Situational awareness report on the Zioconned World's Shenanigans in the Levant, MENA and Iran....
Why Bahrain is not Syria....????
By Pepe Escobar
How poignant that the first anniversary of a true Arab pro-democracy movement in the Persian Gulf - then ruthlessly crushed - falls on February 14, when Valentine's Day is celebrated in the West. Talk about a doomed love affair.
And how does Washington honor this tragic love story? By resuming arms sales to the repressive Sunni al-Khalifa dynasty in power in Bahrain.
So just to recap; United States President Barack Obama told Syria's President Bashar al-Assad to "step aside and allow a democratic transition to proceed immediately" while King Hamad al-Khalifa gets new toys to crack down on his subversively pro-democratic subjects.
Is this a case of cognitive dissonance? Of course not; after all Syria is supported by Russia and China at the United Nations Security Council while Bahrain hosts the US's Fifth Fleet - the defender of the "free world" against those evil Iranians who want to shut down the Strait of Hormuz.
A year ago, the overwhelming population of Bahrain - most of them poor, neglected Shi'ites treated as third-class citizens, but also educated Sunnis - hit the streets to demand the ruling al-Khalifas allow a minimum of democracy.
Just like Tunisia and Egypt - and unlike Libya and Syria - the pro-democracy movement in Bahrain was indigenous, legitimate, non-violent and uncontaminated by Western or Gulf Cooperation Council (GCC) infiltration.
The response was a major crackdown plus a Saudi Arabian invasion over the causeway to Manama. That was the tacit result of a deal struck between the House of Saud and Washington; we give you an Arab resolution allowing you to go to the UN and then launch the North Atlantic Treaty Organization's humanitarian bombing on Libya, you leave us alone to smash this Arab Spring nonsense (see Exposed: the US-Saudi Libya deal Asia Times Online, April 2, 2011.)
The Obama administration took no time to preempt the "celebration" of Bahrain's crushed democracy push by dispatching a State Department honcho to Bahrain.
As reported by the Gulf Daily News, the so-called "Voice of Bahrain" (more like the voice of the al-Khalifas), US Assistant Secretary of State for Near East Affairs Jeffrey Feltman widely praised King Hamad's steps to "diffuse tensions" - such as "the release of political prisoners, a partial cabinet reshuffle and the withdrawal of security forces".
Feltman's briefers must have been catatonic, because political prisoners remain in jail, the cabinet reshuffle is cosmetic and security forces are in overdrive repression mode.
Feltman said Washington stressed "national dialogue", "made-in-Bahrain" solutions, and no foreign states "interfering in the process". Should Bahrainis follow the NATOGCC model as applied to Syria?
He also said, "Bahrainis can count on US support to back a Bahraini consensus on the way forward" and praised the "sincerity" of Crown Prince Salman, also a deputy supreme commander and conductor of the national dialogue. With friends like these, the pro-democracy movement in Bahrain hardly needs enemies.
So that's Washington's message in a nutshell; make these people stop that noise and we keep our base here to defend you and your cousins from the unwashed masses.
If women are scared, call an invasion
Real life in Bahrain is something completely different. What US corporate media calls a "tense emirate" is still under a de facto martial law. Those "released" pro-democracy protesters - hundreds of them - remain in jail. Human Rights Watch, to its credit, but still relying on understatement, says, "There has been little accountability for torture and killings - crimes in which the Bahrain Defense Force is implicated."
No accountability - in fact.
Anticipating further crackdowns related to the first anniversary of the uprising, the Health Ministry has ordered private hospitals to list to the security apparatus every single injured and wounded person; hundreds of doctors and nurses accused of treating injured protesters have been arrested over the past few months.
The army barbed wired all areas near the Pearl roundabout - where the Pearl monument was razed, the ultimate graphic metaphor of democracy smashed. Two US citizens, Huwaida Arraf and Radhika Sainath, were recently arrested in Manama during a non-violent, peaceful protest. Ayat al-Qormozi was jailed because she read out a poem criticizing King Hamad at the Pearl roundabout.
Last November, the Bahrain Independent Commission of Inquiry accused the al-Khalifas of using "excessive force, including the extraction of forced confessions against detainees". Late January, Amnesty International called them to "investigate and account for the reports of more than a dozen deaths following tear gas use" and called Washington to "suspend transfers of tear gas and other riot control equipment to the Bahraini authorities".
Saudi-backed local security relies heavily on Pakistani riot policemen - not to mention made in USA tear gas and stun grenades to disperse every single peaceful anti-government protest. Scores of senior citizens and kids have died from asphyxia after regime troops fired tear gas in residential areas and even into homes. The Saudi-backed repression even hit peaceful mourners who were attending funeral processions of protesters killed by the al-Khalifa security apparatus.
What's the fuss? This is all part of the crown prince's "national dialogue".
Yet even with the non-stop crackdown, demonstrations demanding the al-Khalifas to go happen almost daily. This was never an initial demand of the pro-democracy movement; it became one after the Saudi invasion.
And to prove for good that we're living in a Monty Python's Meaning of Life world, check this interview of King Hamad published by German weekly Der Spiegel [1].
The king says he asked the GCC to invade his country in March 2011 to protect Bahrain's "strategic installations" - "in case Iran would be more aggressive". Tehran had absolutely nothing to do with the protests - caused by a Sunni monarchy that treats the absolute majority of its indigenous subjects like the United Arab Emirates treats its South Asian guest workers.
The king also said that "our women were very scared and it is the duty of a gentleman to protect women". Perhaps instead of an invasion, torture, killings and non-stop repression, the king might have appeased his "scared women" with a state-sponsored handout of Louis Vuitton handbags.
Note
1 See Bahrain's King Says Assad Should Listen to His People Der Spiegel, February 12.
By Pepe Escobar
How poignant that the first anniversary of a true Arab pro-democracy movement in the Persian Gulf - then ruthlessly crushed - falls on February 14, when Valentine's Day is celebrated in the West. Talk about a doomed love affair.
And how does Washington honor this tragic love story? By resuming arms sales to the repressive Sunni al-Khalifa dynasty in power in Bahrain.
So just to recap; United States President Barack Obama told Syria's President Bashar al-Assad to "step aside and allow a democratic transition to proceed immediately" while King Hamad al-Khalifa gets new toys to crack down on his subversively pro-democratic subjects.
Is this a case of cognitive dissonance? Of course not; after all Syria is supported by Russia and China at the United Nations Security Council while Bahrain hosts the US's Fifth Fleet - the defender of the "free world" against those evil Iranians who want to shut down the Strait of Hormuz.
A year ago, the overwhelming population of Bahrain - most of them poor, neglected Shi'ites treated as third-class citizens, but also educated Sunnis - hit the streets to demand the ruling al-Khalifas allow a minimum of democracy.
