What next after US-GCC summit?

After a period of strained relations, the US-GCC summit in Washington and Camp David, held in May, was to be an opportunity to set a new course in their relations. Only time will tell, however, whether the summit made a breakthrough in warming up relations among old allies. American President Obama tried to reassure his Gulf partners a future nuclear agreement with Iran would not be reached at their expense, offering them an “ironclad” security pledge. But behind the warm words, there remains deep unease.

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GCC-US meeting

While some predicted complete failure of US-GCC the summit due to the absence of four of six state leaders, others point out that it may bring a new energy to US-GCC relations providing a new framework for future cooperation. It needs to be stressed, the summit ended on an inconclusive note and many issues have not been resolved. It would take much time and effort from both sides to restore full trust, mutual understanding and previous level of cooperation.

The Gulf countries, on the other hand, were keen on achieving a more explicit and institutionalised security agreement with the US which would guard them from the Iranian threat (real or perceived). On top of that, the Arab countries were seeking protection from violent Islamic extremism on their borders threatening the very existence of the Gulf state.

Escalation of either of these conflicts would have devastating consequences for them. But signing a binding deal was never a realistic option, considering the strong reluctance of the administration and opposition from Congress.

Instead, US officials said there would be a series of new commitments and security initiatives which are expected to calm down Gulf allies’ concerns, but wanted to “wait and see”.

Vatanka Alex
Alex Vatanka, adjunct scholar at the Middle East Institute in Washington, D.C

Divergent visions

There is a general belief in some of the Gulf states that the United States is not doing enough to prevent Iran’s behavior, who in their eyes, is fueling the conflicts in Yemen, Syria and Iraq that have thrown the Middle East into deep crisis.

For some time now, relations between the US and GCC have been tense, showing both sides have conflicting wishes, divergent visions and a different understanding of the situation in the region.

Ever since the beginning of the Iran nuclear talks, some GCC countries, notably Saud Arabia, have shown considerable discomfort with shifting reality in their neighbourhood and strongly opposed any agreement with Iran.

Their main concern is that a nuclear deal will provide Iran new legitimacy to continue with its activities by getting access to more than USD 100 billion of its frozen assets which, they fear,  may be used to finance Iran’s allies and their activities in Iraq, Syria, Lebanon and Yemen.

In the eyes of the Gulf countries, Iran is a major destabilising factor. Many experts including President Obama think the primary task of Iran would be to modernise and improve its economy rather than invest its valuable financial sources into destabilising activities. However, some of the GCC fears are not entirely without foundation.

It is no secret that Iran is engaging in dangerous actions in different countries across the region. Iran sponsors paramilitary units and military groups which are destabilising countries across Middle East.  It supports Hezbollah in Lebanon and Hamas in the Gaza Strip and is a firm supporter of the Assad regime in Syria. Finally, it has been accused of aiding Houthi rebels in Yemen. Therefore, GCC countries have every right to be concerned.

But, at the press conference at Camp David, president Obama pointed out: “Most of the destabilising activity that Iran engages in is low-tech, low-cost activity.” Such a conclusion, could only anger Gulf states and caused deprecation among Republicans, who slammed “President Obama for seemingly downplaying the “low-tech” threat posed by Iran.”

Atmosphere of mistrust

Daniel Wagner, CEO of Country Risk Solution (CRS) tells BQ magazine cracks have certainly appeared in the bilateral relationship between the US and Saudi Arabia, but these cracks have been developing for years. “Starting with 9/11 – and the fact that 15 of the 19 hijackers came from Saudi Arabia, differences in approach on how to address the Arab Awakening in various countries, the US pivot away from foreign sources of oil, and Saudi Arabia’s own pivot toward China have all contributed to these cracks.”

On the other side, the US decision not to intervene in Syria and the decision of the President Obama administration to actively seek diplomatic resolution to the Iranian nuclear programme combined with other decisions related to the Middle East, have created an atmosphere of mistrust. Therefore, is yet to be seen whether the recently held summit in Washington and Camp David will bring about any changes.

