IA) Political Developments: Covid-19 Pandemic
Regional Impact of Covid-19:
- Even as the global death toll from the Covid-19 pandemic crossed the 5 mn mark by the month-end, there were signs of gradual improvement of the situation in the WANA region. While resurgence the pandemic continues to be a threat, higher vaccination and booster doses, herd immunity and institutionalised measures such as quarantines and lockdowns appear to have turned the tide.
Covid-19 and the Individual WANA Countries:
- On Oct 3, Israel began a campaign of booster shots to those already vaccinated.
- Saudi Arabia dropped social distancing protocols at the Grand Mosque in Makkah from Oct 17.
- Friday prayer congregations, an integral part of Shia Islam, were resumed in Iran from Oct 22.
- On Oct 10, Egyptian authorities announced the arrest of three persons blamed for missing 18,400 vaccines doses
IB) Political Developments
WANA and Afghan Transition:
- An official Taleban delegation led by their acting foreign minister, Mullah Amir Khan Muttaqi visited Qatar on Oct 10 to hold separate talks with the US and the EU delegations. These were the first contacts since the Taleban takeover of Kabul on Aug 15. While there were no statements from the US or the EU, the Taleban described them as “positive.” On Oct 12 Qatari Foreign Minister’s Special Envoy on Afghanistan said that recognition of the Taleban government was not a priority for Qatar and the focus should be on engaging with the new administration and addressing humanitarian issues.
- On Oct 1, Turkey Red Crescent announced plans to send food aid to feed 16,000 Afghans for a month. The aid was to be delivered via Pakistan.
- On Oct 27, Iran hosted a foreign ministers’ conference on Afghanistan with Pakistan, Turkmenistan, Uzbekistan and Tajikistan attending. FMs of Russia and China participated through the video links. Iran condemned the attack on Bibi Fatima Shia mosque in Kandhar on Oct 15 in which more than 40 persons died as “a terrorist act.”
The COP26 and WANA Region:
In the run-up to COP26 at Glasgow at the end of the month, some WANA countries got proactive.
- Turkey, ratified the Paris climate deal on Oct 7, becoming the last G20 country to do so. Ankara had held out in its unsuccessful bid to be counted as a developing country. President Recep Tayyip Erdogan, however, cancelled his participation in COP26 at the last minute citing some hospitality-related tiff with the organisers.
- The United Arab Emirates announced on Oct 7 to aim for net carbon neutrality by 2050. – becoming the first WANA country to do so. UAE’s Vice President and PM, Mohammed bin Rashid announced the country plans to invest $165 bn in clean energy by 2050 on top of $40 bn already spent in past 15 years. It hoped that the gesture would help its bid to host COP28 in 2023.
- Meanwhile, the next COP27 is to be held in Egypt in 2022.
- On Oct 23, Crown Prince Mohammed bin Salman announced that Saudi Arabia would target attaining net carbon zero status by 2060. Two days later he launched a Middle East Green Initiative aimed to secure $10.4 bn for an investment fund and clean energy project as part of efforts to reduce regional carbon emissions. This was in addition to Saudi Arabia’s own Saudi Green Initiative programme would involve investments of $190 bn by 2030.
- Relevant to note that the GCC countries are important stakeholders in the global climate discourse both as among the highest per capita carbon emitters and as primordially dependent on hydrocarbon exports. On Oct 19, Qatar established a new Ministry to tackle Climate Change issues.
Pandora Papers and WANA Region:
Oct 3 “Pandora Papers” disclosures of financial malfeasance by some highly visible global personalities mentioned some WANA notables. Among these were the following:
- On Oct 5, the Jordanian Royal Court denied that it had anything to hide about the allegations that King Abdullah had spent over $100 mn on personal properties in the UK and the US, as alleged in the so-called Pandora Paper revelations.
- Reacting to Pandora Papers disclosures about some personal property transactions abroad, Lebanon PM Najib Mikati’s office denied on Oct 5 that there was any illegality in them. It asserted that his family wealth came from a communications business that has been audited in the past and was legal.
- Pandora Papers also claimed that Qatar’s Royal family had avoided GBP15.5 mn in taxes while buying a large property in the UK.
Iranian Foreign Minister Hossein Amir-Abdollahian paid his maiden visits to Russia, Lebanon and Syria on Oct 7-9. He visited Moscow on Oct 7 to meet his Russian counterpart, Sergey Lavrov. In Lebanon, he met the President, PM, Parliament Speaker and the leaders of Hezbollah and Palestinian groups. In his public statements, he offered to rebuild the Beirut port area and two power plants. He also promised to continue fuel product shipments to Lebanon and expressed readiness to enter into a long-term deal. In Damascus, he was received by President Bashar al-Assad on Oct 9.
In the first such bilateral contact, Iran and Pakistan had Deputy Foreign Minister level discussions in Islamabad on Oct 6. Dy FM Ali Bagheri Kani, leader of the Iranian delegation was also received by Pakistani Foreign Minister Shah Mahmood Qureshi. A Pakistani statement described these as wide-ranging bilateral talks on a broad spectrum of topics, including the regional security situation since the Taliban takeover of Afghanistan, Iran-Pakistan border security as well as “the disputed territory of Kashmir.”
