The New Regional Order in the Middle East: Changes and Challenges [1st ed. 2020] 978-3-030-27884-7, 978-3-030-27885-4

Table of contents :
Front Matter ....Pages i-xiii
The Middle East North Africa Socio-economic Challenges (Sara Bazoobandi)....Pages 1-25
GCC Oil Wealth: The Power and the People (Sara Bazoobandi, Rhiannon Alexander)....Pages 27-48
The Realignment of Regional Politics and the Future of the Gulf Cooperation Council (Kristian Coates Ulrichsen)....Pages 49-68
Iran Nuclear Programme, a Brief History (Sara Bazoobandi)....Pages 69-91
The Role of External Powers: Global Actors (Part I) (Neil Quilliam)....Pages 93-118
The Role of External Powers: Regional Actors (Part II) (Neil Quilliam)....Pages 119-141

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The New Regional Order in the Middle East Changes and Challenges Edited by Sara Bazoobandi

International Political Economy Series Series Editor Timothy M. Shaw Visiting Professor University of Massachusetts Boston Boston, MA, USA Emeritus Professor University of London London, UK

The global political economy is in flux as a series of cumulative crises impacts its organization and governance. The IPE series has tracked its development in both analysis and structure over the last three decades. It has always had a concentration on the global South. Now the South increasingly challenges the North as the centre of development, also reflected in a growing number of submissions and publications on indebted Eurozone economies in Southern Europe. An indispensable resource for scholars and researchers, the series examines a variety of capitalisms and connections by focusing on emerging economies, companies and sectors, debates and policies. It informs diverse policy communities as the established trans-Atlantic North declines and ‘the rest’, especially the BRICS, rise. More information about this series at http://www.palgrave.com/gp/series/13996

Sara Bazoobandi Editor

The New Regional Order in the Middle East Changes and Challenges

Editor Sara Bazoobandi Middle East Risk Consulting Hamburg, Germany Nonresident Senior Fellow at the Atlantic Council within the Global Business and Economics Program and Global Energy Center Washington, DC, USA Nonresident Fellow at Arab Gulf State Institute in Washington Washington, DC, USA

ISSN 2662-2483 ISSN 2662-2491  (electronic) International Political Economy Series ISBN 978-3-030-27884-7 ISBN 978-3-030-27885-4  (eBook) https://doi.org/10.1007/978-3-030-27885-4 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2020 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover image: © RBFried/iStockphoto This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Introduction

In recent decades, millions of people across the Middle East and North Africa region have shared the same grievances, including: inequality, lack of social mobility, outdated state—citizen relationships and a general lack of hope in their political systems (to name only few). These grievances have driven widespread and ongoing change across the region. A chain of dramatic and historical events has taken place in the region since 2010–2011. This book is a collective effort to shed light on some of the key events, the underlying reasons behind these and the future challenges for the region. The scope of change and the pace of events are both broad and fast, which makes it virtually impossible to capture all trends. That is why contributors of this book have picked up on important themes that are also closest to their fields of expertise. The idea of this book was born in 2015 at a Gulf Research Meeting in Cambridge, where Dr. Neil Quilliam and myself co-authored a paper on the key factors for strategic changes in the region. The book includes six chapters. Chapter 1 reviews a number of key socio-economic challenges that the region faces. Many of the socio-economic challenges that the region has struggled with in recent decades were highlighted by the chain of political uprisings across the region. This chapter explores how changes in a number of social factors—including identities, social and individual values, the definition of the social roles for different genders and state– citizen relations—have contributed to the recent political uprisings across the region. The degree to which such changes have taken root differs between different countries; nevertheless, the change is widespread v

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INTRODUCTION

and visible in every part of the region. The chapter also sets out how these challenges are compounded by the context of the so-called water– food-energy nexus—a set of critical environmental challenges facing the region. Chapter 2 reviews the changes in and the challenges associated with oil wealth management in the Gulf Cooperation Council. It sets out how oil income has fuelled the region’s growth and development and helped the ruling families to establish and maintain their rule. It then looks into the role of oil wealth in the social contracts in place across the region, and how low oil prices have prompted debates between policymakers and citizens over the sustainability of oil-driven economic growth models and their impact on social contracts across the region. The chapter illustrates how mounting pressure to reduce dependency on oil by diversifying the economy and instituting structural reforms has brought about an increased repurposing of assets that traditionally have been managed through Sovereign Wealth Funds towards domestic and regional needs. While Sovereign Wealth Funds remain active in international markets, they are being readjusted to ensure sustainability in terms of returns, income and operational capabilities. Chapter 3 analyses how and why the GCC developed as a regional organisation and security community in the 1980s, 1990s and 2000s. It explores the factors that favoured closer cooperation among the six ruling families in the Gulf and examines the nature of the cooperative mechanisms that gradually evolved after 1981. Progress was far from seamless or linear as tensions complicated, undermined, and in some cases held back cooperation. The chapter argues that the shock of the Arab Spring in 2011 and the differing regional responses to the upheaval not only widened these fissures in Gulf politics, but also altered the common threat perception that had effectively constituted a consensual baseline in regional considerations of security up to that point. The chapter goes on to look into how the recasting of the dynamics of Gulf security after the blockade of Qatar heralded the rise of a multipolarity of participants in regional security structures that for decades had been the preserve of first the British and then the US as external guarantors of stability. Chapter 4 provides a review of the history of Iran’s nuclear ambitions, the nuclear negotiations, the Joint Comprehensive Plan of Action (JCPOA) and its impacts at domestic, regional and international levels. Iran’s nuclear programme began in the 1960s under the government

INTRODUCTION  

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of the country’s last monarch and was restarted by the Islamic Republic after the end of Iran–Iraq War. Although, it was never proven that Iran’s nuclear programme had an active military dimension, Iran’s regional balance of power struggle, the experience of eight devastating years of war with Iraq, sharing borders with a nuclear nation (Pakistan) and having multiple domestic security challenges led the international community to conclude that it would have made perfect sense for the Islamic Republic to aspire nuclear military capability. The nuclear negotiations that concluded with the JCPOA became a milestone in Iran–US relations since the Islamic Revolution and a significant diplomatic achievement for all parties involved. The unilateral withdrawal of Trump’s Administration from the JCPOA, however, has revived uncertainties about the future of Iran–US relations. This chapter analyses the impact of the Iran nuclear deal and the US withdrawal from it at the domestic, regional and international levels. Chapter 5 addresses the question whether China’s developing economic relationship, which is promoted through the Belt and Road Initiative (BRI), will lead it to play a more muscular political, diplomatic and military role in the near future. The Gulf region is undergoing a series of profound changes at national, regional and international levels. It is at a pivotal moment in its history when the balance of power amongst external powers is transitioning from a predominantly US-dominated order to a multipolar one in which global powers, such as China, and regional powers, such as Russia, Turkey, India and Brazil are beginning to shape and influence the region. This chapter argues that since the Obama presidency (2008–2016), the US has strongly signalled that it is no longer willing to play the role of sole external security provider and, in doing so, has left a vacuum. It examines the exact nature of the US change in policy, its wider implications for the region and, at the same time, the deepening of relations between China and the Gulf. Chapter 6 builds on the analysis presented in Chapter 5 by exploring, in more detail, how Russia, India, Turkey and Brazil are beginning to shape and influence the political and economic landscape in the Middle East and North Africa. It begins with an assessment of Russia’s bid to capitalise on the immediate opportunities afforded to it by Washington’s pause. The chapter then compares and contrasts Russia’s role in the region with that of other key external powers influencing and shaping the region. The chapter provides analysis on India’s strategic move to strengthen relations with the UAE and Saudi Arabia. It also argues that

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INTRODUCTION

in response to those strategies, countries such as Turkey and Brazil align themselves more closely to Qatar, which has been under blockade from its neighbours since July 2017. The book has benefitted heavily from the support of various individuals and institutions, directly and indirectly. I would like to thank my husband, Rupert Winckler, for his constant support and encouragement. I am grateful to all the contributors of this manuscript. I am particularly thankful for the support provided by Palgrave Macmillan Political Economy series Christina Brian, Anca Pusca and Katelyn Zingg and the series editor, Tim Shaw. I would also like to thank my mother-in-law Marie Winckler and Rhiannon Alexander for patiently reading and editing my writings. I am indebted to all the individuals who generously took the time to answer my questions in meetings and interviews, amongst those, I would like to extend my special gratitude to Ambassador Charlotta Sparre, former Swedish Ambassador to Jordan and Egypt and Patrick Costello, Head of Division Global3 at the European External Action Service. I am also thankful to the Economic Research Forum for their generous funding of a research project to which I contributed in 2016. The second chapter of this book hugely benefitted from the findings of that project. Last but not least, I am grateful to Mani Jad, Deputy Director of Centre for Middle East Development, University of California, Los Angeles, for providing her generous advice and assistance. Sara Bazoobandi

Contents

1 The Middle East North Africa Socio-economic Challenges Sara Bazoobandi

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2 GCC Oil Wealth: The Power and the People 27 Sara Bazoobandi and Rhiannon Alexander 3 The Realignment of Regional Politics and the Future of the Gulf Cooperation Council 49 Kristian Coates Ulrichsen 4 Iran Nuclear Programme, a Brief History 69 Sara Bazoobandi 5 The Role of External Powers: Global Actors (Part I) 93 Neil Quilliam 6 The Role of External Powers: Regional Actors (Part II) 119 Neil Quilliam

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Abbreviations

ADIA Abu Dhabi Investment Authority ASPA Summit of South American-Arab Countries BRI Belt and Road Initiative CASF China-Arab States Cooperation Forum CIA Central Intelligence Agency EIA Energy Information Administration FAO Food and Agriculture Organization of the United Nations FDI Foreign Direct Investment FII Future Investment Initiative GCC Gulf Cooperation Council GDP Gross Domestic Product IAEA International Atomic Energy Agency IMF International Monetary Fund IONS Indian Ocean Naval Symposium IRGC Islamic Revolutionary Guard Corps ISIL Islamic State of Iraq and the Levant ISIS Islamic State of Iraq and Syria JCPOA Joint Comprehensive Plan of Action KIA Kuwait Investment Authority LNG Liquified Natural Gas MbS Mohammad bin Salman MENA Middle East and North Africa MOU Memorandum of Understanding NATO North Atlantic Treaty Organization NPT Nuclear Non-Proliferation Treaty NSA National Security Agency xi

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ABBREVIATIONS

OPEC Organisation of the Petroleum Exporting Countries PIF Public Investment Fund PPP Public—Private Partnership QIA Qatar Investment Authority SAGIA Saudi Arabian General Investment Authority SAMA Saudi Arabian Monetary Agency SPV Special Purpose Vehicle SWF Sovereign Wealth Fund UAE United Arab Emirates UK United Kingdom UN United Nations UNSC United Nations Security Council US United States WMD Weapons of Mass Destruction

List

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Figures

Fig. 1.1 Arab Youth Survey: How strongly do you agree or disagree with the statement? (Source Arab Youth Survey [2016], available at: http://www.arabyouthsurvey.com/ pdf/2016-AYS-Presentation-EN_12042016100316.pdf) 4 Fig. 1.2 University attendance in the Middle East (Source Catriona Davies, “Mideast Women Beat Men in Education, Lose Out at Work”, CNN, 6 June 2012. http://www.cnn. com/2012/06/01/world/meast/middle-east-womeneducation/) 17 Fig. 1.3 Global desalination capacities by region (Source CNN 2019) 19

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CHAPTER 1

The Middle East North Africa Socio-economic Challenges Sara Bazoobandi

Introduction Middle Eastern societies have been facing fundamental social, economic and political challenges in recent decades. Many of these challenges were highlighted by the chain of political uprisings across the region that began in 2011. These challenges have arisen partly from changes in a number of social factors. Identities, social and individual values, the definition of the social roles for different genders and state–citizen relations have all begun to change across the region. The degree to which such changes have taken root differs between different countries; nevertheless, the change is widespread and visible in every part of the region. Such changes have presented societies with new challenges for which neither policymakers nor the public have solutions to offer. This chapter will S. Bazoobandi (*)  Middle East Risk Consulting, Hamburg, Germany Nonresident Senior Fellow at the Atlantic Council within the Global Business and Economics Program and Global Energy Center, Washington, DC, USA Nonresident Fellow at Arab Gulf State Institute in Washington, Washington, DC, USA © The Author(s) 2020 S. Bazoobandi (ed.), The New Regional Order in the Middle East, International Political Economy Series, https://doi.org/10.1007/978-3-030-27885-4_1

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review a number of key socio-economic challenges that face the region. It is worth noting that the order in which the list is conducted does not represent their weight or importance. The chapter will examine the ongoing shift of identities, the negative impact of the lack of efficient socio-political dialogue, absence of social mobility, and poor public policy and planning across the region. It will also review the role of external powers as well as some of the key internal players such as women, youth and entrepreneurs. The chapter will then move on to studying the causes of the governance crisis across the region and identifying the main challenges that the MENA region is facing in the globalised world. Finally, a brief review of water–energy–food nexus will be provided.

Shift of Identities Similar to the rest of the world, multiple aspects of globalisation have affected the Middle East North Africa region. The way in which citizens across the region define themselves has been influenced by their experience of living in a globalised world. The Arab Youth Survey1 is an interesting source to look at empirical evidence to confirm regional trends. Although the sample size of this survey cannot be said to represent the entire population of the region (it includes about 200 interviewees per country), it does tell a clear story about the mindset of the current youth cohort in the Middle East. According to the survey, over the past years, a high number of the young believe that globalisation has had a negative impact on their local cultural heritage. The survey also shows that a high number of the participants want their leaders to do more to improve their personal freedoms, human rights and rights of women.2 The Arab uprisings were to a great extent a result of the people’s desire for such improvements. Globalisation has affected the ways in which individuals define their identities, values and aspiration across the world and the MENA region has been no exception in this sense. Desire for protection of human rights and personal freedoms is now an integral part of people’s identity, which goes beyond the existing definitions associated with the region’s national flags, of being Arab or Muslim. One of the challenges facing Middle Eastern societies currently is related to the core identities of the region’s citizens in today’s globalised world. Such identities are often in conflict with one another. This is not limited to the sectarian identities but also includes existing political and social identities. For many years, the political apparatus in many Middle Eastern countries has created identities that have been dictated to the

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citizens by the states. The governments in various countries across the region had heavy-handed campaigns to create identities that suited their own overall political agendas. In addition, for centuries, the patriarchal nature of these societies has also imposed certain identities on citizens. With the forces of globalisation, the influence of some of these ideologies on regional identities has weakened over time. As a result, the socio-political entities that were created to promote those ideologies started to weaken as well. For example, the regional effort to create Arab solidarity no longer resonates with the social, political and economic values and aspirations of most Arab nations across the region. In 2017, I attended a workshop as a part of a regional peacebuilding initiative. In one of the closed-door sessions that were held under the Chatham House Rule, a regional analyst explained the emergence of the new identities across the region as follows: Bigger countries in the region have much bigger challenges to deal with and are no longer focused on the regional issues. Simple socio-economic issues such as education, employment and building one’s life through the ranks of the society are the main priorities for their young citizens. The previous regional sentiment towards the Arab neighbours that was boosted by the concept of Arab solidarity has begun to fade and new identities started to emerge across the region. Today, people, particularly the youth, define themselves through a rather complex combination of identities. The younger generations no longer consider themselves only as Arabs or Muslims. They also describe themselves as Asians, Africans or Mediterranean. Such a shift of identities has had significant economic consequences as well. Economic relations have diversified beyond the regional partners. Over the past years, regional economies have been building p ­ artnerships with Africa, Russia and China.

Lack of Efficient Channels for Dialogue The next challenge facing societies across the region is the lack of social and political dialogue at various levels. Traditionally, the region has been missing efficient channels for dialogue at both national and regional level. At the national level, the democratic institutions through which the citizens are allowed to communicate with the political elite have been corrupt or completely manipulated by the security apparatus or the political elite. Moreover, the political leadership has structurally targeted freedom of expression and it has been always controlled and restricted due to national security concerns. Needless to say, the definition of national security has remained broad and intentionally vague across the region

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(for example, through lack of clarity in the legal description of political crime across the region). Bloggers, journalists, cartoonists, students, civil right activists, women’s rights activists, academics, former politicians and community leaders have all been targeted by the states’ security systems across the region and portrayed as national security threats. Throughout more than two years of research for this book, I have travelled fairly frequently to various parts of the region and had numerous conversations with people across the board (e.g. journalists, activists, academics) about the future of the region. The point most frequently raised in these discussions was that the only solution to address social, political and economic challenges that the region is facing is to implement various drastic reforms. When asked about the prospect of such reforms, though, most people were relatively cynical and believed that the reforms will take a very long time. Not surprisingly, I came across similar results in the Arab Youth Survey (see the graph below). The Arab Youth Survey results show that the majority of survey participants were more optimistic about the prospect of reform and the future of the region at the beginning of the Arab uprising. As the time passed, however, a strong sense of cynicism has grown across the region. Overall, events across the region confirm that the change, particularly since the Arab uprisings, is going in a completely opposite direction from what is required. The MENA region is losing the global competition where innovation, accountability, critical thinking, transparency ͞&ŽůůŽǁŝŶŐ ƚŚĞ ƌĂď ^ƉƌŝŶŐ͕ / ĨĞĞů ƚŚĞ ƌĂď ǁŽƌůĚ ŝƐ ďĞƩĞƌ Žī͟ ůů ŽƵŶƚƌŝĞƐΎ ;^ŚŽǁŝŶŐ й ŐƌĞĞͿ

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Fig. 1.1  Arab Youth Survey: How strongly do you agree or disagree with the statement? (Source Arab Youth Survey [2016], available at: http://www. arabyouthsurvey.com/pdf/2016-AYS-Presentation-EN_12042016100316.pdf) *Arab Youth Survey includes sample data from 16 Arab countries: GCC, Jordan, Iraq, Lebanon, Palestine, Yemen, Algeria, Egypt, Libya, Morocco and Tunisia

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and access to (at least some) information are the key factors for success. Moreover, serious security concerns throughout the region, open conflicts in many countries that often, directly or indirectly, affected other nations have influenced the direction of change in the region. As a result, at the regional level, there is a vacuum of trust and communication at highest political level. Whilst political leaders have been alienating their counterparts by pushing for their own agendas, restrictions to the right to travel, widespread state-sponsored media, regional security and ideological conflicts have also divided people at the grassroots level (Fig. 1.1).

Absence of Social Mobility The lack of social mobility is both another pressing challenge and a significant driver of social discontent across the region. This stems from a lack of values to define social transformation across the region. Values that define social transformation and the tools and mechanisms for social transformation have been neglected in Middle Eastern societies. Institutions, bureaucratic structure, cultural values and human capital development required for the social transformation in the region have not developed in ways conducive to social mobility. As a result, whilst most of the societies within the global community have moved on to a level of technological, economic and political structures which allow easier social transformation, Middle Eastern societies have been struggling to implement simple changes to allow individuals to improve their social status. In most societies across the region, having stronger links with the political elite has been perceived as the best, and indeed the shortest, way to access resources and opportunities. Individual merit, determination and creativity have all been outdone by personal connections with influential political figures. There are however, some agents for change across the region with great potential to change the existing dynamics. Women, youth and entrepreneurs are perhaps, in the current socio-political climate, the most influential agents for change. In many countries women are effecting change, at varying paces and making their voices heard. For example, more than half of the graduates in many countries in the MENA region are female. Given the demographic structure of the region, the majority of the citizens in MENA are young and hold great potential for creating innovative solutions and fighting the current obstacles to social transformation. In practice, however, the youth potential is restricted by both:

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by a lack of opportunities and by the restrictiveness of the socio-political space. Finally, entrepreneurs have demonstrated impressive potential for change in the region. There are numerous examples of successful entrepreneurial solutions across the region. Regional entrepreneurs have introduced creative solutions in a broad range of social, environmental and economic areas such as waste management, traffic, food and energy. Whilst such solutions have hopeful prospects for creating jobs, their operating environment is a real obstacle to development and success.

Exclusionary Public Policy The exclusionary public policies of governments across the region also present another set of challenges. The Middle Eastern political elites have had carefully defined criteria based on which the ‘inner circles’ are created. Ideological orientation and personal or family links have been considered as key factors to create an inner circle to which the political elite has given varying degrees of access to power. Often those who comply with the dominant ideology of the elite (political or religious or both) or have certain personal or family links with the ruling elite are provided with better access to resources and political power. This has led to widespread social dissatisfaction and various forms of radicalisation that have emerged across the region over the past decades. In most of the developed globalised societies, governments have introduced welfare systems that aim to empower the middle classes and boost social mobility. However, in the Middle East, such welfare systems either do not exist or do not function efficiently. Looking at global political history, there are very few cases in which political power has been given up easily. Transformation of power is indeed a long struggle involving frequent forward steps and setbacks. The Middle East is no exception to such a trend. As a result, for many decades, the same political powerhouses have dominated the social, political and economic structure in most of the MENA countries. The main reasons for the limited push for changing the monopoly of political power in the region is to be found in the basics of the Arab Human Development Reports: the deficits in freedom, education and women’s participation. Another key element has been the state ‘buying’ loyalty from the citizens; and, the role of the external factors such as historical ones related to the colonial pasts, as well as more modern ones stemming from the West’s long support—now renewed—for the traditional powerhouses.

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The recent wave of citizens’ demand for change in the regional power structure has certainly not led to any desirable outcomes yet. The demand for change has so far only been the very beginning of a very long, and probably painful, journey for change. Having said that, it is clear that the overall regional dynamics have begun to change. The open public debates over various aspects of social and political structure, a greater interest and engagement from the citizens in political and civic participation, more access to information from different sources (even though often very uneven and mixed with misinformation), the breaking of political, social and economic taboos and last but not least a massive generational shift with large young populations are all solid evidence of such changes. These are perhaps the beginning of a rather lengthy process of transformation in the structure of political power across the region. Such changes will in the long-run play crucial roles in reforming the exclusionary policies in the region.

Delegitimised Democratic Institutions Another key challenge facing the MENA societies is the structural and organised effort for delegitimisation of democratic institutions by the political elite. Rigged votes and sham elections have completely undermined the legitimacy of the democratisation of the societies. As a result, people’s trust in such processes has declined across the region. General public opinion in the region is fairly cynical about the integrity of the existing election processes. For decades, various countries of the region have experienced undemocratic political events such as military coups, and the governments’ manipulation of the election processes and/or change of legislations in favour of the ruling elite (e.g. expansion of presidential power and limitation of the power of assemblies). Such events have further delegitimised the democratic process across the region. Paradoxically, though, in recent decades the participation rate in various elections across the region has significantly increased. In Iran, Egypt and Turkey, people’s involvement in various local and national elections has shown that whilst the general sense of cynicism over the integrity of the elections has remained unchanged, citizens still view these processes as an important communication channel with the ruling elite. Often the citizens use elections as unique occasions to protest against ongoing suppression, corruption and monopolised political power. Some recent elections, therefore, confirm that whilst structural

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efforts to delegitimise democratic institutions have had a negative impact on the institutions and their related election processes, many people in the region turn to the ballot boxes to make their voice heard, even when they are aware the impact on the result will be limited.

The Role of the Western Powers in the Region For decades, Western powers focused on the stability of the region through regional allies, whilst the promotion of human resources and good governance was vastly compromised in the interest of regional stability. As a result, many nations in the region found themselves with weak human resources and poorly governed institutions. However, when the latest political crises occurred in the region, the reactions of the majority of the Western powers encompassed very little support for maintaining social and political stability of the countries that were undergoing the crises. After the widespread uprisings across the Middle East and North Africa, the traditional partnerships between the global powers and some of the regional allies have been altered (in some cases temporarily). Such partnership alterations have prompted regional players to take drastic measures to consolidate their power and influence. Moreover, it has created a hospitable environment for the non-state actors to interfere in the affairs of weaker societies. The regional powers have increasingly used state and non-state actors as proxies to promote their strategies for gaining more power and influence, to the extent that over the past two decades, foreign policy across the region has become the politics of proxies. The increasing number of people dislocated as a result of the political crises across the region caused a wave of migration towards the Western countries. This combined with their own social, political and economic challenges, has boosted the rise of populism and inward-looking politics in the West. This has caused significant reputational damage for the Western powers across the region. Moreover, it has created new opportunities for other global powers such as Russia and China to gain more influence in shaping the future of the region. The Western powers’ image, already tainted by the legacy of colonisation, has not been improved by their long-standing support of regional strongmen.

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The Issue of Social Contract Another important social challenge that the region has been facing stems from the existing social contract across the region. In most of the countries in the region and particularly amongst the resource-rich nations, the social contract has traditionally followed the so-called “allocation state model”. In other words, governments have been able to separate themselves from the national economy as they did not need to tax economic activities in order to finance their budgets. Broadly speaking, across the region, this has been the underlying obstacle to an environment that offers incentives or forces for economic efficiency. Opposite to this model is the common social contract model in the developed economies, based on the government’s tax collection policies in order to generate revenue from various economic activities in the country. Whilst such a model requires more accountability, transparency and efficiency both in the government and non-government sector,3 the allocation state model encourages inefficiency, corruption and rent-seeking. Over the past decades, many countries in the region, including those with abandoned natural resources, have begun to introduce tax regimes, or reform existing ones. Many of the policymakers in the region have started to think of strategies and solutions that allow them to change the existing “Rentier pact” through which rulers distribute a financial incentive package to both locals and expatriates in exchange for political loyalty and support.4 Different governments across the region have recently introduced various initiatives, such as subsidy reform programmes, government salary cuts and introduction of new tax regimes, to reform the existing social contract. Alarming financial difficulties that many governments in the region have faced over the past two decades have prompted most of these efforts. Particularly in the case of economies rich in hydrocarbon resources, the decline in the oil price has encouraged governments to introduce economic reform programmes through which the governments would be able to reduce their social expenditure and introduce tax regimes. Moreover, the region has been facing a combination of youth bulge and lack of sufficient employment opportunities. High fertility rates in most countries in the region have led to significant population growth across the region. As a result, the majority of the population in the region is at working age (15–35 years). For example, about 25% of the GCC population is below 15 years of age. This, combined with

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structural macroeconomic problems, has created a sensitive social challenge in the region that is shared both by hydrocarbon-exporting countries and those that do not possess natural resources. Based on the traditional economic structure of most of the countries in the region, the governments have been the main economic power for creating jobs in the region. For example, in the case of resource-rich economies, energy production has been the leading economic growth sector. It has been either directly the source of job creation, or the proceedings of its economic activities have been the financial engine behind employment opportunities in other sectors. Given that the energy sector requires heavy investments and offers a relatively small number of job opportunities with specific skills, hydrocarbon wealth has been created in the region without having a substantial impact on the young labour force.5 The energy sector in the GCC, for example, where most of the regions’ oil wealth is generated, has been least successful in absorbing the local labour force. Most of the highly skilled workers’ employment positions in the GCC oil and gas industry are filled by expatriates. Not many jobs are allocated to the GCC nationals in this sector due to the lack of required expertise amongst the local labour force. The region’s longstanding social contract model, in which the state had the financial means to distribute resources amongst the citizens in exchange for political loyalty, has proven to be unsustainable. Various governments across the region have started to test measures to alter the existing social contracts. Such alterations will have major implications for state–citizen relationships. As the reliance of the state on tax income from the economic activities increases, the demand for greater transparency, accountability and fairer allocation of resources is likely to increase.

History of Planning in the Region In the interviews I conducted for this book, poor planning and policy implementation repeatedly came up as the ‘root cause’ of most of the region’s socio-economic problems. More or less all the countries across the region, from North of Africa to the Persian Gulf, share this issue. Experts and ordinary citizens from the region have frequently acknowledged that their respective governments have failed to provide well-structured, long-term strategies to address long-standing socio-economic challenges. Most of the decision-making has often been short-term and reactive. Many also argue that even in cases where the

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government had taken an initiative to provide long-term planning, the implementation has been very poor and the results have not been satisfactory. Long government project delays, poor budget management and failure to provide fast and appropriate solutions to the socio-economic challenges have become the norm in almost all the countries of the region. Some countries did not have economic development planning until as late as 2008. In the GCC, for example, with the exception of Oman and Saudi Arabia, where the first development plans date back to 1995 and 1970, respectively, planning has not been a part of the administrative structure of the government. Over the past decade or so, all the GCC states have started to incorporate development plans into their government policy structure. The latest of these development programmes have been introduced in the form of long-term country “Vision”. More or less all of these visions are aiming to achieve similar goals, namely diversifying away from natural resource income, strengthening new growth sectors (i.e. finance, tourism and trade) in the national economy and maintaining or improving living standards through job creation or wage increases. The means of achieving these country vision goals have been more or less the same across the GCC. All the GCC states have demonstrated intentions to apply a combination of policies that will encourage stronger public–private partnership, investments in human capital and education reforms.6 Although the role of the private sector in the success of the development plans has been highlighted, the existing structure of the national economies across the GCC will inevitably require heavy involvement of the government in pursuing the national visions. Another interesting example in the region is the history of planning in Iran. Iran introduced development plans in the early 1920s.7 Since then, the Iranian government has compiled a number of development plans, with a range of different goals depending on the specific period in which they were structured. Whilst pre-1979 plans focused on modernisation of the economy from an agricultural economy to an industrialised one, post-revolution plans concentrated on nationalisation of the economy. After the Iran–Iraq War, reconstruction of the war damage was amongst the key priorities of the government development plans, and most recently, diversification of the economy from hydrocarbon resources has been amongst the key themes. As noted above, one common issue in addressing the socio-economic challenges across the region

12  S. BAZOOBANDI

is that the Middle Eastern countries either have not had efficient planning strategies, or if they did, they have often failed to accomplish their goals. Iran has been no exception in this respect. Although development plans were introduced many decades ago in Iran, the country has not been successful in achieving its long-term macroeconomic planning goals. Particularly, diversification from hydrocarbon sector and development of the non-oil industry has remained a major challenge for the Iranian economy. Diversification has become an important priority for most of the energy-rich countries of the region. Particularly in the case of Iran and the GCC, the economic pressure of fluctuating oil price in the global energy markets and dwindling oil income magnified the importance of economic diversification. In addition to the negative effect of low price, at the current rate of domestic consumption, the prospect of low oil income is rather alarming. The situation is more critical for the countries with larger populations (i.e. Iran and Saudi Arabia) with significantly high domestic consumption. Further, diversification is central to job creation in energy-rich countries of the region. Despite the pressing need for diversification from the hydrocarbon sector, the process has been notably slow across the region. In some cases, in line with the diversification plans, the governments have begun to support the non-oil industries by using oil income. This, in most cases, has led to the implementation of trade restriction policies (in support of infant industries) and heavy government subsidies. The aim of this line of policy has been to allow the new industries to develop to a certain level, which enables them to compete domestically, regionally and even globally. In practice, however, these industries have often delivered relatively low returns and require continuous heavy government financing and subsidies. The Iranian car manufacturing industry is the best example of such a case. Comparing economic development plans in Iran and the GCC, there are some obvious differences in terms of the outcomes. Although Iran has had sophisticated planning strategies for a much longer period than the GCC, the overall implementation results in Iran have been less successful than in the GCC. Having said that, it is important to highlight that neither Iran nor any of the GCC countries has reached their economic diversification targets. Comparing the non-oil growth sectors in Iran and the GCC, though, some GCC policymakers have been much more successful in identifying their competitive advantages. A good example is the recent developments in the aviation industry in some GCC countries.8

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Corruption, lack of efficient implementation strategies and structural socio-economic problems have been major contributory factors to unsuccessful implementation of development plans across the region. In some cases, countries’ political and/or economic relations at both regional and international level have also affected their success in addressing socio-economic challenges. In the case of Iran, for example, the country has been under various levels of international economic sanctions since the Islamic Revolution in 1979. This has restricted economic activities in Iran and, along with other factors, has hampered Iran’s economic development. Comparing the civil aviation industries in Iran and the GCC is a perfect example to measure the negative impact of political and economic relations on the success or failure of the economic activities. Iran’s national aviation company, Iran Air, was one of the first and leading players in the region before 1979. As a result of the economic sanctions, however, it has plunged to the bottom of the global rankings over the past decades. Until recently, due to the economic sanctions, Iran’s national airline did not have access to the global market to renew or repair its existing fleet. The Iranian government was forced to purchase second-hand supplies on the black market and through back-channels. After the conclusion of the nuclear deal, Iran was allowed to initiate deals with major aircraft producers such as Boeing and Airbus. The future of the deals is closely linked with the US administration’s sanction release regime.

Governance Crisis The Middle East has lagged global trends in terms of technological, economic and social transformation due to a combination of factors. Widespread conflicts, lack of socio-economic development and poor political institutions are amongst the key contributing factors for the slow transformation of the region. In many parts of the Middle East, the traditional social bargain in which the state was the sole provider of services and jobs to the citizens in exchange for political legitimacy has been in place for a very long time and it has begun to be challenged. Over the past decade, the number of states that have lost territorial control to non-state actors has increased dramatically and the more powerful states in the region have progressively begun to interfere in the affairs of the weaker ones.9

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The dynamic interrelation between the state and citizens that exists in functioning democracies is absent in the Middle Eastern countries. Almost all the governments of the region have implemented policies that have intentionally limited the citizen participation in governance. This has had a range of negative socio-economic and political repercussions. One of the key outcomes of such policies is the poor practice of law especially when it comes to protecting citizenship rights. Without the active involvement of citizens, governments in the region have abused their power. Consequently, the political power has been used to benefit only a narrow segment of society. Political affiliation, royal bloodline and ideological belief are factors by which the governments across the region have selected a small segment of the societies to whom to delegate the main share of political and economic power. This has created an artificial sense of superiority amongst certain groups of citizens and created divisions in society. These divisions have played a critical role in polarising the societies. Moreover, as a result of such power distribution strategies, social dissatisfaction has increased across the region. Furthermore, the governments have put heavy-handed policies in place that limit citizens’ access to information. The policymakers have conveniently abandoned transparency, accountability and the fight against corruption. Transparent and effective processes that help citizens’ involvement in preparation, implementation and evaluation of government policies have remained underdeveloped. The governments have clamped down on various civic activities and often banned political involvement of certain interest groups. As a result, party politics is considered political crime and a threat to the national security in many Middle Eastern countries and the civil society has been significantly weak. These tendencies are also reflected in the large-scale centralisation of power across the region. Governments have not favoured the distribution of power to local levels or outside of the core of the political elite and the citizens often have been treated unequally in the eyes of law. A paper published by Carnegie Endowment for International Peace in 2017 analyses the existing “bad governance” in the region and argues that the underlying reason for this is the flawed education systems. The paper rightly points out that the education systems of the region do not encourage critical thinking and a healthy concept of citizenship that teaches values of tolerance and appreciation for diversity.10 All in all, poor education systems, combined with the political elites’ interest in

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monopolisation of power, have led to the existing socio-economic and political power balance across the region. Finally, the notion of national security and the way in which the state protects its national security interests is another reason for the existing power structure in the Middle East. National security is often defined as the security of the state and particularly the political elite. This has played a critical role in the current governance crisis in the region. In most countries, the political elite has created a complex security apparatus formed of parallel “security agencies, and other paramilitary or coercive state agencies”11 that often monitor or even interfere with one another. It has also been a common practice in the region for different segments of the security apparatus to have power over and exemption from their respective legal systems. Existing security structures have not only fuelled division and dissatisfaction across the societies, but also have become a major obstacle to meaningful reform and the rule of law.

