Is Qatar the next battlefield?

The Iran-Qatar deal has the potential to derail American hegemony over world financial markets.

Qatar
Qatar

Over the past two years, Qatar has conducted over $86 billion worth of transactions in yuan and signed several economic agreements with China.

Is the Saudi-led crackdown on Qatar a Washington maneuver to nix the Emirate’s attempts to sell oil and gas in Chinese yuan, via Iran, undermining the hegemony of the US dollar that has been the international standard since the Nixon Presidency?

America’s hostility to Iraq and Libya was rooted in their attempts to sell oil in currencies other than the US dollar, and led to regime change in both nations, along with the brutal deaths of Saddam Hussain and Muammar Gaddafi, respectively.

Observers have long opined that the “real” reason for the war in Iraq was Saddam Hussein’s decision, announced in October 2000, to price Iraqi oil in the new currency of the European Union, rather than in US dollars, “the currency of the enemy”. It is well known that unless the price of oil is denominated in dollars, Washington cannot run its huge balance of payments deficits, as other nations hold accounts and reserves in dollars only to pay for oil.

According to a Guardian report of 2003, Iraq made handsome profits in selling oil in euros, until the US invasion (March 2003) forced oil sales back to the dollar. Prior to that, from 2001, under the UN oil-for-food program, almost all Iraqi oil exports were paid in euro and roughly 26 billion euros (£17.4 bn) was paid for 3.3 billion barrels of oil into an escrow account in New York. It earned a higher rate of interest in euros than it would have in dollars.

According to a Guardian report 2003, Iraq made handsome profits in selling oil in euros, until the US invasion forced oil sales back to the dollar.

Wikileaks has since revealed Hillary Clinton’s emails which show that the US and French President Nicolas Sarkozy were keen to attack Libya’s Gaddafi to scuttle his plan to unite Africa under a single gold-backed currency (African gold dinar) to be used to buy and sell oil on the global markets.

France moved UN Security Council Resolution 1973 for a no-fly zone over Libya, ostensibly to protect civilians. But an April 2011 email to Hillary Clinton, titled “France’s client and Qaddafi’s gold”, exposes Nicholas Sarkozy as saying for Gaddafi’s blood to obtain Libyan oil (French company, Total), ensure France’s regional influence, boost Sarkozy’s domestic reputation (for re-election; he lost), assert French military power, and curb Gaddafi’s sway over “Francophone Africa” (French colonial Africa).

Iraq made handsome profits in selling oil in euros, until the US invasion (March 2003) forced oil sales back to the dollar.

The email deals lengthily with the enormous threat that Gaddafi’s gold and silver reserves, estimated at “143 tons of gold, and a similar amount in silver,” posed to the French franc that was a leading African currency.

The “confidential” reason behind the war was that “This gold was accumulated prior to the current rebellion and was intended to be used to establish a pan-African currency based on the Libyan golden Dinar. This plan was designed to provide the Francophone African Countries with an alternative to the French franc (CFA).”

The 2 April 2011 email to Hillary Clinton (UNCLASSIFIED US Department of State Case No. F-2014-20439 Doc No. C05779612 Date: 12/31/2015) reports a high-ranking official on the National Libyan Council as stating that factions have developed within the Council, partly due to French cultivation of clients among the rebels.

General Abdelfateh Younis is said to be the leading figure closest to the French, and Younis has told his clique on the NLC that the French has promised to provide military trainers and arms.

There is some impatience over the pace of delivery, and the men understand that France has clear economic interests at stake. Sarkozy’s occasional emissary, the intellectual Bernard Henri-Levy, is not respected by the pro-France NLC action.

The email notes that Qaddafi has immense financial resources. On April 2, 2011, sources with access to advisors to Saif al-Islam Qaddafi revealed in strictest confidence that while the freezing of Libya’s foreign bank accounts did affect Muammar Qaddafi, his ability to equip and maintain his armed forces and intelligence services was intact. These sources said that Qaddafi’s government holds 143 tons of gold and a similar amount in silver.

