Imperialism Iran Middle East

Iran: The Aftershocks of Nuclear Deal

By Hassan Jan

The nuclear agreement struck between five world powers plus Germany (P5 +1) and Iran was hailed as the start of a new era in the Middle East. While this deal may provide immense opportunities for the Iranian ruling class, it has very little to offer to the ordinary Iranians. The big businesses, both inside and outside Iran, are eyeing on the lucrative contracts. But this process of opening Iran for the global businesses is not a smooth one and is full of contradictions. The American ruling class is split but has no other option but to accept and move along with the deal. The different factions of Mullahs in Iran are also squabbling over the nuclear rapprochement. The so-called ‘hardliners’ have also no better option than to accept this deal for the moment. At the present, the ruling Mullahs have come out as ‘winners’ in the nuclear negotiations but the opening up of Iranian economy to the world imperialist corporations will soon flare up the simmering conflicts in Iranian society and this “win” will turn out to be a nightmare for the regime.

The Iran Nuclear Deal Framework or commonly known as JCPOA (Joint Comprehensive Plan Of Action) was reached between Iran and five permanent members of UN Security Council (USA, UK, France, China, Russia plus Germany (P5+1) and the European Union on 14 July, 2015. Under this deal, Iran will slash its stockpile of uranium by 98% to 300kg for 15 years and reduce its centrifuges from 20,000 to 5000. In return the nuclear-related sanctions imposed on Iran by UN, EU and USA will be lifted.

The years of harsh sanctions imposed on Iran effectively disrupted the lives of ordinary Iranians and the madness of the Iranian Mullahs of building nuclear weapons was paid for by the Iranian masses; squeezing their incomes and devastating lives of the ordinary people. The only ones benefiting from the sanctions regime were Iranian Revolutionary Guards and its subsidiary organizations by their monopoly on Iran’s industries, businesses, and smuggling. In the meanwhile the economic impacts of sanctions resulted in the devastation of the economy with inflation shooting up to more than 50%, Irani Rial hit a record low (40000 rials to a US dollar) with Iran’s GDP shrinking by 6%. Iran couldn’t import vital medical equipments and medicines due to the sanctions on the Central Bank of Iran. The trade sanctions resulted in the closure of many industrial units increasing unemployment sharply.

The Iranian Mullah regime used this economic onslaught to widen their base of support by blaming the USA and the western imperialism for the economic hardships of the masses. The increasing role of Iran in Iraq, Syria, Lebanon and Yemen and the mess the US imperialism and its allies created in the Middle East brought forth a situation in which both sides were compelled to work out a deal which resulted in this tenuous nuclear agreement.

Economic Benefits?

The ‘reformist’ president Hassan Rouhani promised an era of economic prosperity after the nuclear deal. The lifting of crippling sanctions, which stifled the economy, has improved some of the economic indicators. Once the sanctions were lifted Iran boosted its crude oil production from 2.6 million barrel per day in January 2016 to 3.8 million bpd in May 2016. In January 2017, the Iranian officials reported that its daily crude production was almost 3.9 million bpd. Iran plans to ramp up its production to 4 million bpd by April this year to regain its pre-sanction market share. Iran’s crude oil output was more than 4 million bpd in 2012 when crude oil prices were around $110 per barrel. As of now, the oil prices are hovering around $50 a barrel which means Iran is losing a huge source of its revenue. Inflation has dropped from its peak of 45% in June 2013 and is currently hovering around 9.5%. The GDP growth was reported to be 7.4% by Central Bank of Iran in September 2016.

But as IMF has indicated in its report, the bulk of this growth came as a result of the resumption of crude oil exports. The growth of non-oil sector remained a meager 0.9%. But despite these ‘improvements’, unemployment has increased to 12.7% from last year’s 10.8%. Youth unemployment rate is 30%. After a year of sanctions relief, the Iranian masses are still deprived of the promised economic prosperity. One of the major signs of economic difficulties is the current exchange rate of Iranian Rial which is being traded at 30,000 rial per US dollar. Rial even declined to a record low of 41,600 per US dollar in late December last year. It indicates the slow pace of economic activity and the lack of investment which would otherwise strengthen rial.

In the last one year, there has been much talk about foreign businesses’ negotiations with the Iranian government for doing investment in Iran. But so far these talks have largely been confined to the signing of memorandums of understanding only. Big businesses are still concerned about the status of remaining US sanctions on Iran which may put them in trouble. As Muftah pointed out to its website, “On the foreign front, there is continuing uncertainty amongst investors about the remaining U.S. sanctions on Iran and how they might impact investment in the country. These American sanctions have made foreign banks, particularly in Europe, fearful of unintentionally violating U.S. law and suffering the adverse consequences. BNP Paribas, a major French bank, was fined nearly $9 billion in 2014 for violating U.S. sanctions against Iran, Cuba, and Sudan.”

The new administration in White House has also complicated the situation. Though Donald Trump has kept largely silent about the nuclear deal after assuming office but this has further convoluted the situation that has resulted in an increased reluctance of businesses to invest. But the most important aspect is the fact that businesses and corporations are drooling over the untapped market of Iran, which for years remained isolated. They want to exploit the skilled, young, and cheap labour of Iran to raise their rates of profit. The neo-liberal economic recipes of Hassan Rouhani will enrich a few on the top and millions of ordinary Iranians will be subjected to harrowing poverty and exploitation. The growth rates will somewhat rise but very little will trickle down to the impoverished masses. India is also ‘shining’, after all, with its highest growth rate in the world and at the same time half of the very same India has no toilet. This will aggravate tensions and polarization in a society where intense class struggles impend in the near future.

