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Double-edged sword: Opinion poll shows Trump’s Iran policy risks

Dr. James M. Dorsey

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US President Donald J. Trump’s inclination to withdraw from a three-year old international agreement that curbs Iran’s nuclear program is likely to strengthen the country’s hardliners even if the withdrawal would put responsibility for mounting economic and social discontent squarely on the shoulder of President Hassan Rouhani’s government.

That is the conclusion from a public opinion poll that shows widespread support for Iran’s nuclear and missile programs, deep distrust of Mr. Trump and the United States, and rising criticism of a government that has failed to raise standards of living, get management of the economy right, and fight corruption.

Iran scholar Esfandyar Batmanghelidj suggested that, taken together, responses in the poll to the nuclear issue and the economy revealed the “economic roots of a new-anti-Americanism” in one of the few Middle Eastern countries where public perceptions of the United States until the rise of Mr. Trump had been largely positive. Tehran and Tel Aviv were the only two major Middle Eastern cities that reacted to the 9/11 attacks in 2001 in New York and Washington with pro-American demonstrations.

Mr. Batmanghelidj said anti-Americanism was increasing because of perceptions that the Trump administration had failed to fulfil its obligations under the 2015 nuclear agreement negotiated with Iran by the United States, the European Union, Russia, China, Britain, France and Germany. “The very idea of diplomacy is being defeated,” Mr. Batmanghelidj said.

More than 80 percent of those surveyed concluded that relations with the US had not improved as a result of the agreement, a stark increase from the 55.7 percent polled in June 2016. 69.2 percent described Mr. Trump as completely hostile towards Iran as compared to 49.6 percent in December 2016.

Some 60 percent asserted that the US had not lifted all the sanctions it was obliged to wave under the agreement, up from 24.5 percent in June 2016. In perhaps one of the more startling responses, the number of Iranians who had an unfavourable or somewhat unfavourable view of Americans rose from 45 percent in July 2014 to 54.5 percent in January of this year.

Three quarters of those surveyed by IranPoll have soured on the nuclear accord. Despite approval of the agreement dropping only 12 points from 87 percent in 2009 to 75.3 percent in January, the poll suggested that a significant majority favoured a hard line on nuclear issues although support for military applications at a mere 1.9 percent was miniscule.

Support for the nuclear accord dropped from 76.5 percent in 2015 to 55.1 percent in January, indicating mounting disillusionment because of the agreement’s failure to produce tangible economic benefits for a majority of the population. That perception was evident in the fact that the sense of lack of economic benefit remained static with 73.8 percent saying in 2016 that they had seen no upside and 74.8 percent expressing a similar sentiment in January.

The 103-question poll raises the question of how the jellying of Iranian foreign, defense, and economic policies will play out. The poll suggests that the public is likely to rally around the Iranian government in support of its refusal to bow to Mr. Trump’s demand for a renegotiation of the nuclear accord.

The question whether the government can address economic and social grievances that recently erupted in widespread anti-government protest is likely to influence attitudes towards the United States as well as the EU that has yet to put flesh on its skeleton of opposition to US tinkering with the nuclear accord.

The EU has so far refrained from putting legal protections in place to protect European companies that invest in Iran against US secondary sanctions should Washington decide to withdraw from the nuclear accord.

Iranian government officials insist that they have heard the complaints expressed in the recent protests. “Growth has not been inclusive,” admits Ali Taiebnia, Mr. Rouhani’s senior economic advisor. Mr. Taiebnia added that “those in charge have heard the message.”

Discussing the Iranian economy, Mr. Taiebnia projected signals of potential change as routine rather than as a response to the protests. He described efforts to reduce the role of the military and the Revolutionary Guards in the economy except for construction as a policy that was being developed for the past three years. Businesses associated with the Guards are believed to account for 15 percent of Iran’s gross domestic product (GDP).

Iranian Supreme Leader Ayatollah Ali Khamenei appeared last month in the wake of the protests to put his weight for the first time publicly behind the initiative.

Mr. Taiebnia said an initial study had concluded that “the role of the military in the economy has been exaggerated,” but conceded that a commission had decided that it (the armed forces and the Guards) should withdraw from the services, finance and manufacturing” sectors.