Just like Tunisia and Egypt - and unlike Libya and Syria - the pro-democracy movement in Bahrain was indigenous, legitimate, non-violent and uncontaminated by Western or Gulf Cooperation Council (GCC) infiltration.
The response was a major crackdown plus a Saudi Arabian invasion over the causeway to Manama. That was the tacit result of a deal struck between the House of Saud and Washington; we give you an Arab resolution allowing you to go to the UN and then launch the North Atlantic Treaty Organization's humanitarian bombing on Libya, you leave us alone to smash this Arab Spring nonsense (see Exposed: the US-Saudi Libya deal Asia Times Online, April 2, 2011.)
The Obama administration took no time to preempt the "celebration" of Bahrain's crushed democracy push by dispatching a State Department honcho to Bahrain.
As reported by the Gulf Daily News, the so-called "Voice of Bahrain" (more like the voice of the al-Khalifas), US Assistant Secretary of State for Near East Affairs Jeffrey Feltman widely praised King Hamad's steps to "diffuse tensions" - such as "the release of political prisoners, a partial cabinet reshuffle and the withdrawal of security forces".
Feltman's briefers must have been catatonic, because political prisoners remain in jail, the cabinet reshuffle is cosmetic and security forces are in overdrive repression mode.
Feltman said Washington stressed "national dialogue", "made-in-Bahrain" solutions, and no foreign states "interfering in the process". Should Bahrainis follow the NATOGCC model as applied to Syria?
He also said, "Bahrainis can count on US support to back a Bahraini consensus on the way forward" and praised the "sincerity" of Crown Prince Salman, also a deputy supreme commander and conductor of the national dialogue. With friends like these, the pro-democracy movement in Bahrain hardly needs enemies.
So that's Washington's message in a nutshell; make these people stop that noise and we keep our base here to defend you and your cousins from the unwashed masses.
If women are scared, call an invasion
Real life in Bahrain is something completely different. What US corporate media calls a "tense emirate" is still under a de facto martial law. Those "released" pro-democracy protesters - hundreds of them - remain in jail. Human Rights Watch, to its credit, but still relying on understatement, says, "There has been little accountability for torture and killings - crimes in which the Bahrain Defense Force is implicated."
No accountability - in fact.
Anticipating further crackdowns related to the first anniversary of the uprising, the Health Ministry has ordered private hospitals to list to the security apparatus every single injured and wounded person; hundreds of doctors and nurses accused of treating injured protesters have been arrested over the past few months.
The army barbed wired all areas near the Pearl roundabout - where the Pearl monument was razed, the ultimate graphic metaphor of democracy smashed. Two US citizens, Huwaida Arraf and Radhika Sainath, were recently arrested in Manama during a non-violent, peaceful protest. Ayat al-Qormozi was jailed because she read out a poem criticizing King Hamad at the Pearl roundabout.
Last November, the Bahrain Independent Commission of Inquiry accused the al-Khalifas of using "excessive force, including the extraction of forced confessions against detainees". Late January, Amnesty International called them to "investigate and account for the reports of more than a dozen deaths following tear gas use" and called Washington to "suspend transfers of tear gas and other riot control equipment to the Bahraini authorities".
Saudi-backed local security relies heavily on Pakistani riot policemen - not to mention made in USA tear gas and stun grenades to disperse every single peaceful anti-government protest. Scores of senior citizens and kids have died from asphyxia after regime troops fired tear gas in residential areas and even into homes. The Saudi-backed repression even hit peaceful mourners who were attending funeral processions of protesters killed by the al-Khalifa security apparatus.
What's the fuss? This is all part of the crown prince's "national dialogue".
Yet even with the non-stop crackdown, demonstrations demanding the al-Khalifas to go happen almost daily. This was never an initial demand of the pro-democracy movement; it became one after the Saudi invasion.
And to prove for good that we're living in a Monty Python's Meaning of Life world, check this interview of King Hamad published by German weekly Der Spiegel [1].
The king says he asked the GCC to invade his country in March 2011 to protect Bahrain's "strategic installations" - "in case Iran would be more aggressive". Tehran had absolutely nothing to do with the protests - caused by a Sunni monarchy that treats the absolute majority of its indigenous subjects like the United Arab Emirates treats its South Asian guest workers.
The king also said that "our women were very scared and it is the duty of a gentleman to protect women". Perhaps instead of an invasion, torture, killings and non-stop repression, the king might have appeased his "scared women" with a state-sponsored handout of Louis Vuitton handbags.
Note
1 See Bahrain's King Says Assad Should Listen to His People Der Spiegel, February 12.
Putting match to tinder....
By Alastair Crooke
A former head of Mossad, the Israeli secret service, Efraim Halevy, neatly encapsulated [1] one primary aim of a war that has already been ignited in the Middle East: "The current standoff in Syria presents a rare chance to rid the world of the Iranian menace ... And ending Iran's presence in [in Syria] poses less of a risk to international commerce and security than harsher sanctions, or war [on Iran would pose]".
And it is real, hot war now: both in the microcosm of Syria and on the geostrategic plane. In the wake of its failure to bulldoze the United Nations Security Council into demanding President Bashar al-Assad's head, Saudi Arabia and Qatar vowed to intensify the bloody insurgency in Syria in order to bring down a fellow Arab head of state through violent insurrection.
If Syria were not currently such a hated object for the West and Israel, such actions would, in any other circumstances, be labeled terrorism. It would be obtuse to imagine either Saudi Arabia or Qatar were so outraged at the Security Council veto for reason of their deep commitment to popular democracy.
What is roiling the politics of the region, and fanning this hot proxy war into wider sectarian distrust and fear among religious minorities, is the sense that at play are several quite distinct "war projects". The bursting into flame of these multiple agendas touches on the most sensitive, the most elemental aspects of the sectarian divide in Islam.
The feeling is one of approaching an abyss, particularly as it is not clear what the true objectives to some of these wars are. That is to say, we all hear their ostensible aims of humanitarian concern, but for most these ring laughably false. Some projects may march in step, some may overlap to some extent but run counter in part, and some may simply have completely opposing ends to what is proclaimed.
We have the ubiquitous American "project", the Israeli "project" from which it in some respects differs, and which also contains the potential to run counter to the American project. We have too the Sunni Muslim Brotherhood "project" in the region to actualize political power, the Saudi-Salafist "project" to shore up conservative monarchical legitimacy, the Turkish aspirations to lead the Sunni community, the Qatari ambition to be America's regional "fixer", and the not insignificant jihadi-Salafist "project" to deconstruct "authority", to name but a few that have suddenly flared up; and of course there is the long established Iranian "resistance" project.
Additionally, there are the strategically important "projects" to seize influence over the region's energy supplies - in order to influence which of the competing gas pipeline projects will serve Europe's needs: either tilting European dependency towards, on the one hand, Russia and Iran; or alternatively, tying her to US proxies such as Qatar and Turkey. On such calculations will hinge too whether China's future energy needs will, or will not be, vulnerable to subsequent American squeeze as part of its containment of China policies.
