How Iran Changed The World

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Imagine this scenario: A developing nation decides to selectively share its precious natural resource, selling only to "friendly" countries and not "hostile" ones. Now imagine this is oil we're talking about and the nation in question is the Islamic Republic of Iran...

Early news reports on Wednesday claimed that Iran pre-empted European Union sanctions by turning off the oil spigot to six member-states: the Netherlands, Spain, Italy, France, Greece and Portugal.

The reports were premature. According to a highly-placed source in the country, Iran will only stop its oil supply to these nations if they fail to adopt new trading conditions: 1) signing 3 to 5-year contracts to import Iranian oil, with all agreements concluded prior to March 21, and 2) payment for the oil will no longer be accepted within 60-day cycles, as in the past, and must instead be honored immediately.

Negotiations are currently underway with all six nations. Iran, says the source, expects to cut oil supplies to at least two nations based on their current positions. These are likely to be Holland and France.

Meanwhile, the other four EU member-states are in dire financial straits. They are knee-deep in the kind of fiscal crisis that has no hope of resolution unless they exit the union and go back to banana republic basics. Yet, they found the time to sanction Iran over some convoluted American-Israeli theory that the Islamic Republic may one day decide to build a nuclear weapon. I am sure arm-twisting was involved – the kind that involves dollars for votes.

But I digress. This blog is really about ideas. And not just ideas, but really ridiculous ideas.

New World Order Jump-Started by Iran?
Alternative sources of oil will be found in a jiffy for these beleaguered EU economies. But this isn’t so much about a few barrels of the stuff that fuels the world’s engines.

The past few years have shown that there is no global financial leadership capable of pulling us back from the abyss. The US national debt hovers around the US$15.3 trillion mark. Its GDP in 2011 was just under US$15 trillion. You do the math – there is no fixing that one. The only next-big-thing coming out of that dead end will be the complete transformation of the current global economic order.

But how will that take place without leadership and clear direction? I'm betting hard that It will not come from the top, nor will it be directed. The new global economic order will be organic, regional and quite sudden.

What do I mean? Imagine: Iran stops selling oil to the EU; China tells the US to take a hike on currency values; India starts trading in large quantities of rupees; Russia’s central bank becomes a depot for holding dollars that don’t need to pass through New York; the creation of a global payment messaging system competing with SWIFT. Now imagine that a combination of actions - triggered only by an attempt to circumvent some really very silly sanctions - can suddenly unleash some unexpected possibilities that were beyond the realm of imagination a mere few years ago.

Imagine the emergence, say, of regional economic hubs, powered by the currencies of the local hegemonic powers, where bartering natural resources, goods and services becomes as commonplace as transactions involving currency transfers. Because of the frailty inherent in dealing with these new local currencies and a bartering system, nations tend to trade most with those closest to them in geography and culture. Shocking? Maybe not. Sometimes it just takes a need for change...and a handy tipping point.

“This is not the time to fan the flames,” someone should have told the United States. “You and your pals are sitting in a jalopy tottering on the cliff’s edge – why risk making moves now?” they should have warned. “Be a little less arrogant,” would have been sage advice.

But Washington is absolutely, irrevocably, dangerously fixated on showing Iran who’s boss, and spends a good part of every day trying to tighten the screws around the Islamic Republic. For the most part, the US’s pursuit of this dubious objective has instead stripped it of the vital political tools it once wielded. No more UN Security Council resolutions, no more unscrutinized military adventures. The only thing left is the nefarious tentacles of the United States Department of Treasury and its financial weapons. “The new tools of imperialism,” as once US-friendly central banker in the Mideast bluntly put it to me.

I only hear shrill desperation when politicos now parrot the “sanctions are biting” line. Here’s a juicy tidbit for those rolling their eyes right now: Goldman Sachs – America’s premier investment bank and Wall-Street God – has identified the Islamic Republic as one of the “Next 11” growth drivers of the global economy after the BRIC (Brazil, Russia, India, China) nations. BRIC was a term coined by Goldman Sachs, if you recall, and boy, were they right about that one.

