Category Archives: Iran

Politics of Spite

09 Wed May 2018

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As predicted, US president Donald Trump has led the United States out of the Joint Comprehensive Plan of Action (JCPOA) with Iran. The agreement, which was supposed to increase international (Western) oversight into Tehran’s nuclear programme and hopefully rein in its nuclear ambitions, was one of the few unambiguously positive legacies of Trump’s predecessor, Barack Obama, but ran into opposition even during the delicate negotiations. Critics tried to add riders involving their pet projects – usually human rights or missile development – to the deal in an attempt to derail process. Consistent with his pre-election criticism for once, Trump had called the JCPOA a bad deal and promised to repudiate it if elected.

America’s European partners – Britain, France, Germany, and Russia – have parted ways with Washington and declared their intent to continue adherence to the JCPOA; China has so far been mute but already threatened with a trade war with the United States, it is highly likely that it, too, will follow the Europeans in holding on to the Iranian nuclear deal.

It is not yet clear what the fallout of the American departure from the JCPOA will be. Although the rhetoric of the exit has been focused on how the agreement did not go far enough in preventing Iran from pursuing nuclear weapons, the fact that Trump administration officials have stated that sanctions will be “snapped back” indicates that they believe Iran to be in breach of its obligations under the JCPOA – although most technical experts disagree with this evaluation.

Given that the other members of the E3 + 3 – particularly Britain, France, and Germany – will not be following the US example, the interesting question is if Washington intends to sanction their businesses and banks under the recently passed Countering America’s Adversaries Through Sanctions Act (CAATSA) as India fears its defence dealings with Russia might. This would cause an enormous rupture in in the US and world economy as China is the United States’ single largest trading partner and Britain, France, and Germany are together the fourth largest ahead of Japan. Yet if Trump does use his presidential discretion to waive sanctions and exempt these four countries, it would be too blatant an act of political hypocrisy if the same treatment was not extended to others over Russia and North Korea as well as over Iran.

In February 2018, Patrick Pouyanné, the CEO of the French oil & gas giant Total, openly called for the implementation of the 1996 European Union Blocking Regulation, a law that prohibited European firms from cooperating with foreign demands that are in violation of international law or hurt European sovereign interests. Denis Chaibi, a senior diplomat in the European External Action Service, commented that the EU was looking at a variety of options and the blocking regulations would not be difficult to implement.

Ultimately, these are political instruments and businesses would be hurt either by European penalties for obeying US sanctions or the denial of access to American markets due to US sanctions. Obviously, firms would prefer having access to the far larger American markets than pin their hopes on soaring Euro-Iranian trade and the threat of blocking regulations is empty. States are supposed to exercise restrain and caution and a tit-for-tat exchange between the United States and its three primary European allies will hurt everyone. More to the point, the multinational supply chains of most large industrial houses today means that there would be few European firms that are not exposed to the United States and are free to do business with Iran.

Internationally, many countries would be pulled into the US wake for similar reasons; most countries are fairly integrated into the US economy and their national economies are not robust enough to withstand the loss of the American market. Additionally, others may have political reasons to reluctantly support Washington. India, for example, has been trying to purchase high-end American weapons systems and seeks Washington’s cooperation on several crucial issues such as defence technology and the geopolitics of the Indo-Pacific. It is most likely that India will have to bear the damage done to its own ambitions in Chabahar and the International North-South Trade Corridor (INSTC). Delhi will have even more to lose if Tehran responds to Delhi’s distancing by handing the responsibility for the Shahid Beheshti port over to Beijing.

If India can persuade the United States for a partial waiver on trade as it had done last time, its importance to Tehran would rise again only to the extent that other countries stop or reduce links with the Islamic republic.

Saudi Arabia, considered to be one of the beneficiaries of the American abnegation of the JCPOA, will enjoy in the short-term the spike in oil prices that is bound to follow Trump’s decision. However, this entire episode will have reiterated to Iran that the only way to be truly safe from American interference, as an Indian general is supposed to have observed after the First Gulf War in 1991, is to acquire nuclear weapons. Tehran seems to have been acutely aware of this note – Iran’s ambitions, as revealed by Benjamin Netanyahu’s recent document dump, were to posses just five nuclear warheads than an entire arsenal.

