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Saudi Arabia and Iran: A Tale of Two Countries

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And Why It is Unlikely The Two Will Ever Reconcile

This past weekend, a Reuters report brought to the forefront a troubling question that reminds us of the realities of Middle East politics, and with it, Middle East business. With the focus on American President Donald Trump’s golf game, his meeting with Russian President Vladimir Putin and the Federation Internationale de Football (FIFA) soccer games, it passed almost unnoticed in some news services but merits the attention of those who seek to do business in the region.

One of the largest questions currently confounding Middle East politics is the enmity between the Kingdom of Saudi Arabia and the Islamic Republic of Iran, and what could happen next.

According to Reuters, Iranian President Hassan Rouhani suggested that the United States has become more isolated than ever as a result of American sanctions against Iran. When President Donald Trump tore up the Iran nuclear deal last May, Iran’s enemies– the Saudis– may have cheered in the background.

The business and financial implications of Trump’s move last May have not, as yet, become completely clear. Economic sanctions against Iran could affect European companies that do business there or seek to do business there.

Meanwhile, Trump’s relations with some American allies are already troubled and for reasons more connected to events such as the recent NATO summit than Rouhani’s prediction.

While the roots of the Iran-Saudi Arabia issue date back to a centuries- old religious conflict, Rouhani’s concerns are more immediate: as a result of Trump’s move, the Iranian currency has fallen. Recent protests in Iran over worsening economic conditions have led some to suggest the possibility of a new Iranian revolution, a prospect that Rouhani would certainly not welcome.

A complete analysis of the conflict between the two countries would take many features. I can only treat a small part of the whole here in one blog and leave the rest for another edition.

History and historic watersheds do not just happen. A sudden dramatic incident can appear devoid of a clear cause-and-effect relationship with events preceding it although it triggers many subsequent issues. Understanding history – truly understanding history – requires differentiating between an immediate trigger that “lights” the proverbial match setting everything aflame and earlier events pre-dating the match.

History has consistently taught us that World War I began after a gunman killed Archduke Franz Ferdinand in Sarajevo on June 28, 1914. While this is true in absolute terms, the assassination, in fact, lit the match for the continental crisis by releasing huge pent-up tensions between rival alliances in Europe: the Austro-Hungarian Empire and Germany on one side and France, Russia and Great Britain on the other. The tensions had begun before the shot in Sarajevo.

Similarly, the current enmity between Iran and Saudi Arabia did not just happen when many of us first became aware of it a half dozen years ago. It has been waxing and waning for centuries, sometimes almost dormant but always a factor in regional relations.

The beginnings occurred with the original split of Islam between the Sunnis and Shias after the death of the Prophet Muhammad, generally considered to have occurred in 632 A.D. The majority of Iranians are in the Shia branch of Islam while the majority of Saudi Arabia’s population practise the Sunni faith.

Many of Muhammad’s disciples wanted a form of community decision-making in order to replace him with a new spiritual and political leader of Islam. A far smaller group wanted to bestow the mantle on Muhammad’s son-in-law, Ali. In effect, the Shias wanted leadership of Islam to stay within Muhammad’s family while the Sunnis believed that the leadership should more properly devolve to the individual seen by community leaders as the ablest to lead them. That rupture basically set the tone centuries of Sunni-Shia antagonism.

This led to war and Ali was killed during the fighting in 661 A.D. The two branches of Islam have never reunited and, if anything, the current Middle East situation has dimmed what very small chance of reconciliation ever existed.

Some analysts compare this rupture to the division of Christianity into the Roman Catholic and Protestant faiths, a comparison that I personally consider a huge stretch of history.

For long periods the two branches of Islam co-existed peacefully, though at times somewhat uncomfortably, but there have been occasional blow-ups and confrontations, such as the overthrow of Shah Mohammad Reza Pashlavi of Iran in 1979 and his replacement with an aggressively Shia fundamentalist regime.

Add this religious history to the more current jockeying for regional leadership between Iran and Saudi Arabia and you get a very basic explanation of the enmity between the two countries. Traditionally, Saudi Arabia has been a kind of de facto Middle East political leader. Now, Iran wants to change that.

This religious and political dilemma, inextricably combined with the policy of the Trump administration, needs to be taken into account by those who seek to do business with the Middle East.

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