Beyond Al-Qaeda
by Angel Rabasa

Reviewed by Jonathan Schanzer

Middle East Quarterly
February 21, 2008

Angel Rabasa, et al, Beyond al-Qaeda. Part 1: The Global Jihadist Movement. (Santa Monica, CA: RAND Corporation, 2006) pp.186, and Angel Rabasa et al, Beyond al-Qaeda. Part 2: The Outer Rings of the Terrorist Universe. (Santa Monica, CA: RAND Corporation, 2006), pp.178.
Defeating al-Qaeda will require more than a military strategy that attacks the core the group's top leaders. Even if the military were to eliminate Usama bin Laden and Ayman az-Zawahiri tomorrow, the world's most dangerous terrorist organization would continue to wreak havoc. Al-Qaeda can do this because it can rely on a large peripheral network of cells and affiliate groups, which are local Islamist organizations with local grievances that are equally committed to global jihad.

The al-Qaeda leadership should be viewed as the corporate headquarters of the terrorist organization, while the cells and affiliate groups should be viewed as franchises. If and when the headquarters are destroyed, the franchises can easily continue to operate. In short, a holistic approach to defeating al-Qaeda is needed.

The Rand Corporation, a leading defense think tank, has provided an excellent two-volume analysis to that end. The first volume looks at the ideology of the movement, its tactics, finances, and the "nebula" of al-Qaeda that includes local affiliate groups from Southeast Asia, South Asia, North Africa, the Caucusus, and of course, Iraq. Part 1: the Global Jihadist Movement even provides illustrations and tables that help demonstrate the links between jihadists "clusters" and the al-Qaeda core. More importantly, Part 1 also addresses the problem of radical Islam (they call it Global Jihad), identifying it as the ideological enemy that must be defeated. In just 186 pages, this volume covers the al-Qaeda phenomenon in a competent and comprehensive way.

Part 2: The Outer Rings of the Terrorist Universe is somewhat less integrated and less accurate, asserting that the Algerian Armed Islamic Group (GIA) and the Egyptian Gamaa al-Islamiyya (GI) fall outside of the al-Qaeda network. Both groups, while now dwindling in numbers, were cornerstones of the original al-Qaeda affiliate network in the late 1990s. On the other hand, the editors were smart to analyze the Iraqi insurgency, the Palestinian Hamas terrorist organization, the Lebanese Hezbollah, and even some of the antiglobalization groups as potential members of the global terrorist phenomenon. Part 2 also addresses the "convergence of terrorism, insurgency and crime," which is a worthwhile topic, but one that only adds to a feeling of disjointedness throughout.

The authors of these two volumes are not among the usual suspects who typically write about al-Qaeda. Nonetheless, their final products are sober, even-handed, and worthwhile reads.


The Wall Street "Sheikh Up"
by Jonathan Schanzer
February 1, 2008

The stock market is undergoing a dizzying correction. The subprime mortgage mess has forced credit markets to dry up and has hammered U.S. securities. Fears of recession recently sparked one of the worst stock sell-offs in years. But the worst may be yet to come.

While Americans are selling their positions in U.S. companies, Middle Easterners flush with petrodollars are aggressively gobbling up these stocks at fire sale prices. Moreover, as American financial institutions report the losses that forced them to deplete their cash reserves, CEOs are begging for loans from oil-rich Middle East nations that have benefited from the rise in oil prices in recent years from $30 to nearly $100 per barrel. As one former Wall Street executive lamented, U.S. business leaders are "lining up to kiss the ring."

The procurement of these loans (Wall Street calls them "cash infusions") means that our economic interests are growing increasingly beholden to countries that, at best, do not have America's best interests in mind. At worst, they are nations that could one day use their financial leverage to demand that businesses comply with Islamic law (shari'a) or even fund Islamist charities that siphon off donations to fund violence.

Consider the recent financial news coming out of the Middle East that gives cause for concern:

Saudi Prince Alaweed bin Talal and the Kuwaiti government have both been at the center of "rescue packages" for Citigroup and Merrill Lynch, both of which were crippled by the sub-prime mortgage meltdown. Indeed, Kuwait invested $5 billion in both companies. The Abu Dhabi Investment Authority of the UAE reportedly snapped up an additional $7.5 billion share in Citigroup.

The Committee on Foreign Investment in the U.S. (CFIUS) approved the Dubai stock exchange's December 2007 purchase of 20 percent of the NASDAQ, America's largest electronic exchange. According to Rachel Ehrenfeld and Alyssa Lappen, "this may soon give Dubai access to the troubled Boston Stock Exchange (BSE), through Nasdaq's proposed BSE acquisition, which is now pending before the Securities and Exchange Commission." This deal would also give Dubai access to Nasdaq's 28 percent stake in the London Stock Exchange.

According to the Arabic daily newspaper ash-Sharq al-Awsat, state-owned Dubai World has started accumulating shares of MGM Mirage, a casino operator, as part of a deal that included the acquisition of 50 percent of a large MGM project in downtown Las Vegas.

Qatar, the home of the controversial al-Jazeera television channel, is now considering investing a chunk of its $60 billion sovereign wealth fund in the ailing financial services and construction sector here, according to Middle East Online. Specific company names were not listed. Both sectors have been hobbled by the U.S. housing bust, and both are selling at a discount.

How might this harm America? If any of these investors, or a bloc of investors, gains enough controlling shares of a company, they can exact a dangerous influence. This might include the insistence that a corporation's activities are halal, which would mean jettisoning business interests that include: banks charging interest; firms that are either based in Israel or are working with the Jewish state; firms developing weaponry used in Iraq, Israel, Afghanistan or other Middle Eastern states; casinos and other gambling companies; businesses that involve pork products; alcohol distillers and bottlers; publishers that release books critical of Islam; and even entertainment companies that could offend Muslim sensibilities or appear incompatible with Muslim values.

There is also the fear that Middle Eastern investors could force U.S. companies to provide charitable donations to questionable Islamic charities. As Frank Gaffney notes, once an investment becomes subject to shari'a, at least 2.5 percent of the proceeds are donated to zakat, or charity. Of course, many corporations contribute to charities as a way to give back to the community. But most of the world's Islamic charities are unregulated or are of unknown repute. The U.S. Treasury department continues to uncover illicit charities that provide funds to terrorist organizations worldwide. Thus, there remains a danger that the earnings of U.S.-based businesses would begin to sent to questionable Islamic charities rather than regulated U.S. charities at home.

There is also a question of whether our new Middle Eastern partners seek the long-term success of the world financial system, upon which most Westerners rely to grow wealth and ensure a comfortable retirement. Indeed, Wahabbists -- among which many Saudis and Emiratis can be counted -- have little interest in the long-term viability of the U.S.-anchored world financial system. Wahabbists, in fact, seek to destroy the current world system and to return to the world to a time and place in which Islam reigns supreme. Buying out the U.S. stock market would be an easy way to destroy it from within.

Of course, the fear of foreign interests controlling our business interests runs counter to the notion of a free market economy. Indeed, U.S Treasury officials have even warned against a protectionist backlash that could harm cash flows to the U.S. during a volatile time. But Treasury officials may be working under the mistaken assumption that our new financial partners are ultimately as invested in the world financial markets are we are. Difficult financial policy decisions lie ahead.

Jonathan Schanzer, a former Treasury intelligence analyst, is Director of Policy for the Jewish Policy Center and author of Al-Qaeda's Armies: Middle East Affiliate Groups and the Next Generation of Terror.

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