April 18, 2013

Military-Economic Component of the Policy of Monarchies of the Persian Gulf. Part 3 "the Suez Canal in the Plans of Arab Monarchs"

Part 2  “USA - geopolitical retreat”

Part 1 "The Persian Gulf since the end of the last millennium has firmly taken the position of an "explosive site of geopolitical reset"


Part 3 "The Suez Canal in the plans of Arab monarchs"

Revolutions often begin like a holiday, people are in euphoria from the participation in something great and important. Once the regime is overthrown, there comes a pause – what to do next? And this is where the most interesting begins. The fruit of a revolution are enjoyed not by those who self-sacrificed and “threw themselves under tanks”. It is already no secret that the most noticeable consequence of the "Arab Spring" or, as it is also called, "Arab Awakening", has been a significant strengthening of the political positions of radical Islam almost in the entire Middle East and North Africa, particularly where there was a change of ruling regimes - Tunisia, Libya, Egypt and Yemen.

The League of Arab States
The League of Arab States. The influence of  Pro-American heavyweights in LAS –Qatar, United Arab Emirates and Saudi Arabia- after the series of revolutions has increased

Interested in this are Arab monarchies of the Persian Gulf, mostly Saudi Arabia and Qatar, leading in the Arab League and now considering overthrowing of B. Assad's regime in Syria as an important step towards weakening of the hostile to them Iran, removing the Shia influence and the threat of Shiites opposing the Sunni monarchies, as it is happening now in Bahrain. Saudi Arabia, Qatar and other Arab oil-producing states of the Persian Gulf have long been financing and arming Islamist parties and groups in order to strengthen positions of conservative Islam in the Arab world and to counteract Shiite (read Iran) expansion. The Arabian Peninsula states only in the last few years transferred to the fundamentalist Islamist organizations a fantastic amount of money-more than 100 billion US dollars.

Monarchies are also actively using the "Arab Spring" to increase their influence in the Arab-Muslim world. Now it has become particularly evident in Egypt, which, until recently, had been considered one of the most influential countries in the Middle East. But those times, it seems, are in the past. The Emirate of Qatar, Kingdom of Saudi Arabia and the United Arab Emirates are more and more actively trying to take control of key spheres of the Egyptian economy, including the oil and gas industry and the Suez Canal. It is noteworthy that in the VII century, the Canal was completely destroyed by Arabs in a series of wars of conquest to spread Islam. And now, it seems that the Arabs have decided to lay their hands on the Canal, using the difficult economic situation in Egypt.


Суэцкий каналThe Suez Canal is a lockless navigable canal in Egypt, connecting the Mediterranean and Red Seas. The Canal Zone is considered to be a conditional boundary between two continents, Africa and Eurasia. The Canal is situated to the West of the Sinai Peninsula, has a length of 163 km, width of 300 meters and depth of 20 meters. The Canal is located between Port Said at the Mediterranean Sea and Suez at the Red Sea. The shortest water way between the Indian Ocean and the Mediterranean area in the Atlantic Ocean (alternative transport route), is 8 thousand kilometers long.

Construction of the Canal, or rather the idea of ​​connecting the Red Sea and the Mediterranean Sea occurred to kings of the ancient Egypt. The first opening of the Canal took place during the reign of Necho II in the VII- VI centuries BC. For unknown reasons, the construction then stopped and was completed only 100 years later, during the reign of King Darius.

Суэцкий каналFor hundreds of years, the Canal had been getting shallower and needed constant cleaning, without bringing the expected economic effect. In the VII century, the Canal was completely destroyed by Arabs. The Suez Canal was re-opened only on the 17th of November, 1869.

Profits from the operation of the Suez Canal are one of the main income items of the Egyptian budget. Annually 5.6 Billion US dollars come as tax income from passing through the Suez Canal ships.

Not so long ago, the Egyptian authorities took a decision to increase the tax on the passage of ships through the Suez Canal by 2-5%. This Decree will enter into force on the 1st of May, 2013. The size of the tax increase will depend on classes of ships and cargo they carry. Five percent increase in the duty is expected for tankers transporting crude oil, petroleum products and natural gas. A 2.5% increase - for passage through the Canal of ships carrying cars and 3% - for all other cargo ships.


