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Thursday, July 30, 2020

Indonesia: A major prize in the battle for the soul of Islam

By James M. Dorsey

Saudi support of religious ultra-conservatism in Indonesia contradicts Crown Prince Mohammed bin Salman’s promotion of an undefined form of moderate Islam intended to project his kingdom as tolerant, innovative, and forward-looking. It also suggests that Saudi Arabia is willing to work with the Muslim Brotherhood despite its denunciation of the group as a terrorist organization.

An initial version of this story was first published in Inside Arabia

A podcast version of this story is available on Soundcloud, Itunes, Spotify, Stitcher, TuneIn, Spreaker, Pocket Casts, Tumblr, Podbean, Audecibel, Patreon and Castbox.

Java’s mosque landscape resembles a map dotted with flags marking outposts of various warring parties.

Mosques with three-tiered tiled roofs reflect traditional Javanese cultural houses of worship. They outnumber the rapidly growing number of Saudi-funded mosques that sport a little dome rather than tiles as the third tier of their roof that were built by the Prosperous Justice Party (Partai Keadilan Sejahtera or PKS).

A plaque on the construction site of a mosque in a village in Central Java tells the story.

The plaque features the Saudi flag as well as the emblem of Vision 2030, Crown Prince Mohammed bin Salman’s plan to reform and diversify the kingdom’s economy.

The plaque thanks the World Assembly of Muslim Youth (WAMY) for the funding. WAMY is one of the government-controlled non-governmental organizations the Saudi government has used for almost half a century to globally fund the spread of Islamic ultra-conservatism.

The story the plaque tells however goes beyond charitable Saudi support for the construction of houses of worship in the world’s largest Muslim majority democracy.

It suggests that Indonesia is in a category of its own in a global rivalry for Muslim religious soft power in which Saudi Arabia, the United Arab Emirates, and the southeast Asian state are major players.

It also calls into question Prince Mohammed’s shift away from religious legitimization and massive global funding of ultra-conservative religious institutions. Finally, as in the case of Yemen, it casts doubt on the sincerity of the Saudi government’s labelling of the Muslim Brotherhood as a terrorist organization.

It further shines a spot light on religious soft power competition between the kingdom and the UAE and the two countries’ different approaches in harnessing faith in a bid to define what it stands for and how it is utilized to project the state as tolerant, pluralistic and forward-looking.

To be sure, Prince Mohammed, since rising to power in 2015, has significantly curbed almost half a century of Saudi funding of ultra-conservative mosques, cultural and educational institutions, scholarships, and media across the globe which was implemented in an effort to cement the kingdom’s leadership of the Muslim world and counter Iranian revolutionary ideology.

The crown prince has also nurtured a sense of nationalism as a pillar of Saudi identity, curtailing the power of the kingdom’s religious establishment and religion as a major legitimizer of the rule of the Al-Saud family.

Indonesia, however, is the exception that confirms the rule.

Welcomed by tens of thousands lining the streets of Jakarta, King Salman made  the importance of religious investment in Indonesia clear on a visit to Indonesia in 2017, the first by a Saudi monarch in almost half a century, as part of an Asian tour that also took him among others to Malaysia, Japan, and China.

The monarch disappointed Indonesian leaders with the degree to which he was willing to invest in the country’s economy but was more generous when it came to spending on religious soft power.

Media reports suggested that the kingdom committed to building five mosques for the military and three new satellite campuses of the Saudi-funded Institute for Islamic and Arabic Studies (LIPIA) in Indonesian provinces.

Bahasa Indonesia, Indonesia’s official language, is virtually non-existent on the grounds of LIPIA, a bastion of Saudi ultra-conservatism in the Indonesian capital affiliated with the Imam Muhammad ibn Saud Islamic University in Riyadh. LIPIA is dedicated to the teaching of Arabic.

