The US has adopted an uncompromising line on Iran, with no exceptions. “We’re not granting waivers,” said a senior US State Department official when discussing what the sanctions will mean for India. The United States expects and demands that India’s oil imports from Iran “go to zero, without question.”152 Little thought seemed to have gone into how India would replace supplies, or what the logical price rises would do to economic growth—or to the millions of poor for whom even small inflationary pressures can be difficult to absorb.
As it happened, having promised there would be no exceptions, the US duly issued an exception to India—and to most of the importers of Iran’s oil.153 It is not just India’s oil supply that was in question. In 2016, after the JCPOA was agreed in the first place, India committed to invest $500m in expanding the port of Chabahar, partly as a response to the Chinese-built and funded port at Gwadar, but also as a collaboration that the Iranian supreme leader, Ayatollah Khamenei, said could “prepare the ground for deep, long-term and useful cooperation” between India and Iran.154 In addition to the port is the proposed $16bn investment in a free-trade zone that is itself part of a wider plan to connect India to rail and road networks into Iran and Afghanistan and open up opportunities for the future.155 Work on some of these new networks has begun—and some phases are complete.156 Once again, the threats of how Iran’s allies and partners would be dealt with proved to be empty as Chabahar too was exempted from the threat of punitive measures at the last minute.157
As well as putting Indian investment at risk, the threat to those doing business with or in Iran also threatens to compromise others. Chabahar had already proved not just a viable but a highly competitive route to market for goods and products from Afghanistan, opening up a new one that took business away from Karachi.158 Quite how the US squares the circle in the long run is difficult to predict. “We know the port has to happen and the US is going to work with India to do that,” said Nikki Haley on a visit to India in the summer of 2018. India has been “a great partner with us in Afghanistan,” she said, “and really trying to assist the US.” What that means for Chabahar and for India is unclear. “We realise we’re threading a needle,” said Haley, in something of an understatement.159
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The move against Iran opens can after can of worms. The development of Chabahar offers the chance for resource-rich Central Asian republics, such as Uzbekistan, to be able to export quickly and cheaply—something that has been complicated if not curtailed by sanctions against Iran.160 Then there is the issue of Turkey, which has been a long-term US ally, but is now drifting in another direction. “Iran is a good neighbour and we have economic ties,” said Turkish Foreign Minister Mevlüt Çavuşoğlu. “We are not going to cut off our trade ties with Iran because other countries told us so.”161 The Turkish minister of economy, Nihat Zeybekci, went further: “The stronger Iran gets in this region,” he said, “the stronger Turkey becomes as well, and the stronger Turkey becomes, the stronger Iran gets as well.”162
Efforts to weaken Iran therefore have a negative effect on other states too. “I am sorry,” Turkish President Erdoğan told US President Barack Obama last time sanctions were imposed, “but we are purchasing natural gas from Iran.” How else will we get “natural gas if I cannot buy it?”163 Iran is “one of the most important strategic partners for us,” said the Turkish leader, refusing to join anti-Iranian sanctions.164
The risks of getting on the wrong side of the US government are enough for some to leave nothing to chance. Such is the concern at Nike that three days before the start of the FIFA World Cup in June 2018, the sports apparel company announced that “US sanctions mean that, as a US company, Nike cannot supply shoes to players in the Iranian national team at this time.” If a sportswear company is too afraid of repercussions for supplying twenty-two pairs of boots to the Iranian football team, it is perhaps not surprising that others feel equally concerned.165
These include Total, the French oil explorer, which had signed a deal to develop Iran’s South Pars, the world’s largest gas field, with estimated exploitation costs of $5bn.166 In the winter of 2018, Total’s place was taken by Chinese oil major CNPC. Ironically, moves taken to weaken Iran have ended up strengthening China’s hand in the energy sector—even if, for now at least, CNPC have agreed not to exploit the field as part of a wider assessment of what the short-term future has in store for the regime in Tehran.167
Then there are Boeing and Airbus, the world’s two largest aviation companies, which signed business agreements worth a total of $39bn to supply commercial aircraft to Iran at the end of 2016—and whose contracts will also presumably not be fulfilled, something that will affect workers and shareholders of the businesses alike.168
The obvious beneficiary, ironically once again, is of course China. According to Ministry of Commerce spokesman Gao Feng, Beijing is unconcerned by American sanctions and will continue to carry on business as usual with Tehran, regardless of Washington’s threats and actions.169 That is not surprising, both in the context of China offering a geopolitical alternative to the US, but also because of the opportunities created for Chinese companies. A contract that had been awarded to Swiss company Stadler Rail to provide 1,000 underground railway carriages will not proceed in light of US sanctions on any corporation doing business with or in Iran. The contract, said Stadler’s head of sales, “will probably be snapped up by the Chinese.” This was not surprising, commented Philippe Welti, former Swiss ambassador to Tehran: “China jumps into every vacuum that opens.”170
