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The tension between Iran and the United States

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At the beginning of last summer, precisely on May 8, 2018, US President Donald J. Trump carried out one of his old projects, i.e. to explicitly walk out of the Joint Comprehensive Plan of Action (JCPOA) reached between Iran, the United States, China, France, Russia, the United Kingdom + Germany and the European Union on July 14, 2015.

 The IAEA inspectors spend 3,000 days a year, on average, checking Iran’s nuclear facilities, and so far they have not ascertained any particular Iranian infringement of the 2015 agreement.

 Immediately after the US action, the EU adopted a blocking statute, based on the fact that the USA had unilaterally stated that Iran had not publicly declared a previous nuclear programme, prior to the JCPOA.

  According to the 2015 Treaty, Iran had agreed to destroy its arsenal of medium-enriched uranium, as well as to eliminate 98% of its low-enriched uranium production, and to finally reduce the number of its gas centrifuges for the selection of isotopes by two thirds, for a period of 13 years starting from the signing of the agreement with the P5 + 1, namely the JCPOA.

 For the subsequent 15 years, in fact, Iran had committed to enrich its uranium by only 3.67% compared to the levels before the signing of the agreement, without building other centrifuges for the following 10 years as from the signing of the JCPOA, while the enriched uranium production had to be reduced to the activity of a single first-generation centrifuge.

 As previously mentioned, the EU put in place a blocking statute mainly to protect EU-based companies from the effects of US sanctions against Iran. In May 2019, however, IAEA established that Iran had basically complied with the JCPOA, except for some doubts about the number of centrifuges actually in operation.

 Immediately after the US withdrawal from the treaty, Iran reaffirmed its acceptance of the treaty of July 14, 2015, along with France, Germany and Great Britain, while the Russian Federation and China explicitly supported Iran, which stated that only the USA had unilaterally and illegally withdrawn from the agreement.

 According to President Trump, one of the political reasons for the US withdrawal from the JCPOA was the resulting strengthening of his positions during the negotiations with the North Korean leader, Kim Jong Un, while the former US President, Barack Obama, said that the US withdrawal from the treaty of July 14, 2015 left the USA torn between two equally suicidal choices: a completely nuclearized Iran or the quick breaking out of another war in the Middle East.

 The only countries supporting President Trump, against the nuclear agreement with Iran, were Saudi Arabia, the traditional enemy of the Iranian Shiites, and obviously Israel.

 The US President also added that the USA would cooperate with the EU to “put pressure” on Iran, but the European Union implemented a project, called Instrument in Support of Trade Exchanges (INSTEX), to avoid the negative effects of US sanctions on European companies. INSTEX, officially announced on 31 January 2019, is led by Per Fischer -former Head of Financial Institutions at Commerz bank -as President, and includes Simon McDonald, permanent undersecretary for foreign affairs of Great Britain, Miguel Berger, Head of the economic office at the German Foreign Ministry, and Maurice Gourdault de Montaigne, Secretary General of the French Foreign Ministry (“and of Europe”, as the official formula states). The whole body does not include senior managers of the banking system and of commercial institutions.

A political organization that has political purposes vis-à-vis Iran and the USA, not a real starting point for continuing to do business in Iran.

 Hence for many countries, including Iran, INSTEX is more a political move to differentiate themselves – with difficulty – from the USA than an effective and operational system against the US sanctions on Iran.

 On April 29, Iran announced it had set up the Special Trade and Finance Institute (STFI) to monitor the INSTEX activities and thus favour Iran-EU trade even during the US sanction regime.

 The Iranian President of STFI is Ali Askar Nouri, former consultant of Iran Zamin Bank and the Institute also includes Hamid Ghanbari, former director of the Central Bank of Iran, Farshid Farrokh, manager of the Refah Bank, and finally some other managers coming from the Iranian banking system.

 Given the low political level of the Iranian STFI, it is likely that the Iranian government does not trust the INSTEX system at all as a way to really solve the trade relations between the EU and Iran.

 The European system also implies that the profit generated from the purchase of Iranian oil by companies having their headquarters in the EU must be transferred to the INSTEX “special-purpose vehicle”.

