The Gulf crisis that pits a United Arab Emirates-Saudi-led alliance against Qatar is escalating in discreet but no less worrisome ways that effect major third-party commercial interests and could increase international pressure for a resolution of the dispute.
In a major shift away from Saudi and UAE restraint in attempting to force the international community and multi-nationals from taking sides in the 11-month dispute, prominent financial institutions are being sucked into the dispute that erupted last June when the alliance declared a diplomatic and economic boycott of Qatar.
Executives of JPMorgan and HSBC advised Qatar last month, according to The Wall Street Journal, that they would not be involved in the Gulf state’s $12 billion bond issuance because it could jeopardize their relationship with Saudi Arabia.
The kingdom in April rushed a $11 billion bond sale of its own, its fourth international offering, to ensure that it went to market before Qatar did.
Qatar has responded to efforts to persuade financial institutions to reduce, if not halt dealings with the Gulf state by refusing do business with some Dubai-based bankers and consultants. The Qatari response has forced several Western institutions to do business with the Gulf state through their London offices, according to the Journal.
Some bankers and financial executives have, moreover, reportedly been detained at UAE airports because they had Qatari visas in their passports before ultimately being granted entry into the country.
Saudi Arabia, in an unusual move, took the market by surprise when it launched its bond without embarking on a traditional roadshow to market the offering and sought to complete the transaction in one day. The issuance was oversubscribed almost five times.
The Saudi attempt to undermine Qatar failed given that the Gulf state’s sale was similarly oversubscribed.
“This reflects the strength of the Qatari economy and the confidence of international investors,” a Qatari official gloated.
HSBC was one of the Saudi bond’s global coordinators while JP Morgan was one its lead managers. The two banks helped arrange Qatar’s last sale in 2016 of a $9 billion bond. Neither was involved in the most recent Qatari sale which was arranged among others by Deutsche Bank, Barclays and Credit Suisse, banks in which Qatar has significant stakes.
In January, Doha Bank, Qatar’s fifth-biggest lender, was forced to reduce the size of a two-year, $575 million bank loan that it had raised in December 2015 to $400 million, when it sought a one-year extension of the facility because Chinese, Hong Kong and Japanese banks opted not to participate.
The financial reverberations of the Gulf crisis contrast with failed attempts by the UAE-Saudi alliance in the immediate aftermath of the declaration of the boycott to strongarm African nations into supporting their punitive measures against Qatar.
Omar Ghobash, the UAE’s ambassador to Russia, suggested at the time that the anti-Qatar alliance could “impose conditions on our own trading partners and say you want to work with us then you have got to make a commercial choice.”
The quiet tit-for-tat between Qatar and international banks suggests that Saudi Arabia and the UAE, frustrated that Doha has proven to be resilient enough to resist surrendering to the alliance’s demands, have decided to step up the pressure.
The UAE and Saudi Arabia accuse Qatar of supporting militants and political violence, maintaining close ties with Iran, and interfering in the domestic affairs of its neighbours – accusations Qatar denies. Accepting the alliance’s demands would effectively amount to Qatar compromising its sovereignty and ability to chart its own, independent course.
The Wall Street Journal’s disclosure of the tit-for-tat with financial institutions comes days after newly appointed US Secretary of State Mike Pompeo on his first overseas trip in his new job told Saudi leaders in Riyadh that “enough is enough” and that the Gulf crisis must be brought to an end.
Stopping the rot in its tracks and averting the potential impact of the crisis on multi-nationals is certainly not the only reason for Mr. Pompeo’s stepped-up pressure on Saudi Arabia and the UAE. The United States wants to see a united front among its Middle Eastern allies as President Donald J. Trump gears up for a possible withdrawal on May 12 from the 2015 international agreement that curbs Iran’s nuclear program.
Nevertheless, forcing financial institutions to take sides in the Gulf crisis challenges Mr. Trump’s America First approach to policy and the interests of major US corporations – a move the president is unlikely to view kindly.
