National Security

Reports of al Qaeda's Death Have Been Greatly Exaggerated

The terrorist group may be headless, but its tentacles still pack a mean punch.

Al Qaeda is returning to the shadows. The experiment by al-Shabab, al Qaeda's Somali affiliate, of attempting to govern a broad area in Somalia's south officially came to a close this weekend when its fighters fled from their final stronghold, the port city of Kismayo. Its fate in this regard mirrors that of the jihadi group's Yemeni affiliate, al Qaeda in the Arabian Peninsula (AQAP), which also saw its more limited experiment in governance draw to a close in the middle of the year. In contrast, the Sept. 11 attack on the U.S. Consulate in Benghazi, Libya, that killed U.S. Ambassador Christopher Stevens suggests the group's North African affiliate, al Qaeda in the Islamic Maghreb (AQIM), is taking advantage of the chaos in Libya to hone its capabilities.

This isn't just a tale of three different organizations moving in different directions. Rather, al-Shabab and AQAP's failures, along with AQIM's apparent success, are related to the unique weaknesses and strengths of global jihadi efforts: Al Qaeda and its affiliates have been able to control territory at times but have not found much success in doing so. Their rigidity makes them ineffective governors, unable to truly win the sympathies of populations forced to endure their harsh, dystopian brand of Islamic law. Al Qaeda's retreat from governance, however, does not render it irrelevant. The jihadi organization remains comfortable as an insurgent actor, adept at moving in the shadows and carrying out occasional, devastating strikes.

AQIM currently represents the success story in this jihadi triumvirate. After some embarrassing vacillations on the part of President Barack Obama's administration, U.S. government analysts seem to be converging on the idea that al Qaeda's affiliate in North Africa was involved in the Benghazi attack. Although it is unclear whether AQIM was the primary perpetrator, U.S. officials have homed in on the group in recent days, exploring ways to counter its growth, most likely through stepped-up training efforts for local partners in counterterrorism efforts, but perhaps including a direct U.S. military response.

A recent Wall Street Journal article provided the most extensive account of why analysts are coming to associate al Qaeda with the attack. Importantly, the article highlights how various al Qaeda franchises and local actors were able to come together and play varied roles in an attack.

The Wall Street Journal article centers on Muhammad Jamal Abu Ahmad -- who, according to a defense analyst I interviewed, is known by the nom de guerre Abu Ahmad al-Masri -- a militant who had been incarcerated in Egypt prior to the Arab Spring uprisings, which saw many prisons emptied. Ahmad is a locally based militant, and fighters under his command, who may have trained at his camps in the Libyan desert, took part in the Benghazi attack, according to U.S. officials. Ahmad has tried to officially connect with the global jihadi network, even petitioning al Qaeda chief Ayman al-Zawahiri on the subject.

Such permission has not been forthcoming, so Western officials refer to his militant organization as the "Jamal Network." Yet though he is not an official part of al Qaeda, the Wall Street Journal reported that officials think that Ahmad received funding through AQAP and "tapped into its system for smuggling fighters," and that AQIM fighters were also present during the Benghazi attack.

Many counterterrorism specialists have argued that we are seeing the "relocalization of jihad," in which regional interests dominate over global agendas. This may be true, especially because revolutionary events in the region provide jihadists with local opportunities they simply did not enjoy previously. Some analysts, however, appear far too eager to declare networks like al Qaeda irrelevant to the counterterrorism picture.

Indeed, in August -- prior to the Benghazi attack -- the Library of Congress's Federal Research Division published an unclassified 50-page report titled "Al Qaeda in Libya: A Profile." The report, which unfortunately is not available online, concludes that the Libyan revolution "may have created an environment conducive to jihad and empowered the large and active community of Libyan jihadists," and that both AQIM and al Qaeda's senior leadership have attempted to exploit this environment. If indeed the Benghazi attack is connected to AQIM, the details offered in this report suggest that it was likely the outgrowth of many months of effort to build up a jihadi network in Libya.