LIPIA’s more than three thousand students study tuition-free in gender segregated classes. The institute frowns upon factotums of social life that are denounced as forbidden innovations by Muslim ultra-conservatives such as music, television, and fun.

Driving Saudi proselytization interests in Indonesia is far more than the kingdom’s long-standing support for religious ultra-conservatism.

Like in the case of Iran, it aims to counter a challenge, this time around not from a militant rival but from one that threatens to bypass the kingdom as well as the UAE as a result of its moderation.

The renewed Saudi drive came two years after Indonesian President Joko Widodo first endorsed a concept of humanitarian Islam that propagates tolerance and pluralism and endorses the United Nations’ Universal Declaration of Human Rights put forward by Nahdlatul Ulama (NU), widely viewed as the world’s largest Muslim movement.

Mr.  Widodo (also known as Jokowi) chose Ma’ruf Amin, a leader of Nahdlatul Ulama, founded almost a century ago in opposition to Wahhabism, Saudi Arabia’s strand of Islamic ultra-conservatism, as vice-president for his second term.

Speaking three years after his initial endorsement at the laying of the ground stone of the International Islamic University (UIII) in West Java, Mr. Widodo laid down a gauntlet by declaring that it was “natural and fitting that Indonesia should become the (authoritative) reference for the progress of Islamic civilization.”

Mr. Widodo saw the university as providing an alternative to the Islamic University of Medina, that has played a key role in Saudi Arabia’s religious soft power campaign, and Al Azhar, the citadel of Islamic learning in Cairo, that is influenced by financially-backed Saudi scholars and scholarship as well as Emirati funding.

The university is “a promising step to introduce Indonesia as the global epicentre for ‘moderate’ Islam’,” said Islamic philosophy scholar Amin Abdullah. 

Saudi and Emirati concerns were initially assuaged when Mr. Jokowi’s aspirations were thwarted by critics within his administration.

A six-page proposal to enhance Indonesian religious soft power globally put forward by Nahdlatul Ulama at the request of Pratikno, Mr. Widodo’s minister responsible for providing administrative support for his initiatives, was buried after the foreign ministry warned that its adoption would damage relations with the Gulf states, according to the author of the paper.

That could have been the end of the story.

But neither Saudi Arabia nor the UAE anticipated Nahdlatul Ulama’s determination to push its concept of humanitarian Islam globally, including at the highest levels of government in western capitals as well as in countries like India.

Nor did they anticipate Mr. Widodo’s willingness to play both ends against the middle by supporting Nahdlatul Ulama’s campaign while engaging on religious issues with both the Saudis and the Emiratis.

Nahdlatul Ulama’s success in accessing European leaders as well as the Trump administration left the Saudis and the Emiratis with two choices: co-opt or be seen to engage.

While the UAE opted to co-opt with pledges of massive economic investment and religious cooperation, Saudi Arabia, pressured by influential figures in the West, put up a botched effort to be seen as engaging.

In an unprecedented move, Mohammed al-Issa, the secretary general of the Muslim World League (MWL), a prime Saudi vehicle for the global projection of religious ultra-conservatism that Prince Mohammed converted into a tool for the promotion of his concept of moderate Islam, visited the headquarters of Nahdlatul Ulama in February in Jakarta.

It was the first visit to one of the world’s foremost Islamic organizations in the League’s almost 60-year history. Although active on social media about their various engagements, neither the League nor Mr. Al-Issa referred on platforms like Twitter to their meeting with Nahdlatul Ulama.

Mr. Al-Issa had turned down an opportunity to meet two years earlier when a leading Nahdlatul Ulama cleric and he were both in Mecca at the same time.  

Mr. Al-Issa had told a Western interlocutor who was attempting to arrange a meeting that he had “never heard” of the Indonesian scholar and could not make time “due to an extremely previous busy schedule of meetings with International Islamic personalities” that included “moderate influential figures from Palestine, Iraq, Tunisia, Russia and Kazakhstan.”

