Despite a deal with the European Union that promised stricter regulations on migrants traveling from Turkey to the EU, Turkey is doing little to prevent them from entering Europe. Turkey has also not done much to care for those stranded within their borders.

This was expected to change last year after a mini-summit led by German Chancellor Angela Merkel on November 29 in Brussels, to discuss closer cooperation between the EU and Turkey. Both the parties agreed to three main points: to limit the number of refugees leaving Turkey for the EU; to establish a bilateral readmission process, and to accept migrants expelled from the EU. In return Turkey would receive three billion euros from the EU and the US to aid refugees — especially the 2.2 million Syrians now living in Turkey. Additionally, EU member-states would allow visa-free entry for citizens of Turkey.

After the summit, French President François Hollande told reporters, “As Turkey is making an effort to take in refugees — who will not come to Europe — it’s reasonable that Turkey receive help from Europe to accommodate those refugees.”

Former Turkish Prime Minister Ahmet Davutoglu told reporters, “Today is a historic day in our accession process to the EU. With EU leaders today we will be sharing the destiny of our continent, global challenges of the economic crisis as well as regional geopolitical challenges in front of us including migration issues.”

The proposed deal seemed to anticipate that the Turks would control the Aegean border with the Greek islands to stop the flow of migrants there, and crack down on the smuggling rings running the trade. In practice, however, the flow of migrants has not been stopped, and the conditions for migrants in Turkey are not what was hoped for. There is no sign that there will be any serious steps taken against the smugglers operating inside Turkey.

Greek president Prokopis Pavlopoulos recently expressed his concern by saying, “I have a strong fear that Turkey’s smugglers have the support of the authorities, who act like they have seen nothing. … There are even cases where the smugglers are helped. We have evidence.”

Migrants set sail on an inflatable boat from Turkey to the Greek island of Lesbos, August 25, 2015. (Image source: Reuters video screenshot)

The circumstances in which the refugees are living also remain unsatisfactory despite the considerable sum Turkey received to improve the migrants’ quality of life. One report states that,

“Temporary protection does not grant refugees permission to work and to qualify for temporary protection, all refugees must live in ‘satellite towns’ outside the main, cosmopolitan cities such as Istanbul. They must submit to controls and conditions and report once a week to the satellite cities they are allocated to. They do not receive any state support for accommodation or daily expenses so, without independent means, refugees are pushed towards living and working illegally.”

The conditions for migrants in Turkey are provoking them to leave and risk their lives in a quest for safety in Greece. Human Rights Watch, in its 2016 report, wrote,

“A lack of effective protection in Turkey for Syrians and others, existing border restrictions with Syria imposed by Turkey, and Turkey’s record of police abuse gave rise to concerns that the deal could deny people access to asylum, trap people in Syria, and lead to police abuse and detention of asylum seekers who try to travel to the Europe.”

Greece is at the receiving end of the migrants across the sea. If Turkey does not control the migrant flow, there is little that Greece can do once the refugees have arrived in its borders. In an interview with Deutsche Welle, Greek Migration Policy Minister Yiannis Mouzalas said, “Smuggling networks are still in full operation… The deportation of migrants who have traveled from Turkey is also a big problem.”

Although purportedly Turkey is a secular state, 99.8% of its people are officially registered as Muslim, mostly Sunni. Terrorist groups such as the Islamic State (ISIS), Al Nusra and Al-Qaeda come from the same sect of Islam. Some people believe that many Turkish officials sympathize with Sunni terrorist groups such as ISIS and that perhaps this partiality has an effect on their handling of the refugee crisis.

In 2014, amateur video footage appeared revealing Islamic State terrorists chatting with a group of Turkish border guards near the besieged Syrian city of Kobane. A report says, “The amateur footage, understood to have been filmed close to Zarova Hill in the outskirts of Kobane, raises serious questions about the apparently relaxed relationship between the terror group and officials from the Nato member state.” This raises concerns about the future of negotiations between Turkey and the EU.

Turkey, after the attempted coup in July, is expected to become increasingly Islamist. President Recep Tayyip Erdogan, after he finishes purging thousands of those he seems to regard as opponents, appears to be reaching for powers that are strictly Islamist, as well as totalitarian — possibly “Sultan for Life.” Already, homosexual conduct is punishable by imprisonment.