 Nevertheless, considering the general US restrictions on the sale of Iranian oil, in all likelihood the EU “special-purpose vehicle” will be increasingly linked to ever smaller Iranian funds and hence will not be in a position to collect enough liquidity to justify reasonable trade with Europe.

 Moreover, considering that the major buyers of Iranian oil belong to non-European States, it is equally unlikely that these countries, namely China, India, Korea and Japan, will accept to transfer their payments to INSTEX.

 Moreover, considering the US regulations, even if the EU vehicle really worked, Iran could spend all the funds included in the EU mechanism only for medicines and- to a little extent – for food.

 Hence no mechanism to protect Iran-EU trade can be created unless agreements are also made with the USA.

 However, who is really hit by the US sanctions? Rather than the political and military actions of the Iranian government, what is really destroyed is Iran’s private economic sector.

 Currently the Iranian population is equal to 82 million inhabitants, with an economic ranking that places the Shiite Republic of Iran in the eighteenth position in the world.

 In the case of Iran, another reason for the economic crisis led by foreign countries is the devaluation of its national currency, namely the rial.

 The local government’s inflationary actions, the restriction of foreign currency assets and the related slowdown in growth, with an inflation rate at 13% and an unemployment rate at 12.3%, are drastic measures. This is official data from the Iranian government, which is apparently much more acceptable than real data.

 Furthermore, the Shiite regime has imposed restrictions for as many as 1,300 types of product, in addition to the escape from the dollar in transactions and the preferential use of the Euro in international trade.

 In the real exchange market, currently the rialis worth 90,000 as against the US dollar, while at the end of last year one dollar only was worth 42,840 rial. An induced Weimar-styleinflation, which is destabilizing for every social system.

 The Euro, however, is not a currency that has the characteristic of being a Lender of Last Resort, as Paolo Savona often says- hence its global use is inevitably very limited.

 Therefore the rial should still decrease by at least 10% in the exchange with the US dollar.

At official rates, bank interest is already at 24%. Hence, in these crisis contexts, the Euro is therefore not allocable, while the role of the Chinese renmimbi is growing, considering China’s vast purchases of Iranian oil – which will not last forever.

 If not to maintain a game of tensions with the USA, on the part of China, pending the trade war that inflames the two major players in global economy, namely the USA and China.

 Transfers abroad- to the EU in this specific case – cost the Iranian companies at least 20% of the total capital transferred.

 It should also be recalled that oil sales are worth only  40% of Iran’s total GDP, considering that the largest sector of the Iranian economy is services, which account for 51% of GDP, followed by tourism (12%), the real estate sector, and finally the mining sector (13%) and agriculture (still at 10%).

 What could be a possible solution? The greater economic correlation between Iran and China, considering that the commercial crisis between the United States and China is almost simultaneous to the crisis between Iran and the USA – and it has quite similar strategic potentials.

 Hence for the United States the effects will be the maximum pressure available against Iran, in addition to greater US military presence in the Middle East and the damage caused by the USA to the European allies still tied to the signing of the 2015 JCPOA.

  It is also impossible not to think about the inevitable negative reactions on the Nuclear Non-Proliferation Treaty, already under pressure from various parts.

 Moreover, the bilateral relations between China and Iran are still growing significantly, at economic, political and strategical levels.

 Furthermore, China currently imports 11% of its oil from Iran, in addition to an investment of over 5 billion US dollars for the technological upgrading of the refining and transport of oil and gas.

 China has also invested in the urban transport system, particularly in the Tehran subway, as well as in regional motorways and in the Mehran Petrochemical Complex, in addition to a credit line of the Chinese State financial holding (CITIC) to the Iranian government, amounting to over 10 billion US dollars.

 The China Development Bank has also guaranteed additional 15 billion US dollars – up to a transfer of capital – between Iran and China, which, as stated by Hassan Rouhani, the current leader of the Iranian government, are expected to reach 600 billion US dollars.

  Currently Iran is China’ second trading partner, after the United Arab Emirates, and is also capable of permanently supplying the Shiite republic with advanced weapons.

