Middle East

The tension between Iran and the United States

Published

4 years ago

June 17, 2019

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Russian Federation and China explicitly supported Iran, which stated that only the USA had unilaterally and illegally withdrawn from the agreement.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.

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Giancarlo Elia Valori

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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Middle East

Making Sense of Iran’s De-escalation with Saudi Arabia

Published

20 hours ago

March 24, 2023

Harshit Sharma

Soldiers drive at speed past two women begging in Lahj, Yemen. © UNOCHA/Giles Clarke

On March 10, 2023, Iran and Saudi Arabia reached an agreement to resume diplomatic ties which had been severed for the last seven years triggered by the killing of a prominent Shi’ite cleric Sheikh Nimr al-Nimr by the latter. The agreement has been gaining special attention all over the world since two powers competing to gain strategic dominance in West Asia have agreed to come to terms, and even more so because of the agreement being brokered by a third country China which has gotten a step closer to deepening its presence in the region. However, this article intends to narrowly focus on the plausible reasons that led the Iranian regime to agree to reach this agreement.

Cementing Severed Diplomatic Ties

Following the visit of President of the Islamic Republic of Iran, Ebrahim Raisi to Beijing, Secretary of Iran’s Supreme National Security Council (SNSC) Ali Shamkhani visited Beijing on March 6, 2023, and had four days of intense discussions with his counterpart Saudi Arabia’s national security adviser Musaid Al Aiban to settle issues between their countries. This agreement, though as unusual an event it may be, is not very surprising after all. In his first speech after winning the elections, the incumbent President of Iran, Ibrahim Raisi, stated that he is willing to restart diplomatic ties with Saudi Arabia and improve trade with neighbours under the policy of ‘Neighbourliness’.

However, it is not unusual in Iranian politics to say one something about its foreign policy approach without been meaning to do it. Moreover, the first round of talks started back in Hassan Rouhani’s term. Therefore, it would be unwise to give more credit than necessary to President Raisi’s policy of ‘Neighbourliness’. It is also important to notice that before Beijing came into the picture, Oman and Iraq were mediating between Iran and Saudi Arabia and they had had five round of talks in Baghdad from 2021 to 2022 with no concrete result. The fast-changing regional dynamics and Iran’s internal situation have arguably played a key role in instrumentalising the agreement in March 2023.

Countering Regional Grouping

Given the fact that it is running proxy wars and supporting rebel groups in the region, Iran does not have many trusted allies in the region. There is an extent to which it can have sour relations with countries particularly in the neighbourhood since it may give rise to a regional grouping of countries against Iran. Post the signing of Abraham Accord, countries like Bahrain and UAE have already begun the process of normalising relations with Israel. Furthermore, backchannel talks have already been going between Saudi Arabia and Israel facilitated by the USA. Therefore, de-escalation with Saudi Arabia was in favour of Iran in the present especially because it would help undercut Israel’s efforts to isolate Iran in the region. In the light of these developments, Iran’s willingness to ease its years long rivalry with Saudi Arabia can also be seen as a policy of strategic hedging where Iran prepares for the worst by balancing Saudi Arabia by maintaining a strong military presence in the region but does not close itself from gaining whatever it can through constructive engagement.

Countering Internal Distress

Post the tragic death of Mahsa Amini, a 22-year-old Kurdish woman in September 2022 in the custody of the Morality Police (Gasht-e Irshad), the anti-hijab protests raised some serious concerns for the regime. Although the protests have waned in recent weeks due to the brutal crackdown by the clerical regime, but even they have entirely died down. However, the protests that erupted were against the draconian hijab law but were not limited to it. They were also in response to rising inflation, high unemployment, corruption, lack of opportunities due to country’s isolation among others.

The anti-hijab protest draws inspiration from a series of protests which have marked the history of the clerical regime. Many Iranians, particularly the younger population, have been raising their voice against the use of country’s wealth to fund proxy wars in the region rather than using it for their own welfare. The slogan “Neither for Gaza nor for Lebanon; my soul is sacrificed for Iran” can be heard in every protest since the Green Movement of 2009. The ruling dispensation had not witnessed such a big protest since 2009. This may have brought to light the deep-seated unsatisfaction among the population which cannot go unaddressed for long. But to alleviate the economic hardships of its citizens, the government must have money in its disposal to fix the economy and to generate employment.

