IF THERE IS one thing to glean from the case of Marsha Lazareva, it’s that foreign businesses must now think very carefully before investing in Kuwait.
For more than a year, Lazareva, who has a five-year-old son and is one of Russia’s most successful female investors in the Gulf, has been held in the Soulabaiya prison by Kuwaiti authorities. Those authorities claim she ‘stole’ half a billion dollars, a claim she strenuously denies.
Human rights groups and prominent officials, including the former FBI director, Louis Freeh, and Jim Nicholson, former Chairman of the Republican Party and former US Ambassador to the Vatican, have called for her release and expressed concerns about the apparent absence of due process in a country where Lazareva has worked for over 13 years. Both Freeh and Nicholson visited Kuwait in recent weeks with Neil Bush, son of the late President George H. W. Bush. Bush has said Lazareva’s incarceration ‘threatens to darken relations between the U.S. and Kuwait, two countries that have enjoyed a long and prosperous relationship.’
Russian officials have been equally concerned. Vladimir Platonov, the President of the Moscow Chamber of Commerce and Industry, confirmed that a single witness gave testimony in Kuwaiti court, and only for the prosecution. ‘I myself worked in prosecution for more than eight years, and I cannot imagine any judge signing off on an indictment like this,’ he said. ‘One fact of particular note is that Maria was given 1,800 pages of untranslated documents in Arabic.’
Serious questions surrounding the safety and future viability of investing in Kuwait are now being raised. Through The Port Fund, a private investment company managed by KGL Investment, Lazareva has contributed hundreds of millions of dollars to local infrastructure and economic development projects during her time in the country. Until 2017, when a Dubai bank froze $496 million without cause, she had worked largely unobstructed.
But as things stand, more foreign investment is unlikely to be forthcoming. Jim Nicholson has said that the ‘imprisonment and harassment’ of Lazareva ‘threatens’ U.S. support. adding that the ‘willingness of the U.S. to do business with Kuwait’ is based on ‘its record as a nation that respects human rights and the rule of law’. Mark Williams, the investment director of The Port Fund and a colleague of Lazareva’s, has called on international investors to ‘think twice before doing business in this country’.
These comments will surely concern the Kuwaiti government, who said last year that FDI was ‘very crucial’ to the success of its Kuwait Vision 2035 road map. In September 2018, the FTreported that the government planned to reverse its traditional position as an investor in order to diversify its economy, carrying out a series of reforms designed to facilitate foreign investment and assist investors.
But despite these changes, which have propelled Kuwait to 96th—higher than the Middle East average—in the World Bank’s ‘Ease of Doing Business’ report, investors may be unwilling to take the risk so long as Lazareva remains in jail. Lazareva’s lawyers have accused Kuwait of violating international law by breaching a long-standing bilateral investment treaty with Russia. Lord Carlile of Berriew, QC has brought the case to the attention of the British public and the EU, writing in The Times that ‘there is no evidential basis to justify any claim of dishonesty, corruption or any other criminal wrong’. He added: ’Anyone thinking of doing business in Kuwait should read on with mounting concern.’
What’s worth remembering is that Kuwait is an important, long-standing ally of the UK, and a country generally seen as stable and fair. It is equally a major non-NATO ally of the United States, where there are more than 5,000 international students of Kuwaiti origin in higher education. But these relationships, and the investment to which they have historically led, have been cast into doubt. And it now seems certain that relations will continue to sour so long as Marsha Lazareva languishes in Soulabaiya.
Chinese purchases of Iranian oil raise tantalizing questions
A fully loaded Chinese oil tanker ploughing its way eastwards from two Iranian oil terminals raises questions of how far Beijing is willing to go in defying US sanctions amid a mounting US military build-up in the Gulf and a US-China trade war.
The sailing from Iran of the Pacific Bravo takes on added significance with US strategy likely to remain focused on economic rather than military strangulation of the Iranian leadership, despite the deployment to the Gulf of an aircraft carrier strike group as well as B-52 bombers and a Patriot surface-to-air missile system.
As President Donald J. Trump, backed by Secretary of State Mike Pompeo, appears to be signalling that he is not seeking military confrontation, his administration is reportedly considering a third round of sanctions that would focus on Iran’s petrochemical industry. The administration earlier this month sanctioned the country’s metals and minerals trade.
The sailing raises the question whether China is reversing its policy that led in the last quarter of 2018 to it dramatically reducing its trade with Iran, possibly in response to a recent breakdown in US-Chinese trade talks.
