Iran's business

        Tuesday, July 14, 2015 is a date with double significance. Not only is it the day on which world powers, led by the United States, signed the deal with Iran that nominally limits its nuclear programme, but it also marks the re-emergence of Iran into world markets after decades of crippling sanctions. In truth the consequential commercial and economic benefits of the deal will be as vital to Iran’s ambitions as the nuclear.

        As for Iran’s ambitions, its leaders have never concealed them. The Islamic Republic of Iran seeks to become the dominant political and religious power in the Middle East. As the prime exponent of the Shi’ite tradition of Islam, Iran views as its main rival the leading Sunni state, Saudi Arabia. Iran seeks to impose its own version of Islam on the world, just like its Sunni mirror image, Islamic State (IS). And just like IS, it regards Western democracy with contempt. It dubs its leading exponent, the United States, the “Great Satan”. and has for decades initiated and supported terrorist attacks on US targets, many of them deadly. Iran abhors Israel in particular, and it makes no secret of its intention eventually to eliminate the State of Israel from the map of the Middle East.

        It is to this rogue state that the much-vaunted nuclear deal has handed the keys to an eventual nuclear arsenal, and the means to enjoy a mushrooming economy and commercial growth on a previously unimaginable scale. Starved of economic development, and with a population of some 80 million, Iran is replete with juicy commercial plums simply waiting to be plucked.

        “The early bird catches the worm.” The ink was barely dry on the nuclear agreement, before a German government plane filled with some of the nation’s top economic and commercial interests touched down in Tehran.

        The German delegation was led by vice-chancellor, Sigmar Gabriel, who declared that the nuclear deal “has laid the foundations for a normalisation of economic relations with Iran.” He led a team which included the chief executive of Siemens, the German industrial conglomerate, and leading figures from Daimler, Volkswagon and ThyssenKrupp.

        “A lot of companies at the moment are preparing agreements to be signed the moment sanctions are lifted,” said Michael Tockuss, head of the German-Iranian Chamber of Commerce. He said that his association was organising a trip every week for companies interested in doing deals in Iran.

        Germany is far from alone. Newspaper reports speak of European ministers and business people flocking to the country: “Upscale Tehran hotels are packed and tables at trendy restaurants are scarce, as foreigners jostle for bargains.” There are reports of businessmen across Europe packing conference halls to discover how to unlock Iran’s vast potential after three decades of isolation. On August 27 four hundred of them piled into a hotel in Zurich for a day of briefings. Austria’s president is planning to take 240 businessmen with him when he visits later in September.

        Meanwhile, major deals are in the making, while some have already been signed. Italian bank Mediobanca signed a memorandum of understanding in Tehran earlier this month to finance deals between Italian and Iranian businesses. The loans would be guaranteed by Italy’s state-run export credit company.

        On September 15 the Iranian firm Aria Ziggurat Tourism Development Company signed an agreement with the major French hotel chain, AccorHotels. Under the contract, the Iranian company will use the Novotel and Ibis brands, both owned by AccorHotels, for 15 years. Iran hopes to increase tourist arrivals from the current 4.5 million to 20 million over the next 10 years, the head of Iran's Cultural Heritage and Tourism Organization, Masoud Soltanifar, said during the signing ceremony.

         But there are even bigger fish to fry on Iran’s giant cooker. Towards the end of August Iran’s Tasnim News reported that two Russian companies had signed a deal with an Iranian firm to develop a remote-sensing satellite observation system based on the Russian Kanopus-V1. Satellite observation systems can be used to gather information about the Earth's atmosphere, surface, and oceans. What else they can be used for was not specified in the Iranian news report, leaving the imagination to run riot.

        Under the terms of the deal, NPK BARL of Russia will build the ground infrastructure, while another Russian firm VNIIEM will be responsible for building and launching the satellites. Bonyan Danesh Shargh of Iran will operate the observation system. The launch is scheduled for 2018 aboard a Soyuz carrier rocket.

        Scientific cooperation between Tehran and Moscow is nothing new – it is well known that Russia had helped Iran build its Bushehr nuclear power plant. Now reports indicate that Russia has agreed to cooperate with Iran in the fields of aviation and shipbuilding, and plans to supply Iran with commercial airplanes in the future. In addition a deal is close to being finalized for the sale by Russia of S-300 anti-aircraft missile systems to Tehran. Soon after the nuclear deal was signed, Moscow lifted the ban on the potential sale of the advanced surface-to-air missile systems, and Iran increased the order from three to four systems.