Women’s Economic Participation Men have traditionally dominated the workforce in the region. The male-controlled structure of the societies across the region has discouraged women’s participation in the labour force. Although women of the region lag behind men in finding employment, they have been noticeably successful in improving their education level. United Nations statistics show that by 2012 more than half of the university graduates in many Middle Eastern countries were women.12 Female literacy rate has also improved significantly. World Bank data shows that the share of literate female population in the Arab world has increased from 41 to 69% between 1990 and 2010.13 As the chart below shows, in most of the countries in the region, the share of female university graduates is higher than that of the male graduates. However, the data proves that improvement in female education level does not translate into a higher employment rate of women. Maha El-Swais wrote a blog post for the World Bank in 2016 in which she discusses the reasons for low participation of women in the economy across the MENA region. She states that despite the fact that women in most of the MENA countries are outperforming the men academically, finding employment remains a big challenge for them.14 Around 17.5% of the adult female population, roughly less than one in five women, is working in the MENA region.15 At the current unemployment rates, if all the working

16  S. BAZOOBANDI

age population in the MENA look for jobs, by 2050, the region will have 50 million unemployed men, and 145 million unemployed women.16 Over time, the gender-biased social and individual identities and role definitions associated with such identities have been revised, particularly amongst the middle class. This is partly due to technological advancements such as access to satellite TV channels and smart phones. Cyberspace has exposed women to new social and private life-styles and it has encouraged new ideas, demands and initiatives. It has also offered new platforms for female entrepreneurs.17 All in all, thanks to the fast-paced electronic communication, the identity of women across the region has begun to gradually change from the traditional role of stay-at-home mothers to one of actively contributing to the economic welfare of the households. However, women’s revised identities have not led to significant improvements in female employment figures. Although women’s desire and motivation for more active roles socially and economically have been strengthened, male-oriented cultures and economic structures of countries across the region have excluded women in many areas of the region’s economies. For example, whilst the care and education sectors have been traditionally hospitable towards women, science and engineering have been less welcoming to female graduates in the region. This has been the result of a complex combination of two factors: 1. The patriarchal bargain: regardless of religion, language or ethnicity, this seems to be an integral element of the regional culture. It creates an environment in which women’s emancipation is traded for financial security provided by their male head of the households (i.e. father, brother, husband). 2. The dominant role of the state in the economy: this is a regular economic pattern across the MENA. Whether in oil-exporting or oil-importing countries, the governments are the strongest economic players providing the main share of employment opportunities to their citizens, and are fundamentally partial towards male employees. Public employment is one of the key elements in the economic structure of the region. In most countries, a high portion of the governments’ budgets is consumed by paying public sector salaries.18 Public employment, which is largely associated with short working hours and lavish

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perks, has often been seen as an important component of social safety nets across the region. In the GCC, for example, citizenship has traditionally encompassed a wide range of benefits and entitlements, one of which is the promise of highly paid public sector employment. The political uprisings of recent years have strengthened the existing social pact between the state and citizens of the GCC. Widespread social and political unrest across the Middle East and North Africa was mainly associated with unemployment and other economic difficulties. Therefore, in order to implement preventative measures and to avoid spill-over effects, GCC policymakers quickly responded to this issue by providing public jobs (more than 300,000 new jobs in Saudi Arabia, 35,000 in Oman and 20,000 in Bahrain). In addition, public sector salary increases, additional food subsidies, reduced public services’ fees and new housing initiatives were announced across the GCC. The GCC government policies that are put forward through national visions all encompass strengthening public–private partnership and labour force efficiency by investing in human resources and education. The government “giveaways”, however, are largely contradictory to the ultimate aims of the visions.19 Women’s employment, for example, has not received much attention amongst the GCC policymakers (Fig. 1.2).

DĂůĞ zĞŵĞŶ WĂůĞƐƟŶŝĂŶ dĞƌƌŝƚŽƌŝĞƐ /ƐƌĂĞů :ŽƌĚĂŶ >ĞďĂŶŽŶ /ƌĂƋ /ƌĂŶ ĂŚƌĂŝŶ KŵĂŶ ^ĂƵĚŝ ƌĂďŝĂ h YĂƚĂƌ ĂƟŶ ŵĞƌŝĐĂ ĂŶĚ ƚŚĞ ĂƌŝďďĞĂŶ͕ ϰ͘ϳй ^ŽƵƚŚ ƐŝĂ͕ Ϯ͘ϳй

^ƵďͲ^ĂŚĂƌĂŶ ĨƌŝĐĂ͕ ϭ͘ϳй

ƵƌŽƉĞ ĂŶĚ ĞŶƚƌĂů ƐŝĂ͕ Ϯ͘ϲй

Fig. 1.3  Global desalination capacities by region (Source CNN 2019)

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contract, greater transparency and accountability of the service providers by the consumers. Amongst the challenges that the region is facing, the policymakers are least prepared to deal with water challenges. The MENA region has one of the highest projected economic losses (globally) caused by “climate-related water security” that is predicted to stand about 6–14% of GDP by 2050. The predicted figures for Western Europe, Sahel and Central Africa are about 0.01–0.02%, 0.82–11.7% and 0–7.8%, respectively. Indeed, hydrological shocks can be expected to erode legitimacy of governments and create socio-economic and political fragility across the region.21 Water security in the MENA region requires major policy reforms in order to achieve efficient water services and pricing mechanisms that regulate usage and wastewater discharge. Water prices across the region are low and government subsidies for water services are the highest in the world. These factors have contributed to the degradation of resources and the accumulation of government budget deficits across the region. The region has some of the highest water losses in agricultural, processing, distribution and consumption. Water price increases are a politically sensitive issue. However, at the current rate of consumption and given the level of water loss in the region, water price reforms are necessary across the region. The region is one of the highest importers of so-called ‘virtual water’ in the world. The United States, Argentina, Australia and Brazil are amongst the top exporters of virtual water to the MENA region. The links between water, food and energy sectors create challenging tradeoffs for the region. Rising demand for water in agriculture in order to produce food, leads to rising energy consumption, by desalination plants and groundwater pumps, in order to produce usable water.22 According to the Food and Agriculture Organization of the United Nations (FAO), the MENA region has one of the lowest levels of fresh water resources globally. Over the past four decades, the resources have diminished by two-thirds and are expected to decrease by 50% by 2050. Agriculture sectors use up to 85% of freshwater resources in the region. 45% of the total agricultural land across the region is at risk of soil nutrient depletion and wind water erosion.23 People of the region that are living in countries in conflict are suffering from significantly high level of undernourishment. The level of undernourishment in those countries is six times larger than the

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21

non-conflict countries across the region. In Syria alone, the estimated cost of the war for the agriculture sector is about $16 billion. More than 60% of the people in Yemen (17.8 million) do not have reliable sources of food. About half of the women-headed households of Gaza are food insecure and over half a million Sudanese children of under five years of age suffer from critical malnutrition.24 Although, undernourishment does not exist at such severe levels in other parts of the region, food price inflation has affected people’s diet significantly in recent years. In Iran for example, agriculture food prices have increased by 75% year-onyear between March 2017–2018 (Iranian calendar year) in comparison with the previous period.25 This level of inflation is due to a combination of currency devaluation, increasing cost of agriculture production and the rising cost of imported food; this has contributed to an increasing share of population living under the poverty line. Food price inflation at varying degrees has put pressure on the people from Egypt to Israel and the GCC. Despite the widespread food crisis, the MENA region has a high rate of food loss and food waste. Estimates show that more than 30% of total food consumed in the region is wasted or lost. In general, food loss and waste can occur at any point from production to consumption. In the MENA region, 68% of losses occur before the food reaches the end consumer. Lack of access to suitable equipment for harvesting, storage and transportation (i.e. lack of access to cold storage), poor marketing and distribution systems are the key causes of such high level of food loss in the region. According to the FAO, the resources that are used to produce wasted food in the region are equal to 42 cubic metres of water and 360 million hectares of land. The figures are extremely alarming, given the scarcity of resources across the region.26 High energy consumption has become another critical socioeconomic challenge for countries around the region. The Middle East is the largest oil producing region in the world. The region produces 34% of the global production which accounts for nearly half of crude oil exports and about 30% of global Liquid Natural Gas exports. The region has also one of the highest global energy consumption levels. In 2017, the region’s annual consumption growth was about 3.4%.27 That is higher than Europe (2.1%), North America (0.7%) and whole of Africa (2.9%).28 High electricity consumption is a major cause of such increase in total energy consumption. It is estimated that the region’s electricity demand will triple by 2050. Primary energy consumption is

22  S. BAZOOBANDI

expected to increase by only 36% in the same period. This has prompted an increase in renewable energy investments in some parts of the region. For example, Egypt aims to produce 42% of its electricity consumption from renewables by 2025. Iran is also planning to produce 5 Gigawatt of renewable electricity by 2020. Saudi Arabia is investing heavily in solar and wind power and is aiming to provide 30% of the country’s electricity consumption from renewable sources by 2023.29 Considering the region’s population is expected to increase by 40% by 2050, the region is in urgent need of finding alternative solutions to cover rapidly growing energy demands. According to the Energy Information Administration (EIA), as of 2019, the Middle East, Africa and Asia drive nearly all the world’s energy consumption growth.30 Whilst various governments across the region have indicated plans for increasing renewable energy production, there is also an increase in investments for coal-fired power plants. The EIA reports show a regional trend for increasing coal-fired electricity production capacity in countries like Egypt, Oman, Iran, Jordan and United Arab Emirates. Coal consumption across the region has been considerably less than other fuels. It has formed less than 1% of the region’s primary energy production. Most of the coal-fired capacity in the region is planned in collaboration with Chinese entities.31 With the EU push for a global effort to control carbon emissions, it is not surprising that China remains the most viable provider for the region to acquire relevant technology to increase coal-fired electricity production. Considering the urgent global need to cut down carbon emissions, moving towards increased consumption of coal seems to be the least sustainable option at both global and regional levels. However, there seems to be very little interest amongst the region’s policymakers to critically assess the longterm consequences of such investments for the region and for the global community. All in all, the socio-economic challenges that the MENA region faces today stem from the failure of the old social and political structure in which the governments established (a) large centralised administrations to provide employment opportunities and social services for the citizens, (b) various mechanisms to distribute rent across the society (including substantial subsidy expenditure programmes) to buy citizens’ loyalty and (c) strong security services and the armies to protect state security. In today’s globalised world, moving away from the traditional socioeconomic models are necessary for resolving the existing challenges in

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the region. Replacing old policies that formed state–citizens’ relationships across the region with practical measures that requires more accountability for the states and allows for the unlocking human capital through improved citizens’ economic and political participation, are needed to maintain the region’s political, economic and social stability. In addition, the region is under serious environmental threats. Water and food shortages have become serious challenges for almost all the countries in the region. The region’s energy consumption is increasing at an alarming level. With growing urbanisation of the population, rising demand for electricity has pushed the region’s energy consumption ahead of the global trends. The policy response by the governments of the region, however, does not seem to offer adequate and timely solutions to tackle the pressing challenges they face.

Notes

1.  Whitepaper, Arab Youth Survey, http://www.arabyouthsurvey.com/ whitepaper.html. 2.  Arab Youth Survey, “Inside the Hearts and Minds of Arab Youth”, 8th Annual ASDA’A Burson-Marsteller Arab Youth Survey (2016), h t t p : / / w w w. a r a b y o u t h s u r v e y. c o m / p d f / 2 0 1 6 - AY S - P r e s e n t a tion-EN_12042016100316.pdf. 3.  Giacomo Luciani, “Allocation vs. Production States: A Theoretical Framework”, in The Arab State, ed. Giacomo Luciani (Berkeley and Los Angeles: The University of California Press, 1990). 4. Christopher M. Davidson, The United Arab Emirates: A Study in Survival (Boulder, CO: Lynne Reinner, 2005). 5.  Martin Hvidt, “The Development Trajectory of the GCC States: An Analysis of Aims and Visions in Current Development Plans”, in Gulf Politics and Economics in a Changing World, ed. Michael Hudson and Mimi Kirk (Singapore: World Scientific Publishing Co., 2014), pp. 11–28. 6. Ibid. 7. Farhad Daftari, “Development Planning in Iran: A Historical Survey”, Journal of Iranian Studies, vol. 6, no. 4 (1973), pp. 176–228. 8. Martin Hvidt, 2014. 9.  Perry Cammack et  al., Arab Fractures: Citizens, States, and Social Contracts, Carnegie Endowment for International Peace (2016), http:// carnegieendowment.org/2017/02/01/arab-fractures-citizens-states-andsocial-contracts-pub-66612. 10.  Carnegie Endowment for International Peace, “Arab Fractures Citizens, States, and Social Contracts”, http://carnegieendowment.

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org/2017/02/01/arab-fractures-citizens-states-and-social-contractspub-66612#political. 11. Ibid. 12. Catriona Davies, “Mideast Women Beat Men in Education, Lose Out at Work”, CNN, http://edition.cnn.com/2012/06/01/world/meast/ middle-east-women-education/index.html. 13. World Bank, “World Development Indicators: Adult Female Literacy”, quoted in Perry Cammack et al. (2016). 14. El-Swais Maha, “Despite High Education Levels, Arab Women Still Don’t Have Jobs”, World Bank, http://blogs.worldbank.org/arabvoices/ despite-high-education-levels-arab-women-still-don-t-have-jobs. 15. Ron Burder, “How to Encourage More Women into MENA’s Workforce”, World Economic Forum, https://www.weforum.org/agenda/2015/05/ how-to-encourage-more-women-into-menas-workforce/. 16. Arne Hoel, “Missing Voices: Gender Equality in the Arab World”, World Bank (2013), http://www.worldbank.org/en/news/feature/2013/03/ 14/missing-voices-gender-equality-in-the-arab-world. 17. The Economist, “Arab Women Entrepreneurs, Untraditional Choice: The Middle East Beats the West in Female Tech Founders”, http://www. economist.com/news/business/21581740-middle-east-beats-west-female-tech-founders-untraditional-choice. 18. Hodson, “Distributional Structure in the Arab World”, quoted in Steffen Hertog (2014). 19. Steffen Hertog, “Redesigning the Distributional Bargain in the GCC”, in Gulf Politics and Economics in a Changing World, ed. Michael Hudson and Mimi Kirk (Singapore: World Scientific Publishing Co., 2014), pp. 29–54. 20.  Katy Scott, CNN, “Can the Middle East Solve Its Water Problem?” (2019), https://edition.cnn.com/2018/07/11/middleeast/middle-eastwater/index.html. 21.  World Bank, “Beyond Scarcity, Water Security in Middle East and North Africa” (2018), https://openknowledge.worldbank.org/ handle/10986/27659. 22. Ibid. 23. FAO “Near East and North Africa’s Water Scarcity Initiative” (2019), http://www.fao.org/neareast/perspectives/water-scarcity/en/. 24.  FAO, “Building Resilience for Food Security and Nutrition” (2019), http://www.fao.org/neareast/perspectives/building-resilience/en/. 25.  Eghtesad News, “Adad sazi emkan nadarad” (in Farsi) (2018), https://www.eghtesadnews.com/‫شخب‬-‫دیف‬-‫یداصتقا‬-71/246910‫یزاسددع‬-‫ناکما‬-‫درادن‬-‫مروت‬-‫ییاذغداوم‬-‫رد‬-‫لاس‬-‫هب‬-‫دصرد‬-‫هدیسر‬-‫تسا‬.

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25

26. FAO, “Tackling Food Loss and Waste in the Near East and North Africa” (2019), http://www.fao.org/neareast/perspectives/food-waste/en/. 27. BP, “Regional Insight—Middle East” (2018), https://www.bp.com/en/ global/corporate/energy-economics/statistical-review-of-world-energy/ country-and-regional-insights/middle-east.html. 28.  BP, “BP Statistical Review of World Energy” (2018), https://www. bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/ energy-economics/statistical-review/bp-stats-review-2018-full-report.pdf. 29. Ibid. 30. EIA, “The Middle East, Africa, and Asia Now Drive Nearly All Global Energy Consumption Growth” (2019), https://www.eia.gov/todayinenergy/detail.php?id=37932. 31. EIA, “Countries in and Around the Middle East Are Adding Coal-Fired Power Plants” (2018), https://www.eia.gov/todayinenergy/detail.php?id= 36172.

CHAPTER 2

GCC Oil Wealth: The Power and the People Sara Bazoobandi and Rhiannon Alexander

Introduction Across the GCC, oil has driven growth, development and the longevity of the ruling families since its discovery in the first half of the twentieth century. Oil incomes have enabled the ruling families to maintain a Some material used in this chapter has been previously published in Bazoobandi, S. and Jeffrey Nugent, “Political Economy of Sovereign Wealth Funds in the Oil Exporting Countries of Ara Region and Especially the Gulf”, Economic Research Forum, Working Paper No. 1143 (2017), available at: http://erf.org.eg/wp-content/uploads/2017/10/1143.pdf, that has benefited from a financial grant from the Economic Research Forum. The contents and recommendations do not necessarily reflect the views of the Economic Research Forum. S. Bazoobandi (*)  Middle East Risk Consulting, Hamburg, Germany Nonresident Senior Fellow at the Atlantic Council within the Global Business and Economics Program and Global Energy Center, Washington, DC, USA Nonresident Fellow at Arab Gulf State Institute in Washington, Washington, DC, USA R. Alexander  Oxon, UK © The Author(s) 2020 S. Bazoobandi (ed.), The New Regional Order in the Middle East, International Political Economy Series, https://doi.org/10.1007/978-3-030-27885-4_2

27

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carefully balanced social contract between themselves and their citizens, based on economic benefits in return for political acquiescence. However, the weakening outlook for oil prices—along with a socio-political awakening among certain constituencies following the spate of uprisings and conflict across the broader region since 2011—raises uncertainty about the sustainability of both oil-driven economic growth models and their related social compacts. The oil market outlook has raised concerns amongst policymakers and citizens that maintaining the current level of government expenditure to sustain the social contract may not be possible in the future. As a result, pressure has been rising for some time to reduce dependency on oil revenues by diversifying the economy and instituting structural reforms. Demographic trends across the region will compound pressure on regimes to diversify their economies in order to lessen public wage bills and ensure that younger generations have viable opportunities and a positive outlook in terms of expected living standards. This will be essential to ward off social discontent of the sort that has toppled similarly authoritarian regimes across the region in recent years. Sovereign Wealth Funds (which have become important tools for the states to maintain their power across generations) are increasingly being repurposed as buffers against lower oil incomes, in order to maintain the status quo. Their investment strategies have been rebalanced towards domestic and regional needs and, whilst still very much active in international markets, are also being readjusted to ensure sustainability in terms of returns, income and operational capabilities.

GCC Oil at Home and Abroad Over the past decades, the oil producers of the GCC have exerted a ­powerful role in global oil markets. Their oil wealth has brought about not only an astonishing level of economic development across the states, but also made the states a leading presence on global oil markets. According to the EIA, in 2017 Saudi Arabia, Kuwait and the UAE were among the top ten oil producers in the world, with a share of total production of 13, 4 and 3%, respectively.1 And despite growing challenges to the role of GCC oil producers (along with other OPEC members) on global markets from non-OPEC producers, the development of the shale sector, and a shift away from oil to other energy sources in some areas,2 GCC producers’ oil rents continue to afford them a great deal of flexibility in facing both domestic and external challenges.

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The GCC’s status in global energy markets historically has been strong due to its decisive role within OPEC. Four GCC states are OPEC members—Saudi Arabia, Kuwait, the UAE and Qatar—and Saudi Arabia holds particular influence globally due to its ‘swing’ producer status. It is widely expected that the bloc’s influence will wane in the coming years. This is due to significant challenges imposed by non-OPEC producers (including Russia, the US, Canada, Brazil) whose production ­levels have increased significantly in recent years. Non-OPEC production has had major impacts on overall supply and the global pricing mechanism. Such impacts have led to various price decline periods over the recent years. Global growth projections are expected to sustain oil prices over the longer term. However, changes to supply and price formation will impact GCC producers’ role in the market in the nearer term. Indeed, OPEC itself estimates that whilst its role in the market is likely to decline in the coming years due to non-OPEC and shale oil production, its stronger reserves position and uncertainty around the viability of shale as a reliable source will lead to a revival of demand for OPEC exports in the future.3 OPEC’s response to the arrival of shale oil on global markets in around 2011 illustrates the increasingly complex market today. The impact shale oil had on global production levels directly influenced OPEC’s decision in November 2014 to abandon production targets in order to regain market share. Although this had negative fiscal repercussions in the GCC producer states (as their oil-funded budgets were significantly impacted by lower oil prices), it suggests that OPEC members saw maintaining market share as more important at this point. According to the European Central Bank, shale oil production can be expected to remain robust over the next fifteen years due to technological improvements to production and distribution and the highly competitive nature of the shale oil market. However, the Bank also cautions against over optimism due to ongoing uncertainties over the longevity of the so-called revolution and the factors (including geological conditions and supply chain inefficiencies) that effectively prevent distribution far beyond the US market currently.4 This assessment would seem to ­support OPEC’s optimism about the future of oil demand. The strong position of the GCC in the global oil market has also enabled the GCC countries to gain US security guarantees, as a valuable

30  S. BAZOOBANDI AND R. ALEXANDER

counterbalance against other key players in the broader Middle East region. Uncertainties around the long-term viability of shale oil production, as well as other mutual strategic interests in the region between the US and the GCC, mean there is unlikely to be a departure from the existing security arrangement in the foreseeable future. Indeed, deteriorating relations between the US and Iran since the election of President Trump and the US withdrawal from the nuclear deal in May 2018 suggest US–GCC relations could strengthen and that some military bases in the region could even be expanded. To this end, there have been discussions of a more formalised US-backed regional security alliance in the region, the Middle East Strategic Alliance.5

State-Building in the GCC: Oil and the Social Contract The region’s oil wealth has enabled the ruling elites to develop an effective system of governance under which their authority has been underpinned by oil-funded spending on economic development and social benefits. Impressive macroeconomic and development indicators since the discovery of oil (along with very centralised systems which have enabled bureaucratic flexibility during fiscally challenging periods) have been at the root of the high levels of political stability across these countries. Support between the GCC rulers has also been vital in ensuring stability across the bloc. The oil-rich states (Saudi Arabia, Kuwait and the UAE) have extended financial assistance to the—relatively speaking— oil-poor states of Bahrain and Oman, in order to support diversification into non-oil sectors and during times of economic and political crisis. So even for those GCC countries that are not directly dependent on oil income, the broader GCC oil income remains a vital backstop.

The State–Citizen Social Compact The establishment of the Gulf states in the nineteenth century was ­followed by the introduction of a new social contract across the region and a series of treaties with the British Empire.6 These treaties allowed the newly established states to gain international recognition and assisted the rulers in gaining the support of local tribes.7 In order to maintain the stability within the local communities and generate a sense of unity amongst various tribes, the ruling families initiated arrangements

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through which security, justice and economic support was guaranteed by the ruling elite in return for loyalty of other tribes. Oil revenues facilitated such strategies. The Arab ruling families across the Persian Gulf gradually consolidated their power for their respective communities. In 1938 in Kuwait, the year that oil was discovered, the ruler of Kuwait dismissed a parliament established by the merchants. He then appointed members of his family to control most of the a­ dministrative institutions of the government. With the exception of Oman, since their establishment, in all the GCC countries, royal family members have been appointed to control the most important and sensitive government positions.8 The longevity of the ruling families across the region has been in large part due to the distribution of oil wealth throughout the society, as a condition for political compliance. As a result, new definitions of national identity and citizenship emerged in the region. This system has functioned smoothly for the most part, but given its inherent lack of transparency and fairness, there may be growing calls for reform towards a more transparent and meritocratic system in line with the growing global trend of citizens holding their leaders to account. In addition to social and cultural factors, citizenship and national identity in the GCC are also shaped by the political economy of these countries. One common characteristic across the Gulf countries is the close link between citizenship and economic benefits. The distribution of resources is the main mechanism for defining a unique social contract in the region. There has been a conscious effort by the ruling families to associate the economic benefits with national identity in order to encourage loyalty. The privileges that accompany holding GCC passports are reflected in employment benefits, judicial protections and government grants and payments. Being a local citizen of the GCC is associated with higher public sector salaries and access to financial resources (in the form of direct entitlements, as well as subsidised fuel and utilities). The access to oil income had also until recently allowed the regimes to be tax-free, and for oil wealth to be distributed amongst different local, tribal, ethnic or religious groups. Whilst in modern societies, political legitimacy is gained through political mechanisms in which the government is held responsible for the use of tax receipts, the social contract has been different in the GCC. Here, governments have gained political legitimacy through large-scale distribution of resources amongst the various groups in the society.

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Oil-Based Economic Growth Models Economic growth across the GCC countries has been directly correlated with the boom and bust cycles in oil markets, with high levels of public spending in the boom years and fiscal tightening at times of lower prices. Notwithstanding price fluctuations, oil rents have continued to fund governments’ socio-economic programmes of wealth redistribution and job creation. Since the establishment of the GCC states, public employment policies have been the key channel for wealth distribution. One of the main privileges offered to citizens has been secure and well-paid employment opportunities (recent IMF estimates indicate that public sector wages are two or three times higher than those in the private sector across the GCC9). As a result, the number of Gulf nationals employed in the public sector has historically been far higher than in the private sector, where most employment opportunities are filled by foreign labour. Subsidies and entitlements generally have been broad-based and an important pillar of the social contract. Furthermore, since 2008, fiscal stimulus packages across the GCC economies have supported local credit markets and private sector economic activities. Additional spending focused on wages and subsidies were announced during the 2011 Arab Spring,10 some of which subsequently have been withdrawn or reined in as falling oil prices made them unaffordable. Given that oil receipts typically make up the bulk of government revenues across the bloc, the whole social contract is highly vulnerable to oil prices falling below ‘breakeven’ prices needed to fund budget commitments. A similar dynamic to the oil price cycle spending decisions (whereby attempts to reduce reliance on oil revenues during periods of lower oil rents give way to more exuberant spending once prices rise again) can also be observed in attitudes towards economic diversification strategies. Although there has been a general acceptance for decades of the need to diversify away from the budgetary reliance on oil revenues, success in doing so across the GCC economies has been varied. For example, on the one hand the Saudi Arabian economy, including the private sector, remains primarily focused on the oil sector and is therefore almost wholly reliant on oil revenues to service its government spending. Conversely, the constituent emirates of the UAE have successfully, and according to relatively distinct strategies, diversified into other sectors. The concomitant improvements in institutional integrity and regulatory and legal reforms also distinguish the UAE from other GCC states11 and have

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created greater opportunities for future diversification and private sector participation in the economy.

The Role of SWFs in State-Building Historically, the ruling families in the GCC have used SWFs as a tool to support state-building strategies and to boost national identity perceptions. The GCC governments have sought international recognition through acquiring trophy assets (i.e. Harrods, Chrysler Building, Ferrari) to gain international recognition of their wealth—a strategy similar to other relatively young counties seeking recognition on the global stage, such as Singapore. Moreover, SWFs have been important instruments in helping to underpin the social contract. In most of the GCC countries ruling family members have controlled the government investment institutions, including SWFs. Whilst some of the SWFs do have clearly defined mandates, others do not. In such cases, their assets have been controlled and used by the states wherever and whenever they see the need to protect their interests or what they consider state interests. The role of Kuwait Investment Authority (KIA), for example, in financing military operations to liberate Kuwait and post-liberation reconstruction has been rather significant. Finally, the asset accumulation strategy of the GCC funds has also been crucial in prolonging the social contract. The control of national assets in the Gulf by the ruling elites and those close to them has indeed had an intergenerational purpose to it which is structured to transfer the control of wealth to the next generation of the rulers, who therefore have the financial capacity to maintain the current social contract. Sovereign wealth across the GCC has been vital, for example, in enabling regimes to manage the additional spending pledges in the wake of the Arab Spring in straitened fiscal conditions, where weaker oil revenues impacted budgets and would have resulted in more severe deficits in the absence of available sovereign funding mechanisms.

The Arab Spring: A Trigger for Reform? Over the past decades, the political elite in the Arab world, including the oil-rich GCC, has focused more on domestic and regional political manoeuvring and has abandoned the deep-rooted economic and social

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challenges. Most of the countries in the Arab world have experienced high unemployment particularly for youth cohorts, and an increasing level of social dissatisfaction. Macroeconomic indicators such as those on growth and inflation have been performing poorly and a disproportionate share of economic activity has been carried out by the state. On the back of soaring oil prices, the GCC states have been the sole economic power holders and the employers of the vast majority of nationals, with the private sector often remaining underdeveloped and reliant on foreign labour. Most of the successful local private companies have government links and often are owned by influential families or individuals. Decades of economic, social and political difficulties facilitated the biggest and the most widespread political mass mobilisation in the Arab world, commonly known as the Arab Spring. The political uprisings from North Africa to the Levant and Southern Arabia also resonated in the richer parts of the Arab world. Despite the differences in economic and social circumstances, all the GCC countries, perhaps with the exception of Qatar, have experienced some degree of social and political uprising since 2011. The globalised citizens of the GCC who have been watching events in other parts of the Arab world as they unfolded through their computer and mobile phone screens have begun to echo the demands for change and social dignity by their fellow Arabs. This has presented the GCC leaders with one of the biggest challenges to their political and economic power. The people began to question the previous social contract in which the state controls the key resources and expects political obedience in exchange for economic prosperity, regional and global recognition, security and justice. In some cases, this went so far as the citizens taking the streets to protest and, especially when this triggered violence, the citizens were met with deadly force. In the case of Bahrain, this was deemed so serious as to lead to intervention by the Saudi military to prevent further escalation. There was considerable divergence across the GCC in terms of how the Arab uprisings were felt: the more authoritarian and, at times, heavy-handed, response in Saudi Arabia, the UAE and Bahrain contrasted with a more muted response in Oman and Kuwait, where any dissent was resolved through parliamentary and legislative changes. And in Qatar, where there was almost no unrest, and the regime instead sought to leverage political and social discontent elsewhere in the region to further its own influence and challenge the existing regional balance of power. These differences in security perceptions and responses foreshadowed the more substantive

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fragmentation that would emerge in the form of diplomatic crises in 2014 and 2017 between Qatar and Saudi Arabia, the UAE and Bahrain. However, the Arab Spring and its aftermath have also presented the political leaders across the GCC with a rather unique opportunity to introduce the vital political and economic changes needed for more inclusive growth. Arab countries in political transition as well as the oil-rich GCC have been presented with a demand by their public to, as Hedi Larbi puts it, “recast their values, their political, social and economic choices, their rights and duties, and the role of their states in protecting those values and choices, as well as the systems to hold states accountable to their people”.12

Policies to Stabilise Domestic and Regional Unrest The GCC economies enjoyed a brief period of sharp increases in oil prices during the initial phase of the Arab Uprising. The rise of oil export income was soon accompanied by the rise in GCC public expenditures. The GCC leaders reacted to the challenges they faced mainly by channelling financial expenditures in two distinct ways: (1) by introducing new financial packages domestically, and (2) by providing financial assistance to countries going through political transitions.

Domestic Expenditure Projects GCC leaders’ first response to political unrest across the Arab world was to pour money into the old levers of control—public spending and subsidies—in an attempt to ward off any financial pressures that could fuel dissatisfaction and to remind citizens of the social contract. By Summer 2012, all the GCC governments had introduced new measures to increase social benefits for their citizens. Saudi Arabia allocated a total of $130 billion through two major social packages. The main share of newly introduced Saudi social packages was targeted to generate youth employment. In the UAE also, new food subsidies (on bread and rice) and increases in military pensions and housing loans were amongst the social expenditure that the government introduced shortly after the political unrest erupted across the region. In Kuwait, the government announced a $4000 grant to every Kuwaiti citizen, as well as increasing food subsidies. Oman pledged $1.3 billion in new government benefits and Qatar introduced an $8.1 billion government expenditure package aimed at increasing salaries and pensions.13

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Whilst the composition of this expenditure varied across the GCC, there was a common motivation, which was more political than economic. The governments hoped that a sharp increase in domestic spending would reaffirm the social contract, cool off social dissatisfaction and maintain social and political stability. Leaders followed the typical formula seen across the region and across the decades of a balance of cooption and coercion, with the carrot brought out before the stick. Considering such schemes are typically difficult to reverse, these expenditure packages are undoubtedly going to delay much-needed complex labour reform plans across the GCC. Furthermore, the government expenditure programmes will undermine the GCC private sector’s contribution to economic growth and diversification. As a result, such policies fail to resolve the existing socio-economic challenges of the GCC economies and will increase these economies dependence on oil for maintaining their economic growth.14

Regional Spending Packages Following the Arab Uprisings, the GCC states extended financial packages to Egypt, Jordan, Morocco, Tunisia, and Yemen. According to the World Bank, in 2011–2012, the GCC countries provided $7.1 billion to Arab economies in transition. This represents 40% of total official regional expenditures made by the GCC during this period. The GCC countries then invited Jordan and Morocco to join the Council. Although, the invitation was seen at the broader regional level as a slightly far-fetched move since none of the two countries are geographically near the Persian Gulf, it was facilitated by the GCC economies’ commitment to provide financial aid to these countries.15 In 2011, each GCC country committed $2.5 billion over five years to create two $5 billion aid packages extended to both Jordan and Morocco. Jordan cooperated with the GCC to identify suitable investment projects, whilst for Morocco, the Gulf SWFs invested as equity partners in the Moroccan government tourism and infrastructure investment vehicle, Wessal Capital.16 The political transition across the Arab world has generated a number of reasons for the involvement of the GCC in the region, creating a unique chance for the GCC leaders to become an influential force behind shaping the new Middle East. However, in reality, the GCC leaders have failed to act as a unified force to assist in humanitarian crises

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and help bring about peace. Instead, growing divisions between the states has reflected broader regional schisms, particularly the SaudiArabia–Iran balance of power. The role of the GCC in fuelling problems in the region has become particularly acute since the 2017 Qatar crisis, which solidified these divisions. Accusations that Qatar has been funding extremist groups (notably Islamic State, Muslim Brotherhood groups and the Houthi rebels in Yemen) that are destabilising the region and strengthening Iran’s regional standing was one of the main reasons for the Saudi-led 2017 Qatar blockade. Since then, both sides have engaged in a range of tactical interventions in the region, aimed at strengthening their side and weakening opposing forces. Most notably, Saudi Arabia and the UAE have funded the devastating war in Yemen. Their role has become so controversial that Saudi’s main arms suppliers (the US and the UK) have joined the United Nations’ calls for a policy change to bring the conflict to an end.17 As concerns about domestic stability, intra-GCC rivalries and uncertainties around the role of global players (mainly the US and Russia) and Iranian power persist, the GCC states can be expected to continue to fund regional conflicts and development projects that support their role in regional affairs.

An Incentive to Address Longer-Running Challenges? Unrest across the region has also been an important motivator for regimes across the GCC to rethink or address some of the longerrunning challenges they face. This involves balancing the maintenance of their own power with political and economic stability in their countries in the context of a more geopolitically challenging environment and less benign oil market conditions. Leaders have acknowledged the window of opportunity they face to adjust their economies and societies before external conditions force changes that may pose greater risks to regime continuity. Various blueprints for a new social and economic framework have been presented across the region, with the most high-profile iteration being Saudi Arabia’s Vision 2030, fronted by Crown Prince Mohammed bin Salman. Gulf leaders’ authority to effect change is strengthened by the prolonged violence, instability and, in some cases, threats to sovereignty (for example, where Islamic States has taken hold of swathes of territory) in areas of the Middle East where the Arab uprisings successfully ousted leaders. This acts as a sobering lesson to potential dissenters of how regime change can end, to the benefit of the GCC

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rulers whose authoritarian tendencies are presented as justified in the face of such risks. However, great uncertainty remains about how bold reforms will be given that many of the inefficiencies of these states’ economic systems are considered essential in keeping political control over their citizens via the social contract.

