Iran: Impacts of Coercion, Alliances and Proxies

Spearhead Opinion – 15.02.2017

By Hira A. Shafi
Research Analyst, Spearhead Research

The dissemination of power- around the globe, carries a hopeful vision of love beyond borders.

The multiple spheres of influence enable various players to maximise their interests. These oscillating relations –along with a sense of ‘unpredictability’–  perhaps, in itself maintain a balance.

But, a very fragile balance.  

Contemporary war history serves as an example of the detrimental mix of many powers plus conflicting/colliding national interests. Though, military modernisation adds another layer of ‘balance’-  but that too, appears to be a fragile one.

Multiple flashpoints exist today – one such point – where the the balance could be disrupted is the divide over the Iran issue.

The most prominent dimensions on this issue could be categorized into: 1. The US interests 2. The EU interests 3.Russian interests 4. Chinese Interests 5.Maritime security and energy trade( transcending the  concerns to South Asia as well)  6.The middle East divide

Assuming security is the core concern- then, it has become evident that the Iran deal is not bad at all.

Various bodies-including the IAEA, EU, other permanent members( except the US) have assured that Iran is no more a ‘nuclear threat’ and is in compliance with the deal.

While the deal was being carved out- The US held its ‘right’ to sanction Iran on non-nuclear issues.

This right was exercised- once again- three days after Iran carried out another missile test on 31st jan 2017. 13 individuals and 12 companies ( some operating via China) were sanctioned.

The US, Israel and some others are urging the UN to consider sanctions as well- because in their discourse- Iran violates UN resolution 2231- which prohibits Iran from testing ballistic missiles for 8 years starting from July 2015.

According to Iranian officials – the missiles are not capable of carrying nuclear warheads, and therefore the deal has not been violated and stands unapologetic for maintaining conventional arms as it is for self defense purposes- a right it clearly does not wish to give up.

Apart from further neutralising “aggression”; Money is top priority as of 20th Jan 2017.

Trump has stamped the deal as a ‘bad ’, and from the money perspective- he is probably right.

Iran is also the sole petroleum producing country that has dropped the petrodollar trade, since establishing the Iranian Oil Bourse in 2008.

Direct involvement of US firms has also significantly diminished since the 1980 trade sanction –which prohibited US firms(including defence related entities )from entering the Iranian market, some dealings are done via satellite companies but they are not as lucrative.

Though the JCPOA neutralises the nuclear threat, it doesn’t entirely fulfill core interests of the US.

It is interesting to note that in the midst of these high pressure tactics via new sanctions.

Iran’s response appears to be aligned with Trump’s line of thought.

It somewhat ‘sanctioned’ back the US.  Iranian officials announced that due to risks posed to US businesses from sanctions , Iran- “which is open to the idea of US businesses”- would now not be considering their participation  , especially in the oil and gas sector. Several tenders have already been given to European and Asian companies.

A minority hardliners in Iran may be pushing for retaliation, but the signing of JCPOA is in itself evident of what the majority has opted for.

Nonetheless, overall Iran, remains firm on two stances so far: 1. Not budging from its self defence stance 2. Not caving in to core US interests out of pressure.

A recent bill in congress is discussing the possibility of military action against Iran. The socio-economic unrest is also brewing locally in Iran due to economic strains, and the next presidential elections are scheduled for May 2017- concerns of hardliners occupying power—on justification of  ‘ US deceit’— are also widespread locally.

A mix of these three factors might make the current leadership reconsider certain things.

But, a tough approach on ‘re-negotiations’, could also backfire horribly for the US.

Because, the deal is not bilateral. And Iran has not particularly let its guard down due to good faith in the US, but because of ‘good faith in the world’, it also appears to have carved out ‘alternatives’, which need to be considered.  

The EU played a major role in mediating the deal. Ever since the US election campaign rhetoric, several EU officials- despite minor concerns on missile tests- expressed continued commitment to the deal, regardless of the path US chooses.

In the wake of the recent US imposed sanctions; the EU foreign policy chief quickly clarified that for them–the deal is working and expressed concerns over the new sanctions.

