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Egypt after Morsi: Joy and Worry

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The overthrow of Mohamed Morsi in Egypt delights and worries me. Delight is easy to explain. What appears to have been the largest political demonstration in history uprooted the arrogant Islamists of Egypt who ruled with near-total disregard for anything other than consolidating their own power.

Islamism, the drive to apply a medieval Islamic law and the only vibrant radical utopian movement in the world today, experienced an unprecedented repudiation. Egyptians showed an inspiring spirit.

If it took 18 days to overthrow Husni Mubarak in 2011, just four were needed to overthrow Morsi this past week. The number of deaths commensurately went down from about 850 to 40. Western governments (notably the Obama administration) thinking they had sided with history by helping the Muslim Brotherhood regime found themselves appropriately embarrassed.

My worry is more complex. The historical record shows that the thrall of radical utopianism endures until calamity sets in. On paper, fascism and communism sound appealing; only the realities of Hitler and Stalin discredited and marginalized these movements.

In the case of Islamism, this same process has already begun; indeed, the revulsion started with much less destruction wrought than in the prior two cases (Islamism not yet having killed tens of millions) and with greater speed (years, not decades). Recent weeks have seen three rejections of Islamist rule in a row, what with the Gezi Park-inspired demonstrations across Turkey, a resounding victory by the least-hardline Islamist in the Iranian elections on June 14, and now the unprecedentedly massive refutation of the Muslim Brotherhood in public squares along the Nile River.

But I fear that the quick military removal of the Muslim Brotherhood government will exonerate Islamists.

Egypt is a mess. Relations between pro- and anti-Muslim Brotherhood elements have already turned violent and threaten to degenerate. Copts and Shi’ites get murdered just because of their identities. The Sinai Peninsula is anarchic. The incompetent and greedy military leadership, which viciously ruled Egypt from behind the scenes between 1952 and 2012, is back in charge.

But the worst problems are economic. Remittances from foreign workers have declined since the upheaval in neighboring Libya. Sabotage against the pipeline sending natural gas to Israel and Jordan ended that source of income. Tourism has obviously collapsed. Inefficiencies mean that this hydrocarbon-producing country lacks the fuel to run tractors at full capacity. Socialist-era factories churn out sub-par goods.

Egypt imports an estimated 70 percent of its food and is running fast out of hard currency to pay for wheat, edible oils, and other staples. Hunger looms. Unless foreigners subsidize Egypt with tens of billions of dollars of aid a year into the indefinite future, a highly unlikely scenario, that hunger looks unavoidable. Already, about out of seven poor families have cut back on their food intake.

Looming over all these dangers, the Ethiopian government exploited Egypt’s weakness a few weeks ago to begin building a dam on the Blue Nile that could entail a reduction in water being supplied to Egypt from 55 billion cubic meters to 40 billion, a move that has incalculably negative implications for life in the country known as the Gift of the Nile.

As these economic disasters hit, the year-long interlude of Islamist rule by Morsi & Co., which did so much to exacerbate these problems, may well be forgotten – and whoever inherits the rule will take the blame. In other words, the pain Egyptians have and will go through may be for naught. Who knows, they might in desperation turn again to Islamists to pull them out of their future predicament. Likewise, the Muslim Brotherhood’s brief time in power means other Muslim peoples will also not gain as they should from Egypt’s dire experience.

On another subject, Lee Smith of the Hudson Institute speculates that Egypt’s new rulers will see a short war with Israel as the only way to “reunify the country and earn Egypt money from an international community eager to broker peace,” as well as “return Egypt to its former place of prominence” in the Middle East. Such a war would likely achieve none of these goals – Egyptian forces would probably get clobbered, leaving the country yet poorer and weaker – but one cannot discount this possibility. Egypt’s military leaders have many times before engaged in follies against Israel.

In short, my joy at Morsi’s departure more than offset by my concern that the lessons of his misrule will not be learned.

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Middle East

Business and boxing: two sides of the same coin

Dr. James M. Dorsey

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What do a planned US$15 billion Saudi investment in petroleum-related Indian businesses and a controversial boxing championship have in common?

