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HomeBlogIs Netanyahu’s Iran Story Expiring?

Is Netanyahu’s Iran Story Expiring?

Israeli Prime Minister Benjamin Netanyahu brandishes a piece of an armed Iranian drone that the Israel Air Force shot down after it infiltrated Israeli airspace from Syria. Munich Security Conference, February 2018. By Amos Ben Gershom, Israel Government Press Office

Iran has been an eternal part of the political narrative in Israel where political parties, particularly the Likud Party under the leadership of Netanyahu has heavily relied on the “Iranian Threat” as a fear mongering tactic to attract voters for elections.

By Reza Yeganehshakib

Last week, Israeli Attorney General Avichai Mandelblit announced Prime Minister Benjamin Netanyahu to be formally indicted on charges relating to three cases of financial and political misconduct, carrying the possibility of jail time. While the media has largely focused on his scandals within the Isreali domestic affairs, it is also important to shed light on Netenyahu’s misuse of a foreign country, Iran, to shape the domestic politics inside the country.

Iran has been an eternal part of the political narrative in Israel where political parties, particularly the Likud Party under the leadership of Netanyahu has heavily relied on the “Iranian threat” as a fear-mongering tactic to attract voters for elections. Every election, Netenyahu’s narrative revolves around him being the only capable leader to deter the Islamic Republic. However, the Iranian threat narrative no longer seems to be working well for him after Israeli media also revealed his involvement in a “secret deal” that benefited Iran. But what role Iran could possibly play in a deal that Netanyahu claims to reinforce the security of Israel?

The story dates back to the Cold War era when the Iranian government purchased significant shares of a German leading steel company called Thyssen in 1974. Iran’s investment in the company was part of the country’s broader strategy to avoid inflation and damages to its economy. This was mainly a response to an unprecedented inflow of cash into the economy as a result of a sudden rise in the price of crude oil following the Arab oil embargo in 1973. Consequently, the government decided to massively invest its surplus in several overseas giant corporations such as Thyssen. In this case, they bought more than 24% of the company’s shares, which was later reduced with the involvement of a merger company after the Iranian Revolution.

In March 1999, Thyssen officially merged with Krupp, a 400-year old German steel and weapon manufacturer that is known for its battleships, tanks, and U-boats. Resultantly, the Islamic Republic of Iran suddenly became a major shareholder of an international giant battleship and modern weapon manufacturer. Yet, this partnership didn’t live long as the United States used its influence to end Iran’s partial ownership of this company.

In May 2003, President George W. Bush’s pressured Europe to restrict their economic ties with Iran as part of the US containment strategy against Iran. Hence, Thyssenkrupp was forced to repurchase 16.9 million shares of its Iranian partner as well as Iran Foreign Investment Company (IFIC) for $437 million. This reduced Iran’s share from 24% to 4.5%, pleasing the Americans while leaving the Germans very unsatisfied with the outcome. They forcefully made great concessions to the Iranians and faced a consequent adverse impact on their stockholders’ equity as well as the company’s overall assets. Despite making concessions, Washington negatively responded to the company’s request to be reimbursed for their loss in this one-sided deal with Tehran.

The story attracted the media attention after Yedioth Ahronoth, Israel’s most-read newspaper, reported on the Islamic Republic being a minority shareholder in Thyssenkrupp. This expectedly became controversial, considering Israel recently signed a contract with the same company to purchase three submarines.

This later led to Attorney General open an investigation into Prime Minister Netanyahu’s personal attorney, David Shimron who convinced Prime Minister to sign a $1 billion deal with Thyssenkrupp that Shimron himself was representing in Israel. This did not go as easy for the government that was already struggling with another scandal related to Iran.

In August 2016, Swiss high-level court ruled Israel to pay Iran an approximate amount of $1.1 billion-plus interest in order to cover Iran’s loss for its shares in the Eilat-Ashkelon Pipeline Company (EAPC). This company was founded in 1968 to pump Iran’s oil from the Red Sea to the Mediterranean Sea. However, Iran received no benefits from the operations of the pipeline, which has been active since its creation.

