By Mitra Amiri and Robin Pomeroy
TEHRAN | Wed Jan 25, 2012 8:29am ES
(Reuters) – Iran increased bank interest rates on Wednesday and indicated it would further restrict sales of foreign currency, hoping to halt a spiraling currency crisis after new Western sanctions accelerated a dash for dollars by Iranians worried about their economic future.
“The economy minister has announced that (Iranian President Mahmoud) Ahmadinejad has agreed with the approval of the Money and Credit Council to increase interest rates on bank deposits to up to 21 percent,” the official IRNA news agency reported.
The central bank also told Iranians they should only buy dollars if they are travelling and not hoard them to guard against economic uncertainty.
New U.S. and European sanctions targeting Iran’s vital oil exports and its central bank seriously exacerbated a slide in the Iranian currency that was already under way, creating what one senior politician described as economic instability not even witnessed during Iran’s 8-year war with Iraq in the 1980s.
The West hopes the economic pressure will force Iran to curb the nuclear work they fear is aimed at making bombs but which Tehran says is entirely peaceful.
The rial started weakening after a decision last April to cut interest paid on bank deposits to a range of a 12.5-15.5 percent, below inflation which is currently around 20 percent, prompting many Iranians to withdraw savings and buy gold and foreign currency and pushing up the price of both.
The dash for those safe havens accelerated sharply after the new sanctions were announced, resulting in the rial losing 50 percent of its value against the price of dollars available on the open market in just one month.
Monday’s decision marks a policy U-turn for Ahmadinejad, who faces a political test in March 2 parliamentary election. He previously vetoed efforts by Central Bank Governor Mahmoud Bahmani to increase rates.
Bahmani indicated the rate increase would be accompanied by further restrictions on the sale of foreign currency.
“We will provide foreign currency in any amount for people demanding it for various uses,” he said in an interview published on the website of state broadcaster IRIB.
“Travelers, university students and patients will be supplied at an appropriate rate,” he said. Importers of vital goods would also be able to buy as much foreign currency as they need.
“The government will not give foreign currency for storage,” he added, implying that Iranians will no longer be allowed to exchange their rials for hard currency unless they can prove an immediate need.
The rial’s slide is a huge risk to already rising inflation as Iran is heavily reliant on imported consumer and intermediate goods whose prices have surged as the rial has depreciated.
“Government officials and the president himself should definitely be held accountable to people and public opinion.”
Ahmadinejad’s representative in parliament – which is already highly critical of the president and may become more so after March 2 – said the new policy would burst what he called the bubble of gold and dollar prices.
“The effects of the new decision will be clear in the market very soon and the bubbles being created for foreign currency and gold will be removed,” the ISNA news agency quoted Mohammad Reza Mirtajedini as saying.
The deputy head of parliament’s economics committee criticized the government for reacting late to the crisis which he said had “no reasonable, logical basis.”
“Increasing the bank deposit interest rates is an appropriate tool for people’s investments but doing it in a hasty manner and the current inflamed situation of the market will not solve any problem,” Mostafa Motavarzadeh told the semi-official Fars news agency.
The price of 8.133-gram gold coins dropped on the news, local media reported, to 8,500,000 rials, reversing most of last week’s 45 percent increase when the price rose to 10,100,000.
The effect on the price of dollars was negligible however with ISNA saying the price had fallen on the news to 22,500 rials from 23,000 rials – still double the central bank’s official “reference rate” of 11,293 rials.
However, exchange agencies contacted by Reuters said they had no dollars to sell, reflecting either a shortage of notes or a reluctance to sell in such a volatile atmosphere.
- Iran bans foreign currency trading on the street (seattlepi.com)
The Iranian president, Mahmoud Ahmadinejad, is due to touch down in Venezuela on Sunday on the first leg of a Latin American tour aimed at lifting his regime out of international isolation and bolstering its sanctions-hit economy.
Ahmadinejad, who is facing growing economic discontent at home and pressure from the west over Iran’s disputed nuclear programme, will also visit Nicaragua, Cuba, Ecuador and possibly Guatemala in a search for new and improved economic partnerships to reduce the impact of sanctions. The five-day Latin America visit is scheduled to start in the Venezuelan capital, Caracas, with meetings with president Hugo Chávez, a long-time ally.
Ahmadinejad is then expected to travel to Managua for the swearing-in of the Nicaraguan president, Daniel Ortega, before travelling to Cuba and Ecuador. Reports suggest he may also visit Guatemala.
The president’s entourage is expected to include the energy minister, Majid Namjoo, who has said the tour is aimed at promoting commercial ties with Latin American countries. Analysts view Ahmadinejad’s excursion as a reaction to growing economic difficulties at home and political isolation abroad.
Michael Shifter, president of the Washington-based thinktank Inter-American Dialogue, said Iran had economic and geopolitical agendas in Latin America.
