Middle East

10 Consequences of US-Iranian Reengagement

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1. Iraq

Iran is the key to stabilizing or destabilizing Iraq. The Iranians have close religious and political ties with Iraqi Shiites, who make up a majority of the overall Iraqi population and control most of Iraq’s oil wealth. Iran also has potentially close ties with the Iraqi Kurds, since Iran’s own Kurdish regions are arguably better integrated into Iranian society than the Kurds in Turkey, Iraq, or Syria are within Turkish or Arab society, and since Kurdish is actually a branch of the Iranian language family. Iran has consistently proven that it is not willing to relinquish its influence within Iraq, regardless of any sanctions or threats aimed towards it. This is not surprising, since the Iranians remember too well the hundreds of thousands – or perhaps more than a million – of their citizens who died fighting the Iraqi army between 1982 and 1990, in a war in which chemical weapons, and maybe biological weapons, were repeatedly used. As such, to combat groups like ISIS and Al-Qaeda without sending US soldiers to Iraq and Syria, Iran probably needs to be cooperated with.

2. Syria

Given that Assad has not fallen after four years of intense fighting, it may seem to the US that the best move now is to try and cut a deal with the Syrian government that will bring an end to the conflict in the country as soon as possible. The alternative – a sort of large-scale version of the Lebanese Civil War which lasted from 1975-1990, which killed perhaps five percent of the Lebanese population (far more than the share of Syria’s population that has died thus far) and directly drew in the armies of Syria, Israel, and the United States – is a truly terrifying prospect. Iran, because of its ties to the Assads, to Hezzbolah, to Iraq, and potentially to the Syrian Kurds, must be a negotiating partner within any Syrian ceasefire deal. Moreover, because Assad no longer rules over most of the oil-rich desert of eastern Syria, much of which is now controlled by the Sunni group ISIS instead, and because Assad has been struggling to control all of the urban areas even within the much more populous western half of Syria, cutting a deal now may not even leave the Iranians with the level of influence in Syria they had enjoyed prior to the start of the civil war.

3. Afghanistan

Apart from Pakistan, Iran is the only significant country to share a long and accessible border with Afghanistan. Two of Afghanistan’s three biggest cities, Kandahar and Herat, are quite close to the Iranian border and to Iran’s second largest city, Mashhad. One of Afghanistan’s two lingua franca, Dari, is mutually inteligible with modern Persian. One of Afghanistan’s two major ethnic groups, the Tajiks, speak a language that is mutually intelligible with modern Persian as well. Afghanistan’s other major ethnic group, the Pashtun, speak a language that, while not mutually inteligible with modern Persian as such, is nevertheless a member of the overall Iranian language family. And 10-20 percent of Afghanistan’s population is, like Iran, Shiite. As a result, with the US finally withdrawing most of its armies from Afghanistan, Iran may be necessary to ensure that the country remains relatively stable and does not become a haven for Sunni extremism, a source of conflict between India and Pakistan, or a destablizing force for Pakistan (which, unlike Iran, already has many nuclear weapons) via the Af-Pak border-spanning Pashtun and Baluchi peoples – and specifically, via the most famous Pashtun organization, the Taliban.

4. Russia

The US may want to enlist Iran for the newly remergent American rivalry with Moscow. Iran is the only power outside of China to border Russia’s sphere of influence in ex-Soviet Central Asia. The Central Asian country of Tajikistan actually speaks modern Persian as its main language, while the gas-rich country of Turkmenistan shares direct ethnic ties with the adjacent areas of northeastern Iran. Iran is also the only country outside of the former Soviet Union to border the massive, energy-rich Caspian Sea, across which the West has been hoping to build a roughly 200 km long pipeline that will link Central Asia with Europe by way of Turkey and/or the Black Sea, in order to break the monopoly that Russia (and to a lesser extent, China) has on transporting Central Asian energy. Alternatively, Russia’s monopoly in Central Asia could be undercut via the construction of pipelines running through Iran from Turkmenistan to the Indian Ocean, or through Iran and the Middle East toward the Black or Mediterranean Seas.