The recently promoted Saudi crown prince, Mohammad bin Salman, is reputed to be the prime mover behind the attempt to isolate Qatar.

In late March 2011, these stocks were moved to SABHA (southwest in the direction of the Libyan border with Niger and Chad), from the vaults of the Libyan Central Bank in Tripoli.

This gold was intended to be used to establish a pan-African currency based on the Libyan golden dinar and was to offer the Francophone African Countries with an alternative to the French franc.

Seen in this context, Qatar could be the next country to face a Syrian or Yemen-style attempt at regime change. It is pertinent that on June 5, soon after the visit of US President Donald Trump to Saudi Arabia, Riyadh led other members of the Gulf Cooperation Council (GCC) in an attempt to browbeat Qatar through a list of 13 demands that Doha must comply with, or face unspecified action. Most western capitals agree that the demands are difficult to accept.

Briefly, these include shutting down Al-Jazeera and its affiliate stations, and other news outlets funded by Qatar such as Middle East Eye; curbing diplomatic ties with Iran and expelling members of Iran’s Revolutionary Guard (who are not present in Qatar); terminating the Turkish military base in Qatar; consenting to monthly audits for a year after accepting the demands, and aligning with other Gulf and Arab countries militarily, politically, socially, and economically. As of now, Qatar has rejected the demands as unreasonable.

The recently promoted Saudi crown prince, Mohammad bin Salman, is reputed to be the prime mover behind the attempt to isolate Qatar. The aim is to curtail Qatar’s links with Iran, Riyadh’s main regional rival. But this is not practical for Qatar as it derives much of its wealth from the offshore South Pars natural gas field, which it shares with Iran. This relationship is why Iran, like Turkey, immediately sent Doha food supplies after the Saudi blockaded the only land route to the emirate.

It is pertinent that Qatar, like Turkey and Saudi Arabia, had initially wanted to build a natural gas pipeline to Europe, through Syria, against the wishes of President Assad. This prompted the Syrian Alawi/Shia government to urge Shia-majority Iran and Iraq to build a pipeline eastward, excluding the Sunni-majority Qatar, Turkey, and Saudi Arabia, which backed the anti-Assad fighters. Qatar has since reconciled to the near collapse of the anti-Assad front.

Over the past two years, Qatar has conducted over $86 billion worth of transactions in yuan and signed several economic agreements with China.

It is notable that Iran too conducts its oil-related business deals with China in yuan. Soon after the nuclear deal with Washington in 2015, Tehran moved to improve its economy by upping production on its share of the Iran-Qatari gas reserve and signed a deal with France’s Total in November 2016.

Qatar was forced to join and lifted a self-imposed ban on developing the gas field in April 2017.

The Iran-Qatar deal has the potential to derail American hegemony over world financial markets. This explains President Trump’s move to make Riyadh his first foreign visit. Trump has made his intention to secure regime change in Tehran clear. How he intends to cope with Qatar, which hosts the largest US military base in the region, with around 11,000 troops, is less clear. Shifting the base could potentially destabilize other host countries. For now, he could leave the problem to Riyadh. But as events in Syria and Yemen show, it is easier to get embroiled in a conflagration in the Middle East than it is to get out.

Note:
1. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.

