Gulf Arabs fear Iran with cash as much as Iran with the bomb

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When President Barack Obama set out to strike a deal with Iran to constrain its nuclear ambitions, he anticipated that success would lead to a new equilibrium in a Middle East in turmoil from which the US sought to pull back: a self-regulating balance of power between the rival hegemons of the Gulf, Saudi Arabia and Iran.

One reason this is going to be difficult for him to sell to Gulf Arab leaders at this week's meeting at Camp David is that Saudi Arabia and its Sunni allies feel this balance has already tilted alarmingly towards Shia Iran. Some of their officials can be heard fulminating about Tehran's ambition to recreate a Persian empire in Arab lands. They fear that if the framework nuclear deal agreed in Lausanne in April is formally concluded next month, an Iran freed of international sanctions on its economy could lock in its Arab gains and become unstoppable.

The Saudi-led Sunni coalition bombing the Houthis in Yemen - a heterodox Zaydi Shia movement Riyadh insists is powered by Iran - has dramatised this concern, which is centred on the Islamic Republic's influence in Iraq, Syria and Lebanon.

Iran was the big winner from the US-led invasion of Iraq in 2003, which toppled the Sunni minority tyranny of Saddam Hussein and installed Shia majority rule. The virulent return of Sunni jihadism to Iraq through the Islamic State of Iraq and the Levant forced the US Air Force back into action, but on the ground the Baghdad government is dependent on the Islamic Revolutionary Guard Corps (IRGC) and its powerful network of Iraqi Shia militia trained by Iran.

In civil war-riven Syria, the minority regime of Bashar al-Assad, which has already morphed into a national militia network under IRGC guidance, is a ward of the Iranian state and its proxies such as Hizbollah, the Lebanese paramilitary movement. The regime's manpower crisis - it can no longer replace battlefield losses which are mounting again this year - has forced Hizbollah to roughly double its deployment in Syria to between 6,000-7,000 fighters, and IRGC to field a similar number of troops, according to Arab and European sources. Hizbollah's entry into the Syrian maelstrom, meanwhile, has forced it to tighten its grip on the levers of power at home in Lebanon.

In this context, European and Arab officials emphasise, Gulf leaders are not worried about Tehran eventually getting a nuclear bomb so much as a post-sanctions Iran getting its hands on real money. They have seen how much Iran can do with hardly any money, and how little they themselves can do, with vast cash piles accumulated before last year's oil price crash. Syria highlights how important money now is.

Saving the Assad regime cost Iran close to $10bn a year in 2013-14, according to Arab securocrats and Nato diplomats - money its sanctions-stricken economy could scarcely afford. But as their forces dwindle and their hold over a shrinking rump Syria fragments, the Assads are running out of money. Yet their patrons, Iran and Russia, hit by the oil price collapse, are not flush either. Syria's defence minister was recently in Tehran seeking an urgent cash infusion of $6bn. He got a vague promise of $1bn, and an exhortation to emulate Iran's self-reliance and build a "resistance economy".

Money, and the many tens of billions that could flow to Iran as part of what the Lausanne deal still suggests would be a phased lifting of sanctions, does make a difference. But it is hardly the only factor. For Gulf leaders it is often their only diplomatic weapon. That is part of their problem.

The Saudis and their allies complain that Persian Iran has no place in the problems of Arab states. Yet their money weapon has had nugatory success in resolving these problems. Their complaint that Shia Iran's interference in Arab countries is a boost to Sunni jihadi extremists is also one-dimensional. Little bolsters Sunni extremism more than the bigoted Wahhabi brand of Islam practised and exported by Saudi Arabia, and the Gulf's intolerance of dissent and political pluralism hardly helps either.

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