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How Saudi Arabia’s canal plans could backfire

Samantha Maloof

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Thanks to its rift with neighbouring Saudi Arabia, Qatar could soon find itself an island nation, should the rumours that the kingdom intends to construct a 60-kilometer canal along the border between the two countries come to fruition.

Although the plans have yet to be confirmed by Riyadh, media reports claim that a number of companies have already been invited to tender for a project dubbed the ‘Salwa Channel’, with an ambitious budget – and an even more ambitious construction schedule. Costs are expected to top SR2.8 billion ($745 million).

If completed, the canal would further isolate Qatar – geographically as well as politically – from Saudi Arabia, the UAE, Bahrain and Egypt, following the severing of ties between the two factions last June.

Extending the Gulf blockade hasn’t been plain sailing so far

The extraordinary canal project is the latest in a series of Saudi-led initiatives intended to punish Qatar for its alleged state sponsorship of terrorist groups in the region – allegations Qatar strenuously denies. Among its other recent moves, Saudi guards have seized control of the Salwa border crossing, effectively cutting off Qatar’s only land link, while Saudi Arabia’s King Salman has reportedly threatened military action should Qatar go ahead with plans to install a Russian air defence system.

Yet, despite Saudi’s sabre-rattling, there’s no sign of an end to the dispute; rather, evidence is growing that Riyadh’s strategy is beginning to backfire – to the benefit of Doha.

After twelve months of enduring what has been dubbed the ‘Qatar crisis’, reports suggest that not only has the tiny emirate revitalised its flagging financial situation but has also taken the opportunity to polish up its human rights record. Contrary to Saudi expectations, there doesn’t appear to be any sign that the Qatari Emir Tamim bin Hamad Al-Thani is in any hurry to capitulate to Saudi demands.

Qatar’s economy is rebounding

The Qatari economy in particular has seen a dramatic turnaround from the early days of the crisis, which were marked by panic over the possibility of food shortages and a potential Saudi invasion. Then, Qatar had to turn to allies in Turkey and Iran for supplies as imports plummeted by 40 percent of their previous levels.

Now, daily life has largely returned to normal, thanks to the government’s determination to explore new trade routes, while providing state support to banks and helping to boost domestic production of certain essential goods such as dairy products. Qatar is also looking to expand its production of liquefied natural gas (LNG) in partnership with Iran.

Qatar’s progress is impressive by any metric: the International Monetary Fund (IMF) expects the country’s economy to grow by 2.6 percent this year – up from 2.1 percent in 2017, while the country’s fiscal deficit has also narrowed as a percentage of GDP.

Riyadh risks antagonizing Western stakeholders

In addition to the unexpected economic effects of the blockade, there is also the potential for blowback from key partners that are growing increasingly weary of the protracted dispute. Indeed, a year in from the start of sanctions, Saudi Arabia in particular is in the tricky position of wanting to punish Qatar while still maintaining positive relations with key Western allies – notably the UK, France and the US – all of whom would like to see an end to the friction, given their own political and commercial interests in the Gulf.

The good news story in Saudi Arabia at the moment is the announcement that women have been given the right to drive for the first time in three decades. Marked by a ribbon-cutting ceremony and lauded by Western publications like the Economist, the repeal of the driving ban has made for great headlines – though a number of prominent female activists who have been campaigning for a change in the law are still languishing in jail, suggesting that the repeal is hardly a resounding victory for women’s rights.

Nor is Saudi Arabia’s ongoing involvement in the Yemen conflict helping its cause. According to the UN’s latest Children and Armed Conflict report, the Saudi-led coalition was responsible for 370 of the 552 child deaths in Yemen in 2017. The UN has repeatedly criticised the coalition for the high number of civilian casualties resulting from its airstrikes.