Riyadh has only managed to stoke Tehran’s determination and not douse it. The JCPOA was designed to give the international community breathing space to consider how best to dampen Iran’s love of the Bomb – it was never meant to provide a permanent solution as there are none. As non-proliferation experience has illustrated, the determined country will acquire nuclear weapons regardless of the financial and political costs to it and the willingness to pay such a high price will attract unscrupulous suppliers. The classic example of this is Pakistan, whose nuclear journey would have taken far longer had it not been for the generous acts of commission by China and of omission by the United States.

Perhaps the greatest beneficiary of the American walkout is Israel. On the one hand, the reintroduction and expansion of sanctions hurts the Iranian economy and removes funds that might have otherwise gone to fund the Hezbollah and its adventures in Syria but on the other, the European and Iranian decision to continue observing the JCPOA keeps the checks on the Iranian nuclear programme in place for at least the next decade. If the archives reveal 30 years down the line that this was a game of good-cop-bad-cop, this would be a strategic masterstroke by Benjamin Netanyahu.

The one certainty at this moment is that Iran is not as isolated as it was prior to 2015. Even if Europe falls in line with America’s wishes, Russia and China are both unlikely to go along with the West this time. Both countries have been antagonised by Trump’s sanctions and threats of a trade war to be receptive to cooperation. This opens the door for greater Russian and Chinese influence in the Middle East. Russia also gains by the rift that has been created between Europe and the United States over the Iranian nuclear programme.

In some ways, Trump has just given Iran’s hardline clerics a lease of life. There have been several signs that Iranians citizens are frustrated with their government and the poor economy. Some analysts were even hopeful of organic reforms that would gradually move the country from its extreme Islamic views. Trump’s abandonment of the JCPOA underscores everything hardliners warned against – that the United States is not a trustworthy partner and it ultimately seeks the total subjugation of Iran.

If Washington expects Tehran to come back to the negotiating table, it may have a long wait. Rather than re-engage with a party that has shown bad faith, Iranian president Hassan Rouhani may simply choose to wait out his American counterpart in the hopes that Trump’s successor would be more amenable to the Obamian status quo.

It is not clear what the Trump administration sought to achieve by leaving the JCPOA. If anything, it draws attention to the Iranian bogey in American minds and the ghosts of 1979 that such policies would have any support in the houses of legislature or with the citizens. Pace the political acrobatics that are about to ensue over the coming days, the ultimate prize is the withering of the Iranian nuclear weapons programme. It is not clear if anyone in the White House had kept that in mind while thinking about abruptly walking out of an international treaty.

This post appeared on FirstPost on May 10, 2018.

The Execution of a Sheikh

03 Sun Jan 2016

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Saudi Arabia’s execution of the firebrand Shia cleric Sheikh Nimr Bakr al-Nimr on January 2 does not augur well for hope that the kingdom’s relations with its neighbour across the Persian Gulf, Iran, will improve in the new year. Nimr, from al-Awamiyah in Saudi Arabia’s oil-rich and largest province, ash-Sharqiyah, was among 46 others executed by the kingdom but the one who has caught the most attention due to his perceived links with Shia Iran. The execution has met with muted response from the Western powers, all involved to varying degrees in the several conflicts presently plaguing the Middle East and North Africa. However, news of the sheikh’s death resulted in an assault on the Saudi embassy in Tehran and a diplomatic severing of ties between Saudi Arabia and Iran, sparking possibly the worst crisis between the two regional rivals since the Iran-Iraq War.

Despite apprehension that this spat between neighbours will escalate into something far uglier, there is little cause for concern. If anything, the execution may at most be used by either Riyadh or Tehran as a cover for actions against each other that would otherwise have seemed provocative in the unstable region. Although Nimr’s ties to Tehran are questionable, the sheikh clearly enjoyed sectarian sympathies among the Iranian people; this, in addition to his call to overthrow the Saudi state, support of Kurdish autonomy in northern Iraq, sharp criticism of the repressive minority Sunni monarchy in Bahrain, and belief that Saudi Shia had a right to secede condemned him in Riyadh’s eyes. Interestingly, Nimr had cautioned his followers in Saudi Arabia in 2008 that they should not expect any sectarian sympathy from Iran for Tehran will act only in its own selfish national interests. More recently, he differed with the ayatollahs on the repressive regime of Bashar al-Assad in Syria.

