Polina Aniftou: Why USA is not interested in JCPOA

Polina Aniftou, Foreign policy and investments analyst

The unpredictable power of sub- polar systems in MENA

The Trump Administration created a mistrust in the relations with Iran, the assassination of General Soleimani in January 2020, the assassination of nuclear scientist Mohsen Fakhrizadeh in November 2020, the sanctions against Iran since 2018, the unilateral withdrawal of USA from JCPOA, and finally the Abraham Agreements in September 2020, a month after the explosion at the port in Beirut. All these actions occurred in a period that Iran designed its foreign policy next to China signing a 25-year agreement, signed on 24 June 2020 in Beijing, thus China is to invest $400 billion in Iran in infrastructure, trade, banking, and defense sectors.

The Agreement between Iran and China affects the macroeconomic, political, and commercial stability in the region, and engages a periphery from Shanghai, and Afghanistan, Tajikistan, Central Asia, Caucasus to Iraq, Syria and Lebanon. This inland road follows the importance of Heartland and classical geopolitics, that will benefit the transportation of products from China to West through the ports of Beirut mainly and occasionally from Latakia, against any competition to the port of Haifa in Israel. Central Asia is extremely important for Iran as all region used to be part of the Persian Empire that was dissolved by the invasion of Arabs to Iranian plateau in 651 CE.

Most of the populations speak Farsi or other languages/ dialects that are very close to Farsi. The Iranian presence is significant with a strong Consulate in Heirat in Afghanistan, publishing centers in Tajikistan, and strong efforts to de- Sovietize the Muslim Republics that were founded after the fall of USSR. In Tajikistan since 1992, Farsi was promoted to teaching language at schools and Tajikistanis changed their names from Russian to Persian surnames to have more noble origin despite the antagonism in the country between Iran and Saudi Arabia.

Though there is a media focus on the military and paramilitary presence of Iran in Middle East, Iran is present in Central Asia not only via defense agreements and practices, but mainly through the economic influence, that it is driven by several Ministers and centers in Iran. The sectoral structure of Iranian FDI in EAEU countries, Ukraine, and Tajikistan is dominated by the Construction sector that its Iran’s strong point, as the country is the third one globally in postgraduate engineers and the Finance sector.

The Finance sector faces heavy corporate tax and limitations in corporate ownership by Iranian laws, as the Iranian economy is controlled by government and quasi-government entities that prohibits any involvement of foreign shareholders without a supreme approval. The FDIs in construction and finance shares are 42% and 20% respectively in CIS countries. Next come Infrastructure Networks (19% of FDI stock) and Transportation (15%), Agriculture and Food Products with share of FDI stocks to (2%). Additionally, Iranian investments are present in Oil and Gas, Non-Ferrous Metals, and Wholesale and Retail Trade. The Iranian Foreign Direct Investments (FDIs) in EAEU countries, Ukraine, and Tajikistan in the past years reached a total of $1 billion. Iran has tremendous interest in Azerbaijan (Oil and Gas), that after the Caspian Sea Treaty in 2018 has expanded its sovereignty in oil and gas pipes in the region.

Though Iran is an ally of Armenia and backs Armenian government in its movements to weaken Azerbaijan, the reaction of Iran to the recent conflict between Armenia and Azerbaijan in 2020 by staying neutral enhanced the pan-Turkish ego of Azerbaijan that expands its plans to establish a central port in Baku for all Central Asia that will coordinate the distribution of products to Uzbekistan, Kyrgyzstan, Turkmenistan, Tajikistan and China isolating the importance of Persian Gulf ports that lack safety this period.

From the other side the China Global Investment Tracker estimates that the total volume of Chinese investments and contracts within the area of the China’s Belt and Road Initiative in 2013 – 2020 was USD 755.17 billion (as of November 20, 2020), of which USD 297 billion was in the energy sector, USD 185.34 billion in transport, USD 73.22 billion in real estate, USD 57.44 billion in metals, USD 22.58 billion in utilities and USD 15.67 billion in chemicals, while China is the largest producer globally of raw materials and the Chinese companies the biggest ones that ship products from Asia to America through Pacific Ocean.

