It is often said in the Western mainstream media that Russian President Vladimir Putin is playing a disrupting role around the world, including in the Middle East. However, such accusations remind of an old Soviet joke that made its rounds in the late 1980s and could certainly be applicable to the United States and other Western countries. The joke begins with a man walking into a Soviet hospital and asking the desk nurse if he can see the eye-ear doctor. “There is no such doctor,” she tells him, “Perhaps you would like to see someone else?” “No,” he replies, “I need to see an eye-ear doctor.” “But there is no such doctor,” she replies. “We have doctors for eyes and doctors for ears, nose and throat (ENT), but no eye-ear doctor.” “No help,” he repeats. “I want to see the eye-ear doctor.” They go around like this for a few minutes before the nurse interjects and says, “Sir, there is no eye-ear doctor, but if there was one, why would you want to see one?” “Because,” he replies, “I keep hearing one thing and seeing another.”
This is exactly the sentiment that seems to be gripping the international community. It is stated as fact that President Putin is attempting to destabilize the Middle East and Europe quite like he ‘orchestrated’ in the American Presidential Elections in 2016. Leaving aside the lack of evidence for the latter two cases, Middle Eastern countries do not feel that Russia is trying to destabilize the region. In fact, it is quite the opposite. Israeli-Russian relations have never been better: Russia’s “frenemy,” Saudi Arabia turns to Russia for regional issues more so than to the US; and Turkey has improved its relations with Russia since the Turkish army shot down the Russian jet in Syria. Russia is in close contact and on good terms with all the key players and countries in the Middle East, and playing broker or interlocutor when a crisis arises.
Russia has been actively involved in the region to preserve its interests, namely ensuring stability in a region where jihadi terrorism has run rampant. That was the main reason it intervened in Syria in 2015, as Salafi jihadi forces such as Da’esh, Fatah al-Sham (formerly known as Jabhat al-Nusra or Al-Qaeda in Syria), Ahrar al-Sham, and others were almost certainly on their way to occupying Damascus, which constitutes a red line for Moscow. In nearly three years, Russia has almost removed all of the Salafi jihadi terrorists from Syria and is now focused on finding a negotiated solution to the seven-year civil war. While it is working on a peace agreement in Sochi and Astana, Russia still sees Syria as the front line to its war on terror and is closely working with the Syrian Army to ensure it can fend off terrorists and any destabilizing efforts from any regional and external players. At the same time, Russia is constantly working with all the necessary partners to ensure stability there.
However, some prominent Russian figures including Russian foreign minister Sergei Lavrov, the Russian deputy envoy to the United Nations Vladimir Safronkov, and scholar Vitaly Naumkin have suggested that Russia can play a crucial role in resolving the decades-old Israeli-Palestinian conflict. While the prospect for a solution to this conflict seems bleak, having a new player that can help is a positive sign. In fact, Russia has unique credentials to kick-start peace talks, since it is a veto-holding member of the UN Security Council and a member of the Middle East Quartet. In both international bodies, Washington has been mingling with far right-wing elements in Israel and stonewalling any potential peace agreement between the Israelis and the Palestinians by vetoing key United Nations Security Council resolutions. A more reliable player who is active in the region, like Russia, would serve well as a broker to help the necessary parties come to an agreement.
More importantly, Russia can play a constructive role and be a dependable broker because it has close ties with all the necessary parties needed for any agreement. It is more of an honest broker than Washington for a variety of reasons. Chiefly among them, if for no other reason, is the fact that Russia can play a fair interlocutor given its presence in the region. If we look at Donald Trump’s ill-advised decision to recognize Jerusalem as the capital of Israel, it not only reignited violence between the Israelis and the Palestinians but it also revealed that Washington had never been an honest broker in resolving the age-old conflict.
This is not the first time that Moscow had offered to be a broker between the Israelis and the Palestinians. The Kremlin had offered to host the two parties in Moscow as a venue for discussions in 2016. However, all hopes were dashed when two Israeli professors decided to reveal that Palestinian Authority Chairman Mahmoud Abbas was a KGB Agent in the 1980s while pursuing his doctorate degree. It was later revealed that the two Israeli professors had leaked this document to the Israeli press because they had their own agenda and did not want negotiations to bear fruit under the auspices of the Russians.
It takes two to tango: Do the two states want it?
Current Coalition Government
The current Israeli government’s perspective on a peace agreement between the Palestinians and the Israelis is nearly nonexistent. This is Israel’s most far-right government coalition since it first became a state in 1948. Since becoming Israel’s Prime Minister, Benjamin Netanyahu has always found an excuse to not seek a peace agreement with the Palestinians. Moreover, Netanyahu has laid down the conditions to an agreement that no Palestinian leader can agree to. For instance, in 2013, he outlined his so-called “vision” for a future Palestinian state. He stated that there would be no agreement unless the Palestinian leadership recognizes Israel as “the nation-state of the Jewish people.” This is an ill-conceived approach as Israel’s concern should be about creating a two-state solution (and future narrative) for its national security rather than ensuring that its future neighbouring state recognizes the complexion of its statehood. Does the United States have to recognize Canada as a multicultural country? Or does Canada have to recognize the United States as a Christian state? No. The United States recognizes Canada as a state and vice versa. What each state does internally is its own business.
Under Netanyahu’s leadership, he has always suggested that the Palestinians are divided and when they did unite he suggested that they are aligning with Hamas—a “terrorist” organization—and, thus, Israel cannot negotiate with the Palestinians. In reality, Hamas conducted terrorist activities in the past, but today they are very popular with Gazans, East Jerusalemites, and West Bankers. If elections were held today in the Palestinian Territories, Hamas most likely would win in all three cities. For the last nine years, Prime Minister Netanyahu and his coalition governments have accused the Palestinian leadership of incitement. However, the blame should really be put on Netanyahu’s government for their incitement in the Occupied Territories (East Jerusalem and the West Bank), as it condones the daily activities of the Israel Defence Forces (IDF) and the settlers’ mistreatment of the Palestinians on a day-to-day basis. As the country has shifted further to the extreme right in recent years, it will take much skill to convince Benjamin Netanyahu and members of his far right-wing coalition to come to the table and, eventually, agree on a final two-state solution with Israel’s neighbours. If anyone other than Netanyahu’s “Likud” Party in this coalition (namely Naftali Bennett’s “HaBayit HaYehudi” Party, any of the religious parties, or, to a certain extent, Avigdor Lieberman’s “Yisrael Beiteinu” Party, or any of their offshoots) wins the next general election, which is scheduled for 2019, then it will be increasingly difficult to reach a two-state solution agreement.
There is still some hope because there are a few party leaders that want to seek a two-state solution. However, the two main opposition leaders—Avi Gabay (“Labor” Party) and Yair Lapid (“Yesh Atid” Party) — do not seem to indicate that they are genuine in seeking a two-state solution. Their statements about Jerusalem, and other issues for a future agreement between the Israelis and Palestinians, are disheartening. Both Gabay of the “Labor” Party (a central partner in the “Zionist Union” Party with Tzipi Livni’s “Hatnuah” Party) and Lapid of the “Yesh Atid” Party have shifted to the right of the Israeli political spectrum. Whether this is a tactic to attract right-wing voters or it is their fundamental belief remains to be seen. However, their statements signal trouble for the two-state solution if either of them were to become Prime Minister.
