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Qatar’s decision to leave OPEC

Giancarlo Elia Valori

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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.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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Inside the Beltway: Iran hardliners vs Iran hardliners

Dr. James M. Dorsey

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Alarm bells went off last September in Washington’s corridors of power when John Bolton’s national security council asked the Pentagon for options for military strikes against Iran.

The council’s request was in response to three missiles fired by an Iranian-backed militia that landed in an empty lot close to the US embassy in Baghdad and the firing of rockets by unidentified militants close to the US consulate in the Iraqi port city of Basra.

“We have told the Islamic Republic of Iran that using a proxy force to attack an American interest will not prevent us from responding against the prime actor,” Mr. Bolton said at the time.

Commenting on the council’s request, a former US official noted that “people were shocked. It was mind-boggling how cavalier they were about hitting Iran.”

Then US Defense Secretary Jim Mattis, like Mr. Bolton an Iran hawk, worried that military strikes would embroil the United States in a larger conflagration with Iran.

The request, moreover, seemed to call into question US President Donald J. Trump’s promise to America’s European allies that he would rein in Mr. Bolton who has a long track record of advocating military action against Iran.

Months before joining the Trump administration in the spring of 2018, Mr. Bolton drafted at the request of Mr. Trump’s then strategic advisor, Steve Bannon, a plan that envisioned US support “for the democratic Iranian opposition,” “Kurdish national aspirations in Iran, Iraq and Syria,” and assistance for Iranian Arabs in the oil-rich Iranian province of Khuzestan and the Baloch who populate the Pakistani province of Balochistan and Iran’s neighbouring Sistan and Baluchistan province.

Frustrated by the Trump administration’s failure to respond to his suggestions, Mr. Bolton published the memo in December 2017.

Almost to the day two years after the publication and two months before the 40th anniversary of the Iranian revolution, Mr. Bolton asserted in a policy speech in Cairo, that the United States had “joined the Iranian people in calling for freedom and accountability… America’s economic sanctions against the (Iranian) regime are the strongest in history, and will keep getting tougher until Iran starts behaving like a normal country.” Mr Bolton was referring to harsh US sanctions imposed in 2018 by Mr. Trump after withdrawing the United States from the 2015 international agreement that curbed Iran’s nuclear program.

Mr. Bolton’s plan stroked with Saudi thinking about the possibility of attempting to destabilize Iran by stirring unrest among its ethnic minorities. The thinking was made public in a November 2017 study by the International Institute for Iranian Studies, formerly known as the Arabian Gulf Centre for Iranian Studies, a Saudi government-backed think tank.

The study argued that Chabahar, the Indian-backed Iranian deep-sea port at the top of the Arabian Sea, posed “a direct threat to the Arab Gulf states” that called for “immediate counter measures.” Pakistani militants claimed in 2017 that Saudi Arabia had stepped up funding of militant madrassas or religious seminaries in Balochistan that allegedly serve as havens for anti-Iranian, anti-Shiite fighters.

Mr. Bolton’s memo followed an article he wrote in The New York Times in 2015 headlined ‘To Stop Iran’s Bomb, Bomb Iran’ at the time that President Barak Obama was negotiating the international agreement to curb Iran’s nuclear program.

Mr. Bolton argued in the op-ed that diplomacy would never prevent the Islamic republic from acquiring nuclear weapons. “The inconvenient truth is that only military action like Israel’s 1981 attack on Saddam Hussein’s Osirak reactor in Iraq or its 2007 destruction of a Syrian reactor, designed and built by North Korea, can accomplish what is required. Time is terribly short, but a strike can still succeed,” Mr. Bolton wrote.

The memo was written at about the same time that Mr. Bolton told a gathering of the Iranian opposition group Mujahedin-e-Khalq that “the declared policy of the United States of America should be the overthrow of the mullahs’ regime in Tehran” and that “before 2019, we here will celebrate in Tehran.”

While Mr. Bolton has remained outspoken even if he has been careful in his wording as national security advisor, other past advocates of military action against Iran have taken a step back.

