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Iran vs. US: Bracing for war?

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On May 8, 2018, President Donald Trump withdrew the United States from the Joint Comprehensive Plan of Action (JCPOA), better known as the Iran nuclear deal, and imposed tough unilateral sanctions on Tehran. Exactly a year later, this move looks dangerously fraught with unpredictable and potentially catastrophic consequences for the Middle East.

Britain, France and Germany, as participants and co-sponsors of the JCPOA, strongly criticized Trump’s anti-Iranian policy and, with Russian and Chinese support, they established, registered and set in motion, albeit in a test mode, the Instrument in Support of Trade Exchanges (INSTEX) – a special-purpose vehicle (SPV) to facilitate non-dollar trade with Iran.

Tehran took its time hoping for European support. However, on April 22, 2019, Trump ended waivers that Washington had earlier granted China, India, South Korea, Turkey, Italy, the United Arab Emirates, Japan and Taiwan that allowed these countries to import Iranian oil. A complete ban on the purchase of Iranian crude came into force on May 2, 2019. The United States’ ultimate goal is to stop all Iranian crude exports. Whether this is actually possible is not clear. What is clear, however, is that the US is ramping up economic pressure on Tehran.

Meanwhile, Europe will hardly be able to resist Washington’s sanctions against Iran, which are almost as hard-hitting as the ones that were in effect between 2012 and 2016 when the Iranian economy was going through hard times. Still, the EU’s foreign affairs commissioner Federica Mogherini recently went on record saying that “we will continue to support [JCPOA] as much as we can with all our instruments and all our political will.”

Just how much will the EU really has to resist US pressure is a big question though.

Iran found itself in a real fix with President Hassan Rouhani saying that the situation the country is in today is no different from what it experienced during the 1980-1988 war with Iraq.

“During the war, we had no problems with our banks, oil sales, imports and exports. There were only sanctions for the purchase of arms,” he noted.

Hassan Rouhani emphasized the US sanctions’ strong impact on the country, and called for a concerted effort by all to minimize their effect.

“The enemies’ sanctions against our banking sector also affect our oil, petrochemicals, steel and agricultural exports, impair the work of Iranian seaports, shipyards and sea carriers. Our shipping companies have been blacklisted by the US Treasury,” Rouhani added.

He said that Iran would not bow to US pressure and will be looking for a way out of this situation.

What can Iran do?

First, it could exit the nuclear deal. Not immediately, like the US did, but gradually, refusing to fulfill the specific terms of the accord. Iran is already doing this now.

On May 8, President Rouhani announced that Iran would no longer observe two key commitments under the JCPOA accord, namely to sell to Russia and the US uranium enriched to 3.76 percent at volumes exceeding the storage allowed in Iran (over 300 kilograms). By the time the JCPOA was signed in 2015, the Islamic Republic had accumulated 10,357 kilos of such low-grade uranium, and 410.4 kilos of uranium enriched to 20 percent. To date, Iran has destroyed its entire stock of 20-percent-enriched uranium and has shipped surplus low-enriched uranium (LEU) to Russia and the United States. According to the JCPOA, Tehran was allowed to enrich limited quantities of uranium for scientific purposes and sell any enriched uranium above the 300-kilogram limit on international markets in return for natural uranium. Now Iran will start stocking up on low-enriched uranium again. 

Neither will Tehran consider itself committed to the caps agreed under the deal on the mandatory sale of excess heavy water used in the production of military-grade plutonium. Iran has a working facility to produce heavy water, which is not covered by the JCPOA. However, it can store no more than 130 tons of heavy water. Tehran has already exported 32 tons to the US and 38 tons to Russia. Now it will start storing heavy water again.

President Rouhani gave the other signatories to the 2015 nuclear deal 60 days to make good on their promises to protect Iran’s oil and banking sectors. The Iranian move is certainly not directed at Washington but, rather, at Brussels in order to make it more actively and effectively resist US sanctions or see Iran resume higher levels of uranium enrichment, potentially all the way to bomb-making capability.  

He added that if the EU fails to address Iran’s concerns, Tehran will suspend the implementation of two more commitments under the JCPOA.

