.
By Oren Laurent
President, Banc De Binary
The Islamic State has been on our radar and been grabbing headlines for long enough. Yet, if we thought that their influence was subsiding and growing old, they’ve proven us wrong. Different factions of the terrorist group, notorious for their gruesome killings, have stirred violence across the Middle East, prompting the involvement of several international armies who are now coordinating a joint resistance. It’s bad news.
Two weeks ago, ISIS released a video of its militants burning alive a captured and caged Jordanian pilot. The video was reported to be one its most inhumane shock tactics to date, designed to draw mass media attention. Jordan vowed an “earth-shaking and decisive” response. The country stepped up its resistance efforts as part of a US-led coalition and struck various targets in Syria as well as mobilising thousands of ground troops on its border with Iraq. Bahrain pledged that it will take action too and send armed forces to support Jordan.
Then last Thursday, ISIS attacked the city of al-Baghdadi, a strategically significant city in Western Iraq where 300 US armed forces are supporting the Iraqi government with airstrikes against the terrorists. The attack was the group’s first territorial gain in several months. It coincided with US President Obama’s appeal to Congress to approve greater military authorisation and the flexibility to employ ground forces, and was undoubtedly timed to embarrass the President and present an air of defiance.
This Sunday, February 15, the group released a video showing the beheading of 21 Egyptians, which prompted Egypt to coordinate retaliation air attacks with the Libyan government. Together they struck a series of militant camps and weapon storage sites being used by the Islamic State in Libya, and Cairo called on the US to broaden their military operations now that the terror group has expanded their reach outside of Iraq and Syria. Rumour has it that even Iran’s Ayatollah Khamenei has got involved and sent Obama a secret letter about possible cooperation against the Islamic State if the countries first agree a nuclear deal. That would certainly be a remarkable alliance.
As the response to the Islamic State escalates, we must remember that ISIS is very controlled and calculated in its operations. It seems to have purposefully provoked this high emotional and military response from the authorities in the US and its Middle Eastern neighbours. Indeed, many analysts have commented that boots on the ground could empower the terror group in their media and recruitment efforts. Keep in mind that 3,000 Jordanians have already joined their ranks alongside hundreds of impressionable Americans and Brits.
Although the most significant economic damage has been in Iraq and Syria, the neighbouring countries of Lebanon, Jordan and Turkey have lost billions of dollars in output due to shattered business confidence and the influx of refugees which has pushed down wages and used up resources. The weaker these countries become economically, the more vulnerable they will be socially and politically to future ISIS attacks. Foreign markets don’t like the instability either. If it weren’t for fracking in the US and Saudi Arabia’s refusal to cut oil supply, the volatility in the Middle East could have led oil’s price to soar even higher than it did when Mosul fell to ISIS jihadists in June 2014.
The paradox is thus: we are morally and strategically obliged to treat the Islamic State as a most serious threat to global peace and stability. Yet, by giving them the attention they crave, we fuel their raison d'être and risk becoming pawns in their controlled and bloodthirsty quest for power.
I’m glad I’m making trading decisions and not political ones.