Iran’s Regional Outreach

After the landmark nuclear deal reached between Iran and world’s five major powers plus Germany (P5+1) the Iranian Mullah aristocracy as a whole has become stronger and its regional outreach has grown more assertive. The organic crisis of world capitalism forbids American imperialism from continuing its decades’ long aggressive policy which it applied in much of the latter half of the twentieth century. The defeats in Afghanistan and Iraq, the retreat in Syria and above all the economic crisis, all contributed to the reduced role of American imperialism in the Middle East and paved the way for other regional imperialists’ to raise their heads. Iran is one of them.

An ancient proverb says, “Those whom the gods wish to destroy they first make mad”. American imperialism out of his arrogance and might, invaded Iraq in 2003 to teach a lesson to Saddam and also to surround Iran in anticipation of its future invasion. This madness resulted in the total destruction of Iraqi state and army, the dismantling of balance of power in the Middle East and the rise of Al-Qaeda, Daesh, and numerous other fundamentalist outfits. This paved the way for Iran to intervene in Iraq. Far from encircling Iran, the Iraq war became another Vietnam for US imperialists. The war in Iraq cost America about $2 trillion. And the outcome is a government which is inclined towards Iran. The new Iraqi army built and trained by America was so impotent that it swiftly disintegrated before ISIS. The Iranian-backed Shia militias were the main fighting forces that captured many cities and towns from ISIS.

The mass movement that arose in 2011 in Syria was drowned in blood and degenerated on religious sectarian lines. American imperialism and its regional Arab allies created and nurtured their religious proxies to overthrow Bashar Al Assad, a key Iranian ally. Syria became the battleground for the proxy war of regional rival powers mainly Saudi Arabia, Iran, Turkey, Russian, Qatar etc. When the Frankenstein monster of ISIS went out of control and threatened the regional interests of American imperialism, it was the Iranian Shia militias and Lebanon’s Hezbollah that proved to be an effective fighting force. American imperialism needed Iran to clean up their mess in the Middle East. US imperialism has understood that the collapse of Assad regime will further destabilize the region and endanger its interests. That’s why they swallowed Iranian role in Syria grudgingly. Now thousands of Iranians are fighting in Syria to prop up the Assad regime.

Lebanon’s recent presidential election also marked the increased role of Iran in the country. The Saudi-backed leader of Future Movement Saad Hariri finally accepted to support the Hezbollah-backed Michel Aoun to become Lebanon’s president. The election of Michel Aoun marks the reduced role of Saudi Arabia in Lebanon. But things are not as smooth as they seem on the surface, as an expert commented recently, “We are facing a breakthrough with the election of a president, but a minefield the day after.” The diminishing role of Saudis will bring further conflagration in the region. The Saudis will not just sit and see the Iranians capturing one country after another.

Will Nuclear Deal Survive Trump?

During his election campaign, Donald Trump described the nuclear agreement as the “worst deal ever” and vowed to dismantle it once he comes to office. But ever since he entered the White House, he has been evasive on the deal. Though he has issued several fiery statements targeting Iran and imposed sanctions on 25 individuals and entities, nevertheless, he didn’t talk about scrapping the nuclear deal altogether. It seems that the American ruling class, as of now, has no better choice than the current deal. Their Gulf allies are also convinced about the inevitability of the nuclear deal. Senior Saudi Prince Turki al-Faisal, the former intelligence chief said, “I don’t think he should scrap it. It’s been worked on for many years and the general consensus in the world, not just the United States, is that it has achieved an objective, which is a 15-year hiatus in the program that Iran embarked on to develop nuclear weapons.” Prince Turki further said, “To scrap that willy-nilly as it were will have ramifications, and I don’t know if something else can be put in its place to guarantee that Iran will not go that (nuclear) route if the agreement is scrapped”.

Perspectives For Mass Movement

The ruling Mullah regime has always blamed American and Western imperialism for the economic hardships of the Iranian masses. They have been using the anti-imperialist sentiments of the masses to blur the class polarization and conflict in the Iranian society. The clerics’ despotic regime severely represses the political activists. The Iranian masses and youth have time and again shown their resolve to fight back the injustices and the economic onslaught of the regime. There have been innumerable protests for the payment of outstanding salaries, political repression, and economic hardship.

On Sunday, January 15, this year, workers from Hepco Co. in Arak were protesting five months of unpaid wages and demanding to be paid their outstanding wages and benefits. This was the sixth day of their rally. Steelworkers from Energy-Gostar protested the unjust firing of many workers and two months’ unpaid salaries. A spokesperson for the workers said: “The company’s excuse is not receiving the raw material, so they had to let a number of workers go. This was unjust since the workers were not even paid their previous salaries.” This was their second consecutive day of protest.

Recently, protests erupted over pollution in Khuzestan province. According to a report, “Eleven cities in Khuzestan, which has a population largely composed of ethnic Arabs and Lurs, lost power last weekend after an intense dust storm, leading to water shortages when water and wastewater treatment plants were knocked offline. Protests against the outages, which have lasted for several days, eventually spiraled into demonstrations against wider environmental problems in the region and even against the Islamic Republic itself, raising alarm among political figures. The demonstrators chanted “Death to tyranny”, “We, the people of Ahwaz, won’t accept oppression” and “Clean air is our right, Ahwaz is our city” while also calling on the governor of the province to resign.”

In future, there will be more such protests on higher a scale with intensified militancy and courage. The opening up of the economy to global corporations will further increase the exploitation of the working class and seething revolts can erupt. The capitalists will reap the benefits of the economic growth and the workers will pay for it. It will be a perfect recipe for a social explosion.