And as no one really is sure what is the true extent of the designs behind these multiple projects, except that - since all have a claim to power and hegemony - suspicion and mistrust inevitably are mushrooming to the point at which tensions can easily spill over, at any point, into localized sectarian violence and then jump the firewall into the geostrategic conflict. This is what is meant by the "abyss".
Lost in all this is the "Awakening's" origins as a popular stirring: it has metamorphosed for now into a profound geostrategic and sectarian struggle over the future of the region. And though the popular impulse has been for the moment harnessed into other agendas, it nonetheless may yet surge again. The potential for this certainly is there: even to turn the political complexion of the region inside out.
Now, it is the West and Gulf states' "war" against Iran and Syria that predominates. But what exactly are the final aims of this war? It may seem obvious, but in fact on this very point, both America and Israel are internally conflicted. And of the US Arab allies in this project, Saudi Arabia's and Qatar's intentions clearly extend well beyond the mere destruction of Iranian political power to a much wider ambition not only to subvert real reform in the region, but to restore a Sunni conservative primacy throughout much of the Arab world as a bulwark against Iran and reformist Islamism.
This current ultimately is one of political autocracy, and of imposed civil and Islamic discipline. It is about a hugely wealthy elite staying on top.
United States Defense Secretary Leon Panetta, in recent comments, has made clear that a direct military attack on Iran does not suit US interests, (or rather does not suit President Barack Obama's current electoral interests) - at least for now. Any attack at this early stage in the electoral process, simply would be too risky - it would allow too much time - after the television "spectacle" of the first "hit" gives Obama's ratings a lift - for some horrible, possibly traumatic consequences of military action to play out, not least economically - and much to the president's electoral disadvantage.
The US presidential race is about the economy, "stupid", quite evidently, but already Iran has been identified as the potential "wild card" that might upset such electoral calculations. And, although Obama uses tough language to inoculate himself from Republican accusations of being "too weak" on Iran, he knows that the person best placed to play that "wild card" and possibly endanger his presidential bid is Israeli Prime Minister Benjamin Netanyahu, rather than the Republican candidates per se.
Netanyahu makes no secret of his strong Republican sympathies, or his hope that Obama will not be the next president. And it is in this latter context that Netanyahu's calculations on how to weaken Iran are likely to include a large element of US domestic electoral calculation, as much as any simple military cost/benefit analysis.
It is against this background that "regime change" in Syria becomes so important. Both in Israel and America, there are serious constituencies which argue that a direct military strike on Iran would provoke a terrible disaster. To answer this, the combination of financial siege on the Iranian people, in combination with the overthrow of Assad - in favor of an anti-Iranian, Sunni successor - is crafted precisely to assuage those hawks demanding military action.
It holds out the prospect to them, as Halevy notes, of an alternative: "of the Iranian people once again rising up against the regime which has brought them so much suffering" - of soft regime change, in place of the unpredictability and riskiness of war.
The question is: would such a plan see Obama safely pass through the re-election process, and thus sink Netanyahu and Likud hopes for a Republican win in 2012? That is the key issue on which the White House and Panetta must maneuver. Independent Israeli action could upset this calculus.
But collective "suffering" did not cause the people of Gaza to turn against Hamas, and there is no reason to think it more likely to work in Iran. Iranians do not react well to pressure; and if the US and its allies fail to depose Syria's leadership, as seems likely, for an anti-Iranian one, then the very "logic" of the Obama position, on its own terms, will ratchet his policy in the direction of the "final option" - with vociferous Iran hawks levering the war option along the ratchet.
Some in Washington, unable to see how power is shifting in the world today, firmly believe that Iran's destruction would put Israel and the US back at the top in the Middle East.
No wonder there was such affronted outrage from the administration when China and Russia vetoed the Syria "regime change" resolution at the Security Council: It killed the best option for assuaging Iran hawks, and risks Obama being painted into an unpredictable Gulf war.
That Obama has painted himself into such a corner is the direct result of his endorsement of Dennis Ross' "engagement with pressure" policy on Iran, which apart from raising the question of whether there ever was any meaningful engagement intended, cannot now possibly provide any negotiated solution - other than Iranian surrender - that would be not be spared a brutal savaging by the Republicans as Democrat "appeasement" and "weakness", in a campaign year.
But in pursuing this project of seeking to mollify Iran hawks through a hot, increasingly sectarian "war" in Syria, and by letting the Gulf monarchies fire up reactionary Salafist movements across the region - supposedly again to "contain" Shi'ite influence and further weaken Iran - the US and Europe are becoming increasingly witting, or unwitting partisans, in a Sunni sectarian "project" for the restoration of Sunni primacy which is piggy-backing on the US and European obsessive animosity towards Iran. This risks another type of war, just as dangerous - but to which Western powers seem oblivious.
One element of this Sunni project is seen in the electoral resurgence of the more moderate Muslim Brotherhood. But another Sunni primacy "project" actually pits itself against the Muslim Brotherhood initiative: The Saudi-Salafist "project" is intended to "contain" the Brotherhood's bid for power, and to seek for itself the hold over regional changes. This is being done in the interest of preserving pliant, conservative Islam, and Saudi absolutism.
And finally we have the quite separate jihadi-Salafist project to exploit regional tensions to deconstruct "authority" to establish regional footholds as sites for jihad - and the emergence of a very different type of authority. These projects, set afoot under cover of the US containment of Iran, are setting sect against sect, one generation against another and one class in society against another, and in pitting them one against another, may set the region on fire.
They are all pitted against the "resistance" project of Iran, Syria and Hezbollah. And some in Tel Aviv, Washington and Paris will think this must be a good thing; but this limited perspective rather overlooks the fact that some of these movements being fired up - whilst they do indeed hate the Shi'ites - also hate moderate Sunnis, all heterodoxy, Israel and Western values too.
Not surprisingly, Russia and China see the disaster looming: They see the US-Gulf Cooperation Council project as threatening fitna (civil and religious strife), and risking sectarian war. It directly threatens their own security: Russia is not at risk in the Caucuses from Shi'ite Islam; but from fired-up Salafism: Iran in fact is all that stands geographically between the now quiescent Salafism in the Central Asian republics and the stoking of it happening in the Middle East.
It is not hard to imagine that Russians see that this current of Islam that historically has been the most violent could, in due course, be redirected by the US towards their Asian allies - just as it has been pointed towards Syria. Equally, China is just as sensitive about its own Muslim community. It can see too that the Western "project", were it to succeed, potentially would give the US huge leverage over China's growing energy requirements - and hence its economy.