If its demands are not met, Tehran will no longer be bound by its commitment to enrich uranium up to 3.76 percent. Ali-Akbar Salehi, director of the Atomic Energy Organization of Iran, said in January that the country had already taken the necessary steps to resume enrichment in larger volumes and with a higher level of enrichment.

Tehran will also reject help from the 5+1 group of initiators of the JCPOA (Russia, US, Britain, France, China and Germany) in the reconstruction of the heavy water reactor in the city of Arak.

The R-1 heavy water reactor was designed to produce up to 10 kilograms of weapons-grade plutonium a year, which is enough to build two plutonium nuclear weapons. The terms of the JCPOA accord require redesigning the reactor in such a way as to make it incapable of producing weapons-grade plutonium. To oversee the process, they set up a working group of representatives of the Atomic Energy Organization of Iran, the Atomic Energy Authority of China and the US Department of Energy. In 2017, a UK representative moved in to fill the void left by the departing US representative. According to an official Iranian report issued in April 2018, the country had already completed a “conceptual reconstruction of the reactor.”  Still, the reconstruction process is slow and can easily be reversed. At least for now.

If, however, the EU comes across, then, according to Hassan Rouhani, Iran will honor its commitments under the JCPOA deal. “If [the five JCPOA co-signatories] could protect our main interests in oil and banking sectors, we will go back to square one [and will resume our commitments],” Rouhani said.

The question is whether the European Union can fully activate INSTEX and  ensure continued oil exports and imports. Many people doubt this.

According to analysts, by demanding that Europeans “bring down to zero” their purchases of Iranian oil, the United States threatened to slap sanctions on European companies paying for Iranian oil. Shortly afterwards, almost all European banks refused to finance Iranian crude imports. The EU thus inadvertently joined the US sanctions, even though it continued to stick to the terms of the JCPA accord.

At the same time, European companies were all too happy to go ahead with the implementation of the part of the agreement that had not yet been banned, selling unauthorized goods to Iran. Tehran then complained that the deal allowed Europeans to make money inside Iran while preventing Iranians from selling their oil in the EU – a violation of the fundamental provision of the nuclear accord.

Tehran’s threat to walk out of the 2015 nuclear deal is sending a clear signal to the dithering Europeans to resume Iranian oil imports or see Tehran restarting nuclear production.

However, preoccupied by more pressing problems, the Europeans have other things to worry about. Moreover, no one is looking for a showdown with the EU’s main ally, the United States. According to Russian Oriental affairs expert Nikolai Kozhanov, Europeans consider the issue of circumventing US sanctions as an important part of their search for a mechanism of counter-sanctions in similar situations with more important economic partners, such as China or Russia.

Therefore, Iran is likely to press ahead with suspending its obligations under the JCPOA, which include the activation and acceleration of R&D in the field of improving centrifuges and building more of them in the future. Tehran could also hold up the implementation of the Protocol Additional to the Safeguards Agreement with the IAEA. Signed in 2003, the Protocol gives the UN nuclear watchdog greater access to Iran’s nuclear facilities and provides for surprise inspections. Iran has not yet ratified this document, even though it fulfilled its requirements until 2006 and has done so since 2016.

Of course, Iran will go about additional suspensions very carefully (if it will at all), mindful of their possible consequences, because it would hate to see Europe turning its back on it and siding with Washington, adding its own sanctions to the American ones, thus essentially making them international.

Ever since the US’ exit from the JCPOA, Iran has issued a flurry of serious warnings that it might end its participation in the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) and the IAEA. On April 28, Iranian Foreign Minister Mohammad Javad Zarif went on record saying that Tehran was mulling an exit from the NPT as a response to US sanctions. He added that Tehran “has many options” of response. “Exit from the NPT is one such option,” Zarif noted.

This was only a rhetorical threat, however, meant to prod the European Union towards closer cooperation with Iran as a means of countering US sanctions. Therefore, it is highly unlikely that Iran would withdraw either from the NPT or the IAEA, because this could make it an absolute outcast and the butt of scathing criticism worldwide.  

Second, to demonstrate strength and willingness to resist and safeguard the country’s interests. Iran’s Supreme Leader Ayatollah Khamenei never tires of emphasizing the need for a tough policy of “resistance,” based on:

  • an active and effective search for ways to circumvent crippling economic sanctions;
  • strengthening the armed forces with an emphasis on the development of a missile program;
  • active promotion of Iranian interests in the region.

