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Iran: War or Privatization: All Out War or “Economic Conquest”?
Michel Chossudovsky
Global Research
Saturday, July 5, 2008
Is the war on hold?
Tehran is to allow foreign investors, in what might be interpreted as an overture to the West, to acquire full ownership of Iran’s State enterprises in the context of a far-reaching “free market” style privatization program.
With the price of crude oil at 140 dollars a barrel, the Iranian State is not in a financial straightjacket as in the case of most indebted developing countries, which are obliged by their creditors to sell their State assets to pay off a mounting external debt. What are the political motivations behind this measure?
Several Western companies have already been approached. Tehran will allow foreign capital “to purchase unlimited shares of state-run enterprises which are in the process of being sold off”.
(Article continues below)
While Iran’s privatization program was launched during the government of Mohammed Khatami in the late 1990s, the recent sell-off of shares in key state enterprises points to a new economic design. The underlying measure is far-reaching. It goes beyond the prevailing privatization framework applied in many developing countries within America’s sphere of influence:
“The move is designed to attract greater foreign investment and is part of the country’s sweeping economic liberalization program.
Iran will no longer make a distinction between domestic and foreign firms that wish to purchase state-run companies as long as the combined foreign ownership in any particular industry does not exceed 35%. … As an example, a foreign firm may purchase an Iranian steel company but it would not be allowed to buy every business enterprise in Iran’s steel industry.
Among the new incentive measures announced, foreign firms may also transfer their annual profit from their Iranian company out of the country in any currency they wish.”
It is important to carefully analyze this decision. The timing of the announcement by Iran’s Privatization Organization (IPO) coincides with mounting US-Israeli threats to wage an all out war against Iran.
Moreover, the divestment program is compliant with the demands of the “Washington Consensus”. The International Monetary Fund (IMF) has confirmed, with some reservations, that Tehran is committed to a “continued transition toward a viable and efficient market economy” while also implying .that the building of “investor confidence” requires an acceleration of the privatization program.
In its May 2008 Review (Art. 4 Consultations), the IMF praised Tehran for its divestment program, which essentially transfers the ownership of State assets into private hands, while also underscoring that the program was being carried out in a speedily and efficient fashion.
Under the threat of war, is this renewed initiative by Tehran to privatize key industries intended to meet the demands of the Bush Administration?
The Bretton Woods institutions are known to directly serve US interests. They are not only in liaison with Wall Street and the US Treasury, they are also in contact with the US State Department, the Pentagon and NATO. The IMF-World Bank are often consulted prior to the onslaught of a major war. In the war’s aftermath, they are involved in providing “post conflict reconstruction” loans. In this regard, the World Bank is a key player in channelling “foreign aid” to both Iraq and Afghanistan.
The privatization measures suggest that Iran is prepared to allow foreign capital to gain control over important key sectors of the Iranian economy.
According to the chairman of the Iranian Privatization Organization (IPO) Gholamreza Kord-Zanganeh some 230 state-run companies are slated to be privatized by end of the Iranian year (March 2009). The shares of some 177 State companies were offered in Tehran Stock Exchange in the last Iranian year (ending March 2008).
Already the state-owned Telecommunication Company of Iran (TCI) has indicated that “a number of foreign telcos have expressed an interest in acquiring its shares when the government sells off part of its interest in a month’s time. Local press reports did not name the potential investors. TCI has a monopoly in Iran’s fixed line market and is also the country’s largest cellular operator via its subsidiary MCI.” France’s Alcatel, the MTN Group of South Africa and Germany’s Siemens already have sizeable interests in Iran’s telecom industry.
Other key sectors of the economy including aluminum, copper, the iron and steel industry have recently been put up for privatization, with the shares of State companies floated on the Tehran Stock Exchange (TSE)
More than Meets the Eye
Is this decision by Tehran to implement a far-reaching privatization program, in any way connected with continuous US saber rattling and diplomatic arm twisting?
At first sight it appears that Tehran is caving into Washington’s demands so as to avoid an all war.
Iran’s assets would be handed over on a silver platter to Western foreign investors, without the need for America to conquer new economic frontiers through military means?
But there is more than meets the eye.