It is doubtful that Turkey will hold up its end of the EU migrant deal anytime soon.

The announcement by the IAEA that Iran has fulfilled its obligations according to the Joint Comprehensive Plan of Action (JCPOA) has triggered “Implementation Day” and the removal of the nuclear-related sanctions on Iran. The JCPOA, however, did not deal with Iran’s ballistic missile program, and the sanctions related to it are still nominally in force. These sanctions are minor and will not have any real effect on the Iranian missile program. The missile program will mature during this period and will include Ghadr missiles with ranges of 1,650-1,950 km, which may be capable of carrying nuclear warheads.

The question now is: whither the Iranian nuclear program? After the lifting of sanctions, and taking into account the impracticality of “snap-back” of sanctions, we assess that Iran will now initiate a parallel nuclear program. This will, of course, be far slower than the program that was dismantled by the JCPOA, but it will be realized long before the 10-year target of the JCPOA. One possibility for Iran to continue its nuclear program is through North Korea. The wording of the JCPOA is ambiguous on nuclear Iranian nuclear cooperation with other countries that are not a party to the agreement. North Korea could produce the whole chain of nuclear weapons and put it at Iran’s disposal in return for Iranian funding. North Korea would certainly profit economically from such collaboration and would not risk further sanctions. Such cooperation would be difficult to detect, and even if detected, may not reach the threshold of a material breach of the JCPOA.

The most immediate reward that Iran will receive is the release of frozen Iranian funds ($100-$150 billion). In addition, Iran may now market oil stored offshore in tankers (about 50 billion barrels) and is preparing to increase its production by 500 thousand bpd (from 2.8 million bpd). It is doubtful that Iran can truly increase its production as planned. Even if it does, the addition of Iranian oil is likely to drive prices down even further, counter-balancing much of the potential profit. Sanctions relief also is not a quick fix for the Iranian economy. While it removes legal impediments for investment and business in Iran, the risks that Western companies will face due to residual non-nuclear sanctions (that may be enhanced and enforced by a future American administration), lack of government protection, corruption, and the weakness of the Iranian market cannot be removed by decree. Therefore, European banks and investors may not hurry to invest in Iran at the levels needed to jump-start the Iranian economy after years of sanctions.

The Iranian regime’s goal is not only to block the path to the reformists or reformist-minded, but also to the extremists on the right to Supreme Leader Ali Khamenei. Such a balance could help the Iranian system maintain its “centrist” orientation and guarantee the continuity in the event of Khamenei’s death and the appointment of a new successor (or a triumvirate of several potential leaders). It will also facilitate the eventual takeover of the regime by the Islamic Revolutionary Guards Corps (IRGC) after the demise of Khamenei. The backing that the Guardian Council received from the Supreme Leader for the results of its vetting process, in the face of Rouhani’s condemnation of the disapproval of almost all reformists, is also indicative of the balance of power in the regime.

The Iranian seizure of two US Navy patrol boats on January 12 and the publication of drone pictures of a US Navy aircraft carrier underlined the sense of immunity that Iran has achieved. These actions should be seen in the context of Iran’s attempt to change the rules of the game in the Persian Gulf, while testing the waters of American tolerance and sending to Saudi Arabia and the Gulf States an indirect message that Iran is ready and willing to risk conflict with the US and that the US is a paper tiger that cannot be relied upon in a confrontation between the Gulf States and Iran. In our assessment, Iran will continue with shows of force such as seizing of naval vessels of Saudi Arabia and the Gulf States, stop and search operations of commercial vessels en route to the Gulf States, naval exercises — including missile tests close to Gulf sea-lanes and to the territorial waters of the Gulf States — in international waterways that implicitly interrupt and threaten shipping in the Gulf, “spooking” of Gulf aircraft and even false flag operations of mining, piracy or attacks by proxies in the Gulf and the Red Sea along the Yemeni coast. We may expect as a result possible frontier skirmishes on the shared littoral borders of Iran and Saudi Arabia, gas fields and disputed islands and in the international waters of the Gulf.

The Iranian seizure of two US Navy patrol boats on January 12 underlined the sense of immunity that Iran has achieved.