Iran acted with considerable alacrity at growth in defence ties between neighbouring Azerbaijan and Israel, Islamic Republic’s arch enemy. Iran’s army and the Islamic Revolutionary Guard Corps (IRGC) started military exercises near the Azerbaijan border on Oct 1. Iranian Foreign Minister asserted that Iran would not tolerate Israel’s presence or activity “next to our borders” and vowed to take any necessary action. Eventually, on Oct 13, the two foreign ministers talked on the phone and agreed to resolve the issues through dialogue. In a separate move, Iran held a country-wide air-defence exercise on Oct 12.
During the month, there was plenty of talk about the resumption of indirect talks on the US rejoining the JCPOA and removal of Trump-era economic sanctions on Iran. President Raisi’s government seemed to be in no hurry to resume the dialogue and did not indicate any date for it during the month. It also adopted a tough negotiating stand, from asking for “the US to unfreeze $10 bn worth of Iranian funds as a sign of goodwill for the talks” (Iranian FM on Oct 2), “seriousness of JCPOA negotiations means lifting of sanctions” (President Raisi on Oct 18), “Iran has so far enriched 120 kg uranium to 20% level and has been producing 60% enriched uranium only to be remixed back (Head of Iranian Nuclear Commission on Oct 10) and “Iran not ready to resume Vienna talks, plans Brussels meeting first” Reuters Oct 16. On Oct 26, the US Special Envoy on Iran expressed “increased worry” about the delay in the resumption of talks. Finally, on Oct 30, HOS/HOG of four western countries signatories of JCPOA issued a joint statement on the sidelines of the G20 Summit at Rome urging Iran to resume compliance with a 2015 nuclear deal to “avoid a dangerous escalation”. They went on to call upon President (Ebrahim) Raisi “to seize this opportunity and return to a good faith effort to conclude our negotiations as a matter of urgency. That is the only sure way to avoid a dangerous escalation, which is not in any country’s interest.”
Comment: The exit of President Trump, the architect of “maximum pressure” on Iran strategy, and his replacement with more accommodative President Biden (Vice President during JCPOA negotiations) was expected to bring greater bilateral normalcy. This has eluded the negotiators partly because the Iranian political spectrum has moved in the opposite direction with hardliners now in power. Iranian pursuit of its nuclear ambitions seems unabated by the economic deprivations – raising Western suspicions. Moreover, several secondary factors, such as Iran-Israel shadow boxing, Iranian regional role in Iraq and Syria, Saudi threat perception, Afghan imbroglio and Iranian hobnobbing with usual suspects such as China and Venezuela have also addled the witches brew. This tryst between an immovable object and irresistible force is set to continue for the foreseeable future, which should be counted in weeks on figures of one hand.
Venezuelan Foreign Minister visited Tehran on Oct 18 and was received by President Raisi. He announced that President Maduro would visit Iran in a few months. The visit was preceded by an Iranian oil super-tanker departing with Venezuelan crude on Oct 16.
A cyber-attack on the petrol vending system on Oct 26 resulted in long queues of cars and considerable confusion. The authorities blamed Israel and the US.
Prime Minister Naftali Bennett met Russian President Vladimir Putin in Sochi on Oct 22 for their first summit likely dominated by issues concerning Syria and Iran.
Foreign Ministers of the UAE and Israel held a joint meeting with US Secretary of State in Washington on Oct 13. The event marked one year of the Abraham Accords. There were signs of some dissonance at the subsequent joint press conference. US Secretary of State Blinken disclosed the US intention to reopen the American Consulate in Jerusalem to coordinate with Palestinian Authority – a move strongly opposed by Israel. Similarly, the Emirati FM said that there could be no talk of peace in the Middle East if Israel and the Palestinians were not “on talking terms”. He also promised to visit Israel soon. The three ministers decided to set up two working groups on religious co-existence and water management and energy issues.
On Oct 27, the Israeli government gave preliminary approval to 1344 housing units and final approval for 1800 housing units for Israel settlers in the occupied West Bank. The move was sternly rebuked by the State Department saying that it was damaging to the “peace prospects.” Israel has so far settled some 440,000 Israelis in the West Bank, citing biblical, historical and political ties to the area, where 3 mn Palestinians live.
Israel hosted the “Blue Flag” multinational air exercises during the last week of October. These, held every two years, were the largest ever. Even as the UAE did not participate in the exercises, its air force chief visited Israel to be on hand.
On October 25, the Israeli cabinet approved a $9.4 bn package to improve the socio-economic conditions of its Arab minority which constituted nearly a fifth of the total population.
Joshua Angrist, an Israeli-American academic, was one of the three economists awarded the Nobel prize for economics on Oct 11.
Prime Minister Imran Khan of Pakistan visited Saudi Arabia on Oct 21-25, during which he was received by Crown Prince Mohammed bin Salman on Oct 25. The official delegation included the Foreign and Energy Ministers. This was PM Khan’s second visit to Saudi Arabia this year. He also addressed the FII Investment Summit in Riyadh. Among the tangible gains from the visit was the Saudi Fund for Development agreeing to deposit $3 bn with the State Bank of Pakistan. Further $1.2 bn annual deferred payment facility for the purchase of Saudi crude, withdrawn in 2018, was restored.
Comment: The Saudi funding for Pakistan was stopped as Islamabad flirted with Turkey and Malaysia to create an alternative Islamic pole to the Kingdom which was tepid to use of the OIC against Indian move to change the status of Jammu & Kashmir. The bitter lesson was not lost on Pakistan and Islamabad has worked hard to get back to the good books of Riyadh. The restoration of Saudi monetary assistance was timely as it shored up the tottering Pakistani currency which spurted by 2.48 units (nearly 1.5%) to the US dollar. The official Pakistani press release on the visit was conspicuously silent on issues concerning India and J&K dispute. Relevant to note that on Oct 31 Saudi Arabia also similarly deposited $3 bn in Egypt’s Central Bank and extended the term of $2.3 bn previously deposited.