Both reflect a world in which power and economics drive policy, politics and business at the expense of fundamental rights.

And both underscore an emerging new world order in which might is right, a jungle in which dissenters, minorities and all other others are increasingly cornered and repressed.

Rather than furthering stability by building inclusive, cohesive societies both support trends likely to produce an evermore unstable and insecure world marked by societal strife, mass migration, radicalization and violence.

A world in which business capitalizes on decisions by a critical mass of world leaders who share autocratic, authoritarian and illiberal principles of governance and often reward each other with lucrative business deals for policies that potentially aggravate rather than reduce conflict.

No doubt, the planned acquisition by Saudi Arabia’s state-owned national oil company Aramco of 20 percent of the petroleum-related businesses of Reliance Industries, one of India’s biggest companies, makes commercial and strategic economic and business sense.

Yet, there is equally little doubt that the announcement of the acquisition will be read by Indian prime minister Narendra Modi, days after he scrapped the autonomous status of the troubled, majority Muslim region of Kashmir, as a license to pursue his Hindu nationalist policies that discriminate against Muslims and other minorities and fuel tensions with Pakistan, the subcontinent’s other nuclear power.

The ultimate cost of the fallout of policies and business deals that contribute or give license to exclusion rather than inclusion of all segments of a population and aggravate regional conflict could be far higher than the benefits accrued by the parties to a deal.

Underscoring the risk of exclusionary policies and unilateral moves, cross border skirmishes between Indian and Pakistani forces erupted this week along the Kashmiri frontier in which at least five people were killed.

The timing of the announcement of the Aramco Reliance deal in a global environment in which various forms of racism and prejudice, including Islamophobia, are on the rise, assures Indian political and business leaders that they are unlikely to pay an immediate price for policies that sow discord and risk loss of life.

Like in the case of Saudi and Muslim acquiescence in China’s brutal clampdown on Turkic Muslims in the troubled, north-western Chinese province of Xinjiang, the most frontal assault on a faith in recent history, the announcement risks convincing embattled Muslim minorities like the Uighurs, the Kashmiris or Myanmar’s Rohingya who are lingering in refugee camps in Bangladesh that they are being hung out to dry.

To be sure, Kashmiris can count on the support of Pakistan but that is likely to be little more than emotional, verbal and political.

Pakistan is unlikely to risk blacklisting by the Financial Action Task Force (FATF), an international anti-money laundering and terrorism finance watchdog, at its next scheduled meeting in October by unleashing its anti-Indian militants.

Anthony Joshua’s controversial fight with Andy Ruiz scheduled for December in Saudi Arabia, the first boxing championship to be held in the Middle East, pales in terms of its geopolitical or societal impact compared to the Saudi Indian business deal.

Fact is that Saudi Arabia’s hosting of the championship has provoked the ire of activists rather than significant population groups. The fight is furthermore likely to be seen as evidence and a strengthening of Crown Prince Mohammed bin Salman’s selective efforts to socially liberalize the once austere kingdom.

Nonetheless, it also reinforces Prince Mohammed’s justified perception that Saudi Arabia can get away with imprisoning activists who argued in favour of his reforms as well as the lack of transparency on judicial proceedings against the alleged perpetrators of the killing of journalist Jamal Khashoggi in the Saudi consulate in Istanbul. Saudi Arabia insists the killing was perpetrated by rogue operatives.

What Saudi investment in India and the scheduled boxing championship in the kingdom have in common is that both confirm the norms of a world in which ‘humane authority,’ a concept developed by prominent Chinese international relations scholar Yan Xuetong, is a rare quantity.

Mr. Yan employs the concept to argue without referring to President Xi Jinping, Xinjiang, China’s aggressive approach towards the South China Sea or its policy towards Taiwan and Hong Kong that China lacks the humane authority to capitalize on US President Donald J. Trump’s undermining of US leadership.

Mr. Yan defines a state that has humane authority as maintaining strategic credibility and defending the international order by becoming an example through adherence to international norms, rewarding states that live up to those norms and punishing states that violate them. Garnering humane authority enables a state to win allies and build a stable international order.

