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.”
NATO and the puzzle of a nuclear deal with Iran
A meeting of NATO (North Atlantic Treaty Organization) Heads of State and Government was held on Wednesday 11 and Thursday 12 July 2018 in Brussels, Belgium. NATO leaders met in Brussels amidst a terse environment that threatens to further weaken the post-war order.
This year’s meeting came at a tense time for transatlantic relations since the US president is set to sit down one-on-one with Russian president Vladimir Putin on May 16 in Helsinki. One of the topics the US president sought to discuss with his Western counterparts in Brussels was “the nuclear deal with Iran” and its fate. Regarding this controversial issue Time wrote:
“After ripping up the Iran nuclear deal in May, the Trump Administration is fanning out across the globe to rally support for a return to economy-crippling sanctions against Tehran.”
It continues: “The effort comes ahead of President Donald Trump’s trip next week to Europe, where he is expected to pressure leaders into joining the far-reaching campaign to handcuff major aspects of Iran’s economy, including driving oil exports to zero. If European allies don’t join, Trump has threatened secondary sanctions on any company that does business with Tehran.”
According to the Time and other Western sources, Donald Trump intends to press NATO leaders over the Joint Comprehensive Plan of Action (JCPOA), and “The president hopes his bare-knuckled approach will coerce European leaders to unite behind him, even as they publicly oppose a return to sanctions and scamper to salvage the existing nuclear deal without American participation. This is while the White House keeps to press its European allies for increasing the military and defense budget (to 2% of their GDP).
While the transatlantic tensions are raising day by day due to the imposition of tariffs on steel and aluminum imported from Europe, what meaning can negotiations on the JCPOA imply? Does Trump intend to make a deal with his European partners in this regard? Do NATO’s European members welcome the integration of the JCPOA amid their conflicts with the US?
The British Prime Minister Theresa May has recently asked other European countries to remain silent against Trump’s actions in imposing tariffs on imported goods from Europe, and not to seek retaliatory measures. She also asked European authorities to negotiate with the US president on the JCPOA. Indeed, what’s going on among NATO members?
The truth is that in near future, the JCPOA will turn to the Europe’s leverage for making deals with the United States in security grounds, an issue witch its signs we could well see in the Brussels summit. It shouldn’t be forgotten that in its calculations, the EU is still regarding itself as dependent to the United States. Those like Theresa May, Emmanuel Macron and Angela Merkel are adjusting their policies in the international system based on their security dependence on the United States. It might be possible that the European officials agree on “restraining Trump”, but that’s all, and we can’t expect them to go further as to fulfil their obligations in this regard. The EU would never confront the US seriously, since “resisting against the White House” is in no way defined in Europe’s strategies and tactics.
In the course of the G7 recent meeting in Canada, Donald Trump discussed various subjects with Angela Merkel, the German Chancellor, including Iran nuclear deal, tariffs on steel and aluminum imported from Europe, and the increase of NATO defense budget. But these talks resulted in the intensified disagreements among EU member states and Trump. The tensions were so high that the meeting ended with no final statement. Now the US president is pursuing the same approach I dealing with NATO states.
Trump and the European countries both regard the tensions raised in the international system as a “single package”. In this equation, Trump asks the European authorities to cease their support for the JCPOA and the continuation of the nuclear deal in exchange for a decrease in the US economic and security pressures. It should be noted that one of the main reasons for the European leaders’ refusal of offering a conclusive, detailed and effective package to Iran regarding the JCPOA was their secret negotiations with the American officials. Since the U.S. withdrawal from the nuclear deal, Mike Pompeo the American Secretary of State had been constantly in contact with the European troika’s foreign ministers, and announced them the exact positions and policies of the US government.
In the course of the NATO summit, we witnessed the continuation of the Europe’s paradoxical game playing towards the JCPOA. It shouldn’t be forgotten that the EU’s main strategy towards Iran and the JCPOA, is to make us remain as part of the nuclear deal as long as possible, and without benefiting from its advantages, so that the influence of the US sanctions would be multiplied. The offering of the EU’s unacceptable and useless package of proposals is also to be analyzed in the same vein; a weak package which is resulted from the special relations between the US and Europe.