That leaves Israel with “Meretz” Chairwoman Tamar Zandberg, Former Prime Minister Ehud Barak, and “the Joint List” Chairman Ayman Odeh. Zandberg leads the progressive “Meretz” Party into the next election with only 5 seats in the Israeli Knesset (Israel’s Parliament). She has tried to inject new life in the party and suggested that if she were to lead a government, or take part in a coalition government, she would enter with all progressive parties on the Israeli left and would not rule out right-wing politician and current Defense Minister Avigdor Lieberman. Lieberman, the Chairman of “Yisrael Beiteinu,” is a pragmatic leader who might be the only politician on the Israeli right that will change his view if he sees the security of his country at risk. That leaves the progressive with some hope that he would play it nice with Zandberg, but his negative comments about Arabs, Palestinians, and a future peace agreement makes one wonder if his views will actually change when faced with any potential agreement between the Palestinians and the Israelis. Zandberg’s comments, however, could simply be a tactic for trying to lure more voters to her party, especially those on the right of the spectrum. It is still disheartening to hear the new “Meretz” Chairwoman make that promise to voters despite Lieberman’s rhetoric, which puts him in opposition to a fair peace treaty. Also, “Meretz’s” silence on Trump’s Jerusalem declaration, like other political parties on the left, with the exception of the “Joint List,” is also demoralizing to those struggling to bring peace.
Ehud Barak is a factor because he has wanted to return to the political scene since he resigned from his post as Defense Minister in a previous Netanyahu administration. He has been quite critical of the current Prime Minister over his several corruption scandals and his lackluster interest in seeking dialogue with the Palestinians. A former Chief of Staff of the Israeli Defense Forces and a protégé of the late Prime Minister Yitzhak Rabin, Barak has always sought a peace agreement with Israel’s neighbours and the Palestinians in particular. This is encouraging news, as Israel needs safe borders to ensure its stability and address its two national security priorities: ensuring the Jewish complexity of the state and reducing the violence within its borders. While it would be advisable to maintain a two-state solution, Barak’s strategy to ensure Israel’s national security concerns might be met with stumbling blocks. First, it is unclear if Barak is a strong contender, as many Israelis still remember his attempt at a peace agreement with the late Palestinian Authority President Yasser Arafat. Second, it is unclear what he will do should he negotiate with the Palestinians. In his last attempt, he refused to divide Jerusalem, rejected to return land to the Palestinians along the 1967 borders, and declined to dismantle settlements in those Occupied Territories. If he were to repeat this strategy, negotiations will almost certainly fail. In any case, Barak’s last attempt was Israel’s closest at reaching an agreement with the Palestinians. It abruptly ended when violence broke out between Palestinians and Israelis on Temple Mount, when then-opposition leader Ariel Sharon decided to pay a visit to the holy site for Jews and Muslims, thus giving start to the second intifada. In the following elections, Ehud Barak lost to Ariel Sharon ending all hopes for a peace agreement between the Israelis and Palestinians.
While most would dismiss Ayman Odeh, it would be a mistake to do so. The “Joint List” is the third largest political party (13 seats) in the current Knesset behind the “Zionist Union” (24 seats) and the “Likud” (30 seats). Along with being the Chairman of the “Joint List” Party, a coalition of several Arab parties in the Knesset, Odeh is the leader of the “Hadash” Party. The young and energetic leader has consistently said that he supports a two-state solution, has consistently advocated for the rights of minorities living in Israel, and has challenged the current government’s policy on settlement building in the Occupied Territories (the West Bank and East Jerusalem), in Gaza, and how it has conducted itself in bordering countries—namely in Syria and Lebanon. More importantly, Odeh and his “Joint List” Party can play a productive role in a coalition government. As previously mentioned, Odeh has consistently stated that he wants a two-state solution—something that Israel should be seeking to ensure its national security. More specifically, in a future coalition, he can make the government treat minorities with respect and dignity—something past government coalitions have not done. A high ministerial position in the government for Odeh would be a first step in demonstrating that Israel is serious about integrating the 20% of its population that feels neglected and alienated by Israeli society. At the time of publication, both Gabay and Lapid have ruled out giving the “Joint List” Party a place in their coalition government, but we have yet to hear from the other candidates on the Israeli left. It is unknown what “Meretz” Leader Zandberg would do. In any case, if not as Prime Minister, Odeh and his “Joint List” Party can inject some new blood into a two-state solution and implement some progressive policies within Israel.
Fatah (Harakat al-Tahrir al-Watani al-Filastini)
Fatah is one of the main factions in the Palestinian National Authority (PA) and the second largest faction in the Palestinian Legislative Council (PLC). The Chairman of the faction, Mahmoud Abbas, is also the President of the PA. He succeeded the PA’s late President, and Fatah founding member, Yasser Arafat in a contested election. There are many problems with Fatah. Much has changed since it was founded in 1959. Swamped with graft and corruption, the “Old Guard” is still in control, but it is a movement that is deeply divided. The main tribulation for the “Young Guard” is the amount of corruption and the fact that it governs with a vertical approach, both within Fatah and the Palestinian Authority. While the “Young Guard” is demonstrating its frustrations about the movement, it remains largely dominated by aging cadres from the pre-Oslo era of Palestinian politics—most of them gaining prominence through their patronage to the late Yasser Arafat.
Most notable from the “Young Guard” is the popular Palestinian politician Marwan Barghouti. The jailed politician left Fatah in 2005 to form his own “al-Mustaqbal” Party, which was mainly composed of the youth of Fatah. His main complaint was the faction’s lack of vision and exorbitant corruption. This struck a chord with many in the Occupied Territories. However, his party never came to fruition, as Fatah decided to present a unified list to voters in the 2006 Palestinian legislative elections—with Barghouti campaigning for Fatah from his jail cell. After the election, Barghouti remained popular within Fatah regardless of being in jail. PA President, Mahmoud Abbas is aging, in poor health, completely disconnected with the Palestinian people, and utterly alienated and demonized by the Israelis (with support from the United States). Any future mediator must look to the “Young Guard” within Fatah for a negotiating partner for a two-state solution—and Barghouti is one of those leaders to keep an eye on.
Hamas (Harakat al-Muqawamah al-Islamiyyah)
Hamas is another faction within the PA, and the largest faction within the PLC. Sheikh Ahmed Yassin, Mahmoud Zahar, and several others founded it in 1987, right after the beginning of the first intifada. Its current Chief of the Political Bureau is Ismail Haniyeh. He succeeded Khaled Mashal, who held on to the position from 1996 until 2017. Originally an offshoot of the Egyptian Muslim Brotherhood, Hamas was hostile to the Palestinian Liberation Organization (PLO)—the predecessor to the PA—and Israel. However, it has since revoked most of its hostile rhetoric to the PA and Israel. Furthermore, it has revamped its hostile charter, which recognizes Israel as a state along the 1967 borders—indicating the land that Israel obtained in the 1967 Arab-Israeli War, when Israel took ownership of the Gaza Strip, the West Bank, and East Jerusalem.
