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Curious Worldview
#UkraineRussiaWar (+20 Days) - Ghaidaa Hetou | How The War Affects The MENA Region
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🎙️: https://atlasgeographica.com/ghaidaa-hetou-russia-ukraine-war/
This was recorded at 20:00 on the 16th of March, CET.
Ghaidaa Hetou Ph.D. is the founder of iStrategic.
Dr. Hetou guides the development and oversees the operational efficiency of iStrategic. She is a consultant and advisor on Middle East and North Africa affairs, specializing in political risk analysis, foreign policy, political economy, geopolitics, and business strategies. Dr. Hetou also writes a weekly Op-Ed in Forbes Middle East.
In this podcast, we spoke about how the #RussiaUkraineWar is affecting the MENA region (Middle East North Africa).
In This Podcast With Ghaidaa Hetou, You Can Expect To Hear About…
- Wheat Insecurity Throughout The MENA Region.
- Attitudes Of War From The MENA Region.
- Why So Many From The MENA Region Are Joining The Fight In Europe.
Timestamps With Ghaidaa Hetou
- 00:00 – Introduction
- 01:28 -Consequences For The War In The MENA Region.
- 08:00 – Explaining The Chechnyan Angle.
- 10:58 – Oil & What Is The GCC?
- 13:43 – Back To The MENA Wheat Fragility.
- 21:58 – Water Insecurity.
- 27:17 – What Makes Wheat So Special? Are There No Alternatives?
- 32:22 – The Question Of Rebel Groups & Private Militia From The MENA Region.
- 41:44 – How Are People Thinking About This Conflict In The MENA Region?
- 48:28 – The Global Importance Of Oil.
- 52:48 – How Ghaidaa Sees This All Playing Out For The MENA Region.
Episodes Of The Curious Worldview Podcast Similar To This!
- Jim Henry Ukraine/Russia War #1
- Jim Henry Ukraine/Russia War #2
- Vijay Vaitheeswaran On Russia/European Gas
- Michael Hilliard Geopolitical Analysis Of The UkraineRussiaWar
- Tim Harcourt On Russian Economy & How It Affects Australia
- Alexander Kucherenko | A Ukrainian Perspective
- Ghaidaa Hetou | China’s Belt & Road Initiative
Links To Ghaidaa Hetou
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This was recorded at 8 pm on the 16th of March Central European time. It was a conversation with Gaeda Hatu, who is the founder of iStrategic. Gaeda Hatou guides the development and oversees the operational efficiency of iStrategic, which is a consultant and advisory firm on the Middle East and North African affairs. Gaida specializes in political risk analysis, foreign policy, political economy, geopolitics, and business strategies. Gaeta also writes a weekly op-ed in Forbes, Middle East. Gaeta was actually one of the first guests I had in this podcast, and in episode 23, she came on and basically explained top to bottom China's Belt and Road Initiative. In this particular podcast, however, I wanted to ask Gaether how the Russia-Ukrainian war was affecting the MENA region, which is Middle East North Africa. So in this podcast, you can expect to hear about why wheat insecurity is really the biggest implication that this war is having on the MENA region. But then also hear about some of the attitudes of war and this specific war from the various cultures throughout the MENA region. And then finally, an interesting sidebar, why so many rebel groups uh seem to be uh joining the fight, mostly joining the Russian side of the uh conflict, but then as well, curiously enough, a bunch joining the Ukrainian side of the conflict. So there's a lot in here. We also kind of broke away from the main topic, spoke a bit about water security as well. And with no further ado, here is Gay the Hetu. Well, welcome back. Gay the Hetu. Thank you so much.
SPEAKER_01Of course, um glad to be here.
SPEAKER_00I wanted to start off uh with a very generalized overview just to see what you're thinking about um all of this before we maybe look at some specifics, but what are the implications of this war in your specific region of expertise, which is MENA, Middle East, North Africa?
SPEAKER_01Yeah, um it seems that well, why would uh a region like the Middle East and North Africa, why it would it be implicated with the repercussions, right, and the consequences of the war between uh Russia and Ukraine and the larger Western Hemisphere? Um, yeah, they there are multiple um consequences here. The first and foremost is food security, right? We know that there are 800 million people in the MENA region, and they are predominantly dependent on the wheat from the Black Sea. So um you have countries like Egypt, for example, it's the largest wheat importer in the world, and it depends on more than 70% of wheat uh imports from Ukraine and Russia, right?
SPEAKER_02Oh wow.
SPEAKER_01And um, Turkey, Morocco, Lebanon, they're all absolutely trying to figure out how much they have in reserve and how much they need to scramble to find substitute for the youth imports, uh, wheat imports from Russia and Ukraine. So that is absolutely devastating with regards to food security. Um and that's not all, right? So while looking for substitutes from the wheat exports from Ukraine and Russia, you're looking at countries that also depend on the fertilizers, right, that Russia and Ukraine export. For example, Brazil. So Brazil would be one of the substitute destinations for an alternative uh route to uh import wheat, but Brazil also depends heavily on the fertilizer export imports from Ukraine and Russia. So you see the ripple effect here, right? So you're looking for substitutes and they're also affected by the Ukrainian and Russian crisis in similar ways. Um so Ukraine, um, the ports that are exporting wheat are blockaded or attacked, right? I mean, if they close the land bridge and attack from Mariupol to Odessa, now Ukraine is complete Ukraine is completely closed off and doesn't have um export routes uh through the Black Sea. Uh, that would be another you know constraint there. Um we're looking at future harvest of wheat in Ukraine and Russia. That's also there's a lot of uncertainty there as well. So not just the wheat that is ready for export now, but also the future uh production and um you know the whole agricultural sector there. Um so what else? I you know, there's a lot there. So, for example, the United Nations aid programs, right, they depend on on wheat production and flour and so forth. So now those organizations who are heavily operating in Yemen, in Syria, for example, working for with the refugees and the displaced people, they have to ration their what they have as far as food and wheat and flour and so forth. So the ripple effects are quite wide in the region. And this is just the security part.