Qatar – slow yet real progress on reforms

Qatar has attracted its own share of criticism for human rights abuses, especially in relation to its ‘kafala’ sponsorship system for foreign labourers. As the emirate prepares to host the World Cup in 2022, the system has come under renewed scrutiny, with repeated calls to boycott the tournament over the high number of worker deaths that have occurred during the construction of new stadiums.

Yet there are small signs of progress: in its World Report 2018, Human Rights Watch (HRW) credits Qatar for reforms designed to improve labour standards for both domestic and migrant workers. In August, the Emir ratified Law No. 15 on domestic workers, which grants them protections including a maximum 10-hour shift, three weeks of annual leave, and healthcare benefits. Two months later, the International Trade Union Confederation announced that Qatar had agreed to extensive reforms of the kafala system. Of course, details are still lacking on how certain measures will be implemented, but such initiatives would be ground-breaking in a region where migrant workers make up such a large proportion of the labour force.

Meanwhile, as Qatar enacts reforms at home, the Gulf dispute rumbles on. In the latest development, Qatar has taken the UAE to the International Court of Justice, alleging discrimination as Qataris have been unable to visit family members in the Emirates due to the boycott. A provisional ruling is expected within the next few months. As the Qatari crisis enters the next phase, there’s no indication that either side is ready to concede. However, unless Saudi Arabia can change the narrative, the protracted blockade may end up being a blessing in disguise, not only for the Qatari economy but also for the civil liberties of its residents.

Samantha is a freshly minted graduate in International Relations based in Cairo, currently working as a research assistant in a small think tank looking at development and inequality in Africa

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Middle East

Chinese purchases of Iranian oil raise tantalizing questions

Dr. James M. Dorsey

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A fully loaded Chinese oil tanker ploughing its way eastwards from two Iranian oil terminals raises questions of how far Beijing is willing to go in defying US sanctions amid a mounting US military build-up in the Gulf and a US-China trade war.

The sailing from Iran of the Pacific Bravo takes on added significance with US strategy likely to remain focused on economic rather than military strangulation of the Iranian leadership, despite the deployment to the Gulf of an aircraft carrier strike group as well as B-52 bombers and a Patriot surface-to-air missile system.

As President Donald J. Trump, backed by Secretary of State Mike Pompeo, appears to be signalling that he is not seeking military confrontation, his administration is reportedly considering a third round of sanctions that would focus on Iran’s petrochemical industry. The administration earlier this month sanctioned the country’s metals and minerals trade.

The sailing raises the question whether China is reversing its policy that led in the last quarter of 2018 to it dramatically reducing its trade with Iran, possibly in response to a recent breakdown in US-Chinese trade talks.

“The question is whether non-oil trade remains depressed even if some oil sales resume, which I think it will. That’s the better indicator of where Chinese risk appetite has changed. Unfortunately Iran‘s reprieve will be limited—but better than zero perhaps,” tweeted Esfandyar Batmanghelidj, head of Bourse & Bazaar, a self-described media and business diplomacy company and the founder of the Europe-Iran Forum.

A Chinese analyst interviewed by Al Jazeera argued that “China is not in a position to have Iran’s back… For China, its best to stay out” of the fray.

The stakes for China go beyond the troubled trade talks. In Canada, a senior executive of controversial Chinese telecommunications giant Huawei is fighting extradition to the United States on charges of violating US sanctions against Iran.

Reports that Western companies, including Kraft Heinz, Adidas and Gap, wittingly or unwittingly, were employing Turkic Muslims detained in re-education camps in China’s north-western province of Xinjiang, as part of opaque supply chains, could increase attention on a brutal crackdown that China is struggling to keep out of the limelight.

The Trump administration has repeatedly criticized the crackdown but has stopped short of sanctioning officials involved in the repressive measures.

Bourse & Bazaar’s disclosure of the sailing of the Pacific Bravo coincided with analysis showing that Iran was not among China’s top three investment targets in the Middle East even if Chinese investment in the region was on the rise.

