Political Economy

Solving the Saudi Succession Puzzle

Thomas W. Lippman — Wed, 29 Nov 2006 12:00:00 -0500

If there is one thing the ruling princes of Saudi Arabia have shown they are good at, it is self-preservation. They demonstrated their skill once again last month with an adroit political maneuver that drew little media notice in this country because of the carnage in Iraq, but could have long term significance for the the Gulf region and for the United States.

King ‘Abdullah announced a new system for choosing future kings, designed to ensure smooth continuity whenever the monarchy is vacated. He issued a new “Allegiance Institution Law” designed to cover every eventuality: death of the king; simultaneous death of the king and crown prince; temporary incapacity because of illness; and long-term disability.

This news can only be encouraging to those who wish to see long-term political and economic stability in that vital country. But it will not be encouraging to those who believe in promoting democratic reform in the Arab world because the purpose of ‘Abdullah’s move was to fortify the monarchy, not to open up the country’s political process. Its aim is not to give the Saudi people any voice in selecting their leader but rather to codify the existing informal system in which the king and his brothers have the absolute power to designate the next in line for the throne without any explanation of their decision.

The new procedure is more like the selection of a Roman Catholic pope, chosen in a secret conclave by princes of the church, than it is like any democratic system. Just as some cardinals are deemed “papabile,” or suitable to become pontiff in the event of a vacancy, a handful of the many sons and grandsons of Saudi Arabia’s founding King, Abdul Aziz ibn Saud, are understood to be in the running as future kings.

No one outside the House of Saud has any real knowledge of who might be on the list. Any speculation by scholars or think-tank analysts about the line of success is just that — speculation.

Saudi Arabia’s ambassador to the United States, Prince Turki al-Faisal — sometimes mentioned himself as a possible future king—told a Washington audience on October 30 that the new law represents “a contract between the ruler and ruled. The ruler obliges himself to protect, promote, and enhance the lives and property of the ruled; and the ruled oblige themselves to protect, promote, and obey the ruler in everything but that which counters the teachings of God.” He did not say how the “ruled” took on this obligation to obey; in fact they have no choice in the matter.

This won’t matter much to American policymakers, to whom the new law will come as something of a relief because it eliminates a possible source of trouble in Saudi Arabia. Public input is irrelevant. It has been clear since ‘Abdullah met with President Bush at his Texas ranch in April 2005 that Washington was not going to press the Saudis for political liberalization because the Saudi regime is too valuable on other fronts. The Saudi regime has persuaded Bush and his advisers that it is part of the solution on the “war on terror,” not part of the problem, and therefore stability trumps reform, as it almost always has in the 60 years of the US-Saudi alliance.

In case anyone doubted that the Saudis regard themselves as beyond the reach of Bush’s quest for democratization in the Arab world, Prince Turki proclaimed it: “We are not in a hurry to experiment with foreign interpretations of democracy or methods of government,” he said.

Until the new law was issued, the question of who would become king after ‘Abdullah and his designated successor, Defense Minister Prince Sultan, was a gnawing point of concern about the Kingdom’s future. Both men are more than 80 years old, Sultan has reportedly been treated for cancer, and no one has been selected to become ruler after them.

They and other senior princes — all sons of King Abdul Aziz — have many sons of their own in positions of influence who might aspire to take over after Sultan passes from the scene. To outsiders, the potential jockeying among the princes of this “grandsons generation” has raised questions about the cohesion of the House of Saud and thus about the stability of the country.

There appears to be no other imminent threat to the ongoing rule of the al-Saud family. The wave of extremist violence that broke out in 2003 has receded. The perpetrators of the bombings that wracked Riyadh and other cities and frightened foreigners out of the country have been killed or rounded up by the security forces, and they never gained support among the general Saudi population. Moreover, because ‘Abdullah has curbed the corruption that inspired popular anger and has reached out to the country’s Shi’a Muslim minority and other marginalized groups, the House of Saud is less unpopular than it appeared to be before ‘Abdullah took over last year.

The al-Saud family has ruled what is now Saudi Arabia since the 1920s, when Abdul Aziz overpowered rivals from other tribes and unified the country. The root of the succession problem lies in the fact that Abdul Aziz fathered some 45 sons, of whom 23 are still alive, and did not specify how his successors were to be chosen. Until now it has been an informal process among the princes; it is not based on birth order, but upon negotiation and compromise within the family.

Thus, the most serious threat to stability appeared to be the possibility that the princes would split in a power struggle, as they did in the 1960’s. The contest of that decade pitted two other sons of Abdul Aziz, Faisal and Saud against each other and traumatized the family. Ever since then such matters have been thrashed out among the princes, out of public view. When ‘Abdullah became king upon the death of his half-brother Fahd last year, he promptly named another half-brother, Sultan, as crown prince. Many Saudi-watchers believe the likeliest candidate after Sultan is Prince Salman, a half-brother of ‘Abdullah and a full brother of Sultan. Salman, aged 70, is the longtime governor of Riyadh.

Under a 1992 law, “Rule passes to the sons of the founding king...and to their children’s children. The most upright among them is to receive allegiance in accordance with the principles of the Holy Koran and the tradition of the Venerable Prophet,” Muhammad. But the law also gave the king the power to choose his successor. What would happen if other princes did not accept the designated heir as the “most upright” was not clear?

Now King Abdullah has established a more formal system. He created a committee of princes, called the “Allegiance Institution,” to designate future crown princes. Because Sultan has already been chosen as next in line after Abdullah, the new system will take effect only after Sultan becomes king. Once that happens, and in all future cases, the new king is to nominate one, two or three candidates to be his successor. Committee members may accept a nominee or reject all three. “If the committee rejects all the nominees, it will name a Crown Prince whom it considers to be suitable,” according to a translation provided by the embassy.

This process is to be completed within 30 days. In the past, long intervals of uncertainty have sometimes ensued as a new king has delayed naming a successor.

Perhaps more important, the new law specifies the procedures to be followed if the king is incapacitated. This is clearly intended to avoid a repetition of the uncomfortable period between 1995 and 2005, when Fahd was disabled by a stroke. ‘Abdullah was de facto ruler, but his power was limited because he was not king; many important reforms were delayed or set aside because of that vacuum.