Washington has no interest in the imposition of a privatization program on Iran, as an “alternative” to an all out war. In fact quite the opposite. There are indications that the Bush adminstration’s main objective is to stall the privatization program.
Rather than being applauded by Washington as a move in the right direction, Tehran’s privatization program coincides with the launching (May 2008) of a far-reaching resolution in the US Congress (H.CON. RES 362), calling for the imposition of Worldwide financial sanctions directed against Iran:
“[H. CON. RES. 362] urges the President, in the strongest of terms, to immediately use his existing authority to impose sanctions on the Central Bank of Iran, … international banks which continue to conduct financial transactions with proscribed Iranian banks; … energy companies that have invested $20,000,000 or more in the Iranian petroleum or natural gas sector in any given year since the enactment of the Iran Sanctions Act of 1996; and all companies which continue to do business with Iran’s Islamic Revolutionary Guard Corps.” (See full text of H.CON RES 362) (emphasis added)
The resolution further demands that “the President initiate an international effort to immediately and dramatically increase the economic, political, and diplomatic pressure on Iran …. prohibiting the export to Iran of all refined petroleum products; imposing stringent inspection requirements on all persons, vehicles, ships, planes, trains, and cargo entering or departing Iran; and prohibiting the international movement of all Iranian officials not involved in negotiating the suspension of Iran’s nuclear program.”(emphasis added)
Were these economic sanctions to be carried out and enforced, they would paralyze trade and monetary transactions. Needless to say they would also undermine Iran’s privatization program and foreclose the transfer of Iranian State assets into foreign hands.
Economic Warfare
Now why on earth would the Bush administration be opposed to the adoption of a neoliberal-style divestment program, which would strip the Islamic Republic of some of its most profitable assets?
If “economic conquest” is the ultimate objective of a profit driven military agenda, what then is the purpose of bombing Iran, when Iran actually accepts to hand over its assets at rock-bottom prices to foreign investors, in much the same way as in other compliant developing countries including Indonesia, the Philippines, Brazil, etc?
The largest foreign investors in Iran are China and Russia.
While US companies are notoriously absent from the list of foreign direct investors, Germany, Italy and Japan have significant investment interests in oil and gas, the petrochemical industry, power generation and construction as well as in banking. Together with China and Russia, they are the main beneficiaries of the privatization program.
One of the main objectives of the proposed economic sanctions under H. RES CON 362 is to prevent foreign companies (including those from the European Union and Japan) , from acquiring a greater stake in the Iranian economy under Tehran’s divestment program.
Other countries with major foreign investment interests in Iran include France, India, Norway, South Korea, Sweden and Switzerland. Sweden’s Svedala Industri has major interests in Iran’s copper mines.
France, Japan and Korea have interests in the automobile industry, in the form of licensing agreements with Iranian auto manufacturers.
Italy’s ENI Oil Company is involved in the development of phases 4 and 5 of the South Pars oil field amounting to 3.8 billion dollars.(See Iranian Privatisation Organization, 2008 report) Total and the Anglo-Dutch conglomerate Shell are involved in natural gas.
While the privatization process does not allow for the divestment of Iran’s State oil company, it creates an environment which favors foreign investment by a number of countries including China, Russia, Italy, Malaysia, etc. in oil refinery, the petrochemical industry, the oil services economy as well as oil and gas infrastructure including exploration and oil-gas pipelines.
There is, however, no preferential treatment for US companies, no colonial style arrangement which would favor the transfer of Iranian assets into the pockets of a handful of US corporations as in the case of occupied Iraq.
In other words, the privatization program does not serve US economic and strategic interests. It tends to favor countries which have longstanding trade and investment relations with Islamic Republic. .
It favors Chinese, Russian, European and Japanese investors at the expense of the USA. It undermines and weakens American hegemony. It goes against Washington’s design to foster a “unipolar” New World Order through both economic and military means.
And that is why Washington wants to shunt this program through an economic sanctions regime which would, if implemented, paralyze trade, investment and monetary flows with Iran.
The economic sanctions’ regime as defined in H. CON 362 is intended to isolate Iran and prevent the transfer of Iranian assets into the hands of competing economic powers including China, Russia, the European Union and Japan. It is tantamount to a declaration of war.