If financial institutions are continuously forced to take sides, Saudi Arabia and the UAE could decide to target other economic sectors as well as Asian nations that depend on the export of labour to the Gulf.
Countries like Bangladesh and Pakistan, two of the most populous Muslim states, as well as India, home to the world’s fourth largest Muslim population, fear that Saudi Arabia could threaten to expel millions of migrant workers and expatriates in a bid to force them to join the boycott of Qatar.
Saudi Arabia has a history of using as leverage migrant workers, whose remittances constitute the backbone of foreign currency liquidity of many supplier countries and whose Gulf jobs reduce pressure on domestic labour markets.
Thousands of foreign workers in the kingdom have in recent years already lost their jobs as a result of Crown Prince Mohammed bin Salman’s efforts to replace them with Saudi nationals and financial difficulties encountered by major corporations like the Saudi Bin Laden Group and Saudi Oger.
Speaking to the BBC last June, former Bangladesh ambassador to Saudi Arabia Abdul Momen Chowdhury warned that “nothing is impossible” in how the kingdom might seek to build support for its campaign against Qatar. “If anyone obstructs what they want or does not agree with their opinions, they are never hesitant to act.” Mr. Chowdhury said.
Potential Saudi and UAE efforts to increase pressure on Qatar would reflect the fact that the two countries have boxed themselves into a corner by refusing to negotiate with the Gulf state unless it first accepts their demands.
The Gulf stalemate is reinforced by the fact that the international community has by and large refused to back the Saudi-UAE position and repeatedly called for a negotiated solution.
So far, the tit-for-tat with financial institutions has not forced any of the banks and financial majors to close offices on one side or the other of the Gulf divide.
Nonetheless, in a sign of the times, JP Morgan remains the region’s top merger and acquisition advisor, but no longer ranks among the top five banks in Qatar in terms of revenue. For the first time in nearly a decade, it doesn’t even rank among the Gulf state’s top 10.
Said a private equity firm executive in the Gulf: “If this continues, international banks will increasingly be forced to choose sides. That would take the Gulf crisis to a new and dangerous level.”
Iran unveils new negotiation strategy
While the West is pressuring Iran for a return to the Vienna nuclear talks, the top Iranian diplomat unveiled a new strategy on the talks that could reset the whole negotiation process.
The Iranian parliament held a closed meeting on Sunday at which Iranian Foreign Minister Hossein Amir Abdollahian briefed the lawmakers on a variety of pressing issues including the situation around the stalled nuclear talks between Iran and world powers over reviving the 2015 nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA).
The Iranian foreign ministry didn’t give any details about the session, but some lawmakers offered an important glimpse into the assessment Abdollahian gave to the parliament.
According to these lawmakers, the Iranian foreign ministry addressed many issues ranging from tensions with Azerbaijan to the latest developments in Iranian-Western relations especially with regard to the JCPOA.
On Azerbaijan, Abdollahian has warned Azerbaijani President Ilham Aliyev against falling into the trap set by Israel, according to Alireza Salimi, a member of the Iranian Parliament’s presiding board who attended the meeting. Salimi also said that the Iranian foreign minister urged Aliyev to not implicate himself in the “Americans’ complexed scheme.”
In addition to Azerbaijan, Abdollahian also addressed the current state of play between Iran and the West regarding the JCPOA.
“Regarding the nuclear talks, the foreign minister explicitly stated that the policy of the Islamic Republic is action for action, and that the Americans must show goodwill and honesty,” Salimi told Fars News on Sunday.
The remarks were in line with Iran’s oft-repeated stance on the JCPOA negotiations. What’s new is that the foreign minister determined Iran’s agenda for talks after they resume.
Salimi quoted Abdollahian as underlining that the United States “must certainly take serious action before the negotiations.”
