The White House’s wheeling and dealing in the Middle East, with Mohammad bin Salman (MbS), Mohammad bin Zayed (MbZ), and Bibi Netanyahu, for a ‘deal of the century’ has yielded not only ‘no deal’, but rather, has exacerbated Gulf tensions to a near existential crisis. The Gulf States are now highly vulnerable. Ambition has prompted some leaders to ignore the inherent boundaries applicable to small, trading, tribal emirates, and to presume to inflated, power-plays -- as architects, striding atop a new Middle Eastern order.
The Trump team (and some Europeans), intoxicated by these new 30-somethig year old, ambitious, Gulf business school, power-players, drank it all in. The ‘First Family’ embraced the (upside-down) narrative of Iran and the Shi’a as arch villains and terrorists, and thought to leverage out of this, a deal by which Saudi Arabia and Israel jointly would act to hobble Iran and its allies, and in return Israel would gain, finally, its long-sought after ‘normalisation’ from the Sunni world (‘the deal of the century’).
Well, the ill-judged decision on Jerusalem ended that gambit: rather, Trump’s ‘call’ did the opposite: it gave the region a ‘pole’ around which former antagonists from the Syrian conflict could find common cause: defending Jerusalem as the common culture, the common history and the source of identity for Muslim and Christian peoples. A cause that could unite the region – after a recent period of tensions and conflict.
And Gulf States now find themselves, having lost in Syria, being led into another highly contentious controversy – ostensibly an American-led ‘jihad’, as it were, against the Shi’a – in all its regional (real and imagined) manifestations. A high profile project which is neither good for business (Dubai, for example, being essentially a small trading Gulf state that survives on trading with Iran and Pakistan – the latter having a sizeable Shi’i population), nor wise politics: Iran is a 6,000-year-old, real nation, with a population of near 100 million inhabitants.
Not surprisingly, this contentious ‘project’ is pulling the GCC apart: Oman, with its ancient ties to Iran, never was a part with it; Kuwait, with its significant Shi’i component, practices co-existence and inclusion with its Shi’a. Dubai worries for its economic prospects; and Qatar … well, the bullying of Qatar has ended with it forming a new regional ‘axis’ with Iran and Turkey.
But more than this, the ‘Art of the Deal’ is also about American economic revanchism: America recovering economic territory lost to others, through (purportedly) ‘the negligence of past American Administrations’ – according to the analysis of the US National Security Strategy (NSS). Washington reportedly is toying with tariffs for China, sanctions on Russia and economic war, designed to topple the government, in Iran. Were President Trump to pursue this policy (and it seems that indeed, this is his intention), then there will be some form of economic push-back from China, Russia and Iran in retaliation. Already, the area and population, covered by the petro-dollar system has shrunk - and may yet shrink further (even perhaps to include Saudi Arabia receiving payment in Yuan, for its oil).
In short, the liquidity base (petrodollar deposits) on which the Gulf’s financialised hyper-sphere and much of its economic well-being depends, will tighten. And, this comes at a time when oil revenues have already fallen (the first stage of the ongoing petrodollar shrinkage) - with Gulf States having to retrench fiscally, at the expense of their citizens. China recently put a shot across the bows of US trade war plans, too, by intentionally leaking (and then retracting) a suggestion that China’s Central Bank would stop buying US Treasuries, or divest from them. And the major Chinese credit rating agency, Dagong, downgraded US sovereign debt from A- to BBB+ – effectively suggesting that Gulf holdings of US treasuries are no longer the ‘risk free assets’ that they were assumed to be – and even, could become devaluing ones, as interest rates rise; or QE4 strikes.
How is it then, that the Gulf has come to be in such an exposed position? Essentially, through not recognising, and then over-stepping one’s own inherent ‘boundaries’, is the quick answer. In the late 1990s and early 2000s, it was Qatar, and its ruler Hamad bin Khalifa, that was perceived to be punching politically, well beyond Qatar’s tiny weight (pop. 200,000). Qatar had inaugurated the al-Jazeera news network, a shocking innovation in the Arab world at the time, but one which was to become a truly potent tool during the so-called ‘Arab Spring’. It was credited – at least so the Emir told me at the time – with ousting President Mubarak – and with setting the political framework for the associated wave of popular protests in 2011. Perhaps the Emir was correct in his assessment. It did seem, then, that much of the Gulf (including the UAE), might be toppled by the al-Jazeera ‘infowar’ onslaught, and fall to the Muslim Brotherhood, which Qatar was nursing as a tool for ‘reforming’ the Arab Sunni world.
