Tag: Iran

  • West Asian moves and countermoves: Challenges of them spinning out of control

    West Asian moves and countermoves: Challenges of them spinning out of control

    What will the complex calculus of the new Middle East crisis resolve into, and what will be the impact on India?

    ISRAEL has succeeded in diverting world attention from Gaza and Hamas to Iran. This is similar to how Hamas, in October 2023, successfully short-circuited US efforts at normalising relations between the Arab states and Israel under the Abrahams Accord.

    These moves and countermoves are ratcheting up the intensity of conflict in West Asia with serious global implications, including for India. The Indian approach seems to be similar to that in the case of the conflict in Ukraine— to play both sides.

    Countermoves

    Iran’s attack on Israeli soil is unprecedented. It is a response to the Israeli attack on its consulate in Syria on April 1, killing some of its top army commanders. It had warned of a retaliation and that gave Israel and its partners, the US, the UK, etc., time to prepare.

    The US had already moved its forces and prepared its allies in the region to shoot down the projectiles from Iran. Even Jordan apparently participated in this. Israel could take care of the projectiles that managed to reach its territory. So, 99 percent of the projectiles were shot down in the air and there was little damage in Israel.

    The Indian approach seems to be similar to that in the case of the conflict in Ukraine— to play both sides.

    It provided a sense of victory to Israel, the US and their allies. This was US President Joe Biden’s message to Israeli Prime Minister Benjamin Netanyahu and to forestall any immediate Israeli retaliation.

    Did Iran need 15 days to prepare to attack Israel? Could it not have used many more than 300 projectiles to attack to overwhelm Israeli defences? Could the Iranian allies like the Hezbollah in Lebanon and the Houthis in Yemen not have fired a much larger number of projectiles?

    Clearly, Iran was making a show of avenging an attack on them but did not want to hit Israel. It did not want to provoke an attack on its territory from the much superior US and Israeli forces.

    The Iranian foreign minister stated in a press conference after the attack that the US, Turkey and some Arab neighbours were given advance information about the limited attack. The US has denied that it had advance information.

    Not only were 15 days given to Israel to prepare its defence, the timing of the attack was also conveyed in advance. The drones, which would take six–seven hours to reach Israel, and cruise missiles, which would take two–three hours, were bound to be neutralised given the advance preparations.

    Only ballistic missiles, which take only a few minutes to traverse the distance that exists between Israel and Iran, were a serious challenge, but due to the advanced notice and preparation, even they got neutralised.

    The Iranian army briefing after the attack also mentioned that the attack was a limited one and had achieved its objective and no more attacks would occur unless Israel attacked its territory. Thus, the Iranian attack was for show and not effect.

    The US and the G7 that met in the aftermath of the Iranian attack while condemning the Iranian attack suggested that Israel had won and that it should not retaliate against Iran.

    Some even argue that this presents an opportunity to take out Iran’s nuclear establishments and cripple its nuclear bomb capability.

    Indeed, Israel’s attack on the embassy in Syria was meant to draw the US and other allies into unequivocally supporting Israel. That support had been dwindling due to the ongoing genocide in Gaza which was inflaming world opinion. Israel has succeeded in this aim. Today, the attention has shifted from genocide in Gaza to the global implications of a wider war in West Asia.

    Pressures escalating

    The US, while saying it does not want an escalation and that it would not support an Israeli strike, has also said its support to Israel is “ironclad”. Just as Israel has defied US advice to avoid civilian casualties in Gaza and allow more humanitarian aid to enter, it can defy the current US advice to not escalate the conflict.

    Israel could attack, secure in the fact that the US and the allies would defend it if Iran retaliates substantially in response to the Israeli retaliation.

    Will Israel oblige by not attacking Iran? The ultra-right in Israel is pressurising the government to retaliate. They have been a part of the growing problem created by the displacement of Palestinians from the West Bank, coming up of new settlements and aggressive assertions in Jerusalem. All this has led to rising Palestinian resentment.

    Many Israelis and conservative Republicans in the US are arguing for Israeli retaliation. The Israeli war cabinet said the conflict is “not over yet” and we will “extract a price”.

    Even the moderate leader Benny Gantz wants retaliation, though at a time of Israel’s choosing. The ultras argue that Iran has crossed a red line by attacking Israeli soil and it must pay for that.

    Some even argue that this presents an opportunity to take out Iran’s nuclear establishments and cripple its nuclear bomb capability.

    Hamas’s action was a result of perceived subjugation and atrocities by Israel over a long period, which could not have been anticipated by Israel and the US.

    But, there are limits to such actions since there are other players who may be forced to intervene. Also, it could lead to a wider conflict in West Asia. The Sunni nations, though not allies of Iran, may also be forced to act. Already, some of these US allies have prohibited the use of their air space by the US.

    Limits of shadow fights

    Israel has a huge network of intelligence in not only Gaza but all over West Asia. It has been able to kill its opponents’ leaders in Gaza, Lebanon, Iran, Iraq and Syria. Recently, it could kill the sons and grandsons of Hamas leader.

    But, the October 7 attack by Hamas in Israel and Hamas still being able to fight in Gaza six months later lays bare the limits of their intelligence. The extensive network of tunnels in Gaza, the troop strength of Hamas and Israel’s inability to get hostages released for six months also point to the same limitation.

    All this points to the limits of shadow fighting in international relations. Hamas’s attack on October 7 destroyed an equilibrium because it was willing to accept the massive death and destruction in Gaza.

    Israel’s attack on the embassy in Syria knowing that Iranians would retaliate has further shifted the out-of-equilibrium position. These instabilities are feeding into each other since one cannot anticipate what nations may do under uncertainty no matter how well a powerful nation may plan.

    Hamas’s action was a result of perceived subjugation and atrocities by Israel over a long period, which could not have been anticipated by Israel and the US.

    The attack on the embassy in Syria was also unanticipated and a result of Israel’s perception that Iran is behind the Hamas, Hezbollah and Houthis. Iran’s attack on Israel is also a result of its perception of having been attacked on its soil which required an attack on Israeli soil.

    Conclusion: Rising global challenges

    Now that the world is divided into two blocs, the situation has become more worrisome. Iran is a part of the bloc consisting of Russia and China. It has been supplying drones to Russia for its war in Ukraine. Even though this bloc may not want a second front, it cannot but stand with Iran in case of a Western bloc attack on Iran.

    Its stand on the issue will be a crucial determinant of what happens next. The stance of G7 and NATO will be vital since they have been unsuccessfully trying to restrain Israel. Military mobilisation will rise in key nations. The beneficiary will be the military-industrial complex.

    War in West Asia will impact the petroleum products market. If Iran is attacked and it blocks the Hormuz Strait or attacks oil tankers, petro-goods prices will rise. Shipping through the Suez has already been impacted and may face further disruption.

    India imports 85 percent of its petroleum requirements so the outgo of foreign exchange may increase leading to a deterioration in the balance of payments (BOP), weakening of the Indian rupee and higher inflation.

    Thus, the post-pandemic easing of supply bottlenecks may reappear and create inflation globally, disrupting many economies.

    India imports 85 percent of its petroleum requirements so the outgo of foreign exchange may increase leading to a deterioration in the balance of payments (BOP), weakening of the Indian rupee and higher inflation.

    Foreign investments may slow down. A substantial number of Indians working in West Asia may be forced to return and that will reduce repatriation by non-resident Indians.

    Thus, capital flows may be impacted and further aggravate the BOP. India would need to prepare for these challenges in the midst of the fraught election season where the leadership’s attention is not where it should be.

     

    This article was published earlier in The Leaflet.

    Feature Image Credit: Wall Street Journal.

  • Houthi’s attacks in the Red Sea: What does this mean for the world?

    Houthi’s attacks in the Red Sea: What does this mean for the world?

    The Houthis started in the 1990s as an armed group in Yemen, fighting against corruption. They belong to a community called Zaidis, who are a part of the Shia-Muslim minority. Along with Hamas and Hezbollah, the Houthis have declared themselves to be a part of the Iranian-led “axis of resistance” against Israel, the US, and the larger West.1 The Houthis have been attacking commercial ships passing through the lower Red Sea, and this has dramatically increased since mid-November in retaliation to Israel’s bombardment of Gaza. Due to these events, the Red Sea trade route is significantly affected, impacting the flow of global trade and having the potential to cause further damage. With ships attacked and stranded in one of the leading shipping routes of the world, countries seem to find themselves in yet another geopolitical fix. As the war continues between Israel and Gaza, the Red Sea has become a renewed hotspot for geopolitical and military tensions.

    Situated between Africa and West Asia, the Red Sea is a seawater entrance to the Indian Ocean in the south and goes through the Gulf of Aden and the Bab El Mandeb Strait, meeting the Gulf of Suez in the north. Countries like the US, France, Japan, and China have military bases in the region, including in Djibouti and many along the Horn of Africa, with considerable deployment of ships, weapons, and personnel. Establishing such bases conveys how critical it is to have control of the area as a measure of regional power and as a way of asserting their dominance internationally. Big players, including the Cold War rivals, have long struggled to gain presence and influence in West Asia. Having a military and economic presence in Africa with proximity to the Red Sea was necessary, for it provides access to almost 12% of the world’s trade, including nearly 40% of the trade between Europe and Asia.

    Until recently, the Houthis had been targeting ships heading towards Israel or ones that Israelis owned. However, recent developments showing attacks on ships bound for Israel with flags of various countries have raised grave concerns for global trade and security in the immediate future. The US, along with countries like the UK, France, and Bahrain, have tried to stop Houthi attacks on ships passing through the Red Sea under what Washington calls the “Operation Prosperity Guardian”. On the first day of the new year, The US military released a statement conveying that they killed at least 10 Houthi rebels and sabotaged three Houthi ships. Although the US was successful in deterring the Houthis from their attempt to attack, it did not do much to stop the group from being involved in disrupting peaceful navigation through the Red Sea.

    Private shipping companies such as Maersk, CMA CGM, Hapag-Lloyd, and MSC have begun to avoid using the Red Sea route due to the imminent threat from Houthis.3  The ongoing supply chain disruption caused by the COVID-19 pandemic and Russia’s invasion of Ukraine could further escalate due to the Red Sea crisis and cause severe concerns for world trade and consumer goods supply. With the suspension of trade via the Suez Canal, traffic through the Red Sea has dropped by 35%.4  The Houthis have raised the shipping cost internationally, imposing additional costs on commerce when trouble at the Panama Canal due to low water levels has already made shipping more complicated and central banks worry about a new inflationary spike. While trade hasn’t wholly stopped, most ships can choose the longer but safer route around Africa through the Cape of Good Hope to reach Europe and Asia from either side. This option imposes significant costs on shipping and, therefore, to consumers and affects local states in the region if the Houthi “blockade” persists. In the worst-case scenario, crude oil prices would rise in 2024 if oil shipments through the canal were stopped entirely, and this could cause a significant disturbance.

    Image Credit: washingtoninstitute.org

    Surprisingly, though, Russian ships have enjoyed free navigation through the Red Sea. Russian ships travel to Asia through the Black Sea, connecting to the Mediterranean Sea, passing through the Suez Canal and the Red Sea, and joining the Indian Ocean. With sanctions from Europe and the US amid the war in Ukraine, Russia cannot afford to lose its markets in Asia, particularly India and China, since these two countries buy almost 90% of Russia’s oil exports.5  The free navigation of Russian ships could possibly be due to its close relationship with Iran or due to the adoption of a similar stance with the Houthis on the war between Israel and Gaza. In the unlikely scenario that Russia does not have access to the Red Sea, it leaves them with the only other option of travelling through the Cape of Good Hope, adding 8,900 kilometres with an additional two weeks of travel. Such delays in oil shipments and a highly possible hike in price may prompt countries like India and China to start looking for other alternatives to their oil requirement, given the pre-existing energy crisis. Most probable alternatives include Saudi Arabia and other Gulf countries that do not need to pass the Red Sea to reach the Indian Ocean and thus Asian markets since they have ports in the Persian Gulf with access to the Arabian Sea.

