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How to interpret the crisis between Qatar and Saudi Arabia’s allies

Giancarlo Elia Valori

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The crisis between Qatar and much of the new “Sunni” NATO – as some US media already call it today – consists in a formal series of 13 requests  that Saudi Arabia, Egypt, Yemen, the Emirates, Bahrain, and even Mauritius, have made – as an ultimatum – to Qatar:

1) to break off any diplomatic and economic relations with Iran; 2) to immediately close the Turkish military base near Doha and, anyway, put an end to military cooperation between Qatar and Turkey; 3) to immediately close Al Jazeera, an old TV created on the ruins of the BBC broadcasting in Arabic and later de facto monopolized by the Muslim Brotherhood; 4) to make the members of the Qatari Royal House no longer fund networks such as Arabi21, RASSD, Araby al-Jadid and Middle East Eye. “Araby al Jadeed” is a brand-new all-news network created in March 2014 and organized by Azmi Bashara, a former member of the Israeli Parliament, broadcasting from London, Beirut and Doha, with 150 employees, while the above stated Middle East Eye is currently led by David Hearst, formerly foreign editor-in-chief of the London Guardian.

The network Middle East Eye has been blocked by the Saudi authorities and by the other Emirates.

The other requests are the following: 5) Saudi Arabia has asked Qatar to stop funding groups or individuals designated as terrorists by Saudi Arabia, the United Arab Emirates (UAEs), Bahrain and Egypt, as well as providing data and information.

Well done. Some terrorists designated as such by Saudi Arabia are defined in the same way also by the West. It is the case of Hajjaj al Azmi, a Kuwaiti citizen who often lives in Doha. In the list of the 13 requests also the “Benghazi Defense Brigades” are mentioned, namely a militia created in June 2016 to oppose the forces of  Khalifa Haftar’s Operation Dignity.

The Benghazi Defense Brigades cooperated with the ISIS “Caliphate” in its operations at Suq al-Hout and in Sirte.

The Saudi list includes Abdullah Bin Khalid al-Thani, former Interior Minister of the Emirate, linked to the 9/11 jihadist operations.

However, let us be honest and face it. Prince Turki bin Faisal was the leader of Saudi intelligence services for 23 years since 1979 until ten days before the 9/11 attack. Is it by mere coincidence?

According to well-known data, Nawaf bin al-Hamzi and Khalid al-Mindar, who both arrived in the United States for the 9/11 attack, were managed by the Saudi intelligence services.

Al-Bayoumi, selected by the FBI exactly as a Saudi agent, had huge funds in the United States granted by Saudi Arabia through the company Dallah Alco.

Al-Bayoumi was connected with Fahad al-Thumairy, Director of the Saudi Ministry for Islamic Affairs. However, let us not focus on the 29 pages taken from the US report on Saudi Arabia and the 9/11 attack.

This would get us very far and would shed light on many facts and events that are currently taking place, not only in the Middle East.

Strategically, the issue of the relationship between Saudi Arabia and Islamic terrorism has been long lasting: the jihad – which the West has foolishly favoured – has become the primary geopolitical agent throughout the Greater Middle East and also in the rest of the world.

This was solely Westerners’ fault since they had every chance to force Saudi Arabia, the Emirates, Iran, the Lebanon, Iraq and all the other Islamic regional players in the Middle East to be more reasonable and become somewhat milder as to the “sword jihad”.

Nevertheless, Quos Deus perdere vult, dementat.

As things stand now, without a change there is no solution for this situation. We will be confronted with the remote-controlled jihad and later we will ask those maneuvering it for money to be rescued from an economic crisis that is also caused by the crazy geopolitics of the whole West.

Currently Saudi Arabia invests approximately 20 billion US dollars for infrastructure in the United States, as well as six billions for 150 Black Hawk helicopters to be used in the its kingdom.

If all goes well, at the very quick pace recently imparted to reach economic diversification, Saudi Arabia will go ahead according to its program  “Vision 2030” by selling,  at first, Saudi Aramco on the market.

This is another important fact to understand today’s events.

Nevertheless the project “Vision 2030” also proposes measures which may still generate tension, such as the increase in tariffs, rates and taxes, although with a fall in the unemployment rate from 11.6% to 7%.

Furthermore Saudi Arabia envisages primary support for small and medium-sized enterprises (SMEs).

The Saudi public Fund devoted to SMEs, namely Musharakah, has already 4 billion Saudi riyals, equal to approximately 6 billion US dollars.

In short, Saudi Arabia wants to rapidly diversify its oil-dependent economy and grow up to becoming the 15th global economy in 2020.

Special Economic Zones will also be created and foreign direct investment (FDI) will rise from the current 3.8% to 5.7% .

According to Al Saud’s plans, the private sector is expected to reach 65% of GDP as against the current 45%.

If Saudi Arabia does not bring the whole Peninsula and the Sunni world up to speed according to this program, “Project 2020” is clearly doomed to failure. Another rational motivation for the anti-Qatar diktat.

Let us now move to request 6.

Against this background, Saudi Arabia asks Qatar to “break off relations with Hezbollah, al-Qaeda and the “Caliphate”.

