economic dominance, the GCC states have been forced to prudently navigate between the United States, their great strategic ally, and China, their significant economic partner. The various strategies pursued by each state regarding the U.S.-China rivalry will eventually test the region’s security and stability, possibly dividing the GCC. The Gulf states must develop a diplomatic framework to address their foreign policy differences and prevent the region from becoming an arena for the struggle between Washington and Beijing. If the Gulf states fail to do so, competition among neighboring states may emerge, with unpredictable consequences for the region.

Dr. Mordechai Chaziza holds a Ph.D. from Bar-Ilan University and is a senior lecturer at the Department of Politics and Governance and the division of Multidisciplinary Studies in Social Science, at Ashkelon Academic College (Israel). Dr. Chaziza is the author of China and the Persian Gulf: The New Silk Road Strategy and Emerging Partnerships (2019), China’s Middle East Diplomacy: The Belt and Road Strategic Partnership (2020), and The New Silk Road Grand Strategy and the Maghreb: China and North Africa.

Image: Shutterstock.

Modern unmanned aerial vehicles, widely known as drones, have been an indispensable part of warfare for the past two decades. America's use of Predator drones for reconnaissance missions in the Kosovo War against Serbian forces is known as the first time drones officially entered into the equation. At that time, hardly anyone noticed the capacity of these vehicles to change warfare. By the early 2000s, the United States began to use drones not only for intelligence, surveillance, and reconnaissance (ISR) missions but also for precision strikes, starting in Afghanistan.

For some time, the United States, followed by Israel, monopolized not only drone military operations but also the drone market. While these two states took advantage of the military edge provided by drones, it was impossible for other states to develop military drones with the capabilities of Predator, Reaper, or Heron drones. But this is no longer the case.

The success and effectiveness of drones on the battlefield pushed other states to follow suit. Turkey, among a few other states, was successful in developing its own indigenous, technologically advanced drones. This has resulted in what can be called the second drone age, an age where drone technology is no longer monopolized.

As drones started to be used extensively, new operational concepts started to evolve, radically transforming armed conflict. This is especially visible in the Russo-Ukrainian War, where drone usage dominates most of the highlights of the conflict.  

Both Ukrainian and Russian forces have used drones for ISR and strike missions. Among these drones are the MALE Class Turkish Bayraktar TB2 and the Iranian Mohajer 6, which can fire precision-guided munitions, but also loitering munitions (or kamikaze drones), such as American Switchblade and Iranian Shahed 136 and Shahed 131 drones.

It didn’t take long for drones to become one of the most important instruments in the war in Ukraine. In the initial phase of Russian aggression, Ukrainian forces demonstrated adept use of Bayraktar TB2 drones, which effectively neutralized several advancing Russian forces, including tanks, artillery, helicopters, and missile defenses, as well as important maritime targets. Most notably, a Bayraktar drone contributed to the sinking of the Moskva, the flagship of Russia’s Black Sea Fleet.

Some have claimed that Ukrainian drones have gradually lost their effectiveness due to Russia’s increased effort to counter them by better organizing its logistics and air defenses, including its missile defense systems and electronic warfare capabilities. However, this has not stopped Russia from launching its own drone warfare campaign. Russia has begun launching hundreds of Iranian-made drones to attack Ukrainian targets or conduct ISR missions.

Drone warfare in Ukraine reached a new level when Russia began acquiring and using Iranian drones, although Iran initially denied any involvement. Russia has used Mohajer and several variants of Shahed drones to strike not only Ukrainian military components but also critical infrastructure, particularly the country’s energy infrastructure ahead of winter. Ukrainian officials say that Russia has been carrying out such strikes since mid-September. This is likely a result of Russia’s waning long-range precision strike capabilities, which intelligence reports suggest is due to Russia’s depleted stock of precision-guided missiles. Drones can compensate for this shortfall.

On the other hand, the Ukrainian battlefield also demonstrated that one needs a huge inventory of drones if the expected armed conflict will be lengthy and intense. The lessons learned from this can be seen in the rapid, increased interest from decisionmakers worldwide to focus on national production capabilities or, when that is not possible, to sign military agreements with the states that already have the necessary capabilities. The increasing number of states who have requested to buy Turkey’s Bayraktar TB2 is just an example of this proliferation trend of the second drone age.