    The disruption in trade has caused an impact on Indian imports and exports as well. Indian exports traverse the Indian Ocean and reach the Suez Canal through the Arabian Sea to reach European markets. Trade between India and Europe has been rising, at an all-time high in 2022, with goods traded worth $130 Billion.6   As of 2021, India engaged in trade worth $200 Billion through the Suez Canal, making the EU one of India’s main export destinations, with a Free trade agreement in the talks.7  India also procures its oil from Russia using the Suez Canal and the Red Sea. A slowdown or possible pause of oil imports may cause severe concerns amid the ongoing energy crisis. At such a juncture for the Indian economy, if the situation persists, trade will likely take a hit along with India’s domestic economy. If the condition fails to change decisively, the higher fees and the expense of prolonged travel duration will also put inflationary pressure on the global economy and India.

    The Houthis will most likely continue to put pressure on Israel to stop its onslaught in Gaza, and they are likely to keep attacking until they reach their goal. By taking control of the Red Sea and indirectly and directly hurting countries irrespective of their size and power, Houthis pressurize the international community to, in turn, put pressure on Israel. This also means that the group is unlikely to agree on any other way of settlement. Not only does this fall on Israel to stop their attacks but also on the US since the latter has always portrayed itself as a peace negotiator in the Middle East and, therefore, has the responsibility to restore order in the region. The Houthis possess a plethora of Iranian-supplied weaponry, ranging from precision drones to anti-ship cruise and ballistic missiles that can strike a moving vessel hundreds of kilometres away. What makes the Houthis more dangerous is the enormous stockpile that can help them continue their campaign indefinitely.

    The attacks have also prompted an unanticipated return of Somali piracy in international seas. As a result, increased expenses are now a worry for merchant shipping lines and seafarer safety for governments worldwide. The ship Lila Norfolk, under the Liberian flag and carrying six Filipinos and fifteen Indians, was taken over by Somali pirates on January 4th, 2024. The Indian navy had already deployed four warships patrolling the Indian Ocean, including INS Chennai, which was involved in the rescue operation during the recent highjack of ship Lila Norfolk. Even though the Indian Navy’s intervention allowed for the sailors’ rescue, it caused further concerns for India’s security and economy. The spill over of these attacks onto the Indian Ocean may threaten India’s security.

    Countries must monitor developments in the Red Sea and, for India, the Indian Ocean. Although India has not joined any Western-led operations on this matter, the country must push the international community to ensure freedom of navigation and the territorial integrity of countries over their sea is upheld under the UN Convention on the Law of the Seas.

     

    References

    [1] Who are the Houthi rebels and why are they attacking Red Sea ships? (2023, December 23). BBC News. https://www.bbc.com/news/world-middle-east-67614911

    [2] Yerushalmy, J. (2023, December 19). Red Sea crisis explained: what is happening and what does it mean for global trade? The Guardian.

    [3] A new Suez crisis threatens the world economy. (2023, December 16). The Economist. https://www.economist.com/international/2023/12/16/a-new-suez-crisis-threatens-the-world-economy

    [4] Graham, R., Murray, B., & Longley, A. (2023, December 19). Houthi Red Sea Attacks Start Shutting Down Merchant Shipping. Bloomberg.com. https://www.bloomberg.com/news/articles/2023-12-18/houthi-attacks-start-shutting-down-red-sea-merchant-shipping

    [5] Russia: crude oil shipments by destination 2023 | Statista. (2023, September 14). Statista. https://www.statista.com/statistics/1350506/russia-crude-oil-shipments-by-destination/

    [6] I. (n.d.). First India-EU Trade and Technology Council: Significant Milestone in India-EU Relations – Indian Council of World Affairs (Government of India). https://www.icwa.in/show_content.php?lang=1&level=3&ls_id=9416&lid=6112#:~:text=The%20EU%20is%20India’s%202nd,EU%20total%20trade%20in%20goods.

    [7] Ibid.

     

    Feature Image Credit: dailynewsegypt.com

  • The Geopolitical Significance of Chabahar Port to India 

    The Geopolitical Significance of Chabahar Port to India 

    The port of Chabahar is a seaport in south-eastern Iran, located on the Gulf of Oman, at the mouth of the Strait of Hormuz. It is situated in Sistan-va-Baluchestan, one of Iran’s least developed provinces. Contrary to Bandar Abbas, the busiest port in Iran, Chabahar is a deep-water port with direct access to the Indian Ocean that is outside the Hormuz Strait. It is Iran’s only seaport and consists of two separate ports called Shahid Beheshti and Shahid Kalantari. The last Shah of Iran proposed the port’s development in 1973. Work in Chabahar began when the Shah of Iran, Reza Pahlavi, was in power. The Iranian Revolution of 1979 hindered the development of this port. Following the 1979 Islamic revolution, US firms involved in various infrastructure investments fled the country. The new government took on these projects. The port of Chabahar grew in importance during the Iran-Iraq war of 1983 when ships were hesitant to enter the Strait of Hormuz. The port’s first phase opened during the Iran-Iraq war, when Iran began shifting maritime trade up the east coast toward the Pakistani border to reduce the reliance on Persian Gulf ports which were susceptible to attack by the Iraq Air Force. Chabahar is substantial for its fishing industry and will serve as a major trade hub designed to connect South Asia, Central Asia, and the Middle East. Chabahar can emerge as a potential global trading hub – and an arena for geopolitical competition. Chabahar is vital for both India and Iran to reduce their dependence on the Suez Canal for transporting cargo to Europe. Chabahar is a strategic port from an Indian perspective. Apart from being easily accessible from India’s western coasts, it serves several important functions. For starters, by having access to the port, India can reduce its commute time to Central Asia by one-third. Second, a link between Afghanistan and India could be built without going through Pakistan and this could help the already established diplomatic, security and economic relationship between New Delhi and Kabul. Third, India gains road access to four cities in Afghanistan via Chabahar: Herat, Kandahar, Kabul, and Mazar-e-Sharif. This will help India strengthen its trade with Afghanistan (“Chabahar and Beyond” 2016). However, the Taliban’s return to power in 2021 gives rise to a certain level of uncertainty. The current geopolitical environment, both regional and global, creates opportunities for India to overcome possible uncertainties.

    New Delhi views Chabahar port as a means of bypassing Pakistan’s land routes to gain access to the Afghan and Central Asian markets.

    Being one of the world’s fastest-growing economies, expansion of trade relations and access to new markets is a necessity for India. As an investor, New Delhi views Chabahar port as a means of bypassing Pakistan’s land routes to gain access to the Afghan and Central Asian markets. Pakistan’s Gwadar port is one possible route for India to access Central Asian markets, India has long aimed for alternative routes due to its adversarial relationship with Pakistan (“Chabahar Port: A Step toward Connectivity for India and Afghanistan,” n.d.). Additionally, the port will strengthen relations between India and Iran, which may help counterbalance strong Sino-Pakistani cooperation. According to the Minister of Foreign Affairs (MEA), India and Iran share close historical and civilizational ties, “Our bilateral relations are marked by strong linkages across institutions, cultures and people-to-people ties,” the MEA said in a statement. Afghanistan also seeks to explore new trade routes to reach international markets. It aims to reduce its dependence on Pakistan, which handles most of the Afghan trade due to the country’s landlocked status. 

    Afghanistan is crucial for India’s ‘neighbourhood first’ strategy. India assisted Afghanistan in becoming a full member state of SAARC in 2007. It signed a Preferential Trade Agreement with Kabul in 2003 following the establishment of the interim government post the US’s intervention in 2001. Under the North-South Transport Corridor framework, India, Afghanistan, and Iran signed the Chabahar port agreement in 2003, allowing all three countries to use the Chabahar port as a trade hub. India is working on constructing the Chabahar port primarily to compete with the Gwadar port project and to connect it to Russia’s International North-South Transport Corridor (INSTC). India has already built a 218-km-long road from Delaram to Zaranj (“India Completes Zaranj-Delaram Highway in Afghanistan” 2008) and now plans to connect this road to Chabahar port and deliver goods through this route. India is also keen on using the Chabahar port to connect the oil-rich Central Asian countries by road connectivity via the Milak (Iran) and Zaranj-Dilaram (Afghanistan) roads. For India, the port, which is only 940 kilometers from Mundra in Gujarat, is about more than just facilitating the flow of trade with Afghanistan. Rather, the development of Chabahar is a crucial component of the country’s grand strategy to connect with Central Asia. India’s justification for wanting to develop the Chabahar Port goes beyond its interest in Afghanistan. Enhancing regional trade and connectivity as well as thwarting China’s expanding influence in the Indian Ocean are other top priorities for Indian foreign policy (“What Are India, Iran, and Afghanistan’s Benefits from the Chabahar Port Agreement? Manohar Parrikar Institute for Defense Studies and Analyses,” n.d.).

    Geopolitical Challenges

    The port of Chabahar will be of little use if Afghanistan is not stable. Indian interest in the Chabahar Port, therefore, continues to be closely linked to the geopolitical changes the region is currently experiencing.

    The competition for regional dominance between India and China can be seen in the development of ports in the regions. Indian involvement in the Chabahar port is important in securing India’s interest in the region. A calculative China will seize any opportunity that India might present in the port facility. If China moves in, Indian investments in the Chabahar port may be unfavorably affected (Pant and Mehta, 2018). A significant barrier is the complex nature of India-Iran relations, in which the former does not hold a privileged position. Given India’s priorities in the Middle East, it is unlikely that the relationship with Iran could compete with the comprehensive partnership that China and Pakistan share, which includes a strong defence and security arrangement. Iran may find it challenging to ignore or exclude China, its largest foreign investor, from the Chabahar project. Additionally, China has successfully completed several infrastructure projects in Iran, including the Tehran Metro, and has allocated US$ 1.5 billion through its EXIM Bank for the electrification of the Tehran-Mashhad railway line (“$1.5b China Loan for Iranian Rail Project” 2017).

    Peace and stability in Afghanistan will also impact the performance of the Chabahar Port. The tumultuous security situation in Afghanistan could jeopardise trilateral efforts between India, Iran, and Afghanistan to operate the Chabahar Port facility. And finally, the port of Chabahar will be of little use if Afghanistan is not stable. Indian interest in the Chabahar Port, therefore, continues to be closely linked to the geopolitical changes the region is currently experiencing.

    References

    “$1.5b China Loan for Iranian Rail Project.” 2017. Financial Tribune. July 25, 2017. https://financialtribune.com/articles/economy-domestic-economy/68986/update-15b-china-loan-for-iranian-rail-project.

    Amirthan, Shawn. 2016. “What Are India, Iran, and Afghanistan’s Benefits from the Chabahar Port Agreement?” Strategic Analysis 41 (1): 87–93. https://doi.org/10.1080/09700161.2016.1249184.

    “Chabahar and Beyond.” 2016. Www.thehindubusinessline.com. May 25, 2016. https://www.thehindubusinessline.com/opinion/editorial/chabahar-and-beyond/article8646239.ece.

    “Chabahar Port: A Step toward Connectivity for India and Afghanistan.” n.d. Thediplomat.com. https://thediplomat.com/2019/07/chabahar-port-a-step-toward-connectivity-for-india-and-afghanistan/.

    “India Completes Zaranj-Delaram Highway in Afghanistan.” 2008. Development News from Afghanistan, August 24, 2008. https://afghandevnews.wordpress.com/2008/08/24/india-completes-zaranj-delaram-highway-in-afghanistan/.

    Pant, Harsh V., and Ketan Mehta. 2018. “India in Chabahar.” Asian Survey 58 (4): 660–78. https://doi.org/10.1525/as.2018.58.4.660.

    “What Are India, Iran, and Afghanistan’s Benefits from the Chabahar Port Agreement? Manohar Parrikar Institute for Defence Studies and Analyses.” n.d. Idsa.in. https://idsa.in/strategicanalysis/40_1/india-iran-and-afghanistans-benefits-from-the-chabahar-port-agreement.

    Featured Image Credit: Lowy Institute

  • Houthi attack on Abu Dhabi: Yemen civil war and Regional Complexities

    Houthi attack on Abu Dhabi: Yemen civil war and Regional Complexities

    On 17th January, the Houthis conducted their first attack on Emirati soil in years. Carried out in the heart of the country– Abu Dhabi –with the help of a UAV, the attack killed three foreign nationals working in the city– two Indians and one Pakistani. In the aftermath of the attack, the Arab Coalition intensified the air bombings of key strongholds of the Houthis, leading to an increase in civilian casualties in a proxy war that has already caused several thousand civilians their lives. The attack has also underlined the capabilities of the Islamist political outfit in striking a distant country, and not just its northern neighbour. The attack has also rendered the UAE as a country susceptible to attacks from hostile groups in the region.

