Search for “Foreign Enemy”
The views of Russia and the USA of the domestic policy developments in Iran, where the public unrest has caused the deaths of more than twenty people and the arrests of about four thousand protesters, is split into two opposite points of view.
The Russian officials have strongly supported the Iranian position that the public unrest has been caused by “foreign enemies” of the Islamic revolution. It should be mentioned that right after the outburst of protests, Iran’s supreme leader Ayatollah Ali Khamenei blamed foreign enemies for the unrest, without naming the countries concerned.
It is particularly remarkable that Ali Khamenei, who ordered Telegram and Instagram to be blocked in the country and ordered the partially shut down ofthe internet, is an active user of Twitter and he was the first one to post his reaction to protests on social media. In a post on his Twitter, Iran’s supreme leader was quoted as saying: “In recent events, enemies of Iran have allied and used the various means they possess, including money, weapons, politics and intelligence services to create troubles for the Islamic Republic. The enemy is always looking for an opportunity and any crevice to infiltrate and strike the Iranian nation.”
Unlike him, Secretary of Iran’s Supreme National Security Council (SNSC) Ali Shamkhani was more specific and blamed the governments of the USA, United Kingdom and Saudi Arabia for interference in the domestic affairs of Iran. While President of Iran Hassan Rouhani has taken things a step further and described Donald Trump as “the enemy of the Iranian nation from head to toe”.
Such a nervous response of the Iranian authorities has been caused by statements made by US President Donald Trump saying that “it’s time for change” in Iran, and by the promise made by Vice President Michael Pence that the US administration would support the participants of protests in Iran. As this analysis shows, instead of looking for internal reasons for public protests and implementing social and economic reforms to improve the living standards of the people, the political elite of Iran is busy searching for foreign enemies, which is typical of authoritarian countries in the world.
In this situation, the Russian official position,which actively supports the theocratic elite of Iran, does not seem strange, sincethe nature of the authoritarian power in both countries is identical. It istypical for authoritarian and autocratic rulers to take repressive actions against protestors – inthis case, against protesting young people, who demand political change, religious liberties and social and economic reforms.
Moscow was the first one to support Teheran’s statement that public protests in Iran have foreign sources. Thus, on January 4, 2018, amid the public protest in Iran, Russian Deputy Foreign Minister Sergei Ryabkov in his statement warned the United States against attempts to interfere with the domestic affairs of Iran. According to him, the protests in Iran are domestic affairs of the country. He thinks that the United States is merely using the situation in Iran intentionally to attempt to undermine the Joint Comprehensive Plan of Action related to Iran’s nuclear program (JPCOA), which does not do honor to Washington.
The United Russia faction in the State Duma, which is considered the party of President Putin, has demandedthat the UN stop the U.S. provocation against Iran in order to prevent a scenario similar to Libya and Iraq in the country. However, when, on the US initiative on January 5, 2018, the UN Security Council convened for an emergency meeting to discuss the situation in Iran, Russia’s permanent representative Vasily Nebenzya strongly opposed the inclusion of this issue in the agenda. As usual, Russia has quickly found an external enemy represented by the United States.
Russia Fights Tooth and Nail for Iran
Russia defends the theocratic regime of Iran, not only because of the similarity of their authoritarian and paternalisticsystems, but also because of Putin’s objectives of continuing his individual rule and maintaining the status quo. The fall of the theocratic regime in Iran as a result of public protests could have significant impacts on Putin’s regime for several reasons.
