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A Solution for an Unsolvable Problem? Recognition of the State of Palestine – by Israel, now!

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The new Swedish government officially recognized on October 30, 2014 the State of Palestine (1) . British Parliament voted two weeks earlier on a resolution in favour of backing the recognition of the Palestinian State (2) . And even the high representative of the European Union for foreign affairs Federica Mogherini spoke during her first official visit to Israel and Palestine in November 2014 in favour of the recognition of the Palestinian State (3).

Already on November 29, 2012 United Nations General Assembly, voting by an overwhelming majority, accorded Palestine “Non-Member-State” observer status in the UN. Did these important acts change anything on the ground? Certainly not. The only recognition which would count would be the one expressed by the State of Israel – in its own interest. Officially the government of Israel is in favour of the so-called two-states-resolution. So, what has been going wrong, why the world is waiting since the Oslo and Washington Peace Accord for the decisive step?

As a matter of fact the Oslo and Washington Peace Accord was too vague for the core issues of the Israeli-Palestinian conflict: the right to exist in recognized and secure borders for Israel, and the creation of an independent Palestinian state on the territories occupied by the Israelis in 1967.  

While the PLO “recognized the right of the State of Israel to exist in peace and security” and “accepted United Nations Security Council Resolutions 242 and 338” , Israel “in response, decided to recognize the PLO as the representative of the Palestinian people and commence negotiations with the PLO within the Middle East peace process” (5).

In a retrospective view for the PLO the recognition of Israel was obviously connected with the withdrawal from all occupied territories according to UNSC Res.242 und 338. (4) Careful reading of Chairman Arafat’s letter does not allow another interpretation of, while for Israel the recognition of the PLO did not mean the same, neither the total withdrawal from occupied territories, in particular not from in the meantime annexed areas like East Jerusalem or from the settlements, nor in any way a recognition of a sovereign Palestinian state. To some extent this is also the continuity of different interpretations in the past, in particular of UNSC Resolution 242. While Israel reads from the formulation “Withdrawal of Israel armed forces from territories occupied in the recent conflict” (6), that this does not request the withdrawal from “the” territories and therefore not from all occupied areas, the Arab and in particular the Palestinian side has a complete different view, based on the preamble of 242:  “Emphasising the inadmissibility of the acquisition of territory by war…” (7).

So the future failure of the peace process was built in from the very beginning.

In the Israeli view not only the negotiations of the most difficult questions in the relations between Israel and the Palestinians were postponed but the solutions were in no way anticipated, for the Palestinians the solution was already fixed by the implementation of Resolutions 242 and 338 and only the implementation was postponed and subject to further negotiations.

This may explain also some (past) patience of the Palestinian side with delays regarding timetables for Israeli withdrawals from territories, because one day they would have withdrawn from the whole West Bank and Gaza, including East Jerusalem and would have given up the settlements. Taking into account how difficult it was for them to accept even 242 and the principle right of Israel to exist and the opposition to this recognition by radical forces in the own camp, it seems that Arafat for a long time thought that the Israeli also need to overcome a strong opposition on their side to the recognition of a Palestinian state on the whole of the occupied territories, but at the end he expected the compromise, that would combine the Arab and the Israeli reading of 242, namely full withdrawal of Israel behind the borders of 67 (Arab view) and recognition of the State of Israel within these borders (Israeli view). Why would that mean already a compromise in the Arab view? Because first of all they never accepted the creation of the state of Israel by the UN in 48, and secondly, the borders Israel before 67 were only cease fire lines and include also a large area dedicated by the UN in 48 to the Arab state in Palestine.

Indeed there has been strong opposition on both sides against the implementation of the Oslo accord, even to the particular interpretation of the “own” side. Gush Emunim (the religious settlers movement) and the parties of the far right have fought against the abandonment of the occupied territories and even a broad majority of the moderate Israelis has been against compromises on Jerusalem, the Golan Heights and the total abandonment of all settlements (of the latter because of the rejection of the claim that any territory should be “judenrein” (8). Hamas, because of religious arguments, and other radical groups because of their political opposition to Arafat and Al Fatah insisted on the right to establish the own state on the whole territory of Palestine, that includes all of Israel. Despite a series of incidents, including the shooting in the Mosque of Hebron and the assassination of Rabin and continuous attacks in Israel by Hamas and Jihad, Israel and the Palestinian side stuck for a long time to the Oslo process.

It seems that the crucial point was reached in Camp David (9), although this may look paradoxically.  Not only in the Israeli view Barak offered to Arafat a maximum, “more than the majority of Israelis would agree, much more than Arafat could reach in the future”. But it was also a conditional offer – it must be the final solution. Arafat would have had to give up any more claims. No real share of Jerusalem, to accept an archipelago of Israeli settlements, or to say it in a more drastic language, more than 200 stings in the flesh of a Palestinian state, divided by countless Israeli corridors to the settlements. This “offer” was the offence to Arafat, not the visit of Sharon to the Al Aksa, which was of course helpful to mobilize the Palestinian public.

