Friday, July 03, 2009

Middle east elections shake up region's peace diplomacy

International News Services

By Paul Cochrane in Beirut

June has been a month of elections in the Middle East. As happens every now and again in a region pretty thin on democracy and heavy on dynastic rule, there are elections that matter. The outcome of the Lebanese and Iranian elections fall in this rather rare category, with the Lebanese result retaining a status quo the West is happy with, while the Iranian 'result' is further souring relations with the US and Europe.

For despite being on either side of the Middle East, with Beirut and Tehran being as geographically far apart as London and Rome, the results play into the region's fractious politics. The common ground is Israel and the Iranian-backed Hizbullah. The Lebanese Shiite political party is deemed a terrorist organization by the West for its resistance stance against Israel, with the Islamic Republic a financier and ideological inspiration for Hizbullah. The largely unexpected defeat of the Hizbullah-led coalition was therefore welcomed by the international community, with the US having threatened to cut off military aid to Lebanon if the March 8, Hizbullah-led coalition had won. By Lebanese voting in by a narrow margin the more pro-Western March 14 coalition – certainly pro free market and the capitalist business model – the country has been rewarded with continued US military aid and relative stability that will help get Lebanon back on its feet after the political and economic roller coaster ride of the last four years.

Indeed, projections indicate that Lebanon will have its best summer season ever, with over two million tourists expected to descend on this Mediterranean country by the year end. Currently, not a hotel room is available, and retailers have stocked up for what they hope is a bumper season. If Lebanon gets through the summer without any incident, the country will be well on track to having positive growth in 2009, an anomaly for much of the region as well as the rest of the world, largely due to the strength of the country's banking system.

A few years ago when global financial institutions were easing access to credit and banks were lending way beyond their means, Lebanon's Central Bank governor opted for the conservative approach, requiring banks to have 30% of their deposits in cash. While some disapproved at the time, in the long run conservatism has paid off, with Lebanon's banking sector attracting deposits from the crisis hit Gulf and Lebanese expatriates concerned about the security of Western financial institutions. The election results are an added boon for Lebanon's financial as well as hospitality sectors.

But while the outcome is positive for business, there will be no rapprochement with Israel, given the opposition's sizable presence in parliament and Hizbullah still holding on to its weapons. Lebanon's big brother, Syria, has come out and said it is against any peace talks, while Iran under a second term of Ahmedinejad is likely to be even more vitriolic towards Israel than before. That will mean strong support for Hizbullah as well as Palestine's Hamas.

And although the US State Department saying it will send an ambassador to Damascus after a four year hiatus is a step in the right direction towards renewed engagement, Iran and Syria are strengthening ties. Economically, bilateral trade is minimal at $200 million a year, but Tehran and Damascus are necessary friends in a region where all other countries' political leaders are considered 'moderate' by Washington DC.

Damascus now has to decide how close it wants that relationship to be as the country tries to come in from the cold. Any offer Israel could propose to Damascus in return for peace would require major incentives, way beyond even the return of the Golan Heights, which Israel has occupied since 1967.

In Iran, the protests against the 'rigged' results have tailed off, but international relations are deteriorating to even worse levels than they were prior to the election. With Iran booting out two British ambassadors, and London responding in kind, European relations are getting strained. The US has also come out to criticize the outcome of the election. There is now a strong possibility that further sanctions will be imposed on the Islamic Republic. This will not help the high unemployment levels the country has, or the rampant inflation. It could also make it harder for Iran to get hold of the technology it needs to extract gas and oil from non-conventional fields. Ultimately, while Iran promises to be an attractive emerging market, the lack of engagement between Tehran and the West suggests the country will remain essentially cut off for more years to come. This presents security concerns from Palestine to Afghanistan.

Israel is still whipping up the threat Iran's nuclear aspirations pose for regional stability, one of the few cases where the Sunni majority Gulf countries see eye-to-eye with Israel, wary of the rise of a powerful Shiite Iran. If Iran becomes further isolated, Tehran will play fully on its opposition stance towards Israel and 'meddling imperialists' Britain and the US. With Tehran saying that foreign hands have been at work in the post-election protests, animosity and suspicion will only deepen. For the West this is a major set back, coming at a time when the West could do with tapping into Iran's abundant energy supplies, and better coordination and support from Tehran to deal with the challenges NATO faces in Afghanistan and in Iraq. Indeed, in the 30 years since the Islamic Republic was founded, Iran has been one of the missing pieces in the puzzle towards stability in Central Asia as well as the Middle East.