First published in our partner MNA
God’s Grace: Reichstag Fire and July 15 Military Coup
“By the grace of God!” Some rulers use the cry to explain why certain events happen and why they play out as they do. They will argue that God, in allowing the events to happen, has bestowed his grace upon the ruler. Two rulers and two events—the Reichstag fire in Germany on February 27, 1933,and the military coup attempt in Turkey on July 15, 2016—illustrate the devastating consequences this twisted logic can have on the lives of ordinary people.When Adolph Hitler arrived at the scene, he told German Chancellor Franz von Pape, “This is a God-given signal” to crush Communists (and later opponents). Immediately after the failed military coup, Recep Tayyip Erdogan announced that the event was “a gift from God” and justification for Erdogan to start cleansing the military (and later purging opponents).
The similarities between the two events are striking in terms of beneficiaries, consequences and suspicions about the rulers’ true intentions going forward. Soon after the fire, Hitler started to consolidate his powers in the name of protecting the state’s security and democracy. To do so, Hitlersuspended civil liberties and shut the door on the rights and freedom of the country’s citizens. The fire in the heart of the countrywas used to justify the notion that the country was in a great danger. With decrees, Hitler purged his opponents, even though there was only one person considered to be responsiblefor the fire. Erdogan followed a similar path when he has declared a state of emergency after the coup attempt and consolidated his powers with radical changes in the country’s political and legal systems. With decrees, Erdogan purged hundreds of thousands of people under the guise of protecting the country’s security and democracy—even though soldiers who allegedly were involved in the coup attempt that night already had been into custody.In the political arena, Hitler increased the number of votes he received in the election that took place a week after the fire. Similarly, public support for Erdogan increased after the coup attempt. History does, indeed, repeat itself. These are two of many examples that could have been cited.
It may not be possible to know for sure who staged and orchestrated the Reichstag fire orthe military coup attempt; however, it is clear that the rulers’ purported motives are suspicious and their explanations filled with inconsistencies, given the many controversies arising from both events.The Reichstag firehas been discussed by scholars and historians who concluded that Hitler and his team—either directly or indirectly—helped to instigate the fire. Indeed, the arsonist responsible for the fire was pardoned years later. The military coup in Turkey wasa terrorizing and wicked deed against humanity and democracy, and the persons responsible must be identified and punished based on the rule of law and democratic values. It is, however, a Herculean task. Too many loopholes and controversies about the coup attempt need to be clarified. Erdogan should provide evidence-based, honest and objective explanations to remove the suspicions surrounding the coup attempt. Many answers are needed. For example,why did Erdogan refuse to answer questions from the major opposition party (the Republican People’s Party, or CHP) about the coup? Why has the investigation case report and the report of the parliament’s investigation committee deemed inappropriate and unsatisfactory even by some members of the committee? More important, why has an international committee not been allowed to investigate the case? Questions such as these highlight the many mysteries and suspicions that still surround the event two years after it occurred.
An independent international investigation committee should be established by the United Nations to examine the coup attempt and eliminate possible suspicions about Erdogan and his governing team. The committee also should determine whether thousands of people were responsible for organizing the coup attempt, as the government alleges, and clarify the following: whether some U.S. citizens, such as Andrew Brunson, who is still in jail, were among the primary plotters of the coup; whether some other U.S. citizens for whom bounties were offered were behind the coup attempt; and whether the United States was behind the coup attempt, as Turkish politicians and government officials claim—even though the United States has denied any involvement in the event.
Another independent international investigation committee should be established by the U.N.(or some other internationally accepted institution)to investigate the aftermath of the coup. Violations of internationally accepted human rights (as reported by credible human rights organizations such as Amnesty International and Human Rights Watch) that have been committed by government security and intelligence officials since the coup attempt should be investigated. The committee also should also determine whether persons victimized in any way (such as imprisonment, job loss, inhumane treatment, and deprival of constitutional rights and freedoms)were based on evidence or resulted from the arbitrary application punishment. A final task of the committee should be to investigate allegations of abductions, extrajudicial executions and torture by government security and intelligence agencies. As John Dalhuisen,Amnesty International’s Europe director, has said, “It is absolutely imperative that the Turkish authorities halt these abhorrent practices and allow international monitors to visit all these detainees in the places they are being held.”