“Iran has real economic difficulties and is isolated, so the trip makes sense in that context,” he said. “Latin America, in contrast, is in pretty good economic shape and is increasingly active in global, diplomatic affairs.”
Maria Teresa Romero, professor of international studies at the Universidad Central de Venezuela, said the trip was also intended as a warning signal to Washington.
“That Iran’s president has chosen to visit the region – and only the more staunch political opponents to the US – at a moment when tensions between the US and Iran are escalating is a challenge, a threat, from the Iranian government to the US that sends a clear message: ‘We can go to your backyard when we want to,'” she said.
Iran is grappling with a range of domestic and international problems.Its currency, the rial, has plunged to a record low in recent weeks, causing mayhem at the Iranian stock market and prompting fears over the future effects of the sanctions on the economy.
High unemployment, political power struggles and fears of unrest before the parliamentary elections in March have made the domestic political atmosphere increasingly tense.
At an international level, Iran has resorted to sabre-rattling and threatening countries involved in a campaign to bring sanctions against its central bank and impose a ban on the import of its oil.
Iran raised the stakes, warningthe west it might close the strait of Hormuz, a strategically important passageway in the Gulf through which one fifth of the world’s oil is transported, should greater sanctions on its oil be imposed.
Latin America has become an increasing priority for Ahmadinejad since his election in 2005. New embassies have opened in six countries, while state-run Press TV has also been beefing up its presence in the region, with correspondents in Caracas and more recently Sao Paulo.
On the eve of Ahmadinejad’s visit, one Press TV report said: “The promotion of all-out co-operation with Latin American countries is among the top priorities of the Islamic republic’s foreign policy.”
But Shifter said Iran’s president should not hope for big advances during his tour. Ahmadinejad will not visit Brazil, the regional economic powerhouse, as he did during his previous visit in 2009 – an indication that relations have cooled since Dilma Rousseff took over as president.
“Iran should probably keep its expectations in check. If Iran’s goal is to extend its influence, Latin America does not offer a hospitable environment. It is telling that the larger, more significant countries are not part of Ahmadinejad’s itinerary. These countries may want greater independence from Washington, and may be flexing their muscles a bit on the global stage, but they are not keen to be aligned strategically with Tehran,” he said.
Romero said that in the case of Hugo Chávez, who faces a tricky presidential election in October, the visit could even backfire.
“This is an electoral year in both the US and Venezuela, and I would be surprised if the Republicans don’t use this kind of event to exert more pressure on the Obama administration. I think sanctions against Iran are likely to strengthen, but I also think they could be extended to Venezuela.”
- State Department: Ahmadinejad Trip to Latin America a Sign of Desperation (foxnews.com)
- US: Iran ‘flailing’ for friends in Latin America (seattletimes.nwsource.com)
- Iran Leader’s ‘Tour of Tyrants’ Raises Concerns – Military.com (m.military.com)
- Iran accused of diplomacy offensive in US backyard (smh.com.au)
- Iran Seeking To Expand Influence In Latin America (mysanantonio.com)
- Iranian president expected to visit Latin America – Los Angeles Times (latimesblogs.latimes.com)
Iran‘s counter-narcotics programme results in hundreds of executions each year, yet western powers still support it
An ogre floats behind 30 tonnes of narcotics, as they are burned in Tehran on World Anti-Drug Day. Photograph: Vahid Salemi/APFazel Hawramy guardian.co.uk, Tuesday 6 December 2011 04.09 E
Representatives of more that 50 countries will meet in Vienna shortly to determine the level of international support that Iran receives for its continuing war on drugs.
This comes amid concern about the increasing number of executions for drug-related offences in Iran. Six more people were recently hanged in the city of Kermanshah – executions that a senior figure in the judiciary described as “one of the triumphs of Iran”.
As part of the counter-narcotics programme, Iran receives a constant flow of technical support from the UK, the US and other western governments, either directly or through the United Nations Office on Drugs and Crime (UNODC).
Last month, Yury Fedotov, head of the UNODC, said he would “encourage the international community to bolster counter-narcotics” efforts in Iran, Afghanistan and neighboring countries. However, he made no mention of the consequences of supporting the current Iranian government in this way.
The UNODC started its work in Iran in 1998 – one year after the reformist president Muhammad Khatami came to power on a platform of respect for civil society and the rule of law. It played a crucial role in supporting Iran’s health ministry from 2002 to 2005 to implement a “harm reduction” programme to tackle rising rates of drug addiction and HIV.
But progress was reversed when Mahmoud Ahmadinejad became president in 2005. One of his first acts was to appoint a new interior minister: Mostafa Pourmohammadi, an infamous cleric who had ordered and supervised the execution of several thousand political prisoners in 1988.