Just to be clear, Qatar precisely was challenging Saudi Arabia – and not just politically: by sponsoring the Muslim Brotherhood, it was challenging the very doctrine underlying the religious basis of Saudi Arabia’s absolute monarchy. (The MB, by contrast to the al-Saud, hold that spiritual sovereignty rested with the ‘people’ – the Umma – and not with any Saudi ‘king’). The Saudis hated this Qatari ‘revolutionary’ hubris which threatened completely the al-Saud rule. So too did MbZ, who believed that the MB was targeting Abu Dhabi. (It was). There were ancient grievances and competition involved too, in the rivalry between Abu Dhabi and Qatar. The Qatari Emir – finally – had overreached, and was forced from his throne, and into exile, in 2013.
Abu Dhabi, historically, had always had a somewhat brittle relationship with Saudi Arabia, which condescended to these ‘minor’ emirates, but with MbS however, MbZ detected an opportunity for MbZ (and Abu Dhabi) not only to influence the young MbS, but for Abu Dhabi to become the ‘new Qatar’, punching well above its politically light weight. But, unlike Qatar, not seeking to rival Saudi Arabia, but rather be the ‘Wizard of Oz’ behind the curtain, pulling Saudi Arabia’s levers to gain leverage in the US, and to win American approval and favour for both MbS and MbZ’s anti Muslim Brotherhood, secularist, neo-liberal and anti-Iranian stance.
And in a way, MbZ’s own success, in wake of the 2006 Israeli war on Hizbullah, to build a rapport with the Americans (through General Petraeus – then commander of CentCom), and centred on the threat from Iran; his deft use of the fear of infiltration by the Muslim Brotherhood to open a door to expanding Abu Dhabi’s practical control over Dubai and the rest of the princedoms, on the level of the security; and his use of financial assistance to the other emirates by Abu Dhabi in the wake of the 2008 financial crisis, was to become the pilot study in eliminating political rivals, and in assuming untrammeled power. This path to the top was to be the pilot for MbS’ own subsequent rise to absolute authority in Saudi Arabia, under the guidance of the older MbZ. The duo intended to reverse the course of the Middle East, no less, by hobbling Iran, and with American and Israeli help, to restore the primacy of Saudi Arabia.
President Trump wholly (and seemingly irrevocably) embraced MbS and MbZ. But it turned out to be another case of Gulf overreach: the latter could not deliver on ‘normalising’ Jerusalem to Israel; Netanyahu could not deliver on alleviating the situation of the Palestinians (either in his existing coalition, nor could he form another). And, in any event, not even Abu Mazen could concede on the status of Jerusalem. So Trump just ‘gave’ the Holy City to Israel, thus triggering an iconic moment of the near complete diplomatic isolation of America. Politically, MbS, MbZ, Netanyahu and Jared Kushner, all failed, and stand humiliated and weakened. But – importantly – President Trump now is stuck in his embrace of a flailing Saudi Arabian leadership, and his radical antipathy towards Iran, as evinced at the UN in his September address to the General Assembly.
In staying with this anti-Iranian project, President Trump now finds himself – through his misjudgement of the MbS and MbZ capability to deliver anything substantive – with no campaign troops on the ground. The GCC is broken, Saudi is in turmoil, Egypt is drifting towards Moscow (buying from Russia S300 SAMs for $1 billion, and 50 Mikoyan MiG-29 fighter jets for $2 billion). Turkey is alienated and playing both ends: both Moscow and DC, against the middle; and much of Iraq effectively sides with Damascus and Tehran. Even the Europeans are baulking at US policy on Iran.
Of course, Trump can still hurt Iran. He can do this, even, without resiling from the JCPOA. His creating of uncertainty – the ‘will he, or won’t he’ withdraw from the JCPOA, plus his threats of alternative sanctions are probably sufficient to scare away European (and some significant other) enterprises from commencing commercial projects with Iran; but painful though this may be for the Iranian people, it cannot disguise the new post-Syria conflict reality: whether in Lebanon, Syria or Iraq, little can occur without Iranian involvement, one way or another. Turkey too, cannot pursue a realistic Kurdish strategy without Iranian assistance. And Russia and China both need Iranian assistance to ensure that the One Belt, One Road project is not derailed by jihadi extremists.
This is the reality: whilst American and European leaders talk incessantly of their plans for ‘containing’ Iran, the reality is that Iran and its regional allies (Syria, Lebanon, Iraq – and to a unpredictable extent, Turkey) are, in fact, ‘containing’ (i.e. militarily deterring) America and Israel. And the centre of economic gravity in the region, inexorably, is draining away from the Gulf, towards China and Russia’s Eurasian project. The Gulf’s economic strength has passed its peak.
Deploying a ‘small’ US occupation force in north-eastern Syria stands not so much as a threat to Iran, but more as a hostage to Damascus and Tehran. Such is the shift in the balance of power between the northern tier of states in the region, and those of the southern tier. It is a symbolism – an American military force in Syria ostensibly to ‘contain Iran’ - that the US may subsequently rue, should Turkey act - or, ultimately abandon, leaving their erstwhile Kurdish allies to twist in the Syrian dry wind.