        As a matter of interest, the nuclear agreement explicitly prioritizes "the sale of commercial passenger aircraft and related parts and services to Iran." In consequence Iran has started negotiations aimed at upgrading its commercial air transport system. Transport Minister Abbas Akhoundi estimates that 400 new planes could be needed. Negotiations with Airbus and Boeing are under way to rebuild the fleet and finalize leasing arrangements for short-term cover. In addition to fleet upgrades, Iran's infrastructure will see massive investment in areas like radar, air traffic management, the 300 domestic airports and passenger experience. All are key opportunity areas for international firms. Already organized for March 2016 is the first Aviation Iran trade show, to be hosted in Dubai.

        Underneath all this frenetic commercial activity lies something not quite so appetising. A major beneficiary will be Iran's highest authority, Supreme Leader Ayatollah Ali Khamenei, thanks to his close control of one of the most powerful and secretive organizations in Iran -- "Setad Ejraiye Farmane Hazrate Emam," or Setad, a multi-billion dollar operation at the heart of Iran’s economy.

        The nuclear deal lifts US secondary sanctions on Setad and about 40 firms it owns or has a stake in. With a finger in nearly every sector of Iran's economic pie, Setad built its empire by confiscating thousands of properties belonging to religious minorities, business people, and Iranians living abroad. According to a 2013 Reuters investigation, which estimated the network's holdings at about $95 billion, Khamenei exerts exclusive control over Setad's economic empire.

        Do the government officials and businessmen, falling over each other to grab the business opportunities now opened up, know or care what nefarious activities their commercial deals will be facilitating? Probably not. “Business is business” they are likely to declare. “Let the politics take care of themselves.” 

        A dangerous philosophy.

Published in the Jerusalem Post on-line, 24 September 2015:
http://www.jpost.com/Blogs/A-Mid-East-Journal/Irans-business-417989

The Kurds, Turkey, oil and Israel

        One picture dominated the world’s TV and press on September 4 – a Turkish coastguard bearing the lifeless body of a little boy, drowned with his mother and elder brother in a doomed attempt to reach the Greek island of Kos. The dead child epitomized the humanitarian catastrophe that is overwhelming the world in general and Europe in particular. Like literally millions before them, the family were fleeing from a war-ravaged region of the Middle East.

        Virtually every report about the incident described the youngster and his family as Syrians. Few mentioned the fact that Aylan, his 5-year-old brother Galip, and their mother Rehan were Kurds (indeed their family name is Kurdi). The home they were abandoning was situated in Kobane, the town captured by Islamic State (IS) in October 2014, fought over for months, and finally recaptured in January by the gallant Kurdish Peshmerga fighting force. Their personal tragedy brings the Kurds and their problems into the forefront of the unfolding disaster.

        The Kurds are not Arabs but an ethnic group who historically inhabited a distinct geographical area referred to as Kurdistan. No such location is depicted on current maps, for after the first world war the old Kurdistan, together with its 30-plus million inhabitants, was divided between four states – Turkey, Iraq, Iran and Syria. Modern Kurdish history is replete with uprisings against one or other of them in a continuous battle for independence. The near-century of struggle has not been in vain. The Kurds have slowly but surely been gaining political clout.

        With Kurds forming some 20 percent of its population, Turkey has always been intolerant of the Kurdish independence movement, regarding it as a threat to national unity. In 2014, prior to national elections, then-prime minister – soon to be president – Recep Tayyip Erdogan, seeking the Kurdish vote, promised some relaxation of the restrictions placed on them. The result was a dramatic reversal in Kurdish political fortunes. In the June 2015 elections, much to Erdogan’s chagrin, his Justice and Progress Party (AKP) lost its overall majority, and the pro-Kurdish Peoples' Democratic Party (HDP) won 13 percent of the vote and gained parliamentary representation for the first time.