Saudi Foreign Minister Prince Faisal bin Farhan Al-Saud met with his US counterpart Antony Blinken in Washington on Oct 14. In a press conference the next day he said that Iran’s acceleration of its nuclear activities is putting the world in “a very dangerous place” and urged a “quick resumption” of indirect talks between the United States and Iran. While confirming that the Kingdom and Iran have had four rounds of talks since 2020, he added that “These interactions, while cordial, have been exploratory in nature and have not reached a state where we can say that we’ve made substantial progress.”
For Saudi Arabia’s frictions with Lebanon, please see the entry under Lebanon
Saudi Arabia held an FII Investment Summit on Oct 27 during which the Investment Minister disclosed that the FDI had risen by 60% in 2021 so far y/y, even if Aramco’s $12.4 bn oil pipeline sale to a US consortium was excluded. He did not provide any absolute numbers. The licenses were issued to 44 international companies for setting up their regional headquarters in Riyadh under the kingdom’s push to become a regional commercial hub and vie for foreign capital and talent. Saudi Arabia expects the number to go up to 480 by 2030 adding $18 bn to the economy and providing around 30,000 job opportunities.
On Oct 7, a consortium led by Saudi Public Investment Fund (PIF) finally took over Newcastle United Football Club reported for GBP300 mn. The transaction had collapsed last year amidst political bickering about the Kingdom’s human rights record and the perceived need to maintain the integrity of British Premier League football values in face of the deep pockets of the Gulf financiers.
The Cricket T20 World Cup 2021 began in UAE and Oman on Oct 17 with the final to be played in Dubai on Nov 14. The 16-member tournament was initially scheduled to be held in Australia in 2020, but was shifted first to India due to Covid-19 and then to the UAE and Oman.
On Oct 7, Israeli cybertech company NSO announced the termination of the $300 mn contract with the UAE to supply Pegasus snooping software after its misuse in hacking the mobile phone of the ex-wife of Dubai Emir Sheikh Mohammed bin Rashid Al-Maktoum was publicly revealed in a UK children custody court case.
On Oct 31, President Recep Tayyip Erdogan had a meeting with US President Joe Biden on the sidelines of the G20 Summit in Rome. This Summit was preceded by extensive preparations: There was a bilateral NSA-level interaction in Washington on Oct 27. Their defence ministers also spoke on phone. While the Turkish Presidency called the meeting “positive”, the US sources merely gave a bare-bone summary of discussions without any spin.
Comments: The warm bilateral ties during the Trump era have cooled considerably since President Biden took over the White House. The two sides have diverged on fundamental issues such as Biden honouring his pledge on the Armenian genocide, the US military support to YPG Kurdish militia – regarded as terrorists by Turkey – in Syria, Ankara’s procurement of S-400 missile batteries from Russia leading to the US sanctions and denial of F-35 jets and lukewarm response on additional F-16s. President Erdogan, the first openly Islamist President of modern Turkey, has often bristled at perceived American interference while the US has not shied away from criticising Turkey for violation of human and legal rights. Against this inclement backdrop, their first meeting in Biden Presidency was keenly watched for a reset of ties. The prima faci impressions seem to be underwhelming.
Further Reading: “As the lira tanks, so does the stock of Turkey’s president” The Economist 30/10/2021; https://www.economist.com/europe/2021/10/28/as-the-lira-tanks-so-does-the-stock-of-turkeys-president
President Erdogan began a tour of Angola, Nigeria and Togo from Oct 17.
Comment: Under Erdogan since 2004, Turkey has assiduously expanded its ties with Africa, with a welter of motives ranging from economic spin-offs, Islamic solidarity and revival of historic ties during the Ottoman era. As Turkey’s PM and President since 2004, Erdogan has visited 30 African countries, more than any other non-African leader. From $5.4bn in 2003, Turkey’s annual trade with Africa has surged from $5.4 bn in 2003 to over $25bn in 2020. The country has 43 embassies in Africa. Turkish Airlines operates flights to 60 different destinations across 39 African countries. President Erdogan’s visit preceded Turkey-Africa Business Summit in late October and the third Turkey-Africa Summit in December 2021.
On Oct 23, President Erdogan ordered the Turkish Foreign Ministry to declare ten western ambassadors, including one from the US, as persona non grata for jointly demanding the release of Turkish philanthropist Osman Kavala, detained for the past four years. The contretemps was resolved, at least temporarily, two days later with the diplomatic missions reiterating that their adherence to the diplomatic conventions on non-interference. This allowed Turks to claim victory and withdraw the threat of expulsion.
Turkish Parliament adopted a resolution on Oct 26 extending the military missions in Syria and Iraq by two years.
On Oct 19, the European Commission published its annual report of progress made by Turkey towards its accession to the European Union. It took a pessimistic view of such prospects.
At NATO Defence Ministers’ meeting in Brussels on Oct 23, Turkey criticised members forming military alliances outside the NATO framework as harmful – indirectly hitting France and Greece which have signed a defence agreement earlier this year.