Saudi Arabia: A Potential Investor

Keeping in mind the sanctions put in place by the USA, the Iranian regime has been having a hard time getting investment into the country. If this agreement works out, the Iranians will be able to reduce their expenditure that they have been bearing for years for fighting proxy wars in the region. The Saudis are supporting the Yemeni government recognised by the United Nations whereas the Iranians are backing the Houthi rebels. By coming to an agreement with the Saudis about the ongoing conflict in Yemen, Iranians can save a lot of money and resources which can be diverted to strengthen their internal situation in the country. Moreover, Iran may also have a potential investor on their table.

Under the crown Prince Mohammad bin-Salman, the diversification project, revolving around the aspirational document ‘Vision 2030’ has gained a momentum in order to decrease their reliance on oil as a means of state revenue. Therefore, the Saudis are looking forward for different ventures to invest. Given the low wage labour cost due to US sanctions, Iran could be a favourable investing site for the Saudis. In light of recent discovery of large reserves of lithium in Iran, 10 percent of the world’s total, rapprochement with Saudi may help in securing foreign investment and technology since energy and infrastructure costs are high for Iran to do it on its own and due to sanctions, Iran is unlikely to get big investors other than China and Russia. However, trade and tanks seldom go together. For getting Saudi Arabia to invest in Iran, de-escalation had to happen before in Yemen.

Conclusion

Through this agreement, the Iranian regime aims to strengthen its regional security through engaging with a strong neighbour to prevent a regional grouping against itself. Moreover, the regime is also trying to win the confidence of its aggrieved citizens by showcasing itself as responsible and pragmatic. The official statement of the Ministry of Foreign Affairs is that the agreement shows “determination of Iranian government to protect the interest of the Iranian people and Muslim, friendly and neighbouring countries” which was hailed by Islamic Republic News Agency (IRNA), the government backed news channel in Iran. Some other conservative media outlets focused more on how this agreement signals the defeat of USA and Israel. As much as the Iranian regime may hail it in the media, one must be cautious while overestimating the outcomes of the agreement. Through supporting Houthis in Yemen, Iran has been able to build significant influence in the southwest of the Arabian Peninsula and it looks uncertain if it would abandon it. The agreement may reduce tension in the region; however, it is unlikely to settle profound differences between them in the foreseeable future.

Middle East

Iran-Saudi Deal: Prospects for the Region

Published

1 day ago

March 23, 2023

Nimra Javed

Iran and Saudi Arabia have agreed to re-establish diplomatic relations and reopen their embassies within two months, according to both Iranian and Saudi state media. This marks a significant development as tensions between the two regional rivals had been high for years, with Riyadh breaking off ties with Tehran in 2016 after protesters invaded Saudi diplomatic posts in Iran following the execution of a prominent Shia Muslim scholar. Despite supporting rival sides in several conflict zones across the Middle East, including in Yemen, where the Houthi rebels are backed by Tehran and Riyadh leads a military coalition supporting the government, both sides have recently sought to improve ties.

The joint statement from Saudi Arabia and Iran also said the two countries had agreed to respect state sovereignty and not interfere in each other’s internal affairs, and to activate a security cooperation agreement signed in 2001. The announcement came on the day President Xi Jinping clinched a third term as China’s president amid a host of challenges. The presence of Beijing’s most senior diplomat, Wang Yi, at the talks signalled China’s interest in bolstering stability and peace in the region, as well as its own legitimacy.

The agreement has been welcomed in Iran, where senior officials have praised it as a step towards reducing tensions and bolstering regional security. However, some conservative media outlets have focused on how the deal signals a “defeat” for the United States and Israel. The US has cautiously welcomed the move, saying that it supports any efforts to help end the war in Yemen and de-escalate tensions in the Middle East region. Iraq and Oman, who had previously helped mediate the talks, greeted the rapprochement with optimism.

Improved relations between Tehran and Riyadh could have an effect on politics across the Middle East, particularly in Lebanon and Syria, where the two countries are on rival sides. This deal could lead to the creation of a better security situation in the region, and political analysts note that reducing tensions in Yemen, Lebanon, Syria, and Iraq can still entail wide-ranging interests for both sides. However, achieving success will require both countries to begin continuous and long-term efforts to try reliable ways that would guarantee mutual interests. While the development of re-establishing diplomatic relations between Iran and Saudi Arabia is considered a significant one for the region, it is important to note that ending the eight-year war in Yemen is still considered by some to be the most important eventual outcome of the agreement.

