Iran and Russia have deepened their strategic relationship over the past decade. AFP
Iran and Russia have deepened their strategic relationship over the past decade. AFP
Iran and Russia have deepened their strategic relationship over the past decade. AFP
Iran and Russia have deepened their strategic relationship over the past decade. AFP


What is Iran getting out of its alliances with Russia and China?


  • English
  • Arabic

November 21, 2021

Some believe that the much-anticipated nuclear deal between Iran and western powers, Russia and China will diminish Iran's regional influence. But those who think that is the case ignore the huge implications of Tehran's trilateral relationship with Moscow and Beijing. Indeed, there is always the possibility, according to another school of thought, that any lifting of sanctions on Iran as a result of the deal could release a financial windfall that will only bolster Iranian projects and ambitions in the Middle East.

Iran's close relationship with Russia and China – which includes political, military and economic co-operation – could turn it into a regional hegemon, more determined and violent in its quest to impose its system and ideology beyond its borders, especially in Iraq, Syria and Lebanon.

Last week, all the players involved in talks with Iran stepped up their rhetoric and taken important strategic steps. American civilian and military officials revealed new security policies in the Middle East, and confirmed that US troops would remain in the region, albeit with adjustments to their areas of deployment. The US reassured its allies in the region, and affirmed its ability to project power rapidly beyond its bases to confront Iranian threats using "smart" methods.

For its part, the Iranian leadership flexed its military muscles on the field. And a phone call between Russian President Vladimir Putin and Iranian President Ebrahim Raisi carried a deliberate message that the two countries are discussing signing an agreement similar to the 25-year pact signed between Iran and China, to complete a strategic Chinese-Russian-Iranian trilateral that could be further developed, depending on how regional dynamics with respect to the US, Israel and Arab states progress.

The agreement between Iran and Russia is not expected to be on the same scale as the Chinese-Iranian pact, but it has interesting implications, for example in Syria. The Russian and Iranian presidents agreed to step up their efforts to complete the deal possibly before the year ends. The treaty could last for years, and cover military, energy and political co-operation.

Iran has been a major player in the Syrian war. AP Photo
Iran has been a major player in the Syrian war. AP Photo
Iran's close relationship with Russia and China could turn it into a regional hegemon

Iran would benefit a great deal from this. Indeed, while the pact with China has had precious military and economic benefits for both sides (including in the area of oil exports), a comprehensive agreement with Russia would have the added value of Russia’s deep political involvement in the Middle East. That could come in handy in Iran’s regional projects. Iranian influence in Syria, for instance, requires deep co-operation with Moscow. In Syria, the Kremlin possesses the keys to Syria’s leadership through President Bashar Al Assad, while Iran possesses the keys to controlling Syria’s territory. One question is, who in Syria leads and who follows, Russia or Iran? As a result of the major agreements such as the one being drafted between Russia and Iran, part of the answer will lie in the shared objectives and partnership on the battlefield.

Both Iran and Russia also face a changing dynamic in Syria, in the form of changes in US policy and openness within Arab states to the possibility of welcoming Syria back into the Arab League. By bringing Syria back into the fold, Arab states have two things to gain. They can counter Iran’s overwhelming influence there and, by extension, preserve Syria’s Arab identity; and they can capitalise on Iran’s inability to finance the country's reconstruction, a necessary condition for Syrian stability, and strengthen Arab regional economic links.

Incidentally, Russia may not actually mind the reduction of Iranian influence in Syria. Its main priority is to pursue whatever path secures Al Assad's position and influence the most. But it is willing to entertain an Iranian role in the country for now, in case that turns out to be the best way forward.

Of greater significance, perhaps, is a more direct face-off with the US elsewhere in the region. Even in this regard, Iran's alliance with Russia is paying dividends.