Saudi Arabia was forced several months later in the run-up to the 2019 Indonesian presidential election to replace its ambassador in Jakarta, Osama bin Mohammed Abdullah Al Shuaib. The ambassador had denounced in a tweet—that  has since been deleted—Ansor, the Nahdlatul Ulama young adults organization, as heretical and he had supported an anti-government demonstration.

During his February visit, Mr. Al-Issa signalled his intentions by taking with him to the group’s headquarters Hidayat Nur Wahid, a leader of the Indonesian PKS, the Muslim Brotherhood aligned-political party, and a staunch rival of the National Awakening Party (or PKB) that is closely associated with Nahdlatul Ulama.

Mr. Wahid is also a Muslim World League supreme council member and on the advisory board of the Saudi-funded King Abdullah bin Abdulaziz International Centre for Interreligious and Intercultural Dialogue (KAICIID) in Vienna.

However, Mr. Widodo’s office barred Mr. Wahid from attending Mr. Al-Issa’s meeting with the president.

Tellingly, pleading commitments in Indonesia, Mr. Wahid had bowed out of a ground-breaking visit to the former Nazi concentration camp of Auschwitz by 25 prominent Muslim leaders headed by Mr. Al-Issa, weeks before the Muslim World League chief travelled to Indonesia, according to sources familiar with the arrangements for the visit.

Critics suggested Mr. Wahid, who had criticized an earlier visit to Jerusalem by a Nahdlatul Ulama leader at the invitation of the American Jewish Committee, would have been going out on a limb by joining the delegation in Auschwitz.

“This is the Saudis playing a double game,” said a leader of the Nahdlatul Ulama.

PKS’ links to the Muslim Brotherhood and its apparent reluctance to buy into Saudi Arabia and the Muslim World League’s agenda of a nominally tolerant and pluralistic Islam that engages with powerful Jewish communities as well as Israel has not prevented the kingdom from ensuring that the party benefits from its financial largesse.

Back in Javanese villages, PKS’ building of mosques with Saudi money is paying off.
Contrary to Javanese tradition, the mosque in the Central Javanese village was named after the Saudi benefactor who funded the construction through the World Assembly of Muslim Youth. “We don’t name mosques after human beings,” complained a Nahdlatul Ulama villager.

A Palestinian flag fluttered suddenly from the roof of the village’s pickup truck hub from where farmers transport their produce to market with few residents recognizing what it represented.

Rather than taking  the flag down, Nahdlatul Ulema changed the tenor of its religious education and events in the village reverting back to the nationalistic and militaristic themes of Banser, the five-million-member militia of Ansor, its young adults wing. It potentially set the stage for a confrontation if the PKS continued its agitation.

The 2019 elections were nonetheless proof of PKS’ Saudi-backed success.

The party won more than 20 percent of the vote in a village in which historically one could count its votes on the fingers of one hand.

“The war songs and events attended by Banser members in uniform are sending a message. It’s a message that is being heard by the other side. Banser was always strong in our area but now people are lining up,” said a prominent Nahdlatul Ulama member in the village.

He suggested that the parties were for now keeping the peace in the village but that could change if and when Nahdlatul Ulama decides that its militia has no choice but to step in. It would not be the first time the militia has successfully confronted more militant hard-core Islamist groups on the streets of Java.

Warned Indonesian home affairs minister Tito Karnavian: “The real challenge of Indonesia today is the rise of intolerance, intolerant groups or intolerant ideologies,”

Speaking in a soon to be published video of a webinar hosted  by the Religious Freedom Institute. Mr. Karnavian pointed to strands of religion that have “inherent teachings of intolerance such as Salafism. It’s not an Indonesian strand of Islam, of course, being imported… This is happening today in Indonesia… They want to envision the establishment of Indonesia as an Islamic state… Sharia being implemented (would be) the breakup of the country.”

Dr. James M. Dorsey is an award-winning journalist and a senior fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies in Singapore. He is also a senior research fellow at the National University of Singapore’s Middle East Institute and co-director of the University of Wuerzburg’s Institute of Fan Culture in Germany.

