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Will Iran be able to counteract US sanctions?

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American sanctions and how to confront them

The Islamic Republic of Iran (IRI) today, as in the past 40 years of its existence, is in the global spotlight as the focus of major political and economic developments.

As you know, on May 8, US President Donald Trump announced the withdrawal of the United States from the nuclear deal – the Joint Comprehensive Plan of Action (JCPOA) – and the resumption of the sanctions regime against Iran.

On August 7, the United States introduced the first anti-Iranian sanctions package that envisages restrictions on the purchase of Iranian cars, gold and metals. The sanctions also affected Iranian companies specializing in aluminum, graphite, coal, and steel, as well as those manufacturing computer programs for industrial enterprises.

On November 4, the United States will launch a second package that will deal a blow to the Iranian energy sector, in the first place, to the oil and gas industry and related industries, and will affect major transactions, that is, the IRI’s banking system.

Undoubtedly, this is a major attack on the Iranian economy. If we recall the period from 2011 to 2016, back then such international sanctions nearly threw it into an abyss in just a few months. However, today the situation is somewhat different. The anti-Iranian sanctions announced by Trump have lost their international status.

Unlike in those days, when due to Tehran’s “nuclear” persistence the entire world rose against it, today Trump’s anti-Iran initiative is not supported by anyone. The White House administration counts only on the financial and economic pressure on the disobedient and the obstinate who do not want to join the campaign against the IRI.

And these turned out to be quite a few. As they met in Vienna in July, the five participants in the nuclear deal with Iran (Russia, China, Britain, France, Germany) agreed to protect the five countries’companies from the impact of US sanctions. Russian Foreign Minister Sergei Lavrov said that the parties had also agreed to establish methods of maintaining trade relations with Iran which “would not depend on the whims of the United States.”

On August 7, immediately after the introduction of American sanctions against the Islamic Republic of Iran, the European Union adopted the so-called ‘blocking’ regulation which invalidates American sanctions against Iran on its territory, bans European companies from observing them and prohibits the implementation of any foreign court rulings adopted on the basis of these sanctions.

The coming into force of this regulation also allows all European organizations to claim compensation in court for damage inflicted as a result of implementation of these sanctions from persons responsible for this (referring to US authorities).

In late August, the EU began to discuss the possibility of creating an independent payment system, which would protect the European business from US sanctions against Iran. The project may involve central banks of France and Germany.

Moreover, at the end of August, the European Commission (EC) approved financial assistance to Iran to the amount of 50 million euros to solve the “key economic and social problems” of the Islamic Republic of Iran. The first tranche amounted to 18 million euros, which will be channeled “for projects in support of sustainable economic and social development in the Islamic Republic of Iran,” with 8 million euros allocated to Iranian private companies. Measures to support the Iranian private sector include assistance to Iranian small and medium-sized businesses, development of production and marketing chains, and technical assistance to the Iranian Trade Promotion Organization. Though small, the sums are important.

The EU will support Iran as long as the country is committed to “full and effective” compliance with the “nuclear deal”, which stipulates the lifting of sanctions, the executive body of the European Union specifies.

Despite measures to support Iran, the desire to preserve the Joint Comprehensive Plan of Action and the EU’s protests against anti-Iranian sanctions, large European and transnational companies do not really believe in the European Union being able to counteract the United States. Experts say that judging by the experience of the past, when the European Union put up resistance after unilateral actions by the White House, these not quite effective “threats” are about all the “resistance” Europe can mount, since the Iranian market, despite all its attractiveness, can not be compared with the American one. Robert Einhorn, Senior Fellow at the Brookings Institution in Washington, former advisor to the US Secretary of State, said: “Foreign companies are already experiencing difficulty doing business with Iran, and if all these difficulties  – non-transparent rules, corruption, poor management, etc. – become aggravated further by the risk of being cut off from the US market and the US financial system, then no reasoning from  European politicians will work.”

Right now, three months before the Americans introduce the main portion of sanctions, many large companies are leaving the IRI. In the oil sector – this is the French oil and gas giant Total. [1]

Fully aware of the situation, the Iranian leadership relies on cooperation with small and medium-sized foreign enterprises which are not so connected with the United States. Goliam Reza Ansari, the Iranian Deputy Foreign Minister for Economic Affairs, said recently: “There are 23 million small and medium-sized businesses in Europe, and they could assist us in bypassing US sanctions.” We must use the potential of European enterprises to meet our economic needs in times of trouble. We are planning to create a working group of experts to promote such enterprises throughout the country. ”

Many countries back Tehran’s anti-sanctions measures. They are prepared to buy oil from Iran, to invest in projects, to provide know-how and technology. First of all, in the oil and gas sector.