The “resistance” policy is primarily built around the Islamic Revolutionary Guard Corps (IRGC), which brings together the country’s military, intelligence, police, political, ideological, as well as financial and economic structures. The IRGC is actually an all-embracing mega holding, led directly by the Supreme Leader and members of his inner circle. The Revolutionary Guards, who have proved highly efficient in countering sanctions,  modernizing the armed forces and promoting Iranian activities in the region, are all Tehran actually needs to implement a strict “resistance” policy.

With the situation developing as it is, Ayatollah Khamenei’s recent decision to replace the IRGC commander, General Mohammed Ali Jafari, who led the Corps for more than 11 years, with Brigadier General Hossein Salami looks pretty natural. The IRGC’s former deputy commander, General Salami is ideologically closer to Khamenei and is known for his radical statements. Ayatollah Khamenei also replaced about 60 officers both in the IRGC central office and local administrations with relatively young, ambitious, ideologically tested and competent officers. They are tasked with turning the IRGC into an indispensable and all-embracing institution that dominates the entire gamut of Iranian life: from ensuring internal and external security all the way to economic activity and cyberwarfare.

According to Mehdi Khalaji, a researcher at the Washington Institute for Near East Policy, Ayatollah Khamenei is strengthening the IRGC, which he sees as the cornerstone of the country’s triad of advanced missile technology, a nuclear program and asymmetric military capabilities to ensure reliable defense against any potential aggression by anyone.

Tehran’s decision to strengthen the IRGC was certainly prompted by President Trump’s statement on April 8, which branded the Corps as a “foreign terrorist organization.” Until recently, President Rouhani sought to keep the IRGC in check and limit its impact on many aspects of the country’s life. In fact, Trump’s recent statement played right into the hands of diehard radicals within the IRGC and in Iran as a whole.

Iran’s Supreme National Security Council responded to President Trump’s statement by putting on the list of terrorist organizations the United States Central Command (CENTCOM), whose area of responsibility includes the Middle East and Central Asia. Simultaneously, the General Staff of the Iranian Armed Forces said that the Iranian military was ready to use any means at its disposal against US troops in the region who are now likewise designated by Tehran as terrorists. This is putting Americans in peril all across the Middle East region, primarily in Syria, Iraq, Afghanistan and in the Persian Gulf – wherever Iranian and US military might cross their paths.

Washington’s latest anti-Iranian move seriously exacerbated the already very strained relations between the two countries.

Third. To ramp up anti-American propaganda and warlike rhetoric in order to demonstrate Iran’s strength to the United States and its readiness to defend its interests even with the use of military force.

Increasingly frustrated with the situation around the JCPOA and doubting the EU’s ability to resist the US pressure on Iran, Tehran has been rolling back its participation in the nuclear deal, which is dangerously fraught with a new nuclear crisis and heightened tensions with the United States.

Meanwhile, an escalation is already happening. The United States is sending a battery of Patriot air defense missiles and an amphibious warship, USS Arlington, to CENTCOM’s operational responsibility zone. The Arlington will join a naval strike carrier group led by the world’s largest warship, the aircraft carrier Abraham Lincoln (5,680 crew, 90 combat aircraft and helicopters on board) and a tactical group of B-52 strategic bombers.

Moreover, an updated plan that has just been presented by the Acting US Secretary of Defense, Patrick Shanahan, envisions the dispatch of up to 120,000 troops to the Middle East if Iran steps up the development of nuclear weapons, or attacks the US military. However, the plan does not provide for a ground operation against Iran, which would require a lot more troops.

Iran has promised serious response to any use of force by the United States, with the IRGC commander, Brigadier General Hossein Salami, warning that “if America takes a step against us, then we will strike a blow to the head.” He believes, however, that the United States will not risk using its aircraft carriers against Iran, and added that since Iran’s defense capabilities are adequate and sufficient, US aircraft carriers are quite vulnerable.

Military experts know better of course, but when it comes to politics, chances of resolving the current crisis between Iran and the United States look pretty slim. In fact, the conflict may be beneficial to both President Trump and the IRGC.

