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Tuesday, June 26, 2012

Saudi Arabia: Background and U.S. Relations


Christopher M. Blanchard
Specialist in Middle Eastern Affairs

The kingdom of Saudi Arabia, ruled by the Al Saud family since its founding in 1932, wields significant global political and economic influence as the birthplace of the Islamic faith and by virtue of its large oil reserves. Close U.S.-Saudi official relations have survived a series of challenges since the 1940s, and, in recent years, shared concerns over Al Qaeda-inspired terrorism and Iranian regional ambitions have provided a renewed logic for continued strategic cooperation. The ongoing political upheaval in the Middle East and North Africa is changing the dynamics of long-running reform debates in the kingdom. The full effect of these events on the kingdom and on U.S.-Saudi relations has yet to be determined. Official U.S. concerns about human rights and religious freedom in the kingdom persist, and some Members of Congress have expressed skepticism about Saudi leaders’ commitment to combating religious extremism and sharing U.S. policy priorities in the Middle East and South Asia. However, Bush and Obama Administration officials have referred to the Saudi government as an important regional partner in recent years, and U.S. arms sales and related training programs have continued with congressional oversight. In October 2010, Congress was notified of proposed sales to Saudi Arabia of dozens of F-15 fighter aircraft, helicopters, and related equipment and services, with a potential value of $60 billion. Contracts to implement those sales are now being signed.

At home, Saudi leaders are weighing a litany of economic and political reform demands from competing, energized groups of citizen activists. The prevailing atmosphere of regional unrest and increased international scrutiny of domestic political developments further complicates matters. Groups representing liberal, moderate, and conservative trends have submitted advisory petitions to King Abdullah bin Abdelaziz, and many recent reform statements refer to and echo past requests submitted to the king and his predecessor, the late King Fahd. Initiatives to organize nationwide protests have been met with some popular criticism and official rejection, while local protests over discrete issues occur sporadically. Some observers fear that public confrontations with unpredictable consequences may result from the apparent incompatibility of a ban on all demonstrations and the enthusiasm of different activist groups, including Shiite citizens of the Eastern Province, government employees, students, and relatives of prisoners and terrorism suspects. The Obama Administration has endorsed Saudi citizens’ rights to free assembly and free expression. Saudi leaders reject foreign intervention in the country’s internal affairs.

Since taking power in 2005, King Abdullah has created greater public space for domestic social reform debates and has promoted the concept of a strong national identity among Saudis in the face of a determined domestic terrorism campaign. He also has codified royal succession procedures, begun restructuring the justice system, and taken clear steps to exert stronger government control over religious authorities. Robust oil export revenues have strengthened the kingdom’s economic position and provide Saudi leaders with significant financial resources to meet domestic investment needs and provide social benefits. In this context, the United States and Saudi Arabia continue to grapple with a core challenge identified by the 9/11 Commission in its final report: defining a broader bilateral relationship that “leaders on both sides are prepared to publicly defend.” Current U.S. policy seeks to coordinate with Saudi leaders on regional issues and help them respond to domestic economic and security challenges. It remains to be seen whether U.S. initiatives and, more importantly, Saudi leaders’ own reform efforts will enable the kingdom to meet the energy, education, employment, and security needs that its citizens face. Shared challenges have long defined U.S.-Saudi relations, but questions about political, economic, and social reform may become more pressing in light of the calls for political change that are now swirling around the kingdom.


Date of Report: June 19, 2012
Number of Pages: 17
Order Number: RL33533
Price: $29.95


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Egypt: Transition under Military Rule


Jeremy M. Sharp
Specialist in Middle Eastern Affairs

On January 25, 2011, Egyptians began 18 days of mass protests that eventually drove President Hosni Mubarak to resign from the presidency after 29 years in power. In the wake of Mubarak’s resignation, a Supreme Council of the Armed Forces (SCAF)—made up entirely of military officers who enjoyed leading positions under Mubarak—has exercised executive authority directly and via an interim cabinet. The SCAF oversaw a March 2011 referendum that approved amendments to Egypt’s constitution, and also issued new laws on the formation of political parties and the conduct of parliamentary elections. The amended constitution laid out a transitional framework in which the elected People’s Assembly and Shura Council, in conjunction with the SCAF, were to select members for a 100-person Constituent Assembly to draft a new constitution subject to a referendum.