Tuesday, July 28, 2020

Breaking with the past: China hints at greater political engagement in the Middle East

By James M. Dorsey

A podcast version of this story is available on Soundcloud, Itunes, Spotify, Stitcher, TuneIn, Spreaker, Pocket Casts, Tumblr, Podbean, Audecibel, Patreon and Castbox.

China is contemplating greater political engagement in the Middle East in what would constitute a break with its longstanding effort to avoid being sucked into the region’s myriad conflicts and a bid to counter mounting US pressure to force Gulf states to curtail relations with the People’s Republic.

Prominent Chinese scholars, close to the government in Beijing, have increasingly hinted in recent weeks at a possible policy change in public statements and writings. The hints come as the reliability of the United States as a regional security guarantor is increasingly being questioned.

They also coincide with mounting tensions between the United States and China that have sparked US pressure on countries it considers allies, partners and/or friends to limit their technology cooperation with the People’s Republic.

Scholars Sun Degang and Wu Sike, in the most explicit indication of a possible policy shift, argued in an article published this month in a respected Chinese journal, that the Middle East was a “key region in big power diplomacy with Chinese characteristics in a new era.”

Messrs. Sun and Wu suggested that Chinese characteristics would involve “seeking common ground while reserving differences,” a formula that implies conflict management rather than conflict resolution.

The scholars said Chinese engagement in Middle Eastern security would seek to build an inclusive and shared regional collective security mechanism based on fairness, justice, multilateralism, comprehensive governance, and the containment of differences.

The article followed remarks by Niu Xinchun, director of Middle East studies at China Institutes of Contemporary International Relations (CICIR), widely viewed as China’s most influential think tank, suggesting that China’s interest in the Middle East was waning.

“For China, the Middle East is always on the very distant backburner of China’s strategic global strategies … Covid-19, combined with the oil price crisis, will dramatically change the Middle East. 

(This) will change China’s investment model in the Middle East,” Mr. Niu said.
Analysts read Mr. Niu’s comments as advising Gulf states that increasingly are walking a tightrope between Washington and Beijing to dial down tensions with Iran to a degree that differences become manageable.

That would have to involve some kind of regional agreement on non-aggression that would include rather than exclude Iran as outlined in a Russian proposal to rejigger the Gulf’s security architecture that has been cautiously endorsed by China.

“Beijing has indeed become more concerned about the stability of Middle Eastern regimes. Its growing regional interests combined with its BRI (Belt and Road Initiative) ambitions underscore that Middle East stability, particularly in the Persian Gulf, is now a matter of strategic concern for China,” said Mordechai Chaziza, an expert on China-Middle East relations.

Chinese and Russian preference for a rejiggering of the Gulf’s security architecture based on a regional non-aggression pact stroke with options being weighed by the Trump administration.

“One option that was considered recently is a mutual pact of non-aggression… Its not a new idea… In (19)95 something similar was tried between Saudi and Iran. It kept the peace for quite some years,” said Kirsten Fontenrose, a prominent Atlantic Council scholar who served as senior director for the Gulf on President Donald J. Trump’s National Security Council.

Mounting tension between the United States and China makes it more urgent for Beijing to act on its concerns.

Senior Trump administration officials as well as those like Ms. Fontenrose, who recently left government service, are laying out how the United States wants its Middle Eastern partners to structure their relationships with China.

US Assistant Secretary of State for Near Eastern Affairs David Schenker recently said the United States had advised its Middle Eastern partners to take “a careful look at investment, major contracts and infrastructure projects.”

He warned that certain engagements with China could “come at the expense of the region’s prosperity, stability, fiscal viability and longstanding relationship with the United States.”

Ms. Fontenrose cautioned that “the Middle East has got to understand that this is the way the US sees that part of the world and that if you become their best friend…then that’s going to be a challenge to our relationship… Today, there doesn’t appear that there is any room for nuance or any grey space. Its a us or them.”