Saudi Arabia is drawing up its own map of interests and areas of influence that it is projecting as “no-go zones” for Iran — a Saudi “Monroe Doctrine” for the region. The most critical of these are: Yemen (due to the potential for threatening the Bab al-Mandeb Straits), subversion in the Gulf States (primarily Bahrain), the Strait of Hormuz and the international waters of the Gulf. To this list one must add the obvious: any Iranian-inspired or -planned attack on the Saudi homeland itself — government facilities, oil installations etc. — would be perceived as crossing a red line. While neither Saudi Arabia nor Iran is interested in direct conflict, and both would prefer to continue to work through proxies and in areas outside their respective sovereign territories, the dynamic nature of the situation can easily lend itself to misreading of such red lines and such miscalculation may lead to direct confrontation between them. While all-out direct war between Iran and Saudi Arabia remains a low probability, this assessment should be revisited again in the near future.

In Syria, American positions have undergone a strategic shift that reflects the new balance of power created by the Russian intervention. On the military side, the Russian presence imposes a heavy constraint on the American activities, and U.S. officials caution that the success of the Ramadi operation will not be followed by a concerted effort to roll back the “Islamic State” in the Syrian theater. In regards to a political solution, the US has accepted the Russian-Iranian four-point-plan that envisages Bashar al-Assad remaining in office during a transition period and being allowed to run for President in “internationally supervised elections”. In our assessment, the Syrian opposition and their Arab supporters cannot accept any blueprint that would leave any doubt regarding Bashar al-Assad relinquishing power before any process begins. These developments will only feed the sense of the Sunni Arabs that the United States has turned its back on them and is supporting Iranian-Russian hegemony in the region. On this background, the prospects that the Syrian “peace talks” in Geneva will achieve any progress towards resolution or even mitigation of the civil war are close to nil.

Last month’s visit by Chinese President Xi Jin Ping to Saudi Arabia, Egypt and Iran was the first such visit of a Chinese President in the region since 2002, and the first foreign head of state to visit Iran since the announcement of “Implementation Day” of the JCPOA. The Chinese emphasis in all the visits was on economic cooperation, development and stability, but above all — in an implicit stab at the US and Russia — emphasizing that China does not seek proxies, to fill a power vacuum or hegemony in the region. The leitmotif of the visit was the integration of the Middle Eastern partners (i.e. the Arabs in general and Iran) into China’s “Belt and Road Initiative.” In spite of the inclusion of Iran in the visit, President Xi took care not to offend the Arabs. The agreements with Saudi Arabia included nuclear cooperation in a scope far greater than that which was offered to Iran, and the joint statement reflected the Saudi position on Yemen, stating, “both sides stressed support for the legitimate regime of Yemen.”

The “Arab Policy Paper” published on the eve of the visit stresses China’s commitment to “non-intervention and opposition to interference in the affairs of other countries”. This is seen by the Arab policy communities as a sign of implicit Chinese support for their position vis-à-vis Iran’s activities in the region, though they would have welcomed more explicit statements of support. There is no expectation in the region that China is going to play the “Big Power” card in the region. Taking sides in this conflict would be out of character for China. Saudi Arabia and the other Arab states will attempt to convince China to refrain from demonstrations of rapprochement with Iran and to support the Arab positions vis-à-vis Iranian provocations in the Gulf, Syria and Yemen. While China may show a slight implicit leaning towards the Arab position on these issues, it is not likely to take a clear anti-Iranian/pro-Arab position in the near future.

The European Union-Turkey agreement of 25 November, which provided Turkey with 3 billion euros over two years in order to stop the flow of refugees to Europe, has not achieved that goal. Speaking privately, EU officials complain that Turkey has not taken any concrete measures to reduce the flow of refugees. In our assessment, Turkey will continue to prevaricate on steps to stem the flow of refugees as pressure on the EU to give more concessions. Turkey has already signaled that the sum will not suffice for the task of maintaining the refugees inside Turkey alone, and certainly not for other security measures such as blocking the border with Turkey to prevent passage to and fro of “Islamic State” foreign fighters.