The Chinese economic analyst Kingji Su sayvili said that the Iranian economy is able to overcome US sanctions with minimal difficulties, since these measures are not supported by the international community. The Chinese expert emphasized that after the arrival of sanctions many major economies, including European countries, China and Russia, retained or even strengthened economic relations with Iran.

Indeed, the director of the Department of International Cooperation of China Petroleum and Chemical Industry Federation (CPCIF) said that China will continue to import Iranian oil, despite US sanctions. He underscored that the Chinese market and many other Asian markets strongly depend on Iranian oil. According to The Wall Street Journal (WSJ), the number one buyer of Iranian oil – China, which acquires about a quarter of its oil supplies, is unlikely to cut down on its purchases.

In turn, Investment Director of the Iranian National Petrochemical Company (NPC) Hossein Alimorad said that the amount of Chinese investments in the Iranian oil and petrochemical industry had not changed after the US withdrew from the nuclear deal. As Mr. Alimorad announced recently, the NPC has reached an agreement with a consortium of companies from China and the Philippines regarding a $ 7 billion investment in the petrochemical industry in Iran.

Moreover, Mohammad Mostafavi, Director of Investment of the National Iranian Oil Company (NIOC), said that China National Petroleum Corporation (CNPC) together with the Iranian Petropars can take over from Total, which has 50.1% of the stake in the joint project for the development of the 11th phase of the South Pars gas field, if the French company leaves Iran.

German company ADL recently signed an agreement on cooperation in the oil refining sector with the Iranian oil company Sepahan (SOC). The goal is to share technical know-how and knowledge to improve the quality of products, including industrial oils and lubricants. ADL will begin to implement this ambitious plan in cooperation with its Swiss and Austrian partners.

South Korea (ROK) said in mid-August that Seoul will provide financial support to companies affected by new sanctions against Iran, and will look into the possibility of doing business in alternative markets so as to minimize losses to the local economy. It is clear that South Korea, having bought 147 million barrels of oil from Iran in 2017, is more than interested in expanding oil business with it.

Undoubtedly, international support for Iran as it tries to battle Trump’s sanctions is of great value. However, perhaps no less important are the internal economic measures that Tehran is taking to repel, or at least soften the blow to the key sector of its economy – the oil and gas extraction and processing industries.

Oil import substitution

Leaders of the Islamic Republic of Iran are stepping up measures to ensure import substitution. Thus, the Iranian Oil Ministry has banned the import of 84 types of equipment for the oil industry on the grounds that such equipment can be produced domestically.

Among the equipment and products prohibited for importation are wellhead equipment, desalination facilities, anticorrosive substances, sulfur recovery catalysts, wellhead control panels, and others.

Can the Iranians solve the problem of import substitution in the oil industry, while ensuring the necessary modernization of the entire oil and gas sector?

New sanctions against Iran have created severe challenges for Iran’s oil and gas production and its petrochemical industry.

However, it should be noted that the IRI, which was under American sanctions ever since the 1979 Islamic Revolution, has been developing its own production of oil and gas equipment. This kind of work was particularly intensive the period from 2010 to 2016, when anti-Iranian sanctions were the toughest.

The head of the Iranian oil company in southern regions Hamid Bovard said in 2013 that Iranian enterprises were producing oil and gas equipment and developing prototypes for launching into production of about seven thousand items. Mr. Howard expressed confidence that such oil and gas equipment as gas pumps, turbines, ball valves and compressors will be key to the restoration of Iran’s oil industry. By that time, eight hundred projects had been launched, with investments reaching about $ 15.5 billion. All of them aim to increase the recovery rate of crude oil and oil extraction.

Today, amid the increasing pressure from the Trump administration on Iran, measures to counteract sanctions are intensifying. According to Director of the Petrochemical Company Jam Said Shirdel, the company’s specialists, in cooperation with other Iranian companies, have developed and produced 1,000 types of products and equipment for petrochemicals which were previously purchased abroad. He added that in the next two years the company will produce 20,000 types of petrochemical products.

According to Reza Khayyamyan, head of the Association of Equipment Manufacturers of Iranian Oil Companies, the Iranian producers can provide technical services and produce 80% of advanced oil equipment for the development of oil extraction and processing projects. Mr. Hayamyan said this industry employs more than 50 Iranian companies. New contracts worth more than $ 6 billion will soon be signed with local oil extraction and refining companies.

Mr. Hayamyan made it clear that import substitution of oil and gas equipment is on the list of priorities of the Ministry of Oil, which is planning to roll out 14,000 major parts.

As we see, Iran is set on mobilizing its own resources. For one, Secretary of Iran’s Supreme National Security Council Ali Shamkhani said recently that the Iranian private sector plays an important role in counteracting the economic war, which was launched against Iran by the Trump administration.