Egyptian President Mohammed Mursi
Egyptian President  Mohammed Mursi is not making it a secret that the country’s economy needs to be rescued http://i-r-p.ru/page/

Even the Egyptian President Mohamed Morsi does not hide the fact that the economy must be rescued. At present, the country urgently needs about 45 billion US dollars to support the economy. Otherwise, at the end of 2013 - beginning of 2014, it can become a bankrupt. And though it is still far from being recognized a bankrupt, worsening of economic and financial indexes of Egypt has reinforced the reluctance of foreign investors to invest in its economy.

An alternative route around Africa
An alternative route around Africa is 2700 nautical miles longer

Of particular importance the Suez Canal is becoming due to transportation of oil and gas from the Persian Gulf to the countries of the West. An alternative route for oil and gas tankers around Africa is 2,700 nautical miles longer and therefore the cost of delivery of goods along this path significantly goes up. In the long term the value of the Canal for international trade may further increase, for example, in case if, as planned, it is upgraded for passage of supertankers, and if the international community finds the strength to solve the problem of Somali piracy.

Of the Trio of monarchies, the most active is Qatar, until recently, having been the main foreign sponsor of the Egyptian authorities, having provided them with more than 5 billion US dollars in aid. Besides, the Qatari Emir announced his intention to invest in the next five years, another 18 billion US dollars into tourism, gas and oil production, housing and capital construction, as well as into processing of hydrocarbons.

The Emir of Qatar, Sheikh Hamad bin Khalifa al-Thani
The Emir of Qatar, Sheikh Hamad bin Khalifa al-Thani, announced about his intention  to invest, over the next five years, another 18 billion dollars

However, such cooperation has not led to transfer of key sectors of the economy of Egypt to Qatar yet. Such a conclusion can be drawn from the conflict that happened between Egyptian President Mohamed Morsi and the Emir Hamad bin Khalifa at-Thani in March of this year. The Egyptian President flatly refused to discuss the request of Qatar on the possible partial assignment of ownership of the Suez Canal, as well as real estate located on both sides of it, including land and buildings. It is important to note that similar attempts had already been made before, both, by Saudi Arabia and the United Arab Emirates. The official Cairo regarded them as an attempt to infringe the sovereignty of his country. At this, it made it clear to the Arab monarchies that the Egyptian society just will not accept it. Egyptian authorities realize that in far future, under conditions unfavorable for Cairo, the deal can take place, and then a situation can be such that external forces will be able to have a significant influence on the passage of ships through the Suez Canal. In this case, Egypt will lose one of the few major asset with which it can still count on receiving foreign investments on favorable for itself terms.

As for Qatar, getting even a tiny part of the shares of this project is of special significance to at-Thani. Thus, while in 2011 Qatar sold abroad 10 million tons of liquefied natural gas (LNG), in 2013, according to forecasts, the figures will rise to 12 million tons. Besides, Qatar already supplies foreign markets with around 1 million tons of oil products. Taking into consideration the pace of development of the gas producing industry, as well as oil- and gas- processing and oil-chemical industries of Qatar, the volumes of their production in the nearest years will keep significantly increasing. For example, it is planned to increase production of oil-chemicals from 9.2 million tons (2011) to 23 million tons in 2020. For this purpose 25 billion US dollars will be additionally invested into the development of this industry.

At this, despite the fact that the share of Asian countries in the export and import of Qatar keeps growing in parallel with falling of the share of Western countries in it, the latter still continue to be major trading partners. So, the Suez Canal, in view of the expected increase in Qatari exports to the European market, is becoming exclusively important for Doha.

But there is one more factor that should be considered when forecasting possible actions of the Emir of Qatar in realization of his ambitious plans for the Suez Canal. This factor is the "Muslim Brotherhood", or rather a close connection of Qatar with this organization.

"Muslim Brotherhood"
"Muslim Brotherhood" are beginning to create  serious foreign policy problems to Egyptian President Mohamed Morsi - a native of this movement

Despite the fact that over the last decades the "Brothers" have had their headquarters and offices in Europe, in London included, and a number of their prominent figures have worked closely with the British and American Intelligence Services, they obviously can’t be called pro-Western. Therefore, taking into consideration the previously established contacts of Qatar with Egyptian Muslim Brothers, those are Qatar’s positions that appear most promising for capturing leading positions in the Egyptian economy.

