The origins, politics and economics of the Islamic State

Consequences of IS atrocities disorientate the left

Every day news of new atrocities by the Islamic State is making headlines. From the beheading of young journalists to the mass extermination of religious and national minorities in Iraq and Syria, there seems to be no end to the barbarism and brutality of this latest brand of Islamist jihadism. US air strikes might have slowed down the IS’s military progress – earlier this week the two Shia cities of Amerli and Suleiman Beik were recaptured, the latter with the direct intervention of Iranian Revolutionary Guards. However, it is clear that the IS is far from defeated.

It is ironic to think that only a year ago the debate was about US military intervention on the side of Syrian opposition forces – even then dominated by the very jihadists who later chose the name ‘Daesh’ (in Arabic), or Isis. Today the US is conducting an air war against the group (and the United Kingdom is close to joining in). This air war will no doubt bolster the regime of Bashar Assad. The mass media portray US air raids and drone attacks as yet another humanitarian intervention, downplaying the enormity of the US change in policy over the last 12 months. Has there been regime change in Syria? Has the dictator the imperialists were so keen to ditch relinquished power? Is his government more democratic than a year ago? Of course, the answer to all these questions is ‘no’. Assad has consolidated his power with phoney elections; his army (supported by another ‘rogue state’, Iran) is as repressive as ever before. In short, what has changed is the priorities of the imperialist powers – there is now an urgent need to maintain control over the country they ruined in another ‘humanitarian’ intervention in 2003: Iraq.

So Shia Iran, and therefore its ally, Syria, are no longer the main enemy. On the contrary, Iran’s alliance and support is welcomed in Iraq, where, in true colonial fashion, Washington dismisses the prime minister of the occupation government and gets Tehran’s approval to install a replacement. Nouri al-Maliki is ousted and in his place is Haider al-Abadi – and the first person to express support for Iraq’s new premier is none other than Iran’s supreme leader, Ali Khamenei.

Ten years after de-Ba’athification and ‘year zero’, when neoliberal economics was supposed to bring about a flourishing, democratic civil society and, according to some on the left, trade union rights for Iraqi workers, the country remains devastated. Contrary to the US vision, it soon became obvious that the regional power benefiting from the political vacuum was Iran’s Islamic Republic. With a friendly, at times obedient, Shia-led state in Baghdad, relative influence in Syria and growing links with Hezbollah in Lebanon, the clerics in Tehran and Qom could not believe their luck: the neoconservatives had handed them the Shia belt, stretching from Tehran (some would say Kabul) to the Mediterranean coast. Yet Iran’s influence and at times direct interventions in Iraq and Syria – not to mention Hezbollah’s political success in Lebanon – increased sectarian tension, a tension fuelled by Saudi and Qatari financial support for Sunni militias in Syria and Iraq, as well as political opponents of Hezbollah in Lebanon.

US threats against Iran and the hysteria about Iran’s nuclear programme since 2007, as well as subsequent crippling sanctions, were inevitable consequences of attempts by first Bush and then Obama to address the increasing geopolitical strength of Iran. The Arab spring in 2011 and 2012 only reinforced this position, as the US now had to consider the coming to power of the Muslim Brotherhood in Cairo. Ironically it was the defeat of the Arab spring and the rising power of fundamentalist jihadists, especially in Syria, that changed US foreign policy. Obama’s statement this week to the effect that the administration has no strategy (yet) has started a number of debates. Clearly there is a level of disorientation in Washington and, for all the claims of Israel’s supporters that the ‘strategy’ is appeasement of nuclear Iran (according to Israeli prime minister Binyamin Netanyahu, the biggest threat to world peace since Hitler), the reality is that last year’s enemies (the Iranian rulers, Assad and Hezbollah) are today’s allies.

Confusion

Unfortunately this disorientation seems to have found reflection amongst sections of the left. Two recent articles – Andy Cunningham’s ‘New fault lines in the Middle East: Isis in a regional context’ on the Revolutionary Socialism in the 21st Century website1; and a response by Sam Charles Hamad in IS Network2 – are good examples of such confusion.

