The Region that Defies Prediction. The Middle East’s Past Upheavals and the Storms Yet to Break. With Author Simon Sebag Montefiore

0:00Anyone who wants a planetary multi-domain presence, whether it's China or America or even a slightly weakened Russia, they need a presence in the Middle East. There is this disaster in Israel, you know, one of several disasters. One of them is proportional representation, the system of democracy that Ben-Gurion brought in, never thinking that this would happen. There is a real danger now of the militia-ization of Israel. Israel could be, like Lebanon, captured by these settler militias. The Chinese have really concentrated on infrastructure, on investments, on trains, on ports. And so that's worked pretty well for them.

0:40But they're also, meanwhile, been building this massive multi-domain world fleet. and that enables them actually ultimately to exploit American weakness. Back in December 2022, our guest today made his first appearance on the Money Maze podcast to discuss his opus, The World, A Family History, a book praised from all corners with particular appreciation from the late Henry Kissinger. It followed on the heels of Jerusalem, the biography, Stalin, the record of the Tsar, Potemkin and many more. So Simon C. Bagman of Fiore, welcome back. Great to be back. Lovely to be talking to you. Well, Sea Bag, as I know you like to be called, we've known each other for nearly 20 years.

1:22And I still remember the first encounter I had was at the Royal Geographic Society. You were describing your book, but particularly you held the RGS audience enraptured because you described the night in November 1932 when Stalin's wife Nadia left the Bolshevik dinner, went to her private rooms, took a Mauser pistol from her drawer and shot herself. And it was a fusion of, I suppose, drama and history done beautifully. But today we're going to discuss your latest work, The Cauldron, The Making of the Modern Middle East. And I must confess, I was planning on speed reading this to be ready in time for our interview today.

2:01But that wasn't possible. The combination of history, violence, reversals, brutality, economic implications, geography, all set in their rightful chronology, meant I found myself reading a historic tract that actually became a thriller. So, we're going to talk about a few things today, particularly given we're the money maze trying to draw out some of the historic lessons that may give us some economic leaders. But on the way in here, you said something that surprised me. You said, every time I write a book, I get nervous. Yeah. I mean, writing these books is a terrifying process, especially when it's the hottest, most contentious issue on earth at the moment.

2:41and you know a lot of people say like why on earth did you i think the times reviewer said like walking on hot coals is the you know is the equivalent um so yeah one never loses even if it wasn't writing about the middle east one never loses that um trepidation when reviews come out and that's something that stays with you um for your whole life as an author from your from your first book to your latest. And this has been the most challenging book I've written. I mean, when I was writing Jerusalem, the biography, which is a history of the Holy Land over 5 ,000 years, and that was almost 15 years ago, that was incredibly difficult and an insane thing to attempt.

3:26I remember saying to my mother, how on earth, who was in her 90s, how on earth am I going to write this. I'm kind of can't hardly sleep. And she said to me, you know, Simon, you need a lot of, you need a lot of sleep, a lot of food, no stress. You're a very fragile character. And she said, so I said, well, what should I do about this? She said, give the money back. So if I'd taken her advice, I'd still, I'd still be living at home, basically. I'd never have done any of these books. So this one is another, you know, is another turn of the screw, but it's, It's a great challenge. And I've written it, I've rewritten it, and I've worked so hard on this to try and get it right.

4:03And I think it is just about right. So I've got two high level questions before we dive in. Why do you define 1900 as the starting point for the modern Middle East? The key thing is just, you know, there's a sort of, there's a sort of quite, there are a series of boring conventions that appear in all books about the Middle East. One is that all of them start with the end of World War I, with sort of Versailles, you know, the Balfour Declaration, and Lloyd George and Clemenceau dividing up the Middle East. And another one is that they ignore Turkey completely. Another one is that they treat Israel and the Palestinians as if it's the only issue in the whole Middle East.

4:49Another one is that Sunnis and Shia can never work together. Another one is that Islam and the West are in permanent and sort of natural confrontation. And there's a series of these themes. And I hope the book kind of defies all of them. So one of them is that they always start in 1918. But actually, this is a book about the Middle East that's about Middle East people. and it's not really about westerners and it's not really about imperial powers it's not about america and the soviets though they all play a big role and so first of all you can't understand the middle east without understanding the ottoman empire and so 1900 of course is a is a is a sort of um it's just a date it's chosen out of because of its nice round number could have been 1890 um but the point is you have to start with the two big empires that really existed then the Ottoman Empire and the Persian Empire.

