Saudi Arabia

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By Benjamin Lutz

Photo credit: Flickr/wonaboo (https://flic.kr/p/Doj2uW)

Saudi Arabia has more than 260 billion barrels of oil, which accounts for approximately 17 percent of the world’s known oil reserves and, to that effect, Saudi Arabia follows a conservative and protectionist ideology in its domestic and foreign policy. The nation helped create the Organization of the Petroleum Exporting Countries (OPEC) in 1960, leveraging the region’s geographic natural resources in order to raise its political and economic relevance. During the October 1973 Arab-Israeli War, the Arab countries in OPEC declared an oil embargo against Western countries. The destabilizing effects of this embargo reverberated throughout the world, setting a powerful precedent for Saudi Arabia’s allies and enemies on the effectiveness of price controls on oil. The monarchy soon after the October 1973 Arab-Israeli War expanded upon its oil-driven foreign policy initiatives by founding the Gulf Cooperation Council (GCC). The GCC is a consortium of Persian Gulf countries intended to address regional issues and promote cooperation.

Saudi Arabia’s oil pricing policy has been to stabilize the world market and to maintain reasonable oil prices and moderate sharp price movements, a term dubbed as a “price dove.” At the December 4, 2015, and the June 2, 2016, meetings, OPEC decided to maintain its policy of pumping near-record volumes of oil while increasing its collective output price ceiling. Like other meetings, Saudi Arabia stuck with its strategy of defending its market share of stable production, gambling that the lower prices would ultimately drive higher cost producers, such as U.S. shale oil firms, out of the market. However, countries with smaller economies in OPEC are disagree with kingpin Saudi Arabia’s stance because they want OPEC to decrease production to lift low oil prices and their own struggling economies. Contrary to Saudi Arabia’s best efforts, American output has skyrocketed in recent years, leading global oil to be around $45 a barrel. Most of OPEC countries, and especially those in the Middle East, have a much higher break-even point than $45 a barrel. In order to sustain high oil production at a price far below their break-even points, many of these countries are scrambling to find other ways to level their economies due to the fact that most of them are solely dependent on oil revenue.

Saudi Arabia is altering its spending and revenue policies to ensure fiscal sustainability. To counter the amount of money lost due to the price drop of oil, Saudi Arabia is, for the first time, instituting a land tax on its citizens owning empty plots of urban land. These citizens will have to pay a tax of 2.5 per cent of the value of the land each year. Saudi Arabia’s steadfastness in maintaining production, even with this new tax, can be seen as a move to gain political clout in the Middle East. Through partially sacrificing its economic prowess, Saudi Arabia will be able to counter Iran’s growing influence throughout the Middle East, which is undoubtedly their biggest foreign policy ambition. When the oil sanctions against Iran were lifted from the nuclear deal, Iran vowed to increase production of its oil in order to recoup all the money lost from years of sanctions.

If these new technologies and sources of oil become economically viable, the oil powerhouse of Saudi Arabia will begin its decline into obscurity. Of course, Mecca and Medina will always keep Saudi Arabia a relevant country in international relations due to their prime importance for the 1.6 billion Muslims in the world; but in terms of international political economy, Saudi Arabia will not matter when their oil is less economically advantageous than modern technologies and sources. This decline has not begun due to Saudi Arabia’s saturation of its oil on global markets to attempt to ensure their survivability with this contentious resource, in effect shaping OPEC agreements to maintain production and further delaying the inevitable effects of the resource curse of sitting on massive oil reserves. However, since November 2015, the price per barrel has plateaued, either as a testament to Saudi Arabia’s plan of oversaturation or the ebb of international economics. In either case, Saudi Arabia is actively fighting the non-OPEC sources of revenue by overproducing, which further highlights its dependence on oil.