SPEAKER_00Yeah, those seem to be the sort of measured consequences. Can you speculate into some further unintended consequences for the region as well?
SPEAKER_01Okay, so there are a few there. Um, thinking about the agreement that OPEC Plus has with Russia with regards to uh, you know, um identifying the amount of agreed upon um uh production of oil, and that only has increased by 400,000 barrels a day, but not more, and they're not willing to break that agreement with Russia because it was a hard-won agreement that really um uh stopped the price war that was going on in the past two years. So um the the GCC countries have a lot, you know, some leverage gained in that uh dispute there, because there is pressure on uh the the supply, the amount of oil that is in the market, but also um you know um there's calls from Britain and the United States to in order to uh increase production to lower prices. Um that is actually moving now. The oil prices have have been reduced to probably 96 from 130 um just a few days ago. Uh so they gained some leverage there. I'm I'm assuming that they would probably want to cash it in in files that are imported to them. For example, the the Saudis would would want to talk about Yemen again and try to elicit the help of the United States and Britain to try to resolve that file. Um, and also curb the um activities of the IRGC in the region. So there's a lot there where the the the GCC countries and the the the the Saudi Arabia, right? Saudi Arabia can allocate the leverage that is uh gained from the Western ask for increasing oil production. Um what else? What else can I think about? I'm thinking about the Chechen fighters, Ryan. Um, that angle. So so so okay, so they're mobilized, and uh Ramazan Kadyrov, I believe, um, is is now in Ukraine and all that dynamic of that religious right dynamic that is going on there. Now, though, of course, there's a lot to be said about that instantly in the short term, but in the long term, right? So, what is the leverage gained by the Chechen Islamist fighters um post-Putin, right? And what would that affect the dynamic in Central Asia? If you are giving uh the Chechen fighters that much uh reach, right, in Ukraine and closer to Eastern Europe, I mean, is that something that you really want to deal with in the future, right? In post-Putin, where the grip on those groups is not as strong as during the Putin era. I mean, just thinking about those things that might have consequences in the future, right? So, and yeah, these are that that sounds really interesting.
SPEAKER_00I admit I am completely completely ignorant to the Chechen fighters. So perhaps you could explain uh further, it sounds like there's some sort of maybe Islamist group. And then you're suggesting that if they're given all these sort of arms and free reign, once this all settles down, what who's their next target gonna be? Is that sort of what you're thinking about?
SPEAKER_01It's not just the next target, but now now you're creating leverage where where it wasn't there before, right? Um instead of just the the containment of having Chechnya as a Russian republic under the Russian authority, now you're giving them um linkages and and presence and and and you know um leverage in in another country, who knows what what the consequences of that. That is there's a lot of uncertainty created just by allowing them reach into Ukraine and further Eastern Europe. I that is that is quite quite interesting. Um I don't know.
SPEAKER_00Can you explain who they are?
SPEAKER_01So they are um so the Kadyrov group um um is the one that was uh anti-Russia, anti-um the Soviet Union, they have fought the Russia the Chechen wars, and and uh Putin uh in the in in his earlier uh missions that he took on was to fight against the Chechens, and he won that war, Russia won that war. And then they they they co-opted, right? So so Putin co-opted, the Russian leader, uh he became um very very friendly with the with the Russian uh leadership, um conforming to the uh foreign policy directions that uh the Russian leadership and and Putin uh have been devising for Russia and the worldview outlook. So there's a lot of buy-in by the Chechnyan leadership now with the Russian outlook and what the the mission here is in Ukraine, and they are fully on board with that. Um so but but uh there's no hiding the fact that these are uh have Islamic background, right? And uh the the thought here is that there's a Islamic justification to fighting with the Russians against the uh you know the other side that is seen as more heretic, has seen as as more um you know not abiding by the uh right rules, I guess. So um the the co-optation has worked well for President Putin, um, and they seem to be a kind of a supportive role there in Ukraine. But what comes after, right? So so what are the consequences of that? And that is something to be you know to be um, I guess, um looked at and and closely followed, especially for the people who are interested in Central Asia and you know the whole um dynamic that's gonna you know unfold there.
SPEAKER_00And back to the uh oil unintended consequences that you were speculating to earlier. You mentioned GCC. What is the GCC?
SPEAKER_01Uh so the Gulf uh uh this is a community of countries, the Gulf countries. Um so you have Kuwait, uh you have uh Qatar, the Emirates, um uh Oman and Saudi Arabia who have uh established a uh community of uh coalition of nations that has worked closely together for in matters of economic economics and security. And and they these countries are um basically the central parts of OPEC, which is a um uh uh an intergovernmental organization that was um uh originated by uh the original um uh five members um uh in Baghdad, Iran, Iraq, Kuwait, KSA, and Venezuela. And um uh and they were founded in 1960. Now they have 13 members, but with the OPEC Plus, um additional members have been added to are are cooperating with OPEC, the original OPEC. And the OPEC Plus now includes Azerbaijan, Bahrain, Brunei, Kazakhstan, uh Malaysia, Mexico, Oman, um Sudan, South Sudan, and Russia.
