Will Iran be next?
Thursday, December 8th, 2005You may not be aware of it, but in about 100 days time, something important is going to happen. But before we go into that, we need to take a few steps back in time.
Not too long ago, media friendly phrases like ‘axis of evil’ were thrown about, and three countries in particular were named : Iraq, Iran and North Korea. Now, when western politicians, or any politicians for that matter, utter anything in public, the first thing we should do is to ask ; why are they saying that? What is their ulterior motive?
Two of the three choices are not particularly suprising. Seeing that the ‘axis of evil’ was officially borne in the midst of the American’s war against Iraq, it is understandable that first on that list, is Iraq.
North Korea, although hardly a military powerhouse, had at that time obtained a handful of nuclear warheads. This of course pales in comparison to the ten thousand nuclear warheads that the Americans have, but that’s not the point now is it? The point is that no one else other than the Americans should have nuclear weapons. Besides that, bulging their muscles against North Koreans serves a secondary purpose – providing them with a military presence in the Asian region. The fact that its against a communist country is an added bonus.
Which brings us to Iran. What has Iran done to deserve being mentioned in the same league as Iraq, and to a lesser extent, North Korea. As far as my memory serves me, Iran has been relatively quiet these past decade or so. They have just been minding their own business when suddenly, bang!, they are publically made a target.
But why is this so? Is it because of Iran’s nuclear capability? Perhaps, but to me at least, that seems to be a mute argument. Firstly, surely any country should be allowed a chance to develop alternative sources of power, including nuclear power. Iran has, so far, claimed that their nuclear enrichment project is only dedicated for nuclear power plants. Perhaps they are telling the truth, perhaps they are lying. But, I say, innocent until proven guilty, or perhaps the Americans conveniently forgot about something called proof. Even if the Iranians are proven ‘guilty’, what would they be guilty of? Acquiring nuclear weapons? The Americans have ten thousand of them! (And so do the Russians for that matter).
So, why then has Washington so publicly painted a big black target on Iran?
One compelling theory is based on something that Iran is planning to establish during Iran’s new year, about 100 days from today, on the 20th of March, 2006. On that day, Iran plans to open an Iranian Oil Bourse, in itself not particularly special, but what makes it special is that the Iranian Oil Bourse will exclusively trade in Euros– this system is called the Petroeuro. This is converse to the current system, which trades in American Dollars, dubbed the Petrodollar.
Why is this so important though?
Well, it is very important to the U.S economy, simply because they run on a trade deficit every year, which basically means they consume more than they can produce, and hence they are always in debt. The U.S can get away with this simply because so much trade is done in the U.S dollar, hence almost all countries need to retain large amounts of U.S dollars to facilitate trade. These countries do not want the U.S dollar to fall, at least not while they store these large wads of dollars. So, the more international trade is done using the dollar, the more the U.S can run into the red when it balances its books.
The advent of the petroeuro changes this dynamic – oil trade makes up a large percentage of world trade, and since Iran, being one of the members of oil conglomerate OPEC, is one of the global suppliers of oil, the fact that it wants to deal in Euros instead of Dollars will send ripples in the global economy. These ripples have already been felt – China and India, two of the most energy hungry countries in the world, have recently strengthened their ties with Iran – China going so far as to un-peg its currency to the U.S dollar and instead re-evaluating it against a number of currencies, Euro included. No doubt these countries have also started offloading their reserves of U.S dollar, while building up stacks of Euros. One only has to look at the global currency exchange rates to see the effect – weak and sluggish U.S dollar while a strong and stable Euro.
Now, is that reason enough to threaten another country with military might? Well, who was the last country to attempt to sell large amounts of oil in Euros?
The answer : Iraq.
Iraq started selling oil in Euros in late 2000 – and not too long after that, the Americans started finding ways to get into Iraq, which they eventually did. Not surprisingly, the first thing they did when they had control of the oil fields was to revert back to the petrodollar.
It so happens that in that same very year, Hugo Chavez, the president of Venezuela - an OPEC member and one of the world’s biggest oil produces - met with Saddam Hussein and other OPEC members to discuss, amongst other things, the direction of the global oil economy. Less than two years later, Hugo Chavez had to endure two coup attempts against his government – coup attempts that allegedly have been sponsored by who other than the Americans. Oh yeah, and did I mention that Chavez has been championing the idea of the petroeuro for some time now?
So, what will happen to Iran then? We will just have to countdown the days and wait and see, 100… 99….