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“Naturally, the common people don’t want war … but after all it is the leaders of a country who determine the policy, and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in every country.” (Hermann Goering)

Once again we are being prepared for another devastating war in the Middle East. A terrorist group is “allegedly” discovered planning to blow-up 6 aircraft in UK [ 1]. Another group is “discovered” in Germany planning to blow-up a train [2 ]. Then UK warns whole Europe about the threat of terrorism [3 ]. Then there are “loud” accusations that Iran has been trying to buy Uranium from Congo [4 ] followed by a small retraction [5 ] [6 ]. Then there is the release of the 9/11 sound tapes of the fire-fighters along with the release of the emotional movie “9/11”. And finally we have the President of the United States warning us about the threat of Islamo-Fascism.

We are constantly reminded that our very lives are in danger. If it is not the threat of poison gas, anthrax, conventional explosives, dirty radiation bombs then it is some unexplained clear liquid. The favourite target is of course aircrafts, or was it trains, or may be it was ships, or was it tunnels? There is no end to the methods that the terrorists use and places that they could kill us in (read “The Great Deception”). And despite all the wars and billions and billions of dollars that governments are pouring into this war on terror, it seems that we are no safer now than we were in 2001. And every so often Mr. Bin Laden or his lieutenants come on TV to tell us that they are still in Afghanistan. How on earth Mr. Bin Laden, that needs dialysis machine to stay alive, has managed to hide for three years in Afghanistan is beyond me. He must be a very clever man indeed.

But like the hated “Goldstein” of George Orwell’s “1984” [7 ], Mr. Bin Laden is alive and well and his organisation can still scare us witless. Now people are so scared that if you look Middle Eastern or Asian, you are automatically assumed to be a terrorist. And as though we did not have enough threats hanging over us, we are introduced to a new one: “being Middle Eastern/Asian while travelling”. This was recently demonstrated in Malaga, Spain when two young men were removed from the plane because other “passengers” were worried that they were acting suspiciously (i.e., looking foreign and talking in a language that others didn’t understand).

“The removal of two men from a holiday flight on the grounds that fellow passengers feared they were terrorists was condemned yesterday. The pair, thought to be in their 20s and of Middle Eastern or Asian appearance, were removed from a flight to Manchester from Malaga, Spain, after passengers became suspicious of their behaviour.

In the early hours of Wednesday a number of passengers on Monarch Airlines flight ZB613 left the plane, refusing to fly unless the two men were removed, causing a three-hour delay.
Passengers are reported to have become suspicious after the men were overheard apparently speaking Arabic and seen repeatedly checking their watches, although this has not been confirmed by the airline.” [8 ]

I suppose if we do not urge our leaders to invade Iran soon, we will have to go through a strip search before boarding planes, trains or buses.

We are being mentally prepared for what is about to come: a devastating war with Iran. This war has been planned a long time ago and has been delayed by the unexpected insurgency in Iraq (for full details read “Why Iraq and Now Iran”). This war, in one form or other, is “almost” inevitable. The current US administration has climbed on a tiger, and in fear of being eaten, doesn’t know how to get-off.

The Plan

In 1997 another set of Neo-Conservatives that included personalities such as Dick Cheney, Jeb Bush, Donald Rumsfeld, Paul Wolfowitz Elliott Abrams, Lewis Libby, Eliot A. Cohen and others, created a think-tank organisation by the name of “The Project for the New American Century”. They stated their vision of the new world in their “statement of Principles”. To their credit, they were very honest about their goals. They said:

“We aim to make the case and rally support for American global leadership. As the 20th century draws to a close, the United States stands as the world’s pre-eminent power. Having led the West to victory in the Cold War, America faces an opportunity and a challenge: Does the United States have the vision to build upon the achievements of past decades? Does the United States have the resolve to shape a new century favorable to American principles and interests?”[9 ]

The fact is that these people saw what was evident to many other national leaders, the declining power of the United States, and they wanted to arrest that decline. After years of super-spending in WWII, and later an arms-race with Soviet Union, the shape and character of the US economy had changed. By year 2000, it was clear that US could no longer compete with such emerging giants as China and India. China, unlike Soviet Union, is not hampered by the inherent economic flaws of the communist system. Chinese have shown us how over one billion people working hard under a centralised control can achieve tremendous economic growth. And as always it is the economy of a country that underpins its military power. China is growing exponentially and with it its prestige and military might. China is followed closely by India and a host of other smaller nations, not to mention Russia. As these countries grow they try to find their own place under the sun. They no longer appreciate being under the shadows of a giant (read “Cold War II”). They do not bend so easily to the wishes of the US and demand reciprocality in their trade; and at times they may even demand deals more skewed in their favour.