Mohammad Hosseini, member of the Board of Trustees of the National Development Fund of Iran (NDF), said that Fund will allocate 12% of financial resources to counter US sanctions against Iran.

However, it is too early to talk about a profound modernization of the entire oil and gas complex on the basis of state-of-the-art technologies. As it happens, the most advanced technologies, know-how, innovations in the oil and gas and petrochemical industry, which mark dramatic breakthroughs in this industry and its overall renovation, are concentrated and receive special protection in the laboratories of just a few of the largest oil and gas companies, which, alas, are not ready to share these technologies with Iran.

Economy and politics under sanctions

In general, the economic situation in Iran before Trump announced anti-Iranian sanctions regime was not in its best condition. But in connection with the implementation of the Joint Comprehensive Plan of Action there were hopes and faith in a better future.

Now the situation has become worse because of sanctions. The rial rate has fallen, which provoked a rush for buying dollars. This further accelerated the collapse of the Iranian rial. Compared to January, when one dollar on the black market sold for 43 thousand rials, at the end of August it trade for 107 thousand. The official rate for this period decreased from about 36 thousand to 42 thousand.

In the meantime, the opposition is seizing on every opportunity to put the blame for the current situation on President Hassan Rouhani and his liberal reform Cabinet.

In late July, opposition MPs used their constitutional right to summon the president for making a report on the effectiveness of his activities. They gave President Rouhani a month to prepare the answers to their questions and explain to them why the government had done nothing to put an end of the smuggling of goods that damages production, what caused the fall of the Iranian rial, and what triggered economic recession and rising unemployment.

On August 25  President Rouhani addressed the Majlis. In particular, he said: “We are not afraid of America or economic problems. We will overcome all difficulties <…>. You can talk about unemployment, foreign currency, recession and smuggling. I think that the problem is people’s views on the future <…>. People are not afraid of the US, they are afraid of our differences. If they see that we are united, they will believe that the problems will be solved,” the president said. At the same time, he acknowledged that part of the country’s population “had lost faith in the future of the IRI and doubts its power”.

The president’s report did not satisfy Deputies of the Mejlis, who expressed their discontent with the work of Rouhani and his government. In addition to that, the MPs struck a blow to the government’s makeup by securing the dismissal of the Minister of Economy and Finance Masoud Karbasian, Minister of Labor, Social Welfare and Cooperative Affairs Ali Rabiyyi. Dismissed earlier was the head of the Central Bank, Valiollah Seif. Abdolnasser Hemmati was appointed instead.

Thus, the political situation in Iran is no longer stable being marred by visible signs of a schism within the ruling elite. However, it would be premature to suggest a crisis of the Iranian regime. The American sanctions have jeopardized the positions of only President Rouhani and his team, which was ready for a dialogue with the West. The growing political weakness of President Rouhani and his government has given a chance to his hardline opponents to strengthen their positions and exert a significant influence on the policy of the Islamic Republic of Iran at home and abroad.

For now, removal of Rouhani is not on the agenda. Supreme leader Ayatollah Khamenei, fearing an internal political explosion, is supporting the president. However, given the situation and increasing pressure from the opposition, Rouhani’s policies (both domestic and foreign) may change, though not in the direction of reforms and liberalization.

Whether Tehran will agree to new talks with Washington, to compromises on nuclear missile programs is difficult to predict. For today, it is 100% no. This would mean a ‘political death’ for Rouhani and for the supreme leader Khamenei as well. What will happen next is difficult to say. Much will depend on the ability to retain the Joint Comprehensive Plan of Action and, most importantly, on the ability of all opponents of Trump’s anti-Iran sanctions to confront them financially and economically.

However, Ayatollah Khamenei is rather pessimistic about this. He said on August 29 that Iran should give up hopes that Europe will save a nuclear deal. In addition, he added two important things. First, the Joint Comprehensive Plan of Action is not a goal, but a means, and Iran, if it finds that the Plan has ceased to meet Iranian interests, will reject it. And the second: Iran has no intention of negotiating a new agreement with the US at any level because of the “obscenity” of such talks.

Indeed, there are no conditions and no incentives for Iran entering new talks on nuclear missile issues,

Even in case of the worst of scenarios, if the IRI economy faces serious problems, the most radical groups concentrating around the political opponents of Rouhani may come to power in Tehran. These forces will not even consider the issue of negotiations with the US. The Islamic Republic of Iran will yet again become a “besieged fortress”, but this is unlikely to affect foreign policy ambitions, especially in the region. On the contrary, they will grow under the leadership of anti-Western politicians and IRGC, forming a foundation for the military and political instability in the region.