Mr. Yan’s analysis is as applicable to India and Saudi Arabia as it is to China and others that tend towards civilizational policies like the United States, Russia, Hungary and Turkey.

It is equally true for men like Anthony Joshua promoter Eddie Hearn and business leaders in general.

To be sure, Aramco is state-owned and subject to government policy. Nonetheless, as it prepares for what is likely to be the world’s largest initial public offering, even Aramco has to take factors beyond pure economic and financial criteria into account.

At the end of the day, the consequence of Mr. Yan’s theory is that leadership, whether geopolitical, economic or business, is defined as much by power and opportunity as it is by degrees of morality and ethics.

Failure to embrace some notion of humane authority and reducing leadership and business decisions to exploiting opportunity with disregard for consequences or the environment in which they are taken is likely to ultimately haunt political and business leaders alike.

Said Mr. Yan: “Since the leadership of a humane authority is able to rectify those states that disturb the international order, the order based on its leadership can durably be maintained.”

What is true for political leaders is also true for business leaders even if they refuse to acknowledge that their decisions have as much political as economic impact.

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Iran: What is in store for the JCPOA?

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The Islamic Republic of Iran (IRI) continues to be in the spotlight of global politics. And even though the “Iranian problems” go beyond the Joint Comprehensive Plan of Action (JCPOA), it is the “dying” JCPOA that is the main cause of tensions in and around Iran, be it the financial and economic blow of the United States, which uses the “oil baton” to strike at the Iranian economy, the threat of war in the Persian Gulf and tanker conflicts, or Iran’s geostrategic and regional position in general.

Regrettably, we have to admit that because of Washington’s destructive moves on the global scene the JCPOA is coming under corrosion and may well turn into dust in the near future. Such a negative outcome runs counter to the interests of Russia, China, and the European Union. Therefore, they are making tremendous efforts to preserve these agreements, even if in a slightly different format after the withdrawal of the US.

Political analysts reveal two conflicting views on the future of the JCPOA. Some are sure that the days of the nuclear deal are numbered. Others believe that it can still be “saved”, but this requires the concerted efforts of the countries participating in it.

On July 28, members of the Joint Commission on the Implementation of the JCPOA gathered in Vienna at the level of political directors to focus on pressing issues the JCPOA is confronted with. Participating in the meeting were delegations from Russia, China, Great Britain, France, Germany and Iran. They discussed the negative effect of Iran’s measures to curtail its commitments under the agreement thereby aggravating the situation in the Persian Gulf.

Iran’s partners called on Tehran to refrain from further withdrawal from a number of obligations under the JCPOA. The Iranian leaders have announced that, starting from May 8, they introduce 60-day rounds to gradually curtail compliance with the requirements of the JCPOA . Early September will see a new, third phase of the Iranian struggle against US sanctions. The essence of such moves on the part of Iran is to force the European Union, and, first of all, Britain, France and Germany, to launch at full capacity the INSTEX settlement mechanism, which serves to guarantee the export of Iranian oil. Apparently, this presents a lot of difficulty and causes a lot of doubts among the founders of this financial mechanism.

Reporting on the Vienna consultations, Iranian Foreign Ministry spokesman Abbas Mousavi said that “the meeting in Vienna did not give us any guarantees about the future the JCPOA.” He pointed out that Iran is not sure of the effectiveness of European efforts within the framework of INSTEX and, therefore, about maintaining the JCPOA. Iran will decide on further steps after the forthcoming ministerial meeting of countries that act as guarantors of the JCPOA, the diplomat said.

The head of the Russian delegation in Vienna, Deputy Foreign Minister Sergey Ryabkov, remarked in this connection: “We urged the Iranians to refrain from this [from the phased exit from the JCPOA, V.S.] and explained why: the more measures are taken to reconsider commitments, even if voluntary ones, the higher the political temperature and the higher the chances that some of the participants in the JCPOA may lose temper and trigger aggravation. ”

The Russian diplomat went on to comment: “Certainly, you can follow this course, but it is getting ever more precarious. If we want Iran to refrain, and we also talked about this, the rest of the countries must redouble their efforts in order to provide Iran with an acceptable level of oil export despite all the odds and set the stage for at least some normalization of foreign economic activity.”

