2 October, 2023
The word ”checkmate” comes from the Persian ”shah” (king) and mat (dead) (photo: Pixabay, CC0)

The EU, Russia and China work on mechanism through which they could continue developing economic relations with the Islamic Republic

Vladimir Mitev

This article was published on 9 November 2018 on the site ”The Barricade”. 

”Our revolution was not a fundamentalist revolution advocating a return to the past…. The progress we are familiar with was the modernity we experienced before the revolution and we saw that it did not lead to benefits and progress in our society…. Our revolution was not for creating a completed version of new modernity, however, until the time the West starts to crumble from within, not only do we not oppose technology and technological knowledge, but truly embrace this new knowledge.”, says the Iranian philosopher and president of the Iranian Academy Reza Davari in a quote, which has gained prominence among the Iranian Studies scholars in the West. His words sound pointedly in the international context after Donald Trump came to power in the United States and the draconian sanctions against the Islamic Republic returned.

In the first week of November 2018 Iran was taken off the international system for financial transactions SWIFT. It was announced that only eight countries still have the right to buy its petrol – so far for only 180 days, but they also have to reduce the import of Iranian oil. The return of the sanctions is an obvious attempt to isolate the Islamic Repubic, just as it was isolated in the times of its former president Mahmud Ahmadinenjad, who created divisions at home and abroad. Nevertheless, the picture could be different now. Isn’t Davari’s prohecy for the West, which starts to crumble from within coming true with regard and as a consequence to Iran’s existence?

The picture could be different in comparison with 2012, when similar sanctions were enforced, because now plenty of international powers – with the exception of the USA and Israel, insist to have good relations with Iran. It is not only an important market and regional power, but also a country, which respects the clauses of the nuclear agreement of 2015, and searches for multilateral and mutually beneficial cooperation in international relations. Iran doesn’t have the military budget of the United States, Israel or Saudi Arabia. The shiites are a minority in the global community of muslims. Therefore, we should not be surprised that in order to avoid its isolation and marginalisation, the permanently smeared persian-speaking country relies a lot on diplomacy, and not on politics of power.

The Iranian ambassador to Great Britain Hamid Baeidinejad said that his country had “a total loss of confidence” in the negtiations with the US, but is trying very hard with European countries, with China and Russia, to find mechanisms that the nuclear deal could (still) be effectively implemented.”. In this spirit the foreign ministers of the EU, Great Britain, France and Germany came out with a statement, that they “deeply regret the further re-imposition of sanctions by the US, and the US withdrawal from the nuclear agreement, which is “key element of the global nuclear non-proliferation architecture and of multilateral diplomacy”. “Our aim is to protect European economic operators engaged in legitimate business with Iran, in accordance with EU law and with UN Security Council resolution 2231”, say the European diplomats. Not earlier than 2019 the EU will start a mechanism, through which it will do barter with Iran, avoiding the American sanctions.

The deconnection from the SWIFT system blocked the possibility for Iranian banks to do financial transactions with the worl. When Iran was out of this system a few years ago, it used barter in its relations with a lot of the economic partners. Even then there were countres, whose banks or citizens were breaking or circumventing sanctions – such as Turkey. The Turkish president Recep Erdogan has already said that his country will not respect the sanctions against Iran.

According to the Russian foreign minister Sergey Lavrov the anti-Iranian sanctions, which were introduced by the USA, are illegale, because they violate a decision by the Security Council of the UN. A few days before sanctions’ entering in force, Iranian, Russian and international media reported that the Islamic Republic will circumvent the sanctions, using the Russian system for financial payments SPFS. At this moment the system is internal Russian one, and the first transaction through it was accomplished in December 2017. Russian representatives admit that they have to resolve technical problems in order to be able to use the system with foreign partners – such as Iran, China and Turkey, but also add that the talks with Iran are in an advanced stage.

On the eve of sanctions’ announcement China started reducing the quantity of Iranian oil it buys. It is expected that Beijing uses the special mechanism of the EU for trade with the Islamic Republic.

The chief of European diplomacy Federica Mogherini underlined that the mechanism will be open to countries out of the EU. It doesn’t intend to liberate the whole present trade with Iran from sanctions, but has to permit a suffient part of it to take place, so that Teheran is encouraged to keep on respecting the nuclear agreement.

In the meantime WSJ writes that Russia also intends not to respect the sanctions and to buy Iranian oil. Moscow and Teheran will probably use a barter programme, over which they have been negotiating in the last years.

Apart from the big geopolitical equations, the anti-Iranian sanctions will grow the price of goods in Iran – including of food and medicines, and thus they will increase the stress upon the common Iranian citizen. By creating a new existential threat against the Islamic Repbulic, Trump increases the influence of the Revolutionary Guard – an army, which is layal ideologically to the Islamic character of the state. The Guard is considered by the West as hostile force, but its influence as economic subject in the country has grown namely in the last 15 years, when the sanctions against Iran increased significantly. The president Mahmud Ahmadinejad – the only head of the government after 1979, who hasn’t been a cleric, comes from the ranks of the Revoutionary Guard. He ruled in the period 2005-2013 and became notorious not only with the massive protests against his elections, when his second mandate started in 2009, but also with extreme words against Israel. In the present conditions Ahmadinejad criticises the pro-western president Hassan Rouhani and probably gives signs that he could return to politics. While Rouhani’s government is technocratic and neoliberal in its essence, Ahmadinejad built his rule on state investment in infrastructural projects and on construction of social houses, so that the oil money “reach the dinner tables of the people”.

A few years ago the debt crisis of Greece led to rearrangement of the balances in the EU, which will lose Great Britain as its memebers in the spring of 2019. Iran and the sanctions against it also have the strength to provoke changes in the world. Trump makes the successive American attempt to isolate the Islamic Republic, which has been an object of sanctions ever since its establishment in 1979. Wouldn’t it turn out that by sanctioning Iran Trump isolates himself?

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