Ahmadinejad’s brother-in-law, Esmail Ahmadi-Moghaddam (the former head of the Basij paramilitary force, and now head of the national police), was put in charge of the technical assistance received by the UNODC. Senior health ministry officials were sacked and many medical professionals, including the world-renowned Alaie brothers, were imprisoned.
Others, like Dr Bijan Nassirimanesh, the founder of the Persepolis NGO clinic, were forced out of Iran. Academics were banned from participating in international conferences and clinics dealing with drug users at a grassroots level have either closed down or had their activities dramatically reduced.
Ahmadinejad also tried to change the nature of Iran’s relationship with the UNODC. According to Roberto Arbitrio, a former UNODC field representative in Tehran, Iran made a request in July 2006 to the UNODC for equipment worth $500m, which was “riddled with requests for dual-use items”.
It is not clear if Iran received any of these items but a confidential cable released by WikiLeaks appears to show that the head of Iran’s drug control department blackmailed the UNODC’s representative by suggesting that if the agency did not meet the wishes of Iran, the Islamic republic might “reconsider the scope of its own efforts against the traffickers”.
The UNODC and the EU, UK and US seem to have missed the changes Ahmadinejad has made as they have continued to provide invaluable support for its counter-narcotics programme.
Two years into Ahmadinejad’s presidency, the UNODC brokered a new deal through the Paris Pact to launch the Triangular Initiative – a programme of support for Iran, Afghanistan and Pakistan in reducing the flow of drugs to the west. As a result, Iran has managed to bypass the sanctions imposed by the UN, the EU and the US to receive body scanners, drug detecting kits, drug catalysts, sniffer dogs, vehicles, night-vision devices and radio communication equipment. It cannot be ruled out that some of this equipment was used by the police to crush the pro-democracy demonstrations in 2009.
In 2010, the British Foreign Office stated in a report that “for … drug-related and political cases, reliable reports continued to emerge of forced confessions, staged trials and a lack of access to independent legal counsel”. Despite this, just a few months later, the foreign secretary, William Hague, met Iran’s foreign minister and sought “deeper co-operation” between the two countries on counter-narcotics.
This illustrates the systemic contradictions at the heart of the west’s approach in dealing with Iran and the wider “global war on drugs”. When the head of the UNODC visited Iran in July, he concluded his trip by praising Iran’s counter-narcotics strategy as “one of the world’s strongest” and called on the international community to assist Iran in its fight. While he was visiting, several more people were executed on drugs charges.
The European parliament has warned against the funding of counter-narcotic programmes that “result in human rights violations, including the application of the death penalty”. Given that funding to Iran has increased in recent years, it would seem that in our pursuit to stop the flow of drugs into Europe, these concerns are being overlooked.
If the west is serious about supporting reform in Iran, it must rethink whether it’s right for taxpayers to continue funding a programme that leads to the execution of hundreds of people every year.
- Why is the west funding Iran’s deadly war on drugs? | Fazel Hawramy (guardian.co.uk)
- Afghanistan’s toxic cocktail of drugs, graft, mafia (vancouversun.com)
- (The Bandits ) : Narcotics (prosumerzen.net)
- You: U.S. military’s ability to stop drug smuggling declines (latimes.com)
- US adds Qods Force general as ‘Narcotics Kingpin’ for heroin, weapons smuggling in Afghanistan (longwarjournal.org)
- Biden: Iran will not threaten U.S. security through Latin America (cnn.com)
- NATO reports ‘incredible’ seizures of Afghan drugs (vancouversun.com)
- Agreement to Resume Iran Nuclear Talks Aims to Prevent Regional Arms Race (voanews.com)
- 488 Drug Offenders Executed in 2011: Amnesty International Intervenes in Iran’s Quest to Kill Addicts – AlterNet (alternet.org)
by Ben Howe
Late Thursday night, American company Hawker Beechcraft was informed by the U.S. Air Force that they were not going to be allowed to compete for an American military aircraft contract.
The Air Force has notified Hawker Beechcraft Corp. that its Beechcraft AT-6 has been excluded from competition to build a light attack aircraft, a contract worth nearly $1 billion, the company said.
The company had been working with the Air Force for two years and spent over $100 million to ensure compliance with the requirements for the plane and says the craft (Beechcraft AT-6) met all requirements as shown through a demonstration actually led by the Air National Guard.
“We have followed the Air Force’s guidance close, and based on what we have seen, we continue to believe that we submitted the most capable, affordable and sustainable light attack aircraft,” the company said.
Keep in mind, this doesn’t appear to be a question of being outbid or outclassed. In fact, this seems to be a classic example of a contract being awarded without any bidding process at all, something you may remember infuriated the left when the recipient of the contract was American company Haliburton.
There’s a big difference this time. The company the no-bid contract went to isn’t an American company. Worse yet, the company it did go to has questionable friends. Namely, Iran.