As to the positions of Saudi Arabia, in view of old political contradictions between its leadership and key representatives of this movement, at the moment they seem weaker, as Riyadh, until recently, had been relying in inter-Egyptian struggle on various Salafi groups, which was a mistake. However, even this influence is not absolute in view of the fact that some of these groups, again, are financed by the same Qatar.

The weakest positions in the struggle for the Egyptian "piece of cake" are those of the UAE. Qatar and Saudi Arabia have far greater financial and information capabilities, as well as more serious intelligence resources. The Emirates, unlike them, until recently, had no serious influence on the current political elite of Egypt, or on radical Islamist groups acting there. At this, the Emirates managed to sharply conflict with representatives of the same "Muslim Brotherhood", which are now the ruling party in Egypt.

Not in the last turn, it was caused by the actions of the “Brothers” themselves. Thus, in late December 2012 - early January 2013, the UAE Special Services announced a disclosure of a plot involving representatives of this movement. A whole group of Egyptian citizens were arrested in Dubai, and, according to the reaction of the official Egypt, at least some of the arrested did belong to the “Muslim Brotherhood”. This event, widely spread by local media, topped the UAE authorities’ information campaign for discrediting the movement. It is important to note that this was far not the first arrest. Earlier, in 2011-2012, at the territory of the Emirates, Special Services did arrest some Saudi citizens , belonging to the "brothers" and supposedly preparing a coup.

Undoubtedly, the growing influence of Qatar is also being caused by further islamization of the region, carried out by Qatar itself and by Saudi Arabia. Both countries continue to fund radical Islamist groups seeking the overthrow of civil regimes in a number of states of the region, on which they have not only financial, but also ideological influence. It is no coincidence that Qatar competes with other sponsors of Palestinian organizations, actively struggling against Israel, while trying to appear the main defender of Islamic values ​​in the region, and, in fact, is now trying to form its own anti-Israel course of the Arab-Muslim world in general. It was Qatar, not Iran, as they speak out in the West. Why is that? Probably because Qatar is an ally and partner of Washington!

On the other hand, the Egyptian crisis has once again reflected the increased competition between Saudi Arabia and Qatar. They use the "Arab Spring" for actual removal of the strongest competitors for influence in the Arab world such as Egypt and Syria, strengthening their own positions in the League of Arab States (LAS) and getting real levers for pressure on countries of the region. After the overthrow of secular regimes in the unwanted countries, the final result may be realization of their own Islamic project that pursues the creation of a sole Sunni area from the Atlantic to the Indian Ocean, a kind of “New Caliphate”.

Qatari diplomacy promotes U.S. interests
Qatari diplomacy promotes U.S. interests: American  military - the main guarantor of the security of this small and rich Persian monarchy монархии http://russiancouncil.ru/

In this situation, it is important enough to know the West’s attitude to these claims on the Suez Canal. Especially as Qatar and Saudi Arabia, though being regional US satellites, are playing their own game. In this connection I also want to point out that not all of the processes in the Arab world, associated with growing activity of Islamists, Jihadists, the Wahhabists and increase of hydrocarbon prices, connected with continuing instability in the Middle East, meet American interests. So far the West does not show too much concern with such activity of Wahhabists of Qatar and Saudi Arabia, because of the serious dependence of the main participants of the "Battle of the Suez Canal" on Paris, and especially on Washington, in terms of military-technical cooperation. Without weapons and the West’s protection, they simply could not exist, taking into consideration the former Iraqi, and now Iranian ambitions for leadership in the region. Especially as the Armed Forces of Arab monarchies of the Persian Gulf, in fact, are only symbolic. For example, the same Qatar, trying to lead the Arab world, has the Armed Forces numbering just about 12,000 people. No wonder, that in these countries there are numerous US military bases, and in the UAE there are also French ones. That is why the West is counting on the fact that, in case of necessity, and in the presence of the "Iranian threat", both, Qatar, and Saudi Arabia could easily be "put in the stall."

