POLITICAL 063 PCTR 05 E rev 1 Original: English NAT O   Pa rl i a me n t a ry  As s e mb l y SUB-COMMITTEE ON TRANSATLANTIC RELATIONS NATO AND PERSIAN GULF SECURITY DRAFT REPORT RUPRECHT POLENZ (GERMANY) RAPPORTEUR* International Secretariat 19 April 2005 * Until  this  document  has  been  approved  by  the  Political  Committee,  it  represents  only  the views of the Rapporteur. Assembly documents are available on its website, http://www.nato-pa.int

063 PCTR 05 E rev 1 i TABLE OF CONTENTS Page I. THE PERSIAN GULF AND INTERNATIONAL SECURITY.................................................... 1 II. THE SITUATION IN IRAQ AND ITS IMPACT ON THE GULF REGION ................................ 1 III. NATO IN THE REGION......................................................................................................... 2 IV. IRAN...................................................................................................................................... 3 V. THE GULF CO-OPERATION COUNCIL................................................................................ 5 VI. PRELIMINARY CONCLUSIONS............................................................................................ 5

063 PCTR 05 E rev 1 1 I. THE PERSIAN GULF AND INTERNATIONAL SECURITY 1. The  Persian  Gulf,  a  perennial  hotspot  in  recent  history,  is  of  vital  strategic  importance because   of   its   geographic   location,   its   continuing   instability   and   its   energy   resources.   Approximately 60% of the world’s oil reserves are located in the region.  Moreover, the countries hold  the  world’s  second,  third,  fourth  and  fifth  natural  gas  reserves  after  Russia.    The  global economy is heavily dependent on the Gulf’s energy resources and will remain so for decades to come.  What is more, the region also serves as an important international shipping route.   2. Starting  from  the  first  Gulf  War  between  Iraq  and  Iran  in  1980,  the  area  has  seen  three major  wars  in  the  last  25  years.    The  region’s  volatile  security  has  been  further  highlighted because of the new global security threats posed by internationally active terrorist groups and the proliferation of weapons of mass destruction (WMD).  Most countries in the region are facing the danger   of   potential   extremist   and   terrorist   activity   on   their   territory   with   perhaps   profound implications for the stability of the whole ‘Broader Middle East’.   3. NATO’s  ongoing  operations  in  Afghanistan  and  Iraq  have  further  increased  the  strategic importance of the Persian Gulf.  The future of Iraq is a crucial determinant for the whole Gulf.  All NATO  nations  are  highly  aware  of  the  dangers  of  instability  in  Iraq  and  of  the  importance  of assisting the new Iraqi authorities to take control of the security situation themselves.  Moreover, Iran,  by  far  the  most  populous  country,  is  emerging  as  a  more  powerful  state  in  the  region.    A nuclear capable Iran with ballistic missiles under the control of religious extremists with links with terrorist groups would be a truly frightening prospect.  Chances are that in the foreseeable future developments  in  the  Persian  Gulf  and  the  ‘Greater  Middle  East’  will  have  a  greater  effect  on Euro-Atlantic security than in any other region.   4. This  report  briefly  analyses  the  security  situation  in  the  Persian  Gulf.    In  this  context,  the report  will  also  address  the  crucial  issue  of  Iran’s  nuclear  programme.    Referring  to  NATO’s activities  to  date,  the  paper  will  also  address  NATO’s  possible  role  in  the  stability  of  the  region.   Your  Rapporteur  strongly  supports  a  more  pro-active  NATO  approach  to  the  Persian  Gulf.   However,  any  increased  NATO  activity  should  primarily  be  political  and  must  be  based  on  the acceptance of the countries in the region.  In the autumn report, your Rapporteur will put forward some concrete proposals for further NATO action that could increase security in the Gulf.   II. THE SITUATION IN IRAQ AND ITS IMPACT ON THE GULF REGION 5. Naturally, developments in Iraq will have a major impact on the security of the Persian Gulf and  beyond.    Countries  in  the  region  have  been  alarmed  by  the  insurgency  in  Iraq.    Moreover, there  is  concern  that  an  alliance  between  Shiite-dominated  governments  in  Iraq  and  Iran  might attempt to influence the regional Shiite communities and destabilise the Gulf States.    6. A  recent  report  by the Iraqi government suggests that insurgents or criminal gangs have killed  more  than  6,000  Iraqi  civilians  over  the  past  two  years.    