Legislative elections held in late 2011 and early 2012 granted significant majorities to Islamist political parties, including the Muslim Brotherhood’s Freedom and Justice party. The SCAF and various non-Islamist forces challenged the legislature’s efforts to select members for the Constituent Assembly, and a court ruling found the legislative electoral law unconstitutional, putting the recent election results and the future of the Islamist-dominated parliament in doubt. As polls closed for the final round of Egypt’s June 2012 presidential election, the SCAF issued further amendments to the transitional constitution, granting itself sweeping powers to appoint members of the Constituent Assembly, enforce martial law, and remain immune from oversight by the newly elected president. Muslim Brotherhood candidate Mohammed Morsi has claimed victory in the poll.

This report provides a brief overview of the transition thus far and information on U.S. foreign aid to Egypt. The United States has provided significant military and economic assistance to Egypt since the late 1970s. U.S. policy makers have routinely justified aid to Egypt as an investment in regional stability, built primarily on long-running military cooperation and on sustaining the March 1979 Egyptian-Israeli peace treaty. Successive U.S. Administrations have viewed Egypt’s government as generally influencing developments in the Middle East in line with U.S. interests. U.S. policy makers are now grappling with complex questions about the future of U.S.-Egypt relations, and these debates and events in Egypt are shaping consideration of appropriations and authorization legislation in the 112th Congress.



Date of Report: June 21, 2012
Number of Pages: 27
Order Number: RL33003
Price: $29.95

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Kuwait: Security, Reform, and U.S. Policy


Kenneth Katzman
Specialist in Middle Eastern Affairs

Kuwait has been pivotal to two decades of U.S. efforts to end a strategic threat posed by Iraq. Because of its location and close cooperation with the United States, Kuwait is central to U.S. efforts to remain engaged in the northern Persian Gulf region following the completion of the withdrawal of U.S. forces from Iraq at the end of 2011. Kuwait’s relations with the post-Saddam government in Iraq have been hampered by long-standing territorial, economic, and political issues unresolved from the 1990 Iraqi invasion of Kuwait, but those issues have been narrowed since 2011. Kuwait is increasingly suspicious of Iranian intentions in the Gulf, which aligns Kuwait with U.S. efforts to contain Iranian power in the Gulf and prevent Iran from exerting undue influence in post-withdrawal Iraq. Still, Kuwait maintains relatively normal economic and political relations with Iran so as not to provoke Iran to try to empower pro-Iranian elements in Kuwait.

Although Kuwait’s foreign policy has remained steady, its political system has been in turmoil since 2006. The disputes in Kuwait have taken the form of infighting between oppositionists in the elected National Assembly and the ruling Al Sabah family, primarily over the political and economic dominance of the Al Sabah. This has been aggravated by disputes within rival branches of the ruling family. The disputes have produced four dissolutions of the National Assembly and new elections since 2006, the latest of which were held on February 2, 2012. Those elections produced a body that is generally adversarial to the government and has strong Islamist influence, leading Amir Sabah al-Ahmad Al Sabah to suspend the Assembly for one month, beginning June 18, 2012. That suspension may have been mooted by a constitutional court ruling, two days later, declaring the December 2011 Assembly suspension unconstitutional and ordering the previous Assembly re-seated. The many years of political paralysis have led to some economic stagnation as well, because parliamentary approval for several major investment projects, such as development of major oil fields in northern Kuwait, has been held up due to the infighting.

As in other Arab countries that have seen political unrest and change in 2011-2012, there have been demonstrations in Kuwait by opposition groups over official corruption, security force brutality, citizenship eligibility, and other issues. However, in contrast with other states in the region, and despite the elite infighting, the demonstrations in Kuwait have been relatively small since early 2011. Kuwait is a relatively wealthy society where most citizens apparently do not want to risk their economic well-being to bring about the downfall of Al Sabah rule. Opposition demands—supported by oppositionists within the National Assembly—are generally limited to the formation of a constitutional monarchy in which the Assembly names a prime minister. The government’s use of financial largesse—budgets loaded with subsidies and salary increases— as well as some repressive measures, including beatings and imprisonments, have kept the public displays of dissent relatively limited.