Sam Hamad is right to criticise the simplistic arguments of the first article, which almost falls into Press TV-style reductionism regarding the current situation – while it is easy to put all the blame on the US and its allies in the region, the full story is more complicated. However, comrade Hamad’s response, although correct in describing the disastrous policies of Al Maleki and pointing out Iran’s involvement, has its own grave shortcomings, as it implies support for US air raids in ‘defence’ of Iraqi Yazidis:

If anybody, revolutionary socialist or not, wants to see Daesh defeated or weakened without relying on or appealing to imperialism, then we must deal with the realities and complexities of the balance of forces of Iraq since the invasion and occupation by the US and its ‘coalition of the willing’. Narratives that advertise the identification of ‘new fault lines’ in the Middle East, but that then end up relying on old formulations, such as advocating ‘working class independence’ against Daesh, are usually those which necessarily stay as far away as possible from reality. Perhaps, following on from the usual line of regional Revolutionary Socialists, we ought to conclude that the only solution to Daesh is revolutionary socialism?3

Contrary to what Hamad claims, the choice is not between the abstract claim that only “revolutionary socialism will do” and a descent into the ‘realistic’ politics of supporting ‘humanitarian’ interventions by the US and its allies. Even in the current mess of the Middle East you can hold to the principled position of opposing foreign military intervention, while resisting the temptation to support one or the other reactionary state, one or the other hopeless, ‘moderate’ Islamic group, simply because they oppose the local dictator. Why should we do so?

  • Because the origins of many of these jihadists go back to Saudi Arabia and other US allies, and because it was colonialism that created the underlying problems of the region – arbitrary borders, deliberate imposition of ruling elites from religious minorities (Sunni rulers in Shia countries and vice versa). This means that imperialism can play no part in the solution. If the US were serious about stopping the massacres, why does it not impose sanctions on Saudi Arabia and other Gulf states (and take action against the Arab billionaires who finance these dubious organisations)? Instead it continues to arm these states.
  • Because all imperialist ‘humanitarian interventions’ are political, with the single aim of advancing the geopolitical hegemony of US imperialism. Otherwise we would have witnessed, if not US military action, at least forthright condemnation of Israel, as it massacred over 2,000 Palestinians in Gaza.
  • Because, as Obama admitted last week, the US has no clear strategy and the left that tails the latest ‘humanitarian’ intervention ends up supporting the bombing of pro-Assad forces, including Iranian Revolutionary guards, one year and the bombing of Assad’s opponents the next, as ground troops supported by Iranian Revolutionary Guards help Iraqi forces to recapture Shia towns.
  • Because every military intervention, ‘humanitarian’ or otherwise, brings new recruits into the ranks of the jihadists. Anyone in doubt should look at events in Afghanistan and how US bombing increased support for the Taliban.

One of the revolutionary left’s most important tasks in the current situation is to point to the fallacy of ‘humanitarian intervention’. It is the short-sighted, opportunistic politics of falling behind this or that Arab/Middle Eastern state or Islamic opposition (‘moderate’ or jihadist, from the Muslim Brotherhood in Egypt to Al Nasr in Syria) that continues to discredit the international left in the Middle East, and play into the hands of the religious fundamentalists.

Rise of IS

As I have written before, Iraq’s political problems were compounded after the 2010 elections, when the more or less non-sectarian, mainly Sunni Iraqi coalition gained the largest number of parliamentary seats. Maliki used the courts to stop it from attempting to form a government. He followed this later with attacks on non-Shia ministers and officials.

It is true to say that the destruction of Iraq started with the 2003 invasion. However, it is also true that Maliki’s sectarianism, his refusal to incorporate Sunni militias in the regular army, his intolerance of tribal leaders in northern Iraq all contributed to the ensuing chaos. Iraq, a country where religious and national minorities had lived in relative peace side by side for centuries, has become the scene of vicious battles between Sunni jihadists and Shia military sects, of Kurdish peshmergas driven out of their homes, refugees in no man’s land, and victims of ‘humanitarian’ air strikes aimed at stopping Isis’s advance. According to the most conservative estimates, currently there are three million internally displaced persons in Iraq.

Anyone who last year fostered illusions in the potential of air raids to halt Assad’s atrocities, just like anyone who is fooled by US air attacks today, should be thoroughly ashamed. Nothing could be further from the minds of American and British politicians. It is all about safeguarding their interests in the region (remember Gaza).

And what about the IS itself? Who has been financing it over the last few years? How did it gain the prominence it has? According to Charles Lister of the Brookings Doha Center in Qatar, “There is no publicly accessible proof that the government of a state has been involved in the creation or financing of Isis as an organisation.”4 However, the Iraqi government, Iran’s Islamic Republic and a number of independent observers have made accusations that the governments of Qatar, Saudi Arabia and other Persian states financed Isis in 2013 and early 2014. There is credible information about wealthy members of ruling families from the Persian Gulf countries funding it over the last two years. So, for all the Saudi and Qatari denials, there can be little doubt that, before it gained access to oilfields in north Syria and later banks in Mosul, Isis was the recipient of financial support from states in the Persian Gulf region.