What is extraordinary is that European states have not woken up to the fact that it is they who have most to lose in this "great game". They too have an alienated, disenchanted Muslim population, and are far from self-sufficient in energy - unlike the US. Their placing of the Israeli interest, refracted at them from the prism of essentially domestic American political needs, blindly followed, seems to repeat the history of the 2003 Gulf war: Another war "project" that fissured Europe, closed off policy options, and brought terrorism to European streets.
Note
1. See Iran's Achilles' Heel The New York Times, February 7.
By Alastair Crooke
A former head of Mossad, the Israeli secret service, Efraim Halevy, neatly encapsulated [1] one primary aim of a war that has already been ignited in the Middle East: "The current standoff in Syria presents a rare chance to rid the world of the Iranian menace ... And ending Iran's presence in [in Syria] poses less of a risk to international commerce and security than harsher sanctions, or war [on Iran would pose]".
And it is real, hot war now: both in the microcosm of Syria and on the geostrategic plane. In the wake of its failure to bulldoze the United Nations Security Council into demanding President Bashar al-Assad's head, Saudi Arabia and Qatar vowed to intensify the bloody insurgency in Syria in order to bring down a fellow Arab head of state through violent insurrection.
If Syria were not currently such a hated object for the West and Israel, such actions would, in any other circumstances, be labeled terrorism. It would be obtuse to imagine either Saudi Arabia or Qatar were so outraged at the Security Council veto for reason of their deep commitment to popular democracy.
What is roiling the politics of the region, and fanning this hot proxy war into wider sectarian distrust and fear among religious minorities, is the sense that at play are several quite distinct "war projects". The bursting into flame of these multiple agendas touches on the most sensitive, the most elemental aspects of the sectarian divide in Islam.
The feeling is one of approaching an abyss, particularly as it is not clear what the true objectives to some of these wars are. That is to say, we all hear their ostensible aims of humanitarian concern, but for most these ring laughably false. Some projects may march in step, some may overlap to some extent but run counter in part, and some may simply have completely opposing ends to what is proclaimed.
We have the ubiquitous American "project", the Israeli "project" from which it in some respects differs, and which also contains the potential to run counter to the American project. We have too the Sunni Muslim Brotherhood "project" in the region to actualize political power, the Saudi-Salafist "project" to shore up conservative monarchical legitimacy, the Turkish aspirations to lead the Sunni community, the Qatari ambition to be America's regional "fixer", and the not insignificant jihadi-Salafist "project" to deconstruct "authority", to name but a few that have suddenly flared up; and of course there is the long established Iranian "resistance" project.
Additionally, there are the strategically important "projects" to seize influence over the region's energy supplies - in order to influence which of the competing gas pipeline projects will serve Europe's needs: either tilting European dependency towards, on the one hand, Russia and Iran; or alternatively, tying her to US proxies such as Qatar and Turkey. On such calculations will hinge too whether China's future energy needs will, or will not be, vulnerable to subsequent American squeeze as part of its containment of China policies.
And as no one really is sure what is the true extent of the designs behind these multiple projects, except that - since all have a claim to power and hegemony - suspicion and mistrust inevitably are mushrooming to the point at which tensions can easily spill over, at any point, into localized sectarian violence and then jump the firewall into the geostrategic conflict. This is what is meant by the "abyss".
Lost in all this is the "Awakening's" origins as a popular stirring: it has metamorphosed for now into a profound geostrategic and sectarian struggle over the future of the region. And though the popular impulse has been for the moment harnessed into other agendas, it nonetheless may yet surge again. The potential for this certainly is there: even to turn the political complexion of the region inside out.
Now, it is the West and Gulf states' "war" against Iran and Syria that predominates. But what exactly are the final aims of this war? It may seem obvious, but in fact on this very point, both America and Israel are internally conflicted. And of the US Arab allies in this project, Saudi Arabia's and Qatar's intentions clearly extend well beyond the mere destruction of Iranian political power to a much wider ambition not only to subvert real reform in the region, but to restore a Sunni conservative primacy throughout much of the Arab world as a bulwark against Iran and reformist Islamism.
This current ultimately is one of political autocracy, and of imposed civil and Islamic discipline. It is about a hugely wealthy elite staying on top.
United States Defense Secretary Leon Panetta, in recent comments, has made clear that a direct military attack on Iran does not suit US interests, (or rather does not suit President Barack Obama's current electoral interests) - at least for now. Any attack at this early stage in the electoral process, simply would be too risky - it would allow too much time - after the television "spectacle" of the first "hit" gives Obama's ratings a lift - for some horrible, possibly traumatic consequences of military action to play out, not least economically - and much to the president's electoral disadvantage.
The US presidential race is about the economy, "stupid", quite evidently, but already Iran has been identified as the potential "wild card" that might upset such electoral calculations. And, although Obama uses tough language to inoculate himself from Republican accusations of being "too weak" on Iran, he knows that the person best placed to play that "wild card" and possibly endanger his presidential bid is Israeli Prime Minister Benjamin Netanyahu, rather than the Republican candidates per se.
Netanyahu makes no secret of his strong Republican sympathies, or his hope that Obama will not be the next president. And it is in this latter context that Netanyahu's calculations on how to weaken Iran are likely to include a large element of US domestic electoral calculation, as much as any simple military cost/benefit analysis.
It is against this background that "regime change" in Syria becomes so important. Both in Israel and America, there are serious constituencies which argue that a direct military strike on Iran would provoke a terrible disaster. To answer this, the combination of financial siege on the Iranian people, in combination with the overthrow of Assad - in favor of an anti-Iranian, Sunni successor - is crafted precisely to assuage those hawks demanding military action.
It holds out the prospect to them, as Halevy notes, of an alternative: "of the Iranian people once again rising up against the regime which has brought them so much suffering" - of soft regime change, in place of the unpredictability and riskiness of war.
The question is: would such a plan see Obama safely pass through the re-election process, and thus sink Netanyahu and Likud hopes for a Republican win in 2012? That is the key issue on which the White House and Panetta must maneuver. Independent Israeli action could upset this calculus.
But collective "suffering" did not cause the people of Gaza to turn against Hamas, and there is no reason to think it more likely to work in Iran. Iranians do not react well to pressure; and if the US and its allies fail to depose Syria's leadership, as seems likely, for an anti-Iranian one, then the very "logic" of the Obama position, on its own terms, will ratchet his policy in the direction of the "final option" - with vociferous Iran hawks levering the war option along the ratchet.
Some in Washington, unable to see how power is shifting in the world today, firmly believe that Iran's destruction would put Israel and the US back at the top in the Middle East.
No wonder there was such affronted outrage from the administration when China and Russia vetoed the Syria "regime change" resolution at the Security Council: It killed the best option for assuaging Iran hawks, and risks Obama being painted into an unpredictable Gulf war.