As for Iran-EU ties, things look slightly brighter. The Euro is one of Iran’s currency of preference.

Post-deal , Iran has opened up its market to several European business- who also find a prominent role in Iran’s energy sector.

For europe, energy security is crucial for now– and so is the security of the Strait of Hormuz and Caspian, which serve as key routes for European exports and imports(including oil& gas). Geographically Iran, is one of the ‘de facto’ guardians of the strait of Hormuz and has toyed with the threat of ‘choking the chokepoint’ –if unnecessary pressures are applied.
Another destabilised region – to add onto the current refugee crises would not be ideal for EU countries…It appears unlikely for the EU to treat the Iran issue through the US prism.

“Don’t try to fix what isn’t broken”- was the Russian foreign minister’s stance on the deal- post new sanctions .

From the Russian standpoint, it appears to view Iran as a Central Asian region instead of a Middle Eastern.

Iran shares stronger socio-cultural ties with Central Asia as opposed to the ‘Arab’ world; an unrest in Iran carries the potential to disrupt regional security in regions surrounding Russia.

Over the years, Russia has carefully crafted a unifying umbrella and has pushed for regional integration in Central Asia.

Putin, in 2015 extended the invitation to Iran- to join the Eurasian Economic Union; an offer Iran is considering. The essence of the union aims to recreate an ‘OPEC & EU style’ system  to boost inter-region trade and create a unified energy market to prevent oil trade wars.

Iran and the Union are working out free-trade agreements and discussions on creating a new regional currency are ongoing. But, till that materialises; Iran has called for dealing in local currencies. Russia also carries a massive market share in Iranian energy ,defence and other sectors.

For Russia- Caspian sea is a key route; it is also involved in several oil and gas exploration and pipeline construction projects in the region.

Via the North- South Transport Corridor , it aspires to extend its influence in the Persian Gulf and Arabian Sea as well.

Development of Chabahar port and improving Bandar Abbas are also included in this vision; further several land routes are being carved ; primarily aimed at connecting :Russia, Central Asia, Iran and India.  Last year Russia proposed the construction of a canal –linking Persian Gulf and Caspian Sea.

A destabilised Iran then- nearly becomes equivalent to choking Russia’s larynx ;  negative effects could further trickle sideways to Aral Sea and Black Sea too, thus seriously disrupting the Russian economy.

An opposition from China post- new sanctions surfaced as well. Bilateral ties between China and Iran- appear to be on the rise.  Chinese businesses also share a significant share in various sectors of  Iran.

However, Under the OBOR, China aspires to safeguard its own interests- a diversification of routes enables it to decrease dependence and risks.

For that,  China, appears to view Iran as both : Central Asia and Middle East.

So far, China also appears to be careful enough to not interfere with the Russian regional vision in Central Asia. But, in the Middle East it appears to be carving out an independent policy – sensibly ignoring the Sunni-Shia divide. It maintains good ties with both.

One of its land routes aspires to connect:  China- Central Asia and Middle East to the west and Africa; this same route also entangles with one of the maritime route : which encapsulates: Persian Gulf- Strait of Hormuz- Gwadar- Arabian Sea- Bab el Mandeb/Gulf of Aden- to Africa and the West.

For both, routes Iran’s location carries great significance. China and Iran’s military cooperation has also increased over the years. China’s non recognition of the religious divide could also help subdue tensions in the Middle East.

The delicate balances:

It appears that for the EU, Russia and China– stability in Iran would be prefered. However, underneath the calm… the sock is slipping.

The Russian- Sino axis is not strain free; ideally neither would wish to grant too much leverage to the other. It appears that- one such balance between the two- is maintained via the South Asia.

Russia along with the other Eurasian Union countries is drafting alternate routes with India, Iran ,  and Afghanistan, to subdue its infrastructural dependence on China.

Whereas, China- via Gwadar- to Middle East subdues it ‘depence on Central Asian energy’.