Arafat came to the conclusion that further negotiations are senseless (and that was exactly the message he got from Barak –“You will never get more…”). The consequence was the 2nd Intifada, to which Israel reacted in a way, which strengthened day by day the radical Palestinians. In particular Israelis demands of periods of total non-violence before resuming talks with the Palestinian side made Hamas, Jihad and the Al Aksa Brigades the masters of the game. Being totally opposed to the resumption of talks it was easy for them to achieve their immediate goal. Arafat, afraid of loosing his leadership, at least had to tolerate, and within his own Al Fatah camp may be even to authorize or to facilitate some actions.

Israel reacted not only with a definite refusal of talks with Arafat, but in the end with the well-known military action including the siege and humiliation of Arafat. Although stressing that the IDF does not want to stay in the Autonomous Area and he will find “somebody” to negotiate, it seems obvious that Sharon did not have any exit strategy nor do his successors.

The situation far away from peace culminated once again in more and more sophisticated missile attacks of Gaza based Hamas on Israel and the well-known Israeli retaliation on Gaza in 2014. Both sides did not care about heavy criticism from many sides.   

Indeed, a solution cannot be imposed from outside. The parties of the conflict must find it.  While Fatah has shown in the past flexibility (certainly not always for the better, but still), Hamas does not or cannot because of its fundamentalist ideology. Sharon although not of the calibre of Begin, who made peace with Egypt, and his successors showed at the end some flexibility. It is obvious that Israel as a democracy cannot remain forever or even survive as an occupying force. One the one hand this was recognized by the withdrawal from Gaza, on the other hand the Israeli forces are still in the West Bank and claim to return to Gaza whenever they want. Hamas seems not to be ready to recognize Israel under what conditions ever and not to accept the agreements of PLO with Israel. So for the moment the crisis seems to be unsolvable. Is there any solution?

The solution would have to start at that point, where the Oslo Agreement was too vague and gave space to quite different interpretations.

What Israel needs most desperately, is the right to exist in peace and security within the borders of 1967. Everything else should be subject to future negotiations, although it would be clear that there are some emotional issues like the Western Wall and the Jewish Quarter in the Old City of Jerusalem, which go beyond. But it would be an illusion that all open questions could be solved by the peace agreement. For the moment both sides are not able to accept the (necessary) compromise in a long list of sensitive questions as there are e.g. not only Jerusalem and the Temple Mount, but the settlements (and here in particular those in the area of Jerusalem), the return and/or compensation of refugees, the exact borders, future share of resources (water!) etc..

What the Palestinian side needs most desperately is the recognition of an independent, sovereign state with the opportunity to exist in peace and security, but also in dignity. As Israel should be recognized at least within the borders of 1967 that means the recognition of a Palestinian state on the territories of the West Bank and Gaza, occupied by Israel in 1967 (except the Golan Heights) (10). Again, everything else should be subject to future negotiations (between the two states!), including the exact borders. The agreed principle, however, should be, that this Palestinian state will include the vast majority of these territories and sovereign rights in the Arab part of Jerusalem, which will be the capital (not automatically the seat of all authorities). If the Palestinian side can reach this, it would certainly also strengthen Fatah and force Hamas to accept the reality.

Therefore any new agreement should start with:

A mutual recognition of the State of Israel and the Palestinian State, for both with the right to exist in peace, security and dignity; i.e. for Israel within the borders before 1967, for the Palestinian State on the territories occupied by Israel in 1967 (except the Golan Heights) and sovereign rights of this state in (East) Jerusalem, which will be also recognized as its official capital. (11)

Israeli territorial claims beyond and the exact borders of the Palestinian State, with the understanding that it will contain in any way the vast majority of the territories in question, as well as the details of sovereign rights in (the Arab part of) Jerusalem will be subject to negotiations between the two states.

Not depending on these negotiations free access to the believers of all religions concerned to there sanctuaries (list should be established by the parties) will be granted and guaranteed by both states. Real estate property of religious institutions and communities will be respected by both states.

A mutual recognition that due to the history and demography there is no space for “ethnically clean” states; therefore there is in principle the right of Arabs to live with equal rights in the State of Israel as well as the right of Jews to live with equal rights in the Palestinian State. The same applies to all ethnic and religious minorities in both states. The right to return for refugees will be subject to negotiations due to principles to be already agreed.

The State of Israel and the Palestinian State will establish a close co-operation in many fields, in particular in
•    the protection of ethnic and religious minorities (12)
•    the protection of and to access to religious sanctuaries (including cemeteries)
•    the economic area with a view to a free trade area and a customs union
•    the use of natural resources, in particular water
•    border and air space control
•    internal security, in particular prevention of and fight against terrorism
•    general for the implementation of all current and future agreements

The State of Israel and the Palestinian State will negotiate as equal partners in the spirit of good neighbourhood the following subjects:
•    the concrete co-operation in the fields mentioned above
•    the exact borders of both states on the basis of the mutual recognition
•    a time-table for the hand-over of areas within those borders and for the time being still occupied by Israeli armed forces
•    the establishment of joint security check points between Israeli and Palestinian controlled areas
•    the sovereign rights of the Palestinian State in the Arab part of the City of Jerusalem and the status of that as the official capital; from the very beginning Israel will recognize e.g. the “Orient House” as a place where only the Palestinian State will exercise sovereign rights;
•    the use of a corridor between the two parts of the Palestinian State (West Bank and Gaza Strip)
•    military defence and military assistance
•    the future of Israeli settlements with various options
•    the compensation for lost property of Palestinian refugees and the right to return for certain groups of refugees
•    the right of residents of both states to opt for the citizenship of the other state
•    the setting-up of joint bodies or authorities, in particular for common administration of natural resources, air control, border control, combat terrorism
•    creation of a joint parliamentary delegation or assembly
•    common human rights standards, probably based on the European Convention on Human Rights (ECHR) (13)
•    joint co-operation with neighbouring countries, in particular in economic matters (14)
•    …..