Mike Pompeo has since becoming secretary of state hued far closer to the Trump administration’s official position that it is pursuing behavioural rather than regime change in Iran. But as a member of the House of Representatives, Mr. Pompeo suggested in 2014 launching “2,000 sorties to destroy the Iranian nuclear capacity.”

While the Trump administration has largely explained its hard line towards Iran as an effort to halt the country’s missile development, roll back its regional influence, and ensure that the Islamic Republic will never be able to develop a nuclear weapon, Mr. Bolton has suggested that it was also driven by alleged Iranian non-compliance with the nuclear accord.

“Report: Iran’s secret nuclear archive ‘provides substantial evidence that Iran’s declarations to IAEA International Atomic Energy Agency) are incomplete & deliberately false.’ The President was right to end horrible Iran deal. Pressure on Iran to abandon nuclear ambitions will increase,” Mr. Bolton tweeted this month, endorsing a report by the Washington-based Institute for Science and International Security.

Based on Iranian documents obtained by Israel, the report identified an allegedly undeclared Iranian nuclear site. “Documentation seized in January 2018 by Israel from the Iranian ‘Nuclear Archive’ revealed key elements of Iran’s past nuclear weaponization program and the Amad program more broadly, aimed at development and production of nuclear weapons. The material extracted from the archives shows that the Amad program had the intention to build five nuclear warhead systems for missile delivery,” the report said.

Similarly, Mr. Bolton this month told Israeli prime minister Benyamin Netanyahu on a visit to Jerusalem that “we have little doubt that Iran’s leadership is still strategically committed to achieving deliverable nuclear weapons. The United States and Israel are strategically committed to making sure that doesn’t happen.”

Mr. Bolton’s assertion contrasted starkly with then Director of National Intelligence Dan Coats’ assessment in his 2017 Worldwide Threat Assessment of the US Intelligence Community that “we do not know whether Iran will eventually decide to build nuclear weapons.”

Mr. Bolton’s hardline position within the Trump administration could be cemented if Iran were to decide that upholding the nuclear agreement no longer served its interest. Anti-agreement momentum in Iran has been fuelled by the European Union’s seeming inability or unwillingness to create a financial system that would evade US sanctions and facilitate trade with Europe.

Mr. Bolton’s hard line has also been bolstered by the imposition of European Union sanctions on Iran’s ministry of intelligence and two individuals on charges of plotting to kill leaders of an Iranian Arab separatist movement in Denmark and the Netherlands.

An Iranian abrogation of the nuclear agreement would likely lead to a reshuffle of the Iranian cabinet and the appointment of hardliners that would in turn bolster Mr. Bolton’s argument that the Iran issue has to be resolved before the United States can militarily truly disengage from the Middle East and South Asia.

Hardliners like Mr. Bolton may have one more development going for them: Disillusionment in Iran with the government of President Hassan Rouhani is mounting.

The disappointment is being fuelled not only by the failure of the nuclear accord to drive economic growth and the government’s mis-management of the economy and inability to take on nepotism, vested interests such as the Revolutionary Guards and the growing income gap accentuated by the elite’s public display of ostentatious wealth, but also the fact that Mr. Rouhani appears to have lost interest in reform and implementing change.

“Unfortunately, Mr. Rouhani´s second term has been extremely ignorant (about the demands) of the twenty-four million people who make up Iranian civil society. Most of the reformists believe that he no longer wants to interact (with the reform movement). All that concerns him is to emerge from the remaining two years (of his second term) undamaged, and thus maintain his privileged spot in the pyramid of power,” said Abdullah Naseri, a prominent reformist and adviser to the former president Mohammad Khatami. Mr. Naseri was referring to the 24 million people who voted for Mr. Rouhani.

A reformist himself, Mr. Khatami warned that “if the nezam (establishment) insists on its mistakes… (and) reform fails, the society will move toward overthrowing the system.”