In addition, the Iranian foreign minister said that Tehran intends to negotiate over what happened since former U.S. President Donald Trump withdrew the U.S. from the JCPOA, not other issues.
By expanding the scope of negotiations, Abdollahian is highly likely to strike a raw nerve in the West. His emphasis on the need to address the developments ensuing the U.S. withdrawal from the JCPOA in May 2018 could signal that the new government of President Ayatollah Seyed Ebrahim Raisi is not going to pick up where the previous government left.
This has been a major concern in European diplomatic circles in the wake of the change of administrations in Iran. In fact, the Europeans and the Biden administration have been, and continue to be, worried about two things in the aftermath of Ayatollah Raisi taking the reins in Tehran; one is he refusing to accept the progress made during six rounds of talks under his predecessor Hassan Rouhani. Second, the possibility that the new government of Ayatollah Raisi would refuse to return to Vienna within a certain period of time.
With Abdollahian speaking of negotiation over developments since Trump’s withdrawal, it seems that the Europeans will have to pray that their concerns would not come true.
Of course, the Iranian foreign ministry has not yet announced that how it would deal with a resumed negotiation. But the European are obviously concerned. Before his recent visit to Tehran to encourage it into returning to Vienna, Deputy Director of the EU Action Service Enrique Mora underlined the need to prick up talks where they left in June, when the last round of nuclear talks was concluded with no agreement.
“Travelling to Tehran where I will meet my counterpart at a critical point in time. As coordinator of the JCPOA, I will raise the urgency to resume #JCPOA negotiations in Vienna. Crucial to pick up talks from where we left last June to continue diplomatic work,” Mora said on Twitter.
Mora failed to obtain a solid commitment from his interlocutors in Tehran on a specific date to resume the Vienna talk, though Iran told him that it will continue talks with the European Union in the next two weeks.
Source: Tehran Times
Shaping US Middle East policy amidst failing states, failed democratization and increased activism
The future of US engagement in the Middle East hangs in the balance.
Two decades of forever war in Afghanistan and continued military engagement in Iraq and elsewhere in the region have prompted debate about what constitutes a US interest in the Middle East. China, and to a lesser degree Russia, loom large in the debate as America’s foremost strategic and geopolitical challenges.
Questions about US interests have also sparked discussion about whether the United States can best achieve its objectives by continued focus on security and military options or whether a greater emphasis on political, diplomatic, economic, and civil society tools may be a more productive approach.
The debate is coloured by a pendulum that swings from one extreme to the other. President Joe Biden has disavowed the notion of nation-building that increasingly framed the United States’ post-9/11 intervention in Afghanistan.
There is no doubt that the top-down nation-building approach in Afghanistan was not the way to go about things. It rested on policymaking that was informed by misleading and deceitful reporting by US military and political authorities and enabled a corrupt environment for both Afghans and Americans.
The lesson from Afghanistan may be that nation-building (to use a term that has become tainted for lack of a better word) has to be a process that is owned by the beneficiaries themselves while supported by external players from afar.
Potentially adopting that posture could help the Biden administration narrow the gap between its human rights rhetoric and its hard-nosed, less values-driven definition of US interests and foreign policy.
A cursory glance at recent headlines tells a tale of failed governance and policies, hollowed-out democracies that were fragile to begin with, legitimisation of brutality, fabrics of society being ripped apart, and an international community that grapples with how to pick up the pieces.
Boiled down to its essence, the story is the same whether it’s how to provide humanitarian aid to Afghanistan without recognising or empowering the Taliban or efforts to halt Lebanon’s economic and social collapse and descent into renewed chaos and civil war without throwing a lifeline to a discredited and corrupt elite.
Attempts to tackle immediate problems in Lebanon and Afghanistan by working through NGOs might be a viable bottom-up approach to the discredited top-down method.