The US is a declining empire (read “The Coming Financial Crisis”) and can no longer afford to play by the rules; not that it ever was inclined to do so. The talk of pre-emption was a clear sign of the fear that soon US would not be able to control the situation. It was decided to try to arrest the growth and ambition of all those countries that were going to challenge the US hegemony in the international system. But pre-emption is a last desperate attempt to stop the inevitable. The folly of believing that by pre-emption a great power can hold its place in the international system is clearly stated by the historian Paul Kennedy:

“So far as international system is concerned, wealth and power, or economic strength and military strength, are always relative and should be seen as such. Since they are relative, and since all societies are subject to the inexorable tendency to change, then international balances can never be still, and it is a folly of statesmanship to assume that they ever would be”.[10 ]

Stupid or not, this is exactly what the current US administration is trying to do. After examining all the possible scenarios of how to forestall the US’ decline, it came up with one solution: control of oil fields. If the US could physically control the sources of world energy, it could practically determine the growth of the world economies and by extension their military powers that were to challenge it in the future. Of course, the US government could achieve a similar outcome by entering into an alliance with two major Middle Eastern countries Iran and Iraq, but this would require a rethink of its Israel strategy; something that a US president is not even allowed to contemplate.

So they tried to implement this grand strategy. The current US administration under the pretext of “war on terror” invaded Iraq and occupied it. Now we have to note that Iraq was chosen first because it was extremely weak. After 8 years of war with Iran, a devastating war with the US and its coalition in Kuwait and nearly 10 years of sanctions, Iraq was in no position to put-up any kind of resistance. On top of all these, the US government through its agents in UN team in Iraq had obtained blueprints of all military installations, and had even bought the general responsible for the defence of Baghdad.

It was envisaged that once Iraq was occupied and the population pacified, the US and UK forces would turn around and occupy the Iranian Southern oil region of Khuzestan. The area is relatively flat and is ideal for armour assault. Once the oil fields are occupied, it was thought, it would be only a matter of time for the regime in Tehran to collapse; paving the way for a puppet regime to be installed in Tehran.

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World’s Natural Gas Reserves/Production. Source BP

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Having bases in Iraq, Iran, Kuwait, Qatar and Bahrain, the US would control over 30% of the world’s natural gas and over 61% of the world proven oil reserves. China, India, EU and others had to then pay tribute to the US to ensure their economic survival. If that was not enough, the US would create a sphere of influence in Iraq and Iran analogous to the old colonial system of economic exploitation. I know that you may find this difficult to accept; after all we can not believe that these sorts of things can happen today. But it does happen and what is more, people love to make it happen. To make my point clear, consider what this US administration had planned for Iraq.

Coalition Provisional Authority (CPA)

Soon after the occupation of Iraq, United State created the Coalition Provisional Authority (CPA). CPA was to act as a provisional government until such a time as Iraqis could hold an election and create a government. Mr. Paul Bremer was given the full power to do as he liked.

“ The CPA is vested with all executive, legislative and judicial authority necessary to achieve its objectives, to be exercised under relevant U.N. Security Council resolutions, including Resolution 1483 (2003), and the laws and usages of war. This authority shall be exercised by the CPA Administrator.”[11 ]

Mr. Bremer was appointed the President, the parliament and the Supreme Court. He immediately started issuing orders that in effect were laws. There are a total of 100 orders. I can only list a few here to make my point; but if you are interested you can read all the orders by clicking HERE. Some of his interesting orders are as follows:

“Order No. 39:allows for: (1) privatization of Iraq’s 200 state-owned enterprises; (2) up to100% foreign ownership of Iraqi businesses; (3) “national treatment” — which means no preferences for local over foreign businesses; (4) unrestricted, tax-free remittance of all profits and other funds; and (5) 40-year ownership licenses.

“Thus, it forbids Iraqis from receiving preference in the reconstruction while allowing foreign corporations — Halliburton and Bechtel, for example — to buy up Iraqi businesses, do all of the work and send all of their money home. They cannot be required to hire Iraqis or to reinvest their money in the Iraqi economy. They can take out their investments at any time and in any amount.