Moreover,  suicide  bombings, kidnappings  and  hostage  takings  are  real  and  severe  risks  facing  foreign  civilians,  particularly those who work as humanitarian workers, contractors and journalists.  With active assistance from NATO  member  countries,  the  Iraqi  security  forces  have  slowly  begun  to  develop  necessary capabilities  to  provide  security  for  their  own  people.   The  security  situation  in  Iraq  has  to  some extent improved since the largely successful elections to the Transitional National Assembly on 30 January 2005.  According to reports by American, British and Iraqi commanders, insurgent activity has  decreased  in  recent  weeks;  coalition  casualties  in  March  were  the  lowest  in  over  a  year.   Nonetheless,   security   inside   Iraq   still   remains   “extremely   dangerous”,   lawlessness   being   a prevailing  factor  in  Iraqi  society.    Echoing  similar  findings  on  the  US  side,  a  UK  House  of

063 PCTR 05 E rev 1 2 Commons  Defence  Committee  report  on  Iraq¹  states  that  the  British  forces  will  be  present  in broadly similar number throughout 2006.  The US-led coalition will have to retain a high number of troops there, even though, as President Bush recently said, the number of Iraqis trained in security is now higher than the 140,000 US troops stationed there and the involvement of US and coalition troops are increasingly playing a supporting role.   7. The   formation   of   the   new   government,   following   a   political   accord   among   parties representing  the  country's  major  ethnic  and  religious  factions,  on  6 April has been described as “breaking a political deadlock”.  The election of the Kurdish leader Jalal Talabani as president is a positive sign of hard-headed co-operation among the Iraqi parties, but higher political hurdles lie ahead.  The spectre of a civil war, followed by fragmentation of the country into Shiite, Sunni and Kurdish parts, seems remote for now.  But the new Iraqi government will have to produce tangible improvements in daily life if it is to erode support for the insurgency.  Iraq's political process will have more impact on the strength of the insurgency than any military operation.  A poll taken in late February and early March indicates that 60% of Iraqis believe the country is ‘heading in the right direction’, and almost as many expected the situation will "slowly" improve.  According to the House of Commons Defence Committee report, “if nation building exercises are to succeed, they must have a serious commitment of time, energy, financial resources and political resolve”.  Your Rapporteur  wants  to  emphasise  that  the  international  community  has  a  huge  stake  in  Iraq.    If reforms  were  successful,  they  would  send  an  encouraging  signal  to  the  Gulf  countries  and  the whole ‘Broader Middle East’.  On the other hand, if reforms fail, there is an increased risk that the insurgency spills over to neighbouring states and destabilises the whole area.  Therefore, NATO should discuss how Allies and partner countries could further assist in improving security, but also the broader issues of nation building, in Iraq.    III. NATO IN THE REGION 8. Because  of  its  strategic  importance,  there  has  been  considerable  Western,  primarily  US, military presence in the Persian Gulf for decades.  After 9-11, the perception of the region’s pivotal international security role has further increased.  For example, the US has basing agreements with Saudi Arabia, Kuwait, Oman and the UAE, while Bahrain and Qatar host US facilities and serve as important  bridgeheads.    Furthermore,  in  the  context  of  the  ‘war  against  terrorism’,  forces  from NATO  member  countries  have  been  operating  in  the  region.    For  example,  a  US  Nuclear, Biological and Chemical (NBC) team has conducted a series of exercises in the Arabian Sea in the context  of  the  Proliferation  Security  Initiative  (PSI).    Germany  has  an  NBC  battalion  in  Kuwait, which  has  been  stationed  there  before  the  Iraq  war  to  provide  protection  from  a  potential  Iraqi biological  and  chemical  weapons  attack.    The  German  battalion  is  part  of  a  multinational  NBC contingent based in Doha, Qatar, which also comprises Czech forces, among others.   9. Following the 2003 war, 16 NATO Allies currently have troops deployed in Iraq.  Moreover, all  26  NATO  countries  are  now  contributing  to  NATO’s  training  mission  there,  either  inside  or outside of Iraq.  For example, German forces are training Iraqi police and soldiers in the UAE.   10. NATO is co-operating in the Broader Middle East region within the framework of the Istanbul Cooperation Initiative (ICI) agreed upon at the 2004 Istanbul Summit.  The initiative’s primary goal is to enhance security and regional stability through actively promoting NATO’s co-operation with interested countries in the field of security.  In the ICI context, NATO helps develop the ability of interested countries’ forces to operate with those of the Alliance.  Areas of particular interest are:   tackling internationally active terrorist groups, helping prevent WMD proliferation and illegal arms trafficking, as well as contributing to NATO-led peace operations.  Similar to what NATO is offering 1 “Iraq:  An  initial  assessment  of  post -conflict  operations”,  Sixth  report  of  Session  2004-2005  of  the House of Commons Defence Committee