Let us analyze data.

In 2008, the leader of Qatar, Emir al-Thani, held a meeting between all parties present on the Lebanese political scene, by showing clear support for the Shiite movement of the “Party of God” and its allies, especially for the many Iranian foundations operating in Beirut.

It is worth recalling that exactly in 2008, the Sunni Lebanese leader,  Rafik Hariri (whose economic fortune had started in Saudi Arabia), was  killed, probably by a joint operation of some Shiite countries.

Recently the Qatari Emir has also spoken of Hezbollah as a “resistance movement”, adding that it is “not wise” to oppose Iran.

Al-Thani has also said that such news were manipulated, but obviously this just exacerbates the situation.

The issue, however, is not only geopolitical, but also economic.

Qatar is a relatively small, but not irrelevant oil producer, with 620,000 barrels a day. However, it is the first natural gas supplier in the world and – according to 2016 data – it exports 77.2 million tons mainly to the East.

However, why is there no OPEC for natural gas, which would avoid the politicization of the search of market shares between producers?

Meanwhile, the United States is becoming the largest natural gas producer in the world, with a 2016 extraction level equal to 23%, while in 2001 the share of shale gas in North American extraction was a mere 1%.

Hence it is obvious to imagine how prices and market shares will change with this mass of liquid gas in Europe and Asia. It is also easy to imagine how the  economies depending on natural gas in the Middle East would end up if the United States became more aggressive on the global liquid gas markets.

European markets’ net dependence on African and Middle East gas imports and rigid pricing of liquid gas on Asian markets, as well as the huge investment needed for extraction and transport infrastructure, are all factors which – unlike what happened for oil – prevent the creation of a global natural gas market protected by a single producer cartel.

This is why there is no OPEC for gas and this is particularly the reason why the oil exporters floundering in the financial crisis want to back the large gas extracting countries into a corner and later possibly expropriate them.

Hence Saudi Arabia’s and its allies’ current crackdown on Qatar poses a major economic problem for al-Thani’s Emirate, considering that all the ships flying the Qatari flag have been forbidden to dock in the Saudi and Emirates’ oil and gas terminal of Fujariah in the Persian Gulf.

For the time being the Emirate “punished” by Saudi Arabia has reassured its customers, especially the Asian ones and the major one, namely the Japanese Jera buying Qatari gas with long-term contracts, about the regularity of supplies, but nothing prevents delays and additional costs from  occurring,  which will soon affect Italy as well.

Furthermore the oil price fall had created a 98 billion US dollar deficit in Saudi Arabia’s public finances.

In a logic of looting, which Quran rules permit, the easiest solution is to put a strain on the richest opponent.

However, besides creating debt securities, Saudi Arabia will sell significant shareholdings of its oil companies, but above all of Saudi Aramco – and this is a central factor, as already mentioned.

Economic diversification is therefore an immediate need for Saudi Arabia  and this explains most of the current internal conflicts among the “Seven Sudayri” of the Al Saud family, who have been ruling and deciding the fate of much of the Arabian peninsula since the time of the Wahhabi uprising.

However let us continue with the requests made by Saudi Arabia and its  allies to Qatar.

Again to continue the discussion of “request” 5 to Qatar, we are talking about 59 individuals and 12 institutions which, according to Saudi Arabia, support, organize and fund terrorism.

The list of organizations obviously include the charities linked to al-Thani’s family, but there are also Saraya al-Ashtar, an organization of “occasional terrorists” linked to Hezb’ollah in Bahrain; the “February 14 Coalition”, again operating in Bahrain in favor of the Shiite majority in the country; the “Resistance Brigades”, again active in Bahrain; Saraya al-Mukhtar, a Shiite League operating in the al-Khalifa’s kingdom, and finally Harakat Ahrar Bahrain.

Judging from this list, it seems that Daesh-Isis is not a terrorist organization  and the same holds true for al-Qaeda.

That is true, but they are Sunni organizations.

Moreover, a few days ago the British media published very compromising documents on the Saudi leaders’ funding  to all jihadist terrorist organizations.

Again according to the latest data, the money spent by the Saudi ruling class to spread Wahhabism (and Salafism) in the world – both ideological foundations of contemporary jihad – is currently at least 5.2 billion US dollars.

Hence the oil powers are brutally demanding Qatar, the world’s gas leader, to extradite “terrorists” (but only the Shiite ones) and not interfere in domestic affairs or grant citizenship to Saudi, Egyptians and Emirates’ citizens who are wanted in their countries of origin.

These are requests 7 and 8 of the cahier de doleances issued by Saudi Arabia and its allies, also supported  by the short-sightedness of the US intelligence services.

However, it is now well-established that in 1996 the Qatari royal family  hosted and protected Khalid Sheik Mohammed, thus saving him from a US arrest warrant issued against him who is considered one of the “masterminds” of the 9/11 attack.

It has also been ascertained that a member of al-Thani’s family provided a safe cover in Doha to Al Zarkawi, the founder of al-Qaeda in Iraq, during his many transfers to and from Afghanistan.

Later the Iraqi Prime Minister, al-Maliki, openly accused Qatar of backing al-Baghdadi’s Caliphate.