Trump could use the standoff as a chance to show the opposition Democrats how tough he is with Iran, which is equally loathed by his supporters and many of his opponents alike.

Meanwhile, a US military buildup close to the Iranian borders would play right into the hands of local hardliners who have always been up in arms against any negotiations concerning the Iranian nuclear program and the nuclear deal itself.

With the situation favoring the opponents of President Rouhani, the IRGC is ruling out any possibility of negotiations with the US. The head of the IRGC’s political bureau, Yadolla Javani, said that “there will be no negotiations with the Americans,” in a remark that could also be aimed at politicians inside Iran who would like to maintain a dialogue with the US no matter what.

Still, according to unconfirmed reports, the Iranians are negotiating behind closed doors with American representatives in Oman, which is a traditional meeting place for both.

The IRGC needs tensions running high because this is turning it into the country’s foremost institution.

What is also clear is a dangerous psychological war now raging between Washington and Tehran. Just where things may go from now is hard to tell, but it still looks like the sides will not come to blows after all. The Iranian-American brinkmanship with concentrations of troops and military hardware in the region is fraught with unpredictable accidents that can force the parties to go overboard. Hopefully, things will not go beyond bellicose rhetoric.

“There will be no war, the Iranian people have chosen the path of resistance to America, and this resistance will force it to retreat,” Ayatollah Khamenei said, emphasizing, however, that this resistance is not military in nature. Neither side wants a military showdown.

Tehran and Washington realize full well that if the situation comes down to a military flare-up, then this, regardless of the real scale of the fighting, would spell disaster for the entire Middle East with equally dire consequences for the rest of the world.

First published in our partner International Affairs

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Iran: A major Replacement of Human Resources

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Since 1979, when the mullahs seized power, Iran has topped the list of countries affected by the “brain drain”. What appeared to be local bleeding at the time may now become total bleeding affecting other sectors of the population.

The headline of one of the stories in the official news agency, IRNA, was: “It is not only the elite that migrate.” The daily newspaper, Javan, affiliated with the Iranian Revolutionary Guards, warned that Iran was losing some of its best-educated people, and stated that mass immigration of “elite elements” “costs the nation millions of dollars.” But immigration now attracts Iranians with less skills or devoid of skills.

According to the best semi-official estimates, since 1979 some eight million people, roughly 10 percent of the population, have left Iran, including an estimated 4.2 million highly educated and highly skilled people.

In the past four years, the brain drain has accelerated, with an average of 4,000 doctors leaving each year.

According to IRNA, at present, 30,000 general practitioners and senior nurses are awaiting the “good professional standing” certificates that developed countries require from those wishing to immigrate from so-called “developing countries”, such as Iran.

A study conducted by two researchers from the University of Tehran, Adel Abdullah and Maryam Rezaei, showed that almost all Iranians who immigrate seek to enter the European Union or the so-called “Anglosphere” countries such as Britain, Canada, the United States, New Zealand and Australia.

Only 10 percent of potential immigrants are willing to go “anywhere else” to get out of Iran.

The immigration requests did not include a single request who wanted to go to a Muslim country, and the only exception is Iraq, which attracts thousands of Iranian mullahs and students of theology who go to Najaf and Karbala to escape the government’s domination of religion in Tehran.

Potential immigrants also avoid China, India and Russia, while the only two Asian countries still attracting Iranians are Malaysia and Japan.

For many potential immigrants, the first destination they want to go to is Dubai, then Istanbul, then Cyprus and until recently Yerevan (the capital of Armenia), where visas are being applied for to desired destinations. Some immigrants may have to wait two or three years to obtain visas from the European Union, Canada and the United States.

Who migrates and why?

Some of the answers came from a three-year study conducted by Sharif University (Ariamher) in Tehran. According to the study, a survey of 17,078 people across all 31 provinces of Iran showed that 70 percent of senior managers and highly skilled employees in the public sector wish to immigrate.

In the projects and businessmen sector, 66 percent expressed their desire to emigrate. This figure drops to 60 percent among doctors, nurses and other medical personnel.

The study shows that the majority of potential immigrants are highly educated, unmarried youth from urban areas, i.e. the higher the education of the individual, the greater the desire to leave.