063 PCTR 05 E rev 1 3 the  countries  in  the  Mediterranean  Dialogue,  ICI  provides  tailored  advice  on  defence  reform, defence  budgeting,  defence  planning  and  civil-military  relations  to  interested  countries  in  the Broader Middle East, starting with the Gulf States.  The ICI is still “work in progress” and has to date been formally joined by Kuwait, Bahrain and Qatar.   11. In addition to assisting defence reform, a NATO presence in the region can help introduce or strengthen security dialogue and confidence building.  As a start, your Rapporteur suggests that ICI be further developed by including a clause that allows for consultations if a participant country felt  threatened  in  its  security,  similar  to  that  of  Partnership  for  Peace  (PfP).    However,  the perception of NATO in the Broader Middle East region is generally that of something like ‘a foreign policy  arm  of  the  US’.    Your  Rapporteur  shares  the  view  of  NATO  Secretary  General  Jaap  de Hoop  Scheffer  that  NATO  needs  to  do  more  sustained  public  diplomacy  in  the  Arab  world.   Therefore, we must do more to explain the transformed Alliance and what NATO is today and how it can contribute to Middle East security.  To that end, NATO might consider appointing a special representative to the Persian Gulf region.    IV. IRAN 12. Iran is a key country in the Persian Gulf.  The overthrow of Saddam Hussein has left Iran the primary  power  in  the  region.    Due  to  Iran’s  historic  ambitions  in  the  region  and  the  regime’s eagerness  to  promote  Islamic  revolution  abroad  in  the  1980s,  many  regional  neighbours  have been  wary  of  Tehran.    For  them,  Iran  under  the  Shah  had  been  the  main  guarantor  of  political stability in the region.  However, during the 1980s and early 1990s, under the Republic, Iran was promising to be the primary promoter of revolution.  Iran’s neighbours have also critically viewed Tehran’s support for terrorist groups.  The regime’s links with groups like Hezbollah, Hamas, the Palestinian Islamic Jihad and others have also been a key issue in relations with the West.  Other contentious  topics  between  Iran  and  the  Allies  include  the  Middle  East  peace  process,  human rights  in  the  country,  and,  first  and  foremost,  its  nuclear  programme.    The  revolutionary  regime that  replaced  the  Shah  in  1979  has  long  been  hostile  to  the  West,  and  the  US  in  particular.   However, Iran has developed a more constructive foreign policy approach since reformers came to power  in  the  late  1990s.    But  hopes  for  a  normalisation  of  (diplomatic)  relations  have  not  been fulfilled.    Iran’s  ambiguous  policy  towards  Afghanistan  and  Iraq  reflect  fundamental  divisions between ideologues, who want to export the Islamic revolution, and pragmatists, who see stability as a greater priority for Iran.   13. With regard to Iraq, Iran has supported efforts to stabilise the country whilst backing some forces  of  instability,  notably  Moqtada  al-Sadr’s  rebellion  in  2004.    Tehran  wants  to  avoid  the re-emergence of a powerful threat but also to avoid any descent into chaos.  Also, although they share the same Shiite faith, Tehran is somewhat removed from the emerging Shiite leadership in Iraq.  Ali al-Sistani, Iraq’s most influential cleric, is a proponent of the quietist school of Shia Islam, which  rejects  a  political  role  for  clerics  in  the  state.    Moreover,  Iraq’s  Shia  also  retain  a  strong nationalist character.   14. In  Afghanistan,  Iranian  foreign  policy  has  wavered  between  support  for  stabilisation  and efforts  aimed  to  increase  Tehran’s  influence.    Earlier,  extensive  support  for  warlords  like  Ismail Khan and General Rashid Dostum highlighted this effort to establish a foothold in the post-Taliban Afghanistan, whilst undermining the authority of Karzai’s government.  Yet there have also been signs of a commitment to stabilisation, reflected in the initial offer of US$ 500 million in assistance, among the largest foreign donations to the interim government. 15. Iran’s  nuclear  programme  is  one  of  the  dominating  issues  for  Persian  Gulf  security  and indeed  beyond.    The  covert  nuclear  programme  uncovered  by  IAEA  inspectors  has  led  to demands that Iran abandons all of its nuclear activities, but Tehran has so far been unwavering in