Sanctions—or fears of sanctions—were part of the reason for Exxon’s withdrawal from a joint venture with Russia’s Rosneft, after it was made clear that those close to President Putin would have their lives made difficult by the US and by EU authorities. The decision was directly linked to the fact that “in the latter half of 2017, the United States codified and expanded sanctions against Russia.”171 According to estimates, this meant walking away from plans to invest as much as $500bn in exploration projects in the Russian Arctic.172
Apart from the effect that these measures have on American jobs and the American economy, the strong-arm tactics and threats by the US have ruffled feathers among old friends. There was shock in Germany when, on his first day in Berlin as ambassador, Richard Grenell warned that “German companies doing business in Iran should wind down operations immediately.”173 If they did not do so, he said, there would be consequences that would hit German businesses hard.174 This forced the minister of the economy, Peter Altmaier, to make a sanguine admission that there was nothing he could do through legal means “to protect German companies from the decisions of the American government.”175
This has in turn led to an extraordinary sequence of events, which has included the president of the European Commission seeking to activate a so-called blocking statute that bans European companies from complying with the US sanctions against Iran. “We have the duty, the Commission and the European Union, to protect our European businesses,” said Juncker. “We must act now, and we will act now,” he added.176
The blocking statute, which came into effect on 7 August 2018, formally forbids companies based in the EU from cancelling business ties with Iran—under the threat of punishment. In what can only be described as surrealist politics and economics, European businesses face the choice of being fined by the US if they do business with Iran—and being fined by the European Union if they do not. It is hard to think of a more appropriate way to show how the West has lost its way. The fact that President Macron of France felt compelled to tweet that Donald Trump found himself isolated and alone amidst a group of nations that historically had always stuck together after the G7 summit in Quebec in June 2018 shows just how difficult the countries that have led the world for the last 300 years are finding it to adapt to the changing world of the twenty-first century.177
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; It is tempting to think that what we are seeing revolves around the temperament and eccentricity of a single US president with an unusual and emphatic doctrine, and such self-confidence that he can declare when asked about his summit with North Korea’s Kim Jong-un about how he would know how the meeting would develop that “I think within the first minute I’ll know. Just my touch, my feel. That’s what I do.”178
But, in fact, there is something more profound at stake—of which Trump himself is a symptom, rather than a cause. Leaving to one side the current incumbent in the White House, it is striking to note just how few true allies the US has around the world, and how even long-term partners question its basic reliability. The isolation of the US is a matter of deep concern for experienced old hands like former Deputy Secretary of State Strobe Talbott, who has warned that American isolationism is not just foolish, but against US national interests.179 It was precisely the point made by Jim Mattis when he resigned as secretary of defense shortly before Christmas 2018. Mattis believed strongly that the United States’ “strength as a nation is inextricably linked to the strength of our unique and comprehensive system of alliances and partnerships.” Allowing those to degrade and fail not only weakens the US, but also offers opportunities to “those countries whose strategic interests are increasingly in tension with ours.”
Making alliances is an art, and a lengthy, slow process that brings long-term rewards. But building, maintaining and cultivating such relationships takes time and requires investment. To paraphrase Oscar Wilde, jettisoning one might seem like a misfortune; getting rid of them all at the same time looks like carelessness.
| THE ROADS TO THE FUTURE |
The ability to prepare for the future looks questionable. In Europe, the energy, resources and focus of politicians, policy-makers and bureaucrats are almost exclusively committed to one question: Europe itself. There is no little irony in the extended period of introversion at a time when connections are being forged all over the rest of the world—in a classic case of fiddling while Rome burns.
In the course of 2017 alone, the Foreign Service officer corps at the State Department lost 60 per cent of its career ambassadors—its most experienced, knowledgeable and connected country experts.1 This gap extended right up to the very highest echelons. Before Tillerson’s sacking in early 2018, eight of the ten most senior positions in the State Department were formally vacant, as were thirty-eight ambassadorships.2 Of 626 top jobs in the executive branch of the US government as a whole, not only were some 40 per cent unfilled a year after Trump’s inauguration, but there was not even a candidate taking part in the appointment process.3
This makes Trump the most powerful president in US history, especially given American military capabilities: so many senior roles vacant means that there are fewer individuals making decisions, which in turn concentrates authority in the hands of a smaller body of people. In such circumstances, the similarity of the President and his inner circle to that of a medieval ruler is in some ways not surprising. A quixotic and impulsive man anyway, Trump’s ability and willingness to repeatedly discard Secretaries of State, Attorney Generals and other high-ranking officials reveals the concentration of power in his hands.