        For one reason or another, the Turkish electoral system failed to deliver an effective government out of this result, and Erdogan doubtless hopes that new elections, to be held in November, will enable his AKP to regain a majority, thus ensuring the sweeping constitutional changes he is seeking in order to transform the Turkish presidency into an autocracy.

        Erdogan’s policy towards the Kurds is contradictory. Domestically, he is opposed root and branch to any hint of separatism, autonomy, or independence, and in this he has the support of the majority of Turkey’s establishment. Kurdish demands run counter to the national unification achieved by Kemal Ataturk’s revolution in the 1920s. Repeated offensives by successive Turkish governments, aimed at crushing the militant Kurdistan Workers’ Party (PKK). have however left the so-called “Kurdish problem” unresolved.

        The PKK are strong in the Kurdish area just across Turkey’s border with Syria. If anything like Iraq’s autonomous Kurdistan were to be established in Syria, it would feed demands by Turkey’s Kurds to be linked to it in some way. “We will never allow a state to be formed in northern Syria, south of our border,” declared Erdogan in Istanbul on June 26. “We will maintain our struggle whatever the cost. They are trying to…change the demographics of the region. We will not condone it."

        This explains why Erdogan, on joining the US-led anti-IS coalition in Syria in July, began air-strikes against IS and the Kurds indiscriminately, tarring both with the terrorist brush. But wherever they are sited the PKK remain prime targets for Turkey. On September 6 Turkish warplanes bombed PKK targets in Iraq, in retaliation for an assault on the army in which dozens of Turkish troops were killed.

        The PKK is one thing, oil revenues are another. Take Erdogan’s policy in respect of the Kurdish autonomous administration in Iraq – to say nothing of his duplicitous stance towards Israel. The authoritative Financial Times reported on August 23 that roughly 77 percent of Israel’s oil is currently being imported from Kurdistan via the Turkish Mediterranean port of Ceyhan. In short, while Turkey maintains its strong anti-Israel stance for public consumption, it is daily providing Israel with thousands of barrels of oil, and reaping the consequential rewards. “Diplomatic hypocrisy at its finest,” was the verdict of the Saudi Arabian newspaper Al-Arabiya on August 30.

        This oil traffic reflects a weakening of the Iraqi government’s authority over its Kurdish component, which it certainly suspects of eventually planning to bid for complete independence. Meanwhile the oil sales to Israel have provided a revenue lifeline for the Kurdistan authorities, strapped as they are for the cash required to fund the Peshmerga military operations against IS. The emergence of Israel as one of the biggest buyers of Kurdish oil, comments the Financial Times, illustrates the widening gap between Kurdistan and the Iraqi government on fundamental policy. Baghdad, like many Middle Eastern capitals, refuses to recognise Israel and has no official ties with the country. On the other hand, relations between the Kurds and Israel, both small non-Arab entities battling against discrimination, have historically been close.

        A recent visit to Iraqi Kurdistan left two Israeli journalists with no doubt of the genuine empathy felt by many Kurds towards Israel: “Old Peshmerga fighters cradling AK-47s reminisced about the 1960s, when Israel helped them in the war against Saddam Hussein.” Bookshops in the capital, Erbil, sold history books about the Jews of Kurdistan with a Star of David on them – an impossibility in much of the Middle East.

        What they found accords with statements by Kurdish leaders reported in June 2014. In a letter to Israel’s then President-elect Reuven Rivlin, the leader of the Kurdish Left, Mahsum Simo said plainly: “Israel isn’t our enemy.” Amir Abdi, the head of foreign relations for the Kurdish Party, when asked what kind of relationship his party envisages with Israel, responded: “We share a strong relationship with the friendly State of Israel.” 

        It seems clear that if Iraqi Kurdistan eventually emerges as a sovereign state, Israel will be among the first to recognize it. And if any sort of united or autonomous Kurdistan straddling Syria, Iraq and Iran emanates from the current turmoil, Israel might find itself with a valuable friend and ally within the very heartland of the Middle East.

Published in the Jerusalem Post, 6 October 2015:
http://www.jpost.com/Opinion/The-Kurds-Turkey-oil-and-Israel-420012

Published in the Eurasia Review, 17 September 2015:
http://www.eurasiareview.com/18092015-the-kurds-turkey-oil-and-israel-oped/

Libya's struggle for stability

        Libya today is not only a country torn apart politically, but a battlefield where armed militias attack each other with scant regard for any civilians who happen to get in their way, and a happy hunting ground for criminal gangs and people traffickers. The West in general, and Britain perhaps in particular, bears some responsibility for the chaos into which Libya has descended.