SPEAKER_00Okay.
SPEAKER_01So um so the Russia. Yeah, absolutely. And they had to because the the price wars that have uh developed uh because of the you know the COVID and the lack of the destruction, the demand destruction that happened during COVID, and there was a price war. Everybody was was trying to squeeze the others out of the market, and while the Saudis can really produce a barrel of oil for for three dollars and still be okay with that price, the others can't. So um, and of course the shale oil came into and into focus and the price plummeted to the 40s and 30s. Uh, remember those days and in 19 uh 2019 and 2020. So the basically the two warring sides, Russia and OPIC, sat together and said, well, we can do better, right? And we can manage the amount uh supplied of oil supplied to the market where we can also be beneficial for our bottom line with regards to pricing. And this is a very hard-won agreement, which is now the OPIC Plus. And I don't think the Saudis would be um, you know, you can't really entice them to try to break that um agreement with the Russian because it would not only upset the Russians and they have interests with the Russians, but also um it would, you know, bring their word or their you know commitment in into question in the future, and that is not something a price they're willing to pay, as of as of now, of course.
SPEAKER_00Okay. Let let's return to the initial um implication of the war for the MENA region, and that is the giant uh fragility that they have to the supply of wheat. So you said Egypt, a population of 80 million people, 70% of their wheat comes from the Ukraine. What's uh what what are these what are these countries doing now? Presumably um Egypt is not alone in this uh sinking ship. It seems like they all sort of need some wheat. So what's happening?
SPEAKER_01102 million population now, Egypt, from maybe from the last we spoke, but it grew. It grew a lot. And and the same thing with with Turkey, who's not only uh export exporter, importer of wheat, but also exporter of flour for to the region. So there's the supply chain linkages there. Um for example, what what are the immediate policies that Egypt is so they are putting uh they are preventing certain foodstuffs to be exported. The same thing happened to uh Lebanon, to Syria. There they're just putting um prohibiting certain foodstuffs to be exported, right? They're worried about their food security, um uh rationing, right? Um now another policy aspect that has been into consideration and has been implemented in some countries is is the return of subsidies. So remember in 2011, when the whole uprising started, there was a food insecurity aspect of it because there was inflation at that time and and the the price of bread skyrocketed with the price of foodstuffs, basic foodstuffs rocketed. That was combined with the reduction of subsidies in 2011. So it was a perfect storm, right? Reduction of subsidies and foodstuffs and inflation just made people go to the streets, basically. Now you have the same combination going on with with the wheat, right? With the with the you know manufactured crisis in in Ukraine and and and the whole uh war that is going on there that is uh you know made the wheat price not only it was already 30% above average a year ago, now it's another 50%.
SPEAKER_00Yeah, the artificial reduction in supply drew the price up already, in addition to a city. Exactly.
SPEAKER_01So so that was an and and they have and and they are worried about if they also put a pressure on reducing subsidies, that would create the same perfect storm as in 2011 and would push people through the streets. So, of course, the Egyptians and the Syrians also considering the detrimental circumstances that they are in, in addition to the Lebanese, they are returning to providing subsidies on basic foodstuffs because they have to. There's no other way because the alternative is extremely dangerous. Lebanon, for example, just accepted 250 tons of cooking oil from Russia. Uh, you would definitely know think that Russia and China do not want unrest in the region that they have just invested in, right? China with their investment in infrastructure with the IRB, um, Russia with their investment in Syria and Lebanon and so forth. And they have leadership there in Lebanon and Syria where they are pro-Russia, right? And they don't want anything to happen to that leadership at Hezbollah and so forth. So they want to support the leadership to at least provide the basic foodstuffs and aid in order for no unrest to happen. So it's quite interesting that Russia is really worried about the hard-won gains in Syria, uh, in Iran, in Lebanon, for example, is that that could falter because of the war.
SPEAKER_00Yeah, they it seems like we obviously don't know, and we own we will only know with weeks and months of hindsight uh to help us. But it seems like they have grossly miscalculated all of the downside that they were going to receive from this action. But um so the IRB and China, that's the Belt and Road Initiative. Uh, what what what is Russia's investments in the region? What what have they been?
SPEAKER_01Well, uh it's it's mostly um uh defense agreements uh in with some countries. There are the 400S, uh S400 with Turkey, right? I mean, there are certain inroads where Russia was able to um you know uh create defense agreements. Uh for example, uh defense exports to uh Egypt has increased in the past few years. So um Russia definitely has a market there for defense product, it has a market there for wheat, fertilizers, and so forth. Uh there are some you know cooperation with regards to petrochemicals. So there is there's a market there, right? But uh of course the Chinese uh trump uh the trade volume that Russia has. For example, China has with the GCC countries, the Gulf, uh, the Gulf countries um uh trade uh in the amount of $160 billion that dwarfs um any trade volume that Russia has. So so Russia, Russia and China are both heavily invested in in that region, and and you have just to imagine how much uh there's security worries with regards to you know the possibility of unrest, the possibility of of instability there, um, and they are both very um very interested in in maintaining stability in this region.
SPEAKER_00Is there anything special about Egypt's um fragile reliance on Ukraine's wheat? Or is this a story that is actually much bigger? Uh well no, sorry, not much bigger, but one which many, many countries are actually going through, or is Egypt and the MENA regions specifically fragile?