  Therefore, it is a real “substitution of Iran’s imports” both from the EU and, obviously, from the USA, which enables China to create an economic and military outpost in the Persian Gulf, capable of opposing – in a short lapse of time-the US strategic presence in the region. Not to mention the EU countries’ military set-up and arrangement in the Middle East.

 Moreover, also the USA knows that, considering the asymmetric structure of Iran’s military forces, a clash with Iran could be very costly and even burdensome for the United States, which probably could barely penetrate the Gulf, while it is still believed that a direct North American action on Iranian soil is currently ever more difficult.

 Meanwhile, Iran is struggling to create new markets for its oil, in areas that cannot be integrated into the JCPOA and the US system.

 The target countries of Iran’s expansion are Brazil, China – as usual – but also India, which can be decisive today, considering that the Iranian production reached only 400,000 barrels per day last May, less than half of the sales in the previous month and even below the 2.5 million barrels per day of April 2018.

Everything started with an annual income from Iranian oil of approximately 50 billion US dollars.

  Currently, however, according to US experts, oil proceeds have fallen by at least 10 billion US dollars, after the US re-imposing full sanctions last November.

 The situation is still better for Iranian exports – also to Turkey – of petroleum by-products, such as urea, but above all for the sales of natural gas, liquefied petroleum gas, biofuel, methanol, and even other non-oil energy products.

 Iran accepts payments either in currencies other than the dollar or with the old trade-in system, which is a traditional and widespread system in the oil world.

 However, let us revert to the bilateral political crisis between the USA and Iran.

 After the sanctions renewed by President Trump, Iran has started again to enrich uranium to 20% and has also announced it would update the Arak reactor, which was part of the Iranian military system and produced plutonium.

 Moreover, Iran claims that the Arak reactor is still subject to the JCPOA rules and that its productive activity will end soon.

 In Natanz, another important centre for the Iranian production of enriched uranium, the extraction of isotopes has increased significantly. As Iranian leaders themselves say, this extraction should be increased by 400% compared to the JCPOA rules.

 It should be recalled that the treaty of July 14, 2015 limits the production of uranium to 300 kilos of uranium hexafluoride (UF6), which has a real content of active and useful uranium to the tune of 202.8 kilos.

 On a strictly military level, the USA has already sent to the Persian Gulf region a group of warships, including the aircraft carrier Abraham Lincoln and four destroyers armed with missiles. Furthermore, some B-52 bombers have been deployed in the Al-Obeid US base, Qatar, in addition to over 120,000 soldiers, distributed in the various US facilities in the Middle East, although President Trump has said that the shipment of these troops is a fake news.

 Nevertheless, this shipment has recently been confirmed by the US Administration.

 However, on May 12 last, Iran’s Revolutionary Guards, the so-called Pasdaran, attacked four-seven large commercial ships in the port of Fujrairah, one of the great world hubs in oil maritime trade. Other data has not been provided to the press.

 Allegedly, they were vessels belonging to companies based in the United Arab Emirates.

 It is also likely that at least two of those ships were of Saudi nationality.

  Another attack of obscure Iranian origin occurred on May 19, when a Katjuscia rocket was fired against the US Embassy in Baghdad, but without causing victims.

 On May 14, however, Supreme Leader Ali Akhbar Khamenei said that “there would be no war against America”. At the same time, however, the Iranian Rahbar does not want to re-open the nuclear talks with the United States.

  Both because Khamenei does not want to give the impression of rapidly succumbing to the United States – and here the Shiite regime could even self-destruct – and because, in all likelihood, reopening negotiations would imply the end of Iran’s nuclear ambitions.

 It should be noted that there is also the oil issue for the USA itself.

 Tension in the Gulf leads to a fast and significant increase in all OPEC crude oil prices while, even considering its higher extraction costs, the US oil is also capable of producing profit, in a context of quick and uncontrollable growth in the OPEC oil barrel prices.