What is clear is that Israel is quite pragmatic and business-minded when it comes to making deals with the so-called “enemy”. Whether it is delivering weapons to Tehran in Iran-Contra affairs or partaking in deals that benefit Iran, Likud party has managed to simultaneously run effective and fear-based anti-Iran campaigns while benefiting from deals associated with Iran. Netanyahu has surely been the mastermind behind such campaigns as he cleverly deviated attention from crucial internal issues such as housing crisis, unemployment, and failure to make peace with the Palestinians, and diverted it all to the Iranian threat in order to sway public opinion in his favour. However, his recent indications along with the marginal victory of Blue and White Alliance prove that the Netenyahu’s Iran story will not work forever; and the Likud party, especially after Neteyahu’s departure, needs to redesign its strategy based on internal matters if it wants to remain in power.

Reza Yeganehshakib is an Associate Faculty in the Department of History with a specialization in the Middle East and World History at Saddleback College and Santa Monica College.

Panel 4: Pathways to Manage Non-Proliferation in the Middle East (4:30 PM - 5:45 PM ET)

The Western powers have failed to effectively manage the increasing threat of proliferation in the Middle East. While the international community is concerned with Iran’s nuclear program, Saudi Arabia has moved forward with developing its own nuclear program, and independent studies show that Israel has longed possessed dozens of nuclear warheads. The former is a member of the treaty on the Non-Proliferation of Nuclear Weapons (NPT), while the latter has refused to sign the international agreement. 

On Middle East policy, the Biden campaign had staunchly criticized the Trump administration’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA), more commonly known as the Iran Nuclear Deal and it has begun re-engaging Iran on the nuclear dossier since assuming office in January 2021. However, serious obstacles remain for responsible actors in expanding non-proliferation efforts toward a nuclear-free zone in the Middle East. 

This panel will discuss how Western powers and multilateral institutions, such as the IAEA, can play a more effective role in managing non-proliferation efforts in the Middle East.  

Panelists:

Peggy Mason: Canada’s former Ambassador to the UN for Disarmament

Mark Fitzpatrick: Associate Fellow & Former Executive Director, International Institute for Strategic Studies (IISS)

Ali Vaez: Iran Project Director, International Crisis Group

Negar Mortazavi: Journalist and Political Analyst, Host of Iran Podcast

David Albright: Founder and President of the Institute for Science and International Security

 

Closing (5:45 PM – 6:00 PM ET)

Panel 3: Trade and Business Diplomacy in the Middle East (3:00 PM - 4:15 PM ET)

What is the current economic landscape in the Middle East? While global foreign direct investment is expected to fall drastically in the post-COVID era, the World Bank reported a 5% contraction in the economic output of the Middle East and North African (MENA) countries in 2020 due to the pandemic. While oil prices are expected to rebound with normalization in demand, political instability, regional and geopolitical tensions, domestic corruption, and a volatile regulatory and legal environment all threaten economic recovery in the Middle East. What is the prospect for economic growth and development in the region post-pandemic, and how could MENA nations promote sustainable growth and regional trade moving forward?

At the same time, Middle Eastern diaspora communities have become financially successful and can help promote trade between North America and the region. In this respect, the diaspora can become vital intermediaries for advancing U.S. and Canada’s business interests abroad. Promoting business diplomacy can both benefit the MENA region and be an effective and positive way to advance engagement and achieve foreign policy goals of the North Atlantic.

This panel will investigate the trade and investment opportunities in the Middle East, discuss how facilitating economic engagement with the region can benefit Canadian and American national interests, and explore relevant policy prescriptions.