  •  [1] Total is getting ready to leave Iran before November 4. The company is developing the South Pars gas field. Total has already invested in it app. 50 million dollars. The French make it no secret that they do not want to anger Washington. The $ 2 billion project is under threat, but these losses are nothing in comparison with the fines that could be imposed on the violators of sanctions by the US Treasury, and other consequences. The most serious threat is the “cut-off” from the US financial system. For many large companies, this threat is even worse than billions in fines. For example, over 90% of all financial transactions at Total pass through US banks.
  • [2] Wellhead equipment is a set of equipment designed for tying casing strings, sealing the wellhead (annular space, internal tubing cavity, well production diversion) during drilling, well workover and well operation mode regulation.

First published in our partner International Affairs

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Turkey plays Khashoggi crisis to its geopolitical advantage

Dr. James M. Dorsey

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With Turkish investigators asserting that they have found further evidence that Saudi journalist Jamal Khashoggi was killed when he visited the kingdom’s consulate in Istanbul two weeks ago, Turkey appears to be leveraging the case to enhance its position as a leader of the Islamic World and reposition itself as a key US ally.

To enhance its geopolitical position vis a vis Saudi Arabia as well as Russia and Iran and potentially garner economic advantage at a time that it is struggling to reverse a financial downturn, Turkey has so far leaked assertions of evidence it says it has of Mr. Khashoggi’s killing rather than announced them officially.

In doing so, Turkey has forced Saudi Arabia to allow Turkish investigators accompanied by Saudi officials to enter the consulate and positioned President Recep Tayyip Erdogan as the kingdom’s saviour by engineering a situation that will allow the kingdom to craft a face-saving way out of the crisis.

Saudi Arabia is reportedly considering announcing that Mr. Khashoggi, a widely-acclaimed journalist critical of Crown Prince Mohammed bin Salman who went into self-exile because he feared arrest, was killed in either a rogue operation or an attempt gone awry to forcibly repatriate it him back to the kingdom.

US President Donald J. Trump offered the Turks and Saudis a helping hand by referring this week to the possibility of Mr. Khashoggi having been killed by rogues and dispatching Secretary of State Mike Pompeo to Riyadh and Ankara.

Mr. Khashoggi, seeking to obtain proof of his divorce in the kingdom so that he could marry his Turkish fiancé, visited the consulate two weeks ago for the second time after having allegedly received assurances that he would be safe.

Turkey emerges as the crisis moves towards a situation in which an official version is agreed that seeks to shield Prince Mohammed from being held responsible for Mr. Khashoggi’s disappearance and likely murder with its international status significantly enhanced.

Turkish leverage is further boosted by the fact that Saudi Arabia — its image in government, political and business circles significantly damaged by the crisis — and the Trump administration that wants to ensure that the kingdom’s ruling family emerges from the crisis as unscathed as possible, are in Ankara’s debt.

As a result, the denouement of the Khashoggi crisis is likely to alter the dynamics in the long-standing competition between Turkey and Saudi Arabia for leadership of the Islamic world.

It also strengthens Turkey’s position in its transactional alliance with Russia and Iran as they manoeuvre to end the war in Syria in a manner that cements Bashar al-Assad’s presidency while addressing Turkish concerns.

Turkey’s position in its rivalry with Saudi Arabia is likely to also benefit from the fact that whatever face-saving solution the kingdom adopts is likely to be flawed when tested by available facts and certain to be challenged by a host of critics, even if many will see Turkey as having facilitated a political solution rather than ensuring that the truth is established.

Already, Mr. Khashoggi’s family who was initially quoted by Saudi Arabia’s state-controlled media as backing Saudi denials of responsibility, insinuations that his fate was the product of a conspiracy by Qatar and/or Turkey and the Muslim Brotherhood, and casting doubt on the integrity of the journalist’s Turkish fiancée, has called for “the establishment of an independent and impartial international commission to inquire into the circumstances of his death.”

Turkey and Saudi Arabia differ on multiple issues that divide the Muslim world. Turkey has vowed to help Iran circumvent Saudi-supported US sanctions imposed after Mr. Trump withdrew in May from the 2015 international agreement that curbed the Islamic republic’s nuclear agreement.

Turkey further backs Qatar in its dispute with a Saudi-United Arab Emirates-led alliance that has diplomatically and economically boycotted the Gulf state for the last 16 months. The credibility of the alliance’s allegation that Qatar supports terrorism and extremism has been dented by the growing conviction that Saudi Arabia, whether in a planned, rogue or repatriation effort gone wrong, was responsible for Mr. Khashoggi’s killing.

Mr. Khashoggi’s death, moreover, highlighted differing approaches towards the Brotherhood, one of the Middle East’s most persecuted, yet influential Islamist groupings. Saudi Arabia, alongside the UAE and Egypt, have designated the Brotherhood a terrorist organization.