The United States has now reached a production of at least 2.5 million barrels per day, which makes the USA attentive to any possible useful hedging on OPEC oil, with a view to exploiting any geopolitical crisis that – in the oil market – always has immediate consequences on the oil barrel price.

  It should also be noted that the Strait of Hormuz is twenty miles wide. It is technically impossible for Iran to control or block it all.

 Iran, however, can use strong cyberattacks against the oil networks of the neighbouring States that, in various ways, are also all linked to Saudi Arabia.

 Nevertheless, Saudi Arabia and the United Arab Emirates have alternative pipelines that can easily bypass the Strait of Hormuz.

 Even in the case of an Iranian unconventional attack, Saudi Arabia can sell at least 6.5 million barrels per day and currently the USA is much less exposed to an oil shock like those of the 1970s, given that the American economy is less oil-dependent and particularly considering that the national production of American (and Canadian) oil and gas is such as to ensure an acceptable level of oil use, even without the North American purchases from OPEC countries.

 In 2019, however, China has agreed to keep on buying oil and gas at low prices in Iran, at a level ranging between 700,000 and 800,000 barrels per day.

 Iran has no interest in dealing with the United States, right now that a new presidential election cycle is starting.

  On June 8 last, Iran officially declared that it would break some other restrictions included in the JCPOA if the 2015 treaty continues not to provide the expected economic benefits to Iran.

 The remaining parties that adhered to the JCPOA have recommended Iran to comply – even unilaterally – with the agreement of July 14, 2015 – and these countries are China and the United Kingdom.

 The EU, however, will continue to carry out checks on Iran’s compliance with the JCPOA, both in the collection of heavy water and in the production of enriched uranium, which is essential for building nuclear weapons.

 On a strictly economic level, Iran has abolished the oil subsidy regime for the population – a cost of 38 billion US dollars a year, equal to approximately 20% of GDP.

 As both the International Monetary Fund and the World Bank have noted, this is the first aspect to be kept in mind.

 Nevertheless, in a context like the sanction regime, it is impossible to maintain a policy of internal liberalizations.

 However, on a purely strategic level, what could all this mean, insofar as a permanent geoeconomic clash is emerging between Iran and the United States?

 For example a much harder and more continuous war in the Lebanon than we have already experienced.

 Or a clash with Israel involving Assad’ Syrian Army, the Hezbollah, some units of Iran’s Revolutionary Guards and even Hamasin the South.

 A long-term war capable of slowly consuming both the material and soldiers of the Jewish State and its  international support.

 Or a new war in Syria, between the Golan Heights and the areas close to Damascus, forcing Russia to play a military role in Assad’ Syria and creating a clash between Israel and Russia, again on Syria alone.

Or another possibility could be a direct confrontation between Israel and Iran, with airstrikes on the territory of the Shiite republic and the whole panoply of means available for non-conventional actions.

 Or finally a clash throughout the Middle East, with the possible presence of Saudi Arabia and Iran’s coordination of all Shiite forces inside and outside the opposing countries.

 It is from this viewpoint that we must evaluate the above mentioned strengthening of the US military structure throughout the Middle East.

 It should also be noted that the 120,000 US military to be deployed in the various US bases in the region are more or less the same – in number – as those that were used in the attack on Saddam Hussein’s Iraq in 2003.

 Meanwhile, the economic crisis is tightening on Iran: last March oil exports fell drastically up to reaching only 1.1 million barrels on average, while Taiwan, Greece and Italy stopped their imports and the major importers, namely  China and India, reduced their purchases from Iran by 39% and 47% respectively.

 The more the crisis deepens in Iran, the more likely the option of a regional war – probably triggered by Iran – becomes.

 The probable clash between Iran and the United States, Israel and Saudi Arabia must be assessed in the framework of this very weak balance between a possible anti-Shiite war and a careful evaluation of the effects and results of a probable war against Iran and on how it will leave the Middle East.

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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A little acknowledged clause may be main obstacle to revival of Iran nuclear accord

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A little acknowledged provision of the 2015 international agreement that curbed Iran’s nuclear program explains jockeying by the United States and the Islamic republic over the modalities of a US return to the deal from which President Donald J. Trump withdrew.

