Archive for the 'Security' Category

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Obama Keeps Levey, Dubai Dhow Captains Rejoice

Published on February 18, 2009 in Natural Resources, Politics, Ports, Security and Trade. 0 Comments

Barack Obama has decided to keep on Stuart Levey, the Bush Administration’s Treasury Department undersecretary for terrorism and financial intelligence. Levey’s pet project was implementing a set of informal sanctions whereby U.S. officials attempt to persuade foreign banks and firms – many of which are UAE based – to stop doing business with Iran.

For the best outline of the program, I’d refer you to Robin Wright’s article from a few months back. At the time I wrote a post on my objections to it, namely that (among other things) it empowers Iran’s Revolutionary Guards to take on a bigger role in the economy since they can muster state resources to do things like smuggle goods, set up front companies and launder money.

Others no doubt celebrating the move are the smugglers, hawala operators, and countless other individuals who take part in the massive informal trade between the UAE and Iran. I can almost hear the champagne corks popping from Cairo.

The theory behind sanctions, both the formal kind and the informal sort spearheaded by Levey, is that business interests will pressure the government to change its naughty ways. That pressure no doubt exists to some extent. But I am constantly surprised that policymakers rarely take into account (at least publically) the knock on effects that sanctions have within the targeted societies and their economic neighborhoods. For me, the interesting question is who benefits from the re-channeled economic activity shaped by sanctions. A lot of this happens across the Gulf, and is something we should be thinking about more carefully.

The Revolution Has Lost Its Way, But UAE Can Help

Published on February 18, 2009 in Politics, Security and Trade. 0 Comments

An opinion piece in today’s The National (UAE) has an interesting take on the anniversary of the Iranian Revolution, given the current sensitivies in the Gulf over Iran’s growing economic interests in the region.

In it, author Sultan Bin Saud Al Qassimi (who founded Dubai’s Barjeel Securities) describes the early Revolution as a broad-based coaliltion of religious conservatives, communists, nationalists, and liberals that “lost its way” beginning with the takeover of the U.S. embassy in November of 1979.

The piece criticizes the emergence of the clerical elite and its preoccupation with external affairs and relative neglect of internal affairs, citing the Iran-Iraq war and creation of Hizbullah. But the author then immediately shifts into condemning Iran’s present relations with Venezuela and recent tensions over the dispute with the UAE over Abu Mousa, along with two other Gulf islands, the Greater Tunb and the Lesser Tunb.The article then runs through a litany of internal Iranian security and economic issues that the ruling clerical elite and revolutionary Guards continue to neglect.

One additional bit that deserves calling out is this:

It took the US government half a century to admit any wrongdoing and offer a tepid apology to the Iranian people for meddling in their affairs. Madeleine Albright, the former US Secretary of State, announced in the twilight of the Clinton administration that “it is easy to see now why many Iranians continue to resent this intervention by America in their internal affairs”. Too little, too late.

The turn of phrase is actually exactly in line with the feelings of many in the Iranian religious establishment. Here is Albright’s address in 2000 for reference, which was indeed met with derision and accompanied by a widespread crack down on Iranian liberals at the time. But I digress.

The article ends with congratulations to the UAE government’s pursuit of healtheir trade relations with Iran: “A revealing example of how importantly Iran regards its trade with the UAE emerged when it described the US pressure to limit the UAE’s trade with Iran as “illegal”, saying it would jeopardise the region’s economy.” A deftly-woven critique of the U.S. and powerful point of commonality, indeed.

It’s important in this context to remember that Iran’s economy is still dominated by its only state-sanctioned trade syndicate, the Revolutionary Guards. They of course still control both domestic and international economic activity in Iran – sanctions and frozen accounts aside.

In this case, the author’s chiding of current Iranian foreign policy (”…..maybe Iran should consider concentrating on its immediate challenges such as tackling unemployment and cross border terrorism rather than waste time with Hugo Chavez’s deliriums, Hassan Nasrallah and Khaled Meshaal’s empty rhetoric and the Holocaust denial conferences.”) and calls for the Revolution to “again find its way” are perhaps a not so subtle call to some in the Iranian ruling elite to rethink their priorities and regain the broad support of a populace long since marginalized.

And perhaps the UAE can offer constructive assistance and – who knows – investment in tackling more pressing economic challenges inside Iran.

Integration through Environmental Projects?