    Costs of UAE’s intervention strategy

    Importantly, the attack has led to a scrutiny of UAE’s policy vis-à-vis the hapless South Arabian country. Not long ago, in February 2020, the Emirati leadership, in an official ceremony addressing the recent returnee personnel deployed in Yemen, added an achievement to its touted ‘Peace First’ strategy in the country[1]. The gulf country had begun its troop withdrawal from the war-torn country in July of 2019[2]. This move, though remarkable, was hardly surprising by a country that was stopped in its tracks after finding itself as a part of the Arab Coalition[3] back in 2015. But the withdrawal of troops from Yemeni soil didn’t mean a dilution of its involvement in the Civil War. The move by the Emirates was seen as merely a shift from direct involvement to an indirect one.[4] The leadership of the country had utilized its presence in Yemen to cultivate and build a network of belligerents of the Civil War, such as the Sothern Transitional Council (STC), Security Belt Forces and the Shabwani and Hadrami Elite forces to name a few.[5] A withdrawn and non-aggressive UAE depends heavily both upon and sponsors such groups to keep its influence in the country afloat. It had reportedly trained some 90,000 South Yemenis during its stint in the country.[6] These militias have fought, in the past, against the Houthis, Al-Qaeda in Arabian Peninsula (AQAP), Islah and the ISIS. In December last year, one such group, the Giants Brigades, attacked Houthis, eventually defeating them in the Shabwah province. The Houthi attack in January is seen as a retaliation for this precise attack.

    In December last year, one such group, the Giants Brigades, attacked Houthis, eventually defeating them in the Shabwah province. The Houthi attack in January is seen as a retaliation for this precise attack.

    Another key takeaway from the attack on 17th January is associated with the Saudi Arabia-UAE partnership. The Emirates, which contributed the second-largest troops to the Arab Coalition, had virtually abandoned Saudi Arabia in its effort to bring the Hadi government back to Sana’a. Since 2016 up to the troops’ pull-out, the country had focused mainly on counter-terrorism operations, primarily targeting Islah.[7] The two partners were pitted against each other when, in 2019, the Emirati-backed STC pushed itself into the provinces of Shabwa and Abyan held by the Saudi-backed government. Now, with the Houthis becoming a potent threat to the security of the UAE, the stress between the two governments is set to cool down. The attack has made UAE substantially, if not equally vulnerable, when compared with Saudis, to Houthis’ aggression. But it is not likely that the country will put an end to its troop withdrawal strategy. Its focus is likely to be on strengthening its security apparatus, something already visible in French, American and Israeli assistance.

    Attacks boost UAE-Israel Strategic Partnership

    The Houthis conducted another failed attack on Abu Dhabi in late January during Israeli President Herzog’s visit. The day was chosen to deliver a message to both Abu Dhabi and Jerusalem. This, and other numerous attempts by the Iran-backed Zaidi Shia militia to attack the Emirates, is set to further firm up the already burgeoning ties between the two. Immediately after the January 17th attack, Prime Minister Naftali Bennett offered Israeli ‘security and intelligence support’ to the victim state[8]. He committed to partner with the UAE to defeat ‘common enemies’. Right after the signing of the Abraham Accords, both the countries embarked upon strengthening security-related ties[9], leading to the signing of a strategic agreement to develop unmanned military and commercial vessels in November last year. Both the countries have been susceptible to attacks by Iran’s proxies. It is Israel’s North-eastern neighbour Syria that has posed a threat to its security. Now, Houthis’ reach to the Emirati soil renders Israel vulnerable to similar attacks, with speculations already in works in Israel.[10] Additionally, Houthis’ ties with Lebanese Hezbollah could aggravate the situation further. Israeli-Emirati partnership seems to be the greatest benefactor of the attack.

    the UAE has been applauded for pursuing a balanced approach between Saudi Arabia and the US on one hand and Iran and its allies on the other[13]. But with the continuous attack on Abu Dhabi by Iranian proxies, the relations between the UAE and Iran are set to face road blocks

    Just as Emirates was coping with the deadly attack from Yemen, another Iraq-based armed group conducted a drone strike on Abu Dhabi. Known by the name Awliyat al-Waad al-Haq, or the True Promise Brigades, the Shia Islamist group is widely believed to have close ties with both Tehran and Iraq’s Kataib Hezbollah. Though the Iranians have not publicly supported the attacks, they haven’t condemned them either. Moreover, the attacks on Abu Dhabi came just months after Emirati National Security Advisor Sheikh Tahnoun bin Zayed Al Nahyan visited Tehran where he touted his visit as a ‘turning point’ for the two countries[11] and visit of Iranian Deputy Foreign Minister Ali Bagheri Kani to Abu Dhabi, declaring that the two countries had agreed to open ‘a new chapter’ in their bilateral relations[12]. Also, the UAE has been applauded for pursuing a balanced approach between Saudi Arabia and the US on one hand and Iran and its allies on the other[13]. But with the continuous attack on Abu Dhabi by Iranian proxies, the relations between the UAE and Iran are set to face road blocks.

    Yemen’s Humanitarian Crisis

    Last year, in one of his first decisions regarding West Asia, President Biden revoked the Trump administration decision to recognize Houthis as a foreign terrorist group. After the recent attacks on Abu Dhabi and the al-Dhafra airbase, the Biden administration has been forced to reconsider its previous decision[14]. The US has, in response to the attacks, stepped up its naval deployment in the Gulf region, along with enhancing cooperation in intelligence and air defence with the Emirates. It also helped stave off other Houthi missile attacks on Abu Dhabi through US Patriot interceptors. The attacks also come at a crucial time when the talks between P5+1 and Iran regarding the Iran Nuclear Deal underway in Vienna. With eight rounds that have passed without any breakthrough, it remains to be seen how Houthi aggression impacts the JCPOA.

    The Civil War in Yemen is in its eighth year, with no signs of the end in near future. The casualties have reached as high as 377,000. It has resulted in a humanitarian crisis, pushing millions to the brink. According to a UNDP report, the war may cause more than 1.3 million casualties by 2030. Hence, we need to ask, has the international community failed to protect the Yemeni people?

    Notes

    [1] Jalal, I (2020, February 25), ‘The UAE may have withdrawn from Yemen, but it’s influence remains strong’ Middle East Institute https://www.mei.edu/publications/uae-may-have-withdrawn-yemen-its-influence-remains-strong

    [2] Ibid

    [3] Salisbury, P. (2020, July 1), ‘Risk perception and appetite in UAE Foreign and national security policy’ Chatham House https://www.chathamhouse.org/2020/07/risk-perception-and-appetite-uae-foreign-and-national-security-policy-0/8-case-study-uae

    [4] Jalal, I (2020, February 25), ‘The UAE may have withdrawn from even, but it’s influence remains strong’ Middle East Institute https://www.mei.edu/publications/uae-may-have-withdrawn-yemen-its-influence-remains-strong

    [5] Ibid

    [6] Ibid

    [7] Salisbury, P. (2020, July 1), ‘Risk perception and appetite in UAE Foreign and national security policy’ Chatham House https://www.chathamhouse.org/2020/07/risk-perception-and-appetite-uae-foreign-and-national-security-policy-0/8-case-study-uae

    [8] TOI staff, (2022, January 18),’Bennett offers UAE security and intelligence support after attack by Houthis’ Times of Israelhttps://www.timesofisrael.com/bennett-offers-uae-security-and-intelligence-support-after-attack-by-houthis/

    [9] Ulrichsen, K.C. (2021, August 6), ‘Restoring balance to UAE-Iran relations’ Doha Institute https://www.dohainstitute.org/en/PoliticalStudies/Pages/Restoring-Balance-to-UAE-Iran-Relations.aspx

    [10] Melman, Y. (2022, January 21),’After Abu Dhabi, is Israel’s Red Sea port of Eilat next target for Houthi drone strike’ Haaretz https://www.haaretz.com/israel-news/israel-red-sea-eilat-target-houthi-iran-drone-strike-abu-dhabi-1.10553018

    [11] Hafezi, H. (2021, December 6), ‘UAE security official pays rare visit to Iran to discuss ties, regional issues’ Reuters https://www.reuters.com/article/us-iran-emirates-idAFKBN2IL0ME

    [12] Ulrichsen, K.C. (2021, August 6), ‘Restoring balance to UAE-Iran relations’ Doha Institutehttps://www.dohainstitute.org/en/PoliticalStudies/Pages/Restoring-Balance-to-UAE-Iran-Relations.aspx

    [13] Ibid

    [14]  Landay, J (2022, January 20). ‘Biden says administration mulling re-designating Yemen’s Houthis a terrorist group’, Reuters https://www.reuters.com/world/middle-east/us-yemen-envoy-lenderking-visit-gulf-london-state-department-2022-01-19/

    Feature Image Credit: www.mirror.co.uk

    Image Credit: itv Times News

  • UAE-Israel Deal: An Analysis of its Regional Impact

    UAE-Israel Deal: An Analysis of its Regional Impact

    Introduction

    The recently brokered Abraham Accords Peace Agreement between the United Arab Emirates and Israel marks the beginning of the potential shift in West Asia’s existing power relations. Driven by their security interests, and in an attempt to amplify their power projections in the region, the two countries have come together, in what is being seen, as an opposition to the Iranian axis of influence. Although the normalization of relations with Israel marks a huge setback for the possibility of a Palestinian Statehood, several Arab countries are expected to jump on the bandwagon, with Bahrain having already concluded a treaty after UAE. This article highlights the eclectic mix of reactions from various players in West Asia and the potential opportunities and setbacks it brings with itself.

    Palestine

     Several countries held strongly pro-Palestine policies during the Cold War and decolonization period. However, in the last few decades, many have established ties with Israel; Egypt in 1979, and Jordan in1994 and now UAE and Bahrain in 2020. That being said, majority of the Arab and Gulf countries still officially do not recognize Israel. The United Arab Emirates announced its decision to normalize relations with Israel on 12th August 2020. There are many reasons why UAE and Bahrain decided to establish diplomatic relations with Israel; according to some analysts it is to counter Iran’s influence in the region, but for some it is also to establish trade and business contacts.

    However, do these developments indicate that countries in the Arab world are moving gradually into accepting Israel’s occupation of Palestinian lands as ‘fait accompli’? A significant development that needs to be recognised is the fact that many West Asian countries no longer demand the return of Palestinian lands as a precondition to normalizing ties with Israel.

    The Palestinians in the West Bank and Gaza have strongly criticised the deal and see it as betrayal of their rights and cause by the international community.

    It is long-known that Israel will not return to pre-1967 boundaries; in May 2020 Benjamin Netanyahu explicitly stated his plan to annex the West Bank. He has, however, postponed the implementation of his decision, probably indefinitely, in the interests of the deal that is likely to benefit Israel greatly.

    The Palestinians in the West Bank and Gaza have strongly criticised the deal and see it as betrayal of their rights and cause by the international community.  Banners  displaying “Treason” and “No to normalization with the occupier’ have come up across the region.  The Palestinian Authority, in very obvious response, have rejected the deals. These accords, as they rightly fear, affect the future of Palestinian sovereignty and legitimize Israel’s occupation.

    Turkey  

     President Recep Tayyip Erdogan sees himself as the champion of Muslims ever since he came to power in 2002. Under Erdogan, Turkey has pursued a clear pro-Palestinian stance. Turkey has indeed provided aid to Palestine at various times, including during COVID-19. It has criticized Trump’s peace plan for the Israel-Palestine conflict, for ignoring Palestinians’ legitimate rights. Not surprisingly, Turkey is clearly unhappy with UAE’s and Bahrain’s steps to normalize ties with Israel. Turkey has threatened with the option of halting diplomatic relations with UAE over the deal.

    However, for Palestinians Turkey’s statements ring hypocritical and hallow. Turkey was one of the earliest and the first Muslim majority state to recognize Israel in 1949. Turkey and Israel have a long history of intelligence cooperation. Even in the current situation, Turkey is focused more on dealing with the UAE on this issue, rather than Israel. Nevertheless, speaking for Palestinian rights in the international forum is equally important. In that respect, Turkey’s voice in support of the Palestinian cause is an important one.