However, why is Qatar supposed to support Daesh-Isis, mainly funded by its Saudi arch-enemy?

Simply because the Syrian-Iraqi Caliphate perpetrated at least three attacks on the Saudi territory in 2015, 2016 and 2017, for which it duly claimed responsibility.

As to request 9, Saudi Arabia and its allies – supported by the United States that found out that the country organizing terrorists is only the Shiite Iran – oblige Qatar to suspend any aid to their internal political enemies hosted by the Qatari Emirate and immediately inform the Sunni authorities (indeed Qatar, too, is strictly Sunni).

Moreover, Saudi Arabia and its allies ask Qatar to align itself with Saudi Arabia and with the other signatories of the diktat list at “economic, political, social and military” levels, following the indications of the Treaty reached between Qatar and Saudi Arabia in 2014.

In particular, the above mentioned Treaty regards Qatar’s end of money and weapon supplies, as well as logistical support, to groups and individuals hostile to Saudi Arabia in Yemen, Egypt and in the various Gulf Countries, obviously including Saudi Arabia.

The 2013 and 2014 agreements were secret agreements, but the topic is primarily the fight against the Muslim Brotherhood, which is now secretly operating in Saudi Arabia and throughout the Gulf – and listens on al- Jazeera the sermons of Shaykh al-Qaradawi, the most authoritative theoretician of the Muslim Brotherhood.

It is worth recalling that it was exactly a Saudi university professor of the Muslim Brotherhood who radicalized Osama bin Laden who, until then, had been a cheerful Westernized young Saudi tycoon.

The list of the thirteen requests ends with two recommendations: firstly, to undergo monthly supervision during the first year and, for the following ten years, to be monitored, again on a yearly-basis, and anyway decide on  the list of the thirteen requests within ten days.

Obviously Qatar, which so far has not accepted the thirteen requests – has  immediately turned to Turkey, governed by the AKP, a party born from a rib of the Muslim Brotherhood, and to Iran.

As is well-known, the United States initially supported the Saudi requests – although it later remembered that its central command for the whole Middle East was in Qatar, at the al-Udayd base.

If Qatar loses its tug-of-war with Saudi Arabia and its allies, its large  financial reserves will be hoarded by Saudi Arabia to back its project for stabilizing State budgets and rapidly achieving economic diversification, which is at the core of  the new King Muhammad al-Salman’s policy line.

Qatar has a sovereign fund of 355 billion US dollars and owns 30 billions worth of securities and shares, as well as an unknown, but definitely huge amount of other investments outside the Emirate.

Moreover, the Saudi royal family pays a high price – with a public debt that would have forced Saudi Arabia into default by 2018 – for the huge funds and loans granted to terrorist organizations in Syria, Yemen and  Iraq – all jihadist militias now out of the new balance of power and obviously defeated by the new connection between Russia, Iran, Syria and, in the future, Turkey.

Furthermore, in an already problematic situation, the bloody suicide rush to forcedly reduce oil prices – mainly targeted against the US shale oil – has depleted the public finances and the private incomes of the Wahhabi Kingdom.

Hence, with his victory, President Trump – who played many of his electoral cards precisely on the North American economic recovery to be funded with “unconventional oil and gas” – as shale is officially called – has unintentionally triggered off a tough internal power struggle within  the Al Saud family.

The first faction wants to rebuild an effective relationship with Russia and China, so as to stabilize prices and, in the long run, stop pegging the Saudi oil to the US dollar, which will shortly be only the financial instrument of the globalization of North American shale oil – a direct competitor of the Saudi one.

On the contrary, the opposite faction wants to preserve the already strong relationship between Saudi Arabia and the United States, so as to use the US economy as a carrier for the increasingly necessary and quick diversification of the Saudi economy, which is still heavily oil-dependent.

A factor linked to this new US-Saudi bilateralism is also the Saudi pressure against the New Silk Road of China, which is currently the number one enemy of US geopolitics and that the pro-American Saudis want to drive away from all the Gulf countries.

Conversely, it is almost useless to note that Iran has always been an essential passage point of the One Belt and One Road initiative (OBOR) designed by China.

It is also worth recalling it was Qatar, jointly with Iran, to open the first yuan “exchange centre” throughout the Middle East on April 14, 2015.

In addition to the above-mentioned monetary exchange and clearing centre for the Chinese and Middle East currencies – and it should be noted that yuan-denominated oil contracts between China and Iran are already in place – the Industrial and Commercial Bank of China also operates in Qatar.

If the yuan (and the ruble) became the new benchmark for gas and oil, the US dollar good days would be over since it could no longer lay onto the US-dollar denominated international trade the imbalances and asymmetries of public debt (which, including households’ and companies’ debt, accounts for 345% of the US GDP) and of its trade deficit.

“The dollar is our currency, but your problem” as a FED Governor said to his European counterparts.

Meanwhile, the new Saudi king, Muhammad bin Salman, is planning and designing a new 2 trillion US dollar sovereign fund, with a view to putting an end to the Saudi oil-dependence “within the next twenty years.”

