Tag Archives: US Foreign Policy

What are the Saudis Thinking?

Two stories made a big splash today, suggesting US-Saudi ties are fraying and that Riyadh is hugely disappointed by U.S. policies. Saudi intelligence chief Prince Bandar bin Sultan is at the center of both the Wall Street Journal and Reuters articles. European diplomats reportedly met with Prince Bandar (pictured) over the weekend. He made it perfectly clear to them that Riyadh was ready to scale back cooperation with the U.S. on Syria and arm rebel factions now fighting the Assad regime. Sources told Reuters that Saudi Arabia would reconsider arms deals with the U.S. and oil sales just days after the Kingdom rejected a two-year non-permanent seat on the UN Security Council.

Three recent developments have inspired Saudi Arabia to beat its own path of late. With this post, I’m trying to capture the logic driving Riyadh. This post is deliberately sympathetic because the media has largely failed to express their views. Saudi leaders haven’t articulated them carefully, either.

Start with Syria. For two years the U.S. has hinted at arming rebels but held back. These hints hardened into explicit promises in June, when the Obama administration first accused the Assad regime of using chemical weapons and crossing the president’s “red line.” In response, the White House pledged to arm rebels. Even then, the goal was not to oust Assad, but to create a stalemate that would force both sides to negotiate.

Countless stories since then have made it clear that rebels are not receiving enough arms or aid from the U.S. and that allies have withheld aid so as to not anger Washington. As reported by Greg Miller on October 5, an ongoing CIA training program “is so minuscule that it is expected to produce only a few hundred trained fighters each month even after it is enlarged, a level that officials said will do little to bolster rebel forces [.]”

The August 21 chemical attack on a Damascus neighborhood changed everything—it seemed. With 1,400 dead, evidence mounting, and outrage rising, the Obama administration prepared to strike Syria. Warships were positioned off the coast and the White House appeared deadly serious. It encouraged the Saudis to rally Arab opinion at the Arab League and beyond. Saudi officials made the case for war and, according to the Wall Street Journal’s Ellen Knickmeyer, they even asked for target lists to study, so that they could join an attack.

But the strikes never came. British Prime Minister David Cameron failed to secure enough votes to intervene. In the U.S., Obama decided to seek congressional authorization after a brief public debate turned against an attack. The Saudis, for their part, made their case loudly and in many venues, even offering to pay in full for an expanded effort to oust Assad rather than teach him a lesson. They did so with confidence that the U.S. would follow through and were subsequently humiliated by the U.S. climbing down. Settling for a Russian deal to remove Assad’s chemical weapons, while pursuing a deeply flawed peace process in Geneva and not punishing the regime in any meaningful way, has created a sense of abandonment in Riyadh.

This may sound absurd to those who hate Saudi Arabia because they think the system is morally bankrupt—but there is a moral component to Saudi foreign policy in Syria. Their support for rebels is not simply a cold calculation to cut off Iran’s right hand in the Arab world. Leaders like King Abdullah see a country under siege from outsiders, both Sunni jihadists and Iranian agents, and a brutal regime defended by Russia and China at the United Nations. They believe the only way to save Syria and stop the killing is to remove Assad by force.

Then there’s Iran. It’s widely assumed that the Saudis fear a “grand bargain” that would allow them to dominate the region. According to this reading, a comprehensive nuclear deal would really be a prelude to a regional security agreement that lessens the burden on the U.S. and gives Iran more breathing room. This fear isn’t new. It dates back to before the Shah fell. Gulf Arab leaders worry that Iran—with its larger population, stronger military and formidable nationalism—could dominate the neighborhood unless outsiders help secure the Gulf.

But why would the Saudis be unhappy with nuclear deal that satisfies the rest of the world? What they’re most alarmed by, I’m guessing, is the public outreach that creates immense pressure to reach a deal even if it’s flawed. A thaw in U.S.-Iranian relations is not out of the question for Saudi Arabia. It’s easy to forget, in a time of heightened sectarianism and bloody proxy battles, that the Saudis have an embassy in Tehran and the two sides occasionally do business in spite of mistrust.

Egypt is another point of contention. The Saudis genuinely believe they backed a popular uprising in Egypt this summer, when the democratically-elected president, Muhammad Mursi, was ousted by a military supported by millions and millions of Egyptians. The ensuing crackdown on the Muslim Brotherhood, to which Mursi belonged, has killed over one thousand people. Thousands of others are in jail. But the general who led the coup is hugely popular and could win the presidency if he ran for office today. This is good enough for Riyadh.