    Saudi Arabia

     Saudi Arabia, long seen as the champion of Islamic nations, particularly in view of the fact that it is home to the two holiest shrines of Islam. Therefore, this peace agreement is a shock to the conservatives who form the majority in the Kingdom. This move by the UAE is seen as going along with the Jewish regime that denies the rights of the Palestinian Muslims. However, the Foreign Minister, Faisal bin Farhan Al Saud said the deal could be seen as positive, but his country will not normalize relations until peace is signed with the Palestinians,  within the framework of the Arab Peace Initiative.  Saudi Arabia’s track record of its unwavering support to the Palestinian cause from the days of the Yom Kippur war, also known as Ramadan War, makes the nation’s stance on the ‘Abraham Accords’ more influential than any other Gulf country. The advocacy for Palestinian state runs deep in the Saudi people. As a result, Saudi leadership’s slightest inclination towards the agreement could spark unrest among its citizens.

    The current regime under the Crown Prince of Saudi Arabia, Mohammed bin Salman (MBS), who is a very capable leader compared to his predecessors because of his broader outlook to mend diplomatic ties with the regional enemies, yields an element of uncertainty as he may be inclined towards the accord. The political and ideological differences between the people of Saudi and their leader might spark cynicism towards the government; hence, support for the accord is implausible in the short term.

    Israel, which shares the Red Sea coastline with the country and is a major player in technology innovations in the region, makes it an ideal ally for the Kingdom.

    The idea, however, is not wholly inconceivable because of MBS’s Vision 2030. Upon ascending the throne, the Crown Prince has constructed an elaborate plan to detach the Kingdom’s dependence on its natural resources and focus on bringing in diverse investments into the country. One of the main plans is to develop the Red Sea Coastline by exploiting its tourism prospects by building a smart city. Israel, which shares the Red Sea coastline with the country and is a major player in technology innovations in the region, makes it an ideal ally for the Kingdom. One of the other factors that could generate a coalition between Saudi Arabia and Israel is their common enemy, Iran.

    If MBS does accept the accord, it may not come as a surprise, but that does not warrant the fact that there is a high possibility of the decision shocking many conservative and religious establishments.  In retrospect, that could give birth to the “new” Saudi Arabia that the crown prince has promised to build.

    Qatar

    Qatar, which is considered the most developed state in the Gulf region, is in the middle of a diplomatic standoff with the regional players. Its dispute with the two major states, Saudi Arabia and UAE, has made the state go out of its way to establish diplomatic ties with parties that are not particularly approved by the GCC. The state has not given any official statement on the accord, but it’s closeness with Iran may be taken as an unofficial veto to the accord in itself. Qatar’s close relationship with the US and Iran has been a subject of debate ever since the Gulf crisis, but the state has somehow managed not to let the relationship cut across each other. This particular agreement with Israel orchestrated by the Trump government could pressure Qatar to push and resolve its issues with the UAE.

    Like any other Arab country, Qatar has advocated for the Palestinian state. It took it a little further by investing in the Gaza Strip, funding welfare payments to the coastal territory. One can suspect that the Emirati’s decision to form a coalition with the Israeli state will only deepen the ties between Qatar and Palestine.

    Though the Qatar government has been silent about the accord, Doha based news media, Al Jazeera has not shied away from raising concerns regarding the agreement. It even went to the extent of calling the accord ‘PR stunt’ initiated by the UAE. It’s support to Palestine and capitalisation of the hashtag ‘normalization as betrayal’ have received a lot of criticism from those countries that support the agreement. Qatar has always been hostile to Israel’s treatment towards the Palestinian state but has managed to have practical relations with Israel.

    Iran  

    As the world witnesses the coming together of the United Arab Emirates and Israel, two of the former adversaries, it comes as no surprise that Iran has been aggressively lashing out against the deal. With Iran still reeling under the economic pressure of the US sanctions, President Rouhani has called the deal a ‘betrayal’, aimed at satisfying the United States at a time when President Trump prepares himself to run in the national election in November. The leader of Iran-backed Hezbollah has also condemned the deal on similar grounds. Iran’s disapproval stems from two main factors – first, from its support for the Palestinian statehood; and second, more realistically, due to the increasing influence of Israel-United States nexus in the region and consequently its declining axis of influence. Iran’s insecurity is speculated to have stemmed from the confluence of actors that oppose the Islamic Republic’s attempts to establish its hegemony in the region. The confluence opens up the possibility of shifting the regional balance of power in favour of Israel, and Saudi Arabia, under the shadow of the United States. While Saudi Arabia and Israel do not yet have an official diplomatic relationship, various reports suggesting backdoor diplomacy between the two countries have surfaced over the years. The common factor bringing the two countries together has most often been assumed as the perceived threat from Iran.

    Iran and UAE, on the other hand, while maintaining a meaningful trade relationship, continue to have persistent sources of bilateral tension.

    On the other hand, while Iran and Israel have often been engaged in rhetoric of bellicose jingoism towards one another, it is essential to note that both the countries maintained a friendly relationship before the Iranian revolution of 1979, with Iran being the second Muslim country recognizing the state of Israel.

    Iran and UAE, on the other hand, while maintaining a meaningful trade relationship, continue to have persistent sources of bilateral tension, one of which is the unresolved territorial dispute over the islands of Greater Tunb, Lesser Tunb, and Abu Musa, which lie near the critical Strait of Hormuz, providing access to key shipping lanes. Despite UAE’s historical claims over their sovereignty, the islands that were forcefully occupied by Iran continue to be a strain in the relationship between the two countries. A second irritant is a growing relationship between UAE and the United States, with the former becoming one of the largest importers of US weapons and providing the US with military bases and intelligence on Iran. Worried about the growing Iranian aggression, the country has maintained a strong security relationship with the United States and has often supported the UNSC resolutions to bar sensitive materials and technology to Iran.

    Yemen

    The conflict in Yemen that began to unravel with the spread of Arab Spring in 2011 has resulted in an unprecedented loss of civilian lives across the country, making Yemen one of the world’s worst humanitarian crises. The Israel-UAE deal, which reflects the beginning of normalization of ties between Arab countries and Israel, cannot be seen in isolation from the region’s larger volatile landscape. The Peace Treaty, as it is being termed, brings with itself a plethora of threats that seek to shift the existing power relations, without aiming at the cessation of violence. UAE’s increasing outreach must be looked at in the context of its increasingly interventionist policies, especially in Yemen. The deal may ultimately lead to more interference and militarization in Yemen, prolonging the prospects for conflict resolution, and sustaining hostile conditions.

    Varied responses to the deal can be seen with the Yemeni government, and the Houthis, an armed group championing Yemen’s Zaidi Shia Muslim minority, coming out in opposition to the deal in a bid to continue their support for Palestine. On the other hand, it comes as no surprise that members of the Southern Transitional Council (southern separatists), which gets its support from the UAE, have applauded the treaty to build cooperation between UAE and Israel.

    Interest and interference in Yemen are of tremendous strategic significance to both Israel and UAE.

    Interest and interference in Yemen are of tremendous strategic significance to both Israel and UAE. In a show of its strengthening military projection, UAE seized control of the Yemeni island of Socotra, located in the Indian Ocean,allegedly allowing Israel to establish its presence in the region. The archipelago sits at a crucial strategic position en-route to Bab el-Mandeb, providing access to key shipping lanes.

    On the other hand, while there exists no diplomatic relationship between Yemen and Israel, the latter has often been seen intervening in the ongoing conflict in Yemen, “under the pretext of defending its interests in the Red Sea and the Strait of Bab-El-Mandeb”. With a military base already constructed at Emba Soira in Eritrea, Israel continues to increase its strategic presence across the Strait. Further, as speculations about the possible Houthi-Iran cooperation spread across the region, Israel’s surveillance centres continue to monitor the armed group’s actions and other actors in Yemen.

    Conclusion

    Palestine is a very sensitive and rousing issue for most of the citizens in West Asia. It is a shared memory of betrayal and expulsion; indeed, many politicians in West Asia use Palestine as an element in their speech and citizens also use it during slogans referring to Palestine protests.

    That being said, these deals are coming at a time when Israel is increasing its hawkish behaviour towards the Palestinians. Once the annexation happens, one cannot help but wonder how it could change the landscape of West Asia. Thus far, the progress made is the mild indication of some major players in the region favouring the accord.  Analysts suspect that the support for the accord will gain momentum in the long-term side-tracking religious, cultural and social identities to maintain diplomatic relations for economic growth.  If all countries, therefore, become friendly with Israel, will the annexation only receive loud threats with no actions?

    This study is put together by Dharika Athray, Rupal Anand, and Vrinda Aiyaswamy. All of them are Research Interns at TPF.

  • The Geopolitics of Syria’s Reconstruction

    The Geopolitics of Syria’s Reconstruction

    Introduction

    Syria’s territories are controlled by a variety of actors – Al Assad’s regime (with Russia and Iran as its supporters); Kurdish dominated self-administration (with a small number of US troops supporting them); Turkey and its affiliated militias; and the Syrian Salvation Government affiliated to the Hay’at Tahrir al-Sham (HTS), a former al-Qaida offshoot.

    Fragmentation of the state’s territories, as the state lost control of its territories, resulted in the emergence of a network of localised war economies with numerous local and foreign actors being involved. War economies emerged in territories held by Assad’s regime as well as those under the control of various other opposition parties, characterised by an increase in smuggling of goods (among which essential goods, crude oil and arms were popular), extortion, rent seeking for essential services, and taxation of goods at checkpoints established by the warring parties, including local warlords, opposition armed groups or regime’s militias. The Syrian Arab army is also reported to have engaged in rent seeking behaviour through the establishment in recaptured territories (Hinnebusch, 2020).

    Another area of priority for armed opposition groups is the border crossings with Turkey whose access they have sought to control. The Ahrar-Al Sham group, established control over the Bab al-Hawa crossing between 2015-16, and earned around $5 million per month. Armed opposition groups have been involved in conflict with each other over control for border crossings, particularly conflict between Hay’at Tahrir al-Sham (HTS) and Ahrar al-Sham in 2017 (al-Kattan, 2017).

    The Syrian army (that was cross-sectarian) is in crisis of its reducing force size as it is hampered by resistance to conscriptions and many desertions. The Alawite sect was co-opted into the state’s army, political and security apparatus, resulting in tensions along sectarian lines. Another significant development was that those among the pre-war elite who advocated for a political solution based on power sharing were expelled from it, resulting in the contraction of the core to comprise of individuals along sectarian lines. Further, pro-regime militias emerged as pro-government communities were forced to rely on themselves for their defence, leading to a widespread localisation of power to fiefdoms (al-Kattan, 2017).

    The political, economic and security dimensions of the conflict which led to the emergence of war economies has been accompanied by shift of composition of the economy marked by the emergence of ‘war commanders’ and a decentralised elite, who capitalised on evading sanctions, served as middlemen between the armed groups of the state and opposition and established monopoly upon the supply of goods and services.

     These developments further led to the emergence of new centres of power which existed alongside the existing regime that consolidated its power by strengthening its relations with the new elite, army and security sector.

    The domestic dynamics of the Syrian conflict are closely related to a wider geopolitical struggle among regional and external actors who act as patrons for the domestic actors.

    In addition, by portraying itself as a bulwark against radical Islamism and strengthening its relations with influential individuals in minority communities and providing them with disproportionate authority within their societies, the regime’s efforts have redefined existing social hierarchies and co-opted pro-regime minority leaders to power. The regime’s policies, throughout the war, have not only strengthened the neo-patrimonial nature of the State and its relations with its multiple networks but lead to the decentralisation of a system of neo-patrimonialism (Middle East Institute & Etana Syria, 2020).

    The domestic dynamics of the Syrian conflict are closely related to a wider geopolitical struggle among regional and external actors who act as patrons for the domestic actors. The Syrian conflict that began as an internal conflict emerged into a proxy conflict where regional struggle for influence played out between the ‘resistance axis’ comprising of Hamas, Hezbollah and Iran, and Sunni dominated ’moderate’ states comprising of Saudi Arabia, Qatar and Turkey. The latter wished replace the Assad regime that was aligned towards the ‘resistance axis.’ Iran considers the Syrian conflict as threat to its survival and its ability to support Hizbollah against Israel.  The rival axes instrumentalised sectarianism as a part of their discourse and in their support for proxies. However, the interests of those within the Sunni camp clashed (with Turkey and Qatar’s support for the Muslim Brotherhood and Saudi Arabia and UAE against the Muslim Brotherhood and its version of political Islam) resulting in division of the Sunni camp further leading to the division of their proxies (Aita, 2020).