Again according to the pro-American faction of the al-Saud family, the new sovereign fund is expected to invest half of its capital abroad, obviously without ever affecting Aramco, the world’s first oil producer and second holder of world reserves.

Said faction does not show any particular problem with oil price fluctuations, as has already demonstrated by trying – in vain – to push the US shale oil out of the market.

If the oil price increases, there will be more money available to Saudi Arabia for stepping up economic diversification. Even if the oil price  decreases there would be no problem: the Saudi oil has the lowest unit extraction cost and the country will always be in a position to sell its products on the fastest-growing and most liquid market in the world, which is currently the Asian one.

Once again Qatar’s primary role in the Japanese and Chinese energy system is very annoying for Saudi Arabia.

Everything will change in the Middle East when, at the end of hostilities in Syria, Israel shall face a number one enemy, namely Iran, which is currently strengthened by the new balance of power prevailing in Syria (and in the Lebanon) and shall also come to terms with what is increasingly becoming the “lesser evil”, namely Saudi Arabia’s Wahhabism.

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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US: No Restitution to Syria

Eric Zuesse

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On April 22nd, an anonymous U.S. “Senior Administration Official” told a press conference in Toronto, that the only possible circumstance under which the U.S. Government will agree to pay anything for the harms (bombings of infrastructure etc.) it’s doing to Syria, would be if Syria will agree to cede, to U.S. control, a portion of its land:

QUESTION: When you say no reconstruction money for areas that are under Assad’s control, there is some reconstruction money that’s currently frozen or under question for areas that are not under Assad’s control?

MODERATOR: That’s stabilization, which is different from reconstruction, just to clarify.

“Stabilization” is the solidification of control by the U.S. Government, via its proxies (‘rebels’ trained by U.S. and financed by the Sauds) who are fighting to overthrow Syria’s Government; and the U.S. won’t pay any reconstruction unless it’s “stabilizing” that particular part of Syria. If America’s 7-year-long effort at regime-change in Syria turns out to be a total failure (grabbing no part of its territory), then the U.S. won’t pay even a cent for restoration of Syria from its 7-year-long war to control that country via installing there rulers who will be doing the bidding of the royal Saud family, Saudi Arabia’s owners, who have been America’s direct agent all along in Syria to ultimately take over its Government. (America’s other main ally demanding regime-change in Syria is Israel, which is a Jewish theocracy; and, of course, no predominantly Muslim nation would accept being ruled by Jews of any sort — nor by any Christians. Consequently, the U.S. has been using the fundamentalist Sunni owners of Saudi Arabia — the Saud family (the world’s richest family) — as its agent to fund Syria’s ‘rebels’, and to select which of the ‘rebels’ constitute, at the U.N.-sponsored peace talks for Syria, the ‘opposition’ who are negotiating against Syria’s elected Government to rule the country.) The other participants, along with the Sauds who own Saudi Arabia, are the Thanis who own Qatar, and the six royal families who own United Arab Emirates — all likewise being fundamentalist Sunnis. Syria’s Government is committedly secularist and opposed to Sharia (Islamic) law. By installing a Sunni Sharia law government, the Sauds would take effective control over Syria — the U.S. would conquer that land.

On March 16th, the Washington Post bannered “Trump wants to get the U.S. out of Syria’s war, so he asked the Saudi king for $4 billion” and reported that “In a December phone call with Saudi Arabia’s King Salman, President Trump had an idea he thought could hasten a U.S. exit from Syria: Ask the king for $4 billion. By the end of the call, according to U.S. officials, the president believed he had a deal. The White House wants money from the kingdom and other nations to help rebuild and stabilize the parts of Syria that the U.S. military and its local allies have liberated from the Islamic State.” The U.S., in actual fact, had ignored ISIS in Syria until Russia on 30 September 2015, at Syria’s request, started bombing it and other jihadists there. After that, opposing ISIS became America’s excuse for its earlier and continuing demand that “Assad must go,” and America’s objective then became bombing and totally destroying ISIS’s Syrian headquarters in Raqqa so as for America and its allies to gain access to Syria’s oil-producing region. The U.S. had never bombed any of ISIS’s oil tanker trucks in Syria until it started doing that on 17 November 2015, after Russia had on September 30th begun its bombings in Syria. Ever since 1949, America’s real target in Syria has been to replace Syria’s Government, and this goes back long before ISIS even existed, anywhere; and Barack Obama had entered office in 2009 hoping to be the U.S. President who would achieve that decades-long U.S. and Saud and Israel objective. So, for the U.S. Government, Syria is to be conquered, never to be restituted unless and until, and only to the extent that, it is conquered.

On April 16th, the Wall Street Journal headlined “U.S. Seeks Arab Force and Funding for Syria: Under plan, troops would replace American military contingent after ISIS defeat and help secure country’s north; proposal faces challenges.” This report said that, “The initiative comes as the administration has asked Saudi Arabia, Qatar and the United Arab Emirates to contribute billions of dollars to help restore northern Syria. It wants Arab nations to send troops as well, officials said.” The article closed: “Saudi Arabia and the U.A.E. have helped pay the stipends for the Syrian fighters the U.S. is supporting, American officials say. Administration officials are calculating Arab nations will respond more favorably to a request from Mr. Trump, who already has asked Saudi Arabia to contribute $4 billion to restore former Islamic State-held areas of Syria.”

