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Iran: Which way to go?

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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

Middle East

International Solidarity Day with the people of Palestine

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Since 1948, the people of Palestine were suffering due to Israeli oppression and aggression. Despite several resolutions on Palestine passed by the United Nation, Israel has not implemented either of them. Despite the struggle from all peace-loving nations, in various forms, the Palestinian people have not yet been given the right of self-determination, or self-rule, and are yet, forced to leave their land, homes and stay in refugee camps or migrate to foreign countries to live a miserable life. After failure from all aspects, the United Nations desp[erately declared to mark International Day of Solidarity with the Palestinian People.

In 1977, the General Assembly called for the annual observance of 29 November as the International Day of Solidarity with the Palestinian People (resolution 32/40 B). On that day, in 1947, the Assembly adopted the resolution on the partition of Palestine (resolution 181 (II))

In resolution 60/37 of 1 December 2005, the Assembly requested the Committee on the Exercise of the Inalienable Rights of the Palestinian People and the Division for Palestinian Rights, as part of the observance of the International Day of Solidarity with the Palestinian People on 29 November, to continue to organize an annual exhibit on Palestinian rights or a cultural event in cooperation with the Permanent Observer Mission of Palestine to the UN.

The resolution on the observance of the International Day of Solidarity with the Palestinian People also encourages the Member States to continue to give the widest support and publicity to the observance of the Day of Solidarity.

The government and the people of Pakistan join the world community in observing the International Day of Solidarity with the Palestinian People (29 November).

The commemoration of this day is a reminder to the international community that the question of Palestine remains unresolved and the Palestinian people are yet to realize their inalienable right to self-determination as provided in various resolutions of the United Nations. It is also an occasion to reiterate our support and solidarity for the Palestinian people who continue to wage a just struggle against the illegal and brutal occupation.

On this day, Pakistan reaffirms its consistent and unstinted support for the Palestinian people and the Palestinian cause, which has always been a defining principle of Pakistan’s foreign policy.

The international community must shoulder its responsibility to protect the lives and fundamental rights of the Palestinian people, and play its rightful role in promoting a just and lasting resolution of the Palestinian question per international legitimacy in the interest of durable peace and stability in the Middle East. The international community should also ensure accountability for the widespread violations of international human rights and humanitarian law in the occupied territories.

We renew our call on this day for a viable, independent, and contiguous Palestinian State, with pre-1967 borders, and Al-Quds Al-Sharif as its capital being the only just, comprehensive and lasting solution of the Palestinian question, under the relevant United Nations and OIC resolutions.

The purpose of marking this day is to remind the whole world that the people of Palestine deserve your attention and your time to think about their sufferings. It is to remind that the whole world should understand the issue and try their best to solve it according to the UN resolutions. Those who believe in justice, may raise their voice in favor of the Palestinian people and condemn Israeli barbarism and atrocities. This Day invites all of you to join the [peaceful struggle of Palestinian people for their legitimate rights. Irrespective of your profession, social status, or your religion or race, you may support the Palestinian cause for justice on humanitarian grounds and keep your struggle till the people of Palestine gets their legitimate status and rights on equal footings according to the UN resolutions.

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Middle East

Israel-Palestine: Risk of ‘deadly escalation’ in violence, without decisive action

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photo: UNOCHA/Mohammad Libed

With violence continuing daily throughout the Occupied Palestinian Territory, the Special Coordinator for the Middle East Peace Process urged the Security Council on Tuesday to adopt a more coordinated approach to the region.  

Tor Wennesland told Council Members that “recent developments on the ground are worrying”, pointing out the situation in the West Bank and Gaza and the challenges faced by the Palestinian Authority.  

“I therefore emphasize again the importance of concerted efforts by the parties to calm things on the ground. I am concerned that if we do not act quickly and decisively, we risk plunging into another deadly escalation of violence”, he warned. 

He informed that, in the last month, violence resulted in the death of four Palestinians, including two children, and injuries to 90 others – including 12 children – due to action by Israeli Security Forces. 

One Israeli civilian was killed in the same period, and nine civilians, including one woman and one child, and six members of ISF were injured.  

Challenges 

Mr. Wennesland said that a severe fiscal and economic crisis is threatening the stability of Palestinian institutions in the West Bank. 

At the same time, he added, “ongoing violence and unilateral steps, including Israeli settlement expansion, and demolitions, continue to raise tensions, feed hopelessness, erode the Palestinian Authority’s standing and further diminish the prospect of a return to meaningful negotiations.” 