Saudi Arabia recently released its plan for the future of its economy in a plan called Vision 2030. Foreign investment, increased job opportunities for women, religious and non-religious tourism, solar power, and modernization are among the highlights of this plan to truly diversify the one-note economy of Saudi Arabia. These goals are incredibly lofty, especially for a kingdom that has only championed one energy source.

In any case, Saudi Arabia has enough money to outlast other oil competition. While it has started to focus on a diversification plans for its long-term vision for the economic success of the country, Saudi Arabia can afford to reign over OPEC and maintain the high levels of production. No matter the plans in Vision 2030, Saudi Arabia is unmoved in its current production rates and continues to out produce the shale competition, which has seemingly begun to tighten its spigots.

U.S. Secretary of State John Kerry (Left) and Iranian Foreign Minister Mohammad Zarif (Right) in Lausanne, Switzerland. Source: http://mediad.publicbroadcasting.net/p/wabe/files/IranianNegotiations_033015.jpg

By Joshua Shinbrot

Since the August 2002 revelation of Iran’s nuclear enrichment program by the National Council of Resistance of Iran, efforts have been made to prevent the development of nuclear weapons by the Iranians. Initial attempts to curtail the Iranian nuclear program were led by the United Kingdom, Germany, and France. In 2006, the United States, China, and Russia joined the Europeans in their endeavor to prevent Iran’s development of nuclear weapons, forming the P5 + 1 (the permanent five members of the UN Security Council plus Germany).

In March 2013, the United States held secret, direct talks with Iranian officials in Oman. Only three months away from Iranian presidential elections, the Islamic Republic seemed unwilling to budge due to domestic political considerations. The Obama administration became more hopeful about talks after Hassan Rouhani became president of Iran in June 2013.

Since Rouhani’s approval of talks, two deadlines for the conclusion of a comprehensive nuclear agreement have passed, but no final agreement has been reached and deadline extensions have been repeatedly granted. Most recently, in November 2014, the P5 + 1 and Iran agreed to extend the deadline for concluding a final deal until June 2015. As part of the extension agreement, the US and Iran were supposed to produce a “framework understanding” by the end of March. Despite its release two days past the limit set by negotiators, a framework was agreed upon on April 2.

Ever since the release of this framework agreement, media pundits on every major US news network have been praising or condemning the Iran deal. At this point, however, there really is no deal. What exactly was reached, then, after the most recent marathon round of negotiations between the US and Iran hosted in Lausanne, Switzerland? In his April 2, 2015 speech, US Secretary of State John Kerry referred to the outcome of these talks as a “political understanding with details.” For those readers not fluent in ‘Bureaucrat’ who are wondering what a “political understanding with details” actually is, so am I. But, when I attempt to translate from Bureaucrat-speak to English it means something like, “we have a handshake agreement on the outline of a possible deal.”

What are the actual “details” contained within Secretary Kerry’s “political understanding?” Iran must reduce the number of centrifuges it is spinning to 5,060 for the next ten years. The Islamic Republic is only allowed to spin its first generation centrifuges. All centrifuges remaining beyond the first 6,104 are to be placed in “IAEA monitored storage.” This means that the IAEA, the UN’s nuclear watchdog, will have access to the facility where Iran’s 12,896 remaining centrifuges are stored. All 19,000 of Iran’s nuclear centrifuges (devices used to produce and enrich fissile material) will remain on Iranian soil. Iran is only obliged to limit the number of centrifuges it is spinning for ten years. Leaving all 19,000 centrifuges on Iranian soil ensures Iran retains all the components needed to reignite an industrial sized nuclear weapons program the moment this agreement expires.

The Impermanent Portions of the Deal

In fairness, not all aspects of this “political understanding with details” will expire after ten years. The President of the United States, Secretary Kerry, and other members of the Obama administration have attempted to reassure skeptics by stating that some components of this deal will remain in place indefinitely. What exactly are those indefinite components of the deal?

