A Candid Discussion with Ayham Kamel

Ayham Kamel is a Senior Middle East Analyst with the geopolitical risk consulting firm Eurasia Group. Mr. Kamel’s work is focused on Gulf Cooperation Council (GCC) countries and the Levant region (Syria, Jordan, and Lebanon). His sectoral expertise includes the financial industry, banking, hospitality, infrastructure, and oil and gas. He is also involved in integrating country and project risk in financial modeling.

Prior to joining Eurasia Group, Mr. Kamel worked with investment firms in Syria and the Gulf countries, where he managed strategic relations with companies from the GCC and Europe. In the Middle East, he provided consulting advice to key executive of regional corporates on pathways to strategic partnerships and restructuring of decision-making processes. He has also done work on geo-strategic issues, foreign aid, democratization, and business operations in emerging markets for the US Senate, the National Democratic Institute, and the Center for International Private Enterprise. Mr. Kamel appears regularly on CNBC, BBC, Al Jazeera, and Bloomberg to discuss geopolitics in the Middle East, investment environment, and leadership transitions. He is fluent in Arabic.

Mr. Kamel sat down this week with Reza Akhlaghi of the Foreign Policy Association to discuss U.S.-Iran relations and the situation in Syria.
__________________________________________________________________________

What are the key expectations from the U.S. and Iranian delegations vis-à-vis bilateral relations at this year’s UN General Assembly? In addition to the nuclear file, what other topics of mutual significance do you believe could be on the table?

USGA meetings reinforce emerging shifts in the US and Iran, particularly in regards to rapprochement between the two countries. At this point both countries intend to hit the “reset button” to begin a new chapter in their relationships. The very first steps will focus on confidence building that will enable officials in both countries to build a road map for the relationship.US and Iranian rhetoric has changed dramatically over the past few months, especially in Tehran with the election of President Hassan Rouhani and the support he has received from the supreme leader.

Rapprochement will be a difficult process and both sides need to manage expectations. I don’t envisage a scenario where Zarif and Kerry could advance discussion beyond the nuclear program. US officials firmly believe that a peaceful resolution to Iran’s nuclear program can open a gateway to further discussions on other issues. The most immediate concern will be on finding a pathway to compromise on the nuclear issue that allows both Rouhani and Obama to emerge as winners in the process. The key challenge is that while Iran demands partial sanctions relief as a confidence building measure, the domestic political environment for president Obama makes such a step very difficult.

An improvement in bilateral relations will affect a host of other regional security issues, but I doubt that meetings at the UN will delve into details. On Syria both the US and Iran appear to be genuinely interested in constructive engagement on the chemical weapons disarmament plan. The rise of extremist Islamist organizations in Iraq and Syria is also a shared concern for Washington and Tehran.

There are simmering debates in foreign policy circles about certain regional players becoming concerned about a U.S.-Iran détente. Who could be these players and what would be the rationale for their concerns?

The Arab Gulf states are extremely concerned about any US-Iran détente that could redraw the map of political alliances in the Middle East. A deal between Iran and the US could compromise a set of key GCC-US security partnerships which guarantees regime stability in the Gulf Sheikhdoms. Moreover, the Kings, Emirs, and rulers of these states are alarmed that a potential rapprochement would implicitly involve US acquiescence to a broader Iranian and Shia leadership of the region. While these fears are often exaggerated, rulers of the Sunni Gulf states are not necessarily mistaken. Successful diplomacy with Iran would require the US to reshape its partnerships in the Gulf to reassure the Islamic Republic that Washington is no longer hostile to its interests and concerns. This would entail a broad reassessment of the parameters of the security partnership and potentially a more extensive review of weapons sales to the Gulf. However strategically, even under such a transformation the US will not abandon its Sunni Gulf allies in the Middle East.

Especially after the “Syria Fiasco”, Israeli official fear that the US may not be willing to exert additional pressure on Iran. Israeli leaders now view Obama’s political and military commitments with more skepticism given his inability to act in real time in Syria. There is a risk that an improvement in US-Iran relations could create a perception in Israel that the US is not committed to Israeli red-lines.

What is the Arab world’s view of President Rouhani at this point? Do you anticipate a warming of relations between Iran and the Arab world despite their sharp differences over the conflict in Syria?

The rise of a more moderate camp in Iran is widely viewed as positive in the Arab world; however skepticism regarding Tehran’s “real” intentions persists. The Syrian conflict, which has essentially become a proxy Sunni-Shia civil war, has flamed sectarian tensions and damaged Iran’s image in the Arab world. Regional media outlets, such as Aljazeera and Al-Arabia have largely succeeded in framing Iran’s role in Syria as virtuously “destructive and anti-Sunni”.

A pivot in Arab relations with the Islamic Republic requires extensive effort and creative diplomacy. Saudi Arabia and other Gulf officials will need serious assurances from Tehran that its policy will not seek to foment instability in the Sunni-ruled monarchies, particularly in the Gulf. The election of Hassan Rouhani to the presidency; the appointment of Ali Shamkhani to head the Supreme National Security Council (SNSC); and a series of technocratic changes in key government ministries could alleviate some concerns.

What is your assessment of the impact of the Syrian chemical weapons disarmament on the longevity of the Assad regime as well as on the viability of the Syrian opposition?

The US-Russia Chemical disarmament framework will re-legitimize the Syrian regime, which is likely to remain in power for the foreseeable future. Assad and his entire entourage will become the key interlocutors for the international community in the disarmament process and future diplomatic efforts. The regime has also been emboldened by the policy reversal on US strikes and will exploit the emerging geo-political environment to weaken further his adversaries. On a strategic level, the regime has succeeded in shifting the momentum in the civil war which was largely in favor of rebel groups. Syria is still receiving extensive support from Russia, Iran, and Hezbollah, making it difficult to halt and reverse the regime’s recent strategic military advances. At the same time Assad’s forces have become more agile in recent months and have developed significant urban warfare experience. Lastly newly established paramilitary National Defense Force (NDF) is likely to resolve the challenge of maintaining control over territory following battles in specific geographies.

The Syrian opposition’s reliance on US strikes to alter the balance of power in the civil war has proved to be a misplaced gamble. The opposition had hoped that US intervention would bolster its position which remains weak due to widespread division amongst rebel forces. The disparate nature of the rebel groups has made it difficult for Assad to crush the uprising, but it has also prevented the opposition from consolidating on military successes, which have then often proved transient. In the aftermath of the deal, large sections of the opposition will feel demoralized and disenchanted by the West’s new position. After all, US/EU support for rebel groups has not been significant enough to allow for a rebel victory.

How would you characterize a potential thawing of relations between Iran and the U.S. and a credible and verifiable disarmament of Syria’s chemical weapons stockpile would have on the economic dynamics of the region?

In the interim, oil markets could react positively to improving US-Iran relations and some of the Brent risk premium could decrease. However, absent a comprehensive framework to resolve the Iranian nuclear program and the Syrian conflict, the regional economic and security environment will not improve significantly. The US is unlikely to ease sanctions on Iran until key elements of the nuclear program are put on a temporary freeze. These include a cap on centrifuge installation, much more frequent IAEA inspections, conversion of the stockpile of 20% enriched uranium to fuel, cessation of production of 20% enriched material, a halt to work on the heavy water reactor at Arak, and mothballing of the enrichment facility at Fordo.

Over the longer term, the “grand prize” is Iran’s economy. A diplomatic breakthrough would provide ample opportunity for open trade, Western investment, and a transformation in Iran’s energy potential.