However, the proliferation of military drone usage is not the only feature that we are witnessing. While the use of military drones has greatly impacted warfare, new elements witnessed in the Ukraine conflict raise a troublesome question: is a third drone age underway?

One of these elements is the use of civilian drones for military purposes. While this has been a common practice among violent nonstate actors, this is a new practice for states with novel military implications. For instance, Ukrainian officials said that they aim to build a fleet of drones and called upon citizens to donate their own commercial drones to the army. This approach has been concisely defined as “dronations.” Additionally, Ukraine has incorporated into its operations not only commercial drones, but civilians themselves are playing a crucial role. Described as the “democratization of military power,” this new trend is exemplified by Ukrainian citizens using cheap and simple technology to win on the battlefield. In one well-known example, a fifteen-year-old Ukrainian boy used a commercial drone to direct Ukrainian forces against Russian forces. It is exactly these sorts of practices that will lead to even more changes in how states conduct war, and as a result, affect change in the very character of war.

In this context, it is very likely that the trends witnessed in the Ukrainian conflict will propel other nations to follow the same lead by incorporating smaller, less expensive, and easy-to-produce drones into their inventory. Notably, we are seeing these drones being used more and more. One of the latest examples was the case of North Korea, which earlier this month launched five tiny drones on an ISR mission toward South Korean territory for the first time since 2017. The South Korean military failed to intercept the drones, leading Seoul to announce plans to build its own drone unit.

The Russo-Ukrainian War has demonstrated that, via technological advancements, the character of warfare is changing radically. Military and commercial drones have offered more to the war effort than expensive fighter aircraft or other military systems could in terms of cost-effectiveness and procurement opportunities. However, in this new drone age, the incorporation of commercial drones has brought with it the inclusion of civilian power into the equation. This has led to innovative operational concepts, which have demonstrated the power of simple, cheap, and easy-to-use technologies against the existing expensive and difficult-to-develop military mainstream.

Gloria Shkurti Özdemir is a Researcher at SETA Foundation and PhD Candidate at Ankara Yıldırım Beyazıt University.

Rıfat Öncel is a Defense researcher at SETA Foundation and PhD Candidate in International Relations Department at Middle East Technical University.

Image: Wikimedia Commons.

Three years after the death of Qasem Soleimani, the notorious commander of the Islamic Revolutionary Guards-Quds Force (IRGC-QF), the Islamic Republic continues to invoke his “martyrdom” for its malign and self-serving purposes. Six months after ongoing plots against U.S. officials became public, President Ebrahim Raisi reiterated the call on January 3, 2023, for vengeance on the anniversary of his death. The broader veneration of the departed general includes an array of titles: as “the commander of hearts,” “incorruptible,” and “national hero” who “fought and destroyed the Islamic State in Iraq and Syria (ISIS)”—all designed to reinforce the regime while playing fast and loose with the truth.

The facts speak of an entirely different man. Soleimani didn’t fight ISIS so much as he presented his Shiite militias as saviors of both Iraq and Iran. In truth, the violence he unleashed helped create the terror group. Nor is he a hero. Indeed, many in the country view him as a tool of the repressive state and even despise him for his participation in crackdowns against protesters over many years. Soleimani was not incorruptible either, but rather a corrupt military figure who oversaw a mafia network and wasted national resources either for personal gain or for benefit of a kleptocratic regime.

Soleimani’s role in the emergence of ISIS is part of the tangled story of his mission in Iraq, which took off with the U.S. invasion in 2003. When U.S.-led coalition forces occupied Iraq, the Islamic Republic moved swiftly to create several Shiite insurgent groups in the country to force Americans out in hopes of adding Baghdad to its regional “Shiite empire.”

Soleimani was put in charge of overseeing the mission. As a secondary effort, Soleimani took special vengeance on Iraqi Sunnis, particularly former political and military figures of Saddam Hussein’s regime, as a reprisal for the Sunnis’ participation in the eight-year Iran-Iraq War. The anti-Sunni death squads, which Soleimani created, killed and kidnapped hundreds of former senior Sunni political and military officials, among them 182 Iraqi pilots.

The Shiite militia under his command also waged a bloody war against ordinary Sunni citizens, tortured, kidnapped, and killed them, burned their homes, and, in an early version of ethnic cleansing, stopped many of them from returning to their towns. Each month, hundreds of Iraqi Sunnis were executed or tortured to death by Soleimani agents.

