[Peace-discuss] Iran: War or Privatization: All Out War or "Economic Conquest" by Michel Chossudovsky

[n.dahlheim at mchsi.com]

Check out this article from Michel Chossudovsky from Global Research.ca

http://www.globalresearch.ca/index.php?context=va&aid=9501
"Iran: War or Privatization: All Out War or 'Economic Conquest' by Michel Chossudovsky

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. 

The Iranian State is not in a financial straighjacket as in the case of most indebted developing 
countries. What are the political motivations underlying 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". 

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 the American 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 
the US Treasury, they are also in contact with the US State Department, the Pentagon and NATO. They 
are often involved prior to the commencement of a war as well as in its aftermath in the context of so-
called "post conflict reconstruction".  In this regard, the World Bank is a key player in channelling 
"foreign aid" to both Iraq and Afghanistan.   

What the decision to privatize suggests is that Iran is prepared to allowe 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 in to 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) 

The resolution further demands that "the President initiate an international effort to immediately and 
dramatically increase the economic, political, and diplomatic pressure on Iran" among America's  allies 
.... 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."

Were these sanctions to be carried out and enforced, they would undermine Iran's privatization program 
and the 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 no colonial style arrangement which would enforce the transfer of Iranian assets into the 
pockets of 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 favors 
Chinese, Russian, European and Japanese investors at the expense of the USA. It undermines 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 undermines the economic interests of several of America's allies, it 
prevents 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.