When did this start?
It started principally with Iran and it has been developed subsequently. In a book, “Treasury's War,” the tool of exclusion from the dollar-denominated global financial system is described as a “neutron bomb.” When a country is to be isolated, a "scarlet letter" is issued by the US Treasury that asserts that such-and-such bank is somehow suspected of being linked to a terrorist movement -- or of being involved in money laundering. The author of "Treasury's War" [Juan Zarate], who was the chief architect of modern financial warfare and a former senior Treasury and White House official, says this scarlet letter constitutes a more potent bomb than any military weapon.
‘Oil and currency wars are influencing other countries'
What would you say about the prospects of success of this new order?
It is too early to say that it will be successful, but it is a very important shift that is taking place. It has already started to have an effect. Take Russia: European and American leaders thought that Russia would weaken because of sanctions and the fall of the ruble, but China intervened and stopped the collapse in the ruble. In short, China is operating as a backstop to a financial system that is in the process of shifting dramatically away from Western control. And it affects the Middle East.
Because the consequences of these oil and currency wars are influencing other countries -- many energy producers in the Middle East and elsewhere and emerging markets have seen their currencies crash as the dollar gets stronger. There is a huge move of capital out of emerging markets and out of Middle Eastern states whose currencies consequently have been adversely affected. For the first time, too, we see the end of the petro-dollar as a system for recirculating oil revenues to Wall Street.
Why has the oil price dropped?
There was a decision by Saudi Arabia to reduce the price of oil for two reasons: to hurt Iran and to put pressure on Russia to change its stance and drop its support for President [Bashar al-]Assad. The Saudi determination to get rid of Assad remains extremely strong in Riyadh. They only reduced output by 100,000 barrels a day in the first month, and then it started an avalanche: The market had been artificially inflated by the oil companies lending crude oil to financial investors who want a hedge against inflation and currency fluctuations.
‘Turkey does not know now where it stands'
Where do you think Turkey is in that picture?
My sense is that Turkey does not know now where it stands. For about 45 years, Turkey was the frontline for NATO against Russia. That was not a very happy interlude for Turkey, and Turkey has then been snubbed and somewhat discourteously held at arm's length by the European Union. And on top of that, transatlantic relations have soured and regional relations are tense. Prospects now for Turkey to enter the EU are dim, first because the Accession Process is frozen, and second because there is a major crisis in the EU. I don't think anyone in Turkey can ignore the fact that the EU has its own identity problems, too.
Would you elaborate on this idea?
First of all, the EU is unable to provide an autonomous foreign policy. At the end of World War II, NATO was inserted into Europe, and EU foreign policy is essentially the NATO foreign policy -- it has no ability to change NATO policy and effectively is obliged to follow and implement it. For many years, the Europeans then thought that liberal economics would bring prosperity to Europe: "Bringing prosperity to all" was its mantra and principal source of credibility.
‘Russia has emerged with an interesting proposal for Turkey'
You mean the Middle East?
Yes, the Middle East, first, through the Muslim Brotherhood [MB]: Had the region fallen to the MB, as many expected, Turkey would have assumed real influence in the region. It would have been a new outlet, a new direction. But the MB project went wrong: It first went wrong in Syria, then in Egypt, resulting in the Middle East becoming a problematic direction for Turkey to pursue.
In espousing the MB so closely, it's given the Justice and Development Party [AK Party] something of a sectarian tone. The language of the former prime minister, now president, increasingly and evidently has become Sunni, rather than Islamic -- notably at election rallies. This has drawn criticism and pushback both in the region, and domestically in Turkey. The experience of the misadventure in Syria and the perception of the adverse reaction in the region seem to have re-energized the Atlanticist or pro-EU constituency here. How then might this constituency react to a shift towards Eurasia? In Russia, the Western intervention in Ukraine radically undermined support for Atlanticism. Maybe it will be different here.
Many observers are saying there are ISIL sleeper cells in Turkey. How do you evaluate Turkey's relationship with ISIL?
The ISIL cells will remain quiet, providing that ISIL is left to their own devices. But were Turkey to change its position vis-à-vis ISIL, then Turkey is likely to be as disrupted as pakistan has been disrupted by these jihadists. The objective of ISIL is to create God's principality on a slice of territory: to secure that territory, and to practice Shariah. Ultimately, they intend to expand. Of course, it extends beyond just Iraq and Syria; it's a much wider project ultimately, and it would include Muslims in Saudi Arabia and Turkey, and beyond, even Europe, maybe parts of Spain.
‘Will Turkey remain in the Wall Street system'
Do you think Turkey is swimming in dangerous waters by supporting Da'ish, as Pakistan did in the past?
The history of Pakistan is a clear model. Gen. Zia-ul-Haq, who Islamized the military and society of Pakistan, never believed that Da'ish would penetrate into the very arteries of Pakistan. I was there at that time. Zia-ul-Haq was a strong, Muslim Brotherhood-oriented leader, and he rejected any notion of blowback.