Such an agreement should be guaranteed by the UN, USA, the EU and Russia and recognized by the Council of Europe, the League of Arab States and the Organization of the Islamic Conference. (15)

Furthermore it should be accompanied by financial assistance from the USA and the EU and others (e.g. Norway or Switzerland) in the areas of
•    a fund for compensation of lost property of Palestinian refugees
•    a Palestinian Recovery Programme (PRP)
•    establishing common authorities
•    institution building of the Palestinian State

Other organisations (in particular the Council of Europe) could assist in various areas, like review of history textbooks, human rights education, education for democratic citizenship, institution building, training of young leaders, youth exchange, protection of ethnic and religious minorities, multicultural and inter-religious dialogue etc..

The founding father of Israel, Theodor Herzl, told his fellow Jews “If you will it, it is not a dream”. If both sides will peace, it will not be a dream. But they have to will it now!

(1) www.government.se/sb/d/19375/a/249204
(2) 67th UN General Assembly, 44th meeting
(3)  Jerusalem Post, November 10, 2014
(4)  Chairman Arafat’s letter to Prime Minister Rabin from September 9, 1993
(5) Prime Minister Rabin’s letter to Chairman Arafat from September 9, 1993
(6)  UN Security Council Resolution 242(1967) par.1 (i)
(7)  UN Security Council Resolution 242(1967) 2nd paragraph of the preamble
(8)  « cleansed of Jews », Nazi terminology for areas where all Jews have been either deported or murdered.
(9)  2000 Camp David Summit in July 2000, with US President Bill Clinton, Israeli Prime Minister Ehud Barak and PLO Chairman Yassir Arafat
(10)  The Golan Heights have been annexed by Israel and are a question between Israel and Syria, now overshadowed also by the civil war in Syria.
(11)  The late famous mayor of Jerusalem Teddy Kollek had already the vision that the city could be shared as their capital by the two states.
(12)  e.g. Armenians, Bahaï, Bedouins, Druse, Samaritarians, etc.
(13)  A possible European contribution could be to accept both states as observer states or even as associated members to the Council of Europe with a view to open the ECHR to them.
(14)  Several personalities such as former Jordan Crown Prince Hassan, Chairman Arafat and others and institutions such as the Jerusalem Center for Public Affairs saw the Benelux as a model for regional cooperation of Israel, Jordan and Palestine.
(15)  Taking into account the large number of Arab citizens of Israel the Arab League could consider a special relation with Israel, e.g. observer status for certain areas

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Middle East

Shifting Middle Eastern sands spotlight diverging US-Saudi interests

Dr. James M. Dorsey

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A series of Gulf and Middle East-related developments suggest that resolving some of the Middle East’s most debilitating and devastating crises while ensuring that efforts to pressure Iran do not perpetuate the mayhem may be easier said than done. They also suggest that the same is true for keeping US and Saudi interests aligned.

Optimists garner hope from the fact that the US Senate may censor Saudi crown prince Mohammed bin Salman for the October 2 killing of journalist Jamal Khashoggi in Istanbul; the positive start of Yemeni peace talks in Sweden with an agreement to exchange prisoners, Saudi Arabia’s invitation to Qatar to attend an October 9 Gulf Cooperation Council (GCC) summit in Riyadh, and a decision by the Organization of Oil Exporting Countries (OPEC) to cut production.

That optimism, however, may not be borne out by facts on the ground and analysis of developments that are likely to produce at best motion rather than movement. In fact, more fundamentally, what many of the developments suggest is an unacknowledged progressive shift in the region’s alliances stemming in part from the fact that the bandwidth of shared US-Saudi interests is narrowing.

There is no indication that, even if Qatari emir Sheikh Tamim bin Hamad Al Thani decides to accept an invitation by Saudi king Salman to attend the GCC summit rather than send a lower level delegation or not attend at all, either the kingdom or the United Arab Emirates, the main drivers behind the 17-month old economic and diplomatic boycott of the Gulf state, are open to a face-saving solution despite US pressure to end to the rift.

Signalling that the invitation and an earlier comment by Prince Mohammed that “despite the differences we have, (Qatar) has a great economy and will be doing a lot in the next five years” do not indicate a potential policy shift, UAE Minister of State for Foreign Affairs Anwar Gargash insisted that the GCC remained strong despite the rift. “The political crisis will end when the cause behind it ends and that is Qatar’s support of extremism and its interference in the stability of the region.,” Mr. Gargash said, reiterating long-standing Saudi-UAE allegations.