5:49And then, of course, you have the presence already of the British and the French at that time. And I really begin with Prince Ibn Saud, Abdul Aziz Ibn Saud, or Al Saud, seizing Riyadh in 1902. And the reason why I start with the Ottoman Empire and with the Saudis founding their new kingdom in 1902, is that this is a book about the Middle East for the Middle East, of the Middle East. It's about the agency of the Middle Eastern peoples. And it's not completely based on the British and the French. And that's a theme that goes right the way through the book. And one of the themes of the book that I think is important for your listeners to understand is that even though there is a huge narrative in the book and a theme of outside interference.

6:42And we're seeing that now with the American war with Iran, for example. And it goes all the way through with the British and the French mandates, the creation of Turkey, the creation of Israel, all the way through the Cold War, the Soviets and the Americans and so on, the Gulf Wars, even though you see all of those things, actually one theme of this is that the leaderships of the powers in the Middle East from people like NASA and the Shah through to modern leaders have always pretty much done what the hell they liked. Wherever possible, they've bypassed and diverted, manipulated outside powers, but they're all experts at handling the mega powers that want to interfere.

7:29And ultimately, they do what they like. And we saw that on October 7th as well. So that's one of the big themes of this book. ifm investors is a global asset manager founded and owned by pension funds with capabilities in infrastructure equity and debt private equity private credit and listed equities they believe healthy returns depend on healthy economic environmental and social systems and these are evolving on a scale never experienced before to find opportunity build value and meet the needs of future generations, you need scale, skill and expertise. That's what IFM Investors has built up over 30 years.

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8:50When you invest, your capital is at risk. You are at pains to point out a Western sort of, you know, problem which is failing to distinguish between Arab and Islamic issues. Just help us all understand that. Well, I mean, when you look at the region, there are lots of ways to look at the region. You can look at this as a history of the Arab world, but that also includes the huge variety of dialects, of outlooks, of approaches. It's not a monolithic picture. You know, this book quite deliberately covers from Morocco to Iran, from Turkey down to Yemen and Sudan. Sudan is an entirely different realm to the rest of the region.

9:35It's half African and half Arab speaking or Arabized African. And so each of these regions, I mean, the states may be contrived and drawn originally by imperial powers. But the body politic in each of these places is totally different and is reflected in the book. And so you could only understand the region if you understand that there are Arabs, there are Iranians who are completely different and often opposed to the Arabs. There are Sunni, there are Shia, there are umpteen ethnicities and sects from Maronites to Berbers, to Druze, to Alawites, to Assyrians, Chaldeans, all of them appear in this book.

10:21And all of them have to be correct and correctly understood. But the two key thoughts, perhaps to start us off, is that the three main powers in the Middle East are not Arab powers. They are a Turkish-speaking, a Persian-speaking power. There's Pakistan has joined the group. And of course, there's Israel, a Hebrew speaking power. And so those are the power, those are the dynamic powers that are making the running at the moment. And so, you know, one of the reasons I wrote the book was because I couldn't find a book that covered this. I mean, obviously, there are millions of books about the end of World War I.

11:02There are millions of books about the Arab-Israeli wars and the Israel-Palestine conflict. There's a whole new industry about Gaza. And, of course, there are books on the Jews, the Arabs, the Iranians, etc. But no one has put them all together. and I always follow my hero, Benjamin Disraeli, who said, when I want to read a book and I can't find it, I write it myself. Right. If the Middle East didn't have oil, would people have cared as much? Not as much. And you can see that from, you know, the great, many of the great interventions, you know, have been caused by oil. I mean, the British interest in what was then Persia, for example, you know, was focused on the fact that they found oil there.