This will be a difficult goal to achieve, given the high level of distrust and the intensity of geopolitical rivalries, which may render the trend of reducing tensions reversible. Conservative economic dealings with Iran are expected from Saudi Arabia, as it does not want to be exposed to US sanctions, and normalisation does not necessarily mean that the two sides trust each other.

The resumption of diplomatic relations between Iran and Saudi Arabia at both the national and international level is likely to have a significant impact. While it could reduce tensions and lead to improved cooperation in areas such as trade, security, and energy, there are still deep-seated issues that may not be easily resolved. Both countries have supported opposing sides in conflicts throughout the Middle East, and there are religious and geopolitical tensions at play.

Furthermore, the resumption of diplomatic relations may be viewed differently by different segments of society in both countries. At the international level, the agreement could potentially reduce tensions, contribute to stability and peace, and increase China’s influence in the region. It may also have implications for other countries with interests in the Middle East, including the United States and Russia. Ultimately, the impact of the resumption of diplomatic relations between Iran and Saudi Arabia will depend on the actions of both countries going forward and whether they can work towards lasting peace and stability in the region. There is another issue which is vital for the Middle East.

The Director General of the International Atomic Energy Agency (IAEA) visited Iran and met with high-level officials to discuss enhanced cooperation and resolution of outstanding safeguards issues. Both parties agreed to collaborate, address issues related to three locations, and allow for voluntary verification and monitoring activities. Modalities for these activities will be agreed upon in a technical meeting in Tehran, and positive engagements could lead to wider agreements among state parties. This agreement can further help in reducing the tension on the Iran nuclear deal. In conclusion, it is a good deal which can have a long lasting impact on the peace security in the Middle East.

Middle East

Arab plan for Syria puts US and Europe in a bind

Published

2 days ago

March 23, 2023

Dr. James M. Dorsey

Image source: twitter @MohamedBinZayed

A push by Arab allies of the United States to bring Syria in from the cold highlights the limits of a Chinese-mediated rapprochement between the Middle East’s archrivals, Saudi Arabia and Iran.

The effort spearheaded by the United Arab Emirates, and supported by Saudi Arabia, Egypt, and Jordan, demonstrates that the expected restoration of diplomatic relations between the kingdom and the Islamic republic has done nothing to reduce geopolitical jockeying and rebuild trust.

At best, the Chinese-mediated agreement establishes guardrails to prevent regional rivalries from spinning out of control, a principle of Chinese policy towards the Middle East.

The Saudi-Iran agreement also is an exercise in regime survival.

It potentially allows the two countries to pursue their economic goals unfettered by regional tensions.

For Saudi Arabia, that means diversification and restructuring of the kingdom’s economy, while Iran seeks to offset the impact of harsh US sanctions.

The goal of countering Iran in Syria is upfront in the Arab proposal for returning Syrian President Bashar al-Assad to the Arab and international fold.

If accepted by Syria, the United States, and Europe, it would initiate a political process that could produce a less sympathetic Syrian government to Iran.

It would also establish an Arab military presence in Syria designed to prevent Iran from extending its influence under the guise of securing the return of refugees.

For Mr. Al-Assad, the carrot is tens of billions of dollars needed to rebuild his war-ravaged country and alleviate the humanitarian fallout of last month’s devastating earthquakes in northern Syria.

Hampered by sanctions, Mr. Al-Assad’s Russian and Iranian backers don’t have the economic or political wherewithal to foot the bill.

Nevertheless, potential Gulf investment is likely to encounter obstacles. The US sanctions that hamper Russia and Iran, also erect barriers for Saudi Arabia and the UAE that will limit the degree to which they want to be seen as sanctions busters.

Moreover, countering Iranian influence in Syria would have to go beyond trade and investment in physical reconstruction. Iran has over the years garnered substantial soft power by focusing on embedding itself in Syrian culture and education, providing social services, and religious proselytization.

Meanwhile, China has made clear that its interests are commercial and further limited to aspects of Syrian reconstruction that serve its geopolitical and geoeconomic goals.

Mr. Al-Assad was in Moscow this week to discuss trade and humanitarian aid.

The Syrian president’s rejection of a Russian request that he meets his Turkish counterpart, Recep Tayyip Erdogan, suggests that Mr. Al-Assad will be equally opposed to key elements of the Arab proposal.

The Syrian president said he would only meet Mr. Erdogan once Turkey withdraws its troops from rebel-held areas of northern Syria.