“Iran has committed indefinitely to not conduct reprocessing or reprocessing research and development on spent nuclear fuel.” Iran has a heavy water reactor at Arak. The spent fuel from this reactor could be used to produce weapons-grade plutonium. The detail of Kerry’s “political understanding” quoted above seems designed to prevent Iran’s ability to weaponize spent fuel from the Arak reactor, which must be modified according to the terms of the agreement. In addition to the ban on research and development, Iran must not build any additional heavy water reactors for fifteen years.

While the Obama administration is correct in asserting that some aspects of the “political understanding with details” are indefinite, a deal based on this “political understanding with details” is simply inadequate to reassure skeptics that Iran will never develop a nuclear weapon. Iran’s “indefinite” moratorium on research and development simply means that it agrees to halt this research for a period of time that is undetermined. It would be unreasonable to assume that this agreement is so ambiguous that Iran could resume reprocessing research on spent fuel from its nuclear reactors tomorrow. Nevertheless, it is much less unreasonable to assume that Iran will resume reprocessing and reprocessing research after the expiration of Iran’s fifteen-year commitment to refrain from building additional heavy water reactors. In fact, according to an agreement based on this outline, in ten or fifteen years Iran could resume reprocessing and reprocessing research while claiming it is still abiding by the terms of its agreement with the P5 + 1. According to its understanding with the P5 + 1, the ban on reprocessing and associated research is not permanent. It is only indefinite.

This is not merely playing semantics. The word “permanent” does appear in another portion of the text of the political understanding between the US and Iran released by the State Department. According to the text of the agreement, “Iran’s adherence to the Additional Protocol of the IAEA is permanent, including its significant access and transparency obligations.”

Iran has invested copious resources to develop an industrial-size military nuclear program, even under severe economic sanctions. An agreement with Iran must be specific regarding the limits that are placed on research and development. Prohibitions on research and development that could allow Iran to better understand how to build a bomb should be permanent and any final nuclear deal should specifically delineate those unending restrictions.

Is No Enrichment Really Unreasonable to Ask of Iran?

Some have insisted that in order for a nuclear deal with Iran to be acceptable, Iran must not be allowed to enrich any Uranium. In other words, some have insisted that an acceptable deal could allow Iran to have a civilian nuclear energy program. However, given Iran’s support of terrorist organizations, bellicose rhetoric, and violent behavior, Iran should not be allowed to enrich its own Uranium. Instead, Iran could obtain the fissile material it needs for civilian nuclear power and medical purposes abroad.

Iran’s negotiating position calls for domestic enrichment. The Obama administration has generously sought to construct a deal that enables Iran to say that it is continuing to enrich Uranium, while the P5 + 1 can say that Iran will be unable to build a bomb. However, the President has not done anything to ensure the fearful Saudis, Egyptians, Emiratis, and Jordanians that this deal does not “pave Iran’s way to the bomb,” as Israeli Prime Minister Benjamin Netanyahu has stated.

In his speech to the United State Congress that received much media coverage, Prime Minister Netanyahu notably did not call for a deal that prevents the Iranians from all nuclear enrichment. This seems to be an even more moderate position than the one taken by Saudi Arabia and other Arab states at their meeting with President Obama at Camp David in early May. At this meeting the Saudis and other Arab states have committed to match any enrichment program that the Iranians are allowed to retain.

When the United Arab Emirates decided to act upon its desire for a peaceful nuclear program, it signed a cooperation agreement with the United States that prevents domestic nuclear enrichment. Instead, the UAE is assured a supply of needed nuclear fuel from outside sources.

Iran is one of four countries on the State Department’s list of State Sponsors of Terrorism. The United Arab Emirates is not on that list. According to the State Department’s 2013 Country Report on Terrorism, Iran has armed Houthi rebel groups in Yemen and Shia rebels in Bahrian. Iran has continued to sponsor Hezbollah and Palestinian terrorist organizations such as Hamas, Palestinian Islamic Jihad, and the Popular Front for the Liberation of Palestine. In Syria, Iran has continued to actively support Assad, even after he used chemical weapons on his own people. Iran has also aided Al-Qaeda and used its proxy, Hezbollah, to train Shiite militants who have killed Americans in Iraq.