Embraer, a Brazilian aerospace giant which is currently under investigation for potentially making illegal payments to obtain government contracts, is essentially owned by the Brazilian government. Through their “Golden Share,” Brazil essentially has control over the company’s business operations.
According to Embraer’s website, that Golden Share provision empowers the Brazilian government with veto rights over: “Creation and/or alteration of military programs, whether or not involving the Federative Republic of Brazil;” “Development of third parties´ skills in technology for military programs;” and “Interruption of the supply of maintenance and replacement parts for military aircraft,” among other things.
But Brazil has their own explaining to do regarding their long and sordid history with the rogue country of Iran.
According to the Council on Hemispheric Affairs, “In 1989, Brazil chose to sell Tucanos, Embraer’s relatively low cost and basic military aircraft, to Iran.” Currently, the Islamic Revolutionary Guard Corps Air Force operates around 40 Embraer T-27 Tucanos, according to the Washington Institute. In fact, the Iranians use the Tucano as their primary close air support aircraft.
In recent years, Brazil has continued its troubling friendship with Iran and ruthless leader Mahmoud Ahmadinejad. The Hudson Institute notes that, “Another area of tension between Brazil and the United States relates to Iran. In November 2009, President da Silva invited Iranian President Mahmoud Ahmadinejad to Brazil. In May 2010, da Silva helped broker a deal in which Iran would ship only a portion of its low-enriched uranium to Turkey for reprocessing; the rest would remain in Iranian hands, where it could be further enriched for nuclear weapon production.”
According to the Financial Times, building war planes is actually part of an industry that Embraer is fairly new to as they are only just “venturing into the defence industry.” Yet, the U.S. government has found them to be more capable and trustworthy than an American manufacturer that already builds hundreds of U.S. military aircrafts and would employ as many as 1,400 new workers across 20 states.
To make matters worse, Hawker was already experiencing trouble as a result of the tumultuous economy and had already announced potential layoffs. With news that they won’t be offered the opportunity to compete as the only American manufacturer for the light air craft contract, expect more bad news to come out of their offices.
Of course, the employees of Hawker Beechraft may not be on President Obama’s nice list these days anyway. It turns out that Hawker Beechcraft employees are represented by the International Association of Machinists (IAM). IAM president, Tom Buffenbarger, is one of the few union presidents without direct access to the White House. Here’s why:
For the video impaired, here’s the takeaway:
“Barack so loved his own performance that he made Galesburg part of his presidential stump speech. That’s right, he’s damn proud of his performance. Well I’m not. All he proved is like Janus, the two-faced Roman god of ancient times. He could act like a friend to the workin’ man. Even as he danced to tune dictated by billionaires. Yes, we’ve seen this act before.”
Curious that the Obama administration would push an American manufacturing company who’d been trusted in the past in favor of a company run by a government directly involved in the continuing move towards nuclear capabilities by the nation most hostile to American interests.
- Obama Administration Sends, What the heck? It’s only our national security (whoopsies.wordpress.com)
- Air Force bounces US manufacturer for Brazilian competitor (hotair.com)
- Hawker Beechcraft handing out layoff notices (seattlepi.com)
- Hawker Beechcraft to Showcase Diverse Product Line at Dubai Air Show (linkybird.com)
- LAARA: Beechcraft vs. Embraer (xbradtc.wordpress.com)
Abel Salas, vice president of Cuba‘s National Institute of Water Resources, announced the allocation Wednesday at a meeting with Iran’s deputy energy minister in Tehran, Tehran Times reported on Thursday.
Salas expressed the hope that some parts of the credit line would be used for the reconstruction of Cuba’s energy system.
Iran and Cuba signed a protocol for economic and trade cooperation in September during Iranian Vice President Mohammad Reza Rahimi‘s visit to Havana. The protocol stipulated that Iran would expand its credit to Cuba from 270 million to 680 million US dollars.
It also included accords on the two countries’ collaboration in industry, energy, trade, health, finance, biotechnology and hydraulics.
Iran has been producing equipment for rail systems and synthetic media for the Cuban market under a 2009 agreement. The expansion of credit will also support the program.
Iran has in recent years expanded friendly ties with Latin America, specially in economic, trade and industrial fields.
The strong and rapidly growing ties between Iran and Latin America have raised eyebrows in the US and its western allies since Tehran and Latin nations have forged an alliance against the imperialist and colonialist powers.
- The Mottled Relationship: Iran and Latin America (mb50.wordpress.com)
- UK military building plan for attack on Iran (americablog.com)
- Is Israel planning to attack Iran? (americablog.com)
- Brits Steel for Possible US Strike on Iran: Report (newser.com)
September 27, 2011
• Iranian President Mahmoud Ahmadinejad was invited to visit President Hugo Chávez on September 24, but the trip was postponed as the Venezuelan head of state recovers from cancer.
• Ahmadinejad partially empties UN Hall with some of his harshest statements.
• Iranian influence in Latin America is sometimes more fiction than fact.