This is not to mean that Hamas does not face challenges. It is in a quagmire of its own, as it struggles to maintain legitimacy in the Gaza Strip, where it has governed since the brutal power struggle between them and Fatah following the 2005 Disengagement. There have been some small murmurs of discontent of their leadership as it tries to balance between resisting the occupation, avoiding another war, and governing its people. As the economic situation has deteriorated over the years (mainly but not solely due to the Israeli blockade), it has led to small divisions within the rank-and-file, but nothing noteworthy of any type of threat to their leadership in the Gaza Strip. For all intents and purposes, Hamas is a necessary partner in a future peace agreement as it is still popular with the majority of Palestinians.
Suggesting that Hamas is solely a terrorist organization is a mistake. There are some elements within the organization that still seek a hard line with Israel and want to have the entire state of Israel. However, this is not the official position of Hamas. This is the main argument that comes from the Israeli right and the naysayers to openly negotiating with Hamas. To those that feel that Hamas should never be trusted and dialogue with the organization is a non-starter: would it not be wiser to engage with an organization that has extremist views, such as they do, and integrate them into the mainstream in the hopes of marginalizing those that want to make Palestine a cause while strengthening those that want to make Palestine a nation? The only way to change Hamas’ behaviour for the better is to engage them in the process, rather than leave them as an outlier where their mischievous behaviour will certainly continue. Engaging Hamas is necessary because without Hamas, there is no peace agreement.
The current regional players: How do they see it?
The PA and Saudi Arabia have had a longstanding relationship. They both sit in the Arab League and the Islamic Cooperation Council. For the longest time, the two countries have been allies and the perception had been that the Saudis have always defended the Palestinians. As a charter member of the Arab League, Saudi Arabia has supported Palestinian rights to sovereignty and called for the withdrawal of Israeli forces from the Occupied Territories since 1967. However, in recent years, this all changed. With the new Crown Prince Mohammed Bin Salman having won the power struggle to succeed King Salman Bin Abdul-Aziz, the policy and relations with the Palestinians have significantly shifted.
With the Crown Prince in full control, he “offered” a “deal” to the Palestinians that was almost immediately rejected by PA President Abbas because it made many guarantees to the Israelis, but offered the Palestinians nothing. This should not come as a surprise because, in one of the region’s worst kept secrets, Saudi Arabia and Israel have improved their relations significantly. This is a foreign policy that Bin Salman has carried out since solidifying his power. One has to wonder if this is a wise decision for Israel because the young Defense Minister has been highly sectarian in his wars with Yemen and the standoff with Qatar. What is more, he deems Iran as a greater threat than Israel, which is the main reason for his policy shift. For a country that is very weak, he is trying to hold on to power with an iron fist. This will not bode well for the Sheikhdom—a country composed of regions that differ in nature, which were united into a single political entity only by blending the Ibn Saud dynasty with Wahhabism. If left unchecked, Bin Salman’s iron fist mentality, will most certainly disintegrate Saudi Arabia into its historic components, as happened in Iraq, Libya, Yemen, and potentially could happen in Syria. Furthermore, Bin Salman’s belligerent behaviour may lead to resistance from the Saudi elites who he is attempting to purge. Also, there is a considerable Shi‘i minority in the eastern part of the Sheikhdom, which will probably pursue a military or political sponsor for itself in Iran.
This type of aggressive activity at home and abroad has the very real possibility of creating a confrontation with Iran. Thus, Saudi Arabia can no longer be trusted as a key player in any political solution between the Israelis and the Palestinians, if not for its weakness and bellicosity, then for its lack of support within the Palestinian leadership as it’s seen as a guarantor for the Israeli side. This does not mean engagement should be shelved. On the contrary, a mediator should be in contact with the Sheikhdom in order to avoid rogue elements within the regime to sabotage an agreement between the Israelis and the Palestinians.
Iran has been labeled as a menacing force by many Western countries, namely the United States and Israel. The argument is that Iran is a state that is sponsoring terrorism in the region and abroad. This is grossly exaggerated. While it might be on the same level as Saudi Arabia in “sponsoring terrorism,” where is this criticism of Saudi Arabia? It has funded numerous organizations that are in line with its Wahhabist vision. We see this in Iraq, Libya, and Syria where Daesh (the Islamic State or IS for short), and other similar organizations, have wreaked havoc after American covert or overt operations created a vacuum allowing these Salafi jihadi organizations to run amuck. These same organizations are still threatening others in the region. The Arab New Cold War between Iran and Saudi Arabia might have started in 1979, when the Islamic Revolution was successful in overthrowing the Shah, but the extremist ideological feud predated it with the Saudi Sheikhdom’s unholy alliance with Wahhabism and the exportation of its revolution into other countries in the Middle East. All this while cozying up to Western powers long before Iran had begun to export its revolution. What needs to be done with Hamas is exactly what needs to be done with Iran, and for the same reason. However, a similar approach also needs to be taken with Saudi Arabia because it is a country that has been allowed to act without consequence. The onus for the instability in the region and international terrorism should be placed on the Sheikhdom just as much as (if not more than) the Iranians.
Regarding Iran’s influence on the Israeli-Palestinian conflict, it is limited. They do fund the Islamic Jihad in the Gaza Strip, which has claimed responsibility for some of the rockets launched into Israel. However, their influence and power are limited. But, if a mediator wants to marginalize the extremists within the organization, it would be wise to engage with the Islamic Republic of Iran. This is what Fmr. US President Obama began in 2015 with his “Iran Nuclear Deal.” The withdrawal from the deal by the United States by current US President Donald Trump is disheartening for the simple reason that Iran has no incentive for cooperating with the international community and, more specifically, revoking its funding to Shi‘i organizations in the region, such as the Islamic Jihad in the Gaza Strip and Hizbullah in Lebanon.
In recent years, Turkey has taken a major shift from what it used to be in the 20th century. Under current President and former Prime Minister Recep Tayyip Erdoğan, the country has taken on a more traditionalist identity. When first elected as Prime Minister in 2003, Erdoğan was elected because the society was changing. In the 1980s and 1990s, there were military coups happening more often than one would change their underwear. Those that had become wealthier now wanted to be able to practice their religion freely. Many people also felt disenfranchised for a variety of reasons. Whether it was for religious, economic, or social reasons, the people wanted a change from a strict, secular country guided by the military. It would be a misnomer to suggest that Turks wanted (and still do not want) to be an Islamic fundamentalist state. Rather, they wanted to be free to pray or practice their religion without feeling threatened (a more traditionalist state, if you will). The Turks do not want an Islamic fundamentalist state and their Presidential elections have consistently shown that as Erdoğan or his presidential allies have usually received a little over than fifty percent of the vote while always maintaining power in the Turkish parliament. The message the voters are sending is that it likes the government’s economic policies and it wants the traditionalist element in Turkish daily life but it does not want to have a fundamentalist version of Islam guide its country.
