by Pepe Escobar for the Asia Times
The shift in the global balance of financing power towards Russia, India and China — especially China — is opening up opportunities for Tehran
It’s a beautiful late winter morning, the snowy Alborz mountains glittering under the sun, and Professor Mohammad Marandi from the faculty of world studies at the University of Tehran is taking me on the road, westbound.
Sprawling west Tehran is a decentralization/connectivity spectacular, with its brand new highways, metro lines, artificial lakes and megamalls. While not on the epic scale of the construction rush in Beijing or Shanghai, it is similar in spirit and comparable to what’s going on in Istanbul.
The professor — arguably Iran’s leading political and cultural analyst —and I had been on a running conversation for days on all aspects of an evolving Russia-China-Iran strategic partnership, the massive Eurasia integration project pushed by China, and its myriad interconnected challenges.
Watching west Tehran go by, it was hard not to connect this new normal to the atmosphere of excitement surrounding the Iran nuclear deal struck in Vienna in the summer of 2015. But this had actually started even before President Hassan Rouhani came to power in 2013, “linked to Iran’s stability and rising regional status,” Marandi said.
Cue to the former head of the Iranian National Security Council’s Foreign Relations Committee and professor at Princeton, Seyed Hosein Mousavian. He has been adamant that “America’s four-decade push for regime change in Iran is a failure.” On the nuclear deal, Mousavian noted, regarding the Trump administration rumble, “it is 170 pages, too much technicalities, they might not have time to go through different resolutions – and therefore they really don’t know what they’re talking about.”
The implementation of the deal should have signaled the acceptance of Iran by the West – hence renewed trade and commerce. Instead, the new normal points towards the China-driven New Silk Roads, Asian Infrastructure Investment Bank and Shanghai Cooperation Organization, and the Russia-driven Eurasia Economic Union; and towards Iran, alongside other emerging economies, seeking infrastructure finance and foreign investment from BRICS nations, especially the RIC triumvirate. In sum: look east.
Tehran did sign a rash of memorandums of understanding with French industry. But the heart of the trade and investment action is China. When President Xi Jinping visited Tehran in January last year, Rouhani said, “Iran and China have agreed to increase trade to US$600 billion in the next 10 years.”
Most deals, of course, involve oil and gas – but crucially they also span cooperation on nuclear energy and Iran’s positioning as an absolutely crucial hub of One Belt, One Road.
Compared to it, Russia-Iran trade, at almost US$2 billion last year, is not exactly newsworthy, although rising rapidly.
Post-sanctions, Russia-Iran signed almost US$40 billion in MoUs – but projects are mostly still only on paper. The problem is the overwhelming majority of Iranian companies are cash-strapped, so financing should come from Russian sources. “Secret code” exports – as in weapons – are back, as in the US$900 million contract for the S-300 defense missile systems, the first batch delivered to Iran last April.
The real secret though in reference to incipient trade is that Russia and Iran do not have much to exchange at globally competitive rates. Russia exports mainly metals, wood, electrical machines, paper, grain, floating structures, mechanically engineered products and weapons. Iran exports agricultural and seafood products.
With India, the heart of the matter is the development of the port of Chabahar. Here’s where China’s Maritime Silk Road meets India’s drive to connect the Indian Ocean to Afghanistan bypassing Pakistan and the China-Pakistan Economic Corridor.
Enter Indian investment on the Chabahar-Zahedan railway, ending in Sistan-Balochistan, close to the Pakistani border, as well as in the still-in-planning Chabahar-Hajigak railway, which translates as a direct connection to Afghanistan. All this spells out Iran blooming as a crucial integration/connectivity hub for China, India and the intersection of South and Central Asia.
On the energy front, the news is also encouraging. According to the head of National Iranian Oil Company, Ali Kardor, by next month Iran will be producing 4 million barrels of oil a day (there was a peak at 4.2 million before sanctions were tightened in 2011).
Iran used to be the second-largest OPEC producer. Sanctions forced it down to 2.5 million barrels a day and exports of just above 1 million. Now it’s back to OPEC’s number three, behind Saudi Arabia (10 million barrels a day) and Iraq (4.5 million).