“When speaking of feelings of mistrust we have to be more precise about whom are we referring to,” says Alex Vatanka, adjunct scholar at the Middle East Institute in Washington, D.C to BQ magazine. “If we speak of Oman, Oman’s relations with Iran are probably some of the best relations Iran has with any country in the Middle East.

If we speak of Qatar, the Qatari head of the state made it clear, for example during the Arab League summit in Cairo, that Qatar is certainly not looking to make Iran an enemy. On the other hand, there is Saudi Arabia and the ruling dynasty in Abu Dhabi, who have been much greater opponents of Iranian policy and have called for Western muscle to respond to the Islamic Republic.”  So, there is an obvious diversity of relations and understanding among the GCC itself.

Wagner adds, “It is clear at this point that the GCC states have decided to go their own way – at least for the time being, and possibly the long-term – in crafting defence policy for themselves and the region.”

US-gcc relations

Nonparticipation – clear sign of displeasure

The absence of four leaders was also a clear sign of disagreement with current US policy in the region. To be precise, Saudi Arabia and Bahrain decided to send their deputies to the summit, while two other leaders from UAE and Oman were too ill to travel, meaning only Qatari and Kuwaiti heads of state attended the summit.

The decision to stay away from the summit brought some analysts to the conclusion that GCC states had snubbed US President Obama and his initiative of reassuring the Gulf countries.  Some even commented that the absence of Gulf leaders was another humiliation for the foreign policy of the US President.

Vatanka expresses an interesting opinion, without mincing words, when saying that the whole summit was organised out of politeness. “The US did not need to organize this meeting. The US is a super power, which is still thinking what to do in the Middle East, but certainly not a declining power.

This summit was organized out of courtesy, paying respect to the history of good relations with GCC countries.  But an idea that some of the GCC states came up with – convincing Obama not to sign a nuclear deal with Iran was never going to happen.”

Wagner thinks the absence was  certainly a disappointment for the US government, “but by the same token, the US must realise that this is at least in part due to its own approach to the region’s issues and problems,” on one hand, and rising tensions and events that prevail in the region on the other.  “The sands in the region are shifting, and it is bound to have an impact on bilateral relationships.”

Anger and emotional reactions coming from some of the GCC states will not fundamentally change the strategic thinking of this particular White House administration,” continues Vatanka. The US President made it clear once again at the end of the summit that he will not sacrifice the chance for a historic diplomatic opening in Iran or slip deeper into unpredictable Syrian conflict just to please its Gulf allies.

“This president has made up his mind what he wants to do in the Middle East, and GCC countries cannot change his mind. If his own party cannot change his mind and if all the Republican actions cannot change his views, there is not a chance that the GCC countries could change his mind about what to do in the Middle East,” says Vatanka.

Impact on future relations

The question remains whether the Gulf leaders got what they wanted and whether present disagreement over regional policies will impact future relations.

Wagner says, “This is likely to have an impact on some bilateral relations with the US among GCC states, but it is too soon to tell how long lasting such impact will be. For some states, it may be short-term and for others, more permanent.” On the contrary, Vatanka believes the absence of the four leaders would have no significant impact on future GCC-US relations.

“This will only be another up and down in the history of mutual relations.” He reminds that similar situations happened before in 2003 for instance, when the Saudis were extremely upset when the US decided to remove Saddam Hussein and entered Iraq.

“Saudi Arabia remained close to the US after this, and today they will act the same, because Saudi Arabia frankly has no other option, as no one can replace the US in the Gulf.  They might be upset, but they have no other place to go. They simply cannot turn to Russia or China or India.” Besides this, he continues, the GCC countries are much better and safer with being close with the US than being away.

“Ever since World War Two,  they basically had an agreement with the US, which provided them security from foreign threats, either from the Soviet Union throughout  the four decades  or Iran today.  In return for security, the GCC have been a trusted ally, the countries acted according to US wishes on global financial markets, they have been buying plenty of American products including billions of dollars’ worth of arms. All these factors keep both sides close together.”