• Befriending Iran’s repressive regime is somewhat contradictory for Latin American governments that openly crow their respect for democracy and human rights. Does Brazil really mean to have a creditable relationship with one of the most disreputable players and human rights violators?
• In an ironic twist, Chávez is credited for mediating with the Iranian government to free two American hikers.
• The attacks against Israeli centers in Argentina in 1992 and 1994 continue to be a source of tension, but in Buenos Aires, business comes first.
The Islamic Republic of Iran and Latin America have been fostering closer relationships for more than a decade, working towards building cohesive diplomatic relations and strengthening economic agreements. These ties began with Cuba’s championing of the 1979 Iranian revolution, and today those connections also extend to Argentina, Brazil, Bolivia, Ecuador, Nicaragua, Paraguay, Peru, Uruguay, and the ever-controversial Venezuela, with these amplified ties being sedulously cultivated by Tehran. Due to Iran’s internal politics, such as its controversial nuclear program, its contemptible human rights record, and its often tense, if not minatory, relations with the U.S., initiatives between Tehran and the Western Hemispheric states have come under heavy critique. As a result, there is speculation and differing interpretations over the existing level of influence that Iran currently enjoys in several nations of Latin America.
A Brief Overview
Ironically, as relations with the U.S. and European countries have deteriorated, Iran’s relations with the Global South have, if anything, noticeably progressed. Perhaps as a direct result of the U.S. placing Iran within the ‘axis of evil’, the Persian state began pursuing relationships with African governments and, within the last decade, an increasing number of Latin American countries, as a strategy to counteract U.S.-backed ostracism and efforts to diplomatically isolate Tehran. The apparent reasons for these alliances are:
(a) to gain economic advantage as well as much-needed relief and collegiality to cope with the consequences of U.S.- imposed sanctions;
(b) to counterbalance the geopolitical effect of U.S. policy in both the Muslim World and Latin America;
(c) to garner a sympathetic attitude and support for its nuclear program;
(d) to gain recognition in an increasingly prominent part of the Western Hemisphere, and in Washington’s sphere of influence, in order to achieve political prestige in the international community. This also helps, in part, divert the attention among the Iranian people, particularly in the aftermath of the 2009 Iranian election fraud that prompted massive repression of the dissenting democratic opposition.
The most pertinent questions, however, remain to be answered: Has the long term impact of these increasingly intimate relationships, such as the one between Caracas and Tehran, been fully analyzed? Are the initiatives and maneuverings carried out by some Latin American governments solely due to their impetuousness and lack of long-term goals? Notwithstanding the immediate economic advantage of gaining new markets, the long-term political ramifications and disadvantages of doing business with what the free world considers a horrendously corrupt regime places the Latin American region into a precarious situation. Latin America’s good will initiatives and human resources could be more wisely expended in dealing with nations that do not carry out egregious abuses towards its own citizens.
Case Study: Argentina
In March 1992, the Israeli Embassy in Buenos Aires was the subject of a bomb attack. It has been established that a pickup truck loaded with explosives, and driven by a suicide bomber, smashed into the front of the embassy, killing thirty-three and wounding as many as 242 persons. In July 1994, the Asociación Mutual Israelita Argentina (AMIA; Argentine Israelite Mutual Association) building in Buenos Aires was the target of an attack that killed eighty-five people, while scores more were injured.
The violent Islamist militant organization Hezbollah has been regarded as the culprit behind these attacks, but there have been rumors that the Iranian government, including some members of the current administration in Tehran, may have been more directly involved. The Persian state has repeatedly declared its innocence regarding its involvement in both attacks. In July 2011, Iran’s Foreign Ministry stated that “the Islamic Republic of Iran, as one of the major victims of terrorism, condemns all acts of terror, including the 1994 AMIA bombing, and offers sympathy with the families of the victims of the explosion […] Iran’s Foreign Ministry expresses regret that 17 years on from the occurrence of this crime, the truth behind it has not been revealed yet and the identities of its real perpetrators are still shrouded in mystery.” Furthermore, an article published by Press TV (a semi-official Iranian news agency) in July argues that, “under intense political pressure from the United States and the Israeli regime, Argentina formally accused Iran of carrying out the attack on the Jewish community.” Most independent observers, however, dismiss this rhetoric merely as tactical method to confuse the subject.
Tensions between Iran and Argentina took a new twist in early June 2011, when Iranian Defense Minister Ahmad Vahidi visited Bolivia. General Vahidi is wanted by Argentina for allegedly masterminding the 1994 bombing. Buenos Aires asked La Paz to apprehend the Iranian official, but he returned to Tehran before any decision by the Bolivian government could be made. As Iran continues to promote its influence in Latin America, the controversy over the Argentine bombings will continue to be a sore point for the foreseeable future. The Argentine-Persian relationship, or lack thereof, presents a fascinating case study of a state trying to improve relations with another while at the same time attempting to overcome a violent recent past that includes state-sponsored terrorism.