In a serious escalation in security situation, 7 Hezbollah activists demonstrating against the court summons to some of its leaders on the last year’s Beirut port blast, were shot dead by unknown assailants, suspected to belong to Christian militia called the Lebanese Forces, which denied involvement. Although it was the bloodiest sectarian bloodletting in the recent past, Hezbollah avoided raising the ante. Meanwhile, Tarek Bitar, the judge involved, ignored the calls for him to resign.
The parliament voted twice on Oct 19 and Oct 28 to overturn Presidential advisory against holding the next parliamentary elections early on March 23, 2022.
On Oct 17, Saudi Arabia advised its citizens not to travel to Lebanon.
Lebanon’s ever prickly ties with Saudi Arabia were put under severe strain on Oct 29 owing to airing by al-Jazeerah TV of a previously recorded interview of George Kordahi, current Lebanese cabinet minister of information, criticising Saudi military action against al-Houthi militia of Yemen. Riyadh acted angrily to expel the Lebanese ambassador and recall its ambassador from Beirut and ban entry of all Lebanese goods. Some other GCC countries including Bahrain also followed suite with measures against Lebanon. Although Lebanese President and PM sought to control the damage, Mr Kordahi refused to resign, pointing out that he was not a minister when he participated in the TV debate on August 5. On Oct 30, Saudi foreign minister said that the latest crisis with Lebanon has its origins in a Lebanese political setup that reinforces the dominance of the Iran-backed Hezbollah armed group and continues to allow endemic instability. The same day, the Arab League express concern about a rapid deterioration of Lebanese-Gulf relations and appealed to the Gulf countries “to reflect on the measures proposed to be taken… to avoid further negative effects on the collapsing Lebanese economy”.
On Oct 13, the secretary of State Anthony Blinken stated the American intention to reopen the US consulate in Jerusalem, main conduit for engagement with Palestine Authority. It was closed under Trump administration which decided to shift the US embassy to Israel to Jerusalem from Tel Aviv. After initial silence on the proposed US move, the Israeli government hinted its preference to have the consulate opened in the West Bank instead.
The first general elections for 30 seats of the Shoura Council were held on Oct 2 with 233 candidates among whom 26 were women (-none of whom were elected). The voter participation was 63.5%. In his inaugural address to the Shoura Council on Oct 26, Emir Tamim bin Hamad Al-Thani criticised excessive tribalism as a malaise. He disclosed that said the cabinet was preparing the legal amendments to promote “equal Qatari citizenship” and send them to the Council for approval.
Comment: The elections were initially proposed in 2013, but were repeatedly postponed. While the voting passed of peacefully among Qataris who are estimated to be less than 300,000 (the electoral college would be a fraction of that number), it stirred passions about narrow voting eligibility: being confined to the descendents of those who had Qatari nationality in 1930. Al-Murrah, one of the main Qatari tribes, protested exclusion of a large number of their members from the elections and a few arrests were made for incitement. The Shoura Council has 45 members, all of whom were hitherto nominated by the Emir. Following the election of 30 members in this election, the nominated members’ number would come down to 15. While the Shoura Council will have legislative authority and approve general state policies and the budget, it would have no say in the setting of defence, security, economic and investment policies. All political parties are banned in Qatar.
Some tentative moves towards national reconciliation were made during the month. Thus on Oct 4, the east-based parliament agreed to the electoral law to manage the national general election scheduled for Dec 24. However, a day later it decided to hold only the Presidential election on that day, delaying the legislative elections to Jan 2022.
On Oct 9, the two rival sides in the Libyan conflict initialled a deal at the UN-sponsored Joint Military Commission meeting in Geneva to organise a “gradual and balanced” withdrawal of foreign fighters and mercenaries from Libya.
Despite some contrarian developments, normalisation of Syria’s ties regionally and internationally continued during the month with the following main developments:
(i) On Oct 3, Jordan’s King Abdullah II received a telephonic call from Syrian President Bashar al-Assad. This was the first time in nearly a decade since the two neighbouring countries have had such a high-level contact – indicating a gradual return of bilateral normalcy.
(ii) President Bashar al-Assad and Abu Dhabi Crown Prince Mohammed bin Zayed had a telephone conversation on Oct 20. The two Economy Ministers met on Oct 10 on the sidelines of Dubai Expo 2020. The UAE side put the bilateral trade during H1/2021 at $272 mn.
(iii) On Oct 8, Interpol reintegrated Syria into its information exchange network, suspended since 2012.
(iv) After some tentative progress on the UN-sponsored Geneva talks on Oct 17-22 between Al-Assad government and the opposition on the post-conflict political roadmap for the country, the sharp and irreconcilable differences re-emerged.
(v) Secretary of State Antony Blinken said on Oct 13 that the US did not support the normalisation of ties with Syria until there is an ‘irreversible progress towards a political solution’.
Comment: Multiple impetuses were at work to foster reconciliation between Damascus and regional Arab countries after a decade of estrangement and hostilities. Firstly, the reconciliation was an acknowledgement of al-Assad regime’s de facto control of most of the Syrian territory. Secondly, some were motivated by lucrative post-war reconstruction contracts. Some others wished to let bygone be bygones before Syria got stronger and vindictive. Weaning Syria (and Lebanon) away from Iran motivated some, yet some others hoped to use Damascus’ good offices to have a backchannel link to Iran as the nuclear imbroglio seemed headed for high noon. Relevant to note that under President Hafez al-Assad, Syria played a brokers role consummately between the Gulf Arabs and Iran.