First, it’s no secret that Iran and Russia are the guarantors of the Bashar Assad’s regime in Syria.By participation in the military operation in Syria, President Putin has tried to win the recognition of Russia as a global super power. The Middle East has become a testing area where Russia has challenged the United States, so that the power of Moscow is demonstrated to the Western World. Therefore, Putin has used Russian military power to support the government of Bashar Assad, who is considered illegitimate by the United States, Turkey and other NATO members. For the first time in history, Moscow and Washington have been directly involved in military operations in the same state, but on opposite sides of the barricades. The Iranian military of the Islamic Revolutionary Guard Corps (IRGC) and the Tehran-supported Lebanese Shiite group, Hezbollah, are known to secure the victory of Bashar Assad in ground operations, while Russia has waged air bombardments. Iran is the main financial donor of Damascus and spends annually $6bln to support the Syrian government. Therefore, in case of the fall of the Iranian theocratic regime, the Bashar government would not endure for long.Russia would fail to maintain the Syrian regime with only air powerwithout the support of the powerful ground army, which has beenmade possible by the financial support of Iran.Such a change in the Middle East situation would not only smash Putin’s geopolitical ambitions, but would also step up global pressure on Russia regarding the Ukrainian crisis. This could lead to the inglorious escape of the Kremlin-backed armed groups from Lugansk and Donetsk in Ukraine.
Second, the economic and political agenda, which has pushed the protests in Iran forward, is very much similar to the agenda of Putin in Russia.Both countries have large-scale corruption. International sanctions have led to the decline of the neoliberal economy in both countries, which has impoverished millions of Russian and Iranian nationals. The majority of the people in both states stand against the use of vast sums of money to wage war abroad. They think that budgetary funds are not used for the people’s needs, but for the satisfaction of geopolitical ambitions of their political leaders. This is demonstrated by the fact that, the main slogans of protesters in Iran have been “NotGaza, not Lebanon – my life for Iran”, “Leave Syria, think about us instead”, “Death to Russia.” The fall of the Iranian regime could intensify the antimilitary mood within Russia. This, in turn, could deprive Putin of the opportunity to wage “hybrid war” in Abkhazia,Transnistria, South Ossetia, and Eastern Ukraine. It must be admitted though, that the Kremlin propaganda machine can still manipulate public opinion and minimize the antimilitary mood.
Third, the fact that the political regime has so far been irremovable, both in Iran and in Russia, has bred discontent among young people. The protesters in Iran have raised political demands along with economic issues, shouting “Death to Khamenei and President Rouhani.” The crushing power of the protesters has been found among the Iranian urban young people,who have been actively protesting against the clerical regime in recent years. Today neither communists nor liberals pose the major threat to Putin’s regime in Russia, rather it’s the fervent young people who don’t fear the repressive machine of the authorities. High school students, university students and young office workers stood in the front of anticorruption protests in 2013-2017 organized by Alexei Navalny. It’s the young people who faced the police baton attacks, which made them even stronger ideologically. Therefore, the fall of the Khamenei regime could give impetus to the Russian young people and the whole civil society that demand political change and the resignation of Putin.
Fourth, the fall of the Ayatollah regime could deprive Russia of one of its key allies in the region. During the last 40 years Moscow has been known for its active use of the confrontation between Tehran and the United States for its own geopolitical interests. Russia, making use of strife between the Sunnis and the Shiites,along with the support of Iran, has managed to strengthen its political and economic presence in the Middle East, which had been lost after the collapse of the Soviet Union. The overthrow of the regime in Iran would lead to American domination not only in the Greater Middle East, but, as a result,could even open up Central Asia and the Caucasus to American influence, which would not be in the interest of Moscow.
Fifth, the fall of the Iranian regime could lead to a domino effect in the countries which are subject to international economic sanctions. Russia understands well that after the fall of Tehran, Western sanctions would likely be used to weaken its national economy until it returns Crimea and withdraws its “armed volunteers” from the east of Ukraine.
On the other hand, the open call for regime change in Iran stated by American President Trump, even though it may encourage the protesters, may be counterproductive. It provides the opportunity to the authoritarian rulers of Russia and Iran to claim that the protests have been organized from abroad. Thus, it can be expected Moscow will continue to support Iran and blame the United States for interference in the sovereign state affairs of Iran.
In this situation, the West should consider imposing targeted sanctions against political, military and judicial officials of Iran, who violate the rights and freedom of the protesters. The universities of European countries and the United States should also open more doors for the Iranian youth, who will become conductors of democratic values, freedom of speech and religious tolerance, which would ultimately lead to a change in the theocratic system of government in Iran.
