Iran-GCC ties: Middle ground

The six Gulf states may be taking a more circumspect stance over the rumbling Iranian nuclear issue than other global powers, but how much do they stand to lose should the situation escalate? Published in The Gulf, December 2011

When Iran’s president Mahmoud Ahmadinejad accused Yukiya Amano, director general of the International Atomic Energy Agency (IAEA), of being “a puppet of America”, it came as little surprise. He was speaking on 8 November, the day the IAEA released its latest report on Iran’s nuclear activities, setting off a renewed war of words.

Other Iranian officials described the report as “imbalanced, non-professional and politically-motivated”. Iran’s numerous critics, meanwhile, were quick to offer fresh reproaches. France’s foreign minister, Alain Juppé, said the details contained in the report “paint a picture which leaves little doubt as to Iran’s intentions” and promised France was ready to adopt “sanctions of an unprecedented scale”. EU foreign ministers are due to meet on 1 December to discuss, among other things, the imposition of tougher sanctions against Tehran.

Yet one group of countries has remained far more circumspect. None of the Gulf Co-operation Council (GCC) states want Iran to gain any more power or influence than it already has and they certainly don’t want Tehran to have a nuclear weapon, but in public at least they appear content to let others take the lead. “The GCC states have been unusually quiet, I expected more,” says David Roberts, deputy director of the Qatar office of the Royal United Services Institute, a defence think-tank.

They are likely to find it increasingly difficult to keep up that level of reticence, however, given the issues at hand. The IAEA said Iran has continued its uranium enrichment and heavy water activities, contrary to IAEA and UN Security Council resolutions, and added that there are troubling signs of a nuclear weapons programme. “The agency has serious concerns regarding possible military dimensions to Iran’s nuclear programme... Iran has carried out activities relevant to the development of a nuclear explosive device ... [and] some activities may still be ongoing,” said the report.

For the GCC, all this presents a dilemma. Relations between Iran and the six Gulf states are rarely good at the best of times and this year there have been several factors which have tested them even further. The uprising in Syria has seen Iran and the GCC on opposite sides of the fence. Earlier in the year, the GCC accused Iran of fomenting and supporting protest groups in Bahrain. Saudi Arabia has also accused Iran of meddling in Yemen and, in October, the US accused Tehran of plotting to assassinate Saudi Arabia’s ambassador in Washington. Iran’s growing influence in Iraq is a further source of tension.

Yet for all these problems, the GCC states find it hard to act as a group on the issue of Iran.

“The Gulf states are a very disparate bunch when it comes to Iran,” says Roberts. “Qatar’s usual policy is much more nuanced and infinitely less bellicose towards Iran than Saudi Arabia’s. Kuwait as always has a split personality, with people screaming from all sides in parliament. It ends up taking a diluted form of the Saudi line. Abu Dhabi is much more willing to follow Riyadh. Oman tries to do its own thing.”

Even if they could all agree a common policy stance, however, there are a limited number of tools the GCC can use when it comes to the three potential areas of engagement: diplomacy, sanctions and military pressure. The closest diplomatic links that Iran has are with Qatar and Oman. In both cases there are important strategic interests at stake. Iran shares a giant gas field with Qatar, which Doha calls the North Field and Tehran calls South Pars, while with Oman it has an interest in cooperating over the management of the Strait of Hormuz.

These communications channels can occasionally achieve things. In September Muscat helped with the release of two US hikers who had been held in Iran for more than two years on charges of spying. When it comes to its nuclear programme, however, Iran would almost certainly prefer to negotiate directly with the US, rather than use any Gulf intermediaries.

The GCC appears just as keen to use the diplomatic links it has to Washington. “There is a lot of pressure behind the scenes, primarily on the US and even words of support for Israel to confront Iran,” says Kaveh Ehsani, assistant professor at DePaul University in Chicago. “Various reports have come out, and I think they’re credible, that a lot of the pressure for confronting Iran that comes on the US and even encourages Israel, comes from the GCC countries.”