Over the weekend, the administration of US President Joe Biden launched its comprehensive approach to security policy in the Middle East, during Defence Secretary Lloyd Austin’s speech at the Manama Dialogue in Bahrain. The speech echoes recent remarks by US Central Command chief Frank McKenzie, at the National Council for US Arab Relations, in which he confirmed that Washington does not intend to end “our permanent military presence in the region [that] has been guaranteed for more than 70 years”. The Pentagon has also stressed that Iran’s continued threats require vigilance, and that protecting international waterways is imperative.

But at the same time, the Biden administration argues, again, that a "smart" way should be found to confront Iran’s continued security threats. This language sees to acknowledge a belief in Washington today that there is no military solution to the threats from Iran and its proxies. This is the fundamental difference between Mr Biden's approach and that of his predecessor, Donald Trump. Mr Biden’s team do not want to use military language, whether to deter or to respond.

All of this sets the stage for – and describes the psychology of – the important round of the nuclear talks with Iran, which resume on 29 November in Vienna.

The Biden administration's messaging in Manama is likely meant to reassure its partners in the Gulf, and soften the blow for a more generous offer Washington may make soon to Iran as part of the forthcoming nuclear deal. In Vienna, after all, the US side will find it hard to raise the issue of Iran’s regional activities – Iran objects to this being part of the discussion, and it is backed strongly by Russia and China in that objection.

It is already becoming clear that Mr Biden wants neither escalation nor confrontation with Iran. And the more that Iran embeds itself in its alliance with Russia and China, that more likely Mr Biden is to continue that approach.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
RESULTS

5pm: Wathba Stallions Cup – Maiden (PA) Dh70,000 (Dirt) 1,400m
Winner: Yas Xmnsor, Sean Kirrane (jockey), Khalifa Al Neyadi (trainer)

5.30pm: Falaj Hazza – Handicap (PA) Dh70,000 (D) 1,600m
Winner: Arim W’Rsan, Dane O’Neill, Jaci Wickham

6pm: Al Basrah – Maiden (PA) Dh70,000 (D) 1,800m
Winner: Kalifano De Ghazal, Abdul Aziz Al Balushi, Helal Al Alawi

6.30pm: Oud Al Touba – Handicap (PA) Dh70,000 (D) 1,800m
Winner: Pharitz Oubai, Sean Kirrane, Ibrahim Al Hadhrami

7pm: Sieh bin Amaar – Conditions (PA) Dh80,000 (D) 1,800m
Winner: Oxord, Richard Mullen, Abdalla Al Hammadi

7.30pm: Jebel Hafeet – Conditions (PA) Dh85,000 (D) 2,000m
Winner: AF Ramz, Sean Kirrane, Khalifa Al Neyadi

8pm: Al Saad – Handicap (TB) Dh70,000 (D) 2,000m
Winner: Sea Skimmer, Gabriele Malune, Kareem Ramadan

AUSTRALIA%20SQUAD
%3Cp%3EPat%20Cummins%20(capt)%2C%20Scott%20Boland%2C%20Alex%20Carey%2C%20Cameron%20Green%2C%20Marcus%20Harris%2C%20Josh%20Hazlewood%2C%20Travis%20Head%2C%20Josh%20Inglis%2C%20Usman%20Khawaja%2C%20Marnus%20Labuschagne%2C%20Nathan%20Lyon%2C%20Mitchell%20Marsh%2C%20Todd%20Murphy%2C%20Matthew%20Renshaw%2C%20Steve%20Smith%2C%20Mitchell%20Starc%2C%20David%20Warner%3C%2Fp%3E%0A
Desert Warrior

Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley

Director: Rupert Wyatt

Rating: 3/5

Countries recognising Palestine

France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra

 

HEADLINE HERE
  • I would recommend writing out the text in the body 
  • And then copy into this box
  • It can be as long as you link
  • But I recommend you use the bullet point function (see red square)
  • Or try to keep the word count down
  • Be wary of other embeds lengthy fact boxes could crash into 
  • That's about it
Updated: November 21, 2021, 4:00 AM