America’s plan also includes taking control over the dams that supply water to the rest of Syria; so, the goal remains strangulation of Syria’s Government, even if outright conquest of it remains beyond reach.

On 10 June 2017, a meeting was held in Syria’s northeastern city of Qamishli, which borders Turkey, and where Syrian tribal leaders met with America’s allies and with U.S. Colonel John Dorrian (shown here holding a press briefing on a different occasion), at which, according to the Turkish newspaper reporting the event, “Representatives agreed on a pipeline route. Radical decisions were made regarding the extraction, processing and marketing of the underground wealth of the Haseke, Raqqah and Deir ez Zor regions, which hold 95 percent of Syrian oil and natural gas’ potential.” However, as of yet, Trump hasn’t been able to achieve the type of deal that he is aiming for. On April 18th, that same Turkish newspaper bannered “US to build Arab force in NE Syria as part of new ploy: The US is seeking to amass an Arab force in northeastern Syria comprised of funding and troops from Egypt, Saudi Arabia, Qatar and the UAE.” So, perhaps there will be a portion of Syria that the U.S. will “stabilize” or even, just maybe, restitute for damages done in the effort to conquer it.

Whitney Webb has provided an excellent comprehensive view on which Syrian assets the U.S. Government is hoping to win.

The reconstruction costs to restore Syria were initially roughly estimated at $250 billion, but Syria’s Government now estimates it at around twice that figure.

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Saudi engagement in Iraq: The exception that confirms the rule?

Dr. James M. Dorsey

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Stepped up Saudi efforts to forge close diplomatic, economic and cultural ties to Shia-majority Iraq in a bid to counter significant Iranian influence in the country appear to be paying off. The Saudi initiative demonstrates the kingdom’s ability to engage rather than exclusively pursue a muscular, assertive and confrontational policy towards the Islamic republic and its perceived allies. It raises the question whether it is a one-off or could become a model for Saudi policy elsewhere in the region.

The kingdom’s recent, far more sophisticated approach to Iraq is testimony to the fact that its multi-billion dollar, decades-long support for Sunni Muslim ultra-conservatism that at times involved funding of both violent and non-violent militants had failed in Iraq. It constitutes recognition that Saudi Arabia’s absence effectively gave Iran a free reign.

Saudi Crown Prince Mohammed bin Salman’s Iraqi charm offensive amounts to a far more concerted and successful effort than attempts more than a decade ago by then Saudi King Abdullah to reach out to Iraqi Shiite leaders, including firebrand Muqtada al-Sadr and involving the organization of a meeting in Mecca between Sunni and Shia Iraqi religious leaders. King Abdullah’s efforts did not at the time involve a crackdown on funding by Saudi sources of a devastating Sunni Muslim insurgency.

King Abdullah’s initiative notwithstanding, Saudi policy towards Iraq for more than a decade since Iraq’s Shiite majority emerged from the shadow of Saddam Hussein’s minority Sunni Muslim rule as a result of the 2003 US invasion was one of non-engagement, sectarianism, and support of the country’s Sunni minority.

It took the kingdom 11 years to open its first embassy in post-Saddam Iraq, the kingdom’s first diplomatic presence in the country since it broke off diplomatic relations in 1990 because of Saddam’s invasion of Kuwait. Even then, relations got off to a rocky start with Iraq demanding the replacement of the kingdom’s first ambassador, Thamer al-Sabhan, after he publicly criticised Iranian involvement in Iraqi affairs and the alleged persecution of Iraqi Sunni Muslims.

The emergence in 2014 of Iraqi prime minister Haider al-Abadi, who succeeded Nuri al-Maliki, seen by the Saudis as an Iranian pawn, coupled with the rise of Prince Mohammed and the Saudi charm offensive in the wake of the defeat of the Islamic state has produced a remarkable turnaround that holds out the prospect of the kingdom becoming an influential player in the reconstruction of war-ravaged Iraq.

Beyond the opening of the embassy, Saudi Arabia is slated to open a consulate in Basra as well as in Najaf, widely seen as Shia Islam’s third most holy city that rivals Iran’s Qom as a centre of Shiite learning. Unconfirmed reports suggest that Prince Mohammed may visit Najaf after Iraqi elections scheduled for May 12.

The two countries have reopened their Arar Border Crossing that was closed for 27 years and restored commercial air traffic for the first time in more than a quarter of a century. More than 60 Saudi companies participated earlier this year in the Baghdad International Fair.

A Saudi Arabia-Iraq Coordination Council, inaugurated last year aims to strengthen security ties as well as economic and cultural relations envisions student and cultural exchanges and Saudi investment in oil and gas, trade, transport, education, light industry, and agriculture. Saudi Arabia pledged $1.5 billion for Iraqi reconstruction at a donors’ conference in Kuwait in February.

Saudi Arabia garnered substantial brownie points in February by playing its first soccer match in Iraq in almost three decades, boosting Iraqi efforts to persuade world soccer body FIFA to lift its ban on Iraqi hosting of international matches. The kingdom subsequently promised to build a 100,000-seat football stadium in Baghdad.