Despite the immediate sharp tit-for-tat, there is little more that can go wrong between Iran and Saudi Arabia. The two countries are already engaged in a proxy war in Syria and possibly Yemen and Bahrain as well. Historically, one would be hard-pressed to remember a time when relations between the two countries was normal, let alone friendly. Saudi Arabia is a new country but sectarian and racial perceptions between Arabs and Persians go back centuries. Yet pace this historical baggage, it is naive to think that either Riyadh or Tehran are motivated by these motives; a cursory look at the lifestyle of the clerics in Tehran or the royal family in Riyadh betray very un-Islamic personal proclivities. Both countries are ruled by shrewd nationalists who are not above manipulating public emotion via the opiate of the masses.

The question, of course, is what might have caused the House of Saud to firmly cross the line by executing Nimr? It is true that the sheikh had been sentenced to death in 2014 but usually these things resulted in exchanges, concessions, and pardons. Although Riyadh had this time insisted that it would indeed carry out the sentence, King Salman bin Abdulaziz al Saud’s predecessor had punted on the actual date. By carrying out the execution, the Saudis were certain to anger Iran and for rewards yet unclear.

The most plausible explanation for Riyadh’s actions is how the geopolitical winds have blown against it in the past year. In 2015, the West concluded a nuclear deal with Iran that did not eradicate its programme; the civil war in Syria seems to be closer to slipping out of Riyadh’s influence; the invasion of Yemen has not gone as smoothly as planned; the threat of Islamism endangers the House of Saud; and internal stability is fraying faster than Riyadh can throw riyals at public works projects. These setbacks have shaken the kingdom’s role at the helm of affairs in the region – despite a cooperative United Arab Emirates and a docile Qatar at the moment, Saudi Arabia’s leadership of the Sunni Arab community appears bleaker than ever before. The first event threatens an ascendant Shia power and a struggle for regional dominance; the second showcases the increasing reach of a regional rival; the third highlights Riyadh’s military weakness against a far less capable foe; and the fourth and fifth may undermine the ruling dynasty itself.

The execution of Nimr works at many different levels to address these threats: first, it is a symbolic snub to Iran. If it upsets Tehran enough to precipitate a rash action, Riyadh will gladly milk it as another reason the international community cannot trust Iran with a nuclear programme. Second, the execution of Nimr along with mostly convicted al-Qa’ida terrorists portrays the Shia unrest within the kingdom as equivalent to international terror. Third, the execution of a Shia cleric gives some pause to the regime’s Sunni and Islamist critics that the House of Saud is not working in sufficient earnest towards bolstering a (radical) Sunni interpretation of Islam.

What can Iran do in retaliation? Little that it is not doing already. By supporting Assad in Syria and perhaps the Houthis in Yemen – though there have been doubts – Iran is already doing far more to weaken its regional rival than any direct action ever could. Tehran could increase its assistance to its proxies in these two conflicts or perhaps encourage a third front in Bahrain where Shias already have a demographic advantage. Whatever the clerics decide, there is little that can pin any change to the execution of Nimr. The chances of a spillover into the neighbourhood are also minuscule because Saudi Arabia does not have the support it would require from its fellow Gulf Cooperation Council states; Pakistan would avoid getting involved because any deterioration of its relations with Tehran will only be to India’s benefit.

If, for some unforeseeable reason, Riyadh and Tehran decide to talk peace, Nimr’s death will hardly hold them back. Nonetheless, the execution serves as a reminder to all those who thought the nuclear deal with Tehran would transform the Middle East that a lot more work is yet to be done. Perhaps, it even suggests that the problem lay not with Tehran but elsewhere all these years anyway.

What Scope For India-Iran Ties?

15 Wed Jul 2015

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With a nuclear deal between Iran and the N5+1 (Britain, France, Russia, the United States, China, and Germany) finally concluded, Narendra Modi’s meeting with Hassan Rouhani on the eve of the BRICS and SCO summits a few days ago gains more significance than it might have earlier. Leaders, geopolitical analysts, and businessmen are all keen to see what hints may be gleaned from the early interactions between Rouhani and Modi about how relations between two aspiring regional powers will develop. The fact is, however, that there are some very difficult days ahead for both countries and it will require burning a fair amount of the proverbial midnight oil.