At the beginning, Erdoğan and his party, the Justice and Development Party (AKP), were the perfect fit. This is exactly what the party promised in their first election campaign and it has, more or less, implemented these laws throughout their time in power. However, as time went on, many rifts emerged within the AKP that eventually cost it seats in parliamentary elections. In fact, it received a minority government for a brief period before a snap election was called where the AKP regained its majority. Over the years, Erdoğan had gradually become weaker while pursuing a “neo-Ottoman” crusade in the region. We saw this in Libya during its civil war, in Syria during its civil war, and in his tough words and actions regarding Israel’s occupation in the West Bank and East Jerusalem as well as the Israeli blockade of the Gaza Strip. Erdoğan remains weak and we know he is weak given the failed coup attempt back in 2016 and the countless arrests he has made ever since.
Today, Turkey has resumed ties with Moscow after Ankara shot down a Russian plane over Syrian skies. This is good news if Russia seeks to mediate a peace agreement between the Israelis and the Palestinians. Turkish-Israeli relations are “luke-cold” at best. They have diplomatic relations with each other. However, Turkey consistently criticizes Israel’s every move and consistently tries to defend the Palestinians. It is in close contact with Hamas, a vital partner for any agreement, and ties have been improving with Fatah. Turkey has consistently invited Hamas to Ankara and has defended them on many occasions. Any mediator needs to include Turkey, given their strong ties to Hamas, because leaving the country on the sidelines might have undesirable consequences that will not be in the international community’s best interest.
Long before Crown Prince Mohammed Bin Salman’s failed blockade back in 2017, Qatar had been conducting a robust foreign policy. The tiny peninsular Arab country has sought ties with many different states within the region beyond its “base.” For instance, it has sought ties with Iran, which was at the heart of the Saudi Arabia-United Arab Emirates (UAE) led blockade. Since the Saudi-UAE led blockade, the Qataris also successfully reached out to improve diplomatic relations with Oman, Turkey, the United States, and Russia. Regarding the latter, in the waning years of the Soviet Union, Qatar established diplomatic relations and for three decades the two countries have had good diplomatic relations despite some minor tensions between them. In any case, economic ties between the two countries are strong and became even stronger after the failed Saudi-UAE blockade.
More importantly, Qatar is a crucial player in the Israeli-Palestinian conflict and will play a critical role in its solution. For the longest time, Qatar has been an active supporter of Hamas. It housed Hamas’ former Political Bureau Chief Khaled Mashal and has assisted the Palestinian organization financially. This has been another element in its robust foreign policy. For a small country, it is trying to gain clout in a region where countries are jockeying for a position of regional supremacy. In the case of the Israeli-Palestinian conflict, it very much has clout due to the fact that, like Turkey, it has very close ties to Hamas. Some might suggest that it has more pull than Ankara. In any case, like Turkey, it should not be left aside in a future peace agreement.
Two be or not two be: Can it be done?
The question remains: can this seven-decade-old conflict be resolved? The answer is yes, if there is the resolve. There are players in both camps that are willing to engage in resolving the conflict. It will be a tall order to accomplish, but all parties — both domestic and foreign — need to be on board and engaged. “Yisrael Beiteinu” Chairman and Defense Minister Avigdor Lieberman once said that there should be a regional agreement before a peace agreement between the Palestinians and the Israelis. He does have a point, but it is vital that the two sides come to an agreement first before a regional agreement is achieved for the very simple reason: it’s imperative Israel solve this issue for its own national security.
The United States and other Western countries have tried and failed to make the two sides come to an agreement. In the case of the former, it was never an honest broker in resolving the problem and usually took the side of the Israelis. Western players—namely, the European Union (EU) — never had the wherewithal and clout to resolve the conflict. With the exception of some breakthroughs, the Israelis and the Palestinians are far from coming to an agreement in which Israel will agree to give up the West Bank (in its entirety) along with East Jerusalem, and remove the blockade in the Gaza Strip. Israel claims that it still needs security guarantees that the latter will not lead to constant wars. However, if it doesn’t completely relinquish these areas, the one-state reality and the very real possibility of a civil war will be upon the Zionist entity sooner rather than later, which would surely spell the end of the Jewish identity of the country.
At the moment, neither the Palestinians nor the Israelis are keen on talking to one another—each accusing the other of incitement and blaming one another for the upsurge in violence. Where the United States and the EU have been unsuccessful, Russia has the potential of successfully bringing these two sides together. Why Russia? It has good ties with the Israelis and Palestinians as well as the key regional players that must sign off on the agreement. As much as it is in the Israelis’ national security interests to come to an agreement as soon as possible, so too is it an urgent national security issue for Russia. A civil war, which could explode in a region where extremism is rampant, is not only a threat to the Israelis, Palestinians, and the entire Middle East—but also to Russia and the entire international community.
Since the breakup of the Soviet Union, many Russian-Jews left the Russian Federation, because under former President Boris Yeltsin, life was tough and Israel offered better opportunities. Today, Israel has a significant population of Russian-Jews as well as other Jewish people from other countries of the former Soviet Union. Since President Putin came to power, he has sought better relations with Israel. Over the years, there have been numerous state visits: many Israeli Prime Ministers visited Russia and President Putin and others have visited Israel on many occasions. Today, the two countries are cooperating very closely in Syria. Russia also has good ties with the Palestinians. This relationship predates the Russian Federation when the Soviet Union usually took the side of the Palestinians. Where Russia plays a unique role that others don’t is its presence and commitment to the region. It also has contacts with all the countries in the region and is, more or less, on good terms with them all. Russia genuinely wants to ensure stability in this region because of its fears that the extremism can spread to its backyard and, potentially, into its own country. It also has the experience and the relevant expertise to make the two-state solution a reality. More importantly, Russia has been in the region for centuries. So, trust and experience in a region full of skepticism can go a long way—and the Israeli-Palestinian conflict is no exception.
The Israelis and Palestinians have been in a stalemate for too long and something needs to change. The status quo is unsustainable, mainly for the Israelis but, to a certain extent, for the Palestinians as well. Both parties desperately need to return to the table if for no other reason than to ensure that their people live in peace, stability, and security. With the United States removing itself from the region over the last decade and a half coupled with the fact that it is a biased broker in this conflict, both the Israelis and the Palestinians should look to Russia if they want to resolve their age-old conflict. Russia seems to be a willing partner to broker a deal. Now, the warring parties must be ready to do the same rather than throw out useless accusations of incitement or “it is their fault, not mine.” For Israel, this is an existential moment, as the very identity of the country is at stake. If this opportunity is overlooked, Israel will only have itself to blame—and one would assume that the elite in Israel do not want that to happen to its people and to the Jewish diaspora who it claims to be protecting.