Even so, the Arab push potentially offers the United States and Europe the ability to strike a reasonable balance between their lofty moral, ethical, and human rights principles and the less savory contingencies of realpolitik.

The terms of the Arab proposal to allow Syria back into the international fold after a decade of brutal civil war that killed some 600,000 people, displaced millions more, and significantly enhanced Iran’s regional footprint appears to take that into account.

According to The Wall Street Journal, the proposal offers something for everyone but also contains elements that are likely to be difficult to swallow for various parties.

While Mr. Al-Assad rejects the principle of political reform and the presence of more foreign troops on Syrian territory, legitimizing the regime of a man accused of war crimes, including using chemical weapons against civilians, is a hard pill to swallow for the United States and Europe.

However, it is easy to claim the moral high ground on the backs of thousands trying to pick up the pieces in the wake of the earthquakes.

The same is true for the plight of the millions of refugees from the war whose presence in Turkey and elsewhere is increasingly precarious because of mounting anti-migrant sentiment.

That is not to say that Mr. Al-Assad should go scot-free.

Nonetheless, the failure to defeat the Syrian regime, after 12 years in which it brutally prosecuted a war with the backing of Russia and Iran, suggests the time has come to think out of the box.

The alternative is maintaining a status quo that can claim the moral high ground but holds out no prospect of change or alleviation of the plight of millions of innocent people.

To be sure, morality is not a concern of Arab regimes seeking to bring Mr. Al-Assad in from the cold. However, countering Iran and managing regional conflicts to prevent them from spinning out of control is.

Even so, the Arab proposition potentially opens a way out of a quagmire.

It would enhance the leverage of the United States and Europe to ensure that political reform is the cornerstone of Mr. Al-Assad’s engagement with elements of the Syrian opposition.

In other words, rather than rejecting any solution that does not involve Mr. Al-Assad’s removal from power, the United States and Europe could lift sanctions contingent on agreement and implementation of reforms.

Similarly, the US and Europe could make sanctions relief contingent on a safe, uninhibited, and orderly return of refugees.

However, there would be questions about the ability and willingness of Arab forces loyal to autocratic regimes to safeguard that process impartially.

US and European engagement with Arab proponents of dealing with Mr. Al-Assad would potentially also give them a seat on a train that has already left the station despite their objections.

Ali Shamkani, the Iranian national security official who negotiated the deal with Saudi Arabia in Beijing, was in the UAE this week to meet President Mohammed bin Zayed. There is little doubt that Syria was on the two men’s agenda.

Mr. Al-Assad met this weekend in Abu Dhabi with Mr. Bin Zayed for the second time in a year and traveled to Oman for talks with Sultan Haitham bin Tariq last month.

The Jordanian and Egyptian foreign ministers recently trekked separately to Damascus for the first time since the civil war in Syria erupted in 2011.

Perhaps, the most fundamental obstacle to the Arab proposition is not the fact that Syria, the United States, and Europe would have to swallow bitter pills.

The prime obstacle is likely to be the Arab proponents of the plan. The UAE, Saudi Arabia, Egypt, and Jordan are unlikely to stick to their guns in presenting the plan as a package.

Having taken the lead in cozying up to Mr. Al-Assad, the UAE has since last year demonstrated that it is willing to coax the Syrian leader to back away from Iran at whatever cost to prospects for reform or alleviation of the plight of his victims.

Saudi Arabia, like Qatar and several other Arab countries, initially opposed reconciliation but the kingdom has since embraced the notion of rehabilitation of Mr. Al-Assad.

In early March, Saudi Foreign Minister Faisal bin Farhan Al Saud noted “that there is a consensus building in the Arab world, that the status quo is not tenable. And that means we have to find a way to move beyond that status quo.”

Mr, Al-Saud insisted, however, that it was “too early” to discuss Syria’s return to the Arab League that groups the Middle East’s 22 Arab states. The League suspended Syrian membership in 2011 because of Mr. Al-Assad’s prosecution of the civil war.

Even so, this puts the ball in the US and European courts.

Much of the Arab proposition is about enticing the United States and Europe to be more accommodating and more inclined to a conditioned lifting of sanctions.

The problem is that Mr. Al-Assad is likely to call the Arab states’ bluff in the knowledge that Iran is his trump card.

A speedy in principle US and European embrace of the Arab proposition would hold Emirati and Saudi feet to the fire and put Mr. Al-Assad on the back foot.