At the same time, the Saudis sees the growing insurgency in Sinai and Islamists resorting to terrorism as proof that violence is part of the Brotherhood’s DNA. The Saudis are quick to frame their support for Egypt’s military as a response to this threat.

In an effort to bolster the interim government, discredit the Brotherhood, and improve Egypt’s fiscal standing, the Saudis have committed $12 billion in aid along with Kuwait and the UAE. By contrast, the U.S. decided this month to strip Egypt of military aid, leaving the Saudis to scratch their head in astonishment. Such confusion could have been avoided if the U.S. acted decisively in the early days of the coup and withdrew aid immediately. But the delayed reaction has only complicated the relationship. Why do it now when the worst of the crackdown is over and terrorism is a serious threat gaining momentum?

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What other factors are driving Saudi policy today? Please comment.

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Lacking coherent vision, U.S. strikes against Syria would be vain

Today’s guest author is Matthew Gilchrist (@gilchristms). He holds an M.A. in Middle East Studies from the Elliott School of International Affairs, specializing in U.S. foreign policy and security studies. He previously lived in Lebanon while studying at the American University of Beirut and worked at the news website NOW Lebanon. Gilchrist now works in Washington, DC.

Over the past week the Obama administration has built its case for what it claims could be one-time airstrikes in Syria to punish the regime of Bashar al-Assad for its alleged use of chemical weapons, which, according to U.S. estimates, killed more than 1,400 Syrian civilians on August 21. The administration says that an airstrike is necessary to preserve the integrity of the “red line” Obama drew a year ago and to protect Syrian civilians from further attacks.

If the U.S. stands passively by, Assad will use his chemical stockpiles with impunity, setting a dangerous international precedent. But, the administration adds, an American response must be neither too soft nor so strong that it results in the fall of Assad. American actions are intended neither to bring about regime change nor as a pretext for greater involvement in Syria’s civil war, we are told.

Unfortunately, airstrikes are unlikely to achieve anything that could lessen the suffering of the Syrian people or push Assad to the negotiating table. It will most certainly not stop his government’s use of conventional weaponry that has already killed tens of thousands. The strikes will only serve to assuage the Obama administration’s doubts about its own international credibility while creating greater instability and uncertainty in Lebanon, Jordan, Iraq and Israel.

Furthermore, discussion of these strikes – seemingly only  popular in the White House, a few congressional offices and the Élysée Palace – fail to take into account the views of Syrian and Arab publics, who overwhelmingly oppose another American military intervention. American military involvement will do further damage to its image in the Arab world, make a bad situation worse in Syria by exacerbating refugee flows to neighboring countries, and risk reprisal attacks by Syria, Iran, Hezbollah or their proxies that could escalate the Syrian conflict and inflame the region.

Meanwhile, American efforts to prove Syrian government culpability in the August 21 chemical attack have ignored key questions, which without U.N. Security Council approval of a military response further undermines the administration’s claim to legitimacy for any possible military action. Why, for example, would the Syrian government carry out an unprecedented chemical attack a mere 20-minute drive from the U.N. weapons inspectors’ headquarters in Damascus? With U.N. inspectors on the ground in Syria, it is fortuitous for the rebels that the attack came when it did and should raise concerns about their own involvement.

Much of the evidence cited in the unclassified U.S. assessment of the Syrian government’s use of chemical weapons released on Friday is circumstantial and relies on assumptions of prior government culpability in chemical attacks. The most vital piece of evidence the administration cites is a communications intercept “involving a senior official intimately familiar with the offensive who confirmed that chemical weapons were used by the regime on August 21 and was concerned with the U.N. inspectors obtaining evidence.” However, no transcript was provided in either English or the original Arabic, nor was it divulged whether this individual is thought to have played a role in the alleged attack. Lacking context, this “senior official” may have been merely speculating on an event to which he had no connection. With the option of military force on the table, more transparency, evidence and context are necessary for the administration’s claims to be convincing beyond a reasonable doubt.

