By Tertius Mynhardt Jacobs
Analysis in brief: With Trump’s execution of the renowned and highly (locally) respected Iranian General Qasem Soleimani, the tension between the USA and Iran has significantly been exacerbated. If the case of Archduke Franz Ferdinand is used as a benchmark then Soleimani’s assassination is considerably more disconcerting for the world. While it is a given that the conflict between the USA and Iran will have a severe impact on the Middle East, the topic of war between these two states and the potential for wider conflict in the form of World War III leaves questions as to the extent that African countries might be impacted. To this end, this position paper briefly outlines the recent developments of the USA-Iran conflict and aims to assess the various routes through which African countries will feel the impact of this contemporary conflict.
A more dangerous world
Image courtesy: Wikimedia Commons
Archduke Franz Ferdinand, heir presumptive to the Austro-Hungarian throne, was assassinated on 28 June 1914 by a Serbian teenager named Gavrilo Princip. Exactly one month later, Austria-Hungary declared war on Serbia and by the following week, Belgium, France, Germany, Great Britain, Montenegro and Russia were all drawn into the conflict, and later followed by the likes of the United States of America (USA). The assassination of this one individual is often seen as the catalyst that ignited the First World War (WW I), also referred to as the Great War.
Just over a century later, shortly after midnight on the morning of 3 January 2019, the head of Iran’s Quds Force, and one of the Middle East’s most influential men, Qasem Soleimani, was killed by a precision USA drone strike at Baghdad’s airport – the strike was authorised by US President Donald Trump from his golf resort in Florida.
Image courtesy: akkasemosalman.ir
Though it is easy to look at these two events and make the assumption that WW III may be upon us, the contemporary international system differs significantly from that of 1914-1918 and even from the subsequent environment of international relations between 1939-1945 which dictated the events of WW II. The contemporary international system at present rests upon the concept of global interdependence between countries rendering conflict on the scale of World War a highly unfavourable and unlikely scenario given the sizeable impacts which this would have on the global economy.
That being said, it is worth noting the argument of the International Relations Ideology of Constructivism which purports that International Politics is made up of social structures. Social structures, in turn, are but abstract human creations vulnerable to changes in cultures, societies and states. With this in mind, the sentiment originating from Iran sparks significant concern as a change in the majority sentiment may result in a change in ‘social structures’ and, accordingly, in International Politics leaving outright war not a far cry away from the mourning of Soleimani.
During their tenures, Trump’s predecessors – Presidents George W. Bush and Barack Obama – rejected the option to kill Soleimani as too provocative. His predecessors’ decisions, it would seem, had significant merit as the death of Soleimani saw Iranians lash out against Trump and the USA. The Supreme Leader of Iran, Ali Khamenei, paid homage to Soleimani as a “martyr” and announced three days of national mourning in his honour. Khamenei also vowed to exact “severe revenge” on his assassins with many perceiving the attack as a declaration of war against the USA. During the televised coverage of Soleimani’s funeral, official state broadcasters announced that one US dollar would be tabled for every Iranian in the country towards a US$ 80 million bounty for whoever kills USA President Trump. To make matters worse, Iran also discarded their landmark nuclear agreement of the Obama-era stating that their “nuclear program will have no limitations in production, including enrichment capacity”. Concurrently, Soleimani’s death also saw the Iraqi Parliament voting in favour of a plan to end US troop presence in the country. In response, Trump threatened to target 52 Iranian cultural sites – considered a war crime under international law – should Iran retaliate, though the Pentagon quickly stepped in to ease tensions stating that the U.S. Military would not violate the laws of armed conflict.
Image courtesy: Gage Skidmore
While the USA might argue that Soleimani was responsible for various unprovoked attacks on American forces in Iraq and that the Quds organisation Soleimani headed was viewed as a terrorist organisation by the USA, serious questions about the legality of the killing remain. A particularly noteworthy insight sprouts from noted international legal scholar, Prof Mary Ellen O’Connell from the Notre Dame Law School, who argued that “[p]re-emptive self defence is never a legal justification for assassination. Nothing is. The relevant law is the United Nations Charter, which defines self defence as a right to respond to an actual and significant armed attack”. This negative view on Trump’s actions is further supported by some of the USA’s UN Security Council peers – China, France and Russia – who took a dim view of the particular airstrike. In the wake of increasing tensions between the two nations, French deputy minister of foreign affairs, Amelie de Montchalin, noted “[w]e are waking up in a more dangerous world. Military escalation is always dangerous”. Given these developments, the topic of WW III has begun to gain significant traction as a social media trend with fears of an all-out war between the USA and Iran being viewed as a very real danger.
Spill-over effects on Africa
Considering the rise in fears between the USA and Iran and the idea of a third world war, certain topics, like the potential impacts on Africa, are taking a back seat to the media’s focus on the death of Soleimani. A first thought may drift towards Africa’s involvement in a military conflict, especially considering South Africa’s strong opposition towards the airstrike on Soleimani. However, a more likely outcome is vested in the knock-on effect impacting the global economy. In this context, the real threat comes in the form of surging oil prices.