Natural gas production will reach 1.3 billion cubic meters a day by 2021. For that to happen, NIOC needs to drill at least 500 new offshore wells. The problem is NIOC is deep in US$50 billion of debt; not only because of low oil prices but also bad financial and management decisions. Royal Dutch Shell and Total are keen to strike deals, but nothing has been signed yet.
Once again, I got a similar figure to what NIOC provided me roughly 10 years ago; Iran needs at least US$200 billion to upgrade its energy industry infrastructure, and to really start profiting from an astonishing US$7 trillion in gas reserves. It’s fair to assume substantial funds could be provided, eventually, by the AIIB and other sources from Russia and China. Deputy Oil Minister Amir Hossein Zamaninia expects major developments “in a few months.”
Socially, Iran is not a powder keg. The average standard of living improved roughly 70% since the Islamic revolution. Women accounted for 70% of Iran’s science and engineering students in 2015. The healthcare system, by 2014, was the 30th most efficient in the world, way ahead of the US (in 50th).
Much will depend on the upcoming presidential elections. Former president Mahmoud Ahmadinejad was politely dissuaded by Supreme Leader Ayatollah Khamenei, in person, from running again. Marandi confirms President Rouhani, up for re-election, is way less popular than Foreign Minister Zarif, who in turn is less popular than the number one superstar: Major General Qassem Soleimani, the head of the elite Quds Force — who’s not running for office. The reason for Rouhani’s woes; his record on the economy has been far from stellar.
Tehran will soon drop the US dollar in its financial and foreign exchange reports. That will certainly imply more currency swap agreements, and Iran only accepting payment for oil and gas in euros or in a basket of currencies.
Iran trades mostly with China, the EU and the UAE. Trump claimed during his campaign that Iran was handed a US$150 billion gift by the nuclear deal. Not true. The Central Bank’s frozen oil funds repatriated since January 2016 from the UAE, Britain, India, Greece, Italy and Norway amount to less than US$10 billion. And only US$12 billion of blocked assets were released from Japan, South Korea and India, on installments.
Before we arrived back in Tehran, Marandi told me that all in all, “ I believe whoever invests now in Iran will have an amazing return. The time to invest is now.” The RIC in BRICS are doing it. Europeans are doing it – although not much so far. And Americans are not doing it – at their loss. We wrapped it up at a traditional Iranian restaurant downtown, serving first-class food to middle and upper middle class families. The bill: less than US$30 for two. A fabulous return on investment.
Good news from one of the best!
Thanks for the investment tip. I am uncertain that the US won’t turn it into an Iraq, Libya, Syria, Ulraine…. It’s prospects as one of the few countries without a Global-controlled central bank are not good. And it has heaps of gold and oil to steal.
It is one of the last counties to be subdued as per Gen Wesley Clark’ “we’re going to take out 5 counties in 7 years” conquest plan.
Gen.Clark was told about the New American Century’s plan “to take out 7 countries in 5 years” around 10 days after the Bush regime staged the WTC atrocity. That was Sept 2001, how have the conspirators’ plans fared? Not too badly: Iraq, Syria, Somalia, Libya, Sudan and Yemen have been “taken out” ie more or less destroyed – Iran alone has not been invaded. Of course it took 15 years, not 5, and Syria still “stands bloody but unbowed”, but all-in-all a nice fat profit for a tiny handful of “the elite” from all that lovely looted oil, gold, banking service and antiquities. Nevertheless, I believe the confidence of the Iranians in their future is not misplaced; the world may be shifting away from its North-South axis of the past 500 years, and returning to its much older East-West axis – along what Pepe calls The New Silk Road.
And don’t think for one second the Rothschild/Soros/et. al. banksters are not trying to get their filthy debt-hooks into Iran and all the BRICS+. Russia showed how to do it, keep the banking/oligarch bastards under strict control, build physical gold reserves as a hedge against the currency manipulators and don’t allow them to drive the Debt/GDP ratio to where they can crash the economy by remote leverage.
Why the rush to production? They need to borrow 200B to tap 7T? If they ran their exports like a traditional Persian business, they’d never borrow the money, they’d grow slowly, safely, and without the hooks of the modern investment vultures*.