Iran is also the only country apart from Russia and Turkey to border the Caucasus, a region that includes the southernmost, seperatist-inclined districts of Russia as well as the ex-Soviet states of Georgia, Armenia, and Azerbaijan; a region in which 15-20 million Muslims, and a similar number of non-Muslims, live. One Caucuses country, Azerbaijan, is energy-rich: it is currently the world’s 17th largest crude oil exporter and 30th largest natural gas producer. Azerbaijan is also intended to be the lynchpin of any attempt to build a pipeline linking Central Asia with the West. Crucially, Iran has potentially close ties with Azerbaijan, as an estimated 20-25 percent of Iran’s own population is ethno-linguistically Azeri, and as Azerbaijan’s population is Shiite rather than Sunni. Azerbaijan’s leading city, Baku, is only 500 km from Tehran, compared to 1900 km from Moscow and 1750 km from Istanbul.

Finally, given that Iran is thought to have by far the world’s largest reserves of easily-accessible natural gas outside of Russia, and given that Iran’s natural gas export capacity has been consistently underdeveloped in the past generation as a result of sanctions and war (Iran is currently only the 20th-25th largest natural gas exporter, in fact), the US may hope to see future growth in Iranian gas exports substantially undercut Russia’s gas revenues. This would be very significant if it were to occur, sincd Russia is far and away the world’s largest exporter of natural gas at the moment, even without counting the enormous amounts of natural gas in Central Asia where the Russians continue to hold most of the cards.

5. Arabia

By far the biggest prizes for Middle Eastern powers to fight over are the small, energy-rich monarchies in the Persian Gulf: Kuwait, Qatar, Oman, tiny Bahrain, and the considerably larger (though still pretty small) United Arab Emirates. Kuwait and the UAE alone possess an estimated 20 percent or so of the world’s “proven oil reserves” that are not located in shale deposits or tar sands, while Qatar accounts for an estimated 12 percent of the world’s proven natural gas reserves. Together, these mini-monarchies account for 5-10 percent of the world’s current oil and gas production.

These states also directly border the most energy-rich areas of Saudi Arabia, Iran, and Iraq, and even reach as close to 380km from an important region of Pakistan. Nearly all of the US military bases in the Middle East are located in these small kingdoms. Their populations are not ethnically or religiously homogenous: rather, they are a complicated mishmash of ordinary citizens, extended royal families, foreign visitors, and so many foreign workers (many of whom are non-Muslim) that non-citizen immigrants now often outnumber the citizens of these countries. Religiously, their citizens and royals are a mix between Sunnis, Shiites, and, in Oman, Ibadi Muslims.

Regardless of a deal with Iran, the US is probably not going to back away from its relationships with these monarchies under any circumstances. It has already proved its commitment to these countries in the past, most notably in 1990 when it liberated Kuwait from Iraqi annexation, and most recently in 2011 when it basically supported a Saudi-led invasion of Bahrain during the Arab Spring, which was aimed at protecting Bahrain’s Sunni monarchy from its protesting Shiite-majority population. Today, virtually all of the American soldiers in the Middle East (not counting Afghanistan) are stationed in Kuwait.

The US and its allies in this region have long relied on Iran to ensure safe passage through the narrow Strait of Hormuz, and for this reason alone a deal with Iran makes sense. While there is admitedly a risk of Iran becoming more influential in the Persian Gulf than the US or its allies would be comfortable with – in particular, because southern Iraq and eastern Saudi Arabia are both Shiite-majority energy-rich areas – the US is probably not going to let Iranian influence grow to too great an extent. Iran’s ability to access the Gulf is further limited, moreover, by the fact that the population of its own Gulf coastlands are home mainly to ethnic Arabs rather than to Persians, while a majority of Iranians live many hundreds of extremely mountainous – and for the most part inaccessible – kilometers away from the Gulf. As such, while the Iranians might conceivably be able to block or disrupt the energy production of the Gulf Arabs, they are unlikely to consider seizing the energy directly like Iraq tried to do when it annexed Kuwait.