The provision’s magic date is 2023, when the Biden administration if it returns to the agreement, would have to seek Congressional approval for the lifting or modification of all US nuclear-related sanctions against Iran.

Both the administration and Iran recognize that Congressional approval is likely to be a tall order, if not impossible, given bi-partisan US distrust, animosity, and suspicion of the Islamic republic.

As a result, the United States and Iran have different objectives in negotiating a US return to the accord.

The Biden administration is attempting to engineer a process that would allow it to sidestep the 2023 hurdle as well as ensure a negotiation that would update the six-year-old deal, limit  Iran’s controversial ballistic missiles program and halt Iranian support for non-state actors in Lebanon, Iraq, and Yemen.

A pro-longed negotiation would allow President Joe Biden to focus Congress on his domestic legislative agenda without Iran being a disruptive detraction.

Mr. Biden “needs something to get beyond 2023. So, he wants a process that would take a number of steps that could take…a number of years to accomplish. During that time, the United States could ease some sanctions… These small things along the way could happen in a process but the key is going to be to have a process that allows the Biden administration to draw this out for some time,” said former State Department and National Security Council official Hillary Mann Leverett.

An extended process would, moreover, make it easier for Mr. Biden to convince America’s sceptical Middle Eastern partners – Israel, Saudi Arabia, and the United Arab Emirates – that a return to the deal is the right thing to do.

Mr. Biden sought to reassure its partners that, unlike Mr. Trump, he would stand by the US commitment to their defence with this week’s missile attack on an Iranian-backed Shiite militia base in Syria. The strike was in response to allegedly Iranian-backed militia attacks on US targets in Iraq as well as the firing of projectiles against Saudi Arabia reportedly from Iraqi territory.

The US attack also served notice to Iran that it was dealing with a new administration that is more committed to its international commitments and multilateralism as well as a revival of the nuclear agreement but not at any price.

The administration has reinforced its message by asking other countries to support a formal censure of Iran over its accelerating nuclear activities at next week’s meeting in Vienna of the International Atomic Energy Agency’s (IAEA) board of governors.

The United States wants the IAEA to take Iran to task for stepping up production of nuclear fuel in violation of the nuclear accord and stalling the agency’s inquiries into the presence of uranium particles at undeclared sites.

While risking a perilous military tit-for-tat with Iran, the US moves are likely to reinforce Iranian domestic and economic pressures, in part in anticipation of the 2023 milestone, to seek an immediate and unconditional US return to the accord and lifting of sanctions.

Pressure on the Iranian government to secure immediate tangible results is compounded by a public that is clamouring for economic and public health relief and largely blames government mismanagement and corruption rather than harsh US sanctions for the country’s economic misery and inability to get the pandemic under control.

The sanctions were imposed after Mr. Trump withdrew from the nuclear accord in 2018.

The pressure is further bolstered by the fact that recent public opinion polls show that the public, like the government, has little faith in the United States living up to its commitments under a potentially revived nuclear deal.

The results suggest that neither the government nor the Iranian public would have confidence in a process that produces only a partial lifting of sanctions. They also indicated a drop of support for the deal from more than 75 per cent in 2015 to about 50 per cent today.

Two-thirds of those polled opposed negotiating restrictions on Iran’s ballistic missile program as well as its support for regional proxies even if it would lead to a lifting of all sanctions.

Public opinion makes an Iranian agreement to negotiate non-nuclear issues in the absence of a broader effort to restructure the Middle East’s security architecture that would introduce arms controls for all as well as some kind of non-aggression agreement and conflict management mechanism a long shot at best.

Among Middle Eastern opponents of the nuclear agreement, Israel is the country that has come out swinging.

The country’s chief of staff, Lt. Gen. Aviv Kochavi, last month rejected a return to the deal and signalled that Israel would keep its military options on the table. Mr. Kochavi said he had ordered his armed forces to “to prepare a number of operational plans, in addition to those already in place.”

Israel’s ambassador to the United States, Gilad Erdan, suggested a couple of weeks later that his country may not engage with the Biden administration regarding Iran if it returns to the nuclear agreement.