Soleimani’s extreme brutality against Sunnis resulted in sectarian mayhem, provoking large protests in Sunni towns where the populations harbored sharp grievances against the Shiites. It was in these extreme circumstances that Al Qaeda in Iraq (AQI), the predecessor of ISIS, emerged and turned the sectarian strife into a virtual civil war. US forces managed to destroy AQI, but the mistreatment of Sunnis did not end. ISIS rose from AQI’s ashes with Abu Bakr al-Baghdadi as its leader. It eventually took the US-led coalition 13,331 strikes to defeat the group in Iraq in a campaign called “Operation Inherent Resolve.”

If the making of ISIS in Iraq was the by-product of Soleimani’s stirring the sectarian pot, creating the terror group in Syria was by design. When in 2011, the Bashar al-Assad regime used considerable violence against peaceful Syrian protesters, Assad’s tactic backfired and triggered an armed rebellion, which turned into a civil war. This was an unfortunate outcome for Iranians, who regarded Syria as the “Golden Ring” of the “Axis of Resistance.”

With so much at stake, the IRGC-QF increased its presence in Syria to save the Assad regime. However, the extensive use of violence by Assad’s forces, Hezbollah fighters, and Soleimani’s forces resulted in international outrage, causing Western countries to push for regime change in Syria. Soleimani, concerned about the “Golden Ring” and the danger it faced, proposed to create the so-called “binary option” approach, a strategy to fight Assad’s bad international publicity. The strategy entailed creating a radical jihadist group that would make the Syrian dictator look like a lesser evil in the eyes of his people and the West.

On the advice of Soleimani, the Assad regime promptly released hundreds of prominent radical Islamist prisoners, including Amr ‘Abu Atheer’ al-Absi, Ali Musa al-Shawakh, aka Abu Luqman, Abdelhamid Abaaoud, Zahran Alloush, Hassan Abboud and his brother Abu Shadi, and Ahmed Abu Issa housed in Sednaya prison. Many of these jihadists went on to lead the Islamic State in the Syrian Civil War.

During the war, even when ISIS forces occupied northern Syria and proclaimed Raqqa to be the capital of its caliphate, the Assad regime, Soleimani’s forces, and Russian troops refrained from attacking them. Although Soleimani created a narrative of fighting ISIS, his forces and the Russian air force targeted mostly non-ISIS groups. A report by the U.S. State Department demonstrated that most Russian aerial bombing and IRGC ground attacks in Syria targeted moderate anti-Assad forces, not ISIS. As in Iraq, the terror group in Syria was eventually defeated by the U.S.-led coalition, not by Soleimani’s proxy forces, Russia, or the Assad regime.

The regime’s claim that the nation considered Soleimani a “hero” and “the commander of hearts” (Sardar-e Delha) should, similarly, not be taken at face value. In fact, Soleimani’s name is linked to “criminal activities” and the “murder” of Iranian protesters. For instance, in Kurdistan, Soleimani is known for his cruelty in massacring Kurds during the early years of the Islamic Revolution. When in 1979, the Kurdish rebellion erupted against the new regime, and Ayatollah Khomeini declared a jihad to crush unrest in Kurdistan, Soleimani was one of the commanders of the IRGC that participated in murderous campaigns against Kurds. More than 10,000 Kurds were killed (including 1,200 political prisoners, among them children as young as thirteen) during the clashes, which lasted until 1983.

Many—perhaps most—Iranians also despise Soleimani because of his opposition to reform and political openness in Iran. He participated in the IRGC’s brutal campaign against democracy-seeking movements and played a significant role in crackdowns on Iran protesters in 1999, 2009, 2017, and 2019, which he called “sedition.” General Mohammad-Ali Jafari, the former commander of IRGC, disclosed that “Soleimani was present at Tharallah Division [of the IRGC] and on the streets to fight the anti-revolutionaries and took measures to control the unrest.” This shouldn’t be a surprise because protesters chanted against Soleimani’s foreign adventurism.

During the 1999 demonstrations, several students were killed by the IRGC forces, hundreds were injured, dozens of students disappeared, and more than a thousand were arrested. In 2009, the IRGC and its Basij militia force killed over 200 protesters (unofficial reports indicate 700 protesters), 830 people got spinal cord injuries, and thousands were imprisoned, tortured, raped, and disappeared. In 2019, the IRGC forces killed 1,500 protesters, including seventeen teenagers and 400 women, during two weeks of unrest. Suppressing all of these social unrests was directed from the fearsome Tharallah Division, where Soleimani oversaw the brutal operations.

