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The truce in Syria and the plans to cease hostilities

Giancarlo Elia Valori

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The insurgency against Bashar al-Assad’s Alawite regime began on March 15, 2015 in the framework of the Arab Springs – in that case designed to destabilize Saudi Arabia. Unlike what had happened in the Maghreb region and in Egypt, Saudi Arabia managed the issue by putting severe pressures on the United States – the global managers of the “Arab Springs” – but, above all, by harshly repressing every internal rebellion.

The war in Syria coincided with the end of the reckless US plan to extend the “Arab Springs” to the whole Greater Middle East.

Rather than understanding that it was one of their defeats, the United States passively supported the Sunni jihad in Syria – and we cannot currently understand which their real goal was.

Was it to help the Saudi friends? Excessive. Was it the idea of democratizing the Arab world by using jihadists? Pure madness.

Was it to spite Iran by closing it into a Sunni pocket? And why?

Hence the war remained in Syria and Saudi Arabia could support all the forces that opposed Bashar al-Assad’s regime – considered by Saudi Arabia, with some exaggeration, as a mere Iran’s emissary.

The self-proclaimed “Caliphate” or jihadists comically defined as “moderate”, everything was good to set the Middle East on fire.

And, we wonder again, why?

So far the Syrian war has caused over 300,000 casualties and 12 million displaced persons or migrants, thus also prompting the British Brexit and the European countries’ future nationalistic closed-minded attitudes.

Certainly you may think that destabilization throughout Europe – which now never notices anything – is an important strategic goal. However, who should contain Russia, according to the old Obama’s logic of the new cold war?

Talk about the heterogenesis of intents or the law of unintended consequences.

Furthermore, from the very beginning, Barack Obama has also supported the Saudi proxy war in Syria, by pushing the Russian Federation – which wanted to avoid being completely sealed up in the Mediterranean – to start its air raids on September 30, 2015, so as to support the Assads’ Alawite regime and oppose the network of Sunni jihadist groups backed by Turkey, Saudi Arabia and the United States.

An alcoholic-style geopolitics.

Finally it is a mystery how it is possible for the United States to still think of supporting the jihadist gangs, in a fragmented and very unstable environment such as the Middle East.

The jihadists will not destabilize Russia – if this is what is sought. Putin got rid of them with two very harsh wars in Chechnya.

Finally Saudi Arabia wanted to close a vital strategic space for Iran, namely Syria; Erdogan’s Turkey wanted to extend its new caliphate to the Sunni majority in Syria and the United States wanted to support their Saudi and Qatari allies against Iran and its hegemonic ambitions on Shiite minorities throughout the Fertile Crescent.

However, can a superpower like the United States strategically think of destabilizing the whole Middle East, the region which has also built the US financial fortunes since the 1970s?

Hence, currently, the Syrian region highlights some objective factors: a) Obama’s policy of encircling Russia has failed definitively; b) Russia has succeeding in involving also Turkey – the second Atlantic Alliance’s power – in its Syrian project; c) the Sunni jihad supported by Saudi Arabia and its global and regional allies has lost its own challenge precisely on its ground.

On November 30, 2016 the jihadists were expelled from the suburbs of Damascus and from its aqueduct with an action of the Syrian Arab Army and Russia’s very effective air support.

Putin and Erdogan could reach their own agreement because Aleppo had been freed.

Moreover, the Russian agreements signed in Astana clearly state that all the various jihadist groups, adhering or not to the ceasefire of December 30, 2016, must immediately, and without exception, leave their positions in Syria.

As increasingly happens after acts of terrorism, with the brutal New Year’s attack in Istanbul, Turkey is bearing the brunt of its new pro-Russian stance.

A stance which, today, is already a strategic success.

A stance which is fully rational.

Erdogan wanted to conquer the whole Sunni Syria when Bashar al-Assad appeared to be weak, but currently he is satisfied with an Alawite regime not permitting the establishment of a “Kurdish state” between Syria and the Iraqi territory.