Al Qaeda's senior leadership, according to the report, had dispatched high-level operatives to Libya to bolster its network in the country. As of August, the Federal Research Division assessed that though a core network had been created in Libya, it "remains clandestine and refrains from using the al Qaeda name." The report also judged that the network was expanding and had begun operating training camps and undertaking social media campaigns. These initial efforts to establish a network were initially undertaken by al Qaeda's Pakistan-based leadership, but the report also predicted that AQIM would "join hands with the al Qaeda clandestine network in Libya."

Back in August, the majority of analysts writing in the public sphere probably would have disagreed with the report's conclusion. Many thought that al Qaeda had been marginalized, even within the jihadi movement. Today that assessment may be different -- not just because of the Benghazi attack, but also because of additional information that has emerged about the dynamics of jihadism in Libya. Nobody should be surprised, however, that al Qaeda would attempt to keep its growth (or regrowth) hidden from view. Its use of different labels as it established a network in Libya is instructive. It wanted to be off its adversaries' radar during this network's growth phase. Likewise, in both Somalia and Yemen, where al Qaeda's affiliates have recently taken a beating, the terrorist network is going to try to regain strength out of plain sight.

On Oct. 2, African Union peacekeepers were greeted with a bomb blast as they entered Kismayo to take control of the former al-Shabab stronghold. Although there were no casualties, this was al-Shabab's way of saying that, though it no longer controls territory, it is still a force in the country. "This is only an introduction to the forthcoming explosions," the group's spokesman, Sheikh Abdiasis Abu Musab, said.

Al-Shabab will try to repeat a maneuver that already proved successful once before in Somalia. Back in 2006, an Islamist coalition called the Islamic Courts Union (ICU), of which al-Shabab is an offshoot, controlled most of the key strategic points in southern Somalia and had encircled the U.N.-recognized Transitional Federal Government in the south-central city of Baidoa. The ICU governed according to its strict interpretation of Islamic law. It executed people for watching soccer matches and imposed a number of other draconian restrictions (though wasn't as harsh as al-Shabab would later become). As the year neared its end, many observers expected the ICU to undertake an offensive to wipe out the transitional government's final sanctuary. Instead, however, Ethiopia launched an invasion of Somalia that not only received the approval of the United States, but critical military support as well. Ethiopian troops entered the capital, Mogadishu, on Dec. 28, 2006, and quickly reversed virtually all the ICU's strategic gains throughout the country before the end of January 2007.

The ICU promised an insurgency, and one soon gripped Somalia. Al-Shabab split from the ICU during this period and eventually was able to become the dominant force in the country's south. By early 2011, the situation looked much like it did prior to the Ethiopian invasion. Just as a few Ethiopian troops protected the transitional government in Baidoa in 2006, all that stood between the Somali government and certain death at al-Shabab's hands in 2011 was the protection of an African Union force composed of Ugandan and Burundian troops.

But things have gone poorly for al-Shabab since the group won back control of territory. It completely mishandled the devastating drought that racked the Horn of Africa last year, which deepened into a famine in areas under its control. The group's dogmatic insistence on clamping down on humanitarian organizations, claiming they had a "Christian" agenda, certainly made the crisis deeper. Nor did al-Shabab do itself favors with its heavy-handed tactics during this period.

African Union peacekeepers, joined this time by Kenyan forces, went on an anti-Shabab offensive following the drought. As a result, al-Shabab's experiment in governance seems to be over for the time being as it returns to the role of the insurgent force.

Whether al-Shabab will be able to regain its fighting capabilities is, of course, an open question. There are some promising differences between 2012 and 2007. For one, the Ethiopian role has moved to the background. Of all the countries that might try to occupy Somalia, predominantly Christian Ethiopia has particularly poor prospects, given the historical rivalry between the two countries. It is no coincidence that two of the most towering figures in Somali history, Ahmad ibn Ibrihim al-Ghazi and Muhammad Abdille Hassan, both fought against Ethiopia. A second positive factor, frankly, is that al-Shabab has actually had the opportunity to govern. Somalis have tasted its oppressive rule and seen a humanitarian disaster take far too many lives under its watch, and may strongly resist its return to power. Finally, unlike the quick defeat of the ICU in 2006 and 2007, al-Shabab has experienced significant losses over the past several months and may therefore have more difficulty recovering.