A recent US decision to no longer allow dependents to accompany US personnel assigned to the Gulf was intended to send the region a message.

The message, Ms. Fontenrose said, was: “We’re not going to invest in you that strongly. We’re not going to send families out for years if you in effect are going to become best friends with our greatest adversary.”

Serving and former US officials said pressure on Gulf states was likely to mount and could involve US ultimatums and quid pro quo responses.

Our partners “need to know what our red lines…and what that means. If you do purchase this, we will withdraw this,” Ms. Fontenrose said.

Greater Chinese political engagement that could contribute to a reduction of regional tensions would first and foremost serve to protect Chinese interests.

China, however, also appears to be debating whether it could help countering US efforts to force Gulf states to restructure their relations with the People’s Republic.

That is likely to be a long shot in an environment in which the United States appears to have opted for confrontation and in which distrust and suspicion rather than search for common ground is the name of the game.

Writing in Chinese Communist party newspaper Global Times, Wei Zongyou, a scholar who studies the United States, suggested recently that “the future trajectory of China-US relations depends on how the two interact rather than the US one-sidedly. China can still seek strategic initiatives.”

Dr. James M. Dorsey is an award-winning journalist and a senior fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies in Singapore. He is also a senior research fellow at the National University of Singapore’s Middle East Institute and co-director of the University of Wuerzburg’s Institute of Fan Culture in Germany.

Saturday, July 25, 2020

JMD on NBN: The Gulf Region and Israel by Sigurd Neubauer


Old Struggles, New Alliances


July 21, 2020 James M. Dorsey

Gulf scholar Sigurd Neubauer’s The Gulf Region and Israel: Old Struggles, New Alliances makes a significant contribution to our understanding of what drives shifting alliances in the Middle East, an ever more volatile part of the world.

Shunned by Arab states for much of its existence, Israel has become in recent years a key factor in efforts by Gulf states to punch above their weight, shape the greater Middle East in their mould, box in countries like Iran and Turkey, and manage their reputations in Washington and ties to the United States.

A keen student of the region, Neubauer clearly lays out the limitations of burgeoning alliances in the absence of the resolution of the Middle East’s myriad conflicts among which are the dispute between Israelis and Palestinians and the rift between Gulf states.

In doing so, he has written an easily accessible book that is must read for anyone, even those with only a cursory interest in a part of the world that too often impacts the lives of those far beyond its boundaries.

Sigurd Neubauer is an internationally recognized authority on the Gulf Cooperation Council (GCC), Persian Gulf Security, U.S.-Arab relations, Middle East politics, Arab-Israeli relations, Afghanistan, and U.S. defense industry. His expertise also includes NATO, Norwegian defense policy and transatlantic relations.

James M. Dorsey is a senior fellow at Singapore’s S. Rajaratnam School of International Studies, adjunct senior fellow at the National University of Singapore’s Middle East Institute and the author of the globally syndicated column and blog, The Turbulent World of Middle East Soccer.

Wednesday, July 22, 2020

Flying Under the Radar: Iranian Alternatives to Suez and Belt and Road

by James M. Dorsey | Jul 21, 2020

An initial version of this story was first published in Inside Arabia

A podcast version of this story is available on Soundcloud, Itunes, Spotify, Stitcher, TuneIn, Spreaker, Pocket Casts, Tumblr, Podbean, Audecibel, Patreon and Castbox.

Iran, together with India and Russia, is pushing forward with a sea and rail corridor that could substantially reduce the time and cost of shipping goods from India to Europe. If successful, the corridor could challenge the Suez Canal’s primacy and give Iran a significant advantage as its rivalry with Saudi Arabia and the United Arab Emirates plays out in Central Asia.

