The recent developments in Iraq, characterized by the huge territorial gains made by the Islamic State of Iraq and the Levant (ISIL) at the cost of a collapsing central authority, widespread lawlessness, vicious sectarian strife, shut down of the Baiji oil refinery, and the hostage taking of foreign nationals, cannot but be a matter of serious concern. This is all the more so as these developments are but a microcosm of what is happening in the entire middle east which is witnessing an unparalled rise of terrorism, a region wide Shia-Sunni struggle for ascendancy, and central governments hard put to contain dissatisfaction and maintain a harmonious environment which would assure the international community of security of energy supplies and a business friendly environment.

The situation is further exacerbated by the fact that the existing map of the middle east seems on the verge of a tectonic shift with the distinct possibility of a break up of Iraq and Syria on sectarian lines and with anarchy spreading elsewhere as well most notably in Lebanon and Yemen. The scene assumes an even gloomier dimension as major regional players like Iran and Saudi Arabia are ranged against each other due to the Shia Sunni divide.

India cannot but view these developments with grave apprehensions since the Gulf region alone is our largest trading partner, meets about 60% of our oil and gas imports, and is home to about 6.4 million Indian expatriates who contribute around 30% of our total remittances estimated in all at about $70 billion. Clearly, disturbances of the type that are presently convulsing the area will critically impact our economy by pushing up energy prices, enhancing inflation, adversely affecting our balance of payments situation and business interests, and seriously dampening growth. These developments will additionally fuel regional tensions and give a fillip to international terrorism the world over. While much of the latter will primarily be directed to the West, India will not be exempt from its noxious fall out.

In these circumstances, India needs to carefully take stock of the situation and evolve its future course of action. Our continuing neglect of developments in the middle east can only be at our own peril.

Clearly a volatile, splintering and anarchic middle east is not in India’s interest and we need to work along with others for the restoration of at least a modicum of peace and stability, a lessening of sectarian rivalries and a dampening of the support for terrorist outfits. India is well placed to do so because it enjoys great respect in the middle east and has good relations with most of the major regional and international players. Many other players from outside the region like USA, China, Japan and Russia broadly share these goals and can be counted upon to lend their weight to any such endeavours. The major challenge would be to determine the basis on which the major players from within the region and in particular Saudi Arabia and Iran can be persuaded to bury the hatchet and work together for peace and stability in the area. Specifically, would they in the wider regional interest be prepared to guarantee existing national boundaries, cessation of support for terrorist outfits if not an outright condemnation of them, and an agreement to desist from intervening in the internal affairs of others in the neighbourhood in return for guarantees that minority rights would be protected? Addressing sectarian rivalries will not be an easy task but its difficulty should not daunt efforts in this direction as failure will doom the middle east to endemic anarchy the fall out of which can only be disastrous.

While seeking to alleviate the regional tensions in the middle east, India must simultaneously work out plans designed to mitigate the negative consequences of failure in this endeavour. Specifically, it must ensure alternate energy supplies both local and imported, measures to ensure the safety of its nationals including their timely evacuation where necessary, and steps designed to insulate the country from the outward spread of terrorism.

(VIF is organizing a seminar on the subject on July 25, 2014)