SPEAKER_01So I I would say yes to both. It is a general story in the region because of the the drought, climate change. I mean, they have been suffering a lot with with water scarcity. But I think I believe Egypt is is on a much more strain, strange strenuous situation uh because it it cannot as of yet agree with Ethiopia on a higher uh allocation of water volume, especially now that Ethiopia is uh attempting to uh refill the dam, the GRD dam again. Um so so the substitutes, in order not to ask for um higher volumes of water, what Egypt resorted to is exactly that, is to import virtual water. So instead of putting actual volumes of water into the Egyptian agriculture, right, and and producing the wheat on Egyptian land, they resorted to importing virtual water where other you know uh soil in other countries they are using their water and they're just importing the final product which with their which they need eventually. So, what would be then the alternative for Egypt if it cannot um produce that amount of wheat on their own soil because of lack of water, right? One of the solutions they uh uh went to is importing wheat, and now that is in question, right? So I think Egypt is really in a very frantic mode right now to only not only find the substitute of where to import wheat from other countries. I mean, of course there are other options. There are there's Pakistan, there's Ethiopia, there's Sudan, but but none of that, the volume that Ukraine and Russia was able to provide them. And that would be frankly a very uh very tight corner there that Egypt has to resolve because the option of being self-sufficient in wheat production is not an option for Egypt. Just because of the water scarcity that it's already going through, it's below 500 um uh cubic meters per person. I mean that is that is um uh severe uh water water stress. Yes? So and and if they are not gonna resolve that with Ethiopia, it's even even uh personal use, no, it it's very very much stressed.
SPEAKER_00Um this, you know, this is this might be unfair of me. So I I have no expectations that you know this off the top of your head. But Australia is famously um a water restricted country. I remember growing up all the time we had water restrictions, limits on how long you could shower. You couldn't wash your car in public and stuff. I wonder if you know what our do you know what our per person water allocation is? You just said it's 500 cubic meters for an Egyptian.
SPEAKER_01So so so there are different fa it's called the Falcon Mark Index, uh Ryan. So you have uh 1700 uh cubic meters per person, that is your approaching water stress, right? Now below a thousand cubic meters per person, that is water scarcity. I mean, that is when Egypt's got half of that. Yeah, absolutely, and and and Egypt is is is is the 500, right? Is it's where the water stress, where you it's absolutely an emergency. Uh and there's also withdrawing, well, for example, you say, oh, I can still see the Nile River in Egypt. Why don't they uh increase uh, for example, um water from the Nile? All the rivers, all the riparian states understand that there's a certain percentage that you can withdraw from rivers, and after that, the river is not usable anymore, right? There is water there, but it's not replenishable water anymore. So there's a certain, I believe it's at 40%, and you can't exceed that. Uh the river becomes unusable. You can't use that water anymore. So, and and and Egypt had uh has a history of depleting its aquifers, and there's a whole history there, right? I think one of the destinations to understand, of course, is Australia and what they did, right? But also Israel, which is close by for Egypt, and they the technology, the desalination um plans that they have. I mean, all of that technological know-how of how to um manage water, not just from the supply side, but also from the demand side, right? Is absolutely phenomenal in Israel, and and Egypt is is is is closer to that where they absolutely have to deal with that, other than just banking on Ethiopia being more generous.
SPEAKER_00Um I don't want to take this too far away from the topic of war and yeah, Orion.
SPEAKER_01It's on Ukraine, right?
SPEAKER_00Yeah, but there was um uh in uh Tim Marshall's book, Power of Geography, he speaks directly about that um dam, the grand Ethiopian Renaissance dam, the most unnecessary third word and a title ever. And just how it's the most tangible example of a country having a geographical power over another because it's you know they call Ethiopia the sort of tabletop of of Africa to where most of the major rivers are birthed, and the Nile it comes from there, and so Ethiopia can just sort of turn on and off the tap as they want. I mean, imagine that is a stressful sort of geopolitical fragility to have if you're one of the guys in power in in Egypt and you had to deal with that.
SPEAKER_01So there's a there's a very, very like historical dilemma there because across history, Ryan, as you know, the civilizations were downstream countries. Like think of Mesopotamia, think of Egypt, right? These are downstream countries. But now that leverage has flipped on its head, where the leverage is now with the upstream countries. Think of Turkey with Iraq, Syria, think of Ethiopia, Egypt, right? It really flips.
SPEAKER_00China and India as well, they're taking away from the LAs.
SPEAKER_01Yes, absolutely. So so the the idea here is that not just Ethiopia has leverage, it's also the funders who have uh you know funded the building of the dam, and that is primarily China. So China also has a leverage here, right? So it's it's quite interesting how the geopolitical in infrastructure in particular, and and the Chinese are masters as that, is that they leverage geopolitical uh power through infrastructure, and they found in the Ethiopian dam a very much justified infrastructure because it's very much underdeveloped. They have suffered from civil war until the 1990s, right? And and it's absolutely justified that they need economic uh development, and the dam you know provides electricity and other types of uh economic development tools. And and yeah, that that is a great opportunity there, right? And but the thing is that I think is also balanced this out is that China also has a lot of interest in Egypt. So if anybody has probably you know a legitimate role to play as mediator, it might be the Chinese or or of course the World Bank, which has a lot of um uh experience in mediating between riparian states. But yeah, that it's it's not just Ethiopia. I mean also the funders of the of the uh uh great uh Renaissance dam have leverage.