        The UK became intimately involved in Libyan affairs about half-way through Colonel Muammar Gaddafi’s 42-year-long rule. The mid-air explosion of a PanAm plane above the Scottish town of Lockerbie in 1988, soon ascribed by the US to Libya, caused relations between Britain and the Gaddafi regime – already icy because of the murder of a British policewoman outside the Libyan embassy ­in London in 1984 – to freeze solid.

        The thaw, when it came, was swift and dramatic. Apparently inexplicably, in 2003 the Gaddafi regime, which had stonewalled on the Lockerbie issue for fifteen years, suddenly acknowledged responsibility for the disaster, paid handsome compensation to the families of those killed, and handed over two Libyan suspects, one of whom, Abdelbaset Ali al-Megrahi, was convicted for the attack. Gilding the lily, as it were, Gaddafi then announced that Libya intended to abandon its manufacture of weapons of mass destruction, and invited international inspection to verify the elimination of all its stocks.

        It seems increasingly clear that a covert relationship between Gaddafi and Tony Blair, Britain’s then prime minister, was behind this remarkable reversal of policy – a relationship now being subject to intense, and often hostile, scrutiny in the UK media and government circles. 

        As part of a secret deal, revealed some years after the event, Blair apparently travelled to Tripoli, met with Gaddafi and finalised an alleged “deal in the desert”, in which Gaddafi agreed to eschew global terror in return for international companies helping him extract Libya's massive oil reserves. 

        And now a forthcoming biography of Britain’s prime minister, David Cameron, goes further and alleges that Blair tried to save Gaddafi’s neck during the 2011 international military campaign aimed at ousting the Libyan dictator. It claims that Blair telephoned Downing Street saying he had been contacted by “a key individual close to Gaddafi” who wanted to “cut a deal”.

        Cameron was having none of it however, and immediately after Gaddafi’s downfall began patting himself on the back for having achieved régime change without putting a single British boot on the ground, or incurring a single British casualty. It is now painfully clear that this “hands-off” policy has backfired badly, for the result of leaving Libya to sort out its own problems is today’s war-ravaged land, where criminals and gun-toting Islamists are running riot.

        Cameron has belatedly acknowledged that Britain has a “moral obligation” to Libya, and should try to restore some semblance of order. Which explains recent newspaper reports that British troops may be sent to Libya as part of a European stabilisation force – a complete volte-face on the UK’s “no boots” position.

        It is undeniable that Libya has turned into a main transit route for migrants fleeing conflict and poverty to make it to Europe. The number of migrants crossing the Mediterranean has passed 300,000 this year, up from 219,000 in the whole of 2014. That the criminals master-minding this traffic have little regard for the safety of the migrants is demonstrated repeatedly. Since the start of the year some 2,300 people have died trying to reach European shores many, perhaps most, via Libya. One recent tragedy saw a boat packed with some 400 people capsize and sink off the Libyan coast, killing up to 200. That same day the Italian coastguard rescued around 1,400 people off the coast of Libya, while the day before it had pulled 3,000 to safety.

        Libya is certainly in need of outside help. Politically it has been carved into two major warring segments. Following its first free national election in six decades, the interim government established by the General National Congress (GNC) failed to gell. Islamist militant groups refused to accept its authority, and in September 2014 General Khalifa Haftar, a former Gaddafi loyalist, formed “Operation Dignity”, specifically to attack them. To counter Dignity, an alliance of Islamists formed “Operation Dawn”. Now the Dawn coalition controls most of western Libya; the Dignity coalition rules much of Cyrenaica in the east. Each has its own self-declared parliament and government – Dawn in Tripoli, Dignity in Tobruk.

        Will the efforts of UN special envoy to Libya, Bernardino Leon, yield a political truce? Hopeful that the country’s main warring factions would agree to form a unity government by mid-September, Leon consulted with representatives of the GNC in Turkey on September 1, ahead of peace talks which started on September 3. However the prospects are not bright, for the talks exclude the jihadists affiliated with Islamic State (IS) or Ansar al-Sharia – the widespread Salafist Islamist grouping – which regard both Dignity and Dawn as enemies.