While suspicion must fall first and foremost on the party in possession of both massive stockpiles of chemical weapons and the means to deliver them – the Syrian government – the U.S., its European allies and the U.N. have an obligation to consider alternative scenarios and investigate the possibility of rebel involvement. Contrary to the administration’s claims, it is not beyond the realm of possibility that a rebel faction or a group of defected Syrian military officers could have acquired an amount of sarin gas from among Syria’s own stockpiles or from abroad, and staged the attack to bring about a Western military intervention. Knowing that the Americans will blame Assad for the attack, and with so many dead already, might not a thousand more be justifiable if it hastens the end of the war?

Unfortunately, questions such as these are all too often dismissed and discredited by virtue of their popularity with Russia, China, and most damningly, the Syrian regime itself. The Syrian civil war has so polarized the Middle East and the international community that a critical and thorough debate no longer seems possible.

The U.S. must be careful if it chooses to pursue airstrikes against the Syrian government. If the American response is miscalculated and does greater damage to Syrian government assets than intended, the scales could tip in favor of the rebels and throw Syria into a new, bloodier stage of its civil war. The ascendant rebel forces might push deeper into Damascus, seeking to fully dislodge the regime from its capital stronghold, while Assad would quicken the pace of his unrelenting campaign against rebels and civilians alike. Hezbollah or its proxies could strike at Israel, whose own retaliation would be catastrophic for Lebanon and the region.

The Obama administration does not have the best interests of the Syrian people at heart, but rather its own vanity and sense of purpose – one not shared by the Syrian people or its Arab neighbors. Without a strategic vision for how airstrikes could bring about a  resolution to the Syrian conflict or facilitate real negotiations, the administration’s actions are either folly that will accomplish little and be forgotten, or will lead to deeper American involvement and greater suffering in Syria and the region.

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Peace Process Restarts, Harsh Realities Endure

Today’s guest author is Allison Good, an independent analyst and freelance journalist. She tweets @Allison_Good1 and currently resides in Israel.

Well, it’s official: the Israeli-Palestinian peace process will resume in Washington next week with talks between Israeli Minister of Justice Tzipi Livni and veteran Palestinian negotiator Saeb Erekat. Secretary Kerry’s framework, which does not involve preconditions on either side, is being hailed by many as a major breakthrough, as the last round of talks fizzled quickly in 2010. But while it is truly impressive that Kerry has managed the near-impossible feat of bringing Israelis and Palestinians to the negotiating table, the question of whether the talks will actually lead to anything of substance requires a more pragmatic approach, particularly when it comes to considering the patterns of Israel’s engagement in the Oslo Process over decades.

First, the negotiators themselves are not the ultimate decision-makers for their respective parties. Prime Minister Benjamin Netanyahu has never hidden his disdain for Livni, while Erekat does not have nearly as much political clout as he did during the Oslo Process in the 1990s. On the Israeli side, at least, Livni’s role gives Netanyahu someone in the center to blame if she fails. I would certainly expect Livni and Netanyahu to be constantly at odds while the former is working in Washington and there are factions within the Palestinian Authority that would rather see Erekat fail as well. Of course, it is impossible to tell right now what the dynamic between Erekat and Livni will be. They could end up being well-matched negotiating partners. But core issues like settlements, refugees, and Jerusalem could be their downfall–if they get that far.

This brings us to the second factor that needs a realistic examination. The core issues–Jerusalem, settlements, right of return of Palestinian refugees, and borders–have proven elusive for decades. While historically Israel and the Palestinians have been able to reach interim agreements, core issues have always been left on the back burner, only up for negotiation at the last possible minute. The Hebron Accords and Wye River both succeeded because it was stipulated that core issues would be debated at a later date, while President Clinton’s Camp David summit failed because of disagreement over core issues that were introduced, particularly the status of Jerusalem.

Although we do not know all the details of Kerry’s framework yet, it is highly unlikely that a hawk like Netanyahu would have agreed to it if Jerusalem was on the chopping block to start. Of course, Netanyahu did agree to a settlement freeze in 2009, but building in East Jerusalem and the West Bank has been pursued aggressively in the past few years. There may be more wiggle room on borders, but Netanyahu would have to give up most of Israel’s presence in the Jordan Valley, which he has always considered to be a strategic advantage.

