Iran sanctions allow US, GCC to reconfigure the Middle East

By constricting Iran’s ability to engage with the region, the sanctions allow for the Gulf monarchies and Turkey to expand their influence in the fragile post-Arab spring environment and consolidate a pro-Western bloc throughout the Middle East and North Africa.

Threats against Iran continue to propagate even though it’s acknowledged that Western intelligence has no evidence of an Iranian nuclear weapons program and Iran has never threatened aggression against any other country, including Israel. Numerous potential motivations for the ratcheting up of tensions have been noted including to prevent Iran from being able to resist Western aggression, to justify expanding global missile defense to the Gulf countries (to the benefit of Lockheed Martin, Raytheon and Boeing), to serve the Israeli government’s domestic political needs, etc. While all of these likely play a role, more attention needs to be paid to the manufacture of support for the economic sanctions. These sanctions, instead of being a concessional attempt to appease those calling for war , have been the goal all along. The US government doesn’t want war (at least not right now, Iraq’s capabilities were depleted by sanctions for over a decade before being invaded). It wants the sanctions, but threatening war justifies them and, as in any negotiation, has made their ultimate objective the middle ground.

Discussions about the Iran sanctions have been narrowly focused on how they effect the county’s internal conditions. The assumption is that increased economic hardship will turn the population against the government. The opposite is the case as a majority of the Iranian population support the nuclear energy program and (correctly) blame the Western sanctions, and not the government, for the deteriorating economic situation. This may appear to be a failure if judged solely on instigating internal dissent. The true importance is, however, in regard to how they effect the country’s external relations in the region. The sanctions have constrained Iran’s ability to advance its interests throughout the Middle East and North Africa, especially through economic engagement. It is currently less economically capable of, and more politically costly for, the Arab spring countries to engage with because of the international pressure.

The political upheavals that characterized the Arab spring brought declining investment and foreign exchange reserves resulting in severe economic difficulties. The new governments coming to power face not only a delicate political environment but are in desperate need of resources to achieve economic stability. The international investor community has so far been cautious to resume business in these countries and capital inflows remain low. At the same time, the expansion of national debt is limiting the governments’ abilities to stabilize the economy and induce confidence to boost investment. This is a perfect storm a geopolitical reconfiguration of the region.

While the US government was publicly warning Iran against “meddling” in other country’s affairs, it praised the GCC for its economic assistance and investment. Inhibiting Iran’s ability to inject money, and thus influence, has opened the door for Saudi Arabia, Qatar and Turkey, all major Western allies, to monopolize the aid and development agenda in the region and expand their political and economic influence. These countries have had free reign to integrate the region around them and initiate a reconfiguration of the Middle East into a pro-Western bloc. The ultimate goal is to liberalize the Arab spring economies and integrate them into the allied regional network. The US has long sought to advance economic integration in the Middle East and North Africa, one of the least integrated regions in the world. The EU has also been pushing for the same end.

This project has been delegated to the GCC which has increased its oil market share because of sanctions on Iranian oil. This revenue has been utilized to expedite the region’s integration while the Westerns economies remain weak. 2012 was the first year that internal MENA investment has been greater than Western investment. This isn’t evidence of faltering Western interests. It is, instead, a sign of the alignment of interests between the GCC and the West which mutually benefit from the dependence being constructed through a massive spike in inter-regional investment.

The Western press set off alarms when newly elected Egyptian President Morsi visited Iran. This served a number of purposes including signalling a foreign policy break from the Mubarak regime and projecting the image of a country ready to step up as a regional power. What this diplomatic outreach did not do, however, was initiate any large economic agreements. It’s a very different story with the GCC where the Egyptian government has rapidly expanded economic relations. Qatar has pledged to inject $2 billion in the Egyptian central bank to shore up reserves and announced its intention of invest $10 billion in the Egyptian economy in the coming years. Egyptian companies are also looking to Qatar for investment opportunities as the country plans to invest $18 billion in tourism and industry over the next five years. Saudi Arabia has also pledged $4 billion in financial assistance to Egypt. The UAE is throwing in $3 billion worth of aid. For its part, Turkey is providing $2 billion in aid to Egypt. Turkey’s government and business community have also initiated substantial economic networking in Egypt and are poised to expand their economic influence throughout the region.

Qatar has played a decisive role throughout the Arab spring and after. The Qatari state-owned news service Al Jazeera broadcast images of the uprisings, drawing attention from around the world. Far from being independent, it has served as a tool for Qatari foreign policy, amplifying events in accordance with the government’s interests. This included drumming up support for the opposition in Libya. The Qatari government then funneled money and weapons to the Libyan rebels. It also became the primary coordinator of their oil shipment logistics and contributed ground troops and aircraft in the campaign to topple Gaddafi, earning praise from the US government for supplying a cover of regional cooperation. Iran has been effectively excluded from developing ties with the Libyan government as it owes its position in power entirely to NATO’s intervention. It is, therefore, the least likely of the governments to emerge from the Arab spring to shake up relations with the West, by developing ties with Iran or otherwise.

Qatar has also signed numerous agreements with the new government in Tunisia and has begun engaging with Hamas in Gaza, the most crisis-stricken economy in the region. The room for this approach was a result of the sanctions which have diminished Iran’s ability to support Hamas and Hezbollah.  The ongoing conflict in Syria, a traditionally strong ally of Iran, has also absorbed much of the Iranian government’s attention. International pressure has complicated Iranian support for the Syrian government while the US has been aiding the GCC and Turkey distribute weapons and equipment to the Syrian insurgency. The West, the GCC and Turkey are actively preparing a selected leadership for post-Assad Syria.

Needless to say, the sanctions are but one component of a larger strategy of regime change in Iran. The US is also engaged in cyber attacks, special forces operations, supporting anti-regime terrorist organizations, etc. But what often goes unnoticed is how the sanctions have shaped the profound transformation of the region. Iran’s pariah status has paved the way for a fundamental restructuring of the Middle East under the leadership of US aligned-governments. The GCC and their sovereign wealth funds flush with oil wealth are taking full advantage of the weak economic situation to consolidate a new balance of power. The West has essentially outsourced this transformational process to allies in the region, disguising how interests are being realigned and obfuscating the overlapping agendas being advanced.


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