Wagner believes certain shifts will occur when saying that the GCC states have decided that it is in their best long-term interest to craft their own solution to the region’s problems. This is clearly visible from the Yemen campaign. “I view this as a good thing, because it is the only way that a meaningful solution can be produced to the plethora of problems plaguing the region,” he says.

Vatnaka is, however, skeptical about the Saudi-led adventure in Yemen, and adds it will be very difficult for the Saudis to finish the job in Yemen in the way they want to. “There are elements of panic and uncertainty at the moment in Riyadh, without thinking of consequences that can occur tomorrow.

And this is exactly the mistake the US made in Iraq.” Although the US provided intelligence support, they soon become uncomfortable with the way the operation was proceeding and unrealistic Saudi objectives, especially the high rate of civilian casualties, pressing the Saudis to stop air attacks.

Nevertheless, Wagner believes the GCC shouldn’t be relying on external powers to solve their problems. “I do not expect this to negatively impact US relations with the GCC because the US has neither the financial or military resources, nor the political will to engage in the Middle East for the foreseeable future, given its experience in Iraq,” except in the case Iran threatens or attacks regional states as that would undoubtedly tip the balance in favour of US intervention.

Oil factor

Some argue that one of the reasons for alleged American disengagement from the Gulf is related to the new global oil supply reality.  The shale revolution in the US has considerably reshaped the American energy sector, allowing the US to produce 9.6 million barrels per day and increasing its production by 40 percent in the last five years. This however, has created the impression that the US is no longer interested in Gulf oil producing countries and their security problems. But this would be hard to believe.

Wagner explains the transitional nature of bilateral and regional relationships – with the US and among the GCC states themselves – is due at least in part to oil politics.

“A widely held view is that the Saudi position on oil prices stems from a desire to maintain market share, but also a desire to stifle the growth of the oil shale industry more generally, and in the US specifically,” he adds.

But oil is only one chapter in the whole story on the Middle East.

Vatanka reminds the US does depend on oil imports from the Middle East and it has never relied on it. But free flow of oil is one of America’s key interests in the Gulf, in order to keep global economy running.

Therefore, Wagner thinks it is only natural that diplomatic relations are impacted by the nature of which countries are reliant on the supply of sources of oil from specific countries. Besides oil there are other key factors for the US in the region such as proliferation which is why the US is negotiating with Iran, preventing the region from starting an arms race.

And there is the issue of the Israeli state, which is a key concern for the success of American administration, explains Vatanka. “Americans simply cannot afford to walk away from the Middle East. The oil issue alone cannot change this. The idea that the US is interested in the Middle East simply because of oil is nonsense.

This has never been true. Oil has been only one of the factors, sometimes even the most important factor, but never the only factor. I would be very cautious about putting so much emphasis on the issue of oil,” Vatanka adds.

Tight economic/military relations will remain

Despite current misunderstandings and divergent policies, there are no serious implications that economic relations will be significantly changed.  Wagner says sovereign wealth funds may feel some impact, but the US remains the world premier investment destination, and it is likely to stay that way.

This is especially true for Qatar, who in the beginning of the year announced ambitious plans to invest, and this is not likely to change. “Also, individual investors are unlikely to be swayed by what is happening in a bilateral diplomatic relationship, unless the law prevents them from investing somewhere. They will remain influenced by the basic value proposition of the investment destination,” Wagner adds.

Fundamental changes are also not expected in lucrative business of arms selling. Although some countries like France jumped in as firm supporters of the Gulf countries’ interests taking advantage of the current rift by signing multibillion dollar arms deals with the Gulf countries, this will not significantly change the long lasting practice of arms purchasing.

Vatanka reminds the Saudis have been buying weapons from everywhere including Russia and China and this has always been part of their diversified security strategy. But the largest share of their equipment purchase was always dedicated to Western, particularly US military technology.

Wagner believes the sourcing of arms purchases per se will change in the near term, if for no other reason than existing armaments needing spare parts. So unless a country wishes to change its entire mix of armaments, it is likely to remain primary with the supplier(s) it has always purchased from.

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