Further Reading: “Analysis: Arabs ease Assad’s isolation as U.S. looks elsewhere” by Maha El Dahan, Reuters, Oct 11 2021; https://www.reuters.com/world/middle-east/arabs-ease-assads-isolation-us-looks-elsewhere-2021-10-10
An army bus bombing in Damascus on Oct 20 killed 14 persons. This was a rare terror attack in Syrian capital. In an apparent retaliation few hours later, Syrian army shelled opposition enclave of Idlib, leading to 12 deaths.
Eleven weeks after dismissing the previous cabinet, on Oct 11 President Kais Saied approved a new government selected by newly-appointed Prime Minister Najla Bouden Romdhane. It was dominated by non-political figures with an academic or technical background. She kept the ministers of finance and foreign affairs already appointed by the president. In her first public speech since her nomination, PM Bouden said on Monday that “the fight against corruption will be the most important aim” of the new government.
Comment: The appointment of a cabinet is likely to mitigate the criticism President Saied has faced both domestically and from abroad for his sacking of the previous government and suspension of the parliament on July 25.
On Oct 16, Ons Jabeur, a Tunisian female player, became the first Arab to be seeded among the top-10 in the world tennis ranking.
On Oct 25, the state of emergency imposed since 2017 was finally lifted by the Egyptian government, which cited improved security situation.
Following last month’s legislative elections, King Mohammed VI appointed a cabinet with RNI leader and billionaire Aziz Akhannouch as Prime Minister. The new cabinet kept the foreign and interior ministers in place from the previous cabinet.
The month witnessed plenty of pyro-techniques between Algeria and France, its former colonial power. On Oct 3, Algeria recalled its ambassador in Paris and banned French overflights in protest at President Macron’s speech at a conference of Harakis, those Algerians who collaborated with French colonialists. A week later, President Tebboune publically demanded total respect for Algerian State before the ambassador’s return. Perhaps to pacify the ruffled feathers in Algiers, on Oct 17, President Macron attended the remembrance anniversary marking violent suppression of an Algerian demonstration in Paris in 1961, calling the incident “inexcusable”.
On Oct 29, the UN Security Council renewed the mandate of the UN Peace Keeping mission in Western Sahara. The vote was 13-0 with Russia and Tunisia abstaining. While calling for a resumption of negotiations on the future of the territory, the Council also approved the appointment of veteran diplomat Staffan de Mistura as the new UN Envoy on Western Sahara.
Said Bouteflika, brother of the last President, was jailed for two years for obstructing the course of justice.
On Oct 7, the UN Human Rights Council decided to close the body’s ongoing war crimes investigations in Yemen. It was voted with 21 countries for, 18 opposing and 7 abstaining.
Six persons were killed in a car bomb attack in Aden on a convoy of Ahmed Lamlas, Governor of the Aden province and Secretary-General of the Southern Transitional Council. While Mr Lamlas was unhurt, five of his entourage were killed. No one claimed responsibility for the attack.
During the month al-Houthi militia gained ground in the fighting in oil-rich Shabwa and Marib war zones. A missile attack on Oct 31 resulting in 29 casualties in Marib was blamed on al-Houthis.
The fifth general elections for Iraq’s 329-member unicameral parliament were held on Oct 10. While no party got a majority, the results were: Shi’ite Muslim cleric Moqtada al-Sadr’s party (73, gaining over a third from the last election), Sunni parliament speaker Mohammed al-Halbousi’s Taqaddum coalition (38 seats), former PM Nouri al-Maliki’s State Of Law coalition (37), Masoud Barzani’s Kurdistan Democratic Party (32 of the 61 seats won by Kurdish parties). Pro-Iran Fatah Alliance had a bad election with its tally of seats dropping from 48 to 14. Kataib Hizbullah, the most pro-Iranian militia, fielded 31 candidates but won only a single seat. The official turnout figure of just 41%, the lowest recorded so far in post-Saddam Iraq.
Comment: Fractious results of the recent Iraqi elections were symptomatic of a deeply divided society and its largely cynical political elite. The youth (The “Tishriniyun”) who sustained a largely non-violent movement against the two-decade-old “Mushsasa Taifiyah” (sectarian quota) system which institutionalised the political patronage largely on a tribal and sectarian basis. However, a deeply divided mandate, (such as the latest elections where the most successful party got just 22% of the seats) requires months of horse-trading among the politicians. The outcome is normally a string of compromises further entrenching the corruption-prone system that keeps most Iraqis dispossessed, despite the huge oil revenues. In retrospect, the two years of the Tishriniyun’s agitation (which initially sought early elections, but eventually decided to boycott them as the process remained unchanged) with nearly 600 deaths would appear to have yielded only two tangibly positive results: Firstly, Imtidad party, their political outfit, gained 20 seats in the elections; Secondly, Fatah, the political group representing pro-Iranian militias – often accused of violent suppression of the agitators – suffered a humiliating setback getting less than a third of its seats.
Further Reading: “Iraq’s dismal election prompts militias to threaten violence” The Economist, 15/10/2021; https://www.economist.com/middle-east-and-africa/2021/10/14/iraqs-dismal-election-prompts-militias-to-threaten-violence
Masdar, an Abu Dhabi emirate run sovereign wealth fund, signed a deal on Oct 6 to set up five large solar farms in Iraq with a total installed capacity of 1 GW.
