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Economic relations in a low-growth world: potential convergence of Iranian and Saudi interests, divergence from Americans’

August 2, 2016

A country could be in a neo-colonial situation if it is exploited by other countries through net outflows involving surplus-value or terms of trade, or if the country’s economy (though based on capital-intensive petroleum industries) has been maldeveloped to suit other countries’ requirements and is unlike the economy of any imperialist country. Whatever objections one may have about the countries’ involvement in other oppressed countries or interactions with the United States, to treat Iran and Saudi Arabia as if they were imperialist countries and fascist is fundamentally mistaken. That pertains to those claiming to believe the Third World is ripe for violent revolution relative to countries with highly privileged populations. That actually becomes a CIA- and Pentagon- friendly line in the absence of a correct understanding of class struggle in today’s global economic and political context.

Iran and Saudi Arabia are both neo-colonies of various imperialist countries, partly because of structural economic reasons (involving international wage differences and industrial and financial development history) that are beyond the control of their individual respective governments at least in the short term. The structural issues automatically disadvantage them with respect to multiple imperialist countries. But in international economic relations Iran and Saudi Arabia exhibit interests that are independent of the United States, and their actions in the Middle East and Africa encompass more than the “sectarian” religious conflict, and nationalism aimed at other Muslim countries, often simplistically discussed/alleged or emphasized in the Western media. That is true despite regrettable Saudi cooperation with the Americans. As they struggle – in desirable and undesirable ways – with the consequences of U.S. dominance and encounter American opposition to the development and deepening of economic ties between various Middle East and African/Eurasian countries, there is an economic basis for the two Islamic countries to have a shared struggle against the United $tates. Such economic struggles at an international level (which inevitably become political) are important in a complex political environment where genuine, sustained revolutions overthrowing existing capitalist states have been at an ebb due to a situation of U.$. hegemony, a dominance that is itself prolonged by failures to form and develop necessary anti-American united fronts.

The naive and those who have been inculcated with bourgeois economic ideology think of development, growth and poverty-eradication as just a positive-sum (win-win) game without issues of potential exploitation. Some of those, and many others, nonetheless have a sense that some nations lose while others gain. Much protectionism in imperialist countries is based not only on this, but also on a denial of imperialist country privilege and of how imperialist country workers benefit exploitively from trade. Muslims and Arabs are disproportionately poor, exploited, and oppressed, in consideration with some other groups, and have been in the crosshairs of American strategic interests, so economic struggle from their point of view merits attention. Of particular interest are those struggles that could lead to less American influence in the Middle East and less American dominance in the world economy.

After England and Wales voted for Britain to leave the European Union, there was discussion in English-language media of whether Brexit was going to be a good thing for Arabs. Al Arabiya English ran two articles for example, one of which addressed what several had said about currency values, investment, trade terms, long-term gains and stability, and what to do about chauvinism and racism after the vote besides just calling Brexit supporters “racist.”(1) The reader may contrast that Al Arabiya English article with <a href=”“>the article published on this website a week prior</a>.

The category of racism could include an attitude, maintained in spite of contradicting evidence, that capital and goods should continue flowing to the U.K. and the U.S. at stratospherically high levels because the white and white-wannabe workers there rake in more money per hour (are more “productive”). They are more politically advanced than almost anyone else, supposedly, because they are on the verge of scaling the last few obstacles to a yet-more-productive, socialist system. In actual fact, the vast majority of the wealth that appears in the united $tates, Britain, Germany and other First World countries is actually created by workers in other countries – according to a variety of anti-imperialist analysts now – and propping up dollar dominance is self-defeating for countries in the long run despite any short-term benefit. The ability of the united $tates to repay its sovereign debt (the issuance of which is supported by dollar hegemony) is based on an economy that is itself based on extreme exploitation of other countries, a fact that is never mentioned by those justifying dollar dominance by referring to the size of the u.$. economy and U.S. Treasuries liquidity.

The other Al Arabiya article mentioned above suggests to this writer that, though an EU with less British influence may be good for Arabs and the world, a Britain outside that union may be good economically for Arabs in some respects. If Arab countries buy weapons from Britain to fight ISIS, hopefully the fighting will be conducted independently of American and British interests. It is a perilous situation of course.

Many seeking to emulate Westerners may have experienced regret about the demise of the EU as an unblemished symbol of hope and unity, but there are concrete questions to address about what to do with the coming diminished British influence in certain supranational organizations (and continuing influence in others), and the still-disproportionate role of the British pound in finance, trade, and investment. The Brexit vote was a jolt that led many to reconsider the long-term viability of the pound as a major reserve currency – rightfully so contrary to the seemingly perpetual warnings of some about a too-rapid rise of the Chinese yuan as an alternative. The potentially changed influence of top u.$. ally Britain in the Israeli-Palestinian issue, after Britain’s impending departure from the EU, was also discussed. In August now, it still doesn’t occur to some people that a smaller role for the U.S. dollar and the pound in the global financial system, and Middle East peace that can be achieved independently of u.$. interests, are each in the long-term interests of various non-Americans. The status quo of Western currency dominance and horribly outsized influence in peace efforts has much inertia.