Unrest in Egypt ‘s Port -Said
Unrest in Egypt ‘s Port -Said and attempts to block sailing through  the Suez Canal http://egypt_Kanal_ru.focus.lv

On the other hand, in view of the recent unrest in the Egyptian Port Said, and the attempts to block traffic through the Suez Canal, the establishment of a more serious control by the forces of the Arab allies of the West, guaranteeing smooth functioning of this object, at this stage, meets interests of both, Brussels and Washington. The refusal of the Egyptian leadership to make any agreements on the Suez Canal does not mean that they will not be signed in future. Most likely, the disastrous situation in the economy in the coming years could lead to a transition of at least part of the Egyptian assets into the hands of foreign owners. The only question is, into whose hands and how soon.

It won’t be a mistake to say that Iran, under economic sanctions and in a pretty hostile environment of Sunni states of the Persian Gulf, is frantically seeking a way out of this situation. As one of such ways, Tehran really considers a virtual so far project called "Eurasian Union". Tehran considers the Union not as just a potential strategic partner, but also as the most productive form of geopolitical proper integration of the Islamic Republic in a new system of international institutions.

At a recent Conference on Eurasian issues, the Iranian Foreign Minister Ali Akbar Salehi said that “Eurasian cooperation is getting twice the value and regularizing it can increase the contribution of this region to the formation of tomorrow's world and secure the interests of the region”. Today, Iran's Foreign Ministry is actively studying possible scenarios of participation of the country in the new formation.

In fact, Iran is ready to become the second pole of the Eurasian Union, which will take over not only the development of the markets that have opened, but also difficulties of organizational and financial expands during the first and subsequent stages of the new entity, the draft of which has already caused not just criticism, but open aggression on the part of some Western partners of Russia.

Attempts to artificially isolate Iran, being taken by Western countries, of course, complicate the situation. Iran's participation in the project, the author of which is Russia, may become not only a strong irritant, but another reason for the outbreak of political and economic blackmail. We should be aware that the first steps for involving Iran in the Eurasian project will automatically launch new aggressive counter-projects.

Participation of Iran, Kazakhstan, and Russia in the integration body will allow controlling a huge total energy supply that with proper interaction and using advantages will bring many regions of the participating countries to a new level of development. Proper integration of Iran in trade and political relations with a number of countries in the international community will make it possible to complete the "nuclear epic" and remove the growing tension around the Islamic Republic.

There is another factor which Iran is actively trying to exploit. This factor is a «catastrophic shortage of energy" in Pakistan, India and China. What are we talking about? We are talking about Iran-Pakistan and then India gas pipeline.

Iran-Pakistan-India gas pipelin
Iran-Pakistan-India gas pipeline. The Iranian part (1100 km)of the gas pipeline is actually completed

The idea of creation of the Iran-Pakistan-India (IPI) gas pipeline was put forward by Pakistani engineers in 1950 for the “development of the economy in the region and reducing tension between the two countries”.

The Iranian part of the pipeline making 1,100 km is almost complete, it is necessary to finish only about 100 km, and “3.6 million cubic meters of Iranian gas per day will solve most of gas problems and cover Pakistan’s shortage of electricity”.

In March 2013 Pakistan began the construction of its part of the gas pipeline. The construction of 780 km of the gas pipeline at the territory of Pakistan will cost it 1.5 billion dollars, of which 500 million dollars Iran has given as a loan. The implementation of the entire project of the 2700 km long gas pipeline implies the extension to the territory of India and will cost the participating countries 7 billion US dollars. And from there, China is at arm’s length. With the commissioning of the gas pipeline, the West and the United States will not be able to control it. The only thing they will be able to do is to try and frighten Pakistan, India and China with sanctions, but they will hardly succeed in that.

Pakistan did not refuse to participate in the project, especially on the eve of the Presidential elections in May of this year. Iranian gas will provide Pakistan with electricity and jobs, and plants and factories will not get closed. Besides, the USA will need to monitor the situation in Afghanistan even after the withdrawal of US troops from that country, and to do this without Pakistan would be problematic.