On Oct 25, Sudanese Armed forces announced that they had seized power from the Transitional Government and dissolved the Sovereign Council. A state of emergency was declared and Prime Minister Abdalla Hamdok was arrested together with some of his civilian ministerial colleagues and activists. Announcing the takeover, military leader Gen Abdel Fattah al-Burhan justified the move as caused by bickering between the civilian administrators. He promised “The Armed Forces will continue completing the democratic transition until the handover of the country’s leadership to a civilian, elected government,” after the general election scheduled in 2023. He denied that it was a military coup d’etat, stating that “We only wanted to correct the course to a transition.”
There were swift reactions to the military takeover of power in Sudan. Domestically, there were angry, but peaceful demonstrations against the move demanding restoration of full democracy culminating in a million people march in Khartoum on Oct 30. Police and military attempts to suppress these demonstrations led to 11 deaths in the week till month-end. These demonstrations and protests were led by Forces for Freedom and Change (FFC) and the Sudanese Professionals’ Association (SPA). Internationally, the UN Security Council issued a press statement on Oct 28 with the following main text:
“The members of the Security Council expressed serious concern about the military takeover in Sudan on 25 October, the suspension of some transitional institutions, the declaration of a state of emergency and the detention of Prime Minister Abdalla Hamdok, as well as other civilian members of the transitional government.
“The members of the Security Council called for the immediate release of all those who have been detained by the military authorities, and in this regard, took note of the reported return of Prime Minister Hamdok to his residence. They also called upon all parties to exercise the utmost restraint, refrain from the use of violence and emphasize the importance of full respect for human rights, including the rights to peaceful assembly and freedom of expression.
“The members of the Security Council called upon Sudan’s military authorities to restore the civilian-led transitional government based on the Constitutional Document and other foundational documents of the transition. They urged all stakeholders to engage in dialogue without preconditions to enable the full implementation of the Constitutional Document and the Juba Peace Agreement, which underpin Sudan’s democratic transition.
“The members of the Security Council expressed their solidarity with the people of Sudan and affirmed their readiness to support efforts to realize Sudan’s democratic transition in a manner that achieves the hopes and aspirations of the Sudanese people for an inclusive, peaceful, stable, democratic and prosperous future. The members of the Security Council underscored that any attempt to undermine the democratic transition process in Sudan puts at risk Sudan’s security, stability and development. The members of the Security Council reaffirmed their strong commitment to the sovereignty, independence and territorial integrity and national unity of Sudan.”
In addition, African Union suspended Sudan’s membership. The US froze the promised financial aid package to Sudan worth $700 mn and the World Bank and IMF followed suit. The EU and the Arab League also opposed the military coup and demanded adherence to Aug 2019 transitional arrangement between the military and civilian politicians.
Comment: Since its independence in 1956, Sudan has seen 16 military coups. The country has had civilian governments for only around ten years in its 65 years of existence. The military rule has, in general, been divisive, corrupt and unable to provide good governance leading to endemic poverty, insurrections and the resultant undercurrent of popular disaffection. After their success in toppling Gen Oman Hassan al-Bashir’s 30-year-old government in 2019, the proverbial man in the street appears in no mood to be short-changed. At the same time, over two years of the transitional government has yielded very few tangible gains for the average Sudanese. Further, the example of Egypt, the trend-setting Big Brother in the north to Sudanese, where the post Arab Spring experiment with democracy led back to a military take over does not inspire confidence. Last but not the least, political uncertainty in Sudan could pull in the Islamic terrorism. They are not waiting for an invitation: On Sept 28, 5 Sudanese security officials were killed in Khartoum during a raid where 11 suspects of different nationalities were arrested. A week later on Oct 4, four suspected Islamic State-linked militants and one Sudanese security officer were killed during the second raid also in Khartoum. Indeed Sudan has long had a fringe dabbling with fundamentalism: from Mehdi-ism to Al-Qaeda and ISIS.
Further Reading: “Sudan’s democratic transition is upended by a second coup in two years” The Economist 30/11/2021; https://www.economist.com/middle-east-and-africa/sudans-democratic-transition-is-upended-by-a-second-coup-in-two-years/21805857
On the conclusion of an Article IV mission to Kuwait, the IMF team issued a report on Oct 20. It noted that the country’s GDP contracted by (-)8.9% in 2020, but projected the overall GDP growth around 2.7% over the medium term. It had suffered a fiscal deficit of (-)15.4% of the GDP during FY2021 which is likely to become (+)2% surplus in FY2022. Apart from global factors such as the Covid-19 pandemic and low oil prices, it also noted that a “sustained political gridlock has hobbled reforms and increased macroeconomic vulnerabilities”, but expressed optimism that “a new high-level effort” could help resolve the impasse.
Comment: The IMF report was hopeful about the longstanding stalemate between the Royal-family led cabinet and the entrenched opposition in the parliament being resolved to pave the way for the stalled economic reforms being carried out. On Oct 20, Emir Nawaf Al-Ahmed Al-Sabah finally issued an amnesty to pardon dissidents, which has been a major condition of opposition lawmakers to end a months-long standoff with the appointed government that has held up planned fiscal reforms.
II) Economic Developments
Oil and Gas Related Developments:
- Brent oil futures gained 11% during October ended trading around $84.4 a barrel, up about 63% so far this year.
- OPEC+ group met on Oct 4 against the backdrop of a sellers’ market with Brent priced above $80/barrel. It ignored several pleas to raise production to meet the demand and stuck to its planned increase of 400,000 barrels/day per month for October 2021. Moreover, in its Oct 29 Report, OPEC+ Joint Technical Committee (JTC) stuck to the forecast and did not recommend any further hike in the production quota beyond 400,000 b/d.