“The question is whether non-oil trade remains depressed even if some oil sales resume, which I think it will. That’s the better indicator of where Chinese risk appetite has changed. Unfortunately Iran‘s reprieve will be limited—but better than zero perhaps,” tweeted Esfandyar Batmanghelidj, head of Bourse & Bazaar, a self-described media and business diplomacy company and the founder of the Europe-Iran Forum.
A Chinese analyst interviewed by Al Jazeera argued that “China is not in a position to have Iran’s back… For China, its best to stay out” of the fray.
The stakes for China go beyond the troubled trade talks. In Canada, a senior executive of controversial Chinese telecommunications giant Huawei is fighting extradition to the United States on charges of violating US sanctions against Iran.
Reports that Western companies, including Kraft Heinz, Adidas and Gap, wittingly or unwittingly, were employing Turkic Muslims detained in re-education camps in China’s north-western province of Xinjiang, as part of opaque supply chains, could increase attention on a brutal crackdown that China is struggling to keep out of the limelight.
The Trump administration has repeatedly criticized the crackdown but has stopped short of sanctioning officials involved in the repressive measures.
Bourse & Bazaar’s disclosure of the sailing of the Pacific Bravo coincided with analysis showing that Iran was not among China’s top three investment targets in the Middle East even if Chinese investment in the region was on the rise.
The Pacific Bravo was steaming with its cargo officially toward Indonesia as Iranian foreign minister Mohammad Javad Zarif was touring his country’s major oil clients, including China, in a bid to persuade them to ignore US sanctions.
A second tanker, the Marshal Z, was reported to have unloaded 130,000 tonnes of Iranian fuel oil into storage tanks near the Chinese city of Zhoushan.
The Marshall Z was one of four ships that, according to Reuters, allegedly helped Iran circumvent sanctions by using ship-to-ship transfers in January and forged documents that masked the cargoes as originating from Iraq.
The unloading put an end to a four-month odyssey at sea sparked by buyers’ reticence to touch a cargo that would put them in the US crosshairs.
“Somebody in China decided that the steep discount this cargo most likely availed … was a bargain too good to miss,” Matt Stanley, an oil broker at StarFuels in Dubai, told Reuters.
The Pacific Bravo, the first vessel to load Iranian oil since the Trump administration recently refused to extend sanction exemptions to eight countries, including China, was recently acquired by China’s Bank of Kunlun.
The acquisition and sailing suggested that Bank of Kunlun was reversing its decision last December to restrict its business with Iran to humanitarian trade, effectively excluding all other transactions.
The bank was the vehicle China used in the past for business with Iran because it had no exposure to the United States and as a result was not vulnerable to US sanctions that were in place prior to the 2015 international agreement that curbed Iran’s nuclear program.
China’s willingness to ignore, at least to some extent, US sanctions could also constitute an effort to persuade Iran to remain fully committed to the nuclear accord which it has so far upheld despite last year’s US withdrawal.
Iran recently warned Europe that it would reduce its compliance if Europe, which has struggled to create a credible vehicle that would allow non-US companies to circumvent the sanctions, failed to throw the Islamic republic an economic lifeline.
In a letter that was also sent to Russia and China, Iran said it was no longer committed to restrictions on the storage of enriched uranium and heavy water stocks, and could stop observing limits on uranium enrichment at a later stage.
Russian president Vladimir Putin warned in response to the Iranian threat that “as soon as Iran takes its first reciprocal steps and says that it is leaving, everyone will forget by tomorrow that the US was the initiator of this collapse. Iran will be held responsible, and the global public opinion will be intentionally changed in this direction.”
The Iran Question
Will there be war with Iran? Will there not be war with Iran? The questions are being asked repeatedly in the media even though a single carrier task force is steaming up there. The expression is old for the latest carriers are nuclear powered. Imagine the mess if it was blown up.
There are two kinds of weapons in the world … offensive and defensive. The latter are cheaper, a fighter plane compared to a bomber. If a country does not (or cannot afford to) have offensive intent, it makes sense to focus on defense. It is what Iran has done. Moreover, its missile centered defense has a modern deadly twist — the missiles are precision-guided.