“Orders No. 57 and No. 77 ensure the implementation of the orders by placing U.S.-appointed auditors and inspector generals in every government ministry, with five-year terms and with sweeping authority over contracts, programs, employees and regulations.

“Order No. 17 grants foreign contractors, including private security firms, full immunity from Iraq’s laws. Even if they, say, kill someone or cause an environmental disaster, the injured party cannot turn to the Iraqi legal system. Rather, the charges must be brought to U.S. courts.

“Order No. 40 allows foreign banks to purchase up to 50% of Iraqi banks.

“Order No. 49 drops the tax rate on corporations from a high of 40% to a flat 15%. The income tax rate is also capped at 15%.

“Order No. 12 (renewed on Feb. 24) suspends “all tariffs, customs duties, import taxes, licensing fees and similar surcharges for goods entering or leaving Iraq.” This led to an immediate and dramatic inflow of cheap foreign consumer products — devastating local producers and sellers who were thoroughly unprepared to meet the challenge of their mammoth global competitors.”[12 ]

When I talk about neo-colonisation of the Middle East I am speaking of the above laws and regulations. United States, citing national security, has consistently refused to allow foreign companies or individuals to control major American companies. The US congress refused to approve the sale of some US ports to a UAE company because of “national security” reasons [13 ] [14 ]. If a foreigner wants to own more than a certain percentage of a US company (e.g., TVs, Newspapers etc) he/she has to become a US citizen. Yet when it comes to Iraq, it is an open country for western corporations to do as they wish.

But as Murphy’s Law dictates, everything that can go wrong will go wrong; and in the case of Iraq it did go wrong. First it took over 4 months to capture Saddam Hussein. The number of troops employed was not sufficient for the job. The people not only did not welcome the occupation troops with flowers but also started a full-blown guerrilla war as well. Now the troops that were supposed to turn around and go into Iran had to stay to fight the insurgents. The UN and others that were against the invasion were not going to help either. They had tried their best to stop the invasion without any success.

The Quagmire

This has left the US and UK governments in a quagmire. They had calculated that the invasion of Iraq was going to cost around $100 billion. “When Lawrence Lindsey, then President Bush’s top economic adviser, said in September 2002 that war in Iraq might cost the United States as much as $200 billion, other top aides rebuked him and Bush fired him three months later” [15 ]. Now the total Iraq war cost is estimated to reach as much as 2 trillion dollars [16 ]. US had calculated that with a swift occupation of Iraq, the oil fields could be brought online, reducing the price of oil; this has also back-fired. The oil fields, pipelines and installations have been under heavy insurgent fire [17 ]. It is three years since Iraq was occupied and its oil fields still can not produce anything close to half of the 5 to 6 million barrel/day that the US/UK had envisaged. The oil prices have stayed at 60 to 78 dollar range, with no sign of weakening. This simply can not continue. United States can not endure this for many more years. Its economy simply can not cope with these kinds of oil prices and the cost of military operations abroad.

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We all know that the higher oil prices affect GDPs negatively. The only question is to what extend. Colin Campbell and Jean Laherrère have studied this problem and published their result in the Journal of Applied Economics.

“We find that in the US the output loss resulting from a 100% oil price hike increases from around 3.5% in the linear approach to 5% in the scaled case. Among the other oil importing countries, the respective increase in the output loss arising from the same shock is from around 2% to a range of 3 to 5% in the case of individual euro area countries, from less than 1% to 2% in the case of the euro area as a whole, and from very small values to around 1% in Canada.”[18 ]

Three and a half percent or five percent may sound marginal, but it is only when one looks at the dollar amount that one begins to see the significant of this loss.

(United States GDP 2005) 12.47 trillion dollars X 3.5% = 436.45 billion dollars.
(United States GDP 2005) 12.47 trillion dollars X 5% = 623.5 billion dollars.

The negative affect of higher oil prices on GDP has not been ignored by the United States. The Energy Information Administration (EIA) estimates that the negative effect of high oil prices on U.S. GDP will be felt for years to come.

