Syria lures but will China bite?
China looms large as a potentially key player alongside Russia and Iran in President Bashas al-Assad’s post-war Syria. With Russia and Iran lacking the financial muscle and the United States and Europe refusing to engage with the Al-Assad regime, China is from Syria’s perspective the shining knight on a white horse. Syria could become a key node in China’s infrastructure, telecommunications and energy-driven Belt and Road Initiative (BRI). Syria could also bring it closer to being sucked into the Middle East’s multiple conflicts.
China’s economic interests in Syria
Mohammed Jarah and Ahmad Bustati’s warehouse in Damascus symbolized China’s emergence as the largest supplier of industrial and consumer goods to Syria on the eve of the Syrian civil war. The dilapidated warehouse was stocked with everything from Chinese laser cutting machines to plastic toys for children.
A decade of fighting dashed the two Syrian entrepreneurs’ hopes. However, things seem to be looking up for businessmen like Mr. Jarah and Mr. Bustati with Syrian President Bashar al-Assad having gained the upper hand in the war with Russian and Iranian assistance and China seeing longer-term economic potential in Syria as a regional node of what BRI will look like irrespective of the coronavirus pandemic and its devastating economic consequences.
Syrian officials have sought to drive home China’s competitive advantages and perceived interest in taking a lead in the reconstruction of their country. “The Silk Road is not a silk road if it does not pass through Syria, Iraq and Iran,” said Buthina Shaaban, Bashar al-Assad’s media advisor, referring to the BRI.
Chinese access to the Syrian Mediterranean Sea ports of Tartus and Latakia is an attractive prospect for China’s multi-billion-dollar infrastructure, telecommunications and energy-driven initiative that seeks to link Eurasia to the People’s Republic. It would complement Beijing’s footholds in Greece’s Piraeus and the Israeli harbours of Haifa and Ashdod and echo Syria’s key position on the ancient Silk Road.
Closely connected to Chinese interest in Syrian ports is the exploration by China Harbour Engineering Company Ltd (CHEC) of the possible upgrading of the deep seaport of Tripoli, Lebanon to allow it to accommodate larger vessels. In contrast to Syrian ports, Tripoli would grant China greater freedom of action because it would not have to share control with Russia. Together with Syrian ports, Tripoli would serve as an alternative to passage through the Suez Canal.
Russia appeared to be anticipating potential Chinese moves when it last year negotiated with the Assad government an extension of its access to military bases including what it describes as a “logistics support facility of the Russian navy” in Tartus.
In the absence of making the agreement public, it remained unclear what Russian intentions are. However, modernization of Tartus for military purposes that would guarantee Russia a role in control of the Eastern Mediterranean would have to involve upgrading it to be able to accommodate all types of vessels, including aircraft carriers.
In a further move, Russian President Vladimir Putin ordered his foreign and defence ministries in May to reach agreement with Syria on an additional expansion of a 2015 accord that governs Russia’s naval presence in Tartus and allows the Russian navy to base up to 11 ships in the port for 49 years. Mr. Putin wants the life of the agreement to be extended by an additional 25 years.
“From the coast of Syria, there is an opportunity to control not only the eastern part, but the entire Mediterranean Sea,” said Captain 1st Rank Anatoly Ivanov, a Moscow-based naval expert. “The United States has in the Mediterranean Sea not only the ships of its Sixth Fleet, but also an extensive ship repair base and training centres of the Navy. For Russia, the Mediterranean Sea is much closer not only geographically, but also geopolitically. Therefore, to use the opportunity to establish (itself) more densely in Syria seems to be a reasonable measure”
Qingdao Haixi Heavy-Duty Machinery Co. has already sold Tripoli port two 28-storey container cranes capable of lifting and transporting more than 700 containers a day, while a container vessel belonging to China’s state-owned COSCO Shipping Lines docked in Tripoli in December 2018, inaugurating a new maritime route between China and the Mediterranean.
Major Chinese construction companies are also looking at building a railroad that would connect Beirut and Tripoli in Lebanon to Homs and Aleppo in Syria. China has suggested that Tripoli could become a special economic zone within the BRI and serve as an important trans-shipment point between the People’s Republic and Europe.
Adding to China’s expansion in the Eastern Mediterranean, COSCO acquired in 2015 a 65 percent stake in Turkey’s Kumport Terminal on the Ambarli coast of Istanbul. To round off the circle, Egypt’s navy last year signed an agreement with China’s Hutchinson Ports to build a terminal in Abu Qir, a port 23 kilometres northeast of Alexandria. Chinese companies already operate Alexandria’s own port as well as that of El Dekheila, ten kilometres west of the city.