Battling for the Future: Arab Protests 2.0
Momentous developments across Arab North and East Africa suggest the long-drawn-out process of political transition in the region as well as the greater Middle East is still in its infancy.
So does popular discontent in Syria despite eight years of devastating civil war and Egypt notwithstanding a 2013 military coup that rolled back the advances of protests in 2011 that toppled Hosni Mubarak and brought one of the country’s most repressive regimes to power.
What developments across northern Africa and the Middle East demonstrate is that the drivers of the 2011 popular revolts that swept the region and forced the leaders of Egypt, Tunisia, Libya and Yemen to resign not only still exist but constitute black swans that can upset the apple cart at any moment.
The developments also suggest that the regional struggle between forces of change and ancien regimes and militaries backed by the United Arab Emirates and Saudi Arabia is far from decided.
If anything, protesters in Algeria and Sudan have learnt at least one lesson from the failed 2011 results: don’t trust militaries even if they seemingly align themselves with demonstrators and don’t surrender the street until protesters’ demands have been fully met.
Distrust of the military has prompted an increasing number of Sudanese protesters to question whether chanting “the people and the army are one” is still appropriate. Slogans such as “freedom, freedom” and “revolution, revolution” alongside calls on the military to protect the protesters have become more frequent.
The protests in Algeria and Sudan have entered a critical phase in which protesters and militaries worried that they could be held accountable for decades of economic mismanagement, corruption and repression are tapping in the dark.
With protesters emboldened by their initial successes in forcing leaders to resign, both the demonstrators and the militaries, including officers with close ties to Saudi Arabia and the UAE, are internally divided about how to proceed.
Moreover, neither side has any real experience in managing the crossroads at which they find themselves while it is dawning on the militaries that their tired playbooks are not producing results.
In a telling sign, Sudan’s interim leader Abdel Fattah Abdelrahman Burhan praised his country’s “special relationship” with Saudi Arabia and the UAE as he met this week with a Saudi-Emirati delegation at the military compound in Khartoum, a focal point of the protests.
Saudi Arabia has expressed support for the protests in what many suspect is part of an effort to ensure that Sudan does not become a symbol of the power of popular sovereignty and its ability to defeat autocracy.
The ultimate outcome of the dramatic developments in Algeria and Sudan and how the parties manoeuvre is likely to have far-reaching consequences in a region pockmarked by powder kegs ready to explode.
Mounting anger as fuel shortages caused by Western sanctions against Syria and Iran bring life to a halt in major Syrian cities have sparked rare and widespread public criticism of president Bashar al-Assad’s government.
The anger is fuelled by reports that government officials cut in line at petrol stations to fill up their tanks and buy rationed cooking gas and take more than is allowed.
Syria is Here, an anonymous Facebook page that reports on economics in government-controlled areas took officials to task after state-run television showed oil minister Suleiman al-Abbas touring petrol stations that showed no signs of shortage.
“Is it so difficult to be transparent and forward? Would that undermine anyone’s prestige? We are a country facing sanctions and boycotted. The public knows and is aware,” the Facebook page charged.
The manager of Hashtag Syria, another Facebook page, was arrested when the site demanded that the oil ministry respond to reports of anticipated price hikes with comments rather than threats. The site charged that the ministry was punishing the manager “instead of dealing with the real problem.”
Said Syrian journalist Danny Makki: “It (Syria) is a pressure cooker.”
Similarly, authorities in Egypt, despite blocking its website, have been unable to stop an online petition against proposed constitutional amendments that could extend the rule of President Abdel Fattah el-Sisi until 2034 from attracting more than 320,000 signatures as of this writing.
The petition, entitled Batel or Void, is, according to Netblocks, a group that maps web freedom, one of an estimated 34,000 websites blocked by Egyptian internet service providers in a bid to stymie opposition to the amendments.
Mr. El-Sisi is a reminder of how far Arab militaries and their Gulf backers are potentially willing to go in defense of their vested interests and willingness to oppose popular sovereignty.