Many brothers have sought refuge in Turkey with Mr. Erdogan empathetic and supportive of the group. A former brother, Mr. Khashoggi criticized Saudi repression of the group.

The Saudi-Turkish rivalry for leadership of the Muslim world was most evident in the two countries’ responses to Mr. Trump’s recognition of Jerusalem as the capital of Israel and his as yet unpublished plan to resolve the Israeli-Palestinian conflict.

Turkey emerged as the leader of Islamic denunciation of Mr. Trump’s move of the US embassy from Tel Aviv to Jerusalem and recognition of the city as Israel’s capital after Prince Mohammed tried to dampen opposition. Ultimately, King Salman was forced to step in a bid to clarify the kingdom’s position and counter Turkish moves.

No matter how Turkey decides to officially release whatever evidence it has, Saudi Arabia figures out how to respond and halt the haemorrhaging, and Mr. Pompeo holds talks with King Salman and Mr. Erdogan, Turkey is likely to emerge from the crisis strengthened despite its increasingly illiberal and increasingly authoritarian rule at home,

Turkey’s success is all the more remarkable given that it has neither Saudi Arabia’s financial muscle nor the mantle the kingdom adopts as the custodian of Islam’s two holiest cities, Mecca and Medina.

A successful political resolution of the Khashoggi crisis is likely to earn it the gratitude of the Trump administration, Saudi Arabia, and its other detractors like the UAE who support the kingdom even if it may help it to regain popularity in the Arab world lost as a result of its swing towards authoritarianism, alliance with Iran and Qatar, and support for Islamism.

One immediate Turkish victory is likely to be Saudi acquiesce to Mr. Erdogan’s demand that Saudi Arabia drop its support for Kurdish rebels in Syria that Ankara sees as terrorists – a move that would boost Turkey’s position the Turkish-Russian-Iranian jockeying for influence in a post-war Syria. Turkey is also likely to see Saudi Arabia support it economically.

Turkey may, however, be playing for higher stakes.

Turkey “wants to back Saudi Arabia to the wall. (It wants to) disparage the ‘reformist’ image that Saudi Arabia has been constructing in the West” in a bid to get the US to choose Ankara as its primary ally in the Middle East, said international relations scholar Serhat Guvenc.

Turkey’s relations in recent years have soured as a result of Turkish insistence that the US is harbouring a terrorist by refusing to extradite Fethullah Gulen, the preacher it accuses of having engineered the failed 2016 coup; detaining American nationals and US consulate employees on allegedly trumped up charges, cosying up to Russia and purchasing its S-400 surface to air missile system, and aligning itself with Iran. Relations were further strained by US support for Syrian Kurds.

Mr. Trump, however this week heralded a new era in US-Turkish relations after the release of unsubscribeAndrew Brunson, an evangelist preacher who was imprisoned in Turkey for two years on charges of espionage.

Mr. Guvenc argued that Turkey hopes that Saudi Arabia’s battered image will help it persuade Mr. Trump that Turkey rather than the kingdom is its strongest and most reliable ally alongside Israel in the Middle East.

Said journalist Ferhat Unlu: “”Turkey knows how to manage diplomatic crises. Its strategy is to manage tensions to its advantage,”

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MbS: Riding roughshod or playing a risky game of bluff poker?

Dr. James M. Dorsey

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A stalemate in efforts to determine what happened to Saudi journalist Jamal Khashoggi is threatening to escalate into a crisis that could usher in a new era in relations between the United States and some of its closest Arab allies as well as in the region’s energy politics.

In response to US President Donald J. Trump’s threat of “severe punishment” if Saudi Arabia is proven to have been responsible for Mr. Khashoggi’s disappearance while visiting the kingdom’s consulate in Istanbul, Saudi Arabia is threatening to potentially upset the region’s energy and security architecture.

A tweet by Saudi Arabia’s Washington embassy thanking the United States for not jumping to conclusions did little to offset the words of an unnamed Saudi official quoted by the state-run news agency stressing  the kingdom’s “total rejection of any threats and attempts to undermine it, whether through economic sanctions, political pressure or repeating false accusations.”

The official was referring to the kingdom’s insistence that it was not responsible for Mr. Khashoggi’s disappearance and assertion that it is confronting a conspiracy by Qatar and/or Turkey and the Muslim Brotherhood.

“The kingdom also affirms that if it is (targeted by) any action, it will respond with greater action,” the official said noting that Saudi Arabia “plays an effective and vital role in the world economy.”

Turki Aldhakhil, a close associate of Saudi Crown Prince Mohammed bin Salman and general manager of the kingdom’s state-controlled Al Arabiya news network, claimed in an online article that Saudi leaders were discussing 30 ways of responding to possible US sanctions.