In a bitter irony, H CON 362 serves to undermine the economic interests of several of America’s allies, it would prevent them from positioning themselves in the Middle East, despite the fact that these allies (e.g. France and Germany) are also involved through NATO in the planning of the war on Iran.
War and Financial Manipulation
The Bush administration has opted for an all out war on Iran in alliance with Israel, with a view to establishing an exclusive America’s sphere of influence in the Middle East.
A US-Israel sponsored military operation directed against Iran, would largely backlash on the economic and financial interests of America’s allies, including Germany, Italy, France, and Japan.
More broadly speaking, a war on Iran would hit corporate interests involved in the civilian economy as opposed to those more directly linked to the military industrial complex. It would undermine local and regional economies, the consumer manufacturing and services economy, the automobile industry, the airlines, the tourist and leisure economy, etc.
Moreover, an all out war feeds the profit driven agenda of global banking, including the institutional speculators in the energy market, the powerful Anglo-American oil giants and America’s weapons producers, the big five defense contractors plus British Aerospace Systrems Corporation which play a major role in the formulation of US foreign policy and the Pentagon’s military agenda, not to mention the gamut of mercenary companies and military contractors.
A small number of global corporations and financial institutions feed on war and destruction to the detriment of important sectors of economic activity, Broadly speaking, the bulk of the civilian economy is threatened.
What we are dealing with are conflicts and rivalries within the upper echelons of the global capitalist system, largely opposing those corporate players which have a direct interest in the war to the broader capitalist economy which ultimately depends on the continued development of civilian consumer and investment demand.
These vested interests in a profit driven war also feed on economic recession and financial dislocation. The process of economic collapse which results, for instance, from the speculative hikes in oil and food prices, triggers bankruptcies on a large scale, which ultimately enable a handful of global corporations and financial institutions to “pick up the pieces” and consolidate their global control over the real economy as well as over the international monetary system.
Financial manipulation is intimately related to military decision-making. Major banks and financial institutions have links to the military and intelligence apparatus. Advanced knowledge or inside information by these institutional speculators regarding specific “false flag” terrorist attacks, or military operations in the Middle East is the source of tremendous speculative gains.
Both the war agenda and the proposed economic sanctions regime trigger, quite deliberately, a global atmosphere of insecurity and economic chaos.
In turn, the institutional speculators in London, Chicago and New York not only feed on economic chaos and uncertainty, their manipulative actions in the energy and commodity markets contribute to spearheading large sectors of the civilian economy into bankruptcy.
The economic and financial dislocations resulting from the hikes in the prices of crude oil and food staples are the source of financial gains by a handful of global actors. Speculators are not concerned with the far-reaching consequences of a broader Middle East war, which could evolve into a World War Three scenario.
The pro-Israeli lobby in the US indirectly serves these powerful financial interests. In the current context, Israel is an ally with significant military capabilities which serves America’s broader objective in the Middle East. Washington, however, has little concern for the security of Israel, which in the case of a war on Iran would be the first target of retaliatory military action by Tehran.
The broader US objective consists in establishing, through military and economic means, an exclusive US sphere of influence throughout the Middle East.
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10 Responses to “Iran: War or Privatization: All Out War or “Economic Conquest”?”
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July 5th, 2008 at 9:05 am
Didn’t Saddam try the same thing? The Russians and Europeans had sizeable investments there. Didn’t help him any did it? As far as Israel, the Jewish State actually has operational nuclear weapons and delivery systems so I doubt they are too worried. The Israeli lobby is pushing for the war on Iran like it did for the invasion of Iraq but the US is dragging its feet due to troop constraints and other concerns. The Iranians should know that they are not getting out of the crosshairs with this “privatisation” scheme.
July 5th, 2008 at 9:18 am
Top secret US military plans to test deadly nerve gas by dropping it on soldiers in a remote Queensland rainforest during the Cold War have been uncovered in Australian Government archives.