Thirty years of “biting” sanctions and sanctions “with teeth” have achieved the following: “Strong or improving growth conditions,” said Goldman Sachs just last year, “combined with favorable demographics, form the foundation of the N-11 growth story.” The investment bank, furthermore, estimates “a measurable increase in the N-11’s share of global GDP, from roughly 12 percent in the current decade to 17 percent in 2040-2049.”

It’s a bad global economy we are facing right now, but Goldman Sachs’ charts illustrate that Iran is still one of five nations in the N-11 pot whose “productivity and sustainability of growth” is above average.

Shrugging off Dollar Dominance
A British investment research firm wrote in January: “Sanctions on the Central Bank of Iran effectively restricts Iranian oil sales to barter contracts or to state-to-state agreements utilizing non-G8 currencies…It represents a major irritation to the Iranians, rather than a chokehold.”

The authors specify the Chinese Yuan as the non-G8 currency, but in the past few days that scenario has busted open with the addition of the Indian Rupee into the mix.

The new trade deal inked between Iran and India ensures Rupee payment for 45 percent of Iranian oil imports, with the balance remaining in Indian banks to pay for exports to the Islamic Republic. This achieves two important things that are an unintended consequence of US sanctions: firstly, it eliminates the Dollar as the trading currency (note that oil prices have traditionally been priced in US Dollars); secondly, it significantly accelerates economic integration between Iran and one of the four largest emerging economies in the world.

D.S. Rawat, head of the Associated Chambers of Commerce and Industry in India, says of the agreement: “The potential of trade and economic relations between the two countries can touch the level of US$30 billion by 2015 from the current level of $13.7 billion dollars in 2010-11."

There’s more. During the course of the past two weeks, Iran has purchased around 1.1 million tons of cereals and wheat from international markets – including products originating in Germany, Canada, Brazil and Australia - which it has paid for entirely in currencies other than the Dollar.

The US Dollar, which has been the international reserve currency for close to a century, is on its way out anyway. America’s huge balance of payments deficit has weakened US fundamentals and made investors wary. The downside of the Dollar’s changing status is that the Federal Reserve loses a lot of flexibility in managing its currency and the US economy. That does not bode well for keeping the US competitive against the BRIC nations and other emerging economies.

Iran Sanctions Biting the US Right Back?
It takes one solid idea, in a world desperately seeking them, to start the creaky shift to a new global order. Emerging economies have been nipping at the heels of the world’s governing bodies for decades, demanding entry into the hallowed halls of the UN Security Council’s permanent members; insisting on a seat at the main table at the IMF, World Bank, World Trade Organization.

When European leaders went begging for scraps at the last G-20 meeting, the BRICs found their feet and yawned a collective “no.” It signaled a reversal of fortunes, that meeting, and the idea that they can forge their own path was born. The BRICs then announced their first joint foreign policy statement last November – on Syria, of all places. The idea matured.

But US/EU sanctions against Iran are giving the idea steam. One has to act when faced with a dilemma, after all – and that dilemma has been literally foisted in the faces of nonaligned countries the world around: “sanction Iran or else.”

Now they are just shrugging and finding ways around the maze of traps set up by the Department of Treasury. Why should they care much? What is the United States today but an unwieldy bully with few arrows left in its quiver?

This week the US is putting the screws on Belgian-based SWIFT. If you’ve ever wired money to another country, you have used SWIFT – it is essentially the messaging system between banks that alerts them to money transfers. The US wants to cut Iranian banks out of the SWIFT system, in effect making it practically impossible for anyone inside or outside Iran to send or receive funds.

Who knows what Iran will do if this comes to pass? It will probably just join non-aligned countries to create an alternative SWIFT, further undermining the western grip on global finance. Iran, after all, decided last year not to put up with the prospect of perpetual cyberwar with the west, and is forging ahead with plans to create a closed internet system for itself.

Each step the US and EU take to hinder Iran’s flexibility is countered with an innovative solution – one that includes more and more non-western players who are keen to craft a new global order. They used to worry about that kind of confrontation with the west, but the collapse of the current order has left few obstacles in their paths - and even offers incentives.