Panelists:

Hon. Sergio Marchi: Canada’s Former Minister of International Trade

Scott Jolliffe: Chairperson, Canada Arab Business Council

Esfandyar Batmanghelidj: Founder and Publisher of Bourse & Bazaar

Nizar Ghanem: Director of Research and Co-founder at Triangle

Nicki Siamaki: Researcher at Control Risks

Panel 2: Arms Race and Terrorism in the Middle East (12:00 PM - 1:15 PM ET)

The Middle East continues to grapple with violence and instability, particularly in Yemen, Syria and Iraq. Fueled by government incompetence and foreign interventions, terrorist insurgencies have imposed severe humanitarian and economic costs on the region. Meanwhile, regional actors have engaged in an unprecedented pursuit of arms accumulation. Saudi Arabia and the United Arab Emirates have imported billions of both Western and Russian-made weapons and funded militant groups across the region, intending to contain their regional adversaries, particularly Iran. Tehran has also provided sophisticated weaponry to various militia groups across the region to strengthen its geopolitical position against Saudi Arabia, UAE, and Israel. 

On the other hand, with international terrorist networks and intense regional rivalry in the Middle East, it is impractical to discuss peace and security without addressing terrorism and the arms race in the region. This panel will primarily discuss the implications of the ongoing arms race in the region and the role of Western powers and multilateral organizations in facilitating trust-building security arrangements among regional stakeholders to limit the proliferation of arms across the Middle East.

 

Panelists:

Luciano Zaccara: Assistant Professor, Qatar University

Dania Thafer: Executive Director, Gulf International Forum

Kayhan Barzegar: Professor and Chair of the Department of Political Science and International Relations at the Science and Research Branch of Azad University

Barbara Slavin: Director of Iran Initiative, Atlantic Council

Sanam Shantyaei: Senior Journalist at France24 & host of Middle East Matters

Panel 1: Future of Diplomacy and Engagement in the Middle East (10:30 AM-11:45 AM ET)

The emerging regional order in West Asia will have wide-ranging implications for global security. The Biden administration has begun re-engaging Iran on the nuclear dossier, an initiative staunchly opposed by Israel, while also taking a harder line on Saudi Arabia’s intervention in Yemen. Meanwhile, key regional actors, including Qatar, Iraq, and Oman, have engaged in backchannel efforts to bring Iran and Saudi Arabia to the negotiating table. From a broader geopolitical perspective, with the need to secure its energy imports, China is also expected to increase its footprint in the region and influence the mentioned challenges. 

In this evolving landscape, Western powers will be compelled to redefine their strategic priorities and adjust their policies with the new realities in the region. In this panel, we will discuss how the West, including the United States and its allies, can utilize multilateral diplomacy with its adversaries to prevent military escalation in the region. Most importantly, the panel will discuss if a multilateral security dialogue in the Persian Gulf region, proposed by some regional actors, can help reduce tensions among regional foes and produce sustainable peace and development for the region. 

Panelists:

Abdullah Baabood: Academic Researcher and Former Director of the Centre for Gulf Studies, Qatar University

Trita Parsi: Executive Vice-President, Quincy Institute for Responsible Statecraft

Ebtesam Al-Ketbi: President, Emirates Policy Centre​

Jon Allen: Canada’s Former Ambassador to Israel

Elizabeth Hagedorn: Washington correspondent for Al-Monitor

Panel 4: Humanitarian Diplomacy: An Underused Foreign Policy Tool in the Middle East (4:30 PM - 5:30 PM ET)

Military interventions, political and economic instabilities, and civil unrest in the Middle East have led to a global refugee crisis with an increasing wave of refugees and asylum seekers to Europe and Canada. Moreover, the COVID-19 pandemic has, in myriad ways, exacerbated and contributed to the ongoing security threats and destabilization of the region.

While these challenges pose serious risks to Canadian security, Ottawa will also have the opportunity to limit such risks and prevent a spillover effect vis-à-vis effective humanitarian initiatives in the region. In this panel, we will primarily investigate Canada’s Middle East Strategy’s degree of success in providing humanitarian aid to the region. Secondly, the panel will discuss what programs and initiatives Canada can introduce to further build on the renewed strategy. and more specifically, how Canada can utilize its policy instruments to more effectively deal with the increasing influx of refugees from the Middle East. 