Chinese influence in at least ten ports in six countries bordering the Eastern Mediterranean – Israel, Greece, Lebanon, Turkey, Egypt, and Syria – could complicate US and NATO’s ability to manoeuvre in the region.
This was one reason that the Trump administration has warned Israel that Chinese involvement in Haifa, where the Chinese have built their own pier, could jeopardize continued use of the port by the US sixth fleet.
Informing US thinking is China’s Military Strategy white paper, published in 2015, that emphasises the “strategic requirement of offshore waters defense and open seas.” It raises the spectre of Chinese-managed or owned ports in the Eastern Mediterranean serving the People’s Republic’s economic and commercial, as well as military interests.
The Chinese sway over multiple ports in the Eastern Mediterranean could also encourage Turkey to bolster its grip on the energy-rich waters in violation of international law. Turkish military support for the internationally recognised Libyan Government of National Accord produced a maritime agreement between the two entities that created an Exclusive Economic Zone (EEZ) in the Eastern Mediterranean favouring expansive Turkish claims.
China’s interest in Mediterranean ports is part of a larger effort to integrate the Middle East into the maritime leg of the Belt and Road that also includes the Gulf, the Arabian Sea with the Pakistani port of Gwadar as its focal point, and the Red Sea with the establishment of the People’s Republic’s first military outpost in Djibouti.
The integration is further advanced by Chinese investment in ports and logistics facilities in among others Dubai and Oman as well as industrial parks linked to maritime infrastructure. China’s moves have been embraced by Gulf states, several of which have incorporated them in long-term plans to diversify and streamline their economies.
Qi Qianjin, China’s ambassador in Damascus, spelled out China’s interest in Syria when he stressed in 2018, in a statement in 2018 to the People’s Republic’s state-run news agency Xinhua as well as in a letter, his country’s intent to expand its economic, political, and military footprint in the.
“I think it’s about time to focus all efforts on the development and reconstruction of Syria, and I think China will play a bigger role in this process by providing more aid to the Syrian people and the Syrian government,” Mr. Qi said during a visit to a hospital in the Syrian capital.
Donations in recent years of at least US$44 million to Syria for humanitarian purposes back up Mr. Qi’s statements.
In a letter written in August 2019, the ambassador focussed among other things, on the development of Syrian railways and seaports. The letter was published a month after Chinese President Xi Jinping promised to lend $20 billion to Syria, Yemen, Lebanon, and Jordan for reconstruction and economic development.
Few doubt that China, even prior to the coronavirus pandemic and its devastating economic fallout, is best positioned to be a key, if not the key player, in post-war reconstruction of Syria, estimated to require between $250 and $400 billion in investment.
This is even more the case as other potential funders, the United States, Europe, Russia and the Gulf Cooperation Council states, will either refuse to work with the government of Mr. Al-Assad or be consumed with fighting a domestic and global recession and substantial loss of revenues in the wake of the pandemic.
Moreover, in opposition to Western states, China on six occasions, backed Russian vetoes in the United Nations Security Council that blocked condemnations of the Syrian government and its backers, Russian and Iran; calls for ceasefires; and sanctioning of alleged war criminals.
One of China’s comparative advantages in heavily sanctioned Syria is the experience it garnered in circumventing US and United Nations sanctions imposed on Iran and North Korea.
China further benefits from alternative institutions that it built like the Asian Infrastructure Investment Bank and the Shanghai Cooperation Organization that it either controls or in which it has considerable influence.
That has not stopped the US Justice Department from accusing Chinese telecommunications giant Huawei of operating in Syria in violation of US sanctions. The department is seeking the extradition from Canada of Meng Wanzhou, the company’s chief financial officer and daughter of its founder. Ms. Meng was detained in Canada at the request of the United States.
Seemingly oblivious to the risk of being targeted by the long arm of US justice, some 200 Chinese companies in 2018 and 58 in 2019, active in sectors such as telecommunications, oil and gas, and transportation, attended the Damascus International Fair where they discussed deals ranging from car manufacturing to development of mobile hospitals.
The participation of China National Heavy Duty Truck Company highlighted Chinese interest in the Syrian automotive sector. Syria could also prove to be a lucrative market for Chinese military exports. Mr. Al-Assad could well see Chinese interest as a way of loosening Moscow and Tehran’s grip on his country despite Russian and Iranian effort to reap the benefits of their boots-on-the-ground support for his government by winning lucrative reconstruction contracts.