The roots of Mr. Bolton’s thinking lie in a policy paper entitled US Defense Planning Guidance that has been in place since 1992. The paper stipulates that US policy is designed “to prevent any hostile power from dominating a region whose resources under consolidated control be sufficient to generate global power.” The paper goes a long way in explaining why the US and Saudi Arabia potentially would be interested in destabilizing Iran by stirring unrest among its ethnic minorities.

Iran scholar Shireen Hunter suggests that squashing Iran’s ambition of being a regional and global player may be one reason why senior Trump administration officials, including Mr. Bolton, Mr. Pompeo and Rudolph Giuliani, the president’s personal lawyer, alongside the Saudis support the Mujahedin e-Khalq even if its domestic support base is in question.

“The MEK was willing to support Saddam Hussein and cede Iran’s (oil-rich) Khuzestan province to Iraq. There is no reason to think that it won’t similarly follow U.S. bidding,” Ms. Hunter said referring to the Mujahedeen’s support of Iraq during the Iran-Iraq war in the 1980s.

Mr. Bolton appeared to be fortifying what amounted to the most hard-line approach towards Iran in an administration that was already determined to bring Iran to its knees by elevating Charles M. Kupperman, a long-time associate and former Reagan administration official, to deputy national security adviser.

Mr. Kupperman, a former Boeing and Lockheed Martin executive, previously served on the board for the Center for Security Policy, a far-right think tank advocating for a hawkish Iran policy founded by  Frank Gaffney, a former US government official who is widely viewed as an Islamophobe and conspiracy theorist.

Similarly, Mr. Trump, reportedly on Mr. Bolton’s advice, hired this month Richard Goldberg as the national security council’s director for countering Iranian weapons of mass destruction.

As a staffer for former Senator Mark Kirk, Mr. Goldberg helped write legislation that served as the basis for the Obama administration’s sanctions regime on Tehran prior to the nuclear deal. He went on to work for the Washington-based Foundation for Defense of Democracies, which advocates a hard line towards Iran.

Earlier, Mr. Bolton hired Matthew C. Freedman, who in March 2018, together with Messrs. Kupperman and Bolton registered the Institute for a Secure America as a non-profit organization on the day that Mr. Trump announced Mr. Bolton’s appointment as national security advisor.

A long-standing Bolton associate and one-time member of Mr. Trump’s transition team, Mr. Freedman worked in the 1980s and 1990s as a foreign lobbyist with Paul Manafort, who managed Mr. Trump’s election campaign for several months and was last year convicted as part of special counsel Robert Mueller’s investigation into alleged collusion between the campaign and Russia to influence the outcome of the 2016 presidential election.

Messrs. Bolton, Kupperman and Freedman also established in 2015 the Foundation for American Security and Freedom to campaign against the Iran nuclear deal.

David J. Rothkopf, a former Clinton administration official who wrote a definitive history of the National Security Council described Mr. Bolton as a man “who has never crossed a bridge he hasn’t burned behind him, who is surrounding himself with what appears to be a second-tier group of advisers who have spent a disproportionate amount of time on the swamp side of things — as consultants or working on his extreme political projects.”

Said journalist and political commentator Mehdi Hasan: “You underestimate John Bolton at your peril… In 2003, Bolton got the war he wanted with Iraq. As an influential, high-profile, hawkish member of the Bush administration, Bolton put pressure on intelligence analysts, threatened international officials, and told barefaced lies about weapons of mass destruction. He has never regretted his support for the illegal and catastrophic invasion of Iraq, which killed hundreds of thousands of people. Now, he wants a war with Iran.”

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Syria’s Kurds: The new frontline in confronting Iran and Turkey

Dr. James M. Dorsey

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US President Donald J. Trump’s threat to devastate Turkey’s economy if Turkish troops attack Syrian Kurds allied with the United States in the wake of the announced withdrawal of American forces potentially serves his broader goal of letting regional forces fight for common goals like countering Iranian influence in Syria.

Mr. Trump’s threat coupled with a call on Turkey to create a 26-kilometre buffer zone to protect Turkey from a perceived Kurdish threat was designed to pre-empt a Turkish strike against the People’s Protection Units (YPG) that Ankara asserts is part of the outlawed Kurdish Workers Party (PKK), a Turkish group that has waged a low-intensity war in predominantly Kurdish south-eastern Turkey for more than three decades.