First published in our partner RIAC
Shifting Middle Eastern sands spotlight diverging US-Saudi interests
A series of Gulf and Middle East-related developments suggest that resolving some of the Middle East’s most debilitating and devastating crises while ensuring that efforts to pressure Iran do not perpetuate the mayhem may be easier said than done. They also suggest that the same is true for keeping US and Saudi interests aligned.
Optimists garner hope from the fact that the US Senate may censor Saudi crown prince Mohammed bin Salman for the October 2 killing of journalist Jamal Khashoggi in Istanbul; the positive start of Yemeni peace talks in Sweden with an agreement to exchange prisoners, Saudi Arabia’s invitation to Qatar to attend an October 9 Gulf Cooperation Council (GCC) summit in Riyadh, and a decision by the Organization of Oil Exporting Countries (OPEC) to cut production.
That optimism, however, may not be borne out by facts on the ground and analysis of developments that are likely to produce at best motion rather than movement. In fact, more fundamentally, what many of the developments suggest is an unacknowledged progressive shift in the region’s alliances stemming in part from the fact that the bandwidth of shared US-Saudi interests is narrowing.
There is no indication that, even if Qatari emir Sheikh Tamim bin Hamad Al Thani decides to accept an invitation by Saudi king Salman to attend the GCC summit rather than send a lower level delegation or not attend at all, either the kingdom or the United Arab Emirates, the main drivers behind the 17-month old economic and diplomatic boycott of the Gulf state, are open to a face-saving solution despite US pressure to end to the rift.
Signalling that the invitation and an earlier comment by Prince Mohammed that “despite the differences we have, (Qatar) has a great economy and will be doing a lot in the next five years” do not indicate a potential policy shift, UAE Minister of State for Foreign Affairs Anwar Gargash insisted that the GCC remained strong despite the rift. “The political crisis will end when the cause behind it ends and that is Qatar’s support of extremism and its interference in the stability of the region.,” Mr. Gargash said, reiterating long-standing Saudi-UAE allegations.
Similarly, United Nations-sponsored peace talks in Sweden convened with the help of the United States may at best result in alleviating the suffering of millions as a result of the almost four-year old Saudi-UAE military intervention in Yemen but are unlikely to ensure that a stable resolution of the conflict is achievable without a lowering of tension between Saudi Arabia and Iran. Even humanitarian relief remains in question with the parties in Sweden unable to agree on a reopening of Sana’a airport to facilitate the flow of aid.
More realistically, with the Trump administration, backed by Saudi Arabia and Israel, determined to cripple Iran economically in a bid to force it to alter its regional policies, if not change the regime in Tehran, chances are the Yemeni conflict will be perpetuated rather than resolved.
To Yemen’s detriment, Iran is emerging as one of the foremost remaining shared US-Saudi interests as the two countries struggle to manage their relationship in the wake of Mr. Khashoggi’s killing. That struggle is evident with the kingdom’s Washington backers divided between erstwhile backers-turned-vehement critics like Republican senator Graham Lindsey and hardline supporters such as national security advisor John Bolton. The jury is out on who will emerge on top in the Washington debate.
The risks of the Saud-Iranian rivalry spinning out of control possibly with the support of hardliners like Mr. Bolton were evident in this week’s suicide bombing in the Iranian port of Chabahar, an Indian-backed project granted a waiver from US sanctions against the Islamic republic to counter influence of China that support the nearby Pakistani port of Gwadar.
Iranian officials, including Foreign Minister Mohammad Javad Zarif and Revolutionary Guards spokesman Brigadier General Ramadan Sharif suggested without providing evidence that Saudi Arabia was complicit in the attack that targeted the city’s police headquarters, killing two people and wounding 40 others.
Iran’s semi-official Tasnim news agency, believed to be close to the Guards, said the attack was the work of Ansar al-Furqan, an Iranian Sunni jihadi group that Iran claims enjoys Saudi backing.
Iran’s allegation of Saudi complicity is partly grounded in the fact that a Saudi thinktank linked to Prince Mohammed last year advocated fuelling an insurgency in the Iranian province of Sistan and Baluchistan that incudes Chabahar in a bid to thwart the port development while Mr. Bolton before becoming US President Donald J. Trump’s advisor called for US support of ethnic minorities in Iran.
In a bid to create building blocks for the fuelling of ethnic insurgencies in Iran, Pakistani militants have said that Saudi Arabia had in recent years poured money into militant anti-Iranian, anti-Shiite madrassas or religious seminaries in the Pakistani province of Balochistan that borders on Sistan and Baluchistan.
The divergence of US-Saudi interests, agreement on Iran notwithstanding, was on display in this week’s defeat of a US effort to get the UN General Assembly to condemn Hamas, the Islamist group that controls the Gaza Strip. Saudi Arabia, despite the kingdom’s denunciation of Hamas as a terrorist organization and its demand that Qatar halt support of it, voted against the resolution.
The vote suggested that Mr. Trump may be hoping in vain for Saudi backing of his as yet undisclosed plan to resolve the Israeli-Palestinian dispute that is believed to be slanted towards Israel’s position.
Saudi ambassador to the UN Abdallah Al-Mouallimi said the defeated UN resolution would “undermine the two-state solution which we aspire to” and divert attention from Israel’s occupation, settlement activities and “blockade” of territories occupied during the 1967 Middle East war.
Saudi Arabia’s changing status and the divergence of longer-term US-Saudi interests was also evident in this week’s OPEC meeting in Vienna.
To get an OPEC deal on production levels, the kingdom, once the oil market’s dominant swing producer, needed an agreement with non-OPEC member Russia on production levels as well as Russian assistance in managing Iranian resistance, suggesting
The agreement, moreover, had to balance Mr. Trump’s frequently tweeted demand for lower prices, and the kingdom’s need for higher ones to fund its budgetary requirements and Prince Mohammed’s ambitious economic reforms and demonstrate that the Khashoggi affair had not made it more vulnerable to US pressure.
The emerging divergence of US-Saudi interests in part reflects a wider debate within America’s foreign policy community about what values the United States and US diplomats should be promoting.
With some of Mr. Trump’s ambassadorial political appointees expressing support for populist, nationalist and authoritarian leaders and political groups, the fact that some of the president’s closest Congressional allies back the anti-Saudi resolution illustrates that there are red lines that a significant number of the president’s supporters are not willing to cross.
All told, recent developments in the Middle East put a spotlight on the changing nature of a key US relationship in the Middle East that could have far-reaching consequences over the middle and long-term. It is a change that is part of a larger, global shift in US priorities and alliances that is likely to outlive Mr. Trump’s term(s) in office.
Qatar’s decision to leave OPEC
The Emirate of Qatar will leave OPEC as from January 1, 2019.
The primary reason for this choice is the Emirate’s project to become the world leader in the natural gas market, raising its production from 77 million tons per year to 110 million tons. However, there is obviously also a geopolitical and energy decision underlying Qatar’s current choice.
