Choose your traveling companion carefully before you set out. Those were the words -- a proverb well-known to Arabs -- that German Economics Minister Karl-Theodor zu Guttenberg used to conclude his opening remarks at the Bertelsmann Stiftung's 12th Kronberg Talks, held in Riyadh, Saudi Arabia, an event co-organized with the King Faisal Center for Research and Islamic Studies and Saudi Arabia's Institute of Diplomatic Studies. As would become apparent over the course of the two-day meeting, the attendees had indeed taken the saying to heart. The first segment of the gathering was open to the public, a fact that was in and of itself worthy of note in the Saudi capital. Above all, however, the talks were marked by an openness that was much appreciated by the some 50 policymakers, diplomats, business leaders and academic specialists from Germany and Europe. In Riyadh, Europeans and Arabs set off together as willing companions on their common journey.
The first stop: the armed conflict between the Israelis and Palestinians. Were Israel to adopt the Arab Peace Initiative, Europe's assistance would be needed during the joint process. "Support the Arab Peace Initiative in Europe," said Prince Turki Al-Faisal, chairman of the Board of Directors of the King Faisal Center. Prince Turki reminded his listeners of Saudi Arabia's proposal for a Middle East devoid of weapons of mass destruction, an area stretching from Israel to Pakistan, something he said could be achieved through negotiations as opposed to through the carrot-and-stick method.
The event's second issue was the pending free-trade agreement between the Gulf states and the European Union. As Saudi Finance Minister Ibrahim Abdul Aziz Al-Assaf noted with regret, even though Europe is the region's largest trading partner, negotiations have bogged down. His remark was not an accusation, merely a polite request directed toward the Europeans to finally set things in motion. (During the two days of the talks the negotiations in fact resumed, the atmosphere became less charged and, at least in terms of both sides' feelings toward the issue, progress was made.)
Finally, the third topic was the all-encompassing global financial and economic crisis. "The problem is not the financial sector, but how it is monitored and regulated," Al-Assaf said. "No one listened when we called for oversight of hedge funds." His remarks in Riyadh were virtually identical to those given by German Chancellor Angela Merkel at the G8 summit in Heiligendamm in 2007, and at least the Germans present must have felt at one with the Saudis on this point.
At the same time, Al-Assaf made clear that outsiders do not always have an easy go of it when they try and find common ground with the EU. "In Europe, you have one currency, but you have a variety of policies," he said. With that, the gathering shifted from public to private mode. Initially, participants discussed the challenges posed by the current financial and economic crisis, asking how Europe and the Gulf region should respond to them, a situation made more complex by the different background conditions found on both sides. Germany, for example, the EU's economic engine, is currently experiencing negative growth rates of some six percent, while Egypt is growing at a rate of four percent, with the overall economy in the Gulf region just as robust, excepting Dubai. According to a business leader from the region, Middle East-based banks had participated to a very limited extent in the subprime loans issued in the United States in light of the religious constraints on financial transactions they are subject to. Investors in the region were just as hesitant to get involved with complex financial products, he also noted, and the entire region is thus emerging from the crisis in a more favorable position, even if profits are somewhat reduced and a number of exceptions are serving to prove the rule. One participant active in the Gulf's investment sector reported that a considerable accumulation of capital has occurred over the past five or six years, estimating that the region's sovereign wealth funds now top €2 trillion. "Investors are interested in stable, long-term financial instruments and not in achieving fast returns," he said. "In addition, they are subject to strict oversight, which helps when dealing with our European partners."
Yet how long will the "window to Europe" remain open? As one participant from the Middle East remarked, Asia has become the market of the future. Europe remains, from the vantage point of the Gulf states, both a partner of choice and a complex entity with 27 members that is, for the Arab world, hardly easier to understand than it is for many Europeans. At the same time, it remains a peripheral factor, more visible as a financial and economic player than a political one -- all of which impacts its opportunities in the Gulf region.
Political issues were of course some of the most pressing addressed at the Kronberg Talks, as both sides agreed, even if the vantage points remained distinctly different. First and foremost, there were the three I's: Israel, Iraq and Iran. In all three cases, the Middle East's actors and analysts sense that Europe takes an interest in the crisis-ridden region, or, more precisely, several European nations do, "but not the EU as a whole," to quote a critical observation made by one participant well versed in the views of both sides, whose remark was meant to highlight the EU's lack of joint resolve.