The official announcement of the new system does not answer all questions — it says members of the Allegiance Institution must be “capable and known for their integrity” but does not say how those qualities are to be determined, nor does it specify what happens after the passing of all the grandsons, many already approaching old age. Nevertheless, given the way the House of Saud operates, it can be assumed that ‘Abdullah issued his decree only after extensive discussion with his brothers and probably some of the key nephews, and that they have signed off on it. That means the family will not allow or encourage any aspirant to stake a claim outside the system when the time comes.

Once again the House of Saud displays its talent for survival.

Referendum in Algeria: True Reconciliation or Selective Amnesia?

Jacques Roussellier — Thu, 29 Sep 2005 12:00:00 -0400

Algerians on September 29, approved the 2005 Charter for Peace and National Reconciliation that will put an end to over a decade of bloody civil war, which claimed more than 150,000 lives. The first offer of amnesty, approved in a 1999 referendum, expired in 2001. Some 4,500 Islamist insurgents reportedly gave themselves up to the authorities at that time, and the government hopes others will do the same under the new amnesty.

The Charter proposes to give amnesty or reduce punishment for Islamist insurgents who surrender their arms, even though some may have been responsible for serious human rights abuses. Legal proceedings will be cancelled against all Islamist militants who cease their armed activities and surrender their weapons, provided they are not implicated in mass killings, rape or placing explosives in public places. Yet the Charter is silent about state agents, whose de facto impunity remains unchanged.

According to Human Rights Watch, the perpetrators of one or more individual murders, or acts of torture causing permanent injury, who were ineligible for amnesty under the 1999 law, could be eligible under the new Charter — contrary to the fundamental principles of international law.

The Charter also proposes to ban from political life those “responsible for instrumentalizing religion” for political ends, a reference to the Islamic Salvation Front (FIS) and its leaders. It was the prospect of a FIS victory in the 1992 elections that sparked Algeria’s civil conflict. The army, who de facto took the helm, abruptly put an end to the parliamentary election, declared a state of emergency, banned the FIS and made sweeping arrests, including detention and internment without trial. But the crackdown failed. The guerilla movement grew stronger, particularly in the north, and terrorism reached into the heart of Algeria’s urban areas. Increased violence prompted the security forces to launch a complex anti-terror campaign to fight Islamist armed groups in central Algeria.

At the time, the Algerian socialist revolution was running out of steam and the army was losing its grip on power. The collapse of the Soviet Union, Algeria’s main arms supplier, and the demise of the socialist dream meant the regime had to re-position itself vis-à-vis the Western model of democracy and free markets if it wanted to survive. Through a swift take-over in 1992, Algerian army commanders emerged as the defenders of a secular and republican order against the threat of a potential Islamist dictatorship.

What looks like a managed crisis and controlled polarization of society between radical Islamism and secularism proved to be a risky, but fruitful, brinkmanship for the Algerian military and its political establishment. In the post 9/11 world, Algeria’s strongmen can claim ambiguous credentials as saviors of the constitutional order and indispensable anti-guarantors against terrorism.

How Algeria deals with its past also poses a challenge for the US administration. The now popular “Algerian syndrome” of using the threat of political Islam to justify a political and economic status quo should test Washington’s newly-found determination to no longer let democratic reforms and human rights stall for the sake of political stability.

Washington should not be swayed by a growing US-Algeria trade, including oil and gas deals, and cooperation on counter-terrorism, to avoid some tough questions for a few of Algeria’s generals, even behind closed doors.

The referendum and amnesty appear a smooth, if unelegant, exit strategy for a partially self-inflicted decade-long civil war that helped keep power in the hands of the old Algerian revolutionary establishment and the powerful army. Algeria paid the cost in the setback to genuine democratic reforms and economic liberalization.

Referendums and amnesties are often the episodic tools of lonely rulers in search of popular support. Without a strong civil society and genuine debate, they rely on a top-down exercise of power that defeats the very purpose of democracy.

Amnesty is not amnesia: without its own painstaking narrative, amnesty will yield neither truth nor reconciliation.

Syria: From Authoritarianism to Benevolence

Murhaf Jouejati — Tue, 6 Sep 2005 12:00:00 -0400

Conventional wisdom holds that economic and political reforms are directly linked. With regard to sequencing, the debate within the development community has been dominated by two schools of thought: The first argues that economic reforms ought to precede political liberalization on the grounds that authoritarian regimes are better equipped to carry out economic reform. The second insists that only by altering the political logic that sustains authoritarian regimes — moving from a base built on the discretionary distribution of patronage to one grounded in the legitimacy that comes with procedural legality and political accountability — will political elites ever be persuaded to undertake economic reform.

In the Syrian context, that debate is heavily skewed in favor of those pushing for economic reform first — the political will to redistribute power, or at least to share it, being absent. The recommendations that the tenth Ba‘th Party Congress advanced this summer reaffirmed the Syrian political elite's determination to maintain the political status quo. Some examples: The idea of a constitutional amendment to level the political playing field was ruled out; and the Ba‘th Party is to remain the vanguard party, in accordance with Article 8 of the constitution. Among the political parties that will soon be licensed, only those that appear to be the least threatening to Baathi dominance will be allowed to organize. Emergency laws, in effect since 1963, will not be lifted; they will be relaxed. What the term relaxation means, according to the "can do" list put out by the authorities, is that Syrian citizens will now be allowed to, among other things, erect falafel stands and open hair salons without the prior approval of the dreaded secret police, the mukhabarat. In these circumstances, it is safe to assume that those in Syria who stress the need to prioritize political liberalization must be very lonely people.

Bashar Assad and his reformist cohorts, on the other hand, are of the view that economic reforms must precede political reform. Assad's reasoning is that Syrian citizens are more in need of jobs and higher incomes than they are of new political arrangements. In this, the young Syrian leader may be right: when over a fifth of Syria's labor force is unemployed and per capita income is as low as $1,000, only a handful of citizens would give Lockean liberalism the priority. The problem is that Syria's political elite has not yet engaged in the kinds of painful economic reforms that are requisite to restoring the Syrian economy to even its pre-Ba‘th levels. Privatization of the bloated and highly inefficient public sector remains a taboo subject, and talk of a shift to a market economy was deliberately diluted during the Ba‘th Congress to "social market economy" — a catch phrase intended to appease the powerful labor unions and the bureaucracy, the regime's power base.