11:54And then ultimately, as you know, Churchill converted the Royal Navy to oil fueling. And, you know, at the same time, the world was embracing the internal combustion engine and the car was, you know, was going crazy. So oil became enormously important. And it's not a coincidence in our own time that all these wars, there have been three Gulf Wars now, and we're in the middle of the third. And so oil is enormously important, and it's changed the region. But I think one needs to understand a couple of other factors, which is, one is a geographical one. And, you know, one of the reminders of the Straits of Hormuz crisis that we're seeing today is that, you know, geography may be rather old-fashioned, You know, it's about sort of ports and straits and chokeholds and strangleholds and pathways at sea.

12:49But the fact is that that world still is hugely important. And it's funny, it's a funny, it's an irony of globalization that we expect in magic, what I call magical capitalism to have things delivered to our houses at all times, whatever we order. And we forget that, of course, this is coming by ships, in old-fashioned metal ships through straits all over the world, whether it's in the Far East or the Gulf or the Red Sea. And this whole kind of change is based on these quite old-fashioned facts. And therefore, geography is hugely important. And that's part of it. There's the seaways. But then secondly, there is a sort of a land fact, which is that the Middle East or what we call the heart of the Middle East is the bridge between Africa, Europe and Asia.

13:43And anybody from ancient times to now who wants a presence in those continents needs to have some sort of presence in the Middle East. And, you know, traditionally, even when the world was much smaller and we didn't have steam power and railways and all of that, you know, ancient powers from Akkad to the Persians to the Ottomans to the Mamelukes, all of them needed access, whichever part of the Middle East they came from, to this bridge. You know, that's why Alexander the Great took a route south towards Egypt. He needed Egypt. Egypt was traditionally the richest part of the region. And so before he went on to defeat Darius III, he took the Middle East, and that's why.

14:30And so that has not changed today. And anyone who wants a planetary presence, a planetary multi-domain presence, whether it's China or America or even a slightly weakened Russia, they need a presence in the Middle East. In times of economic and geopolitical volatility, investors will look to gold. Today as the world navigates uncertainty and heightened risk investors of all sorts will look to safeguard their wealth. We're thrilled to welcome the World Gold Council as one of our sponsors. Tap the link in the show notes to learn more or visit goldhub.org on your browser for comprehensive research insights and analysis on the global gold market.

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15:52Well, you quote the late Shah of Iran, who said about the Straits of Hormuz, it's our jugular vein, we won't shrink from fighting it. But you also talk about the Iran-Iraq war, I think 700 ,000 dead. And of course, at that point, you saw the land alternatives, pipes being built across Saudi. And I wonder, because we had Rob Arnott on the show, who runs Research Affiliates,$90 billion. He says, you really think we're going to be talking about the Straits of Hormuz being blocked in three years time? What's your own sense? No, but that's the point. What we're going to see now is something that's been delayed by ideology, really, for decades.

16:28I mean, when you look at the British plans for the Middle East in World War I, they saw pipelines from Iraq and from Arabia. They hadn't found all in Arabia yet, but they wanted to see pipelines from Persia, from Iraq, through to Haifa. and that is the obvious place to have a to have a pipeline to the Mediterranean there are northern routes too which they're they're looking at now and some of them already exist um but what we're going to see in the next sort of two three years is a complete reap I mean almost like a re-plumbing it's like a house they're going to it's going to be completely re-plumbing the electrics are going to be completely redone and some of these things will never be built but many of them will be and if they're clever they're going to get over ideology um but there's a balance in all these powers between um pragmat pragmatic um utility which would be for god's sake build a pipeline to haifa or somewhere like haifa now and obviously the the the people that their own peoples which they're terrified of who are invested in the anti-Israeli narrative for all sorts of reasons.

17:44And so, you know, there's this kind of balance. But you're absolutely right. What we're going to see is now a complete redrawing. And everyone is going to make sure that they're not dependent on the marauding Iran in the future. And so the Straits of Hormuz is a vanishing asset for them. Let's stay with oil because you write very nicely about the emergence of the Gulf states. And we all know how much capital has flown out, but human capital that's moved in as these economies have developed. But of course, it wasn't like that. Just explain again how they buried their differences to create the UAE.

18:22Well, it's this very fascinating story because when you open in 1900, what people forget is the British were present in Egypt. They had the sort of veiled protector, the hidden protectorate of Egypt. Egypt was a sort of monarchy, but the British actually controlled it. But otherwise, the main British presence was in eastern Arabia with the Trucial states. And they were called Trucial because there was a truce in which they'd all signed. And so the British actually controlled Aden, Oman, and then what is now UAE, all those emirates up the coast towards Kuwait, which was entering into the British sphere at that point.