Transition to a Post-oil Economic Growth Model The GCC economies were affected to differing extents by oil price falls in 2009 and 2015. Whilst the break-even price of oil for the budgets of most of the GCC economies is considered to be around $50 per barrel over the next few decades, Saudi Arabia’s break-even requirement to balance its budget is likely to be higher, according to the IMF’s most recent assessment.18 There is therefore considerable pressure to make substantive changes towards a more diversified economic model. Whilst the ambitions of strategies such as Saudi Arabia’s Vision 2030 are admirable, it remains unclear whether the international investor sentiment needed to drive such wholesale change and sustain dynamic private sectors exists,19 and indeed whether there is appetite at any level of society to disrupt the complex fabric of entitlements and vested interests that hold the status quo together in GCC states.20 The recent, but possibly enduring, decreases in hydrocarbons export income may profoundly affect the economic growth prospects in the GCC. Being the largest economy in the GCC and with the largest number of nationals, Saudi economic growth is likely to face more serious challenges than the other GCC states.21 According to the IMF’s projections overall GDP fell by 0.2% in 2017, and Saudi Arabia recorded its first contraction since 2009,22 underlining the importance of planned reforms. GCC economies have taken steps towards driving up non-oil revenues (e.g. the introduction of value-added tax in Saudi Arabia and the UAE) and addressing unsustainable public spending measures (e.g. public sector hiring freezes and pay cuts and subsidy reductions). However, these do not address structural problems and may not all be sustainable in any case (wage cuts will have to be abandoned to avoid social discontent). Added to this is a pattern of non-delivery and backtracking, especially at times of higher oil prices. For example, in April 2017 previously applied public sector pay cuts were reversed and then in July 2017 levies were imposed on expatriate workers and their dependents, suggesting a certain lack of conviction

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is in truly moving away from the system of well-established public sector entitlements towards a functioning private sector. Indeed, privatisation in itself is seen as key to the successful diversification away from oil-dependent growth, to improve economic efficiencies and raise tax revenues. Countries within the GCC that have more successfully moved away from the oil-based growth model to date have had more open and sectorally diverse private sectors, and there are various plans across the region on how to expand the reach of private investors into different sectors of the economy.23 The challenge for countries wishing to expand their private sectors will be to overcome investor doubts about the viability of doing business in such economies. Saudi Arabia’s prospects are particularly hobbled by the current discrepancy between aspirational levels of private sector participation and the reality of doing business there. Changing the culture that has been created as the by-product of the current social contract is possibly the biggest challenge to policymakers in the region. The current social contract has created varying degrees of entitlement amongst the citizens across the region. Therefore, the ability to achieve the seemingly inevitable reinvention of the social contract in the Gulf due to the possible decline of oil income will very much depend on the ability and willingness of the government to change the entitlement culture. As a result of the current social contract, citizens perceive the economic benefits provided by the government as their right rather than a privilege. If these entitlements were to be removed, they would need to be replaced with robust social welfare systems and public services that could fulfil some of the same functions but in a more efficient and fairer way. The government’s public sector heavy labour market policies that have stemmed from the current social contract in the region have also become problematic over time. The current demographic structure in the GCC, combined with the medium-term prospect of lower oil prices, mean most of the GCC states will not be able to maintain the policy of continuous recruitment of the ever-growing number of young labour-market entrants into the public sector.24 Labour force participation rates among nationals in the GGC states are lower than in the broader region and very low by global standards. According to International Labour Organization estimates, foreign workers account for on average half of all workers in the GCC, rising to three quarters or more in the private sector.25 As the policymakers of the GCC attempt to decrease their economic dependence on oil income, the government employment

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opportunities will have to be the subject of reforms. Such reforms will undoubtedly require revising the current social contract. Unemployment, especially among the youth, and especially in Saudi Arabia, means that the transition away from excessive levels of public sector employment and above-market-level remuneration towards greater private sector penetration in the job market will be difficult to manage. Improved education and training will be an essential prerequisite to ensure preparedness of this growing youth cohort for private sector employment. And given that the growth of the private sector will, even under a best-case scenario, take years, an appropriate social safety net (e.g. unemployment benefits) needs to be established in tandem to prevent a rise in unemployment as a public–private sector rebalancing is brought about.26

Balancing Cheap Oil and Rising Domestic Consumption In addition to the labour market challenges posed by demographic changes across the GCC countries, domestic energy consumption needs will also become increasingly onerous for governments across the bloc. Heavily subsidised energy prices, harsh weather conditions, lack of efficient public transport and consumer preferences have boosted the domestic energy consumption in the GCC dramatically. GCC countries consumed an average of 9 tonnes of oil equivalent (TOEs) per capita in 2014, nearly double the global average (4 TOEs per capita). High energy consumption in the GCC is expected to continue. Over the past four decades, per capita energy consumption in Qatar, Saudi Arabia and the UAE has grown at an annual average rate of over 2%. This figure in other countries with similar national income level has stood around 1%.27 If current trends continue, the capacity to export hydrocarbon resources in some of the GCC countries, particularly Saudi Arabia that is the home to the largest population in the GCC, will drop significantly. Given the GCC’s economic dependence on energy revenues and high population growth, a decline in export capacity will lead to grave financial and social pressures.28 The GCC’s use of fossil fuels (mainly gas) to generate electricity and desalinated water has increased significantly over the past decades. This has already had opportunity costs caused by limited export capacity for some of the countries in the region. Increasing domestic energy consumption in the GCC will have a global impact by limiting the availability

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of oil and gas for export as well as the position of GCC ­countries in ­international climate change negotiations. It could also have a longerterm impact on the economic sustainability of these countries. In the context of the region’s SWFs, any reduction in export capacity and ­revenue due to domestic energy consumption will have a negative effect on the ability of the sponsoring governments to divert assets towards these funds. In the long run, therefore, high energy consumption will translate into lower government saving levels. This will not only weaken the role of the GCC funds in the global financial markets, but also it will limit the capacity of the region’s political elite in maintaining the existing social contract that will jeopardize the future of social and political stability in the region. The development of the green energy sector is seen as an important component in preparing for future energy consumption needs. Government investment strategies into green energy are in large part taking place through SWFs, the most high-profile of which is the alternative energy company, Masdar, owned by one of Abu Dhabi’s SWFs, Mubadala. Masdar has two funds focused on investment into renewables including into overseas renewables projects.29 Homegrown initiatives in the sector can be expected to expand as distribution networks and regulatory and policy frameworks develop.

Adjusting SWF Strategies to the ‘New Normal’ The Gulf SWFs have come under immense pressure since the 2009 slump in oil prices. Finding new investment opportunities to maximize returns is no longer their main priority. Instead, there has been a reduction in strategies based on capital maximisation towards a heavier focus on investments focused on economic development and stabilisation at home. The GCC economies share a high dependence on oil revenues and all the oil exporting countries in the bloc share the pressure of declining oil markets. According to the latest figures from the Sovereign Wealth Fund Institute,30 the main SWFs of the GCC countries have over $2.9 trillion of assets under management, meaning that these funds continue to be both a crucial financial resource for present and future needs, and an increasingly important tool in exerting their political power both at home and abroad.

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The combination of low oil prices and regional events such as the Arab Uprisings have prompted the GCC countries to increase their local spending and to redirect a bigger share of their foreign investments back into the region. This is reflected in various studies over the past few years. The inward shift of GCC sovereign wealth fund assets was one of the most immediate responses to the regional unrest and global oil market declines. However, a rebalancing has to become a part of a more longterm sovereign wealth management strategy in the GCC. Reports show that the region has planned to invest around $142 billion on mega infrastructure development plans between 2013 and 2020.31 It is expected that the investment behaviour of the SWFs will need to remain flexible due to more moderate oil price expectations and domestic and regional financial needs. In 2016, there were reports that institutional investors such as Abu Dhabi Investment Authority (ADIA), Saudi Arabian General Investment Authority (SAGIA) and the Qatar Investment Authority (QIA) planned to repatriate around $700 billion of assets from their European investments.32 Whilst challenging oil market conditions can be expected to temper overseas investments by the GCC sovereign wealth funds, there are some indications of a return to appetite for more familiar ‘trophy’ investments; for example, the QIA has recently announced plans that indicate a return to form on this front.33 Moreover the Public Investment Fund (PIF) of Saudi Arabia, the country’s main SWF, has expanded its investment programme globally since the Kingdom’s young crown prince, Mohammad bin Salman (MbS), took over as the fund’s chairman in 2015. A decade later, under the management of the Crown Prince, the PIF seems poised to rapidly catch up with other sizable SWFs in the region. Under Vision 2030, the fund has a mandate to split its assets between domestic and international investments, open new offices globally, and double its staff.34 The fund’s investments in Uber, Softbank and Blackstone35 have largely replicated the past investment strategies of other Gulf SWFs, namely investing in high profile, if not high yield, opportunities. The Crown Prince announced in early October 2018 that the PIF was close to reaching its $400 billion target and that its assets under management will increase to $600 billion by 2020.36 The expansion of PIF investment strategy has been a key element in rebranding the fund and re-introducing it as a global investor with ambitious and broad

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investment goals. Saudi Arabia has faced growing reputational issues arising from its domestic political crisis (including the arrests of a number of senior members of the ruling family at Ritz Carlton Hotel), the war in Yemen, the ongoing balance of power struggle with Iran in Iraq and Syria, the diplomatic crisis with Canada, and withdrawals of prominent attendees from the much anticipated 2018 Future Investment Initiative (FII) following the Khashoggi affair. However, history suggests that the financial clout of Saudi Arabia is likely to prevent material punitive measures from the international community in the longer term. For example, in 2006, legislation was tabled in Congress to block an acquisition by the UAE state-owned enterprise DP World of several US port management businesses on national security grounds. But after the global financial crisis hit a couple of years later, the US unquestioningly welcomed similar investments in strategic industries that needed financial support. Also, a number of Russian and Chinese executives37 did attend the FII, and whilst they present valuable alternative partners, it will not be easy for Saudi Arabia’s biggest investment vehicle to find opportunities in Russia or China that are equally attractive and reputable as those in the Western economies. Moreover, Western leaders are likely to be uncomfortable with the geo-political implications of stronger financial ties between the GCC SWFs and Russia and China.38 So despite developments such as the recent call by the US and the UK for the Saudi-led coalition in Yemen to adhere to the UN peace process, there is unlikely to be a strategy of more wholesale condemnation against allies in the GCC that would weaken longstanding political alliances and financial links, and push these countries further into the Russia/China sphere of influence. Another change in investment behaviour of the GCC funds in the wake of oil price falls and the Arab Spring was related to governments’ push for higher returns and more efficient reserves management, partly through cutting down on wealth management fees. In subsequent years, Western asset management companies reported heavy withdrawals by the GCC sovereign wealth funds of assets. By the end of 2015, the GCC sovereign wealth funds withdrew at least $19 billion of their assets from European and US wealth management houses. In 2015, Aberdeen, the third-largest listed fund house in Europe, reported consecutive outflow of assets by the SWFs. Companies like Invesco, State Street, JPMorgan, BNY Mellon and Goldman Sachs also reported similar trends. The high

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redemptions by the SWFs following oil price falls are unlikely to be reversed in full whilst concerns over oil revenues and ongoing instability in the region support the rationale for keeping funds more accessible and achieving higher yields. This desired reduced reliance on external asset managers is also, in part, due to the fact that SWFs’ teams of internal experts have been strengthened over time. As part of a broader returns strategy, and as a means of reducing conflicts of interest and having more control over their investments, GCC SWFs are likely to continue to build up their internal functions to further reduce their reliance on external providers. Indeed, moves such as the closure of ADIA’s London office and hiring of senior finance professionals for its Abu Dhabi office39 suggest steps are already being taken to reduce external dependencies. At the same time, some recent reports suggest that the pools of GCC SWF investment capital available to international managers will remain considerable as levels of internal expertise will take time to develop40 and because of GCC SWFs’ high usage of active management strategies given their activity in less traditional and often less efficient markets.41 Since the beginning of 2015, the GCC funds’ outgoing investment volumes have dropped significantly. This is primarily caused by the governments’ pressure on SWFs to invest in their respective domestic markets. Sovereign wealth management institutions like ADIA, QIA, SAGIA and SAMA (Saudi Arabian Monetary Agency) Global Holding, have been more active (than ever) in local private equity, real estate and infrastructure opportunities, and many of the newer funds are concentrating in these local investments. The region is facing about $1 trillion deficit in financing infrastructure projects. Naturally, public sector supplied infrastructure projects have received the most attention from the GCC funds. This readjustment towards a less international investment stance may also be strengthened by the current growth in global nationalist and protectionist rhetoric, which is not only changing perceptions of which assets or geographies are considered ‘safe’, but also making overtly protectionist stances more accepted on the global stage. However, the GCC governments have recently emphasised the importance of strengthening public–private partnership (PPP) in the building of these regional infrastructure projects. Involvement of the SWFs, along with private investors, will therefore be one of the key government tools for expanding and strengthening PPPs.

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Conclusion The decades-old social contract in the GCC countries has been disrupted by oil price falls in 2009 and 2014 as well as by social and political unrest is the broader region that has worsened since 2011. The 2014 end to the so-called global oil “supercycle” caused the economic activities in these oil exporting economies to slow dramatically. This forced a slew of fiscal consolidation measures (including tax and energy subsidy reforms and steps to reduce the public wage bills) in response to the impact of lower oil rents on governments’ budgetary spending power. Such measures, however, have not been successful in addressing fiscal deficits and long-standing structural economic problems persist. Lower oil prices have compounded the challenges the GCC ruling elite were facing as a result of political and social instability across the broader Middle East region since 2011. This has driven a renewed commitment towards diversification as rulers seek to mitigate the risk to social and political stability caused by the impact of lower oil prices of fiscal spending power. So whilst macroeconomic stability has been preserved for now, economic, labour and financial market reforms are critical to put these countries on a more sustainable footing. There needs to be a new strategy for re-directing money currently spent on public sector employment, subsidies and other entitlements into a more equitable and transparent social support system where the basic needs including education and training, healthcare and unemployment benefits mean that living standards are maintained and the workforce is equipped to fulfil roles created outside the public sector. In addition, for private sector development to take off, GCC governments also need to focus on shoring up the legal, policy and regulatory frameworks, and meeting international standards in order to attract and retain international investment over the long term. Ambitious economic transformation programmes have been presented by various states within the bloc and a supportive investment stance from sovereign wealth funds will continue to support economic development. However, such a transition will be exceedingly challenging to implement, especially as it—by definition—requires upsetting the complex network of patronage and benefits that make up the social contract that has maintained the political and economic stability across the GCC over the decades and ensured the longevity of the ruling families.

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Notes









1. EIA Chart, “The 10 Largest Producers and Share of Total World Oil Production in 2017”, https://www.eia.gov/tools/faqs/faq.php?id= 709&t=6. 2. IEA, Oil 2018 (March 2018). 3. OPEC, World Oil Outlook 2018 (September 2018). 4. Irma Alonso Alvarez and Virginia Di Nino, “The Oil Market in the Age of Shale Oil”, ECB Economic Bulletin (December 2017). 5. “A New Arab Military Alliance Has Dim Prospects”, The Economist, 6 October 2018. 6. James Onley, “The Arabian Frontiers of the British Raj: Merchants, Rulers and the British in the Nineteenth Century Gulf”, in Oxford Historical Monographs (Oxford University Press, 2007). 7. James Onley and Sulayman Khalaf, “Shaikhly Authority in the Pre-oil Gulf: A Historical-Anthropological Study”, History and Anthropology, vol. 17, no. 3 (2006), pp. 189–208, available at: http://sulaymankhalaf. com/pdf/Onley-and-Khalaf-2006.pdf. 8. Jane Kinninmont, “Future Trends in the Gulf, Chatham House Report” (2015), available at: https://www.chathamhouse.org/sites/files/chathamhouse/field/field_document/20150218FutureTrendsGCCKinninmont. pdf. 9. Natalia Tamirisa and Christoph Duenwald, “Public Sector Wages Bills in the Middle East and Central Asia”, International Monetary Fund (January 2018). 10.  Chatham House, “Middle East and North Africa Programme: Future Trends in the GCC Workshop Summary: Political and Economic Scenarios for the GCC” (2012), available at: https://www.chathamhouse.org/sites/ files/chathamhouse/public/Research/Middlepercent20East/0512gcc_ summarytwo.pdf. 11. The UAE scores highest of all GCC members in the World Bank’s “Ease of Doing Business Index” for 2018. The United Arab Emirates is ranked 11 among 190 economies. 12.  Hedi Larbi, “Re-writing the Arab Social Contract: Towards Inclusive Development and Politics in the Arab World”, Belfer Center Study Report (May 2016). 13. Centre for Security Studies, “Economic Costs, the Arab Spring and the GCC” (2012), available at: http://www.css.ethz.ch/en/services/digital-library/articles/article.html/143694/pdf. 14. Ibrahim Saif and Rand Fakhoury, “Lessons from the Gulf’s Twin Shocks, Carnegie Europe” (2012), available at: http://carnegieeurope.eu/ publications/?fa=47196.

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15. Fares Braizat, “Jordan Joining the GCC: Strategic Regional Realignment, Doha Institute” (2011), available at: http://english.dohainstitute.org/ file/get/0e0a49b6-9826-413e-8101-6a3701813d81.pdf. 16. Mustapha Rouis, “Response of the Arab Donors to the Global Financial Crisis and the Arab Spring, MENA Knowledge and Learning Series, the World Bank” (2013), available at: http://siteresources.worldbank.org/ INTMENA/Resources/QN112.pdf. 17. Gardiner Harris, “U.S. and Britain Seek Yemen Cease-Fire as Relations With Saudis Cool”, The New York Times, 31 October 2018. 18. International Monetary Fund, “2018 Article IV Consultation”, Country Report No. 18/263 (August 2018). 19. Jane Kinninmont, “Vision 2030 and Saudi Arabia’s Social Contract: Austerity and Transformation”, Chatham House Research Paper (July 2017). 20.  Steffen Hertog, “Late Populism: State Distributional Regimes and Economic Conflict after the Arab Uprisings” (May 2016) from the workshop From Mobilization to Counter-Revolution: The Arab Spring in Comparative Perspective. 21. “Jadwa Investment, Labour Market Update” (2016), available at: http:// www.jadwa.com/en/researchsection/research/economic-research. 22. International Monetary Fund, Regional Economic Outlook, Middle East, North Africa, Afghanistan & Pakistan (May 2018). 23. Paul Stevens, “Economic Reform in the GCC: Privatization as a Panacea for Declining Wealth?” Chatham House Research Paper (December 2016). 24.  Chatham House, “Middle East and North Africa Programme: Future Trends in the GCC Workshop Summary: Political and Economic Scenarios for the GCC” (2012), available at: https://www. chathamhouse.org/sites/files/chathamhouse/public/Research/ Middlepercent20East/0512gcc_summarytwo.pdf. 25.  “World Employment and Social Outlook - Trends 2019” (2019), International Labour Organization, available at: https://www.ilo.org/ wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/ publication/wcms_670542.pdf. 26. Toward a Diversified Knowledge Based Economy: Education in the Gulf Cooperation Countries, World Bank Group Engagement Note (October 2017) and The Jobs Agenda for the GCC Countries, World Bank Group Working Paper (April 2018). 27. International Monetary Fund, “Energy Price Reform in the GCC: What Can Be Learned from International Experiences?” (2015). 28. Chatham House, “Improving Energy Intensity in the Gulf Cooperation Council Countries” (2011). 29. Price Waterhouse Coopers, “Sovereign Investors 2020: A Growing Force”.

48  S. BAZOOBANDI AND R. ALEXANDER 30. SWFI’s Sovereign Wealth Fund Rankings (https://www.swfinstitute.org/ sovereign-wealth-fund-rankings/) estimate the size of the GCC’s SWFs in terms of assets under management as follows: ADIA, US$683bn. KIA, US$592bn. SAMA US$515.6bn. PIF, US$360bn. QIA, US$320bn. ICD US$229.8bn. Mubadala, US$226bn.EIA, US$34bn. SGRF, US$18bn. Mumtakalat $10.6bn. OIF, US$6bn. 31. Al Bawaba Business, “Sovereign Wealth Funds in GCC Focus More on Local Investments” (2013), available at: http://www.albawaba.com/ business/wealth-funds-gcc-490922. 32. Cyril Widdershoven, “Analysis: Petro-dollar Crunch Hits GCC Sovereign Wealth Funds”, Investment and Pension Europe (2016), available at: http://www.ipe.com/news/analysis-petro-dollar-crunch-hits-gcc-sovereign-wealth-funds/10012612.fullarticle. 33. George Hay, “A Flashy Qatari Deal Hints at the Nation’s New Investment Style”, The New York Times, 7 November 2018. 34.  Philip Cornell, “The Saudi Public Investment Fund: The Emerging Financial Vehicle Behind Vision 2030”, Atlantic Council Blog (30 March 2018). 35. “The Saudi Sovereign Wealth Fund Is Splashing Cash Around”, Financial Times, Due Diligence Daily Briefing, March 2018. 36.  David Butter, “After Khashoggi Disappearance, Business Sours on Mohammed bin Salman”, Chatham House Expert Comment (15 October 2018). 37. Nicholas Parasie and Asa Fitch, “Saudi ‘Davos in the Desert’ Lowers Its Profile”, Wall Street Journal, 22 October 2018. 38. Adam Ereli and Theodore Karasik, “Nationals Are Wielding Their Sovereign Wealth Funds as Tools of Power”, Foreign Policy, 11 January 2018. 39. Paul Clarke, “One of the World’s Largest SWFs Has Quietly Been Hiring London Finance Professionals”, efinancialcareers.com (11 April 2017). 40. Christopher Copper-Ind, “New Report Estimates GCC Assets to Total £3.5 Trillion”, International Investment, 18 September 2018. 41. Invesco, Invesco Global Sovereign Asset Management Study 2018.

CHAPTER 3

The Realignment of Regional Politics and the Future of the Gulf Cooperation Council Kristian Coates Ulrichsen

Introduction For thirty-six years after its launch in 1981, the Gulf Cooperation Council (GCC) represented one of the most durable examples of a regional intergovernmental organisation in the Arab world. Whilst other groups such as the Arab Cooperation Council and the Arab Maghreb Union failed to survive the vicissitudes of regional geopolitical currents in the 1990s and 2000s, the six member-states of the GCC (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) moved forward incrementally, if at times unevenly, on a path of gradual regional alignment. Whilst consensus on matters that touched on national sovereignty—such as foreign and defence affairs—was sometimes difficult to reach, a record of tangible cooperation meant that a regional security community did emerge in the GCC, even if it revolved around an uneasy power imbalance between Saudi Arabia and its five smaller partners, together with the US. K. Coates Ulrichsen (*)  Rice University’s Baker Institute for Public Policy, Houston, TX, USA © The Author(s) 2020 S. Bazoobandi (ed.), The New Regional Order in the Middle East, International Political Economy Series, https://doi.org/10.1007/978-3-030-27885-4_3

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The two iterations of the political dispute between Qatar, on the one side, and the troika of Bahrain, Saudi Arabia and the UAE on the other, have inflicted lasting damage on the GCC both as a grouping if like-minded states and as a regional security community. Whereas the nine-month withdrawal of the Bahraini, Saudi and Emirati Ambassadors from Doha in 2014 was ultimately resolved by an agreement signed in Riyadh that November, the subsequent diplomatic and economic embargo of Qatar by the same three countries that was launched in June 2017 is far more severe both in scope and implication. Proving far more resilient than its three adversaries had anticipated, Qatari leaders deepened ties with partners such as Iran and especially Turkey, whilst Kuwait and Oman eyed with wariness the evolution of a hawkish new axis in regional politics centred on the Crown Princes of Saudi Arabia and Abu Dhabi. Meanwhile the breakdown in the hitherto rock-solid network of US security partnerships in the GCC opened inroads for Russia in the region. This chapter begins by examining how and why the GCC developed as a regional organisation and security community in the 1980s, 1990s and 2000s. An opening section explores the factors that favoured closer cooperation among the six ruling families in the Gulf and analyses the nature of the cooperative mechanisms that gradually evolved after 1981. Progress was far from seamless or one-directional, however, and a second section examines the tensions that complicated, undermined and in some cases held back cooperation. Section three argues that the shock of the Arab Spring in 2011 and the differing regional responses to the upheaval not only widened these fissures in Gulf politics, but also altered the common threat perception that had at least constituted a consensual baseline in regional considerations of security. The chapter concludes with a fourth section that looks at how dynamics in Gulf security have been recast after the blockade of Qatar and herald the rise of a multipolarity of participants in regional security structures that for decades had been the preserve of first the British and then the US as external guarantors of stability.

Evolution of Cooperative Mechanisms The GCC was launched in Abu Dhabi on 25 May 1981, largely in response to the two seismic regional shocks of the Islamic Revolution in Iran in 1978–1979 and the outbreak of the Iran-Iraq War in September

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1980. Periodic attempts had occurred in the 1970s to bring together the countries of the Gulf but had lacked consensus on what type of cooperation—political, economic or security—should be prioritised and whether Iraq or Iran should be included. Oman led the way in the search for closer security cooperation with its neighbours borne out of its experience of the domestic Dhofar rebellion between 1965 and 1975 which was quashed with Iranian and British assistance.1 Preliminary discussions for collective security arrangements in the Gulf took place in Jeddah in July 1975 and in Muscat in November 1976, but no agreement could be reached between the eight participants, with the Iraqi and Iranian viewpoints on regional security, especially far apart. Indeed, the two meetings served more to highlight the lack of consensus amongst the eight littoral states when it came to sensitive issues of defence, security and foreign policy.2 The move towards practical cooperation accelerated only after the Iranian Revolution and the Iran-Iraq War illustrated in the harshest possible way to the six Gulf monarchies their shared regional challenges and interests. Thus, in November 1980, Saudi Arabia’s Interior Minister, Prince Nayef bin Abdulaziz Al Saud, stated, during a visit to Kuwait, that “The security of each Arab Gulf state is the security of Saudi Arabia”.3 Two months later, Kuwait’s Foreign Minister (and current, as of 2018, Emir) Sheikh Sabah al-Ahmad Al Sabah, submitted a working proposal for the establishment of the GCC that provided the basis for a meeting of Foreign Ministers in Riyadh in February. Three subsequent meetings were held in quick-fire succession and the six Foreign Ministers ratified the decision to create the GCC at a summit in Muscat on 10 March 1981. Kuwait’s permanent representative to the United Nations, Abdulla Yacoub Bishara, was selected to be the first Secretary-General of the GCC which formally came into existence in Abu Dhabi on 25th of May.4 Three very different ideas for a GCC from Kuwait, Oman and Saudi Arabia had emphasised, respectively, economic integration, military cooperation and collective security.5 The speed with which the new organisation was drawn up—along with the compromises between the three visions of coordination—meant that key issues of institutional design were left unaddressed. Writing in 1999 about the early years of the GCC, Emirati political scientist Abdulkhaleq Abdulla noted that ‘Its nature and what it stands for was hardly clear at the outset, and it is certainly no clearer today’, in part because the hasty formation of the GCC reflected ‘not so much sober thinking as…an immediate ad hoc reaction

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to the turbulent regional events of 1979-80’.6 The GCC was neither a political nor a military alliance and lacked an integrative decision-making institution akin to the European Commission or any treaty-based foreign policymaking power. Moreover, the requirement for unanimity (rather than majority voting) on substantive matters at the Supreme Council (of rulers) and the Ministerial Council meant that individual countries (and rulers) have, in practice, had veto power over policies they did not approve of.7 Although the actual term ‘security’ was absent from the main text that founded the GCC, the organisation clearly represented a comingtogether of the Gulf monarchies in a defensive response to the instability raging around them. The developments in Iran and Iraq reinforced in Gulf rulers’ minds their common regime characteristics and mutual interests as status quo powers struggling to hold back the tide of war and revolution.8 Sultan Qaboos of Oman caught the mood when he observed that “We are thinking together, we are talking together, we are planning together, and we are seeing things together instead of individually”.9 Gulf leaders additionally shared an interest in containing the ideological overspill of the Iranian revolution to their own polities as well as the targeting of offshore energy installations and maritime shipping by the warring combatants.10 Bishara himself observed that the objective of the GCC during the 1980s was to “keep the region at a distance from the Iran-Iraq War” and to “preserve the status quo and maintain the prevailing balance of forces”.11 Policymaking authority in the GCC was vested in the Supreme Council that consisted of the six heads of state and supported by a Ministerial Council and a Secretariat in Riyadh that managed the dozens of committees and sub-committees that provided its bureaucratic underpinning. The Supreme Council convenes each year in December at an annual GCC Summit whilst the Ministerial Council consists of the six foreign ministers or their deputies and meets quarterly. The six GCC counterparts in other ministerial capacities also gather regularly (e.g. Health Ministers, Defence Ministers, Interior Ministers) to ensure coordination of sector-specific approaches to policy.12 A Unified Economic Agreement that was signed shortly after the creation of the GCC pledged the six member-states to harmonise and coordinate oil and industrial policies, design a uniform system of tariffs and work towards the free flow of labour and capital across their common borders.13

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Security cooperation between GCC states initially took place on a bilateral basis between Saudi Arabia and individual smaller neighbours. Bahrain and Saudi Arabia signed a defence agreement in December 1981 shortly after reports surfaced of an attempted coup linked to the Iranianlinked Islamic Front for the Liberation of Bahrain, whilst the UAE, Oman and Qatar all signed agreements on security cooperation and the exchange of information with Saudi Arabia in 1982. Bahrain and Oman also concluded a bilateral agreement of their own in 1982 that covered maritime security for shipping transiting the Strait of Hormuz.14 In this early period, Kuwait was the only GCC state not to sign a bilateral security agreement with Saudi Arabia as officials resisted extradition and border control arrangements that would enable Saudi officials to enter Kuwait at will, as they would do again in 1994 when Kuwait opposed a GCC-wide internal security agreement.15 Iran’s counterattack deep into Iraqi territory in 1982 and an intensification in security incidents in the Gulf itself led the Gulf rulers to agree to establish a common security force at their third GCC Summit which took place in Bahrain’s capital, Manama, in 1983. The Peninsula Shield Force represented the most tangible outcome of GCC states’ security cooperation in the early years of the organisation and was borne—like the GCC itself—of a response to external threats. However, the utility of the Peninsula Shield Force was hampered by lingering unease amongst the six member-states at the prospect that the units would become a vehicle for the projection of Saudi power. The limitations of a collective security arrangement when the six GCC states could not reach consensus on an issue was illustrated at the GCC Summit in Abu Dhabi in November 1986, when a Kuwaiti request for the Peninsula Shield Force to station a contingent of troops on Kuwait’s Bubiyan Island, opposite Iranian-occupied Iraqi territory, was denied, to the dismay of Kuwaiti officials. The reason for the denial was the reluctance of Oman and the UAE—both states in the Lower Gulf which lacked the proximity to the warzone of Kuwait—to confront or provoke Iran.16

Challenges to Cooperation After being rebuffed by its partners in the GCC, Kuwait turned to the Soviet Union and the US for help in countering threats from Iran to Kuwaiti shipping in what became known as the ‘Tanker War’ in 1987 and 1988. Similarly, in 1990, neither the Peninsula Shield Force

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collectively nor GCC states individually were able to reverse the Iraqi invasion and occupation of Kuwait, which was rolled back by a massive US-led multinational coalition with only token Gulf support. After Kuwait was liberated, an Omani proposal to expand the Peninsula Shield Force to 100,000 men failed to gain traction, as did a short-lived effort to involve Egyptian and Syrian forces in a pan-Arab approach to Gulf security.17 The ‘Damascus Declaration’ signed by the six GCC states with Egypt and Syria in December 1990, in the run-up to Operation Desert Storm, was already a thing of the past by the time it was discussed at the first post-war GCC Summit that took place in December 1991 in Kuwait.18 The US also responded to the Gulf War by signing a series of bilateral ten-year Defence Cooperation Agreements with individual Gulf partners that undermined further any move towards collective security arrangements within the GCC.19 Several key reasons account for the failure of the GCC to move forward on substantive issues that went beyond technocratic cooperation to touch upon matters of national power and sovereignty. One was (and remains) the basic imbalance in size and power within the GCC between Saudi Arabia, on the one hand, and its five neighbours which vary in degrees of smallness. As Rory Miller has noted, Saudi Arabia is seven times larger than Oman, the next biggest GCC state, which itself is bigger than the other four states of Bahrain, Kuwait, Qatar and the UAE combined.20 This imbalance has been more than just an abstract consideration as Saudi leaders have exhibited expansionist designs over all their Arabian Peninsula neighbours at various times over the past century. Kuwait beat back an attack by Ikhwan (tribal forces) at the Battle of Jahra in October 1920 and was then subjected to a fourteen-year economic and trade blockade by Abdul Aziz bin Abdul Rahman Al Saud, the founding King of Saudi Arabia, that lasted from 1921 to 1935.21 Saudi Arabia went to war against its southern neighbour Yemen in 1934, only two years after the formal establishment of the modern Kingdom, as mobile columns led by three future Kings—Princes Saud, Faisal and Khalid—advanced deep into Yemeni territory and imposed a ‘victor’s peace’ at the Treaty of Ta’if that ceded the Yemeni provinces of Asir, Jizan and Najran, to Saudi control.22 The Saudi leadership later made territorial claims against the Ruler of Qatar in the 1930s and against the British protected states of Oman and Abu Dhabi in the 1950s and 1970s.23 King Abdul Aziz maintained a territorial claim on the majority of the Qatari peninsula, which he based on

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political allegiances of tribal groups, and in 1935 made an unsuccessful attempt to formalise this demand in advance of the drawing up of the oil concession for Qatar.24 In 1949, the Saudi government laid territorial claim to much of Abu Dhabi, including large swathes of its coastline and the inland oasis region in the border area of Al Ain with Buraimi in Oman. Three years later, a Saudi force occupied one of the villages in the Omani sector, precipitating a three-year standoff between Saudi Arabia and the rulers of Abu Dhabi and Oman.25 Matters came to a head in 1955 when a contingent of the Trucial Oman Scouts moved into the oasis region with the support of the rulers of Abu Dhabi and Oman, at around the same time that the Levies were also deployed to Dubai to strengthen the position of the sitting Ruler against the intrigues of an uncle who was backed by Saudi interests.26 Concern at the Saudi threat to Abu Dhabi was one of the reasons why the soon-to-be-ousted Ruler, Sheikh Shakhbut bin Sultan Al Nahyan, wished to set up an armed force of his own (the Abu Dhabi Defence Force).27 Two decades later, Saudi officials forced the President of the newly-created United Arab Emirates (which had been set up in 1971) to agree to give up a strip of land between Abu Dhabi and Qatar in return for Saudi recognition of the UAE. The later discovery of the large Shaiba oilfield in the Khor al-Udaid corridor ceded in 1974 by the UAE to Saudi Arabia continued to rankle among Emirati officials for the next four decades.28 Although most border disputes were resolved prior to the formation of the GCC in 1981, they left a legacy of residual wariness in other Gulf capitals over expressions of Saudi power and influence within the organisation and never entirely disappeared. In September 1992, for example, a short but sharp skirmish took place along the Qatari–Saudi border at Khafus that left two Qatari soldiers dead whilst further incidents occurred in 1994.29 Ties between Qatar and Saudi Arabia remained strained for fifteen years thereafter, with the Qatari delegation withdrawing from the final session of the annual GCC Summit in 1995 and beginning a partial boycott of GCC meetings to protest the appointment of a Saudi diplomat, Jamil al-Hujailan, as the new SecretaryGeneral.30 Qatar also blamed Saudi Arabia for an attempt to restore the ousted Emir, Khalifa bin Hamad Al Thani, following his toppling by his son and heir apparent, Hamad bin Khalifa Al Thani, in 1995. Tempers flared in January 1996 as Abu Dhabi and Bahrain responded to Qatar’s walkout from the GCC Summit by welcoming Khalifa bin Hamad on a