6. Turkey

Many people worry that Iran will become the major power in the Middle East. In reality, however, Turkey actually seems to be in a far stronger position than Iran is. The Turks have an economy that is larger than Saudi Arabia’s and more than double the size of Iran’s; an economy which, unlike most other economies in the region, will probably benefit a great deal from the recent fall in oil prices. Turkey has a population that is less internally fractious than those of Iran or Saudi Arabia, and which has significant ties with the Turkic populations of Uzbekistan, Khazakstan, Turkmenistan, and western China, as well as with Turkic Azerbaijan and with the populous Turkic Azeri regions of Iran. Moreover, unlike Shiite Iran or extremist Wahabbi Saudi Arabia, Turkey potentially has ties with the rest of the world’s Sunnis, who account for perhaps 90 percent of all Muslims. Turkey also has a military that has benefited from being an ally of the US – and the only longtime Muslim NATO member – for decades. The Turkish military has dominated Turkey’s domestic politics for most of the past century, securing for itself a generous budget in the process.

Turkey’s economy grew faster than any other major country apart from China during most of the 2000’s; it grew, for example, from about the same size as its arch-nemesis Greece twenty years ago to roughly quadruple the size of the Greek economy today. One of Turkey’s closest allies, Azerbaijan, meanwhile, was virtually the fastest growing economy in the entire world during the past decade: the Azerbaijani GDP is now more than 11 times larger than it was back in 2003. Finally, and most importantly, almost every single one of Turkey’s neighbours – Greece, Syria, Iraq, Ukraine, Georgia, Libya, Egypt, Cyprus, Russia, the European Union, and before them the former Soviet Union, Yugoslavia, and Armenia – have been either seriously weakened or completely torn apart during the recent past. This has created quite a large power vacuum for the Turks to consider filling.

As Turkey’s power has grown, and as Turkey’s relationship with the West and especially Israel has become increasingly strained, a deal with Iran has become much more palatable for the US. Indeed, prior the mid-19th century, Iran was the only significant foil of the Turks in both the Middle East and Caucasus for many hundreds of years. Today, potential Iranian influence with the Kurdish people – the achilles heel of modern Turkey – and with the Alevi religious grouping that makes up arguably one-fifth of Turkey’s own population, may help in containing the vehemently Sunni and allegedly neo-Ottoman tendencies that have been emerging under the stewardship of Turkey’s Islamist Prime Minister-turned-President Recep Tayyip Erdogan since 2003. Iran may also be useful in balancing Turkish influence in both the Caucasus and Central Asia, where Turkey has very ambitious economic and pan-Turkic aspirations. Finally, the Iranians may have some economic leverage over the Turks, since Turkey gets around 40 percent of its oil imports from Iran, 20 percent of its natural gas imports from Iran, and 20 percent or so of its oil imports from Iraq where the Iranians continue to have influence.

7. India

While the Americans and Israelis have been publically spending most of their time worrying about the eventual possibility of an Iranian nuclear bomb, a much more pressing and probable danger may actually be that, should the political stability of South Asia deterioriate, one of Pakistan’s hundred or so nuclear weapons might fall into the wrong hands. Today, with the US leaving Afghanistan, and with India having last year elected a Prime Minister from an anti-Islamic, arguably fascistic organization (a Prime Minister who is not even allowed to travel to the United States except for when he is serving as Prime Minister, because he is seen as having been complicit in a large-scale attack against Muslims while he was governor of the Indian state of Gujarat), the politics of South Asia, which are brittle in the best of times, may be getting worse. This is not good for anybody.

Iran, however, has the potential to serve as a stabilizing force in South Asia. This is not only because of its level of influence in Afghanistan, which is signficant, but also because Iran is the only major country that has potentially close ties to both the Indians and the Pakistanis. Iran already has a very close economic relationship to India; even with sanctions, India gets around 5-10 percent of the oil it imports from Iran, another 15 percent or so from Iraq, where the Iranians have influence, and another 10-15 percent or so from Iran’s main Arab trade partner, the United Arab Emirates. Moreover, the Indians and Iranians have a relatively close political relationship, which has emerged in order to balance against the Sunni Arab-Sunni Pakistani-Sunni Afghan relationship that they both are afraid of. India is also home to tens of millions of Shiite Muslims, hundreds of millions of speakers of Hindi, which is related to modern Persian, and millions of speakers of Urdu, which uses the Persian script and is even more closely related to modern Persian (though admitedly, Urdu is quite a bit closer to Hindi than it is to modern Persian).