In shifting gears in Iraq, Prince Mohammed appears to have broken with decades of Saudi efforts to primarily confront Iran in proxy and covert wars. It remains, however, unclear to what degree Prince Mohammed’s policy shift in Iraq is an indication of a broader move away from sectarianism and support for ultra-conservative militants and towards engagement.

The record is mixed. Saudi Shiite activists see little positive change and, if anything, assert that repression in their heartland in the kingdom’s Eastern Province has increased since Prince Mohammed’s rise.

“Bin Salman is already acting like he’s the king of Saudi Arabia. He keeps telling the West that he will reform Islam, but he keeps raiding the homes of Shia and stripping us of any political rights,” one activist said.

Nonetheless, a Saudi-funded Bangladeshi plan to build moderate mosques to counter militancy, the kingdom’s relinquishing of control of the Grand Mosque in Brussels, and the newly found propagation of tolerance and inter-faith dialogue by the government-controlled World Muslim League that for decades funded ultra-conservatism globally would suggest that Saudi money may be invested in attempting to curb the impact of the kingdom’s decades-long support of ultra-conservatism.

There are, however, also indications that Prince Mohammed is not averse to funding militants when it suits his geopolitical purpose. Saudi funds have flowed since his rise in 2015 to militant religious seminaries in the Pakistani province of Balochistan at a time that the kingdom was drafting plans to destabilize Iran by exploiting grievances and stirring unrest among Iran’s ethnic minorities, including the Baloch. Those plans have not left the drawing board and may never do so, but ultra-conservative militants figure prominently in them.

Nevertheless, the magnitude of the shifting of gears in Saudi policy towards Iraq as well as other steps that Prince Mohammed has taken to curb, redirect, and reduce, if not halt, Saudi support for militant ultra-conservatism is highlighted by the conclusions of a 2002 study of funding of political violence conducted by the New York-based Council of Foreign Relations.

Coming in the wake of the 9/11 attacks when Saudi funding and counter-terrorism cooperation with the United States was put under the magnifying glass, the study suggested that the kingdom’s global support for ultra-conservatism was woven into its fabric.

“It may well be the case that if Saudi Arabia…were to move quickly to share sensitive financial information with the United States, regulate or close down Islamic banks, incarcerate prominent Saudi citizens or surrender them to international authorities, audit Islamic charities, and investigate the hawala system—just a few of the steps that nation would have to take—it would be putting its current system of governance at significant political risk,” the study warned.

In many ways, Saudi support for the Iraqi insurgency was a textbook example of the decades-long, $100 billion Saudi campaign to confront Iran globally by promoting ultra-conservatism and sectarianism and in a minority of countries – Afghanistan, Pakistan, Bosnia Herzegovina, Iraq and Syria – funding violence.

Nawaf Obaid, a Saudi scholar with close ties to the government, said Saudi options at the height of the Sunni Muslim insurgency included supplying the insurgents with the same type of funding, arms and logistical support that Iran was giving to Shiite armed groups. Another option, he said, was to create new Sunni brigades to combat the Iranian-backed militias.

“Saudi engagement in Iraq carries great risks — it could spark a regional war. So be it: The consequences of inaction are far worse,” Mr. Obaid said in 2006.

US and Iraqi officials at the time suspected Saudi Arabia of covertly supporting sectarian Sunni jihadist insurgents opposed to the US military presence in the country and the rise of a Shia-dominated government. While there was no evidence of government assistance, the lines between the actions of private citizens and authorities were and remain often blurred in the kingdom.

An Iraq Study Group report in 2006 at the height of the Sunni Muslim insurgency concluded that “funding for the Sunni insurgency comes from private individuals within Saudi Arabia and other Gulf states.”

Without identifying them, Iraqi officials asserted that funds were also flowing from Saudi charities that often operated as governmental non-government organizations. They said some of the funds had been channelled through Saudi clerics who decided who the beneficiary would be.

Truck drivers at the time described transporting boxes of cash from Saudi Arabia that were destined for insurgents. The transports frequently coincided with pilgrimages to Mecca.

“They sent boxes full of dollars and asked me to deliver them to certain addresses in Iraq. I know it is being sent to the resistance, and if I don’t take it with me, they will kill me,” one driver said. He said he was instructed to hide the money from authorities at the Iraqi border.

One official said $25 million was sent by a Saudi religious scholar to a senior Iraqi Sunni cleric who bought Russian Strela shoulder-fired anti-aircraft missiles on the black market in Romania.

Baath Party loyalists claimed at the time that a US Air Force F-16 jet that crashed while flying in support of American soldiers fighting insurgents in Anbar province had been downed by a Strela. The US military denied the claim.

“We have stockpiles of Strelas and we are going to surprise them (the Americans),” a spokesman for the party, said.

The Iraqi cleric involved in the purchase of the missiles was suspected to be Sheikh Harith Sulaiman al-Dhari, a tribal chieftain dubbed “the Spiritual Leader of the Iraqi Resistance” with a lineage of opposition to foreign rule dating back to the killing in 1920 of a British colonel by his father and grandfather. Iraqi authorities issued an arrest warrant for Mr. Al-Dhari in late 2006, who has since passed away, on charges of inciting sectarian violence after he visited Saudi Arabia.