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regional tour during which he met with UAE President Sheikh Zayed bin Sultan Al Nahyan and was provocatively escorted by Bahrain’s Crown Prince Hamad bin Isa Al Khalifa in a Bahraini naval vessel to within sight of the Qatari coastline.31 The strained relationship between Qatar and Saudi Arabia was a major reason by Emir Hamad bin Khalifa Al Thani sought to diversify Qatar’s foreign relations and escape the Saudi shadow after he took power in 1995. The attempt by Emir Hamad and his long-serving Foreign Minister, Sheikh Hamad bin Jassim Al Thani (who doubled as Prime Minister of Qatar between 2007 and 2013) to carve an autonomous niche in regional affairs was never fully accepted by Saudi leaders and sowed some of the seeds of the later diplomatic ruptures of 2014 and 2017.32 In the intervening period, however, and somewhat at odds with the close post-2011 alignment of the Saudi and Abu Dhabi leadership, several of the most acrimonious disputes within the GCC during the 2000s involved Saudi Arabia and the UAE and actively undermined attempts to develop GCC-wide institutions. In 2006, Saudi officials withdrew transit rights for an extension of the planned Dolphin gas pipeline network from Qatar to Kuwait and attempted to halt the construction of a line from Qatar to Abu Dhabi by claiming—as they did with Kuwait but unsuccessfully with the UAE—that the pipeline crossed Saudi territory and therefore required Saudi consent.33 Three years later, in May 2009, years of preparation for a GCC currency and monetary union collapsed when the UAE withdraw suddenly and without warning from the project less than a year before it was due to launch in 2010. Emirati officials had campaigned vigorously to host the GCC Central Bank in Abu Dhabi and reacted with visceral anger to the decision to locate the bank in Riyadh instead.34 Also in 2009, Saudi officials placed restrictions on Emirati citizens entering the Kingdom using UAE identification cards that featured a map that included as Emirati contentious territory stemming from the abovementioned 1974 territorial dispute.35 Several months later, in March 2010, a short yet sharp naval clash was reported to have occurred as the UAE navy opened fire on a Saudi patrol vessel and forced its surrender after it strayed into disputed water.36

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Impact of the Arab Spring Developments since 2011 have gravely weakened, if not shattered, the notion of collective self-interest that underlay the decision to establish the GCC back in 1981 and provided a baseline of cooperation ever since. Until 2011, and throughout the three major wars in the Gulf, the IranIraq War (1980–1988), the Gulf War (1991) and the Iraq War and subsequent US-led occupation (2003–2011), all six Gulf States had retained enough of a common threat perception that enabled them to overcome instances of intra-GCC friction, such as Saudi and Emirati attempts to reverse the 1995 succession of Qatar’s Emir Hamad bin Khalifa Al Thani or the Emirati walkout from the planned GCC monetary union in 2010 after Riyadh was chosen over Abu Dhabi as the site of the prospective GCC central bank. However, the cathartic upheaval of the Arab Spring and the role of Islamist groups in political transitions in North Africa underscored the dramatic divergence in threat perceptions that conditioned policy responses in Doha and the new Abu Dhabi–Riyadh– Manama axis in and after 2011. In 2011, the Qatari leadership of Emir Hamad bin Khalifa Al Thani and Prime Minister Sheikh Hamad bin Jassim Al Thani responded to the outbreak of protests at authoritarian rule in North Africa by supporting—cautiously at first and then more openly—the calls to hold political leaders to account. Rolling coverage by the Doha-based and Qatar-funded Al Jazeera media group spread the demonstrators’ message and galvanised protestors elsewhere as the initial demonstrations in Tunisia spilled across the region.37 Uniquely in the Middle East, Qatar faced no real prospect of economic or political upheaval and was able to approach the ‘Arab Spring’ in a very different way from every other regional state, including its neighbours in the GCC. This included Saudi Arabia, which faced persistent protests in the Eastern Province, Bahrain, which experienced a full-blown uprising, and the UAE, where policy hawks in Abu Dhabi constructed a threat to national security from a petition for (modest) political reform to justify a security crackdown on opposition figures and human rights activists, as well as intermittent rounds of protest in Kuwait and Oman.38 The Arab Spring provided an opportunity for Qatari leaders to mark themselves and their country as distinct from more obviously authoritarian counterparts across the region, and to make a high-profile stand for ‘universal norms’ such as political and human rights and freedom of

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expression, at an apparently minimal cost to themselves. The same went for Al Jazeera, which experienced its CNN-style ‘breakout moment’ with its no-holds-barred coverage of the latter stages of the Egyptian revolution and the subsequent uprising against Colonel Gaddafi’s dictatorial regime in Libya. During the first few giddy weeks of the Arab Spring, when for a time at least it seemed that virtually anything might be possible, it seemed that the whole world was watching Al Jazeera. Through its association with Qatar, this effectively meant that the emirate was able to shape some of the narratives emerging within and about the Arab Spring. As such, it was not long before both Al Jazeera and Qatar became to be perceived as threats to the fragile status quo by nervous leaders facing actual or merely potential unrest. Thus, in April 2011, Yemen’s embattled President, Ali Abdullah Saleh, reacted with anger to a call for his resignation by Qatar’s Prime Minister as he denounced Qatar’s “blatant interference in Yemeni affairs” and, at a rally of supporters in Sana’a, thundered that “the Qatari initiative is rejected, rejected, rejected. We reject what comes from Qatar or Al Jazeera”.39 Both Qatar and the UAE participated alongside NATO and other non-NATO forces in the creation and enforcement of a No-Fly Zone in Libya that led to the ousting of Colonel Gaddafi by Libyan militia forces in August 2011 and culminated in his grisly death two months later. Emirati leaders nevertheless approached the Arab Spring—and the Libyan intervention—from a standpoint that was virtually diametrically opposed to their Qatari counterparts. Jean-Marc Rickli observed the Emirati response to the Arab Spring from the vantage point of a post at the Institute for International and Civil Security at Khalifa University in Abu Dhabi and argued that ‘the fall of Mubarak in Egypt was a wake-up call…that traditional Western support could no longer be taken for granted and that more efforts would have to be invested in managing their strategic alliances whilst at the same time taking care of their own security’.40 Rickli—who moved from the UAE to a post based at Qatar’s Joint Command Staff College in 2013—argued also that the budding rivalry between the UAE and Qatarwhich grew exponentially between 2011 and 2013—added another dimension to the UAE’s decision to join the Libyan No-Fly Zone to at least reciprocate.41 Under the firm leadership of Crown Prince Mohammed bin Zayed Al Nahyan of Abu Dhabi, the authorities in the UAE adopted a ­‘zero-tolerance’ approach towards the Arab Spring and the prospect of protests domestically as well as regionally. Mohammed bin Zayed’s task

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was facilitated by the decline of his older half-brother, UAE President Sheikh Khalifa bin Zayed Al Nahyan, who suffered a debilitating stroke in January 2014 and withdrew from public life, and the consolidation of Abu Dhabi’s financial influence across the UAE in the aftermath of the 2008 global financial crisis, which hit Dubai, especially hard. The death in October 2010 of Ras al-Khaimah’s longstanding ruler, Sheikh Saqr bin Mohammed Al Qassimi, also became important in retrospect as it removed the protection hitherto provided by the veteran sheikh to adherents of an Emirati Islamist organisation loosely linked to the Muslim Brotherhood. Taken together, these developments meant there were far fewer constraints to the rise of a hard-security ‘clique’ clustered around Mohammed bin Zayed as the Arab Spring unfolded.42 Although the significance of Sheikh Saqr’s death only became clear in retrospect, the fact that it took place less than three months before the onset of the Arab Spring removed a significant obstacle to the State Security’s subsequent decision to dismantle Al-Islah, the Ras al-Khaimah based Islamist group, once and for all. Evidence also began to accumulate during 2010 that members of Al-Islah were attempting to break out of their long-held stronghold in Ras al-Khaimah and lay the foundations for a national campaign that would focus on social and political issues in the UAE. A Public Relations Committee in Ras al-Khaimah attempted to coordinate the actions of members and sympathizers across the seven emirates and reach out to the broader Emirati community. At around the same time, moreover, members of Al-Islah began to get involved in calls for political reform and agitate increasingly openly for a widening of the democratic opening initiated in 2006.43 Thus, several members of the Public Relations Committee were heavily involved in the preparation of a petition submitted to the UAE President, Sheikh Khalifa bin Zayed, on 3rd March 2011. Signed by 133 Emirati individuals, including many members of Al-Islah, the two articles in the petition called for the election of all members of the Federal National Council (FNC) and for constitutional amendments to grant the FNC full regulatory and supervisory powers.44 Beginning in 2011 but escalating in 2012, the UAE authorities arrested dozens of people whom they suspected of harboring Islamist sympathies and placed 94 of them on a mass trial in 2013 that found 69 of them guilty of attempting to overthrow the government and given jail sentences that ranged from seven to fifteen years without the right to appeal.45 Simultaneously, senior Emirati officials portrayed the UAE

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as standing on the frontline of a defensive campaign against the Muslim Brotherhood across the region. The charge against Al-Islah and other groups perceived to be linked to the Muslim Brotherhood was led by the outspoken director-general of the Dubai Police Force, General Dhahi Khalfan Tamim. In March 2012, Khalfan Tamim claimed (without providing supporting evidence) that the Brotherhood was planning to ‘take over’ the Gulf monarchies: “My sources say the next step is to make Gulf governments figurehead bodies only without actual ruling. The start will be in Kuwait in 2013 and in other Gulf states in 2016”.46 Remarkably, Tamim also suggested, “they [the Muslim Brotherhood] are also secret soldiers for America and they are executing plans to create tension”.47 Later in 2012, after a rapid escalation of political demonstrations in Kuwait in October, the UAE Foreign Minister, Sheikh Abdullah bin Zayed Al Nahyan denounced the Brotherhood as “an organization which encroaches upon the sovereignty and integrity of nations” and called upon fellow ruling families in the Gulf to join a coordinated crackdown on the group.48 In yet another interview in 2012, Dhahi Khalfan Tamim warned that “if the Muslim Brotherhood threatens the Gulf’s security, the blood that will flow will drown them”.49 Tamim subsequently returned to the anti-Brotherhood theme in April 2013 when he labelled them ‘dictators’ and added that “they want to change regimes that have been ruling for a long time, but they also want to rule forever … We have evidence this group was planning to overthrow rulers in the Gulf region”. In this deeply-polarised climate, it was inevitable that Qatar and the UAE should clash over domestic- and regional-level approaches to the perceived Islamist threat in general, and the Muslim Brotherhood in particular. Tensions boiled over in the spring of 2012 after the UAE revoked the visas of several Syrians and began to return them to the wartorn country. This followed an unlicenced protest towards the Assad regime outside the Syrian consulate in Dubai that drew some 2000 people. The display of popular support for an Arab Spring-style protest deeply unnerved the Emirati authorities who themselves were in the process of stamping down on any signs of domestic unrest within the UAE. Yusuf al-Qaradawi, the spiritual figurehead of the Muslim Brotherhood based for decades in Doha, responded on his weekly Sharia and Life program on Al Jazeera, saying that “the Emiratis are humans like us, if they think they are superior, they are wrong … They do not have rule over people more powerful than the others”.50 These comments enraged

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Dhahi Khalfan Tamim and prompted a diplomatic rift between the UAE and his Qatari hosts. Khalfan responded by issuing an arrest warrant for Qaradawi, whereupon the spokesperson for the Muslim Brotherhood in Egypt warned the UAE that the whole Muslim world would rise in Qaradawi’s defence if the warrant was ever carried out. Tempers flared to the point where both the secretary-general of the GCC and the head of the Arab League had to issue statements calling upon all sides to exercise prudence and avoid making irresponsible and rash statements.51 A visceral regional rivalry between the UAE and Qatar therefore took root as officials in Doha and Abu Dhabi competed for influence and supported very different groups in the post-transition political reordering. The two iterations of the Qatar dispute—the nine-month withdrawal of the Saudi, Bahraini and Emirati Ambassadors from Doha in 2014 and the blockade that began in 2017—shredded any lingering illusions of a common threat perception in Gulf security. In fact, both for the individual Gulf States as well as for the GCC as a unit, the legacy of the 2014 and 2017 disputes are as profound as they are polarising. Ties of trust and confidence have been shattered on both sides of the divide as positions have hardened and a ‘zero-sum’ mentality has taken root. Just as Qataris ask themselves why they should ever trust their immediate neighbours again, leaders of the ‘GCC-3’ of Saudi Arabia, Bahrain and the UAE remain convinced that Qatar violated the agreement that settled the 2014 dispute and would do the same again if given another chance. As for the GCC, twice in three years it has been unable to prevent three of its members from turning on a fourth and has been bypassed at every stage of the crisis—from the formulation and delivery of the initial grievances to attempts to mediate and resolve the dispute.52

Consequences of the Qatar Blockade Far from creating and expanding cracks in Qatari society, the blockade launched in June 2017 has instead strengthened a burgeoning national identity that increasingly seems to be encompassing all residents of Qatar, expatriates as well as citizens. In August 2017, the Qatari government approved a plan to create a pathway towards permanent residency for selected groups of expatriates in a move that broke with the GCC consensus that imposed rigid distinctions between citizens and non-citizens. The blockade also has created human hardships in a region where many have extended cross-border familial ties and have faced

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restrictions on visitation that have been criticised by international human rights groups such as Amnesty.53 Collective memories are being formed on both sides of the divide that will be hard to dislodge or overcome after the sheer intensity of the campaign of vilification against Qatar in Quartet media and online. Aside from the human impact of the political standoff between governments, the blockade struck a dagger at the heart of the freedom of movement for citizens and goods that until 2017 was one of the hallmarks of the GCC’s decades-long move towards a common market which became operational in 2008. Here again, the Quartet appeared to miscalculate the impact of its blockade on Qatar which—rather than yielding to pressure—instead accelerated existing plans to localise production and diversify economic and trading routes. Prior to the blockade Qatar imported around four-fifths of its food across its only land border (with Saudi Arabia) or by ships that called first at ports in the UAE but acted very quickly to put new logistical arrangements in place.54 Trade volumes between Qatar and Oman surged by 144% in 2017 as Qataribound shipping was rerouted through Omani ports whilst bilateral trade with Iran, Turkey and Pakistan also increased significantly in the aftermath of the blockade.55 If the Quartet hoped its action would isolate Qatar it backfired as only a couple of countries in the Middle East and North Africa downgraded ties and none of Qatar’s major trading partners in Europe, North America or Asia did. The strengthening of bilateral relations with extra-regional partners is, on the surface, nothing new, as it has long been a feature of individual GCC states’ decision-making, especially when it came to trade and defence agreements. Saudi policymakers, for example, reacted with fury in 2004 when Bahrain broke ranks with the GCC and negotiated a bilateral Free Trade Agreement with the US and accused the Government of Bahrain of putting national considerations ahead of the collective GCC interest.56 There were, nevertheless, signs that the GCC was getting its act together and moving towards a collective position on key issues during, ironically, the Obama presidency which several Gulf leaders came to despise. The Obama administration made concerted efforts to engage and coordinate policy with the GCC as a bloc, particularly on defence and security policy, and in 2013 President Obama issued a presidential determination making it possible, for the first time, for the US to sell arms to the GCC as a bloc.57

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In December 2014, the GCC Summit—held in Doha shortly after the resolution of the first round of the Qatar diplomatic rowlaid out plans to create a GCC police force (‘GCC-Pol) to be based in Abu Dhabi, a joint naval force to operate from Bahrain, and a joint military command.58 None of these plans had come to fruition before 2017 but every GCC state except Oman committed troops to the Saudi-led coalition that launched military operations in Yemen in April 2015. This included Qatar, whose armed forces incurred casualties defending the Saudi border from attacks by Houthi militants operating from Yemen but were unceremoniously expelled from the Saudi-led coalition in the wake of the June 2017 blockade.59 The diplomatic crisis within the GCC is stuck, with little prospect of a breakthrough if not all the parties are willing to consider how and where they might make concessions to result in a compromise agreement. The impasse in the Gulf has become the first international crisis of the era of ‘alternative facts’ in which the distinction between real and fake news has become more blurred than ever before. A stream of allegations—derived, ironically, from a hacked email account—has documented how intermediaries associated with Saudi and Emirati interests seemingly targeted the incoming Trump administration as it took office in early-2017.60 The political naivete of some of the neophyte advisers to the president fed a perception that the administration could be nudged to pursue policies favourable to Saudi Arabia and the UAE and detrimental to Qatar, with the president’s tweet praising the blockade the day after it was imposed a case in point.61 The challenge now for US policymakers is that having facilitated, however unwittingly, some of the forces that culminated in the attempt to isolate Qatar, they are finding it far harder to row them back. President Trump may have flipped back in support of the US–Qatar strategic partnership but his sudden hostility in June 2017 shocked officials in Doha and other Gulf capitals who had come to view the US partnership as a bedrock of their defence and security arrangements. The president’s (temporary) willingness to throw Qatar under the bus, coupled with other aspects of his mercurial style of decision-making, has raised questions about the reliability of the US as a long-term partner. Trump’s unpredictability has highlighted the utility of diversifying security and defence relationships and ensuring that states are no longer over-dependent on any one partner. Although the UAE began to broaden its defence relationships in the 2000s, the events of the past

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year are likely to accelerate and expand this process and to move beyond Western participants to encompass Turkey and Russia as well. For over a century, Gulf security has been underwritten by Britain until 1971 and the US since the 1980s, with a ‘lost decade’ in the 1970s serving as a reminder of the perils facing small states lacking powerful external security guarantors whilst trying to survive in a volatile, conflict-prone region. Indeed, it was the events of that dangerous decade that had prompted the Gulf States to come together and create the GCC in 1981 after several previous attempts had faltered. The value of the Western security and political partnership became clear in 1990 when President George H.W. Bush and Secretary of State James Baker denounced the Iraqi invasion and mobilised an international coalition to liberate Kuwait. This makes the widespread view that it was not the US but Turkey which stepped in to prevent the Saudis and Emiratis from launching military action against Qatar in June 2017 a major departure from the regional norm.62 Moving forward, these thickening strategic relationships with Turkey and European states such as Britain, which is expanding its military presence in Bahrain, Kuwait and Oman are one manifestation of the changing dynamics in Gulf security, as is the expansion of Russia’s presence in the region more broadly. It will not have been lost on observers of Gulf politics that Vladimir Putin spoke by telephone with Emir Tamim of Qatar on the same day in June 2017 that Donald Trump’s presidential tweet pitched the basis of the US–Qatari relationship into doubt. Russian commercial and security interests in the Gulf have grown considerably in recent years, despite international sanctions on Russian entities and individuals close to President Putin, and it would certainly align with Russia’s apparent objective of weakening Western political and security partnerships if the hitherto rock-solid web of US partnerships in the Gulf weakened or fragmented. Whilst the Gulf crisis does not signify the end of US interests in the region, moving forward there will be a greater proliferation of participants and agendas coexisting and inevitably competing in a more crowded and potentially a more antagonistic ‘post-GCC’ arena. In addition, the political fallout in the US from the murder of the Washington Post columnist Jamal Khashoggi in the Saudi Consulate in Istanbul in October 2018 will reverberate across the spectrum of US–Saudi relations. Whilst Crown Prince Mohammed bin Salman survived the wave of international condemnation in late-2018, the affair galvanised

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Congressional opposition—among Republicans and Democrats—to other perceived Saudi missteps, including the four-year military campaign in Yemen. This has eroded still further the base of Saudi support in the US and in European capitals, and, in the Washington context, leaves the Kingdom—and, to a lesser extent, the UAE—over-reliant on a political relationship with one of the most polarising presidential administrations of recent times, and vulnerable to blowback if and when the political pendulum swings back towards the centre.

Notes





1. Rory Miller, Desert Kingdoms to Global Powers: The Rise of the Arab Gulf (New Haven, CT: Yale University Press, 2016), p. 59. 2.  Jeremy Jones and Nicholas Ridout, A History of Modern Oman (Cambridge: Cambridge University Press, 2015), pp. 185–186. 3. Yoel Guzansky, “Defence Cooperation in the Arabian Gulf: The Peninsula Shield Force Put to the Test”, Middle Eastern Studies, vol. 50, no. 4 (2014), p. 641. 4.  Hassan Asli Al-Ebraheem, Kuwait and the Gulf: Small States and the International System (London: Routledge, 2016 re-issued edition), pp. 69–70. 5. Abdulkhaleq Abdulla, “The Gulf Cooperation Council: Nature, Origin, and Process”, in Middle East Dilemma: The Politics and Economics of Arab Integration, ed. Michael Hudson (New York: Columbia University Press, 1999), pp. 154–155. 6. Ibid., pp. 153–154. 7. Matteo Legrenzi, The GCC and the International Relations of the Gulf: Diplomacy, Security and Economic Coordination in a Changing Middle East (London: I.B. Tauris, 2011), p. 35. 8. Guzansky, Defence Cooperation in the Arabian Gulf, p. 640. 9. Miller, Desert Kingdoms to Global Powers, p. 9. 10. Abdul-Reda Assiri, Kuwait’s Foreign Policy: City-State in World Politics (Boulder, CO: Westview Press, 1990), p. 71. 11. Miller, Desert Kingdoms to Global Powers, p. 72. 12. Robert Mason, “The Omani Pursuit of a Large Peninsula Shield Force: A Case Study of a Small State’s Search for Security”, British Journal of Middle Eastern Studies, vol. 41, no. 4 (2014), p. 357. 13. Fred Lawson, “Transformations of Regional Economic Governance in the Gulf Cooperation Council”, Georgetown University School of Foreign Service in Qatar, Occasional Paper No. 10 (2012), p. 6.

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14. Joseph Kechichian, Security Cooperation in Oman and the World: The Emergence of an Independent Foreign Policy (Santa Monica, CA: RAND Corporation, 1995), p. 116. 15. Joseph Kechichian, “The Gulf Security Pact: Another GCC Dilemma”, Al Jazeera Online, 24 February 2014. 16. Assiri, Kuwait’s Foreign Policy, pp. 101–102. 17. Anon., “Policy and Defence”, Gulf States Newsletter, vol. 16, no. 424 (18 November 1991), p. 4. 18. Anon., “In Brief”, Gulf States Newsletter, vol. 17, no. 427 (13 January 1992), p. 5. 19. Anthony Cordesman, Kuwait: Recovery and Security After the Gulf War (Boulder, CO: Westview Press, 1997), p. 126. 20. Miller, Desert Kingdoms to Global Powers, p. 8. 21. Anthony Toth, “Tribes and Tribulations: Bedouin Losses in the Saudi and Iraqi Struggles Over Kuwait’s Frontiers, 1921–1943”, British Journal of Middle Eastern Studies, vol. 32, no. 2 (2005), p. 147. 22. Mareike Brandt, Tribes and Politics in Yemen: A History of the Houthi Conflict (London: Hurst & Co., 2017), pp. 76–78; Fred Halliday, The Middle East in International Relations: Power, Politics and Ideology (Cambridge: Cambridge University Press, 2005), p. 178. 23. For a good overview of mid-twentieth century territorial claims and counter-claims, see Michael Quentin Morton, Buraimi: The Struggle for Power, Influence and Oil in Arabia (London: I.B. Tauris, 2013). 24. Rosemarie Said Zahlan, The Creation of Qatar (Abingdon: Routledge, 2016 edition), pp. 80–85. 25. Frauke Heard-Bey, From Trucial States to United Arab Emirates (Dubai: Motivate Publishing, 2004 edition), p. 305. 26.  Ash Rossiter, “Britain and the Development of Professional Security Forces in the Gulf Arab States, 1921–71: Local Forces and Informal Empire”, University of Exeter, PhD thesis (2014), p. 111. 27. Ibid., p. 206. 28. Christopher Davidson, Dubai: The Vulnerability of Success (London: Hurst & Co., 2008), pp. 276–277. 29. Anon., “Alarms and Incursions”, Gulf States Newsletter, vol. 17, no. 447 (17 October 1992), p. 2; Anon., “Saudi-Qatar Flare-Up”, Gulf States Newsletter, vol. 19, no. 501 (12 December 1994), p. 5. 30.  Kristian Coates Ulrichsen, “Qatar: The Gulf’s Problem Child”, The Atlantic, 5 June 2017. 31. Anon., “Khalifah’s Comeback?” Gulf States Newsletter, vol. 21, no. 528 (29 January 1996), p. 2. 32.  David Roberts, “Understanding Qatar’s Foreign Policy Objectives”, Mediterranean Politics, vol. 17, no. 2 (2012), p. 235.

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33.  Andy Critchlow, “Saudis Demand Say in Emirates Pipeline”, International Herald Tribune, 12 July 2006. 34.  Anon., “UAE’s Withdrawal from Monetary Union Is Justified”, Gulf News, 21 May 2009. 35. Anon., “FACTBOX: Rivalry and Differences Between Saudi and UAE”, Reuters, 6 April 2010. 36. Richard Spencer, “Naval Battle Between UAE and Saudi Arabia Raises Fears for Gulf Security”, The Daily Telegraph, 26 March 2010. 37. Russell Lucas, “The Persian Gulf Monarchies and the Arab Spring”, in Beyond the Arab Spring: The Evolving Ruling Bargain in the Middle East, ed. Mehran Kamrava (Oxford: Oxford University Press, 2014), p. 316. 38. Ibid., pp. 318–325. 39. Kristian Coates Ulrichsen, “Qatar and the Arab Spring”, Open Democracy, 12 April 2011. 40. Jean-Marc Rickli, “The Political Rationale and Implications of the United Arab Emirates’ Military Involvement in Libya”, in Political Rationale and International Consequences of the War in Libya, ed. Dag Henriksen and Ann Karin Larsen (Oxford: Oxford University Press, 2016), pp. 146–147. 41. Ibid., pp. 147–148. 42. Kristian Coates Ulrichsen, “Evolving Power Dynamics in the United Arab Emirates”, Houston Chronicle, 1 March 2016. 43. Author Interviews, December 2015. 44. Courtney Freer, “The Muslim Brotherhood in the Emirates: Anatomy of a Crackdown”, Middle East Eye, 17 December 2015. 45. Anon., “UAE Sentences 69 in Al-Islah Trial”, Gulf States Newsletter, vol. 37, no. 950 (4 July 2013), pp. 7–8. 46. Anon., “Islamists Plot Against Gulf, Says Dubai Police Chief”, AFP, 25 March 2012. 47. Ibid. 48. Ian Black, “Emirati Nerves Rattled by Islamists’ Rise”, The Guardian, 12 October 2013. 49. Alain Gresh, “Dubai’s Police Chief Speaks Out”, Le Monde Diplomatique, 19 May 2015. 50. Birol Baskan, “The Police Chief and the Sheikh”, The Washington Review of Turkish and Eurasian Affairs, April 2012. 51. Anon., “Qaradawi’s Comments Spark Spat Between UAE and Egypt”, Gulf States Newsletter, vol. 36, no. 920 (22 March 2013), p. 4. 52. Kristian Coates Ulrichsen, “The Gulf Impasse’s One-Year Anniversary and the Changing Regional Dynamics”, Gulf International Forum, 30 May 2018.

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53. Anon, “Gulf Crisis: Six Months On, Families Still Bearing Brunt of Qatar Political Dispute”, Amnesty USA, 14 December 2017. 54. Nader Kabbani, “The High Cost of High Stakes: Economic Implications of the 2017 Gulf Crisis”, Brookings Markaz Blog, 15 June 2017. 55. Sachin Kumar, “Surge in Qatar-Oman Trade”, The Peninsula, 30 January 2018; Hafsa Adil, “Turkey, Iran, Pakistan See Big Trade Boost with Qatar”, Al Jazeera Online, 3 December 2017. 56. Abdulla Baaboud and Geoffrey Edwards, “Reinforcing Ambivalence: The Interaction of Gulf States and the European Union”, European Foreign Affairs Review, vol. 12 (2007), p. 547. 57.  “Presidential Determination—Gulf Cooperation Council”, The White House: Office of the Press Secretary, 16 December 2013. 58. Justin Vela, “GCC to Set Up Regional Police Force Based in Abu Dhabi”, The National, 9 December 2014. 59. Sami Aboudi, “Qatar Says Six of Its Soldiers Wounded on Saudi-Yemeni Border”, Reuters, 3 June 2017. 60. Desmond Butler and Tom LoBianco, “The Princes, the President, and the Fortune Seekers”, Associated Press, 21 May 2018. 61.  Kristian Coates Ulrichsen, “Fire and Fury in the Gulf”, Gulf States Analytics, 31 January 2018. 62.  Ali Bakeer, “Making Sense of Qatar’s Military Buildup”, Gulf International Forum, 8 March 2018.

CHAPTER 4

Iran Nuclear Programme, a Brief History Sara Bazoobandi

Introduction Iran’s interest in developing a nuclear programme dates back to 1957, when the last monarch of the country (Mohammad Reza Shah Pahlavi) engaged with the US ‘Atoms for Peace’ programme to develop Iran’s peaceful nuclear plan.1 Parallel to the progress in its nuclear activities, Iran joined multiple international pledges over time aimed at ensuring the civilian purpose of the activities. In 1968, about a decade after the country’s nuclear activities started, Iran became a signatory of the Nuclear Non-Proliferation Treaty (NPT) of the International Atomic Energy Agency (IAEA), which consequently allowed Iran’s uranium enrichment plan within the framework of the Treaty in 1970.2 In 1974, Iran entered another agreement with the IAEA for the application of safeguards related to the NPT. According to this agreement, Iran agreed to give the IAEA access to its facilities to assess the application of safeguards on all of its peaceful nuclear activities.3 S. Bazoobandi (*)  Middle East Risk Consulting, Hamburg, Germany Nonresident Senior Fellow at the Atlantic Council within the Global Business and Economics Program and Global Energy Center, Washington, DC, USA Nonresident Fellow at Arab Gulf State Institute in Washington, Washington, DC, USA © The Author(s) 2020 S. Bazoobandi (ed.), The New Regional Order in the Middle East, International Political Economy Series, https://doi.org/10.1007/978-3-030-27885-4_4

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Although the Shah did not start a nuclear military plan, he indicated clear intentions of doing so. In 1974, a French journalist asked him about Iran’s intentions for building nuclear weapons and he replied, “Certainly, and sooner than one would think”.4 To what extent this claim was realistic is unclear but the domestic political challenges facing the Shah led to the 1979 Islamic Revolution and he never had the opportunity to pursue his military nuclear ambitions. The Islamic Republic abandoned the nuclear programme for about a decade after the revolution, as the country was under a great deal of pressure during the eight devastating years of war with Iraq. In the 1990s, the Islamic Republic restarted the country’s existing programme. After the end of the Iran–Iraq War, Iran approached some European countries (i.e. Germany and France) for assistance in transferring peaceful nuclear technology. However, due to US pressure, all of Iran’s proposals were rejected. After failing to receive Europeans’ support, Iran approached China, Russia and Pakistan. All three countries offered Iran various degrees of collaboration with its nuclear plans. Iran’s nuclear partnership with the East increased US and European concerns over its nuclear aspirations. This concern grew further in the summer 2002, when the spokesperson of an Iranian opposition group5 announced at a press conference in Washington, DC that the Islamic Republic had clandestine nuclear facilities under construction in two locations in Iran.6 The Iranian government then confirmed the accuracy of the opposition group’s claims and argued that, although it has not disclosed information about the newly disclosed nuclear sites, it has not violated the NPT because the activities held in those sites were peaceful.

Bomb or No Bomb That Is the Question Opinions on whether Iran had committed a breach of its obligations under the NPT vary. But Iran’s lack of willingness to give immediate full access to IAEA site investigators reduced the international community’s confidence in its nuclear intentions. Moreover, as John Simpson describes it in his chapter in Iran’s Nuclear Program Realities and Repercussions, assuming Iran’s intention was purely to build nuclear energy capabilities in order to achieve long-term energy security; building a complete fuel cycle—which seemed at the time to have been the core activity carried out at the undeclared sites—was not really economically viable at that stage. Iran’s nuclear plans were particularly alarming to the IAEA, as uranium enrichment technology can, with some

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modification, be used for both nuclear power stations and the production of nuclear weapons.7 After the Iranian opposition group’s information leak, the IAEA launched a series of investigations into Iran’s nuclear sites. At that stage, the IAEA found only circumstantial evidence relating to an intention to acquire nuclear military capabilities, and not concrete proof that the Iranian government had an active nuclear weapons programme.8 The IAEA’s initiatives to assess the country’s nuclear programme were designed for increasing transparency and confidence-building. Iranian authorities by and large cooperated with the IAEA in providing access to various sites to the Agency’s staff. Although the IAEA did not find solid evidence to prove the country’s military nuclear plans, it reported some alarming revelations during the initial investigations, including that Iran had enriched uranium and separated plutonium in undeclared facilities. Such a degree of advancement in Iran’s nuclear programme, although not limited to such, could have potentially had a military purpose. In December 2003, Iran and the IAEA signed an additional protocol to the agreement for the application of safeguards relating to the NPT. The additional protocol is a voluntary agreement that grants the IAEA complementary legal authority to verify country’s safeguard obligation. While, the additional protocol is voluntary, it is legally binding for signatories once it is enforced. In theory, it requires open access to the IAEA safeguard inspectors to all the nuclear sites in the country.9 Most of the measures taken under the additional protocol are aimed at creating information-sharing channels to ensure the peaceful nature of nuclear activities. The reason for the IAEA’s demand for having a greater access to Iran’s nuclear sites was to ensure preventing Iran from ‘smart proliferation’. This is a situation in which Iran could stay in the NPT until it has the necessary fissile material to make 10–15 nuclear devices and then give a 90-day compulsory notice and withdraw from the Treaty, after which the ‘breakout’ could be instigated without any legal consequences.10 By March 2005, the IAEA announced that its inspectors were making “good progress” in understating Iran’s nuclear activities and highlighted a greater need for disclosure and transparency of Iran’s nuclear activities. Shortly after that (in June 2005), the presidential election took place and President Ahmadinejad assumed office. Not long after the election, the IAEA began to express growing concerns over Iran’s cooperation with the IAEA and the challenges facing the agency in monitoring its nuclear activities.11 Ahmadinejad entered the office of the President of

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the Islamic Republic of Iran on 3 August 2005 and on 10 August 2005, Mohammad ElBaradei, the Director General of the IAEA, announced that Iran had removed the IAEA seals from its uranium conversion facilities in Isfahan. Iran then informed the Agency that it had decided to resume its research and development on a peaceful nuclear programme from 9 January 2006. Iran continued removing the IAEA seals from other nuclear sites. As a result, in February 2006, the IAEA board of governors passed a resolution requesting the Agency to report Iran to the United Nations Security Council (UNSC).12 The presidential election of 2005 had many unexpected consequences. It was the only time in the history of the Islamic Republic in which an election was taken to a second round. In the second round, the former President Ahmadinejad was racing against one of the most wellknown politicians in Iran, former President Akbar Hashemi Rafsanjani. Rafsanjani had a long-standing political career since the establishment of the Islamic Republic and portrayed himself as a moderate and modernist with liberal economic ideas. Ahmadinejad, on the other hand, was a populist whose highest political position to date had been to serve as the mayor of Tehran. Certain segments of the Islamic Revolutionary Guard Corps (IRGC) and the most conservative organs of the establishment also backed Ahmadinejad, which was instrumental in his 2005 victory. Ahmadinejad’s election victory had indicated a shift in balance of power in Iran and it added to the international community’s anxiety about the country’s nuclear programme. In August 2005, former President Khatami, a reformist figure, left the presidential palace in Tehran after eight years, and was replaced by a conservative populist. Although Khatami was known as a reformist Iranian politician who favoured normalised relations with the international community a lot more than his conservative successor, he had also defended Iran’s core nuclear strategy. He outlined his views on the nuclear programme as: “We [Iran] don’t need atomic bombs, and based on our religious teaching, we will not pursue them…but at the same time, we want to be strong, and being strong means having knowledge and technology”.13 Ahmadinejad enjoyed widespread support from ultra-conservative clerics such as Ayatollah Mesbah Yazdi, who is known for openly expressing strong anti-west and anti-Israeli sentiments.14 Therefore, there was very little reason for the international community to believe that Iran’s nuclear programme’s secrecy was not a confirmation of its military purpose, which by extension was a major threat to both the west and Israel.