Therefore, also thanks to Barack Obama’s strategic foolishness, currently Russia gives the cards and controls the New Middle East game.

Hence if the United States want to rescue their power in the region, they shall avoid delegating their strategic interest in the Middle East to the Sunni powers.

Furthermore the United States must avoid unilateralism, thus accepting the fait accompli and creating their control areas, without hoping Saudi Arabia would do so on their behalf.

Israel is the real winner of this war: it sees all its historical enemies exhausted in a long and bloody war; it has an information exchange agreement with the Russian Federation and can control – better than in the past – the whole Golan Heights region, which is essential for its defense.

Finally, at political and legal levels, the restriction to Hezbollah and Iranian special forces’ operations in Syria – according to the Astana agreements – reflects Russia’s and Assad Syria’s willingness to expel all jihadist groups – and, hence, their supporters’ interests – from the territory.

Too much Iran’s involvement prompts and recalls Saudi Arabia and neither Syria nor Moscow have any interest in being involved in the final war between the two Islam’s schools of thought.

Therefore the Middle East is too important to be managed with proxy wars or with set-ups built only with words and for a very short lapse of time.

We must therefore change our conception of the whole region, which currently has the Syrian war at its core.

The Fertile Crescent is not only the channel between Europe and Asia, as in the British Empire’s days, but also an area acting as a buffer zone between two regions which will be crucial in the future: Central Asia and China.

It is also autonomous in its dynamics – for many years it has no longer been the Arab, Islamic or Jewish extension of the great powers’ interests.

Obviously the central point of this new set-up will be the Mediterranean, which will become the most important “regional sea” of the globe.

Just to paraphrase the old laws of British and American geopolitics, whoever dominates the Middle East controls the Heartland, but whoever is dominant in the “middle land” controls the Eurasian peninsula and the two oceans.

Thinking of the Fertile Crescent only in terms of oil or energy transits is certainly important but, by now, fully reductive and simplistic.

Nevertheless let us revert to clashes and fighting. To date, the local sources of the war in Syria give us some definite results: the jihadist groups have been expelled from Wadi Barada and Ghouta East with the Syrian Arab Army’s weapons and hence have broken off – out of spite – the negotiations in Astana, Kazakhstan.

The jihadist groups expelled from Wadi Barada and Ghouta East include also the Syrian Free Army – a coalition of “moderate” groups, according to the US State Department’s dangerous jargon – and the Army of Conquest, another coalition of small jihadist groups.

All groups and people who have always gone back and forth the self-proclaimed Daesh/Isis Caliphate and the so-called small jihadist groups.

In ever clearer terms, the truce of Astana is becoming the legal and military tool to quickly remove the jihadist pockets still remaining between the center of Syria and its Southeast.

Hence the truce will hold until the jihadists do not realize it is a powerful tool of war against them and – as claimed by multiple sources of the Syrian Sunni jihad – the “cease-fire” will end unilaterally, but with the jihadists out of all the strategic positions they held so far.

Without “America being able to do anything for us”, as one of the leaders of the Syrian jihad said.

Therefore the issue lies in definitely freeing Mosul – the Iraqi axis of the Syrian victory – where the elimination of the so-called “Islamic State” is entrusted to 50,000 units including Kurds, Iraqi intelligence services, Anbar Sunni tribes and paramilitary Iranian Shiites.

It is the real center of gravity of the war against the so-called “Caliphate”, which will be quick and effective when the various jihadist groups, adhering or not to the Astana Agreement, will get out of the way.

The other areas from which to currently expel jihadists are Maarat al Numan, Saraqeh and Sheikhoun near Idlib, Teir Maalah, north of Homs and Souha, east of Hama.

Hence, at strategic level, Russia and Syria are closing every escape route to the many Syrian jihadi groups, before launching – with the necessary forces – the attack on the so-called Al Baghdadi’s Caliphate.

Therefore, politically, we can envisage the following scenario.