    The global struggle for power between the US and Russia, with the former promoting a liberal world order and advance its hegemonic interests, and the latter interested in increasing its sphere of influence, limiting US intervention while emphasising on state sovereignty. Russian intervention in Syria in support of the Assad regime tilted the power balance in its favour allowing the regime to gain control of its lost territories.

    Image Credit: Al Araby

    US sought to limit direct intervention in Syria while relying on proxies and financial sanctions (that it pursued along with the EU) to pressurise Assad’s regime to compromise to a solution that would promote its interests. Assad’s regime, due to its connection Iran, Shia militas in Iraq and Hezbollah in Lebanon, was able to manage despite the external pressure it faced. US attention and efforts were diverted to controlling ISIS. In 2019, while US withdrew from Northern Syria due Turkish intervention against the Kurdish forces, it announced it would redeploy its forces to the energy reserves in Deir ez-Zor to prevent Assad’s forces or ISIS from gaining control over them (Hinnebusch, 2020).

    The geo-political struggle for influence in the Syrian conflict among regional and global actors, has also transcended into efforts to capitalise on Syria’s post-war reconstruction efforts and business.

    With diversion of US efforts towards constraining ISIS, Russian intervention, growing differences between Saudi and Qatar, Saudi and UAE intervention in Yemen, have all resulted in a gradual withdrawal of the GCC, leading to a rise in the role played by Turkey, Iran and Russia. Turkey’s role and interests evolved from installing a Brotherhood government and targeting the regime to controlling the Syrian Kurdish PYD, which it views as a terrorist organisation. The threat of a confrontation with Moscow in Syria allowed it to participate in the Astana Process and a gradual realignment of its policy with that of Russia’s policy. More recently, Turkey and Russia have brokered a ceasefire deal in Idlib.

    The geo-political struggle for influence in the Syrian conflict among regional and global actors, has also transcended into efforts to capitalise on Syria’s post-war reconstruction efforts and business.

    This paper explores the local, regional and international dimensions of reconstruction and development Syria while analysing the impact the war has had on the political economy of Syria.

    Internal dynamics of Syria’s reconstruction

    The internal dynamics of Syria’s reconstruction are characterised by conflict among Syrian actors (supported by external actors) for resources and instruments that would lead them to strengthen their control. The regime views reconstruction efforts as a means to consolidate its authority and power over the country.

    Image Credit: NYT

    While the efforts made by the regime to consolidate its power and authority served its objectives and reduce the costs of governance, they have led to the decentralisation of political and security apparatus at the local levels. In addition, Iran and Russia continue to establish relations based on patronage with several Syrian clients. The integration of Hezbollah, Iraqi Shi’i militias and Iran’s revolutionary guards, have further loosened the control the regime holds over the security apparatus and strengthened sectarianism.

    The efforts of Assad’s regime have been directed at satisfying its loyalist elite on whom it is vitally dependent to legitimise its authority and power, and to a lesser extent the public.

    The regime sought to prevent local security apparatus from capitalising on their autonomy by incorporating them into the newly established units under centralised defence forces as in the case of the 5th Army Corps, although this was only partially successful. Russian intervention and participation in the conflict allowed it to establish order in the army.  The paucity of manpower further prevents the regime from extending its authority over the entire country, forcing it to continue to depend on its relations with tribal leaders and local warlords (Hinnebusch, 2020).

    The efforts of Assad’s regime have been directed at satisfying its loyalist elite on whom it is vitally dependent to legitimise its authority and power, and to a lesser extent the public. It encouraged its loyalists to participate and reap benefits off the war economies during the war as its authority over its local proxies declined, while the threat of being targeted by the opposition has ensured that the elites remain loyal. With the localisation of war, the regime has strengthened its relations with the elite while consolidating its power by encouraging investment of income and revenues earned through illicit means into the formal economy. The elite, the warlords, who are partners in the conflict are increasingly participating in the formal economy by setting up formal companies and businesses. However, there remains much to be done to fully integrate them into the productive economy, discourage involvement in rent seeking, and to promote the revival of a productive economy (Sinjab, 2017).

    One of the major effects of the conflict and its resulting socio-economic and political patterns has been the lawlessness, that serves as a deterrent to socio, economic and political cohesion, further preventing the investments required for reconstruction.

    Legislation aimed at Reconstruction

    The regime’s economic strategy for reconstruction namely the ‘National Partnership’, enforced in 2016, allows public bodies to form private investment companies while supporting the establishment of private firms.

    Image Credit: BBC

    Private investors are encouraged to investing in the remaining public property allowing the government to retain its influence on the economic movements. This serves the purpose of attracting new investors to invest in lucrative opportunities while the investments serve to support regime’s prime customers and clients. The legislation also enables them to obtain and secure public sector properties at the cost of the state treasury’s finances, thereby raising a doubt regarding the ability of the ‘new elite’ to alter the nature of the enterprise. Another significant measure taken by the regime as part of its reconstruction repertoire are property and urban reconstruction laws, including the Law 66 of 2012 and Law No 10 of 2018, that expropriate land and property from displaced opposition supporters in substandard living conditions and reallocate them to new upscale housing. This is meant to gather the support of the regime’s loyalists. The regime by creating uncertainty about the security of the property could discourage all investors with the exception of a few capitalists (Daher, 2018).

    Despite the fact that restrictions on capital movement makes it very difficult to attract investments into Syria, the Syrian government is implementing policies and schemes to attract financial aid from outside. It intends to tax finance inflows ranging from money sent by expatriates into Syria for humanitarian aid, which must be channelled through NGO’s funded by the regime. It also intends to attract $100 billion worth Syrian currency held outside Syria through tax concessions and by launching the Syrian International Business Association (SIBA) under the auspices of World Bank. Analysts warn about the difficulties associated with investments from other nations. They suspect that given the dispersion of investments, diaspora would find it difficult to compete with loyalists for reconstruction contracts and there may be issues with fraudulent officials and widespread corruption. The assets of those businessmen who left the state have been frozen. Lastly, the US and EU-imposed multilateral sanctions led to Syria being cut off from the international banking system(Aita, 2020).

    The Syrian Government has declared that reconstruction contracts will be granted to its supporters and not countries who supported its opposition. It has also offered concessions in order to attract investments from Russia and Iran, but this may jeopardize Syria’s financial independence in the coming years.

    Reconstruction of Syria would lead to stronger relations with Iran and Russia followed by simultaneous decline in relations with the West (to whoom it exported a major portion of its oil ) and the Arab Gulf. Previous economic partners may engage in reconstruction in areas where there is negligible regime-control. The reconstruction parameters are bound to affect Syria’s social fabric. The gap between the rich and the poor has widened due to the war economy. The rigged economy will put the interests and benefits of the common people in peril.

    Geopolitical Dynamics of Reconstruction

    The geopolitical struggle over reconstruction among competing players at the regional level is centred around increasing one’s own influence, either through direct intervention or proxies. Considering that different parts of Syria is under the control of different parties there is every chance that Syrian reconstruction effort may not be an integrated effort across the nation but rather take the form of parallel reconstruction initiatives across the many different areas of Syria.

    The global geo-economic factors influence whether resources become available for reconstruction and on what terms. Because the powers that are geopolitically strongest on the ground in Syria (Russia, Iran) are geo-economically weaker than those who lost the geopolitical conflict (US, EU, Gulf), the latter are using the capital that they can withhold and obstruct or seek to leverage their contribution to effect the looming winding down of the military conflict on their terms. They, together with the World Bank, are making their participation conditional on a political settlement. Specifically, this will affect whether the regime will be able to reconstitute authority over the country’s territory and its reconstruction, or will be forced into some sort of power-sharing/territorial confederation or, these failing, reconstruction deepens fragmentation. If the parties do not reach a compromise the outcome could be a frozen conflict consolidated by separate and minimalist reconstruction tracks.

    Further, regional and global actors that have not participated in the conflict happen to be economically stronger and have the means to mobilise resources. Their support and resources to fund the reconstruction and development of Syria remain contingent on the ability of Assad’s regime to fulfil their conditions of a political settlement.

    Russia’s Reconstruction Support

    Russia’s role in Syria’s reconstruction have been driven by the benefits a stable Syria could provide it. It has provided Assad’s regime with support in economic and military terms and settled Syria’s debt. Russia also seeks to renew and recoup its pre-war investments in infrastructure and energy sector, and establish new contracts in geo-strategic areas. Assad’s regime has been granted a preferential role in redevelopment of its energy and infrastructure sectors. The state of the Russian economy has made lesser resources available for investment. The risk of investing in Syria due to the political and security climate and the threat of being targeted by US sanctions have led to minimal investment into Syria. The entities that have invested are operated/owned by oligarchs close to Putin, and those under sanctions, for instance, Gennady Tim-Chenko’s construction company (Van Veen, 2020).

    Russia has realised that it lacks the resources to actively finance Syria’s reconstruction effort and instead focussed its efforts on building the state institutions necessary to provide adequate security infrastructure, which is an important pre-condition for any reconstruction effort.

    Russia has realised that it lacks the resources to actively finance Syria’s reconstruction effort and instead focussed its efforts on building the state institutions necessary to provide adequate security infrastructure, which is an important pre-condition for any reconstruction effort. Simultaneously it tried to seek support from the European Union and international organisations to create the necessary infrastructure required to facilitate the return of refugees based out of Europe while ensuring the attainment of a political settlement that helps Bashar Al Assad to stay in power (Daher, 2018).

    Image Credit: NYT

    Russia has also worked with the Assad regime to implement policies aimed at the return of refugees thereby addressing some of the requirements and requests of the European Union. However, Bashar Al Assad has so far only paid lip service to such requests.  For instance a law intended to promote reconstruction projects has been amended under Russian pressure but without any major changes to its provisions and was used to expropriate the property of Syrians who fled abroad.

    Iran’s Role

    Iran has provided Assad’s regime around $16billion worth of financial aid since 2012.It has provided an additional $3.5 million in 2013 which was further extended by $1 billion in 2015 and $6.4 billion and $700million to pro-Iran militias in Syria.   It has expressed its interests in participating in the reconstruction of Syria. Iranian entities were awarded numerous contracts worth millions of dollars to initiate redevelopment of the electricity infrastructure by the central government as well as local governments but are yet to be implemented. The Iranian Revolutionary Guards, who have considerable experience in participating in the reconstruction of Iran after the Iran-Iraq war and own vast construction companies in Iran, have entered into agreements in the sectors of mining and communications. While Iran has stated it would offer $1 billion for reconstruction, the amount it pledged is a minuscule amount of the total funds required. Iran’s participation in Syria’s reconstruction is also likely to be limited due to the impact of US sanctions on its own economy(Van Veen, 2020).

    Diminished role of US, EU and Arab States

    As for regime controlled parts of Syria, Washington moved to block reconstruction funding in these areas. US pundits argued that the regime would inevitably be empowered by reconstruction and should not be rewarded for its brutal repression of the uprising; anti-regime interest groups moved not only to preclude US funding but also to erect obstacles to others participating in reconstruction. In April 2018 the US Congress passed the No Assistance for Assad Act (NAAA) which was designed to prevent any drift from humanitarian assistance to reconstruction stabilization, and according to Faysal Itani, had the effect of ‘killing any World Bank dreams to get funding to operate in Syria’. Indeed, the US has a long history of directing the flow of world financial capital via sanctions, conditionality, etc. for its geopolitical purposes; in Syria, it seeks to manipulate money (geo-economics) to obtain what it could not achieve via geopolitics: specifically, keeping Syria a failed state that would make it a resource-draining burden for Russia and its allies.

    The US has used its influence in North-Eastern Syria, to counter efforts by the Assad regime to consolidate its power over Syria which is a precursor to a “nationally integrated” reconstruction. Establishing control over energy reserves is essential for Assad’s regime to pursue its reconstruction efforts successfully. The US, by controlling reserves in the North-East Syria, has been able to deprive Syria’s access to essential resources.