Among those who express “dissatisfaction with the current situation,” 43 percent of them want to leave the country. This figure drops to 40 percent among those who feel “great satisfaction”, which reveals that the desire to leave is deeper than occasional social and political concerns, which is confirmed by other figures in the same study.

Of those who felt “despairing about the future in Iran,” 42 percent want to leave, a figure that drops to 38 percent among those who still have some hope for the country’s future.

The study shows that the desire to flee Iran is not caused by economic hardship as a result of unemployment or inflation. It is not only the poor or the unemployed who wish to flee, but also those with good jobs, or candidates for well-paid jobs and a seat on the mullahs’ train and their security and military partners.

The largest number of immigrants comes from the provinces of Tehran, Isfahan and Qom, where per capita income is 30 percent higher than the average income in the country. Poorer provinces such as Sistan Baluchistan, Boyer Ahmad, Koh Kiluyeh, and South Khorasan are at the bottom of the list in terms of immigrant numbers.

The study does not provide figures, but there is anecdotal evidence that tens of thousands of immigrants, especially to Canada and the United States, are descended from ruling Islamic families.

None of the studies we looked at suggested other reasons as potential attractions for immigrants, such as the great success stories of Iranian immigrants around the world. A study conducted by Nooshin Karami revealed that more than 200 politicians of Iranian origin now occupy senior positions in the political structures of 30 countries, including those of the European Union and the Anglosphere. 1000 Iranians hold senior positions in international companies, while thousands more are active in the media, scientific research and academic circles in the leading industrialized countries. Dozens of Iranian writers, poets, playwrights, and filmmakers have built successful careers for themselves outside of Iran.

At the other end of the spectrum, Iran also attracts immigrants from neighboring Iraq, from the Kurdish and Shiite Arab regions, the Nakhichevan enclave, Afghanistan and Pakistan, while hosting thousands of religious students from Yemen, Syria, Lebanon and Nigeria. Qom.” According to state media, many students remain in Iran after completing their studies and marrying Iranian women.

All in all, Iran hosts more than six million “foreign guests,” including Afghan, Pakistani, and Iraqi refugees. Interestingly, the desire to leave seems to have reached the “guests” as well. Between March 2021 and March 2022, more than half a million Afghan refugees returned to their homes.

To deal with the consequences of this “brain drain,” the Islamic Republic unveiled a program to attract highly educated and skilled people from “anywhere in the world” with the promise of one-year contracts, good salaries, and enjoyment of “all citizenship rights except the right to vote.”

An estimated 300,000 fighters who served under the Iranian command in Lebanon, Syria, and Yemen were promised permanent residence in Iran and access to agricultural land to start a new life.

Critics claim that the Khomeinist regime is pleased that so many potential opponents among the urban middle class are leaving Iran, as Iran can compensate for the loss of population with newcomers from poor Muslim countries who aspire to a better standard of living under what they see as a “true Islamic” regime.

It is worth noting that other authoritarian regimes, notably the former Soviet Union, communist China, North Korea, Vietnam, and Cuba, benefited from the exodus of what they saw as potential enemies from the middle class, allowing them to implement a scheme of “great replacement.”

On this, Iranian Revolutionary Guard General Mohammad Reza Najdi said: “Let those who do not love us leave the country, to make room for those who love us.”

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‘Saudi First’ aid policy marries geopolitics with economics

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When Mohammed al-Jadaan told a gathering of the global political and business elite that Saudi Arabia would, in the future, attach conditions to its foreign aid, the finance minister was announcing the expansion of existing conditionality rather than a wholly new approach.

Coined ‘Saudi First,’ the new conditionality ties aid to responsible economic policies and reforms, not just support for the kingdom’s geopolitics.

For the longest time, Saudi Arabia granted aid with no overt strings. The aid was policed by privately demanding support for the kingdom’s policies, often using as a carrot and stick quotas for the haj, the yearly Muslim pilgrimage to the holy city of Mecca allotted to countries across the globe.

As a result, over the years, Saudi Arabia poured tens of billions of dollars into black holes, countries that used the aid as a band-aid to address an immediate crisis with no structural effort to resolve underlying causes.

For countries like Lebanon, Egypt, and Pakistan, this meant stumbling from one crisis to the next.