Moreover, Soleimani was among the twenty-four IRGC commanders who, in 1999, wrote an open letter to President Khatami and threatened him with action if he continued with his political reform, which in their view, threatened the “stability and peace in the country.”

Soleimani’s sobriquet, the “incorruptible,” was as much of a fabrication as the rest of his public persona. Soleimani was involved in massive financial corruption cases, such as the $3 billion embezzlement case of Yas Holding, and he used public resources for his benefit by using his political and military influences. Soleimani oversaw a mafia network comprised of embezzlers, smugglers, and money launderers and plundered billions of dollars of national resources. Soleimani’s wife was also involved in twelve cases of financial corruption and transferred the ownership of several companies. Tehran City Council had notified the judiciary to investigate the corruption case, but the judiciary closed the case out of fear of reprisal from Soleimani.

The Iranian regime’s effort to sustain and mobilize the myth of Qassem Soleimani, as seen last week in renewed calls for vengeance, is a transparent attempt to manipulate the Iranian population. It’s but the latest instance in a long history of the Islamic Republic crafting narratives, often seizing on Shia valorization of martyrdom, which have been so harmful to Iran and its long-suffering people. The myth of Soleimani, like so many myths, combines useful embellishment and cynical fabrication toward a purpose—here the perpetuation of the theocratic kleptocracy of the Islamic Republic. But Iran is changing. Today, regime-driven narratives about who should be venerated are being replaced by stories of young men and women on the streets of Iran, of no renown at all, who are putting their lives on the line to protest the regime’s repression. Theirs is a story of true heroism.

Farhad Rezaei is a senior research fellow at Philos Project.

Image: Shutterstock.

Opposés sur la question de l'indépendance catalane, les dirigeants politiques au pouvoir à Barcelone et à Madrid se ressemblent : ils estiment que leur intransigeance fera oublier les scandales de corruption qui les accablent. Un bouillon de culture propice aux surenchères, y compris répressives. (...) / Espagne, Europe, Droit, Élections, Identité culturelle, Langue, Mouvement de contestation, Nationalisme, Parti politique, Politique, Région, Indépendance - 2017/11

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The infamous three letters FTX will be removed from the arena that serves as home to the Miami Heat basketball team and as a popular venue for musical events. The collapse of the cryptocurrency exchange has impacted many other organizations as well, such as ProPublica, the non-profit investigative news outlet, that received a $1.6 million donation from FTX. (They have indicated they intend to return it).

What has transpired with FTX is, in the words of its new CEO John Ray, “really just old-fashioned embezzlement.” But the debacle does call into question the financial instrument itself that was the elixir of FTX—cryptocurrency.

In truth, the verdict is still out on cryptocurrency, a type of digital currency that generally exists only electronically. The advantages of crypto are compelling: protection from inflation, security and privacy, self-governed and managed, decentralized, and cost-effective for transactions and funds transfer. The negatives are significant, however: crypto can be used for illegal transactions such as drug and gun trafficking, money laundering, and funding terrorism; data losses can cause financial losses; adverse effects of coin mining on the environment (because of the enormous amount of energy required); susceptibility to hacks; and no refund or cancellation policy.

Overall, recent times have not been good to crypto. Digital currencies have lost over $2 trillion during the past year. In the second week of November alone, crypto fell 21 percent. Big companies are not bullish on cryptocurrency, cases in point being Tesla, which will no longer accept it for payment, and Facebook (Meta), which sold its crypto intellectual property and assets.

While individuals should be free to invest in any financial instrument they choose, entire nations should not. Yet putting millions at financial risk by adopting cryptocurrency as legal tender is precisely what El Salvador and the Central African Republic have done.

The former became the first country in the world to use bitcoin as legal tender in 2021. One year later the Central American Republic did the same. At present, countries that could adopt bitcoin as legal tender include Saint Kitts and Nevis, Paraguay, Venezuela, Ukraine, Russia, and Argentina.