Like the proverbial finger in the dyke to block a leak…the water will always find another way out and possibly even bust open the dam. A warning to Washington: the burden of anxiety will always fall on the one who needs the dam most.

Sharmine Narwani is a commentary writer and political analyst covering the Middle East. You can follow her on twitter @snarwani.


Really well written example of the law of unintended consequences. I have shared it on Twitter and Facebook.

isreal is the culprit strangling American foreign policy.....When will the West learn? all the wars and mayhem Usa is responsible...

Great to hear that Iran isn't suffering , as much as the US warmongers had hoped. There is a phrase," what goes around, comes around". The yanks need to realise that they are not the only world power anymore. Their corrupt foreign/military polices, bullying of Arab and other states - will do nothing for their standing in the World.It will all be remembered !

One only has to watch the clowns on tv for the US presidential campaign to realise -virtually all of them know very little about WORLD affairs . And that idiot Mitt Romney - well what a king CLOWN !!! Trouble is, any of these idiots could be the next president - purely because they have a rich daddy ! God help the world if KING CLOWN ROMNEY wins-It will be catastrophic , for he has already stated Israel will be supported as it is surrounded by terrorist states ! HE needs a history lesson.It is Israel that has repeatedly invaded other countries, and continues to inflict barbaric GENOCIDE on the Palestinians .It is therefore Israel that is the threat to the middle east - not Iran !

I am pleased that other nations are willing to opt out of using the dollar as a world currency. Because of the ignorance of most Americans, they see every one else as a threat -be it a muslim or communist etc. I wish Iran and other middle eastern states the best of luck in defying the US & succeeding internationally - despite the West's sanctions, and I am a white European. Good luck Iran.

Well there is one way out of financial crisis for the US and the rest of the world powers, what if: the US isnt going to commit any troops to war at this time, same as early ww2 they cant afford it and arent ready, but israel seems to think they are, well dont do it, Obama tells israel, but really we mean do it, take out iran, or try. And Russia and China will hope for the same and tell iran the same thing behind closed doors, Why? its obvious isnt it, what better way to bring the world out of crisis financially then to sell them the most expensive commodity, arms! So israel will buy arms from the US and iran can trade oil to russia, china and oh yes who needs food, north korea, all have major arms surplus. and before u say oh this would never fly on the world stage as they wont publically allow that to happen, well sure they will, as a matter of fact they will agree on it, arms sales to certain countries, but greed will spin this out of control, and omg its ww3, guaranteed its comming folks, I guarantee it, pre ww2 we had the same unemployment conditions, same debt, ect... all we need is one crazy leader of a super nation, or any nation really w big nations supplying them who eventually get sucked into the war, and dont worry, no one will have the balls to throw nukes at anyone, not in the beginning, anyways, no nukes are hitting north america anyways, few have the tech to reach us, so its a perfect financial solution for the states, if they dont have to fight but get to sell, and sell they will.

"A warning to Washington: the burden of anxiety will always fall on the one who needs the dam most."

There is a long shot hypothetical possibility that could change the world totally, and make the entire globe happy, for about ten minutes. Then the thought processes would kick in...

Ron Paul, or someone like him, is elected President. America slashes it's Military, slashes it's budget, and pulls back to a Protectionist State. It confiscates all oil within it's boundries, and cuts deals with Canada and Mexico for Supply (They can't refuse.) The rest of the world is left to itself, and seriously warned not to F*** with the US or it's neighbors.

I think a majority of Americans would love to see this happen. I certainly would; and, for about Ten minutes, so would the rest of the world.

Excellent article. However, there are a few issues that will change the outcome of global economics that are not included in the article, and depending on how things play out could change the prognosis completely. The following are currently playing out. What will happen remains to be seen.

First: China is about to hit the wall with their economy. China is about to enter a long recession, and their population is getting more and more restless. The Chinese are growing more aware of the duplicity and hypocracy of the Party.