Mr. Taiebnia appeared to downplay this week’s rejection by parliament of the government budget that Mr. Rouhani presented in December on the eve of the protests in a speech in which he focused on corruption. “It’s not important. It will be re-discussed and most probably approved,” Mr. Taiebnia said.

Parliamentarians insisted that the budget needed to address issues such as employment and poverty. The budget’s proposed slashing of cash payments to tens of millions of Iranians was one reason parliament rejected it.

The long and short of the poll’s results is that Iranians are increasingly pessimistic about their economic prospects and that Mr. Trump’s belief that he can force Iran to make concessions on its missile program and support of groups in Lebanon, Syria, Iraq and Yemen and possibly incite Iranians to revolt against their government could backfire by altering public perceptions of the United States and possibly Europe.

A European move to ensure that it can abide by the nuclear agreement even if the Mr. Trump withdraws could focus Iranian anger exclusively on the US. Some 60 percent of those surveyed expressed confidence that Europe would live up to its obligations.

Perhaps the most troubling poll result is the fact that 67.4 percent of those surveyed concluded from the experience of the agreement that “it is not worthwhile for Iran to make concessions, because Iran cannot have confidence that if it makes a concession world powers will honour their side of an agreement.”

In a further warning sign, 67.3 percent favoured Iran seeking to achieve economic self-sufficiency – a policy pursued by former hard-line Iranian President Mahmoud Ahmadinejad. That promises to complicate any future negotiation with Iran.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog, a book with the same title, Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario and three forthcoming books, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africaas well as Creating Frankenstein: The Saudi Export of Ultra-conservatism and China and the Middle East: Venturing into the Maelstrom.

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Economic reform in the Gulf: Who benefits, really?

Dr. James M. Dorsey

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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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Ratcheting up tension: US designation of Revolutionary Guards risks escalation

Dr. James M. Dorsey

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The stakes in the Middle East couldn’t be higher.

Suspicion that the United States’ intent is to change the regime in Tehran rather than its officially stated goal of forcing Iran to curb its ballistic missile program and support for militias in Lebanon, Gaza and Yemen was heightened with this week’s decision to designate the Iranian Revolutionary Guards Corps (IRGC) as a terrorist organization.

It was the first time that the United States labelled a branch of a foreign government as a terrorist entity, particularly one that effects millions of Iranian citizens who get conscripted into the military and for whom the IRGC is an option.

“Today’s unprecedented move to designate the IRGC as a Foreign Terrorist Organization demonstrates our commitment to maximize pressure on the Iranian regime until it ceases using terrorism as tool of statecraft,” tweeted Mr. Trump’s national security adviser, John Bolton..

The designation effectively blocks Mr. Trump’s potential successor from possibly returning to the 2015 international accord that curbed Iran’s nuclear program, complicates any diplomatic effort to resolve differences, and changes the rules of engagement in theatres like Syria where US and Iranian forces operate in close proximity to one another.

“Through this, some US allies are seeking to ensure a US-Iran war or to, at a minimum, trap them in a permanent state of enmity,” said Trita Parsi, head of the National Iranian American Council, referring to Saudi Arabia and Israel.

The designation was likely to embolden advocates in Washington, Saudi Arabia and Israel of a more aggressive covert war against Iran that would seek to stoke unrest among the Islamic republic’s ethnic minorities, including Baloch, Kurds and Iranians of Arab descent.

Both Saudi Arabia and Israel were quick to applaud the US move. Israeli prime minister Benyamin Netanyahu, on the eve of a hard-fought election, claimed credit for the suggestion to designate the IRGC. The official Saudi news agency asserted that the decision translates the Kingdom’s repeated demands to the international community of the necessity of confronting terrorism supported by Iran.”

The risk of an accident or unplanned incident spiralling out of control and leading to military confrontation has also been heightened by Iran’s response, declaring the US military in the greater Middle East a terrorist entity.

The US move and the Iranian response potentially put US military personnel in the Gulf as well as elsewhere in the region in harm’s way.

The designation also ruled out potential tacit US-Iranian cooperation on the ground as occurred in Iraq in the fight against the Islamic State and in Afghanistan. That cooperation inevitably involved the IRGC.

Beyond geopolitical and military risks, the designation increases economic pressure on Iran because the IRGC is not only an army but also a commercial conglomerate with vast interests in construction, engineering and manufacturing.

