by Daniel Rice
September 14, 2014
For twelve days terrorists controlled one of the largest dams in the Middle East when ISIS took control over the Mosul Dam in northern Iraq. The region was one explosive detonation away from a military, political, economic and humanitarian crisis that could have had literal and figurative downstream effects not only throughout Iraq, but could have affected regional stability and the global financial markets. Fortunately the terrorists did not blow the dam and Iraqi forces, including the Kurdish Peshmerga and supported by the U.S., were able to successfully retake the dam in a combined coalition attack. This event is a seminal event in the relationship between water, agricultural and energy that will change the way countries; militaries and companies look at the nexus of agriculture, energy and water. The United Nations has stated that “water, energy and food are inextricably linked” and has a dedicated task force to tackle global issues related to that nexus.
As an Infantry officer working on economic development in the Sunni Triangle in 2004-05 it became obvious to me and my team that water, energy and agriculture were the building blocks of civilization at the micro-economic level. In the agrarian society of Iraq, water, energy and agriculture are the driving forces for the majority of the population. Water, energy and agriculture were also the primary driver of economic development and job creation in Iraq. We worked with the Iraqi people to help them clear the irrigation canals to provide water to the farms throughout the region in order to re-start farming. But clearing the canals had to be sequenced simultaneously with establishing power for the pumping stations downstream. Unless it was properly sequenced, the operation would fail: the weeds would swamp the irrigation canals again in short order and the entire process would need to be re-initiated. Our efforts were not without risk, twice roadside bombs en route to meetings to form agricultural co-operatives to help the farmers deal with these issues hit my team. Water from irrigation and diesel-generated power allowed small-scale farming and we were make some progress by successfully re-starting many farms on the individual subsistence level. However, without large-scale food processing facilities to can, bottle, or otherwise package the crops, large-scale production of agriculture was not possible and Iraqi farmers were naturally limited to only farm as much as their family or tribe could consume and nothing more.
So in 2007, after leaving the Army and returning to finance in New York, two business partners and I formed a private equity fund called The Marshall Fund and acquired a defunct tomato paste factory in Northern Iraq near Irbil. In 2008-2009 we acquired, refurbished and re-opened the Harir Tomato Paste and Juice factory and were able to provide diesel-generated power, which allowed us to re-open the factory. Opening the factory and restarting tomato paste processing allowed Kurdish, Sunni and Shiite farmers to begin large scale farming again, (as far south as Karbala which is south of Baghdad). The linkages between energy, water and agriculture were being used to great positive regional effect and our relatively small operation made international news and was covered in the media by The National (Dubai), Zawya, as well as Investor News and the Today Show in the United States among many others.
In 2014 those same linkages between water, energy and agriculture were combined in a regional crisis at the Mosul Dam, but instead of creating economic activity, the entire region was actually put at risk by the nexus of energy, agriculture and water. The dam represents macro-level electricity, water and agriculture to not only northern Iraq, but to all of Iraq as the Tigris River runs from Kurdish north to Sunni central to Shiite southern regions. The ISIS takeover of the dam was seen far in advance and should have been prevented. The ISIS movement towards the dam was like a slow moving terrorist train wreck. From January through August 2014 Iraqi leaders saw ISIS forces slowly advancing towards the dam, a strategic national asset of Iraq, and yet ISIS was allowed to take it--a near fatal strategic error by coalition forces that should be prevented in the future in all similar circumstances. Although much of the press attention was on humanitarian support of the Yezidi’s trapped on Sinjar Mountain, the critical strategic objective of the U.S. reintroduction of force in Iraq was to help wrest control of the Mosul Dam from ISIS. The fact that the dam was retaken does not diminish the strategic error that Allied forces allowed the dam to be taken with many months of notice as the ISIS forces moved closer and closer towards the dam.