On other regional issues, in part because of its leadership turmoil, Kuwait tends to defer to consensus positions within the Gulf Cooperation Council; this deference is evident in Kuwait’s stances on the Israel-Palestinian dispute as well as on the uprisings in Yemen and Syria. On the uprising in Bahrain, in March 2011, Kuwait joined a Gulf Cooperation Council intervention on the side of the government, but unlike Saudi Arabia and UAE, Kuwait sent naval and not ground forces.



Date of Report: June 20, 2012
Number of Pages: 28
Order Number: RS21513
Price: $29.95

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Iran Sanctions


Kenneth Katzman
Specialist in Middle Eastern Affairs

The current objective of international sanctions—to compel Iran to verifiably demonstrate that its nuclear program is for purely peaceful uses—may be on its way to achievement but has not been accomplished to date. The international coalition that is imposing progressively strict economic sanctions on Iran has broadened and deepened, producing significant effects on Iran’s economy. U.S. officials believe that these sanctions—which are now harming Iran’s oil export lifeline— caused Iran to return to the nuclear bargaining table in 2012 with greater apparent intent toward resolution. Many judge that Iran needs an easing of sanctions because the energy sector provides nearly 70% of Iran’s government revenues. Iran’s worsening economic situation is caused by

  • A decision by the European Union on January 23, 2012, to wind down purchases of Iranian crude oil by July 1, 2012. EU countries buy about 20% of Iran’s oil exports. This embargo is coupled with decisions by several other Iranian oil customers to substantially reduce purchases of Iranian oil in order to comply with a provision of the FY2012 National Defense Authorization Act (P.L. 112-81, signed December 31, 2011). 
  • Together, these sanctions have reduced Iranian oil exports to about 1.2 million to 1.8 million barrels per day, down from an average of 2.5 million barrels per day for all of 2011, according to the Energy Information Administration in June 2012. This loss of sales is causing Iran to store oil aboard tankers and to reduce production somewhat. Once the EU embargo is fully implemented, Iran’s oil sales might fall further, and Iran is widely assessed as unable to indefinitely sustain that level of lost oil sales. The Iran oil purchase reductions also symbolize burgeoning international cooperation with U.S. and allied attempts to pressure Iran significantly. 
  • The willingness of other oil producers with spare capacity, particularly Saudi Arabia, a strategic rival, to sell additional oil to countries cutting Iranian oil buys. 
The signs of economic pressure on Iran are multiplying. The value of Iran’s rial has dropped by about 50% since September 2011. Iran is virtually cut off from the international banking system and is increasingly forced to trade through barter arrangements rather than hard currency exchange. Many major international firms have left the Iran market, many Iranian firms are reported to be closing and laying off workers, and the effect on the energy sector has been further deterioration of its oil and gas production. Still, Iran has small amounts of natural gas exports; it had none at all before Iran opened its fields to foreign investment in 1996. Relatively high world oil prices have reduced some of the effects of the sanctions.

Despite the imposition of what many now consider to be “crippling” sanctions, some in Congress believe that economic pressure on Iran needs to increase further and faster. In the 112th Congress, legislation such as H.R. 1905 has passed the House and the Senate. Both versions, which contain some similar provisions, would enhance both the economic sanctions and human rights-related provisions of previous Iran sanctions laws, although the effects on Iran are not likely to be dramatic. For a broader analysis of policy on Iran, see CRS Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.



Date of Report: June 18, 2012
Number of Pages: 82
Order Number: RS20871
Price: $29.95

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In Brief: Next Steps in the War in Afghanistan? Issues for Congress


Catherine Dale
Specialist in International Security

On May 1, 2012, President Obama gave a speech from Bagram Air Field in which he laid out U.S. government approaches for “winding down” the war in Afghanistan.1 While a number of observers have challenged the logical plausibility of a unilateral decision to “wind down” a war, the Administration’s commitment to decreasing U.S. involvement in the war in Afghanistan is clear.