    US efforts in reconstruction have been motivated by its interests to deter any reconstruction efforts sponsored by the regime through geo-economics measures such as sanctions, when its geo-political efforts have had limited success in motivating Syria and its allies in pursuing a political solution in line with US policy interests.

    The US campaign against ISIS devastated Raqqa but reconstruction there has remained limited to stabilization measures. The Trump administration tried to get the Saudis to assume the burden of reconstruction (asking for $4 billion). The US goal was to start enough reconstruction to deter any move in the area to join regime sponsored reconstruction efforts (Alaaldin et.al., 2018; Burcher, 2018; Harris, 2018; US Congress, 2018;). US efforts at convincing Saudi Arabia to undertake reconstruction efforts have not been successful as the latter offered relatively smaller amount (al-Khateb, 2020).

    US efforts in reconstruction have been motivated by its interests to deter any reconstruction efforts sponsored by the regime through geo-economics measures such as sanctions, when its geo-political efforts have had limited success in motivating Syria and its allies in pursuing a political solution in line with US policy interests.  It simultaneously blocked reconstruction funding directed towards territories under the control of the regime. The Caesar Act, now incorporated into the National Defence Act of 2020, targets investment into Syria, through individuals and businesses coming into the ambit of the UN sanctions (Hinnebusch, 2020).

    While the EU has provided substantial aid to Syrian refugees in Syria’s neighbouring countries, it has made its aid and participation in reconstruction contingent on efforts to reach a political solution that is in accordance with ‘UNSCR 2254 and the Geneva Communique’

    The EU has been affected by the Syrian Conflict due to the influx of refugees and large-scale migration of its citizens to partake in terrorist activities. While the EU has provided substantial aid to Syrian refugees in Syria’s neighbouring countries, it has made its aid and participation in reconstruction contingent on efforts to reach a political solution that is in accordance with ‘UNSCR 2254 and the Geneva Communique’ (Van Veen, 2020).

    Russia is making efforts to broker a political settlement of sorts, with Turkey’s support, to convince EU to invest in reconstruction to enable refugees to return. While the EU seems to be relying on the inability of Syria’s allies to support its funding and thus force Assad to agree to the EU’s conditions, the regime does not seem to be interested in accepting EU conditions and give up its power in return for support of its reconstruction. However, individuals EU states have participated in reconstruction efforts in a limited manner in both the regime-held as well as opposition-held areas.

    Turkey continues to be one of Syria’s top trading partners. Numerous Syrian businessmen who have been exiled have invested in Turkey, around 26% of foreign investment in Turkey in 2014 originated from Syrian businessmen, particularly in its border regions with Syria. While a number of exiled Syrian businessmen supported the opposition, their investment would be instrumental, if mobilised, in territories held by Turkey and its militias at a time when refugees are returning to the region. While the Syrian government is against the participation of Turkey in the reconstruction of Aleppo, Russia’s efforts in mediation would lead Turkey to participate in the reconstruction process. Turkey has invested significantly in establishing institutions facilitating the governance of areas under its control and also in building economic infrastructure in these areas (Daher, 2018).

    While Jordan and Lebanon have expressed interest in participating in the reconstruction of Syria, the resources they can mobilise are limited.  The Gulf countries have, no doubt the resources required for reconstruction, but have made their role in Syria’s reconstruction contingent on withdrawal of Iran and its proxies and in case of some countries, a regime change. The UAE as expressed its interest in participating in Syria’s reconstruction so as to limit Iran’s influence. However, Yazigi (2017) states that reconstruction efforts, in the case of  Lebanon, were contingent on a solution that emphasised upon power-sharing, backed by regional and international actors and substantial financial aid from Saudi Arabia. It is unlikely that either of the two scenarios would play out in the case of Syria.

    China: A Possible Contender?

    the Chinese state considers Al Assad’s regime as a bulwark against terrorism and its relations with the regime an asset in combating Uighurs who are participating on the behalf of terrorists.

    China has expressed its interest in participating in the reconstruction of Syria to advance its interests through investments in economy and geo-strategic areas such as the maritime sector, and to develop and connect its Belt and Road Initiative in the region. Given China’s interests, size and nature of China’s capital, China becomes a viable partner in the reconstruction of Syria.  China conducted a trade fair in 2018, which was attended by 1,000 Chinese companies and witnessed an investment of $2 billion for the reconstruction and development of Syria’s industrial sector. Private investors have been concerned about the widespread corruption in Syria and the threats of being targeted by US sanctions. Moreover, the Chinese state considers Al Assad’s regime as a bulwark against terrorism and its relations with the regime an asset in combating Uighurs who are participating on the behalf of terrorists.

    Conflict Resolution vs Conflict Management

    Given that the warring parties consider the conflict to be more-or-less of a zero-sum game, territorial and social fragmentation of Syria, it would be extremely difficult for them to pursue means to resolve the conflict through creating the need for the conflict to be managed and downsized (Dacrema, 2020). The non-recognition of certain non-state actors by the rival sides and questions regarding the participation of non-state actors in negotiations, which would only serve to legitimise them further, complicates the process of negotiating a solution.

    Temporary Arrangements

    A strategy that would allow for the management of the conflict would be to negotiate temporary agreements and deals. Turkey and Russia have been able to broker temporary ceasefires at multiple instances, throughout the conflict, in the Idlib region. Temporary arrangements would help build confidence among the warring parties in the long run, and reduce the possibility of escalation of war (Dacrema, 2020).

    Conclusion

    Given that the warring parties prefer a status quo in comparison to the resolution of a conflict and value their geo-political and economic interests, it is highly unlikely that parties would push for resolution of the conflict. In consideration of a political stalemate, reconstruction efforts among the warring parties are likely to take place parallelly, as they have played out with the localisation of the conflict. While resources in the territories held by the regime are being diverted to areas that have remained loyal during the conflict and/or areas of strategic importance with areas formerly occupied by opposition forces receiving relatively lesser attention; territories under Turkish control and those held by the Kurdish forces have witnessed efforts aimed at stabilising the territories.

    Russia and EU have the potential and the leverage required to emerge as power brokers in the reconstruction and initiate the process in a manner that promotes social, economic and political cohesion in the long run.

    Russia and EU have the potential and the leverage required to emerge as power brokers in the reconstruction and initiate the process in a manner that promotes social, economic and political cohesion in the long run. The likelihood of being able to convince themselves that the possibility of achieving one’s interests alongside the other is a far better option in comparison to its alternative of a failed state, which threats both their interests. However, their ability to convince their allies and their clients (in this instance, Assad regime is Russia’s client) and the mistrust between both the parties as well as between their allies poses a challenge.

    Russia’s efforts in brokering a constitutional committee for Syria under the aegis of the UN is an indicator of a compromise. Hinnebusch (2020) suggests that “it is not impossible to move incrementally toward a minimalist sort of political settlement that might acquire enough international legitimacy to open the door to some reconstruction funding.” While the likelihood of this occurrence is difficult amid conflicting interests, it cannot be overruled.

    The humanitarian aspects of the conflict and urgent need for reconstruction to alleviate tangible and intangible costs of the conflict have largely been ignored. The warring parties have been preoccupied with advancing and fulfilling their interests at the cost of ordinary Syrians. There is a need for parties to acknowledge and make efforts towards the realisation of the urgency of reconstruction that is vital for securing the social and economic interests of ordinary Syrians. The likelihood of the same, however, is questionable.

     

    References

    Aita, S. (2020). Reconstruction as a political-economy issue: The case of Syria. Retrieved 28 June 2020, from https://www.thecairoreview.com/tahrir-forum/reconstruction-as-a-political-economy-issue-the-case-of-syria/

    al-Kattan, R. (2017). Retrieved 25 June 2020, from https://www.atlanticcouncil.org/blogs/syriasource/the-economic-case-for-syria-s-stabilisation/

    al-Khateb, K. (2020). US outsources Syria aid to Gulf. Retrieved 4 July 2020, from https://www.al-monitor.com/pulse/originals/2018/08/us-outsources-syria-aid-gulf.html

    Dacrema, E. (2020). Three Concepts to Understand the Future of Syria. Retrieved 25 June 2020, from https://www.oasiscenter.eu/en/what-future-for-postwar-syria

    Daher, J. (2018). The political economic context of Syria’s reconstruction : a prospective in light of a legacy of unequal development. Retrieved 3 July 2020, from https://core.ac.uk/display/162303203

    Hinnebusch, R. (2020). The Battle over Syria’s Reconstruction. Retrieved 1 July 2020, from https://www.globalpolicyjournal.com/articles/development-inequality-and-poverty/battle-over-syrias-reconstruction

    Human Rights Watch. (2019). Rigging the System. Retrieved 25 June 2020, from https://www.hrw.org/report/2019/06/28/rigging-system/government-policies-co-opt-aid-and-reconstruction-funding-syria#_ftn114

    Middle East Institute, & Etana Syria. (2020). Manufacturing Division: The Assad Regime and Minorities in South-west Syria. Retrieved 2 July 2020, from https://www.mei.edu/publications/manufacturing-division-assad-regime-and-minorities-south-west-syria

    Sinjab, L. (2017). How Syria’s War Economy Propels the Conflict. Retrieved 25 June 2020, from https://syria.chathamhouse.org/research/how-syrias-war-economy-propels-the-conflict

    Veen, E. (2020). The geopolitics of Syria’s reconstruction: a case of matryoshka. Retrieved 27 June 2020, from https://www.clingendael.org/publication/geopolitics-syrias-reconstruction-case-matryoshka

    Yazigi, J. (2017). Analysis: No Funds to Foot Syria’s Reconstruction Bill. Retrieved 1 July 2020, from https://www.newsdeeply.com/syria/community/2017/12/04/analysis-no-funds-to-foot-syrias-reconstruction-bill

     

    Main Image Credit: Palmyra before its destruction by ISIS – www.citymetric.com 

     

  • China’s support to Syria: In Conflict and Redevelopment

    China’s support to Syria: In Conflict and Redevelopment

    China is looking to ramp up relations with Syria both as part of its strategic Belt and Road Initiative (BRI) but also to take advantage of the multi-billion dollar reconstruction effort that is expected to materialise following the gradual winding down of the war.

     

    Syria is an ancient civilisation and also an important part of the ancient silk route, with cities such as Palmyra, Aleppo and Damascus playing an important role in trade and travel between the East and the West. While the discovery of a maritime route between Europe and Asia has to some extent diminished its importance in this regard, Syria is still strategically important. China is looking to ramp up relations with Syria both as part of its strategic Belt and Road Initiative (BRI) but also to take advantage of the multi-billion dollar reconstruction effort that is expected to materialise following the gradual winding down of the war.

    China’s non-interference policy is an integral aspect of its involvement and role in the Middle East. During the course of the Syrian war, China has consistently supported the Bashar Al Assad government on the diplomatic front – through the exercise of the veto power against the resolutions introduced in the United Nations Security Council either condemning the Syrian government, calling for ceasefire or for imposing sanctions on suspected war criminals. While negotiating the renewal of border crossings for aid, China agreed on the need for humanitarian assistance but emphasised on state sovereignty. China’s policy of non-interference has served it well in strengthening bilateral relations and advancing its interests.

    One of the reasons for the diplomatic support extended by China to the Syrian government is also the involvement of the Uighur fighters in the Syrian conflict which has greatly bothered China. While it has never got directly involved militarily in the Syrian conflict there are unconfirmed media reports which suggested that China was sharing military intelligence with the Syrian government and also sent its military advisors to Syria to help it in its fight against the rebels. In this sense, it saw Syria as a key player in its fight against religious extremism thereby preventing its export to its own volatile Xinjiang province.

    With the Syrian conflict slowly winding down and Bashar Al Assad’s hold on Syria greatly strengthened more than at any other time since the beginning of the civil war, China is ramping up its diplomatic efforts in Syria  using trade as an important policy tool to ramp up the relations between the two great civilisations.

    Based on Chinese government’s invitation Syria has participated in the second BRI summit held in Beijing in April 2019. Previously in 2018, China held a Trade Fair on Syrian reconstruction projects which was attended by nearly one thousand Chinese companies and which saw investment proposals of nearly USD two billion. The collapse of most of the industry in Syria due to the war has also resulted in a significant increase of cost-effective Chinese imports into Syria ranging from toys to car parts and industrial machinery and equipment.