Russia has no interest in making its Syrian hegemony unipolar: Putin has repeatedly stated that the “truce way” is also open to the United States and even to Saudi Arabia.

Russia does not want to bear the whole Middle East burden upon itself – and rightly so.

Those who hegemonized the Middle East before Russia created the conditions for their ruin and the subsequent Middle East disaster – see the United States which, with the Bush’s and Obama’s administrations, made their interest overlap with Saudi Arabia’s.

Politically, the alternative options will be either a smaller Syria under Bashar al-Assad, who has anyway won his war, or a “Greater Syria” with an Alawite leader who can also be liked by the United States and the Sunni powers in the region.

Bashar al-Assad, however, has won and he will not get out of the way so quickly or easily.

And the Alawite leader shall also be liked by Israel, if he does not create problems in the Golan Heights and does not allow militants and advanced weapons to pass through the Heights up to the Lebanese border or even the areas of the Gaza Strip.

Israel, too, is one of the winners of this new Syrian war and has the right to have many of its demands accepted.

Russia will involve the United States in the final agreement, with some strategic guarantees and especially stable cooperation between the two countries throughout the Middle East, in addition to the acceptance of Russia’s primary interest in the region.

Security of Russia’s military ports on the Mediterranean; the right to be consulted on all matters regarding the Mediterranean; Russia’s business expansion throughout the region.

Under these conditions, the United States can rest easy and avoid Saudi Arabia’s subsequent destabilization, the Lebanon’s final cantonization, which is in nobody’s interest, and finally Israel’s very dangerous encirclement.

Forget about Obama’s anti-Semitic hysteria: if America does not keep Israel it cannot afford any independent policy throughout the Middle East.

The Jewish State could have an international guarantee, with a “stabilization” force similar to UNIFIL II in the Lebanon, but on its Northern borders and, above all, in the strategic link between these areas and the border with Jordan.

In fact, the game played by some Israeli analysts is very dangerous: they favour the anti-Iranian and Assad’s enemy groups so as to avoid the integration of the Shiite forces in the Golan Heights and the Lebanon.

A US-borrowed strategy that will only cause disasters in the medium term.

The Hashemite Kingdom of Jordan, which is essential for every geopolitical project in the Middle East, could be integrated with most of the Palestinian National Authority, a very dangerous failed state that is the offspring of the Cold War old logic.

Russia could be the reliable and credible broker for the Palestinians, with a view to settling the Arab-Palestinian issue, in connection with Israel.

At the end of Barack Obama’s two Presidential terms, the United States could reach an agreement with the Russian Federation for Syrian stabilization and for the final settlement of the Kurdish issue, by redesigning – together with Russia – the borders of a non-sovereign Kurdish area which, of course, cannot destabilize Turkey.

Turkey will be in a position to have what it has always wanted, namely a droit de regard on the Sunni majority in Syria and safe passage to Central Asian Turkmen areas.

Bashar al-Assad has won. He will not get out of the way easily and, moreover, we do not even understand why he should do so.

If he is politically smart and open-minded – as he has proved to be during the war against the Sunni jihad – he could avoid maintaining the aura of Alawite leader extended to all Syria and create, for himself, the image and project of leader for all Syrians.

Furthermore, Iran has gained what it wanted, namely the security of the Shiite areas on its Syrian border.

It will not want more than this, if there are those that will be able to deal with the tough but smart religious leaders of the Iranian Shi’a.

Who is the loser? Obviously the European Union.

It had proposed the previous two totally ineffective truces and it did not succeed in creating its own geopolitical autonomy between a flat reiteration of US slogans and its interest in curbing and controlling immigration, which was used as blackmail by Erdogan’s Turkey.

Currently, if the United States come back into the Middle East region, they can only do so as losers: accept the Russian conditions and start again from there, without being deceived by the siren songs of some of their allies’ Sunni jihad.

From this viewpoint, Trump’s signals are fully reasonable.

Israel can see all its enemies be exhausted and be content with it, or take control of the situation.

