KWR Special Report

The Middle East’s New Cold War: Shiite – Sunni Rivalry Constitutes a Growing Risk Factor
By Scott B. MacDonald

NEW YORK (KWR) December 31, 2006 -- As the United States and the United Kingdom look for an exit in Iraq, the battle lines for the new Cold War in the Middle East are being cemented. Looming over the region are Iran and Saudi Arabia, both flush with oil money and very different views of where they want to take the region. Iran is a resurgent Shiite theocracy under President Mahmoud Ahmadinejad. It is proclaiming its leadership of the Islamic world and remains highly focused on its neighbor Iraq, where its old foe, Saddam Hussein and his clan of Sunnis, was overthrown and Shiites have formed the dominant parts of the government. As Martin Walker, a senior scholar at the Wilson Center, noted: “For the first time in centuries, the Shia of the Arab world can taste the prospect of power, while the Sunni are experiencing the bitterness of being overthrown.” For its part, the Kingdom of Saudi Arabia regards itself as the champion of Sunni Islam and perceives Iran as a regional (non-Arab) and religious aggressor.  Indeed, the old fissure of Sunni versus Shiite increasingly represents the major future risk factor in the Middle East. 

From the 1980s to 2002, the Middle East’s power structure was constructed around “revolutionary” Iran, checked by secular Iraq (dominated by its Sunni minority), supported to varying degrees and at different times by Saudi Arabia and the other Gulf States.  Iran’s Shiite fervor, combined with pockets of fellow Shiites throughout the region (Lebanon, Syria and sprinkled through the Gulf states and Pakistan), made the Sunnis apprehensive and willing to support Iraq during its war against Tehran (1980-1988).  However, the U.S. led ouster of Saddam Hussein as well as the destruction of the Taliban in Afghanistan left Iran without these traditional regional checks. 

As the Middle East adjusts to the possibility of a U.S. exit from Iraq, things are changing yet again.  Iran under President Khatami (1997-2005) worked hard to reassure the Arab, largely Sunni world, that its intentions were peaceful.  President Ahmadinejad has departed from that policy – Tehran has adopted an aggressive stance, backed by the idea that Iran has to be a superpower, equipped with nuclear weapons and with proxies elsewhere in the region.  Ahmadinejad has also made it very clear that in taking Iran back to the fervor of the 1979 Shiite/populist revolution that originally knocked the Shah from power who he views as his enemies – the United States/United Kingdom, Israel and the Sunni royal houses (Saudi Arabia, Kuwait, Bahrain, UAE, Oman, and Jordan).  Lebanon has been one arena of competition for Iran via its proxy, Hezbollah, and Iraq is the other.   

For their part, the Saudis are not sitting back. Iraq was and remains a major point of interest to Riyadh and it is suspected that young Saudis and weapons have already headed north into the fighting. Saudi money has also been a major factor in Lebanon’s reconstruction.  In addition, Iran has complained that Saudi money is stirring up the Arab-minority province of Khuzestan by encouraging locals to convert from Shiism to Sunnism.

The usual Saudi opaqueness was briefly dropped in late November and early December 2006 when Nawaf Obaid, a well-placed consultant to the Saudi government in Washington, D.C., wrote an opinion piece in The Washington Post, indicating that Riyadh frowned upon U.S. talk of quitting Iraq and Washington’s recent diplomacy with Tehran.  Obaid noted that his former boss, Saudi Arabia’s ambassador to the United States, Prince Turki al-Faisal, warned the Bush administration “since America came to Iraq uninvited, it should not leave Iraq uninvited.”  The consultant then went to say: “If it does, one of the first consequences will be massive Saudi intervention to stop Iranian-backed Shiite militias from butchering Iraqi Sunnis.”

Obrain outlined several possible Saudi actions in the event of a U.S. retreat.  Among the options under discussion are to provide Sunni military leaders with funding, arms and logistical support, the creation of new Sunni brigades to combat the Iranian-backed militias, and boosting oil production to cut the price of oil in half, which would be devastating to Iran (which is already struggling with its economy).  Obaid provides a clear rationale for Saudi Arabia to play a more muscular role: “As the economic powerhouse of the Middle east, the birthplace of Islam and the de facto leader of the world’s Sunni community (which comprises 85 percent of all Muslims), Saudi Arabia has both the means and the religious responsibility to intervene.”