That Obama has painted himself into such a corner is the direct result of his endorsement of Dennis Ross' "engagement with pressure" policy on Iran, which apart from raising the question of whether there ever was any meaningful engagement intended, cannot now possibly provide any negotiated solution - other than Iranian surrender - that would be not be spared a brutal savaging by the Republicans as Democrat "appeasement" and "weakness", in a campaign year.
But in pursuing this project of seeking to mollify Iran hawks through a hot, increasingly sectarian "war" in Syria, and by letting the Gulf monarchies fire up reactionary Salafist movements across the region - supposedly again to "contain" Shi'ite influence and further weaken Iran - the US and Europe are becoming increasingly witting, or unwitting partisans, in a Sunni sectarian "project" for the restoration of Sunni primacy which is piggy-backing on the US and European obsessive animosity towards Iran. This risks another type of war, just as dangerous - but to which Western powers seem oblivious.
One element of this Sunni project is seen in the electoral resurgence of the more moderate Muslim Brotherhood. But another Sunni primacy "project" actually pits itself against the Muslim Brotherhood initiative: The Saudi-Salafist "project" is intended to "contain" the Brotherhood's bid for power, and to seek for itself the hold over regional changes. This is being done in the interest of preserving pliant, conservative Islam, and Saudi absolutism.
And finally we have the quite separate jihadi-Salafist project to exploit regional tensions to deconstruct "authority" to establish regional footholds as sites for jihad - and the emergence of a very different type of authority. These projects, set afoot under cover of the US containment of Iran, are setting sect against sect, one generation against another and one class in society against another, and in pitting them one against another, may set the region on fire.
They are all pitted against the "resistance" project of Iran, Syria and Hezbollah. And some in Tel Aviv, Washington and Paris will think this must be a good thing; but this limited perspective rather overlooks the fact that some of these movements being fired up - whilst they do indeed hate the Shi'ites - also hate moderate Sunnis, all heterodoxy, Israel and Western values too.
Not surprisingly, Russia and China see the disaster looming: They see the US-Gulf Cooperation Council project as threatening fitna (civil and religious strife), and risking sectarian war. It directly threatens their own security: Russia is not at risk in the Caucuses from Shi'ite Islam; but from fired-up Salafism: Iran in fact is all that stands geographically between the now quiescent Salafism in the Central Asian republics and the stoking of it happening in the Middle East.
It is not hard to imagine that Russians see that this current of Islam that historically has been the most violent could, in due course, be redirected by the US towards their Asian allies - just as it has been pointed towards Syria. Equally, China is just as sensitive about its own Muslim community. It can see too that the Western "project", were it to succeed, potentially would give the US huge leverage over China's growing energy requirements - and hence its economy.
What is extraordinary is that European states have not woken up to the fact that it is they who have most to lose in this "great game". They too have an alienated, disenchanted Muslim population, and are far from self-sufficient in energy - unlike the US. Their placing of the Israeli interest, refracted at them from the prism of essentially domestic American political needs, blindly followed, seems to repeat the history of the 2003 Gulf war: Another war "project" that fissured Europe, closed off policy options, and brought terrorism to European streets.
Note
1. See Iran's Achilles' Heel The New York Times, February 7.
Tehran takes issue with Azerbaijan....
By Kaveh L Afrasiabi
PALO ALTO, California - Israel is reportedly using Azerbaijan as a "watchover" playground against Iran, but in light of Iran's summoning of Baku's envoy to Tehran and Israeli accusations that Iran is behind a car bomb found near the Israeli Embassy in Tbilisi, Georgia, on Monday, it is fair to say that we are witnessing an extension of the Iran-Israel conflict into the Caspian-South Caucasus.
This is not to mention a car bomb that did go off in New Delhi, damaging an Israeli Embassy car, coinciding with the Tblisi incident and thus raising the specter of a widening net of violence and counter-violence stemming from the increasingly dangerous tension between Iran and Israel.
In Baku, which has offered itself to the US's and Israel's covert campaign of anti-Iran counter-proliferation, the news of the twin incidents in Tblisi and New Delhi will likely serve as a warning sign that it could be witness to similar, if not worse, troubles threatening the country's peace and tranquility if it continues to favor Iran's adversaries.
Israel has been quick to blame Iran for both incidents.
In summoning Iran's ambassador to the Foreign Ministry for questioning over Israeli reports that the killers of scientists in Iran had fled to Israel via Azerbaijan, Tehran's intention is to level new pressures on Baku to reconsider its bandwagoning with Tel Aviv, which is threatening military action against Iran over its nuclear program. In no uncertain terms, Iran's military leaders have made it clear that if attacked, they will retaliate against any country aiding the invaders.
The Iranian protest note to Azerbaijan on Sunday asked the Azeri government to "stop the activities of the Mossad intelligence services in that country against Iran", Iran's IRNA news agency said.
An Azeri Foreign Ministry spokesman, Elman Abdullayev, said the Iranian protest was an "absurd reaction" to Azerbaijan's protest last month over an alleged plot by Iranian agents to kill Israelis in Azerbaijan, the BBC reported.
The ball is now in Baku's court, it can either continue with its decision to turn itself into a front-line state against Iran and prepare for the worst consequences if its territory or air space are used for strikes against Iran, or take drastic measures to insulate itself by adopting a more balanced approach. The latter would lessen tensions with its bigger and more powerful neighbor to the south - that has just celebrated the 33rd anniversary of the Islamic Revolution.
In this time, despite three decades of Western animosity, Iran has remained unchanged and, in fact, turned more aggressive and virulent in light of the comprehensive sanctions and military threats against it.
As the only Shi'ite-dominated nation in the Caucasus-Central Asia, Azerbaijan ought to have normal relations with Iran, irrespective of its grudges that Iran has excellent relations with Armenia, which has controlled a chunk of Azeri territory in Nagorno-Karabakh since the mid-1990s.
But, far too often, Azeri leaders have forgotten that Iran's tilt in favor of Armenia at the time was due to Baku's "pan-Turkic" missteps that introduced irredentist worries for Tehran.
Unfortunately, though Baku's leaders have moved away from the self-inflicted injuries of early post-independence (1990s), they have not yet moved to the level of foreign policy sophistication that ensures optimal national security based on good neighborly relations. In mortgaging its national security to the US and Israel, ie, two out-of-area powers that have no intrinsic commitments to Azerbaijan's well-being, the government in Azerbaijan has entered into a Faustian bargain that may well backfire.
Azerbaijan's attitude is viewed with strong suspicion by Tehran's ruling elite, which may resort to offensive measures inside Azerbaijan to retaliate against Israeli aggression.
In such a scenario, Azerbaijan would be put on a state of alert, scaring energy investors, and thus introducing economic hardship to an already weak and fragile economy that counts on regional peace to advance its "pipeline" politics.
This could also have adverse effects for European energy security, now slightly edging toward insecurity due to the European decision to embargo Iranian oil, thus making Europe ever-more dependent on Russia, a main supplier of European energy, a true nightmare scenario for all European politicians.
