The Complexity of Regional Re-balancing

Conflicts Forum’s Weekly Comment, 20-27 March 2015

Irrespective of whether there will, or will not, be some sort of agreement between the P5+1 and Iran this month, the region already is ‘re-balancing’: anticipation of some sort of nuclear agreement may be playing some part in this shift, but just as important are the changing ‘facts on the ground’.  Even if no agreement is reached, these facts still will continue to fundamentally re-shape the region.

Regional re-balancing will also be affected by the bilateral re-balancing that is taking place between Europe and America (epitomised in the open rift between Germany and the US, which began with the eavesdropping scandal, and has widened with suspicions that NATO is undermining Franco-German peace efforts in Ukraine — see Conflict Forum’s last weekly comment), and by the re-balancing that is bound to ensue from Netanyahu’s strong showing at the polls – achieved, it seems, in part, from Netanyahu’ open disavowal of a two-state solution.  Many had long suspected that this represented the PM’s inner conviction, but now it is explicit – and what is more (this is now plain) it is a disavowal that is also the shared view of the Israeli people and not ‘just’ some unwelcome quirkiness of a then-serving PM. Israelis clearly voted for the Netanyahu ‘never a Palestinian state’ agenda.

Both these latter, prospective, rather than accomplished realignments, will impinge heavily on the region. In Israel, we have witnessed the trashing of the core to the European and American approach to the Middle East: the overriding assumption has been that regional peace and stability ultimately rested on the acceptance of Israel into the region, and, concomitantly, justice for the Palestinian people. 

It is now clear that the past decades of policy have brought neither. The consequent distress of Palestinians coupled with evident Israeli rejectionism, and its shift towards a somehow psychologically welcome sense of victimhood and undemocratic isolation clearly spells new regional insecurity and volatility.  America and Europe will have to work out how to address this ‘fact’, now risen to explicit, undeniable consciousness.  Already, it is plain that America will likely be supping with a long spoon as far as Israel is concerned (whatever the political rhetoric may demand of Presidential candidates in 2016). 

The rise of ISIS too, has somehow contributed to the unloosening (but not so radically) of another part of the regional ‘balance’: the US-Gulf Alliance. Again, Saudi Arabia’s long flirtation with radical jihadism and with spreading the thinking of Mohammad Abd-el Wahhab has long been sub-consciously understood in the West, but seldom spoken about openly (the fetters imposed by Gulf arms sales, ‘bought’ think-tanks and big money, ensured this). But again, the acts of extreme violence committed by ISIS have begun to make an awareness of its Wahhabist roots – no longer just sub-conscious, and unstated – but now, much more publicly conscious, and explicitly said.

This elevation of the formerly unsaid into what is now said, is mirrored in the questioning of the old arrangement by which America guaranteed the security of the Gulf Sates in return for the security of its oil supplies. It has cost America considerably, but the benefits of such security (Americans are beginning to notice), have been accruing more to rivals such as China, India, Japan and Korea, than to America, which has become much less dependent on Middle East oil.  America’s lessening dependency too, comes at a time when China’s overall dependency on imported oil is rising, and the proportion of that oil coming from the Middle East is rising also. Why then, should others not share in the burden of protecting the Gulf?  America needs money for its own domestic nation-building project. The question has been posed, but not yet answered. There will be no quick reply, but it is another harbinger of an America withdrawing into itself.

What remains unsaid, and stands repressed to a subconscious level, however are the more profound doubts about the Saudi Kingdom itself. Like Israel, Saudi Arabia, has turned in upon itself.  The Succession is proclaimed to be a smooth passage of the baton of state, but was it?  The Sudairi coup was efficiently managed recidivism.  And of revenge: ‘it being a dish that is best taken cold’, so out went (unceremoniously) the Abdullah faction.  The Sudairis simply took the state. In came a Wahhabi-orientated ‘security state’ – the whole overseen by an inexperienced and widely disliked 34-year old (Prince Mohammad bin Salman), who has a reputation for haughtiness, but who has his father’s signature in his pocket, and who has, for a higher authority – only that of his mother. 

Even the Americans who oversaw the succession (and the placing of bin Naif as the first of the new generation as next but one, in line) are concerned. They can understand how such an arrangement will lead the family to hope for (and even help lay) the traps intended to have Prince Mohammad bin Salman fall flat on his face.

The more substantive impetus to the regional re-alignment (apart from the prospect of some sort of nuclear accord) however is simply realpolitik. The fact is that Iran has become the preeminent strategic player in the region. Saudi Arabia is not, and cannot be, an equal power. King Salman’s rebuff by Pakistani PM Nawaz Sharif underlines the kingdom’s waning power.

The Great Powers, from their differing optics, can see the ‘writing on the wall’: America has no appetite for any new major war in the Middle East – and particularly for a war with Iran, whose outcome (short of nuclear conflict) would be far from certain (both militarily and politically). 