Similarly, United Nations-sponsored peace talks in Sweden convened with the help of the United States may at best result in alleviating the suffering of millions as a result of the almost four-year old Saudi-UAE military intervention in Yemen but are unlikely to ensure that a stable resolution of the conflict is achievable without a lowering of tension between Saudi Arabia and Iran. Even humanitarian relief remains in question with the parties in Sweden unable to agree on a reopening of Sana’a airport to facilitate the flow of aid.

More realistically, with the Trump administration, backed by Saudi Arabia and Israel, determined to cripple Iran economically in a bid to force it to alter its regional policies, if not change the regime in Tehran, chances are the Yemeni conflict will be perpetuated rather than resolved.

To Yemen’s detriment, Iran is emerging as one of the foremost remaining shared US-Saudi interests as the two countries struggle to manage their relationship in the wake of Mr. Khashoggi’s killing. That struggle is evident with the kingdom’s Washington backers divided between erstwhile backers-turned-vehement critics like Republican senator Graham Lindsey and hardline supporters such as national security advisor John Bolton. The jury is out on who will emerge on top in the Washington debate.

The risks of the Saud-Iranian rivalry spinning out of control possibly with the support of hardliners like Mr. Bolton were evident in this week’s suicide bombing in the Iranian port of Chabahar, an Indian-backed project granted a waiver from US sanctions against the Islamic republic to counter influence of China that support the nearby Pakistani port of Gwadar.

Iranian officials, including Foreign Minister Mohammad Javad Zarif and Revolutionary Guards spokesman Brigadier General Ramadan Sharif suggested without providing evidence that Saudi Arabia was complicit in the attack that targeted the city’s police headquarters, killing two people and wounding 40 others.

Iran’s semi-official Tasnim news agency, believed to be close to the Guards, said the attack was the work of Ansar al-Furqan, an Iranian Sunni jihadi group that Iran claims enjoys Saudi backing.

Iran’s allegation of Saudi complicity is partly grounded in the fact that a Saudi thinktank linked to Prince Mohammed last year advocated fuelling an insurgency in the Iranian province of Sistan and Baluchistan that incudes Chabahar in a bid to thwart the port development while Mr. Bolton before becoming US President Donald J. Trump’s advisor called for US support of ethnic minorities in Iran.

In a bid to create building blocks for the fuelling of ethnic insurgencies in Iran, Pakistani militants have said that Saudi Arabia had in recent years poured money into militant anti-Iranian, anti-Shiite madrassas or religious seminaries in the Pakistani province of Balochistan that borders on Sistan and Baluchistan.

The divergence of US-Saudi interests, agreement on Iran notwithstanding, was on display in this week’s defeat of a US effort to get the UN General Assembly to condemn Hamas, the Islamist group that controls the Gaza Strip. Saudi Arabia, despite the kingdom’s denunciation of Hamas as a terrorist organization and its demand that Qatar halt support of it, voted against the resolution.

The vote suggested that Mr. Trump may be hoping in vain for Saudi backing of his as yet undisclosed plan to resolve the Israeli-Palestinian dispute that is believed to be slanted towards Israel’s position.

Saudi ambassador to the UN Abdallah Al-Mouallimi said the defeated UN resolution would “undermine the two-state solution which we aspire to” and divert attention from Israel’s occupation, settlement activities and “blockade” of territories occupied during the 1967 Middle East war.

Saudi Arabia’s changing status and the divergence of longer-term US-Saudi interests was also evident in this week’s OPEC meeting in Vienna.

To get an OPEC deal on production levels, the kingdom, once the oil market’s dominant swing producer, needed an agreement with non-OPEC member Russia on production levels as well as Russian assistance in managing Iranian resistance, suggesting

The agreement, moreover, had to balance Mr. Trump’s frequently tweeted demand for lower prices, and the kingdom’s need for higher ones to fund its budgetary requirements and Prince Mohammed’s ambitious economic reforms and demonstrate that the Khashoggi affair had not made it more vulnerable to US pressure.

The emerging divergence of US-Saudi interests in part reflects a wider debate within America’s foreign policy community about what values the United States and US diplomats should be promoting.

With some of Mr. Trump’s ambassadorial political appointees expressing support for populist, nationalist and authoritarian leaders and political groups, the fact that some of the president’s closest Congressional allies back the anti-Saudi resolution illustrates that there are red lines that a significant number of the president’s supporters are not willing to cross.

All told, recent developments in the Middle East put a spotlight on the changing nature of a key US relationship in the Middle East that could have far-reaching consequences over the middle and long-term. It is a change that is part of a larger, global shift in US priorities and alliances that is likely to outlive Mr. Trump’s term(s) in office.

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Qatar’s decision to leave OPEC

Giancarlo Elia Valori

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The Emirate of Qatar will leave OPEC as from January 1, 2019.

The primary reason for this choice is the Emirate’s project to become the world leader in the natural gas market, raising its production from 77 million tons per year to 110 million tons. However, there is obviously also a geopolitical and energy decision underlying Qatar’s current choice.

This is the Emirate’s final response to the boycott and blockade imposed by Saudi Arabia on Qatar in June 2017, with the support of the United Arab Emirates, Bahrain, Yemen, Maldives, the Libyan GNA, Egypt and Jordan – based on Saudi Arabia’s generic accusation whereby Qatar was supposed to sponsor and support “terrorism” on its own.