Comment: Several factors continued to disrupt the demand-supply equilibrium. These included an extraordinary rise in gas prices – particularly in Europe, inability of several producers such as Nigeria, Venezuela and Libya to produce their quota, inability of the US Shale oil frackers to raise production due to financial legacy issues, etc. The OPEC+ producers, on their part, were also somewhat unsure of the permanence of the demand rise and therefore kept their bets short.
Further Reading: “As oil races toward $100, India, US and Japan tell OPEC+ enough is enough”, Bloomberg, Oct 30 2021; https://mybs.in/2ZiM2G5
- In its monthly bulletin released on Oct 13, OPEC trimmed its forecast for the world oil demand growth forecast for 2021 by 5.82 mbpd, down from 5.96 mbpd made in its previous forecast. It maintained the growth forecast of 4.2 mbpd for 2022.
- Asia LNG spot prices surged by 40% on Oct 6 to a record high of over $56 per mn BTU amid a global energy crunch. Qatar, the world’s biggest LNG exporter said on Oct 11 that its production was “maxed out”. All the same, on Oct 17, Qatar Gas announced the start of construction of four new LNG mega trains to raise annual production capacity to 110 MT from 77 MT at present.
Comment: This price works out to roughly over $320 per barrel of oil equivalent. The hike in LNG prices mirrors even sharper trends in Europe and is caused by a global energy crunch, low gas inventories and mounting supply concerns. Over the longer term, the past under-investment in gas upstream was also responsible for supplies falling short of surging post-Covid demand.
- Saudi Aramco said on Oct 31 that its Q3 net profit more than doubled to $30.4 bn from $11.8 bn y/y, boosted both by 12% higher crude oil prices and 9.6 mbpd production. The valuation of the company crossed the $2 tr mark, making it the world’s third most valuable company after Apple and Microsoft. It declared $18.8 bn as a dividend, most of which goes to the Saudi government.
- Saudi Arabian utility ACWA Power announced on Oct 23 financial closure of its $12 bn Jazan project for gasification, power generation and hydrogen production. It would be its joint venture with Saudi Aramco and US-based Air Products Inc.
Following economy-related developments took place in individual WANA countries:
- Turkey’s monetary policy continued to be perturbed under countervailing pressures with Central Bank’s intent towards tight money to curb near 20% inflation being challenged by President Erdogan’s unorthodox preference for lower interest rates. Things came to a head on Oct 13 when the Presidency overhauled the Bank’s Monetary Policy Committee causing the national currency Lira to fall to a record low. It fell further to 9.49 to a US dollar on Oct 21 as the bank reduced the benchmark rate by 2% to 16%.
- Saudi Arabia recorded a budget surplus of 6.7 billion riyals ($1.79 billion) in Q3/21, thanks to improved oil and non-oil revenue and reduced outflow. This was the first budget surplus of its kind in two years. IMF estimated that the country, which had a fiscal deficit of over 11% of the GDP in 2020, would reduce the figure to 4.2% this year. (Please also see item under Saudi Arabia in Part I)
- On Oct 13, the UAE approved a federal budget of 58.9 billion dirhams ($16.04 bn) for 2022.
Comment: The federal budget accounts for only a fraction of consolidated state spending in the UAE as individual emirates such as Abu Dhabi and Dubai have their budgets, which are higher. It is, however, an indication of official plans for the national economy.
- On Oct 21, FATF added Turkey, Jordan and Mali to the “Grey List” of countries that require enhanced monitoring of their financial activities to weed out money-laundering and terror funding.
- On Oct 2, S&P revised its outlook for Oman to “Positive” from “Stable”.
- According to the IMF data, Bahrain’s public debt climbed to 133% of the GDP in 2020 from 102% in the previous year due to the Covid-19 pandemic.
III) Bilateral Developments
- Among the four ambassadors who presented their credentials to President Ramnath Kovind on Oct 26 were H.E. Mr Naor Gilon, Ambassador of Israel and H.E. Mr Wael Mohamed Awad Hamed, Ambassador of the Arab Republic of Egypt. In his maiden press conference the next day, the Israeli ambassador described the ongoing Pegasus hacking row in the country as India’s “internal affair.” He also denied that the new “western” Quad grouping between the US, Israel, the UAE and India had any military component. He added that India and Israel hope to reach a Free Trade Agreement by June 2022.
- Prime Minister Narendra Modi and Minister for Petroleum and Natural Gas H.S. Puri addressed the CEO of Indian and multinational oil companies at the fifth India Energy Forum held by CERAWeek on Oct 20-22
- EAM Dr S. Jaishankar visited Israel on Oct 17-21. He met Prime Minister Neftali Bennett on Oct 20 and delivered him a letter of invitation for an India visit from the PM. An agreement on the mutual recognition of the Covid-19 vaccination was also reached. This was the first bilateral minister-level contact since the new Israeli government took office. EAM and his counterparts from Israel, the US and the UAE held a video conference on Oct 19 during which they agreed to establish a quadrilateral forum for economic cooperation for joint infrastructure projects in the fields of transportation, technology, maritime security, and economics and trade.