To what extent is this possible amid the unprecedented US pressure on Iran? Federica Mogherini, head of the EU for foreign affairs, has cautiously suggested the possibility of intensifying the work of INSTEX. “The question whether INSTEX will deal with oil is currently being discussed by the shareholders,”- she said.

But it is this very issue that determines Iran’s policy, and the choice of the directions of this policy clearly correlates with the following possible developments regarding the JCPOA.

The first way is possible if the authors of the JCPOA, the European Union, and other countries concerned can provide an “acceptable level of oil export”. In this case, Iran will return to the meticulous fulfillment of its nuclear deal commitments. However, there are great doubts that Iran’s partners will be able to satisfy its oil export needs.

American officials have warned European countries that they risk violating sanctions against Iran if they promote a barter system that could allow the export of Iranian oil. A senior White House administration official told Washington Examiner that the US Department of the Treasury had contacted the INSTEX Council to “signal dissatisfaction with the creation of a tool that helps to dodge sanctions and the dangers associated with it.”

No matter how much European politicians and diplomats would like to support the JCPOA, it seems that European business is not ready to take chances with the US sanctions.

The American oil embargo has created a situation which is unparalleled, even compared to the tough international sanctions of 2012-2016. In July, the export of Iranian oil fell to 100 – 120 (taking into account condensate and light oil) thousand barrels per day . In June, this indicator ranged between 300 and 500 thousand. In April 2018, Iran exported 2.5 million bpd , which is 25 times more than this July.

According to experts, to determine the exact amount of oil currently sold by Iran is difficult, since Tehran is using “gray” and other export options. However, the current estimates range within the above mentioned figures.

Thus, even if INSTEX begins to operate at its full “oil” capacity, even if oil is sold on a daily basis to China , Russia , and European countries, and even if the oil export is carried out with the use of all possible legal and semi-legal ways, it is unlikely that all this will compensate Iran’s losses in oil exports and, accordingly, in petrodollars.

However, even in the event of such a far from optimistic scenario, and even considering financial losses, Tehran will not profit from leaving the JCPOA, first of all, for political reasons.

The second option for Iranian policy, will most likely take shape in the context of the EU’s inability to circumvent US sanctions and thereby fulfill its obligations under the JCPOA. In this case, there could be two scenarios.

The first hypothetical option for Iranian policy amid INSTEX futility: Iran openly leaves the JCPOA. On July 29, the Iranian Foreign Ministry issued a statement in which it demanded yet again that European countries act on the conditions of the JCPOA. Otherwise, the statement said, Iran would cease to pursue its obligations under this agreement.

As part of this option, Iran terminates the implementation of the Additional Protocol to the IAEA guarantees,  puts an end to the activities of the IAEA inspectors and control by the Agency, restores its nuclear potential and activates the implementation of its nuclear program under plans which were in force before the adoption of the JCPOA. In its most radical version, Iran withdraws from the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). Such a policy, in its best version for the Iranians, will lead to the complete isolation of Iran and the resumption of international sanctions, possibly under the patronage of the UN Security Council. At worst, it will lead to possible air and missile strikes by the United States and / or Israel at Iran’s nuclear facilities (let’s recall the troubled year 2012). Clearly, such a development does not suit anyone, first of all, Iran.

It should be borne in mind that the European Union (Britain, France and Germany), while opposing the United States on the JCPOA, backs Donald Trump and his team on other issues concerning Iran and its policies. These are as follows: Iran’s missile program, Tehran’s military and political activities in the Middle East, Iran’s support of Hezbollah, Hamas and other Shiite groups, which are deemed terrorist in most Western countries. Therefore, in the event of the collapse of the JCPOA, the EU will concentrate all its political, diplomatic and propaganda campaigns and, possibly, military potential, on Iran.