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Although, it was never proven that Iran’s nuclear programme had an active military dimension, Iran’s regional balance of power struggle, the experience of eight devastating years of war with Iraq, sharing borders with a nuclear nation (Pakistan) and having multiple domestic security challenges (including the militia resistance groups in Kurdestan and Balouchestan provinces) led the international community to conclude that it would have made perfect sense for the Islamic Republic to have aspirations of becoming equipped with nuclear military capability. It was therefore inferred that Iran’s logical solution to this long list of security threats would be to make a nuclear bomb.15 In February 2006, Iran’s nuclear file was referred to the UNSC, whose five permanent members are China, France, Russia, the UK and the US. From that point, Iran’s nuclear programme went through a very turbulent journey until a deal was struck in 2015. The country’s strategy under President Ahmadinejad completely diverged from his predecessor’s stance, in the sense that most of the information sharing and confidence-building initiatives had proven to be unfruitful during that period. Upon the election of President Rouhani in June 2013, Iran’s nuclear strategy was again fully revised. Rouhani promised to resolve the country’s nuclear deadlock in his election campaign. Soon after assuming the office, he appointed a new team to restart the nuclear negotiations with the international community. By the time the new round of talks started, negotiations included the so-called P5+1 (UNSC five permanent members plus Germany), the European Union and Iran.16 In July 2015, the nuclear negotiations concluded in a Joint Comprehensive Plan of Action (JCPOA). The key aim of the JCPOA was to ensure the peaceful nature of the country’s nuclear activities. As a result of adopting the JCPOA, amongst other outcomes, Iran has reduced the number of centrifuges from about 20,000 to no more than 5060 for a period of ten years. Iran has also committed to reduce its uranium stockpile by 98% for a period of fifteen years and not to fuel or develop one of its heavy water reactors in the city of Arak, and transfer most of the heavy water to the US.17 Iran’s nuclear deal was considered one of the most successful cases of resolving a global security issue through diplomacy. Both the Iranian government and the international players involved in the negotiations made significant compromises and took pride in having reached a final conclusion after years of failing negotiations. Although it was not a perfect deal, it was the best possible solution for all parties involved. It was

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widely criticised by the conservatives both in the US and Iran. It was also not supported by some of the regional players specifically Israel and some of the GCC countries. Even once the deal was agreed, uncertainty around Iran’s regional strategy and its relations with its neighbours, domestic political developments and exigencies in Iran and the US, and the future of economic sanctions made it difficult to anticipate how the deal would play out in reality over the longer term.

The Joint Comprehensive Plan of Action and Its Impact on Iran–US Relations The Iranian government has had an enduring sense of ‘status discrepancy’ since before the revolution,18 leading to a sense of frustration amongst Iran’s leadership regarding the regional security structure. The Shah had aspirations for making Iran a wealthy country that has the most powerful military of the region, a vision that certainly was not shared by many nations in the world, particularly the US. The Islamic Republic has also shared the same sense of frustration and frequently pushed for a new regional order in which it plays a stronger role. Since 2001 Iran has intervened in Afghanistan, Iraq, Lebanon and Syria to assert its regional importance. The Islamic Republic has been keen on establishing itself as a strategic player in the region without whom the external global powers, particularly the US, would be unable to fulfil their policy aims in the region. The Iranian nuclear programme at various stages of its development was perceived by the international community as a strategic element of Iran’s regional policy towards gaining a stronger status as a key regional player. So, one impediment to the nuclear deal stemmed from the fact that the US continuously rejected Iran’s aspirations to become a leading regional player. For decades, the US held an ‘uncompromising stance’19 towards Iran’s nuclear activities and insisted on the suspension of the fuel production cycle. Seyyed Hossein Mousavian, a member of Iran’s nuclear negotiation team under the Khatami administration, argues that this US attitude was the reason the negotiations with Khatami’s administration failed and that it was a significant factor behind the decline of the reform movement in the Islamic Republic. Mousavian believes that at various points during the decade-long nuclear negotiations, the US campaigned internationally to force Iran to give up the enrichment programme.

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The Islamic Republic has frequently argued that enduring US pressure on its nuclear activities is a double standard as the US has been turning a blind eye to, and even supporting, the military nuclear capacity of India, Israel and Pakistan. Iran’s Supreme Leader, Ayatollah Khamenei, has regularly stated that the US has had an arrogant attitude towards Iran and called on the nation to resist capitulating to the perverse demands of the US. For a long time, the US referred to destroying Iran’s nuclear infrastructure militarily as an option to deal with the threat of its nuclear ambitions. The US administration under Bush and Obama publicly announced that should the diplomatic route to resolving Iran’s nuclear crisis fail, they were ready to use the military option. The experience of the war in Iraq, however, had shown US policymakers the potential shortcomings and risks associated with a military response to Iran’s nuclear programme: • Misjudging the reaction of the retaliator could shift the result of a military operation against the aggressor. • It is important to have a so-called “end game”. Having an exit strategy for after the end of the military action is highly important in shaping the result of the operation. • Intelligence cannot always be trusted as it is always possible that the collected intelligence could be misleading. This can jeopardise the most well-executed targeted military actions. One of the biggest challenges the US military faced in Iraq was the Iraqi response to the military intervention. Prior to the attack, exiled Iraqi advisors of the US policymakers convinced them that once Saddam Hussein was ousted, Iraqi nationalism would unite the Iraqis and eliminate the risk of sectarian divide.20 But in reality, the predictions for post-invasion scenarios were proven to be wrong. Iraq was dragged into a civil war more than a decade long and a security crisis fuelled by sectarianism and foreign influence. In the 1980s, Saddam Hussein made a similar mistake when he entered a military confrontation with Iran. Prior to the war with Iran, Iraqi policymakers predicted that the Arab population in the Southern Iranian province of Khouzestan would support Iraq’s aggression and welcome an Iraqi occupation. In reality, the Khouzestanis fought till the last minute against Iraqi forces, united as Persians. During the war, the Islamic Republic’s founding father and Iran’s Supreme Leader at the time, Ayatollah Khomenini, had also expected that the

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Iraqi Shia population would welcome Iran’s attacks to Faw Penninsula, near Shia- majority Basra in South of Iraq, but they defended Iraq’s territorial integrity and defeated Iranian troops. The war in Iraq has had devastating results for the country and to a great extent for the wider region. Poorly designed strategies for an endgame post-occupation in Iraq led to widespread sectarian violence across the country causing a large-scale humanitarian crisis. The sectarian issues have also created a hospitable environment for the rise of Islamic radicalism in Iraq with huge spillover effect across the region. Moreover, the Iranian influence through Shia governments in Iraq has enabled Iran to expand its influence in the region, contrary to the interests of the US and its allies. As Robert Jervis has described the misjudgement of Iraq’s weapons of mass destruction (WMD) programme as perhaps “the most studied intelligence failure since Pearl Harbor”.21 Jervis argues that the American concern over Iraq’s WMD programme quickly accelerated after the invasion of Kuwait in 1990, which was followed by persistent hostility between Iraq and the West.22 One can draw some parallels between the case of the Iraqi WMD programme and Iran’s nuclear file. In the case of the latter, the result of 2005 elections and the aggressive rhetoric of President Ahmadinejad accelerated the concern over the country’s nuclear programme. But US policymakers decided to pursue a non-military response in this instance. The result of the 2003 invasion of Iraq indicates that if the truth about Saddam Hussein’s programmes had been revealed before military attacks were mounted, many US politicians, as supportive as they may have been of the invasion, would have questioned the plan. The fear of yet another incident of misjudgement, this time about Iran’s nuclear programme, has therefore supported a diplomatic strategy in dealing with Iran. Another lesson from the experience of intelligence failure in Iraq was the use of the so-called “connecting the dots” method that became a common intelligence analysis strategy by the US after September 2001. The results of the UN inspection on Saddam Hussein’s WMD programme show that Iraqi officials would only admit certain activities when they were confronted by solid evidence. They also used other denial and deception methods, learnt from the Soviet Union, such as moving material and records from investigated facilities and hiding or even burying machinery. Connecting these dots led the American, and by extension the Western, intelligence analysis to a solid conclusion that Iraqi

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government’s use of such methods was a confirmation of its active WMD programme. After the invasion, the evidence was compelling that the conclusion was incorrect.23 As a result, in the case of Iran, the US and international community were extremely cautious about connecting the dots and jumping to conclusions. Iran had in various episodes paused its cooperation with the IAEA, which constituted a breach of its legal obligation, but such behaviour was not immediately decoded as a confirmation of Iran’s military nuclear programme by the intelligence analysis of the West. The Iranian opposition group’s revelation of Iran’s nuclear activities came about at a sensitive time. At the time, winning the battle against terrorism in Afghanistan had given the US a great sense of confidence and set the stage for the next step in its regional strategy, which involved attacking Iraq and overthrowing Saddam Hussein’s regime.24 During this period, Iran’s nuclear strategy was very much focused on development of activities at home whilst managing the crisis at the international level. Iran’s crisis management approach then became a key element of Iranian nuclear strategy during the decade to come, to the point of breaking one of the greatest political taboos in the Islamic Republic: direct negotiation with the US officials. The nuclear negotiations became a milestone in Iran–US relations since the Islamic Revolution. After nearly four decades of animosity, the JCPOA marked a clear departure from traditional dynamics, as officials of both countries took part in a constructive diplomatic initiative. Despite many obstacles during the negotiations, both sides made significant compromises in order to reach a final agreement. One very interesting observation that experts (who wished to remain anonymous) close to the negotiations made was that: “The Iranian negotiators strongly pushed their own agenda for as long as the other parties tolerated, and took steps back as and when they felt a stronger push from the other side”. Evidence of such a strategy, particularly in relation to the US, is what Ali Akbar Velayati, the former foreign Minister of Iran and foreign policy Advisor to the Supreme Leader alluded to in 2003: “They [the Americans] are bullying us and if we surrender and retreat in the face of blackmail, this is in effect shutting down Iran as a country”.25

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Iran–GCC Relations and the Nuclear Agreement The experience of Iraq has not only had painful lessons for the West but also has created strategic apprehensions amongst neighbouring Arab nations. Iran’s strategies in Iraq have magnified the Gulf Cooperation Council countries’ anxiety over Iran’s regional ambitions. This has intensified the regional balance of power struggle particularly between Iran and Saudi Arabia. Given the great influence of Saudi Arabia in the GCC, the perceived threat of Iran in Riyadh has had a great impact on Iran–GCC relations. Many experts on the Arab side of the Persian Gulf believe that Iran has been pursuing heavy-handed expansionist strategies in the region to increase its influence in the Arab world and such strategies are far more dangerous for the GCC than the nuclear ambitions. Iran’s dominance in the region and its aspiration to act as a regional leader made the GCC uncomfortable even before the Islamic Revolution. The aspirations of the Iranian political leadership in the region have changed in only one aspect: Shia ideology. Even before the Revolution, the Shah’s arrogance and his regional ambitions already caused concern to Iran’s Arab neighbours. Perhaps with the exception of Omani government, which has maintained friendly diplomatic relations with Iran since the time of the Shah (during the Dofar crisis), the GCC has always felt threatened by Iran. Its vast territory, which stretches from the shores of the Persian Gulf to the Caspian, and its large population, give it a natural superiority in relation to its Arab Persian Gulf neighbours. Moreover, the Persians take pride in thousands of years of grand civilisation in comparison to their GCC neighbours who were recognised as states less than a century ago. Therefore, Iran with or without a nuclear programme, has had the reputation of the “gendarme of the Persian Gulf”; something that has made the GCC particularly uncomfortable. The former Prime Minister of Qatar, Sheikh Hamad bin Jasim bin Jaber Al Thani, spoke at the Royal Institute of International Affairs, Chatham House in November 2015 about the Nuclear Deal and its consequences for the GCC. In his remarks, Sheikh Hamad openly criticised the West for not including the GCC in the negotiations. Whilst praising Iranians for their negotiation skills, he argued that due to the importance of Iran for the GCC, the West should have formed a group of negotiators from the P5+1 and a GCC representation. Despite his strong views on this perceived missed opportunity, Sheikh Hamad also acknowledged

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the key challenge of including the GCC in the negotiations would have been the absence of one united view amongst the GCC countries on the Iran nuclear file.26 Sheikh Hamad’s remarks are very much in line with the overall official stand of the GCC on the issue. Although the Qatari government, unlike some of the GCC countries, did not support a US military as a solution to Iran nuclear programme, it shared concerns over the implications of the deal for the region. Since the 2003 war in Iraq and the significant increase of Iran’s influence in Iraq, the GCC’s sense of insecurity has increased. The nuclear deal with Iran has deepened the GCC’s fear of Iran’s expansionist strategy in the region and somehow it was perceived as the West giving a green light to Iran’s regional strategies. Unfortunately, Iran’s more muscular role in the region has coincided with a fragmentation of intra-GCC solidarity, culminating in the 2017 blockade of Qatar by a Saudi-led group of GCC and other Middle Eastern states. Differing security perceptions and increasingly divergent political stances amongst the GCC states is reflected in the absence of a common approach towards Iran— something that strengthens Iran’s position in the regional balance of power. Furthermore, unlike Iran, the GCC governments have not been successful in mobilising citizens into their armed forces. With small populations and no obligatory military service, the GCC countries have become reliant on the US for their defence. Various other countries in the region have used different tools to mobilise manpower for their armed forces, in ways that the GCC countries have failed to replicate. For example, authoritarianism in Syria and Iraq, the unifying power of revolutionary ideology in Iran and democratic ties that encourage loyalty between citizens and the state in Israel have been instrumental in forming large armies elsewhere in the region.27 The social contract in the GCC also contributes to weak military capabilities. Since the establishment of the GCC countries, the ruling families of the region have portrayed themselves as the protective patriarchs of society. The relationships between the states and the citizens in the GCC have been formed around a one-way direction of distribution of resources from the top to the bottom. The only expectation of the citizens has been that they should remain loyal and accept the political legitimacy of their leaders. Therefore, expecting the citizens to make sacrifices that are required from the members of the army would distort overall state–citizen relationships. It has therefore been the responsibility of

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the state to provide security and military protection for the citizens at the time of crisis. At various points in time, the GCC leaders have ‘outsourced’ this responsibility to foreign military powers. The experience of the Kuwait war is an exemplar of this military weakness. The GCC, particularly Saudi Arabia, supported Saddam Hussein during the Iran–Iraq War, as Riyadh portrayed Saddam as instrumental in its balance of power struggle with Tehran. During the crisis between Iraq and Kuwait in the early 1990s, Saudi Arabia had taken a relatively soft stand towards Iraq’s aggression in Kuwait. This was partly to keep Iraq as a regional ally, capable of confronting the Revolutionary Iran, and also to force Kuwait to comply with the OPEC crude oil production quota of the time. At the time, the oil prices were very low and Riyadh was trying to push for a production reduction to boost the price to its previous level. Saudi Arabia asked other regional Arab powers like Yemen, Egypt and Jordan to get involved in mediation between Iraq and Kuwait whilst supporting the Iraqi stand on the financial and border disputes with Kuwait. Ultimately, after the mediations with Iraq did not reach an agreement and Iraq refused to withdraw from Kuwait, the Saudi government allowed the US forces to step in and defeat Iraqi forces and liberate Kuwait.28 As noted above, after the collapse of Saddam’s regime in 2003, Iran gained more ground in Iraq and succeeded in building a great degree of influence in Iraqi politics, which elevated GCC’s anxiety over the role of Iran in the region. Such a sense of anxiety was deepened by the conclusion of the nuclear deal. As a result, Saudi Arabia began to take a more self-reliant military approach. Saudi Arabia has started to pursue a new security and military strategy that allows the Kingdom to claim the role of the main rival to the Islamic Republic. Both Iran’s nuclear programme and the nuclear deal have been contributory in Saudi Arabia’s shift towards a more self-reliant military strategy. As far as Saudi Arabia, and by extension the GCC, is concerned, the Iranian nuclear military capability would have turned Iran into an untouchable regional power. Therefore, the GCC have more or less held a united view on the issue of Iran’s nuclear strategy, with the exception of Oman, and that is to cooperate with the US in mounting pressure on Iran to force Iran to give up its potential military nuclear plans. The GCC has pushed for being involved in the nuclear negotiations with Iran, something that both Iran and the international community rejected. After the deal was reached, the GCC and Israel both expressed

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concerns about the nature of the deal. Both the GCC and Israel have argued frequently that the JCPOA was the worst possible deal, as it does not guarantee complete dismantling of the Iranian nuclear programme. Iran capitulated to the western pressure and decided to come back to the negotiating table and reach a deal. In the longer term, whether the revolutionary mentality inside the country will allow full compliance with the deal beyond the current political structure is a vital question for the GCC.

Domestic Political Struggle and Iran Nuclear Deal Iran’s motives for having access to nuclear weapon could be summarised as: status and national pride, regional security concerns, and an effort to gain domestic legitimacy through nationalist sentiments. The Islamic Republic has been struggling with a long-standing legitimacy crisis both at domestic and international level since its establishment. The establishment has utilised the nuclear programme as a tool for reinforcing itself by stoking nationalist sentiments. Over more than two decades of international controversy over Iran’s nuclear activities, the country has pursued two different approaches in dealing with the international community’s anxiety about the nuclear file. The country’s nuclear strategy has been dominated at various times by the two mainstream political approaches of the Islamic Republic: the pragmatic reformists (such as Rafsanjani and Rouhani) and the conservative ideologues (such as Ahmadinejad and Larijani).29 The first group has been keen on pursuing the country’s nuclear plans whilst maintaining relatively normalised diplomatic and economic relations with the West, particularly with Europe. The second camp, however, believed in developing the country’s nuclear capacity at any cost, with damaging diplomatic and economic consequences. Under the reformist government of President Khatami (1997–2005), Iran took a more moderate approach and maintained more cooperative relations with the IAEA. The conservatives on the other hand had an uncompromising attitude and used the nuclear programme to garner domestic support. Their strategy towards Iran’s nuclear programme has been to associate it with national pride and Iran’s international status. Such strategy has served their interest in the sense that they managed to portray themselves, at least amongst a certain section of the society, as the best political camp to defend Iran’s rights and to pursue national

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interests. Under Ahmadinejad’s administration, nearly every time the Iranian negotiating team came back from meetings with IAEA officials, the establishment organised public rallies with nationalistic slogans, the most famous of which was: “Nuclear energy is our undeniable right”. With the election of President Rouhani in 2013, Iran’s nuclear strategy again shifted back to a more moderate stance, similar in some ways to the Khatami approach. For sure, with changes in the government, from the reformist government of Khatami to the hard-line administration of Ahmadinejad and the moderate leadership of Rouhani, Iran’s nuclear strategy has also changed significantly. Despite the changes in the overall nuclear policy, however, the critical role of the Supreme Leader in Iran’s nuclear strategy has remained relatively unchanged. The Supreme Leader has closely monitored and supervised the country’s nuclear strategy from the time of Khatami’s presidency, when the first nuclear complications surfaced, through the conclusion of the nuclear deal under Rouhani’s government. The Supreme Leader managed to strategically position himself at the heart of the country’s decision-making through the entire two decades of negotiation between Iran and the international community. He has made a conscious effort to protect his own reputation and vision whatever the outcome might be. He offered enough support to the conservatives so they would be able to pursue a heavy handed nuclear expansion strategy. When that strategy failed and Iran was entrapped with complicated economic sanctions, he then gave the green light to the moderates to pursue a compromising strategy to conclude the deal. During the last round of negotiations led by the moderate foreign policy team of President Rouhani, the Supreme Leader positioned himself in such a way that if the negotiations succeeded, it would be seen as the fruit of his blessing and support and if the negotiations failed, his vision and indeed scepticism would be perceived as legitimate.30 Iran’s fluctuating nuclear strategy has also been the result of various political camps’ influence on the Supreme Leader over the years. In other words, the shifts occurred when one group managed to convince the Supreme Leader that the available options at the time were the best possible ones to maintain the longevity of the establishment. Such shifts have been justified by the concept of expediency, ‘Maslehat-e-Nezam’, in the Islamic Republic. This concept has been an integral part of the Islamic Republic’s ethos. It is one of the fundamental elements of the

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ideological framework of the establishment on which more or less all the key stakeholders are in consensus. At various points in time and in the interests of stability, the conservatives and the moderates have presented different interpretations of ‘Maslehat-e-Nezam’. Although the practical implications of ‘Maslehate-Nezam’ vary for different stakeholders, the core belief remains unchanged. The fundamentals of the approach amongst the key stakeholders involved in the domestic decision-making over the issue of nuclear activities—including the Supreme Leader, IRGC, Supreme National Security Council, the president and his foreign ministry and the parliament (Majlis)—have been solely focused on preserving the Islamic Republic. Whilst the practical considerations of each of the stakeholders varied from one another, ultimately they all have had one key aim: to maintain the stability of the Islamic Republic. As a result, the practical implications of Maslehat-e-Nezam have varied rather drastically over time. At times, it has been pursued and protected by aggressive anti-western rhetoric and alienation of the West, whilst at other times taking a more collaborative attitude with the West has served its ultimate aim. In October 2003, Rouhani, who at the time was the secretary of Iran’s Supreme National Security Council, managed to convince the Supreme Leader that it was in the interest of Iran for the government to accept a temporary suspension of the enrichment programme. At the time, Rouhani had a relatively successful track record of being able to influence the Supreme Leader’s opinion over the sixteen years in which he sat on the SNSC. Although Rouhani was successful in convincing Ayatollah Khamenei that the suspension (in line with ‘Maslehat-eNezam’) was the best strategy, with the election of Ahmadinejad, the political landscape in Iran moved against his reading of the expediency of the establishment. In August 2005, shortly after President Ahmadinejad assumed office, he was removed from the Council and replaced by Ali Larijani. Coming from a prominent political family, Larijani has been known to be close to the Supreme Leader. Altogether the five Larijani brothers have held an incredible amount of political power since the establishment of the Islamic Republic.31 They are known to share conservative rightwing political ideologies and to be traditionally close to the Supreme Leader. The major shift in Iran’s nuclear strategy in August 2005 was an instance in which the reading of one element of the establishment of

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the concept of ‘Maslehat-e-Nezam’ had won over that of an opposing group. In this case, the ideologues overpowered the pragmatists. Iran’s hard-line nuclear strategy between 2005 and 2009 led to fullscale international political crisis and hard-hitting economic sanctions. The presidential election of 2009 presented Iran with a domestic political shock. The election crisis in 2009 suddenly hit Iran’s political structure with a major legitimacy crisis. The Supreme Leader stepped into resolve the crisis by clearly articulating his support for Ahmadinejad. Only few days after the results were announced, public demonstrations began in response the alleged rigging of votes. In this instance, Ayatollah Khamenei’s support not only failed to resolve the crisis, but it also increased public anger at perceived electoral transgressions. As the crisis escalated in various cities in Iran, harsh anti-Khamenei slogans were chanted in public gatherings. Peaceful rallies turned to violence by the security forces over the course of few days. Public anger and frustration was met with a heavy-handed and violent response from the security forces. After weeks of unrest across the country, the establishment managed to stop the public demonstrations through the mass arrests of the political activists and those who took part in the demonstrations. Ahmadinejad started his second term in office as the President of the Islamic Republic of Iran, whilst the widespread public discontent remained unresolved. Ayatollah Khamenei was portrayed as the key factor behind the 2009 crisis. The majority of those who supported Ahmadinejad supported him because he was the Supreme Leader’s preferred candidate. Those who opposed Ahmadinejad’s presidency also considered Ayatollah Khamenei as the key obstacle against their constitutional democratic rights. The political cost of the 2009 election for the establishment, specifically for the Supreme Leader, was very high. Four years after the 2009 election crisis, Iran was preparing itself to welcome a new president into office. The previous administration’s nuclear strategy had driven the country into an economic crisis and a diplomatic deadlock. Many ordinary Iranians experienced the costly outcomes of the nuclear sanctions on their well-being. Inflation was at its highest since the Iran–Iraq War, whilst oil exports and economic growth stood at historically low levels. In the weeks running up to the election in 2013, the election debates were mainly focused on economic sanctions and nuclear deadlock. During the election campaign the establishment was suddenly and quite visibly tolerant of public criticism of Ahmadinejad’s nuclear strategy by the presidential candidates. Amongst

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the long list of candidates, there were two former chief nuclear negotiators: Hassan Rouhani and Saeed Jalili. Rouhani led the negotiations under Khatami and Jalili was in charge under Ahmadinejad. Most of the 2013 election debates focused on the nuclear programme and each candidate’s plan for the country’s nuclear strategy. Rouhani, who had been involved in the nuclear issue for most of his professional life, promised to resolve the nuclear crisis in a peaceful manner and lift the economic pressure. During his election campaign and after assuming office, Rouhani made it clear that bringing Iran out of the nuclear deadlock was his government’s key mandate.32 Promising to reach an agreement with the international community after a near decade-long crisis has been instrumental in gathering public support for his election. Moreover, after the controversy surrounding the 2009 election, the only incentive that could have brought the majority of the Iranian citizens, particularly the supporters of the democratic reforms, back to the ballot stations and encourage them to trust another election under the Islamic Republic, was the hope for resolving the country’s nuclear crisis. The complexities of the political structure and invisible hands of the decision makers in Iran have often alarmed the international community. The country’s political system has been described as being “more like a conspiracy than a government”.33 Whilst this is clearly exaggerated, the increasing role of the security apparatus, particularly the IRGC, in Iran’s political decision-making has been a source of concern at both the domestic and international level. Since 2001, the regional security agenda of the Islamic Republic has been handled exclusively by the overseas branch of the IRGC, Quds Force, whilst directly and closely supervised by the Supreme Leader.34 The IRGC’s influence in Iran’s regional dossier has made both the regional and external powers extremely nervous. Notably, the thought of nuclear military capacity in the hands of the Quds Force has been a cause of concern from Riyadh to Tel Aviv. The shift of Iran’s nuclear strategy has been initiated from within and supported by the key stakeholders domestically, particularly the Supreme Leader. Iran’s nuclear strategy in 2005, with or without Ahmadinejad as the President, would have shifted towards resuming the enrichment programme because at the time the collective leadership was determined to manifest Iran’s nuclear rights and to advance its capabilities. The leadership was confident in pursuing enrichment as the European negotiators at the time (UK, France and Germany) and the US failed to offer sufficient incentives to convince the Iranian government that its political,

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economic and security interest would be better protected if it cooperated with the international community fully.35 In other words, it was not ­difficult for the conservatives to present a different reading of ‘Maslehate-Nezam’ that sought to aggressively focus on expanding the enrichment programme. Eventually, the international community concluded that an essential tactical move to change Iran’s nuclear strategy was to force a shift in Iran’s domestic policy. Such a shift would have been possible only pursuing nuclear activities at the time had brought on negative consequences. Although the ideologue government of Ahmadinejad maintained its uncompromising nuclear strategies between 2009 and 2013, towards the end of this period, as the economic sanctions were at their toughest and the government and the people were under enormous pressure, Ayatollah Ali Khamenei finally endorsed direct negotiations with the US over the nuclear issue. The Supreme Leader authorised the Iran– US secret talks in 2011. However, the direct negotiations did not begin until the beginning of Rouhani’s election in 2013.36 It took about two years for the parties involved in the negotiations to reach a final deal. As President Rouhani put it in his remarks at the United Nation’s General Assembly in 2015, the nuclear deal became the beginning of “a new chapter in Iran’s relations with the world”.37 Iran’s nuclear deal was hailed as a turning point in the history of the region. The international community decided to explore peaceful diplomatic channels after the experience of more than a decade of crisis and instability in Iraq. The US’s coercive diplomacy offered Iran enough incentives and threats at the same time to motivate a shift in its nuclear strategy. The shift was initiated from within the country and was as a result of changes in the reading of the ‘Maslehat-e-Nezam’ by different political factions in Iran. Although some of the regional players, notably Saudi Arabia and Israel, continued to express concerns about the extent to which Iran might be able to pursue smart proliferation, the JCPOA was widely considered the best possible deal that could have been reached.

Nuclear-Related Economic Sanctions Following the endorsement of the JCPOA in UN resolution 2231 (20 July 2015), and despite the strong support of most parties involved, the deal prompted a great deal of criticism from various constituencies on

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both the US and Iranian side. Their discontent threatened the viability of the deal almost from the outset. Iranian conservatives criticised Rouhani for giving up almost the entire nuclear programme without gaining any meaningful sanction lift from the US. And Donald Trump made withdrawal from the deal one of his main foreign policy campaign pledges. The approach of US policymakers towards Iran since “Implementation Day”38 of the JCPOA (16 January 2016) did not in reality diverge from its previous sanctions regime. This was due to the fact that despite US commitments within the framework of the JCPOA, the US Treasury maintained non-nuclear-related sanctions on Iran. The US Treasury has adopted multi-layered sanctions on Iran over the past decades in response to Iran’s support for terrorism, human rights abuses in Iran, the country’s ballistic missiles programme in relation to proliferation of WMD, Iran’s involvement in human right abuses in Syria and the Iranian government’s role in destabilising Yemen.39 The economic outcome of the JCPOA for Iran was heavily criticised within Iran by both supporters and critics of the nuclear deal. The Rouhani administration found itself under immense pressure towards the end of his presidency as many associated the failure of the US to lift Iran’s sanctions with the soft approach of the Iranian negotiating team. Given this, there was always some doubt as to how long Iran would comply with the JCPOA if tangible economic benefits were not forthcoming. As noted above, Iran has been subject to economic sanctions for more than three decades. The US has been the primary sanctioning power since the attack on US embassy in Iran that led to the hostage crisis in 1979. Since then the US government has expanded the sanctions regime on Iran, in response to Iran’s various domestic and regional political strategies, and as ‘restrictive measures’ to replace the military action. The European Union also joined the US after 2006. Although Iran has increasingly been targeted by international sanctions, the latest round of sanctions has had a more pronounced negative impact on the country. This heightened impact was the result of two main factors: (1) the US government has made a great effort in persuading Iran’s economic partners globally. As a result, Iran’s key partners in Europe, Middle East and Asia collectively joined the US-led sanctions regime. (2) Economic mismanagement between 2005 and 2013 under Ahmadinejad magnified the negative impacts of the sanctions.

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A combination of sanctions, long-term structural economic problems, widespread corruption and the populist economic policies of Ahmadinejad’s government (which aimed to redistribute wealth across society) pushed Iran’s economy into deep a macroeconomic crisis. Although addressing structural economic issues and reversing some of the poor policy choices of the previous government have been major challenges for the Rouhani administration, the conclusion of the JCPOA had a visible impact on the Iranian economy, particularly due to the lifting of the sanctions on oil exports. The impact was reflected in the IMF report that showed real GDP growth of 7.4% in the first half of 2016/17.40 Iran therefore had a great deal of interest in the success of the JCPOA, which held the opportunity of further lifting of sanctions. However, these hopes were short-lived as the US re-imposed sanctions on Iran in May 2018 on the basis of Iran’s funding of overseas armed proxies and the risks presented by its ballistic missile capabilities, which President Trump had repeatedly asserted made the JCPOA a “bad deal”. The new US sanctions hit Iran’s oil exports and energy sector, central bank operations, shipping and aviation sectors and financial institutions, heralding a return to challenging economic conditions. In contrast to the positive outlook noted in its 2016 review of the Iranian economy, by November 2018 the IMF was warning of a return to more straitened and uncertain economic conditions, with reduced trade and growth prospects as oil production and exports were expected to fall for at least two years.41 The IAEA’s inspections, however, have shown that Iran continues to comply with the requirements of the JCPOA. As a result, the EU, Russia, China and the UN were swift in their condemnation of the US unilateral withdrawal in the context of an internationally binding multilateral agreement. These stakeholders subsequently sought to work with Iran to salvage the deal and restore economic activity. To this end, the EU has proposed a “Special Purpose Vehicle” (SPV) to allow companies trading with Iran to circumvent US sanctions by engaging in a sterlingand euro-denominated barter exchange, distinct from the international financial system and not involving financial transfers to Iran. However, appetite to participate in the SPV has not been high, as demonstrated in the pre-emptive withdrawal of key European multinationals from the Iranian market following the announcement of renewed US sanctions. Furthermore, the complexities and practical difficulties of

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setting up the SPV have also stalled progress in moving from an aspiration to a workable reality. Iranian leaders are under growing domestic pressure to demonstrate the economic benefits of continuing to comply with the JCPOA in the face of renewed sanctions. The planned SPV is not expected to facilitate meaningful levels of trade and investment given that companies are unlikely to risk US sanctions by making use of the mechanism. However, ongoing commitment to the deal from the remaining signatories—along with an expected continuation of economic activity between Iran and some key trading partners and the fact that the US is in fact in breach of UN resolution—may assuage concerns that Iran is no longer getting what it bargained for, and thereby lessen pressure on the Iranian leadership to take a more assertive stance.

Notes









1. IAEA, 1953, https://www.iaea.org/about/history/atoms-for-peacespeech. 2. United States Institute of Peace, http://iranprimer.usip.org/resource/ timeline-irans-nuclear-activities. 3. IAEA, 1974, https://www.iaea.org/sites/default/files/publications/ documents/infcircs/1974/infcirc214.pdf. 4. Seyed Hossein Mousavian and Shahir ShahidSaless, Iran and the United States (New York: Bloomsbury, 2014), p. 178. 5. The National Council of Resistance of Iran (NCRI) is Iran’s the most well equipped military opposition group on exile. 6. Nima Gerami and Pierre Goldschmidt, “The International Atomic Energy Agency’s Decision to Find Iran in Non-Compliance, 2002–2006”, Centre for the Study of Weapons of Mass Destruction National Defense University (2012). 7.  John Simpson, “Iran’s Nuclear Capabilities and Potential to Develop Atomic Weapons”, in Iran’s Nuclear Program Realities and Repercussions, The Emirates Center for Strategic Studies and Research, Abu Dhabi (2006). 8. Ibid. 9.  IAEA, Additional Protocol, 1997, https://www.iaea.org/safeguards/ safeguards-legal-framework/additional-protocol. 10. Simpson, 2006. 11. IAEA, 2016, https://www.iaea.org/sites/default/files/infcirc214a1.pdf. 12. IAEA, https://www.iaea.org/newscenter/focus/iran/chronology-of-keyevents.