“We are changing the way we provide assistance and development assistance. We used to give direct grants and deposits without strings attached, and we are changing that. We are working with multilateral institutions to actually say, we need to see reform,” Mr. Al-Jadaan told this month’s World Economic Forum in the Swiss resort of Davos.

Saudi First serves multiple Saudi purposes.

It ties geopolitical drivers of Saudi aid to economic criteria that are likely to enhance the kingdom’s influence, create opportunities for Saudi investment and business, and enhance the kingdom’s ties to recipient countries.

In doing so, the additional conditionality positions the kingdom as a constructive, forward-looking member of the international community. It aligns Saudi Arabia more closely with multilateral institutions like the World Bank and the International Monetary Fund (IMF), regional development banks, and major donors such as the United States and the European Union.

It also enables Saudi rulers to circumvent the implications of the principle of ‘no taxation without representation’ that traces its roots to the American revolution.

Saudi Crown Prince Mohammed bin Salman’s social and economic revamping of the kingdom while tightening the political screws as part of his plan to diversify the kingdom’s economy has involved introducing taxes with no political participation.

“Saudi people see their resources going abroad while they’re being asked to pay taxes, have their benefits cut, and so on. So, I think this Saudi first stance really serves as a way to both court and contain populism,” said Gulf scholar Kristin Smith Diwan.

Saudi circumvention of the American revolutionary principle, irrespective of whether it helps pacify Saudis, has already had unintended consequences.

Earlier this week, the Jordanian parliament fired a deputy, Mohammad Al-Fayez, for asking Mr. Bin Salman to stop aiding Jordan.

“All your aid lands in the pockets of the corrupt. Your donations pay bills that have nothing to do with the Jordanian people. We hear about aid coming in for the state. However, this aid only goes to a corrupt class that is getting richer at the expense of the proud Jordanian people,” Mr. Al-Fayez said in a letter to the crown prince.

The Jordanian parliament’s measure coincided with the Saudi finance minister’s announcement. Mr. Al-Fayez wrote his letter in December at the height of clashes in the southern city of Maan between security forces and protesters angry about rising fuel prices and poor governance.

Countries like Lebanon, Pakistan, and Egypt that are potentially most impacted by the new conditions for Saudi aid illustrate the geopolitical complexities of the change.

For Saudi Arabia, Lebanon is about countering Iran and its Lebanese Shiite proxy, Hezbollah, a powerful militia and political movement with significant influence in government and the country’s power structure.

Saudi Arabia hopes that the new conditionality will force a change in Lebanon’s power dynamics.

“The whole world knows what the kingdom offered Lebanon…until it…was back on its feet. But what can we do if current Lebanese policy chooses to surrender the reins of an ancient Arab nation to Iran’s proxy in that country?” asked Saudi columnist Hammoud Abu Taleb.

To be sure, the Lebanese establishment is responsible for the country teetering on the brink of collapse.

The World Bank has described the crisis fuelled by corruption, waste, and unsustainable financial policies as one of the worst globally since the mid-19th century.

This week’s judicial battle over holding powerful figures accountable for the 2020 Beirut port explosion that has spilled onto the streets of the Lebanese capital reflects the establishment’s determination to shield itself no matter the cost to Lebanon as a whole.

The explosion in a warehouse in the port housing hundreds of tons of ammonium nitrate, a material used in fertilizers, killed 218 people, injured more than 6,000, and damaged large parts of Beirut.

A Saudi contribution to forcing political change, a sine qua non for putting Lebanon on a path toward recovery, would be welcome.

It would also go some way towards the kingdom taking responsibility for its role in fighting a decades-long proxy war with Iran that helped bring the Mediterranean nation to its knees.

That is, if the conditions imposed by Saudi Arabia are tailored in ways that contribute to change while seeking to alleviate the pain the Lebanese endured, with the Lebanese pound losing 95% of its value, prices skyrocketing, and purchasing power demolished.

One way would be making accountability for the Beirut blast a condition for future aid.

Recent Saudi standoffishness towards the regime of Egyptian general-turned-president Abdel Fattah al-Sisi, was evident in the kingdom’s conspicuous absence at a gathering of regional leaders in Abu Dhabi earlier this month. Mr. Al-Sisi was one of the attendees.