Another issue that requires careful thought is Netanyahu and his coalition. After all, he was already skating on thin ice with the Hebron Accords in 1997 during his first term as Prime Minister, and his missteps at Wye caused his coalition to collapse, resulting in 1999 elections that replaced Netanyahu with Ehud Barak. Netanyahu’s now-famous speech at Bar Ilan University in 2009, in which he endorsed the two-state solution for the first time, was seen as a positive evolution, but regardless of whether he was sincere, he has clearly chosen to cater to his popular right-wing base rather than put his vision into action. Indeed, it is likely that Netanyahu will pull out of these negotiations if the Palestinians provoke an impasse by asking for what he considers to be too much.

On the Palestinian side, Abbas is also constrained by domestic politics. It must have taken some extreme wrangling to get the PLO and Fatah to agree that the time is ripe for talks. All it takes is one wrong move by Erekat–or one unreasonable Israeli demand–for Abbas to feel insecure enough about this position at home that he feels the need to break things off. This is not a case in which Abbas feels that he has nothing to lose, but there are limits to what they are likely willing to accept. The Palestinian Authority has sunken deeper into political and economic disarray in the past few years and Abbas and Erekat will have to tread very lightly. But attempting to please both the Israelis and the Palestinian public is a zero-sum game that automatically imposes consequences for pleasing one group or the other. Erekat’s challenge will be to strike a balance that mitigates any fallout on either side.

So why agree to negotiate at all? The answer is unclear at this moment. Perhaps Netanyahu is looking for talks to eventually collapse, hoping that such an exercise will help his political future by enabling him to blame the Palestinians, thus allowing him to push negotiations further down the road so he does not have to make concessions during his term in office. Maybe he will refuse to bow to pressure from fellow Likud politicos and HaBayit HaYehudi leader Naftali Bennett at the last minute, even though Bennett has already threatened to throw the coalition into crisis if Netanyahu agrees to negotiate based in the 1967 lines. More likely, though, he is moving on the peace process to please Secretary Kerry and the U.S., with no intention of signing any agreement whatsoever.

Abbas, on the other hand, knows his own political career is coming to an end. It is entirely possible that he believes he has nothing to lose, and that this is a legacy he wants to leave. But it is more plausible that he also wants something to show the Americans to prove that he is making an effort.

The U.S. will certainly offer packages of carrots to both sides during forthcoming talks that will entice each party. Unfortunately, history shows that these carrots cannot overcome the stalemate on final status issues. Netanyahu refused to move on implementing the Hebron Accords (the 1997 agreement that provided for Israeli withdrawal from the West Bank) even after Clinton offered him a bilateral defense treaty. Reassurances for the Palestinians will certainly take the form of increased aid, but Erekat knows there are concessions he cannot make, despite the Palestinian Authority’s desperate need for more cash.

There are way too many ifs to know how the talks will proceed and whether they will end with some sort of interim or comprehensive agreement. However, given the realities on the ground, all signs point to a repeat of 2010 and the further deterioration of the peace process, which many have declared dead for years. Kerry’s effort to take it off life support is bold and unexpected but applause and optimism are much too premature.

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KRG’s Talking Points on Display in DC

From the Facebook page of the KRG’s Representative in the US.

A high-profile delegation from the Kurdistan Regional Government visited Washington, DC last week. Speaking on behalf of the KRG were: Fuad Hussein, chief of staff to KRG President Massoud Barzani; Natural Resource Minister Ashti Hawrami; Falah Bakir, Director of the KRG’s Foreign Relations Department; and former KRG envoy Qubad Talabani, now Director of the KRG’s Coordination and Follow-Up Department.

The timing of the mission’s visit is telling: it arrived in Washington just weeks before Turkish premiere Recep Tayyip Erdogan is set to visit the White House. The main topic discussed by the delegation—during joint panels and speeches—was Iraqi Kurdistan’s relationship with Turkey. Over the past five years, this relationship has grown rapidly. It constitutes a majority of Iraq-Turkey trade.

Normally, the U.S. would champion prosperity and peace between neighbors who, just years before, were totally at odds over the question of Kurdish independence. But today, U.S. officials worry that Turkey and the KRG are ready to forfeit Iraq’s unity in favor of a comprehensive energy deal. That deal—if signed—would presumably connect Kurdish oil fields to Turkey and world markets. Conventional wisdom dictates that this move would grant the KRG independent oil revenues and enable it to withdraw from Baghdad’s orbit. In the worst-case scenario, the KRG would go its own way; Iraq would become a less diverse rump state with a weaker political opposition.