There is little that Washington can do about this, but throw a few delaying obstacles in Iran’s path. But why try to postpone the inevitable when, as Ambassador Ranjit Gupta notes, “there is absolutely no possibility of any improvement in any of the conflict theatres in West Asia without Iran being an active participant in any such endeavours. The region is now caught in the vice of multiple crises forcing the US to finally recognise the reality of strong Iranian regional influence”.  The other side to this US calculus is the (parallel) loosening of the formerly untouchable links to Israel and Saudi Arabia: not at America’s doing, but by both Israel and Saudi bringing their own situations onto themselves.

But as significantly, the two and a half year P5+1/Iran negotiations have brought the American and the Iranian negotiating teams together.  The teams get on well; there is chemistry.  I\And it seems that this has produced something of an alchemical transformation of the American psyche.  A clear shift in the perception of Iran’s intentions can be observed in the latest US Director of National Intelligence’s Threat Assessment. This is very different language: it can almost be read to suggest that Iran’s intentions are well-meaning: wow!

“Despite Iran’s intentions to dampen sectarianism, build responsive partners, and deescalate tensions with Saudi Arabia, Iranian leaders – particularly within the security services – are pursuing policies with negative secondary consequences for regional stability and potentially for Iran. Iran’s actions to protect and empower Shia communities are fuelling growing fears and sectarian responses.” 

In the past, another great power, China, sought to balance between Saudi Arabia and Iran with weapons sales, among other means. As David Goldman notes, “One Chinese analyst observes that although China’s weapons deliveries to Iran are larger in absolute terms than its sales to Saudi Arabia, it has given the Saudis its best medium-range missiles … [But] as China sees the matter … the proportion of that oil coming from Iran and its perceived allies is rising. Saudi Arabia may be China’s biggest provider, but Iraq and Oman account for lion’s share of the recent increase in oil imports”.

China fears conflict erupting in the Middle East more than anyone: it does not wish to offend either party, but is inclining towards Iran because of its dependency on Iran and Iraq. It too, can observe Washington’s reading the ‘writing on the wall’, which, coupled with the rise of ISIS, have emerged as new components to China’s security calculus. “Beijing is worried that the rise and spread of Sunni militant Islam so close to its borders, including neighboring former Soviet “Stan” countries of Central Asia, will kindle radical elements in Xinjiang. Sunni militant Islam also threatens to become a strategic and an ideological nightmare for China’s massive and unprecedented multi-billion dollar investments from Xinjiang westward across Central Asia, the linchpin of Beijing’s future vision of energy security and economic development”, write Paul Nash and Reza Akhlarghi. 

For Russia, the security calculus is similar: Iran is needed as a strategic partner in the war on ISIS, but also to give Russia and the SCO strategic depth. So, the world’s major powers - each for its own reasons - have come to see that Iran must be brought in from the cold; that the region needs to be re-balanced (not as in the past when the Shah acted for the US as its regional policeman, but simply because Iran exemplifies that rare commodity today: a state that is able to pursue statecraft effectively).

How do these various re-balancings knit together? This is where it becomes complex. On the one hand, one can perceive recent events to suggest that America and Europe are coming around to accept (and even cautiously to welcome) Iran’s advent as a regional power – and that other factors (the loosening of the links to Israel and to Saudi Arabia) are pushing in this direction too. But perhaps this is not how it is perceived in Iran.

The suggestion here, of, as it were, some ‘inevitability’ to the process is wrong. There is another aspect: the US is engaged in a geo-financial war to weaken Russia. It is attempting to contain China’s rise. Tensions over Ukraine are rising.  This is the geo-political re-balancing that is under way as both Russia and China attempt to set up an analogue trading and financial clearing system that will lessen their vulnerability to dollar jurisdiction. And in parallel, both are creating a parallel infrastructure to that created at Bretton Woods in 1944: namely, the reserve status dollar, the IMF and the World Bank.  

The latter economic and financial structure has worked effectively as an accumulation strategy (via practices such as promoting debt expansion, privatisation and the financialisation of revenue streams) to gather economic and financial control into the realm of US executive power.  The fine-tuning of dollar hegemony by the US Treasury has made this a key instrument of coercion that (in the present circumstances) has to some extent, trumped even that of America’s vast military might.

This is an epic ‘war’ launched by Russia and China to de-fang the neo-liberal (and neo-conservative) programme of the 1970s and 1980s which has made of the globilised financial system such a potential weapon of economic mass destruction (in America’s hands). But to do this, to make their parallel system work, Russia and China require political and economic strategic depth: and for both, Iran, Turkey and Egypt can be one part of this strategic depth.

This, then, is the complexity of the ‘re-balance’ for Iran: On the one hand, the possibility of a gradualist lifting of sanctions beckons, but normalisation with the West also means Iran’s incorporation into the dollar-based ‘global market’, into the US system of financial and economic hegemony,  and thereby to opening itself to further forms of geo-financial coercion.  On the other hand, China and Russia offer a possible ‘non western’ exit from the umbrella of America’s ‘financial neutron weapons’. Which path will Iran take? Which way will the region re-balance? Standing back somewhat, it seems clear however, that in the longer term, the political and economic centre of gravity is shifting away from the shores (and maritime strengths) of those who border the Atlantic, towards (the land-centred mass) of Eurasia.