Will that Gulf be the same again

Hard choices between appeasing the IDF and managing the IRGC

Much is being discussed about how the US regime change operation got nowhere; giving rise to a global wave of stagflation and energy prices spiral, the major cause of the former. However, very few observers are looking at what has been transformed in the matter of 40 days, the conflict between the USA and Israel on one side and Iran on the other.

Once the investment and regional financial hub of the Middle East, the Gulf sheikhdoms despite ruling dynasties being still in power and with no indications of a regime change in these artificial states in the near future, the peace and tranquility and the safety and invincibility they sold to the whole world is nowhere to be seen now. An investment heaven for all the black money in South Asia and elsewhere, the Gulf, whether it is Bahrain, Qatar or UAE; the post-conflict Gulf is a wasteland with broken infrastructure, which might take years to rebuild and be back on the saddle. However, what loss is irreversible in decades to come is the paradigm built over decades and lost in six weeks.

The Gulf states, called sheikhdoms or emirates, have been the part of the greater land mass called the Arabian Peninsula. The areas constituting these states have been identified in the historical accounts as provinces usually ruled and controlled by the central authority, whether that authority was in Madina, Kufa, Damascus or Baghdad.

For the region, the choices are hard as well as realistic. Needless to say, the Iranians, despite leadership losses, have emerged as a necessary interlocutor to talk to, not just for the Americans, but also for the Gulf; failing which they might have to still review their putting options all in one basket

They were inhabited by the tribes whose significance does not have any historical claims; other than being inhabitants. After the end of the Baghdad caliphate and the rise of two important dynasties in the Middle East, namely Ottomans and Safavids, these areas were alternately under the control of any one of the dominant powers in the region.

It was not before the advent of the foreign powers, the European nations and especially the British, which rekindled the hopes and fortunes of the neglected tribes along the eastern coast of the peninsula. If one goes back into the history, all the sheikhdoms inclusive of Kuwait were so-called liberated or formed as a crescent of pro-British and eventually Pro-West monarchies with one-family dictatorship as the preferred mode of governance. These states were unnaturally formed in 1971 onwards and practically, much of the development in these emirates and consequently the relevance of remittance money for the states like Pakistan, India, Bangladesh and states in the Far East was primarily due to the lot of development work taking place in UAE, Kuwait, Bahrain and Qatar. The development of the infrastructure gave way to the next stage of the development paradigm. 

These emirates gave way to the development of the banking system in the region. The development and sustainability of the banking industry squarely depend upon the availability of funds and deposits. These emirates flushed with oil revenues were the best bet for the banking industry, from the likes of Pakistani ace banker Agha Hasan Abedi to the western bankers, the development of the infrastructure was based on the same premise as of Singapore. The far eastern city state has no mineral or agriculture. Almost everything is imported in that place.

However, the development of the financial centre complete with all auxiliary services and products, like investments in hedge funds, pension funds and other formats, with the passage of time, elevated the status of these emirates to regional banking hubs with strong convergence of interests with the mainstream banking industry in the western capitals. It was no coincidence that Bahrain, practically encapsulated in the capital city Manama, a tiny state like Qatar and similarly city confederating states like Sharjah, Abu Dhabi or Dubai were to be groomed as the financial capitals of the region. 

Such banking industry hubs’ creation automatically gives way to the development of a city where there are lot of opportunities for the tourism sector, even if the area is not endowed by natural beauty; everything is made up even the beaches , retiring areas besides other liberal value system enclaves, it was all natural that the western powers found the area compliant enough for setting up military infrastructure. The Udaid Air Force Base in Qatar, the 5th Fleet headquarters in Bahrain, discreet eavesdropping infrastructures in UAE, were part of the partnerships between the western military might and the deep pockets of the sheikhdoms. 

It is obvious that these infrastructures were not for fun, rather they were created in anticipation of future wars which might get triggered in the region due to factors which might not conform to the western strategic calculations. The first such test came in 1980 when the monarchies incensed with the possibility that like the 1979 rout of the Iranian monarchy, they might well be shown the door by the societies they rule over, they invested in the somewhat strange bedfellow, the Baathist faction in Iraq ruled by Saddam Hussain. The formation of the Gulf Cooperation Council in 1981, a year after the start of eight years of hostilities between Iran and Iraq was the indicator that in the coming days, the relationship between the Pentagon and the sheikdoms was likely to deepen.

Towards that end, it was a common practice that public dissent in these states were suppressed under various tags, sometimes the Ikhwan ul Muslimoon tag or sometimes the Shia crescent tag. The motive was to maintain these states as the conduits, which will act as the first line of defence of the Pentagon war plans.

Despite the fact that the decapitation strike jets took off from Israel, the listening posts were in the Gulf and other electronic surveillance was done from there. After the first salvo which killed the Iranian Supreme Leader, the return strikes by the IRGC hit the US military infrastructure with pinpoint precision; a threat Iranians have repeated multiple times before carrying out. 

The strikes damaged and devastated the infrastructure, and in the process hit at the perception of the world regarding these sheikhdoms. As the Iranian Shahed drones and other medium range warheads rained down on these emirates, they also proved to many investors in these states that in the event of any military conflict the place was not safe enough for a secure investment or a sustainable future for development work of any kind. 

The Gulf lost its image of being a safe place, a safe haven, an enjoyable place and a place to have a home, even in the most artificial settings, due to the discovery of the fact for all stakeholders that these emirates were little more than US bases hidden within an otherwise urban centre.

As things stand, about 80 energy facilities across the Gulf are damaged courtesy the IRGC barrage of missiles and drones, the needed investment goes to around US $58 billion and the economy growth has gone down, with the tourism sector all roughed up, and the financial sector in peril; to the point that the initial projections of around 4.2 percent growth have contracted to 1.9 percent due to uncertain conditions, which are as US President Donald Trump has repeatedly said, ‘ a ceasefire on ventilator’ . there are little chances that the recovery or even a semblance of recovery will be anyway round.

The emerging scenario, where the Gulf economies are in shambles, yet they are strategically tied to Pentagon as well as IDF, means that if the hostilities in the region resume, there is ample chance that the recovery is delayed even further. Of importance is the fact that if the recovery is not any way round the corner, it means that the area is at risk of losing its position in the coming days, a position it had accrued for itself painstakingly during the last five decades.

For the region, the choices are hard as well as realistic. Needless to say, the Iranians, despite leadership losses, have emerged as a necessary interlocutor to talk to, not just for the Americans, but also for the Gulf; failing which they might have to still review their putting options all in one basket.