So too does the role played by family members, where his daughter Ivanka and son-in-law Jared Kushner have leading roles in the administration as senior advisors and, in the case of the latter, overseeing policy towards the Middle East. But perhaps the most revealing demonstration of the authority of the president and his immediate family comes from the dismissal of the deputy national security advisor, Mira Ricardel, in the latter part of 2018. Ricardel had apparently got on the wrong side of the President’s wife, Melania, during a trip to Africa earlier in the year. “She no longer deserves the honour of serving in this White House administration,” said Melania Trump’s spokesperson—shortly before she was dismissed.4
Perhaps, not surprisingly in the circumstances, the most natural path is to follow in international affairs is the course of least resistance. Thus, Saudi Arabia has become the pillar of US policy in the Middle East—despite the fact that the country’s government is currently being pursued through the courts by families of victims of the 9/11 atrocity.5 One reason for this is the oil wealth of Saudi, but another is the prodigious amount of money that the country spends on weapons, much of it bought from the United States. During President Obama’s time in office, the US sold an astonishing $112bn of armaments to Saudi alone over the course of eight years, including one deal for over $60bn in 2009.6
The depth of Saudi pockets for weapons-buying, but also the importance of Iran in American foreign-policy thinking explains why Trump’s first trip abroad as president was to Riyadh. This was a statement of intent and a sign of a major re-orientation in thinking of how to deal with Tehran.
So far, Trump’s success in emulating the arms-selling of his predecessor has proved illusory. Despite his much-heralded business background and eye for the deal, and despite announcing a package of $110 billion of weapons sales during his visit to Riyadh, the sales of hardware were not finalised. This was one reason why Trump upbraided the Saudi crown prince when the latter visited Washington in the spring of 2018, telling Mohammad bin Salman that he should have increased his spending and that sums of several hundred million dollars “are peanuts to you.”7
Saudi Arabia is “a very great friend,” Trump said when receiving the crown prince, because it is “a big purchaser of equipment and lots of other things.”8 This explains why Saudi had been singled out for special treatment, as is clear from the fact that when Mike Pompeo was appointed CIA director in 2017 he lost no time in telling his hosts in Riyadh that his first overseas trip was to Saudi Arabia, just as President Trump’s had been.9
Trump’s visit to Riyadh in 2017 had certainly been memorable. Indeed, said the president later, it was “one of the most incredible two-day meetings that I’ve ever seen—that anybody has ever seen.” Those who saw Trump, Secretary of State Rex Tillerson and his then chief strategist Steve Bannon attend exhibitions of sword-dancing and hop about uncomfortably as they took part in festivities alongside their Saudi hosts would agree.10
Trump’s alignment with Saudi has consequences for proposed arms sales elsewhere in the region. In 2017, visiting Qatar, the president had addressed the Gulf state’s leader and told him, “We are friends. We’ve been now for a long time indirectly, haven’t we? And our relationship is extremely good. We have some very serious discussions right now going on. And one of the things that we will discuss is the purchase of lots of beautiful military equipment because nobody makes it like the United States. And for us that means jobs and, frankly, great security back here, which we want.”11
That is a problem in the context of a major falling-out between Qatar and Saudi Arabia and its neighbours, which has seen a land blockade imposed on the gas-rich state. Relations have become so bad that Riyadh is planning to “change the geography of the region,” according to one senior Saudi official, by digging a canal to cut off Qatar from the mainland—and not only to build military installations along it, but also use it as a dump for atomic waste.12
This has prompted the Qataris to intensify political, military and economic ties with Turkey, which has aspirations of its own across the region, and has also led to a remarkable rapprochement with Iran—restoring diplomatic relations and significantly boosting trade links.13 That complicates matters for the US. As many US administrations have found, sitting on the fence can be very difficult. “You have been a great friend to the US,” Treasury Secretary Steve Mnuchin told the Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani in the summer of 2018.14
So when Trump calls Saudi Arabia “a very great friend” when receiving the crown prince at the White House in March 2018, many across the Middle East were listening carefully, trying to read the tea leaves. Trump kept to what he knows best—sales. Saudi, he said, could be relied on to buy massi
ve amounts of weapons, and would be bound to buy them from the US. “We make the best equipment in the world,” he said. “There’s nobody even close.”15
Protecting Saudi weapons sales was one reason why the President stood fast alongside Saudi Arabia after the murder of Jamal Khashoggi. “The world is a very dangerous place!” he announced at a press conference designed to show his support to Riyadh. US defence contractors do well from Saudi Arabia; taking steps to sanction, punish or criticise the Saudis would make Russia and China “enormous beneficiaries—and very happy to acquire all of this newfound business.” Besides, he went on, Khashoggi had been named as an “enemy of the state,” and in any event, “we may never know all of the facts surrounding the murder”—a strange statement given that Trump himself had admitted that he had been fully briefed on the contents of an audio recording of what had happened to the journalist when he was killed at the Saudi consulate in Istanbul.
Saudi Arabia, said Trump, produces vast quantities of oil and buys large amounts of weapons. It is a fine ally for the US, he added, that “has agreed to spend billions of dollars” countering radical Islamic terrorism. He even provided support for the military operations in Yemen which have led to a major humanitarian crisis. The Saudis, said Trump, “would immediately provide” desperately needed assistance—if only they were allowed to do so.16
The New Silk Roads Page 16