In the latter case, it will be in a position to involve the United States and Russia in the new negotiations between the Jewish and the Islamic States, outside all the Cold War old ideas: useless and dangerous territorial concessions; creation of strategically useless pockets southwards and eastwards; trade only on paper.

Old “cold war” junk that no longer serves anyone.

Either Russia will make peace prevail between the Jewish State and its historical opponents or the work made in Syria will melt away like snow in the sun.

Conversely, the new US President, Donald Trump, may rebuild the US hegemony over the Middle East, possibly by being the promoter of a military agreement between all parties that would mark the greatness, vision and far-sightedness of the new White House leader.

Meanwhile the European Union will stay idle faced with its demographic and strategic disaster, waiting for someone to solve problems on its behalf.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs "La Centrale Finanziaria Generale Spa", he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group and member of the Ayan-Holding Board. In 1992 he was appointed Officier de la Légion d'Honneur de la République Francaise, with this motivation: "A man who can see across borders to understand the world” and in 2002 he received the title of "Honorable" of the Académie des Sciences de l'Institut de France

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Paris Peace Forum: A missed opportunity for the Middle East

Samantha Maloof

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Timed to coincide with the centennial of the World War I armistice, the Paris Peace Forum (PPF) launched by French president Emmanuel Macron adopted a welcome approach to the root causes of contemporary conflict, including climate change and the double-edged sword represented by new technologies.

The forum, which took place from November 11-13, showcased projects that spoke to the innovation and collaboration critical to improving lives and reducing tensions across the globe.

Conspicuous by their absence

Even though the summit saw 65 heads of state from all over the world come together to launch the event, precious few of those leaders came from the Middle East – even though the region could benefit as much as any other part of the world from this “Davos for democracy.” While this first peace summit represented a promising start, any future editions need to find a way to make inroads with citizens in the countries where they are needed most. Of course, this is a two-way street, with leaders in those countries needing to participate in and draw lessons from such gatherings.

The Middle East’s most notable representatives at the event were Qatari emir Tamim bin Hamad al-Thani and Lebanese prime minister Saad Hariri. Their presence was fitting: while so many of their neighbors jostle with each other to secure their own geopolitical ends, Qatar and Lebanon have faced down the instability surrounding them to protect themselves from dangerous regional currents. Unfortunately, the leaders who could have really used reminding of the importance of peace were absent from the stage.

An “island” of stability

Qatar, for its part, has been the subject of a regional blockade for the best part of 18 months. A coalition of Saudi Arabia, Bahrain, Egypt and the United Arab Emirates (UAE) have all severed ties with the country since June 2017 for its alleged “support for terrorism” but more realistically for its willingness to deal with Iran against a backdrop of acrimony between the two sides of the Gulf. The Saudis, for their part, have gone so far as planning to cut Qatar off from the mainland with a new canal.

Far from buckling, however, Qatar has proven remarkably resilient and stuck firmly to a strategy of de-escalation with both sides of the Saudi-Iranian cold war. Events since have rewarded that cool-headedness. Global markets nervous about the turbulence in Riyadh are now looking to Qatar as a regional investment driver instead. Ironically enough, none other than Saudi crown prince Mohammad bin Salman praised the performance of the Qatari economy last month.

Delicate peace in Beirut

Lebanon has had greater difficulty insulating itself from the instability across its border with Syria, but Saad Hariri has nonetheless maintained a fragile domestic peace even after an apparent kidnapping and forced resignation (later rescinded) orchestrated by bin Salman in November of last year. Hariri was detained for two weeks and only released on the back of intense international pressure, apparently out of Saudi anger with the Lebanese premier for cooperating with his Shi’a Hezbollah rivals in Lebanon.

In Lebanon’s torturous system of confessional politics, however, difficult compromises are the nature of the game. Hariri and his Sunni-led political movement have no choice but to negotiate with Hezbollah’s Shi’a faction over the balance of political power on an ongoing basis to keep the country stable. Hariri’s resistance to Saudi demands for aggression has helped keep the peace between Lebanese Sunnis and Shi’a, preventing the sectarian fires that have torn Syria apart from jumping across the border.

