Divesting from sectarianism: reimagining relations between Iran and the Arab Gulf States.

• Author: Beydoun, Khaled A.
• Position: REGIONAL SHIFTS - Report

Until recently, Iran has been economically isolated by way of sanctions, preempting investment opportunities with states allied with the United States. However, the Obama administration's recent effort towards economic normalization with Iran affords it with unprecedented commercial possibilities, and per the focus of this article, legalized commercial enterprising within Saudi Arabia, the United Arab Emirates, and other Gulf Cooperation Council (GCC) States--across sectarian tensions and fault lines. From both a legal and practical prism, this article investigates the recent lifting of sanctions, which opens the door for Iran's investment within neighboring states including the GCC. Subsequently, it analyzes how commercial investment and the reciprocal advancement of economic interests offers a promising pathway toward eroding political standoffs, economic inequities, and the politicization of sectarianism. In closing, the article addresses salient challenges that may hinder the potential of this economic rapprochement, and ways forward.

1. INTRODUCTION

   Sectarian tension is polarizing the Middle East like never before. Proxy wars pitting Iran, the Shiite hegemon, against the Sunni guard--Saudi Arabia and the Gulf states--are intensifying throughout the region. Both Iran and the Gulf States have exploited sectarianism to broaden their political spheres of influence in the region, and as a means of advancing their economic agendas. In short, sectarianism is realpolitik strategy and business strategy for states in the region.

   Until recently, Iran has been economically isolated by way of sanctions, preempting investment opportunities with states allied with the United States. However, the Obama administration's recent effort towards economic normalization with Iran affords it with unprecedented commercial possibilities and, per the focus of this article, legalized commercial enterprising within Saudi Arabia, the United Arab Emirates, and other Gulf Cooperation Council (GCC) States, across sectarian tensions and fault lines.

   The prospects for ameliorating sectarian tension and embedded political rivalry through commerce are undoubtedly considerable. As examined by political scientists and renowned economists, symbiotic advancement of economic interests is an effective means of forging better diplomatic relations and sustained alignment. Therefore, commercial investment stands as the optimal conduit toward divestment from sectarian tensions, and mitigating the direct, proxy, and collateral standoffs rooted in it.

   From both a legal and practical prism, this article investigates the recent lifting of significant sanctions between the international community and Iran, which opens the door for the latter's investment within neighboring states, including the GCC. Subsequently, it analyzes how commercial investment and the reciprocal advancement of economic interests offers a promising pathway toward eroding political standoffs, economic inequities, and the politicization of sectarianism. Thus, envisioning coordinating economic understanding and advancing the interests of states currently interlocked in sectarian strife as an alternative to the politics of sectarianism is the central focus of this article. In closing, the authors address salient challenges that may hinder the potential of this economic rapprochement, and ways forward.

2. THE MODERN EVOLUTION OF POLITICAL SECTARIANISM IN THE MIDDLE EAST

   Sectarianism is politically and discursively framed as an age-old, deep-seated rivalry between Sunni and Shiite Muslims. While the theological divisions are old, they have not manifested themselves in stark political terms until recently. The politicization of sect, spearheaded by the GCC states (most notably Saudi Arabia) and Iran after the 1979 revolution, have mutated the salience of sect from a largely private spiritual matter into a political vehicle to realize state interests. (1)

   In the modern Middle East, Iran and the GCC exploit and mobilize sectarianism to promote their interests. Iran's spheres of regional influence are strongest in states with indigenous Shiite populations. These states include Lebanon, where Shiite Muslims comprise roughly 27 percent of the small Mediterranean nation's population and are historically marred by economic and political marginalization. (2) Neighboring Syria, currently bludgeoned by a civil war fought squarely along sectarian lines, is also home to a sizable Shiite population. Approximately 13 percent of Syria's population, before the war, was Shiite, comprised largely of Alawi, Twelver, and Ismaili Shiites.

