March 03, 2011

Jasmine thorn

The global economy is still coming to grips with the aftermath of the Jasmine revolution- a phrase originally coined for the Tunisian uprising but now which I will apply to the infectious unrest that has spread across the Arab world and even beyond, with pre-emptive detentions and website curbs being enforced in faraway China. Unfortunately, commercial shipping faces exceptional and additional risks that threaten to hobble it just as it appeared that it was getting back on its feet.

Obvious risks have to do with fear of the spread of the unrest, impact on oil prices and regional political or economic stability. Libya -with the largest reserves of oil in Africa- is in civil war, but that is not what rattled the stock and oil markets around the world last week. For Libya is only the 18th largest producer of oil in the world, and ranks a lowly 9th in proven reserves. If civil war there has spiked oil prices to the extent it has, it is not because of fears of the Libyan oil tap being shut off: it is because of fears of the fragrance of Jasmine spreading - imagine if Saudi Arabia (second largest oil producer) or Iran (fourth) were hit by paralysing civil unrest and violence.

Egypt, Suez Canal or not, is another common concern; it is the centre of gravity of the Arab world and is, additionally, the birthplace of the Muslim Brotherhood, the theological base for the Al Qaeda. The geopolitical impact because of instability and public demonstrations in countries like Morocco, Jordan and Bahrain – or even Yemen, with its own civil war and strong Al Qaeda affiliate- similarly impacts shipping more or less in line with other commercial activity.

However, the major unique threat that shipping faces must have to do with security of sailors and ships, for the Jasmine revolution generated tsunami can quite easily threaten these for entire voyages from Gibraltar to Sri Lanka and eastwards.

With apologies to all for beating my favourite dying horse yet again, I invite you to join the dots with the following facts. (Not theories. Facts)

1. Shipping – and the wider international community- have proved, beyond a shadow of a doubt, that they are incapable or unwilling to protect ships and seafarers from piracy or maritime terrorism to the point that they appear deliberately malevolent.

2. A maritime advisory (23 February 2011) says, in a further testimony to links between terrorism and piracy as if these were needed, that “Pirates in the harbour town of Xaraardheere (Somalia) have agreed to pay 20% of their ransom money to Al-Shabaab (an Al Qaeda affiliate) in exchange for being allowed to use the town as a base for their activity”.

3. The Al Qaeda in the Islamic Maghreb (AQIM) publicly offered its support to Libyan rebels recently, even as Gaddafi blamed AQIM for the uprising in his country. (Al Qaeda affiliates may not have started the Jasmine revolution, but they will try their damnest to benefit from it across the region. A benign example-the Muslim Brotherhood, banned for decades, is close to being absorbed in the Egyptian political mainstream. Less benign possibilities would include more Lindbergs and MStars)

4. The Al Qaeda in the Arabian Peninsula (AQAP), active in Yemen and Saudi Arabia and with links to African, Pakistani, European and Afghani affiliates, has attacked ships in the past and has publicly stated that it wants to control to Bab El Mandab straits at the entrance to the Red Sea.

5. Way back in 2003, a plot in Morocco resulted in three Saudi Arabians being jailed for planning to sail speedboats rigged with explosives and sink warships in the Straits of Gibraltar. They could have targeted merchant ships more easily. Today, the Western Med is unstable. Chances of reactivation of terrorist cells are therefore high.

6. Attacks on shipping in the Niger Delta and approaches are largely ignored right now. Nonetheless, seamen (and oil workers) have been shot, killed or taken hostage. (No ships for ransom though, so ignorance is bliss)

7. The last week saw the ITF say they were advising “seafarers and their trade unions to begin to prepare to refuse to go through the danger area, which includes the Gulf of Aden, off the Somali coast, the Arabian Sea and the wider Indian Ocean”. No doubt this has more to do with piracy and the recent executions and torture of seafarers- or the killings of the four American yacht ‘Quest’ sailors - than the Jasmine revolution, and is another way of trying to put pressure on the international community to finally act. No one needs to be told of the impact on trade- and oil prices- if the entire Arabian Sea and Indian Ocean up to South Africa are out of bounds for seafarers.

I don’t know about you, but it is clear to me that nearly every country along the Mediterranean or Red Sea North African coast is (often violently) unstable today. Start from Morocco, where thousands have protested, demanding a new constitution, change in government and end to corruption. Algeria, Tunisia, Libya and Egypt. Sudan with its own (non Jasmine) civil war and split. Somalia. Even smallish Eritrea, where analysts fear unrest could easily spread. Only tiny Djibouti, with its large American military base, seems to be exempt.

Add Yemen to the North, and a much rattled Saudi Arabia (the Saudi monarch returned to his kingdom recently after two months, opening his wallet and spreading largesse to his subjects- debt forgiveness, interest free loans et al, $36 billion dollars worth-probably out of fear) to the mix, and you have a situation where the entire geography across a large part of the world is unstable and prone to terrorist violence.

Given terrorist history, designs, linkages, public statements and possible plans I spoke of earlier, and given that the northern Med and the entire Red Sea sees tens thousands of ships visiting or passing through every year, one can safely say that shipping- and seafarers- have a lot to worry about. Whatever worries the rest of the global community in this connection, getting your house and office blown up from under you is not one of them.

And we haven’t even started talking of piracy-terrorism yet; if we did, the unstable zone would extend up to the coastline of Sri Lanka, Western India, Oman and the Straits of Hormuz.

An idle thought to end: If the threat of violence to ships and seafarers widens from the Arabian Sea and Indian Ocean to include the Mediterranean and Red seas, will we be soon talking of permanent additions to on-board complements- armed teams operating in shifts?

What an excellent business opportunity, did I hear you say yet again?

No comments: