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Posts Tagged ‘Iran

The Iran détente in context

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Some people have asserted that diplomatic ties between the U.S. and Iran were never really severed—they merely went underground, to reemerge at a convenient time.

The alacrity with which nuclear- and sanctions-talks have developed since the election of Rouhani should suggest the truth of this assertion.

First, to that effect, here’s some recent news—from Oct. 28th (here):

Tehran (AFP) – The Tehran municipality has removed anti-American posters from the streets of the capital which questioned US honesty in nuclear talks with Iran, media reported on Sunday.

And from today (here):

(Reuters) – Iran’s supreme leader gave strong backing on Sunday to his president’s push for nuclear negotiations, warning hardliners not to accuse Hassan Rouhani of compromising with the old enemy America.

Now, to put it in context, here’s George Friedman’s divination (2012), which I covered in a prior post:

In simple terms, the American president, in order to achieve his strategic goals, must seek accommodation with Iran.

. . .

The Iranians will be assuaged in the short run by their entente with the Americans, but they will be fully aware that this is an alliance of convenience, not a long-term friendship. It is the Turks who are open to a longer-term alignment with the United States

. . .

As long as the United States maintains the basic terms of its agreement with Iran, Iran will represent a threat to Turkey. Whatever the inclination of the Turks, they will have to protect themselves, and to do that, they must work to undermine Iranian power in the Arabian Peninsula and the Arab countries to the north of the peninsula—Iraq, Syria, and Lebanon.

. . .

In due course, the Turks will begin to react by challenging the Iranians, and thus the central balance of power will be resurrected, stabilizing the region. This will create a new regional balance of power.

Syria, too, must be understood in this context. And the Saudis know it.

Written by M. James

November 3, 2013 at 1:53 pm

Posted in News, Politics, Turkey

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Accommodating Iran, developing Turkey

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In an effort to escape the myopic mumblings of the Middle East’s self-proclaimed pundits this past week, I picked a copy of George Friedman’s The Next Decade (2012) out from between the Harlequin novels of a small-town bookstore and, retreating to a lawn chair for the afternoon, paged through his familiar prose.

His sober, measured, and readable approach to the next ten years of global politics is written primarily in terms of geopolitical imperatives, and from the viewpoint of the American presidency. Shunning realist-idealist distinctions, he sets out on a nuanced vision of the near trajectory of world politics as divined by history and geography. That I find it difficult to argue with his augury is reassuring, his conclusions being very similar to my own, and generally much more well-informed.

When it comes to the Middle East, specifically, Friedman plainly sketches the necessity for a new, postIraq-war (20032011) balance of power. At present, he suggests, the imperative is an accommodation with an expansionist Iran, allowing Turkey the time to develop into the regional bulwark that will eventually compete with Iran and re-stabilize the region.

First, the accommodation (pp. 112113):

[The United States and Iran] despise each other. Neither can easily destroy the other, and, truth be told, they have some interests in common. In simple terms, the American president, in order to achieve his strategic goals, must seek accommodation with Iran.

This seemingly impossible strategic situation driving the United States to this gesture is, as we’ve discussed, the need to maintain the flow of oil through the Strait of Hormuz, and to achieve this at a time when the country must reduce the forces devoted to this part of the world.

. . .

Aspects of Iran’s influence would range from financial participation in regional projects to significant influence over OPEC quotas to a degree of influence in the internal policies of the Arabian countries. Merely by showing a modicum of restraint, Iranians could gain unquestioned preeminence, and economic advantage, while seeing their oil find its way to the market. They could also see substantial investment begin to flow into their economy once more.

Interestingly, it was in January of 2012the publication date of Friedman’s first edition Anchor Books paperbackthat this very process began. That January, I wrote (here):

The U.S. does not see a war on the horizon. Nor does it see a fallen Iranian regime. If anything, it sees an assertive, opportunist Iran edging out some of the GCC’s petroleum market share and gumming up the works in the Arabian peninsula. If nothing else, it sees this as a very real possibility. With Iranian influence potentially dominant in the new Iraq and the old Syria, the U.S. is in need of a hedge against a new Iran and a new oil empire.