This is the Emirate’s final response to the boycott and blockade imposed by Saudi Arabia on Qatar in June 2017, with the support of the United Arab Emirates, Bahrain, Yemen, Maldives, the Libyan GNA, Egypt and Jordan – based on Saudi Arabia’s generic accusation whereby Qatar was supposed to sponsor and support “terrorism” on its own.
The blockade was imposed two days after President Trump had met as many as 55 Heads of Arab and Muslim countries to build a sort of NATO equivalent, always against “terrorism” – an alliance to be set up immediately to counteract, above all, the Shiite and Iranian danger.
Let us leave aside the twenty-eight pages taken from the report of the US Senate on September 11, which would definitively prove the connection between those Al-Qaeda operatives and the Saudi regime – as well as the many multiannual reports of private and public funding to the jihadists and finally the lines of credit opened again by eminent citizens of the Wahhabi Kingdom in favour of Al Baghdadi’s Syrian-Iraqi Caliphate.
The Saudis, however, are too rich not to be believed, especially by the USA – hence the great blockade on Qatar succeeded also with the support of some Western countries.
For the whole Middle East, their troops, like the US ones, reported to CENTCOM, at the Al Udeid base having its headquarters precisely in Qatar.
The strategic characteristics of Qatar, which today wants to build its autonomous natural gas organization – independent of the oil one of OPEC, which does not deal with gasand is, however, dominated by Saudi Arabia – are many and particularly interesting: firstly, the Qatari people are probably the richest citizens in the world.
If we assume that the Americans’ average income is 100, that of Qatari citizens is 187.4.
Just about the size of the Falkland Islands, the Emirate has 1.9 million residents, with a very high and growing share of immigrants.
From 2000 to 2010 the Emirate’s economy grew by a 12.9% average per year.
Its future growth up to 2022 is expected to be 18% higher than the current one.
There is also an interesting geopolitical sign: Qatar participated – with great commitment – in the Western operations against Gaddafi by supporting, in particular, the black market of Cyrenaica’s oil, together with the Turkish intelligence services.
Nevertheless Qatar supports also some “rebel” jihadist Syrian groups against Assad, thus doing half a favour to US allies – while hosting, since 2013, a political office of the Afghan Taliban, which is well known and also frequented by the US intelligence service operatives.
Qatar’s global industrial and financial investments, however, are manifold.
Through its sovereign fund, the Emirate owns significant shareholdings of the Agricultural Bank of China – and certainly the Qatari decision to leave OPEC has been blessed by China. It also has shareholding in the Airbus Group; the London Stock Exchange (15.1%); Volkswagen (17%); Lagardère, a large and diversified media and publishing company; the Paris St.Germain football club; the Virgin megastore; the HBSC, one of the largest banking groups in the world; Credit Suisse (5.2%) and Veolia, a French water and gas utility and service company.
Not to mention the countless real estate operations: Porta Nuova in Milan; Westin Excelsior in Rome; Gallia in Milan; Costa Smeralda in Sardinia; Deutsche Bank; Barclay’s; Royal Dutch Shell; Tiffany; Siemens; the Heathrow airport; Walt Disney and the Empire State Building.
In addition to many other shareholdings not mentioned in this paper.
However, it has also a 3% shareholding of Total, which for Italy is an extremely important sign; a majority shareholding of the Miramax entertainment and movie company, as well as shareholdings in Rosneft, the Russian giant of natural gas and raw materials, and in the big five-year project for liquefied petroleum gas (LPG) in Germany and in the EU – a 30 billion US dollar project, of which 10 invested for Germany alone.
Therefore, between Qatar and Saudi Arabia, in the fight between oil producers and natural gas extractors, there is a real war for the hegemonic conquest of technologically advanced areas and of Europe, in particular, with a view to definitely acquiring markets and using their diversification opportunities.
Moreover, Qatar is at least as rich in natural gas as Iran (and, together with the Shiite Republic, it participates in the exploitation of the South Pars II marine field), but also as the Russian Federation.
The new Qatar-centred “gas OPEC” means, therefore, that there is no longer the US-friendly Sunni oil OPEC, precisely the one that organized the great petrodollar recycling started after Egypt and Syria’s Yom Kippur war against Israel in 1973.
Oil recycling at a “high” price against the US dollars which, after the end of the Bretton Woods agreements, led to the new hegemony of the US currency and its inappropriate exchange rate, despite its internal fundamentals.
“The dollar is our currency, but it is your problem”, FED Governor Paul Volcker said to his fellow Governors of the European Central Banks.
At that time, there was not yet the weak and irresolute timidity of the Euro to make the picture more complex.
The European currency is not a lender of last resort, but it plays the game of the global currency as an alternative to the US dollar, with the operational results we can imagine.
It is therefore no mere coincidence that the only strategic uses of the Euro were the minimum Iranian ones, in the oil Stock Exchanges of the islands in the Persian Gulf, or the more paraded than real ones by Saddam Hussein.
In essence, reverting to the geopolitical sense of the very recent Qatari decision to leave OPEC, this means that the 600,000 barrels/day of oil extracted from Qatar are considered fully marginal by it and certainly can never compete with Saudi Arabia’s 11 million barrels/day of Saudi Arabia.
Qatar plays the game with its natural gas – it does not play its oil cards.
The current Qatari operation, however, implies a strategic choice in the near future, which could be the creation of a “gas OPEC” with Russia and Iran, in view of a doubling of the LPG prices in 2019, with China becoming the world’s LPG top consumer and the USA the world’s top oil extractor, albeit with the new and expensive shale techniques, which generate profits only with high oil barrel prices.
Or an economic and financial alliance between Qatar, China, Japan and Russia, which could marginalize the dollar area by reducing it to oil.
At geopolitical level, this will certainly mean greater instability – not necessarily fully peaceful – between the Emirate and the Saudi Kingdom, while the former will invest – also within the EU – in the industrial processing of LPG, which mainly regards plastics, resins and all synthetic products from hydrocarbons.
If Russia – which also plays on the Saudi table – will be able to control its oil production, in line with the Sunni OPEC, the Qatari operation will be successful, but only for the creation of the new LPG market, and Qatar will not affect the positions already reached by Saudi Arabia and its allies.
Conversely, if Russia and Iran increase oil production, the pro-Saudi OPEC will definitely collapse and the African, Indonesian and South American production areas shall look for other regional cartels and, hence, for other geopolitical axes.
Furthermore, the bilateral relationship between the USA and Saudi Arabia will be put to an end, given the new US production and oil power, its global exporting capacity and, finally, its autonomy from the Middle East political and financial cycles.
Moreover, according to the Emir’s policy lines, the Qatari economy is focused on attracting and accumulating foreign investments, especially after the 2017 blockade, which has attracted much capital from Asia and the Middle East itself, in addition to the opening of new ports and the creation of new Special Economic Zones.
Both Saudi Arabia and Qatar have used the so-called Arab “springs” to broaden their personal power and create strong competition among the Gulf countries.
Moreover, Qatar has used the phase following the Arab “springs” to redefine its traditional expansion axes: the special relationship with the Muslim Brotherhood and its traditional link with Iran.