External actors have key roles to play

Of course, none of the crises in the Middle East can be viewed in a vacuum. One key part of the program at the Paris Peace Forum summit – entitled Global Powers and the Middle East – focused on the responsibility of outside powers like the United States, Russia, China, Europe and India to find common ground and address the causes of Middle Eastern instability. Left unsaid: these same countries are often deeply involved in perpetuating these crises.

If American, European, or Russian leaders truly want to prevent conflicts in the Middle East, their first step should probably be a sort of Hippocratic oath to “do no harm.” The arms trade is a notable case in point. The Middle East is responsible for 32% of global arms imports. Saudi Arabia, Egypt, and the UAE are three of the five largest customers; their primary suppliers are the US, UK, France, Italy, and Russia.

Rather than encourage stability, this supply of weapons has fed a volatile arms race. Much of that equipment has been used by the Saudi coalition’s intervention in Yemen, which has left eight million Yemenis are the brink of starvation and the country confronting the fastest growing cholera epidemic the world has ever seen. Russia has openly used the civil war in Syria as a venue for showing off its military hardware to potential customers worldwide, even as Bashar al-Assad’s regime continues to massacre civilians.

Instead of helping their local allies arm themselves to the teeth, these outside powers should push Middle Eastern governments to change their damaging patterns of behavior and undertake the kinds of social reforms that are instrumental in easing tensions. Otherwise, systemic inequality and unaccountable leadership will continue to lay the groundwork for conflicts and crises. That might enrich weapons manufacturers, but it will do nothing to achieve the goals pursued in Paris this week.

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The sanctions of a split

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The tough economic sanctions imposed by the United States against Iran have aggravated conflict between Washington and its close allies. The European Union, the United Kingdom, France and Germany have expressed regret over measures taken by American President Donald Trump and signaled the need to protect their companies. Simultaneously, eight countries have received a six-month “sanctions delay” from the United States, which produced a further negative effect on the balance of strength and set the scene for a further escalation of tension.

The United States announced the resumption of anti-Iranian sanctions, which ban the purchase of Iranian oil and oil products, on November 5. The US Treasury Department pointed out that they were the “toughest” in history: “These are the toughest U.S. sanctions ever imposed on Iran, and will target critical sectors of Iran’s economy, such as the energy, shipping and shipbuilding, and financial sectors.  The United States is engaged in a campaign of maximum financial pressure on the Iranian regime and intends to enforce aggressively these sanctions that have come back into effect.”

“The unprecedented financial pressure exerted by the US Treasury Department on Iran should make it clear to the Iranian regime that it will face ever-increasing financial isolation and economic stagnation until it radically changes its destabilizing behavior. From now on, the maximum pressure exerted by the United States will only increase,” – emphasizes US Treasury Secretary Stephen Mnuchin. Washington makes it no secret that the ultimate goal of the sanctions is to reduce oil exports from Iran “to zero.”

Over 700 individuals and legal entities have been put on the sanctions list, including the Iranian national air company Iran Air, more than 65 aircraft it owns, and several dozen ships of the merchant fleet. The sanctions prohibit the purchase of Iranian oil and are directed against port operators, shipping and shipbuilding companies, the financial sector,  – primarily tanker insurance companies, – and also restrict operations with Iran’s banks and Central Bank.

Fines will be imposed on anyone who trades oil with Iran and works with its banking system. Secondary sanctions (fines and shutout from the dollar system) may be imposed on companies of third countries. The US also demanded that Iran should be cut off from the SWIFT international payment system. According to reports, on November 5 SWIFT suspended access of some Iranian banks to its system, but without reference to the US sanctions.