90  S. BAZOOBANDI 13. United States Institute of Peace, http://iranprimer.usip.org/resource/ timeline-irans-nuclear-activities. 14. Colin Freeman and Kay Biouki, “Ayatollah Who Backs Suicide Bombs Aims to Be Iran’s Next Spiritual Leader”, The Telegraph, 19 November 2006, http://www.telegraph.co.uk/news/worldnews/1534604/Ayatollahwho-backs-suicide-bombs-aims-to-be-Irans-next-spiritual-leader.html. 15. Emanuele Ottolenghi, Under a Mushroom Cloud Europe, Iran and the Bomb (London: Profile Books Ltd., 2007), pp. 21–23. 16. US Department of State, Joint Comprehensive Plan of Action, https:// www.state.gov/e/eb/tfs/spi/iran/jcpoa/. 17. BBC News, Iran Nuclear Deal: Key Details, 2016, http://www.bbc. co.uk/news/world-middle-east-33521655. 18. Shahram Chubin, “Iran’s Strategic Predicament”, Middle East Journal, vol. 54, no. 1 (2000), pp. 10–24. 19. Seyed Hossein Mousavian and Shahir ShahidSaless, 2014. 20.  James Noyes, “Iran’s Nuclear Programme: Impact on the Security of the GCC”, in Iran’s Nuclear Program Realities and Repercussions, The Emirates Center for Strategic Studies and Research, Abu Dhabi, 2006. 21. Robert Jervis, “Why Intelligence Fails Lessons from the Iranian Revolution and the Iraq War” (Cornell University Press, 2010), pp. 123–155. 22. Robert Jervis, 2010. 23. Ibid. 24. Shahram Chubin, 2006. 25.  Velayati’s quote in Shahram Chubin, “Iran’s Nuclear Ambitions”, Carnegie Endowment for International Peace (2006), p. 75. 26. Chatham House, The MENA Region After the Iran Nuclear Deal, 19 November 2016, https://www.chathamhouse.org/event/mena-regionafter-iran-nuclear-deal. 27. F. Gregory Gause III, “From ‘Over the Horizon’ to ‘Into the Backyard’: The US-Saudi Relationship and the Gulf War”, in The Middle East and The United States, ed. David W. Lesch (Colorado: Westview Press), pp. 356–370. 28. Ibid. 29. Shahram Chubin, “Iran’s Nuclear Ambitions”, Carnegie Endowment for International Peace (2006). 30.  Sara Bazoobandi, “Nuclear Negotiations Highlight Iran’s Internal Tensions”, Chatham House Expert Comment (2014), https://www. chathamhouse.org/expert/comment/nuclear-negotiations-highlightiran-s-internal-tensions. 31. Nour Samaha, “The Brothers Larijani: A Sphere of Power”, Al Jazeera, 2013,  http://www.aljazeera.com/indepth/spotlight/2013/06/ 2013628374847373.html.

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32.  Patrick Clawson, “Rouhani’s Nuclear Views: An Open Book?” The Washington Institute (2013), http://www.washingtoninstitute.org/policyanalysis/view/rouhanis-nuclear-views-an-open-book. 33. Shahram Chubin, 2006. 34. Ian Black and Saeed Kamali Dehghan, “Qassem Suleimani: Commander of Quds force, Puppeteer of the Middle East”, The Guardian, 2014, https://www.theguardian.com/world/2014/jun/16/qassim-suleimaniiraq-iran-syria. 35. George Perkovich, “Iran’s Nuclear Programme After the 2005 Elections”, in Iran’s Nuclear Program Realities and Repercussions, The Emirates Center for Strategic Studies and Research, Abu Dhabi (2006). 36. Laura Rozen, “Inside the Secret US-Iran Diplomacy That Sealed Nuke Deal”, Al-Monitor, 2015, http://www.al-monitor.com/pulse/originals/2015/08/iran-us-nuclear-khamenei-salehi-jcpoa-diplomacy. html#ixzz4dq6cNh9U. 37. Tom Kutsch, “Iran’s Rouhani Praises Nuclear Deal Diplomacy but Slams US Role in Region”, Al Jazeera America, 2015, http://america.aljazeera.com/articles/2015/9/28/irans-rouhani-praises-nuclear-deal-diplomacy.html. 38. US Department of the Treasury, Frequently Asked Questions Relating to the Lifting of Certain U.S. Sanctions Under the Joint Comprehensive Plan of Action (JCPOA) on Implementation Day (2016), https://www. treasury.gov/resource-center/sanctions/Programs/Documents/jcpoa_ faqs.pdf. 39. Ibid. 40. IMF, “IMF Executive Board Concludes 2016 Article IV Consultation with the Islamic Republic of Iran” (2017), https://www.imf.org/ en/News/Articles/2017/02/27/PR1765-IMF-Executive-BoardConcludes-2016-Article-IV-Consultation-with-the-Islamic-Republic-ofIran. 41. IMF, “Regional Economic Outlook Update: Middle East and Central Asia” (November 2018), https://www.imf.org/en/Publications/REO/ MECA/Issues/2018/10/02/mreo1018.

CHAPTER 5

The Role of External Powers: Global Actors (Part I) Neil Quilliam

Introduction The Gulf has long been penetrated by external powers, which have included in modern times, but has not been limited to, the Ottomans, Russian, British, US empires and in a much more limited sense, Turkey, France and the Netherlands. The current era has been defined largely first by the influence of the British Empire up until 1971 and then the US era, which is beginning to move into its sunset years.1 The Gulf has remained a strategic hub for the past two hundred years; it first served as a gateway for the British Empire to secure and service Imperial India. Since the Second World War, it has served as the centre-point of the world’s energy markets with now 18.5 mbd passing through the Strait of Hormuz.2 The US has played a key role in securing not only the Gulf Arab states since the UK left the sub-region in 1971, but perhaps more importantly, the Strait, even during times of conflict, which has arguably become the central nervous system of global energy markets.

N. Quilliam (*)  The Royal Institute of International Affairs, Chatham House, London, UK © The Author(s) 2020 S. Bazoobandi (ed.), The New Regional Order in the Middle East, International Political Economy Series, https://doi.org/10.1007/978-3-030-27885-4_5

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The Gulf is undergoing a series of profound changes at national, regional and international levels. It is at a pivotal moment in its history when the balance of power amongst external powers is transitioning from a predominantly US-dominated order to one that witnesses the growing influence of China, Russia and India. This chapter and the next one argue that since the Obama presidency (2008–2016), the US has strongly signalled that it is no longer willing to play the role of sole external security provider and, in doing so, has left a vacuum that has been all too readily filled by Russia, as an opportunist power, and China—as a strategic power with a view to the long-term. This, however, does not suggest that the US has drawn down militarily to such an extent that it has become a peripheral actor. The US remains a dominant force in the region, and its military assets are arguably more sizeable than ever before. Instead, the author opines that the US has lost the political will to project its power unilaterally and confront forces it considers malevolent beyond striking hard against terrorist organisations, such as the so-called Islamic State of Iraq and Syria (ISIS). As such, the US was happy to lead the anti-ISIL coalition and provide both air support and Special Forces to roll back the organisation’s territorial gains in Iraq and Syria, but it has been not willing to deploy forces against nation-states opposed to its policies. At the same time, Russia has capitalised upon US hesitation and both reinvigorated and invigorated its relationships with states across the Middle East, notably, Syria, Saudi Arabia, Qatar and the United Arab Emirates (UAE). Although the Arab Uprisings, which started in late 2010, were considered to be an affront by Russian President Vladimir Putin, he has since supported the counter-revolution to great effect by deploying forces in Syria, lending diplomatic support to Turkey, Iran and Egypt and oil diplomacy to Saudi Arabia and the UAE. The uprisings have afforded Russia with the opportunity to insert itself into the region. China, on the other hand, has continued to develop, cultivate and deepen relations with all Gulf states, including Saudi Arabia and Iran. Its energy relationship with the major oil and gas producers has grown ever closer and become more integrated, in spite of Beijing’s bid to diversify its energy sources. Although China’s Belt and Road Initiative (BRI)3 basically circumvents the Gulf and arguably makes it virtually irrelevant, the UAE’s ambitious goal of creating its own string of pearls along the Horn of Africa could set the Gulf powers and Beijing on a collision course.

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Whereas Moscow’s political ambitions in the Middle East region and the Gulf are clear to see, Beijing has quietly been exploring its options. The Chinese leadership is well aware that the US is leaving behind a political vacuum and one which has left in its wake instability in a number of states, including Syria, Yemen, Iraq and Libya. Consequently, China’s Ministry of Foreign Affairs is beginning to consider deepening its political and diplomatic engagement in the region to bring about stability, an end to the Israeli–Palestinian conflict and resolution of disruptive Saudi–Iranian rivalry.4 Chapter 5 will analyse the factors that have given rise to the change in the international order in the Gulf and have begun a process, which will lead to the diminution of US power and the increase in competition between Russia and China for influence over the sub-region. It will take as its starting point the Obama presidency and his administration’s approach to the Arab Uprisings, Gulf Arab states and Iran, as a whole, and pivot to Asia. Whilst the chapter draws out the contrast in approaches between the Obama and Trump presidencies, it emphasises the structural nature of US disengagement from the Gulf and the response from Russia and China. The next chapter will focus on Russia and other regional powers, namely Turkey, India and Brazil, growing interest in the region.

The US and the Gulf Arab States It is commonplace to characterise the relationship between the US and Gulf Arab states through the lens of security and energy. The terms of trade were originally based upon the US providing security in exchange for guaranteeing regime survival and the free-flow of oil. To a large extent, this transactional aspect of the relationship is historical in nature, as the Gulf Arab states, and their forerunners, sought external support from outside powers, including the British and the Ottomans, to underpin their leadership, in exchange for providing access to important trade routes.5 And yet, this chapter suggests that the relationship between the US and the Gulf Arab states has been more than transactional; it has been deepened because of ties between agencies, institutions and people. This will lend the relationship longevity even as US influence diminishes sharing echoes of Britain’s waning protectorate over them. This chapter examines the changing nature of the relationship between the US and the Gulf Arab states between the Obama and

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Trump administrations and posits that irrespective of president, the US has embarked upon a slow and inexorable withdrawal from the Gulf. The change is symptomatic of a structural shift in the balance of global power, rather than an expression of the proclivities of presidents Obama and Trump. However, a series of events and crises in the region, including the US-led war against in Iraq in 2003 and its aftermath, the Arab Uprisings and advancements of Iran’s nuclear programme have accelerated the process. During the Obama presidency, the leaders of Saudi Arabia, Bahrain and the UAE, grew concerned that the US was actively disengaging from the region. They believed that the US pivot towards Asia, President Barack Obama’s pursuit and conclusion of a nuclear deal with Iran in 2015 (Joint Comprehensive Plan of Action [JCPOA]), his failure to enforce his own redline over the use of chemical weapons in Syria and unwillingness to support unequivocally Egyptian President Hosni Mubarak during the protests provided hard evidence that the US was, in effect, walking away from the region and leaving the Gulf Arab states to fend for themselves. After all, Obama’s interview with The Atlantic confirmed their belief when he made clear his dislike of the Gulf Arab states and called them ‘freeriders’ arguing that they should learn to share the Gulf with Iran.6 The culmination of these events led to a pivotal moment in US–Gulf Arab relations: it not only signalled that structural change was underway, but also compelled Gulf Arab leaders to consider the contours of a post-US order. They lost no time in exploring new options.7 However, the election of Donald J. Trump to the US presidency in 2016 ushered in a new era and immediately gave hope to the same Gulf Arab leaders that the US would remain an unwavering supporter and security guarantor. Trump’s first official visit as president was to Riyadh in May 2017, and he seemed willing to reinforce the message that the US was a reliable partner and that their shared distrust of and disdain for Iran would galvanise both parties into action. Indeed, Trump sought to reassure key allies notably, Saudi Arabia, UAE, Egypt and Israel that the US would not only push back against Iranian influence in the region, but also walk away from the JCPOA.8 Nevertheless, Trump’s ‘America First’ policy and reluctance to deepen engagement in Syria and, in fact, to seemingly endorse a Russia-led solution to the conflict also sent another signal, and one much more in line with the Obama administration: the US expected its partners to share the security burden. However, before analysing the differences and

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similarities between the Obama and Trump administrations, it is important to set the context for US policy towards the Middle East region and the Gulf.

US Policy Towards the Middle East This chapter argues that whilst US strategic interests are changing, the Gulf will remain a priority, though of diminishing importance. The US will continue to provide security in the face of major threats, but the terms of trade will change. In other words, the US will expect its Gulf Arab partners to assume greater responsibility towards providing their own security, as Washington prepares for other military theatres.9 This shift also emanates from a clear sense amongst the US electorate of foreign adventure fatigue; the cost of interventions in overseas conflict far outweighs the benefits of projecting power and has been reflected in elections since at least 2008. Depicting the US–GCC10 relationship as security-driven oversimplifies an otherwise complex set of relationships between the US, its international partners and the six sovereign states, which continue to be governed by traditional ruling families. However, this chapter focuses primarily on regional security and, therefore, pays little attention to other factors,11 except energy relations. The basis of the security arrangement between the US and the Gulf Arab states has been a guarantee against aggression from its sizeable neighbours, notably, Iraq and Iran. Whilst there is no over-arching security umbrella, as such, the Gulf Arab states hold bilateral defence agreements with the US, UK and France. There is insufficient space to provide historical details of the bilateral agreements, and these have been covered elsewhere. In spite of enviable defence budgets, an ability to purchase the most advanced military hardware available (national parliaments, notwithstanding) and access to elite officer colleges in the US, UK and France, the Gulf Arab states remain dependent for their national security upon external actors.12 The support that external players provide not only guarantees the security of the states, but also the survival of the ruling families, which has become a more pressing issue since the start of the Arab Uprisings, Houthi take-over of Sana’a in 2015 and the Quartet’s (Saudi Arabia, UAE, Egypt and Bahrain) blockade of Qatar in 2017.13

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The peak of the security relationship between the US and the Gulf Arab states followed Iraq’s invasion of Kuwait on 2 August 1990, when the US-led coalition liberated the Gulf state. The collapse of the Soviet Union in 1989 and the ensuing ‘unipolar moment’ allowed the US to not only impose a security solution and liberate Kuwait, but also assemble a far and wide-ranging coalition.14 After the events of 11 September 2001, and during the US-led war against Iraq, the US military presence increased substantively in Bahrain, Qatar, UAE and Kuwait. Those Gulf Arab states, in particular, provided a hub from which the US, and its allies, prosecuted the wars in Iraq and Afghanistan.15 Security cooperation between the US and Gulf Arab states further developed following a series of terrorist incidents in the Gulf, especially in Saudi Arabia between 2004 and 2007, and has led to close cooperation on counter-terrorism. US security cooperation on counter-terrorism has become a bedrock of the overall security relationship, as the threat of ‘blowback’ emanating from the various military theatres, including Syria and Iraq, continues to pose a significant challenge to the US, Gulf Arab states and allies.16 The US appetite for foreign adventures and further loss of blood and treasure, however, changed with Obama’s election in 2008. He was elected with a mandate to withdraw combat forces from Iraq and Afghanistan. “On August 31, 2010, Obama declared an end to the U.S. combat mission in Iraq, turning the page on American military involvement in the country that began with the invasion in 2003 that toppled Saddam Hussein from power”.17 Consequently, the US withdrew combat forces from Iraq in 201118 and drew-down combat forces from Afghanistan in 2014.19 Nevertheless, the US still maintains a significant presence in the Gulf to help secure its interests in the region and beyond. The Quadrennial Defence Review 2014 and US 2015 budget made clear US military commitment to both Asia and Middle East. The Review identifies US defence priorities which ‘include rebalancing to the Asia-Pacific region to preserve peace and stability in the region; maintaining a strong commitment to security and stability in Europe and the Middle East; … the United States has enduring interests in the Middle East’. Secretary of Defence Chuck Hagel emphasised in his speech in the IISS Manama Dialogue in 2013 that the US remained ‘fully committed to the security of our partners in the region’ and that the Department of Defence ‘will continue to maintain a strong military posture in the Gulf

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region, one that responds swiftly to crisis, deter aggression, and assure our allies … while making sure that our military capabilities evolve to meet new threats’.20 To that end, the US continues to station its 5th fleet in Bahrain, 380th Air Expeditionary Wing at Al Dhafra Air Base in UAE and has deployed additional US military personnel in Oman, the UAE and Kuwait. The US Combined Air and Space Operations Centre, based in Al Udeid, south west of the capital Doha, represents a key asset enabling the US to project its military power in the whole region. US–Qatar military cooperation is based on a long-term agreement, renewed for another 10 years in December 2013. This committed the US to continue operating the base and maintaining troops there until at least 2024. Indeed, the US military presence in Qatar was likely a determining factor, which dissuaded Saudi Arabia and the UAE from taking military action against Doha in June 2017. Moreover, the scale of the US military commitment meant that calls for the US Department of Defense to relocate the base to the UAE fell on deaf ears.21

Obama’s Presidency Although Obama launched his policy towards the Middle East with a ground breaking speech in Cairo, on 4 June 2009, and called for ‘a new beginning between the United States and Muslims around the world’,22 he quickly became deeply unpopular amongst leaders and populations alike throughout the region. His administration’s response to the Arab Uprisings, pursuit of a nuclear deal with Iran and overall policy towards Syria undermined confidence amongst his Gulf Arab allies and, at the same time, gave an inadvertent boost of confidence to Russia, Syria and Iran. The challenge of the Arab Uprisings in 2010 and the response of the US, prior to and after the fall of Mubarak, sent shockwaves amongst the leaders of the Gulf Arab states. They came to realise that the US was no longer the ally of the early 1990s, committed to project its power across the world to secure its allies and preserve stability. To them, it looked as though their long-term ally had suddenly become a fair weather friend. This sense of vulnerability grew even stronger following the election of Muslim Brotherhood leader Mohammed Morsi to the Egyptian presidency.23 It seemed that the US hedge to work with the Muslim Brotherhood in its various political manifestations across the region posed a direct threat to the regimes the superpower had once supported.

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Gulf Arab leaders came to believe that the US neither had the appetite nor the commitment to deploy combat troops to confront threats to its allies. At the time, Gulf Arab officials would often cite US inaction over Syrian President Bashar al-Assad’s use of chemical weapons against opposition forces in March 2013 as evidence that the US Administration would desist from meaningful military intervention, even under the most extreme circumstances.24 Despite assurances and earlier efforts to reassure Saudi Arabia and the Gulf Arab states of its enduring commitment, notably, US Secretary of Defence Chuck Hagel’s address to the Manama Dialogue in late 2013, the message appeared to have fallen on deaf ears. In his address, Hagel highlighted the size and quality of US military engagement, including significant air and naval presence (35,000 military personnel); deployment of the most advanced fighter aircraft, intelligence, surveillance and reconnaissance assets in the region (F-22s); extensive missile defence capabilities, such as ballistic missile defence ships, Patriot batteries and radar; and the presence of 40 ships, including a carrier strike group.25 However, Hagel’s address and the Quadrennial Defense Review 2014 did little to assuage the fear felt by Arab leaders in the Gulf that the US could either lose interest in the Gulf or realign its interests with Iran. Moreover, Saudi Arabia’s then leader King Abdullah grew concerned that a combination of energy self-sufficiency and its pivot towards Asia would result in the US either disengaging from the region and reaching an agreement with Iran over the nuclear file, thus leaving the Gulf to deal with its own security dilemmas.26 Given this background, Saudi Arabia and other Gulf Arab leaders came to ask the critical question whether they could continue to rely upon US (and its allies) to secure not only the states against external aggression, in particular, from Iran or ISIS, but also from internal dissent (Muslim Brotherhood and even blowback from Syria and Iraq). There was a genuine fear that the strategic interests that led the US to assemble a coalition to liberate Kuwait after Saddam Hussein’s Iraq had invaded on 2 August 1990 no longer existed. In essence, it came down to two issues: first, Gulf Arab leaders, especially Saudi Arabia and the UAE, no longer trusted the US administration to act; second, the question remained whether the pivot towards Asia was structural or transitory and would, therefore, transcend future administrations. Of course, the Saudi–US relationship had undergone many ups and downs, especially, following the events of 11 September

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2001,27 but the culmination of events coupled with the US drive for a nuclear deal with Iran indicated that profound change was underway. There can be little doubt that a structural shift is taking place, as the balance of power amongst the world’s leading states changes and, as a result, the US is in the process of disengaging from the Gulf. However, the US remains the keystone of the region’s security architecture and will do so for many decades to come. It cannot simply pull out of the region because unlike the UK in 1971, it is still a global power with a global reach and is locked into a strategic competition with China. Furthermore, the ties between the US and the Gulf Arab states are strong and not only based on transactional merit. Whilst the relationship between the US and the Gulf Arab states may appear simply transactional, the ties between consecutive US administrations and the Gulf Arab ruling families, in particular, Saudi Arabia and the UAE, run deep. It is true that people to people ties are limited, and this, amongst other things, has affected perceptions of the relationship between the US and Gulf Arab states,28 but Gulf Arab leaders, in particular, younger generation leaders, enjoy strong relationships with their counterparts in range of institutions. For example, leaders from Saudi Arabia, Qatar and the UAE enjoy easy and regular access to senior policymakers in Washington, DC, London and Paris. The soft power, accrued from enduring military connections, the establishment of premier academic institutions and think tanks, and the presence of leading financial institutions in the Gulf Arab states, has tied together the economic and social fortunes of a cadre of professionals between states. The nature of the relationship, therefore, has deepened and is not simply based upon a transaction of security for oil; it is far more complex. A combination of close ties between the US and Gulf Arab political and business elite will continue to underpin the security arrangement, even as the US moves down the long road to disengagement. In fact, the US will draw upon these resources to secure its interests in a bid to cultivate the Gulf Arab state efforts to develop its own security solutions. Between 2010 and 2016, the ruling families in Saudi Arabia, UAE and Bahrain felt threatened by the Arab Uprisings, Morsi’s election and their own doubts about the reliability of the US security umbrella. However, the options for finding alternative security arrangements, through emerging powers, such as China, Russia and India, simply were not there. This forced Mohammed bin Zayed, Crown Prince of Abu

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Dhabi and Commander in Chief of UAE Armed Forces, to not only re-evaluate the UAE’s relationship with the US, but also to seek strong partnerships with other global powers in order to prepare for an era when the US is no longer the policeman of the Gulf and other hegemons are knocking on the door. Mohammed bin Zayed has long sought to identify security partners for the future, and in 2015, when Russia deployed its forces in Syria, he could not help but be impressed. Despite its military might, the US had failed to save long-term ally, Mubarak, and seemingly allowed him to be deposed. Putin, on the other hand, had stepped into save Assad and his regime and demonstrated without question that Russia could be a trustworthy and dependable ally.29 Unlike Obama or UK Prime Minister David Cameron, Putin did not require the permission of parliament before backing Assad. Saudi Arabia’s younger leader Mohammed bin Salman—under the influence of Abu Dhabi Crown Prince Mohammed bin Zayed—has begun to consider key partnerships more strategically, and he views the benefits of the US relationship through the law of diminishing returns. Both leaders embraced wholeheartedly the election of Trump to office and have sought to refresh relations with the White House, but Mohammed bin Zayed knows that the US president is at heart a transactional politician. Trump’s exit from the JCPOA, as discussed below, may have gone someway to restoring Mohammed bin Zayed and Mohammed bin Salman’s faith in Washington, but both leaders who will likely rule their countries for decades to come are now looking to Russia and China as part of their futures.

Trump Presidency Saudi Arabia and Abu Dhabi’s crown princes enjoy unprecedented access to the Trump administration. It is no coincidence that Mohammed bin Zayed cultivated close relations with the Trump team before the election and that senior Emirati diplomats and figures, including Mohammed bin Zayed, met with Jared Kushner and other close advisers.30 In effect, it looks as though their reach into the White House has helped them overcome the insecurities they felt during the Obama years and they have now pulled the US firmly back onside. Saudi Arabia was eager to welcome a more strident president into the White House and one that would refresh the US–Saudi relationship.

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He did that quickly by making Riyadh the location of his first official visit and making clear that curtailing Iranian influence would be a top priority. The US prioritises its relationship with Saudi Arabia because it is the most influential state in terms of geography, energy resources, population, religious significance and it buffers direct Iranian influence in the Gulf. During the Obama presidency, the rise in US shale oil production seemingly made Washington less dependent upon Saudi Arabia’s crude exports and proved fortuitous when it came to imposing sanctions against Iranian crude exports. However, Saudi Arabia is still the world’s swing producer and despite the dramatic and sustained increase in US shale oil production, it is critical to oil markets.31 Whilst there has been much debate about whether Saudi Arabia will ‘swing’ anymore, given that it signalled strongly in November 2014 that market share was more important than price,32 it has become abundantly clear since Mohammed bin Salman became Defence Minister and then Crown Prince that the kingdom will swing when political interests demand it—both domestic and international. Therefore, it is no surprise that Trump has sought to exploit Saudi Arabia’s swing capacity. In transactional mode, he called upon Saudi Arabia several times in 2017 and 2018 to increase production to meet shortfalls aggravated by outages in countries, including Venezuela, Libya and Iraq.33 Moreover, he appears eager to highlight his ability to lean on the Saudis and push for higher production levels. For example, on 30 June 2018, he claimed in a tweet following a conversation with King Salman that Saudi Arabia would increase production by 2 mbd, which the Saudis then quickly denied, to dampen the oil market.34 As noted above, though Trump’s warm embrace gives an impression of a strong relationship, his transactional approach carries risks. As a transactional politician and business leader, Trump expects to draw upon allies’ support at short notice and this will mean that he calls upon the Saudis to balance the market not only in times of short supply, but also when the market is oversupplied. There is no doubt that Trump will continue to call upon Saudi Arabia and other Gulf Arab states to increase production levels, especially as he seeks exclude Iranian crude from the oil market following the imposition of punitive sanctions since November 2018.35 The US has long called upon the Gulf Arab states to burden share. As noted above, Obama openly criticised them for ‘freeriding’. Whilst his interview clearly caused offense amongst its intended audience, President

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Trump is no different in expecting allies to burden share. Similar to Obama, he has been openly critical of allies, in particular, NATO members, whom he has called upon to not only meet their 2% of GDP contribution towards the military, but also increase it to 4%.36 In a similar vein, he has called upon Saudi Arabia and the Gulf Arab states to contribute funds to help with reconstruction in parts of Syria, deploy ground troops to prevent ISIS from returning in Syria and commit resources to support the Middle East Peace Process.37 Although the US will remain the main security guarantor of the Gulf Arab states, with assistance from EU states, especially France, and the UK, it will likely place a greater emphasis upon Gulf partners to shoulder more of the burden. This aligns with emerging sentiment amongst Western governments that Gulf Arab states should accept greater responsibility for managing crises, rather than relying upon the international community to bring solutions. It reflects a broader trend amongst Western policymakers against deploying conventional forces to support partners and a general reluctance to be drawn into open-ended conflicts, especially following the experiences of Iraq and Afghanistan.38 Before the Quartet’s blockade against Qatar, the US expected the GCC states to shoulder a greater burden of responsibility towards Gulf security, especially through the auspices of the GCC Military Command and to achieve more unified command and control capabilities, as well as greater military cooperation and interoperability.39 The US had sought to organise the GCC states under an umbrella of security with a heavy emphasis on their collective ability to connect their missile-defence systems and enhance interoperability. This initiative facilitated the sale of THAAD and Patriot systems to the UAE and other GCC states, the launch of X-band radar in Qatar, and the development of region-wide command, control and communications capabilities.40 Despite significant efforts by the US and other international partners to push GCC towards closer military cooperation, little had been achieved, except establishing the defence force Peninsula Shield. Peninsula Shield was an amalgam of military forces from each Gulf state; however, it lacked the cohesion or organisation of a centralised military structure.41 Other than Peninsula Shield, unified strategic planning and defence cooperation amongst GCC states had always been weak, except in the case where GCC member-states Saudi Arabia and the UAE moved into Bahrain during Arab Uprising protests in March 2011.42

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Saudi Arabia and the UAE have recently changed from being status quo powers into active foreign policy players and, in doing so, have caused consternation amongst foreign policy communities in Washington, Brussels, Paris and London. It is almost as though Saudi Arabia and the UAE have called their bluff. Their material support of the Sisi-coup against the Morsi presidency in Egypt in 2013; intervention in Yemen43; blockade of Qatar44; Saudi detention of Lebanese Prime Minister Saad Hariri45; withdrawal of Saudi ambassador to Ottawa46; agreement to part fund the reconstruction of Raqqa in Syria47 following Trump’s request and encouragement of General Haftar’s assault on Tripoli in Libya in April 201948 all signify that Saudi Arabia and the UAE are willing to assume greater responsibilities even without the blessing of the US. The fact that Saudi Arabia has responded to calls made by both presidents Obama and Trump underscores their realisation that US policy and engagement—irrespective of the president—is undergoing a deep structural change.49 There is little doubt that the US will continue to provide security to the GCC states, for the time being, as the free flow of energy exports, significant economic interests in both Gulf Arab states and US-bound investment flows and close personal ties (considerable political and social capital) will bind together common interests. However, the sequence of events that have come to challenge the willingness of the US to commit forces, resources and energy to stabilise the Gulf region and underpin the rule of the leading families gives a strong indication that the world’s only superpower is in retreat. Even if the period of retreat is temporary, then it will have yielded important ground to two other competing powers that stepped in fill the vacuum. During the Obama and Trump presidencies, it became abundantly clear that whilst the US continues to deploy significant forces in the Gulf and across the Middle East region, as a whole, it will no longer commit to major combat operations and interstate conflict, so far from home. At the same time, Mohammed bin Zayed has proven to be a resourceful and strategic thinker who made the decision after the event of 11 September 2001 that the UAE had to diversify its relationships. As a consequence, the UAE has certainly diversified its economic relations and developed new relationships throughout Asia, notably, in India, South Korea and China.50 Furthermore, since Mohammed bin Salman came to prominence, Mohammed bin Zayed has taken him under his wing and begun

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to diversify their security relationships; whilst they have drawn close to the Trump White House, both Mohammed bin Zayed and Mohammed bin Salman have made enormous efforts to not only enhance their own security capabilities, but also deepen relations with Russia, China and a number of private militaries.51

China As noted above, Russia is an opportunist power that has successfully re-inserted itself into the region via the vacuum left by the US. China, on the other hand, is a slower moving strategic player—in no rush, but on a clear and determined path. Russia and China considered together are reminiscent of the Aesop’s fable ‘The Tortoise and the Hare’52— Beijing will reach the finish line, but it will do so in its own time. In June 2014, speaking at the sixth ministerial conference of the China-Arab States Cooperation Forum (CASF), President Xi outlined his ‘1+2+3’ strategy. This was a comprehensive and wide-ranging vision that focused on energy, trade, investment as well as nuclear power, technology and renewables. The strategy was then given greater clarity in China’s Arab Policy Paper published in 2016, which laid out Beijing’s vision for engagement with the Arab world. The foundation of this regional vision is predicated on the belief that greater economic development can foster ‘peace and stability’ in the Middle East. Through a forward-looking trade relationship, China would leverage energy cooperation, infrastructure, trade and investment and renewable energy diversification, all supported through the expansive BRI, an ambitious project combining trade, connectivity and infrastructure investments. Also discussed in the paper were plans for people to people exchanges, intelligence sharing and military and counter-terrorism cooperation pointing to China’s intention to increase regional cooperation. President Xi affirmed the centrality of the region when he stated that “Instead of looking for a proxy in the Middle East, we promote peace talks; instead of seeking any sphere of influence, we call on all parties to join the circle of friends for the Belt and Road Initiative; instead of attempting to fill the ‘vacuum’, we build a cooperative partnership network for win-win outcomes”. In 2018, President Xi Jinping further pledged $20 billion in loans to Arab countries. This included over $100 million in financial aid to countries in the MENA region. Speaking of the intention to also form

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a strategic partnership with the Arab League, Xi proclaimed that the partnership itself would become ‘the keeper of peace and stability in the Middle East’. Naturally, this raises the question whether China can support peace and stability actor without projecting its military might into the region. But it speaks to China’s worldview in that they see economic development as the means to reducing conflict and promoting stabilisation. In contrast to western states, China views economic cooperation as a state-state endeavour rather than one pursued through other actors, such as international, regional, national non-governmental organisations and the private sector. The Chinese approach is, in many ways, a riposte to the US approach to the region. Under the Carter Doctrine, which designated the Persian Gulf as a vital national interest of the US, it has practised a balance of power approach to the region. In part, this was a continuation of a containment strategy against the then Soviet Union so that no external power challenged American dominance in the region. As such, China’s Arab Policy paper departs from the US’ traditional approach to the region. However, this is not to say that there are not securitised aspects of China’s engagement in the region. For example, military exchanges have increased between China and Saudi Arabia. China has also built interim technical service stops in Oman, Saudi Arabia and Sudan. From the Chinese perspective, this expansion is necessary to protect their commercial investments and safety of Chinese overseas workers. For the Chinese, instability is the biggest problem in the region—in 2015, Chinese nationals in Yemen had to be evacuated marking the first time China’s military had undertaken such action. The increased security engagement also allows China to practically develop its military and naval capacities and capabilities. However, its security engagement is entirely predicated on a strict adherence to long-standing principles of non-alignment, respect for international boundaries and non-interference in other countries’ internal affairs. But it is clear keeping the peace in this context is primarily about safeguarding Chinese interests. According to China’s “1+2+3” formula for China–Arab cooperation, energy cooperation will be the “core” of the relationship, with constructing infrastructure and facilitating trade and investment as the “wings” supporting that core. The “3” refers “three breakthroughs”—a wishlist for future cooperation in nuclear energy, new and clean energy and

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aerospace (particularly satellites, but including “cooperation on manned spaceflight”). China’s “Belt and Road” initiative will serve as the framework for all of the “1+2+3” cooperation. For example, in less than a decade, the Chinese–GCC commercial interactions doubled from $57 billion in 2007 to $114 billion in 2016. For now, China’s relationship with the Arab world is largely defined by its energy imports—meaning, of course, oil. As China’s Arab paper notes, “Arab countries as a whole have become China’s biggest supplier of crude oil”. The full truth is even more striking: Saudi Arabia alone is China’s largest supplier of oil, and when you factor in Iraq, Kuwait, Oman and the UAE, the Arab world accounts for over 40% of China’s total oil imports. Thus, China’s engagement in the Middle East region to date has been determined largely by furthering its strategic economic interests, but US disengagement has led its leadership to re-evaluate its approach and consider deepening political and diplomatic ties. At the same time, US equivocation during the Arab Uprisings spurred Gulf Arab leaders to diversify economic and political relationships, in particular, in Asia. Moreover, China’s BRI incorporates aspects of the Middle East region, though by and large, circumvents the Gulf Arab states, except Oman. Nevertheless, Gulf Arab states are positioning themselves, so that they can attract significant Chinese investment, particularly in infrastructure and energy, and states, such as Kuwait, are trying hard to become part of the BRI.53 As a result, ties between China and the Gulf Arab states have thickened to such an extent that they are in the process of changing from being simply transactional to strategic.