   The war-torn nation is overwhelmingly Sunni, with 74 percent of its Muslim population following one of the Sunni schools. Capitalizing off of the presence of these Shiite populations in the Levant, Iran has established a strong political relationship with the presiding Bashar aLAssad government in Syria, and in nearby Lebanon, proxy affiliation with the Shiite militia organization Hezbollah. (3)

   The recent civil strife in Yemen, the Arab world's poorest nation, is viewed by many as just another proxy war between Iran and Saudi Arabia, whereby the former stood with the Houthi Shiite faction. As the journalist Jared Maslin wrote in 2016, "Arrayed against the Saudis are the Houthi rebels and their allies within Yemen. The Houthis are a movement committed to Zaidism, which is an offshoot of Shiite Islam and aligned with Iran. Some Saleh loyalists have also entered an alliance of convenience with the Houthis." (4)

   With Yemen directly to its south, Saudi Arabia viewed Iranian support of the Houthi militias as a sectarian play and responded in kind, aligning with the Sunni-majority opposition. This illustrates yet another dimension of how sectarianism in the region provides a popularly resonant tactic, and potent state strategy, for carrying the rational interests of nation-states forward. The small Gulf country of Bahrain, also home to a sizable population of Shiites, was also the site of an explosive "Arab Spring" revolution in 2011, contested by the largely Sunni government as Iran mobilized the nation's majority population (roughly 65 percent) to protest and topple the government. (5) The "Shiite Uprising" in Bahrain, as some have dubbed it, was suppressed by the Saudi-backed regime, and five years after, offers another lurid illustration of how sectarianism is deployed and amplified by Iran and Saudi Arabia to secure and advance inerests.

   The vast majority of the Middle East's population practices Sunni Islam.

   Mirroring the global Muslim population, approximately 87 to 90 percent of Muslims in the Middle East practice one of the Sunni schools of Islamic thought. (6) The GCC, and particularly Saudi Arabia, export Sunnism as a vehicle for advancing their aims. This provides a sharp demographic advantage to the GCC states, and Saudi Arabia specifically, to export and expand its specific brand of Sunni Islam, Wahhabism, into predominantly Sunni populations in Syria, Lebanon, Yemen, Iraq, and states in north and sub-Saharan Africa.

   As deployed by Iran, sect becomes more political tool than religious sentiment. Indeed, the very basis for winning the hearts and minds of populations that share kindred takes on Islam, and subsequently, using that foundation to expand a nation-state's sphere of influence, carries forward specific political objectives that facilitate the economic ambitions of the state. Iran's saber-rattling with Israel, a close ally of the United States, and its affiliation with Hezbollah, a proximate rival of Israel's, rendered it a political pariah for the United States, which led to the placement of economic sanctions until very recently. A change in the state of these sanctions, while politically controversial in the United States, opens the door for relieving the sectarian jostling, posturing, and proxy wars unfolding in the Arab World.

3. NORMALIZATION OF RELATIONS

   Even before the removal of select sanctions on Iran, relations with the West have been cooling since Hassan Rouhani was elected in 2013. Rouhani replaced the fierce-talking firebrand Mohamoud Ahmadinejad, a succession welcomed by the United States and its GCC allies. Furthermore, this cooling was underscored by key liberalizing economic policies to attract investors and a general rapprochement with western powers to ease the crippling sanctions on the country.

   While Rouhani has made outreach to the Gulf states a priority, ongoing conflicts in Yemen, Syria, and Iraq, where Iran is playing a central role, have rendered his efforts moot, as they have largely "landed off the mark." (7) That said, his government's new direction has helped to considerably improve Iran's position in the world. This culminated in a comprehensive nuclear deal, signed in July 2015 and implemented in January 2016. The multiparty initiative has gone a long way towards forging the environment necessary for a normalization of relations with many countries, paving the way for opening its economy for trade and investment.

   On 16 January 2016, the world awoke to the following headlines: "Sanctions lifted after Iran found in compliance on nuclear deal." (8) This was hailed as a masterstroke by world leaders, with U.S. secretary of state John Kerry, one of the key architects of the deal, calling the world "a safer place because of the developments." (9) While condemned by Republican leadership, the lifting of sanctions not only brought about immediate changes in economic policy, but also foreshadowed the prospect of markedly improving economic and political ties with Iran, a nation long branded as a pariah, at best; and at worse, a terrorist state and core part of the "axis of evil."

   The sanctions, however, were only lifted in part. When the International Atomic Energy Agency certified that Iran had met its obligations, the U.S. eased sanctions that were limited and focused primarily on the recently implemented nuclear-related...