Aside from the 3 billion euros, the EU commitments will also not be easily implemented; visa waivers for Turkish citizens in general will encounter massive opposition within the EU. The road to Turkish accession to the EU must also go through complex negotiations on various aspects of compatibility of Turkey to the standards of the EU. All these discussions will encounter a veto by Cyprus, pending a peace deal with Turkish-occupied Northern Cyprus. This veto may be resolved if a referendum on unification of Cyprus takes place and supports re-unification later this year. However, the real obstacle towards Turkish accession is not technical or due to the Cyprus question; it revolves around the shift in European public opinion towards absorption of immigrants from Muslim countries. During the coming year, there will certainly be further terrorist attacks that will push European public opinion further to the right. Under these circumstances, Turkish accession or even visa waiver will be very unlikely.

In our assessment, the trend towards Kurdish independence will eventually lead to an independent Iraqi Kurdistan. The events in Syrian Kurdistan will also affect the pace and direction of the independence movement in Iraq’s Kurdistan Regional Government (KRG). Unification of the parts of Syrian Kurdistan in the face of Turkish opposition and under Russian protection will give impetus to the demand to create a political fait accompli of independence in Iraqi Kurdistan. As the principle of Kurdish independence in Iraq gains more and more support and becomes a reality, the irredentist demand for unification of Kurdistan — Iraqi and Syrian — will also begin to be heard. This is the fulfillment of the Kurdish nightmare that Turkey has always feared. With the deterioration of relations between the AKP government and the Turkish Kurds inside Turkey, such a political reality of independent Kurdistan will add fire to the flames of the Kurdish rebellion in southern Turkey. It is highly likely that Russia will take advantage of the trend and support the Kurds, effectively turning an American ally into a Russian one. If this happens, the US will have lost an important potential ally in the new map of the Middle East.

The large number of players on the ground that may take a part in the campaign for Mosul will only complicate the campaign further and — if the city or part of it is retaken, will increase the chances of internal fighting between the components of the ad-hoc alliance of Iraqi government forces, Shiite militias, Sunni militias, Kurdish Peshmarga, Turks and American forces.

On this background, the Syrian “Peace Talks” in Geneva started (29 January) as “proximity talks” in which the UN representatives shuttle between the rooms of the opposing parties. The Saudi supported High Negotiations Committee (HNC) of the Syrian opposition ceded their original conditions — cessation of the attacks on civilians — though they refuse to meet with the regime representatives while the latter refuse to meet with “terrorists”. The Syrian regime representation is low-level as an indication that there is no intention to hold real negotiations. Furthermore, the Kurdish Democratic Union Party (PYD), whose military wing, the YPG, is the most effective fighting force on the ground against the “Islamic State,” were not included in the opposition delegation because of the Turkish threat to boycott the Geneva negotiations if it participates. Under these conditions, the prospects that the talks will achieve any progress towards resolution or even mitigation of the civil war are close to nil.

Dr. Shmuel Bar is a senior research fellow at Israel’s Institute for Policy and Strategy at the Interdisciplinary Center Herzliya in Israel and a veteran of Israel’s intelligence community.

Saudi Arabia

Approval of the National Transformation Plan

The Saudi Cabinet approved (June 6) the National Transformation Program (NTP), part of Saudi Vision 2030, led by Deputy Crown Prince Muhammad bin Salman. The NTP is supposed to be the basis for laying out targets to be met by government ministries and departments. The NTP was well received not only be the Saudi mainstream media (to be expected) but by the Saudi social media that represents to a great degree the public opinion of the younger Saudi generation. It may be expected that Prince Mohammad bin Salman will continue to take steps in the framework of his initiative that will, at least, preserve the sense of momentum and the public support he is enjoying.

Saudi-US Relations

In this framework, Mohammad bin Salman visited Washington DC in a bid to sell his project and himself as the future Saudi leader. During the visit, and especially in the meetings with officials from Congress and the security and intelligence Community, he also sought to build his own stature as future king and as the leader who must be at the helm throughout the period of implementation of his “Vision 2030” plan and beyond. His goal therefore was also to usurp Crown Prince Mohammad bin Nayef’s status as the favorite of the Washington officialdom as the successor to King Salman. This status derived not only from Washington’s respect of the Saudi rules of succession, but also from his years-long and tight cooperation with US agencies on security and counter-terrorism issues. Therefore, Mohammad bin Salman made an effort to project himself as a preferred effective interlocutor on those issues. The fact that Mohammad bin Salman was accorded meetings with President Obama, an honor usually reserved for heads of state, and the red-carpet reception he received, indicates that the administration now considers him as a likely future king and therefore seeks to establish a dialog with him and influence him.