Trade and Investments
During recent years, Iran has expanded its economic cooperation with many Latin American states, entering into substantial trade agreements with Venezuela, Bolivia, Peru, Brazil and, somewhat surprisingly, Argentina. The International Monetary Fund (IMF) stated in a report issued in December 2009 that Brazil is Iran’s largest trade partner in Latin America. Last year, Iran’s state radio announced that bilateral trade with Brazil had increased to more than USD 2 billion in 2009-10, an increase from USD 500 million in 2005, and was forecast to reach USD 10 billion in the next 5 years.
Argentina is Iran’s second largest trading partner in the region, despite the fact that Buenos Aires has accused Tehran of the 1992 and 1994 bombings. Trade relations remained at marginal rates throughout the 1990s, but commercial activity never ceased entirely, and by 2008 bilateral trade had soared to USD 1.2 billion, dramatically overshadowing the 2007 figure of USD 30 million.
In addition, relations between Iran and Venezuela are a mixed bag of actual achievement and diplomatic rhetoric. According to the IMF report, and in spite of highly cordial political and diplomatic relations, bilateral trade between Venezuela and Iran did not advance in the same way as it did for other Latin American countries. For example, while Brazilian and Argentine trade with Iran has increased by 88 percent and 96 percent since 2007 respectively, Venezuela’s trade increased by only 31 percent in the same period. Following the increase in trade with Brazil and Argentina, Venezuela became Iran’s fifth largest trade partner in the region.
Moreover, Iran has pursued deeper trade and diplomatic relationships with Bolivia as well. Trade and energy agreements between La Paz and Tehran, signed in September 2007, confirmed the increasingly friendly nature of ties between the two countries. Iran’s involvement in the Bolivian economy extends to investment in and technological support for industrial projects such as dairy factories, agriculture, mining, and hydroelectric dam construction. Additionally, in July 2009, Tehran agreed to provide USD 280 million in low-interest loans to La Paz. Finally, Peru is also a growing importer of Iranian products, as is Ecuador. The expansion of trade ties follows an overall regional trade ‘offensive’ by Iran in recent years. IMF data analyzed by the Latin Business Chronicle indicates that Iran-Latin American trade skyrocketed by 209 percent in 2008, totaling a robust USD 2.9 billion. What this data tells us is that there is certainly a potential for trade to grow between Iran and several Western Hemisphere states, however Iran’s trade numbers are dwarfed by the region’s other trade partners, like the U.S., China and Europe.
To Washington’s increasing concern, the Brazilian Deputy Foreign Minister Maria Louisa met with her Iranian counterpart, Ali Ahani, in Brazil in early August 2011. The Brazilian official described Iran as one of “the important partners of Brazil” and an “influential” country. Louisa noted that Tehran and Brasilia would attempt to increase the level of mutual ties “considering the developments of the two countries in different fields.” The Iranian Deputy Foreign Minister, for his part, hailed “the friendly and good relations” between both states and said that the governments of Iran and Brazil are eager to expand ties. Given the grim status quo between Washington and Tehran, at some point in the near future, the White House is bound press the issue, and Brazilian President Dilma Rousseff may have to choose whether her government will pursue closer relations with Washington, or with Tehran.
According to the Iranian International Newspaper Ettelaat, Iran has nearly doubled the number of embassies and cultural centers it maintains in Latin America. The number of embassies increased from six in 2005 to ten in 2010, and Tehran is building cultural centers in seventeen Latin American countries. Additionally, Iran has successfully negotiated no-visa agreements with Nicaragua, Venezuela, and Bolivia. It can also be argued that although relations have been strained with Argentina since the terrorist bombings, the continued trade between the two countries is a signal that geopolitical interests have gradually taken precedence over efforts to apprehend the perpetrators of the attacks. Argentina’s reaction to the visit of Defense Minister Vahidi to Bolivia does point out that Buenos Aires has not forgotten Iran’s alleged role, but that ultimately other initiatives have taken priority.
Nevertheless, if we consider Iran’s repressive regime, its brutal crackdown on dissenting voters, and the continued suppression of what most nations, particularly in the West, consider a wholly organic and legitimate uprising, it is difficult to comprehend the continued warming of relations with its Latin American partners. Nations are certainly free to pursue close relations with any states they wish, but it is baffling, considering the Iranian government’s repressive record when it comes to its own population, that Latin American governments, many of which repeatedly publicly proclaim their respect for human rights, want to befriend a thoroughly toxic nation like Iran. So what could be the reasons why Latin American countries continue to welcome the Iranian government’s overtures? Simply put, Latin American nations want an alternative to what some regional players see, at times, as U.S. imperialism. This is exemplified by the Chávez and Ahmadinejad pact signed in 2007 to formulate an “Axis of Unity”, particularly against the U. S.