Despite the jet-setting Modi has been accused of, the Indian prime minister is yet to visit Iran. An invitation was extended to him in January at the Vibrant Gujarat Summit and has been accepted though the dates have not yet been decided. However, other Indian leaders and officials have made their way to Tehran in recent months. Most notably, the Minister for Roads and Transport, Nitin Gadkari, visited the Middle Eastern country in May of this year and came back promising that upgrades to the Iranian port of Chabahar will be completed by December 2016 – India had won the contract in 2003. Additionally, Foreign Secretary S. Jaishankar visited Tehran in June and External Affairs Minister Sushma Swaraj was scheduled to make a trip towards the end of July for a meeting of the Non-Aligned Movement that has now been postponed by Venezuela until the first quarter of 2016. If Modi is to visit Iran this year, it will have to be between now and November when he is scheduled to visit Turkey for the G-20 meeting, Malaysia for the East Asia and ASEAN-India summits, and Israel and Singapore on state visits. Russia has been penciled in for December.

While the world expects a commercial bonanza from Iran in terms of lucrative contracts to modernise and develop the country’s industrial infrastructure and lower oil prices, India will most likely miss out on most of the party. However, its interest in Iran, now free from US pressure, is far deeper and lies in strategic initiatives more than commerce. In the post-sanctions era, Delhi hopes to see Tehran revive three or four projects of crucial bilateral importance that have languished in the doldrums for over a decade.

Security

Whenever Modi and Rouhani do meet, security will be high on their agenda. Ironically, India has had better relations with the Islamic Republic than with the Shah despite initial concern over the outcome of the 1979 Iranian Revolution. Tehran has been critical of Islamabad’s attempts to use fora like the Organisation of Islamic States to pass resolutions condemning India and in the 1990s, the two countries cooperated with the Northern alliance to fight the Taliban in Afghanistan. The latest situation in Afghanistan, however, does not bode well for either.

The fledgling appearance of ISIS in Afghanistan is of great concern to its neighbours. In the 1990s, Iran and India supported the Northern Alliance against the Pakistani-backed Taliban. However, Tehran sees the emergent ISIS as a far greater threat and may now be lukewarm to India’s concerns about their former enemy; India’s policy on the Middle Eastern terrorist syndicate is as yet unclear. In February 2015, ISIS killed a Taliban leader in Logar province and in April, claimed credit for a suicide bombing in Jalalabad that killed 35. US drone strikes have killed a few ISIS commanders in the country but the number of dissatisfied Taliban fighters heading over to the newcomers is steadily increasing though still small. The ultimate nightmare scenario for both India and Iran would be if ISIS spilled over into Pakistan’s toxic soup of terrorist safe havens. Both Tehran and Delhi need to develop a strategy that does not strengthen their old enemy, the Taliban, but also keeps ISIS out of the region. If US reports are to be believed, Iran has already made a few small shipments of arms and other supplies to the Taliban.

According to some analysts, ISIS has made an appearance in Afghanistan to stake a claim to a portion of the profits of the narcotics trade. US airstrikes against oil facilities in Iraq and Syria and the loss of important towns along the Turkish border have diminished their finances and ISIS hopes to find new economic pastures in Wilayat Khorasan – what they call their imaginary province in the Afghanistan-Pakistan area. If so, it could prove the task of eliminating them much harder as poppy traders have always been.

Economics

On a less dire front, much has been made of the potential for trade between India and Iran. Before US sanctions and pressure brought trade between the two countries to a trickle, it stood at approximately $15 billion per annum. There is no doubt that hydrocarbons will boost commerce between India and Iran quickly back to this level – India is already back to importing 370,000 barrels of Iranian crude per day – but questions remain on the emergence of a broader trading portfolio. Iran’s most immediate needs are in the upgradation of its hydrocarbon infrastructure, its factories, and other high-tech goods that are available in Western rather than Indian markets.

Iran will also want to improve its transport, education, health, and cyber infrastructure but with the prospect of the sanctions lifting, Iranian negotiators have become tougher negotiators and told several Indian delegations that they could acquire their needs from other sources at lower cost. One deal to be hit by Tehran’s increasing confidence was a $233 million State Trading Corporation venture to supply Iran’s railways with tracks; India was able to hold on to the deal but after lowering its price by seven per cent and officials are still worried that further cuts may be demanded or the order split. Iran has also withdrawn its offer to India to develop the Farzad B gas field since it was made in 2013 and free shipping as well as discounts on oil purchases have been canceled. Part of the reason is that India is seen as low on delivery; in 2007, ONGC Videsh was bumped from Yadavaran oil and gas field in favour of China’s Sinopec despite a memorandum of understanding.