Islamic Republic of Iran Railways (RAI) is the national state-owned railway system of Iran (Photo courtesy Railway Gazette International)

As Eurasia’s geopolitical sands shift, Iran is touting a sea and rail hook-up involving Iranian, Russian, and Indian ports that would link the sub-continent to northern Europe as a viable alternative to Egypt’s Suez Canal and addition to China’s Belt and Road Initiative.

Iranian and Indian officials suggest the route would significantly cut shipping time and costs from India to Europe. Senior Indian Commerce Ministry official B B Swain said the hook up would reduce travel distance by 40 and cost by 30 percent.

The Iranian-Indian-Russian push is based on a two-decades old agreement with Russia and India to establish an International North-South Transport Corridor (INSTC) as well as more recent free trade agreements concluded by the Russia-dominated Eurasian Economic Union (EAEU) with Iran and Singapore.

The agreements have fuelled Central, South, and Southeast Asian interest in the corridor even if the EAEU itself groups only a handful of countries: Russia, Kazakhstan, Belarus, Armenia, and Kyrgyzstan.

Exploiting the momentum, Russia has been nudging India to sign its own free trade agreement with the EAEU while the grouping is discussing an accord with the ten-member Association of Southeast Asian Nations (ASEAN).

If successful, the Iranian push, backed by Russia and India, would anchor attempts by Iran to project itself as opposed to Saudi Arabia and the United Arab Emirates as the key Middle Eastern player in Russian and Chinese ploys for regional dominance.

Leveraging geography and Central Asian distrust of past Saudi promotion of its ultra-conservative strand of Islam, Iran expects that kickstarting INSTC will give it a significant boost in its competition with the kingdom and the Emirates for the region’s hearts and minds.

INSTC would also strengthen Iran’s position as a key node in the Belt and Road on the back of a two-year old rail link between western China and Tehran that runs across Kazakhstan, Uzbekistan and Turkmenistan.

Map of North South Transport Corridor (NSTC) from India to Europe

India’s ambassador to Russia, D B Venkatesh Varma, told a webinar hosted by the Federation of Indian Chambers of Industry and Commerce that he expected to bring shipping and insurance companies as well as other businesses and stakeholders together to advance the INSTC.

The Iranian-Indian-Russian push suggests that Iran is playing multiple cards in the geopolitical jockeying for the future of Eurasia amid much speculation about a draft Iranian proposal for a 25-year strategic partnership with Beijing that if agreed and implemented would inextricably hook the Islamic republic to China.

The INSTC would link Jawaharlal Nehru Port, India’s largest container port east of Mumbai, through the Iranian deep-sea port of Chabahar on the Gulf of Oman, funded by India to bypass Pakistan, and its Caspian Sea port of Bandar-e-Anzali to Russia’s Volga River harbour of Astrakhan and onwards by rail to Europe.

Suez Canal Authority spokesman George Safwat dismisses assertions by Iranian and Russian officials that the link would cut shipping time from 40 days through the Suez Canal to somewhere between 25 and 28 days.

Speaking to Al-Monitor, Mr. Safwat said it takes only 19 days for a container shipped from India through the Suez Canal to reach the German port city of Hamburg.

A search on Searates, Dubai ports management company DP World’s search engine for shipping times puts the transit time at 21 days.

Mr. Safwat further insisted that INSTC would be unable to match the Suez Canal’s capacity to accommodate more than one billion tons of cargo a year.

The Iranian push was boosted in March by an agreement between Russia and India that would enable the shipment of goods through the corridor on a single invoice within a matter of months.

“Within three months, traders from India and Russia could move goods between the two countries through Iran,” said V. Kalyana Rama, the chairman of India’s state-owned Container Corporation (Concor).

Indian sources close to the Chabahar project said in interviews that the ability to issue one bill of lading that would allow exporters to get a bank letter of credit coupled with an agreement by state-owned Russian Railways (RZD) to act as the carrier had removed key obstacles for INSTC.