This is not to say that Syria has not experienced change during the past five years. Assad introduced private banking, drafted more business-friendly investment laws to create jobs, reinvigorated the private sector, and overhauled an important segment of the public sector, giving its managers greater say in day-to-day operations. Moreover, in order to reduce market distortions, Assad eliminated some subsidies and reduced others.

Nor were his reforms limited to the economy. Assad allowed the establishment of private universities. He promoted the demilitarization of society by reducing the length of military conscription and by lifting mandatory high school military uniforms. In administration, Assad replaced hundreds of Ba‘th apparatchiki with younger, more educated and reform-minded elements. Moreover, senior appointments were made according to merit, not to Ba‘th affiliation. Syria's ambassadors to Washington and to London and its deputy premier for economic affairs are cases in point. Finally, Assad freed hundreds of political prisoners and, in an effort to promote national reconciliation, allowed the return of a number of exiled pre-1963 politicians, including a former Syrian president. In short, five years into his rule, Bashar Assad made positive changes.

These measures, welcome as they are, do not amount to much, however. As the noted expert on democratization Marina Ottaway warns, it is important not to confuse positive change with democratization. The transition from an authoritarian to a democratic system, Ottaway notes, requires a political paradigm shift — an abandoning by those controlling the government of old assumptions about the fundamental organization of the polity, the relation between the government and the citizens, and thus the source, distribution and exercise of political power. As long as changes are benevolent acts of the ruler rather than the recognition of inalienable rights of the citizens, no paradigm change has taken place. In this context, the reforms that Assad made in the past five years appear to be more benevolence than paradigmatic shifts.

In the final analysis, some measure of economic reform seems necessary, even though it does not point a clear-cut path to rapid success. After all, democratization is not an event but a process, and democratization may start with seemingly insignificant changes.

Mauritania: A Future Rogue State in Africa

Jacques Roussellier — Tue, 16 Aug 2005 12:00:00 -0400

The August 3 coup d’état that brought to power a military junta in Mauritania was predictably met with perfunctory condemnations by the UN, EU and the African Union, joined by the United States and France, Nouakchott’s key partners. But at the same time, while the streets of the capital were mostly peaceful, even joyful, ambassadors were lining up to shake hands with the new strongman in town. Colonel Vall was a co-putschist back in 1984. Now he’s in charge. Vall’s first move was to keep the government in place and release from prison popular Islamist opponents to the previous regime.

Apparent popular support for the junta and concern for stability are leading the international community to replace its initial constitutionalist rhetoric with a more cautious realpolitik.

The deposed Mauritanian president, Ould Taya, was widely unpopular and known for his deftness at using the Islamist threat to root out his few remaining opponents and present himself as the best protection against religious extremism. In a country still deeply divided between Arabs and black Africans, with not much of a sense of shared identity let alone democratic experience, economic reforms have been undermined by growing corruption and an entrenched patronage system.

Those who have been left out from the spoils, chief among them the security forces, may have had no other way to vent their frustration than staging coups, as they did in 2003 and 2004. The coup on August 3 succeeded.

The threat of Islamist terrorism has been mostly a diversion aimed to strengthen Nouakchott’s hand in securing US political and financial support, not to mention shoring up its credentials as NATO’s key strategic partner in the fight against terrorism in the region. But Ould Taya had few friends left. He alienated many Arab allies by establishing diplomatic relations with Israel, switching sides in Iraq and taking his cue from the United States. With no outside political leverage, it is hard to see how the situation can be reversed to a semblance of constitutionality.

Mauritania remains a key US ally in fighting terrorism in the Sahel region. Granted, the Sahel is not the hotbed of Islamist terrorist extremism that some in the US and the sub-region would like to think. But there are legitimate concerns that the vast and largely ungoverned Sahara Desert could be used by terrorist organizations to train or shuttle fighters and weapons to targeted areas farther north. In this context, a broad, well-balanced and sustained strategy in the Sahel could prove a most effective counter-terrorism engagement.

The initial US response to the potential threat, known as the Pan-Sahel Initiative (PSI), was supposed to train military units from the four partner countries, Chad, Mali, Mauritania and Niger. It also included US operating bases to strengthen surveillance capacity and create combined rapid reaction capability. However, a perceived US heavy-handedness may backfire, especially if a stabilizing US presence is exploited by authoritarian regimes in the region to further crack down on opposition parties and stall democratization processes by alleging links with Islamist extremists.

Broadening PSI – through the Trans-Saharan Counterterrorism Initiative – into a joint US interagency effort that will cover security issues and promote democratic governance is a step in the right direction. (The TSCTI will also include Algeria, Morocco, Senegal, Nigeria and Tunisia, and perhaps Libya at a later stage.)

It stops short, however, of addressing the root causes of both terrorism and instability in the region: poverty, disease, illiteracy and widespread corruption. With over 60 percent of Niger's population currently threatened by famine, and now Mauritania heading for uncertain times, there is urgency for the United States to think bigger and more multilaterally because even its modest yet constructive involvement in the Sahel is at stake.

The greatest threat in the region does not come from ideologically driven motivations but rather from failed or “rogue” states, a category to which Mauritania may just have graduated. An unusually blunt International Monetary Fund last June warned that its three-year program was “irretrievably off-track” and “serious fiscal and monetary policy slippages in 2003 and the first half of 2004 undermined achievement of Mauritania's ambitious macroeconomic objectives and progress in implementing the poverty reduction strategy.” Furthermore, Mauritania is slated to become an oil-producing country next year. With 75,000 barrels of crude oil a day expected from its offshore Chinguetti field early next year, hopes of finding more reserves onshore could bring production to 165,000 barrels per day in 2009. At current prices of well over US $50 per barrel, oil revenue could reach $300 million a year, well above the 2003 foreign direct investment level (US$214.1 million) and the equivalent of roughly 38 percent of its 2003 external debt.

There are concerns that Mauritania is unlikely to meet its stated intention to adopt sound principles for oil revenue management and transparency. Quoting diplomatic sources in Nouakchott, the International Crisis Group reports corruption is running at 20 to 25 percent of the government budget. Given the crucial lack of independent oversight mechanisms to enforce politically sound and socially fair revenue management, this new oil money will only encourage corruption and ultimately fuel civil conflict.

It is time for the international community, particularly the United States and France, to join efforts at constructive engagement to prevent what sadly looks like a textbook case of the birth of another rogue state in a continent that has had more than its fair share and needs no more.