- Ninth Meeting of the India-UAE High-Level Joint Task Force on Investments was held in Dubai on Oct 2 under co-chairs Shri Piyush Goyal, Minister of Commerce & Industry and Sheikh Hamed bin Zayed Al Nahyan, Member of the Executive Council of the Emirate of Abu Dhabi. Among the issues on the agenda were Comprehensive Economic Partnership Agreement (CEPA) negotiations, amending the Bilateral Investment Treaty, facilitating further investment in India by the UAE SWFs, some issues faced by Indian investors in the UAE and bilateral air transport. Shri Goyal also attended the inauguration of the Dubai Expo 2020 and addressed the Indian Professionals’ Forum.
- Further Reading: “View: India-UAE CEPA negotiations is a case for making haste slowly” by Mahesh Sachdev, Oct 27 2021; https://economictimes.indiatimes.com/news/india/view-india-uae-cepa-negotiations-is-a-case-for-making-haste-slowly/articleshow/87285009.cms
- On Oct 18, an MoU was signed between the Union Territory of Jammu and Kashmir and the government of Dubai at the Raj Bhawan in Srinagar to build infrastructure such as real estate development, building industrial parks, IT towers, multipurpose towers, logistics, medical college, a super speciality hospital, etc. The ceremony was attended by Shri Piyush Goyal, Minister of Commerce & Industry.
- Comment: This was the first such bilateral MoU signed since the abrogation of Article 370 and indicated the UAE implicitly come to terms with the new realities in the Union Territory. While there appears to be no official reaction from Pakistan, the development triggered outrage in some sections of Pakistani media, which sees all J&K developments as a zero-sum game.
- On Oct 8 Indian Ministry of External Affairs issued a rejoinder rejecting the statement by the Organisation of Islamic Cooperation critical of some incidents in Assam state. The two statements are as under:
OIC condemns escalating racist attacks against the Muslim community in India’s Assam
The General Secretariat of the Organization of Islamic Cooperation (OIC) condemned the “systematic persecution and violence” ramping up against the Muslim community in Assam, India, claiming so far the lives of three Muslims in Daspur, capital of Assam, north-eastern India, during protests against an eviction drive of hundreds of Muslim families from the state had turned gruesomely deadly.
The OIC’s General Secretariat indicated that the media reports are disgraceful and call for a responsible stance by the government and officials in the Republic of India.
The OIC’s General Secretariat called on the Indian government to protect the Muslim minority and respect all their religious and social fundamental freedoms, noting that dialogue is the best way to address any issues within national sovereignty.
India slams OIC for misleading statement on eviction drive in Assam
In response to a media query about a statement by the Organization of Islamic Cooperation (OIC) on the unfortunate incident in the Indian State of Assam, the Official Spokesperson, Shri Arindam Bagchi said:
India notes with utmost regret that the Organization of Islamic Cooperation (OIC) once again chose to comment on matters internal to India by issuing a factually incorrect and misleading statement on the unfortunate incident in the Indian State of Assam. Indian authorities have taken due legal action in this regard. It is reiterated that OIC has no locus standi in matters concerning India’s internal affairs and it should not allow its platform to be subverted by vested interests. The Government of India rejects all such unwarranted statements and hopes no such references are made in the future.
October 08, 2021
- On Oct 11, Sudan finally conceded in the arbitration tribunal at the International Court of Justice in Hague that it owes India’s ONGC Videsh Ltd (OVL) $100 mn for a pipeline built by the Indian company. This sets the stage for a favourable award in the $530 mn arbitration launched by OVL three years ago that also includes claims over non-payment for oil lifted by the Khartoum government.
- An Indian consortium led by OVL has a contractual right to take a 30% interest in the Farzad-B gas field development in the Persian Gulf even after the Iranian decision to award rights of the giant field to a local firm an unnamed Indian official was quoted by Economic Times on Oct 17.
- Reuters exclusively claimed on Oct 18 that India had asked Qatar to expedite the delivery of 58 LNG cargoes delayed over the past two years. India’s top gas importer, Petronet LNG, has long-term deals to buy 7.5 MT per year of LNG from Qatar.
- On Oct 19, the Ministry of Petroleum and Natural Gas disclosed having asked Indian refineries to pool their demand for foreign crude together to obtain better terms.
- According to official Indian data for October 2021, the demand for petrol rose 3.9% over the same month last year and that for diesel fell 5.1%. The demand for both fuels, however, stayed above the pre-pandemic levels on increased transportation in the festival season. Diesel sales were 1.3% more than in October 2019 while petrol sales were 8.2% higher. The cooking gas consumption rose 2.6% year-on-year and 6.6% over 2019. Cooking gas demand has been steady through the pandemic.
- Bahrain-based Investcorp, currently managing nearly $300 mn private equity investments in India, aims to more than double its investments in India over the next 3/4 years, Reuters mentioned on Oct 5.
- Adani Ports announced on Oct 11 that it would stop handling containers from Iran, Pakistan and Afghanistan from Nov 15. This followed the discovery by the Indian anti-narcotics authorities of a huge consignment of drugs in a container shipped from Iran to Mundra port. Iranian embassy in India issued a statement protesting the move.
- Indian Professional League Cricket tournament ended in Dubai on Oct 15 with Chennai Super Kings defending their fourth title.
- On Oct 20, Reliance Industries Ltd (RIL) received shareholders nod for the proposed appointment of Saudi Aramco Chairman Yasir Al-Rumayyan as an independent director to its board. Earlier on Oct 2, RIL established Reliance International Ltd (RINL), a subsidiary in the UAE for trading in crude oil, petroleum, petrochemical products and agricultural commodities.
The previous issues of West Asia & North Africa Digest are available here: LINK
(The views expressed are personal)