This step followed President Trump’s announcement in May this year about Washington’s withdrawal from the Joint Comprehensive Plan Of Action on the Iranian nuclear program. Adopted in 2015 with the participation of Iran, the USA, Russia, China, Britain, France and Germany, the document envisages easing sanctions against Tehran in exchange for its measures to wrap up its nuclear program under the control of the IAEA. The US president dubbed it “the worst deal ever,” saying that it does nothing to stop Iran from pursing its nuclear and missile programs. After Washington’s withdrawal from the JCPOA, the other participants expressed their commitment to this document.

Two days before the sanctions package was put into effect, US President Donald Trump made it clear that the United States was ready to conclude a new agreement with Iran on more stringent conditions. “Our objective is to force the regime into a clear choice: either abandon its destructive behavior, or continue down the path toward economic disaster”, – the US president said on November 3: “The sanctions will target revenues the Iranian regime uses to fund its nuclear program,  development and proliferation of ballistic missiles, fuel regional conflict, support terrorism and enrich its leaders”. At the same time, according to Donald Trump, “the United States remains open to reaching a new, more comprehensive deal with Iran that forever blocks its path to a nuclear weapon, addresses the entire range of its malign actions, and is worthy of the Iranian people. Until then, our historic sanctions will remain in full force”.

Having introduced “unprecedentedly tough” sanctions against Tehran, Donald Trump, as part of his business approach to international affairs, left substantial “windows of opportunity” for the subsequent bargaining on a wider range of issues of the international agenda. The USA made an exception for eight states. China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea were allowed to buy Iranian oil temporarily. According to the London-based Financial Times, these countries will be able to import a limited amount of Iranian oil over the next six months.

Simultaneously, US Secretary of State Michael Pompeo said that more than 20 countries have already cut down on oil exports from Iran, reducing purchases by more than 1 million barrels per day.  Independent sources indicate that average daily oil production in Iran fell from 3.8 million barrels in May to 3.3 million barrels in early October. This is quite a lot: because of the reduction, Iran loses about 1 billion dollars a month.

Given that the above exemptions from the sanctions list are temporary, the United States will likely resume political and economic bargaining with the eight countries in spring, with a view to preserve a favorable regime for these countries. In the first place, it concerns China. President Donald Trump will try to use the “Iranian factor” in order to achieve maximum concessions on trade and economic issues from Beijing. Among other things, he will probably make an attempt to force the Chinese side to reconsider joint energy projects with Russia. In the meantime, China’s response to the US decision to resume the anti-Iranian sanctions has been markedly restrained. A spokeswoman for the Chinese Foreign Ministry has called on Washington to respect China’s trade rights and expressed “regret” that the United States relaunched sanctions against Iran.

A much more resolute response came from the European Union – whose trade and economic interests are affected by anti-Iranian sanctions first. EU High Representative for Foreign Affairs and Security Policy Federica Mogherini, as well as the foreign ministers of Great Britain, France and Germany issued a joint statement in which they promised to protect their companies from restrictive US measures. “Our goal is to protect the subjects of the European economy that have legal commercial ties with Iran,” the document states.

In the meantime, the European Union is confronted with the problem of creating a specific structure that would allow European companies to continue to trade with Iran without risking falling under Washington’s sanctions. Brussels reported in October that a new mechanism of payment for Iranian oil exports should be legally ready by November 4, and would go into operation in early 2019. However, according to The Financial Times, by the time the current sanctions were introduced, the Europeans did not have even a legal foundation for the defense mechanism and had not come to agreement on the location of the corresponding “special purpose structure” (SPV). “Now we are actively discussing where the SPV will be located, who will participate in it, and are launching the process of registering it. Time is short, and given the complexity and sensitivity of this issue in the light of its geopolitical consequences, we see very rapid and effective progress,” – said a representative of the French Finance Ministry.