But, this also translates to risking– enhanced tensions between India and Pakistan. As the two- out of-  their respective apprehensions and belief in ‘’strong external support’’ — might get ‘encouraged’ to find their own balances through Kashmir or Afghanistan. But, continued unrest in Afghanistan and borders of Pakistan ; carries the potential to disrupt stability in Iran and make the region prone to various external interferences. India-Pakistan and India-China disputes need to be  resolved in ensuring stability in the region.

EU countries also appear to be  divided over their stance on Russia . Closer working relations between the two, would most likely play a positive impact on the Iran issue and regional stability.

Middle Eastern Divides:

The 5th circle of hell from Dante’s inferno- best describes the unruly Middle East dimension.

The region appears to be in complete disarray without a coherent , common regional goal. The agendas, divides, non state actors are multifarious.

Saudi Arabia and majority of the sunni belt along with Israel- accuse Iran for supporting militant factions of groups such as : Hamas, Hezbollah, Houthi’s in Yemen, Shias in Bahrain, Palestine Liberation, Iraqi Shia’s and Syrian Shia groups.

Whereas Iran accuses several Sunni countries -under the umbrella of US-Israel- for supporting Kurdish uprisings, Jundallah( iranian Salafi group) , People’s Mujahideen of Iran( a group which supposedly leaked information on iran’s nuclear program in early 2000’s), Al Nusra Front and other Syrian rebels, Al Qaeda and even ISIS. Several offshoots of various groups exist in the region.

Nonetheless, at the heart of these contentions the Saudi-Iran divide— appears to have paved the way for much of the regional mess.

Firstly, state relations have witnessed a negative impact . In the past : Iran, Qatar, UAE and Oman –all those adjacent to the Persian Gulf and the Strait have maintained decent state relations and have co-operated in ensuring strait securities.

⅓rd of Qatar’s Northern gas fields are under Iranian waters– Joint exploration and resource sharing in overlapping waters has usually been opted by these members.

However, since 2015, there has been a surge in Saudi-Iran tensions– which in turn has strained diplomatic ties between Iran and these neighbouring Sunni regions.

Secondly, the belief in this divide appears to have trickled down to the grassroots –where these disputes are solely being viewed as a shia sunni problem.

The Arab-Sunni grievances in regards to Syria appear to be un-amendable for now.

The defilement of Yazidis and other Kurds under the banner of ‘Sunni aggression’– has only further consolidated the demand for a separate Kurdistan.

Political crimes committed under religious banners appears to be making- further divisions of the Middle East -an inevitable reality.

The Self Fulfilling prophecy:

A multitude of agendas appear to be at play  especially in the Middle East/ South Asian and Central Asian regions, those of:  major powers, regional powers, militants, separatists, the economically strained masses and then the religious hardliners.

The choice of hoping to checkmate each other in such circumstances  – is an extremely risky bet.

The interconnectedness of Middle-East, Central Asia and South Asia would most likely create various spillover effects.

But, Keeping Iran as the focal point: if provocations amplify via sanctions or by pumping up the Sunni belt and amplifying the Sunni-Shia divides.

A likely retaliation from Iran, in the worst case- would be towards, US presence in : the straits, sea, ocean ; in the Sunni-Arab regions and maybe Israel if possible. Or, Iran’s increasing threats to retaliate could prompt the Saudi forces-along with others- to make the first move.

Either way, given the varied interests of major powers in this highly crucial region, it would be unlikely for Russia, China, Pakistan, India, European countries, US  and others to not get involved directly–in order to safeguard their interests and possibly maximise on the ‘war gains’.

The major players of the East could divert attention in subduing these regional divides. India and Pakistan should also evaluate the risks created due to their own rivalries and should collectively work on integrating Central Asia to South Asia. Perseverance is required in upholding this delicate balance by Russia and China as well.

What appears to be a snowball’s chance in hell– ideally, the various Middle Eastern leaderships should also realise the disintegrating impacts.

And lastly, the US could rethink its strategy towards Iran. Forming an alliance with Iran and subduing  the Sunni-Shia divides, perhaps creates a better chance for safeguarding various interests because coercion might push Iran further and increase the chances of  a bloody end for several.