In order for Iran to gain the geopolitical strength that its revolutionary leaders so fervently aspire to obtain, the country continues to play its U.S- as-an-imperial power card as aggressively as possible. It also plays a powerful role in pushing its Latin American partners into recognizing Palestine as a counterbalancing force against U.S. and Israeli influence. When it comes to assessing geopolitical gains, the common denominator between Latin America and Iran is economic advancement, rather than the counterbalancing of geopolitical power. Venezuela’s President Chávez is the exception to this rule, as, even though Venezuelan-Iranian economic relations are fairly robust, a major factor for this close rapprochement is that Chavez and the Iranian government are fairly ideologically aligned (at least regarding their views on Washington).
Support for Iran’s Nuclear Program
Venezuela, Cuba, and Syria were the only three countries that supported Iran’s nuclear energy program when the UN voted on it in 2006. However, there is little doubt that support has been increasing throughout Latin America due to Iran’s diligent pursuit of such backing. Now Bolivia and Brazil are also offering their measured support for Tehran’s civilian nuclear program. In addition, the ever-vociferous Venezuelan leader has officially stated that Iran has a legitimate right to its nuclear program and that Venezuela supports Tehran’s quest for peaceful nuclear technology.
The Future of the Iran-Latin America Alliance
Chávez’s present personal medical issues, and the recent U.S.-imposed sanctions on Venezuelan oil company PDVSA (Petróleos de Venezuela S.A. – Venezuelan Petroleum S.A) for dealings with Iran, could serve to weaken the Venezuelan-Iranian nexus. This is because Venezuela’s current ideological views – particularly its foreign policy – ultimately derive from Chávez, and it is unclear what a post-Chávez Venezuela would look like. Would his political party maintain its unity and continue Chávez’s ideology, or would another course be taken? In addition, the Venezuelan military has declared its support for Chávez to the point that some organizations are concerned as to what would happen if another political party were to win the upcoming presidential election. What this means for Tehran is that its closest ally in Latin America is not Venezuela but rather its leader, and it is difficult to foresee how diplomatic ties would be affected by a transition of leadership.
Late September 2011 saw an interesting development, as the Iranian government recognized mediation initiatives by Chávez to free two American hikers held in an Iranian prison since 2009. According to statements by the Venezuelan Vice Minister of Foreign Affairs, Temir Porras, the Venezuelan government agreed to help Shane Bauer and Josh Fattal after receiving a request for help from the hiker’s friends. It has also been reported that Noam Chomsky signed a letter asking for Chávez’s help.
Although various news sources have reported an increase in the establishment of Iranian embassies in Latin America, a Latin daily source indicates that, at least in the case of Nicaragua, such plans have failed to come to fruition. This is particularly interesting as there had been rumors circulating that Iran’s embassy in Managua is, or was supposed to be, some kind of massive intelligence hub involving an unusually large number of staff, which, by default, would put U.S. interests in the region at risk. In reality, the Iranian Embassy in the Central American country may be nothing more than somewhat large.
In mid-June, an Iranian analyst published a piece in the Iranian newspaper Jaam-e Jam entitled “Failure of the United States to break relations between Iran and Brazil.” The analyst explains that Iran’s initiatives in Latin America “change the quiet backyard of the United States to a dangerous backyard for that country, because the expansion of Iran’s economic and political relations with the countries of that region is indicative of the failure of U.S. efforts to impose sanctions and threats on Iran.” The analyst also discusses how relations between Tehran and Latin America affect Israel:
Changing the United States’ quiet backyard to a dangerous backyard has also created major concerns for Tel Aviv, in addition to Washington. Such worries have intensified to the point that Shimon Peres, the head of the Zionist regime, left for a visit to Latin America, which is considered the first official visit of this sort to Latin America in the course of several decades, only a few days before the visit of Mahmoud Ahmadinejad.
The bottom line seems to be that Latin America sees Iran’s involvement in the region in terms of economic interests. Additionally, it may allow the region to gain a foothold in the Muslim world, with the secondary benefit (at least possibly in Venezuela’s case) of reducing U.S. influence in the region. Meanwhile, as interpreted by the aforementioned Jaam-e Jam analysis, Tehran sees its rapprochement with Latin America mostly in terms of its impact on Washington and Tel Aviv.
Finally, it is interesting to observe that Brazil, Latin America’s powerhouse and a nation that is currently attempting to obtain a permanent seat on the United Nation Security Council, has also increased the pace of diplomatic ties with Iran. Brasilia has gone on record to declare its support for Tehran’s civilian – albeit controversial – nuclear program. It may soon become apparent to Itamaraty diplomats that they will have to choose between Washington and Tehran as their primary overseas partner.