    China is also leveraging its economic strength fully by using aid as a foreign policy tool. In 2019,  Xinhua reported on the  that an economic cooperation agreement was signed between Syria’s Planning and International Cooperation Commission (PICC) and the Chinese embassy in Damascus. As part of this agreement, a donation will be set aside to fund a series of humanitarian projects as agreed upon by both sides.

    The collapse of most of the industry in Syria due to the war has also resulted in a significant increase of cost-effective Chinese imports into Syria ranging from toys to car parts and industrial machinery and equipment.

    China is expected to be a key player in the international reconstruction and development effort that is expected to take place in Syria due to its strong bilateral ties with not only Syria but also its alignment with Russian and Iranian position on Syria , these two players being the major supporters of Bashar Al Assad’s government in the civil war. While Russia and Iran are surely expected to carve out a large part of the reconstruction contracts between themselves, their capacity to make the huge investments in these projects, estimated to be worth anywhere between USD 200 million to USD 1  trillion is doubtful. This creates the ripe opportunity for China to enter the reconstruction business effort either by themselves or, as is more likely, in partnership with Russian and Iranian governments or businesses.

    Beyond the business opportunities provided by the potential reconstruction of Syria, China is also strategically interested in Syria. China was always interested in securing access to the Ports of Tartus and Latakia on Syria’s Mediterranean coast. Such an access is expected to complement Beijing’s interests in the Greek port Piraeus (COSCO shipping, the Chinese state-owned shipping and logistics services supplier company in the Port authority) and the Israeli port of Haifa, in securing a trade route to Europe. In alignment with these strategic interests, Chinese companies’ area also exploring the possibility of upgrading the deep seaport of Tripoli, Lebanon to allow it to accommodate larger vessels and also the possibility of building a railroad that would connect Beirut and Tripoli in Lebanon to Homs and Aleppo in Syria.

    Beyond the business opportunities provided by the potential reconstruction of Syria, China is also strategically interested in Syria. China was always interested in securing access to the Ports of Tartus and Latakia on Syria’s Mediterranean coast.

    Chinese investments into and trade ties with Syria however, risk the attraction of US sanctions on Syria. The arrest of Meng Wanzhou, Chief Financial Officer of Huawei, , in Canada, based on a request by the United States highlights the extent of these risks. “The Caesar Syria Civilian Protection Act”, also known as “The Caesar Act”, a United States legislation that sanctions the Syrian government, including Syrian president Bashar al-Assad, for war crimes against the Syrian population, parts of which  are now incorporated  in the “National Defense Authorization Act for Fiscal Year 2020” greatly tightened the sanctions environment against the Syrian government and a number of its industries potentially impacting the Chinese investments and trade ties. While China has called for an end to sanctions stating they were “inhuman,” they have been wary of being targeted by sanctions and further straining their relations with the US. However, it is unlikely that the sanctions would have a significant effect on China given the size of China’s economy and its ability to circumvent sanctions while dealing with Iran and North Korea. China, as part of its ‘mask diplomacy,’ is increasingly providing aid to the Syrian government in their efforts against Covid-19. This serves the dual purpose of strengthening China-Syria relations and strengthening China’s narrative of Covid-19.

    To conclude, China has been a staunch supporter of the incumbent Syrian government of Bashar Al Assad during the almost decade long Syrian civil war and is set to reap the benefits from the post-war Syrian reconstruction effort in conjunction with the Russians and the Iranians to advance its interests.

    Image: Middle East Institute

     

  • Deal or No Deal: The Future of Iran’s Nuclear Agreement

    Deal or No Deal: The Future of Iran’s Nuclear Agreement

    Iran’s nuclear program has been at the epicentre of most non-proliferation narratives since the beginning of 21st century. From the initial stages of receiving nuclear assistance from US to being sanctioned for their nuclear activities, Iran has managed to remain at the centre of this discourse. In 2015, Iran signed the nuclear agreement with the five permanent members of the United Nations Security Council (UNSC) – the US, Russia, France, China and U.K as well as Germany and the European Union. However, with the arrival of Trump presidency, this deal was reopened by the US and has remained controversial despite a wide consensus that Iran has largely abided by the clauses of the agreement.

    The Iran Nuclear Deal or the Joint Comprehensive Plan of Action (JCPOA) is unique for a number of reasons. It is an amalgamation of years of negotiation process between countries of widely differing perceptions and interests. It is the coming together of the western powers with Iran in order to sign a deal to curb Iran’s nuclear programme and ensure non-proliferation of nuclear weapons. Over the course of fifty odd years, the series of discourses on Iran’s nuclear programme, since its genesis till the time the deal was signed has evolved significantly. These discourses have impacted and resulted in significant policy changes. Most importantly, it has also led to a process of rapprochement between Iran and the western states making it one of the landmark agreements in recent times. However, the deal also received criticism because the narratives portrayed that Iran got a better deal through lifting of sanctions while its part of the commitment to the non-proliferation requirements was much less.

    Unlike the Obama administration that pushed for the deal, President Donald Trump has been clear about his dislike for the agreement and has been an advocate of how this could possibly be “the worst deal”. Owing to this, Trump unilaterally pulled out of the agreement on May 08, 2018 and stated that he would reimpose sanctions until a better deal could be worked out. While Trump’s decision to undo years of negotiation comes from various factors such as Israeli influence, Iran’s support for Hamas and its role in Syria to name a few, it is also due to the perception of the Republican hardliners that there was not enough pressure put on Iran and that the US managed to get a bad deal out of it, and this remains a large part of Trump’s narrative. The US strategy now is to push for a more hard-line agreement and ensure complete isolation of Iran if it refuse to fall in line. This however, has failed because more than two years later there are still no signs of Iran buckling under US pressure, although the economic impact of sanctions has started to bite.

    Given the situation, there are four possible outcomes that can be observed – First, Iran is likely to play a victim card and protest to the Europeans for compensations against the unilateral sanctions that affect its economy despite Iran abiding to all the terms and conditions of the JCPOA. In another context, this could also push Iran to retaliate by threatening to pursue uranium enrichment and continue operations in its nuclear facilities while preventing the International Atomic Energy Agency (IAEA) from inspections. Recent announcements by the Iranian government regarding its nuclear enrichment is a clear indication that they are choosing the latter option. Secondly, while the European countries are disappointed with USA’s withdrawal, there are high chances of the deal falling apart purely based on the fact that the European members of P5+1 are strategically and intimately tied to the US through much larger scope of mutual interests. However, the European countries will aim to renegotiate the deal because of the serious security concerns that might come into play if Iran is pushed towards becoming a nuclear power. Thirdly, lack of commitment from the P5+1 countries might force Iran to second guess about its decision to renegotiate a new deal. If Iran decides to abandon the agreement, there exists a high risk of nuclear proliferation in the region. However, this would only lead to further sanctions from the other European countries as well. Therefore, any decision taken by Iran will have to be done taking all these factors into consideration. Finally, Iran’s strategy going forward will largely depend on USA’s strategy and the increasing economic pressure as a result. While Trump has chosen to withdraw from the deal, he has also stated that he is open to further negotiations to ensure a better deal. It is unclear as to what a better deal entails and therefore, Iran will have to play its cards right yet again to not only stop itself from being isolated and ridden with sanctions but to also prevent its own population from revolting against its decisions.

    Another aspect that comes into play with respect to the deal is the role of China and Russia as counter-weights to dealing with US pressure. Along with the European allies, both the countries are against Trump’s decision to leave the nuclear agreement, reintroduce sanctions and renegotiate the deal. Earlier, China and Russia’s involvement remained minimal in the JCPOA. This time around, both the countries won’t allow Iran to be isolated. China and Russia have had historical ties with Iran and therefore, have been reluctant participants in the sanctions regime. However, both the countries will now actively look to counter USA’s unilateral decisions regarding the deal and will support Iran weighing out the consequences.

    Iran is currently amidst domestic protests due to hike in fuel prices and bad economic conditions. Despite being an oil rich country, it is unable to reap the benefits of it through exports, due to sanctions. The Iranian government is exactly in the same situation it was in 2015 (politically and economically) when it signed the JCPOA. Therefore, strategically, this could be the right time for the US to give a window of opportunity to Iran to renegotiate. However, given the circumstances, renegotiating this deal is not at the top of the priority list for any of the countries and therefore, the future of the deal still remains uncertain.

    Looking ahead at the future possibilities

    If the countries come together again at the negotiating table, there are a few things that has to be done differently this time around to ensure that a deal is signed and is followed through. Firstly, a fool-proof clause has to be added in order to ensure that there are no easy exit strategies for any country from the deal. Once the deal is signed, every signatory has to abide by the deal unless there are any violations made by a member country. Secondly, with respect to Iran, the deal should be such that, the benefits of staying in the deal should be far more important than threatening to quit. Thirdly, the P5+1 countries have to ensure that they all have the same goal and approach to the deal rather if they want this deal to succeed. Fourthly, opportunity to improve the nuclear facilities in Iran must be provided but the agreement should be designed to detect and prevent clandestine programs. Finally, any further delay in signing a new deal will only increase Iran’s breakout capabilities which is counter-productive given that it was the need for the deal in the first place. Therefore, the imperative of saving or renegotiating the JCPOA as acceptable to all is never more urgent, particularly in the context of the emerging humanitarian crisis in Iran as a result of back-breaking sanctions.

    Swathi Kallur is a Research Intern with TPF. She holds a master’s in international relations from Symbiosis University, Pune. Views expressed are author’s own.

    Image Credit: Commons.wikimedia.org

  • American Sanctions on Iran and the Underlying Oil War

    American Sanctions on Iran and the Underlying Oil War

    Adithya Subramoni                                                                                      June 24, 2019/Analysis

    In a shocking turn of events, America in 2018 announced its withdrawal from the Joint Comprehensive Plan of Action 2015. This came as a surprise to the international community for good reason, because subjecting Iran under harsh sanctions when they kept up their end of the bargain seemed like a punishment from the US for keeping up this good behaviour. President Donald Trump, calling towards the international community and specifically ‘like-minded countries’ for a team effort, said it was time to curb Iran’s state-sponsored terrorism. But his idea to get Iran to re-engage on this field was through the ‘maximum pressure campaign’. This strategy is unlikely to find takers owing to the fact that the nuclear issue and state sponsored terrorism are two completely different issues, and hence need to be dealt with separately. To charge Iran with state sponsored terrorism is completely misplaced. Iran has not caused any damage to US or its citizens in the last twenty five years. On the other hand terrorist acts affecting the US and its allies have almost always had a link to Sunni Islamic fundamentalism with its links to Saudi Arabian Wahabi organisations. The real motive is USA’s geopolitical targeting of Iran. Trump’s recent designation of the Iranian Islamic Revolutionary guard corps (IIRGC), a unit of the Iranian army, as a terrorist outfit defies all logic and may become counterproductive to the US interests, the very issue that Trump wants to safeguard.

    Iran’s support to Hamas is fundamentally a regional and geopolitical struggle with Israel, while the Sunni vs Shia conflict is a manifestation of the regional power struggle between Saudi Arabia and Iran. If the USA wanted to pressurise Iran on its support to militant outfits like Hamas, it should have ensured it has support of its allies and multilateral institutions. USA’s unilateral action on Iran does not have the support of other members of the P5 +1(Germany) as well as other oil-dependent countries. With the latest round of sanctions, countries with economies having exposure to Iranian trade industry are gearing up to take a major hit. This brings us back to the subject of concern, why take such hasty decisions impacting the global economy without consultations from other members of the P5 + 1?

    The exit strategy

    In 2018 shale oil catapulted America to the leading position amongst the oil producers. As companies in Texas adopted fracking technology to good use in optimising their oil production, America climbed up to the first position in the oil producers list, surpassing major oil producers such as Saudi Arabia,Russia, Iran and the UAE. Climbing up the oil ladder came at a cheaper price for America considering the OPEC countries, excluding Iran, and Russia had agreed to reduce their oil production to protect the free-falling price of oil. This gave America a free hand at capturing the oil market especially where the demand from emerging economies was increasing rapidly. The only barrier to becoming the largest oil exporter was qualms from the emerging economies and other countries who found the American alternative to be an extremely expensive replacement for their oil needs. With emerging economies deeply dependent on Middle Eastern oil sources, one of the options for America to increase the demand for its oil was by blocking Iran’s oil exports through sanctions. This could give multiple advantages to the US: one is to create economic pressure on Iran; second is to boost American oil exports by eliminating Iran’s oil supply from the market; and third is to strengthen its ally Saudi Arabia’s pursuit of regional domination by squeezing Iranian oil-based economy.