“We will not be able to be part of such a process if the new administration returns to that deal,” Mr. Erdan said.

By taking the heat, Israel’s posturing shields the Gulf states who have demanded to be part of any negotiation from exposing themselves to further US criticism by expressing explicit rejection of Mr. Biden’s policy.

To manage likely differences with Israel, the Biden administration has reportedly agreed to reconvene a strategic US-Israeli working group on Iran created in 2009 during the presidency of Barak Obama. Chaired by the two countries’ national security advisors, the secret group is expected to meet virtually in the next days.

It was not immediately clear whether the Biden administration was initiating similar consultations with Saudi Arabia and the UAE.

In a confusing twist, Israel has attracted attention to its own officially unacknowledged nuclear weapons capacity by embarking on major construction at its Dimona reactor that was captured by satellite photos obtained by the Associated Press.

Some analysts suggested that Israel’s hard line rejection of the Biden administration’s approach may be designed to distract attention from upgrades and alterations it may be undertaking at the Dimona facility.

“If you’re Israel and you are going to have to undertake a major construction project at Dimona that will draw attention, that’s probably the time that you would scream the most about the Iranians,” said non-proliferation expert Jeffrey Lewis.

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Will the New Interim Government Lead Libya Out Of A Long-Standing Crisis?

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Last week, February 17, Libyans celebrated the 10th anniversary of the revolution that ousted the long time leader Colonel Muammar Gaddafi. The decade that followed the violent change of power has not brought Libya any closer to the desired outcome. Instead, the country plunged into endless wars and economic turmoil, the consequences of which did not cease to plague Libya until recently.

In June 2020, after the Libyan National Army (LNA) led by Marshal Khalifa Haftar and the forces loyal to the Government of National Accord (GNA) de facto established a ceasefire, the United Nations intensified its peacekeeping efforts to resume the political process. Jump started by Stephanie Williams, interim head of the UN Support Mission in Libya, the Libyan Political Dialogue Forum paved the way for a step-by-step solution to the impasse in which Libya has found itself after almost a year and a half of non-stop hostilities. From the first meeting in Tunisia in early November of 2020 up to the last one held in Geneva this February, 75 forum members representing the Libyan society in its entirety have been working to determine the fate of the war-weary nation.

Finally, to the great surprise of many foreign observers familiar with the Libyan agenda, the forum participants managed to agree with little effort on the lists of potential candidates for positions in a transitional government, which is supposed to replace both rival administrations in Tripoli and Al-Bayda. By doing this, the representatives actually accomplished two main tasks: filling in the vacuum of legitimacy of the GNA conditioned by the expiration of the Skhirat agreement, as well as ending the vicious struggle for power, putting the implementation of reform under international supervision.

It’s worth noting that the winning list of candidates comprised of the chairman of the Presidential Council (PC), his two deputies, and prime minister, appeared to be starkly different from the expectations of many. The vote gave victory to politicians with little fame not only among foreign pundits, but even Libyans themselves. Muhammad Younis Al-Manfi, a former diplomat, became the head of the PC, while Abdullah Al-Lafi and Musa Al-Quni took over as his deputies. In turn, Abdelhamid Al-Dabaiba, a prominent Libyan businessman hailing from an influential family of the city of Misurata, was appointed as prime minister. Al-Dabaiba is supposed to oversee the appointment of ministers and the formation of the so-called government of national unity, which will lead Libya to the national elections scheduled for December 24.

Holding general elections is the primary mission of the new government, along with the reform of the armed forces, which mainly implies their unification, as well as the disarmament and elimination of illegal armed groups. In order to fulfill this ambitious task, something their predecessors failed to do since 2015, the current leaders of the interim government should make every effort, keeping in mind that any manifestation of bias or flirtation with foreign powers at the expense of the aspirations of the nation can annihilate all achieved progress and spark the conflict anew.