But the country's transitional government, on the other hand, does not inspire much hope. It has never been able to govern effectively, and just like in 2007, it is being protected by a foreign army. These two deficits may be sufficient to allow an insurgency to gain strength in Somalia. If one does, its early growth will largely be out of sight -- the occasional bombing or attack on African Union or transitional government forces the only sign that al-Shabab remains a force to be reckoned with.

AQAP did not manage to control and govern territory in Yemen for nearly as long as al-Shabab did in Somalia, nor did it preside over as large a region. As noted Yemen specialist Gregory Johnsen has written, the United States increased its airstrikes in Yemen following Abd al-Rab Mansur al-Hadi's ascension as president in February, and a major offensive from May to June "forced AQAP to abandon overt control of the towns it had captured." Hadi has proved very willing to accept counterterrorism assistance from the United States, including publicly praising drone strikes. Johnsen notes that AQAP seems to be at a crossroads, faced with the choice of returning to what it had been -- a militant group that moved in the shadows -- or trying to reclaim its lost territory and "once again position itself as a governing authority."

It is not yet clear which of these routes AQAP will try to pursue, though there are signs that it is experiencing somewhat of a rebound. In mid-September, for example, gunmen affiliated with AQAP front group Ansar al-Sharia captured an entire security unit in Yemen's al-Bayda governorate. As with the other two groups, AQAP will keep its organization out of public view as much as it can, meaning that much of what we learn about it will be from its militant actions. To that extent, if AQAP did play a role in the Benghazi attack -- even one limited to financing a key perpetrator -- it tells us something new about its expanding regional influence.

The United States must be on alert as these al Qaeda affiliates move into a new phase of their evolution. These groups are done with the business of trying to govern, at least for now, and are back to doing what they do best: operating in the shadows, fighting as insurgents, and engaging in terrorist attacks.



The Real Reason Energy Traders Are Losing Sleep

This time, it's Western politicians, not Arabian sheikhs, who are roiling the oil markets.

The oil crises of the 1970s taught Americans one of the iron laws of geoeconomics: that unrest in the Middle East can cause pain at the pump. But almost 40 years later, that law is blinding analysts to some of the most significant sources of market uncertainty -- which are right here at home. True, Iranian bellicosity and broader regional storm clouds are adding froth to oil prices. But even more striking is how much market-churning uncertainty is emanating from Washington and Brussels, rather than Caracas, Baghdad, or elsewhere in OPEC. The ambiguous economic trajectories and fluctuating policies of major energy-consumers like the United States, European Union, and China are proving at least as unsettling to oil prices as any decisions under the control of Middle Eastern officials.

Ask the leaders of OPEC what it's like to control the world oil market right now and they would probably laugh at your premise. Today's market jitters are largely beyond their control. The U.S. Federal Reserve's new open-ended commitment to expanding its balance sheet will likely push up the price of real assets like oil, even as White House chatter about dipping into the Strategic Petroleum Reserve (SPR) keeps the markets guessing about a sudden price collapse. At the same time, U.S. and European Union sanctions on Iran have crippled its oil exports, contributing to soaring oil prices and sparking demonstrations in downtown Tehran over the plunging value of the rial.

The potential for oil prices to shoot sharply higher or lower in the coming months due to events far outside OPEC's control is real, though still improbable. An Israeli military strike against Iran has the potential to drive oil prices skyward, just as the spread of Europe's debt crisis could cause oil markets to collapse. Add to this mix the threat of a so-called hard landing for China's economy or Washington falling over the fiscal cliff, either of which could send oil prices sharply lower. Yes, unrest in the Middle East is a continuous threat to stable oil prices, but political decision-making in the West and China is injecting more than its fair share of uncertainty into the market.

Part of this uncertainty is the result of policy incoherence in Washington. There is more than a little irony in the fact that the White House may decide to tap the SPR, the nation's 695 million barrel emergency fuel stockpile, to prevent a harmful rise in gas prices stemming in part from the decisions of the Fed. The mere announcement of the latest round of quantitative easing by Ben Bernanke, in addition to the already-loose monetary stance of other major central banks, was enough to send oil prices higher, only to crash shortly thereafter. The bounce would no doubt have been larger had many market participants not anticipated the Fed's decision. But the Fed's aggressive monetary easing is partly responsible for putting the Obama administration in the unenviable position of having to consider dipping into the SPR in order to keep a short-supplied market from pushing up prices too high.

