The EU, Russia and China work on a mechanism through which they can continue to develop economic relations with the Islamic Republic of Iran
”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. The quote has gained prominence among Iranian Studies scholars in the West. Davari’s words sound pointedly in the international context after Donald Trump came to power in the United States and reinstated the draconian sanctions against the Islamic Republic.
In the first week of November 2018 Iran was removed from 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, and also have to reduce the import of Iranian oil. The return of sanctions is an obvious attempt to isolate Iran, just as it was isolated in the times of its former president, Mahmoud Ahmadinejad, who created divisions at home and abroad. Nevertheless, the picture could be different now. Isn’t Davari’s prophecy for the West, which starts to crumble from within, coming true with regard to and as a consequence of Iran’s existence?
The picture seems 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 on having 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 isolation and marginalisation, the permanently smeared Persian-speaking country relies a lot on diplomacy, and not the politics of power.
The Iranian ambassador to Great Britain, Hamid Baeidinejad, said that his country had “a total loss of confidence” in negotiations with the US, but is trying very hard with Europe, China, and Russia “to find mechanisms [so] 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 a] key element of the global nuclear non-proliferation architecture and of multilateral diplomacy.” The European diplomats reaffirmed, “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.” Not earlier than 2019 the EU will employ a mechanism through which it will barter with Iran, and thus avoid the American sanctions.
The removal from the SWIFT system blocked the possibility for Iranian banks to do financial transactions with the world. 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 countries 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 new sanctions against Iran.
According to the Russian foreign minister, Sergey Lavrov, the anti-Iranian sanctions which were introduced by the US are illegal, because they violate a decision by the UN Security Council. A few days before sanctions were enacted Iranian, Russian, and international media reported that the Islamic Republic would circumvent the sanctions by using the Russian system for financial payments, SPFS. At the moment, the system is an internal Russian one and its first transaction was completed in December 2017. Russian representatives admit that they have technical problems to resolve in order to be able to use the system with foreign partners-such as Iran, China, and Turkey – but also add that talks with Iran are in an advanced stage.
On the eve of the sanctions announcement, China started reducing the quantity of Iranian oil it buys. It is expected that Beijing will use 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 outside of the EU. It doesn’t intend to liberate all trade with Iran from sanctions, but has to permit a sufficient part of it to take place, so that Tehran is encouraged to keep respecting the nuclear agreement.
In the meantime, Wall Street Journal writes that Russia also intends not to respect the sanctions and will buy Iranian oil. Moscow and Tehran will probably use a barter programme, which they have been negotiating in the last few years.
Apart from the big geopolitical equations, the anti-Iranian sanctions will grow the price of goods in Iran, including food and medicines, and will increase the stress upon the common Iranian citizen. By creating a new existential threat against Iran, Trump increases the influence of the Revolutionary Guard — an army which is loyal ideologically to the Islamic character of the state. The Guard is considered a hostile force by the West, but its influence on the country’s economy has grown, mainly in the last 15 years, when the sanctions against Iran increased significantly. Former president Mahmoud Ahmadinejad, the only head of the government after 1979 who hasn’t been a cleric, comes from the ranks of the Revolutionary Guard. He ruled in the period 2005-2013 and became notorious not only for the massive protests against his reelection 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 may be giving 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 infrastructure projects and on construction of social houses, so that oil money “reaches the dinner tables of the people.”
A few years ago, the balance of power within the EU was rearranged by Greece’s debt crisis, and this balance may shift again with the loss of Great Britain as a member in the spring of 2019. Iran and the sanctions against it also have the strength to provoke changes in the global arena. Trump has made the latest, successive, American attempt to isolate Iran, which has been an object of sanctions ever since its establishment in 1979. Could it turn out that by sanctioning Iran, Trump isolates himself?
Photo: Checkmate comes from the Persian ”shah” (king) and ”mat” (dead) (Pixabay, CC0)
Vladimir Mitev is a Bulgarian-Romanian journalist based in Rousse, a town on the very border between the two countries. He is the editor-in-chief of the Romanian website BARICADA Romania, which initially started as a Romanian language version of the Bulgarian portal by the same name. He focuses on international politics. He has worked for the Bulgarian weekly “Tema” until its closure in 2015. He founded the bilingual Romanian-Bulgarian blog ”The Bridge of Friendship”. His articles and translations have been published by the BGNES agency, the magazines of A-specto and Economy, the blog of ”Solidary Bulgaria” and others. His articles and interviews have appeared in the Romanian magazines Decât o Revista, 22 and Q Magazine, in the Romanian cultural magazines of Vatra and Poesis, and in the Romanian left-wing portal Critic Atac. At present, he makes a Ph.D. research on new Iranian literature before the Islamic Revolution at the University of Sofia. Starting from June 2020 he develops in English, Romanian, Bulgarian and other languages the blog “The Persian bridge of Friendship”, which deals with the Persian-speaking world.