The blockade was imposed two days after President Trump had met as many as 55 Heads of Arab and Muslim countries to build a sort of NATO equivalent, always against “terrorism” – an alliance to be set up immediately to counteract, above all, the Shiite and Iranian danger.

Let us leave aside the twenty-eight pages taken from the report of the US Senate on September 11, which would definitively prove the connection between those Al-Qaeda operatives and the Saudi regime – as well as the many multiannual reports of private and public funding to the jihadists and finally the lines of credit opened again by eminent citizens of the Wahhabi Kingdom in favour of Al Baghdadi’s Syrian-Iraqi Caliphate.

The Saudis, however, are too rich not to be believed, especially by the USA – hence the great blockade on Qatar succeeded also with the support of some Western countries.

For the whole Middle East, their troops, like the US ones, reported to CENTCOM, at the Al Udeid base  having its headquarters precisely in Qatar.

The strategic characteristics of Qatar, which today wants to build its autonomous natural gas organization –  independent of the oil one of OPEC, which does not deal with gasand is, however, dominated by Saudi Arabia –  are many and particularly interesting: firstly, the Qatari people are probably the richest citizens in the world.

If we assume that the Americans’ average income is 100, that of Qatari citizens is 187.4.

Just about the size of the Falkland Islands, the Emirate has 1.9 million residents, with a very high and growing share of immigrants.

From 2000 to 2010 the Emirate’s economy grew by a 12.9% average per year.

Its future growth up to 2022 is expected to be 18% higher than the current one.

There is also an interesting geopolitical sign: Qatar  participated – with great commitment – in the Western operations against Gaddafi by supporting, in particular, the black market of Cyrenaica’s oil, together with the Turkish intelligence services.

Nevertheless Qatar supports also some “rebel” jihadist Syrian groups against Assad, thus doing half a favour to US allies – while hosting, since 2013, a political office of the Afghan Taliban, which is well known and also frequented by the US intelligence service operatives.

Qatar’s global industrial and financial investments, however, are manifold.

Through its sovereign fund, the Emirate owns significant shareholdings of the Agricultural Bank of China – and certainly the Qatari decision to leave OPEC has been blessed by China. It also has shareholding in the Airbus Group; the London Stock Exchange (15.1%); Volkswagen (17%); Lagardère, a large and diversified media and publishing company; the Paris St.Germain football club; the Virgin megastore;  the HBSC, one of the largest banking groups in the world; Credit Suisse (5.2%) and Veolia, a French water and gas utility and service company.

Not to mention the countless real estate operations: Porta Nuova in Milan; Westin Excelsior in Rome; Gallia in Milan; Costa Smeralda in Sardinia;  Deutsche Bank; Barclay’s; Royal Dutch Shell; Tiffany; Siemens; the Heathrow airport; Walt Disney and the Empire State Building.

In addition to many other shareholdings not mentioned in this paper.

However, it has also a 3% shareholding of Total, which for Italy is an extremely important sign; a majority shareholding of the Miramax entertainment and movie company, as well as shareholdings in Rosneft, the Russian giant of natural gas and raw materials, and in the big five-year project for liquefied petroleum gas (LPG) in Germany and in the EU – a 30 billion US dollar project, of which 10 invested for Germany alone.

Therefore, between Qatar and Saudi Arabia, in the fight  between oil producers and natural gas extractors, there is a real war for the hegemonic conquest of technologically advanced areas and of Europe, in particular, with a view to definitely acquiring markets and using their diversification opportunities.

Moreover, Qatar is at least as rich in natural gas as Iran (and, together with the Shiite Republic, it participates in the exploitation of the South Pars II marine field), but also as the Russian Federation.

The new  Qatar-centred “gas OPEC” means, therefore, that there is no longer the US-friendly Sunni oil OPEC,  precisely the one that organized the great petrodollar recycling started after Egypt and Syria’s Yom Kippur war against Israel in 1973.

Oil recycling at a “high” price against the US dollars which, after the end of the Bretton Woods agreements, led to the new hegemony of the US currency and its inappropriate exchange rate, despite its internal fundamentals.

“The dollar is our currency, but it is your problem”, FED Governor Paul Volcker said to his fellow Governors of the European Central Banks.

At that time, there was not yet the weak and irresolute timidity of the Euro to make the picture more complex.

The European currency is not a lender of last resort, but it plays the game of the global currency as an alternative to the US dollar, with the operational results we can imagine.

It is therefore no mere coincidence that the only strategic uses of the Euro were the minimum Iranian ones, in the oil Stock Exchanges of the islands in the Persian Gulf, or the more paraded than real ones by Saddam Hussein.

In essence, reverting to the geopolitical sense of the very recent Qatari decision to leave OPEC, this means that the 600,000 barrels/day of oil extracted from Qatar are considered fully marginal by it and certainly can never compete with Saudi Arabia’s 11 million barrels/day of Saudi Arabia.

Qatar plays the game with its natural gas – it does not play its oil cards.

The current Qatari operation, however, implies a strategic choice in the near future, which could be the creation of a “gas OPEC” with Russia and Iran, in view of a doubling of the LPG prices in 2019, with China becoming the world’s LPG top consumer and the USA the world’s top oil extractor, albeit with the new and expensive shale techniques, which generate profits only with high oil barrel prices.