They allegedly included allowing oil prices to rise up to US$ 200 per barrel, which according to Mr. Aldhakhil, would lead to “the death” of the US economy, pricing Saudi oil in Chinese yuan instead of dollars, an end to intelligence sharing, and a military alliance with Russia that would involve a Russian military base in the kingdom.

It remains unclear whether Mr. Aldhakhil was reflecting serious discussions among secretive Saudi leaders or whether his article was intended either as a scare tactic or a trial balloon. Mr. Aldakhil’s claim that a Saudi response to Western sanctions could entail a reconciliation with the kingdom’s arch enemy, Iran, would make his assertion seem more like geopolitical and economic bluff.

Meanwhile, in what appeared to be a coordinated response aimed at demonstrating that Saudi Arabia was not isolated, Oman, Bahrain, Jordan, Palestine, Lebanon, the United Arab Emirates and Egypt rushed to express solidarity with the kingdom. Like Turkey, Bahrain, Egypt and the UAE have a track record of suppressing independent journalism and freedom of the press.

Ironically, Turkey may be the kingdom’s best friend in the Khashoggi crisis if its claims to have incontrovertible proof of what happened in the consulate prove to be true. Turkey has so far refrained from making that evidence public, giving Saudi Arabia the opportunity to come up with a credible explanation.

Turkish president Recep Tayyip “Erdogan wants to give Saudis an exit out of #Khashoggi case, hoping the Saudi king/crown prince will blame ‘rogue elements’ for the alleged murder, then throwing someone important under the bus. This would let Erdogan walk away looking good & prevent rupture in Turkey-Saudi ties,” tweeted Turkey scholar Soner Cagaptay.

The Saudi news agency report and Mr. Aldakhil’s article suggest that Prince Mohammed believes that Saudi Arabia either retains the clout to impose its will on much of the international community or believes that it rather than its Western critics would emerge on top from any bruising confrontation.

Prince Mohammed no doubt is reinforced in his belief by Mr. Trump’s reluctance to include an arms embargo in his concept of severe punishment. He may also feel that Western support for the Saudi-UAE-led war in Yemen and reluctance to credibly take the kingdom to task for its conduct of the war was an indication that he was free to do as he pleased.

Prince Mohammed may have been further strengthened in his belief by the initial course of events 28 years ago, the last time that the fate of a journalist was at the centre of a crisis between a Western power and an Arab country.

At the time, British prime minister Margaret Thatcher, similar to Mr. Trump’s inclination, refused to impose economic sanctions after Iraqi president Saddam Hussein ordered the arrest, torture and execution of Farhad Barzoft, a young London-based Iranian journalist who reported for The Observer.

Since declassified British government documents disclosed that Mrs. Thatcher’s government did not want to jeopardize commercial relations despite its view of the Iraqi government as a “ruthless and disagreeable regime.”

The comparison between the Khashoggi crisis and the case of Mr. Barzoft goes beyond Western governments’ reluctance to jeopardize commercial relationships.

Mr Barzoft was executed months before Mr. Hussein’s military invaded Kuwait prompting US-led military action that forced his troops to withdraw from the Gulf state, crippling economic sanctions, and ultimately the 2003 Gulf War that, no matter how ill-advised, led to the Iraqi leader’s downfall and ultimate execution.

Prince Mohammed’s ill-fated military intervention in Yemen, of which Mr. Khashoggi was critical in one of his last Washington Post columns, has tarnished the kingdom’s international prestige and sparked calls in the US Congress and European parliaments for an embargo on arms sales that have gained momentum with the disappearance of the Saudi journalist.

To be sure Saudi Arabia enjoys greater leverage than Iraq did in 1990. By the same token, 2018 is not 1973, the first and only time the kingdom ever wielded oil as a weapon against the United States. At the time, the US was dependent on Middle Eastern oil, today it is one of, if not the world’s largest producer.

More fundamentally, Prince Mohammed appears to show some of the traits Mr. Hussein put on display, including a seeming lack of understanding of the limits of power and best ways to wield it, a tendency towards impetuousness, a willingness to take risks and gamble without having a credible exit strategy, a refusal to tolerate any form of criticism, and a streak of ruthlessness.

“We’re discovering what this ‘new king’ is all about, and it’s getting worrisome. The dark side is getting darker,” said David Ottaway, a journalist and scholar who has covered Saudi Arabia for decades.

Mr. Hussein was public and transparent about Mr. Barzoft’s fate even if his assertion that the journalist was a spy lacked credibility and the journalist’s confession and trial were a mockery of justice.

Prince Mohammed flatly denies any involvement in the disappearance of Mr. Khashoggi and appears to believe that he can bully himself out of the crisis in the absence of any evidence that the journalist left the kingdom’s Istanbul consulate of his own volition.

