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Further signs of an Iranian regional rapprochement 1, February 2008

Posted by thegulfblog.com in Foreign Policies, Iran, Middle East.
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It was suggested in an article earlier this week (‘Iran Threatens Reprisals’ 30th January) that Iran appeared to be softening its stance towards its regional neighbours. In that particular case it was Iran apparently relinquishing its previously asserted aim that countries which harboured US bases would themselves be attacked if the US launched an attack against Iran from those bases. Thus, Kuwait, Qatar, and Bahrain – all with large US bases – would have been pleased to hear such an apparent change in policy, even if Iran retaliating against their countries was an unlikely prospect.

Additionally, in the past few months, there have been various signs of Iran edging towards a formal rapprochement with Egypt, which lends more and more credibility to the thesis suggesting that Iran are seeking to lower intra-regional tensions.

Iran broke off relations with Egypt after their involvement in the Camp David peace accords in 1978, during which Egypt negotiated with Israel. Iran saw this as a sign of betrayal and the two countries’ relations were further damaged for the coming decades when Anwar Sadat granted the deposed Shah of Iran refuge following the 1979 Islamic Revolution.

In the last few months, however, there have been a number of ministerial meetings signalling a thaw in relations. In December 2007, Ali Larjani the Iranian National Security Chief met with President Mubarak for discussions. This past week the speaker of the Iranian Parliament Gholam Ali Adel visited Cairo for a two day meeting orchestrated by the Organisation of Islamic Countries (OIC). This visit followed quickly on the heels of Iran’s Director General for foreign policy for the Middle Eastern and North African affairs, who was in Cairo on Sunday to discuss the Palestinian refugee situation with Egypt’s foreign minister. Indeed, the very next day the Iranian foreign minister announced that Iran and Egypt are close to re-establishing diplomatic links.

Iran, therefore, are mending their fences in the region, not only with Egypt but with other countries such as Saudi Arabia. Indeed, Ahmadinejad’s visit to Mecca and invitation to the GCC meeting in Doha are proof, if it were needed, that Iran’s policy shift is bearing fruit. Furthermore, Iran are seeking to make friends and influence people further a field in China and Central Asia. Hence their (as yet unsuccessful) lobbying to be included in the Shanghai Cooperation Organisation (SCO).

The ultimate goal of these foreign policy forays is to offset American and European attempts to isolate Iran and they seem to be doing a good job at it so far. This means that any American and European attempts to pressure Iran need to take into account these constantly evolving international relationships. Any kind of blanket or insufficiently nuanced strategy could well backfire in the long run. Indeed, according to Harvard political scientist Samantha Power, current US policies do not appear to have such as level of flexibility and understanding. One can only hope that, assuming the Bush administration is not going to revamp its policies in its twilight months, the new American administration, which ever it may be, can bring with them fresh but educated ideas of how to interact with Iran.

China and the Middle East – made for each other 27, January 2008

Posted by thegulfblog.com in China, China and the ME, Oil, Saudi Arabia, Western-Muslim Relations.
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Everyone wants a piece of the Middle East at the moment. Israel, unfortunately, takes this quite literally and seems intent on forever expanding its borders with uncomfortable overtones of lebensraum. American companies have, for the most part, been falling over themselves to find GCC cash to bail themselves out of their various woes. The list of those seeking investment is a veritable who’s-who’s of the American blue chip elite: Citigroup, General Electric, Dow Chemicals, and Merrill Lynch to name a few. The French seem to have placed, in a rather un-Gallic, highly capitalistic way, a price tag on their cultural heritage. For about $1 billion, you can now purchase priceless French art, plucked from the bosom of the most famous museum in the world, the Louvre. Furthermore, the French have also taken the name of their most prestigious university in vain by building ‘the Sorbonne Abu Dhabi’ with infinitely easier entry requirements. However, not only have the French been handsomely rewarded for the loan of their culture, but they now have a military base overlooking the straits of Hormuz, so maybe they knew what they were doing all along. Britain were predictably slow on the uptake and are now desperately searching for Middle Eastern cash to bail out the collapsing Northern Rock bank and moving further east, Dubai holdings have invested heavily in the Indian bank ICICI, as well as taking an estimated billion dollar stake in Sony of Japan.

Among those doing their utmost to make friends and influence states in the region are the Chinese. However, they are doing this in a less brash manner. Indeed, to some degree, they have been doing the opposite way by investing in the Middle East. For example, two Chinese state-owned companies are investing some $4 billion in Saudi aluminium production. This is but one half of an example of reciprocal investment between various Middle Eastern countries and China, and, more to the point, you’re going to be seeing a lot more of it.

China are the most natural trading partner for countries in this region. This may seem like something of a bizarre statement, but it stands up to scrutiny. As any good (or even only mediocre) economics student will tell you, two crucial factors when discussing trade are supply and demand.

In terms of supply, the Middle East has oil and money. According to the US Energy Information Administration, as of 1st January last year, the Middle East as a whole had 739 billion barrels of proven oil reserves, more than the rest of the world combined which amounts to 578 billion proven barrels. As for money, thanks to the bumper oil prices of recent years, the region is awash with cash. In total, Morgan Stanley estimate that in 2007 alone, Persian Gulf countries invested around $75 billion overseas. This, therefore, excludes the $500 billion that is being investing domestically in creating new super-cities, trying to look ahead to the paradigm changing day when oil runs out. The crucial point here is that this inflated oil price appears to be with us for the medium term, and, therefore, so do these record profits for Middle Eastern government and thus their ability to generously invest abroad.