Michael Stephens, director of the Royal United Services Institute in Qatar, asks:

So has Qatar funded the Islamic State? Directly, the answer is no. Indirectly, a combination of shoddy policy and naivety has led to Qatar-funded weapons and money making their way into the hands of IS. Saudi Arabia likewise is innocent of a direct state policy to fund the group, but, as with Qatar, its determination to remove Mr Assad has led to serious mistakes in its choice of allies … many taking bags of cash to Turkey and simply handing over millions of dollars at a time.5

Some of this money was originally destined for Al Nusra (Al Qa’eda’s wing in Syria). However, Isis/IS also benefited from the money smuggled via a Turkish border left deliberately unchecked. This has made the organisation one of the richest jihadist groups in the world, which now benefits from control of oilfields in Syria – indeed selling oil back to the Assad regime – and from conquering Iraqi cities: “During its conquest of the northern Iraqi city of Mosul, Isis fighters looted more than 500 billion Iraqi dinar, worth about $420 million … Iraqi officials estimate that the group now has about $2 billion in its war chest.”6

IS leader Al Baghdadi has established a military command, which includes officers from Saddam Hussein’s military. In the Middle East it is widely reported that former Iraqi officers like Fadel al-Hayali, who was one of the Ba’athist regime’s top military commanders, as well as Adnan al-Sweidawi, a colonel of the Saddam Hussein era, hold crucial positions in the military leadership of IS. These are men who fought the US occupation in the mid-2000s. Other Sunnis, linked to northern Iraqi tribes, groups which fought al Qa’eda in the 2000s, felt so isolated and betrayed by Baghdad that they sided with Isis. The Iraqi government of Maliki broke its promise to integrate over 90,000 Sunnis who fought al Qa’eda into the military security system, thus providing them with a proper income. Instead, incompetent, corrupt Shias were promoted to the highest ranks of the army – and they were among the first to run away and abandon their posts as Isis advanced.

The Americans and their new regional ally, Iran’s Islamic Republic, hope the removal of the much hated Maliki and the coming to power of the ‘moderate’ al-Abadi will improve relations with Sunni tribes. However, as late as August 30, Sheikh Ali al-Hatim of the Dulaim tribe was urging fellow Sunni leaders to withdraw from talks to form a new government. Hatim also called on the Sunni authorities to clamp down on Shi’ite militias.

Kurds

The western press and media have been full of stories about Kurdish fighters and their role in the current battles in Iraq. Former Liberal Democrat leader Paddy Ashdown has encouraged the government to “arm Kurdish forces” and called on Britain and the US to act as “handmaidens to Kurdish independence”.7

However, all those who are familiar with the region will tell a different story. Fighters from the Kurdistan Democratic Party (KDP) and Patriotic Union of Kurdistan (PUK) have not been as brave as some reports suggest, nor were they in the forefront of recent battles. Those who survived the IS’s onslaught in Sinjar province last month claim that the peshmergas and the political parties of the Kurdish Regional Authority abandoned them. Throughout the last few years, the KDP has recruited members and supporters from among Yazidis in the Sinjar province, promising them protection. (The Yazidis, whose religion is close to Zoroastrianism, have often been called “devil worshippers” because there is confusion between their name and that of the third Islamic Khalif, Yazid, who was considered by Shias to be a heretic). In Sinjar province, the KDP assured the residents, both Christians and Yazidis, that they would be safe from Sunni and Shia extremists. Sarbast Baiperi, head of the local KDP in Sinjar province, appeared on KDP radio and TV and on Facebook claiming: “Until the last drop of blood we will defend Sinjar.”8 In return the KDP expected the population to vote for its deputies. Yet in the first test of this pact, the local population claims that when the IS advanced KDP peshmergas abandoned their posts and fled.

Of course, other Kurdish fighters, mainly from the YPG (Syrian Kurdish Peoples Protection Units), members of the Syrian wing of the Kurdistan Workers’ Party (PKK), as well as Iranian peshmergas based in Iraqi Kurdistan, did fight the IS. As the refugees approached a checkpoint where Kurdish Regional Government authorities were confiscating weapons, the Yazidis and the Christians sent word back down the convoy behind them: “Give your guns to the YPG!”

The western mass media might confuse the heroism of leftwing Kurdish fighters with the cowardice of Barzani, Talabani and their useless armies, but the peoples of the region know better.