It remained however unclear to what degree the sanctions would affect the IRGC, which, already heavily sanctioned, does much of its business in cash and through front companies.

US policy, even before the IRGC designation, had already raised the spectre of a nuclear race in the Middle East. The designation increases the chances that Iran will walk away from the nuclear agreement.

Saudi Arabia has however already been putting in place the building blocks for its own nuclear program in anticipation of Iran abandoning the agreement and returning to its full-fledged, pre-2015 enrichment project.

The IRGC goes to the heart of the Iranian regime. It was formed to protect the regime immediately after the 1979 revolution at a time that Iran’s new rulers had reason to distrust the military of the toppled shah.

Some of the shah’s top military and security commanders discussed crushing the revolution at a dinner on new year’s eve 1978, some six weeks before the shah’s regime fell. It was the shah’s refusal to endorse their plan that foiled it. The shah feared that large-scale bloodshed would dim the chances of his exiled son ever returning to Iran as shah.

The IRGC has since developed into a key pillar of Iran’s defense strategy which seeks to counter perceived covert operations by the United States, Saudi Arabia and Israel by supporting proxies across the Middle East.

It is a strategy that has proven both effective and costly, Iran’s failure to address fears that the strategy is an effort to export its revolutions and topple the region’s conservative regimes, particularly in the Gulf, has raised the cost.

To be sure, the Iranian revolution constituted a serious threat to autocratic rulers. It was a popular revolt like those more than 30 years later in the Arab world. The Iranian revolt, however, toppled not only an icon of US power in the Middle East and a monarch, it also created an alternative form of Islamic governance that included a degree of popular sovereignty.

The revolution unleashed a vicious cycle that saw Gulf states fund the eight-year long Iran-Iraq war in the 1980s in which up to one million people died; Saudi Arabia wage a four-decade long US$100 billion campaign to globally propagate ultra-conservative, anti-Shiite, anti-Iranian strands of Islam; repeated attempts to stoke ethnic tensions among Iran’s disgruntled minorities, and Iranian counter measures including support for proxies across the Middle East and violent attacks against Americans, Israelis, Jews and regime opponents in various parts of the world.

“Given that the IRGC is already sanctioned by the US Treasury, this step is both gratuitous and provocative. It will also put countries such as Iraq and Lebanon in even more difficult situations as they have no alternative but to deal with the IRGC. It will strengthen calls by pro-Iran groups in Iraq to expel US troops,” said Barbara Slavin, an Iran expert at the Washington’s Atlantic Council

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Middle Eastern protests challenge debilitating Gulf counterrevolution

Dr. James M. Dorsey

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Much of the Middle East’s recent turmoil stems from internecine Middle Eastern rivalries spilling onto third country battlefields and Saudi and United Arab Emirates-led efforts to roll back the achievements of the 2011 popular Arab revolts and pre-empt further uprisings.

This week’s successful toppling of ailing Algerian president Abdelaziz Bouteflika and months of anti-government demonstrations that have put Sudanese leader Omar al-Bashir on the defensive suggest that the Saudi-UAE effort may be faltering.

So does the record of the past eight years. The counterrevolution’s one success, Egypt, has produced some of the harshest repression in the country’s history.

Saudi and UAE intervention in Yemen has sparked one of the world’s worst humanitarian crises, tarnished the image of the two Gulf states, and provided opportunity to Iran to expand its network of regional proxies.

In a twist of irony, Saudi Arabia, the UAE and Egypt, who justify the Yemen war by pointing to an invitation by the internationally recognized exile government of  president Abd Rabbuh Mansur Hadi, support the rebel forces of Field Marshal Khalifa Haftar in Libya.

Mr. Haftar’s forces are poised to march on Tripoli, the seat of the United Nations-recognized government of Libya, two weeks after the field marshal met with King Salman in Saudi Arabia. The fighting in Libya has turned into a proxy war between Gulf rivals with Qatar supporting the Islamist-dominated Tripoli government.

In Syria, rivals Saudi Arabia, the UAE and Qatar, who exasperated the country’s eight-year long devastating civil war by backing rival rebel forces, are back to square one: the man they wanted to remove from office, president Bashar al-Assad, has gained the upper hand with the support of Russia and Iran.