Second: Americans are waking up to the fact that America has been bought and paid for by the Wall Street Banksters. There is a tidal wave of awarness growing that the Military Industrial and Financial Cabals OWN America.

Third: Europe and the EU are in the final leg of collapse. What this will do to individual countries is uncertain as no one is capable of tracking the global amount of derivitives and swaps associated with this outcome.

Fourth: Japans influence over SE Asia is gone, and Japan is at the bottom of the rope, hanging over the chasm, and no one tied a knot at the end.

Fifth: The Middle East is a total cluster f*** . Anyone that thinks they know what is going to happen there is delusional. Saudia Arabia will get a nuclear device if Iran does. Libia, Syria, Bahrain, Lebanon are on the edge of Civil War. China is moving in with boatloads of money, and the US will protect it's interest come hell or high water.

This is just five of the developing issues that many do not consider in their projections. What happens with any of these has the potential to change the world for the good, or the bad. But, one thing is for certain... No matter who you are, your country and it's leaders has blood on it's hands, either from current or past history.

There is a lot we all have to change.

Well, I see why the Iranian President have done several trips to Latin America. The Iraninas are looking for new markets. That is the new wolrd order. Viva la Republica Persia de Iran!!

Enjoyed reading your article. Well done, Sharmine.
Regarding a comment by one of your commentators (Annonymous), who touched on the somewhat unlikelihood of the 'Anglo-Alliance' (principally, led by USA/UK) starting the 3rd WW - much to my consternation, I think to the contrary. My guess is that Obama (or the next Pres) and more importantly his 'minders' (the chieftains and barons of corporate America and their neo-conservatives), will at some stage, feel desperate enough to want to put a 'stop' to Asia's and in particular, China's rise and rise as the USA's global position increasingly gets 'substituted'. The one 'sure solution' at America's disposal and which could 'stop China and Asia in its tracks' and 'solve' this and perhaps, conveniently, a few other man-made problems plaguing the world just now would involve, it seems, the instigation and engineering of WW3 which would likely bring immediate arrest to the economic advancement of China like nothing else would. If this sounds mad, remember 'MAD', the policy developed by Kissinger and others? (MAD = mutually-assured destruction)?. It prevailed and dictated military and foreign US/UK thinking and policy-making for more than a generation prior to the collapse of Russia as a superpower. And I would suggest that that thinking is not dead but merely lurks in the not-so-deep recesses of the minds of current neo-conservatives. And further, I would suggest that the nuclear bombing of Hiroshima and Nagasaki by Ameriaca (closely supported by its allies) was an act of sheer madness and a war crime that stands apart like no other. To non-cynics the world over, it is exceedingly hard to believe that 'our politicos' could be that insane, but as we have increasingly come to know, our politicos, under the guise of proceeding upon the people's mandate, will seemingly stop at nothing including the legitimisation of evil and the demonisation of good if self-interest and self-aggrandisation is perceived as obtainable for themselves and their lackeys. Now, more than ever before, the people need to watch, and if needs be, stop their politicos dead in their tracks, not unlike the scenario with Murbarak!!. At its basics, the people need to urgently and desperately wake up to the fact that they in fact are the true owners of the world and its fate, not even the 'uncorrupted' politicos (if still living) be they democratic or otherwise.

Well this is a wonderful and thought provoking article. My take on this is that the UK/US Bankster Cartel is running scared because the BRICs basically told them to stuff it when the Banksters tried to force the oil/dollar domination as it has been for the last forty plus years. When Iran switched to non-dollar oil transactions a couple of years ago is when the Khazar Banksters started ratcheting up the rhetoric on Iran's nuclear energy desires being used to develop nuclear weapons. Face it the US economy is going to tank again before the end of this year. The Bankers want Pres. Obama gone and one of their own elite put in. Pres. Obama's hand was forced to allow the Goldman Sachs bailout and all of that money went to the "City of London" Banksters as they got caught with their britches down by the Derivatives collapse.

