Thursday, November 19, 2015

ISIS and the European Refugee Crisis - What's to be Done

Those of you who know me know that I don't write about politics and foreign affairs very much.  I usually stick to what I know best - P2P lending, credit, high yield bonds and angel investing. So take what I say here with a grain of salt.

Watch out!  I'm going to use broad brush strokes in this piece.  I might make some generalisations and I might over-simplify many issues. Not everything I propose will be practical, nor politically correct.  So please don't take offense.  In this case we have to pay attention to the big picture.

I saw Thomas Friedman on CNN a few days ago.  He spoke on the topic of ISIS and he spoke in pretty broad terms.  Speaking about the briggade of men from all corners of the world who join ISIS he said,

"None of them had ever held job, power, or a girl's hand. And when you put large numbers of young males together and you offer them a wife, yoTu offer them a salary, and you offer them the ability to lorded over somebody else, that is ISIS' value proposition."

Wow!  Talk about generalisations!  I'll neither agree nor disagree with this statement.  I have neither the statistical nor the empiracl evidence about that.  Thomas probably speaks to more people about the testosterone levels, dating history and employment background of this new generation of radicalised fighters than I do.

But, Thomas Friedman can speak in such broad terms, then I can also allw myself some leeway to depart from my training as an economist and historian.  So I'll generalise and I'll make Mike's 18 point wishlist for a better world..
1. We must tackle the security threat. ISIS, Al Qaeda and Taliban and any other organised group of radical Islamists are a threat to global stability and security. All of these groups are fundamentally dangerous.  So long as they can operate on any scale, our collective global security is at risk.

2. We must commit real resources. Air strikes, bombardments and focus on local opposition armies such as Iraqi Kurds are a strategies bound to fail.  The only result will be more turbulence, more chaos, more refugees, more misery, more insecurity.

3. We must see the urgency. Terrorist attrocities around the world will become more and more common place so long as these groups are able to function on any scale.  If left unchecked, sooner or later one of them will succeed in obtaining, if they haven't already, weapons of mass destruction.

4. The international community must band together for sake of the greater good. World leaders need to present a grand coalition of armed forces to root ISIS out of Syria and Iraq.  The force must be overwhelmingly large.  There are an estimated 30,000 ISIS fighers, spread out over a wide swath of territory in two countries.  I'm not a military expert, but my own estimate is the international coalition is likely to have to number roughly 200,000 or more, similar to the size of the force needed to remove Sadaam Hussein from Iraq and to remove Taliban and Al Qaeda in Afghanistan.

5. The flow of money to and from ISIS and other terrorist organisations will be stopped.  If ISIS are earning $40 mn or more a month then they also must be spending that money somewhere. Security agencies around the world must co-ordinate with each other, find those who buy from ISIS and those who sell to ISIS and put those people out of business.

6. A serious war again ISIS won't last long. Faced with a force of overwhelming, shocking size, ISIS will melt back into the civilian population.  ISIS's fundamental flaw is that it can never keep the hearts and minds of the populations it rules at the barrel of a gun. The most radical among them will of course fight to the death. But the rest will fall away much like Nazis at the end of World War II.  They will realise the error of their ways or they will throw off the yoke of tyranny misguided.  ISIS will fade away like Prospero's spirits.

7. The real hard work will come in the aftermath and will continue for a generation or more.  Mark my words - it will take twenty or more years to rebuild the ruins left from the past two decades of war and strife in Afghanistan, Iraq, Syria and other war torn impoverished countries.

8. Tomas Friedman and the world's policy makers will see beyond the wall of angry young men.  Yes, among the latest generation of Al Qaeda, Taliban and ISIS fighter are angry young men.  But the real root of the problem goes far beyond girlfriends and paychecks.

9. The international community will see the real problem is not religion but economics. When President Bush led the US into Afghanistan and then into Iraq the television images I saw were startling. Twenty years later the story, sadly, hasn't changed much. These are countries where many of the population live in abysmal conditions.  Much of the population has limited access to basics like running water and electricity. Education is at best a luxury.  Unemployement is persistenently high. A small portion of the population controls the overwhelming majority of the wealth while the rest are disenfrancised. I call this the problem of houses, dogs, grass, parks and trees.

10. We won't need rocket scientists and nuclear physicists to fix this problem. It's pretty simplistic, but to me self-evident.  Disenfranchise enough people, force them to live in poverty and without education and they will turn to whatever demigogue that comes along with a fist full of dollars and promises of revenge.  That's plain and simple.