063 PCTR 05 E rev 1 4 asserting  its  right to a peaceful nuclear programme.  While it argues that it is entitled to pursue peaceful   nuclear   capabilities   under   the   NPT,   certain   elements   of   the   nuclear   programme uncovered could not be justified under a civilian nuclear energy programme.  Iranian claims that it is  seeking  a  purely  peaceful  programme  appeared  disingenuous  after  traces  of  weapons  grade uranium have been found, for which no explanation has been given.  What is more, the possibility of Russia taking responsibility for the fuel cycle of an Iranian nuclear energy programme exists, in which Russia would provide the necessary fuel and remove the spent rods for reprocessing.  This makes the need for centrifuges within Iran itself unnecessary, adding to the sense that Tehran has an ulterior motive. 16. The 2004 Paris agreement between the EU-3 (France, Germany, and the United Kingdom) established a series of working groups to deal with the issue.  They are supposed to come up with ideas of how the Iranian programme could be ended – or verifiably prevented – and what the EU could give in return.  The EU says it wants ‘objective guarantees’, i.e. breaking the fuel cycle and dismantling existing infrastructure (particularly centrifuges), that Iran terminates its military nuclear programme for good.  Iran has halted the enrichment and the production of plutonium for now, i.e. during the negotiations with the EU-3.  But it argues that it has kept its part of the bargain and had received nothing in return.   17. In the view of your Rapporteur, the issue of Iran’s nuclear programme would not simply fade if  a  more  pro-Western  government  were  in  power  in  Tehran.    Even  though  many  Iranians, particularly the young generation, appear to oppose the current regime, the reformers are unlikely to be back in the government.  More importantly, Iran’s rationale for acquiring nuclear capability is much less an issue of reformers vs. conservatives as it is based on strategic considerations and national pride.  The implications of Iran ‘going nuclear’ are difficult to predict.  A nuclear Iran would certainly add to the volatility of the region.  The prospect of nuclear weapons under the control of religious  fanatics  (or  the  Republican  Guards)  with  links  to  terrorist  organisations  dismays  Iran’s immediate neighbours and the international community.  The greatest fear is that a nuclear-armed Iran would incite a nuclear arms race in the region and could lead to further WMD proliferation.  In addition,   if   Tehran   were   to   acquire   nuclear   weapons   this   would   undermine   the   nuclear Non-Proliferation Treaty (NPT).     18. Iran  obviously  wants  some  kind  of  security  guarantee,  which  only  the  US  can  offer.   Unfortunately,  Iran  has  been  a  divisive  issue  between  the  US  and  its  Allies  and  caused  serious transatlantic frictions since the 1980s.  There has been no co-ordinated strategy among the Allies.   Some  pundits  have  criticised  the  US  for  its  ‘policy  vacuum’  over  Iran  in  the  past.    Although determined  not  to  offer  incentives,  there  was  no  plan  for  how  to  deal  with  the  problem  since commitments in Iraq make any military action near impossible at present.  But following the visit of US  President  George  Bush  to  Europe  this  February,  the  US  has  vowed  to  support  the  EU-3’s diplomatic  efforts.    The  US  administration  has  signalled  that  it  is  now  prepared  to  stop  blocking Iran's application to the World Trade Organization (WTO) and to allow the sale of spare parts for Iran's aging civilian aircraft.  However, Iranian negotiators dismissed this offer as "ludicrous" and "insignificant”.  At the time of this writing, there is no progress in nuclear discussions between Iran and the European Union.   19. Any viable solution of the intricate Iran’s nuclear issue requires close US-European, indeed transatlantic co-operation.  While NATO as an organisation is not involved in the negotiations with Iranian  regime,  the  Allies,  including  the  US,  support  the  diplomatic  efforts  of  the  EU-3.    But US-Allied  consensus  over  how  to  defuse  the  crisis  over  Iran’s  nuclear  programme  may  only  be temporary.  Therefore, your Rapporteur suggests that the North Atlantic Council (NAC) puts Iran on its agenda.  NATO could be the platform to consider and agree upon a, primarily diplomatic, agenda for how to persuade Iran to abandon its nuclear programme and end its political isolation and to pro-actively engage the country in a regional security dialogue.  