The KRG came to D.C. to relieve these fears and change minds before Prime Minister Erdogan arrives. Their talking points were sharp and polished. I say this as someone who saw the mission in person at George Washington University and the Atlantic Council on April 8.

Over the course of last week, the delegation met with Deputy National Security Adviser Tony Blinken and Acting Assistant Secretary of State for Near Eastern Affairs Beth Jones. According to an April 16 press release: “The delegation met with Congressional leaders and other key members of Congress, both Democrats and Republicans including the House Majority Leader, Rep. Eric Cantor (R-VA); Rep. Christopher Van Hollen (D-MD); Foreign Affairs Committee chairman, Rep. Ed Royce (R-CA); Intelligence Committee chairman, Mike Rogers (R-MI); Senator John McCain (R-AZ); Senator Roger Wicker (R-MS), as well as members of the Kurdish American Congressional Caucus including its new Democratic co-chair, Rep. Jarred Polis (D-CO).” (For pictures see last week’s entries on the KRG’s Facebook page.)

With this post I want to give readers a sense of how officials are framing the issues and what they’re seeking from the U.S. Much of this blog post is paraphrased unless quotation marks are used. The two events I attended were on-the-record and covered by media outlets so nothing confidential is contained herein. You can find audio and a copy of Hawrami’s prepared remarks on the Council’s website. Also be sure to read his April 14 op-ed for Real Clear World.

The delegation focused on the constitutionality of any future arrangement with Turkey. The KRG believes Iraq’s constitution allows the region to sign a bilateral trade deal with a foreign government without Baghdad’s input. Officials maintain that revenues from oil sales will be divided according to long-standing oil revenue-sharing agreements. Kurdish officials frequently cite a legal finding provided by a British law firm that upholds their claims—and they referenced it in D.C. more than once. Until it is tested in court, however, there is no telling how the argument will hold up if challenged by Baghdad, which has threatened to sue companies that export Kurdish oil.

Iraqi Prime Minister Nouri al-Maliki gives the KRG no choice but to sign these deals and pursue new infrastructure. Maliki represents the greatest threat to Iraqi unity because of his sectarian approach and refusal to apply the constitution. In his remarks at the Atlantic Council, Hawrami, the energy minister, said that the concentration of power for Iraq’s oil sector is unfair: “It’s what it was under Saddam Hussein.” He argued that oil and revenues are key sources of power in Iraq. As such, the U.S. cannot insist that Baghdad has final say on oil deals or export agreements. Maliki has no interest in developing Kurdish oil fields.

The sense of frustration and urgency felt by the Kurds was very real. They want to act now. In order to improve ties between Baghdad and Erbil, the only choice is to change the situation on the ground, and pursue reconciliation after the KRG’s success makes the central government reconsider its hard-line position. This argument makes sense given the long time horizons associated with the oil and gas industry (pipelines take months to build; commercial oil production levels are only achieved after years of surveys and drilling; etc.).

The Kurds want to initiate deals now because other options are no good. They could wait years more for an Iraqi oil law. Or they could wait for Maliki to change his mind or leave office.

Kurdish independence is a “myth,” Hawrami said. For the foreseeable future, the KRG wants its fair share of Iraq’s wealth, as guaranteed by the constitution. Erbil wants a federal system. But a decentralized oil policy is essential to that arrangement, meaning that the Kurds must be allowed to exploit resources and sell oil. A bruising fight over the Iraqi budget earlier this year has only confirmed for the Kurds that they need control over a revenue stream of their own. They cannot trust Maliki and his allies in parliament to produce a fair budget.

Hawrami’s most memorable line was delivered with a smile: “Iraq is a rich country. We want a share of that wealth… If even we have any motive for independence, we will wait until the last drop of Iraqi oil [is pumped and sold]—and then we might do something” (25:00 minute mark). The Kurds don’t want to prematurely cut themselves off when Iraq’s production could double or triple in the coming decades. Kurdistan may contain 45 billion barrels of recoverable oil. Iraq now estimates that the country holds 150 billion barrels total, placing it fifth in the world for proven reserves.

There is another upside to a Turkey-KRG deal and it has to do with Kurdish independence beyond Iraq. Hawrami suggested that the KRG’s dealings with Turkey had actually buoyed Erdogan’s outreach to Kurdish insurgents in his own country. How so? Cooperation with the KRG proved that the Turkish government was reliable; these ties gave the PKK confidence in Ankara’s sincerity.