If successful, it could provide a way of strengthening the voice of recent mass protests in Lebanon and Iraq that transcended the sectarianism that underlies their failed and flawed political structures. It would also give them ownership of efforts to build more open, pluralistic, and cohesive societies, a demand that framed the protests. Finally, it could also allow democracy to regain ground lost by failing to provide tangible progress.
This week’s sectarian fighting along the Green Line that separated Christian East from the Muslim West in Beirut during Lebanon’s civil war highlighted the risk of those voices being drowned out.
Yet, they reverberated loud and clear in the results of recent Iraqi parliamentary elections, even if a majority of eligible voters refrained from going to the polls.
“We never got the democracy we were promised, and were instead left with a grossly incompetent, highly corrupt and hyper-violent monster masquerading as a democracy and traumatising a generation,” commented Iraqi Middle East counterterrorism and security scholar Tallha Abdulrazaq who voted only once in his life in Iraq. That was in the first election held in 2005 after the 2003 US invasion. “I have not voted in another Iraqi election since.”
Mr. Abdulrazaq’s disappointment is part and parcel of the larger issues of nation-building, democracy promotion and provision of humanitarian aid that inevitably will shape the future US role in the Middle East in a world that is likely to be bi-or multi-polar.
Former US National Security Council and State Department official Martin Indyk argued in a recent essay adapted from a forthcoming book on Henry Kissinger’s Middle East diplomacy that the US policy should aim “to shape an American-supported regional order in which the United States is no longer the dominant player, even as it remains the most influential.”
Mr. Indyk reasoned that support for Israel and America’s Sunni Arab allies would be at the core of that policy. While in a world of realpolitik the United States may have few alternatives, the question is how alignment with autocracies and illiberal democracies would enable the United States to support a bottom-up process of social and political transition that goes beyond lip service.
That question is particularly relevant given that the Middle East is entering its second decade of defiance and dissent that demands answers to grievances that were not expressed in Mr. Kissinger’s time, at least not forcefully.
Mr. Kissinger was focused on regional balances of power and the legitimisation of a US-dominated order. “It was order, not peace, that Kissinger pursued because he believed that peace was neither an achievable nor even a desirable objective in the Middle East,” Mr. Indyk said, referring to the Israeli-Palestinian conflict.
Mr. Indyk noted that in Mr. Kissinger’s mind the rules of a US-dominated order “would be respected only if they provided a sufficient sense of justice to a sufficient number of states. It did not require the satisfaction of all grievances… ‘just an absence of the grievances that would motivate an effort to overthrow the order’.”
The popular Arab revolts of 2011 that toppled the leaders of Egypt, Tunisia, Libya, and Yemen, even if their achievements were subsequently rolled back, and the mass protests of 2019 and 2020 that forced leaders of Sudan, Algeria, Iraq, and Lebanon to resign, but failed to fundamentally alter political and economic structures, are evidence that there is today a will to overthrow the order.
In his essay, Mr. Indyk acknowledges the fact that “across the region, people are crying out for accountable governments” but argues that “the United States cannot hope to meet those demands” even if “it cannot ignore them, either.”
Mr. Indyk may be right. Yet, the United States, with Middle East policy at an inflexion point, cannot ignore the fact that the failure to address popular grievances contributed significantly to the rise of violent Islamic militancy and ever more repressive and illiberal states in a region with a significant youth bulge that is no longer willing to remain passive and /or silent.
Pointing to the 600 Iraqi protesters that have been killed by security forces and pro-Iranian militias, Mr. Abdulrazaq noted in an earlier Al Jazeera op-ed that protesters were “adopting novel means of keeping their identities away from the prying eyes of security forces and powerful Shia militias” such as blockchain technology and decentralised virtual private networks.
“Unless they shoot down…internet-providing satellites, they will never be able to silence our hopes for democracy and accountability again. That is our dream,” Mr. Abdulrazzaq quoted Srinivas Baride, the chief technology officer of a decentralised virtual network favoured by Iraqi protesters, as saying.