If you were asked for advice by the Turkish government in this regard, what policies would you suggest based on your experience?
These issues have been coming up and are being discussed in Iran, Russia and China. What sort of state should be built; how might it defend itself from a color revolution; from geo-financial predations; from globalized financial crises: how to build a strong state, how to give its people security?
Isn't there a danger of falling under another dictated structure while trying to get out of one?
No, because in the parallel structure there is no intention to make a reserve currency, like the dollar -- unless it is gold which no one can "print." It will be interesting to observe how Turkey makes its choice.
Who has been hurt as a result of the policy of the Saudi Arabia to reduce the price of oil?
Saudi Arabia needs to balance its budget; it has enough reserves to last at least two years at this lower oil price. But many other oil producers, including the Gulf States, don't have the size of reserves that Saudi Arabia has. This crisis hasn't been confined to just the Gulf States, but to others, like India and Brazil.
So you are saying that the conflict between the US and Russia is essentially about whose economic system is less vulnerable to what's happening in the financial markets?
Yes, and President [Barack] Obama says that the US system is stronger and less vulnerable because it has a broader base of its economy than Russia does. It is not really true. In Russia, oil and gas comprise only about 11 percent of the total gross domestic product [GDP] of Russia. And because it has allowed the ruble to fall, its revenues in ruble terms are unchanged. And now, unlike in 1989, Russia is a foreign exchange creditor and not a debtor, so maybe it will survive this. Maybe Russia is less vulnerable to geo-financial war than many supposed, and maybe America more vulnerable. Time will tell.
Who will be hurt most by the financial turmoil then?
It will be Europe, because of the debts held by its financial institutions, and because Europe is teetering at the cusp of a serious economic crisis. That's why they are so desperate for the European Central Bank to print money. If Russia survives this financial onslaught and China continues to develop an analogue financial system that allows them to pull out of the Washington-controlled global system, then it will have a big impact, especially for countries like Iran, which is getting closer to Russia and China.
‘Was King Abdullah of Saudi Arabia Muslim?'
First, the West is trying to assert that there is a "true" Islam, and that ISIL is a heretical deviation from this "true" Islam. This assertion is really a projection of the Christian experience: In fact, Islam wears many faces, and there is no authority -- unlike Christianity -- that can bestow on any one orientation the mantle of being the true Islam. Only one orientation makes the bold claim to be true Islam, and that is Wahhabism. When Western policymakers say that the ideology of ISIL is a "heresy" and must be de-legitimized, in this respect, they do not understand ISIL.
You were critical of the words of Secretary of State John Kerry, who said that “we are fighting an ideology not a regime” in regards to ISIL.
Because what he was saying was that ISIL does not follow Islam. And then the Americans are surprised when Saudi Arabia does not send troops to fight it. But he is not understanding the principles on which Saudi Arabia is based. It was founded jointly by Mohammed Abd-al Wahhab and Ibn Saud in the 18th century, and these same practices were first emulated by King Abdulaziz in the 1920s -- and are now being emulated by ISIL.
The principles are the same, but the West simply calls ISIL terrorists.
Do you think the West can be successful in its fight against ISIL?
I don't think the West can be successful in fighting ISIL. They don't have the troops and an air campaign alone will not defeat them. The West needs to understand the history of this phenomenon. It did not begin out of the blue in Iraq in 2007. The firing up of radical Wahhabi Islam was originally part of the British agreement with Abdulaziz from the 1920s, by which Abdulazziz was to become king of Arabia. These original understandings that gave the green light to the spread of Wahhabism were later transferred to the Americans in 1947.
Since that time, the West has piggybacked on Saudi Arabia's ability to create a psychologically charged Sunni radicalism in pursuit of Western -- and Saudi -- interests. Firstly, radical Islam was deployed to confront Nasserism, to confront Ba'athism, to circumscribe the influence of the Soviet Union and then Iran, and to fight the Soviet Union in Afghanistan. Time after time the West has come to an understanding with Saudi Arabia to use its forces for the pursuit of Western interests, and the latest example has been that of Syria.
Why did Saudi Arabia encourage or facilitate the coming into being of ISIL?
Because it wanted to counter Iran: It was pitching -- if you like -- blood for blood against Iran. But, as you may gather, there is quite a lot of history to the whole Western involvement in the firing up of radical Sunnism. It's hard to let go of these things. Now we have a competition between Turkey and Saudi Arabia for influence over these movements. This is why there is such tension between Turkey and Saudi Arabia. Turkey is the only state that can negotiate directly, state to state, with Da'ish for the release of its hostages; it enjoys a relationship with ISIL.
‘Paris attacks not planned and organized directly by ISIL'
Do you see the Paris attacks as the job of ISIL?
It's created a mass psychological impact in the West, but I have seen no evidence that it was planned and organized directly by ISIL. It seems that some individuals may have read about ISIL thinking and methodology and acted on that basis: Copycat phenomena perpetrated by a few individuals, perhaps?