In Gaza, the cessation of hostilities continues to hold, but the Special Envoy argued that “further steps are needed by all parties to ensure a sustainable solution that ultimately enables a return of legitimate Palestinian Government institutions to the Strip.” 

Settlements 

The Special Coordinator also said that “settler-related violence remains at alarmingly high levels.” 

Overall, settlers and other Israeli civilians in the occupied West Bank perpetrated some 54 attacks against Palestinians, resulting in 26 injuries. Palestinians perpetrated 41 attacks against Israeli settlers and other civilians, resulting in one death and nine injuries.  

Mr. Wennesland highlighted a few announcements of housing units in settlements, reiterating that “that all settlements are illegal under international law and remain a substantial obstacle to peace.” 

Meanwhile, Israeli authorities have also advanced plans for some 6,000 housing units for Palestinians in the occupied East Jerusalem neighbourhood of al-Issawiya and some 1,300 housing units for Palestinians living in Area C (one of the administrative areas in the occupied West Bank, agreed under the Oslo Accord). 

The Special Envoy welcomed such steps but urged Israel to advance more plans and to issue building permits for all previously approved plans for Palestinians in Area C and East Jerusalem. 

Humanitarian aid delivered 

Turning to Gaza, the Special Envoy said that humanitarian, recovery and reconstruction efforts continued, along with other steps to stabilize the situation on the ground. 

He called the gradual easing of restrictions on the entry of goods and people “encouraging”, but said that the economic, security and humanitarian situation “remains of serious concern.” 

The Special Envoy also mentioned the precarious financial situation of the UN Relief and Works Agency for Palestine Refugees (UNRWA), which still lacks $60 million to sustain essential services this year. 

The agency has yet to pay the November salaries of over 28,000 UN personnel, including teachers, doctors, nurses and sanitation workers, many of whom support extended families, particularly in the Gaza Strip, where unemployment is high.  

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Middle East

Saudi religious moderation is as much pr as it is theology

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Mohammed Ali al-Husseini, one of Saudi Arabia’s newest naturalized citizens, ticks all the boxes needed to earn brownie points in the kingdom’s quest for religious soft power garnered by positioning itself as the beacon of ‘moderate,’ albeit autocratic, Islam.

A resident of Saudi Arabia since he had a fallout with Hezbollah, the Iranian-backed Lebanese Shiite militia, Mr. Al-Husseini represents what the kingdom needs to support its claim that its moderate form of Islam is religiously tolerant, inclusive, non-sectarian, pluralistic, and anti-discriminatory.

More than just being a Shiite, Mr. Al-Husseini is the scion of a select number of Lebanese Shiite families believed to be descendants of the Prophet Mohammed.

Put to the test, it is a billing with as many caveats as affirmatives – a problem encountered by other Gulf states that project themselves as beacons of autocratic interpretations of a moderate strand of the faith.

Even so, Saudi Arabia, despite paying lip service to religious tolerance and pluralism, has, unlike its foremost religious soft power competitors – the United Arab Emirates, Qatar, Turkey, Iran, and Indonesia, yet to legalise non-Muslim worship and the building of non-Muslim houses of worship in the kingdom.

Similarly, the first batch of 27 newly naturalized citizens appeared not to include non-Muslims. If it did, they were not identified as such in contrast to Mr. Al-Hussein’s whose Shiite faith was clearly stated.

The 27 were naturalized under a recent decree intended to ensure that Saudi Arabia can compete with countries like the United Arab Emirates, Qatar, and Singapore in attracting foreign talent. About a quarter of the new citizens, including Mr. Al-Husseini and Mustafa Ceric, a former Bosnian grand mufti, were religious figures or historians of Saudi Arabia.

In doing so, Saudi Crown Prince Mohammed bin Salman linked his economic and social reforms that enhanced women’s rights and catered to youth aspirations to his quest for religious soft power and leadership of the Muslim world. The reforms involved tangible social and economic change. Still, they refrained from adapting the ultra-conservative, supremacist theology that underlined the founding of the kingdom and its existence until the rise of King Salman and his son, the crown prince, in 2015.

Prince Mohammed’s notion of ‘moderate’ Islam is socially liberal but politically autocratic. It calls for absolute obedience to the ruler in a deal that replaces the kingdom’s long-standing social contract in which the citizenry exchanged surrender of political rights for a cradle-to-grave welfare state. The new arrangement expands social rights and economic opportunity at the price of a curtailed welfare state as well as the loss of political freedoms, including freedoms of expression, media, and association.