Published on February 18, 2009 in Energy, Natural Resources, Politics, Security and Water. 0 Comments

A recent story in the Times reports:

“A noxious tide of toilet paper, raw sewage and chemical waste has transformed Dubai’s most prestigious stretch of shoreline into a foul-smelling health hazard.

A stretch of the exclusive Jumeirah Beach — a magnet for Western tourists and home to a string of hotels — has been closed.”

This particular article is a bit over dramatized, but it is typical of the environmental horror stories that are common in press coverage of the UAE, both international and domestic. In this case, the culprit was workers dumping waste into storm drains that led directly to the beach. Tomorrow the story could be shipping waste, air pollution, helicopter noise, the list goes on. There is no doubt that pollution of the Gulf is a big problem on the way to becoming a huge one.

The UAE government is certainly aware of the problem, and seems keen clamp down on domestic polluters. It has also conducted bilateral deals with Bahrain, for example this agreement recently renewed on limiting fishing. But the problem is that the Gulf is a small ecological neighborhood, so bilateral deals can only go so far. Any serious efforts to combat problems like water pollution or overfishing will require coordination of all the Gulf states.

A few months back al-Jazeera reported that the GCC and Iran were studying a joint security apparatus. This went nowhere, largely I would guess because of the huge amounts of tension on the geopolitical level over things like the three islands dispute, the nuclear issue, perceived Iranian meddling in the Levant, etc.

Given this, I would think some type of joint Iran-GCC effort on environmental issues have a much better chance of getting somewhere than security talks. Could it actually work? I don’t know, but its certainly something to watch going forward.

Hello and Welcome

Published on February 18, 2009 in Energy, Natural Gas, Politics, Security and Trade. 0 Comments

… to Iran in the Gulf! As our name implies, we plan to keep track of developments in the region and use this site as a sounding board for ideas that will develop into more formal writing on Iran’s relationship with its neighbors across the Gulf.

I want to begin with a Bloomberg article from today about the UAE’s civilian nuclear cooperation deal with the US. It’s not particularly groundbreaking, but touches on many of the issues that we will be covering here. The article is brimming with quotes from US politicians and nonproliferation types praising the deal, by which the UAE forswears domestic enrichment in exchange for America’s blessing and technical support. The obvious message to Iran being that playing by the nuclear rules pays off. Amid the sea of praise comes a voice who nonetheless raises a proliferation concern:

Joseph Cirincione, president of the San Francisco-based Ploughshares Fund, a nonproliferation foundation, says he worries that power plants can be ‘the starter kits for nuclear weapons,’ and that some nations may have ulterior motives in seeking nuclear energy.

‘Iran’s rivals cannot afford to let it gain the military, political and diplomatic leverage conveyed by nuclear weapons,’ he says. ‘What’s to stop them once they’ve built the reactors from adding on a fuel-making facility?’

The concern that nuclear infrastructure — no matter how well safeguarded — poses a significant proliferation risk looks much less relevant in the wake of the Bush years, which saw nuclear cooperation expand with US allies like India who for decades have been developing nuclear infrastructure — including weapons — outside the NPT. Under Bush, nuclear policy was sharply politicized; friendly countries got technology and a blind eye towards past excesses while enemies like Iran and Syria got sanctioned or bombed.

Gulf countries — Iran included — have four main reasons to develop nuclear technologies: prestige/nationalism, weapons potential (not necessarily immediate), to free up more hydrocarbons for export, and to diversify energy sources thus improving energy security. The key difference is that Iran seeks to enrich its own uranium while the UAE has committed to obtaining its nuclear fuel from outside sources, and, of course, that Iran is not friendly with the United States and its allies.

Where does this leave us? A few thoughts:

1. I would argue that Iran’s hostility to the U.S. and Israel, and general regional tensions have much more to do with causing the “Iran nuclear crisis” than the nitty gritty of how many centrifuges are spinning, etc. Solve the regional strategic problem by creating an Iranian-American-Israeli modus vivendi , and you have solved 95% of the Iranian nuclear problem.

2. It is getting harder and harder to control the flow of nuclear material and know-how. This is partially the result of the Bush administration’s politicization of nuclear deals, but mostly, it has to do with the inability of governments to control the spread of knowledge and technology, and their unwillingness or inability to sanction allies who proliferate.

3. At least in the short term, the global financial crisis looks set to be the proliferation hawk’s best friend. Nuclear plants cost $ 2-3 billion a pop, most of which must be spent in foreign exchange. And you can’t exactly abandon one in the airport parking lot and skip town if you miss a few payments.