Why is Iran, perhaps the world’s largest state sponsor of terror, allowed to enrich Uranium while the United Arab Emirates is not? The United Arab Emirates is not on the State Sponsors of Terrorism List and the UAE did not plan a raid in Iraq in which five American soldiers were killed. This is not to argue that the UAE should be allowed to enrich Uranium. It shouldn’t be permitted to enrich its own Uranium and it seems perfectly happy to be obtaining its own Uranium abroad.

Perhaps the case of the UAE illustrates the clear difference in the intentions between the Iranians and the Emiratis. The Emiratis want nuclear power for civilian purposes. They are willing to forgo domestic enrichment and obtain nuclear fuel abroad. Despite maintaining that it only seeks a peaceful nuclear program, Iran has all the components of a military nuclear program. Beyond its industrial-sized and extensive nuclear enrichment program, Iran has a vast ballistic missile program. It is important to mention that the other components of Iran’s military nuclear program, including its ballistic missile program are not limited in any capacity according to the “political understanding with details” between the P5 + 1 and Iran. Unlike the UAE, Iran insists on enriching its own Uranium and on keeping the 13,940 centrifuges that it is not permitted to use within its borders.

The “political understanding with details” that the Obama administration has produced is not a framework for an agreement that ensures that the only type of nuclear program Iran maintains is a peaceful one. Any Iran deal that Obama signs based on this framework is one that merely kicks the can down the road and will leave a future American President with no option to prevent Iran from obtaining a bomb but military intervention. As Iran is allowed to continue nuclear research and development, its breakout time will be continually reduced. President Obama himself has said that in a mere thirteen years, Iranian breakout time will be near zero.

In 2028, with an Iranian breakout time of zero, the President of the United States will not have the luxury that President Obama has now of extending deadline after deadline in the hope of negotiating a nuclear agreement with Iran. The President will be faced with the choice of either eliminating Iran’s nuclear program or permitting the development of nuclear weapons by the world’s largest state sponsor of terror and allowing for the outbreak of a massive nuclear arms race in the world’s most volatile region.

Negotiating a Better Deal

At present, the US has a tremendous opportunity to alter its negotiating tactics and lock down a better deal with Iran that ensures any Iranian nuclear program will be a peaceful nuclear program. Realities of the negotiating situation have changed. Although Iran needs a nuclear deal more than the US, the Obama administration has negotiated as if it wants a deal more than the Iranians. On May 21, the President signed a bi-partisan law granting Congress the power to review any deal he makes with the Iranians. Regardless of whether or not the President wants a deal more than Iran does, the President will only get a deal, if any, that Congress can accept. Moreover, the insistence by Saudi Arabia and other members of the Gulf Cooperation Council that they will match any enrichment capability that Iran retains provides the US with additional bargaining power and it may change the president’s calculations.

Can President Obama accept responsibility for Iran as a threshold nuclear power in the Middle East if it does not develop a nuclear weapon on his watch? Perhaps. Can the crowning foreign policy achievement of Obama’s presidency be the creation of multiple threshold nuclear powers in the Middle East, including Egypt, Saudi Arabia and the rest of the Gulf Cooperation Council? President Obama has coined himself as an opponent of nuclear proliferation and claims to be opposed to a nuclear Iran partly because of the arms-race that a nuclear Iran would initiate in the Middle East. If a deal with Iran based on the released framework guarantees the development of industrial sized nuclear programs within many Middle Eastern states, this will constitute a threat not only to American national security, but also to Obama’s legacy.