The sources said shipping costs were likely to be pushed upwards by the fact that much of the cargo traffic would be originating in India rather than destined for India. “Empty containers on one leg adds to the freight cost,” one source said.

The Russia-India agreement nevertheless takes on added significance as countries seek to diversify their supply chains after the experience of bottlenecks during the coronavirus pandemic.

If successful, the corridor could benefit men like Adar Poonawalla whose Serum Institute of India is the world’s largest vaccine manufacturer.

It may however not all be smooth sailing.

Chabahar, located in the Iranian province of Sistan and Baluchistan, is not immune to the fallout of renewed Baloch nationalist violence in neighbouring Pakistan.

The violence, effecting investment in Gwadar, the Chinese backed port 70 kilometres down the coast in the Pakistani province of Balochistan, may give Chabahar a leg up but raises the spectre of proxy battles with Saudi Arabia and India suspected of supporting the nationalists for different reasons. Saudi support targets Iran while India’s focus is Pakistan, it’s longstanding nemesis.

In a further twist, Iran this week denied Indian media reports that it had dropped India as a partner in the development of a rail line from Chabahar to the border with Afghanistan because of delays in Indian funding.

Iran’s IRNA news agency, however, quoted Farhad Montaser, an official of the country’s Ports and Maritime Organization, as saying that Iran and India had failed to agree on Indian participation in developing Chabahar’s railway infrastructure during the original talks that secured Indian support for the port.

This would have included a 1,000-kilometre line to Sarakhs on the Iranian border with Turkmenistan. Iran has said it would fund the construction of railway infrastructure.

Indian analysts said in interviews that the government in Delhi had put participation by a state-owned Indian infrastructure company on the backburner because it may violate harsh US economic sanctions against Iran.

"We are very much in the game, but progress is slow due to the current political environment," India’s Zeenews quoted government sources as saying.

That offers Gulf states at best temporary consolation. Uncertainty about the outcome of the November election in the United States that could sweep presumptive Democratic presidential candidate Joe Biden into office holds out the prospect of an administration that would be more critical of Saudi policies and more willing to return to negotiations with Iran.

Dr. James M. Dorsey is an award-winning journalist and a senior fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies in Singapore. He is also a senior research fellow at the National University of Singapore’s Middle East Institute and co-director of the University of Wuerzburg’s Institute of Fan Culture in Germany.

Friday, July 17, 2020

The China-Iran Deal: It’s not about business but geopolitical poker

By James M. Dorsey

A podcast version of this story is available on Soundcloud, Itunes, Spotify, Stitcher, TuneIn, Spreaker, Pocket Casts, Tumblr, Podbean, Audecibel, Patreon and Castbox.

Hobbled by harsh US sanctions and a global economic downturn, Iran has discovered a new opportunity: hot air that carries messages to its opponents. China, albeit far less economically impaired, sees virtue in the business too.

A proposed 25-year humongous China-Iran cooperation deal has proven to be good business. Realms of media reporting and analysis and commentary by pundits serves to ensure that the two countries’ messages are delivered loud and clear.

The two countries have provided the evidence to keep the story alive: Numerous agreements signed by Presidents Xi Jinping and Hassan Rouhani during the Chinese leader’s visit to the Middle East in 2016 would, if implemented, expand economic relations between the two countries by a factor of ten to $US600 billion and significantly enhance military cooperation.

The agreements, signalling a potential Chinese tilt towards Iran, were concluded at the time in anticipation of significant lifting of some and easing of other US sanctions as part of the 2015 international agreement that curbed Iran’s nuclear program.

Those hopes were dashed when US President Donald J. Trump pulled out of the agreement in 2018 and returned to the warpath with the introduction of crippling sanctions. China has since by and large abided by the US restrictions.

Iran appeared this month to put flesh on the skeleton with the leaking of a purported final draft of a sweeping 25-year partnership agreement that envisions up to US$400 billion in Chinese investment to develop Iran’s oil, gas, and transportation sectors.