Washington should fear losing Pakistan as an ally, otherwise the Iran-India unity, as they say in the West, “will take the driver's seat”. By the way, in connection with India it should be mentioned that when Delhi listened to Washington it, in 2009, rejected Tehran’s proposal to build a gas pipeline .Now, apparently, the smell of oil and gas finally awakened the interest of India in this project, which promises it great dividends.

Prospects and forecasts of land supplies of energy carriers to China
Prospects and forecasts of land supplies of energy carriers to China:
It is likely that the thread of the pipeline will run parallel to the Karakorum highway, and Iranian oil will flow to western Chinahttp://etoruskiy.livejournal.com/

China also has its own interest, and will not miss its chance. Beijing signed with Islamabad a 4 billion contract for construction of the largest to date, oil refinery at Gwadar (South-Western province of Baluchistan, Pakistan). Today Gwadar is famous for the fact that it is a deep-water port, by the way, also built by the Chinese.

But that's not all. In this connection, the next step of Beijing can be traced- Construction of oil pipeline from Gwadar-Xinjiang-Uighur Autonomous Region (XUAR) – Region in the North-West of China. It is likely that the thread of the pipeline will run parallel to the Karakorum highway, and Iranian oil will flow to western China having left aside the Persian Gulf with Hormuz problems.

So, the port of Gwadar becomes of essential geopolitical and geo-economic importance. This will be the oil - gas key of Pakistan, opening the Iran-China energy corridor. By the way, it seems that this is a new incarnation of the Great Silk Road.

Iran's success in South Asia is obvious, and contrasts sharply with certain problems in South-Western Asia. The fact is that the world's largest gas field, "South Pars", Iran has to share with Qatar. Between Tehran and Doha there exist exceptionally cunningly devised relations, in which cooperation and competition are closely intertwined.

Gwadar - the city and administrative center of the district, located in the South-Western Pakistani province of Baluchistan Белуджистан http://wikimapia.org/

The key moment of Doha’s policy in the region is overthrowing the regime of Bashar Assad in Syria and preventing the construction of 10-billion-dollar Iran-Iraq-Syria gas pipeline, the agreement on which was reached by the parties in July 2011.

Turkey is also against that gas pipeline because it will pass by Ankara, which considers itself energy crossroads between East and West.

Unlike the IPI gas pipeline, Washington, having Turkey and Qatar as allies, can sabotage its construction. And this also means that Washington will be able to influence the region of "Four Seas" (the Caspian and the Black Sea, the Persian Gulf and the Eastern Mediterranean), in which Damascus sees itself as the key link. No wonder the Iran-Iraq-Syria gas pipeline is also called «gas pipeline of friendship", while in the West it is known solely as the «Islamic Gas Pipeline". Syria also plans, in case of implementation of the project, to extend the pipeline to Lebanon, and from there it is not far to the European energy market.

In the region of the "Four Seas" (the Caspian and the Black Sea, the Persian Gulf and the Eastern Mediterranean)
In the region of the "Four Seas" (the Caspian and the Black Sea, the Persian Gulf and the Eastern Mediterranean)
Damascus sees itself as a key link

This energy Solitaire is much trickier than it seems at first glance. Apart from Syria and Lebanon, by waters of the Eastern Mediterranean, are also washed Israel, Palestine, Cyprus and Egypt. At a certain scenario, all these gas importers can turn into exporters, and this already smells of big money.

Tel Aviv has a chance to get its share, and export gas to Turkey and Europe. This is confirmed by "suddenly warmer" relations with Turkey.

Damascus and Tehran, against the will of Washington, keep supporting Beirut. Damascus also supports Baghdad who wishes to bypass the Strait of Hormuz and to export oil and gas in exchange for "big" dollars. That is, in brief, what intricacies of the Iran-Iraq-Syria gas pipeline are about? Undoubtedly, Syria is a "red line" for Tehran. And now all the potential players are watching Qatar’s actions, trying to guess how far Doha is ready to follow Washington’s policy?

Iran’s advantage at the moment is its being ready for any development of the situation in the Middle East. We should not think that Iran relies only on Allah and just prays. Tehran is trying to somehow change where it can. In any case, Iran very sensitively perceives everything that happens around and takes measures in respond. Religious shade does exist but that does not mean that it clouds the eyes and minds of Iranian leaders.

Time will tell.

To be continued.