US Options

No US administration has ever damaged United States’ interests so heavily and in such a short time as Bush’s administration. This administration has managed to alienate over 1 billion Muslims around the world. It has alienated Europeans, Africans, and Asians. It has used threat of force to force nations into submission, and instead of wining friends has created enemies across the globe. Russia, China, Iran and Venezuela are just to mention a few countries, out of fear (for details read “Cold War II”) are trying their utmost to make sure that US doesn’t get any stronger.
This has left US with few options. Having destroyed the balance of power in the Middle East, it is left with either accepting the new arrangement, or throw the whole world into an unimaginable economic chaos.

US has three options: (1) Withdraw from Iraq, (2) make a grand bargain with Iran, or (3) attack Iran.

1. The first option is a huge strategic defeat for the US; something that will affect all the countries in the Middle East. A US withdrawal is tantamount to a defeat. The US clients having backed the US against the will of their populations will have to make a U-turn making similar security deals with Iran, ensuring an even greater strategic rise in the Iranian power.

2. US can not/will not come to terms with Iran. United States, after spending billions of dollars, not to mention the thousands of American dead and wounded wants to have economic and strategic compensation. Iran does not accept US hegemony and demands security guarantees from US that it will not in the future invade Iran; something that US doesn’t want to give. There is also the matter of Israel. Iran has become the centre of the Islamic and Arab world. Muslims now look to Iran to protect the interest of the Palestinians. A grand bargain would also mean that Israel has to vacate the occupied lands and return to its 1967 borders, something that the US Jewish lobby does not accept.
3. This leaves US with only one choice: weaken/isolate Iran first (if possible) and then attack it. All the talk about NPT and uranium enrichment etc is geared towards this end.

This administration has painted itself into a corner. It is in a loose-loose situation. The only difference is that if it attacks Iran, US ensures that at least lots of other countries will suffer as well. The attack, tactics, strategies and consequences take too much space to mention here. So I leave that part for the next article; for now, let it suffice to say that if US attacks Iran, we all have to get used to riding bicycles. The future doesn’t look bright at all. It seems that this administration is bent on destroying anything that it can not control; and by doing this, it is losing all controls.

Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
William Butler Yeats: “The Second Coming”.

FOOTNOTES:

1. Business Standard, “UK Terror Threat: BoE issues list of 19 suspects”, 11 August, 2006

2. Bloomberg.com, “German Suitcase Bombs were Primed to Go Off, Kill”, 18 August, 2006

3. Guardian Unlimited, “Reid warns of EU-wide terror threat”, 16 August, 2006

4. The Australian, “Iran bid to get Congo Uranium”, 7 August, 2006

5. Rawstory.com, “Intelligence officials doubt Iran claims, say Cheney receiving suspect briefings”, 18 August, 2006.

6. Khaleejtimes.com, “Congo denies selling unranium to Iran”, 9 August 2006

7. George Orwell, ’1984’, Plume (Centennial Edition), UK 1949 ISBN 0452284236 (Paperback edition)

8. Guardian Unlimited, “Removal of men from holiday flight condemned”, 21 August, 2006

9. PROJECT FOR THE NEW AMERICAN CENTURY, “Statement of Principles”, June 3, 1997

10. Paul Kennedy, ”The Rise and Fall of the Great Powers”, Fontana Press, 77-85 Fulham Palace Road. Hammersmith, London W6 8JB, UK. Page 693. ISBN 0 00 686052 4

11. CPA Official Documents, “Coalition Provisional Authority Regulation Number 1”, 16 May, 2006

12. Democracy Rising.US, “The Democracy Rising Interview: Antonia Juhasz”, 22 March, 2005

13. Strategic Forecasting, Inc, “UAE: The Effects of the Port Deal Reversal in the Middle East”, 10 March, 2006

14. Middle East Forex, “UAE, Saudi considering to move reserves out of dollar”, 17 March, 2006

15. Sacbee.com, ”Bill for Iraq war keeps on climbing”, 1 May, 2006

16. IOL, ”Iraq War has cost US $320bn-analysts”, 28 April, 2006

17. New York Times, “Attacks on Iraq Oil Industry Aid Vast Smuggling Scheme”, 4 June, 2006

18. R. Jimenez-Rodriguez and M. Sanchez. “Oil Price Shocks and Real GDP Growth: Empirical Evidence for Some OECD Countries,” Applied Economics, Vol. 37, No. 2 (February 2005), pp. 201-228.

Copyright Abbas Bakhtiar, all rights reserved.