The problem is that there is nothing final about the draft and that the draft constitutes little more than the floating of a trial balloon.

That is just fine as far as Tehran and Beijing are concerned even if both countries would likely opt to pursue cooperation on a far grander scale once geopolitical circumstances were more conducive.

For now, both countries have suggested that there is a long negotiation path to conclusion of an agreement, let alone implementation.

That does not mean that there is no upside to be had immediately.

By fuelling talk of an imminent agreement, Iran is signalling Europe and a potential Biden administration after the United States’ November presidential election that US and European policies threaten to drive the Islamic republic into the arms of China.

It also allowed Iran to take a swipe at Saudi Arabia, suggesting that when the chips are down it will be Iran rather than the kingdom that China turns to.

China capitalized on Iran’s hot air business by allowing it to flourish and boost messages Beijing was directing towards Washington and Riyadh.

Officially, China limited itself to a non-committal on-the-record reaction and low-key semi-official commentary.

Foreign Ministry spokesman Zhao Lijian, a wolf warrior or exponent of China’s newly adopted more assertive and aggressive approach towards diplomacy, was exceptionally diplomatic in his comment.  

“China and Iran enjoy traditional friendship, and the two sides have been in communication on the development of bilateral relations. We stand ready to work with Iran to steadily advance practical cooperation,” Mr. Zhao said.

Writing in the Shanghai Observer, a secondary Communist party newspaper, Middle East scholar Fan Hongda, argued that an agreement, though nowhere close to implementation, highlighted “an important moment of development” at a time that US–Chinese tensions allowed Beijing to pay less heed to American policies.

In saying so, Mr. Fan was echoing China’s warning that the United States was putting much at risk by retching up tensions between the world’s two largest economies and could push China to the point where it no longer regards the potential cost of countering US policy as too high.

China’s response also amplified its message to Gulf states echoed by scholars with close ties to the government that the People’s Republic’s interest in the Middle East was not a strategic priority.

These scholars suggest that the economic downturn, which impacts China’s economic ties to the region, could persuade Beijing to further limit its exposure if Gulf states failed to find a way to come to grips with Iran in way that would dial down tensions.

“For China, the Middle East is always on the very distant backburner of China’s strategic global strategies … Covid-19, combined with the oil price crisis, will dramatically change the Middle East. (This) will change China’s investment model in the Middle East,” said Niu Xinchun, director of Middle East studies at China Institutes of Contemporary International Relations (CICIR), widely viewed as China’s most influential think tank.

Iran this month, in an interesting twist that could indicate China’s appetite to play the Iranian card any time soon, dropped India as a partner in the development of a rail line from its Indian-backed deep-sea port of Chabahar because of delays in Indian funding. The Trump administration had exempted Chabahar from its sanctions regime.

Iranian Transport and Urban Development Minister Mohammad Eslami last week inaugurated the track-laying for the first 628 kilometres of the line that ultimately will link Chabahar to Afghanistan.

Iranian officials said Iran would fund the rail line itself but both China and Iran have repeatedly expressed in interest in linking Chabahar to Gwadar, the Chinese-backed Arabian Sea port, some 70 kilometres down the coast in Pakistan.

The economic downturn as a result of the coronavirus pandemic has revived doubts about the viability of Gwadar, a crown jewel of the approximately US$60 billion China Pakistan Economic Corridor (CPEC), China’s single largest Belt and Road-related investment.

In an indication that the United States does not see a potentially game-changing China-Iran deal as imminent, the Trump administration has so far stuck to reiterating its long-standing policy.

“The United States will continue to impose costs on Chinese companies that aid Iran, the world’s largest state sponsor of terrorism,” said a US State Department spokeswoman.  

Dr. James M. Dorsey is an award-winning journalist and a senior fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies in Singapore. He is also a senior research fellow at the National University of Singapore’s Middle East Institute and co-director of the University of Wuerzburg’s Institute of Fan Culture in Germany.