Saudi Arabia’s approach to Iraq has come a long way since the days of the insurgency. The question is whether the kingdom will draw a lesson from its success in the way it manages its regional rivalry with Iran. So far, there is little indication that Iraq is more than the exception that confirms the rule.

Said political analyst Hussein Ibish in a just published study of Saudi-Iraqi relations: “Iraq is the only major regional battleground at present in which Saudi Arabia is relying almost entirely on carrots rather than sticks. Yet, arguably, more has been accomplished by Riyadh over the past year in Iraq than, for example, in either Yemen or Lebanon… Saudi Arabia’s outreach in Iraq, particularly in 2017, belies the stereotype of a rash, reckless, and uncontrolled new major regional actor, showing instead that Saudi Arabia can be deft and delicate when it wants to. That’s an important lesson for the rest of the world, but also for Saudi Arabia itself, to ponder.”

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Middle East

Syria’s future

Giancarlo Elia Valori

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Many sources think that the most significant clashes in Syria are likely to end late this year.

Probably the small clashes between the various ethnic groups and hence among their external points of reference  will not end yet. The bulk of armed actions, however, will certainly finish since now the areas of influence are stabilized.

The first fact that stands out is that, despite everything, Bashar al-Assad’s forces have won.

All the international actors operating on the ground -be they friends or foes – have no difficulty in recognizing it.

Certainly neither Assad nor Russia alone have the strength to rebuild the country, but Western countries – especially those that have participated in the fight against Assad – and the other less involved countries plan to participate in the reconstruction process, with a view to influencing Syria, although peacefully this time.

The military start of Assad’s victory was the Northwest campaign of the Syrian Arab Forces from October 2017 to February 2018.

Operations against what the United States calls “rebels” -namely, in that case, Isis and Tahrir al-Sham – focused at that time on the intersection between the provinces of Hama, Idlib and Aleppo.

It is extremely difficult for a regular army to conduct operations against guerrilla organizations, but Assad’ Syrian Arab Army has succeeded to do so.

The subsequent destruction of Isis-Daesh pockets south of Damascus, in Eastern Ghouta and Idlib was decisive to later establish stable and undisputed hegemony of the Syrian forces throughout the Syrian territory – and above all in traditionally Sunni areas.

There is also the issue of Al-Rastan, the ancient town of Arethusa on the Orontes river, located on the side of the bridge uniting Hama and Homs. From the beginning of hostilities, it has been a basis for the jihadism of the so-called “rebels”.

Another military problem is the opening of the bridge and the commercial passage on the border between Syria and the Lebanon, namely Al-Nasib, which is essential for Syria’s trade with Jordan and the Gulf countries.

Conquering the Al-Nasib pass means conquering also the road between Deraa and Damascus, as well as the Syrian side of the Djebel Druze.

Between the Deraa-Damascus road and the Golan, the situation is still largely frozen thanks to the agreement reached by the Russian Federation with the United States and Israel, in which the former guaranteed to the Jewish State that Iran and Hezb’ollah would not get close – up to the limit of 25 miles (40 kilometers) – to the old ceasefire line established in 1973.

Moreover, even though the representatives of the Democratic Federation of Northern Syria, commonly known as Rojava, were never accepted in the negotiations between the parties in conflict, the Kurds – already abandoned by the United States – know that the territories they freed from Isis-Daesh will be returned precisely to the Sunni Arabs, but in exchange for the autonomy of the traditionally Kurdish districts of Afrin, Kobane and Qamishli.

Furthermore, since the Sochi Conference on the Congress of Syrian National Dialogue held at the end of January 2018, Russia has convinced the 1,500 participants from the various parts of Syria to accept the fact that every ethnic and religious area and every group of Syrian society must be respected and protected by the new Constitution. A break with the old Ba’athist and centralist tradition of the Syrian regime, but without reaching the Lebanese paradox, i.e. permanent civil war.

The political process envisaged by Russia is a process in which the Westerners still present in the Syrian territory had no say in the matter.

Nor will they have it in the future.

The going will be really tough when the time of reconstruction comes.

Reconstruction is the most important future lever for external influence on the long-suffering Syrian Arab Republic, where conflict has been going on for seven years.

The World Bank estimates the cost of reconstruction at  250 billion dollars.

Other less optimistic, but more realistic estimates point to a cost for Syrian national reconstruction up to 400 and even 600 billion US dollars.

Syria does not even dream of having all these capital resources, which even the Russian Federation cannot deploy on its own.

Six years after the outbreak of the conflict, in 2011, the great diaspora of Syrian businessmen met in Germany in late February 2017.

Hence the creation of the Syrian International Business Association (SIBA).

With specific reference to the great Syrian reconstruction, the Russian, Iranian and Chinese governments are already active and have already secured the largest contracts in the oil and gas, minerals, telecommunications, real estate and electricity sectors.

As far as we know, there is no similar investment by Western countries, which will still leave the economic power they planned to acquire in the hands of other countries, after having caused the ill-advised but failed “Arab Spring” in Syria.