Strategically, then, in addition to threatening to close the Strait of Hormuz, Iran's other retaliatory measure consist of sowing the seeds of instability in the South Caucasus-South Caspian region, two major routes of energy pipelines to Europe.
Tehran could achieve this relatively easily by engaging in counter-covert operation activities that are tantamount to tit-for-tats against Israeli and Western interests in the broader region, given the widening net of tensions between the two sides. This signals that countries such as Azerbaijan are caught in the fallout of a new cold war. (See Azerbaijan at crosswinds of a new cold war Asia Times Online, September 9, 2008.)
For now, however, with Iran's Asian energy partners giving the cold shoulder to US-European efforts to impose a total energy ban on Iran, Tehran does not feel sufficiently threatened to resort to such drastic counter-measures that would translate into growing tensions with some of its neighbors.
A delicate balancing act between the quest for economic survival against the tidal waves of sanctions and the use of hard power to strike back constitutes Tehran's overall strategy; this is in a constant state of being fine-tuned, given the fluid and dynamic state of the crisis in which it finds itself.
However, if it is perceived that Baku is insensitive to Iran's requests to rein in US and Israeli operators in its territory, then Tehran will take it to the next level and most likely take action inside Azerbaijan.....
By Kaveh L Afrasiabi
PALO ALTO, California - Israel is reportedly using Azerbaijan as a "watchover" playground against Iran, but in light of Iran's summoning of Baku's envoy to Tehran and Israeli accusations that Iran is behind a car bomb found near the Israeli Embassy in Tbilisi, Georgia, on Monday, it is fair to say that we are witnessing an extension of the Iran-Israel conflict into the Caspian-South Caucasus.
This is not to mention a car bomb that did go off in New Delhi, damaging an Israeli Embassy car, coinciding with the Tblisi incident and thus raising the specter of a widening net of violence and counter-violence stemming from the increasingly dangerous tension between Iran and Israel.
In Baku, which has offered itself to the US's and Israel's covert campaign of anti-Iran counter-proliferation, the news of the twin incidents in Tblisi and New Delhi will likely serve as a warning sign that it could be witness to similar, if not worse, troubles threatening the country's peace and tranquility if it continues to favor Iran's adversaries.
Israel has been quick to blame Iran for both incidents.
In summoning Iran's ambassador to the Foreign Ministry for questioning over Israeli reports that the killers of scientists in Iran had fled to Israel via Azerbaijan, Tehran's intention is to level new pressures on Baku to reconsider its bandwagoning with Tel Aviv, which is threatening military action against Iran over its nuclear program. In no uncertain terms, Iran's military leaders have made it clear that if attacked, they will retaliate against any country aiding the invaders.
The Iranian protest note to Azerbaijan on Sunday asked the Azeri government to "stop the activities of the Mossad intelligence services in that country against Iran", Iran's IRNA news agency said.
An Azeri Foreign Ministry spokesman, Elman Abdullayev, said the Iranian protest was an "absurd reaction" to Azerbaijan's protest last month over an alleged plot by Iranian agents to kill Israelis in Azerbaijan, the BBC reported.
The ball is now in Baku's court, it can either continue with its decision to turn itself into a front-line state against Iran and prepare for the worst consequences if its territory or air space are used for strikes against Iran, or take drastic measures to insulate itself by adopting a more balanced approach. The latter would lessen tensions with its bigger and more powerful neighbor to the south - that has just celebrated the 33rd anniversary of the Islamic Revolution.
In this time, despite three decades of Western animosity, Iran has remained unchanged and, in fact, turned more aggressive and virulent in light of the comprehensive sanctions and military threats against it.
As the only Shi'ite-dominated nation in the Caucasus-Central Asia, Azerbaijan ought to have normal relations with Iran, irrespective of its grudges that Iran has excellent relations with Armenia, which has controlled a chunk of Azeri territory in Nagorno-Karabakh since the mid-1990s.
But, far too often, Azeri leaders have forgotten that Iran's tilt in favor of Armenia at the time was due to Baku's "pan-Turkic" missteps that introduced irredentist worries for Tehran.
Unfortunately, though Baku's leaders have moved away from the self-inflicted injuries of early post-independence (1990s), they have not yet moved to the level of foreign policy sophistication that ensures optimal national security based on good neighborly relations. In mortgaging its national security to the US and Israel, ie, two out-of-area powers that have no intrinsic commitments to Azerbaijan's well-being, the government in Azerbaijan has entered into a Faustian bargain that may well backfire.
Azerbaijan's attitude is viewed with strong suspicion by Tehran's ruling elite, which may resort to offensive measures inside Azerbaijan to retaliate against Israeli aggression.
In such a scenario, Azerbaijan would be put on a state of alert, scaring energy investors, and thus introducing economic hardship to an already weak and fragile economy that counts on regional peace to advance its "pipeline" politics.
This could also have adverse effects for European energy security, now slightly edging toward insecurity due to the European decision to embargo Iranian oil, thus making Europe ever-more dependent on Russia, a main supplier of European energy, a true nightmare scenario for all European politicians.
Strategically, then, in addition to threatening to close the Strait of Hormuz, Iran's other retaliatory measure consist of sowing the seeds of instability in the South Caucasus-South Caspian region, two major routes of energy pipelines to Europe.
Tehran could achieve this relatively easily by engaging in counter-covert operation activities that are tantamount to tit-for-tats against Israeli and Western interests in the broader region, given the widening net of tensions between the two sides. This signals that countries such as Azerbaijan are caught in the fallout of a new cold war. (See Azerbaijan at crosswinds of a new cold war Asia Times Online, September 9, 2008.)
For now, however, with Iran's Asian energy partners giving the cold shoulder to US-European efforts to impose a total energy ban on Iran, Tehran does not feel sufficiently threatened to resort to such drastic counter-measures that would translate into growing tensions with some of its neighbors.
A delicate balancing act between the quest for economic survival against the tidal waves of sanctions and the use of hard power to strike back constitutes Tehran's overall strategy; this is in a constant state of being fine-tuned, given the fluid and dynamic state of the crisis in which it finds itself.
However, if it is perceived that Baku is insensitive to Iran's requests to rein in US and Israeli operators in its territory, then Tehran will take it to the next level and most likely take action inside Azerbaijan.....
India's dilemma: How to pay for Iranian oil....
By Vijay Prashad
An explosion on Aurangzeb Road in New Delhi damaged an Israeli embassy car, and injured its occupants.Tal Yehoshua Koren, the wife of the defense attache at the Israeli embassy was seriously wounded. She is in critical care. She was on her way to pick up her children from their school. It is unusual for a diplomatic vehicle to be attacked on the streets of New Delhi. The Delhi police went into action. The international media wanted to know who had done the attack minutes after it was reported.