Like Turkey, the United States and Europe have designated the PKK as a terrorist organization.

Turkey has been marshalling forces for an attack on the YPG since Mr. Trump’s announced withdrawal of US forces. It would be the third offensive against Syrian Kurds in recent years.

In a sign of strained relations with Saudi Arabia, Turkish media with close ties to the government have been reporting long before the October 2 killing of journalist Jamal Khashoggi in the Saudi consulate in Istanbul that Saudi Arabia is funding the YPG. There is no independent confirmation of the Turkish allegations.

Yeni Safak reported in 2017, days after the Gulf crisis erupted pitting a Saudi-UAE-Egyptian alliance against Qatar, which is supported by Turkey, that US, Saudi, Emirati and Egyptian officials had met with the PKK as well as the Democratic Union Party (PYD), which Turkey says is the Syrian political wing of the PKK, to discuss the future of Syrian oil once the Islamic State had been defeated.

Turkey’s semi-official Anadolu Agency reported last May that Saudi and YPG officials had met to discuss cooperation. Saudi Arabia promised to pay Kurdish fighters that joined an Arab-backed force US$ 200 a month, Anadolu said. Saudi Arabia allegedly sent aid to the YPG on trucks that travelled through Iraq to enter Syria.

In August last year, Saudi Arabia announced that it had transferred US$ 100 million to the United States that was earmarked for agriculture, education, roadworks, rubble removal and water service in areas of north-eastern Syria that are controlled by the US-backed Syrian Democratic Forces of which the YPG is a significant part.

Saudi Arabia said the payment, announced on the day that US Secretary of State Mike Pompeo arrived in the kingdom, was intended to fund stabilization of areas liberated from control by the Islamic State.

Turkish media, however, insisted that the funds would flow to the YPG.

“The delivery of $100 million is considered as the latest move by Saudi Arabia in support of the partnership between the U.S. and YPG. Using the fight against Daesh as a pretext, the U.S. has been cooperating with the YPG in Syria and providing arms support to the group. After Daesh was cleared from the region with the help of the U.S., the YPG tightened its grip on Syrian soil taking advantage of the power vacuum in the war-torn country,” Daily Sabah said referring to the Islamic State by one of its Arabic acronyms.

Saudi Arabia has refrained from including the YPG and the PKK on its extensive list of terrorist organizations even though then foreign minister Adel al-Jubeir described in 2017 the Turkish organization as a “terror group.”

This week’s Trump threat and his earlier vow to stand by the Kurds despite the troop withdrawal gives Saudi Arabia and other Arab states such as the United Arab Emirates and Egypt political cover to support the Kurds as a force against Iran’s presence in Syria.

It also allows the kingdom and the UAE to attempt to thwart Turkish attempts to increase its regional influence. Saudi Arabia, the UAE and Egypt have insisted that Turkey must withdraw its troops from Qatar as one of the conditions for the lifting of the 18-month old diplomatic and economic boycott of the Gulf state.

The UAE, determined to squash any expression of political Islam, has long led the autocratic Arab charge against Turkey because of its opposition to the 2013 military coup in Egypt that toppled Mohammed Morsi, a Muslim Brother and the country’s first and only democratically elected president; Turkey’s close relations with Iran and Turkish support for Qatar and Islamist forces in Libya.

Saudi Arabia the UAE and Egypt support General Khalifa Haftar, who commands anti-Islamist forces in eastern Libya while Turkey alongside Qatar and Sudan supports the Islamists.

Libyan and Saudi media reported that authorities had repeatedly intercepted Turkish arms shipments destined for Islamists, including one this month and another last month. Turkey has denied the allegations.

“Simply put, as Qatar has become the go-to financier of the Muslim Brotherhood and its more radical offshoot groups around the globe, Turkey has become their armorer,” said Turkey scholar Michael Rubin.