Americans need to reevaluate whether or not Iranian nuclear enrichment is tolerable if other Middle Eastern states intend to match that enrichment capacity. The United States should also re-examine whether or not it is really wise to allow Iran to keep all 19,000 of its centrifuges within its borders. Saudi Arabia has insisted that it will match Iranian enrichment capacity. This could mean that Saudi Arabia will decide to keep 19,000 centrifuges within its borders, but promises only to spin 5,060 of them. Could the United States really prohibit its Saudi friends from pursuing this type of enrichment program after approving it for the Iranians?

Would the United States be changing the rules in the middle of the game if it were to deviate from the understandings reached in the political framework? It may be more accurate to characterize such a move as an acceptance of the Iranian rules of negotiation, rather than a change of the rules by the US. After all, the adoption of a position insisting upon enrichment was a change in the middle of the process by the Iranians. In 2003, when the UK, France, and Germany threatened to bring Iran to the UN Security Council over its nuclear program, Iran agreed to “cooperate fully with the IAEA and suspend all Uranium enrichment.” This demonstrates that in the past, the Iranians have been willing to accept a position of zero-enrichment in order to prevent possible sanctions.

Any deal with Iran must not only prevent Iran from developing a nuclear weapon in the short term, but assure the United States and its friends that Iran will never be able to develop a military nuclear program. This will involve strict limitations on the types of nuclear components and dual-use items that can be kept inside the country. Moreover, the world will not be confident that Iran only seeks a peaceful nuclear program until it demonstrates a change in its intentions. The P5 + 1 should craft a deal that compels Iran to restrain its ballistic missile program, forces it to abandon its sponsorship of terror, permanently limits Iranian nuclear research and development, and puts a comprehensive and intrusive nuclear inspections regime in place. Inspectors should be allowed to go anywhere in the country at any time. Failure to accept such a deal will reveal Iran’s true intentions and the Islamic Republic’s nuclear program should be dealt with accordingly.

 

 

By Benjamin Jury

Women and children protest for peace during the 2011 Yemen Revolution. Source: Al Jazeera English

A few months ago, I wrote an article detailing the dire situation in Yemen following both the Houthi (Believing Youth) uprising in the north and the Southern Movement in the country’s south. Since then, the situation has gone from bad to worse.

Just yesterday, members of the Houthi opposition “beat and detained” demonstrators in Sana’a, the capital.Yemen clearly remains a nation under siege.

Women and children protest for peace during the 2011 Yemen Revolution. Source: Al Jazeera English
Women and children protest for peace during the 2011 Yemen Revolution. Source: Al Jazeera English

Houthi forces, led by Abdul Malik al-Houthi (the brother of the group’s namesake), have successfully taken over much of the state apparatus in Yemen in the past few months. Advancing south at a rapid pace, Houthi rhetoric was heralded by Yemeni citizens (mostly Zaydi Shi’a) with support against the indifference and impotence of President Abd Rabbuh Mansur Hadi’s government.

At the same time, the secessionist movement in the country’s south has gained steam, increasing its own gains with the help of Al-Qaeda in the Arab Peninsula (AQAP). The government, disinterested in the plight of southerners being exploited for their oil resources, lacked credibility in the eyes of many southerners. This disrespect and indifference towards the southern population prompted an on-going movement against the establishment.

Early this year, the Houthi insurgency forced Prime Minister Mohammed Basindawa to resign from office after the group took Sana’a by force. Just last week, the Houthis took control of the presidential palace. With Yemeni government officials resigning en masse and the Hadi’s influence dwindling, the Houthis have effectively taken over Northern Yemen. The separatists, on the other hand, have raised the flag of South Yemen (from the pre-republic period of Yemeni history) and taken control of the port city of Aden in the south.

With the situation growing more and unstable by the minute, compromise or intervention in the region is essential to preventing outright chaos like that found in Libya today. Yet with Saudi threatening to cut off financial support until the political situation stabilizes and the US closing its embassy amidst continued drone strikes against AQAP, however, it appears both East and West have written Yemen off as a lost cause, even though both spheres rely heavily on a stable Yemen.