The Emirate, in fact, believes that the Muslim Brotherhood is the central axis of Arab politics and, hence, intends to support it.
While all the others repress it, in line with Saudi Arabia.
Even after the fall of the “Muslim Brotherhood” regime in Egypt – with the coup organized by Al Sisi in 2013 against Mohammed Morsi – Qatar keeps on supporting the fraternal Ikhwan or also Hamas and all the other organizations that have integrated into the global network of the Muslim Brotherhood.
The Saudi tension with Qatar also results from the Qatari geo-economic link with Iran and, above all, from Iran’s economic growth after the 2014 JCPOA agreements on the Iranian nuclear capacity. Saudi Arabia wants to avoid said agreements leading to the economic, oil and military recovery of the Shiite Iran.
Furthermore it cannot be ruled out that, in the near future, Saudi Arabia – possibly supported by the USA, which now believes in every “counterterrorist” storytelling – even organizes a coup against Al-Thani and the current Qatari ruling elite.
The sequence of attempted and failed coups is already long.
It would be a geopolitical suicide, but it may happen.
Pakistan, Bangladesh and other countries are now dependent on the remittances sent from Qatar by their fellow citizens to their homeland, even if, as countries, they sided with Saudi Arabia during the blockade imposed on Qatar in 2017.
Since the beginning, however, Tunisia refused to condemn Qatar (and Italy should be more careful to these infra-Islamic shifts), while Turkey – which operated with Qatar during the Libyan jihadist uprising – does not accept the Saudi diktat. The same obviously holds true for Iran and – probably less intuitively – for Oman.
After an ambiguous phase, even the Russian Federation – which had not well foreseen the internal conflict on Qatar within the Gulf Security Council in 2017 – has gradually linked itself to the Emirate, even without questioning its ties with Saudi Arabia.
Moreover, the United States has even discovered it still has a large military base in Qatar and hence cannot afford a worsening of the infra-Arab conflict and, above all, of the infra-Wahhabi conflict between Saudi Arabia and Qatar.
Obviously the issue of relations between Qatar and “terrorism”, or the link between Qatar and Iran, is a completely uncertain and widely manipulated issue.
The Emir’s speech that expressed support for Iran and Hamas and criticized the other governments of the region – a speech that allegedly was to be held on May 23, 2017 – was never delivered. There had been announcements widely publicized by the Saudi and Emirates’ news agencies, but the Emir’ speech had never been delivered.
In this regard, the official Qatar’s news agency in Doha talked about the hacking of Qatari websites, but not even this is certain.
There is also the issue of the one billion US dollars paid as a ransom to “bandits” in Iraq by some members of the Emir’s family.
It is ascertained that part of that money arrived at the Syrian Al-Qaeda “section”, Jabhat Tahrir al Sham, with a share of funds that – not too strangely – later reached the Iranian government.
Certainly there is also the already-mentioned support for the Muslim Brotherhood and there are now ascertained links between the Ikhwan and some Iranian financial and political-military networks.
Everything is possible in the Middle East.
In Doha there is also a “historical” office of the Palestinians and also one of Hamas, which has always been an integral part of the Muslim Brotherhood, while it is certain that large amounts of money were sent by Qatar to the Egyptian Brotherhood during Morsi’s government and that the Ikhwan militias from every part of the Middle East were trained in Qatar.
Obviously, at least initially, the guerrilla warfare in Libya after Gaddafi’s fall was a clash between the forces supported by the Qatari intelligence services and those organized by the other Emirates, with a specific role played by Turkey – a loyal ally of Qatar – above all at economic level.
Westerners’ stupidity did the rest.
Moreover, Qatar also sent its troops so that the Sunnis could regain control in Bahrain during the 2011 Shiite uprising.
Nor should we forget that, apart from the Al Udeid US base in Qatar, Turkey itself is building its base in Qatar for as many as 5,000 soldiers – a base located in Tariq bin Ziyad, south of the capital city.
However, how does the Gulf Cooperation Council (GCC) – the instrument of confrontation between Saudi Arabia and Qatar – work?
Is it not affected – like OPEC – by an internal weakness that blocks it for any relevant decision?
The GCC was founded in 1981. However, the monetary union, which has been gradually abandoned by Oman and the Emirates, has never been reached.
And the GCC still regards Iran as an “imperialist” factor of radical destabilization of the Arabian peninsula, especially with the organization of Shiites in Saudi Arabia and in other areas of the Emirates.
The Shiites within the Saudi regime account for 15-20%, especially in the major oil extraction areas. Obviously the Saudi regime does not want to destabilize these areas and, above all, it does not want to break the link between the USA and the Sunni world of the Arabian Peninsula – a break that, in the near future, would lead to the victory of the Iranian Shiites.
Iran: Which way to go?
The US withdrawal from the Joint Comprehensive Plan of Action (JCPOA), seriously hampered the chances for keeping the landmark accord in place.
The accord, signed in 2015 by the P5+1 group of countries — China, Germany, France, Russia, the United Kingdom and the United States — with Iran, requires Tehran to maintain a peaceful nuclear program in exchange for sanctions relief.
According to the IAEA, Iran strictly abides by the terms of the JCPOA, while the international community is unable to do the same, no matter how much politicians in the EU and other countries would like to stick to its provisions – all because of US pressure.
Sadly, the United States has financial and economic levers to punish not only Iran, but also foreign companies doing business with the Islamic Republic. Given the choice of either maintaining business relations with the US and the rest of the world or with Iran alone, there is little wonder which of the two options they will go for. This doesn’t necessarily mean that they will do this under US pressure. Business always goes where the money is and sticking with the US looks a more profitable way to go. This is exactly what business-savvy Donald Trump is staking on.
In 2018, some 100 foreign companies, including big ones as Shell, Volkswagen, Daimler, Peugeot, Airbus, Total, PSA, Siemens, and Russia’s LUKOIL and Zarubezhneft, started pulling out of Iran even before the US sanctions, announced by President Trump in May, actually took effect. However, although bending under Washington’s pressure, the authors of the 2015 Iran nuclear deal (Russia, China, Britain, France and Germany) as well as the European Union as a whole and many other countries around the world are still interested in keeping the nuclear accord alive. Why?
First, the JCPOA is a truly historic document which, possibly for the first time ever (not mentioning, of course, the Treaty on the Non-Proliferation of Nuclear Weapons – NPT) has curbed the nuclear ambitions of a particular country and put its nuclear program strictly in line with international laws and IAEA requirements. This is a vivid example of the world countries’ effective diplomatic work, which created a precedent of genuine confidence of the parties for the sake of preserving the nuclear non-proliferation regime.
Secondly, Iran a leading player in the volatile region of Western Asia, which incorporates the Middle and Near East, the Caucasus, the Caspian Sea zone, and Central Asia.
Thirdly, it should be borne in mind that Iran is a powerful source of hydrocarbons, and that its territory is an important transit route for oil, natural gas and other products to the world market. A well-educated population and a relatively developed industry and agriculture attract the attention of world business. In addition, the 70-million-strong Iran, which boasts one of the world’s biggest militaries, is an important factor in West Asian and world politics.