The police was wary. Let us conduct our investigation, they said. Israeli Prime Minister Benjamin Netanyahu went before his parliament and accused Iran of a terrorist act. "The elements behind these attacks were Iran and its protege, Hezbollah." Iran, he said, is "the largest terror exporter in the world" and Israel "would act with a strong hand." This was all the confirmation that BBC needed. It began to report the attack as an Iranian act against an Israeli diplomat on Indian soil.
Why would Iran conduct an attack on an Israeli diplomat in India, particularly as India is in the midst of trying to negotiate a delicate arrangement with Tehran to pay for Iranian oil? The question mystifies.
Iran is responsible for 12% of India's imported oil (see my India pivots, and pivots again, Asia Times, February 9, 2012). Over the past two years India has struggled to find a mechanism to pay Iran for this oil. Sanctions by the United States and the European Union as well as by the United Nations Security Council against Iran have complicated the market for Iranian oil. Until 2010, India used the facilities offered by the Asian Clearing Union (ACU), founded in 1974 as an outgrowth of the United Nations Economic and Social Commission for Asia and the Pacific.
To help countries economize on their foreign exchange reserves, the ACU allowed them to conduct bilateral barter and make payments using the Asian Monetary Units (currency units indexed to the US dollar and the euro that allowed countries to hold surpluses and deficits outside their formal foreign exchange reserves). In December 2010, under pressure from the US Treasury, the Indian government withdrew from the ACU facility (a Reserve Bank of India circular from December 27 noted that "all eligible current account transactions including trade transactions with Iran should be settled in any permitted currency outside the ACU mechanism").
The Indian government then turned between February to April 2011 to a complex mechanism using the Hamburg-based Europaisch-Iranische Handels Bank (EIH) via the German Central Bank and the State Bank of India. The procedure did not violate UN security council or European Union sanctions. With the end use for payments certificate provided by the State Bank of India, the US Treasury should have ben satisfied - the money was going toward payments for crude and not to facilitate Iran's nuclear program.
Nonetheless, pressure on German Chancellor Angela Merkel from the US mounted. "Treasury is concerned about recent reports that the German government authorized the use of EIH as a conduit for India's oil payments to Iran," the US government noted. "Treasury will continue to engage with both German and Indian authorities about this situation and will continue to work with all the allies to isolate EIH." On April 4, 2011, the US Treasury got its way. Germany broke the India-Iran link.
India then conjured up an arrangement with Turkey's Halkbank. Turkey, with deep economic ties with Iran, has abided by the 2010 security council restrictions but has refused the deeper US and European Union sanctions regime. The Turkish government owns a 75% stake in Halkbank, and has allowed it to be the conduit for countries like India to pay for Iranian oil. Mehmet Ozkan, who teaches international relations at the International University of Sarajevo, told me that Turkey is trying to develop an "independent line," following the UN sanctions but keeping itself apart from the harsher US and European Union sanctions.
Over the past year, US Treasury officials have visited Turkey to try and cut Turkey's links to Iran. Obama's December 31 tighter sanctions made it illegal for American firms to do business with those firms that dealt with Iran's Central Bank. Halkbank is relatively immune from the US financial system, and it is the main financial intermediary for the Turkish refiner Tupras. Nonetheless, as E Ahmet Tonak who teaches political economy at Istanbul Bilgi University told me, Halkbank had to accede to the strong US pressure, particularly after a US Treasury team visited Turkey in the past few weeks.
Indian and Iranian officials have been in dialogue over the past two weeks to circumvent the embargo of Iran's financial system. India does not have the flexibility of China, whose economic power gives it genuine independence. China pays for Iranian oil with the yuan, which it is trying to put forward as an international trading currency. India does not have that freedom.
In early February, the Indians and Iranians created a payments mechanism: India would pay 45% of its oil bill with rupees which would be held in the Kolkata-based UCO bank and paid out to two Iranian private banks, Bank Parsian and Karafarin Bank. The rest of the oil bill will be sorted out in time.
India hopes to use these rupees to boost exports from India to Iran. Currently trade between India and Iran is uneven, with only US$ 2.74 billion as Indian exports in a total trade bill of $13.6 billion. To boost the Indian exports, the government plans to send a delegation to Iran in the next few months. "A huge delegation will be going," said Commerce Secretary Rahul Khullar. Anup Pujari, Director-General Foreign Trade (DGFT), Union Ministry of Commerce, pledged to a gathering in Mangalore that this delegation was going to strike a deal.
The exporters should continue booking business with their Iranian counterparts. India wishes to export wheat and rice, tea, pharmaceuticals, iron and steel. The US has said that it would not sanction "food, medicine, medical devices. So from our perspective," US State Department spokesperson Victoria Nuland said, "this kind of trade would not be sanctioned." Or at least one should say, it will not be sanctioned for now. There was also talk that India could barter wheat for oil, but the country's Food Minister K V Thomas has not yet seen a formal proposal.
The stumbling block this week was over the payment mechanism. By Indian law, if Iran receives payment in rupees inside India it will have to pay a 40% withholding tax. The Indian government is under pressure from the refiners in India to forgive this tax. "Most likely the National Iranian Oil Company would not want to pay this high tax," said B Mukherjee, a director of the Hindustan Petroleum Corporation. "We clearly do not want to pay the tax as it will make our imports costlier. I might as well buy oil from somewhere else if this 40% stake is saddled on me."
In a major speech at the Center for Strategic and International Studies in Washington on February 6,India's Foreign Secretary Ranjan Mathai noted, "Iran is our near neighbor, our only surface access to Central Asia and Afghanistan, and constitutes a declining but still a significant share of our oil imports. For us, there are also broader and long-term geostrategic concerns that are no different from what we face elsewhere in the Asia-Pacific region. Our relationship with Iran is neither inconsistent with our non-proliferation objectives, nor is it in contradiction with the relationships that we have with our friends in West Asia or with the United States and Europe."
The US sees these trade relations as deeply troubling. The US is eager to make the Iranian sanctions a test of friendship with its allies. US State Department spokesperson Nuland said last week, "We are working with countries around the world, including India, that maintain strong oil relationships with Iran, encouraging all of them to reduce their dependence on Iranian crude."
The India-Iran deal is near completion. How the attack on the Israeli embassy car in New Delhi will impact on this is anyone's guess. Parochial political agendas once more threaten to interrupt a very important quest, which is to create trust and interdependence across the Asian continent and defuse any tensions that might lead to war. The sanctions regime is a fool's paradise, undermining the fuel paradise that Iran and India have sought to construct.....despite the Zioconned World's shenanigans globally.....