19:03And they remained British protectors until 1971. So though most of the Middle East became independent after World War II effectively, these only joined later. But the various families that control these emirates, they started to plan for a British departure. And the whole British theme of the British Empire in this book in the 20th century is a series of ignoble scuttles out of their possessions. And it really is a disgrace the way the British... I mean, even if you think that the British had a right or had imperial or national interests to take, to intervene in these countries, the way they left was unforgivable.

19:51And it's not just Israel-Palestine that is, you know, an outrageous British scuttle. Churchill used the word scuttle. But, you know, the British had sort of fled from Turkey in 1922, effectively, and that brought down the Loridge Gorge government. Then they had 1947, they had India-Pakistan, a partition that cost, you know, 12 million to 14 people displaced, about 2 million killed, extraordinary. Then Palestine. And then they had Aden, where they just left and gave the Marxists, Leninist Marxists, the control of what became the People's Republic of South Yemen. And then 1971, they left the Trusial States.

20:44And the Trusial States begged them to stay, which is pretty unusual for a colonial power leaving. But they begged them to stay. And they even offered to pay for British troops there. But the British left. And at that point, the main families, led by MBZ's father, had decided to create this new kind of state, which was a very unusual state. UAE because it's a presidency. It's an elected presidency, but with only six or seven voters, the emirs of each of these small emirates or monarchies. And it was a very clever idea. And it's a strange feature of the Middle East in our time that the best run, the best governed states have been these absolute monarchies.

21:33So you write about the Gulf countries, that they will continue to fear and loathe Iran, but it looms too large, too lethal, and too close to ignore. You describe these luxury monarchies will become Iron Dome monarchies. So I'm going to put an economic question to you. Would you be positive or negative about real estate in that part of the world? Good time to buy. Well, that was the Rothschild, wasn't it? Buy to the sound of gonfire. Let's turn to Turkey because I, maybe it's my own deficit of education, but I certainly had no idea that, you know, it almost didn't exist. And obviously, we know they're a member of NATO.

22:07Now we've got this Mecca joint defence agreement. Can you just explain the genesis? And what I'm really interested in now is their view of the future. Well, the interesting thing about Turkey is, you know, Turkey is one of the countries in the Middle East of which this accounts, all of them, except for Egypt and Iran. They're the only two ancient states that still exist. All the others, all of them were invented or created in warfare at the end of the world wars or between the world wars. And Turkey was really the first of them. Turkey was not created by the Western powers. Turkey was created in rebellion against the Western powers.

22:51And it was invented in a vicious ethnic war, huge massacres, hundreds of thousands of people, millions of people driven out of their homes, slaughter, burning cities, and the creation of a new nationality, a new nationalism, a new militarism. And of course, if that sounds familiar, it sounds very like the creation of Israel. So there are huge similarities between the creation of these states and huge differences, of course. But what happened was the Western powers, Britain and France, had decided to really to take, not to give the Turks anything more than a tiny rump state around Ankara. And this was punishment for what they regarded as the Turkish massacres of Armenians, of Maronite Christians, of Pontic Greeks.

23:48the Ottoman Empire, far from being the sort of lovely, tolerant, poetry-spouting Kumbaya Empire that often appears in Western historiography, had ended up as a brutal, proto-Nazi, eugenicist, social Darwinist narrative where they had believed that war and the massacre of outsiders and traitors from within, mainly the Armenians, was the only way to save the Ottoman state and to harden the Turkish people. And that had not ended well. They'd been defeated in 1918 and the empire had fallen apart. And the British and French then said, okay, we'll keep Constantinople and we'll give what is now Western Turkey to the Greeks and they can create a new Byzantine kingdom there.

24:49And the Turks would have a little bit in the middle and the Kurds and Armenians who had been persecuted by the Ottomans, they need to have states of their own. So that was the idea. And the French would come up from the south and have Cilicia. And actually what happened was Mustafa Kemal, the most talented Turkish commander of World War I, got control of an intact Ottoman army that was still in Anatolia. And he launched a series of wars against the French, against the Armenians, against the Kurds, and then against the Greeks. These were huge battles, which are completely forgotten now in 1922.