Although Obaid’s contract with the Saudi government was cancelled and Saudi officials disavowed the consultant’s op-ed piece, many within the Arab community regard this as Riyadh’s real policy line.  Moreover, Iraq is regarded as only the first major battlefield.  As Martin Walter noted in his Wilson Quarterly article (Autumn 2006), “…the next would be the oil-endowed regions of the Persian Gulf, southern Iraq, and Azerbaijan, where Shia happen to live.  In this scenario, the ayatollahs of Shiite Iran could then secure control of the Iraqi, Saudi, and Caspian oil and gas field by placing them under the protection of their own nuclear arsenal, thus establishing the first Islamic state to achieve great-power status since the collapse of the Ottoman Empire in 1918.”  Such a development certainly scares the Saudis as well as the Egyptians and Jordanians and even the predominantly Sunni Turks.

Complicating the Iraqi picture is al-Qaeda, a Sunni organization.  It has been a major force in stirring Sunni-Shiite fighting and has no love for Iran, Saudi Arabia or the United States.  While it is not strong enough to take power, al-Qaeda remains a spoiler vis-à-vis the objectives of all other players.  It is too weak to take power, but strong enough to nudge the U.S. from Iraq and push Iran and Saudi Arabia down the road to a civil war within Islam.  Indeed, the collapse of Iraq might actually help revive al-Qaeda’s fortunes, as it could serve as a rallying point against the resurgent Iran and its regional Shiite allies.

Where does this leave U.S. policy?  The Iraqi Study Group (ISG), a panel of wise men assembled to advise the President, recommended an exit of U.S. troops from Iraq by the first quarter of 2008.  It also recommends building up a more capable local military and state establishment to contain the country’s bloody sectarian violence – a difficult task.

The ISG additionally suggested seeking to draw in Iran and Syria into a peace process in Iraq.  After all, both countries share extensive borders with Iraq, have large Iraqi refugee communities, and share a common religion in being led by Shiites. While the ISG is not suggesting the U.S. cut and run, it appears willing to push the problem off to two countries with which Washington has little love – and vice versa. 

U.S-Iranian relations are built around Iranian resentment of the U.S. involvement in the 1953 coup and support for the Shah, while U.S. perceptions are heavily influenced by the disgraceful seizure of the American embassy in 1979.  In addition, the current administration in Tehran is of the 1979 revolution generation, which is highly anti-American and not very worldly. An ongoing crisis in the region allows them to play the national unity card to eliminate their local rivals (the reformists) and to revert to the martyr ideology and revolutionary selflessness of the glory days of the Islamic revolution.

Although the December 2006 local elections in Iran were largely in favor of moderate conservatives, Iran’s radical conservatives maintain power over the country’s key institutions, including the Islamic Guard organizations and interior ministry. For the U.S. to look to Tehran for salvation over Iraq would certainly give Ahmadinejad and his cohorts a splendid advantage vis-à-vis their main enemy, the United States.  It also leaves the Saudis and other Sunni Muslim governments out of the picture – not a wise option.

Middle Eastern politics are entering a new phase.  In some ways, the region’s trials and tribulations are far removed from the U.S.  Yet, the cost of maintaining a large U.S. military presence in Iraq and the bad will it generates in the region is not a net positive and the potential rise of tensions between Saudi Arabia and Iran could greatly complicate the flow of oil – still the major lubricant of the global economy.  Moreover, if Iraq were to fragment into three states – Sunni, Shiite and Kurdish, prospects for a more regional conflict would emerge, especially as Iran and Turkey are not keen on the emergence of an independent Kurdish state and the Saudis are not likely to let their fellow Sunnis suffer from Shiite dominance. Hopefully, the new Cold War has more room for compromise than currently shown, but we see the stage set for more violence before cooler heads prevail.   

While the information and opinions contained within have been compiled from sources believed to be reliable, KWR does not represent that it is accurate or complete and it should be relied on as such. Accordingly, nothing in this article shall be construed as offering a guarantee of the accuracy or completeness of the information contained herein, or as an offer or solicitation with respect to the purchase or sale of any security. All opinions and estimates are subject to change without notice. KWR staff, consultants and contributors to the KWR International Advisor may at any time have a long or short position in any security or option mentioned.

KWR International Advisor

Editor: Dr. Scott B. MacDonald, Sr. Consultant

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