Sandhya Jain
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Sandhya Jain

Sandhya Jain is a writer of political and contemporary affairs. A post graduate in Political Science from the University of Delhi, she is a student of the myriad facets of Indian civilisation. Her published works include Adi Deo Arya Devata. A Panoramic View of Tribal-Hindu Cultural Interface, Rupa, 2004; and Evangelical Intrusions. Tripura: A Case Study, Rupa, 2009. She has contributed to other publications, including a chapter on Jain Dharma in “Why I am a Believer: Personal Reflections on Nine World Religions,” ed. Arvind Sharma, Penguin India, 2009.
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9 COMMENTS

  1. Ultimately it boils down to greed and money ,on which the life style of Sheiks and their families depend upon. It hurts the US because it has developed a taste to live on other people’s money.The U.S has developed an excellent engineering and research base for war equipment of offence and defense without which the middle eastern kingdoms cannot survive. When the money for oil from Qatar,Iran is paid in yuan ,it is obvious that defense equipment at some point of time will have to be bought from China. This is a vicious circle like the dog trying to catch its tail. Where will all this lead to ? To me it appears that China is making an all out effort to replace the U.S dollar.
    A common global currency acceptable to all the countries of the world is a possible solution. But Is it Possible in to day’s atmosphere f mistrust and hatred?

  2. Sandhya Jain… One of the most educative articles I have ever read… succinct, balanced, and with the perfect allocation of detail. As a writer, I do so appreciate your all-round ability and discipline.

    As a busy Australian, I find it difficult to access articles that explain the complexities of the Middle East, especially in a context of geopolitics. So, well done.

    I don’t suppose you have the time, but if you ever need to understand how Australia fits into the general scheme of things, especially acknowledging how our government in no way represents the will or aspirations of 90% of the Australian people, a full explanation can be found in oziz4oziz.com

  3. Thank-you Ms Jain. Yours is a well communicated, most probable, and fascinating thesis –that the US proxy conflict developing with Qatar (as with the US conflicts with Iraq and Libya) results not from humanitarian concern with political oppression but most likely from these countries refusing to exclusively denominate trade and finance in US dollars. I encourage you to further develop these ideas and position them in scholastic discourse and ultimately in the western media where their exploration can expose false narratives and undermine the priorities of the global financial oligarchs. Michael\\

  4. There are no free lunches in this world and there is no country which will stand only for honesty and fair play.Only wooly headed Indian IFS/congi wallas like Nehru kind who are used to the ways of free lunches thought the world is different and blundered along happily without realising that none in this world gave 2 hoots to what we think.In other words,India just doesn’t matter.Some idiots still think our imports from many countries atleast should count for something.Yes,they are right, it just counts for how to wink and swindle the Indians.Russians did it for a long time as USSR,China doing it now without batting an eyelid.This article should teach Indians what this world is all about,

  5. “In late March 2011, these stocks were moved to SABHA (southwest in the direction of the Libyan border with Niger and Chad), from the vaults of the Libyan Central Bank in Tripoli.
    This gold was intended to be used to establish a pan-African currency based on the Libyan golden dinar and was to offer the Francophone African Countries with an alternative to the French franc.”

    This inference can’t be factually correct as French franc didn’t exist in 2011, Euro has been invogue since early 2002

    • ha, you don’t know the history of 2 CFAs-West African Franc,Central African franc both backed by France and it has a fixed exchange value of 100CFAs=! FF = 0.15Euro,,all very complicated but in reality,France controls this currency and I think more than 15 african countries are involved.Sandya has written a believable scenario.It is highly confusing to understand what goes on in Middle East.Their politics is so devious,it requires very high level of knowledge of the place/players to understand what is going on.

    • The franc, commonly distinguished as the French franc (FF), was a currency of France. Between 1450 and 1999, it was the name of coins worth 1 livre tournois and remained in common parlance as a term for this amount of money. It was reintroduced (in decimal form) in 1795.

      It was revalued in 1960, with each new franc (NF) being worth 100 old francs. The NF designation was continued for a few years before the currency returned to being simply the franc.

      The French continued to reference and value items in terms of the old franc (equivalent to the new centime) until the introduction of the euro in 1999 (for accounting purposes) and 2002 (for coins and banknotes). The French franc was a commonly held international reserve currency of reference in the 19th and 20th centuries.

  6. wonderful article and its true, but I doubt war/ invasion may come to Qatar, because GCC unity is very strong (and I wish no more wars)

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