    America’s play on executing its exit and sanctions in such a speedy manner may be rooted in the fact that the major countries dependent on the Iranian oil are in the Asian continent. European countries such as France, Greece, Italy and Spain all combined import close to 500,000 barrels a day as opposed to China and India who import close to 600,000 barrels per day and 500,000 barrels per day respectively. With America limiting its oil imports primarily from Canada and Saudi Arabia, and the European Union sourcing two-thirds of its oil requirements from Russia and Saudi Arabia, American sanctions on Iran do not impact the energy requirements of the western power bloc significantly. Hence, it may have been an American expectation that other members in the JCPOA (P5+1) would support Trump administration’s move to scrap the JCPOA and resume the earlier hard line approach of sanctions on Iran. This, however, has not happened.

    Unfortunately for America, other members of the JCPOA did not see any justification in the logic and accusation given by the Trump administration and hence, there was no support forthcoming from them. Trump’s disdain for allies and his unilateral approach, virtually demanding complete acceptance from European allies bordered on disrespect and insult to the member countries’ sovereignty and pride. Reaction to Trumps position was one of disbelief and contempt, as his actions displayed, in their opinion, disregard and contempt for international norms and credibility. Quite clearly USA has sought to bulldoze its way through with utter disregard for international institutions and multilateralism, exploiting its domination of the global financial institutions, banking system, and the fact that the US dollar is still the world’s reserve currency.

    UK, France and Germany together set up Instex – Instrument in Support for Trade Exchanges, to facilitate the trade of medicines, medical devices and food supplies, which trades in Euro through a financial channel having zero exposure to the American financial intermediaries. This marked a milestone in the chapter of American supremacy, where its European allies took a stance against its imposing regime. Though the volume of trade is negligible, the all important European message is that it will not support the American unilateralism. In the absence of any European support, Trump administration should have recognised its folly of trying to impose its decision on its allies, but on the other hand it made it even worse by virtually threatening diplomatic ties with those countries. Others in the P5, such as China and Russia have agreed with the European counterparts to re-examine and review if necessary the terms of the 2015 JCPOA deal and look for ways to deflect and overcome the US sanctions. Iran too, has welcomed the idea and agreed to keep its end of the 2015 deal. Time however, is running out as Iran has demonstrated its loss of patience over the lack of progress on the issue, and has stated on more than one occasion, in the last six months, that it will recommence its nuclear fuel reprocessing and enrichment activities.

    Asian approach to the Iranian issue

    Asia is the largest customer of crude oil, importing 53% of the global total oil imports, translating to an approximate amount worth $628.2 billion. One major reason for this huge oil influx is the fact that Asia is home to the fastest developing economies such as China and India. Though China and India have maintained that they will continue to import oil from Iran, one issue that concerns all the countries importing Iranian oil is the availability of insurers willing to take up the risk for oil supply from Iran. Most insurers will be cautious to take up projects for fear of losing business and financial access in the West.

    With the ongoing trade war with America, China is fighting a dual war. For America, the opponent has been weighed down with two hurdles co-incidentally and conveniently. With the trade war impacting the export industry and sanctions on its oil supplier indirectly hitting the Chinese economy, China may chose well to hit back on America by disregarding the sanctions on Iran. Iran might just have earned itself a powerful ally because of American hegemony. Chinese imports of crude oil from Iran have surged to record levels in April and May. Iran is set to become China’s 2ndlargest supplier of crude oil.

    Steering the wheel of attention towards India, Iran is its third largest oil source. Particularly being an oil dependent emerging economy, the sanctions on Iran will force India to look at more expensive oil options. The six month credit line and insurance included price for Iranian oil made it the most lucrative oil supplier in the business. Another issue that has come to India’s doorstep is the longevity of the rupee account based trading system with Iran using the UCO Bank. UCO Bank being the only bank with no exposure to American financial channels is the only means for continued Iran-India trade relations. In light of the US sanctions, India reduced its oil imports to turn eligible for a sanction waiver. This sanction waiver came to an end on 02May 2019, and oil imports stopped owing to the election period as well. Now the primary concern for the new Indian government is to prioritise the Iran issue. Iran is accountable for thirty percent of India’s exports, and given that the rupee account is fuelled by the INR deposited in favour of oil imports from Iran, the systematic reduction of oil import also creates a proportional fall in demand for Indian exports, owing to the curb of Iran’s purchasing power. Since the end of the sanctions waiver, India has stopped import of Iranian oil, hopefully only as a temporary measure.

    At the same time, a diplomatic concern that arises for India is its interest over the Chabahar port. Chabahar Port is a major investment arena for India to create a transportation corridor connecting Asia as well as the land-locked Afghanistan with the rest of the world. Though India plans on disregarding the US Sanctions and continuing business through the UCO Bank and Iran’s Pasargad Bank, attention needs to be paid to resolve the reducing Iranian imports, not only to secure India’s exports but also to show Iran the commitment India has towards its diplomatic ties with them and its vested interest in operating the Chabahar Port. Going ahead with the possibility that China would disregard the sanctions on Iran, a reduction in Iranian imports could weaken Iran’s ties to India and pave the path to strengthen Iran-China ties. This would particularly be drastic for India, if Iran were to give China operational rights to the Chabahar port. Needless to say, this would bring in interference from Russia, who wouldn’t be thrilled with the loss of regional trade autonomy to China.

    Approaching the dénouement

    From a bird’s eye view, the rising conflicts in the West Asian region, with Saudi Arabia and the UAE being the main champions who support the efforts for a change in Iran’s regime, Iran finds itself in a cornered situation amongst its neighbours. If cornered, both strategically and economically, Iran could resort to using its strategic location to choke the Strait of Hormuz by planting sea mines or through any other obstruction mechanism. Though unlikely, as it would put Iran in a very hostile situation with rest of the world, it cannot be ruled out as an extreme last resort measure. This could create major international crisis. It would, as a start contribute to the run up in oil prices and owing to supply security – it is possible that USA stands to benefit immensely in such a crisis.

    On the other hand, by imposing sanctions on Iran, America has pushed India to an uneasy corner. Owing to regional ties, it plays to India’s strength to take care of her interests by dealing with Iran and securing operation of Chabahar port. On the other hand it is essential to keep India’s ties with America on an even keel. If it refuses to acknowledge India’s ground interests and resorts to the muscle power of sanctions, China may end up as the beneficiary with a fortuitous win with Chabahar port, leading to an ultimate strategic loss to India and the US.

    The situation calls for global introspection into imposing sanctions by a country due to its phenomenal control over the world’s financial channels and the domination of the USD international trade. But this round of sanctions just might be the one where countries figure out alternate solutions together; considering the European initiative of Instex, Asian methods such as the trade using rupee account, Russian and Chinese support towards Iran; to finding a more cooperative and equitable solution that enables the world to trade outside the control of America. The sanctions may have just provided the edge to catalyze the changing world order, but the question is who’ll sit on the throne of the high table when the rubble settles? Or will it be, as it seems more likely, a more cooperative and less competitive, multi-polar world order?

    Adithya Subramoni is interning at ‘The Peninsula Foundation’. She has a Bachelors degree in Commmerce  from Christ College, Bangalore.

    Photo Credit under a Creative Commons Attribution 4.0 International License.: english.khamenei.ir

  • Strategic Autonomy and the Looming Oil Crisis

    Strategic Autonomy and the Looming Oil Crisis

    Kamal Davar                                                                                             May 31, 2019/Commentary

    The new Modi government will have to speedily contend with a serious foreign policy challenge on its hands.

    That this ordeal comes in the wake of some underplayed serious economy problems currently facing the nation will compound the problems for India which imports over 80 per cent of its burgeoning oil needs.

    Thus, if the looming crisis in the Persian Gulf between an arrogant US and an equally defiant Iran does not get resolved peacefully, ominous ramifications await the region, the world and all those nations which import crude oil from Iran.

    The genesis of the current crisis between the US and Iran has its roots in the Joint Comprehensive Plan Of Action (JCPOA) which was agreed upon by Iran and six western nations in 2015, led by the US, to curb Iran’s nuclear programme, which boils down to deterring Iran from developing nuclear weapons. But in May 2018, the US, under its mercurial President Donald Trump, chose to renege on this treaty as Trump felt that this was the “worst deal ever negotiated.”

    It is also a fact that Iran did not violate any norms of the law as regards this agreement.

    Meanwhile, the US allowed some nations, including India, which import oil from Iran a six-month waiver, which ended on May 2, 2019. As a consequence of the US action, oil prices the world over have jacked and soon its adverse effects will be felt in India as inflation will hit the already strained Indian economy. Over a 10 per cent hike in global oil prices has already taken place in the last one month and a crippling escalation in oil prices ahead is well on the cards.

    Notwithstanding any US pressure on India, the unalterable fact of Iran’s strategic significance to India in the region remains beyond question. India imported 24 million metric tonnes of crude from Iran in the 2018-19. India was Iran’s second largest buyer of crude last year, while Tehran was the third largest supplier to India after Iraq and Saudi Arabia (11 per cent of a total of India’s oil imports).

    Additionally, Iranian crude comes with a longer credit period and cheaper freight owing to Iran’s geographical proximity to India and, thus, Iranian oil remains the best option for India in more ways than one.

    Higher oil prices also make the Indian rupee weaker, making imports to India costlier. Importantly, that Iran-India collaboration in the development in the vital Chabahar Port in Iran will give India vital ingress to Afghanistan and the Central Asian Republics cannot be understated.

    Meanwhile, the US has rushed the formidable USS Abraham Lincoln carrier-borne Task Force to the Persian Gulf region and undertaken certain prophylactic steps in case war breaks out.

    The Iranians, too, have mounted some small-range anti-ship missiles on their warships. Iranian President Hassan Rouhani recently said that his nation is facing acute pressure from international sanctions, dubbing it a “war unprecedented in the history of the Islamic revolution.”

    The US has also branded Iran’s elite Revolutionary Guards as a foreign terrorist organisation. A war of words has broken out, with President Trump declaring that if “Iran wants to fight, that will be the official end of Iran. Never threaten the United States again.”

    Replying back sternly, Iranian Foreign Minister Javad Zarif retorted that Iranians have stood tall for millennia against aggression and that “economic terrorism and genocidal taunts won’t end Iran.” He added that “never threaten an Iranian. Try respect it works.”

    Importantly, even US allies have steered away from of taking any partisan positions with either the US or Iran. Meanwhile, oil-producing nations like Saudi Arabia, Kuwait, Mexico and the US itself have been requested to step up their oil production to cater for Iranian oil shortfalls.

    How this oil crisis will shape up to meet global demands is anyone’s guess.

    It is a strategist’s nightmare in conjuring up a scenario concerning the ramifications of a war between Iran and the US. The Persian Gulf is easily one of the world’s critically significant strategic waterways through which one-third of the world’s oil is transported.

    In the event of a war, Iran will definitely close the vital Straits of Hormuz for commercial shipping purposes, throwing the region’s economy out of shape — an eventuality which, hopefully, should not ever take place.

    Preoccupied with its General Election, India, as a major regional player, has so far not reached out to its strategic partner, the US, to impress upon it to defuse the crisis.

    Recently, the Iranian Foreign Minister made a trip to India to explain their position to India on the current standoff.

    India, however, need not succumb to any US pressures or take sides. India has an adequate financial standing and moral stature to play a peacemaker’s role. India must conscientiously follow the time-honoured policy of zealously guarding its strategic autonomy. Respect for India from nations even adversarial to each other — as in earlier decades — will follow automatically and some of India’s economic tribulations will also get simultaneously addressed.

    Let the new government in New Delhi bear in mind Iran’s more than significant strategic value for India in the region.

    The author, Lt Gen Kamal davar is a former DGDIA and is visiting Distinguished fellow at TPF. 

    This article was earlier published in The Tribune.