11. The path to a stable Middle East looks terribly complex, but is really simple.  The world and a new generation of political leaders must win back the hearts and minds of the people and set about the task of nation building, and in a way that gives every man, woman and child in the country a good reason to buy into the social contract.  Look at Northern Ireland.  It was a war zone until the Good Friday peace accords.  Twenty years later Nothern Ireland is a completely different place.  Few if any will trade what they have today for the war zone, misery and tears of the past.

12. Revenge and revolution is not the only way forward.  Must  Assad must go?  Must there be strong, new leadership in Iraq? What about the fragile democracy in Afghanistan?  The answer is I don't know.  It depends on how enlightened, how humble, how visionary they become or if they are blinded by their own egos and prejudces. Countries like Pakstan and Ukraine suffer because nothing ever really changes. Government and the national resources get passed back and forth between a few groups of competiting interests who put each other in jail and unwind each other's deals.  That cycle cannot be allowed to unfold in the Middle East.  Instead a new generation of leaders must be bred in these countries and learn to put the interests of the population ahead of their own interests.  They have to learn to share the wealth and to help the population create their own wealth.  And they must receive international aid and support. Every man, woman and child, must see their basic rights and needs met and they must be able to see that somewhere in the distance there is hope.  A strong middle and working class must emerge that has entrenched vested interest in the workings of the country.

13. Europe must get to grips with the refugess crisis. So long as the crisis of fear and destruction and criminalism of ISIS and other terrorist activities continues the tide of refugees will swell.  But we shouldn't kid ourselves into thinking that when things settle down all these people will pick up their marbles and go back home, because they won't.  The sooner Europe recognises that, the better.

14. A key issue must be well understood. There's a fundamental difference between refugees landing on Europe's shores in the 21st century and the tide of immigrants landing on America's shores in the late 19th and early 20th century.  The immigrants to America, like my gradfather and my great grandfather, were strong, pratical hardy people who came to America seeking to build a new life and a better life. They came prepared, ready willing and able to sign onto the societal contract that if you work hard you can create opportunity or opportunity will find you.  These immigrants sweated and toiled day and night to send their children to good schools and to get their children an education.  They were willing to sacrifice for sake of a better future.

15. Europe and the refugees must accept each other. The tide of refugees coming into Europe are (generally speaking) wholly different.  They are running away from brutality, violence and destruction.  They come not necessarily with the hope that they can build a better life, but rather with the prayer that at least life will be peaceful.  Two things must therefore happen.  First, Europe must offer these people real hope. While the hard work of building and rebuilding the likes of Iraq and Syria and Yemen and Afghanistan continues,  Europe must set the conditions in place for the refugees who choose to stay (assuming they are presented with a choice) to integrate into the fabric of European society, get their children an education, get jobs, contribute to the economy and realize their humanity.  Like wise, these refugees must be presented with the basic proposition that if they buy into the society, and I repeat, buy into the the society, they will be accepted and eventually have the same opportunities as anyone else.

16. Crisis breeds opportunity. Many of Europe's leaders are thinking about the refugees as a problem rather than a challenge and an opportunity.  The poor wretched mass of immigrants that washed onto American's shores went on to build schools, universities, hospitals, centers of culture and sport.  Their children and grandchildren became today's political leaders.  Look at the value these people and there decendants created!  Europe needs to look at the refugees in a different light.

17. Europe and the refugees learn to live with each other.   If the refugees think life in Europe will be easier they will be disillusioned, angry and frustrated.  Life will not be easier for them. Sooner or later the benefits will run out, the handouts will stop and Europe will have a new class of poor disenfranchised people living in slums.  So Europe must put opportunity on offer and be serious about it.  Likewise, the refugees that stay must be convinced that hard work will pay off if not for them, but for their children and their grandchildren.

18.  I won't write about foreign affairs, regligion and politics.  I'll sleep well at night knowing that the world is a better place and my clients who invest their hard earned money into my Angel Fund and my Lending Fund can look forward to a future of security and prosperity.

So there you have it.  The world will be dealing with the aftermath of disintegration, terrorism and failed states for years to come.  Step 1 is to root out the terrorist organisations convincing force. Step 2 is to restore order and to rewrite the societal contract.  Step 3 is to build, rebuild, and create hope. Nothing in this life comes easy without hard work.

If you had fun reading this, see my blog on Angel Investing and look for my blogs to come on P2P Investing.  Visit Symfonie on the web at

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