The Landscape of Factional Politics in Iran

Hossein Seifzadeh — Tue, 20 Aug 2002 12:00:00 -0400

The Bush Administration's July 12 statement of support for "the Iranian people" and reporting in the New York Times and elsewhere suggests that the White House has given up on the ability of reformist politicians like Iranian President Mohammad Khatami to alter Iran's foreign policy orientation. But before the United States turns away from its attempts to engage Iran, it would do well to learn more about the factions that govern Iranian politics today. A clearer understanding of the domestic balance of power in Iran would prompt more thoughtful US policy, including, when appropriate, a policy of saying nothing at all.

Contrary to the disappointment of the US administration over the pace of reform in Iran, a deeper analysis demonstrates that Iranian society is increasingly becoming modern and diverse. As a result, fundamentalists are on the decline, transitionalists are in search of self-definition, and modernizing forces are becoming increasingly popular. Within such a mixed context of rapid change, it is normal that factionalism has become a basic feature of Iranian politics, easily creating confusion among those who are new to the dynamics of Iranian politics. This essay closely examines the power distribution, the philosophical or ideological teachings and the dynamics of competition between and among political factions in Iran.

Political Factions in Iran

While the electoral process in Iran is still tightly controlled by fundamentalists opposed to reform, there have been important changes in the character of the Islamic Republic since 1979. In fact, the electoral process in Iran has given rise to four unique eras, or Republics: the Liberal-Nationalist Republic, the Fundamentalist Islamic Republic, the Pragmatist Republic, and the Reformist Republic. In all these eras, except that of the Reformists, one social stratum achieved hegemonic status, while others were marginalized. But even the fundamentalists, with their power over the electoral process, have been unable to sustain total control of the Iranian political system at least by now.

Today, for the first time, there is a balance of power between two rival factions: Fundamentalists and Reformists. The former has the structural power within the state, the latter has the power of popular support, and the pragmatists play a balancing role between them. Unfortunately, if the current US policy of sanctions combined with rhetorical support for reform is continued, there is a high probability that reform and the reformers will suffer. They will lose their popularity on two counts: on the one hand, they will be accused of implementing "hostile US policies" in Iran, since the US claims to support them. On the other hand, continuing sanctions will prevent them from improving day-to-day life as they have promised to do. They will thus lose all credibility with the Iranian public that elected them to office.

Because of the US claim of support for the reformist movement, the Council of Guardians is determined to avoid further electoral successes by reformists in the future. To implement this scheme, they plan to disperse their supervising organizations across the country in order to build prior understanding of the ideological orientations of would-be candidates in local districts. Reformist candidates will then face a terrible choice: they will either water down their agendas during the campaign and lose their popularity, or they will be disqualified from running by Council of Guardians.

In addition, the Expediency Council is contriving to expand the supervisory role of the Supreme Leader over all three branches of the government, using the Expediency Council as a tool. If these fundamentalist schemes succeed, the Islamic Republic will turn into a patriarchal Islamic government in the short-term, just as the fundamentalists desire. However, in the longer run, Islamic government can be expected to pave the way for another round of instability in the region, perhaps through a fascist or ultranationalist revolution.

Popularity and Power Distribution among Factions in Iran

In the last presidential election, 78.3% of the vote went to the reformists, including the pragmatist party Kargozarane Sazandegi (Agents for Construction), and 15.9% went to the fundamentalists, including another pragmatist party, E'tedal Va Tose'eh, (Moderation and Development) that was in an implicit coalition with the fundamentalists.

Power distribution in Iran, however, does not reflect the popular vote. Even with 78.3% of the electoral vote, reformists have still limited structural power. Traditional economic and cultural sources of power, plus unelected institutions controlled by the fundamentalists, restrict the reformists' ability to exercise power in the institutions they control: the Majlis (parliament), the presidency, and the city councils. And 70% of the highest official positions in the state bureaucracy are filled by appointment, generally by fundamentalists.

Implicit in the electoral statistics is the disenchantment of a sizeable 33% of the population, those who refused to vote in the 2001 presidential election. Dissatisfaction with the efficiency of reform is considerably on the rise. In a 2001 national survey, 90.5% supported either reform or fundamental change in political processes. This reservoir of popular support for reform and/or fundamental change is a challenge to the fundamentalists, who crave popular acceptance, and far less against the efficiency of the reformists. But the bloc of disenchanted voters threatens to grow larger if the reformists continue to be stymied in their attempts to change domestic policy. The growing number of frustrated voters thus presents a challenge to both of the contending factions, territorial integrity of the nation, and stability of the region.

Factions that Support the Idea of an Islamic Government or Islamic Republic

Fundamentalists

Fundamentalism originated from two different social strata in Iran: modernizing and traditional. Thanks to a very deep education and cultural transformation, the modernizing fundamentalists of the past are the reformists of today. The current ideologically fundamentalist faction in Iran has a traditional social base. Due, however, to the immense social changes in Iran over the past two decades, the traditional fundamentalists have receded and lost their popular support. Nonetheless, they still have sufficient structural power to impede the processes of modernization and democratization being advocated by the reformists.

Fundamentalists support a patriarchal Islamic government, in which popular sovereignty is void. They seek to preserve what they view as a traditional lifestyle, characterized by the politicization of Islamic concepts of law and society, the primacy of the military, and the preservation of the wealth of traditional merchants. Politically, the fundamentalists are organized through the Society of Assertive Clerics (Jame'eh Rohaniyate Mobarez, or JRM) and the Society of Instructors of the Seminaries (Jame'eh Modarresin Hoze Elmieh), which is the core cultural group among fundamentalists. A modified version of their views is reflected in their daily newspaper, Entekhab.

There are two other influential fundamentalist associations as well. The first, which represents the traditionalist merchants of the bazaar, is politically organized in the Board of Islamic Coalition (Heyate Mo'talefeh Eslami, or BIC). The second is the tightly organized Society of Muslim Engineers (Jame'eh Eslami Mohandesin). Each of these two groups publishes a daily newspaper that conducts relentless attacks on reformist figures. Moreover, they try to educate their own forces through new, modern universities that are tightly controlled and free from governmental supervision. Various colleges and universities have been established in the seminaries of the city of Qom and by their representatives in Tehran. The most influential ones are Imam Sadegh University, controlled by JRM, and the Islamic Azad University which is the largest and widespread across the country. Thanks to the unwavering support of the financially and legally strong BIC - the strongest non-clerical fundamentalist group in Iran - the officials of this university do need to abide by academic rules set by Ministry of Higher Education.