And yet the policy dissonance in Washington has not been nearly so vexing to the oil market -- or to financial markets more broadly -- as the uncertainty surrounding the eurozone. Hardly a week passes without investors frantically buying or selling oil on the faintest whisper from the European Central Bank, Chancellor Angela Merkel, or the leaders of the most imperiled debtor nations. The unending lurch from Eden to Armageddon on trading floors around the world is typical of the so-called "risk on, risk off" capital-market mentality that has swept across every asset class -- and oil is no exception. Demand for oil correlates closely to global economic growth. When Europe's nagging ills appear on the mend, the outlook for growth appears brighter, causing oil prices to rise. Ditto on the flip side. But the sheer complexity of the problems facing European leaders, not to mention the uncertainty of domestic support for their policy prescriptions and the risk of cross-border contagion, mean oil prices have lurched to-and-fro with unusual velocity.

The prospect of a cataclysmic European tailspin is what economists call a left-side tail risk to prices: low in probability, but with the potential to topple the oil market should worldwide growth stall or even shrink. But right-side tail risk -- that oil markets might spike -- is also causing risk managers to lose sleep. The market's primary worry is an Israeli air strike on Iran, possibly with backing from or in coordination with the United States. If that happens, Tehran may well retaliate by disrupting tanker traffic in the Strait of Hormuz, the passage through which 35 percent of all traded seaborne oil flows. These are not idle fears. U.S.-led naval maneuvers in the Persian Gulf, which have included mine-sweeping drills, are already underway, and Iran has test fired missiles at ship-like targets near the Strait. Were Washington or its allies to launch a pre-emptive attack on Iran, oil prices would soar. Though Iran may be setting the stage for a confrontation, Western powers may end up being the ones to pull the trigger, setting off energy markets.

Even if such a conflict never materializes, efforts by the United States and the European Union to curb Iran's nuclear ambitions have already contributed to rising prices. Tightening U.S. sanctions and an EU ban on Iranian oil imports have caused the country's crude exports to fall to less than half of last year's average. This tightening of the screws has been disastrous for Iran, which depends on oil for 80 percent of its foreign revenue. By causing prices in the United States to rise, however, this strategy for bringing Tehran to the negotiating table has also been painful for American consumers. Whatever one thinks of the wisdom of sanctions in this or any other case, they have clearly caused global oil markets to labor under a strain that they would not have had to grapple with otherwise.

Still other wild cards remain far outside the control of OPEC. Market participants are already speculating about what measures Beijing will take to spur waning real economic growth. Oil has bounced along with other assets investors perceive as relatively risky, like emerging market equities, because of guessing about whether China might opt for more aggressive fiscal and monetary stimulus in the near future. Market fears persist about the possibility of a so-called Chinese "hard landing" and what it could mean for oil prices. Meanwhile, back in the United States, the much-discussed fiscal cliff looms. Its combination of tax hikes and spending sequestrations, due to drop in January if Congress fails to cut a deal, could weigh on domestic growth and hence oil demand. That loss could shave several percentage points off oil prices over the course of several years, according to a recent Citigroup analysis. Any mixed signals from Congress that cause Wall Street to question if or how it might tackle the approaching legislative deadline are sure to set off fireworks in the oil market in the meantime.

Make no mistake: Unrest in the Middle East has the potential to destabilize energy markets. With a civil war raging in Syria and North Africa in the midst of a trying transition period, it's not difficult to see how oil supplies could be interrupted. Trouble elsewhere in Africa, in places like the Sudan and Nigeria, is not helping matters. Given these realities, it's hard to imagine a scenario in which oil prices move significantly higher for an extended period absent something going wrong in that part of the world, which contains 70 percent of known oil reserves. Yet when it comes to sovereign decision-making, moves from Washington, Brussels, and Beijing may prove more unsettling to global energy markets in the months ahead than anything OPEC does.

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