Once occupied, the terrorists temporarily controlled the power that provided electricity to the region and they had the option of blowing the dam or rigging with explosives and a “kill switch” in case of Iraqi Army or US attack. They controlled the water flowing from the dam and could have flooded the Tigress in the off-season and starved it of water during the peak-farming season, thus holding farmers hostage and starving the region of water and food. The cities along the Tigress: Mosul, Bayji, Tikrit, Samarra, Balad, Baghdad and Basra, are all dependent upon water from the Tigress and would be affected by either a massive one time flood if the dam were blown- or sporadic flooding and drying up had the terrorists manipulated control over the dam.
The damage that could have been done to the entire region is inconceivable. The flooding would have not only caused massive loss of life, but would have shattered a fragile Iraqi Army downstream, limited their freedom of movement and allowed ISIS a temporary advantage to stage a massive complex attack against Baghdad, a target which they could not likely take without an external event such as the flooding caused by blowing the dam. The resulting damage to the Shiite community could have increased the Sunni-Shiite rift and the resulting humanitarian crisis with internally displaced persons could have spread the crisis over borders into Iran, Kuwait and Jordan. The destruction of the Mosul Dam could have made a Small War become a Big War- with one blasting cap (and lots of explosives). Assuming that the terrorists would not blow the dam, or will not blow the smaller dam they currently control in Fallujah over the Euphrates, is a dangerous assumption and mistakenly assumes that they would act rationally.
On a global scale, the Mosul Dam should be a symbol of the nexus of three of the most important economic forces in the world: water, energy and agriculture. These three sectors are becoming increasingly stressed with an increasing global population, expanding middle class, population growth, urbanization and a shift towards higher protein diets. These driving forces are causing disruption on every continent.
In Yemen, the water table is being destroyed by over-farming of the drug “khat” at the same time as the same country is running out of oil to fund continuing government operations. A humanitarian crisis is emerging in spite of funding from Qatar and Saudi Arabia to mitigate its impact. The United Arab Emirates imports 85% of its food and, if blockaded, could have a massive humanitarian crisis on its hands within weeks. It must invest heavily in “food security” to avoid this calamity. In Afghanistan, reduction of U.S. forces may make the strategically important Kajaki dam—which is responsible for most of the energy and water for Helmand and Kandhar provinces—vulnerable to Taliban attack if the Afghan Force repeat the same mistakes of Iraqi forces and do not protect their strategic infrastructure. China, India, Nepal, Bhutan, and Pakistan are building over 500 dams to fuel their growing demand for electricity, which will dramatically affect the ecosystem crossing over borders throughout the region. In the United States privatization of water resources is dramatically changing the way we look at water and are causing interstate battles over water rights.
Throughout the Middle East and North Africa countries are now spending massive amounts on areas that were previously not identified as investment categories, but are now considered national security interests such as “Water Security”, “Food Security (agriculture)” and “Energy Security”. Population growth, a rapidly expanding global middle class, urbanization and a shift towards higher protein diets are all putting tremendous burden on these globally stressed resources and countries are spending significantly in these areas to provide national resources/institutions. This massive spending, estimated at $8 trillion over the next decade, will have a global effect on governments, regions and countries and will determine whether there is stability or instability in any particular region
The US National Security apparatus should have a dedicated focus on supporting our allies by helping them to secure their vital infrastructure like the Mosul Dam, while positively encouraging governments to increase spending in water, energy and agriculture that will provide stability to regions through the economic development that will follow. US Embassy personnel around the world should evaluate their host nations’ economies and stability through these lenses’ in order to help support US National Security interests. US Department of Commerce and US Department of Agriculture foreign officers for example, should encourage sovereign wealth funds to continue their massive investments in “food security”, “energy security” and “water security”- the growing themes that will likely impact regional and global stability- or instability in the future.
Daniel Rice is a West Point graduate and Kellogg MBA with expertise in US National Security interests with experience investing in energy, agriculture and water. He served for two years in uniform in the Army in the Tigris River Valley, one in Iraq and one in Eastern Turkey. He is the President of SunDial Capital Partners and has traveled extensively throughout Iraq, Afghanistan, Yemen and most of the Middle East as an investor. He is also an award-winning author and was awarded the Purple Heart after being hit by a roadside bomb while traveling to a meeting with Iraqis to discuss…agriculture, energy and water.
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