Pakistan, meanwhile, shares a long border with Iran, and, jointly with Iran, governs over the large, sparsely populated, resource-rich region of Baluchistan, where many Baluchis would like to gain independence from both Iran and Pakistan (and where Iran and Pakistan have historically cooperated in order to ensure that they are not able to do so). Baluchi languages are part of the Iranian language family, as are the Pashtun languages that are spoken by tens of millions of people in Pakistan along the Afghan border and in megacities like Lahore and Karachi. Anywhere from 15-35 million Shiites live in Pakistan, meanwhile, and nearly all of Pakistan’s population speaks Urdu. Finally, like India, the Pakistanis also have an increasingly voracious appetite for Middle Eastern and/or Central Asian energy, which the Iranians could help to provide them with.

Iran, therefore, could be helpful in keeping South Asia relatively stable. Given the harsh realities and dangers which exist in South Asia, which could in theory spread from South Asia to the rest of the world – and have already done so in the past, most famously on September 11, 2001 – stability in this region could be a huge boon for everyone, the US and its allies included. From a long-term, self-interested US point of view, moreover, an Iranian partner might eventually be useful in helping to contain India geopolitically if India becomes a major power and if the Pakistani or Bangladeshi states implode.

8. Qatar and the UAE

In recent years, the foreign policy of Qatar, the Gulf Arab monarchy with a per capita GDP that is well over double any of the others (it is the highest in the world apart from Norway, in fact), has diverged from those of some of the other Gulf Arab states. Not only has Qatar been trying to gain global prestige and influence via its plan to host the World Cup in 2022, its hosting of the pan-Arab news station Al Jazeera, and its ambitions for its capital city of Doha to outshine even Dubai as a regional hub, but the Qatari government has also been bankrolling groups like the Muslim Brotherhood (and its Palestinian affiliate, Hamas), which the Saudis view as an enemy. The Saudi-Qatari rivalry came to a head in 2013, when Egypt’s Muslim Brotherhood government was overthrown in a coup by the Egyptian military, which has been receiving huge amounts of subsidies from the Saudis, and which had the support of Egypt’s next largest electoral bloc, the Saudi-backed Islamist Salafists.

The Saudis have been looking for a way to curb Qatar’s confident meddling in the region, but this is not easy to do, since the Qataris have powerful friends in the United States (Qatar hosts a critical US air force base), Turkey (which has been the Muslim Brotherhood’s other leading backer in the politics of the Middle East), and Japan (which buys about 40 percent of the world’s LNG, an industry in which the Qataris are by far the dominant players). While the Saudis are certainly not happy about the possibility of American-Iranian reengagement, they may nevertheless see a silver lining in the deal as being that it could reduce the regional clout of Qatar.

The reason this could occur is because the Qataris, unlike the other Gulf Arab states, overwhelmingly produce natural gas rather than oil. With Iran itself having the world’s second largest gas reserves, and needing lots of Western capital in order to build pipelines and LNG facilities in order to transport those reserves to market (since transporting gas is not nearly as simple a process as transporting oil), a US-Iran deal could hurt Qatar’s position in the global natural gas market – and in particular, its dominance in LNG markets, in which Qatar accounted for one-third of the world’s exports as recently as 2013, which was almost quadruple the amount of the world’s next largest LNG exporter, Australia.

Apart from Qatar, Saudi Arabia’s other potential frenemy within the Gulf Cooperation Council fraternity is the United Arab Emirates, a country with a population that is about as large as those of Qatar, Kuwait, Oman, and Bahrain combined – and with a GDP that is actually larger than those of Iran and Israel, and more than half the size of that of Saudi Arabia itself. The Emiratis have historically had relatively close commercial ties to Iran, and they have kept these ties in place throughout the modern sanctions era. The UAE is also home to quite a large Iranian population. Indeed, along with Iraq, the United Arab Emirates are thought to have been by far the leading intermediaries for Iran’s covert, sanctions-beating imports of goods and exports of oil. This has earned the UAE enormous sums of money, but has also bothered the Saudis at times. If the sanctions on Iran end, it might put an end to this situation, which could be another silver lining for the Saudis. (The Economist had a somewhat different take on this point).