Principles

It is inevitable that, faced with the horrors inflicted by the IS, the left in the imperialist countries is suffering from some confusion. However, the answers remain simple and straightforward. For example, in 2007 we pointed out, in opposition to the line adopted by the Stop the War Coalition leadership, that threats of war against Iran should not cause us to side with a reactionary religious state that intervenes in the affairs of other countries in the region. In 2012, during the Arab spring, we said that, while in Egypt the departure of Hosni Mubarak was a cause for celebration, we should remember that, in the absence of any viable leftwing alternative, the Muslim Brotherhood’s adherence to neoliberal economics, accompanied by the imposition of aspects of Sharia law, would be a recipe for disaster. We rejected claims about the allegedly progressive and anti-imperialist nature of the MB and warned against calling for a vote for it. We were also against the military coup in Egypt in the summer of 2013, which, for example, the Socialist Workers Party at first giddily supported.

And we opposed US military intervention in Syria. Foreign interventions in that country from Iran and Russia on the side of the Syrian dictator, and from Saudi Arabia and Qatar in support of Al Nasr, Isis and the Free Syrian army, paved the way for subsequent disasters.

We can do no more than repeat the same warnings again. The Middle East has a complicated history, compounded by arbitrary borders drawn up by the colonial powers. It has been the scene of imperialist interventions throughout the last century. For the left there is only one position that has stood the test of time: we refuse to echo social-imperialist calls in favour of ‘humanitarian’ intervention. Nor do we offer ‘critical support’ to this or that regional dictator or Islamist group (‘moderate’ or otherwise), but stand alongside those sections of the working class movement that have not been tainted by either social-imperialism or false anti-imperialism.

Only by adhering to basic principles can we stand any chance of regaining support amongst the working class in the region. Do not be fooled: there are no short cuts, no easy solutions.

Notes

1. http://rs21.org.uk/2014/08/12/new-fault-lines-in-the-middle-east-isis-in-a-regional-context.

2. http://internationalsocialistnetwork.org/index.php/ideas-and-arguments/international/war-and-imperialism/483-iraq-response?showall=1&limitstart.

3. http://internationalsocialistnetwork.org/index.php/ideas-and-arguments/international/war-and-imperialism/483-iraq-response.

4. www.dw.de/who-finances-isis/a-17720149.

5. http://commonsensewonder.blogspot.co.uk/2014/09/islamic-state-income-stream.html.

6. www.dw.de/who-finances-isis/a-17720149.

7. The Guardian August 15 2014.

8. www.thedailybeast.com/articles/2014/08/17/how-the-u-s-favored-kurds-abandoned-the-yazidis-when-isis-attacked.html.

Descent into regional chaos, horror and fragmentation

Last week, the leader of the Islamic state (formerly the Islamic State of Iraq and the Levant, or Isis) appeared in Friday prayers in Mosul addressing Muslims worldwide. At least this is what his supporters claimed after a week when the organisation had declared the territory under their control a “caliphate”.

On July 3 the Iraqi ministry of interior (not the most reliable source of information) put out a statement maintaining that Abu Bakr al Baghdadi (otherwise known as Ibrahim al-Samarrai), the Islamic world’s new caliph, or Amir Almuminin (‘commander of the believers’), successor to prophet Muhammad, had been wounded in an air strike and had been transferred to Syria for medical treatment. Irrespective of whether this was the real Baghdadi or a double (as claimed by Iraqi government forces and the United States), Isis took no chances. According to Mosul residents, the city’s mobile network was closed down, presumably to stop any tracing of the movement of the Isis leader.

The same day the militant Sunni group also issued video footage showing the destruction of dozens of places of worship in Nineveh province in northern Iraq. Shia, Sunni and Christian sites were destroyed, with images placed on social media. In line with Isis’s claim that it is abolishing the arbitrary borders drawn up by Britain and France in 1916, the group symbolically blew up border posts between Syria and Iraq. On July 8 the Al Arabia news agency was reporting the circulation of a new Isis passport in the name of “the State of the Islamic Caliphate”.

The first caliphate, or succession to Islam’s prophet Muhammad, was established in the 7th century, when, according to Sunnis, Abu Bakr succeeded Muhammad as the commander of the believers. Sunni Muslims claim Abu Bakr was chosen by Muhammad in the last few days of his life – the prophet asked him to lead prayers and this indicated his choice of successor. However, according to followers of Shia Islam, Ali ibn Abi Talib, Muhammad’s cousin and son-in-law, had been designated his successor and previous caliphs were irrelevant.