To stabilize their government, Yemen must look within. The Houthis desperately need to consolidate power in the north in order to defeat AQAP’s encroaching threat on the capital. It is imperative the Houthis bring members of the pro-government General People’s Congress that still occupy widespread support in the east and region between Aden and Sana’a to the table. Important too are members of the Muslim Brotherhood affiliated al-Islah party that make up a large percentage of the legislature’s minority.

Without meaningful, strategic negotiations between the country’s prominent political parties and the Houthis, there is no hope a peaceful transition. Leaving the power vacuum open in Yemen much longer will certainly spell trouble for Sana’a, Aden, and everyone in between.

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By Olivia Daniels

A photo of then-Crown Prince Salman bin Abdulaziz in Riyadh, 2013. Source: Reuters/Fahad Shadeed

Last week, Saudi Arabia’s 90-year-old king Abdullah bin Abdulaziz passed away after being hospitalized for pneumonia. Abdullah ascended to the throne in 2005, and began his reign by visiting some of the poorest areas in Riyadh. In 2013, he appointed the first female minister and during his rule he allowed 30 women to take positions in the Shura Council, the official advisory council to the Saudi monarchy. In comparison to previous rulers, Abdullah was considered a reformer. He funded scholarships for young Saudis to study in Western universities, and ensured that extreme Islamic teachings were removed from all school textbooks after September 11, 2001. Despite these reforms, however, Saudi Arabia has failed to make progress in terms of human rights under Abdullah. They remain the only country in the world where women are forbidden by law to drive, public beheadings are hardly short of a norm, and the recent public flogging of Saudi activist Raid Badawi was covered and condemned by human rights groups worldwide.

A photo of then-Crown Prince Salman bin Abdulaziz in Riyadh, 2013. Source: Reuters/Fahad Shadeed
A photo of then-Crown Prince Salman bin Abdulaziz in Riyadh, 2013. Source: Reuters/Fahad Shadeed

Abdullah’s half-brother, Salman, was immediately named Saudi Arabia’s new king. Salman has already made it clear on state television that his government “will continue adhering to the correct policies which Saudi Arabia has followed since its establishment” in 1932. He also reminded his audience that the “Arab and Islamic nations are in dire need of solidarity and cohesion”. He inherits a country that is simultaneously in the midst of economic change and uncertainty, troubled by the political instability in neighboring Yemen and the deeply rooted rivalry with Iran, and in direct opposition to the Islamic State. Salman’s political history as minister of defense suggests he will continue Saudi Arabia’s policy of keeping problems at home quiet, while focusing on those abroad. Salman might merely be a continuation of the late King Abdullah, in more ways than one. At 79, Salman has had spinal surgery, a stroke, and might even be suffering from Alzheimer’s, making his old age and bad health a topic of concern.

For now, not much seems to have changed for Saudi Arabia, but many are looking to the new deputy crown prince in hopes of future reforms. Mohammed bin Nayef, 55, is now second in line to the throne, and would be the first king of Saudi Arabia to be a grandson of the founder of the state. Bin Nayef is known for his strong stances against terrorism and his sympathy for the Shi’ite minority population within Saudi Arabia. The deputy crown prince was educated in the West, and has had a close relationship with U.S. diplomats.

While representing the new generation of Saudi royalty, bin Nayef still does not represent hope for human rights activists. In his most recent post as Minister of the Interior, bin Nayef had control of law enforcement, courts, and prisons, yet no noticeable improvements were made. It has been under bin Nayef that so many public floggings have taken place and that political activists of all forms have been seriously threatened. This “Open Letter to the New Saudi King” displays the concerns many have with bin Nayef’s record.

Clearly, the Kingdom will have many choices to make in the coming months, as their fight against the Islamic State will require strong allies and internal strength, and the shifting role of oil in the world will continue to have a direct effect on their economy. As of now, the Kingdom seems to be staying on the path it has been on from the start.

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