Iraq

The War against the Islamic State

The liberation of Fallujah from the “Islamic State” after a month-long campaign (23 May-26 June) may be an important milestone is not the “beginning of the end” and it will certainly not lead to a stronger and more unified Iraqi state. The campaign and its anticipated aftermath will only exacerbate the sectarian divide in the country and encourage further conflict, whether in the name of the “Islamic State” or its successor under another name

The overt American support for the Iranian involvement[1] will also serve to rally Sunnis to an anti-American position. By backing a military campaign against Sunnis in which Shiite militias and Iran played a direct role, the US-led international coalition was fighting against the symptom — the Islamic State — while actually exacerbating the main problem: the sectarian divide in Iraq. Therefore, the American involvement in the Fallujah campaign will not buy it Sunni gratitude. The view of the US as pro-Shiite and pro-Iranian must have been enhanced by Secretary of State John Kerry’s statement (28 June) that Iran’s presence in Iraq is helpful to American attempts to beat back the threat of the Islamic State, and the praise heaped on the Shiite militias by the US special envoy tasked with defeating the Islamic State, Brent McGurk[2].

Iraqi army units and Shiite militias during the assault on Fallujah, June 2016.

Many Sunnis — in Fallujah and elsewhere in Anbar Province — view the Fallujah campaign as part of a strategic Iranian plan to take control, through its Iraqi proxies, of central and western Iraq, from the Diala Governorate on the Iraq-Iran border to the Iraqi-Syrian border, in order to create a safe land-bridge from Iran through Syria to Lebanon. To achieve this objective, the Sunnis of western Iraq have to be weakened and denied the ability to stage a meaningful resistance[3].

No End to the Political Stalemate Expected

The paralysis of the Iraqi Parliament further complicates the situation. The parliament cannot reach agreement on the composition of a new cabinet, and cannot pass the 2016 budget. While Iraq can continue to muddle along with a caretaker government under al-‘Abadi (just as Lebanon “survives” without electing a president), passing a reduced 2016 budget is a sine qua non for execution of the agreement that that the government reached in May with the International Monetary Fund (IMF) for a low-interest loan of $5.4 billion and for loans from other international institutions.

Iran’s interest is to maintain its control over the government in Baghdad, On one hand, this calls for a relatively stable and cohesive Shiite establishment. On the other hand, Iran enhances its position in Baghdad by playing one party against the other and positioning itself as the only acceptable broker between the different Shiite factions. In the eyes of Tehran, Muqtada al-Sadr is a loose cannon, and al-‘Abadi is too close to the West and therefore must be held in check. By maintaining the innate instability of the Shiite political system, Iran attempts to preserve the Iraqi Shiites’ dependency on it to bridge the differences between the different factions.

Therefore, the Shiite infighting will continue as long as al-Sadr is around. This is clear to Iran and to al-Sadr’s rivals and increases the possibility that an attempt will be made to assassinate him. In such a case, the reaction of those elements in the Shiite community who currently support him will be violent and extreme, possibly ultimately leading to the total breakdown of the Shiite political establishment that Iran is trying to prevent.

Iran and Hezbollah in Syria and Iraq

In contrast to its singular status as power-broker in Iraq, the situation in Syria and Lebanon does not bode well for the Iranian strategy. Since these two theaters are critical for Iran’s regional designs, it has no options for an exit strategy, disengagement or even reduction of its footprint. Its primary agent, Hezbollah is suffering setbacks on all the fronts. Without massive Russian military support in Syria, Hezbollah has had to resort to repeated tactical withdrawals and it and the Iranian forces are suffering increasingly heavy fatalities, wounded and fighters taken as prisoners by the Syrian Sunni rebels. In addition to that, the rebels know their own turf better, limiting Hezbollah’s ability to deploy more troops in the more sensitive areas of the theater. Nevertheless, Hezbollah is committed to increase its footprint in the Syrian theater and cannot back down — even as its growing casualties cause increasing discontent within its Shiite Lebanese constituency[4].