Mr. Hussein miscalculated with his invasion of Kuwait shortly after getting away with the killing of Mr. Barzoft.

Prince Mohammed too may well have miscalculated if the kingdom is proven to be responsible for Mr. Khashoggi’s disappearance.

Mr. Hussein’s reputation and international goodwill was irreparably damaged by his execution of Mr. Barzoft and invasion of Kuwait.

Mr. Khashoggi’s disappearance has dealt a body blow to Saudi Arabia’s prestige irrespective of whether the journalist emerges from the current crisis alive or dead.

King Salman and the kingdom appear for now to be rallying the wagons around the crown prince.

At the same time, the king has stepped into the fray publicly for the first time by phoning Turkish president Erdogan to reaffirm Saudi cooperation with an investigation into Mr. Khashoggi’s fate.

It remains unclear whether that phone call will pave the way for Turkish investigators to enter the Istanbul consulate as well as the Saudi consul general’s home and whether they will be allowed to carry out forensics.

The longer the investigation into Mr. Khashoggi’s fate stalls, the more Saudi Arabia will come under pressure to put forth a credible explanation and the harder Western leaders will be pressed by public opinion and lawmakers to take credible action if Saudi Arabia is proven to be responsible.

A Saudi decision to act on its threats to rejigger its security arrangements and energy policy, even if overstated by Mr. Aldhakhil, in response to steps by Western nations to penalize the kingdom,  could prove to have not only far-reaching international consequences but, in the final analysis, also equally momentous domestic ones.

“Looks like #Saudi royal family is coming together to protect the family business. Eventually there will be internal reckoning with what transpired. Not now. Now is the time to save the family reign,” tweeted Middle East scholar Randa Slim.

Said former US State Department and White House official Elliott Abrams: “Jamal Khashoggi lost control of his fate when he entered the Saudi consulate in Istanbul. Mohammed bin Salman must act quickly to regain control of his own.”

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Syrian Kurds between Washington, Turkey and Damascus

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The recent turmoil over Idlib has pushed the developments in Syrian Kurdistan out of political and mass media spotlight. However, it’s Idlib that will most likely host the final act of the drama, which has become known as the “civil war in Syria”.

The self-proclaimed Democratic Federation of Northern Syria (DFNS), or Rojava, was formed in 2016, although de facto it has existed since 2012. Added later was the hydrocarbon-rich left bank of the Euphrates, which had been cleared of militants of ISIL (an organization banned in the Russian Federation), and now the jurisdiction of the unrecognized DFNS extends to almost a third of the country’s territory.

From the very start the main threat to the existence of this predominantly Kurdish quasi-state came for obvious reasons from Turkey, where Turkish Kurds were set on securing autonomy. In addition, the most influential political force in Rojava, the Democratic Union Party, is affiliated with the Kurdistan Workers’ Party, and the latter has officially been declared a terrorist organization and unofficially – a number one enemy – in Turkey.

In January-March 2018, the Turkish army, backed by the Arab and Turkomanen allies, occupied part of the territory of Rojava (canton Afrin). And it looks like Ankara plans to settle on these territories: recently, Turkish President Recep Tayyip Erdogan reiterated that Afrin will be transferred to its residents “when the time comes” and that “this time will be set by us”. In the meantime, according to local media reports, the demographic situation in the canton is changing rapidly. Taking advantage of the fact that many Kurds left their homes at the approach of the Turkish army, the local (in fact, Turkish) administration is bringing in Arabs here, who, in many cases, are not Syrian Arabs.

Kurdish politicians, fully aware of the fact that amid Turkey, Iran and Syria maintaining statehood without outside assistance is hardly possible, opted for the patronage of Washington. And, as it seems, they lost.

In Syria, the Americans decided to replay the “Kosovo scenario”, by turning part of a sovereign state into a political structure, which is allied to them. Washington, which only recently excluded the People’s Protection Units (the armed wing of the Democratic Forces), from the list of terrorist organizations, argues, like Ankara, that its military personnel will remain in the region “for an indefinite period” to protect Kurdish territories from “aggression” on the part of Damascus. And from Ankara’s ambitions as well. But this is read between the lines.

All this enabled Turkey to accuse the United States of supporting terrorism and relations between the two countries quickly deteriorated into a crisis. As mutual accusations, occasionally supported by political and economic demarches, persist, the parties, however, are beginning to look for common ground. Talks on June 4, 2018 in Washington between Turkish Foreign Minister Mevlut Cavusoglu and US Secretary of State Michael Pompeo resulted in a “road map” for the withdrawal of Kurdish forces from predominantly Arab Manbij, which Kurds regained control of from ISIL (an organization banned in Russia) two years ago. The next day, the Turkish minister announced that the Kurdish troops “… would retreat east of the Euphrates. However, this does not mean that we will agree that they stay there. ” On September 24, 2018, upon arriving at the UN General Assembly, Erdogan confirmed: Turkey will expand its sphere of influence in Syria, by including areas that are under control of the Kurdish armed units.

