Rooyesh

A polished silver Spitfire on the desk of Crown Prince Salman bin Hamad bin Isa al-Khalifa recalls two centuries of close and cordial ties between Britain and Bahrain.

But even its most powerful friends cannot guarantee the security of this strategic island caught in the Gulf between worsening Iranian threats and “deadly serious” talk of a US military strike.

It is not a position from which to mince words. In an interview with The Times the Crown Prince has become the first Arab leader to jettison the language of diplomacy and directly accuse Tehran of seeking nuclear weapons.

“While they don’t have the bomb yet, they are developing it, or the capability for it,” he said – the first time one of Iran’s Gulf neighbours effectively has accused it of lying about its nuclear programme.

that “the whole region” would be drawn into any military conflict and called on India, as well as Russia, to help find a diplomatic solution. “There needs to be far more done on the diplomatic front,” he said. “There’s still time to talk.”

If there is a front line in the looming confrontation between Iran and the Arab world, Bahrain is on it.

The US Fifth Fleet is based here, its main carrier battle group tasked with securing the Strait of Hormuz. The King Fahd causeway to Khobar makes Bahrain a gateway to the richest oil reserves on Earth in eastern Saudi Arabia.

The Iranian coast is ten minutes away by fighter or medium-range missile. And this week a senior Iranian general said that suicide bombers were ready to strike at targets throughout the Gulf “if necessary”. Such rhetoric will focus minds in Qatar, Riyadh and the United Arab Emirates. But its effect is especially chilling in Bahrain as the only Sunni-led country with a Shia majority that is not at war or on the brink of war.

“We are a country like Iraq and Lebanon, and we are the only one that is functioning properly,” said Sheikh Khalid al-Khalifa, the Foreign Minister.

Bahrain’s Shias – and the carnage in Iraq to the north – make the kingdom a vital experiment in sectarian coexistence. So far the Shias have repaid the Royal Family’s efforts at political reform with consistent professions of loyalty. That could change overnight in the event of an attack on Iran.

Already, large-scale demonstrations are not unusual. When the Golden Mosque in Samarra was bombed by al-Qaeda in Iraq last year, and again when Israel invaded Lebanon, “Bahrain turned yellow with Hezbollah flags”, according to one Western diplomat.

Since then a reform process that started with the release of all political prisoners in 2000 has largely stalled and leading Shia figures have complained about “systematic discrimination” by the Sunni Establishment. A scandal over alleged plans to end the Shia majority by granting fast-track citizenship to tens of thousands of foreign-born Sunnis has proved so inflammatory that an otherwise relatively free press has been banned from covering it.

The Crown Prince rejected claims of discrimination but acknowledged that the broader sectarian issue had become “so politically charged that nobody is really willing to have a rational discussion about it”.

Iran has not helped. In a newspaper editorial this summer, a close associate of President Ahmadinejad rekindled an old claim on Bahrain as Iran’s 14th province, with echoes of Saddam Hussein’s designs on Kuwait in the late 1980s that were picked up from London to Washington. The claim “touched on the legitimacy of our country”, the Foreign Minister said.

There is no suggestion – yet – of an Iranian invasion of Bahrain. But even as the kingdom throws up skyscrapers to compete with Dubai and Abu Dhabi for regional financial dominance, its security forces are on high alert for evidence of Iranian-backed “sleeper cells” that could bring them all tumbling down.

Between Bahrain’s two tallest office towers three giant wind turbines are suspended in a brave vote of confidence in a future of eco-friendly peace and prosperity. Without a diplomatic end to the Iran crisis, that confidence may soon look misplaced. But the alternatives – a military strike on Iran and a regional nuclear arms race – are too bleak to contemplate.

Source: Times (UK)

Mahmoud Ahmadi-Nejad, Iran’s president, this week moved to consolidate further his government’s hold over the country’s main sources of revenue when he presented his nominees to take over as the oil and industries ministers to parliament. 

The move follows a recent cabinet reshuffle and the appointment two months ago of a central bank governor seen as more sympathetic to the president’s economic policy. Analysts suggest that, if his ministerial choices are approved, this will increase his influence over the top three organisations that administer the country’s resources.

Parliament will vote in the middle of the month on whether to approve the new candidates, both of whom have served as acting ministers following the resignation of their predecessors over the summer.

Gholam-Hossein Nozari is thought likely to win his vote of confidence as oil minister but there are doubts about the proposed industry minister, Ali-Akbar Mehrabian, an ally of the president, who may be blocked for lack of experience.

The oil ministry generates the lion’s share of Iran’s revenues, providing about 60 per cent of the government’s budget and has been the focus of several power struggles between the president and parliament.

The previous oil minister was imposed on the president after parliament rejected three of his nominees. Mr Nozari is believed to be less hostile to the government’s populist policies.

Analysts say he has been backed by one of the two main interest groups inside the oil ministry – the National Iranian South Oil Company (Nisoc) – which is the biggest subsidiary of the National Iranian Oil Company and deals with onshore projects in southern Iran.

Mr Nozari was head of the Nisoc’s intelligence department during the previous reformist administration and it was under his direction that Nisoc complained about an “oil mafia”, which it said awarded contracts to western oil companies, including Royal Dutch Shell, when it should have been giving them to local entities.

The oil ministry is projected to earn about $70bn (£34bn) by March 20 when this Iranian year ends – far beyond its budgetary needs. Many economists have blamed the government for failing to channel surplus oil revenues towards productive sectors, using them instead for day-to-day spending, which has led to record levels of liquidity.

The ministry of industries and mines oversees Iran’s biggest factories through two holding companies: the Industrial Renovation and Development Organisation, which handles car factories producing more than 1m cars annually, and the Iranian Mines and Mining Industries Renovation and Development Organisation.

The two ministries are set to carry out most of Iran’s privatisation programme, disposing of companies worth hundreds of billions of dollars. “Ahmadi-Nejad is trying to have as much control as possible on financial resources not to let them go to [critical] political groups in times of election,” said one economist.

Source: FT