An independent and objective domestic committee that consists of members from every political party in the country—regardless of the parties’ percentage of the vote among constituents—should be established to investigate the same issues the two international committees need to review. Care must be taken to ensure that the members of this domestic committee—unlike those serving on the committee that was formed after the coup attempt—can maintain their objectivity and are aware of their responsibilities. The committee should be transparent and its actions and discussions observed and by international representatives of the U.N., the Organization for Security and Co-operation in Europe, the European Union, and individual countries and/or journalists.
Finally, the European Court of Human Rights, an internationally accepted high court of which Turkey is a member,should determine for itself—rather than rely solely on the response from government officials—whether the country’s domestic legal and judicial system can be accessed openly and freely by all citizens and the attorneys representing them in legal matters.
It is only through these independent international and domestic investigations that the truth about the failed coup attempt can come to light.
Ghassan Kanafani, the Palestinian Pioneer Author of Resistance Literature
The eighth of July marks the 46th martyrdom anniversary of Ghassan Kanafani, who was assassinated by the Zionist Intelligence; Mossad, along with his 17-year-old niece Lamees. Days before their martyrdom, Lamees had asked Kanafani to diminish his activitism and to concentrate on his writings. He answered her,” I write well because I believe in a cause, in principles. The day I leave these principles, my stories will become purposeless. If I were to leave behind my principles, you yourself would not respect me.”
Kanafani was born in 1936, in Palestine, to a father who was a national activist in the resistance against the British colonialism. After the 1948 Zionist occupation, his family sought refuge to Syria, when he was 12-year-old. In the refuge camps, Kanafani wrote most of his novels which highlights the sufferings that the Palestinians endure in the diaspora. He won multiple awards for his works both during his life and posthumously. For instance, in “Umm Saad,” Kanafani’s protagonist is a symbol of the Palestinian women in the refugee camps.
Kanafani was inspired by Jamal Abd al-Nasser’s ideas of national independence and defiance of imperialism. Due to the decline of Nasserism after the 1961 failure to consolidate Egypt and Syria under a unified United Arab Republic, the ascendancy of imperialism and Zionism and the rise of communism; Kanafani, along with his comrade George Habash, resolved to adopt Marxism. They belived that the political crisis in the Arab world could only be solved by turning the anti-imperialist struggle into a social revolution.
In Lebanon, Kanafani adopted the Communist philosophy and become a leading member of the Marxist-Leninist Popular Front for the Liberation of Palestine (PFLP). He says, “The Palestinian cause is not a cause for Palestinians only, but a cause for every revolutionary, wherever he is, as a cause of the exploited and oppressed masses in our era.”
Besides, he was a prolific creative and brilliant novelist and the first to anticipate the “resistance literature” genre. His literary products and fictitious works have inspired a whole generation of resisting youth, both during and after his lifetime as they are greatly rooted in the Palestinian culture and cause. Kanafani dedicated his works to reflect on the Palestinians’ lives and the challenges they face under the Zionist occupation. He states, “My political position springs from my being a novelist. In so far as I am concerned, politics and the novel are an indivisible case and I can categorically state that I became politically committed because I am a novelist, not the opposite.”
The assassination of Ghassan Kanafani was the result of his commitment to the Palestinian cause and the resistance methodology. Today, his legacy echo within every free revolutionary who devoted his life to confront the imperialist conspiracies. Indeed, Kanafani was murdered merely because he had constituted an intellectual threat to the Zionist entity. He refused the negotiations with the enemy, pointing that it would be “a conversation between the sword and the neck […] I have never seen talks between a colonialist case and a national liberation movement.”
The chief thematic field of Kanafani’s writing was inseparably connected to the anti-imperialism struggle. He stressed that the Palestinian cause could not be resolved in isolation of the Arab ‘s social and political crisis. Further, he insisted on developing the resistance movement from being a nationalist Palestinian liberation movement into being a pan-Arab revolutionary socialist movement of which the liberation of Palestine would be a vital component.
Definitely, Kanafani played an influential role in raising consciousness on the issue of imperialism. He maintains, “Imperialism has laid its body over the world, the head in Eastern Asia, the heart in the Middle East, its arteries reaching Africa and Latin America. Wherever you strike it, you damage it, and you serve the world revolution. “Shortly after Kanafani’s obituary in Lebanon, “The Daily Star” stated, “He was a commando who never fired a gun, whose weapon was a ball-point pen, and his arena the newspaper pages.”
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