As an Iranian general remarked when questioned about the carrier task force: some years ago it would’ve been a threat he opined; now it’s a target. Iran also has a large standing army of 350,000 plus a 120,000 strong Revolutionary Guard and Soviet style air defenses. In 2016 Russia started installation of the S-300 system. It has all kinds of variants, the most advanced, the S-300 PMU-3 has a range similar to the S-400 if equipped with 40N6E missiles, which are used also in the S-400. Their range is 400 km, so the Iranian batteries are virtually S-400s. The wily Putin has kept trump satisfied with the S-300 moniker without short-changing his and China’s strategic ally. The latter continuing to buy Iranian oil.
Iran has friends in Europe also. Angela Merkel in particular has pointed out that Iran has complied fully with the nuclear provisions of the UN Security Council backed Joint Comprehensive Plan of Action i.e. the Iran nuclear deal. She is mustering the major European powers. Already alienated with Trump treating them as adversaries rather than friends, they find Trump’s bullying tiresome. President Macron, his poll ratings hitting the lowest, is hardly likely to engage in Trump’s venture. In Britain, Theresa May is barely able to hold on to her job. In the latest thrust by senior members of her party, she has been asked to name the day she steps down.
So there we have it. Nobody wants war with Iran. Even Israel, so far without a post-election government does not want to be rained upon by missiles leaky as its Iron Dome was against homemade Palestinian rockets.
Topping all of this neither Trump nor Secretary of State Pompeo want war. Trump is as usual trying to bully — now called maximum pressure — Iran into submission. It won’t. The wild card is National Security Adviser John Bolton. He wants war. A Gulf of Tonkin type false flag incident, or an Iranian misstep, or some accident can still set it off.
In Iran itself, moderates like current President Hassan Rouhani are being weakened by Trump’s shenanigans. The hard liners might well want to bleed America as happened in Iraq and Afghanistan.
Iran’s game just started
By announcing that Iran will begin keeping its excess uranium and heavy water, the Islamic Republic now sends a firm and clear message to the west, exactly one year after U.S. president, Donald Trump unilaterally withdrew from its nuclear deal with Iran.
At this point, it seems that Iran has made a wise decision. Over the last year, the European troika has not only done anything to revive the nuclear deal or bring any kind of benefit to the Iranian nation, but they have actually backed up U.S. by developing new plans to undermine Iran’s “missile work”, and diminish its “power in the region” as well as its “nuclear technology”.
As stated in clauses 26 and 36 of Joint Comprehensive Plan of Action
(JCPOA), if the other side fails to meet its obligations, Iran is entitled to
partially or completely end its commitments as well. So, Iran’s recent decision
could be analyzed both on legal and strategic terms.
However, it seems that the strategic aspects of Iran’s decision are even more important than its legal aspects. This decision is strategically important because it stops Washington and European troika to carry out their anti-Iran scheme, a dangerous scheme that they actually started devising when Trump took the office in 2017.
At the time, Theresa May, the British Prime Minister, and Emmanuel Macron, the French president played a major part in carrying out the west scheme. A scheme based on enforcing Iran to keep its “nuclear promises” and stay committed to a “distorted nuclear deal” while “U.S. had abandoned the deal”, and at the same time, trying to “diminish Iran’s power in the region” and “reduce its missile activities”.
All other actions of Europeans toward Iran were also simply targeted at carrying out this major plan, including how they constantly changed their strategies toward Tehran, and how Germany, U.K. and France intentionally delayed in launching the alternative trade mechanism (Instex) with Iran.
Now, Iran’s decision to keep its Uranium and heavy water is definitely in compliance with JCPOA, and more importantly, it will seriously undermine the “American-European” joint plan against Iran. This also explains why French government was so distressed by Iran’s new nuclear strategy and had such a quick reaction, considering that Emmanuel Macron, the French president and Jean-Yves Le Drian, the French Foreign Minister both have had important roles in carrying out the American-European anti-Iran scheme.
At any rate, what is clear now is that the game has just started! And the Iranian political system and specially the foreign ministry have a great mission to run this game wisely.
In following days, the European troika might want to force Iran into changing its decision by threats such as reviving the European Union sanctions against Iran or even taking Iran’s case to the United Nations Security Council (so that Trump administration can meddle in Iran’s affairs). But, it is time for Iran political system to be adamant in its decision.
The Iranian Foreign Ministry should clearly ask the Europeans to choose one of these options, either Iran will “further reduce its commitments to the nuclear deal” or the Europeans should do something practical to “protect the rights of Iranian nation”.
It is also necessary that the Iranian political system reveals the American-European joint anti-Iran scheme to the people so that the true nature of Europeans is showed to Iranians. In that case, Europe and specially the European troika will completely lose their reputation.
First published in our partner Tehran Times
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