A series of recent op-eds in Saudi media written by pundits rather than clerics seemingly with the endorsement, if not encouragement of the crown prince or his aides, called for top-down Martin Luther-like religious reforms that would introduce rational and scientific thinking, promote tolerance, and eradicate extremism.

Mamdouh Al-Muhaini, general manager of the state-controlled Al-Arabiya and Al-Hadath television networks, spelled out the top-down process of religious reform that would be led by the crown prince even though the writer stopped short of identifying him by name.

“There are dozens, or perhaps thousands, of Luthers of Islam… As such, the question of ‘where is the Luther of Islam’ is wrong. It should instead be: Where is Islam’s Frederick the Great? The King of Prussia, who earned the title of Enlightened Despot, embraced major philosophers in Europe like Kant and Voltaire and gave them the freedom to think and carry out scientific research, which helped their ideas spread and prevail over fundamentalism after bitter clashes. We could also ask where is Islam’s Catherine the Great…? Without the support and protection of these leaders, we would have likely never heard of these intellectuals, nor of Luther before them,” Mr. Al-Muhaini said.

Messrs. Al-Husseini and Ceric represent what Saudi Arabia would like the Muslim and non-Muslim world to take home from their naturalization.

A religious scholar, Mr. Ceric raised funds in Saudi Arabia, Iran, and Malaysia during the Bosnian war in the 1990s and defended issues close to Saudi Arabia’s heart even if his own views are more liberal.

Mr. Ceric argued, for example, that opposition to Wahhabism, the kingdom’s austere interpretation of Islam that has been modified since King Salman came to power, amounted to Islamophobia even if the cleric favoured Bosnia’s more liberal Islamic tradition. The cleric also opposed stripping foreign fighters, including Saudis, of Bosnian citizenship, granted them for their support during the war.

To Saudi Arabia’s advantage, Mr. Ceric continues to be a voice of Muslim moderation as well as proof that Islam is as much part of the West as it is part of the East and the hard to defend suggestion that being a liberal does not by definition entail opposition to ultra-conservatism.

Referring to the fact that he is a Shiite, Mr. Al-Husseini said in response to his naturalisation by a country that was created based on an ultra-conservative strand of Islam that sees Shiites as heretics: “The glowing truth that cannot be contested is that the Kingdom of Saudi Arabia is open to everyone…and does not look at dimensions of…a sectarian type.”

Beyond being a Shiite Muslim cleric, Mr. Al-Husseini is to have been a Hezbollah insider. A one-time proponent of resistance against Israel, Mr. Al-Husseini reportedly broke with Hezbollah as a result of differences over finances.

He associated himself on the back of his newly found opposition to Hezbollah with the Saudi-backed March 14 movement headed by Saad Hariri, a prominent Lebanese Sunni Muslim politician.

As head of the relatively obscure Arabic Islamic Council that favoured inter-faith dialogue, particularly with Jews, Mr. Al-Husseini ticked off another box on the Saudi checklist, particularly given the kingdom’s refusal to establish diplomatic relations with Israel without a clear and accepted pathway to a resolution of the Israeli-Palestinian conflict.

While Mr. Al-Husseini’s history fits the Saudi bill, his impact appears to be limited. He made some incidental headlines in 2015 after he used social media to urge Muslims, Jewish, and Christian clerics to downplay religious traditions that call for violence.

Mr. Al-Husseini spoke as the tension between Israel and Lebanon mounted at the time after Hezbollah killed two Israeli soldiers in a cross-border attack.

Earlier, Mr. Al-Husseini seemingly became the first Arab Shiite religious figure to address Israelis directly and to do so in broken Hebrew.

“We believe that not all Jews are bad [just as] not all Muslims are terrorists. Let us cousins put our conflicts aside and stay away from evil and hatred. Let us unite in peace and love,” Mr. Al-Husseini told an unknown number of Israeli listeners.

Mr. Al-Husseini’s presence on social media pales compared to that of the Muslim World League and its head, Mohammed Al Issa. The League, the one-time vehicle for Saudi funding of Muslim ultra-conservatism worldwide, and its leader, are today the main propagators of Prince Mohammed ’s concept of moderate Islam.

Mr. Al-Husseini’s 47,00 followers on Twitter and 10,200 on Facebook pale against his Saudi counterparts who propagate a message similar to his.

The League has 2.8 million Twitter followers in English and 3.4 million in Arabic in addition to 662,000 in French and 310,00 in Urdu. The League boasts similar numbers on Facebook. The League’s president, Mr. Al-Issa, has 670,000 followers on Twitter and 272,000 on Facebook.

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