Safar Barlek of the 21st Century: Erdogan the New Caliph
Since the American’s withdrawal from Afghanistan, it became clear that everyone is holding his breath. That is exactly what Recep Tayyip Erdogan is doing these days. Ten years have passed since his war on Syria; however, he has, so far, reached zero accomplishments towards his 2023 dreams. As a matter of fact, Erdogan is in the worst position ever. His dream of becoming the new Ottoman Caliph began to fade away.
If we want to understand what is going on in his mind, it is crucial to follow Gas and Oil pipelines: He actively participated in the war on Syria because Syrian President Bashar al-Assad refused to betray his Russian and Iranian friends by allowing the Qatari gas pipelines to pass through Syria then Turkey to reach Europe. Such a step would have empowered Turkey, opened a wide door for it to enter the gas trade industry, and would become the American’s firmed grip around the Iranian and Russian necks.
He saw the opportunity getting closer as the war on Syria was announced. He imagined himself as the main player with the two strongest powers globally: the U.S. and Europe. Hence, his chance to fulfil the 1940s Turkish- American plan to occupy northern Syria, mainly Aleppo and Idlib, where he could continue all the way to al-Mussel in Iraq, during the chaos of the futile war on ISIS seemed to be reachable. By reaching his aim, Erdogan will be able to open a corridor for the Qatari gas pipelines and realize the dream of retrieving the legacy of the old Turkish Petroleum Company, which was seized to exist after the collapse of the Ottoman Empire in 1925.
Consequently, Erdogan announced his desire to establish a 15 km deep buffer zone along the Syrian borders and inside the Syrian territory. This is in fact, an occupation declaration, which will definitely enable him to reach the Syrian oil and gas fields. He even tried to offer the Russians a compromise that he would like to share managing these fields with them after Donald Trump’s announcement of withdrawing the American troops from Syria in 2018.
It was clear since the year 2019, after attacking the Kurds in east-north Syria, that he has lost the Americans and European support in the region. Especially after inking the Russian missiles S400 deal against the American’s will. Then he supported Azerbaijan against Armenia, threatening both Iranian and Russian security.
The situation was repelled with Iran when he recited a poem on the 11th of December 2020, which could have provoked the feelings of the Azeris and incited them to secede from Iran. On the 28th of February 2021, he even accused Iran of harboring the Kurdistan Workers’ Party, which Turkey considers a terrorist organization.
Now the situation is escalating again. A few days ago, the Iranian Army’s Ground Force launched the “Fatih Khyber” maneuvers in the northwest of the country near the border with Azerbaijan, with the participation of several Armored Brigade, 11th Artillery Group, Drones group, and 433rd Military Engineering Group, with the support of airborne helicopters. A major maneuver that indicates there is an escalation between Iran and Azerbaijan, which is taking place under Turkish auspices. The escalation is an attempt to threaten Iran’s security from the north.
When Dr. Mohsen Fakhrizadeh, the Iranian nuclear scientist, was assassinated at the end of last year, the American newspaper New York Times described the deed as “the most brilliant work of the Mossad”. At that time, many resources revealed that the executors of the operation passed to Iran through Azerbaijan and were situated in Turkey for a while before moving. And now Iran has great concerns because of Azerbaijan hostess of active Israeli and American intelligence members.
As Iran is going now to another stage of nuclear talks with G5+1, it is an opportunity for the American and Turkish interests to meet again, as Erdogan is pushing towards achieving a victory in the region, and the Americans are trying to create trouble to distract it. We know what the Americans want, but what matters here is what Erdogan wants.
Erdogan wants to be a bigger participant in the Azeri oil industry. He wants to push Iran into aiding him to give him more space in the Syrian lands. He wants to be given a chance to save face and be granted some kind of victory in his “War on Syria”. It is his wars that he is leading in Libya, Sudan, the Mediterranean Sea, and now in Afghanistan and Azerbaijan. Erdogan was preparing himself to become the first of the new coming rein of the new Ottoman Sultanate in 2023.
