The ISIL Threat: Weekly Geopolitical Report

Over the past two weeks, the insurgent group called the Islamic State of Iraq and the Levant (ISIL) has made stunning inroads into Iraq, moving within 50 miles of Baghdad. The combination of ISIL insurgents, Sunni tribal fighters and Baathist remnants of Saddam Hussein’s military routed Iraqi government troops in a series of smashing victories, moving rapidly and gaining territory. In doing so, they captured a significant amount of military equipment and raided banks, procuring millions of dollars.

ISIL represents a new threat to the region. In this report, we will offer a historical analysis of how the modern Middle East was constructed and why the construct is coming under pressure. One of the keys to understanding why ISIL is so potent is to differentiate it from al Qaeda; we will analyze the differences. Finally, we will offer the strongest reason why we believe

ISIL has staying power—simply put, the regional powers are generally concerned about the group but are trying to use its presence to boost their own specific goals. We will also note two other key issues, ISIL’s greatest weakness and the possibility of a broader sectarian conflict. As always, we will conclude with market ramifications.

The History

The Ottomans ruled most of the Middle East and the Levant until after WWI.

ISIL Threat

The Ottomans did not conquer most of modern Saudi Arabia since it was considered mostly wasteland and thus did not warrant control; the empire did control the coast of the Red Sea and the western side of the Persian Gulf.

Ottoman rule was generally considered a “light touch.” The leaders in Istanbul tended to use proxies in the areas it ruled who were required to send tribute to the capital. Local conditions were determined by the proxies in power. The Ottoman rulers became convinced that sectarian, tribal and ethnic differences in the region made centralized control impossible.

As the Ottoman Empire began to break down at the beginning of the 20th century, European powers cautiously planned to manage its disintegration. WWI marked the end of the Ottoman Empire.

The Europeans were not enamored with the Ottoman’s ruling methods, preferring to establish separate nation-states. During WWI, France and Britain began secret meetings to allocate interests in the region. Sir Mark Sykes and François Georges Picot met in 1916 to establish colonial regions. The Sykes-Picot Agreement became the basis for European colonization.

ISIL Threat

The actual dividing lines were not established until the San Remo Conference in 1920.

ISIL Threat

Britain’s primary goal was to secure oil in Persia (Iran) and Iraq. It had sent Gertrude Bell into Iraq as a spy during the war to gather intelligence on the region. She managed to slip past Ottoman officials because they believed she was an archeologist. In addition, during the war, T.E. Lawrence organized local tribes to attack Ottoman positions; Lawrence promised these tribes independence after the war, unaware that Sykes and Picot had already bargained away that vow.

Since the Hashemite leaders were denied the opportunity to rule in what became Syria and Lebanon because the French controlled that area, Bell managed to install Faisal, a member of the Hashemite royal family, as king of Iraq. She even managed an election of sorts; reports indicate that Faisal won “96%” of the vote, which became standard operating procedure for the region. The lines drawn by both Sykes-Picot and the San Remo Conference showed little regard for conditions on the ground. In fact, both colonial powers had a tendency to put minority groups in power, Sunnis in Iraq, Alawites in Syria and Christians in Lebanon. This meant the local rulers would be dependent on the colonial powers to maintain control.

The insistence on creating nation-states in a region riven by religious and ethnic divisions has been a recipe for tyranny and autocratic governments. Although Iran is nominally democratic, control of the state is held by an unelected cleric. Only Israel can be considered a functioning democracy. Essentially, the Europeans wanted to create political divisions that they believed worked in their continent, but created artificial boundaries that were more suited for colonial control than statehood.

Although the borders established remain the recognized ones (de jure), the functioning boundaries (de facto) are quite different. For example, Lebanon and Syria are no longer centrally controlled. Although Libya isn’t part of the Levant (it’s part of the Maghreb), it is no longer a functioning state either. It appears that Iraq is moving into a similar situation.

ISIL versus al Qaeda

Although the media and many political figures are treating these two groups as the same, ISIL has evolved into a significantly different entity. ISIL emerged out of al Qaeda in Iraq, which, during the American occupation, was run by Abu Musab al-Zarqawi, a Jordanian. Al-Zarqawi was a controversial figure even among jihadists. He had numerous disputes with al Qaeda’s leadership over his methods, which included terrorist attacks against Shiites. The leadership in Afghanistan did not want al-Zarqawi attacking other Muslims regardless of belief. Al-Zarqawi held a special hatred for Shiites, considering them the worst of apostates.

Al-Zarqawi was killed by a U.S. airstrike on June 6, 2006. The following year, President Bush ordered the Iraq Surge, where 20,000 soldiers were deployed into the country. Gen. David Petraeus was able to effectively implement a counterinsurgency strategy in which Sunnis that had become disenchanted with the jihadists for their brutality and their harsh implementation of sharia law were built into a unified force that turned on groups like al Qaeda in Iraq. Within a couple of years, al Qaeda in Iraq was virtually eliminated. Sunni tribal leaders were promised representation and power sharing in future Iraqi governments for their role in stabilizing the previously ungovernable areas in western Iraq.

However, as we noted in a recent report (see WGR, Iran’s Iraq, 5/19/2014), Iraqi PM Maliki steadily excluded Sunnis from his government and then worked with Iran to ensure that U.S. troops would not remain. After the U.S. left, Maliki essentially eliminated Sunnis from any important role. Feeling threatened, the Sunnis began to protest against their plight. Maliki’s ham-fisted response essentially prepared the ground for an insurgency.

ISIL, which was built from remnants of Zarqawi’s group, is led by Abu Bakr al-Baghdadi (a nom de guerre, it is not clear what his actual name is), an Iraqi cleric from Samarra. His group, which began in Iraq, began to move into Syria to contribute to the fight there. He began to take control of another al Qaeda-related body, Jabhat al-Nusra (JN). ISIL, at times, attacked JN and other rebel groups in Syria that ISIL did not deem as sufficiently “pure.” Ayman al-Zawhari, the current leader of al Qaeda, ruled that ISIL should be subordinate to JN in Syria but ISIL would be dominant in Iraq. Al-Baghdadi rejected that decision and his group was ousted from al Qaeda by al-Zawhari.

ISIL is different from al Qaeda in two key ways. First, ISIL, in the spirit of al-Zarqawi, is focused on eliminating Shiism by conversion or death. Although the group has attacked Christians and other less devout Sunnis, al-Baghdadi sees Shiites as the worst of apostates and believes

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