063 PCTR 05 E rev 1 5 V. THE GULF CO-OPERATION COUNCIL 20. With  the  exception  of  the  Gulf  Co-operation  Council  (GCC),  there  exists  no  security dialogue, let alone co-operation, among the Persian Gulf littoral states.  The GCC was established in  May  1981,  initially in response to the Iraq-Iran war, to foster greater co-operation between its members comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE).    It  is  a  regional  common  market  with  a  defence  planning  council  and  has  a  collective security  mechanism.    Security  issues  are  prevalent  within  the  GCC,  especially  the  desire  to establish a regional security structure independent of US influence.  Since its inception the GCC has held joint military exercises, introduced defence compatibility measures and established a joint intervention  force.    Although  the  GCC  states  have  committed  themselves  to  establishing  an integrated defence policy, little progress as been achieved to date.  For example, the planned joint defence  force  Dira’  al-Jazeera  (“Peninsula Shield”) remains a two brigade -strong force with only small non-Saudi contingent.  Divisions among its member states and their reluctance to relinquish sovereignty  in  the  defence  realm  have  hampered  the  further  development  of  the  GCC.    The smaller states fear being dominated by Saudi-Arabia, by far the largest GCC participant.  The war in  Iraq  was  a  good  example  of  these  divisions.    While  some  members  were  opposed  to  the invasion, others such as Kuwait offered the US passage for launching the invasion. 21. Saudi-Arabia, by far the largest and most influential member country of the GCC, is facing one of the more difficult phases in its history.  While the rulers have been criticised for perceived complacency  with  Islamic  extremism  from  outside,  the  domestic  constituency  is  increasingly resentful  of  what  is  seen  as  subservience  to  the  West,  and  the  US  in  particular.    It  needs  to address  internal  and  external  pressures  for  reform  without  alienating  the  conservative  religious leadership  on  which  its  legitimacy  depends.    Severe  socio-economic  problems  include  rising unemployment and poverty in a context of galloping population growth.   22. Armed,  militant  groups  within  the  country  have  unleashed  a  wave  of  violence  intended  to shatter  confidence  in  the  regime,  its  economic  prosperity, and its stability.  Security forces have had some success, arresting hundreds of suspected extremists, killing many others including the presumed  leader  of  al-Qaeda  in  the  Kingdom,  and  confiscating  weapons  and  bomb-making material.   23. The rise of radical Islamism in Saudi Arabia has many and complex causes - most recently including  the  US  posture  in  the  region,  epitomised  by  the  invasion  of  Iraq  and  neglect  of  the Israeli-Palestinian conflict.  Reform will not come easily or without risk.  Saudi Arabia is a highly conservative society where religion plays a central role in framing political discourse for rulers and opponents alike and is a potent tool of legitimisation.  The challenge is to marginalize the violent forces without alienating the broader conservative constituency.   24. As mentioned above, NATO is developing its relationship with the region.  NATO’s ICI aims at establishing mutually beneficial bilateral relations with the countries of the Broader Middle East, starting  with  the  GCC.    Some  of  the  GCC  countries  have  already  contributed  to  Euro-Atlantic security.  For example, the UAE have committed troops to NATO-led operations in the Balkans.   NATO  forces  and  those  of  NATO  member  and  partner  countries  are  currently  deployed  on operations in Iraq and Afghanistan.  Further development and deepening of NATO’s relationship with  the  Persian  Gulf  States  should  emphasise  building  trust  and  confidence  among  the  littoral states.   VI. PRELIMINARY CONCLUSIONS 25. The   Persian   Gulf   region   has   become   increasingly   relevant   for   Euro-Atlantic   security, particularly as the most likely challenges, those originating from terrorism and WMD proliferation,