As of mid-2012, many observers point to a coalescing vision of the way forward—shared by the governments of the United States, Afghanistan, and other international partners—that includes bringing the current campaign to a close by the end of 2014, and pursuing a political settlement among the parties in conflict, while extending U.S. and other international commitments to Afghanistan beyond 2014. In evaluating this emerging vision, some observers emphasize that the overall level of ambition has been lowered, while others stress that the timeline for international engagement has been extended. For the U.S. government, the broad strategic issues at stake in the war in Afghanistan continue to include:

  • What fundamental national security interests does the United States have in Afghanistan and the region? 
  • What minimum conditions—political, economic, security—would need to pertain in Afghanistan in order for those U.S. interests to be protected? 
  • How appropriate are current and projected future U.S. approaches, until and after 2014, for helping Afghans establish those conditions? 
  • When and to what extent are Afghans likely to be able to sustain those conditions with relatively limited support from the international community? 
  • Ultimately, how important is this overall effort—given its likely timeline, risks, and costs—compared to other U.S. government priorities? 
At this apparent turning point in both strategic thinking and activity on the ground, this short report considers issues that may be of interest to Congress as it considers the strength and duration of further U.S. involvement in Afghanistan, to 2014 and beyond.


Date of Report: June 15, 2012
Number of Pages: 16
Order Number: R42137
Price: $29.95


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Bahrain: Reform, Security, and U.S. Policy


Kenneth Katzman
Specialist in Middle Eastern Affairs

The uprising that began in Bahrain on February 14, 2011, following the revolt that overthrew Egypt’s President Hosni Mubarak three days earlier and numerous earlier periods of unrest in Bahrain, began a political crisis that appears to defy resolution. The ongoing unrest demonstrates that the grievances of the Shiite majority over the distribution of power and economic opportunities were not satisfied by the efforts instituted during 1999-2010, or by any reform measures announced since the uprising began. The bulk of the Shiite majority in Bahrain says it demands a constitutional monarchy in which an elected parliament produces the government, but the Sunni minority believes the Shiites want nothing less than outright rule.

In March 2011, Bahrain’s government rejected U.S. advice by inviting direct security assistance from other Gulf Cooperation Council countries, declaring a state of emergency, forcefully suppressing demonstrations, and arresting dissident leaders and pro-opposition health care workers. Although the state of emergency ended on June 1, 2011, a “national dialogue,” held in July 2011 reached consensus on only a few modest political reforms. Hopes for resolution were raised by a pivotal report by a government-appointed “Independent Commission of Inquiry” (BICI) on the unrest, released November 23, 2011, which was critical of the government’s actions against the unrest as well as the opposition’s responses to government proposals early in the crisis. The government asserts it has implemented many of the BICI recommendations—an assertion largely corroborated on March 20, 2012, by a national commission appointed to oversee implementation—and says it will institute the remainder. However, stalemate on more substantial political reforms has stoked continued demonstrations and dashed hopes that a solution is in sight. A proposed closer union with Saudi Arabia, announced May 14, 2012, would strengthen the Saudi ability to limit any Bahrain government compromise with Bahrain’s Shiites.

The Obama Administration has not called for a change of the Al Khalifa regime and has to some extent concurred with the Bahrain government view that Iran might take advantage of the Bahrain unrest, but the Administration has criticized the regime’s use of force against protesters and urged further political reform. The U.S. position on Bahrain has been criticized by those who believe the United States is downplaying regime abuses because the U.S. security relationship with the Al Khalifa regime is critical to U.S. efforts to secure the Persian Gulf. Bahrain has provided key support for U.S. interests by hosting U.S. naval headquarters for the Gulf for over 60 years and by providing facilities for U.S. war efforts in Iraq and Afghanistan. Beyond the naval facility, the United States signed a formal defense pact with Bahrain in 1991 and has designated Bahrain a “major non-NATO ally,” entitling it to sales of sophisticated U.S. weapons systems. Partly to address criticism from human rights advocates and some Members of Congress, the Administration put on hold a proposed sale of armored vehicles and anti-tank weapons. However, in mid-May 2012 the Administration announced a resumption of sales to Bahrain of arms that it can use to protect itself against Iran and support U.S. operations in the Persian Gulf. Consumed by its own crisis, Bahrain has joined with but deferred to other GCC powers to resolve uprisings in Libya, Syria, and Yemen.