Thus, the plan of the Iran- China Agreement was to integrate the local markets of Central Asia countries into the aggregate GDP of the Agreement, the products transportation to occur through a main railway between  Iran and Afghanistan, to establish core infrastructures at Chabahar port in Indian Ocean, and use mainly the port of Beirut and instantly the port of Latakia in exporting products to West. A magnificent indeed plan, that now must face the other mega- plan that USA created by Abraham Accords. The China’s Belt and Road Initiative from Shanghai to Beirut through Iranian facilitation and agency, needs to face a political, economic, security and possibly soon an e-monetary space union of Abraham Accords from Persian Gulf, UAE, Bahrain to Gibraltar after the normalization of relations between Israel and Morocco.

There are already technology investments between Israel and UAE, UAE announces $10 billion fund for Israel investments and Emirati investors are highly interested in Israeli high-tech, military and agro-tech. Leading Cybersecurity technology companies such as the Vision Fund, with half of its $100 billion under management coming in from the Persian Gulf and Saudi Arabia.

Already Israelis are living and working in Saudi Arabi holding passports of Jordan, and Bahrain is receiving security and defense systems by Israel. From the other side the monarchy of Morocco under territorial exchanges in Western Sahara, is welcoming Israeli Morocco Jews, granting passports of the country and receiving vast investments and opening its FIR to Israeli Air Forces that can fly freely from Bahrain to Cyprus, Greece, Gibraltar controlling with their partners the Mediterranean sea, and the only exit of Iran- China trade vision to West and Europe.

Moreover, France has a great interest into its post-colonial countries, Macron visited Lebanon immediately after the explosion at the port in Beirut and French delegation met for first time with the political wing of Hezbollah to mitigate their relations. General Aoun that did not want to get into conflict with all powers in the region, in the meeting of 7^th of October 2021, with the Iranian Foreign Minister Hossein Amir-Abdollahian did not accept the proposal of Iran to reconstruct the port of Beirut, meaning to monitor and control the port on behalf of Iran and China. The refusal of Aoun led to the 2 weeks conflict of armed groups in Beirut with pro- Shia organizations demanding reforms in the governance of the country, but also changes in traditional principles in the country such as the legal right the president of Lebanon to be a Christian Lebanese.

The presence of France in Lebanon was not welcomed by Iran and China. In 2018, France’s investments in Lebanon totaled € 748 million and imports to France from Lebanon totaled € 54 million, with a trade surplus of € 694 million. The number of French companies exporting to Lebanon increased from 4,558 in 2016 to 4,707 in 2017. In 2018, France was the seventh largest supplier to Lebanon with 3.38% market share in the local market, behind China, Greece, Italy, the United States, Germany and Turkey. French financial investments in Lebanon totaled € 612 million in 2017 from € 295 million in 2010, while Lebanon’s stock investments in France are increased to €3 billion by the end of 2017. This strong economic position of France into Lebanon runs against the Iran-China Agreement, that Macron visiting China in January 2018, warned Beijing that its new “Silk Road” initiative should not be “one-way” and against the interests of NATO and France in Middle East and Pacific region.

Thus, France faced the polemic by AUKUS (Australia, UK, USA) partners due to its neutral position towards China and the supply of products to Chinese ports, that ended into a strong confrontation with AUKUS Ambassadors in Paris, after Australia cancelled the “contract of the century”, agreed between Paris and Canberra in 2016, that France was to provide Australia with diesel-electric Barracuda submarines for a total of 34 billion euros (A$55 billion) over a 25-year period. USA warned France that the collaboration with China will not mitigate the competition in Middle East, but also France is in danger of its investments in Pacific. France has island territories spanning the Indo-Pacific: Reunion and Mayotte in the Indian Ocean, and Noumea, Wallis and Futuna and French Polynesia in the Pacific. Australia and New Zealand have each separately warned that China is seeking to exert influence in the Pacific through its international aid program.