In addition to their hegemonic positions in seminaries and the Old Bazaar, fundamentalists benefit from their appointments to high positions at various endowments (bonyads), economic institutions, armed forces, the judiciary and the executive branch. These appointments include six clerical members of Council of Guardians; the clerical members of the Council of Experts; the leaders of Friday prayers; the clerics in the "Propagation Organization," which is responsible for publicizing Islamic values; senior judgeships; the Chamber of Commerce; and other positions appointed by the Supreme Leader.

Fundamentalist Policy Preferences

The domestic politics of fundamentalists are more congruent with totalitarianism, though they are unable to implement its principles within the current political system. In foreign policy, this faction capitalizes on radical approaches towards Israel and relations with the West in general and the United States in particular. For them, closer relations with the West will promote modernizing sectors of society, at their expense. They oppose foreign investment, again since it builds the reformists' power base while damaging the traditional economic interests of fundamentalist allies. In other, less sensitive, sectors of the economy, however, they would like to curtail government interference.

Pragmatists

The pragmatists are an elitist authoritarian faction, mainly inspired by the intellectual work of economic professors at Shahid Beheshti University. They believe in economic modernization from above, but have no evident interest in the democratization of politics.

The pragmatists organize themselves in two different parties, both supporting former Iranian President Hashemi Rafsanjani. Rafsanjani's two daughters are founding members of the two parties. Both parties are made up of technocrats who support bureaucratic authoritarianism, but they differ on cultural issues. Hezbe Kargozaran Sazandegi supports the Reformists' open approach to culture. By contrast, Hezbe E'tedal va Tose'eh's views toward culture are more congruent with the fundamentalists: they believe in at least a partially closed society. Both parties are economically modern and organized politically to fill the centrist gap between the extremes of the reformist and fundamentalist factions. They do not take positions on sensitive issues such as democratization of the society, Iran-US relations or the Arab-Israeli issue, but do favor technical and economic relations with the West, including the United States.

The presiding members of Hezbe Kargozaran Sazandegi include the former mayor of Tehran, Gholam-Hossein Karbaschi, the governor of Central Bank, Mohsen Nour Bakhsh, the former Minister of Guidance, Atta'ollah Mohajerani, and former vice-president Mohsen Hashemi Taba. Rafsanjani's daughter, brother and nephew also figure prominently in the party.

During the heated electoral debates between seven presidential candidates in 2001, Rafsanjani and the Hezbe Kargozaran Sazandegi tilted towards an alliance with the pro-Khatami reformist platform. Due to the critical stances of some leading reformists against Rafsanjani's non-democratic approach to reform, his second daughter, Fatemeh, alongside with other pragmatists such as Mahmoud Vaezi (the former deputy foreign mimister) and Hossein Kamali (former labor minister), who are loyal to her father, set up the Hezbe E'tedal va Tose'eh.

Reformists

The reformist camp is the intellectual force in Iranian politics. They support the democratization of Iran and peaceful interaction with the outside world. They split into idealist and realist schools of thought.

Idealists believe in economic interdependence, the coexistence of diverse cultures, and political interactions within a universal global civilization. They therefore root their foreign policy doctrine in the concept of a Dialogue Among Civilizations and look towards a "coalition for peace."

Realist reformists, by contrast, believe in an institutional balance of power in domestic politics and political deterrence in international politics. They perceive important international threats, but distinguish themselves from the fundamentalists by arguing that political rather than military means should be used to fend off these threats. With respect to the Arab-Israeli issue, both groups of reformists advocate a two-state solution supported by the United Nations, and believe that any political settlement must be both just and determined by the Palestinians themselves. They favor a balanced relationship with the United States, based on mutual interests, and far from the patron-client relationship that existed in the past.

Reformists are united in their support for a pluralist, democratic political system, but the idealists emphasize the promotion of civil society in Iran while the realists believe in a balance of power in domestic politics. Generally, they are inspired by the romantic sociology of Ali Sharia'ti and wisdom of modern and post-modern Iranian thinkers, who synthesize Islamic moral concepts with modern Enlightenment political philosophy, and argue that there is no inherent tension between democracy and an Islamic society.

Today, reformist thinkers find a home in the Department of Political Science at Tehran University, in Tarbiat Modarres University, and in the works of such thinkers as Abdol-Karim Soroush and Mohammad Mojtahed Shabastari. Many young clerics are attracted to this reading of Islam, based simultaneously on scientific rationality, philosophical wisdom, and spiritual Gnosticism.

The reformist camp is very diverse. The most liberal amongst them is the Participation Front Party, led institutionally by Mohammad Reza Khatami, the president's brother, and intellectually by Sa'eed Hajjarian and his associates. The second-most influential and disciplined party is the Organization of Strivers of the Islamic Revolution (Sazmane Mojahedine Enghelab Eslami). The third non-clerical group is the Solidarity Party (Hezbe Hambastegi), whose major leading figure is Ibrahim Asgharzadeh, one of the leaders in the hostage-taking fiasco. Asgharzadeh now asserts that such action is detrimental to world peace and hence inappropriate in diplomatic relations. Indeed, many leading reformists are now critical of their own radical fundamentalism in the immediate aftermath of the 1979 revolution.

Amongst the reformists, the least modern group is the Association of Assertive Clerics (Majma'e Rohaniyoune Mobarez, not to be confused with the fundamentalist Society of Assertive Clerics). This group is mainly affiliated with Ayatollah Hossein Ali Montazeri, who has been under house arrest by the regime for the past few years, and Ayatollah Jalal Taheri, whose recent public letter of resignation from the Friday prayer leadership made him the target of harsh attacks by fundamentalists. As a cleric who supports a post-modern perspective on Islam, Iranian President Khatami stands out among this group.

Conclusion

In sum, the reformists support a transition to a democratic pluralist state, pragmatists promote bureaucratic authoritarianism, and fundamentalists favor a more totalitarian approach to politics. Currently, the two extremes are evenly matched, and only the pragmatists' interest in economic development and social modernization keeps them from indulging wholeheartedly in the intensive, scholastic debates over the future of the Islamic Republic. It is this balance of power and the stasis it has induced that are interpreted by some American observers as Khatami's inability to implement reform. The American policy of rhetorical support for reformists and simultaneous maintenance of sanctions is perhaps the most incapacitating factor now affecting the reformist movement. Because the reformists lack structural power, rhetorical support from outside only increases their vulnerability.