For Europeans, sensitivity of this issue lies in their unwillingness to come under tough Washington’s sanctions themselves – especially in the context of deepening trade and economic differences between the US and the EU. “The US authorities are demonstrating that they will act aggressively towards violators of sanctions, which boosts the effect,” warns partner of law firm Morrison & Foerster and former director of the Office for Foreign Assets Control (OFAC) of the US Treasury John Smith. “When the United States threatens to punish violators and does it in practice, examples of punished companies force others to think seriously,” he said in an interview published by the American newspaper The Wall Street Journal.

Without waiting for the sanctions regime to come into effect, Iran’s President Hassan Rouhani stated that Tehran would be able to overcome it. “America wants to bring down Iran’s oil sales, but we will continue to sell oil to break through the sanctions,” he said.

Tehran could not but point out the fact that the resumption of the US sanctions package against Iran coincided with the anniversary of the capture of the US embassy during the Islamic revolution in Tehran in 1979. Addressing his compatriots, Supreme Leader Ayatollah Ali Khamenei said: “The goal of American sanctions is to cripple and restrain the Iranian economy, but the result we obtained in reality was the country’s striving for self-sufficiency.” “The main objective of the United States in all this is to regain the supremacy it had in the period of tyranny. But this will not happen,” Ayatollah Khamenei said.

Meanwhile, Tehran does not attach any fundamental significance to the exclusion of eight states from the sanctions regime. “The Islamic Republic could sell its oil even if these eight countries were not excluded, we would still sell our oil,” said Hassan Rouhani in this regard.

The anti-Iranian sanctions imposed by Washington have not yet had a direct impact on Russia. The sanctions list published by the US Treasury contains only the Russian “daughter” of the Iranian Bank Melli – the Mir Business Bank, registered in Moscow (MB Bank).  Its shareholder is Bank Melli Iran, which, according to the United States, provides multi-billion financial, material and technological support to the Islamic Revolution Guards Corps (IRGC). “Bank Melli enabled the IRGC and its related parties to transfer funds both inside and outside Iran,” the statement of the US Treasury said. JSC Mir Business Bank was registered in Moscow in 2002. Bank Melli Iran is its sole shareholder.

According to reports, the Trump administration has decided not to pursue the Russian direction in its pressure on Iran ahead of a new meeting of the presidents of Russia and the United States due to take place at the end of this year. The meeting could be held on November 11 in Paris, at events dedicated to the 100th anniversary of the end of the First World War, or — more likely — at the G-20 summit in Argentina in late November – early December this year. However, regardless of the outcome of this meeting, Russia should bear it in mind that its trade and economic ties with Iran, and in a broader context – relations with OPEC – will become the target of a new round of global games of the US administration.

First published in our partner International Affairs

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The Khashoggi crisis: Saudi Arabia braces for tougher post-election US attitude

Dr. James M. Dorsey

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Saudi Arabia is bracing itself for a potentially more strained relationship with the United States in the wake of Democrats gaining control of the House of Representatives in this week’s mid-term elections and mounting Turkish efforts to corner the kingdom in the Khashoggi crisis.

To counter possible US pressure, the kingdom is exploring opportunities to diversify its arms suppliers and build a domestic defense industry. It is also rallying the wagons at home with financial handouts and new development projects in a bid to bolster domestic support for crown prince Mohammed bin Salman.

The Democrats’ election victory has strengthened Saudi concerns that the Trump administration may pressure the kingdom to back down on key issues like the Yemen war that has sparked the world’s worst humanitarian crisis since World War Two and the 17-month old Saudi-United Arab Emirates-led economic and diplomatic boycott of Qatar.

US officials have argued that Saudi policies complicate their efforts to isolate and economically cripple Iran.

The officials assert that the boycott of Qatar and the fallout of the October 2 killing of journalist Jamal Khashoggi in the Saudi consulate in Istanbul constitute obstacles to the creation of a Sunni Muslim alliance against the Islamic republic, dubbed an Arab NATO, as well as the achievement of other US goals in the Middle East, including countering political violence and ensuring the free flow of oil.

Going a step further, senior Israelis say they have given up on the notion of a Sunni Muslim alliance whose interests would be aligned with those of the Jewish state and see their budding relations with Gulf states increasingly in transactional terms.