From Transactional to Strategic Relations To date, the relationship between China and the Middle East has been largely transactional and based on China’s growing energy demand and Beijing’s access to growing markets in the highly populous centres of Iran and Egypt, and the high-tech capitals of the Gulf Arab states. On the other hand, Gulf Arab states have been strategic in how they have invested in downstream ventures in China, in an effort to create a value chain for their petroleum exports. Despite concerted efforts to deepen relations with China, Gulf Arab leaders had, until recently, been unsuccessful in doing so.54 US energy self-sufficiency buoyed by substantive increases in shale oil and gas production forced Gulf Arab leaders to

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seek more secure long-term markets in Asia. However, each Gulf Arab state has found it difficult to penetrate the market given the paucity in relations with China. Furthermore, they have wished to emulate the type of relationship held with the US, but without with the ‘hard-wiring’ of strong institutional relations and soft power of people to people connections have been unable to do so. However, the three key factors discussed below will not only transform the relationship between China and the Middle East region and, in particular, the Gulf Arab states, but also lend a pretext for Beijing to move economically, diplomatically and militarily closer to the region. China and the Gulf Arab states share one common feature when it comes to policymaking; they enjoy the luxury of planning for the longterm, rather than the short-term policy options made available to elected officials in Western democracies. Therefore, the time horizon for the changes in the relationship between China and the Gulf Arab states is set in line with long-term visions and plans in the region of twenty or fifty years, rather than in the next few years. The three factors that will transform relations from transactional to strategic in the coming decades include: China’s energy demand and Middle East oil and gas producers’ need for fossil fuel intensive markets; the impact of US disengagement and China’s increasing need for stability; and Gulf Arab leaders’ search for a new security arrangement.55 There is little doubt that the Middle East region, as a whole, and the Gulf region in particular, is growing in strategic importance to China. It is not only rich in natural resources and offers a growing market, but it also provides a gateway to key maritime routes, and African and European markets.56 Currently, China imports 49% of its crude oil and 21% of oil products from the region; whilst 37% of the region’s oil exports are destined for China, amounting to nearly $123 billion in 2016; imports from the region are valued at $87.5 billion.57 China has made a number of significant upstream investments in Iraq and Iran, whilst Qatari and Saudi investors have invested in downstream operations in China as a means of developing a value chain that ties the long-term economic interests of the countries together. The subject of Saudi Aramco’s IPO remains unresolved, given the issues of where to list and what it means in terms of valuation, transparency and reporting,58 but there is speculation that China may be offered a private sale of the 5% on offer.59 Should the sale

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go ahead and China take a private stake, then it would constitute a major development in Saudi–Chinese strategic relations. Although China has made clear that its needs to diversify the provenance of its natural resources and the BRI will help realise that goal, the Gulf will only continue to grow in importance as the country’s domestic demand grows. At the same time, increasing US production of shale oil and gas will displace further Middle Eastern oil into the markets of North America and Europe and, thereby, create a mutual energy dependency between China and the oil producing region of the Gulf.60 As already noted earlier in this chapter, the relationship between the US and its allies in the region has been strategic, predicated upon strong military, economic and energy relations: in simple terms, energy for security. Though, given the close ties between militaries, the provision of secondary and tertiary education to Arab elites in the US and the close bonds between government agencies (including the NSA, CIA and State Department and their counterparts), the relationship has been much stronger than that. However, former US President Obama’s pivot to Asia, determination to reach a nuclear deal with Iran and seeming disengagement from the region, as evidenced in his interview with The Atlantic in April 2016, severely undermined the confidence that leaders in the region placed in the US as security provider. In response Gulf Arab leaders increased the diplomatic traffic with Beijing, accruing a number of high profile visits with King Hamad Bin Eisa Al Khalifa of Bahrain (September 2013),61 former Saudi Crown Prince and now King Salman Bin Abdulaziz Al Saud (March 201462 and March 201763), Emir Sheikh Tamim Bin Hamad of Qatar (November 2014)64 and UAE Minister of State, Dr. Sultan Al Jaber (January 2014)65; Prime Minister of Kuwait Sheikh Jaber Mubarak Al-Hamad Al-Sabah (June 2014).66 President Sisi of Egypt visited China in December 2014,67 August 201768 and August 2018,69 and Crown Prince Mohammed bin Salman visited China in February 2019,70 whilst President Xi paid visits to Saudi Arabia and Egypt in January 2016,71 and the UAE in July 2018.72 Gulf Arab leaders would welcome a more muscular foreign policy from China in order to compensate for the decline in US influence. However, the timeline for such an eventuality appears extensive. As noted above though, in spite of Mohammed bin Salman’s haste to reform Saudi Arabia’s economy, Gulf Arab leaders are more inclined to consider policies over a long-term horizon. In other words, they are

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unlikely to contemplate a new security arrangement in the near future, but preparing for the eventuality is already under consideration. After all, Mohammed bin Zayed is a strategic thinker and started the process of diversifying relations in the early 2000s.73 At the same time, there are signs that Beijing wishes to step up its political and diplomatic engagement to complement and support its economic goals. The appointment of Special Envoys to Syria and the Middle East Peace Process, and the convening of symposia in China drawing together second and third tier decision-makers and influencers, put down a clear marker that Beijing is reconsidering the level of its commitment to diplomacy. Chinese officials have made clear to the author that Beijing sees a new role for itself by stepping into the vacuum left by the US and pushing hard for stability.74 The issue, however, remains one of timing—when should China deepen its political engagement and how long can it benefit from freeriding on the US and maintaining a policy of non-interference. The prioritisation of stability over democracy promotion is particularly attractive to Gulf Arab leaders, many of whom attribute the Arab Uprisings to the Western obsession with political reform and human rights—an incorrect analysis, but one believed by leaders nevertheless. There is little doubt that China will need to increase its engagement in the Gulf in order to secure its interests, as they grow and extend to Africa and Europe via BRI. Obama’s quip about the Gulf Arab states’ freeriding has been extended to include China freeriding on the US security umbrella.75 Given that the US withdrawal, however slow, is structural and not cyclical, China will be obliged to shoulder responsibility for regional security. For the time being, China feels confident that it can fill the vacuum slowly and in doing so, it will continue to share good relations with the region’s natural enemies, Saudi Arabia and Iran, Israel and Palestine, and the so-called Sunni and Shia Crescent states. Beijing’s first test of prioritising stabilisation in Syria over the political process will be its first real test and possibly its first bloody nose in Middle East diplomacy.

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Notes

1. Anoushiravan Eteshami and Raymond Hinnebush, Syria and Iran: Middle Powers in a Penetrated Regional System (London: Routledge, 2014). 2.  US Energy Information Administration, “World Oil Transit Chokepoints”, 25 July 2017, accessed 1 September 2018, https://www. eia.gov/beta/international/regions-topics.php?RegionTopicID=WOTC. 3. BRI consists of a sprawling network of planned capital projects in transport, trade and other economic infrastructure in dozens of countries across Asia, Central Asia and beyond. The initiative is designed to improve overland and maritime trade links between China and the rest of the world, and is also an outlet for the increasingly outward looking investment strategies of Chinese companies. Harriet Moynihan, “‘Belt and Road’—Encouraging China to Play by International Rules”, in House Expert Perspectives 2018: Risks and Opportunities in International Affairs (London: Chatham House, 2018). 4. This was discussed in the International Symposium on the Prospect of a Political Settlement of the Syrian Issue, Shanghai, May 2018. Also see Helena Legarda and Marie L. Hoffmann, “China as a Conflict Mediator: Maintaining Stability Along the Belt and Road”, Mercator Institute for China Studies, 22 August 2018, accessed 5 September 2018, https://www.merics.org/en/china-mapping/china-conflict-mediator. 5. David Commins, The Gulf States: A Modern History (London: I.B. Tauris, 2012). 6.  Jefrey Goldberg, “The Obama Doctrine”, The Atlantic, April 2016, accessed 1 September 2018, http://www.theatlantic.com/magazine/ archive/2016/04/the-obama-doctrine/471525/. 7. Mohammed El-Katiri, United States Gulf Co-operation Council Security Co-operation in a Multipolar World (Carlisle: US Army War College Press and Strategic Studies Institute, 2014), accessed 5 September 2018, https://www.globalsecurity.org/military/library/report/2014/ssi_ el-katiri_141001.pdf. 8.  David Miller Aaron and Richard Skolosky, “Donald Trump Has Unleashed the Saudi Arabia We Always Wanted—And Feared”, Foreign Policy, 10 November 2017, accessed 1 September 2018, https://foreignpolicy.com/2017/11/10/donald-trump-has-unleashed-the-saudi-arabiawe-always-wanted-and-feared/. 9. Conversation with UK official, London, June 2014. 10. It is important to note that whilst we refer to the GCC states, we are, in fact, making reference to the six states individually, rather than the GCC as an organisation. The organisation is now defunct and largely irrelevant following the Saudi and Emirati-led blockade against Qatar in June 2017.

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See Kristian Coates Ulrichsen, The Exclusionary Turn in GCC Politics, 21 August 2018, accessed 1 September 2018, http://arabcenterdc.org/ policy_analyses/the-exclusionary-turn-in-gcc-politics/. 11. These factors are: trade, defence sales and investment. 12.  Anthony H. Cordesman, “Gulf Security: Looking Beyond the Gulf Cooperation Council”, Center for Strategic and International Studies (CSIS), 12 December 2017, accessed 2 September 2018, https://csisprod.s3.amazonaws.com/s3fs-public/publication/171213_GCC. pdf?hm10rj5lnKMJtrpQ_yY_GJr8lmubYoxk. 13. Kristian Coates Ulrichsen, The Gulf Impasse’s One Year Anniversary & the Changing Regional Dynamics, 30 May 2018, accessed 2 September 2018, https://gulfif.com/the-gulf-impasse/. 14.  Lawrence Freedman and Efraim Karsh, The Gulf Conflict, 1990–1991: Diplomacy and War in the New World Order (Princeton: Princeton University Press, 1990). 15. F. Gregory Gause III, “The Approaching Turning Point: The Future of U.S. Relations with the Gulf States”, Brookings, May 2003, accessed 1 September 2018, https://www.brookings.edu/wp-content/ uploads/2016/06/gause20030430.pdf. 16. In spite of the defeat inflicted upon ISIS in Iraq and Syria and the loss of its territory and the end of the so-called Caliphate in October 2017, there are signs that the organisation will re-emerge amidst the continuing political chaos in Iraq and in the embers of the Syrian conflict. See Hassan Hassan, “ISIS Is Ready for a Resurgence”, The Atlantic, 2018, accessed 1 September 2018, https://www.theatlantic.com/ international/archive/2018/08/baghdadi-recording-iraq-syria-terrorism/568471/; Robin Wright, “ISIS Makes a Comeback—As Trump Opts to Stay in Syria”, The New York Times, 30 August 2018, accessed 4 September 2018, https://www.newyorker.com/news/news-desk/ isis-makes-a-comebackas-trump-opts-to-stay-in-syria. 17. Krishnadev Calamur, “ISIS Never Went Away in Iraq”. The Atlantic, 31 August 2018, accessed 2 September 2018, https://www.theatlantic. com/international/archive/2018/08/iraq-isis/569047/. 18. Obama, however, deployed 300 Special Forces and airpower, as part of the anti-ISIL Coalition to rid the country of ISIS. Joseph Logan, “Last U.S. Troops Leave Iraq, Ending War”, Reuters, 11 December 2011, accessed 1 September 2018, https://www.reuters.com/article/us-iraq-withdrawal/ last-u-s-troops-leave-iraq-ending-war-idUSTRE7BH03320111218; Zeke J. Miller, “Obama to Deploy Special Forces to Iraq”, Time, 19 June 2014, accessed 1 September 2018, http://time.com/2901449/ obama-iraq-isis-troops/.

114  N. QUILLIAM 19. Karen DeYoung, “Obama to Leave 9,800 U.S. Troops in Afghanistan”, The Washington Post, 27 May 2014, accessed 1 September 2018, https:// www.washingtonpost.com/world/national-security/obama-to-leave9800-us-troops-in-afghanistan-senior-official-says/2014/05/27/ 57f37e72-e5b2-11e3-a86b-362fd5443d19_stor y.html?utm_term= .35a5f76af056. 20. Secretary of State Chuck Hagel, “Secretary of Defense Speech”, Manama, 7 December 2013, accessed 5 September 2018, http://archive.defense. gov/speeches/speech.aspx?speechid=1824. 21.  David Des Roches, A Base Is More Than Buildings: The Military Implications of the Qatar Crisis, 8 June 2017, accessed 1 September 2018, https://warontherocks.com/2017/06/a-base-is-more-than-buildingsthe-military-implications-of-the-qatar-crisis/. 22. Barack Obama, “Obama’s Speech in Cairo”, The New York Times, 4 June 2009, accessed 4 September 2018, https://www.nytimes.com/2009/06/ 04/us/politics/04obama.text.html. 23. David D. Kirkpatrick, Into the Hands of the Soldiers: Freedom and Chaos in Egypt and the Middle East (New York: Viking, 2018). 24.  Neil Quilliam, “Saudi Arabia’s Syria Policy”, in The Syrian Imbroglio: International and Regional Strategies, ed. Ioannis Galariotis and Kostas Ifantis (Florence: European University Institute, Robert Schuman Centre for Advanced Studies), pp. 20–26. 25.  Hagel, “Secretary of Defense Speech”, Manama, 7 December 2013, accessed 5 September 2018, http://archive.defense.gov/speeches/speech. aspx?speechid=1824. 26. Neil Quilliam, “China and the Middle East: From ‘Economy Only’ to ‘Keeper of International Order’”, The Middle East in London, June–July, 2018, pp. 7–8. 27. Bruce Riedel, Kings and Presidents: Saudi Arabia and the United States since FDR (Geopolitics in the 21st Century) (Washington, DC: Brookings University Press, 2017). 28. This was discussed in a workshop on British–Saudi Relations organised by Chatham House in partnership with the Institute of Diplomatic Studies in Riyadh in April 2014. 29. Quilliam, “Saudi Arabia’s Syria Policy”, pp. 20–26. 30.  Simon Henderson, “Meet the Two Princes Reshaping the Middle East”, Politico Magazine, 2017, https://www.politico.com/magazine/ story/2017/06/13/saudi-arabia-middle-east-donald-trump-215254. 31. Nick Cunningham, “Iran Sanctions Are Different This Time”, Oil Price, 9 July 2018, accessed 5 September 2018, https://oilprice.com/Energy/ Energy-General/Iran-Sanctions-Are-Different-This-Time.html.

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32.  Council on Foreign Relations, US–Saudi Relations, 12 May 2017, accessed 1 September 2018, https://www.cfr.org/backgrounder/ us-saudi-relations. 33. Georgi Kantchev and Benoit Faucon, “More Middle East Oil May Not Be Enough”, The Wall Street Journal, 2 July 2018, accessed 5 September 2018, https://www.wsj.com/articles/to-head-off-rising-crude-prices-itmay-take-more-than-calls-for-more-oil-1530477786. 34.  Associated Press, “Trump Claims Saudi Arabia Has Agreed to Boost Oil Production Amid Turmoil”, The Guardian, 2018, accessed 5 September 2018, https://www.theguardian.com/world/2018/jun/30/ trump-saudi-arabia-oil-production-iran-venezuela. 35.  US Department of Treasury, “Iran Sanctions”, 4 November 2018, accessed 2 May 2019, https://www.treasury.gov/resource-center/sanctions/programs/pages/iran.aspx. 36. Ewen MacAskill and Peppa Crerar, “Donald Trump Tells Nato Allies to Spend 4% of GDP on Defence”, The Guardian, 11 July 2018, accessed 5 September 2018, https://www.theguardian.com/world/2018/jul/11/ donald-trump-tells-nato-allies-to-spend-4-of-gdp-on-defence. 37. Donald Trump, Twitter Post, 18 August 2018, accessed 5 September 2018,  https://twitter.com/realDonaldTrump/status/103093516417 8903044. 38. Yves Loiselle, War in Afghanistan: The Longest War in the United States History (CreateSpace Independent Publishing Platform, 2018). 39. Brahim Saidy, “GCC’s Defense Cooperation: Moving Towards Unity”, October 2014, accessed 5 September 2018, http://www.fpri.org/ articles/2014/10/gccs-defense-cooperationmoving-towards-unity. 40.  Cordesman, “Gulf Security: Looking Beyond the Gulf Cooperation Council”, 41. Yoel Guzansky, “Defence Cooperation in the Arabian Gulf: The Peninsula Shield Force Put to the Test”, Middle Eastern Studies (2014), pp. 640– 654, https://doi.org/10.1080/00263206.2014.901219. 42.  Ala’a Shehabi, “Bahrain’s Sovereign Hypocrisy”, Foreign Policy, 14 August 2013, accessed 5 September 2018, https://foreignpolicy. com/2013/08/14/bahrains-sovereign-hypocrisy. 43. David Roberts, “The Gulf Monarchies’ Armed Forces at the Crossroads”, Institut francais des relations internationales, 4 May 2018, accessed 1 September 2018, https://www.ifri.org/en/publications/etudes-de-lifri/ focus-strategique/gulf-monarchies-armed-forces-crossroads. 44. Cinzia Bianco and Gareth Stansfield, “The Intra-GCC Crises: Mapping GCC Fragmentation after 2011”, International Affairs (1 May 2018), pp. 613–635.

116  N. QUILLIAM 45.  David Ignatius, “Saudi Arabia Forcibly Detained Lebanon’s Prime Minister, Sources Say”, The Washington Post, 10 November 2017, accessed 1 September 2018, https://www.washingtonpost.com/opinions/globalopinions/saudi-arabia-forcibly-detained-lebanons-prime-minister-sources-say/2017/11/10/b93a1fb4-c647-11e7-84bc-5e285c7f4512_story.html. 46.  Summer Said, “Saudi Arabia Expels Canadian Ambassador”, The Wall Street Journal, 5 August 2018, accessed 1 September 2018, https://www. wsj.com/articles/saudi-arabia-recalls-ambassador-to-canada-1533512832. 47.  The National, “Saudi Arabia Pledges $100 m to US-backed Syria Campaign”, The National, 17 August 2018, accessed 21 August 2018, https://www.thenational.ae/world/mena/saudi-arabia-pledges-100mto-us-backed-syria-campaign-1.760889. 48. Sasha Toperich, “Khalifa Haftar Is No Longer Part of Libya’s Solution”, The Hill, 1 May 2019, https://thehill.com/opinion/international/441552khalifa-haftar-is-no-longer-part-of-libyas-solution. 49. Neil Quilliam, “The Saudi Dimension—Understanding the Kingdom’s Position in the Gulf Crisis”, in Divided Gulf—The Anatomy of a Crisis, ed. Andreas Krieg (London: Palgrave Macmillan, 2019). 50. Oxford Business Group, The Report: Abu Dhabi 2010 (London: Oxford Business Group, 2010). 51.  Jenna Mclaughlin, “Deep Pockets, Deep Cover: The UAE Is Paying Ex-CIA Officers to Build a Spy Empire in the Gulf”, Foreign Policy, 21 December 2017, accessed 5 September 2018, https://foreignpolicy. com/2017/12/21/deep-pockets-deep-cover-the-uae-is-paying-ex-ciaofficers-to-build-a-spy-empire-in-the-gulf/. 52. Aesop, Aesop’s Fables (New York: Signet Classics, 2004). 53.  Jonathan Fulton, “The G.C.C. Countries and China’s Belt and Road Initiative (BRI): Curbing Their Enthusiasm?” Middle East Institute, 17 October 2017, accessed 3 May 2019, https://www.mei.edu/publications/gcc-countries-and-chinas-belt-and-road-initiative-bri-curbing-theirenthusiasm. 54. Neil Quilliam and Maggie Kamel, “The GCC-Asian Relationship: From Transaction to Strategy”, East Asia (2015), pp. 323–339, https://doi. org/10.1007/s12140-015-9236-4. 55. Kristian Coates Ulrichsen, “The Gulf States Are Turning to Asia in a Big Way: Here’s Why It Matters”, The Washington Post, 21 April 2017, accessed 2 September 2018, https://www.washingtonpost.com/ news/monkey-cage/wp/2017/04/21/the-gulf-states-are-turning-toasia-in-a-big-way-heres-why-it-matters/. 56. Elizabeth C. Economy and Michael Levi, By All Means Necessary: How China’s Resource Quest Is Changing the World (Oxford: Oxford University Press, 2014).

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57.  World Trade Integrated Solutions (WTIS), China Product Exports and Imports from Middle East & North Africa 2016, accessed 3 September 2018, https://wits.worldbank.org/CountryProfile/en/Country/CHN/ Year/2016/TradeFlow/EXPIMP/Partner/by-country. 58. Arash Massoudi, Anjli Raval, Robert Smith, and Simeon Kerr, “Riyadh to Seek $11bn in Bank Loans After Saudi Aramco IPO Stalls”, Financial Times, 23 August 2018, accessed 5 September 2018, https://www. ft.com/content/71695b84-a6c8-11e8-926a-7342fe5e173f. 59.  Rania El-Gamal and Alex Lawler, “Exclusive—China Offers to Buy 5 Percent of Saudi Aramco Directly: Sources”, Reuters, 16 October 2017, accessed 5 September 2018, https://uk.reuters.com/article/uk-saudi-aramco-ipo-china/exclusive-china-offers-to-buy-5-percent-of-saudi-aramco-directly-sources-idUKKBN1CL1WX. 60. Quilliam, “China and the Middle East: From ‘Economy Only’ to ‘Keeper of International Order’”, pp. 7–8. 61. Bahrain News Agency, HM King Hamad’s Historic Visit to China Hailed, 13 October 2013, accessed 3 September 2018, http://www.bna.bh/ portal/en/news/584135. 62.  Arabiya News, “Saudi Crown Prince in Official Visit to China”, Al Arabiya News, 13 March 2014, accessed 3 September 2018, https:// english.alarabiya.net/en/News/middle-east/2014/03/13/SaudiCrown-Prince-in-official-visit-to-China.html. 63. AFP, “Hosting Saudi king, China Pursues Mideast Charm Offensive”, Al-Monitor, 16 March 2017, accessed 3 September 2018, https://www. al-monitor.com/pulse/afp/2017/03/china-saudi-diplomacy-royals. html. 64. Gulf States News, “China Deals”, Gulf States News, 13 November 2014. 65.  Gulf News, “UAE Seeks to Strengthen Economic Ties with China”, Gulf News, 30 May 2014, accessed 3 September 2018, http://gulfnews.com/business/economy/uae-seeks-to-strengthen-economicties-with-china-1.1341102. 66. China Daily, “Xi Meets Kuwait Prime Minister”, China Daily, 4 June 2014, accessed 3 September 2018, http://www.chinadaily.com.cn/ china/2014-06/04/content_17563183.htm. 67. Abdallah Schleifer, “Shifting Sands: Egypt’s Sisi Goes All Out on China Visit”, Al Arabiya, 26 December 2014, accessed 5 September 2018, http://english.alarabiya.net/en/views/news/world/2014/12/26/ Shifting-sands-Egypt-s-Sisi-goes-all-out-on-China-visit.html. 68.  State Information Service, Sisi Visits China and Vietnam, 29 August 2017, accessed 3 September 2018, http://www.sis.gov.eg/Story/ 117390?lang=en-us.

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69. Daily News Egypt, “Al-Sisi in China to Boost Investments Cooperation”, Daily New Egypt, 1 September 2018, accessed 3 September 2018, https://dailynewsegypt.com/2018/09/01/al-sisi-in-china-to-boostinvestments-cooperation/. 70. Arab News, “Saudi Crown Prince Mohammed bin Salman in China”, Arab News, 22 February 2019, accessed 3 May 2019, http://www. arabnews.com/node/1456446/saudi-crown-prince-mohammed-binsalman-china. 71. AFP, “China’s Xi Jinping to Visit Saudi Arabia, Egypt, Iran”, Dawn, 15 January 2016, accessed 3 September 2018, http://www.xinhuanet.com/ english/cnleaders/201601xjp/index.htm. 72. Stanley Carvalho, “Xi’s Visit to UAE Highlights China’s Rising Interest in Middle East”, Reuters, 20 July 2018, accessed 3 May 2019, https:// www.reuters.com/article/us-emirates-china/xis-visit-to-uae-highlightschinas-rising-interest-in-middle-east-idUSKBN1KA26K. 73. Neil Quilliam, “Saudi Arabia, the UAE and Turkey: The Political Drivers of ‘Stabilisation’”, in Stabilising the Contemporary Middle East and North Africa—Regional Actors and New Approaches, ed. Victor Gervais and Saskia van Genugten (London: Palgrave, 2019). 74.  Author’s discussions with Chinese diplomats in the International Symposium on the Prospect of a Political Settlement of the Syrian Issue, Shanghai, May 2018. 75. “Exclusive Interview: Obama on the World”, The New York Times, 10 August 2014, accessed 3 May 2019, https://www.nytimes.com/video/ opinion/100000003047788/china-as-a-free-rider.html.

CHAPTER 6

The Role of External Powers: Regional Actors (Part II) Neil Quilliam

Introduction Chapter 5 examined the role of the US in the Gulf and made reference to the vacuum the superpower is leaving behind. It described how the balance of power between the US and China is shifting on the global stage and the impact it has had so far on the region. Whilst the US and China are the world’s dominant powers, the contemporary era is best described as one that is emerging from a unipolar moment towards a multipolar order. As such, other significant actors, best described as regional powers, are beginning to exert themselves, project power and capitalise upon opportunities opening up to them. These powers include, amongst others, Russia Brazil, India and Turkey. This chapter explores in more detail how these other actors are beginning to shape and influence the political and economic landscape in the region. It begins with an assessment of Russia’s bid to capitalise upon the immediate opportunities afforded to it by Washington’s pause.

N. Quilliam (*)  The Royal Institute of International Affairs, Chatham House, London, UK © The Author(s) 2020 S. Bazoobandi (ed.), The New Regional Order in the Middle East, International Political Economy Series, https://doi.org/10.1007/978-3-030-27885-4_6

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Russia After the collapse of the Soviet Union, Russia became a peripheral actor in the Middle East region and in the Gulf, marginal, at best. The end of the Cold War brought a close to the struggle for the Middle East between the Soviet Union and the US and gave rise to a unipolar moment in history. Although the US had been the dominant external actor during the Cold War, the Soviet Union’s relationships with Syria and Iraq, in particular, and at times with Egypt and Yemen’s People Democratic Republic of Yemen (PDYR),1 gave it the means to shape and influence developments and events in the region. However, relations between the Soviet Union and the Gulf Arab states were practically non-existent, as they were closely allied with the US.2 Between 1990 and 2010, the US was the dominant external actor in the region, though it lost legitimacy and credibility following its war against Iraq in 2003.3 Whilst many celebrated the twentieth century as the ‘American century’, the US soon lost influence in the early twenty-first century in the Middle East following costly wars in Afghanistan and Iraq, signposted as chapters in the Global War on Terror,4 penchant for regime change and then ambivalence towards the Arab Uprisings. As noted above, although the US has retained its military might, it has lost most of its political capital amongst Arab populations for not taking enough steps to stop the Assad regime from repeatedly using chemical weapons against its own people and for choosing stability over democracy, when it comes to challenging autocracies in Egypt, Saudi Arabia and the UAE. At the same time, Russia, in spite of, or because of, its ailing economy has sought to fill the vacuum left by the US and project its power, mostly in the form of military might, into the region. As an opportunist power, Russia has benefited from US failings in the region, not because it could match the economic, social or political weight of Washington, but because it could deploy hard military power at little domestic cost and then use the resulting political capital to great effect. Russia has continued to benefit from US policy towards the region irrespective of whether it has been an Obama or Trump White House. In fact, whilst Obama either wittingly or unwittingly gave Russia the opportunity to move wholesale into Syria and begin its conquest of the region, Trump has done little to discourage Putin from continuing along that path.5

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The following section examines closely how Russia has deepened its engagement in the region and, by doing so, has become an indispensable external power, not only for its traditional ally, Syria, but also more importantly for the Gulf Arab states, especially Saudi Arabia and Qatar. Furthermore, as we note later, Russia’s successful political, diplomatic and military engagement since 2011 has also spurred China into changing its diplomatic posture in the region. Russia and Syria The Arab Uprisings posed both threats and challenges to Russia. On the one hand, Putin feared that popular uprisings across the region posed two major threats to Russia. First, there was the risk of contagion. The successful challenge of central authority, especially to autocratic regimes could have inspired his own restive populations, in particular, Muslim majority populations in Chechnya, Tatarstan, Bashkortostan, the republics of the North Caucasus to rise up against the rule from Moscow. It was a time that autocrats feared their own populations; and Putin was no different to leaders in Middle Eastern states. Second, the uprisings, especially in Libya and Syria provided a context for Western powers to once again call for and support regime change. Both Russia and China believed that they had been deceived by the US, UK and other Western powers, when they voted in favour of United Nations Security Council Resolution (UNSCR) 1973 that authorised the establishment of a no-fly zone over Libya and approved all necessary measures to protect civilians in March 2011. The military operation resulted in the overthrow of the Qaddafi regime leaving China and Moscow to conclude that their abstentions in the vote had paved the way for the US, UK and France—with Qatari and UAE backing—to exceed UN authority and the right to protect and seek regime change.6 Driven by its fear of contagion and the prospect of further regime change, Russia seized the opportunities afforded to it by the Arab Uprisings, particularly, in Syria, and also through the US’ apparent inaction at critical moments in the Syrian conflict.7 Russia was able to take advantage of Obama’s reluctance to deepen US engagement in the region. Obama’s ‘walk-back’ from the ­redline8 he issued against the Syrian regime using chemical weapons in 20 August 20129 undermined the US’ credibility in issuing threats. Consequently, Putin risked deploying forces into Syria to help

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underpin the security of the Syrian regime, at a time, when it was ceding ground to the opposition. Whilst Russia’s primary goal appeared to be securing its assets in the country, such as its naval base in Tartous, there is no doubt that it helped to shore up Assad’s regime. Putin effectively ‘packaged’ the intervention as a move against Islamic terrorism,10 and argued that because it was carried out at the request of the Syrian government, it amounted to a legitimate move. There is little agreement amongst policymakers and analysts across the political spectrum about the cause and origins of the Syria conflict. It remains a highly contested issue. This author shares the opinion that what initially started out as a protest movement in March 2011 against the policies of the Syrian government was later transformed by the Syrian regime into an armed confrontation between Syrian forces and armed groups.11 The regime’s policy of turning the protests into an armed conflict—facilitated by its release of Islamist extremists from prison12— enabled Assad to claim that the country was under assault from terrorists. Russia’s military deployment and intervention into the Syrian theatre in September 2015 was a major turning point in the conflict.13 Although Putin’s intentions were unclear at the outset, the deployment changed significantly the balance of forces on the ground, emboldened Assad and undermined the prospect for political settlement. Although Russia’s direct military intervention in Syria in September 2015 surprised Western policymakers, it was more the scale of the intervention that caught them off-guard, than the action itself. It amounted to a significant military deployment, including Su-34, SU-25 and Su-24 attack aircraft at al-Assad airport, attack and transport helicopters and a battalion of marines from the 810th Naval Infantry Brigade.14 Putin chose to intervene at this particular moment of the conflict for four key reasons: Syrian regime forces were under increasing pressure and losing territory; Saudi Arabia had agreed to host a conference for the Syria opposition15 and established the High Negotiating Committee16; US policy towards Syria and the wider region appeared weak; and Putin sought to circumvent Russia’s growing international isolation following the annexation of Crimea and its policy towards Ukraine.17 Russia calculated that the Assad regime was under severe pressure from opposition forces and required direct material support to guarantee its survival. For the previous six months, the opposition had been forcing the regime back, capturing the major city of Idlib. The Syrian regime appeared at its weakest in the summer of 2015, as opposition forces and

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ISIS made significant territorial gains. Furthermore, in June 2015, Assad had given an uncharacteristic speech in which he acknowledged that manpower shortages had made ceding territory necessary. It was the first real indication that the regime was under serious strain and could fall.18 The Russian entry put an end to the rebels’ advances and put paid to any potential for an outright military defeat for the regime. Whilst Saudi Arabia hosted a conference for the Syrian opposition in December 2015, which brought together all groups, except Jabhat al-Nusra, in a bid to undermine Russia and Syria’s narrative, the airstrikes against all opposition groups continued with impunity. Moscow continued to claim that it is at the forefront of a fight against international terrorism, but overwhelmingly targeted moderate opposition groups.19 Russia’s deployment, therefore, has been aimed at securing the regime and helping it to consolidate and recover territory. Without doubt, the intervention changed the balance of power between regime and opposition forces; importantly, it has also given Russia an indisputable advantage over the US in influencing events on the ground.20 Given that the US had ‘blinked’ over the Syrian regime’s use of chemical weapons and had failed to enforce its own redline, Putin calculated that the US would have no direct military or political response to his country’s intervention. In one fell swoop, Russian intervention would not only secure its key territorial interests (ports and airbases), but also deter irrevocably the prospect of Turkey and the US establishing no-fly zones or safe zones. More importantly, it would guarantee that Western-imposed regime change and calls for Assad to step aside would fail, which has proven to be an essential part of Putin’s political strategy.21 The US, on the other hand, had miscalculated that the Syrian regime’s weakness would lead Russia to temper its support for Assad in a bid to shore up support from a successor regime. The US intensified efforts at persuading Russia to forgo Assad. It was believed amongst some US officials that Russia was moving closer to its position on transition and that Assad would not be part of it. The US miscalculated Russian intentions.22 At the time of the intervention, whilst surprised, the US Administration expected Russia to become bogged down in the conflict and suffer its second Afghanistan.23 However, Russia calculated the risks of intervention and carefully weighed them against the rewards: opportunity to change the overall narrative; chance to undermine the ‘moderate’

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opposition; changing the balance of forces on the ground and saving the Assad regime; and limited options open to US to respond forcibly. Russia’s intervention was intended to change the narrative of the Syria conflict from revolution and uprising to one of counter-terrorism. Russian fighter aircraft had the freedom of Syrian airspace to strike against groups that it determined terrorists. Whilst it used the language of the anti-ISIL coalition, it was clear from the early stages that Russian airstrikes were not to be confined to ISIS targets, but other groups, including Nusra and Ahrar al-Sham, amongst others. Targeting groups that the US had already designated ‘terrorist’ gave Russia considerable latitude in striking against opposition groups that posed a threat to the Syrian regime. In other words, the intervention not only changed the lexicon on what constitutes moderate or extremist groups, but also gave Russia licence to target opposition groups backed by the US and its allies.24 Russia’s deployment in September 2015 sent a clear signal to Syria’s regional neighbours and the international community that it was a reliable partner. It demonstrated a level of commitment that other powers, such as the US or EU states, could not match. Consequently, this allowed the Syrian regime to remain intransigent in international peace talks and once again talk about retaking ‘every inch’ of Syria.25 The intervention has clearly shown that Assad’s friends are more committed to him than his enemies are to unseat him. Russia’s intervention not only tipped the balance of forces back in favour of the regime, but also gave it the initiative in peace talks. It has since become the main arbiter in international peace talks and has effectively side-lined the UN in the process and made the US a junior partner.26 Russia and the Gulf Arab States As mentioned above, Russia’s commitment to Syria has impressed leaders in the Gulf Arab states. Saudi Arabia and Qatar have rigorously opposed Russia’s policy towards Syria since the beginning of the conflict and funded armed groups inimical to both Russia and the Syrian government’s interests. Moreover, they worked closely with the US, UK and France in forming the Friends of Syria Group and shaping the opposition to meet the challenge of the Syrian regime. Nevertheless, they have grown frustrated with the equivocal support that the Western powers

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have invested in arming the opposition and fomenting the overthrow of the Assad regime. There is no space in this chapter to address the complexities of Western and Gulf Arab states’ efforts to unseat Assad, but their failure to do so has left some leaders wondering how they can now work with Russia to achieve their goals. The leadership in Saudi Arabia, UAE and Bahrain, in particular, were traditionally leery over Soviet and Russian ambitions in the region.27 However, the series of events described in the previous chapter counter-posed against Russia’s unwavering support of Syria has forced the Saudi leadership to recalculate its approaches to Washington and Moscow. As a result, Mohammed bin Salman and Mohammed bin Zayed have actively pursued a reinvigorated relationship with Russia believing that Putin’s support for their wider goals will be enduring. This includes securing support for a number of key projects, such as working together to achieve oil price stability, developing a domestic arms industry, combatting political Islam, limiting Iranian influence in Syria, drawing Assad back into the ‘Arab camp’ and guaranteeing their own regime security in the face of domestic challenges. Indeed, the UAE re-opened its embassy in December 2018 and re-established diplomatic relations with Syria.28 The move was likely coordinated with Russia and aimed at shoring up the ‘secular’ Assad regime, drawing the Syrian leader away from Iran and presenting Russian and Emirati businesses’ opportunities to help reconstruct the country. The number of deals struck between Russian companies and investment vehicles and Gulf Arab states investment funds has multiplied since the Qatar crisis started in June 2017. There is a very clear pattern emerging between Russia and the Gulf Arab states: irrespective of their past disagreements, they recognise an opportunity to work together— politically, militarily, diplomatically, financially and commercially. Russia sees a clear opportunity to fill the vacuum—in trust, unequivocal support, military deployments—left by the US. The Gulf Arab states, on the other hand, identify a chance to leverage their new-found relationship with Russia to draw Moscow away from Tehran with the promise of investment, defence sales and diplomatic support.29 The thickening of relations is evident in the increase in diplomatic traffic between Gulf Arab state capitals and Moscow.30 The Qatari leadership, whilst fervently opposed to Russia’s involvement in Syria has also taken a leading role in furthering relations with Moscow, arguably, for

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the same set of reasons that Saudi Arabia, UAE and Bahrain have done so. Whilst there can be no doubt that the US base in Qatar is a semi-permanent fixture, Emir Tamim has hedged all bets and invested heavily in its relationship with Russia.31 In the aftermath of Khashoggi affair, whilst Saudi Arabia was being condemned by Western governments and leaders alike and many of them boycotted the Riyadh investment forum, dubbed ‘Davos in the desert’, Russia sent a large delegation, including 30 top executives. As a reward for its participation, the Saudi Energy Minister announced that the kingdom aimed to acquire 30% of Russian gas producer Novatek’s $21 billion liquefied natural gas project in the Arctic. Furthermore, Russian state oil producers, Rosneft and Gazprom Neft, are negotiating with Aramco potential supply sharing, and joint research and development projects, and Riyadh has initially agreed to a multibillion-dollar deal to acquire Russia’s S-400 missile defence system.32

Turkey Turkey’s strategic location amongst major oil and gas rich regions, which include the GCC states, Iran, Russia, Central Asia and consumer markets in Europe, makes it a natural energy hub.33 Turkey’s neighbouring regions account for over 70% of the world’s known oil and gas reserves. As such, it is intimately and intrinsically linked to the energy centre of the Gulf.34 At the same time, its historical footprint in the Middle East and close relations with the Gulf Arab states (and their forerunners), lends Ankara considerable soft power to expend in its former Ottoman territories. The increase in economic engagement between Turkey and the GCC since 2002 has been notable. The period 2002–2014 saw a series of government-led initiatives, including the creation of four primary institutions to facilitate deeper trade and investment ties between Turkey and the GCC: 1.  Non-governmental business councils between Turkey’s Foreign Economic Relations Board (DEIK) and GCC business associations. 2. One-off, GCC state-specific and sector-specific committees, such as the 2012 Abu Dhabi TAQA–Turkey Committee for Joint Energy Investments.