Because of AmeriKKKans’ priorities, there is a potential for divergence between what Amerikans and non-Amerikans want with respect to allowing other currencies to play a larger role, and Middle East peace. Amerikans don’t want the two-state solution as much as they want many other things. Within the context of the Israeli settler state continuing to exist until the Amerikan settler state is knocked down several pegs economically and politically, there is a struggle between Amerikans and non-Amerikans over whether or how to approach specific two-state outcomes. In concrete ways many have discussed, the Amerikans, and Britain as a close ally, stand in the way of Middle East peace and greater economic stability and growth.

When the oppressed see crisis happening, still, and getting worse in the long run despite tweaking of the financial system, they will gain more motivation to oppose imperialism in general and capitalism in general. Not focusing on struggling against the Amerikans will make more sense then. Among the people who take a more “narrow-sighted view” (to use the Al Arabiya English editor’s words) are those who think disproportionate Amerikan and British control and influence have a positive role to play. The world must deal with Amerikan dominance in particular, first, or it will forever remain in a quagmire.

There is too much investment in the united $tates. The Amerikans benefit in the short term and in the long term. Although, like the rest of the world, they also experience the destabilizing effects of not investing in different countries more evenly. Foreign investment is associated with colonialism historically, but the largest part of international wealth transfers involves inequalities in trade and wages (as analysts of unequal exchange and contemporary imperialism have pointed out); so, it would be a mistake for Chinese and Saudis (who remember the history of Western colonialism in China and Saudi Arabia), for example, to view their investment in the united $tates too positively. Excessive investment in the united $tates may be in a decline fortunately. A writer for Bloomberg put it this way, “In fact, net foreign flows to the U.S. have been decidedly weak this year, thanks to an exodus by foreign central banks and sovereign wealth funds, who’ve been dumping U.S. securities in order to raise cash to put to work at home.”(2) Bloomberg suggests there is still a dollar idolatry problem, though, with Chinese putting money that would have gone to buying U.S. Treasuries into offshore dollar accounts. Amerikans get material goods from China, and in exchange Chinese get pieces of paper or digital account balances they might not spend for anything tangible in their own country.

In other news, the reason why Saudis took the actions they took with respect to oil price is becoming more visible.(3) It was mainly about their own political and economic survival in the midst of Amerikan dangers, not opposing Iran. The Amerikans conducted divide-and-conquer with Iran and Saudi Arabia while supporting a domestic shale industry that had the potential to keep the oil price lower over a long period of time than Saudi Arabia wanted.

Views such as this writer’s are sometimes regarded as those of an international banker or transnational capitalist interests. This writer has condemned antisemitism while showing a willingness to defend Iranian, Saudi and even Israeli interests to the varying degree they can be distinguished from Amerikan interests. Some would say the common factor must be money, because of course what else could make somebody so promiscuous as to love Arabs, Iranian Muslims, and Jews – in the minds of Westerners with anti-Islam, anti-Semitic and fascist tendencies simultaneously. Many have not realized the extent to which Amerikan hegemony generates opposition in various countries. U.$. dominance creates a basis for unity between countries, unity which might be unexpected if one is overly influenced by narratives that don’t address the Amerikan role in causing, perpetuating and exacerbating different Middle East conflicts: the Israeli-Palestinian issue and Iranian-Saudi contradictions.

There are prominent examples of alleged socialists or anti-Amerikans portrayed as rich people oppressing Amerikan workers. Some are known as capitalist enemies of capitalism. “Banker” is an odd accusation, though, given that many u.$. workers have retirement accounts with international portfolios or have opened accounts to buy securities. (Some bankers or former bankers or financial managers this writer is aware of may actually have some insight on how the united $tates prospers/plunders at the world’s expense, so any ad hominem in this regard may be particularly misleading.) U.$. workers exploit Third World workers – through wages that are many times higher than global average productivity – but also depend on global financial stability for long comfortable retirements. That is, the same Amerikan can have contradictory interests with respect to international finance. Apart from such considerations, there is a grain of truth to the banker accusation in that there is no reason to constantly favor the interests of Amerikan workers – who are petty-bourgeois exploiters of Third World workers – over those of various non-Amerikan capitalists. The idea that the main struggle in the world today is against capitalism or even “capitalist-imperialism” is misleading, because there continues to be a need and basis for international united fronts against u.$. imperialism. Anti-capitalist struggle is complicated by u.$. hegemony interfering with progress against neo-colonialism in general. Because of the complexity of the situation in which global class stratification at the level of the national unit exists concurrently with u.$. hegemony, most of the world is still far away from making the ascent to socialist revolution.