Libyan renegade Field Marshall Khalifa Belqasim Haftar is another, Mr. Haftar’s Libyan National Army (LNA) is attacking the capital Tripoli, the seat of the United Nations recognized Libyan government that he and his Emirati, Saudi, and Egyptian backers accuse of being dominated by Islamist terrorists.
The three Arab states’ military and financial support of Mr. Haftar is but the tip of the iceberg. Mr. Haftar has modelled his control of much of Libya on Mr. El-Sisi’s example of a military that not only dominates politics but also the economy.
As a result, the LNA is engaged in businesses ranging from waste management, metal scrap and waste export, and agricultural mega projects to the registration of migrant labour workers and control of ports, airports and other infrastructure. The LNA is also eyeing a role in the reconstruction of Benghazi and other war-devastated or underdeveloped regions.
What for now makes 2019 different from 2011 is that both sides of the divide realize that success depends on commitment to be in it for the long haul. Protesters, moreover, understand that trust in military assertions of support for the people can be self-defeating. They further grasp that they are up against a regional counterrevolution that has no scruples.
All of that gives today’s protesters a leg up on their 2011 counterparts. The jury is out on whether that will prove sufficient to succeed where protesters eight years ago failed.
As Marsha Lazareva languishes in jail, foreign businesses will “think twice” before investing in Kuwait
IF THERE IS one thing to glean from the case of Marsha Lazareva, it’s that foreign businesses must now think very carefully before investing in Kuwait.
For more than a year, Lazareva, who has a five-year-old son and is one of Russia’s most successful female investors in the Gulf, has been held in the Soulabaiya prison by Kuwaiti authorities. Those authorities claim she ‘stole’ half a billion dollars, a claim she strenuously denies.
Human rights groups and prominent officials, including the former FBI director, Louis Freeh, and Jim Nicholson, former Chairman of the Republican Party and former US Ambassador to the Vatican, have called for her release and expressed concerns about the apparent absence of due process in a country where Lazareva has worked for over 13 years. Both Freeh and Nicholson visited Kuwait in recent weeks with Neil Bush, son of the late President George H. W. Bush. Bush has said Lazareva’s incarceration ‘threatens to darken relations between the U.S. and Kuwait, two countries that have enjoyed a long and prosperous relationship.’
Russian officials have been equally concerned. Vladimir Platonov, the President of the Moscow Chamber of Commerce and Industry, confirmed that a single witness gave testimony in Kuwaiti court, and only for the prosecution. ‘I myself worked in prosecution for more than eight years, and I cannot imagine any judge signing off on an indictment like this,’ he said. ‘One fact of particular note is that Maria was given 1,800 pages of untranslated documents in Arabic.’
Serious questions surrounding the safety and future viability of investing in Kuwait are now being raised. Through The Port Fund, a private investment company managed by KGL Investment, Lazareva has contributed hundreds of millions of dollars to local infrastructure and economic development projects during her time in the country. Until 2017, when a Dubai bank froze $496 million without cause, she had worked largely unobstructed.
But as things stand, more foreign investment is unlikely to be forthcoming. Jim Nicholson has said that the ‘imprisonment and harassment’ of Lazareva ‘threatens’ U.S. support. adding that the ‘willingness of the U.S. to do business with Kuwait’ is based on ‘its record as a nation that respects human rights and the rule of law’. Mark Williams, the investment director of The Port Fund and a colleague of Lazareva’s, has called on international investors to ‘think twice before doing business in this country’.
These comments will surely concern the Kuwaiti government, who said last year that FDI was ‘very crucial’ to the success of its Kuwait Vision 2035 road map. In September 2018, the FTreported that the government planned to reverse its traditional position as an investor in order to diversify its economy, carrying out a series of reforms designed to facilitate foreign investment and assist investors.
But despite these changes, which have propelled Kuwait to 96th—higher than the Middle East average—in the World Bank’s ‘Ease of Doing Business’ report, investors may be unwilling to take the risk so long as Lazareva remains in jail. Lazareva’s lawyers have accused Kuwait of violating international law by breaching a long-standing bilateral investment treaty with Russia. Lord Carlile of Berriew, QC has brought the case to the attention of the British public and the EU, writing in The Times that ‘there is no evidential basis to justify any claim of dishonesty, corruption or any other criminal wrong’. He added: ’Anyone thinking of doing business in Kuwait should read on with mounting concern.’