In the interest of creating a just and prosperous hemispheric community, it is important for regional nations to continuously evaluate the scope and breadth of the burgeoning economic aid pacts and political gains being devised between Latin American countries and Iran. This survey must also include a gauging of the inherent merits of these gains and an evaluation of whether they are more fictive than real. A closer examination of the Islamic Republic of Iran depicts an undemocratic governing body heavily burdened by religious dogma, underdeveloped financial standards, institutional corruption and self-imposed non-transparency, a legal system hardly worthy of the name, the absence of any civil liberties, and atrocious human rights violations.
Iran’s current leadership can hardly be described as providing a suitable alternative to traditional U.S. domination and a sphere of influence. Even if counterbalancing U.S. power in Latin America can become more than a fantasy, and grow into a viable plan to amplify the resonance of democracy in the region, the advantages derived from an arrangement with Iran must be weighed against the costs of introducing another form of despotic influence into the democratically fledgling Latin American region.
- The Up-and-Coming Presence of India in Latin America (mb50.wordpress.com)
- *Yawn* Iran to send it’s MASSIVE Naval Might to US Waters (erickbrockway.com)
- Iran Mass-Produces New Missile, Rejects ‘Hot Line’ Idea With America (nytimes.com)
- Chavez supporting growth of Hizbollah terror network in Latin America (video) (creepingsharia.wordpress.com)
- Argentina Praises Iran Offer in Bombing Probe (time.com)
- Don’t put international cooperation on Iran at risk (thehill.com)
- Argentina praises Iran help offer in bombing probe (seattletimes.nwsource.com)
By Jerry Della Femina July 27th, 2011
Grandpa, I’m so so cold.
But Grandpa, why is it so cold?It’s cold because we have no oil. There isn’t a drop of oil anywhere in this country.
Because drilling for oil in Alaska was bad for the caribou. And drilling for oil offshore sometimes caused an oil spill. And we used up every drop of oil we had.
But couldn’t we have bought the oil from another country?
Yes, but we ran out of money and the Chinese were so mad that we couldn’t pay back the money we owed them that they bought up a lot of the world’s supply of oil for themselves.
But Grandpa, is that when The Supreme Leader Barack Obama made that great speech that I read about in my schoolbooks?
Yes, he was in his best speech-making mood after we lost Israel and the Middle East.
Who could his forget his “Shame on you, Iran, for being not nice” speech at the United Nations. The delegates cheered him for seven minutes and gave him their “Prince of Peace” award. Then he made a brilliant speech blaming the banks, the rich, the oil companies and the car companies for making us dependent on oil and causing global warming.
Grandpa, isn’t that when Obama dissolved our armed forces?
Yes, that was his most famous “What do we need the military for? We’ve won the respect of the Third World by destroying all of our weapons” speech.
Then he flew to Iran, threw his arms around Mahmoud Ahmadinejad and said, “I will be your friend if you will be my friend.” Ahmadinejad just giggled and walked away.
Was Obama embarrassed?
No. He dropped to his knees and said, “I never liked Israel either.” Then he sang “All We Are Saying Is Give Peace a Chance.” There wasn’t a dry eye in the Iranian parliament. Actually they laughed until they had tears in their eyes. Sadly, Iran tried to destroy the glory of Obama’s big moment the next day when they dropped a hydrogen bomb on Saudi Arabia. But that didn’t stop Obama. He went to Brazil and made his famous “I’m starting to lose patience with Iran” speech.
Yes. By that time the United Nations had moved out of New York because we were out of oil and re-located to Brazil where it was warmer and more comfortable.
Grandpa, was that in 2016, when he stopped being President and asked to be re-elected for the third time?
Yes, that was a wonderful time for the Liberals, the unions, Democrats and The New York Times. It started with a New York Times front page “news” story titled “Many Want Obama To Stay On.” Then the Times said in an editorial that since it was against the law for Obama to be elected President again, let’s eliminate the title of President and elect him as The Supreme Leader.
Yes, I read all about it in school. That’s when he ended taxes and unemployment in the United States.
Exactly. Since he had convinced everyone that the rich were destroying the country and he had taxed just about every penny he could get out of them, he came up with his “Your Money or Your Life” amendment.
He said, “We are all born equal and there is no reason why we shouldn’t stay equal financially, no matter if one man chooses to work every day of his life and another man chooses to live off the work of the man who works.”
Grandpa, I know the great Obama “We are all our brothers’ keepers” speech, and that’s when he was declared the last President of the United States and the first “Leader of the World.”
Yes. So far we’re the only country to go along with this, and all the other countries have more respect for Costa Rica as a world power than us, but you know how persuasive Obama can be when he opens his mouth. YES HE CAN, YES HE CAN.
But Grandpa, it’s freezing. I’m so so cold.
Well I have a surprise for you. For your 10th birthday your Grandpa just sold everything we have for nine pieces of black-market coal.
Grandpa! Grandpa! Nine pieces of coal—we’re rich!