However, a careful examination of El Salvador’s experiment with cryptocurrency should give one reason to pause. To begin with, the nation’s debt to GDP ratio is 87 percent, the country is vulnerable to debt default, and the nation is projected to grow less than 2 percent in 2023. President Nayib Bukele launched a virtual wallet named “Chivo” (meaning “awesome” in Spanish) and paid people $30 to download the app and use it but so far only 20 percent have—no surprise since one in three Salvadorans lacks access to a mobile phone with internet. With so many Salvadorans living and working abroad, it is not surprising that remittances account for more than 20 percent of the country’s GDP, yet less than 2 percent of remittances are sent via digital wallets. Perhaps part of the reason is due to the complexity and cost of converting cryptocurrency into local currency. The fees charged by money providers along with the need for a bank account are clear disincentives. As for businesses, over 85 percent have never made a sale in bitcoin and only 20 percent of businesses accept the digital currency.

El Salvador’s experiment with cryptocurrency has cost the country $375 million—in fact, the nation lost $60 million in one year on its crypto bet. Not to be deterred, Bukele is keen on building a “Bitcoin City” near the country’s Conchagua volcano.

Those who champion cryptocurrency as legal national tender believe the global financial system is designed to benefit wealthy countries, so these proponents of crypto seek to reform financial services to make them more inclusive and accessible. They attack the International Monetary Fund, World Bank, and central banks for pushing back against reform initiatives even though these institutions vehemently argue that using cryptocurrency as a national currency can facilitate money laundering, undermine capital controls, and expose citizens to major price volatility. In addition to issues regarding crypto’s negative impact on macroeconomic stability issues, financial integrity, and consumer protection, the adoption of crypto as a national currency would make it impossible to estimate tax revenue and, therefore, money available to spend on social services.

Be that as it may, digital currencies as a “mirror” rather than an alternative to a national currency are generating a good deal of interest from governments and some have implemented them already. CBDCs (central bank digital currencies) are digital tokens, similar to cryptocurrency, issued by a central bank. They are tied to the country's national currency and are issued and regulated by a nation’s monetary authority or central bank. According to the Atlantic Council’s Central Bank Digital Currency Tracker, 114 countries, representing over 95 percent of global GDP, are exploring a CBDC. Eleven countries have fully launched a digital currency, and in 2023, over twenty countries will take significant steps toward piloting a digital currency.

To quote Harvard economist Jeffrey Frankel: “cryptocurrencies are backed neither by reserves nor by the reputation of a well-established institution such as a government, private bank or trusted corporation.” Todd Baker, a financial services executive and Columbia Business School fellow, is more concise and harsher, asserting: “crypto is money without a purpose.”

As eighteenth-century French novelist Pierre Choderlos de Lachos asserted: “all publicity is good publicity.” Within the financial realm, crypto is “hot” at the moment, joining derivatives (such as options and warrants, forwards, and futures) in the portfolio of financial instruments available to investors. But entire nations such as El Salvador that speculate on crypto, substituting it or placing it alongside their national currencies or the U.S. dollar, can create collateral damage to our own community as well. Impacts can include distress sales of real estate, shuttered businesses, defaults on bank loans, and repatriation of capital to meet obligations in their home countries.

When all is said and done, a nation with a sound currency, stable inflation and exchange rates, and credible institutions has no need for an alternate national currency. As for less stable economies, they would invariably choose the euro or the U.S. dollar.

The Latin warning “caveat emptor” (buyer beware) is meant for consumers; however, nations that consider banking their treasuries on speculative instruments should heed the warming, as well.

Jerry Haar is a professor of international business at Florida International University and a fellow of the Woodrow Wilson International Center for Scholars and the Council on Competitiveness, both in Washington, D.C. He is also a board member of the World Trade Center Miami.

Image: Shutterstock. 

“Africa’s success and prosperity is essential to ensuring a better future for all of us,” declared President Joe Biden at last month’s U.S.-Africa Leaders Summit. Africa has many success stories and ready partners—Botswana, Ghana, Kenya, Morocco, Namibia, Somaliland, and South Africa are all democracies. Biden is less picky. While he signaled at the summit that he would turn a blind eye to corruption and human rights violations, some countries remained beyond the pale. At the top of that list is Eritrea.

Eritrea’s Thirty Years of Failure

This year marks the thirtieth anniversary of Eritrea’s independence. There was optimism when Eritrea won independence. After years of fighting culminated in the defeat of Ethiopia’s Marxist dictatorship, Eritrean leader Isaias Afwerki and Ethiopian interim president Meles Zenawi agreed to a peaceful divorce. Both countries disappointed as their leaders sought to consolidate dictatorship. Zenawi transformed Ethiopia into an authoritarian state, while Isaias preferred a totalitarian model. Today, Freedom House ranks Eritrea lower than even North Korea on its civil liberty index.