The Pacific Bravo was steaming with its cargo officially toward Indonesia as Iranian foreign minister Mohammad Javad Zarif was touring his country’s major oil clients, including China, in a bid to persuade them to ignore US sanctions.

A second tanker, the Marshal Z, was reported to have unloaded 130,000 tonnes of Iranian fuel oil into storage tanks near the Chinese city of Zhoushan.

The Marshall Z was one of four ships that, according to Reuters, allegedly helped Iran circumvent sanctions by using ship-to-ship transfers in January and forged documents that masked the cargoes as originating from Iraq.

The unloading put an end to a four-month odyssey at sea sparked by buyers’ reticence to touch a cargo that would put them in the US crosshairs.

“Somebody in China decided that the steep discount this cargo most likely availed … was a bargain too good to miss,” Matt Stanley, an oil broker at StarFuels in Dubai, told Reuters.

The Pacific Bravo, the first vessel to load Iranian oil since the Trump administration recently refused to extend sanction exemptions to eight countries, including China, was recently acquired by China’s Bank of Kunlun.

The acquisition and sailing suggested that Bank of Kunlun was reversing its decision last December to restrict its business with Iran to humanitarian trade, effectively excluding all other transactions.

The bank was the vehicle China used in the past for business with Iran because it had no exposure to the United States and as a result was not vulnerable to US sanctions that were in place prior to the 2015 international agreement that curbed Iran’s nuclear program.

China’s willingness to ignore, at least to some extent, US sanctions could also constitute an effort to persuade Iran to remain fully committed to the nuclear accord which it has so far upheld despite last year’s US withdrawal.

Iran recently warned Europe that it would reduce its compliance if Europe, which has struggled to create a credible vehicle that would allow non-US companies to circumvent the sanctions, failed to throw the Islamic republic an economic lifeline.

In a letter that was also sent to Russia and China, Iran said it was no longer committed to restrictions on the storage of enriched uranium and heavy water stocks, and could stop observing limits on uranium enrichment at a later stage.

Russian president Vladimir Putin warned in response to the Iranian threat that “as soon as Iran takes its first reciprocal steps and says that it is leaving, everyone will forget by tomorrow that the US was the initiator of this collapse. Iran will be held responsible, and the global public opinion will be intentionally changed in this direction.”

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Middle East

The Iran Question

Dr. Arshad M. Khan

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Will there be war with Iran?  Will there not be war with Iran?  The questions are being asked repeatedly in the media even though a single carrier task force is steaming up there.  The expression is old for the latest carriers are nuclear powered.  Imagine the mess if it was blown up.

There are two kinds of weapons in the world … offensive and defensive.  The latter are cheaper, a fighter plane compared to a bomber.  If a country does not (or cannot afford to) have offensive intent, it makes sense to focus on defense.  It is what Iran has done.  Moreover, its missile centered defense has a modern deadly twist — the missiles are precision-guided. 

As an Iranian general remarked when questioned about the carrier task force:  some years ago it would’ve been a threat he opined; now it’s a target.  Iran also has a large standing army of 350,000 plus a 120,000 strong Revolutionary Guard and Soviet style air defenses.  In 2016 Russia started installation of the S-300 system.  It has all kinds of variants, the most advanced, the S-300 PMU-3 has a range similar to the S-400 if equipped with 40N6E missiles, which are used also in the S-400.  Their range is 400 km, so the Iranian batteries are virtually S-400s.  The wily Putin has kept trump satisfied with the S-300 moniker without short-changing his and China’s strategic ally.  The latter continuing to buy Iranian oil.

Iran has friends in Europe also.  Angela Merkel in particular has pointed out that Iran has complied fully with the nuclear provisions of the UN Security Council backed Joint Comprehensive Plan of Action i.e. the Iran nuclear deal.  She is mustering the major European powers.  Already alienated with Trump treating them as adversaries rather than friends, they find Trump’s bullying tiresome.  President Macron, his poll ratings hitting the lowest, is hardly likely to engage in Trump’s venture.  In Britain, Theresa May is barely able to hold on to her job.  In the latest thrust by senior members of her party, she has been asked to name the day she steps down.