This “hedge” was the attempt to guarantee that Iran continued to denominate its oil sales in dollars through the brutal sanctions begun by President Obama on December 31st, 2011. The intention was to annihilate the rial, leaving the uniquely stable dollar as the only sensible alternative.

In effect, this is the American precondition to Iranian expansion: (a) Exercise “a modicum of restraint,” and (b) whatever you do, do it in dollars. Whether Iran—once determined to disregard the dollar entirely—has accepted this precondition is still a matter of confusion. But don’t expect Ahmadinejad, or the next Iranian president, to scream it from the rooftops if Friedman is right.

Assuming he is right, though, there is still the second step to re-establishing a Middle Eastern balance of power (pp. 118119):

The Iranians will be assuaged in the short run by their entente with the Americans, but they will be fully aware that this is an alliance of convenience, not a long-term friendship. It is the Turks who are open to a longer-term alignment with the United States, and Turkey can be valuable to the United States in other places, particularly the Balkans and the Caucasus, where it serves as a block to Russian aspirations.

As long as the United States maintains the basic terms of its agreement with Iran, Iran will represent a threat to Turkey. Whatever the inclination of the Turks, they will have to protect themselves, and to do that, they must work to undermine Iranian power in the Arabian Peninsula and the Arab countries to the north of the peninsula—Iraq, Syria, and Lebanon.

. . .

In the long run, Turkey cannot be contained by Iran. Turkey is by far the more dynamic country economically, and therefore it can support a more sophisticated military. More important, whereas Iran has geographically limited regional options, Turkey reaches into the Caucasus, the Balkans, Central Asia, and ultimately the Mediterranean and North Africa, which provides opportunities and allies denied the Iranians.  . . .  Over the next decade we will see the beginning of Turkey’s rise to dominance in the region. It is interesting to note that while we can’t think of the century without Turkey playing an extremely important role, this decade will be one of preparation. Turkey will have to come to terms with its domestic conflicts and grow its economy. The cautious foreign policy Turkey has followed recently will continue. It is not going to plunge into conflicts and therefore will influence but not define the region. The United States must take a long-term view of Turkey and avoid pressure that could undermine its development.

. . .

In due course, the Turks will begin to react by challenging the Iranians, and thus the central balance of power will be resurrected, stabilizing the region. This will create a new regional balance of power.

Voila! Even the doubters have to appreciate the beautiful simplicity of reading the regional state of affairsSyria, most visiblythrough this lens. (1) Accommodate and contain Iran while (2) Turkey develops into its natural counterbalance. Certainly, Turkey and Iran have already been at odds over their regional interests. One wonders if it can be so simple.

But perhaps the more interesting question is: Does Erdoğan read Friedman? How about Ahmadinejad? Obama?

Written by M. James

June 10, 2013 at 2:52 am

Posted in Politics, Turkey

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Responding to a perceived white flag

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An appropriate follow-up from my last post, which suggested that the sanctions against Iran may have succeeded. The Financial Times reports (here):

The US is ready to hold direct talks with Iran if it is serious about negotiations, Vice-President Joe Biden said on Saturday, backing bilateral contacts that many see as crucial to easing an international dispute over Tehran’s nuclear programme.

The currency war in Iran may have been won, with the result that the eastern Mediterranean is opening to further Turkish influence.

Written by M. James

February 3, 2013 at 11:30 am

Posted in News, Politics, Turkey

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Iran: Backpedaling?

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Perhaps the biggest news since the sanctions against Iran began, and perhaps an indication of their success (here):

Mahmud Bahmani, Governor of Iran’s Central Bank, said on the sidelines of the second conference on Electronic Banking and Payment Systems, “There will be some changes to the foreign trade pattern, but the euro and US dollar won’t be removed from the foreign trade system.” He explained that these changes are required, as Iran does not trade with America and European countries. Previously, the Minister of Economic Affairs and Finance said that Iran would no longer use the euro and US dollar in its trade exchanges, in keeping with the government’s economic working group decision.