The ultimate outcome of this drawn-out factional battle will determine Iranian foreign policy as well as domestic developments. Those interested in understanding the dynamics of Iranian politics would do well to pay attention to the outlines of this factional battle in Iran.

Given the internal balance of power between the three factions, perhaps the best the United States can do right now is take a hands-off attitudes toward domestic factional politics in Iran, and try to capitalize instead on the shared strategic interests of both countries. Iran's pressing strategic interests are something that all the Iranian factions can agree on, and thus present the best hope for constructive US-Iranian dialogue.

But there is also an Iranian form of "constructive engagement" that could shift the internal balance between the popular reformists and the powerful fundamentalists. While there is little American rhetoric can do to change politics in Iran, its leverage is far more meaningful. Iran has applied for consideration to join the World Trade Organization, and its faltering economy is desperate for international investment to help create jobs for its overwhelmingly youthful population. Growing economic ties to the West could create new private wealth in Iran, which would significantly reduce the appeal of xenophobic arguments and the leverage of the fundamentalist parties. Commercial ties to the outside world would also reinforce Iran's increasing social openness. In this way, rather than through declarations of support for the Iranian people, the United States could encourage constructive change in Iranian politics.

From Khartoum to Meroe

Andrew Watkins — Mon, 6 Oct 2008 10:50:45 -0400

Recently, I took a journey with the English language professors of the University of Al-Neelain in Khartoum to the Pyramids of Meroe, some 300 kilometers away. While the pyramids are a testament to the power of the ancient civilizations that produced them, this is not a story of those civilizations but rather a view into modern Sudan.

MEI Annual Conference 2008: Panel II

Susan Bastress; Nabil Ali Alyousuf; Amr Awadh al Rawass; Aamir Rehman — Tue, 25 Nov 2008 16:22:30 -0500

Nabil Ali Alyousuf cites the UAE as an example of major regional trends toward development and openness in the Gulf. In the past, he says, Gulf countries spent their vast oil revenues outside of the region. In recent years, they have learned to invest internally, improve local government structures, and open markets to outside investors. Alyousuf advises developing countries to encourage inward investment to take advantage of a larger share of the world's economic growth.

The UAE Minister explains that market driven reform has allowed businesses to prosper. Government has played a transparent and objective role as regulator. He suggests economic regulations, which establish a rule of law, will trickle down to the general public. If the private sector sees that the government is serious about regulations and openness, companies will be more likely to make large investments in the country. He cites a recent survey that ranked the UAE in first place for its desirability as a place to live and for the perception that hard work will be duly rewarded.

Alyousuf considers the UAE a model for other countries when it comes to diversifying economies. In the UAE, only five percent of the GDP comes from oil revenues. Other sectors play a larger role. Saudi economic cities, tourism throughout the GCC, and the real estate markets of UAE, Qatar and Bahrain are other examples of regional economic diversification. Dubai has created new sectors like tourism out of virtually nothing. Now tourism contributes to over 20 percent of the GDP. Dubai took in over eight million visitors this past year; more than India or Egypt, two widely recognized tourist attractions.

Amer Awadh Al Rawas describes changes in the GCC's development strategies. In the past, he says, investments were made outside the region or in the oil and gas sector. Gulf countries were susceptible to declines in oil prices, as witnessed in 1986 and 1997. GCC countries learned from these downturns. They began increasing their sovereign wealth funds, selling more oil when prices were high, investing in oil exploration and production, and using prudent fiscal balancing. Today, small countries like Qatar are enjoying huge surpluses. The recent spike in growth has allowed for large investments in infrastructure to take place, which supports the many immigrants and tourists coming to GCC countries. However, Al Rawas also mentions a downside of rapid growth: a spike in inflation rates, difficulties for the GCC's low income population, and lower immigrant worker remittances.

Al Rawas says the global financial crisis will cause companies to fire some workers and rehire them at lower prices. Competition will increase, and the government must play an increased role in the economy. Al Rawas reiterates the point that Gulf countries must move toward more diversification. Oman has done so by branding itself as a tourist destination, building several airports throughout the country, and investing in indigenous resources.

Aamir Rehman identifies three factors that will continue to make the GCC attractive for international business. The first is sustainable prosperity and growth, which the GCC economy has achieved with wealthy emerging markets.

Second is the GCC's attractive demographic, which includes a young population and two generations of an educated public.

Third is the regulatory reform by GCC governments, where Dubai is a clear front-runner. Rehman assures that surpluses in GCC economies will allow for a quick bounce back from the global financial crisis. And the attractive regional demographics are long term trends. The biggest challenges will be providing employment to the young population, and avoiding a policy of protectionism. Another development to watch closely in the region is the opening of Saudi Arabia's free economic cities.

Rehman advises economic stakeholders in the GCC to expand prudently, as surpluses are not what they used to be. Stakeholders should buy through private equity and other sophisticated investment tools. Finally, Rehman counsels GCC governments to keep capital within the region, to diversify revenue sources – possibly through taxation. He explains that taxation will positively alter how the public and government interact. Although the GCC is facing many challenges, all three panelists identified ways for the GCC to grow and become more competitive in the long run.

Iran on the Horizon: Panel II: Iran and the Gulf

Wahid Hashim, Ebtisam al-Kitbi, Sami al-Faraj, and Barbara Slavin — Wed, 13 Feb 2008 12:48:51 -0500

Opening the panel, Barbara Slavin, spoke briefly about the current goal of US policy in the region to isolate Iran and its allies. She noted that Gulf Arab states have been increasingly reluctant to buy into the current US policy agenda, hedging their bets against Iran's growth as a regional hegemon. Hamas' recent performance and public relations victory in Gaza coupled with Hizbullah's success in delaying the Lebanese presidential election has added to the perception that Iran and regional allies are doing well. This signifies to GCC states the imminent emergence of a new power order in the region. Due in part to this and to the sense that the US is struggling in its role as a regional power, Slavin stated that Iran has received a warmer reception from GCC states. President Mahmud Ahmedinejad was the first Iranian president to be invited to a Gulf Cooperation Council summit which recently took place in Qatar, where he called for the establishment of economic and security pacts among Persian Gulf states. Also, King ‘Abdullah of Saudi Arabia invited President Ahmedinejad to perform the Hajj, which as been seen by many as a reconciliatory gesture.