Iran is entering a new stage of war in Syria which evokes the situation that the Soviet Union found itself in in Afghanistan in 1985. Until that year, the Soviet Union achieved no decisive victory over the mujahedeen, but also did not lose any battle on the ground. Like the Soviet Union in that stage of the Afghan war, Iran has achieved no decisive victory, but has incurred significant domestic opposition to the war and has no additional resources that could tip the scales. In light of this, our forecast is that the current situation in Syria will become a stalemate for all the parties at least in the months to come.

Israel-Syria-Lebanon

In these circumstances, a conflict with Israel does not serve the interests of either Iran, Hezbollah or Syria. Therefore, all four parties (and Russia) have adapted themselves to a routine of tolerance towards Israeli attacks on Syrian and Hezbollah targets that endanger Israel directly or threaten Israel’s “strategic edge” in the Syrian-Lebanese theater. In a series of actions directed towards enhancing Israel’s deterrence, the IDF held an extensive war game (12-14 June) based on a scenario of confrontation with Hezbollah. Subsequently, Israeli aircraft hit a Syrian military target near the Israeli border and uncharacteristically released a communiqué that the target had indeed belonged to the Syrian regime and had been hit in response to shelling by the Syrians near the border fence.

Hezbollah seems to be losing its predominance even within the Lebanese theater itself, where it had been almost unchallenged for decades. The attrition of Hezbollah in Lebanon is weakening it within the Shiite community. At the same time, the large (1.4 million) Syrian Sunni refugee population has effectively changed the demographic status quo in Lebanon and created a large restive population for whom Iran, Shiites and particularly Hezbollah are the prime enemy.

Syria

Bashar Assad is defiant, but not delusional

On June 7, Bashar Assad delivered a speech to the newly “elected” Syrian Parliament. This was his first major speech since the collapse of the peace talks sponsored by the International Syria Support Group (ISSG) in Geneva in April. Assad vowed to retake every inch of the country from his enemies, and effectively dismissed the concept of a peaceful transition of power, which is at the heart of the ISSG’s approach to the resolution of the crisis.

Assad is not — as the US State Department implied — “delusional”. He clearly perceives no military or political threat to his rule. He may rationally asses that Secretary Kerry’s reported “Plan B” that called for escalated military action if Assad continued his defiance will not receive support of President Obama, who will be reluctant to increase the American military involvement in Syria and to risk damaging Iranian-American relations and the nuclear agreement, which is the centerpiece of Obama’s foreign policy legacy.

Assad also most probably assesses that neither Hillary Clinton, whose Libyan experience will discourage her from intervention, nor Donald Trump, who has laid out a non-interventionist foreign policy approach, would undertake a more active involvement in Syria than that of President Obama. Assad therefore felt free to obstruct the international efforts to transport emergency aid to civilians trapped in rebel-held areas, and to reject in his speech the August 1 deadline set by the US for developing a transition plan leading to his stepping down.

Assad’s attitude, the limits of the American, Iranian and Russian interventions and the absence of any additional forces that could appear in the theater and tip the scales means that the war will grind on. It may be expected, therefore, that in the coming months, the Syrian efforts to implement “ethnic cleansing” of Sunnis in the north will continue and even escalate, resulting in a growing stream of refugees into Turkey, Lebanon and Jordan. This will continue to destabilize these countries and to pose a challenge to a weakened Europe.

Iran

New Political Appointments

It may be assumed that the Iranian leadership understands that restoring full control by the Assad regime over all of Syria is unrealistic and it has an undeclared “Plan B”. This would entail defining “useful Syria” as the stretch of land from Damascus along Lebanon’s border through Homs to Aleppo and along the Syrian coast that would be essential for the above objectives. This “useful Syria,” however, does not correspond territorially with the “useful Syria” that Russia envisions. Russia’s “useful Syria” focuses on maintaining a viable “Alawistan” that would enable Russia to maintain a beachhead on the Mediterranean and a presence on the Turkish border.