The second possible political option of Tehran in the conditions of INSTEX incapacity is the continuation of the policy which is currently pursued by the Iranian leadership. On the one hand, there is a well-structured and well-thoughtout phasing out of obligations under the JCPOA, which does not envisage going beyond the “red lines”. On the other hand, bringing partners as close as possible and at the same time lifting tensions in relations with opponents with a view to set the stage for negotiations

On January 29, 2019, addressing a conference on defense and security in Iran, Chief Military Advisor to the Commander-in-Chief and Supreme Leader of the Islamic Republic of Iran, Brigadier-General Yahya Rahim Safavi said that “the development of Iran’s strategic relations with global competitors of the United States, including Russia and China, is one of Iran’s major defense strategies.”

In June, China and Iran held joint naval exercises at the strategic Strait of Hormuz. In July, Iran unilaterally introduced a visa-free regime for citizens of China, as well as for residents of Hong Kong and Macau.

According to Iranian politicians and political analysts, Russia is Iran’s strategic ally in the region and elsewhere in the world. The Commander of the Iranian Navy, Rear Admiral Hossein Khanzadi, has said that Iran and Russia intend to step up maritime cooperation. According to the admiral, a memorandum of understanding was signed in Moscow on naval cooperation and the two sides plan joint military exercises in the Indian Ocean before the end of the year. “By the Indian Ocean, we mean a vast area in the northern part of the ocean, including … the Strait of Hormuz, as well as the Persian Gulf.” Later, on July 30, the command of the Iranian Navy stated that Rear Admiral Khanzadi’s words about the location of the exercises were misinterpreted. He meant the northern part of the Indian Ocean and the Oman Sea.

On August 1, the Russian Defense Ministry did not confirm either the signing of any  document, or any plans for joint maneuvers of the Russian Navy and the Iranian Navy.

Judging by these facts, Tehran is trying to use Iran’s good relations with China and Russia for its political agenda and for an effective struggle against its antagonists.

Simultaneously, Iran is seeking to alleviate tensions with its opponents as part of its policy of moderate withdrawal from the JCPOA. A few days ago, Iranian Foreign Minister Mohammad Javad Zarif announced his country’s readiness for a dialogue with Saudi Arabia, Iran’s most fierce rival in the Middle East. The two countries disagree on many issues and support parties that are at war with one another.

The most significant event of recent days is an appeal of the Iranian Foreign Minister Mohammad Javad Zarif to U.S. President Donald Trump to settle the differences between the two countries through negotiation and not succumb to the influence of advisers and allies, who, in his opinion, are pushing Washington into war with Tehran. As Mr. Zarif said “diplomacy is tantamount to common sense, not weakness.”

The Iranian diplomacy is thus demonstrating political flexibility and, at the same time, pragmatism. It seems that Tehran is playing a simultaneous game with many parties and, an all likelihood, there are two major points for Iran to gain from these games.

The first is to prolong the time it takes to make drastic decisions. In any case, it will play for time until the presidential election in the United States, due to take place in November 2020, hoping for the victory of the Democrats and, accordingly, the revival of the JCPOA and the return of Iranian-American relations to the period of 2015-2016.

The second is to score as many points as possible on playing venues around the world to create favorable conditions for undoubtedly welcome future negotiations, in the first place, with the Americans, and, preferably, with a Democratic administration.

Despite its daring and independent position, Tehran has no other pragmatic choice but negotiations. In all likelihood, the American pressure on Iran under Donald Trump will not dwindle. Given the situation, Iran’s foreign policy of the near future will move along a thorny path full of unpredictable pitfalls and unexpected turns. But obviously, all these efforts are oriented at the only option possible – negotiations. Other ways are either unrealistic, or lead to war. And this, I dare say, is something no one wants, including the United States.

From our partner International Affairs

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Middle East

U.S. – Iran tensions: Position of Baku Remains the Same

Asim Suleymanov

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The situation in the Middle East is still tense. First of all, because of the aggravating relations between Iran and the United States, that resemble a roller coaster. A temporary stabilization follows the next peak, but at a level below the previous aggravation. Then a new incident takes place or another ultimatum is given by one of the parties, and everything repeats again.