Dr. Wahid Hashim, the first panelist to address the audience, focused on relations between Iran and Saudi Arabia, with particular emphasis on the history of the Shi‘a-Sunni conflict. The Gulf region has been defined by the continuity of the struggle between Shi‘a and Sunni Muslims, and since the Islamic Revolution in 1979, Shi‘a Muslims, Persian or otherwise, have increasingly turned to Iran and its clergy for leadership. He argued that prior to the Revolution, a pan-Shi‘ite identity did not exist to unify Arab and Persian Shi‘a under a singular national identity. Following the events of 1979, Iran was able to create such an identity and gather a strong following of Shi‘ite supporters, Dr. Hashim asserted, by exporting their ideology of revolution mainly along Shi‘a lines. Iran was able to garner such support from the non-Iranian Shi‘ite community since Shi‘a Muslims felt they were not being adequately represented in governments dominated by Sunnis, causing Arab Shi‘a in the Gulf to turn elsewhere for ideological leadership, which they found in Iran.

The tensions that once existed along Arab and Persian lines, Hashim declared, have shifted and now divide the Gulf region along Shi‘a and Sunni lines. Iran sees itself as being surrounded by Sunni states, namely and because of this, Dr. Hashim claimed, Iran is seeking to build what he termed as “the Shi‘a bomb” in order to balance its Sunni counterpart and to discourage Sunni interference in Iranian affairs.
Dr. Hashim followed this statement expressing his view that the future of relations between Iran and Saudi Arabia is not without hope. The antipathy and suspicion that exist between the two states is present at the level of government, but not on the street, pointing to the warm reception that Shi‘a on pilgrimage receive in Mecca. He concluded that beginning a new era of bilateral relations between Iran and Saudi Arabia, despite their storied history, would be beneficial to both parties and is contingent upon the cooperation of the two countries' respective governments.

Following Dr. Hashim's presentation on the dynamic of Saudi Arabian relations with Iran, Dr. Ebtisam al-Kitbi addressed the conference on the subject of the Gulf Cooperation Countries' changing stance toward Iran and the United States, focusing on that of the United Arab Emirates. The invasion of Iraq and the US failures there, she said, have contributed to the image that the US administration has lost its credibility and is more the cause of regional instability, rather than its cure. As such the US can no longer expect to impress its policies on Gulf states, adding that the US has yet to come to terms with this reality. As a result, the UAE and GCC countries are beginning to define their own national interests outside of the need for US military support and protection in exchange for a stable oil supply.

With US power declining in the Gulf region, Dr. al-Kitbi explained that GCC states have decided it is a better long-term strategy to engage with an emergent Iran now. This comment sheds light on why President Ahmedinejad was invited to attend the recent GCC summit in Qatar. In light of an expected reduction of US influence in the Gulf region, a trade agreement between Iran and any GCC state could be useful. Improving economic relations between Iran and GCC countries, al-Kitbi stated, would also serve as a vessel to lessen overall political tensions in addition to the economic benefits each country would reap. She added that Iran is eager to engage GCC countries economically because it provides a way for Iran to counter US moves to strangle the Iranian economy.

Dr. al-Kitbi focused the rest of her remarks on the stance of the UAE toward Iran and the crucial factors it would have to consider before making future policy decisions. She listed geographical proximity, Iranian military power, and religious influence, among several other factors, as important considerations the UAE must make in its future dealings with Iran. Of primary interest was her exploration of the economic relations between the two countries. She stated that 8,050 Iranian companies were listed in the Dubai Chamber of Commerce, the worth of Iranian assets in the UAE totaled around 66 billion USD, and that the 2006 volume of trade between the countries stood at around 11 billion USD. The UAE stands to gain a great deal from establishing a free trade agreement with Iran, she said, which would allow Iran a window through which to access the international market.

Concluding her remarks, she noted that the UAE is weighing its options to enhance its ties with the West in the face of Iran's rise to power in the region.

Dr. Sami al-Faraj, the final panelist, spoke about the threats that a nuclear Iran would pose to GCC states, focusing his remarks on Kuwait. Throughout his presentation, he presented the issues facing Kuwait and GCC states concerning the rise of Iran using an extended metaphor of Iran as the ex-girlfriend of the man of the house, a role played by the US, and the impact that letting her back into the household would have for the wives, GCC states, and the neighborhood. Iran sitting down with the US to solve regional problems, he argued, would only erode US influence, a consequence which the GCC states must come to terms with as members of the household under US protection.

Iran as the ex-girlfriend, now an object of interest for the husband despite the fact she poses a danger to the other wives, wants to become the primary power in the region, effectively eclipsing the current wives. One of the problems, al-Faraj noted, is that Iran will not go away. As appealing as eliminating the ex-girlfriend would seem because she is troublesome, it would create havoc for the entire region and pose dire consequences for GCC states. That being said, al-Faraj stated that the GCC outlook toward Iran is that it will certainly become a source of trouble in the future and that GCC states must be prepared to face that eventuality.

Iran, he said, wants to become a hegemonic power on the cheap and could resort to terrorism, war, the antagonism of Shi‘a in GCC states, or even mishaps in Iraq to launch Iran into that position. Given that Iran is likely to obtain nuclear capabilities, GCC states must be prepared to cope with disasters of national proportions. Therefore, the GCC must band together to ensure mutual survival stressing that he spoke not of economic survival, but material survival, as humans regardless of extant religious and/or ethnic divides. There is no way that any of the GCC states could protect themselves without real cooperation, nor without Iran as a partner. He pointed to the fact that Iran's lack of transparency concerning its uranium enrichment program worries GCC states as they are unsure of the security measures set in place on Iran's part to prevent nuclear disaster.

Dr. Sami al-Faraj concluded by suggesting that the US does not need to marry Iran and bring her back into the household. Rather, Iran must have a special status and be aware of its borders and barriers.