China has so far refrained from responding in any real way to Syrian urging to kickstart reconstruction of critical national infrastructure even before remaining rebel strongholds in the country are reconquered. It has however exploited commercial opportunity.
The vast majority of Syrian exports go to China and Chinese goods are ubiquitous in Syrian markets. Hama, Syria’s most important industrial region after the collapse of manufacturing in Aleppo and Damascus as a result of the war, is awash with Chinese-made car parts, machine tools and equipment for the automobile, motorcycle, and shoe industry.
Multiple delegations of Chinese investors and businessmen have visited Syria in recent years. In 2018, China hosted its First Trade Fair on Syrian Reconstruction Projects with some 1,000 Chinese companies in attendance and pledged $2 billion for the construction of industrial parks.
China’s security concerns from Syria
Mr. Al-Assad’s ability to regain control of most Syria, with the exception of the rebel-held northern region of Idlib, created not only economic opportunity but also heightened already existing Chinese security concerns.
As Syrian government forces rolled back rebel fighters, China feared that their battle-hardened Uyghur and Central Asian contingent would gravitate towards Afghanistan, Tajikistan, and Pakistan from where it would be easier to target China.
The presence of Uyghur fighters in Syria was one driver for a brutal crackdown on Turkic Muslims in China’s troubled north-western province of Xinjiang. It also persuaded China to step up border security cooperation with Tajikistan and Afghanistan, where militants of the Uyghur jihadist Turkistan Islamic Party, an al-Qaeda-affiliated group, allegedly fight alongside the Taliban.
The Uyghur presence in Syria prompted China to consider sending Chinese troops to join the fight for Idlib in violation of its foreign and defense policy principles. China ultimately dropped the idea, which would have amounted to the People’s Republic’s first military intervention in recent memory beyond its borders.
Repeated unconfirmed media reports have, however, suggested that China has been sharing intelligence with Syria and has been sending military advisors for the past four years to help in the fight against Uyghur militants.
The discussion about an intervention followed a pledge in 2016 by Rear Admiral Guan Youfei of the People’s Liberation Army Navy (PLAN) to increase military cooperation with the Syrian government.
Two years later, a Syrian state-controlled newspaper, Al Watan, Mr. Qi, the Chinese ambassador, and China’s military attaché, Wong Roy Chang, as saying that China wanted to contribute “in some way” to Syrian military campaign against the rebels in Idlib. The PLAN took nine days to deny Chinese interest in getting involved in the fighting, calling the report a “misunderstanding.”
Meanwhile, while supportive of efforts to negotiate an end to the Syrian war, China has studiously avoided taking a leading role. Its sole initiative to shape the outcome of the conflict was a four-point plan that never gained significant traction.
China’s dilemma in Idlib lies partially in sensitivity to Turkish opposition to an all-out assault on Idlib. Turkey fears that it would likely spark a renewed refugee exodus and concern that Chinese involvement in an assault could whip up pro-Uyghur sentiments in Turkey despite growing anti-refugee sentiment in the country.
Turkey has long supported Uyghur rights and has frequently turned a blind eye to Uyghur militants.
An Uighur dressed in a Turkish military uniform and sporting an automatic weapon, claiming in a video clip posted on Twitter that he was fighting in the northern Syrian district of Afrin alongside Turkish-backed rebels, advised Han Chinese residents of China’s troubled north-western province of Xinjiang to leave the area. “Listen you dog bastards, do you see this? We will triumph! We will kill you all. Listen up Chinese civilians, get out of our East Turkestan. I am warning you. We shall return, and we will be victorious,” the Uyghur said.
Syria in the wider Chinese Middle East policy
Beyond its hesitancy of becoming embroiled in the Syrian war, China, despite its consistent backing of the Syrian government as a secular bulwark against Islamic extremism, feared that greater involvement in Syria could jeopardise its successful efforts to remain aloof in the conflict between Saudi Arabia and Iran that influenced multiple disputes in the Middle East.
That fear has receded with states in the GCC ending their long-standing support for anti-Assad rebels and cosying up to the Syrian leader in an effort to counter Iranian and Turkish influence.