So there we have it.  Nobody wants war with Iran.  Even Israel, so far without a post-election government does not want to be rained upon by missiles leaky as its Iron Dome was against homemade Palestinian rockets.

Topping all of this neither Trump nor Secretary of State Pompeo want war.  Trump is as usual trying to bully — now called maximum pressure — Iran into submission.  It won’t.  The wild card is National Security Adviser John Bolton.  He wants war.  A Gulf of Tonkin type false flag incident, or an Iranian misstep, or some accident can still set it off. 

In Iran itself, moderates like current President Hassan Rouhani are being weakened by Trump’s shenanigans.  The hard liners might well want to bleed America as happened in Iraq and Afghanistan.

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Middle East

Iran’s game just started

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By announcing that Iran will begin keeping its excess uranium and heavy water, the Islamic Republic now sends a firm and clear message to the west, exactly one year after U.S. president, Donald Trump unilaterally withdrew from its nuclear deal with Iran. 

At this point, it seems that Iran has made a wise decision. Over the last year, the European troika has not only done anything to revive the nuclear deal or bring any kind of benefit to the Iranian nation, but they have actually backed up U.S. by developing new plans to undermine Iran’s “missile work”, and diminish its “power in the region” as well as its “nuclear technology”.  

As stated in clauses 26 and 36 of Joint Comprehensive Plan of Action (JCPOA), if the other side fails to meet its obligations, Iran is entitled to partially or completely end its commitments as well. So, Iran’s recent decision could be analyzed both on legal and strategic terms. 
However, it seems that the strategic aspects of Iran’s decision are even more important than its legal aspects. This decision is strategically important because it stops Washington and European troika to carry out their anti-Iran scheme, a dangerous scheme that they actually started devising when Trump took the office in 2017.  

At the time, Theresa May, the British Prime Minister, and Emmanuel Macron, the French president played a major part in carrying out the west scheme. A scheme based on enforcing Iran to keep its “nuclear promises” and stay committed to a “distorted nuclear deal” while “U.S. had abandoned the deal”, and at the same time, trying to “diminish Iran’s power in the region” and “reduce its missile activities”. 

All other actions of Europeans toward Iran were also simply targeted at carrying out this major plan, including how they constantly changed their strategies toward Tehran, and how Germany, U.K. and France intentionally delayed in launching the alternative trade mechanism (Instex) with Iran.  

Now, Iran’s decision to keep its Uranium and heavy water is definitely in compliance with JCPOA, and more importantly, it will seriously undermine the “American-European” joint plan against Iran. This also explains why French government was so distressed by Iran’s new nuclear strategy and had such a quick reaction, considering that Emmanuel Macron, the French president and Jean-Yves Le Drian, the French Foreign Minister both have had important roles in carrying out the American-European anti-Iran scheme. 

At any rate, what is clear now is that the game has just started! And the Iranian political system and specially the foreign ministry have a great mission to run this game wisely.  

In following days, the European troika might want to force Iran into changing its decision by threats such as reviving the European Union sanctions against Iran or even taking Iran’s case to the United Nations Security Council (so that Trump administration can meddle in Iran’s affairs). But, it is time for Iran political system to be adamant in its decision.  

The Iranian Foreign Ministry should clearly ask the Europeans to choose one of these options, either Iran will “further reduce its commitments to the nuclear deal” or the Europeans should do something practical to “protect the rights of Iranian nation”. 

It is also necessary that the Iranian political system reveals the American-European joint anti-Iran scheme to the people so that the true nature of Europeans is showed to Iranians. In that case, Europe and specially the European troika will completely lose their reputation.    

First published in our partner Tehran Times

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