SPEAKER_00Yeah. Um and also that was a great point you made there, just how um how significant a leverage uh funding a foreign piece of infrastructure can be famously. It's like the debt trap diplomacy um line of things. And um I would urge if anyone was interested in that, that's exactly what we spoke about in our last podcast, uh, specifically the Belt and Road Initiative and I think Sri Lanka and Pakistan specifically. But back to the um topic on hand. This might seem like a silly question, but why is wheat so important? Um is there not is it simply just because there's no substitute good at such a low price per kilo? I mean, is it is it absolutely necessary that we can't do we can't get around the sort of efficiency of calories in for price that bread is, for example?
SPEAKER_01That that is where culture uh plays a big role, right? It's it's the role of bread, right? And breaking bread. And and the all those phenomena around bread is is very much entrenched in in Arab culture. Uh, you can't breakfast, lunch, and dinner, you can't escape that food stable, right? It's there in your face all the time in different forms. Um, and of course, the French had to come in with the croissants and all of that. So it's just meshed up with everything that a decent lifestyle, even at the at the middle income and low income level, is just part of it, right? Um, I think there are two reasons of why this did not budge, although the leaders in those countries knew that this is a weak spot and they cannot, for the life of them, be self-sufficient in production of wheat. Saudi Arabia tried it in the 1980s and they depleted their aquifers, right? When they had to stop, right? They couldn't be the first wheat producer. It can't be done in the region to be a wheat producer. Sudan might have, if if everything goes back to stability in Sudan, Sudan might have a chance in being, you know, just covering some of the of the of the percentage there. But other than that, nobody can have self-sufficiency in wheat production. So the alternatives could not be introduced because remember, all those leaders they strived for stability, right? Regime survival. And how can you um you know maintain stability if you're touching upon the main foodstuffs of the poor, rich, and and the middle class? You won't do that. Jordan tried to even reduce a little bit of the subsidies on bread in particular, and there was the bread riot in Jordan, right? So it's really one of those, I think, the most risky um uh angles for any policy to have reform in. And that's why it would it has been postponed year after year. And the the thing that makes people, you know, uh at least not have an incentive to go out and ride is that they have the bread for the day. They they they know that they can feed their families, but once they know that you can't feed their families, as happened in 2011 in Syria and in and Tunisia and Egypt, that's you basically allowing people to believe that they have nothing to lose if their own livelihood and survival of their families is on the line, right? So that is the the most trickiest um and riskiest uh uh issues to tackle in the region. They can't have self-sufficiency in wheat, at the same time, they can't tackle uh the subsidies as much.
SPEAKER_00I I I I do understand the the cultural angle and how it's almost unthinkable to just go without having flour in your diet and you know, even in a even in Stockholm, right? It's just there are some diets that where you can uh volunteer to leave them behind, but I you said there um at the end as well. They at least know they have bread to feed their family. Is it is it is it the case that there is no substitute to bread? Is it the case that you remove bread from the supermarkets and all of a sudden you can't feed your family?
SPEAKER_01No, theoretically, no, of course, right? Because at least you have other carbohatred sources. You have rice and you have potatoes, right? I mean, I remember from just living in in Germany for a while and going back and visiting Syria and saying that, you know, we ate kartoffeln with, you know, the the potatoes, right? You have potatoes next to your steak, you have potatoes next to your uh fish, for example. So and it was so strange to hear that they they couldn't believe it. Like, how could you substitute with potatoes? So rice is a close substitute, but it can never replace the actual, you know, uh bread as as a it I can't see it happening unless you actually start out with kindergarten, with school, right? This is a generational education effort where you introduce that in lunches, right, in schools, and you just ingrain it in children that this is okay to do, and this is because bread is is is difficult to to I don't know to to grow in our countries. We can we can now rely more on potatoes and such. I mean it's definitely a generational educational, uh, what do you call it, engineering, social engineering type of project that will will take years, but yeah, it's it's one of those uh scary things that um you know those leaders have to think about and tackle.
SPEAKER_00To move on from the wheat question, because I think uh you've really covered that top to bottom. That sounds like it's the biggest sort of implication and and downside to the region from the war. Um but can I ask you about something else which is uh a little bit more niche? It doesn't affect the broader populations, but I've seen rebel groups from Syria and the Central African Republic and um potentially others as well that are very motivated to join the Russian cause and denazify Ukraine. So could you explain this to me and the audience? Where does the motivation come from from these groups?
SPEAKER_01Uh so you have Russian military presence in Syria since uh 2015, uh, where the Russian military has really helped the Syrian government to repel uh the and and you know try to um uh nullify the the rebellion threat against the government. There's still almost over 30% of the Syrian Tory that is still in outside of the control of the government, but for for the most part, this Russian military has was able to stabilize the situation in Syria. Now, for that particular reason, you have now uh trained armed men that have been in in uh urban combat, uh have accumulated urban combat uh experiences, and now those can be mobilized to join the Syrian effort on the Russian side. Uh but but to also make this interesting, uh Ukraine also is also uh having people who are Syrians and Libyans and others that are more than happy to fight the Russians in Ukraine. So you have uh mercenaries, right, on both sides that are join joining the the the film you know the whatever the the what's going on in Ukraine. And you know, the idea of inviting foreign fighters, I mean, that is a double-edged source because you could you get you get in an unstable situation all sorts of characters, right? You can get the one that says, well, I'm I'm here to fight the Russian, and then you can find him in Hungaria or or some other place, right? I mean, so so all of that creates more uncertainty for Ukraine, is that it it opened up the space to invite foreign fighters. They are not just joining the fight with the Russians against the Ukraine. You have also from the region people who are uh they have been bombed by the Russians, right? They can't wait to fight the Russians uh in other places. So um it's quite interesting. I mean, you know, it's uh yes, there are definitely mercenaries from Syria, from Libya, and from other countries that are joining the fight, but not just on the Russian side.