When the discussion turned to Iraq, emotions were considerably calmer than at last year's Kronberg Talks. As one attendee noted, the situation in Iraq is improving, despite the horrific images of suicide bombings seen in the media. Yet what about the other two I's, with their nuclear capabilities? If Iran acquires nuclear weapons, said one Middle Eastern participant, then "we will have three options: first, we can capitulate; two, we can seek refuge under someone else's nuclear umbrella; or, three, we can acquire such weapons ourselves." That, in turn, explains the growing interest among Iran's Arab neighbors in establishing a nuclear-free zone.
If the countenances clouded when considering conditions in the east, they cleared when gazing toward the far west. As many noted in Riyadh, America's new president will help improve the situation in the region. In addition, they felt that security in the Gulf states is a matter for the entire Arab world, since the chain of crises stretches from the Indian Ocean to the Horn of Africa and from Pakistan to Somalia. At this point, however, opinions diverged -- even more so when the question arose of whether the Gulf's security is an internal or a global affair. Various attendees noted that the war to free Kuwait and in particular the invasion of Iraq by American (and European) troops had made clear to the entire region that its local conflicts would inevitably become externalized, with a variety of outcomes, including the emergence of nonstate actors such as Hezbollah. Others disagreed, particularly those cognizant of a growing focus, at least by the region's elites, on the interrelatedness of the region's conflicts to the global situation.
While the Middle East's predisposition to Obama improves the United States' image in the region, the growing distrust of Iran is clouding feelings about that major player. The Kronberg Talks took place shortly prior to Iran's presidential election, and one notable aspect of the discussion was how little participants were interested in which candidate would win, and how few illusions they harbored that the situation in Tehran might change for the better.
For many at the event, the issue of security when discussing Iran includes more than just the weighty question of nuclear weapons, since demographic trends are transforming the country (and Iraq as well) into a very young nation. Young people there want an education, jobs and a future. Yet as one participant explained, until now they have experienced underemployment, if not unemployment, while water, arable land and food are becoming more scarce, a situation that environmental degradation is making all the more critical. Iran, the speaker noted, is even less prepared to face the post-oil era than the Gulf states -- yet another potential source of conflict. In addition, tensions between Shiites and Sunni and between Arabs, Persians and Kurds also play a considerable role in Middle Eastern relations. According to one participant, the current economic crisis has also made differences clear between countries such as Iran that are willing to disburse financial resources, and others like Saudi Arabia that are less forthcoming -- another indicator of the different levels of readiness to respond to the current global crisis.
The free-trade agreement between the Gulf region and the European Union is, as noted, still being negotiated. Some participants argued that it might be better to ignore the bothersome issue of exports for a year or two and come to terms on everything else in order to make some clear progress and build trust on both sides. It would be possible, another attendee said, to reach an accord on important topics such as fishing, environmental protection and maritime free-trade zones, since that would also give rise to greater trust.
A number of participants were predisposed to using similar tactics to make some progress on the eternal issue of promoting a so-called peace process -- "such an appealing term," as one attendee from the Middle East soberly noted -- between Israelis and Palestinians. The method for doing so was also the subject of debate, with some arguing that the problems at hand should be addressed in parallel and no longer step by step. Some felt that the whole process should be set down in writing from the start and that the flowery phrases should be dispensed with; others felt a timetable is necessary, as are exact benchmarks -- a point that quickly met with general agreement.
Always expecting the United States alone to deliver a solution, which has been the case since Jimmy Carter was president in the 1970s, is insufficient, participants said. Yet Europe has been as indecisive and scattered in its dealings with Israel's governments, especially the recently elected one, as the Gulf states and Arab world have. Is the as-yet untried alternative -- roundtable negotiations that bring all of the region's actors together to discuss the full roster of interrelated issues -- the better approach? As Gunter Thielen, chairman and CEO of the Bertelsmann Stiftung, noted in his opening remarks, perhaps it is time to stop trying to resolve each crisis in succession and put all conflicts on the table, clearly and openly.
Thielen's observation met with both doubt and appreciation. On the one hand, a number of participants felt that the Middle East is not ready for a cooperative security organization a la the OSCE, since mistrust in the region is still too prevalent. Yet when the OSCE was first established, Europe, which was then in the throes of the Cold War, organized a conference on security issues and was able to address the mistrust that then pervaded international relations. "Talk, talk, talk," was the recommendation made by one European to attendees from all regions, since "as Dr. Sigmund Freud's method has shown, that is the best method to overcoming trauma."
The extent to which "talk, talk, talk" can in fact prove helpful was demonstrated by the two days of lively discussions in Riyadh. "Kronberg on the Gulf" was a world premiere that took place in the Saudi capital's desert sands, far from the real Kronberg in central Germany. Could there be a more appealing symbol for strategic dialogue in a key global region keenly aware of the opportunities available to it and willing to resolve its crises with the help of its partners?