063 PCTR 05 E rev 1 6 originate   in   the   South   and   the   South-East  of  Europe.    As  NATO  continues  operations  in Afghanistan  and  Iraq  and  expands  its  presence  beyond  its  traditional  area  a  more  active NATO policy towards this region is urgently needed. 26. The ICI is recognition of this need:  it provides a broad set of instruments to assist interested countries of the region in meeting their security requirements.  Moreover, the Allies also contribute to  NATO  operations  in  Iraq  and  in  Afghanistan  with  the  goal  of  building  up  capabilities  of  their governments  to  address  the  security  needs  of  their  people.    In  addition  to  continuing,  and  if possible increasing, their security assistance to Iraq and Afghanistan, the Allies should therefore further  develop  the  ICI,  and  put  a  particular  emphasis  on  developing  a  political  and  security dialogue among the Gulf littoral states.  NATO Allies also should actively support the Middle-East process, the Road Map, as Middle Eastern and Gulf security is closely intertwined.   27. In  the  longer  run,  NATO  should  assist  the  countries  of  the  region  in  establishing  new collective   security   mechanisms.      Eventually,   confidence-building   efforts   could   lead   to   the development  of  new  security  structures  in  the  Persian  Gulf.    These  could  not  only  include  the countries of the GCC but could also embrace Iraq, Iran and Yemen.   28. Trying  to  establish  collective  security  agreements,  even  if  they  can  be  achieved  only gradually  over  a  longer  period  of  time,  is  of  vital  importance  in  this  volatile  area.    In  the  past, Western, i.e. US military presence has helped to tackle military problems.  A military presence of Allied forces will remain important for the foreseeable future.  However, today’s regional security challenges are much more complex and any Western military presence in the Gulf, which might be required if Iran became nuclear and would pursue a more aggressive foreign policy, would have a negative  impact  on  combating  terrorism  and  internal  stability  in  the  Gulf  states.    Therefore,  it  is crucial that the Allies, perhaps in close co-ordination with the EU, assist reform processes in these countries, even if they are likely to be incremental as ruling elites prefer to manage them in a way as to ensure their own survival.   29. An  important  first  step  would  be  to  find a solution to the Iranian nuclear programme.  The Allies  need  to  devise  a  policy  that  supports  Iran's  political  development  but  explicitly  avoids  the rhetoric of regime change, which only stirs up nationalistic feelings in Iran.  The immediate goal should be to move Iran to fulfil its promise made in the fall of 2003 to the EU-3, namely to verifiably terminate  all  work  on  enrichment  and  reprocessing.    In  the  longer  term,  an  agreement  must  be reached  on  the  permanent  abandonment  of  uranium  enrichment  and  other  capacities  of  the nuclear  fuel  cycle,  ratification  of  the  IAEA  Additional  Protocol  and  the  acceptance  of  further safeguards that make it possible to determine the civilian nature of the nuclear programme.   30. Despite their differences, the Allies and Iran share a number of important security interests.   They share a common interest in border security, particularly as Iran remains a transit country for South-Western  Asian  heroin  to  Europe.    Iranian  domestic  narcotics  consumption  remains  a persistent problem and according to official statistics there are at least 2 million drug users in the country.  Allies and Iran, which has given refuge to thousands of Afghan refugees, also share an interest in the stability of Afghanistan and Iraq.   31. Therefore, NATO Allies should support the EU-3 negotiations with Iran as much as possible.   NATO member countries also need to discuss and agree on a comprehensive policy for Iran.  The Allies need to focus on persuading the country to abandon its nuclear programme and recognise Iran’s legitimate security interests.  NATO can make a significant contribution to the security and stability   of   the   Persian   Gulf.      However,   apart   from   activities   in   the   context   of   combating internationally  active  terrorist  groups,  the  role  of  the  Alliance  should  primarily  be  political,  much less  military.    In the autumn report, your Rapporteur will put forward more specific proposals on this.