On the day of Soleimani’s death, Brent Crude oil prices displayed a notable spike, reaching a high of US$ 70.72 a barrel on the 6th of January 2020, as fears of tension between the USA and Iran grew more intense. The spike did not represent an exorbitant surge in oil prices which is mostly due to investors not expecting the situation to deteriorate. However, should the near future see the US-Iran conflict escalate leading to a war fought across the border of Iran and Iraq, essentially disrupting production of oil in both countries and creating an increased demand for oil, a surge in the global oil price would be a natural consequence. Yet, the question remains of how such a hypothetical war, or even a World War in this region, might influence Africa?
Data courtesy: Nasqad, 2020
It is generally known that an increase in oil prices is linked to increased inflation and reduced economic growth. Every day inflation and economic growth is influenced by oil prices, to some extent, and although this is perfectly normal, the real problem comes in when the oil production of the world’s fourth-and fifth-largest oil producers, namely Iraq and Iran respectively, is disrupted. The every-day influence of the oil price is multiplied significantly causing an immense rise in inflation and having quite the detrimental effect on economic growth. Taking this into account one could consider South Africa’s already dreadfully low economic growth ranging between 0.4% in 2019 to 0.8% for 2020, according to the latest IMF estimates. An event such as a global oil crisis caused by conflict in the Middle East would only exacerbate the decline of Africa’s most advanced economy. Across Africa, economies that are already facing a tough time with the myriad of challenges in the global economy, such as the US-China trade war, Brexit and China’s broader slowing economic growth, would likely have a considerable impact on oil prices. Contributing to the threat is that the global economy is already facing a recession in the wake of weaker growth in both advanced and developing countries. Conflict on the level of outright warfare holds the potential to tip the world into another recession, adding another layer of impact on Africa’s already daunting economic challenges. While countries such as Angola and Nigeria might benefit from a higher oil price initially, the medium- to long-term view would still entail increased inflation, and potentially the effects of a global recession.
Another impact comes from African corporations, such as South Africa’s MTN, and their ties to Iran or even the broader region that might see significant disruption due to the hypothetical war. In 2018, MTN reported a 7% drop in half-year profits with about US$ 256 million accumulated dividends and loans from its joint venture in Iran. The key reason for MTN’s current operational and repatriation challenges in Iran is due to the re-imposed sanctions by the US which have made it difficult for MTN to legally expatriate dividends. Following MTN’s announcement of their challenges in Iran, the African firm saw an 8% drop in its share value. Continued disruption of African operations in this region holds an opportunity for high rewards, in the absence of prominent competition, though as the MTN example shows, also entails severe risks. While an opportunity might open for African companies to capitalise on this situation, it is more likely that the high risks and the USA’s influence will outweigh the reward limiting the scope for African businesses to expand in the Middle East.
The likelihood of WW III
Today, oil permeates most aspects of modern society. For industry and African economies, this is a particularly critical resource. Years later it is still argued that the 2003 Iraq War mainly revolved around oil, with USA’s interests in Iraq’s oil still determining a significant portion of its foreign policy today. Ultimately, however, the tension between the USA and Iran is unlikely to escalate – especially after Iran missed American troops, either intentionally or not, in their retaliatory missile strike. One train of thought may argue that if Iraq is even marginally successful in its bid to expel US troops from its soil terrorist groups in the region might be able to win some ground, especially if Iran opts to engage with these groups to retaliate at the USA. Combine this with Iran reigniting its nuclear plans, and Scott Sagan’s argument of ‘more will be worse’ which states that “new nuclear states will lack the organisational structures to ensure safe and rational control of their weapons”, will evolve from theory to reality. Such an outcome will have a much higher likelihood of leading to WW III with African countries to the north and more advanced states such as South Africa becoming involved out of geographical location and alliances to other nations, as well as their commitment to human rights and the preservation of global security.
Regardless of the above, the year ahead does not hold the potential for a conflict on the level of a World War. The likelihood of a global recession and surging oil prices, significantly disadvantaging African countries, however, is very real and should have African leaders quite concerned on the course which Khamenei, and Trump in particular, will decide on next.
Key Points
- US President Donald Trump ordered a drone strike on Iran’s General Qasem Soleimani, the second-most important individual in Iran.
- While the escalation to all-out war is unlikely, questions remain regarding the stability and future of world oil prices.
- Although Africa is unlikely to be involved in a war in the Middle East or a third World War, such events will still hold significant detriment for most African economies as well as for the global economy.
- The biggest threat sprouting from conflict between the USA and Iran is vested in the knock-on effect of surging global oil prices.
- A myriad of consequences stemming from Soleimani’s death is still to be realised, including Iran’s decision to renew its nuclear plans, leaving a lot of uncertainty on the horizon.