        Taking advantage of Libya’s political instability, these Islamist groups are using the country as a base from which to extend their grip across the region. IS leader Abu Bakr al-Baghdadi, self-appointed caliph of all Muslims, has already declared Libya to be part of his caliphate. Their growing presence escalates the violence and reduces the chances of restoring stability.

        Indeed, authoritative newspaper reports, back in February 2015, asserted that evidence existed of plans by IS to take over Libya, and use that benighted country as a "gateway" to wage war across southern Europe. Documents were said to reveal that the jihadists intended flooding Libya with fighters from Syria and Iraq, who would then sail across the Mediterranean on people-trafficking vessels, posing as migrants. According to plans seen by Quilliam, the British anti-extremist group, the fighters would then run amok in southern European cities, and also try to attack maritime shipping.

        Whether these plans have been put into operation, and whether the torrent of migrants pouring out of Libya do indeed include jihadist infiltrators, are questions as yet unanswered. The mere possibility must give added urgency to plans by the UN, the US, the UK and other EU countries to provide genuine assistance to the rump of Libya’s democratic government in Tobruk. 

        A restoration of law and order, the re-establishment of effective government. a crack-down on the people traffickers and other gangsters running amok in the country, above all a determined effort to counter and overcome the nefarious and subversive activities of the jihadists, especially IS, not only in Libya but in its heartlands of Syria and Iraq – these must be the objectives for those now pledged to assist Libya.

Published in the Jerusalem Post on-line, 11 September 2015:
http://www.jpost.com/Blogs/A-Mid-East-Journal/Libyas-struggle-for-stability-415841

Published in the Eurasia Review, 11 September 2015:
http://www.eurasiareview.com/11092015-libyas-struggle-for-stability-oped/

Published in the MPC Journal, 21 September 2015:
in English:
http://mpc-journal.org/blog/2015/09/21/libyas-struggle-for-stability/
in Arabic:

http://mpc-journal.org/arabic/blog/2015/10/12/كفاح-ليبيا-من-أجل-الاستقرار/

What future for Syria?

        In March 2011 a few teenagers in a southern Syrian city – fired up no doubt by the revolutionary fervour sweeping the Middle East at the time – daubed some inflammatory slogans on a school wall. Unfortunately for them, the Syria that President Bashar al-Assad had inherited in 2000 from his autocratic father was a tightly controlled police state, in which a powerful and all-encompassing security machine ensured that the slightest hint of opposition to the régime was ruthlessly crushed.

        The youngsters were hunted down, arrested and tortured. When details of their ordeal became known, protesters took to the streets. The security forces, unable to break up the demonstration, eventually fired into the crowd. That was enough to spark widespread rebellion. Groups antagonistic to Assad's government began nationwide protests. Gradually, popular dissent developed into an armed revolt. The opposition, consisting of a variety of groups, but primarily the Free Syrian Army, were finally seeking to overthrow the despotic Assad régime and substitute a democratic form of government.

        Had assistance of any sort been forthcoming from the US or other Western governments at that early stage, Assad could have been defeated, to be replaced by a democratically elected government. But President Obama hesitated, and then continued vacillating even after it was clear in August 2013 that Assad had used chemical weapons against his opponents, utterly indifferent to the extensive civilian casualties that ensued.

        Why did Obama shrink from action? Because he had set his sights on a nuclear accommodation with Iran, which always regarded Syria as essential to its Shi’ite empire. Rather than put his projected nuclear agreement in jeopardy, Obama reneged on his declared intention to punish Assad if he deployed chemical weapons. Instead he seized on a deal brokered by Russia, under which Assad would nominally surrender the whole of the chemical arsenal that he had originally denied possessing.

        However the Assad régime did no such thing, concluded US intelligence agencies in July 2015. On the contrary it concealed certain deadly chemical stocks and, adding insult to injury, actually continued developing a new type of chemical munition using chlorine.