The Trump administration signalled its concerns even before the killing of Mr. Khashoggi.

“Our regional partners are increasingly competing and, in the case of the Qatar rift, entering into outright competition to the detriment of American interests and to the benefit of Iran, Russia and China,” National Security Adviser John Bolton wrote to Secretary of State Mike Pompeo and Defense Secretary Jim Mattis in a letter late summer, according to Reuters.

With the House expected to be tougher on arms sales to the kingdom and possibly go as far as imposing an arms embargo because of the humanitarian crisis in Yemen caused by Saudi and UAE military operations, Saudi Arabia has wasted no time in casting around for alternative weapons suppliers.

In apparent recognition that the Saudi military, reliant on US and European arms acquisitions, would find it difficult to quickly shift to Russian or Chinese systems, Saudi Arabia appears for now to be focussing on alternative Western suppliers.

That could prove to be risky with anti-Saudi sentiment because of the Yemen war also running high in European parliaments and countries like Spain and Germany either teetering on the brink of sanctions or having toyed with restrictions on weapons sales to the kingdom.

Saudi Arabia, nonetheless, has in recent days contracted Spanish shipbuilder Navantia to jointly build five corvettes for the Saudi navy and offered South African state-owned defense group Denel $1 billion to help the kingdom build a domestic defense industry.

The partnership with Denel would involve Saudi Arabia taking a minority stake in German defense contractor Rheinmetall, which designs armoured fighting vehicles and howitzers.

With sale of the US-made precision-guided munitions bogged down in Congress, Spain has stepped in to address Saudi Arabia’s immediate need. The question is however whether Spain can fully meet Saudi demand.

A US refusal already before the Gulf crisis and the Khashoggi incident to share with Saudi Arabia its most advanced drone technology, paved the way for Chinese agreement to open its first overseas defense production facility in the kingdom.

State-owned China Aerospace Science and Technology Corporation (CASC) will manufacture its CH-4 Caihong, or Rainbow drone, as well as associated equipment in Saudi Arabia. The CH-4 is comparable to the US armed MQ-9 Reaper drone.

Saudi Arabia also fears that Democratic control of the House could strengthen opposition to a nuclear energy agreement with the kingdom. Five Republican senators called on President Donald J. Trump days before the mid-term election to suspend talks with Saudi Arabia.

Development of a defense industry would over time serve Prince Mohammed’s efforts to diversify the Saudi economy and create jobs.

So would  King Salman’s inauguration this week of 259 development projects worth US$6.13 billion ranging from tourism, electricity, environment, water, agriculture, housing, and transport to energy.  King Salman launched the projects during a curtailed visit to Saudi provinces designed to bolster support for his regime as well as his son, Prince Mohammed

On the other hand, the government’s most recent decision to restore annual bonuses and allowances for civil servants and military personnel without linking them to performance constitutes an attempt to curry public favour that runs contrary to Prince Mohammed’s intention to streamline the bureaucracy and stimulate competition.

Bonuses were cut in 2016 as part of austerity measures. They were restored last year and linked in May to job performance.

In a further populist move, King Salman also pardoned prisoners serving time on financial charges and promised to pay the debts up to US$267,000 of each one of them.

King Salman’s moves appear designed to lessen Saudi dependence on US arms sales and project a united front against any attempt to implicate Prince Mohammed in the death of Mr. Khashoggi.

The moves come as Turkish President Recep Tayyip Erdogan insists that the order to kill the journalist came “from the highest levels of the Saudi government” and the Trump administration demands Saudi action against the perpetrators and those responsible for the murder.

Failure to be seen to be taking credible action may not undermine King Salman’s rallying of the wagons at home but will do little to weaken calls in Washington as well as European capitals for tougher action in a bid to force Saudi Arabia to come clean on the Khashoggi case and adopt a more conciliatory approach towards ending the Yemen war and resolving the Gulf crisis.

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