Or an economic and financial alliance between Qatar, China, Japan and Russia, which could marginalize the dollar area by reducing it to oil.

At geopolitical level, this will certainly mean greater instability – not necessarily fully peaceful – between the Emirate and the Saudi Kingdom, while the former will invest – also within the EU – in the industrial processing  of LPG, which mainly regards plastics, resins and all synthetic products from hydrocarbons.

If Russia – which also plays on the Saudi table – will be able to control its oil production, in line with the Sunni OPEC, the Qatari operation will be successful, but only for the creation of the new LPG market, and Qatar will not affect the positions already reached by Saudi Arabia and its  allies.

Conversely, if Russia and Iran increase oil production, the pro-Saudi OPEC will definitely collapse and the African, Indonesian and South American production areas shall  look for other regional cartels and, hence, for other geopolitical axes.

Furthermore, the bilateral relationship between the USA and Saudi Arabia will be put to an end, given the new US production and oil power, its global exporting capacity and, finally, its autonomy from the Middle East political and financial cycles.

Moreover, according to the Emir’s policy lines, the Qatari economy  is focused on attracting and accumulating foreign investments, especially after the 2017 blockade, which has attracted much capital from Asia and the Middle East itself,  in addition to the opening of new ports and the creation of  new Special Economic Zones.

Both Saudi Arabia and Qatar have used the so-called Arab “springs” to broaden their personal power and create strong competition among the Gulf countries.

Moreover, Qatar has used the phase following the Arab “springs” to redefine its traditional expansion axes: the special relationship with the Muslim Brotherhood and its traditional link with Iran.

The Emirate, in fact, believes that the Muslim Brotherhood is the central axis of Arab politics and, hence, intends to support it.

While all the others repress it, in line with Saudi Arabia.

Even after the fall of the “Muslim Brotherhood” regime in Egypt – with the coup organized by Al Sisi in 2013 against Mohammed Morsi – Qatar keeps on supporting the fraternal Ikhwan or also Hamas and all the other organizations that have integrated into the global network of the Muslim Brotherhood.

The Saudi tension with Qatar also results from the Qatari geo-economic link with Iran and, above all, from Iran’s  economic growth after the 2014 JCPOA agreements on the Iranian nuclear capacity. Saudi Arabia wants to avoid said agreements leading to the economic, oil and military recovery of the Shiite Iran.

Furthermore it cannot be ruled out that, in the near future, Saudi Arabia – possibly supported by the USA, which now believes in every “counterterrorist” storytelling – even organizes a coup against Al-Thani and the current Qatari ruling elite.

The sequence of attempted and failed coups is already long.

It would be a geopolitical suicide, but it may happen.

Pakistan, Bangladesh and other countries are now dependent on the remittances sent from Qatar by their fellow citizens to their homeland, even if, as countries, they sided with Saudi Arabia during the blockade imposed on Qatar in 2017.

Since the beginning, however, Tunisia refused to condemn Qatar (and Italy should be more careful to these infra-Islamic shifts), while Turkey – which operated with Qatar  during the Libyan jihadist uprising – does not accept the Saudi diktat. The same obviously holds true for Iran and – probably less intuitively – for Oman.

After an ambiguous phase, even the Russian Federation  – which had not well foreseen the internal conflict on Qatar within the Gulf Security Council in 2017 – has gradually  linked itself to the Emirate, even without questioning its ties with Saudi Arabia.

Moreover, the United States has even discovered it still has a large military base in Qatar and hence cannot afford a worsening of the infra-Arab conflict and, above all, of the infra-Wahhabi conflict between Saudi Arabia and Qatar.

Obviously the issue of relations between Qatar and “terrorism”, or the link between Qatar and Iran, is a completely uncertain and widely manipulated issue.

The Emir’s speech that expressed support for Iran and Hamas and criticized the other governments of the region – a speech that allegedly was to be held on May 23, 2017 – was never delivered. There had been announcements widely publicized by the Saudi and Emirates’ news agencies, but the Emir’ speech had never been delivered.

In this regard, the official Qatar’s news agency in Doha talked about the hacking of Qatari websites, but not even this is certain.

There is also the issue of the one billion US dollars paid  as a ransom to “bandits” in Iraq by some members of the Emir’s family.

It is ascertained that part of that money arrived at the Syrian Al-Qaeda “section”, Jabhat Tahrir al Sham, with a share of funds that – not too strangely – later reached the Iranian government.

Certainly there is also the already-mentioned support for the Muslim Brotherhood and there are now ascertained links between the Ikhwan and some Iranian financial and political-military networks.

Everything is possible in the Middle East.

In Doha there is also a “historical” office of the Palestinians and also one of Hamas, which has always been an integral part of the Muslim Brotherhood, while it is certain that large amounts of money were sent by Qatar to the Egyptian Brotherhood during Morsi’s government and that the Ikhwan militias from every part of the Middle East were trained in Qatar.

Obviously, at least initially, the guerrilla warfare in Libya after Gaddafi’s fall was a clash between the forces supported by the Qatari intelligence services and those organized by the other Emirates, with a specific role played by Turkey – a loyal ally of Qatar – above all at economic level.

Westerners’ stupidity did the rest.

