June 28, 2016 Could Draw and Into Direct Conflict?

Stratas Advisors

This report is from Stratas Advisors’ Executive Dialogue service.

Bahrain appears set to reprise its role as yet another flash point of proxy conflict between Saudi Arabia and Iran after Iran's commander Gen. Qassem Soleimani warned on June 20 that Iran would support a "bloody" uprising against Bahrain's Al-Khalifa monarchy if it continued to suppress peaceful opposition from its Shi'a majority population. Soleimani issued his provocative retort in response to Bahrain's revocation of the citizenship of Sheikh Isa Qassim, leader of the Shi'a Al-Wefaq National Islamic society, after it convicted him of sedition for allegedly acting on behalf of Iran to destabilize the monarchy. On Oct. 1, 2015, Bahrain cut diplomatic ties with Tehran after accusing Iran of involvement in bombing plots targeting the kingdom. Iran's Shi'a clerical establishment does not recognize the legitimacy of the Bahraini government or hereditary monarchies generally. Stratas Advisors considers allegations of Iranian covert operations to destabilize the Khalifa monarchy credible. Whatever the degree of Iranian influence over Bahrain's Shi'a political groups, the Khalifa's responses to their domestic political challenges have not helped matters.

The UN, US and other Western governments and NGOs have repeatedly admonished Bahrain for its human rights abuses and repression of its Shi'a majority to no avail. Bahrain has precluded most channels of meaningful political representation by treating peaceful criticism of its policies and lack of effective constitutional checks and balances as "terrorism."

This indicates a strong likelihood that another violent uprising will happen in the near future, as occurred in March 2011, when Saudi Arabia deployed armored units across the King Fahd causeway to crush it.

Stratas Advisors expects a similar outcome given the close proximity of Saudi Arabia and Bahrain vis a vis Iran and the presence of the US Navy's Fifth Fleet, headquartered at Bahrain's capital Manama. These factors together would make it difficult for Iran to infiltrate large quantities of weapons to Shi'a dissidents without being detected and for this population to rapidly mobilize in large numbers before being suppressed. The composition of Bahrain's security forces and ultimately the intolerance of Saudi Arabia for Shi'a rule in such close proximity to its oil-rich Eastern province would also likely make it difficult for the Shi'a opposition to prevail over the Khalifa monarchy by utilizing a strategy of mass nonviolent civil disobedience. We do not preclude this possibility however.

Whatever occurs in the coming weeks or months, it should be apparent to oil-importing countries that relying on these two unstable pillars of the global economy is unwise

and that more robust measures should be taken to mitigate the consequences of their entrance into direct conflict with each other.

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