25:29And in the end, he defeated them. He drove out, he massacred, he took the city of Smyrna, which famously was in apocalyptic scenes was taken by the Turks. And he created a new state, the Turkish Republic, and a new nationalism linked to religion, which was the Turkish nation. And so that's how Turkey was created. But they weren't satisfied with what they got. And they then turned north towards Constantinople and they faced the British and they called the British's bluff. And that brought down the David Lloyd George government and ended Lloyd George's career. And out of that, they got the Turkish Republic.

26:10But this is relevant because they weren't really happy with the borders they got. They thought that they should get more like the Ottoman Empire. And they resented not getting northern Syria. They resented not getting Mosul. They wanted Mosul, which is now part of Iraq. And that is what is happening now to jump ahead, is that, you know, President Erdogan has recast Kemalism or the idea that Turkish nationalism must be secular. It was always secular, but a secular nationalism linked to the fact that the Turks were Muslim. And so it was natural that that could be turned into a religious nationalism, which is exactly what's happened with an Islamist version of Turkish nationalism, which is Erdoganism.

27:01And President Erdogan is an incredibly kind of shrewd veteran player who has got complete control of Turkey by repressing the opposition, by arresting people this week. He's arresting gay people and launching a purge of gay people. He's arrested the mayor of Istanbul. Most of the opposition is now in prison. But outside, he's proved a master at promoting a new version of Turkish influence. So there are Turkish advisors and troops in Somalia, in Libya. There's a Turkish presence in Sudan. And, you know, he regularly, him and his ministers regularly say that they want more power in former Ottoman cities like Aleppo, Damascus, Beirut.

27:48And of course, they want to retake Jerusalem. And even in Saudi Arabia, they want to rebuild the Hejaz Railway, which formerly linked Constantinople with the pilgrimage cities of Mecca and Medina. So what is happening now is a direct result of the way that Turkey was created. And the Mecca agreement is a very interesting moment. This has just been signed a month ago. And it brings in another interesting Islamic power, Pakistan, into the mix. And we can talk about that in a minute, because that is very significant. But Turkey, Saudi Arabia and Pakistan, you know, this is on paper quite a formidable lineup because you've got Turkey, which is like incredibly sophisticated society, massive population, large territory, interest everywhere, you know, an Ottomanist inheritance and legacy, very aggressive and prestigious leadership.

28:54you know, drone technology, sophisticated economy, links to the EU, NATO, you know, NATO membership, extraordinary. So that's quite a powerful mix. And a sort of new kind of supposedly moderate Islamism. Then you've got Pakistan, nuclear power, huge population, huge military, and an aspiration since independence to become an Islamic power. You know, that's why Ali Bhutto, the prime minister, called their nuclear weapon the Islamic bomb. And so they're very excited about this opportunity. And then you've got Saudi Arabia. Saudi Arabia, fascinating. You know, it's like the biggest country in the Middle East.

29:38You know, Saudi prestige of the family. And that family really comes from 300 years. This is the third Saudi state now. But also the fact that they are guardian of the two sanctuaries, Mecca and Medina, gives them immense prestige. Huge armaments, you know, but not that good at using them. But all of these reasons, and now, you know, has replaced Egypt as the leading Sunni power. So you've got this amazing alliance, but what does it really mean? And that's the million dollar question. I mean, it looks like it's not going to mean much. And that's because actually, it's a bit of a paper tiger. All of these states are actually extremely fragile.

30:23You've got Turkey, for example. I mean, much of it depends on the character of Erdogan himself and his survival, but also it depends on growing repression at home. It counts on the fact that Russia is out of the game for the minute, traditional rival of Turkey. And also it's slightly held back by its NATO membership. I mean, it's both an asset, but also a problem. then you've got the fact that a lot of Arab powers they're quite happy to get the help of Turkey now but actually everybody remembers that you know the Ottomans ruled the Arabs pretty brutally you've got to remember in World War I and I recount this in the book there were mass hangings of Arab notables and nationalists in Beirut in Damascus in Jerusalem in all of the main Arab cities.