The protests in Algeria and Sudan suggest that the social, economic and political grievances that fuelled the 2011 protests continue to hover just below the surface in a swath of land that stretches from the Atlantic coast of Africa to the Gulf.

Like in 2011, protests in the Middle East are not isolated incidents but the most dramatic part of a more global wave prompted by a loss of public confidence in leaders and political systems that has sparked anti-government demonstrations in countries as far flung as Zimbabwe and Haiti.

The Algerian and Sudanese protests come on the back of a wave of smaller, political and socio- economic protests since 2011 that suggested that the Middle Eastern counterrevolution amounted to putting a lid on a pot that could boil over at any moment. Protests have erupted in recent years in a host of countries, including Iraq, Morocco, Jordan, Lebanon and Tunisia.

The protests also suggest the fragility of hopes of Middle Eastern autocrats that China’s model of successfully growing the economy, creating jobs and opportunity, and delivering public goods coupled with increased political control and suppression of rights would prove to be a sustainable model in their own backyard.

The fragility of the model is enhanced by the tendency of autocrats to overreach in ways that either distract from their core goals or pursue objectives like the creation of a ‘new man’ that ultimately have failed in countries like Turkey.

Turkey’s Islamist Justice and Development Party (AKP) has been in power for the better part of two decades. Its success suggests that the effort to create a secular New Turk by Mustafa Kemal Ataturk, the visionary who carved modern Turkey out of the ruins of the Ottoman empire almost a century ago, has stumbled.

Egyptian general-turned president Abdel Fattah al-Sisi and Chinese leader Xi Jinping have taken control and civilisationalism to new extremes by seeking not only absolute political power but also the ability to shape culture and dictate personal behaviour.

Mr. Al-Sisi recently ordered his officials to dictate the themes and scripts of Egyptian soap operas, a popular regional staple, particularly during the holy month of Ramadan. A military-linked production company has taken charge of some of Egypt’s biggest and most successful shows.

Film directors have been instructed to focus on shows that praise the military and law enforcement and demonize the Muslim Brotherhood, a group that has been brutally targeted by Mr. Al-Sisi as well as the UAE that together with Saudi Arabia backed his 2013 military coup. The coup toppled Mohammed Morsi, a Brother and Egypt’s first and only democratically elected president.

Mr. Xi’s hopes to promote ‘core socialist values’ such as patriotism, harmony and civility amounts to an effort to counter individualism, materialism and hedonism. The campaign involves blurring piercings and jewellery worn by male pop stars during performances on television and the Internet, obliging soccer players to wear long sleeves to cover their tattoos, and ensuring that women conference hosts raise their necklines and rappers restrict their lyrics to promotion of peace and harmony.

Saudi Arabia has argued that journalist Jamal Khashoggi was killed in the Saudi consulate in Istanbul six months ago by rogue government operatives who are currently standing trial in a process that lacks transparency and has called into question the kingdom’s version of events.

The overreach suggests that Middle Eastern autocrats are unlikely to respond to the protests in Algeria and Sudan any differently than they did in 2011.

Analyst Giorgio Cafiero predicts that in the wake of Mr. Bouteflika’s resignation, Saudi Arabia is likely to support efforts to maintain control by what Algerians call Le Pouvoir (The Power) or the deep state, a cabal of military and security officials and business tycoons, The same is likely to be true for the UAE.

Similarly, Saudi Arabia and the UAE alongside Egypt continue to back Mr. Al-Bashir although he is on the defensive after months of protests that have rocked the East African state.

Whether Algeria’s ancien regime backed by Gulf states is able to retain power may well be dependent on what conclusions protesters draw from the experience of the 2011 revolts.

Like the protesters than, Algerian demonstrators need to decide whether Mr. Bouteflika’s resignation is a sufficient enough success to justify surrender of their street power and return to a structured political process.

Indications are that the protesters have learnt their lesson.

“Algerians are very realistic. This is a beautiful victory, a tangible first step but they know that more has to be done. They are not satisfied entirely … they want all of them to be gone,” said Algeria scholar Dalia Ghanem.

“Algerians are calling for radical change, a change in leadership. They didn’t want Bouteflika, they don’t want Bouteflika’s family, or Bouteflika’s clan — and they don’t want the old guard to stay in power,” Ms. Ghanem added.

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