The standoffishness reflects the fact that Egypt is a black hole. Saudi Arabia, the United Arab Emirates, and other Gulf states have injected tens of billions of dollars with few tangible results except for keeping in power a regime that emerged from a 2013 military coup supported by the kingdom and the Emirates.

Saudi Arabia and the UAE backed the coup as part of a campaign to roll back the achievements of the 2011 popular Arab revolts that toppled four leaders, including Egyptian President Hosni Mubarak.

The coup also ended the flawed presidency of Mohammed Morsi, Egypt’s first and only democratically elected leader. Because he was a member of the Muslim Brotherhood, Mr. Morsi was like a red cloth to a bull in the two Gulf states.

The UAE recognised early on that it needed to ensure its billions were judiciously deployed. So it based a Cabinet-level official in Cairo to advocate reforms and assist in crafting policies that would help put the economy back on track.

The Emirati effort came to naught, with Egypt continuously needing additional funds from the Gulf and the IMF, and the UAE, allowing Mr. Al-Sisi to turn the military into the country’s foremost economic player.

The impact of the Covid-19 pandemic and the Ukraine war on commodity and energy prices only aggravated Egypt’s economic crisis that is largely the result of Mr. Al-Sisi’s economic mismanagement

Mr. Al-Sisi unsuccessfully tried to manipulate Egypt’s currency, set misguided spending priorities, launched wasteful megaprojects, and expanded disruptive state and military control of the economy.

Time will tell what lessons the Saudis may learn from the Emirati experience. Unlike Lebanon, the question is whether Saudi Arabia will strictly impose its news aid policy conditionality or continue to view Egypt as too big to fail.

The problem for Saudi Arabia and the Gulf states is that popular discontent is simmering just below the surface in Egypt and could explode at any time. What makes things potentially more volatile is the possibility of the plight of the Palestinians, aggravated by the policies of Israel’s new hardline, Jewish nationalist government, becoming the catalyst for anti-government protests.

Such demonstrations have a life of their own, and in a moment, they can turn into a protest against the government, against poverty and waste, and we have a direct confrontation whose results can be lethal,” said an Egyptian journalist.

One factor in Saudi thinking about Egypt may be the perception that the North African country, which refused to get sucked into the kingdom’s war in Yemen, may no longer be the security buffer in Africa it once was together with Sudan, a country in transition following a 2019 popular revolt.

That seemed to be one reason for this month’s signing of a memorandum on defence cooperation between Saudi Arabia and Chad, a nation in a region wracked by ethnic and jihadist insurgencies.

The memorandum signals a potential Saudi interest in playing some security role in West Africa at a time that France is on the retreat while Turkey, Iran, and the Wagner Group, Russian mercenaries with close ties to President Vladimir Putin, are on the march.

Last year, Qatar mediated a peace agreement between the Chadian government and more than 30 rebel and opposition factions. However, nine groups, including the Front for Change and Concord in Chad (FACT), the most powerful insurgent faction, refused to sign the deal.

The likelihood of Saudi Arabia taking on an expanded security role far from its shores may be slim in the immediate future.

Even so, creating building blocks that include tighter relations with recipients of Saudi foreign aid through sensible strings attached is one step towards cementing the kingdom’s geopolitical influence.

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MBS policies: Are a threat to the Washington-led Global Order or not?

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In this photo released by Saudi Press Agency (SPA), Saudi Crown Prince Mohammed bin Salman, right, greets President Joe Biden, with a fist bump after his arrival in Jeddah, Saudi Arabia, Friday, July 15, 2022. (Saudi Press Agency via AP)

Amid the Ukraine crisis, Riyadh’s policy towards Washington took a bitter shift. The years-long loyalty of Riyadh towards Washington began to tremble. The Riyadh did not condemn Moscow’s attack on Kyiv, nor it fulfilled the Washington’s expectations by refusing to OPEC Plus’ decision of not increasing the oil production. Whether Moscow’s valiant attempt of opening war against Kyiv, against the will of Washington and NATO, inspired the KSA to take an unpredictable position or Riyadh’s policy shift is owing to its economic and strategic interests, it is quite debatable. This shift not only triggered the minds of researchers worldwide but also caused Biden’s eyebrows to rise. In addition, Riyadh also showed its willingness to join BRICS. In case, Riyadh joins BRICS to ensure its economic and strategic interests; it will challenge the supremacy of petro-dollar, as Saudi Arabia is one of the largest oil exporters. As a whole, it will affect US economy drastically, hence posing serious threats to the Washington-led Global Order.