Slavery to emancipation

Commentary - Executive magazine

Expatriate labor rights and living conditions in the Gulf have become hot, contentious topics once again. The BBC was the latest media player to cause concern for the Gulf's glitzy image when a reporter sneaked into a labor camp in Dubai and secretly filmed living conditions, exposing the gritty – and in this case, sewage swamped – underbelly.

Dubai took badly to the coverage, as it has been prone to do whenever the international media sticks its nose in places it shouldn't, and the company involved has been at pains to show it was an unusual case. But what has driven the issue further into international prominence was Bahrain's decision in early May to end the sponsorship system, the first Gulf Cooperation Council (GCC) country to do so.

Manama decided to annul the longstanding requirement that all expatriate workers have to be sponsored by a Bahraini citizen. To be put into effect August 1, the government will be responsible for issuing work permits, which can be renewed over two years and will allow expat workers to change jobs without having to seek a sponsor's permission. This is a significant step, ending a system - known as “kafala” - that effectively shackled workers to their employer, whether a construction worker or a general manager. Indeed, in the likes of Saudi Arabia, foreign workers cannot travel from one city to another without stamped official authorization from an employer, let alone hop on an airplane.

Bahrain's bold move has resultantly garnered praise from human rights groups and international labor organizations around the world. The word now is that other GCC countries should do the same.

There is certainly momentum picking up, with Qatar saying it is studying Bahrain's move and wants to adopt the same policies, while the United Arab Emirates has signed an agreement with India and the Philippines to launch a project to improve contract workers conditions.

But as always with radical shifts in policy, Bahrain's move is causing a great deal of controversy, foremost in its own parliament and among the local business community. One party, Al Wefaq, came under fire for failing to use its influence – it has 17 of the 40 seats in the lower house - to block a clause in the law that would require foreigners to have a minimum one-year contract. Businessmen say the ruling will be detrimental to the economy by putting the country at a competitive disadvantage, while businesses will be left to foot the bill of implementation costs.

That will clearly be the case, and Bahrain would stand to lose somewhat unless other Gulf countries do the same. On the other hand, Bahrain will become a more attractive place to work for expats, and the government won't have to worry about embarrassing stories that scream of 'slavery' and 'abuse'. Or face worker strikes, like the two that happened within the space of a week in Bahrain early June. A headache in the short term is better than a migraine in the long term.

The GCC is of course easily singled out globally, given its exposure to the West and its estimated 13-15 million foreign workers, predominantly from Asia. But while the West chastises the GCC on labor rights, millions of Asians, South Americans and Africans continue to toil away in sweat shops to make cheap consumer goods for the West. Millions of migrant laborers also work illegally and often in poor conditions in the West itself.

But where the GCC is strikingly different is in the sponsorship law, and that it was foreign labor that physically built and manned the transformation of the Gulf we see today – the tallest tower, the largest mall, the artificial islands, and the endless real estate projects. These 'unsung heroes' have long been under respected and appreciated. It is also worth recalling the region's own indentured past.

In Oman earlier this year I was reading the late British explorer Wilfred Thesiger's account of crossing the Empty Quarter in 1950, Arabian Sands. He arrives at an oil prospecting camp outside of 'Dibai' with his two Bedu guides, but while Thesiger is allowed to bunk down in the 'European lines', his companions have to sleep in the 'native lines.' This disparity was further emphasized in Abdul Rahman Munif's superlative trilogy Cities of Salt, where the local Gulf Arab laborers that built the oil infrastructure slept under hot tin roofs and earned a pittance while the Americans chilled out in air conditioned compounds.

That period is still in living memory, as is Saudi Arabia only ending slavery in 1962. While that might be a difficult past to talk about, so is the present sponsorship system. The move by Bahrain to end it, and the discussion it has provoked in Qatar and the UAE, shows that workers rights do matter. It should also prove economically advantageous in the long run, given that old adage of “happy workers make productive workers.”