Moreover, Qatar also sent its troops so that the Sunnis could regain control in Bahrain during the 2011 Shiite uprising.

Nor should we forget that, apart from the Al Udeid US base in Qatar, Turkey itself is building its base in Qatar for as many as 5,000 soldiers – a base located in Tariq bin Ziyad, south of the capital city.

However, how does the Gulf Cooperation Council (GCC) – the instrument of confrontation between Saudi Arabia and Qatar – work?

Is it not affected – like OPEC – by an internal weakness that blocks it for any relevant decision?

The GCC was founded in 1981. However, the monetary union, which has been gradually abandoned by Oman and the Emirates, has never been reached.

And the GCC still regards Iran as an “imperialist” factor of radical destabilization of the Arabian peninsula, especially with the organization of Shiites in Saudi Arabia and in other areas of the Emirates.

The Shiites within the Saudi regime account for 15-20%, especially in the major oil extraction areas. Obviously the Saudi regime does not want to destabilize these areas and, above all, it does not want to break the link between the USA and the Sunni world of the Arabian Peninsula – a break that, in the near future, would lead to the victory of the Iranian  Shiites.

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Middle East

Iran: Which way to go?

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The US withdrawal from the Joint Comprehensive Plan of Action (JCPOA), seriously hampered the chances for keeping the landmark accord in place.

The accord, signed in 2015 by the P5+1 group of countries — China, Germany, France, Russia, the United Kingdom and the United States — with Iran, requires Tehran to maintain a peaceful nuclear program in exchange for sanctions relief.

According to the IAEA, Iran strictly abides by the terms of the JCPOA, while the international community is unable to do the same, no matter how much politicians in the EU and other countries would like to stick to its provisions – all because of US pressure.

Sadly, the United States has financial and economic levers to punish not only Iran, but also foreign companies doing business with the Islamic Republic. Given the choice of either maintaining business relations with the US and the rest of the world or with Iran alone, there is little wonder which of the two options they will go for. This doesn’t necessarily mean that they will do this under US pressure. Business always goes where the money is and sticking with the US looks a more profitable way to go. This is exactly what business-savvy Donald Trump is staking on.

In 2018, some 100 foreign companies, including big ones as Shell, Volkswagen, Daimler, Peugeot, Airbus, Total, PSA, Siemens, and Russia’s LUKOIL and Zarubezhneft, started pulling out of Iran even before the US sanctions, announced by President Trump in May, actually took effect. However, although bending under Washington’s pressure, the authors of the 2015 Iran nuclear deal (Russia, China, Britain, France and Germany) as well as the European Union as a whole and many other countries around the world are still interested in keeping the nuclear accord alive. Why?

First, the JCPOA is a truly historic document which, possibly for the first time ever (not mentioning, of course, the Treaty on the Non-Proliferation of Nuclear Weapons – NPT) has curbed the nuclear ambitions of a particular country and put its nuclear program strictly in line with international laws and IAEA requirements. This is a vivid example of the world countries’ effective diplomatic work, which created a precedent of genuine confidence of the parties for the sake of preserving the nuclear non-proliferation regime.

Secondly, Iran a leading player in the volatile region of Western Asia, which incorporates the Middle and Near East, the Caucasus, the Caspian Sea zone, and Central Asia.

Thirdly, it should be borne in mind that Iran is a powerful source of hydrocarbons, and that its territory is an important transit route for oil, natural gas and other products to the world market. A well-educated population and a relatively developed industry and agriculture attract the attention of world business. In addition, the 70-million-strong Iran, which boasts one of the world’s biggest militaries, is an important factor in West Asian and world politics.

What needs to be done to resist US sanctions and, thereby, save the JCPOA?

To solve this complex task, Iran and all countries willing to preserve the accord, above all Britain, France, Germany and the EU as a whole, should work together. This is already being done now with the direct and active participation of Russia and China.

Today, the main priorities are:

Providing legal assistance to companies doing business with Iran. The practical implementation of the EU-declared blocking statute, which declares null and void US sanctions against Iran on its territory, prohibits European companies from observing them, as well as implementing any decisions by foreign stemming from these sanctions. The blocking statute also allows European organizations to take legal action to make up for the losses incurred as a result of the implementation of sanctions at the expense of persons who caused these losses (meaning the US government).

It is also necessary to establish an independent payment system that would safeguard European businesses against US sanctions on Tehran (a special purpose vehicle, SPV, to facilitate financial transactions with Iran) with the possible involvement, among others, of the French and German central banks.

The EU is creating a special legal entity to carry out transactions with Iran. Other participants will be able to join in, which will allow European companies to work with Iran in keeping with European legislation – something like the SWIFT banking system, only on a European scale and based on the euro.

This will be an extremely difficult task for Europeans, both from “political” (a real challenge to the US) and technical standpoints. EU foreign policy chief, Frederica Mogherini, said: “The involvement of the Finance Ministers of the E3 [France, Germany, UK] is of key importance at this stage. They are working hard to finalize it. I cannot tell you a date, but I can tell you that work is continuing and is progressing in a positive manner.”

In his turn, Russia’s Deputy Foreign Minister Sergei Ryabkov said that this was fraught with problems.

“We need to redouble our efforts here and this is what we are doing now with both Europeans and Iranians.”