SPEAKER_00So the motivation on one hand is people want to get revenge against the Russians, so they're gonna fight alongside the Ukrainians. Is the motivation on the other hand that they are, you know, paid mercenaries and this is a job opportunity for them? Or are there also ideological groups that want to fight alongside the Russians from the Meta region?
SPEAKER_01Uh I can tell you from the people that are going from Syria, for example, they are ideologically motivated. For so the Russian alliance with the Syria is not a new phenomenon. Uh the the Syrian military has been uh trained and equipped and supported by by the USSR and then later Russia for many decades. So there's an idea ideological affinity with the Russian worldview perspective, right? There's a belief that uh the the Russian the Russian protection of the uh Orthodox uh Eastern Church that is very much believed in Syria, right? So so you also have that religious angle where uh the Russia says, we are your protectors, right? We are the protectors, the legitimate protectors of the Eastern Orthodox Church, we are the protectors of the East, the rise of the East, right? I mean, the the whole perspective there is that now a young Syrian man that is absolutely, you know, believe believe with that ideology, finds that a good paying opportunity to to uh uh to fight with the Russians. Uh he feels that this is not just an opportunity but also an honor to do that, right? To be selected, to be trained, and to be shipped over overseas. And that's quite unfortunate because now you have a population of uh young men who have not only experienced the horrors of war in Syria, but now have to double down on on another set of horrors and and trauma that they're gonna come back with from Ukraine. It's absolutely devastating.
SPEAKER_00Yeah, it is devastating and and for me, like so um inexplicable. You know, I I I kind of begin to understand the motivations to go and um say, yeah, defend in a region that is completely separate to you. You know, no one's gonna look like you when you go over there, and um things are gonna be different. Then they're gonna be speaking Ukrainian and Russian to each other, you know. It it is yeah, it's it's very it's perplexing. Can can you put some names to these groups um who are heading over there?
SPEAKER_01Uh there are it's it's now the group of individuals that uh the Russian officers on the ground in Syria and Hemim base uh in on the on the Mediterranean. You know that the Hemimin base is the uh Russian base uh in Syria uh near Tortuz. And um yeah, it's it's where they are trained, where they are also vetted and selected, correct? So it's not just a group, it's it's the the could be from the Syrian military, could be from the paramilitary that supported the uh mil uh Syrian military operations in Syria, could be so group of individuals that are just trained and shipped. Uh the other side is doing that as well. Is you know, we if there's an opening for a pro-Ukrainian foreign fighter to have a place in Ukraine and fight the Russians over there, some there's some movement from Syria on that side as well. You know what makes this absolutely um difficult to comprehend is that while you have the Russians and the Ukraine, there's there's kinship, right? They not only understand each other, there's also family ties between the two, right? They it's it's the folk, right? They understand each other. And to have those foreign elements come in, it's it's diluting this whole possibility of reconciliation that existed, and now you have more trauma and more possible human uh human human rights violations. Yeah, it's it's just clouding the picture more and more when you have foreign fighters coming into that picture.
SPEAKER_00Yeah. One more on the foreign fighters. Um a group that has been infamous for you know the longest time, um, but are getting a lot of attention now since this war started out was the what the Wagner group. Um who uh my girlfriend was telling me the other day, so I'm prepared to be wrong if this is I didn't fact check it, but she said Wagner, the reason it was called the Wagner Group is because um Wagner is the famous composer and he was famously Hitler's famous composer. And the guy who founded the Wagner Group um loved Hitler, and so he uh named it the Wagner Group after that. I I don't know if that's true, but at least that was what what she told me. And um anyway, it's like an interesting backstory. The Wagner Group are just dripping in atrocities uh uh you know throughout Africa, throughout the Middle East as well, I'm presuming.
SPEAKER_01So and Mali, the latest. And Mali, and and they're now in Mali.
SPEAKER_00Yeah. So could you talk about uh just as as much as you've seen or you or you know, um what their role is in this conflict as well?
SPEAKER_01Um so I don't know in particular in Ukraine where the Wagner group uh is is uh positioned or or utilized and so forth. I mean, I I wouldn't be surprised if they are. Uh, but I I definitely know that they had uh their operations in in Libya, for example, in support of Haftar, which you know Libya is now a two-section, the the eastern section under Haftar, who is pro-Russia, pro-UAE, and so forth, and then you have the eastern part, which is supported by the United Nations and the international community. And so so they they had a big role to play in in Libya, for example. They have they are now just signed a contract with the Malian government who have tried to kick out the French uh uh counter-terrorism operation in Mali. Um and uh and and now the contract is signed with the Malian government to support their security operations in Mali. So it's quite fascinating the reach there. Of course, the Russian authorities deny that they're there's it's a private military uh group and so forth. But yeah, I I don't know the specifics of how they operate in Ukraine, but their presence in in Syria and in Libya, it's is you know, everybody knows about those.
SPEAKER_00Interesting. Look, I did again the time has absolutely flown by. Um I feel like we got the big one sort of out of the way, which was the implication of wheat shortages for the MENA region uh due to this conflict. I also wanted to ask you how much it was um the people in the MENA region are paying attention to this conflict as well. Is it sort of happening in the background, or are they just getting on with their lives and hey, you know, this is absolutely nothing to do with us. We've been going through loads of stuff in the last 20 years, we'd need to worry about them.