*colloquialism. Not intended to be disparaging to large birds.
Here’s everything that’s wrong with Iran in one sentence:
“Cue to the former head of the Iranian National Security Council’s Foreign Relations Committee and professor at Princeton, Seyed Hosein Mousavian”
If the former head of the Russian National Security Council’s Foreign Relations Committee left his homeland during the Yeltsin era to teach at an American Ivy League university, he’d be derided as a “sell out”, “puppet”, “pawn”, etc., but it happens in Iran and it’s suddenly applauded without a second thought.
This isn’t a defense of Yeltsin by any stretch of the imagination, just a different way of looking at this in order to highlight the double standards and deification which go into alternative media reporting about Iran.
The Rothschilds are investing heavily in Russia. I bet they are doing, or will do, the same in Iran.
The difference is, Putin has shown the Rothschilds what will happen to their “investments” if they don’t behave. He has quietly investigated, charged and jailed a few of their vassal oligarchs, then stripped them of their ill-gotten gains. That’s what the “sanctions” were about, the US/EU/Zionist banksters freezing Russian international assets in an attempt to stop that cash from going back to Russia.
Putin played the Rothschilds, not the other way around. The Rothschilds can pull out their investment tentacles if they choose, but then risk losing a stake in one of the most solid economies in the world today. Given all indications of the imminent beginning (March 15, Fed interest hike, Obama’s US debt ceiling holiday ends, etc.) of the Rothschild’s plan to collapse the US/EU economy and blame it on Trump, Russia/China (and now Iran, if Pepe is accurate) is the new safe-haven for investment. But the Bilderbergs are not in control of Russia’s economy or banking system.
Ditto for Iran, all the $$$ “given” to Iran as part of the “nuclear deal” were actually frozen assets the US stole after the Shah was booted from power. Odd, the MSM was completely silent about the origins of Iran’s nuclear industry… “Atoms for Peace”, where the US handed the psychopathic Shah nuclear technology. What could go wrong? The far more peaceable Ayatollah’s did the world a favour, otherwise we’d have had another former “staunch ally” lunatic with WMD’s supplied by… the US/NATO.
Saker, Do you read what the pentagon is saying about the nuclear capabilities of USA?
Two other essays by Pepe, both excellent reads! http://www.atimes.com/article/wikileaks-trove-fails-shift-dial-trump-putin-narrative/ https://sputniknews.com/columnists/201703071051346892-total-screen-how-baudrillard-anticipated-trump/
Now we know how the CIA hacked the Iranian laptop used as the #1 bit of “evidence” of its bomb program: “Hence, these capabilities were used in partnership with the Israelis to create a constructed/fabricated false/flawed nuclear warhead design/development data cache and ‘implant’ that on a secure Iranian researchers laptop. That laptop was subsequently conveniently physically ‘obtained’ and passed on as faux evidence to the IAEA and formed the basis of endless false assertions and propaganda for many years.” http://www.moonofalabama.org/2017/03/cia-leak-russian-election-hackers-may-work-in-langley.html#c6a00d8341c640e53ef01b7c8de97b9970b
Good to see Pepe back on Asia Times, it was careless of them to misplace him for so long. Looking back at those days, Escobar was the only journalist who could see those armed Toyotas zooming over the desert toward SyRaq, predicted that Mrs.Victoria (F*k-the-EU) Nudelman-Kohen’s Jewkrain would end up as a basket case that really did F*k the EU, coined the keyword Pipelinistan to cover all the shenanigans in ME, Central Asia and SE Europe, and predicted the rise of the New Silk Road.
Interesting things are afoot in Russia. A group of truckers have proposed mass strikes involving the refusal to deliver goods. Their demands: – get rid of a road use tax, eliminate restrictions on working hours, justify fuel excise duty – and the dead give away – Putin must resign.
https://z5h64q92x9.net/proxy_u/ru-en.en/colonelcassad.livejournal.com/3292684.html
What stocks are available in the U.S.?
Ayatollahs in İran against western culture and economy. it is very difficult to deal with iran