Three decades of Isaias’ mismanagement have left Eritrea a failure. Eritrean per capita income hovers around $50 per month. Absent remittances from the many Eritreans who fled to North America, Europe, or the Middle East, Eritrean income would fall by half, below even South Sudan’s. Eritrea’s capital, Asmara, is among the world’s most beautiful cities, and the country sits aside one of its most important waterways. With competent management, Eritrea might have transformed itself into a regional Dubai. Instead, under Isaias, Eritrea has become a modern-day slave state under the guise of mandatory, indefinite conscription.

Eritreans have no freedom of speech and little religious freedom. The Eritrean embassy in Washington’s attacks on the United States Holocaust Museum are merely par for the course. The Isaias regime recognizes only four religions—Sunni Islamism, Orthodox Christianity, Roman Catholicism, and evangelical Lutheranism—and it places strict restrictions on even their freedoms. The regime forbids any religious practice among those conscripted into the military, for example. While Western media and politicians have criticized China for imprisoning Hong Kong cardinal emeritus Joseph Zen, Isaias has done the same in Asmara, only releasing the city’s bishop days ago after two months of detention on charges that were never released. Eritrea, however, is not only a human rights tragedy—it’s a security threat.

How Eritrea Destabilizes the Region

It is one thing to condemn your compatriots to misery; it is another thing to spread it. While Biden was willing to rehabilitate Ethiopian prime minister Abiy Ahmed, a man responsible for the deliberate starvation of hundreds of thousands of Tigrayans, he ignores that Isaias, as Abiy’s partner and mentor, is not a signatory to Ethiopia’s tenuous ceasefire. The Eritrean Army continues to treat Tigray as the Russian Army treats eastern Ukraine. The killing of World Health Organization director Tedros Adhanom’s uncle by Eritrean troops made headlines, but it is a story repeated thousands of times over against lesser-known Tigrayans. That Abiy allows such Eritrean actions on Ethiopian territory shows his insincerity, impotence, and collaboration. Ethiopian nationalists talk big, but Abiy has subordinated 118 million Ethiopians to 6 million Eritreans.

Isaias is not content to put only Ethiopia under his thumb. Recently, he also sponsored unrest in Djibouti and sought to interfere in the tense situation in Sudan. Indeed, his axis with former Somali leader Mohamed Farmaajo destabilized Somalia. At one time, he also considered attacking Somaliland in order to gain a port on the Red Sea.

Isaias grows more erratic every year. Eritrean foreign and military policy has become the African equivalent of George Orwell’s 1984: there will always be a conflict, though Isaias’ allies and adversaries may change on a dime depending on his mood or latest paranoid conspiracy.

Washington Needs a Coherent Strategy

Eritrea’s embassy in Washington is a den of organized crime whose main victims are the Eritrean diaspora. This should be a national security and law enforcement concern for American citizens. The United Nations Security Council and U.S. law prohibit the imposition of Eritrea’s tax on former citizens regardless of their current citizenship status. While the United States also taxes expatriates—a bad policy—the situations are not analogous. The White House doesn’t assert its authority on those who have forfeited U.S. citizenship, nor does it threaten to retaliate against the family members of those who resist extortion. Simply put, if Eritrean envoys insist on acting as Mafiosi rather than diplomats, it is time to close the Eritrean embassy. The State Department should be under no obligation to perpetuate the illusion of the Eritrean regime’s legitimacy.

Rep. Chris Smith (R-NJ), long the chairman or ranking member of the House Foreign Affairs Committee’s Subcommittee on Africa, Global Health, and Global Human Rights, has been at the forefront of efforts to nudge and coerce Eritrea toward a more responsible direction. Against the backdrop of Eritrea’s rape and pillaging of Tigray, Smith proposed a number of specific sanctions to target Eritrean regime revenue. None of these should be controversial. Four months later, Biden ordered the Treasury and State Departments to identify sanctions targets and declared a national emergency over Tigray. The Treasury Department ultimately sanctioned a number of entities identified by Smith: the Eritrean Defense Force; the ruling People’s Front for Democracy and Justice; Eritrean National Security director Abraha Kassa Nemariam; the Hidri Trust, which controls most Isaias-held businesses, and its day-to-day manager, Hagos Ghebrehiwet Kidan; and the Red Sea Trading Corporation. Biden could go further. Smith identified other revenue producers, like the Bisha Mine, where Isaias allegedly used conscripts as slaves. The Treasury Department might also re-designate Presidential Advisor Yemane Gebreab, perhaps the most influential man in Eritrea after Isaias.