The Cold War is over, but the United $tates is dominant and the top exploiter and aggressor by far. The Non-Aligned Movement hasn’t prevented many countries from cooperating with the united $tates militarily or in intelligence, and many others from cooperating diplomatically and politically. The NAM could play a larger role in discouraging that. There should be no illusions about neo-colonialism, collaboration with Amerikan or non-Amerikan imperialists, or rapprochement; at the same time, international united fronts against u.$. imperialism should develop to a higher level.

Iranian and Saudi interests in Africa; potential formation of trade blocs

Iran’s foreign minister @JZarif recently said two more things, one right after the other, suggesting a desire for Iranian-Saudi unity.(4) Zarif was starting and concluding a series of meetings in Africa. “#Afghanistan terror bombings another instance of depth of #Daesh depravity: Shia & Sunni are both victims & must unite to defeat extremists.” This was followed several days later by, “Ending successful W. Africa visit w/70 business execs. Encouraged by huge potential for economic cooperation & commitment to fight extremism.” The cynical will say these are just some nice public words from Zarif hiding an anti-Saudi or anti-Sunni policy. But when Iran criticizes Saudi Arabia, there is often an accompanying or underlying anti-Amerikan message and a suggestion that any future ties between Iran and the united $nakes are not to be viewed as favorably as potential improved Iranian-Saudi ties. The two latest tweets came after a third tweet, denouncing “Western-backed terrorists” and “Western” silence and hypocrisy.(5)

It may be increasingly understood in the media that it isn’t just Saudi Arabia making things worse for Iran, or Iran and Saudi Arabia making things worse for themselves. It seems so obvious as to be not worth mentioning except that many pieces about Iran or Saudi Arabia have referred to Shia-Sunni conflict or Iranian-Saudi conflict exclusively. Equalization of Western hostility to Iran and Saudi Arabia is making the economic vulnerability of both Islamic countries clearer to some as well as creating a potential for the two oil-exporting countries to come together on certain issues in the current climate of low oil prices and looming u.$. energy independence. Iran has been struggling against unequal treatment of it and Saudi Arabia by the U.S. State Department and the U.S. Treasury, and that is well-known among Westerners who accuse Saudis of having policies promoting terrorism.

Reuters suggested uncertainty related to the Brexit vote and Donald Trump’s candidacy had been discouraging banks from transacting business with Iranians.(6) The ability of Amerikans to impact non-Amerikans’ business with Iran, or with any other country, to this extent is unacceptable. Despite the nuclear deal that lifted some sanctions against business between non-Amerikan banks and Iranians, banks are more cautious in the current environment. They are scared by the risk of u.$. penalties if there is an error while conducting business within the new rules, and they fear the possibility of expanded sanctions returning. Reuters quoted an Iranian official as suggesting Amerikan-caused difficulties are leading Iran to make more effort to increase financial ties with “mainly China, Russia and African countries.” In addition to uncertainty- and risk- related difficulties, remaining sanctions prevent u.$. banks from processing dollar transactions between Europeans and Iranians.

Russia is having its own oil- and sanctions- related difficulties. Some say the weakened position of Arab/Muslim countries is driving them into exploitive relationships with Israeli imperialism and Russian imperialism, but the difficulties of Israel and Russia related to global economic crises (and adversarial actions of the united $tates in Russia’s case) are driving Israel and Russia themselves to seek greater ties with a variety of countries including each other. The Amerikans are concerned about this, which is why some Amerikan elites are trying to get their compatriots to support rapprochement with Iran.

Iranian PressTV discussed Zarif’s trip to promote African business with Iran.(7) The PressTV article doesn’t mention as a factor the difficulties caused by the Amerikans except to say: “Iran’s active diplomacy in Africa has been construed as a sign of the country’s willingness to engage deeper in Africa’s political and economic equations; a move that can secure the country’s foothold in the region following the removal of sanctions against the Islamic Republic over its nuclear program.” This suggests Iran might have pursued a new level of relations with African countries regardless of current Amerikan obstacles in financial and business dealings, but excluding Iran from financial markets and from dollar-denominated transactions through the u.$. system causes the options available with African countries and others to become more appealing.