Fueling Shiite unrest is the fact that Bahrain, having largely run out of crude oil reserves, is poorer than most of the other Persian Gulf monarchies. In September 2004, the United States and Bahrain signed a free trade agreement (FTA); legislation implementing it was signed January 11, 2006 (P.L. 109-169). The unrest has further strained Bahrain’s economy.


Date of Report: June 21, 2012
Number of Pages: 36
Order Number: 95-1013
Price: $29.95


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Thursday, June 21, 2012

U.S. Foreign Aid to the Palestinians


Jim Zanotti
Specialist in Middle Eastern Affairs

Since the establishment of limited Palestinian self-rule in the West Bank and Gaza Strip in the mid-1990s, the U.S. government has committed over $4 billion in bilateral assistance to the Palestinians, who are among the world’s largest per capita recipients of international foreign aid. Successive Administrations have requested aid for the Palestinians to support at least three major U.S. policy priorities of interest to Congress:

  • Combating, neutralizing, and preventing terrorism against Israel from the Islamist group Hamas and other militant organizations. 
  • Creating a virtuous cycle of stability and prosperity in the West Bank that inclines Palestinians toward peaceful coexistence with Israel and prepares them for self-governance. 
  • Meeting humanitarian needs and preventing further destabilization, particularly in the Gaza Strip. 
Since June 2007, these U.S. policy priorities have crystallized around the factional and geographical split between the Fatah-led Palestinian Authority (PA) in the West Bank and Hamas in the Gaza Strip. In April 2012, the Obama Administration obligated all remaining FY2011 bilateral assistance for the Palestinians. Obligation had been delayed for several months due to informal congressional holds by some U.S. lawmakers. The holds were largely a response to Palestinian pursuit in late 2011 of United Nations-related initiatives aimed at increasing international recognition of Palestinian statehood outside of negotiations with Israel. A hold remained on a portion of the FY2011 assistance when the Administration obligated it. Additionally, various agreements since May 2011 between Fatah and Hamas leaders regarding a possible consensus PA government have raised concerns among some Members of Congress, even though under most scenarios, such a government would be unlikely to include Hamas ministers unless Hamas performs well in future elections. Nevertheless, conditions might be attached to U.S. budgetary assistance to a PA government whose composition could be subject to Hamas’s approval. Prospects for implementation of the Fatah-Hamas agreements remain unclear.

From FY2008 to the present, annual U.S. bilateral assistance to the West Bank and Gaza Strip has averaged nearly $600 million, including annual averages of approximately $200 million in direct budgetary assistance and $100 million in non-lethal security assistance for the PA in the West Bank. Additionally, the United States is the largest single-state donor to the U.N. Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). However, whether UNRWA’s role productively addresses the refugee issue in the context of efforts to mitigate or resolve the larger Israeli-Palestinian conflict remains a polarizing question, particularly with respect to UNRWA’s presence in Hamas-controlled Gaza.

Because of congressional concerns that, among other things, funds might be diverted to Palestinian terrorist groups, U.S. aid is subject to a host of vetting and oversight requirements and legislative restrictions. U.S. assistance to the Palestinians is given alongside assistance from other international donors, and U.S. policymakers routinely call for greater or more timely assistance from Arab governments in line with pledges those governments make. Even if the immediate objectives of U.S. assistance programs for the Palestinians are met, lack of progress toward a politically legitimate and peaceful two-state solution could undermine the utility of U.S. aid in helping the Palestinians become more cohesive, stable, and self-reliant over the long term.



Date of Report: June 15, 2012
Number of Pages: 33
Order Number: RS22967
Price: $29.95

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