There has been disagreement inside the Iranian power elite since the Syrian uprising began to deteriorate into a full-fledged civil war. The disagreement focused on the extent of the Iranian investment of resources to support Assad’s objective of restoring the regime’s control over the entire country.

The Islamic Revolutionary Guards Corps (IRGC), which dominated the policy on Syria and was the key executor of the policy through the Qods Force and Hezbollah, has supported these objectives. Other Iranian power-brokers — notably those associated with the Rouhani camp — have warned against a Syrian quagmire and have opposed tying Iran to Assad’s fate. They argue that while it is of strategic importance to prevent Syria from falling into the hands of radical Sunni groups, it is not prudent to insist on Assad remaining in office, particularly in view of his use of chemical weapons against his own population. (The use of chemical weapons is a sensitive issue in Iran since their use by Saddam Hussain against the Iranians in the Iran-Iraq war.)

The recent appointment of Rear Admiral Ali Shamkhani as military and security coordinator of the Iran-Syria-Russia joint cooperation group, and the reshuffle in the Foreign Ministry, may indicate a move towards willingness to project more flexibility vis-à-vis the Syrian peace process even before the anti-Assad forces have been crushed militarily, and a formal willingness to consider the possibility of a post-war Syria without Assad personally.

This was implied in the statement by Iranian Foreign Minister Javad Zarif after his meeting with US Secretary of State John Kerry, that “there will be no solution if we focus on any individual [i.e. Bashar Assad],” and that the process must “focus on institutional dispersion of power and the future form of governance, through which it will be possible to reduce or even eliminate the centrality of the role of any individual or ethnicity.”

If Iran no longer insists on Bashar Assad staying in power, it could open the road to some procedural progress in the peace talks, which have been blocked by the dispute regarding his future, with Western powers and the Sunni Arab states insisting on his departure. However, the damage done by the civil war is irreversible. Even if some formula is found that would facilitate negotiations, the crux of the crisis is whether Syria will return to be dominated or even co-ruled by an Alawite minority. The Assad regime and Iran (and even Russia) cannot accept a Sunni-dominated Syria that would inevitably take revenge on the Alawites and destroy all the assets that Iran has built up over the last thirty years.

The Financial Sanctions Issue

The US administration is continuing in its determined efforts to convince the Western business community to invest in Iran. In May, John Kerry and US Treasury Department officials met with European bankers in London to tell them “legitimate business” is available to them in Iran and to “dispel any rumors” regarding future American sanctions on Iran. The administration’s message was that as long as the banks do their normal due diligence, “they are not going to be held to some undefined and inappropriate standard.”

Nevertheless, the international banking system continues to view Iran as high-risk and is likely to continue to do so for the foreseeable future. Regardless of the credibility of the guarantees of the current American administration, which will not be in office after January 2017, the reluctance of the international financial community to approach Iran derives from real risk assessment. Iran ranks 130th (out of 168) on Transparency International’s “Corruption Perception Index” and 118th on the World Bank’s “Ease of Doing Business” list.

Given the current state of affairs, these goals are far from achievable. The approval of the Iran Petroleum Contract (IPC) model does not guarantee its implementation, given the opaque and informal character of the Iranian economy. The goals of the regime’s Five Year Plan are also not clearly detailed and it is difficult to see how they can be achieved. Furthermore, Iran cannot comply with the Financial Action Task Force (FATF) rules without a fundamental transformation of its economic structure and the very essence and worldview of the regime. Taking into consideration the leadership structure, the predominance of the Supreme Leader and the position of the IRGC in economy, such a move is impossible.

The Kurdish Factor

The alliance between the Patriotic Union of Kurdistan (PUK) and the Movement for Change (Gorran) is openly challenging the Barzani clan’s dominance of Kurdish politics and raises the pressure on Massoud Barzani. To consolidate his popularity among the Iraqi Kurdistan Region’s population, Massoud Barzani might therefore resort to “patriotic” acts, like holding his promised referendum on Kurdish independence soon, which PUK-Gorran will not be able to oppose. This could lead to “Kurexit” (Kurdish exit from Iraq), which would be the result not of well-thought-out strategic planning but of Kurdish political infighting.