By Vijay Prashad
An explosion on Aurangzeb Road in New Delhi damaged an Israeli embassy car, and injured its occupants.Tal Yehoshua Koren, the wife of the defense attache at the Israeli embassy was seriously wounded. She is in critical care. She was on her way to pick up her children from their school. It is unusual for a diplomatic vehicle to be attacked on the streets of New Delhi. The Delhi police went into action. The international media wanted to know who had done the attack minutes after it was reported.
The police was wary. Let us conduct our investigation, they said. Israeli Prime Minister Benjamin Netanyahu went before his parliament and accused Iran of a terrorist act. "The elements behind these attacks were Iran and its protege, Hezbollah." Iran, he said, is "the largest terror exporter in the world" and Israel "would act with a strong hand." This was all the confirmation that BBC needed. It began to report the attack as an Iranian act against an Israeli diplomat on Indian soil.
Why would Iran conduct an attack on an Israeli diplomat in India, particularly as India is in the midst of trying to negotiate a delicate arrangement with Tehran to pay for Iranian oil? The question mystifies.
Iran is responsible for 12% of India's imported oil (see my India pivots, and pivots again, Asia Times, February 9, 2012). Over the past two years India has struggled to find a mechanism to pay Iran for this oil. Sanctions by the United States and the European Union as well as by the United Nations Security Council against Iran have complicated the market for Iranian oil. Until 2010, India used the facilities offered by the Asian Clearing Union (ACU), founded in 1974 as an outgrowth of the United Nations Economic and Social Commission for Asia and the Pacific.
To help countries economize on their foreign exchange reserves, the ACU allowed them to conduct bilateral barter and make payments using the Asian Monetary Units (currency units indexed to the US dollar and the euro that allowed countries to hold surpluses and deficits outside their formal foreign exchange reserves). In December 2010, under pressure from the US Treasury, the Indian government withdrew from the ACU facility (a Reserve Bank of India circular from December 27 noted that "all eligible current account transactions including trade transactions with Iran should be settled in any permitted currency outside the ACU mechanism").
The Indian government then turned between February to April 2011 to a complex mechanism using the Hamburg-based Europaisch-Iranische Handels Bank (EIH) via the German Central Bank and the State Bank of India. The procedure did not violate UN security council or European Union sanctions. With the end use for payments certificate provided by the State Bank of India, the US Treasury should have ben satisfied - the money was going toward payments for crude and not to facilitate Iran's nuclear program.
Nonetheless, pressure on German Chancellor Angela Merkel from the US mounted. "Treasury is concerned about recent reports that the German government authorized the use of EIH as a conduit for India's oil payments to Iran," the US government noted. "Treasury will continue to engage with both German and Indian authorities about this situation and will continue to work with all the allies to isolate EIH." On April 4, 2011, the US Treasury got its way. Germany broke the India-Iran link.
India then conjured up an arrangement with Turkey's Halkbank. Turkey, with deep economic ties with Iran, has abided by the 2010 security council restrictions but has refused the deeper US and European Union sanctions regime. The Turkish government owns a 75% stake in Halkbank, and has allowed it to be the conduit for countries like India to pay for Iranian oil. Mehmet Ozkan, who teaches international relations at the International University of Sarajevo, told me that Turkey is trying to develop an "independent line," following the UN sanctions but keeping itself apart from the harsher US and European Union sanctions.
Over the past year, US Treasury officials have visited Turkey to try and cut Turkey's links to Iran. Obama's December 31 tighter sanctions made it illegal for American firms to do business with those firms that dealt with Iran's Central Bank. Halkbank is relatively immune from the US financial system, and it is the main financial intermediary for the Turkish refiner Tupras. Nonetheless, as E Ahmet Tonak who teaches political economy at Istanbul Bilgi University told me, Halkbank had to accede to the strong US pressure, particularly after a US Treasury team visited Turkey in the past few weeks.
Indian and Iranian officials have been in dialogue over the past two weeks to circumvent the embargo of Iran's financial system. India does not have the flexibility of China, whose economic power gives it genuine independence. China pays for Iranian oil with the yuan, which it is trying to put forward as an international trading currency. India does not have that freedom.
In early February, the Indians and Iranians created a payments mechanism: India would pay 45% of its oil bill with rupees which would be held in the Kolkata-based UCO bank and paid out to two Iranian private banks, Bank Parsian and Karafarin Bank. The rest of the oil bill will be sorted out in time.
India hopes to use these rupees to boost exports from India to Iran. Currently trade between India and Iran is uneven, with only US$ 2.74 billion as Indian exports in a total trade bill of $13.6 billion. To boost the Indian exports, the government plans to send a delegation to Iran in the next few months. "A huge delegation will be going," said Commerce Secretary Rahul Khullar. Anup Pujari, Director-General Foreign Trade (DGFT), Union Ministry of Commerce, pledged to a gathering in Mangalore that this delegation was going to strike a deal.
The exporters should continue booking business with their Iranian counterparts. India wishes to export wheat and rice, tea, pharmaceuticals, iron and steel. The US has said that it would not sanction "food, medicine, medical devices. So from our perspective," US State Department spokesperson Victoria Nuland said, "this kind of trade would not be sanctioned." Or at least one should say, it will not be sanctioned for now. There was also talk that India could barter wheat for oil, but the country's Food Minister K V Thomas has not yet seen a formal proposal.
The stumbling block this week was over the payment mechanism. By Indian law, if Iran receives payment in rupees inside India it will have to pay a 40% withholding tax. The Indian government is under pressure from the refiners in India to forgive this tax. "Most likely the National Iranian Oil Company would not want to pay this high tax," said B Mukherjee, a director of the Hindustan Petroleum Corporation. "We clearly do not want to pay the tax as it will make our imports costlier. I might as well buy oil from somewhere else if this 40% stake is saddled on me."
In a major speech at the Center for Strategic and International Studies in Washington on February 6,India's Foreign Secretary Ranjan Mathai noted, "Iran is our near neighbor, our only surface access to Central Asia and Afghanistan, and constitutes a declining but still a significant share of our oil imports. For us, there are also broader and long-term geostrategic concerns that are no different from what we face elsewhere in the Asia-Pacific region. Our relationship with Iran is neither inconsistent with our non-proliferation objectives, nor is it in contradiction with the relationships that we have with our friends in West Asia or with the United States and Europe."
The US sees these trade relations as deeply troubling. The US is eager to make the Iranian sanctions a test of friendship with its allies. US State Department spokesperson Nuland said last week, "We are working with countries around the world, including India, that maintain strong oil relationships with Iran, encouraging all of them to reduce their dependence on Iranian crude."
The India-Iran deal is near completion. How the attack on the Israeli embassy car in New Delhi will impact on this is anyone's guess. Parochial political agendas once more threaten to interrupt a very important quest, which is to create trust and interdependence across the Asian continent and defuse any tensions that might lead to war. The sanctions regime is a fool's paradise, undermining the fuel paradise that Iran and India have sought to construct.....despite the Zioconned World's shenanigans globally.....
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