SPEAKER_01Yeah, so the people, a good percentage of the intelligentsia in the region, you know, the academics, the reporters, the the officials and so forth who are engaged in these types of uh discourses, um, a good percentage of them they found vindication when they were trying to accuse the West of weak leadership, for example. Biden is weak, uh, Boris Johnson is weak, it's it's the EU is a mess, right? They so the all of that now there's vindication because Putin did not care and he invaded anyway, right? And and and there's nothing from that perspective. Look, there's nothing the West can do about it other than blabber about how much they are upset. NATO cannot motivate there because they don't want to engage in direct combat combat with with the Russians. So there's there there seems to be a sense of vindication for that percentage of the intelligentsia and regional. Like, look, we told you the the futures in the east, right? With China and Russia, because precisely of exactly what is going on in Russia, that's just a vindication of that. The others are other percentage is is about a bit more cautious, right? They said it's quite um premature to announce the the decline of the West, that they are you know useless, or or we shouldn't take, we shouldn't care about their uh allegiance or their friendship and so forth. So I and I think that is a bit more prudent because there's a lot there that the United States still has um you know its influence in in the region. Yes, we talk a lot about the the the you know the uh disengagement of the United States from MENA, but yeah, there's a lot there. There's defense contracts, there's security agreements, there's um there's a lot there that the United States still has leverage in. So um, but yeah, the the tone overall is that see, we told you there's they they are weak, there's nothing they can do about it, and um yeah, and and they um Chris and Everettem also justify that what Putin did. You know, for example, if someone said, Oh, this is this is the intervention in uh you know in a sovereign nation, for example, the the rebuttal would be you don't understand the Ukrainian history, right? You don't know where Ukraine belonged to first. So there's actually they've read, right, and they are ready with the rebuttal, and um uh and they don't mind uh even justifying Putin's perspective here, and that is quite scary, right? Especially when you hear it from uh you know educated people from countries that are traditionally pro-US. So if you hear it from a Syrian, from an Algerian, yeah, that's that's not a surprise. But if you hear it from uh Gulf countries, right, that's that's quite an impression if that how much the perspective has shifted to engaging with the East, justifying the East, right, and just being on board with this.
SPEAKER_00What do you chalk that down to? That traditionally sort of pro-US countries in the MENA region who aren't washing Russia today, you know, who aren't being fed the propaganda machine, why they still might come down on that side of this uh conflict?
SPEAKER_01I think it has a lot to do with US policy in the region post-2012 onwards, right? So the the Arab Spring happened in 2012. Uh, and here you have to remember Arabs have long memories. They do not forget. Everything is connected, everything is connected to everything, right? This is the the the really the Bedouin spirit here is that the long memory and everything absolutely has to be vindicated and and accounted for. And they will never forget the the the how America has stabbed the traditional alliances with Hasnibubarak, with the Zainla Habiddin bin Ali in Tunisia, right? And it just sided with the people on the streets. Of course, from the US perspective, that makes sense because you how long can you support dictatorship and authoritarian leaders? But for the traditional leaders in the MENA region, it's like this is a stab in the back and US cannot be trusted anymore. Now, couple that with how the United States now started to negotiate with Iran and just putting everybody else under the bus, right? Now Iran is the is the future for the region, right? Between 2012 and 2015, that was the case for GCPOA. And um they're willing to make an agreement with Iran, up ease Iran, and that that whole perspective now uh accumulated in the psyche. There is that we can see clearly that the United States has abandoned us. Remember a few years ago when there were um houthy uh drone strikes on the major oil fields in the eastern part of Saudi Arabia, and the others, that was a major attack where the United States did not mobilize the Patriot uh missile defenses, right? So there was not any type of um tangible action that would answer to that security agreement between the US and Saudi Arabia. Is that the US did did nothing, right? And again, the US did nothing when a major port in UAE also was attacked by the Houthis that were seen as an arm to Iran. So the stabbing off the back of traditional leaders in MENA, the willingness of the US to do that, coupled with Iran is is the one we're gonna talk to and compromise with. Yeah, that's what do you want us to do? And it's and and also add to that, Ryan, is that the market, the oil market is shifting to Asia, right? Most of the oil production and exports is geared to the Asian market. So it's not, oh, we're gonna for the men are Asian, exactly. 40% of uh Chinese imports are from the GCC countries. There is a nuanced, very intricate security and and oil relations that's gonna develop between the two. It's just natural. That's where the oil has a future market. You know that the EU wants to divest away from oil, right? We don't want to do anything with oil and gas. This is this is done. The US has the same thing. You're gonna run off windmills. Exactly, exactly. As if they don't understand. So there are two things here. They don't understand that even the production of electric vehicles will need more petrochemical products. Where is that coming come from? From oil, right? It needs 30% more petrochemical products to make the vehicle lighter, right? To make it uh fuel uh to make it energy efficient. Um, the other thing is that all the wind turbines and all that, where is that coming from? This is from petrochemical products. That is coming from oil. The worst thing, one of the Saudi officials used to say, the worst thing you can do with oil is burn it for energy. There are better, better, better uh utilities for petrochemical.
SPEAKER_00Oh, that's a great line.
SPEAKER_01Yeah. The other thing is here is that even with the most conservative that have accounted for uh green energy, for uh advancement in technology, in 2050 we're gonna need 110 billion barrels a day. Now, in in 2020, 2022, we use 100 million barrels a day, right?