If Turkey does not change its rhetoric, then the assurances of the American authorities that the US troops will remain in Syria are intermingled with statements about the need for the withdrawal of its forces from this country. In any case, it is unlikely that the United States will choose to leave the region “to its own devices”. We can recall how Washington trumpeted the withdrawal of its troops from Afghanistan! But things haven’t budged an inch since then. The Afghanistan example demonstrates that the Americans will not move out of Syria that easily – they will not pull out in full, at least not of their own free will. US instructors and pilots will remain here “for an indefinite period.” But who will they care of and support? Here are the options:

Firstly, it could be a hypothetical “Arab NATO” with Saudi Arabia in the lead. But there are serious doubts as to the effectiveness of such a structure – even if we forget about the level of combat readiness of these kinds of coalitions (in Yemen, for example), Arab countries could unite only on an anti-Israeli platform. And that, as history shows, is unlikely to yield success. In addition to this, it is still unclear how Kurds, the majority of whom are not religious, will react to Wahhabi commanders.

Secondly, the United States could choose to strengthen the Arab sector of the “Syrian Democratic Forces” (Rojava militia) at the expense of the Kurds. In mid-September, a number of media outlets, citing sources in the Syrian opposition, reported that Saudi emissaries had already suggested this option while meeting with leaders of the Arab tribes living east of the Euphrates. However, this development is also fraught with the Kurdish-Arab confrontation.

Thirdly, Washington persists in its attempts to improve relations with Turkey,  distancing it from Russia and Iran, and instruct it to “maintain order” in the region: the Americans did not intervene in the Operation Olive Branch and made concessions on Manbij. Even though this might seem strange amid the hostile American-Turkish rhetoric, military and political contacts between Washington and Ankara have been on the rise in recent months. Moreover, President Erdogan has already stated that he believes in an early improvement of relations with the United States despite the “inconsistency” and “economic aggression” of Washington.

Meanwhile, we need to remember that the US control over Kurds is far from unlimited. The “people’s protection units” are ideologically close to the Kurdistan Workers’ Party (or could even be seen as its “branch” in Syria), and the PKK itself, grown on the Marxist ideas, would normally support the Soviet Union and “by inertia” – Russia. For this reason, the Americans have to threaten the Kurdish allies with a cessation of military and financial support. Reports say the US and Turkish troops are already operating in the Manbij area, having dislodged the Kurdish YPG militia from the area.

These threats, along with the self-withdrawal of the United States during the capture of Afrin by Turkish troops, have made Kurds doubt the reliability of their patron. The result is a move towards rapprochement with Damascus. In late July, the Kurdish leadership announced an agreement with the Syrian authorities on the creation of a “road map” for the formation of a decentralized Syria.

The Americans are not sitting idle either, though it looks like they have no concrete plan of action. Such a conclusion comes from Donald Trump’s somewhat incoherent answers to questions from a correspondent of the Kurdish media group Rudaw (09/27/2018):

Question: What are you planning to do for (Syrian – AI) Kurds?

Answer: We will offer them a lot of help. As you know, we are good friends to them, we fought shoulder to shoulder with ISIL (an organization banned in the Russian Federation), we recently defeated ISIL (an organization banned in the Russian Federation). We accomplished this with the support of the Kurds. They are great warriors. You know, some nations are great warriors, and some are not. The Kurds are great warriors, they are a wonderful people. We are currently negotiating this.

Question: So what will you do to support them?

Answer: As I said, we will negotiate this, we have begun negotiations. The Kurds have helped us a lot to crush ISIS (an organization banned in the Russian Federation).

Most likely, the hot phase of the protracted inter-Syrian conflict is nearing its end, and the preferences of the Kurds will determine the outcome of future elections, a referendum, or another form of will expression of the Syrian people, when the political situation allows it. Moscow has always called for involving Kurds in the negotiation process and on ensuring their full participation in the life of post-war Syria. “Russia insists that Kurds should participate in the process to determine the post-conflict future of Syria on a parity basis with other ethnic and religious groups of this country,” Foreign Minister Sergey Lavrov said in an interview with the Italian magazine Panorama.

Until recently, Damascus did not particularly pedal negotiations with Rojava, but being aware that the capture of Afrin by Turkish troops was not in its interests, it has adjusted its approach to the self-proclaimed territorial entity. It looks like Syrian leaders have opted for softening their stance, which was previously set on the revival of the country on the basis of unitarism. Otherwise, an agreement with the Kurds will be nowhere in sight.

First published in our partner International Affairs

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