Ironically, the fact that various Arab states, including the UAE and Bahrain, recently reopened their embassies in Damascus with tacit Saudi approval after having supported forces aligned against Syrian President Bashar al-Assad for much of the civil war, like Mr. Trump’s threat to devastate the Turkish economy, makes Gulf support for the Kurds more feasible.

Seemingly left in the cold by the US president’s announced withdrawal of American forces, the YPG has sought to forge relations with the Assad regime. In response, Syria has massed troops near the town of Manbij, expected to be the flashpoint of a Turkish offensive.

Commenting on last year’s two-month long Turkish campaign that removed Kurdish forces from the Syrian town of Afrin and Turkish efforts since to stabilize the region, Gulf scholar Giorgio Cafiero noted that “for the UAE, Afrin represents a frontline in the struggle against Turkish expansionism with respect to the Arab world.”

The same could be said from a Saudi and UAE perspective for Manbij not only with regard to Turkey but also Iran’s presence in Syria. Frontlines and tactics may be shifting, US and Gulf geopolitical goals have not.

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‘Gadkari effect’ on growing Iran-India relations

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If the ‘Newton Effect’ in physics has an equivalent in international diplomacy, we can describe what is happening to India-Iran relations as the ‘Gadkari Effect’.

Like in the case of the 18th century English scientist Isaac Newton’s optical property of physics, the minister in the Indian government Nitin Gadkari – arguably, by far the best performing colleague of Prime Minister Narendra Modi – has created a series of concentric, alternating rings centered at the point of contact between the Indian and Iranian economies.

‘Gadkari’s rings’ around the Chabahar Port in the remote province of Sistan-Baluchistan in southeastern Iran are phenomenally transforming the India-Iran relationship.

The first definitive signs of this appeared in December when the quiet, intense discussions between New Delhi and Tehran under Gadkari’s watch resulted in the agreement over a new payment mechanism that dispenses with the use of American dollar in India-Iran economic transactions.

Prime facie, it was a riposte to the use of sanctions (‘weaponization of dollar’) as a foreign policy tool to interfere in Iran’s oil trade with third countries such as India. (See my blog India sequesters Iran ties from US predatory strike.)

However, the 3-day visit to Delhi by the Iranian Foreign Minister Mohammad Javad Zarif on January 7-9 highlighted that the application of the payment mechanism to the Indian-Iranian cooperation over Chabahar Port holds seamless potential to energize the economic partnership between the two countries across the board. In a historical sense, an opportunity is at hand to make the partnership, which has been ‘oil-centric’, a multi-vector ‘win-win’ relationship.

The meeting between Gadkari and Zarif in Delhi on Tuesday signaled that the two sides have a ‘big picture’ in mind. Thus, the opening of a branch of Bank Pasargad in Mumbai is a timely step. Pasargad is a major Iranian private bank offering retail, commercial and investment banking services, which provides services such as letters of credit, treasury, currency exchange, corporate loans syndication, financial advisory and electronic banking. (It is ranked 257th in the Banker magazine’s “1000 banks in the world”.)

Bank Pasargad is establishing presence in India just when the Chabahar Port has been ‘operationalized’ and a first shipment from Brazil carrying 72458 tons of corn cargo berthed at the port terminal on December 30.

More importantly, the discussions between Gadkari and Zarif have covered proposals for a barter system in India-Iran trade. Iran needs steel, particularly rail steel and locomotive engines “in large quantities, and they are ready to supply urea,” Gadkari told the media.

Then, there is a proposal for a railway line connecting Chabahar with Iran’s grid leading northward to the border with Afghanistan. Zarif summed up the broad sweep of discussions this way:

“We had very good discussions on both Chabahar as well as other areas of cooperation between Iran and India. The two countries complement each other and we can cooperate in whole range of areas… We hope that in spite of the illegal US sanctions, Iran and India can cooperate further for the benefit of the people of the two countries and for the region.”

Paradoxically, the collaboration over Chabahar Port, which has been a “byproduct” of India-Pakistan tensions, is rapidly outgrowing the zero-sum and gaining habitation and a name in regional security. There are many ways of looking at why this is happening so.