9. Israel

There has always been something a little bit ironic about the rheotric Israel has used regarding Iran, given that Israel arguably needs Iran as a balance against the Sunni, Arab, and Sunni Arab worlds far more than any other country does. Indeed, it seems possible that Benjamin Netanyahu was never as worried about Iran as it seemed to be, but was railing against it mainly because doing so helped his party within domestic Israeli politics, and because, prior to Iran’s weakening position in the Middle East as a result of the rise of anti-Assad rebels in Syria, Israel may have been agreeing to play “bad cop” with Iran during the past decade, while the US played “good cop”. (The Saudis – who are truly terrified of Iran – were not willing to publically play bad cop themselves, since they did not want to be seen as stoking inter-Islamic conflict. Moreover, the Saudis, unlike Israel, lacked the ability to seriously scare Iran with military threats much even if they had been willing to issue them). Certainly, the Iranians have a far better historical relationship with Israel and the Jewish people, both in modern and premodern times, than any major Arab state has.

The Iranian-Israeli relationship has also been indirectly improving of late, as a result of the broken ties between Hamas and Iran over Syria, and the fact that Hezzbolah and Assad have been focused entirely on Syria rather than on Israel since the civil war began, and finally because Israeli relations with Turkey have sdeteriorated sharply ever since the Gaza flotilla incident in 2010. The Israeli economy is also likely to be among the major beneficiaries of the lower oil prices that a US-Iran deal could help to solidify. This is of course not to say that Israel is not worried about Iran – far from it. But Israel has a lot of things to worry about. It is not so difficult to imagine that Israel may actually end up being happier about improving relations with Iran than even the Americans will be. And even if the Israelis do keep Iran as their main enemy, a US-Iranian deal may still be appealing, as it will distance the US from Israel a little bit, which some Americans may be pleased with since it could help grant them leverage against Israel with regard to Israeli-Palestinian relations.

10. Iran

Apart from the geopolical argument that a rapprochment with the Iranians will make Iran too strong in the Middle East, or the argument that it will allow Iran to covertly develop nuclear weapons, the most common argument against a US-Iranian deal is that Iran is a terrorist state that is pushing an extremist ideology across the Muslim world. In fact, this argument has never made too much sense, because clearly Saudi Arabia fits this description far better than the Iranians do. Unless the Americans are willing to adopt a new strategy in which both Saudi Arabia and Iran become US rivals, this argument does not seem to have much merit.

Indeed, as has often been pointed out, Iran is in many ways arguably the most promising major country in the region from a cultural perspective. Much of its population is urban (72 percent, the same percentage as Turkey’s population, and not too far from double that of Egypt’s), and it is also much more pro-American than any other major Muslim country in the region (in some ways at least), and less socially conservative than most of the Arab world, or even than large areas of Turkey or a decent-sized share of the Israeli population. Iran’s government, meanwhile, while hardly a true democracy, is a lot more democratic than many other Middle Eastern states. And since Iran is Shiite rather than Sunni, its ability spread its extremist religious ideology around the rest of the Muslim world, which as a whole is thought to be nearly 90 percent Sunni, is relatively limited.

Iran also has one of the largest, and probably the wealthiest and most secular, American diaspora among major Middle Eastern states. This is a result of the historical US and British alliance with the Iranian elite, which fled the religious Iranian Revolution in 1979. The Iranian population in California, where about half of Iranian-Americans live, is sort of like a smaller version of the Cuban-American diaspora that resides in southern Florida. By contrast, there is not much of a Turkish diapsora in the US, and the Arab diaspora in the US tends to be made up of poorer immigrants who arrived just in the past decade or two. Because the Iranian diaspora has been in the US for a longer period of time, and because it is not Arab, its relationship with the US was not complicated by the recent 9-11 and Iraq War era in the same way that America’s Arab diaspora has been. Moreover, its earlier arrival has given it the time to give birth to a generation of bilingual, bicultural children who have now come of age.

Finally, the Iranians have a a uniquely proud identity that stretches back far before the emergence of Islam. This stands in  contrast to some of the other Middle Eastern states, such as Saudi Arabia, where Islam is seen as the fundamental and overwhelming attribute of national identity, or Turkey, which was proudly the seat of the Sunni Caliphate, with formal control over Mecca and Medina, until the early 20th century, and where pre-Islamic history is associated with the original Turkic home of Central Asia rather than with the country’s modern location in Asia Minor.

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3 thoughts on “10 Consequences of US-Iranian Reengagement

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  2. Pingback: Iran’s Weakening Position | Future Economics

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