 

Panelists:

Erica Di Ruggiero: Director of Centre for Global Health, University of Toronto

Reyhana Patel: Head of Communications & Government Relations, Islamic Relief Canada

Amir Barmaki: Former Head of UN OCHA in Iran

Catherine Gribbin: Senior Legal Advisor for International and Humanitarian Law, Canadian Red Cross

Panel 3: A Review of Canada’s Middle East Engagement and Defense Strategy (3:00 PM - 4:15 PM ET)

In 2016, Canada launched an ambitious five-year “Middle East Engagement Strategy” (2016-2021), committing to investing CA$3.5 billion over five years to help establish the necessary conditions for security and stability, alleviate human suffering and enable stabilization programs in the region. In the latest development, during the meeting of the Global Coalition against ISIS, Minister of Foreign Affairs Marc Garneau announced more than $43.6 million in Peace and Stabilization Operations Program funding for 11 projects in Syria and Iraq.

With Canada’s Middle East Engagement Strategy expiring this year, it is time to examine and evaluate this massive investment in the Middle East region in the past five years. More importantly, the panel will discuss a principled and strategic roadmap for the future of Canada’s short-term and long-term engagement in the Middle East.

Panelists:

Ferry de Kerckhove: Canada’s Former Ambassador to Egypt

Dennis Horak: Canada’s Former Ambassador to Saudi Arabia

Chris Kilford: Former Canadian Defence Attaché in Turkey, member of the national board of the Canadian International Council (CIC)

David Dewitt: University Professor Emeritus, York University

Panel 2: The Great Power Competition in the Middle East (12:00 PM - 1:15 PM ET)

While the United States continues to pull back from certain regional conflicts, reflected by the Biden administration’s decision to halt American backing for Saudi Arabia’s intervention in Yemen and the expected withdrawal from Afghanistan, US troops continue to be stationed across the region. Meanwhile, Russia and China have significantly maintained and even expanded their regional activities. On one hand, the Kremlin has maintained its military presence in Syria, and on the other hand, China has signed an unprecedented 25-year strategic agreement with Iran.

As the global power structure continues to shift, it is essential to analyze the future of the US regional presence under the Biden administration, explore the emerging global rivalry with Russia and China, and at last, investigate the implications of such competition for peace and security in the Middle East.

Panelists:

Dmitri Trenin: Director of Carnegie Moscow Center

Joost R. Hiltermann: Director of MENA Programme, International Crisis Group

Roxane Farmanfarmaian: Affiliated Lecturer in International Relations of the Middle East and North Africa, University of Cambridge

Andrew A. Michta: Dean of the College of International and Security Studies at Marshall Center

Kelley Vlahos: Senior Advisor, Quincy Institute

Panel 1: A New Middle East Security Architecture in the Making (10:30 AM -11:45 AM ET)

The security architecture of the Middle East has undergone rapid transformations in an exceptionally short period. Notable developments include the United States gradual withdrawal from the region, rapprochement between Israel and some GCC states through the Abraham Accords and the rise of Chinese and Russian regional engagement.

With these new trends in the Middle East, it is timely to investigate the security implications of the Biden administration’s Middle East policy. In this respect, we will discuss the Biden team’s new approach vis-à-vis Iran, Yemen, Saudi Arabia, and Israel. The panel will also discuss the role of other major powers, including China and Russia in shaping this new security environment in the region, and how the Biden administration will respond to these powers’ increasing regional presence.

 

Panelists:

Sanam Vakil: Deputy Director of MENA Programme at Chatham House

Denise Natali: Acting Director, Institute for National Strategic Studies & Director of the Center for Strategic Research, National Defense University

Hassan Ahmadian: Professor of the Middle East and North Africa Studies, University of Tehran

Abdulaziz Sagar: Chairman, Gulf Research Center

Andrew Parasiliti: President, Al-Monitor