MEI's 61st Annual Conference - Closing Remarks

H.E. Abdullah AlirezaH.E. Abdullah Alireza — Mon, 26 Nov 2007 11:42:01 -0500

Abdullah Alireza began his address on a positive note, drawing attention to the encouraging developments of the economic sector in the Middle East. He emphasized that in the three decades since his last visit to the National Press Club as a Georgetown student in 1968, the economic trajectory of the Middle East has been significantly altered. The benefits reaped for the Kingdom of Saudi Arabia from the economic boom of the 1990s are considerably different than the economic improvements that were ushered in as a result of the windfall from the 1970’s oil boom.

Alireza highlighted Saudi accession to and participation in the World Trade Organization and underscored that despite the region’s ongoing struggle to position itself favorably in the 21st century, the Middle East is not in a state of perpetual negative flux.

Despite the chaotic backdrop, he contended that the Middle East is experiencing an economic boom and the Gulf Cooperation Council (GCC) is emerging as a strong and stable entity, which along with China, constitutes a $300 billion current account surplus—55 percent of which was invested in the US between 2002-2006. The GCC has also helped link North Africa to the rest of the Arab world; GCC exports have been the drivers of integration, increasing from 5.8 percent to 8.9 percent in the last few years alone. The private sector has also been quite active, demonstrating sustainable progress amid economic diversification.

Mr. Alireza noted that Saudi Arabia is ranked 25th among the world economies and the Kingdom boasts a $700 billion stock market. World Bank data demonstrates that unemployment is declining. He noted that some consultants calculated that Saudi Arabia is able to offer some 600,000 jobs in middle management, with approximately 200,000 Saudis qualified to fill the positions. He said there is $600 billion available for economic investment; much of which could be allotted for various sectors including natural gas, chemicals, tourism, technology, and much more. Saudi Arabia is also seeking greater cooperation between China, India, Brazil and Turkey.

The Saudi advisor said King Abdullah took a another step in 2004 to try to open the way for future economic successes for his nation by delineating the four steps needed for a healthy transition to private sector development: diversification, increasing private sector opportunities, enhancing bureaucratic efficiency and utilizing private sector capital for investment. Another effort has included construction of the King Abdullah University for Science and Technology—the only institution outside of the Jeddah, Riyadh and eastern provinces devoted to research and development. Seventy percent of the members on its board of trustees are non-Saudi. Its president is also President Emeritus of Cornell University. Ideally the university would accommodate some 300,000 graduates.

Notwithstanding these hopeful measures, he said US investment in Saudi Arabia remains highly deficient. Mr. Alireza called for greater western economic involvement and suggested greater use of economic restructuring to alleviate some of the issues plaguing Palestine, Lebanon and Iraq. He also underscored the importance of modernization and development in conflict resolution.
Saudi Arabia, he said, can continue to foster a robust economy well into the future by investing the wealth from its vast oil revenues into technical knowledge and human capital and by promoting institutional collaboration. He emphasized that Adam Smith’s predictions 200 years ago rings true today—that free market economics and capitalism is the key to building a viable and sustainable society.

Abdullah Alireza urged that dialogue replace the chaos and destruction in the region that has colored relations between the West and the Muslim world.

Israeli and Palestinian Economic and Civil Policy: A New Strategy

Haggai Alon, Senior political advisor to Israeli Minister of Defense Amir Peretz — Wed, 28 Feb 2007 12:00:00 -0500

Mr. Alon opened his presentation with a quote from Abraham Lincoln: “the dogmas of the quiet past are inadequate to the stormy present.” This quote refers to Israel’s need to improve the living conditions of the Palestinian population as a prerequisite for resolving the conflict. According to Mr. Alon, alleviation of the socio-economic reality in which the Palestinian population has been living will eventually enable the establishment of an independent Palestinian state alongside Israel.

Mr. Alon acknowledged that the challenges facing the MoD in executing a new strategy are numerous. Obstacles include the current halt in peace talks between Israel and Palestine, the breakdown of official channels between the two governments, the functional deterioration of the Palestinian Authority (PA) due to the violent rivalry between Hamas and Fatah, and the severe economic regression of the Palestinian Territories, which have a 60-70% unemployment rate. He emphasized, however, that these challenges cannot persist for much longer given the political and strategic reality.

Mr. Alon outlined the MoD’s new socio-economic policy, which relies on three main strategic pillars. First is the idea that security and economic prosperity are inseparable and depend upon on one another. Second, Israeli-Palestinian functional interdependence needs to be maintained under extreme political conditions, i.e., any economic development promoted by the MoD could not revert even during political turmoil. The third pillar is the concept that short-term solutions create long-term damage. Therefore, financial aid from the international community cannot solve economic and societal issues in the long run. Mr. Alon added that since prosperity is a product of a development-oriented political environment, it is incumbent on the MoD to create an environment in the Palestinian territories that is suitable for developmental projects.

According to Mr. Alon, the underlying logic for building such an environment is the view that the Israeli and Palestinian societies are in fact “Siamese twins.” Consequently, disengagement is not feasible for these two populations. Economic links, especially in the agricultural and industrial sectors, are vital to both Israelis and Palestinians. Additional ties between the two societies exist in the energy and environmental fields. Issues such as Palestine’s dependence on Israel as its primary source of electricity, and the pressing, mutual environmental concerns of both Israelis and Palestinians as residents of a comparatively small land area between the Mediterranean and the Jordan River, cannot wait until a peace agreement is reached to be resolved. Moreover, Israel must gradually remove roadblocks inside the Palestinian Territories to allow for greater movement of people and goods; indeed, in order for the PA to achieve anything close to full employment, substantial numbers of Palestinians must have access to work inside Israel.

Mr. Alon asserted that the strengths of the MoD’s new strategy lie in realizing the interdependence of the Israeli and Palestinian societies, linking security with economic development, viewing the Palestinians as partners rather than enemies, and in incorporating pledges from international organizations. Regarding this last element of the strategy, he pointed to the development of several economic cooperation projects that are internationally funded. One such example is the Turkish-financed Ankara Project in which an industrial park which was previously located on the Israeli side of the Erez cross point in Gaza is being rebuilt on the Palestinian side. Mr. Alon estimated that the first factory will be built by October 2007 and might attract private investors to the area.

Mr. Alon concluded by stating that the greatest challenge facing the MoD was to combat endemic pessimism and restore hope in both Israelis and Palestinians that a solution to the conflict does exist. Reviving this hope will be a long process that depends first and foremost on rebuilding trust between the two groups via economic improvement, while also taking into account ongoing security concerns.