These considerations must at all times remain at the top of the agenda of the transitional authorities, since many influential domestic players appear to be not fully satisfied with the current distribution of power and the appointment of ‘undesirable’ persons to senior positions. Among these ‘undesirables’ is a native of Misurata Abdelhamid Al-Dabaiba. After the 2011 revolution, the city exploited the seaport and ready access to the state budget to achieve a virtual independence, building an army of numerous and well-equipped militias. It is generally accepted that it was the Misurati groups that made a deciding contribution to lifting the blockade on Tripoli in 2020 and forcing Khalifa Haftar to withdraw his troops from western Libya. The election of Al-Dabaiba was only logical, as it represents an outcome of the conflict that ended in favor of a coalition where Misurata played a key role.

There is another circumstance that could potentially cause a démarche of the elites in eastern Libya, who still remember the bitterness of defeat. The Al-Dabaiba family has close ties with the Turkish leadership and personally President Erdogan. In particular, Ali Al-Dabaiba, cousin of the new prime minister Abdulhamid Al-Dabaiba and once mayor of the city of Misurata (1989-2011), who headed the Organisation for Development of Administrative Centers (ODAC) and granted Turkish companies 19 billion dollars in Libyan construction contracts during his tenure. The issue of Turkey’s involvement still constitutes a main obstacle for normalizing relations between parties to the conflict. Ankara actively supported the GNA in the fight against the LNA, sending thousands of mercenaries, military equipment and advisers to Libya. The LNA repeatedly listed the withdrawal of the Turkish forces as a condition for national reconciliation. In addition, Ali Al-Dabaiba has almost succeeded in subversion of the work of the Libyan Political Dialogue Forum in Tunisia, after he attempted to bribe its participants to make them vote for his cousin. This incident provoked uproar from the Libyan public, forcing the UN to open an investigation into the forum members.

In this regard, Prime Minister Abdelhamid Al-Dabaiba along other officials of the newly formed government will face a difficult challenge of meeting the expectations of the Libyan people and the international community. Although the recent reforms of governmental organs did not actually change the balance of power, keeping those loyal to the established allies of the GNA within the leadership structure, they sidelined the existing differences between the warring parties, allowing to prolong the fragile truce and relaunch the political process.

In the nearest future Libya’s current leaders should make it their priority to minimize the dictate of Turkey or the West, and, if possible, prevent their further interference, as well as maintain the transparency of the interim government before the general elections. Even the slightest retreat from neutrality and independence, two principles the new head of Presidency Council Mohammed Al-Manfi appear to be keen on upholding, may entail catastrophic consequences and lead to an indefinite delay in settling the Libyan conflict.

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Gender in the GCC — The Reform Agenda Continues

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In my previous Op-Ed about the road map for reforms in the Gulf Cooperation Council (GCC), I talked about the importance of the human capital. Today, and as the world celebrates International Women’s Day this March 8th, it is a good moment to take stock of the impressive progress that some countries in the GCC are making in expanding opportunities for women in order to utilize all their human capital to achieve the developmental goals that they set for themselves. Saudi Arabia and the UAE have emerged over the last couple of years as the region’s leaders in this effort. Along with Bahrain, they have introduced groundbreaking reforms that are allowing women to more fully participate in economic activities, as they also support equal treatment for women in their personal lives.

The benefits of such trendsetting reforms for the societies and economies of these three countries cannot be overstated. Furthermore, a spillover effect is being seen in the rest of the Middle East and North Africa (MENA) region. The reforms focused on gender not only allow reforming countries’ economies to tap into the productivity of 50% of their populations, they also contribute to poverty reduction, sustainable growth and, most importantly, gender equity for women in both the public and private spheres. To ensure the maximum impact of these benefits, those GCC countries that have introduced reforms must keep a laser focus on effective implementation, while those in the region that have yet to expand opportunities for women can look to their neighbors for inspiration.