Chinese aloofness also shielded it from entering into direct competition with Russia and Iran in the post-war reconstruction phase. Deepening Chinese-Russian ties in the wake of the pandemic and perceived greater Iranian dependence on China may allow for a divvying up of the pie in ways that turn Syria into an important Belt and Road node
Author’s note: The original version of this article was published by the Geneva Center for Security Policy
China Gains Political Clout in the Middle East at the expense of the US’s Indispensability
There is yet another détente in the Middle East, but it is neither between Israel and Arabs nor has the United States of America (USA) played an intermediary. For a change, Saudi Arabia and its archrival across the Persian Gulf, Iran, have agreed to resume bilateral ties severed since the 2016 attack on the Saudi embassy in Tehran, and in a rather surprising first, the peacemaker happens to be China. Auspiciously for Beijing, it was uniquely placed to broker a detente between Saudi Arabia and Iran given its cordial relations with both countries — a feature that the “indispensable” USA lacked owing to its longstanding animosity with Iran.
Since the exponential rise in the significance of the Middle East owing to the discovery of oil, the USA has been an “indispensable” power player in the region. However, discernably fatigued by the decades-long military engagements in the region and adapting to a transformed global geostrategic environment, Washington underwent retrenchment from the Middle East in a bid to reorient its priorities to Asia-Pacific to counter China’s growing clout and recently towards Europe following Russia’s invasion of Ukraine. On top of that, thanks to their lofty economic and technological ambitions, the gulf countries have been making overtures to China to further expand their already multifaceted relationship — a trend expedited by the frosty relations between the Biden Administration and some of the Arab monarchs.
During the past few decades, China made steady inroads into the Middle East under the garb of geo-economics. Beijing is the largest trading and investment partner of the Middle Eastern nations and buys more oil from the region than any other country. Furthermore, almost all the Middle Eastern countries have signed to China’s Belt and Road Initiative (BRI), and as the Arab Monarchs aim to diversify their economies away from dependence on oil revenues, they are heavily counting on China for crucial investments and technological upgradations.
The growing economic influence did yield China significant political clout in the Middle East but until recently, Beijing has been cautiously reticent to publicly venture into the political arena. Nevertheless, it has gradually been propounding itself as a standard-bearer of United Nations (UN) principles and a proponent of win-win cooperation with reiterated stress on “dialogue and diplomacy” to settle disputes. The mediation between Saudi Arabia and Iran is the first employment of “dialogue and diplomacy” entirely sponsored by China. Reportedly, Saudis — skeptical of Iran — only accepted the deal after China signed as a guarantor, and economically debilitated Iran participated in the dialogue without preconditions after being granted immediate financial concessions besides the previous pledge of grandiose economic partnership. Needless to mention that Beijing is leveraging its economic clout to influence political happenings and more importantly, is no longer doing it behind closed doors; rather is advertising it as a momentous achievement of its diplomacy.
In the larger Chinese scheme of geo-economics outlined via BRI, the Middle East is among the most important geographical spheres, wherein it eyes grand investments in infrastructure, energy and technology. The acrimonious Saudi-Iran rivalry undermined China’s economic ambitions in the region and by brokering the détente, China aims to achieve not only its economic goals but has also announced itself as an influential political player in the region — an alternative to the “indispensable” USA.
Even though American officials welcomed the Saudi-Iran détente and have reportedly scoffed at the suggestion that the US influence in the Middle East is declining, in a zero-sum interplay between great powers, one side’s gain is always the loss of the other side. With the USA already engaged in bitter competition with China in economic, technological, and military spheres, diplomacy is just another frontline where Washington faces a supercharged Beijing vying to carve out its share of international diplomacy — previously dominated by the USA. Saudi Arabia and Iran resuming ties at Chinese mediation — while the “indispensable” USA spectated from the sidelines — bears evidence to the scale of Beijing’s political influence over Saudi Arabia and Iran in particular and all over the Middle East in general.
In addition, the diplomatic coup provides a clue about China’s political ambitions, which are not confined just to the Middle East. China — with frequent references to the UN charter and stress on diplomacy — has been trying to pitch itself as a peacemaker in various troubled zones. Just weeks before the Saudi-Iran mediation, China rolled out a 12-point position paper to bring an end to the hostilities in Ukraine. Although the plan did not receive a warm reception in the West, the message from Beijing couldn’t be less ambiguous: China is no longer reticent to shoulder political responsibilities and seeks to play a global political role by applying “Chinese wisdom”.
The bid to play as a mediator in conflicts stems from the view in Beijing that in contrast to the USA — involved directly or indirectly in conflicts, such as in the Middle East and Ukraine — China has stayed neutral and is, therefore, best suited to play the role of an intermediary. It is yet to be seen how successful Beijing’s push to field itself as a global peacemaker proves in the long haul; nevertheless, the USA’s indispensability, lately circumscribed to the diplomatic arena, has essentially been dispensed with.