Also the BRICS and countries such as the Lebanon, Armenia, Belarus and Serbia invest in Syria, or at least in the regions where peace has been restored and the “Caliphate” does no longer exist.

Usually collaboration takes place through the purchase of pre-existing companies in Syria – something which now  happens every day- or through bilateral collaborations with Syrian companies.

With specific reference to regulations, Syria is continuously changing the rules regarding the structure of operating companies, work permits, imports and currency  transfers.

State hegemony, in the old Ba’athist tradition – the old Syrian (but also Egyptian) national Socialism which, however, adapts itself to the structure of current markets.

It is estimated that Syrian companies can already provide 50% of the 300 billion US dollars estimated by the World Bank as cost for Syria’s reconstruction.

An estimate that many still think to be rather optimistic.

Nevertheless, it will take at least thirty years to bring Syrian back to the conditions in which it was before  hostilities began.

With rare effrontery and temerity, the United States and the European Union are already putting pressure on the Syrian government to be granted economic and political concessions, but Assad has no intention of giving room to its old enemies.

In any case, the Syrian reconstruction will need at least 30 million tons of goods per year from sea lines, while the Latakia and Tartus airports can – at most – allow loads of 15 million tons/year.

From this viewpoint, the Lebanon is organizing a Special Economic Zone around the port of Tripoli, already adapted by China to the international transport of vast flows of goods in cargoes and containers.

Obviously the companies going to work in Syria must also take the physical safety of their workers and their offices into account, as well as the need to have constant, careful and close relations with local authorities.

Furthermore, the US sanction regime also favours President Trump’s plan to topple the Syrian regime through economic pressure, which would make also the work of European companies in Syria very difficult or even impossible.

However what is the need for destroying Syria economically? For pure sadism? The current US foreign policy is not unpredictable, it is sometimes crazy.

The US sanctions, however, concern the new investment of US citizens in Syria; the re-exporting or exporting of goods and services to Syria; the importing of Syrian oil or gas into the United States;the transactions of Syrian goods and services carried out by non-US citizens also involving a US citizen.

Other sanctions will soon be imposed by President Trump on the Russian Federation due to its “tolerance” for the increasingly alleged factories of nerve gas and materials.

Obviously the fact that the Syrian regime is the winner of military confrontation, along with Russia and Iran, is now a certainty.

Nevertheless, loyalist Syrians are still badly supplied, both at military and civilian levels, and they are severely dependent on external aid, which is decisive also for their survival and for preserving their strategic and military superiority.

Without Russia and Iran, Bashar al-Assad would have collapsed within two months since the beginning of the  “Syrian spring”, when the Muslim Brotherhood organized by the United States was demonstrating in the streets violently.

Hence, in the current stability of the Syrian regime, nothing must be taken for granted: the end or decrease of Russian support and the fast return back home of the Iranian Pasdaran and Afghan Shiites organized by Iran would bring Assad’s military and civilian power back to the 2011 level.

Nevertheless Syria does no longer exist as a Soviet-style centralized State.

In Assad-led Syria the centralized economy does no longer exist, for the excellent reason that four primary military powers operate in the country, namely Russia, Iran, Turkey and the United States.

They collectively control all the Syrian resources on which the Syrian national government no longer has any power.

As can be easily imagined, the United States holds oil reserves by means of their occupation – through the Kurds – of Raqqa and the Northeastern region.

Turkey holds a nominally Syrian region of approximately 2,400 square kilometers between Aleppo and Idlib, in the area of the “Euphrates Shield” operations.

Russia and Iran already hold the majority of reconstruction contracts, while they will acquire most of the public sector to repay the military expenses they incurred to keep Bashar al-Assad’s regime in power.

Hence if no agreements are reached between Russia and the United States, each area of influence will have different reconstruction and development plans.

As early as the 1945-1958 period, Syria had been the  target of expansionist designs that were anyway bound to fragment its territory.

The two Hashemite Kingdoms of Iraq and Jordan thought they could together take control of the whole Syrian State,  while their eternal rivals, namely the Saudi-Egyptian axis, thwarted their designs.

Great Britain and France, still powerful in Syria, operated through their Arab points of reference.

CIA collaborated with the Syrian dictator, Husni Zaim.

Zaim was of Kurdish origin and had taken power in 1949. He had organized a regime not disliked by the Ba’ath Party – a Westernizing and vaguely “Socialist” dictatorship.

After Husni Zaim’s fall, Syria was divided as usual: the collective leadership was held by the Sunni urban elite who had fought harshly against France.

Nevertheless, the unity of the nation – which was decisive for the Sunnis themselves – found it hard to bring together the Alawites, the Druze, the Shiites and the thousands of  religious and ethnic factions that characterized Syria at that time as in current times.

The nationalist union between Syria and Egypt created in 1958 and soon undermined by Syria’s defection in 1961, experienced its Ba’athist-nationalist coup in 1963, with a military take-over.

Hafez El Assad – the father of the current Syrian leader, who ruled Syria from 1963 to 2000, the year of his death – immediately emerged among the military.

Long-term instability, medium-term political stability. That is Syria, from the end of the French domination to current times.

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