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3.  The Turkey–GCC High Level Strategic Dialogue, initiated in 2008, and the related 2010 Joint Action Plan. 4.  The GCC–Turkish Joint Committee for Economic Cooperation and specialised sub-committees in agriculture and food security, electricity and water, energy, environment, financial and monetary issues, health, investment, tourism and trade. Turkey’s largest trade partners in GCC countries generated shared trade of some $16 billion in 2014, up from $1.49 billion in 2002, whilst FDI flows to Turkey from GCC countries between 2010 and 2014 amounted to some $2.8 billion. Turkeys largest export markets in GCC countries in 2014 were the UAE and Saudi Arabia, with key products including construction materials, iron and steel. Saudi Arabia and the UAE absorbed 10% of Turkey’s steel exports in 2010. Trade in sensitive industries like defence is robust between Turkey and GCC countries. Bahrain, Saudi Arabia and the UAE accounted for some 25% of Turkey’s defence exports in 2012.35 The privatisation of defence contracting and efforts to build the manufacturing sectors in Saudi Arabia and the UAE could spur regional investment and create opportunities for firms in Turkey. New ties between Turkey and Qatar in defence basing may also create opportunities, though the risk of alienating other GCC countries remains high.36 Saudi investment in Turkey has also greatly expanded, rising over the past 10 years from 4 billion riyals to 22 billion riyals (from approximately $1.07 billion to $5.87 billion), and encompassing at least 800 Turkish– Saudi joint venture companies working in Turkey in many fields.37 Turkey exports almost $5 billion in goods and services annually to the UAE, and in 2015 trade volume between the two countries reached $8 billion, expected to rise to $10 billion in coming years. Around 9000 Turkish expatriates reportedly live and work in the UAE, and 500 Turkish companies operate in that country, mostly in construction.38 Qatar and Turkey have enjoyed strong relations. In November 2016 the two countries signed a deal to boost economic and political cooperation. Turkish companies have invested an estimated $11.6 billion in Qatar, much of it connected to the 2022 FIFA World Cup, and there are 99 Turkish companies operating with Qatari partners.39 Kuwait and Turkey enjoy strong diplomatic relations and robust trade. Trade volume between them reached $678 million in 2018. Turkey claims its companies have been involved in $6.3 billion worth

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of projects in Kuwait as of 2016. Turkey and Bahrain reportedly enjoyed a nine-fold increase in trade volume since 2003, reaching $300 million per year. Bahraini tourism in Turkey has also reportedly increased 700% over the past decade, reaching almost 25,000 visitors a year by 2014. Oman, too, has significant trade with Turkey, including Turkish investment worth $5.5 billion in its economy. Bilateral trade is nearly $600 million per year, and both sides have agreed to try to increase it to $1 billion per year.40 Financial ties between Gulf Cooperation Council (GCC) countries and Turkey mutually support economic growth and diversification. Investment flows and banking sector ties have fluctuated since 2014, but over the last decade and a half, the general trend has been an upsurge in shared investment opportunities. Turkey is a prime destination for foreign direct investment (FDI) from GCC countries, particularly in banking, and for investment by private equity firms based in GCC countries, especially the UAE. The GCC countries have proven an important platform for business in Turkey, providing large contracts in infrastructure development for firms in Turkey.41 Leading Turkish international contracting firms—TAV and Tekfen— are executing large Gulf projects. The Tekfen Holding conglomerate’s member, Tekfen Construction, won the Qatar Al Khor Expressway, valued slightly above US$2 billion. This project comes in addition to the contractor’s pre-existing contract for upgrading Al Shamal Road. Tekfen is also contracted by Qatar’s Public Works Authority for the service road enhancement design and construction for the North Road corridor. TAV is more widely spread throughout GCC countries with large projects in Oman, the UAE and Bahrain.42 However, Turkey’s goal of re-asserting its influence throughout the region—with neo-Ottoman pretentions has been undone by its support of protestors in the so-called Arab Spring (hereafter called the Arab Uprisings),43 which pitted its leadership against a loose alliance of states supporting the counter-revolution, which includes Saudi Arabia, the UAE and Egypt.44 As discussed elsewhere, and, at length, Turkey and Qatar played instrumental roles in backing protestors across the MENA region since 2011 and supported the overthrow of leaders (and systems) in Tunisia, Egypt, Libya and Syria—all with differing degrees of success.45 Turkey’s leadership recognised that the protests spreading throughout the region offered the country an opportunity to not only shape events

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and cultivate close relations with successor regimes, but also to export its model of political Islam. In one fell move, Turkey, which supported political Islam in its numerous manifestations, but commonly depicted as the Muslim Brotherhood, antagonised the leadership of the UAE, Saudi Arabia and Bahrain; and following the coup in Egypt in July 2013 against President Mohammed Morsi, antagonised the new Egyptian leadership.46 Consequently, Turkey’s efforts in supporting protestors in Arab Uprisings states met with resistance from groups supported first by the UAE and later Saudi Arabia.47 Turkey and Qatar engaged in a chequer-board game with the UAE and Saudi Arabia for influence across the region—the former encouraging the ‘revolutionaries’, and the latter backing the ‘counter-revolutionaries’. The alliance between Turkey and Qatar has proven critical to Doha since the so-called Quartet of Saudi Arabia, UAE, Bahrain and Egypt instituted a blockade against the small gas rich state.48 In October 2017, Qatar authorities announced negotiations for a $19 billion investment in Turkey, with $15 billion to come through one of the world’s largest sovereign wealth funds, Qatar Investment Authority (QIA). The remaining $4 billion will be invested by Q Invest, another fund in the Gulf state. The potential investment by Qatar will likely include a varied selection of sectors including energy, telecommunication, tourism, food, health, insurance, defence, banking and shipbuilding.49 Trade between Qatar and Turkey is estimated to have topped the $2 billion mark in 2018, a 54% jump compared with the previous year. The $15 billion package of economic projects, investments and deposits pledged by Qatar to Turkey included up to $3 billion currency swap to firm up the country’s battered currency, the lira. Turkish exports to Qatar include food and building materials, whilst imports to Qatar include LNG and aluminium.50 However, the deep division in the region between the states allied with the revolution and the counter-revolution has, in effect, created a cold war between the two blocs. Whereas Turkey and Qatar self-define themselves as sponsors of democracy, Saudi Arabia and the UAE argue that they, in fact, sponsor the Muslim Brotherhood, which both countries have proscribed as terrorist organisation. The Quartet’s blockade of Qatar in July 2017 has deepened ties between Ankara and Doha, which are now far ranging and include the deployment of at least 3000 Turkish forces in the country.51 Although the relationship appears robust and important to Turkey, there is no doubt that Ankara through its support

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of ‘revolutionary’ forces has lost influence across the Middle East region, especially given that Saudi Arabia and the UAE—with the blessing of President Trump—has extended its reach into North Africa and Iraq. Turkey’s reach into the Gulf is limited to Qatar for the time being, northern Syria in the Levant and Tunisia in the Maghreb. However, its growing relationship with Russia may well come to lend it greater leverage in the Gulf at a later point, especially as its once prickly relations with Iran have been smoothed over and its coordination with Moscow and Tehran in the Astana Process may serve it well.

India India’s historical connection with the Gulf dates back more than five thousand years, to trading between the ancient civilisations of the Indus Valley and the Dilmun (linked with present-day Bahrain). British India’s imperial interests in the Gulf were determined, pursued and administered from the Bombay Presidency.52 India now considers the Gulf to be an integral part of its ‘extended neighbourhood’ because of geographical proximity and New Delhi’s ambition to expand its influence. The relationship is primarily defined by three factors: energy, expatriates and economy. India is dependent on the Gulf Arab states for 42% of overall oil imports; three of the top five oil suppliers to India are Gulf Arab states, with Saudi Arabia, the largest, providing 20% of India’s total oil imports.53 Qatar is also India’s main supplier of LNG.54 Therefore, any disruption in energy imports from the Gulf would have serious implications for India’s growth. Indian citizens typically comprise Gulf Arab states’ most numerous expatriate community; over 7.6 million Indian nationals live and work in the region—notably in Saudi Arabia (2.8 million) and the UAE (2.6 million) and earn remittances of approximately $40 billion per annum. The safety and security of Indian citizens has become a key priority for the Modi government. Successive Indian governments have evacuated thousands of expatriates due to conflict in Iraq, Kuwait and Yemen.55 India’s trade relationship with the states of the GCC, which amounted to $104 billion in 2017–2018 is greater than India–EU trade ($102 billion) and India–ASEAN trade ($81 billion). Moreover, Saudi Arabia and the UAE are two of India’s top five trading partners. In fact, Indian– UAE relations are developing rapidly. Prime Minister Narendra Modi

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and Mohammed bin Zayed intend to increase bilateral trade by 60% over the next five years and have targeted $75 billion of UAE investment into India’s infrastructure development, which includes ports, airports, highways, construction and petrochemicals. When Modi visited the UAE in August 2015, the two leaders discussed the establishment of a strategic petroleum reserve in India.56 Furthermore, during Modi’s visit to Riyadh in April 2016, both countries agreed to transform their relationship from buyer–seller (transactional) into a deeper and more expansive partnership with a focus on Saudi-led investments in the energy value chain, including establishing joint ventures in petrochemical projects, research and development, and new exploration in the Indian sub-continent.57 The nature of India’s relationship with Gulf Arab states is changing. It is diversifying into security and defence cooperation and, as a result, India, similarly to China, has a strong and growing stake in Gulf stability. Consequently, India has established strategic partnerships with Gulf Arab states on issues, such as counter-terrorism, money laundering, cyber security, organised crime, human trafficking and anti-piracy.58 Increasing numbers of armed-forces personnel from the Gulf Arab states are trained in Indian defence and military academies.59 Reflecting India’s growing energy dependence upon the Gulf and its ambition to support stability in the sub-region, its relations now encompass defence and naval cooperation, including joint exercises and regular Indian ship visits. Indeed, India’s most notable defence cooperation has been with Oman.60 India has also played an active role in enhancing the stability and security of the Gulf’s sea lanes through its participation in anti-piracy patrols off the coast of Somalia.61

Brazil Brazil is a relative newcomer to the region. It has slowly, but surely begun to play a diplomatic and economic role in the Gulf, though it remains a marginal player for the time being. Although it opened embassies in the UAE and Qatar in the 1990s, its political and economic footprint remained light until it opened a commercial office in Dubai in 2002. Former President Lula visited the Gulf Arab states numerous times, including UAE (2003), Saudi Arabia and Qatar (2005), and for the first time Iran (2010).62

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In 2010, Brazil, along with Turkey, sought to use their leverage, as emerging powers to seek a diplomatic solution to Iran’s quest to develop a nuclear programme.63 They persuaded Iran to make a commitment to send its uranium abroad in return for international recognition of its right to civil nuclear energy, otherwise known as the Tehran Declaration. Nevertheless, Turkey and Brazil’s efforts were overshadowed by UNSCR 1929, which placed extensive sanctions on Iran and eventually brought Tehran to the negotiating table. Brazil voted against sanctions.64 Trade flows between Gulf Arab states and Latin American and Caribbean nations stood at $16.3 billion in 2018. Amongst the Gulf Arab states, the UAE is the top trading partner of Latin American and Caribbean nations and accounted for 27% of exports and 46% of imports in 2018. Meanwhile, Brazil is the leading trade partner amongst the states of the region to Gulf Arab states with trade flows of $9.1 billion in 2018, followed by Argentina at $2 billion and Mexico at $1.2 billion.65 Brazil’s main exports are: food (chicken and beef) and sugar. For some Gulf Arab states, notably, Qatar following the Quartet’s blockade, Brazil has become one of the top providers of these products. Although a marginal player, especially when compared to China and India’s growing role in the region, Brazil’s position and influence is growing. In spite of its relatively strong economic ties with the UAE, Brazilia is becoming a close political, diplomatic and economic partner of Doha. The Qatari leadership has sought to draw upon Brazil’s experience hosting the FIFA World Cup Finals in 2014 in preparation for staging the event in 2022.66 At the same time, Qatar has sought to diversify its food imports—as part of its food security strategy—and is now a major customer for Brazilian beef and other foods.67 Trade between the two countries is almost $1 billion in 2017, where Brazil’s exports to Qatar amounted to $378 million whilst its imports from Qatar totalled $532 million.68 Qatar has also sought to deepen ties through a series of highlevel investments in Brazil’s energy sector, as well its financial and agricultural sectors.69

Conclusion This chapter and the previous one have noted how Saudi Arabia’s Crown Prince Mohammed bin Salman and UAE Crown Prince Mohammed bin Zayed welcomed the election of Trump to the US Presidency in 2016 and his early commitment to help ‘push back’ against expanding Iranian

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influence. Nevertheless, they continue to worry about long-term US engagement in the region in the post-Trump era. There are even concerns that in a fit of pique Trump could ‘burn’ relations with Gulf Arab allies, as he has done with other partners only to be ‘walked back’ by US Secretary of State for Defense James Mattis. The fact that relations with the US may be more transactional and vulnerable to emotional outbursts than strategic decisions, during the current presidency, is not very reassuring for the Gulf Arab leaders. The terms of trade in the Gulf region were predicated upon the provision of US security in exchange for free-flowing oil from the key Gulf Arab states, Saudi Arabia, Kuwait and the UAE. Since the Arab Uprisings and the downfall of leaders in Tunisia, Egypt and Libya, Saudi Arabia has feared that the US strategy towards the region has changed and is no longer focused on ensuring regime security and stability amongst its key Gulf Arab allies. This fear has grown partially in response to initial US ambivalence towards Egyptian President Hosni Mubarak when protests in Tahrir Square led to his fall from power and the coincidental development of the shale revolution, which seemingly gave North America energy independence. There is little doubt that the formula that once regulated the role of external powers in the Gulf has changed since 2011. The old order has been replaced by one that has yet to be defined; but it reflects a change in the world order, notably, US policy against direct intervention, a resurgence of middle power Russia, and the quiet but decisive rise of Chinese interest. It has been argued that the US is still the world’s only remaining superpower and that its decision to pivot towards Asia and by implication away from the Gulf region was based on a strategic calculation, rather than a position of weakness. In other words, the Obama administration reacted against the interventionist policies of his predecessor George W. Bush. The Bush years represented the next phase in the US dominated world order that started under George H. W. Bush with the US-led coalition’s drive to liberate Kuwait in 1990/1991. Whilst the first phase marked the ascent of the US as the world’s only superpower and ushered in an era of unipolarity, the second phase essentially amounted to over reach and ultimately saw US power projection challenged, as it became bogged down in the politics of occupation. The US remains the world’s only single actor that can act unilaterally and project power across the globe to achieve its objectives—both through

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military and economic means. There is no other country at the present time that has the same capability to do so. However, by the time Obama entered the White House, the US public’s appetite for foreign adventures had retreated and gave the president a stronger domestic agenda and the means to pivot towards the US’ strategic interests in Asia. President Obama simply gave a higher foreign policy priority to Asia, than the Middle East. Obama made a strategic choice driven by realism to drawdown military assets in the Middle East based on his electoral victory and gave a lower priority to stabilising the Gulf and instead projected US power into the Asia theatre, as a means of checking China’s power. The US decision led to a vacuum into which other external powers tried to step and created a complex emerging order that has yet to crystallise. There will be two main beneficiaries from US withdrawal from the region, namely Russia and China. However, the power play in the region is likely to be shaped and determined by a complex of major and regional players. As a regional power, Russia will continue to fill the vacuum in some states, as long as China remains on the margins of the security equation. At the same time, other regional actors, as discussed above, such as Turkey, India and even Brazil will ally themselves with key partners and, therefore, a new multipolar order will emerge in the region shaped by competing centres of power. It is no coincidence that ­external powers are already finding it difficult to balance interests between the competing blocs in the region. With its limited resources Russia can only seize opportunities as and when they appear. Whilst the US slowly disengages, the doors and sealanes are opening for a new strategic partner to enter and Russia has capitalised on this by revitalising relations with old and new allies. It has inserted itself into the conflict in Syria and, in doing so, has extended its influence beyond Syria into Turkey, Iran, Egypt and Libya. In supporting and underpinning the Assad regime, Putin has sought to persuade the Gulf Arab states, especially, that he is the region’s most reliable security partner. Arguably, he has been successful in doing so and has used that leverage—along with a shared interest in keeping oil prices high to considerable effect. India’s ambitions in the region are growing and becoming material. Its relationship with Gulf Arab states, in particular, the UAE, looks set to move from transactional to strategic ahead of China. Moreover, India’s foreign policy is typically more assertive than China and accords with both the UAE and Saudi Arabia’s newfound appetite for adventurism.

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It is quite likely that India’s political, diplomatic and military relationship with the UAE and Saudi Arabia will advance quicker than those of China, though Beijing’s economic ties and willingness to invest in the region may well swamp New Delhi’s economic ambitions. Though China has made a clear effort to diversify its energy sources, recognising the vulnerability of depending upon a region beset with long-standing conflicts, China needs the Middle East. The ‘economy only’ approach has, until now, allowed China to navigate the Gulf and neither choose between Saudi Arabia and Iran nor engage in the thorny issue of the Palestine question. Nevertheless, in time, Beijing will have to step up its political, diplomatic and military engagement. This will not only demand re-thinking relations with rulers in Iran, Saudi Arabia, Qatar, Iraq and Egypt, but also a significant investment in advancing those relations by cultivating deeper political, social, economic and military links. But one thing is clear: China has begun down this thorny path.



Notes 1. Paul Dresch, A History of Modern Yemen (Cambridge: Cambridge University Press, 2001). 2. Nikolay Kozhanov, Russia and the Middle East: Adjusting to a New Political Vista (New York: Palgrave Macmillan, 2014). 3. Neil Quilliam, Syria and the New World Order (London: Ithaca Press, 1999). 4.  George C. Herring, The American Century and Beyond: U.S. Foreign Relations, 1893–2014 (Oxford: Oxford University Press, 2017). 5. Nikolay Kozhanov, Russia and the Syrian Conflict: Moscow’s Domestic, Regional and Strategic Interests (London: Gerlach Press, 2016). 6. Christopher S. Chivvis, Toppling Qaddafi: Libya and the Limits of Liberal Intervention (Cambridge: Cambridge University Press, 2013). 7. Christopher Phillips, The Battle for Syria: International Rivalry in the New Middle East (New Haven: Yale University Press, 2018). 8. Adam Entous and Carol Lee, At the Last Minute, Obama Alone Made Call to Seek Congressional Approval, 1 September 2013, accessed 5 September 2018, http://www.wsj.com/articles/SB1000142412788732 4009304579047542466837078. 9. Kilic Bugra Kanat, A Tale of Four Augusts: Obama’s Syria Policy (Washington, DC: SETA, 2015). 10. Kozhanov, Russia and the Syrian Conflict: Moscow’s Domestic, Regional and Strategic Interests.

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11. Robin Yassin-Kassab and Leila Al-Shami, Burning Country—New Edition: Syrians in Revolution and War (London: Pluto Press, 2018, 2nd edition). 12.  Phil Sands, Justin Vela, and Suha Maayeh, Assad Regime Set Free Extremists from Prison to Fire Up Trouble During Peaceful Uprising, 21 January 2014, accessed 5 September 2018, http://www.thenational.ae/ world/syria/assad-regime-set-free-extremists-from-prison-to-fire-uptrouble-during-peaceful-uprising. 13. BBC, “Syrian Crisis: Russia Air Strikes ‘Strengthen IS’”, BBC, 2 October 2015, accessed 5 September 2018, http://www.bbc.com/news/ world-middle-east-34431027. 14.  Jonathan Marcus, “Syria: What Can Russia’s Military Do?” BBC, 7 October 2015, accessed 5 September 2018, http://www.bbc.com/ news/world-asia-34411477. 15.  Al Arabiya News, “Saudi Arabia Hosts Moderate Syrian Opposition Groups”, 8 December 2015, accessed 5 September 2018, https://english.alarabiya.net/en/News/2015/12/07/Moderate-Syrian-oppositiongroups-arrive-in-Riyadh-.html. 16. Saudi Ministry of Foreign Affairs, Final Statement of the Conference of Syrian Revolution and Opposition Forces Riyadh, 14 December 2015, accessed 5 September 2018, http://www.mofa.gov.sa/sites/mofaen/ ServicesAndInformation/ImportantIssues/Pages/ArticleID201512 14143757814.aspx. 17. Kozhanov, Russia and the Syrian Conflict: Moscow’s Domestic, Regional and Strategic Interests. 18. Maher Samaan and Anne Barnard, “Assad, in Rare Admission, Says Syria’s Army Lacks Manpower”, The New York Times, 26 July 2015, accessed 5 September 2018, http://www.nytimes.com/2015/07/27/world/middleeast/assad-in-rare-admission-says-syrias-army-lacks-manpower.html?_r=0. 19. Phillips, The Battle for Syria: International Rivalry in the New Middle East. 20. Tom Cooper, Moscow’s Game of Poker: Russian Military Intervention in Syria, 2015–2017 (Warwick: Helion and Company, 2018). 21. Kozhanov, Russia and the Syrian Conflict: Moscow’s Domestic, Regional and Strategic Interests. 22. Sam Dagher and Thomas Grove, “Russia Seen Reassessing Support for Assad”, The Wall Street Journal, 27 July 2015, accessed 5 September 2018, http://www.wsj.com/articles/russia-seen-reassessing-support-forassad-1438037002. 23. Alistair Bell and Tom Perry, “Obama Warns Russia’s Putin of ‘Quagmire’ in Syria”, Reuters, 3 October 2015, accessed 3 September 2018, https://www.reuters.com/article/us-mideast-crisis-syria-airstrikes/obama-warns-russias-putin-of-quagmire-in-syria-idUSKCN0RW0W220151003.

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24. Raziye Akkoc and Roland Oliphant, “Russia Kills US-Backed Syrian Rebels in Second Day of Air Strikes as Iran Prepares for Ground Offensive”, The Telegraph, 2 October 2015, accessed 5 September 2018, http://www. telegraph.co.uk/news/worldnews/europe/russia/11903702/RussiasVladimir-Putin-launches-strikes-in-Syria-on-Isil-to-US-anger-live-updates. html. 25. Kozhanov, Russia and the Syrian Conflict: Moscow’s Domestic, Regional and Strategic Interests. 26. Ibid. 27. Although Saudi Arabia established diplomatic relations with the Soviet Union in 1926, the Soviet diplomatic mission in Jeddah was closed in 1938 and it was only in 1990 that the two countries agreed to resume diplomatic relations and subsequently Russia opened its embassy in Saudi Arabia in May 1991. 28. Hashem Osseiran, “UAE Reopens Embassy in Damascus After Six Years”, The National, 27 December 2018, accessed 3 May 2019, https:// www.thenational.ae/world/mena/uae-reopens-embassy-in-damascusafter-six-years-1.806947. 29.  Yury Barmin, “Russia and the GCC: An Unlikely Partnership”, Middle East Centre Blog, 28 March 2018, accessed 5 September 2018, http://blogs.lse.ac.uk/mec/2018/05/02/russia-and-the-gcc-anunlikely-partnership/. 30.  Visits of Gulf Arab leaders to Russia included: King Salman Al Saud (October 2017) (Patrick Wintour, “Saudi King’s Visit to Russia Heralds Shift in Global Power Structures”, The Guardian, 5 October 2017, accessed 5 September 2018, https://www.theguardian.com/world/2017/ oct/05/saudi-russia-visit-putin-oil-middle-east); Mohammed bin Salman (June 2018) (Nikolay Kozhanov, “Saudi Crown Prince, Putin Boost Energy Cooperation in Moscow Meeting”, Al-Monitor, 17 June 2018, accessed 5 September 2018, https://www.al-monitor.com/pulse/originals/2018/06/russia-saudi-arabia-putin-mbs-meeting-energy.html); Mohammed bin Zayed (October 2014) (Kremlin, Meeting with Crown Prince of Abu Dhabi Mohammed bin Zayed Al Nahyan, 22 October 2014, accessed 5 September 2018, http://en.kremlin.ru/events/president/ news/46856) (August 2015) (Khaleej Times, “Putin, Mohammed bin Zayed Share Views on Counter-terrorism”, Khaleej Times, 26 August 2015, accessed 5 September 2018, https://www.khaleejtimes.com/nation/government/putin-mohammed-bin-zayed-share-views-on-counter-terrorism) (April 2017) (Theodore Karasik and Giorgio Cafiero, Russia and the UAE: Friends with Benefits, 25 April 2017, accessed 5 September 2018, http:// www.atlanticcouncil.org/blogs/new-atlanticist/russia-and-the-uae-friendswith-benefits); (May 2018) (The National, “Sheikh Mohammed bin Zayed

138  N. QUILLIAM in Russia on Two-day Official Visit”, The National, 31 May 2018, accessed 5 September 2018, https://www.thenational.ae/uae/government/sheikhmohammed-bin-zayed-in-russia-on-two-day-official-visit-1.735764); Emir Tamim bin Hamad Al Thani (March 2018) (Al-Jazeera, “Qatari Emir in Russia to Discuss Syrian Crisis”, Al-Jazeera, 25 March 2018, accessed 5 September 2018, https://www.aljazeera.com/news/2018/03/ qatari-emir-russia-discuss-syrian-crisis-180325195253621.html); Emir Sabah Al-Ahmed Al-Jaber Al-Sabah (November 2015) (Kremlin, Meeting with Emir of Kuwait Sabah Al-Ahmad Al-Jaber Al-Sabah, 10 November 2015, accessed 5 September 2018, http://en.kremlin.ru/events/ president/news/page/187). 31.  Courtney Freer, “GCC–Russia Relations: Looking Beyond Syria and Towards Investment”, Middle East Centre Blog, 28 March 2018, accessed 5 September 2018, http://blogs.lse.ac.uk/mec/2018/05/01/ gcc-russia-relations-looking-beyond-syria-and-towards-investment/. 32. Henry Foy, “Russia-Saudi Arabia Rapprochement Reshapes More Than the Oil Market”, Financial Times, 30 October 2018, accessed 3 May 2019, https://www.ft.com/content/aa39b74c-4f0c-11e8-ac41-759eee1efb74. 33.  Severin Fischer, “Turkey and the Energy Transit Question”, Carnegie Europe, 23 August 2016, accessed 4 May 2019, https://carnegieeurope. eu/strategiceurope/64382. 34. Tuncay Şahin, “Is Turkey Becoming an Energy Hub?” TRT World, 6 November 2017, accessed 4 May 2019, https://www.trtworld.com/ turkey/is-turkey-becoming-an-energy-hub—11912. 35.  Karen Young, “Enter Erdogan: Turkey’s Economic Stake in the GCC Dispute”, The Arab Gulf States Institute in Washington, 19 July 2017, accessed 3 May 2019, https://agsiw.org/enter-erdogan-turkeys-economicstake-gcc-dispute/. 36. Suliman Al-Atiqi, Turkey-GCC Trade and Business Relations, The Oxford Gulf & Arabian Peninsula Studies Forum (OxGAPS) in partnership with the International Cooperation Platform, 2017, accessed 24 April 2019, https://www.oxgaps.org/files/turkey-gcc_tarde_and_business_relations_2017.pdf. 37. Steven Cook and Hussein Ibish, Turkey and the GCC: Cooperation Amid Diverging Interests, The Arab Gulf States Institute in Washington, 28 February 2018, accessed 4 May 2019, https://agsiw.org/wp-content/ uploads/2017/02/GCCTurkey_ONLINE-2.pdf. 38. Ibid. 39. Ibid. 40. Ibid. 41. Suliman Al-Atiqi, Turkey-GCC Trade and Business Relations, The Oxford Gulf & Arabian Peninsula Studies Forum (OxGAPS) in partnership with

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the International Cooperation Platform, 2017, accessed 24 April 2019, https://www.oxgaps.org/files/turkey-gcc_tarde_and_business_relations_2017.pdf. 42. Ibid. 43. Jonathan Schanzer and Merve Tahiroglu “Ankara’s Failure: How Turkey Lost the Arab Spring”, Foreign Affairs, 25 January 2016, accessed 4 May 2019, https://www.foreignaffairs.com/articles/turkey/2016-01-25/ ankaras-failure. 44. Steven Cook and Hussein Ibish, Turkey and the GCC: Cooperation Amid Diverging Interests, The Arab Gulf States Institute in Washington, 28 February 2018, accessed 4 May 2019, https://agsiw.org/wp-content/ uploads/2017/02/GCCTurkey_ONLINE-2.pdf. 45. Kemal Kirişci, “The Rise and Fall of Turkey as a Model for the Arab World”, Brookings Institutions, 15 August 2013, accessed 4 May 2019, https://www.brookings.edu/opinions/the-rise-and-fall-of-turkey-asa-model-for-the-arab-world/; Bulent Aras and Fuat Keyman (eds.), Turkey, the Arab Spring and Beyond (London: Routledge, 2016); Aron Lund, Syria’s Civil War: Government Victory or Frozen Conflict? Swedish Defence Research Agency (FOI), 2018. 46. Steven Cook and Hussein Ibish, Turkey and the GCC: Cooperation Amid Diverging Interests, The Arab Gulf States Institute in Washington, 28 February 2018, accessed 4 May 2019, https://agsiw.org/wp-content/ uploads/2017/02/GCCTurkey_ONLINE-2.pdf. 47.  Birol Baskan, “Turkey and the UAE: A Strange Crisis”, Middle East Institute, 1 May 2019, accessed 4 May 2019, https://www.mei.edu/ publications/turkey-and-uae-strange-crisis. 48. Robert Mogielnicki, “The New Economics of Qatar-Turkey Relations”, Middle East Institute, 30 August 2018, accessed 3 May 2019, https:// www.mei.edu/publications/new-economics-qatar-turkey-relations. 49. Betül Alakent, “Qatar Poised to Invest $19B in Turkey Next Year”, Daily Sabah, 18 October 2017, accessed 3 May 2019, https://www.dailysabah.com/economy/2017/10/18/qatar-poised-to-invest-19b-in-turkeynext-year. 50. Suliman Al-Atiqi, Turkey-GCC Trade and Business Relations, The Oxford Gulf & Arabian Peninsula Studies Forum (OxGAPS) in partnership with the International Cooperation Platform, 2017, accessed 24 April 2019, https://www.oxgaps.org/files/turkey-gcc_tarde_and_business_relations_2017.pdf. 51.  Middle East Monitor, “Turkey to Deploy 60,000 Soldiers in Bases Abroad, Including in Qatar”, Middle East Monitor, 18 January 2018, accessed 3 May, https://www.middleeastmonitor.com/20180118-turkey-to-deploy-60000-soldiers-in-bases-abroad-including-in-qatar/.

140  N. QUILLIAM 52. Akhilesh Pillalamarri, “India and the Gulf States Share a Long History”, The Diplomat, 10 June 2016, accessed 3 May 2019, https://thediplomat.com/2016/06/india-and-the-gulf-states-share-a-long-history/. 53.  Robert Mogielnicki, “Gulf States Help Defuse South Asia Tensions, Protect Economic Interests”, The Arab Gulf States Institute in Washington, 14 March 2019, accessed 4 May 2019, https://agsiw.org/ gulf-states-help-defuse-south-asia-tensions-protect-economic-interests/. 54. Economic Times, “India Begins Importing LNG from Russia”, Economic Times, 4 June 2018, accessed 3 May 2019, https://economictimes.indiatimes.com/industry/energy/oil-gas/india-begins-importing-lng-fromrussia/articleshow/64449583.cms. 55. Nadeem Ahmed Moonakal, “India and the Evolving Geopolitics of the Middle East”, The Diplomat, 31 December 2018, accessed 3 May 2019, https://thediplomat.com/2018/12/india-and-the-evolving-geopoliticsof-the-middle-east/. 56. Kadira Pethiyagoda, India-GCC Relations: Delhi’s Strategic Opportunity, Brookings Doha Center Analysis Paper No. 18, Brookings Doha Center, February 2017, accessed 4 May 2019, https://www.brookings.edu/ wp-content/uploads/2017/02/india_gcc_relations.pdf. 57. Narendra Modi, “India-Saudi Arabia Joint Statement During the visit of Prime Minister to Saudi Arabia”, 3 April 2016, accessed 3 May 2019, https://www.narendramodi.in/india-saudi-arabia-joint-statement-during-the-visit-of-prime-minister-to-saudi-arabia-439963. 58. Embassy of India, “India-Saudi Arabia Joint Statement During the State Visit of His Royal Highness the Crown Prince of Saudi Arabia to India”, 20 February 2019, accessed 3 May, http://www.indianembassy.org.sa/ india-saudi-arabia/js. 59. Rahul Roy-Chaudhury, “India and the Gulf Region: Building Strategic Partnerships”, International Institute for Strategic Studies (IISS), 29 August 2018, accessed 3 May 2019, https://www.iiss.org/blogs/ analysis/2018/08/india-gulf-strategic-partnerships. 60. “India and Oman Sign Four Key Defence Agreements”, Economic Times, 11 July 2018, accessed 2 May 2019, https://economictimes.indiatimes. com/news/defence/india-and-oman-sign-four-key-defence-agreements/ articleshow/52389370.cms. 61. “No Hijacking of any Ship for Last Two Years on Anti-piracy Watch: Indian Navy”, Economic Times, 14 July 2018, accessed 2 May 2019, https://economictimes.indiatimes.com/news/defence/no-hijackingof-any-ship-for-last-two-years-on-anti-piracy-watch-indian-navy/articleshow/50013756.cms.

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