The wake of the Ukraine war wreaked havoc throughout the globe by destabilizing the global economy. Moreover, this eruption of the conflict increased food and energy insecurity vertically and horizontally. Being a global leader, Washington stepped forward to discourage Moscow and compelled it to withdraw its troops from Kyiv. As a result, Moscow decided to cut off the energy supply to the west. This was just an initiation of the devastation. The clash of interests between Moscow and Washington led to the American use of so-called institutional power, freezing Moscow’s assets. Contrarily, Moscow’s denial to supply energy gave rise to energy insecurity caused by the rising oil and gas prices. Following the primacy doctrine, the global hegemon America took the responsibility to curb this energy insecurity leading to global economic instability. Continuing the long tradition, Washington intended to exercise the influence on the Middle Eastern partners KSA and UAE to supply the energy resources abundantly to fill the energy supply and demand gap.

This time the results were unpredictable, as both of these states defied to enhance their energy production. The unprecedented stance of the Saudi Monarch was to comply with OPEC Plus’ decision to decrease production and increase the prices of energy products. This denial of Riyadh was taken as a serious gesture by Washington. It was perceived that Riyadh’s refusal was a gesture for having goodwill for Russia, consequently creating the situation of “Either you are with us or against us.” In other terms, we may conclude that it was a shift in loyalties.

The whole debate revolves around the question, “Whether Riyadh’s policy has strength to shake the foundations of prevailing Washington led global order or not?” Is the global order a volatile structure to be transformed so easily just by shifting a policy of one state, or does this policy shift have some potential challenges? Before directly coming to the horror impacts of this policy, we should better discuss the worth of energy security and its irrefutable importance for the stable global economic system. If the fuel prices aren’t lowered, it will halt or lower the industrial processes of major industrialized states, including the U.S., consequently drastically affecting the states’ GDP and Per capita income. The vulnerabilities in economic position will surely lead to chaos and internal instability.  

The other facet of this debate, “Whether Riyadh is shifting towards Russia or not? Is Russia capable enough to serve the strategic interests of Riyadh? If not, then what does this policy shift mean?” The ultimate strategic interests of Riyadh always centered on attaining regional hegemony by countering Tehran. At the same time, Moscow is already enjoying better diplomatic ties with Tehran. Moscow will adopt a balanced approach between Riyadh and Tehran. Contrarily, there may be some possibilities of extension of this Riyadh-Moscow cooperation from energy to Economic and military cooperation because Russia is capable of providing the defense technology to Riyadh but unable to provide security in the region. Most importantly, Washington’s institutional hold can be used against Riyadh. These threats still can restrict Riyadh from standing up with Moscow. 

The other important frontier of this debate is KSA’s willingness to join BRICS. As the world’s largest oil exporter, Saudi Arabia has played a central role in the Petrodollar system. The country has used its vast oil reserves to maintain a strong influence on the global economy and has largely adhered to the practice of only selling oil in exchange for U.S. dollars. This has helped to ensure the continued global demand for U.S. dollars and has contributed to the dollar’s status as the dominant global currency. One potential outcome is that Saudi Arabia and other BRICS countries could agree to use a different currency for oil trade, such as the Chinese yuan or a new currency specifically for use by BRICS countries. This could lead to a decrease in global demand for U.S. dollars and potentially negatively affect the U.S. economy.

Saudi Arabia’s recent policy shift towards BRICS and Russia has raised questions about the stability of the current global order, particularly about the stability of Petro-dollars and global energy security. While it is debatable whether the shift is motivated by economic or strategic interests, it is clear that this move is a serious concern for the United States and has the potential to impact the contemporary Washington-led global order significantly. It remains to be seen whether Saudi Arabia will follow through with its potential decision to join the BRICS group and how this will affect its relationships with other countries, particularly Russia and the United States. In a nutshell, major global order changes are expected to occur if Saudi Arabia joins BRICS because it will affect the supremacy of Petro-dollars and consequently lead to the decline in U.S. economic power.

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