Meanwhile, the Iranians, who have so far been strictly implementing the terms of the 2015 nuclear accord, are losing faith in the EU’s ability to resolve the problem. Therefore, it may take several months to see whether this plan is really working.

Speeding up the process of shifting to the use of national currency in trade with Iran (primarily by Russia, China, India, Turkey, which have done this before) would be of much help to Tehran.

In order to move around the financial and banking hurdles erected by the United States, it would be advisable to enlist the help, whenever possible, of Islamic banks in Muslim countries for cash transactions to and from Iran. The Islamic banking system has its specific features that are hard to destroy from the outside, even by a financial superpower like the United States.

The same is true about small and medium-sized companies in Muslim countries used as intermediaries in financial transactions with Tehran. Moreover, it is small and medium businesses, and not necessarily in Muslim countries alone, that can play the main role in maintaining trade and other economic relations with Iran.

Therefore, it would be equally desirable for the EU to provide legal and financial assistance to small and medium-sized companies in Europe, which are willing to do business with Iran, and to shift the main load from big companies to medium and small firms for financial transactions with Iran in Euros. Even though they will hardly be able to completely replace the giant companies, small and medium-sized firms have all they need to offset at least part of the losses. According to Iranian estimates, Tehran hopes to establish business relations with many of the 23 million or so small and medium-scale enterprises in Europe in order to circumvent US sanctions. Moreover, Iran has good experience in getting around tough sanctions between 2012 and 2016.

What can Tehran do under these circumstances?  First and foremost, it should establish a business triangle of Iran-EU, Islamic banks and Islamic small and medium-sized businesses, build close trade and economic partnership with European and other small and medium-sized businesses. This is quite feasible because the Americans will find it hard to keep an eye on a huge number of enterprises, much less trace their transactions in Euros, especially if the European Union contributes to such cooperation with Iran.

Iran’s Supreme Economic Coordination Council recently allowed the country’s private sector to sell crude oil abroad as a way of circumventing US sanctions. This is the first time the Iranian private companies have been granted permission to trade in oil. Tehran should avail itself of this opportunity as soon as possible.

As for Iran’s time-tested methods of tackling sanctions like, for example,  the use of “ghost” oil tankers, which switch off their automatic identification system (AIS) transmitters not to disclose their route and destination, as well as selling “unrecorded” oil at reduced prices, I can assume that these methods have been used before and are being used today.

It seems that, in view of the situation at hand, Tehran should also recall its oil-for-goods project with Russia, prepared back in 2014, whereby Iran supplies oil to Russia (at least 100,000 barrels per day – about 5 million tons a year) in exchange for industrial equipment and machinery. Four years ago, the plan was never implemented in full because Iran, already withdrawing from the sanctions regime in keeping with the JCPOA, was no longer interested in it.

There was only one shipment made in November 2017, to the tune of 1 million tons. The project could be revived now. Russia’s Promsyryeimport, which is part of the Russian Energy Ministry and was created expressly with this project in mind, will implement the Russian side of the deal.

A program of developing two Iranian oil fields, Aban and Peydar, by Promsyryeimport (which replaced Zarubezhneft) and Iran’s Dana Energy Company, could also be considered.

Overall, the across-the-board cooperation between Russia and Iran against US sanctions could contribute very significantly to minimizing their impact.

Tehran will certainly put to maximum use the great potential of the Islamic Revolutionary Guard Corps (IRGC), which proved so effective during the period of hard-hitting sanctions of 2012-2016 and which controls between 25% and 35% of the country’s economy and 25% of all its capital.

In 2012-2016, the IRGC set up a large-scale system of circumventing the sanctions by controlling considerable “gray” financial flows to, through and out of Iran. IRGC intelligence was gathering information abroad about the “weak” spots in the sanctions system, about the most effective ways of circumventing sanctions, and was also obtaining data on new technologies Iran was not allowed to buy.

Iran and countries opposed to US sanctions against it are looking for ways to ease their impact. Even though completely neutralizing the negative effect of these sanctions will hardly be possible, a certain let-up is quite possible.

Well, the Iranian response to the US sanctions could at times be controversial, but Washington’s exit from the JCPOA and the US sanctions themselves are by no means legal either.

In October, President Hassan Rouhani warned that the previous four months had been a difficult time for the Iranians and that the coming few months would be equally hard. He said that the government would make every effort possible to tackle the situation. Meanwhile, Tehran says it will stick to the terms of the JCPOA as long as its other signatories (save for the US, of course) do the same. Can they do this?

The situation is complex and unpredictable. For Iran, much will depend on whether the JCPOA is kept alive without the US, if Tehran is able to maintain, albeit limited, financial and economic cooperation with foreign countries, primarily with small and medium-sized businesses, and whether it is satisfied with the results of this cooperation.

How will the sanctions, and especially the fall in oil production and exports, affect the national economy and the life of ordinary Iranians? A good question, given the impact the internal political situation can have on the alignment of political forces in the country.

The outcome of this struggle may not take too long coming. Maybe six months, when a European mechanism against Washington’s unlawful withdrawal from the JCPOA and the resumption of its sanctions on Iran is already in place and the deadline set by President Trump for the eight importers of Iranian oil has expired.

First published in our partner International Affairs

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