Tensions with Iran have steadily increased since U.S. President Trump withdrew the United States from the 2015 Iranian Nuclear Agreement and re-imposed harsh economic sanctions on Iran. Rouhani and other Iranian officials accuse the United States of engaging in “economic terrorism.”

The international community now is watching the development of the conflict between the US and Iran. The regular imposition of new sanctions on Iran, the start of tanker wars, the mutual threats of Washington and Tehran become a real threat to international security. The projects exempted from US sanctions include the Bushehr Nuclear Power Plant, the Fordow Fuel Enrichment Plant (FFEP) and the Arak heavy water nuclear reactor.

It seems clear the Iranians have little inclination or motivation to back down. They will probably increase the aggression toward merchant shipping, either putting mines in the Strait of Hormuz (which they did as part of the so-called “tanker wars” in the 1980s) or actually sinking a ship, probably surreptitiously using a diesel submarine.

Meanwhile, anti-Iran sanctions hit considerably Iran’s partners. They are forced to look for mechanisms of evading these sanctions and to look for new formats of interaction in order to protect existing ones.

Today, many countries reject full economic cooperation with Tehran. But the format of cooperation, aimed primarily at the implementation of global economic and transport projects, continues to exist. The next trilateral summit of the leaders of Russia, Azerbaijan and Iran is clear evidence that this format of cooperation is beneficial. All the sanctions can’t hinder it.

If we imagine that the war between the USA and Iran will start, it will become an unconditional, non-compensating disaster for all its participants. That will be a war without winners. All the involved parties will lose.

As a neighboring country Azerbaijan will inevitably be drawn into the conflict. It can turn into a catastrophe, as refugee flows and extremists will head to Azerbaijan, especially from Iranian (Southern) Azerbaijan region.

So far, the President of Azerbaijan Republic Ilham Aliyev remains the most successful leader of the South Caucasus. He is confidently controlling the ship of the state. With its reasonable policy, Azerbaijan has already ensured its own place in a multipolar world. And this place does not mean that Azerbaijan will follow Russia and China instructions. The government of Baku will act in accordance with its own interests that ensures independence and a place in the future multi-polar world.

The main thing is to continue this course being afraid of nothing, but acting within the framework of international law, if some other country commits indecent acts. A real politician should not fall prey to intimidation, the psychological attack of the West countries. This politician weighs reality, facts, actions. If Azerbaijan succumbs to such an attack, the tested methods will be applied in response such as color revolutions, external pressure and etc.

For Azerbaijan, the Islamic Republic of Iran is not just an ordinary country. First of all, Iran is the Azerbaijan Republic’s southern neighbor. The 2 states share about 618 kilometers of land borders. These two countries border each other in the Caspian Sea as well. Both countries share values from their mutual past and some elements of a common culture. Azerbaijan has the second largest Shi’i population in the world, after Iran. The membership of both countries in Muslim and regional organizations like the Organization of Islamic Conference and ECO, is an indicator of the countries’ affinities in terms of geography and religion.

The history of direct relations for the last 10 years shows that such positive and binding factors as neighborhood and the same religion are not enough to create close relations between them. Other important factors, which affect current relations between Azerbaijan and Iran, exist as well.

Azerbaijan is well aware that there can be no sovereign state in a unipolar world. This simple, but very sober and very courageous calculation dictated Aliyev’s policy of supporting the Iran-Azerbaijan-Russia format of cooperation.

The Islamic Republic of Iran plays an active role in the geopolitical struggle over Caspian oil. As major hydrocarbon exporters themselves, Russia and Iran view the new oil and gas producers in the Caspian region as a threat to their own economic interests. Just like Russia, Iran is deeply concerned over growing western capital investments and the expansion of foreign interests and presence in the region. Being unable to compete with US and European technology and capital in tapping the abundant Caspian natural resources, Iran and Russia have resorted to non-economic ways of influence in the region.

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