Washington must adopt a neutral policy instead of backing Baghdad. Supporting Maliki in the name of “Iraqi unity” is a mistake. Supporting the constitution (i.e. the Kurdish reading of it) will prevent the country from fracturing. The Kurds recognize that U.S. influence over Baghdad is limited today. Washington prioritizes Iraqi “stability” above all but it has no real vision or policy for achieving that end, they say. Instead, Washington insists on reconciliation with Maliki, which favors central authority by default. Hawrami said the KRG can’t wait another seven years and do nothing. (Note: Maliki became PM in 2006.) The US approach is “outdated.”

Publicly-traded oil companies operating in the KRG slashed production in December because they could not rely on prompt payment from the central government. The newest Iraqi budget, which Hawrami called a “punishment,” provides only $650 million for operator costs in Kurdish territory, whereas the KRG demanded $3.5 billion. Kurdish oil exports flirted with 200,000 b/d late last year; volumes have since fallen to roughly 50,000 b/d, all of which is trucked across the border into Turkey because the federal government can’t be trusted to ship oil and compensate the Kurds as they see fit.

Looking forward, Hawrami believes the KRG can produce 2 million b/d by the end of the decade, most of which would be exported. A new pipeline like the one being considered by Turkey and the KRG would allow Iraq to sell ~3 million b/d through a northern corridor if the Kurdish and federal pipelines all become fully operational. As a rule, supply diversity is the best guard against energy insecurity. Hawrami mentioned “market stability” as an incentive for a deal with the Turks, something the U.S. can get behind.

Finally, the U.S. should not deter companies from operating in the KRG, the delegation said. The region is no different from anywhere else in Iraq. This goes back to the central theme of neutrality.

Kurdish prosperity will serve Iraq’s interests even if it angers Maliki. Speaking at the Atlantic Council, Hawrami said, “The KRG is confident that once oil export revenues are generated by KRG, and shared constitutionally, then Baghdad will become more reasonable, accepting a constitutional settlement on power and revenue sharing, thus creating lasting stability and unity in Iraq.”*

This kind of success, reinforced by timely transactions, will convince the people of Iraq—not just politicians—that the KRG was right all along. It will change minds and encourage the adoption of the constitution in practice. Kurdistan’s reputation for development and better services may even trickle down to the rest of Iraq, as more and more people ask: what are the Kurds doing right?

Conclusion: It’s hard to tell how successful the KRG mission was. We know who they met with but it’s impossible to tell how receptive their American counterparts were. Jackson Diehl of the Washington Post wrote an approving editorial on April 14 after meeting with at least one member of the delegation. That article ended with Diehl, a critic of Obama’s foreign policy generally, arguing that the U.S. policy towards the KRG was “wrongheaded.” Instead, Washington should encourage what he called Kurdistan’s “renaissance.”

The Kurds made a strong case last week. The rest is up to Erdogan when he raises the issue with Obama next month.

* Note: Revenue sharing is a thornier issue than first glance might suggest. Right now, the two sides disagree on the number and cost of “sovereign expenses,” which have cut the Kurds’ budget share year-on-year from 17 percent to about 10 percent. Might the Kurds push back once they control revenues? Could they retake 17 percent in full or compromise closer to 15 percent? Hawrami told the Associated Press on April 12 that the KRG will return revenues to Baghdad “after it has taken its legal allocation and paid contractors.”)

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Erdogan’s Case for KRG Oil Exports

The Middle East Policy Council published my new briefing yesterday on the Turkish prime minister’s upcoming visit to Washington. Titled “Erdogan’s Case for KRG Oil Exports,” the article skips the issues that the U.S. and Turkey agree on, and instead focuses on a much thornier problem. By all indications, the Obama administration opposes future energy deals between Turkey and Iraqi Kurdistan. The White House is afraid that any comprehensive deal could supercharge Kurdish aspirations for independence, dissolve Iraq, or at the very least heighten the risk of conflict. Although American anxiety is sincere, the Turks and Kurds believe it is misplaced. They are convinced an energy deal will benefit all Iraqis–even if Baghdad appears irreconcilable for now. To paraphrase the KRG’s Minister of Natural Resources, who spoke this week at the Atlantic Council, “Baghdad will be more reasonable after they get their cut.”