Clearly, both India and Iran have turned the Chabahar project around to provide an anchor sheet for spurring trade and investment between the two countries. This approach holds big promises. There is great complementarity between the two economies.

Iran is the only country in the Middle East with a diversified economy and a huge market with a fairly developed industrial and technological base and agriculture and richly endowed in mineral resources. It is an oil rich country and the needs of Indian economy for energy, of course, are galloping.

Second, Chabahar Port can provide a gateway for India not only to Afghanistan and Central Asia but also to Russia and the European market. Logically, Chabahar should be linked to the proposed North-South Transportation Corridor that would significantly cut down shipping time and costs for the trade between India and Russia and Europe.

Thus, it falls in place that the Trump administration, which keeps an eagle’s eye on Iran’s external relations, has given a pass to the Indian investment in Chabahar. Prima facie, Chabahar Port can provide access for Afghanistan to the world market and that country’s stabilization is an American objective. But then, Chabahar can also provide a potential transportation route in future for American companies trading and investing in Afghanistan and Central Asia.

According to a Pentagon task force set up to study Afghanistan’s mineral wealth, that country is sitting on untapped rare minerals, including some highly strategic ones worth at least 1 trillion dollars. Indeed, President Trump has pointedly spoken about it to rationalize the US’ abiding business interests in Afghanistan. Now, from indications of late, conditions have dramatically improved for an Afghan settlement that provides for enduring US presence in that country.

We must carefully take note that Iran is in effect supplementing the efforts of Pakistan and the US to kickstart an intra-Afghan dialogue involving the representatives from Kabul and the Taliban.

Importantly, China has also adopted a similar supportive role. A high degree of regional consensus is forging that security and stability of Afghanistan should not be the stuff of geopolitical rivalries.

The bottom line is that Iran’s own integration into the international community, which the Trump administration is hindering, is inevitable at some point sooner than we believe.

The disclosure that behind the cloud cover of shrill rhetoric against Iran, Washington secretly made two overtures to Tehran recently to open talks shows that Trump himself is looking for a deal to get out of the cul-de-sac in which his Iran policies have landed him.

Washington cannot but take note of the constructive role that Tehran is playing on the Afghan situation. (Interestingly, Zarif and Zalmay Khalilzad, US special representative on Afghanistan who go back a long way, have paid overlapping visits to Delhi.)

There is an influential constituency of strategic analysts and opinion makers within the US already who recognize the geopolitical reality that American regional policy in the Middle East will forever remain on roller coaster unless and until Washington normalizes with Tehran. They acknowledge that at the end of the day, Iran is an authentic regional power whose rise cannot be stopped.

From such a perspective, what Zarif’s discussions in Delhi underscore is that while Iran is keeping its end of the bargain in the 2015 nuclear deal, it is incrementally defeating the US’ “containment strategy” by its variant of “ostpolitik”, focused principally on three friendly countries – Russia, China and India.

This is where much depends on the Indian ingenuity to create new webs of regional partnerships. There are tantalizing possibilities. Remember the 3-way Moscow-Baghdad-Delhi trilateral cooperation in the bygone Soviet era?

That is only one model of how the three big countries – Russia, India and Iran – can have common interest to create sinews of cooperation attuned to Eurasian integration. It is a rare convergence since there are no contradictions in the mutual interests of the three regional powers.

The Indian diplomacy must come out of its geopolitical reveries and begin working on the tangible and deliverable. That will make our foreign policy relevant to our country’s overall development. Gadkari has shown how geo-economics makes brilliant, purposive foreign policy. Equally, he followed up diligently what needed to be done to get Chabhar project going so that an entire architecture of cooperation can be built on it. Zarif’s extraordinary remarks testify to it. Even a hundred theatrical performances on the Madison Square Garden wouldn’t have achieved such spectacular results in a short period of time.

*Nitin Jairam Gadkari is an Indian politician and the current Minister for Road Transport & Highways, Shipping and Water Resources, River Development & Ganga Rejuvenation in the Government of India.

First published in our partner MNA

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