Here‘s a bit of background from the blog.

And here’s what the Minister of Economic Affairs was saying before Bahmani.

Written by M. James

January 30, 2013 at 8:34 am

Posted in News, Politics

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Davutoğlu visits Yemen

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A smaller business delegation than the one that visited post-revolution Egypt, but the effect is the same—an economic, and potential geographical, win for Turkey:

Foreign Minister Davutoğlu paid an official visit to Yemen
Turkish Ministry of Foreign Affairs

Minister of Foreign Affairs of the Republic of Turkey, Mr. Ahmet Davutoğlu paid an official visit to Yemen on 20-21 October 2012. Foreign Minister Davutoğlu was received by Mr. Abdu Rabbu Mansour, the President of Yemen and Mr. Mohammed Salem Basendwah, Prime Minister of Yemen. He also met with Mr. Abu Bakr Abdullah Al-Qırbi, Foreign Minister of Yemen and some other senior officials. On the occasion of the visit, a delegation consisting of approximately 150 businessmen also held contacts with the business community in Yemen.

Foreign Minister Davutoğlu stated that Turkey would like to further develop its economic cooperation with Yemen and the 100 million Dollar donation committed by Turkey to Yemen would be provided through bilateral projects.

As part of his contacts in Yemen, Foreign Minister Davutoğlu attended the Turkey-Yemen Business Forum with the accompanying business delegation. “Turkey wants to be among the top three countries with which Yemen trades” said Foreign Minister Davutoğlu pointing out that for the economic development of Yemen, Turkey was ready to cooperate in every field.

Written by M. James

November 1, 2012 at 1:14 pm

Posted in News, Politics, Turkey

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Turks subvert Iran sanctions

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Exclusive: Turkish gold trade booms to Iran, via Dubai
Humeyra Pamuk; Reuters; Oct. 23rd, 2012

To see one of Iran’s financial lifelines at work, pay a visit to Istanbul’s Ataturk International Airport and find a gate for a flight to Dubai.

Couriers carrying millions of dollars worth of gold bullion in their luggage have been flying from Istanbul to Dubai, where the gold is shipped on to Iran, according to industry sources with knowledge of the business.

The sums involved are enormous. Official Turkish trade data suggests nearly $2 billion worth of gold was sent to Dubai on behalf of Iranian buyers in August. The shipments help Tehran manage its finances in the face of Western financial sanctions.

A trader in Turkey said Tehran had shifted to indirect imports because the direct shipments were widely reported in Turkish and international media earlier this year. “Now on paper it looks like the gold is going to Dubai, not to Iran,” he said.

Iranian gold buyers may want to conceal their Turkish gold deliveries for fear of attracting attention from the United States, which is pressing countries around the world to shrink their economic ties with Iran.

The buyers may also want to make their purchases less vulnerable to any possible interference by Turkey’s government. Turkey’s close relationship with Iran has begun to sour as the two states find themselves on opposite sides of the civil war in Syria, with Turkey advocating the departure of President Bashar al-Assad and Iran remaining Assad’s staunchest regional ally.

Written by M. James

October 23, 2012 at 6:49 pm

Posted in News, Politics, Turkey

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Rial continues to fall

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Just as a reminder, the currency war in Iran continues, in tandem with the ousting of al-Assad. From the San Francisco Chronicle (here):

TEHRAN, Iran (AP) — Iran’s currency hit a record low against the U.S. dollar in street trading, the semiofficial Mehr news agency reported Sunday.

Mehr says the rial dropped nearly 7 percent in a single day, to 24,300 rials to the dollar. Street traders say the rial rose slightly later on Sunday to around 23,900 rials to the dollar.

Written by M. James

September 9, 2012 at 2:51 pm

Posted in News, Politics

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The new trend in Turkish-Iranian relations

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As the Syrian crisis has progressed, I have found it instructive to recall, at intervals, the words of a particular regional expert from October 2011 (here):

In his first interview with a Western journalist since Syria’s seven-month uprising began, President Assad told The Sunday Telegraph that intervention against his regime could cause “another Afghanistan”. Western countries “are going to ratchet up the pressure, definitely,” he said. “But Syria is different in every respect from Egypt, Tunisia, Yemen. The history is different. The politics is different.