I would appreciate you stop all this negative propaganda about the 08 financial crisis. We are in a recovery here in the US. CNN says so. 400,000 people filing new unemployment claims each and every week in this country for the last 4 years is perfectly normal. Fox news says so too.

I thought the freedom locals in Libya putting 2 in the back of the head of their former leader, after they sodmized him, then slapping his decomposing body in a mall meat locker for public viewing, recorded all of it, was a heartwarming expression of democracy in action.Stay tuned for the next episode of Arab Spring or is that Arab Awakening? I get em mixed up sorry

"CNN says so"

wow. wake up.

He is obviously more awake than you my friend. Somebody needs to look up the word IRONY.

[email protected] steve. Great article btw.

An interesting, well-written perspective.

It is time that non-aligned nations come to the fore again in the face of an increasingly imperialistic Anglo-US Alliance. The US is going bankrupt and is only seeking answers in conquests. Globalisation isn't what it is made out to be. It is a far more pernicious work than just a working together of nations. It is protectionist when it needs to be while the canard being touted to the world is that of an open, free market and society. No such can exist if you can think and look at it more closely. Some markets need to be protected in this far from level playing field, cultures need to be preserved, the uniqueness of nations preserved for the world is a diversity, not a place to be wall-papered with Coca Cola and designer labels. The promise and effect of sameness of globalisation is endangering us all. The world was a far better place when each one of its parts was unique and respected one another. Oh yes of course we have to fight tyrants and seek justice where justice should prevail, but what hope for that when the policemen are themselves shutting up the doors of justice in their own back garden, when those who are claiming to fight oppression are themselves oppressors, when what they want - under the guise of human rights and democracy - is your soul and your submission and your oil? Iran will be right if, as you say, they go back to manufacturing goods that they need, open alternative monetary systems, well, barter if you must, not feed at the trough of consumerism and ostentation that are for slaves of this pernicious philosophy. I feel sick when I look at the Gulf of high rise towers and Bourj al-Stupidity occupied by the Beckhams and the Lady Gagas of the world. But what for?

US would be suicidal to be goaded into a totally self-destructive war for Zionist delusions. The Zionist entity usurping Palestine is an albatross around the rednecks of deadbeat US taxpayers. US is indeed bankrupt and economic power has completely and irreversibly shifted to China and Asia. A shooting war in the Persian Gulf instigated by AIPAC and the Zionist lobby would literally throw the bankrupt US into an early thrash heap of history, not to mention start World war 3. US needs to settle down and live with the reality of a nuclear Iran and an Asia centric multipolar world. Zionism has done enough damage to the world.

The best thing Iranians has is the west creating EMBARGOS in each and every way
Yes,initially painful but long term best results are obtain I.e. the river to flow
I look at my example when I asked for bank support in institutionally racist country like Britain for a project they refused but idea was there ,it took a little time but solution was found
INDEPENDENT of the British banks
Also, one has to look at history of USA/ the west it based on thuggery no doubt they developed technological and administrative systems but that has come to end
With their arrogance and that the best thing that has happened for rest of the world
The west is wise with success comes HUMILITY but opposite happened

If it wasn't for Israhell agitating trouble we would have no problems with Iran. They have been a good tradeing partner and have harmed no one.

Interesting article. Important to note that I think its the sanctions that - although very painful initially and somewhat throughout - helped them focus on their real economy instead of the financial aspect as the U.S./U.K. have. It seems Iran is doing what the U.S. was doing when their economy was at their best: focusing on manufacturing and building its infrastructure.
Granted there's corruption, inequality and the usual issues that haunt every nation, they've even had a minor financial corruption crisis but it pales into insignificance when compared to that of the 08 crisis of the U.S. both in relative and absolute terms it seems.
While their products aren't something one would own or envy, the fact that its produced by them (as well as some of the industrial machinery that produces these goods) signifies a potential for the future. Unlike the Gulf countries which have focused on importing brands and high - cost and inefficient lifestyles focusing more on "bling" than on proper cost/profit analysis and future direction, Iran has focused on more efficient and consistent results.
Great article, keep it up Sharmine!

A substantive read.

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