        Now, more than four years after it began, the full-blown civil war that developed in Syria has killed over 230,000 people, half of them civilians. In addition, the UN estimates, nearly 8 million Syrians have been displaced from their homes. When the additional 4 million Syrians who have fled into neighbouring countries are taken into account, it follows that a humanitarian disaster has overtaken more than half of the country’s pre-war population of 23 million.

        This is the outcome to date of the complex series of battles that have developed within Syria over the past five years. An overview of the devastated battlefield that Syria has become reveals no less than six separate conflicts in progress. 

        There is first the initial domestic battle between the Assad regime and the Syrian opposition seeking a democratic alternative. Both sides are supported by outside forces – Assad by Iran’s Revolutionary Guards and Hezbollah; the Syrian opposition by Sunni Arab groupings. The second major battle is between the forces of Assad and those of Islamic State (IS), which is set on extending its territorial gains to encompass the whole of Syria and Iraq.

        Thirdly there is the struggle between IS and the US-led coalition that, fighting under the less-than-inspiring slogan of “no boots on the ground”, confines itself to training local forces and supporting their operations with air-strikes.  Fourthly, Turkey has renewed its attacks on the Kurdish PKK. As soon as Turkey’s President, Recep Tayyip Erdogan, decided to join the fight against IS, he mounted air strikes equally against the Kurds, whose campaign for autonomy is a long-standing source of friction within Turkey.

        The fifth conflict on Syrian soil is that of the Kurdish Peshmerga troops against IS – a notably more successful effort than most of the other anti-IS activity over the past few years. Finally, IS finds itself battling intermittently against a number of jihadist Sunni groups that reject the claims of its leader, Abu Bakr al-Baghdadi, to be caliph of all Muslims, and his organization to be the basis of an eventual world-wide caliphate.

        This maelstrom that is Syria has thrown up three recent attempts to settle the future. One, sponsored by Saudi Arabia, calls for the removal of Assad and his régime, and supports the Sunni Arab rebellion against it. Another, sponsored by Saudi’s rival, Iran, is a four-point plan calling for an immediate ceasefire, a national unity government, the safeguarding of minority rights, and internationally supervised presidential elections – apparently reasonable proposals which did not fool the London-based Arab newspaper, Al Hayat. In an article on August 16, it reveals what it dubs “Tehran’s hidden motives”.

        In 2012, the UN and the Arab League adopted a six-point peace plan for Syria, subsequently ratified in the 2014 Geneva II Conference. Integral to it was a call for Assad’s resignation. Inevitably Iran and Russia opposed the proposals, and this new Iranian initiative, Al Hayat asserts, is an attempt to by-pass the Geneva plan.

        “By promoting a plan of its own, supported by Russia,” says Al Hayat, “Tehran is … trying to use a cease-fire in order to give an official status to the militias it has built in Syria…The leaders in Tehran talk about a diplomatic solution in Syria, while deploying more and more Revolutionary Guard militias, supported by Hezbollah, to fight alongside Assad. It uses noble rhetoric to deceive the international community.”

        The third current peace initiative, conceived by Staffan de Mistura, a UN special envoy, was endorsed by the UN Security Council in mid-August. Although the plan is based on the Geneva II proposals, it calls for a transitional government “on the basis of mutual consent “, implying that Assad and his regime would be party to the arrangement. This plan does envisage the eventual removal of Assad, but at some unspecified time in the future. It has been positively welcomed by Iran, and is backed Russia - possibly one reason for recent media rumours that Russia and Iran are considering abandoning their unquestioning support for Assad.

        So what might Syria’s future be? A country wholly over-run by IS, and under its control? A country from which IS has been expelled, the government returned to Bashar el-Assad, and therefore once again firmly within the Iranian sphere of influence? A country split into its component parts, one of which might be an autonomous Kurdish area, possibly linked to Kurdistan in Iraq? A country with a new constitution and a democratically elected government? The possibilities are many and various. 

        It is, as they say, in the lap of the gods.

Published in the Jerusalem Post on-line, 3 September 2015:
http://www.jpost.com/Blogs/A-Mid-East-Journal/What-future-for-Syria-415066

Published in the Eurasia Review, 6 September 2015:
http://www.eurasiareview.com/06092015-what-future-for-syria-oped/

Published in the MPC Journal, 3 September 2015:
http://mpc-journal.org/blog/2015/09/03/future-syria/