This Distant Damascus
For the last 12 years, the war in Syria has been raging on. March 15, 2011 is considered to be the starting date of the conflict. At that time, the Syrian Republic was overwhelmed by mass protests following the havoc brought by the Arab Spring. As a result, a political crisis escalated into violent clashes, bringing external forces into the mix. Turkey, in particular, has been supporting the Syrian opposition. Initially, it was also supported by the United States, Saudi Arabia and Qatar. Despite the cessation of large-scale hostilities, we cannot say that the Syrian conflict is frozen. There are still some clashes in the country, including those involving foreign countries.
The Syrian government now controls approximately 65% of the territory. Most of the northeastern governorates of Raqqa, Al-Hasakah, and the northern parts of Deir ez-Zor are controlled by the Syrian Democratic Forces (SDF), consisting mainly of Kurdish militias. Part of Idlib is occupied by the radical Hay’at Tahrir al-Sham movement (outlawed in the Russian Federation). A number of areas in Aleppo, Raqqa, Al-Hasakah and Idlib are under the de facto protectorate of Ankara, which was established as a result of Turkish military operations: “Euphrates Shield”, “Olive Branch” and “Source of Peace”.
Syria is still a hotbed of terrorism. The posing extremist threat reached its peak in 2015, when ISIS (outlawed in the Russian Federation) seized numerous major cities. Although the organization’s main forces have been defeated, there are still sleeper cells in the Syrian desert. According to the UN, there are between 6,000 and 10,000 ISIS terrorists in Syria and Iraq, not counting the present representatives from other organizations. Additionally, there are thousands of terrorists in Syrian prisons (including those controlled by the Syrian Democratic Forces), which are becoming breeding grounds for jihadist ideas.
Moreover, the risk of escalation between individual countries still remains. There is a U.S. military base, Al-Tanf, in the southeastern province of Homs, along the Iraq-Jordan-Syria border. Syria can also be described as a Russian stronghold in the Middle East. In 2015, Russia launched a military operation against ISIS after Damascus appealed to Moscow for help. The Russian Hemeimeem air base and the Russian Tartus naval base are both located in Syria. Iran also has significantly increased its presence in recent years. Turkey constantly warns about the possibility of launching another military operation in northern Syria against Kurdish militias.
With all things considered, the risk that tensions between Moscow and Washington may spillover into Syria remains high. However, the Syrian crisis may also demonstrate that Russia and the United States can find common ground even amid the difficult situation over Ukraine.
Another problem is Syria’s severe humanitarian crisis. According to the UN, 90% of Syrians live below the poverty line. In 2022, the international organization allocated only 47% of the amount needed to implement humanitarian programs. Fuel shortages and high food prices are only exacerbating the existing humanitarian problems. This situation is further compounded by even more serious economic difficulties. The conflict is encouraging the expanding informal economy to play a major role in Syria due to high levels of corruption. The country’s civilian infrastructure has not yet been restored, and the sanctions imposed on Damascus by the United States and the EU in particular are hampering economic recovery.
Until 2022, a number of Russian companies were reasonably worried about doing business in Syria because of the risk of Western sanctions. However, now that many of the concerned organizations have fallen under the same sanctions themselves, the importance of this factor has diminished and Russia can expand its presence in Syria. This would allow Syria, a key ally of Russia in the Middle East, to manage its difficulties better.
The war in Syria has shown that a military solution to the conflict is doomed to fail, and establishing political peace seems almost the only probable way to resolve the conflict. However, the unresolved Kurdish issue remains one of the main stumbling blocks to a real settlement. The northeastern parts of Syria controlled by the SDF are demanding greater political and economic autonomy.
No progress can be made without an agreement between the government in Damascus and the Syrian Kurds on the post-war settlement of the country. The government’s willingness to find a compromise that takes into account the interests of the Autonomous Administration of North and East Syria could help resolve the crisis. The experience of Iraq, where the Kurds have been granted fairly extensive autonomy, could serve as an example of a successful solution to a similar problem.
Russia could act as a mediator between the Syrian government and the Kurds. Also, Moscow can guarantee the implementation of political agreements between the Syrian government and the Autonomous Administration of North and East Syria. However, much of this will depend on Damascus’ flexibility and the Syrian political system’s desire for reforms.
From our partner RIAC
Making Sense of Iran’s De-escalation with Saudi Arabia
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.
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.
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