It’s not just that the Amerikans are causing Iranians to compete with Saudi Arabia in Africa either. Asia Times recently discussed China’s ties with both Iran and Saudi Arabia as a basis for attenuating conflict between those two countries.(8) “ . . . [T]he possibility of Saudi Arabia and Iran reaching a certain level of normalization due to participation in China’s ‘Silk Road’ cannot simply be brushed aside.” Getting out of the oil business, or diversifying the Saudi economy, will improve prospects for Iranian-Saudi cooperation.

In regard to the Palestinian liberation struggle and Russia, Russia is a member of the Middle East Quartet, which is a tool of the Amerikans. However, the Palestinians have made remarks favoring Russian influence relative to Amerikan influence. Shortly after Iran appeared in the media as favoring increased ties with Russia, Saudi Arabia’s foreign minister said the country desired enhanced cooperation with Russia according to Saudi Gazette.(9) “The Kingdom is keen to build the best relations with Russia in a number of joint cooperation fields, Foreign Minister Adel Jubeir said here on Sunday.” “Jubeir described Russia as an important country which is home to more than 20 million Muslims.” Russia may play a role similar to that of China in relieving conflict between Iran and Saudi Arabia, which includes conflict over the extent to which to pursue peace deals with Israel diplomatically now. Of relevance to the two-state solution are China’s and Russia’s existing economic ties with Israel. Many different capitalists consider the two-state solution for economic reasons, and Israel’s economic ties with a variety of countries are already growing.

The BDS movement may be able to take partial credit for that somewhat paradoxically. The BDS movement website doesn’t claim to support a particular outcome in terms of one- or two-state solutions. If Israel is weakened economically, it will be more willing to pursue increased economic and diplomatic ties with Arab and Muslim countries.

Of course, many on all sides will disagree, some prematurely supporting movements to topple their own country’s government. That is one reason why some elites less influenced by the Amerikans still have a role to play. Hopefully, elites in various nations can figure out arrangements for Palestine or trade that aren’t what the Amerikans want.

Traditionally with Russia – which at one point had become an imperialist superpower and still claimed to be socialist – one would be wary of potential entanglement in inter-imperialist rivalry. However, unlike Russia, France has no proletariat to speak of and yet many understand the merits of French-led multilateral peace efforts relative to Amerikan so-called peace efforts. United fronts against the united $tates may involve an element of inter-imperialist rivalry (as united fronts against Germany and Japan did during World War II), and there are acceptable levels of tolerance in that regard as long as there are no illusions about that. On an obvious level, Russia no longer claims to be a socialist country. And the closest the French petty-bourgeoisie came to revolution (after France was occupied by the Nazis) was five decades ago, in 1968. The oppressed can unite with some imperialist countries temporarily, in certain struggles, without being deceived.

The world will be stuck in a neo-colonial basin until a major blow is dealt to u.$. imperialism. The world in general has been in a rut in terms of domestic revolutionary advance. External forces are needed to overthrow imperialism in a majority of imperialist countries; at the same time, neo-colonialism isn’t simply a policy that a new government in an oppressed country could end. Iran and Saudi Arabia will remain neo-colonies for five years at the very least (the length of only one five-year plan) regardless of what they do. No oppressed country can be expected to collaborate with another country against its own long-term interests, but within the context of opposing u.$. dominance there is a range of possibilities involving how to relate economically, diplomatically and politically with various non-Amerikans. ◊

• “Three Worlds Theory,” 2008 September 22.
• “Quartet report: one-state reality versus one-state fantasy,” 2016 July.

1. “Neither Chilcot nor Brexit are a reason for Arabs to rejoice,” 2016 July 9.
“Why Brexit won – and how Arabs can be happy with Britain’s choice,” 2016 July 9.
“Brexit may have consequences in the Israeli-Palestinian issue and currency-related international wealth transfers,” 2016 July.
2. “Foreign appetite for U.S. securities has taken a drubbing,” 2016 August 1.
3. “US shale oil producers making life harder for OPEC as crude prices fall back toward $40 a barrel,” 2016 July 13.
4. @JZarif, 12:23 PM - 23 Jul 2016.
@JZarif, 6:44 AM - 28 Jul 2016.
5. @JZarif, 7:06 AM - 22 Jul 2016. “Apparently western-backed terrorists beheading a 12-year innocent boy in #Syria is the new normal. Western silence is deafening. #hypocrisy”
6. “Iran’s global banking problems deepen with rise of Trump, Brexit,” 2016 July 29.
“Most U.S. states have sanctions against Iran. Here’s why that’s a problem.” 2016 June 1.
7. “Iran’s Zarif sets off on four-leg West Africa tour,” 2016 July 24.
8. “Iran, China to explore new areas of cooperation despite challenges,” 2016 July 28.
9. “Saudi Arabia wants to strengthen ties with Russia: Jubeir,” 2016 August 1.

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