Israeli-Turkish “Reconciliation”

The Israeli-Turkish reconciliation is a formal step that will certainly not revive the golden age of Israeli-Turkish relations. Turkey will continue to support Hamas and to incite against Israel in international fora, though it will stick to the letter of the agreement and will take advantage of the economic opportunities afforded by the reconciliation.

The French Peace Initiative

The chances that the French peace initiative will succeed in relaunching the Israeli-Palestinian peace process are very slim. The Israeli position remains that negotiations must take place directly between Israel and the Palestinians, and not through international fora. The French initiative, however, will encourage the Palestinian Authority to reject alternative proposals for direct negotiations, pending the international conference.

Terrorism

The spate of terrorist attacks by the Islamic State during the period of this report highlights the disconnect between the situation on the ground in Syria and Iraq and the threat of Islamic State or al-Qaeda inspired jihadi terrorism in susceptible countries. Most the latest attacks took place in Muslim countries (Istanbul, Turkey in June; Dhaka, Bangladesh in June; Baghdad, Iraq in June, and Mecca, Qatif and Medina in Saudi Arabia on July 4) in which the ability to “profile” potential attackers is limited and security measures are weak.

The explanation put forward by the American administration that the attacks reflect the Islamic State’s “despair” in the face of its defeats in Syria and Iraq over the last months is specious. International terrorism “to strike fear in the hearts of Allah’s enemies” has been a hallmark of the Islamic State since its beginning and it does not need the excuse of military defeat in Syria and Iraq to continue to carry out such attacks. Furthermore, these attacks were obviously planned many weeks or even months in advance. The Islamic State will continue to attempt to carry out such attacks according to its strategy to project its jihad into the heartland of its enemies — into Europe and in the territory of its enemies in the Middle East.

Spotlight on the Saudi Economic Transformation Plan

Deputy Crown Prince Muhammad bin Salman’s economic plan represents far more than economic change: it calls for no less than a transformation of the nature of the Saudi state and political order through creation of an economically independent citizenry. The developments in the level of education of the Saudi population and particularly the potential of Saudi women entering the upper levels of the workforce, coupled with the high level of unemployment among those parts of the society, are among the unspoken drivers of the Vision 2030 plan. The goal of this process is to gradually replace the waning traditional tribal and clerical power base of the regime with a young professional economic power base out of concern that the high percentage of (unemployed) youth in the country would be a recipe for social unrest that, along with the loss of the influence of the traditional Wahhabi power base to more radical anti-establishment Salafi clerics, may destabilize the country.

Mohammad bin Salman seeks therefore to mobilize their support by making Saudi society advanced technologically and by creating a large number of jobs in technology. Monitoring of social media shows significant support for Mohammad bin Salman and his plans among the younger Saudi population, including high expectations that the economic initiatives will be followed by social change — loosening religious controls and social restrictions, expanding women’s rights and increasing social mobility. The Saudi leadership, however, is on the horns of a dilemma; accelerated change will raise the ire of the conservative elements in the elite, whereas a sense among the younger population that change is too slow will give rise to a crisis of expectations and subsequent instability.

Dr. Shmuel Bar is a senior research fellow at the Samuel Neaman Institute for National Policy Studies at the Technion in Haifa, Israel, and a veteran of Israel’s intelligence community.

[1] Secretary of State, John Kerry, declared that Iran has been very “helpful” in Iraq.

[2] McGurk said that Iran-backed Shiite militias are mostly helpful in Iraq, though some go rogue: Most of them do operate under the control of the Iraqi state, but about 15-20% of them actually do not, “and those groups are a fundamental problem”.

[3] This Sunni suspicion finds support in statements of senior Shiite Iraqi leaders like former PM Nouri al-Maliki, whose hard-handed policies towards the Sunnis in Anbar Province fed the rise of the “Islamic State”, and who now praises the role of Iran and the Shiite militias, and accuses Iraq’s Sunni political leaders of supporting terrorism.

[4] Hassan Nasrallah (26 June): “The defense of Aleppo is the defense of the rest of Syria, it is the defense of Damascus, it is also the defense of Lebanon, and of Iraq. … It was necessary for us to be in Aleppo and we will stay in Aleppo. We will increase our presence in Aleppo…”.