From the section Erdogan’s Challenge:

If Erdogan is serious about pursuing a comprehensive energy deal, then he will have to explain the Kurdish side of their dispute with Maliki and point to the absence of the U.S. as an honest broker. As long as the U.S. and other members of the UN Security Council take Baghdad’s side in the dispute, any KRG exports to world markets could be rigorously challenged by Baghdad in various judicial venues. Erdogan’s case is made stronger by other negative developments in Iraq that reflect poorly on Maliki.

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Baghdad and Washington at Odds Over Syria’s Future

U.S. Sec. of State John Kerry was sworn in on February 1, 2013

The Los Angeles Times reported yesterday that Iran is still using Iraqi airspace to shuttle weapons to Bashar al-Assad’s forces in Syria. This arrangement was first reported a year ago, to the dismay of U.S. officials who hoped Iraqi Prime Minister Nouri al-Maliki would stop it. Baghdad promised last year to inspect Iranian cargoes. However, according to anonymous sources quoted by the Times, they have not done so since two planes were brought down in October, one of which was inspected after its cargo was discharged in Syria. On February 25, the New York Times quoted an American official who said the shipments were so routine they could be called “a milk run.”

No doubt these shipments have taken on greater importance in recent weeks. Syria’s rebels “scored a string of strategic victories” early this year and aid from outside sources is strengthening the resistance. Even though the war has not reached a tipping point, Assad needs all the help he can get. And Iran is happy to help. He may need more assistance now than ever before, as the U.S. reconsiders its options, the second anniversary of the uprising approaches, the capital becomes less secure, and the death toll eclipses 70,000.

The sectarian conflict in Syria is deeply unsettling for Maliki. Assad and his most loyal forces belong to the Alawite offshoot of Shia Islam, while certain religious minorities have gravitated to his side or remained neutral out of fear. By all accounts, the resistance draws its power from the country’s Sunni majority; it represents both secular and ultra-conservative trends, all of which aim to drive Assad from power.

Maliki’s logic is simple. The prime minister, who belongs to Iraq’s Shia majority, is worried that Assad’s ouster could inspire Sunnis to rise up in Iraq or—at the very least—resist his rule, which many complain is autocratic. He fears the spill-over effects of a new insurgency, like the one Maliki faced when he first became prime minister in 2006. “Neither the opposition [in Syria] nor the regime can finish each other off,” Maliki told the Associated Press in a February 27 interview. “If the opposition is victorious, there will be a civil war in Lebanon, divisions in Jordan and a sectarian war in Iraq.”

More specifically, Maliki is worried about the strong cross-border ties that connect Sunnis in Iraq’s Anbar province with those fighting Assad next door. For years, Anbar was the beating heart of the anti-American, anti-government insurgency following the 2003 invasion. Violence there subsided only after Sunni militias joined forces with the U.S. to fight Al Qaeda in Iraq.

At the end of last year, outraged Sunnis took to the streets in increasingly large demonstrations against Maliki’s government. They accuse Baghdad of systematic intimidation and abuse. As proof, they point to high-profile cases in which Sunni politicians, including Vice President Tariq al-Hashemi, were charged with crimes against the state—despite a lack of evidence and the use of forced, televised confessions (a hallmark of Saddam Hussein’s rule). Hashemi has been sentenced to death five times in absentia; he now lives in exile. In December, the security detail of Sunni politician and Iraqi Finance Minister Rafi al-Issawi was arrested, kicking off the newest wave of protests. Channeling demands heard elsewhere in the Arab world, demonstrators are calling for the downfall of “the regime.”

Maliki says the Anbar protests can continue but he is eager to dismiss them. Like other Arab heads of state—both democratically elected and self-appointed—he swears the demonstrations are sponsored by foreign powers. At the same time, he has made some concessions, freeing about 4,000 prisoners in order to satisfy Sunni demands. Thus far, his calls for dialogue have not gained traction.

It’s worth noting that Maliki is already locking horns with the Kurdistan Regional Government, the semi-autonomous grouping of provinces in Iraq’s north (these are administered by Erbil rather than Baghdad). The two sides have exchanged threats over oil contracts, export rights, the constitution, and revenues. The KRG and federal government even deployed forces and heavy artillery to disputed provinces in November.