What’s worth remembering is that Kuwait is an important, long-standing ally of the UK, and a country generally seen as stable and fair. It is equally a major non-NATO ally of the United States, where there are more than 5,000 international students of Kuwaiti origin in higher education. But these relationships, and the investment to which they have historically led, have been cast into doubt. And it now seems certain that relations will continue to sour so long as Marsha Lazareva languishes in Soulabaiya.
Economic reform in the Gulf: Who benefits, really?
For Gulf leaders, long-overdue economic reforms were never going to be easy.
Leaders like the crown princes of Saudi Arabia and the United Arab Emirates, Mohammed bin Salman and Mohammed bin Zayed, quickly discovered that copying China’s model of economic growth while tightening political control was easier said than done. They realised that rewriting social contracts funded by oil wealth was more difficult because Gulf Arabs had far more to lose than the average Chinese. The Gulf states’ social contracts had worked in ways China’s welfare programmes had not. The Gulf’s rentier state’s bargain—surrender of political and social rights for cradle-to-grave welfare—had produced a win-win situation for the longest time.
Moreover, Gulf leaders, struggling with mounting criticism of the Saudi-UAE-led war in Yemen and the fall-out of the killing of journalist Jamal Khashoggi, also lacked the political and economic clout that allowed China to largely silence or marginalise critics of its crackdown on Turkic Muslims in the troubled northwestern province of Xinjiang.
The absence of a welfare-based social contract in China allowed the government to power economic growth, lift millions out of poverty, and provide public goods without forcing ordinary citizens to suffer pain. As a result, China was able to push through with economic reforms without having to worry that reduced welfare benefits would spark a public backlash and potentially threaten the regime.
Three years into Mohammed bin Salman’s Vision 2030 blueprint for diversification of the economy, Saudi businesses and consumers complain that they are feeling the pinch of utility price hikes and a recently introduced five per cent value-added tax with little confidence that the government will stay the course to ensure promised long-term benefit.
The government’s commitment to cutting costs has been further called into question by annual handouts worth billions of dollars since the announcement of the reforms and rewriting of the social contract to cushion the impact of rising costs and quash criticism.
In contrast to China, investment in the Gulf, whether it is domestic or foreign, comes from financial, technology and other services sector, the arms industry or governments. It is focused on services, infrastructure or enhancing the state’s capacities rather than on manufacturing, industrial development and the nurturing of private sector.
With the exception of national oil companies, some state-run airlines and petrochemical companies, the bulk of Gulf investment is portfolios managed by sovereign wealth funds, trophies or investment designed to enhance a country’s prestige and soft power.
By contrast, Asian economies such as China and India have used investment fight poverty, foster a substantial middle class, and create an industrial base. To be sure, with small populations, Gulf states are more likely to ensure sustainability in services and oil and gas derivatives rather than in manufacturing and industry.
China’s $1 trillion Belt and Road initiative may be the Asian exception that would come closest to some of the Gulf’s soft-power investments. Yet, the BRI, designed to alleviate domestic overcapacity by state-owned firms that are not beholden to shareholders’ short-term demands and/or geo-political gain, contributes to China’s domestic growth.
Asian nations have been able to manage investors’ expectations in an environment of relative political stability. By contrast, Saudi Arabia damaged confidence in its ability to diversify its oil-based economy when after repeated delays it suspended plans to list five per cent of its national oil company, Saudi Arabian Oil Company, or Aramco, in what would have been the world’s largest initial public offering.
To be sure, China is no less autocratic than the Gulf states, while Hindu nationalism in India fits a global trend towards civilisationalism, populism and illiberal democracy. What differentiates much of Asia from the Gulf and accounts for its economic success are policies that ensure a relatively stable environment. These policies are focused on social and economic enhancement rather than primarily on regime survival. That may be Asia’s lesson for Gulf rulers.
Author’s note: first published in Firstpost
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