Tehran has also reduced its purchase of Indian rice after its frozen assets were released from Indian banks. Exports from India may still include iron, edible oils, meat, diesel, tractors, turbines, grains, computers, machinery, and medicines, but they will face stiffer competition from the international market than before.

Regional Infrastructure

While the stars do not seem too favourable towards booming India-Iran trade, the Islamic republic still sees India as a valuable partner. In a recent interview, Iran’s ambassador to India, Gholamreza Ansari, expressed his country’s interest in developing the International North-South Trade Corridor through his country. Indian goods would reach European, Central Asian, and Russian markets sooner and at lesser cost if this corridor were completed. As a country along the route, Iran would also piggyback its imports and exports on the same network; Chabahar will already have been upgraded from 2.5 million tonnes to handle 12.5 million tonnes per annum. Coincidentally, Modi mentioned a similar proposal that linked Bombay to St. Petersburg in his discussions in Uzbekistan and Kazakhstan a couple of days ago. Such a project would be of immense economic as well as strategic value to India. it would bypass Pakistan and offer an alternative to China’s One Belt, One Road project; extending the INSTC from Bombay eastwards to Haiphong would alter trading patterns in the region.

Iran is still keen on building an undersea gas pipeline to India, another project hanging on from the previous decade. With improvements in technology and less US pressure, this might be a project India takes up with alacrity. This pipeline would diversify India’s hydrocarbon imports and certainly be more secure than the other project India has signed on to, the Turkmenistan-Afghanistan-Pakistan-India gas pipeline.

India also has the opportunity to develop a stronger naval presence in the Sea of Oman and the Arabian Sea. Iran is just as concerned as India about the safety of sea lanes in the area, its two major ports of Bandar Abbas and Chabahar both lying in those waters or adjacent to them. An expansion of the Indian Navy’s role westwards would improve Delhi’s grasp over the Indian Ocean Region as well as dilute the effect of Chinese presence in Gwadar.

Foreign Policy

Will India’s ties with Iran not interfere in Delhi’s relations with many of Tehran’s foes such as Israel, the United States, and Saudi Arabia? Absolutely not. India’s links to Iran are almost entirely commercial and overlap with US and Israeli interests where they are not – Afghanistan. Despite some literary affinity in the north, India does not share, to employ an overused expression in international affairs, a “strategic/special relationship” with Iran. In all likelihood, American companies will have a greater presence in Tehran after the sanctions are lifted than will Indian companies.

For similar reasons, there is little reason for Saudi Arabia to be alarmed by India’s ties to Iran – they are largely economic. South Bloack’s long-held belief that friendly relations with Riyadh would temper Rawalpindi’s misbehaviour has been proven wrong over the decades and has therefore diminished the Arab capital’s importance to Delhi. Nonetheless, Saudi Arabia still hosts almost two million Indian workers who make considerable remittances back to India. Yet greater economic interaction with Tehran hardly constitutes antagonism towards Riyadh and is no more than what the Gulf country has extended towards Pakistan.

Despite outward appearances, Israel has a somewhat intimate relationship with India that will take a lot to disrupt. India is a large country and has many needs both in volume and diversity; Israel is a useful partner in several arenas of its security framework and economy that India will not jeopardise. Renewed links to Iran do not change the fundamentals of India’s world view and should in no way concern Israel. Delhi’s influence in Tehran and jerusalem may be limited yet but a voice without geopolitical baggage in both capitals cannot hurt either side. Modi’s upcoming visit to Israel has caused some flutter as has India’s recent vote in the United Nations, abstaining from censuring Israel. This scaling down on rhetoric reflects a marginal course correction in Indian policy towards the region but ultimately, India has no skin in the game and is hardly a major player in the region to change the course of nations.

There is a lot on Modi’s plate whenever he visits Tehran. Though the scope for any rapid expansion in direct trade remains uncertain, the potential to transform trade routes in the region and with them local economies lies latent as does the hope that some stability if not peace will be brought to India’s mountainous northern borderlands. This is certainly too ambitious an agenda for one trip but perhaps the first steps may be taken.

This post appeared on FirstPost on July 16, 2015.