In terms of trade ties, the options are even more limited than the diplomatic channels. With the exception of Dubai, trade between the GCC and Iran is fairly meagre. According to figures from the UN Comtrade database, Iran imported $16.1 billion-worth of goods from the GCC in 2010 and exported $3.9 billion, but Dubai accounted for 97 per cent of these imports and 89 per cent of exports.

Even Dubai’s position is diminishing, however. Under US pressure, it has been gradually clamping down on Iranian-owned businesses that use its ports and airports. Iranian businessmen in Dubai report some displacement of activity to Turkey, Malaysia and elsewhere and international companies are also being affected.

Lord Lamont, chairman of the British Iranian Chamber of Commerce, explained how the US pressure works, during a speech to the International Institute for Strategic Studies (IISS) in London last month.

“The US is actually operating a system of trying to impose its own laws on other countries in an extra-territorial way,” he said. “The way this operates is the US Treasury, in ways it will not admit publically, actually goes and leans on banks who are financing ordinary day to day business, like possibly pistachios or carpets or any activity that would be perfectly legal, and says if you continue to finance this business with this company that is operating in Iran your bank cannot do any business in the US.”

Notwithstanding US pressure, the key sanctions regime for the Gulf states is that laid down by the UN Security Council. If further sanctions are agreed by the UN, then they will have little option but to cooperate, but that appears unlikely in the short-term.

Security Council members are divided on whether or not to pursue further sanctions. While the UK, US and France are in favour, Russia and China are not. The only Middle East country on the Security Council is Lebanon and, given the presence of Hezbollah in the coalition government in Beirut, it would be most unlikely to vote in favour of further sanctions.

“Lebanon certainly won’t vote for,” says Karim Makdisi, of the American University of Beirut. “They’ll probably vote against or abstain, depending on the pressure that they’re under.”

The third potential area of pressure on Iran is the most serious and unpredictable: military strikes. For now, the US is playing down the possibility of military action. US defense secretary Leon Panetta, at a press conference in Washington on 10 November, called for tougher economic and diplomatic pressures on Iran but said military action “ought to be a last resort”.

Israel has also been focusing on more indirect approaches, although the debate inside the county has been getting more strident. It is widely suspected of being behind the Stuxnet computer virus, a series of assassinations of Iranian nuclear scientists and the recent explosion at a military base close to Tehran which killed Brigadier General Hassan Moghaddam, a leading figure in the development of the country’s missile technology.

The policies of Israel or the US could quickly change, but all sides are keenly aware that it is impossible to know the full consequences of any strike. If any do go ahead, it will place the Gulf states in an uncomfortable position. While not everyone will be sorry to see their main regional rival being attacked, they will also be keenly aware of the potential costs.

“The military fallout is incalculable,” says one analyst. “Riyadh realises that all their oil assets are on the east coast, within easy targeting distance from Iran.”

Although the Gulf states have spent tens of billions of dollars building up their armed forces in recent years, that is unlikely to concern Iran too much, according to Ehsani.

“The great threat that Iran feels is primarily the US,” he says. “They’re basically surrounded by US military on all their borders. I don’t think they feel threatened by the GCC. The way they perceive the GCC states is places where they can fight a proxy war should it come to some kind of confrontation. I don’t think it will necessarily be a direct military attack where you can see the hand of Iran, but I think stirring local discontent, feeding it, arming it, helping organise it and radicalising it is a possibility,” he notes.

Of course, such events may never come to pass. For all the rhetoric that followed the release of the IAEA report, not everyone is convinced it provides a particularly strong case for military action. While it set out much detail, the report acknowledged Iran seems to have suspended a lot of its more contentious activities in 2003.

“There are a lot of questions that Iran has to answer out of the IAEA report,” said Lord Lamont at the IISS meeting. “This report raises some disturbing questions, but it does not provide a smoking gun.”

Having set off a war of words, the Gulf states must now hope that the IAEA’s report does not set off something far more serious.