In 2019, Saudi Arabia’s ranking in the World Bank Group’s Women, Business and the Law report jumped by the largest number of points of any country in the world, as compared to its 2018 ranking. This was in large part due to Saudi Arabia’s historic enactment in July 2019 of a raft of measures to expand women’s roles in Saudi society and give them unprecedented economic freedoms. The reforms included increasing freedom of travel and movement by giving women the right to obtain passports on their own; enabling women to be heads of households in the same way as men and allowing them to choose a place of residency; a prohibition on the dismissal of pregnant women from the workplace; a mandate of non-discrimination based on gender in access to credit; the prohibition of gender-based discrimination in employment; the equalization of retirement ages between women and men; and a removal of the obedience provision for women. A year later, amendments to the Labor Law followed, which lifted restrictions on women’s ability to work at night and opened all industries to women, including mining.

As for the UAE, in September 2020, it became the first country in MENA to introduce paid parental leave for employees in the private sector. This historic reform was part of a broad package enacted by the UAE to support women’s labor force participation, which, at 57.5%, is one of the highest in the MENA region. The 2020 reform package builds on work the UAE has engaged in since 2019 to prioritize gender equality and women’s economic empowerment. In 2019, the UAE introduced a first set of reforms, including guaranteeing equality between women and men in applying for passports; allowing women to be heads of households like men; passing legislation to combat domestic violence and impose criminal penalties for sexual harassment in the workplace; prohibiting gender-based discrimination in employment and the dismissal of pregnant women; and removing job restrictions for women in specific sectors such as mining. These reforms were recognized in the World Bank’s Women, Business and the Law 2021 report, in which the UAE was the highest-ranked country in the MENA region.

The additional reforms introduced in 2020 address persistent legal inequalities, including those related to women’s mobility, their rights within the marriage and with respect to parenthood, and their ability to manage assets. Specifically, the reforms include the amendment of the Personal Status Law to remove the provision on women’s obligation to obey husbands and to lift restrictions of women’s ability to travel outside the country, new provisions to allow women to choose where to live and to travel outside the home in the same way as men, and an amendment to the Labor law that mandates equal pay for work of equal value across different industries and sectors.

Lessons Learned and Ingredients for Success

Three common elements underpin the success of these reform efforts: strong government commitment, effective collaboration across ministries, and the deployment of information campaigns supporting the reforms.

Strong government commitment is crucial because it ensures not only that reform-minded legislation is passed in the first place, but that it is underpinned by tools to ensure implementation. In the UAE for example, the government updated the Explanatory Note of the Personal Status Law to support the effective implementation of family-related reforms in the courts and to ensure accurate interpretation of new provisions by judges. To support implementation in Saudi Arabia, the government updated all employment regulations to reflect the new legislative reforms.

Effective collaboration and cooperation among government ministries is also key. In both Saudi Arabia and the UAE, the recent reforms were championed by a broad swath of government entities. And in Saudi Arabia specifically, a June 2019 royal decree established the Women’s Empowerment Committee, which includes representatives from a wide range of ministries and has as its mandate the coordination of efforts to achieve women’s empowerment through legal reforms.

Such cooperation among ministries is important because it can help support governments’ effective decision-making going forward. Specifically, all ministries whose mandates touch on issues related to women can collect reliable, uniform data to be used to support policy choices aimed at helping both women and the economy. In the UAE, for example, ministries are collecting gender disaggregated data on topics ranging from women’s opportunities for entrepreneurship to their dropout rate from the labor market to the incidence of domestic violence.

Effective implementation efforts have also included strong communication and information dissemination campaigns. The governments of the UAE and Saudi Arabia have placed great emphasis on raising awareness of the new provisions to ensure compliance with the legal framework and to show the economic and social benefits of these reforms. The reforms were widely covered by local and international media. The government also used social media, government websites, and government-sponsored seminars and workshops with various stakeholders to spread the word.

Throughout history, women have played a critical role in economic recovery following global crises. As the world continues to adapt to the impact of the COVID-19 pandemic, the legal reforms in the Gulf are enabling women to contribute more effectively to recovery this time, as well. The role of regional leaders like Saudi Arabia, the UAE and Bahrain will be critical going forward, not just for inspiring reforms, but for sharing reform experiences, success factors and lessons learned from the reform effort. These three countries can play a transformational role in the MENA region and beyond in encouraging and supporting the implementation of gender-neutral laws.

World Bank

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