The Americans are testing there nerve gas on australian soldiers.
during the cold war…
Newly declassified Australian Defence Department and Prime Minister’s office files show that the United States was strongly pushing the Government for tests on Australian soil of two of the most deadly chemical weapons ever developed, VX and GB — better known as Sarin — nerve gas
A former senior official with then Prime Minister Harold Holt, Mr Peter Bailey, tells the program that as far as he knows the tests never went ahead but the planning was very advanced.
He admitted the whole operation was to be kept secret because use of such weapons was almost certainly illegal under international law at the time.
July 5th, 2008 at 9:20 am
the americans tested nerve gas on australias during the cold war
July 5th, 2008 at 11:54 am
So which American city(ies) will bear the brunt of a false flag attack as a precursor to all this? You know Bush is itching to push the buttons. I looked along the 33rd parallel, and there are quite a few juicy targets. Dallas, Little Rock, Charleston, San Diego. Remember that lame nuke-holocaust poor-mans 24-knockoff show called Jericho? Remember in week 3 or 4, multiple cities were briefly shown along the 33rd as being nuked, along with others. The interesting thing is L.A., D.C., and N.Y. city were NOT hit. No, we can’t have the power base disrupted by a few dozen megatons. No, we can’t let our satan worship and sodom orgies be disrupted. No, you insects are on your own. Remember in Jericho the I.R.S. STILL WANTS YOUR MONEY, even if you’ve just soaked up 1500 rads, puking your guts out and don’t know where tomorrows food is going to come from.
July 5th, 2008 at 1:12 pm
‘Civillian economies’ can be rebuilt;civilians can not.The Russian and Chinnese investors;the Swiss,French; is that not where many American investors and corperations went back during the eighties and nineties?These investors are pretty savey people are they not?Think about it,would they really be undertaking these huge deals knowing war with Iran was close,if they did not think they could ultimatly profit from such a war? Are you trying to tell me no one told These foreighn investors war might very well be coming to Iran?This whole thing stinks to high heaven.Privitization is the love child of all capitalists,it always takes what belongs to the people ,ie the community or nation and turns it over to a few elites.The community then toils and sweats just to earn what is rightfully theirs to begin with.It seems to me that either this is an economic false flag operation, and there will be no war in Iran ,or this is an economic hi-jacking to be followed by an excercise in population control.After all how many useless eaters are in Iran?If war does not come,the elites will boast how capitalisam brought peace to that country.The case being all along that either Iran sell or be bombed.If war does come the capitalist will brag how they put the country back together,and the blood spilled there was like seeds of prosperity.Not their blood but the blood of innocent Iranians,and young soldiers ancy to become heroes,not understanding that in death there are no heroes.
Wars could be avoided,and endless suffering and poverty avoided if it were not for those amongst us who insist they should own creation.Creation belongs to all of us,we should be working together for the good of everyone,oh! I am not sorry if that sounds like socialisam!Each of us,all of creation has a right to be here ,and enjoy the fruits of creation.To those who believe that even God is a capitalist;I say this.Man was created for the pleasure of God not for the profit of other men.
Watch carefully the events of the next few months;history is going to be made.Remember,you shall know a tree by its fruits.
July 5th, 2008 at 2:36 pm
Jee I hope no organization ever compiles a dossier of the most important men of power, (politicians have no real power), and decide to off them if they dont start pulling for everyone instead of themsleves. In an era of secret societies and cults wouldnt a cult with high moral ideals, working in total secrecy, with a ruthless streak to make the bankers blush, wouldnt that be so welcome right now. As the top men all started getting whacked, theyd know theyd been warned. Remember their flaw is that they are still mere mortals. You could off any one of them with a peach of a right hook. Weak men with power has always been the scourge of mankind.
July 5th, 2008 at 8:13 pm
@ John:
They don’t need to get out of the crosshairs.. they’ve put the US in the crosshairs of other people.. Especially those who could benefit most from this move.
All this time western countries were bitching and now that Iran is complying the proverbial “monkey falls out of the sleeve” as they say in the Netherlands. They were bitching about Iran being too closed for foreign countries and whatever… I believe the aim of these complaints should be a desirable reaction from the Iranians. Well.. this is as desirable as it gets. What the f*ck are the U.S. thinking? That they have a right to profit the most where ever they go?