Though Beijing denies the aforementioned allegation, the FDIs of China in Pacific, the quasi-state funding in the region, the Chinese investors that seek to obtain passports of Pacific islands indicate exactly the opposite. Over the past decade, China’s growing influence in the 14-nation Pacific Islands -whose cumulative population of just 13 million is sprawled over thousands of islands and atolls in a region stretching across 15% of the world’s surface – has triggered alarm bells in the U.S. and Australia.Vanuatu, with a population of 300,000, also announced in January 2021 that it had accepted a US$12 million grant from the Chinese government. French Polynesia is home to a large Chinese community, with 5 to 10% of its total population being of Chinese origin. Since 2011, Beijing has invested more in Papua New Guinea (PNG) which is home to gold, nickel mines, liquified natural gas and timber forests than in any other Pacific Island.

The plans of the USA are not affiliated to Middle East anymore, USA allowed the Arab Monarchies to guarantee Israel after leaving Iraq, and continued funding Israel. USA also made sure that Israel will receive its first “own pocket money” as a “teenager state” form the trade and political agreements with the Arab Monarchies, and USA will care less about the child that shares a new room, in the neighborhood. The normalization of the relations with Israel paved the way to new economic alliances that respond to the security dilemmas of the region;

• Yemen; the normalization of the relations between Israel and Sudan, creates the opportunity Israel to be politically and strategically present in Sudan and Indian Ocean, establishing a new Jewish community in Yemen with the consent of Saudi Arabia. In this way Israel will control the shipping and the transportation to Red Sea from Oceania, Africa, and Asia. Also, the expansion of Eilat port and the creation of cargo facilities to Ashkelon port next to Gaza, opposite Suez gives the benefit to Israel to become an alternative source of transportation avoiding Suez, with low-cost railways and oil pipes for the companies that can transfer the oil and gas through the Eilat- Ashkelon pipes.
• Persian Gulf; The Arab Monarchies find it difficult to face Iranian domination in Persian Gulf. Thus, UAE, Bahrain and Saudi Arabia have agreed Saudi Arabia to maintain the railway that goes from their countries and support the new railway from Oman to Kuwait. This railway that will cross the whole country of Saudi Arabia, will give exit to the goods, oil, and gas to be transferred to West away from Persian Gulf, to Jordan, Egypt and Israel avoiding the fragmentations in the closed space of Persian Gulf. Thus, the only feasible exit for Iran to West will be through Turkey in the north of the country, Russia and perhaps through the Chinese trade commissions in Europe, if and when agreed.
• China is reluctant after the explosion at the port in Beirut to invest in Middle East and work with Iran on an agent basis. In 2017, President Xi Jinping paid a state visit to Finland and jointly decided with President Sauli Niinistö to establish a new-type partnership for the future. Part of the vision and the discussions is the Chinese main warehouses for the Chinese products to be exported to Europe, to be located to Finland after transportation solely through Russia avoiding whole political instable Central Asia.

The security dilemmas in the region remain a strong indication that Middle East needs a strategic roadmap to design the political limitation of the influence of many powers. USA is not interested in Iran as the sanctions imposed in 2018 created a distance between the two countries and their visions in the region. The empowerment of the Arab Monarchies, the exit of Israel in MENA and the support to be incorporated into the living environment of its positioning became an international diplomacy duty of each and all allies of Abraham Accords, and of other allies such as Cyprus, Greece and Egypt. In these circumstances, USA remains a third party in the relations of MENA states and turns its investments and political orientation to Pacific Ocean, and to the need their allies to control the most strategic sea straits (Oman, Yemen, Arctic, Panama, Alaska etc.). In these plans, USA does not have any interest at the moment in improving its relations with Iran, that may control the space from Tehran to Lebanon, but as it has been analyzed above the trade and political power of this space has become inactive and Iran’s exit to West through Mediterranean Sea from Lebanon and Syria has been blocked to the benefit of other ports in Israel, Egypt and Turkey.