“Syria is the hub now in this region. It is the fault line, and if you play with the ground you will cause an earthquake … Do you want to see another Afghanistan, or tens of Afghanistans?

“Any problem in Syria will burn the whole region. If the plan is to divide Syria, that is to divide the whole region.”

One of the divisions is already becoming apparent as Turkey and Iran start fighting over influence in the new Syria (here):

A series of unusually sharp statements over the past several days from both Turkey and Iran have brought relations between the two neighbors — which have kept improving until recently even at the expense of angering Turkey’s NATO ally the United States — to what one may call a historic low.

Turkey hit back with a harsh statement at recent remarks from Iranian officials, including the country’s chief of General Staff who has said that “it will be its turn” if Turkey continues to “help advance the warmongering policies of the United States in Syria.” Prime Minister Recep Tayyip Erdoğan called comments by Gen. Hassan Firouzabadi “regrettable” and denied his country has meddled in Syrian affairs.

Read more.

Written by M. James

August 8, 2012 at 6:45 pm

Posted in News, Politics, Turkey

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All aboard in Syria

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We have seen the term “civil war” slowly gain more currency in reference to the deteriorating Syrian uprising—how about “proxy war?”

Syrian army being aided by Iranian forces
Saeed Kamali Dehghan; The Guardian; May 28th, 2012

A senior commander in Iran’s Revolutionary Guards has admitted that Iranian forces are operating in Syria in support of Bashar al-Assad’s regime.

Ismail Gha’ani, the deputy head of Iran’s Quds force, the arm of the Revolutionary Guards tasked with overseas operations, said in an interview with the semi-official Isna news agency: “If the Islamic republic was not present in Syria, the massacre of people would have happened on a much larger scale.”

“This is the first time that an IRGC senior officer has admitted that the Quds force is operating in Syria,” said Meir Javedanfar, an Iranian-Israeli Middle East expert.

Read more.

Written by M. James

May 28, 2012 at 10:11 pm

Posted in News, Politics

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Fixing the rial

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Since March, when I last posted (“Iranian oil empire?”) about the currency war in Iran, things have visibly and significantly cooled. But just because there are no pipeline explosions, naval exercises, or military threats doesn’t mean the situation hasn’t progressed. Let’s start where we left off, with an Iran inconvenienced by sanctions, but essentially unfettered in its oil production and export capabilities—especially in transactions with the BRICS.

Chris Cook, former director of the International Petroleum Exchange, suggests that the sanctions on Iran may not just be ineffective, but counterproductive; and that Iran is actually better off (as March 20th might have suggested) without a market for dollars. Anyone who can foster a good relationship with an off-market Iran will now have incentive to buy discounted crude (relative to global prices) for refining and resale at a profit.

Even more significant is the possible end result of a developing energy voucher system in Iran designed to decrease domestic demand and wasteful energy use.

Taken to its logical conclusion, where this policy leads is for Iran’s Central Bank simply to fix a new rial – with several zeroes removed – to a suitable unit of energy, and for energy prices to be set against this unit. This could be implemented in a similar way that a deficit-based abstract currency unit was fixed to participating European currencies at the launch of the euro.

The transition process would need to be properly and transparently managed by a monetary authority – probably the Central Bank – in close liaison with the oil and gas complex. The outcome of adopting an “energy standard” and an energy dividend in this way would be to rapidly reduce profligate use of energy at the same time as addressing the problem of inflation.

Instead of debasing Iran’s rial entirely, the U.S. may only be encouraging Iran to rethink its currency in new, energy-based terms. If this becomes reality, the Iranian rial would effectively become a hedge against volatile global crude oil prices and dollar-denominated market manipulation. Put simply: If each rial in your reserves guarantees a fixed amount of Iranian oil, free from market volatility, you’re going to buy more rials.

I don’t think that’s what Obama intended.

Written by M. James

April 27, 2012 at 1:16 pm