What needs to be done to resist US sanctions and, thereby, save the JCPOA?
To solve this complex task, Iran and all countries willing to preserve the accord, above all Britain, France, Germany and the EU as a whole, should work together. This is already being done now with the direct and active participation of Russia and China.
Today, the main priorities are:
Providing legal assistance to companies doing business with Iran. The practical implementation of the EU-declared blocking statute, which declares null and void US sanctions against Iran on its territory, prohibits European companies from observing them, as well as implementing any decisions by foreign stemming from these sanctions. The blocking statute also allows European organizations to take legal action to make up for the losses incurred as a result of the implementation of sanctions at the expense of persons who caused these losses (meaning the US government).
It is also necessary to establish an independent payment system that would safeguard European businesses against US sanctions on Tehran (a special purpose vehicle, SPV, to facilitate financial transactions with Iran) with the possible involvement, among others, of the French and German central banks.
The EU is creating a special legal entity to carry out transactions with Iran. Other participants will be able to join in, which will allow European companies to work with Iran in keeping with European legislation – something like the SWIFT banking system, only on a European scale and based on the euro.
This will be an extremely difficult task for Europeans, both from “political” (a real challenge to the US) and technical standpoints. EU foreign policy chief, Frederica Mogherini, said: “The involvement of the Finance Ministers of the E3 [France, Germany, UK] is of key importance at this stage. They are working hard to finalize it. I cannot tell you a date, but I can tell you that work is continuing and is progressing in a positive manner.”
In his turn, Russia’s Deputy Foreign Minister Sergei Ryabkov said that this was fraught with problems.
“We need to redouble our efforts here and this is what we are doing now with both Europeans and Iranians.”
Meanwhile, the Iranians, who have so far been strictly implementing the terms of the 2015 nuclear accord, are losing faith in the EU’s ability to resolve the problem. Therefore, it may take several months to see whether this plan is really working.
Speeding up the process of shifting to the use of national currency in trade with Iran (primarily by Russia, China, India, Turkey, which have done this before) would be of much help to Tehran.
In order to move around the financial and banking hurdles erected by the United States, it would be advisable to enlist the help, whenever possible, of Islamic banks in Muslim countries for cash transactions to and from Iran. The Islamic banking system has its specific features that are hard to destroy from the outside, even by a financial superpower like the United States.
The same is true about small and medium-sized companies in Muslim countries used as intermediaries in financial transactions with Tehran. Moreover, it is small and medium businesses, and not necessarily in Muslim countries alone, that can play the main role in maintaining trade and other economic relations with Iran.
Therefore, it would be equally desirable for the EU to provide legal and financial assistance to small and medium-sized companies in Europe, which are willing to do business with Iran, and to shift the main load from big companies to medium and small firms for financial transactions with Iran in Euros. Even though they will hardly be able to completely replace the giant companies, small and medium-sized firms have all they need to offset at least part of the losses. According to Iranian estimates, Tehran hopes to establish business relations with many of the 23 million or so small and medium-scale enterprises in Europe in order to circumvent US sanctions. Moreover, Iran has good experience in getting around tough sanctions between 2012 and 2016.
What can Tehran do under these circumstances? First and foremost, it should establish a business triangle of Iran-EU, Islamic banks and Islamic small and medium-sized businesses, build close trade and economic partnership with European and other small and medium-sized businesses. This is quite feasible because the Americans will find it hard to keep an eye on a huge number of enterprises, much less trace their transactions in Euros, especially if the European Union contributes to such cooperation with Iran.
Iran’s Supreme Economic Coordination Council recently allowed the country’s private sector to sell crude oil abroad as a way of circumventing US sanctions. This is the first time the Iranian private companies have been granted permission to trade in oil. Tehran should avail itself of this opportunity as soon as possible.
As for Iran’s time-tested methods of tackling sanctions like, for example, the use of “ghost” oil tankers, which switch off their automatic identification system (AIS) transmitters not to disclose their route and destination, as well as selling “unrecorded” oil at reduced prices, I can assume that these methods have been used before and are being used today.
It seems that, in view of the situation at hand, Tehran should also recall its oil-for-goods project with Russia, prepared back in 2014, whereby Iran supplies oil to Russia (at least 100,000 barrels per day – about 5 million tons a year) in exchange for industrial equipment and machinery. Four years ago, the plan was never implemented in full because Iran, already withdrawing from the sanctions regime in keeping with the JCPOA, was no longer interested in it.
There was only one shipment made in November 2017, to the tune of 1 million tons. The project could be revived now. Russia’s Promsyryeimport, which is part of the Russian Energy Ministry and was created expressly with this project in mind, will implement the Russian side of the deal.
A program of developing two Iranian oil fields, Aban and Peydar, by Promsyryeimport (which replaced Zarubezhneft) and Iran’s Dana Energy Company, could also be considered.
Overall, the across-the-board cooperation between Russia and Iran against US sanctions could contribute very significantly to minimizing their impact.
Tehran will certainly put to maximum use the great potential of the Islamic Revolutionary Guard Corps (IRGC), which proved so effective during the period of hard-hitting sanctions of 2012-2016 and which controls between 25% and 35% of the country’s economy and 25% of all its capital.
In 2012-2016, the IRGC set up a large-scale system of circumventing the sanctions by controlling considerable “gray” financial flows to, through and out of Iran. IRGC intelligence was gathering information abroad about the “weak” spots in the sanctions system, about the most effective ways of circumventing sanctions, and was also obtaining data on new technologies Iran was not allowed to buy.
Iran and countries opposed to US sanctions against it are looking for ways to ease their impact. Even though completely neutralizing the negative effect of these sanctions will hardly be possible, a certain let-up is quite possible.
Well, the Iranian response to the US sanctions could at times be controversial, but Washington’s exit from the JCPOA and the US sanctions themselves are by no means legal either.
In October, President Hassan Rouhani warned that the previous four months had been a difficult time for the Iranians and that the coming few months would be equally hard. He said that the government would make every effort possible to tackle the situation. Meanwhile, Tehran says it will stick to the terms of the JCPOA as long as its other signatories (save for the US, of course) do the same. Can they do this?
The situation is complex and unpredictable. For Iran, much will depend on whether the JCPOA is kept alive without the US, if Tehran is able to maintain, albeit limited, financial and economic cooperation with foreign countries, primarily with small and medium-sized businesses, and whether it is satisfied with the results of this cooperation.
How will the sanctions, and especially the fall in oil production and exports, affect the national economy and the life of ordinary Iranians? A good question, given the impact the internal political situation can have on the alignment of political forces in the country.
The outcome of this struggle may not take too long coming. Maybe six months, when a European mechanism against Washington’s unlawful withdrawal from the JCPOA and the resumption of its sanctions on Iran is already in place and the deadline set by President Trump for the eight importers of Iranian oil has expired.
First published in our partner International Affairs
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