As for demand, the same economics student would no doubt tell you that demand is infinite. This is meant in a theoretical way, but when discussing China, the theory becomes a lot more practical. China has a population of 1.3 billion people. By the year 2050, however, the UN population division estimates that (depending on which report you read) the population will rise to between 1.5 – 2 billion people. So not only do these people need their energy needs taken care of, but thanks to China’s phenomenal growth, many people have ever growing energy needs. With greater affluence comes greater demand for bigger and better houses and apartments and, of course, bigger and better cars, to name but two energy consuming factors. In 2007 alone, the Chinese car market grew 20% and overtook Japan as the world’s second largest automobile market, and with tens of millions of people waiting to dump their bicycles, this market is only going to grow faster in the coming years. The staggering conclusion of these factors is that, according to Commentary magazine, China’s demand for imported oil will grow by 960% over the next two decades.

Issues of demand and supply, therefore, are clearly suitably poised for a long and prosperous relationship. Yet there are many more factors to consider. After all, the rest of the world demands oil and will continue to do so for a long time yet. So what makes China so special?

For one thing, China do not have any historical or colonial baggage in the region. This could be construed as a good or a bad thing. For example, France’s long standing relationships with the Emirates clearly made it possible for Abu Dhabi to cede some land for a French military base, and America’s long history in Saudi Arabia made it possible for similar arrangements there in the past. I would suggest that the latter example is more instructive, especially considering the eventual outcome of the US bases in the land of the two holy places. China, however, has a clean slate; indeed, it was as late as 1990 when they officially recognised all GCC countries. There are no old policies to appease, apologise for or defend.

Another aspect that appeals to many governments worldwide is that China are very good partners to have in terms of demands exogenous to the deal itself: there aren’t any. For example, China will never lecture, pressure, castigate or otherwise try to impose their ideals on another state. This is a fundamental pillar of Chinese policy: the absolute and utter respect of sovereignty from criticism or interference. Thus, if a state is not appreciative of America’s lectures regarding full democracy or the rule of law (especially regarding the egregious hypocrisy of Guantanamo Bay) then they will certainly know that they would receive no such criticism from China.

Along the same lines, China make it easier for Middle Eastern companies to invest there. Whilst, as it was shown above, many countries have invested heavily in the West, there is still an element of quasi-racism. This was clearly shown in the Dubai Ports World controversy, where a furore erupted when it was revealed that a Middle Eastern company would be involved with security arrangements at American ports. This would, according to some woefully misguided segments of the American media, lead to security concerns. It is difficult to imagine such security concerns from the Chinese.

Lastly, with significant anti-Americanism in the Middle East, and significant anti-Arab sentiment in America and the West generally, China could offer themselves as a neutral alternative to the Middle East-American/Western axis. It is no great secret that parts of the Middle East have security concerns, which are answered in one way or another by the West generally or America specifically. For example, answered in terms of arms sales ($20 billion only last week) as well as physical protection, as in the Gulf War. However, it must not be forgotten that China has been supplying various countries in the region for a long time now. More to the point, China are more willing to sell certain weapons that the West are – generally – not willing to, such as ballistic missiles and related technology, which were sold to both sides during the Iran-Iraq war, to take but one example. Furthermore, with the amount of industrial espionage that Beijing currently engages in, certain aspects of their armaments technology may not be that far behind the US itself.

However, there are a few caveats. Firstly, America is currently the only power capable of offering a meaningful security blanket, such as the one that freed Kuwait and protected Saudi Arabia. Theoretically, were the Chinese to sell an Atomic bomb ‘off the shelf’ to Saudi, that might negate that particular US role, but such a reckless policy is highly unlikely for the cautious and long-term thinking Chinese. Secondly, the prevalence of American goods, ideas, motifs, restaurants, books, films, TV channels, and music throughout the Middle East, compared to the utter lack of Chinese equivalents, shows that America, or at least, its manifestations are not going anywhere. It does not seem at all likely that McDonald’s will turn into Jowza (dumpling) restaurants any time soon. American culture, therefore, may well be here for the next 100 years, even if the manifestations of American power and trade are not.

One report but with differing reports of it 22, January 2008

Posted by thegulfblog.com in Western-Muslim Relations.
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The World Economic Forum have just released a major new report on the state of Western-Islamic relations. It was complied by a veritable cornucopia of experts in the field and runs to some 156 well-spaced pages of sensible, articulate, and accurate observations and conclusions on the current state of affairs.

Th BBC covered the release of the report with the headline “Islam-West rift widens, poll says”. Contrast this with the headline ran by the Arab News: “Muslim-West conflict can be avoided: Report”. Both headlines are correct: that is to say that what they suggest is indeed to be found in the report and neither article, in the end, comes across as biased one way or the other. However, the crucial thing is the overall impression that each news agency wants to impress upon its readers: one of pessimism; one of hope.

Why the difference? Neither the BBC nor the Arab News are known for being overly hawkish or dovish. The answer may lie within the report itself. One part of the report deals with what people in the West and the Muslim world think about each other. On the specific question of how they view closer ties and interactions between the two worlds, it is Europeans who are most uneasy with this notion. Contrarily, it is the US, Israel and the Islamic countries polled whom believe that closer ties would more beneficial to both sides.

It seems, therefore, that the BBC and the Arab News are simply conforming to their culture-wide stereotypical beliefs as described by the report. It will be interesting to see more reaction in the coming days from the media to see if they carry on the trend, in many ways, vindicating and confirming the report’s conclusions.

http://news.bbc.co.uk/2/hi/europe/7200514.stm

http://www.arabnews.com/?page=4&section=0&article=105951&d=22&m=1&y=2008