SPEAKER_00110 billion.
SPEAKER_01110 now now we're predicting a 10x increase in the next 30 years. So so so the thing is that now now 100 million, 100 million, 110 million, right? Okay, yes, 100 million now, 110 million in 2050. Now we have the sources for 100 million uh barrels per day now. In 2050, there's an additional 10 million barrels. Where is that coming from? If there's no investment now and people are reducing their capex, right, where is that 10 million coming from? And this is accounting for green energy, accounting for, but with population growth, right, between 2022 and 2050, you're gonna need 110 million barrels a day. And this we're not accounting for the 10 million because everybody does want to does not want to invest in oil production, oil discoveries, oil drilling, because of you know the many pressures from not just the federal government, but also general um, you know, trying to divest away from oil. But there's an oil crunch that's going to develop regardless uh in the future. If there's no capex, there's no capital expenditure there in this field.
SPEAKER_00And when you say there's no capex, you mean people aren't spending loads of money to try and find new oil fields or to invest in better oil drilling technology. Basically, money's just not going towards it, it's being Exactly.
SPEAKER_01Windmills, um, solar energy, which which I absolutely understand and absolutely am on board with. But accounting for population growth and accounting for even a percentage shifting towards electric vehicles, you still have an increase in demand for oil in 2050, no matter how you look at it, right? The reduction in demand might be by 2050 two million barrels. That's a conservative estimate. But you have still you're still a large amount of demand that is going to be there regardless. Just think about the petrochemicals that are gonna go do go in into the production of what you need for green energy. So forget about burning gas for energy. We need that same oil production to be diverted for petrochemicals.
SPEAKER_00To produce the materials.
SPEAKER_01Right? Absolutely, plastics and other all other types of of uh of production that goes into turbines and and um uh uh car frames and so forth.
SPEAKER_00Do you know something crazy I learned about oil the other day? That it polyester, like the running tights, the sort of um swimming t-shirts, is just oil spun around at some ridiculous speed.
SPEAKER_01Yeah, absolutely.
SPEAKER_00I mean I mean it's blew my mind.
SPEAKER_01Absolutely. The the most um uh one of the the best fertilizers is is from is from oil uh and because it produces nitrogen, right? I mean there there is a and nitrogen nitrogen-based fertilizers is is part of that production line that can come out for petrochemicals. I mean it's it's just a vast amount of of um investment opportunities that is associated with oil, but now it has like a black mark on its back, right? Because it's associated with the with the oil industry. But you know, you don't have to divert oil for energy consumption. You can you can basically use it to produce petrochemical products.
SPEAKER_00Um well look, guy that we've definitely uh ventured away from the central um topic. So I just want to return to that for the final question. Uh you um I I think yeah covered top to bottom the role of wheat as the most obvious implication for the Meta region of this war. We touched on maybe a little bit of the ideological uh reaction as well from what people are thinking to what as well rebel groups might be uh motivated to do. Could you just look forward into the future? I don't want you to say make a prediction or anything, but if you could just speculate as to how the MENA region is going to be further affected by this uh conflict.
SPEAKER_01Um picture. Well, um, so there seems to be a kind of uh early consensus that the partition of Ukraine might not be irreversible with the Republic of Donetsk and Crimea and and the other uh I think two other little republics there. And it's kind of hard to see how Putin, if everything stays the same, you know, if everything stays the same, that that will change. So there's a conservative conservative scenario that says that well, the Ukrainian partition is not something we could, you know. But now the worst scenario is that he takes over Kiev uh and and uh controls Russia, does forced regime change, and he has a a um favorable government structure in Ukraine, and it becomes uh something uh resembling, I don't know, maybe Chechnya or something. I mean, this is the kind of the worst scenario that hopefully it's not gonna. But now the other part is is Moldova safe, right? Are other region other countries in Eastern Europe safe? And will Poland, for example, actually send the MiGs to Ukraine? And that is a NATO country that is now engaging in war efforts. So all of those, I mean, will have ramifications, it might weaken Russia to the point of you know, now the the GCC countries will will, okay, we we're not supporters of this, right? We're gonna wash our hands off this, and we then they can have more uh playing room here in in trying to navigate with the agreements that they had with Russia and so forth. That would give them a bit more leverage in in working that out with the United States. But I think the the GCC countries and MENA countries are really hedging here, is is it's they're watching this like hawks, and and because that will affect their relationship with the United States, with with the European countries. And um yeah, they're they're watching this. It's really a close-watched development that will have an effect on the MENA region at large. Not just the wheat, but also the relationship that they have and how they're gonna relate to Russia and China as an alternative.
SPEAKER_00Absolutely amazing, Gay. I uh really appreciate you giving me some of your time again. Um yeah, it's a privilege to get to talk to you. I get the sense as well. Uh I think I felt the same last time I spoke with you, but the there's so much going on in the meta region. Uh it seems like every country has its own big problem that somehow adds complexity to the guy next to him, and then that double downs again to the guy next to him, and so forth, and you end up with this belt of countries that you know in most of the world's energy comes from there, right? Maybe that's where it'll that's why all the complexity is there.
SPEAKER_01But anyway, um, Ryan, you're welcome. Uh also going back to the geography aspect of it, it's it's at the fault line between east and west, right? There's no uh you know ignoring that region at all. It's it's where they're at.
SPEAKER_00Brilliant. Well, thank you so much.
SPEAKER_01Very welcome. All right.