Sanctions Aren’t Enough

Military academies teach the DIME Model, which states that every coherent strategy should have diplomatic, informational, military, and economic components. To date, the United States has largely limited its efforts to sanctions. There are two problems with a sanctions-only strategy. First, Isaias cares nothing about the Eritrean people. Second, bilateral and international trade with Eritrea is minimal, so the outside world has limited financial leverage.

The State Department has long lacked a diplomatic strategy to accompany sporadic U.S. sanctions. Both Israel and the United Arab Emirates have traded cash for access to Eritrea’s military facilities or territory in order to run regional counter-terror operations. Eritrea, however, is not indispensable. The Berbera Airport in democratic Somaliland would bring the same geographical advantages as Eritrea’s Assab Air Base without the baggage that subsidizing Isaias brings. Rather than compartmentalize the Eritrea problem to a single desk or regional bureau, Secretary of State Antony Blinken should pressure each Eritrean partner to abandon the Isaias regime. Such a diplomatic campaign might be difficult, but the dividends would be great. African states would welcome the opportunity to have the Isaias threat reduced. Additionally, seeing American leadership in practice rather than only in rhetoric would enhance America’s regional credibility.

The United States also lags behind in its information strategy. Isaias’ rule depends in part on his ability to cut Eritreans off from the outside world. Reporters Without Borders ranks Eritrea’s media freedom as the second worst in the world. Voice of America broadcasts in Tigrigna, but for only thirty minutes per day. Many of the programs are anodyne and steer clear of political news. If Washington is serious about Isaias’ pariah status, it is time to sharpen news broadcasts, give more space to opposition voices, and broadcast to Eritrea for longer periods.

The United States also lacks a military strategy. With the exception of Secretary of Defense Lloyd Austin, who does not regularly have Biden’s ear, Biden’s national security team hails almost entirely from the Ivy League and the State Department. Few, if any, members of Biden’s team have any experience with the military. The rhetoric about “forever wars” and the administration’s ignorance of deterrence are symptomatic of a tendency to downplay military components of U.S. strategy. The U.S. military should never directly involve itself in Eritrea, but a more robust military presence in the Horn of Africa would amplify diplomacy by signaling investment in regional security. This is yet one more reason why the State Department’s hostility toward rotating American forces through Somaliland is so counterproductive.

The End Game in Eritrea

Almost every U.S. administration pays lip service to Africa, but few sustain attention. Biden is no different, despite the fanfare of last month’s summit. Compounding the strategic neglect is U.S. foreign policy’s traditional reactive nature. For three decades, this has meant kicking Eritrea policy down the road. But that road now ends. Isaias is increasingly erratic. Simultaneously, he is in the twilight of his rule. Even if rumors of Isaias’ poor health are false, at seventy-six years old, his life expectancy is limited.

The United States must plan for Eritrea’s transition upon Isaias’ death. It would be a human tragedy if Isaias’ son or any of the Eritrean dictator’s top lieutenants succeeded him. That will occur, however, if the State Department and the National Security Council do not plan now. Isaias’ greed, incompetence, and selfishness have condemned millions of Eritreans to misery. Eritreans are thirty years behind where they might otherwise be, but it still is possible to catch up. For a fraction of the $500 million the Biden administration seeks to spend funding the Palestinian Authority, West Bank, and Gaza, for example, Biden could develop a Marshall Plan for a post-Isaias Eritrea that could enable one of the world’s most reclusive states to join the international community in earnest. To do nothing, however, would condemn Eritreans to suffer and provide an opening for Russia, China, or other reactionary states to expand and cement their Red Sea foothold. It is time to get serious about the Eritrea problem. The decisions made by Biden’s team today will have an outsized impact on democracy, economics, and security in Eritrea and the broader Horn of Africa and Red Sea regions.

Michael Rubin is a senior fellow at the American Enterprise Institute.

Image: Flickr/U.S. State Department.

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