2023 is the date for two important occasions; the first is the Turkish presidential elections. And the second is the end of the Treaty of Lausanne 1923. Erdogan had high hopes that he would be able to accomplish a lot before the designated date. In involving Turkey in every trouble in the Arab country since the “Arab Spring” had begun. He has an agenda in each of them, from Syria to Libya, to the Mediterranean Sea, to where he seeks to preserve the Turkish right for expansion.
Erdogan believed in building double alliances between Russia and Iran from one side and the United States through Turkey’s presence in NATO from the other, he can manipulate everyone to achieve his goal in Syria and secure the Buffer Zone. He started a policy of Turkification in northern Syria, which is against international law in occupied regions and countries. In addition, as he is still politically maneuvering to reach this goal, he is becoming more like a bull chasing a red carpet. He is backstabbing everyone, even his allies in Nusra.
Erdogan, the paranoid, has used every possible method to rally aggregations against local governments and authorities in each country as he built his alliances. In Syria, he played on sectarian differences to rally Sunnis and, in particular, on Muslim Brotherhood groups to build alliances against the current Syrian government. He imported terrorists from al-Nusra, armed them, and ideologically manipulated terrorists from Tajikistan, Uzbekistan, Kyrgyzstan, and the Chinese Xinjiang, into fighting in Syria in the name of Islam against the Alawites “regime”. He represented himself as the protector of Sunnis. In order to justify bombarding the Kurds, he was playing on nationalistic feelings.
In Libya, he played on empowering the Muslim Brotherhoods against other atheist groups, as he rates them. He empowered the al-Wifaq government along with the Americans to pave the way to dividing Libya, where the dirty international game almost tore the country apart using terrorist groups financially backed by Saudi Arabia, the United Arab Emirates, and Turkey, i.e. Qatar.
In Lebanon, he presented himself as the protector of the injustice Sunnis. Turkish intelligence paid around four million dollars to regroup Sunnis in Said and Tripoli. The same thing was going on with Hamas in Palestine in the name of the freedom of the Palestinians and their fight against Israel. In the Arab countries, Erdogan worked hard to be designated as the new Muslim leader and was very careful not to be perceived as a Turk but as a Muslim. And now the same game is going in Azerbaijan.
Erdogan’s interference in Azerbaijan does not fall out of the American expected Turkish role. A few days ago, a congress member praised the important role Turkey is playing within NATO. It is not a language of reconciliation; it is a language of playing on Erdogan’s ego. Therefore, it is only fair to question the Turkish role in Azerbaijan, in particular to the relation between the two mentioned countries and Israel.
Iran has been dealing with the two countries with tolerance, as neighboring countries, particularly Turkey, who is playing in this case on the nationalistic feelings of the Azeris in Iran to start trouble, in the least expression. It is clear, if the situation escalates with Azerbaijan, Iran would be walking through land mines. Therefore, it needs to be carefully leading its diplomatic negotiations. On the other hand, Iran knows, but it needs to acknowledge that as long as Turkey occupies one meter in northern Syrian, the region will never know peace and security. The first step to get the Americans out of Iraq and Syria will be to cut Erdogan’s feet in Syria, once and for all.
In leading his quest for victory, Erdogan moved the terrorist around the region. Now he is filling Azerbaijan with these mercenary terrorists from the Arab region and center of Asia, just like the Ottoman when they dragged the compulsorily recruited soldiers from their villages and houses from all over the Arab countries to fight their war in the Baltic region. A dream that needs to put an end to it. The Syrians believe that it ends with ending the Turkish occupation in Idlib. However, it is important that their friends believe that too.
*The Safar Barlek was the mobilization effected by the late Ottoman Empire during the Second Balkan War of 1913 and World War I from 1914 to 1918, which involved the forced conscription of Lebanese, Palestinian, Syrian, and Kurdish men to fight on its behalf.
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