A lot of people are already viewing the U.S. with a critical eye and if America decides to boycott Iran’s move then everything is even clearer than it ever was. America’s been pissing in other people’s gardens far too long and we’re all sick of the scheming and warmongering.
I have to say that it’s a rather well thought of move by the Iranians. If America and Israel decide to attack then they will achieve nothing but Armageddon… but the step towards the apocalypse was made when Israel was founded.. It has brought nothing but trouble to the world. Post WW2 should have been a time of peace, but a new threat was quickly formed to replace the old one.. to have “us” remain in fear, to control our thoughts, to make us cry out for protection.. and true schemers know how to handle these kind of situations. Hell… Cesar said it himself even. It’s one of the oldest tricks in the book.
Anyway.. more ontopic.. now it’s going to get reallllllyyyyy interesting. I can’t comprehend why the U.S. would make such a DUMB move which as mr. Chossudovsky already mentioned not only a move in their own interest, but a move to cut out Russia out of Iran.. further increasing tensions with Russia. Bush should be satisfied with those Texans who are running around in Iraq and checking the oil. -_-
July 5th, 2008 at 8:46 pm
(REPOST, cuz it’s been over an hour after I posted the first one)
@ John:
They don’t need to get out of the crosshairs.. they’ve put the US in the crosshairs of other people.. Especially those who could benefit most from this move.
All this time western countries were bitching and now that Iran is complying the proverbial “monkey falls out of the sleeve” as they say in the Netherlands. They were bitching about Iran being too closed for foreign countries and whatever… I believe the aim of these complaints should be a desirable reaction from the Iranians. Well.. this is as desirable as it gets. What the f*ck are the U.S. thinking? That they have a right to profit the most where ever they go?
A lot of people are already viewing the U.S. with a critical eye and if America decides to boycott Iran’s move then everything is even clearer than it ever was. America’s been pissing in other people’s gardens far too long and we’re all sick of the scheming and warmongering.
I have to say that it’s a rather well thought of move by the Iranians. If America and Israel decide to attack then they will achieve nothing but Armageddon… but the step towards the apocalypse was made when Israel was founded.. It has brought nothing but trouble to the world. Post WW2 should have been a time of peace, but a new threat was quickly formed to replace the old one.. to have “us” remain in fear, to control our thoughts, to make us cry out for protection.. and true schemers know how to handle these kind of situations. Hell… Cesar said it himself even. It’s one of the oldest tricks in the book.
Anyway.. more ontopic.. now it’s going to get reallllllyyyyy interesting. I can’t comprehend why the U.S. would make such a DUMB move which as mr. Chossudovsky already mentioned not only a move in their own interest, but a move to cut out Russia out of Iran.. further increasing tensions with Russia. Bush should be satisfied with those Texans who are running around in Iraq and checking the oil. -_-
July 6th, 2008 at 4:43 pm
What this does is that it will bring more “concerns” to the table and will inevitably make it harder to attack iran with the reason of fear of “nuclear capability”. If privatization goes ahead in a controlled manner there will be a need for nuclear or some sort of power grid to feed industries, new and growing cities and probably a whole lot of western people and their families setting up businesses in land of opportunity – IRAN
So where does this leave military force? nowhere. but it could be an act of “terrorism” that triggers the “after the fact” propaganda” (as in 9/11 lies) and the bush administration can set in motion the plan as it would have been one way or the other.
This article gives me hope that the planners in pentagon will think at least one more time before they have anything along the lines of using military force as a primary plan. the world can only allow so much before it can turn on you..
July 7th, 2008 at 2:49 pm
Privatization is what is behind the whole war thing. No one cares or believes that they are going to get a nuclear bomb. Just like they never thought Iraq had weapons of mass destruction. It isn’t governments doing this, it is multi-national corporations who have their puppets in most governments. Aristide in Haiti was asked why he was pushed out. He said privatization, privatization, privatization. We are headed for Feudal times where a few ‘lords’ and corporate ‘royalty’ own everything and the rest of us are serfs. The war in Iraq was meant to privatize the whole country , and they did. Read Paul Bremer’s hundred rules. He gave Iraq away to private owners. Iran is being threatened for the same reason.