For the prime minister, raising the stakes and risking conflict in the country’s west at the same time may not be an option, especially if it backfires or changes attitudes ahead of Iraq’s upcoming provincial elections. Instead, Maliki has relied on a friendly judiciary to undercut his enemies, security forces to do his bidding, and the Assad regime to suffocate an insurgency before it can poison Iraq’s western territory. Turning a blind eye to Iran’s aid achieves this end.

Iraq’s refusal to intercept Iranian aid to Syria has not been overlooked by Washington. In a September 2012 hearing, Senator John Kerry told Robert Beecroft, now the U.S. Ambassador to Iraq, that aid to Baghdad should be conditional. Informed that Iraq had already been engaged on the matter, Kerry said:

“Well, I mean, it may stop when it’s too late. If so many people have entreated the government to stop and that doesn’t seem to be having an impact, that sort of alarms me a little bit and seems to send a signal to me maybe we should make some of our assistance or some of our support contingent on some kind of appropriate response… it just seems completely inappropriate that we’re trying to help build their democracy, support them, put American lives on the line, money into the country and they’re working against our interest so overtly—against their interests too, I might add.”

Kerry is now Secretary of State. He is closer to President Obama than ever before and his counsel will carry additional weight. It’s unclear if he still thinks holding back aid is a wise choice. But it is one of the only remaining points of leverage the U.S. has now that the occupation is over. In FY 2012, the U.S. provided $1.7 billion of aid to Iraq. That sum could climb over $2 billion in FY 2013.  And, in 2014, Iraq is set to receive its first batch of American-made F-16 fighter jets. This administration doesn’t want to act directly in Syria by arming rebels or intervening militarily. So cutting off Iranian supplies to Assad may be the easier option, even if it complicates relations with Iraq.

Maliki, for his part, may seek to avoid being leveraged, however, as I’ve argued before. Last year, a $4.2 billion deal for Russian military hardware collapsed at the last minute when accusations of corruption were revealed. Officials later said that the deal would be renegotiated. This past week, another deal—this one for roughly $1 billion of Czech aircraft—also fell through.

If the U.S. attempts to leverage Maliki by making aid conditional or withholding military sales, look for both of these deals to be revived soon. Any American threat would be conveyed quietly at first, behind closed doors, so that Maliki is not humiliated. And given the tremendous investment made by the U.S. in Iraq over the past decade, we should expect Washington to give Maliki another chance to redeem himself. But if the Russian and Czech arms deals are seriously expanded in the coming months, it may be the first signal that Maliki is preparing other options in case he’s punished for enabling Syria’s crackdown.

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Egypt’s Prospects Wane Without Leadership

The Middle East Policy Council just published a new briefing titled “Anxiety Grips Egypt’s Economy.” Co-written by this author, it addresses some of the systemic issues facing Egypt right now. Subsidy reform, the Central Bank’s struggle to manage currency devaluation, inflation, fuel shortages, black markets, and loan prospects are all covered. Perhaps most importantly, the article makes the case that the United States is not sworn to approve a $4.8 billion loan from the International Monetary Fund. This seems apparent now that the U.S. Ambassador has called on Egypt’s government to do more and act fast.

The IMF loan, negotiated last year and expected to be finalized last December, was delayed by drawn-out political crises in Egypt, which began in late November. It is still on hold today even though all parties recognize that it is absolutely necessary. (The IMF deal is now considered the ultimate stamp of approval by the international community. It could unleash an additional $14.5 billion in aid from other sources.)

The problem is leadership, which Cairo lacks. President Mohammad Morsi has thus far shown a perplexing willingness to consolidate power by decree and rush through political reforms by referendum. While, at the same time, he has refused to make tough decisions affecting Egypt’s economy ahead of parliamentary elections. He and his party–the Muslim Brotherhood’s Freedom and Justice Party or FJP–are clearly afraid of alienating voters, even though the value of the Egyptian pound falls to news lows every day and the poor stand to lose the most from steady inflation.

Take an extra moment and revisit our November 15 briefing for MEPC. That article (“Egypt’s Economy Looks to 2013“) was hopeful by comparison. Until that point, Morsi’s government had said all the right things; the IMF loan looked certain. But three short months have turned Egypt’s prospects upside down. A courageous leader needs to deliver an ambitious economic plan, campaign for it publicly, and–at the same time–protect Egypt’s most vulnerable.

Can Morsi be that leader?

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