The Ottoman emperors (1451-1924) were originally secular conquerors. However, Fatih Sultan Mehmed in 1481 claimed caliphal authority and his grandson, Selim I, who conquered and unified more Islamic territories, continued the title as the defender of Islam’s holiest shrines. The collapse of the Ottoman empire in 1923 marked the end of the caliphate.

Over the last few centuries small fringe groups have, like Isis, declared their territory to be a caliphate and, of course, Iran’s Islamic Republic portrays itself as the true Islamic state for both Sunnis and Shias, while the Moroccan king calls himself “commander of the faithful”. The specific problem with Isis’s declaration is not just that it has left itself open to accusations of overreaching itself, but that it has put it on a collision course with al Qa’eda. The conflict between the two groups has been in the open for months and in Syria they have taken up arms against each other.

Stalemate

The government of Nouri al-Maleki has rightly been blamed for sectarianism and incompetence and it is certainly largely responsible for creating the political stalemate that paved the way for the current crisis in Iraq. Throughout his two spells as prime minister, the Iraqi leader made no serious effort to reach out to either the Sunnis or the Kurds. On the contrary, Maleki’s ‘counterinsurgency’ policies were aimed at reducing the influence of Sunnis in the state and the military – a policy that created dissatisfaction amongst the Sunni population of the northern provinces. The Iraqi army became dominated by incompetent, unpopular officers whose only quality was loyalty to the Shia prime minister.

Maleki ignored reports of corruption and torture made against his allies in the upper ranks of the military. One general close to the Iraqi premier was implicated in torture; another, already sacked in 2009 for failing to protect Baghdad from terror attacks, was put in charge of defending part of the northern territories and is believed to have been amongst the first deserters. As a result, the military was quickly sapped of morale and cohesion, and the local population lost confidence in the central government.

In the 2010 elections, the more or less non-sectarian, mainly Sunni Iraqiya coalition gained the largest number of parliamentary seats. However, Maleki used the courts to stop it from attempting to form a government. He later used delaying tactics, bringing false accusations of corruption against Sunni rivals to outmanoeuvre opposition politicians and eventually taking power himself. And now, nearly three months after the elections held on April 30 2014, the Iraqi parliament has failed to reach an agreement over nominations for the country’s top posts: president, prime minister and speaker of the parliament.

According to the Iraqi constitution, a new president should be chosen within 30 days of the election of parliamentary speakers and their deputies. Following this process, the new head of state will have two weeks to ask the political party/alliance with the most MPs to nominate a prime minister, whose responsibility it is to form a government. Maleki, who remains the prime minister-designate until August, is responsible for carrying the process through and it is his delaying tactics that are blamed for the current political chaos in Iraq – a stalemate that has paved the way for Isis’s military advances.

The Iraqi prime minister has now acquired some powerful enemies. The United States, Britain and some factions of Iran’s Islamic Republic are looking for an alternative figure. John Kerry, Tony Blair and senator John McCain all agree that Maleki needs to stand down before a unity government can take shape in Baghdad. In late June US deputy secretary of state William Burns discussed Iraq with Iran’s foreign minister, Javad Zarif, in Vienna. US officials claim Iran is sending out conflicting messages over whether it is prepared to support a new Shi’ite prime minister other than Maleki. Both Adil Abdul-Mahdi and Ahmed Chalabi, mentioned as possible replacements, are acceptable to Iran’s government. However, ayatollah Khamenei, Iran’s supreme leader, has publicly declared his support for Maleki and demanded the US stop interfering in Iraq’s political deliberations.

His views are supported by some commanders of Iran’s Revolutionary Guards. In fact the Revolutionary Guards are heavily involved in military operations against Isis. For all the denials by Iran’s foreign ministry officials regarding the country’s military intervention in Iraq, there are a number of reports over the last couple of weeks of funerals held for Revolutionary Guards, as well as for Iranian airforce pilots, killed in Iraq and Syria.

Tribal leaders and Sunni politicians in northern Iraq have also been blamed for the crisis. Without the active cooperation or acceptance of locals, Isis would not have been able to capture so many cities. Those Sunni leaders who think they are preparing the ground for an Islamic state have clearly not thought through the implications of being part of an Isis-led ‘rogue state’, with little or no access to oil; a state where self-appointed ‘caliphs’ will interfere forcefully in every aspect of the private and social lives of Iraqi citizens in the cities under its control, irrespective of their religious and cultural background.

Kurdistan

In the midst of this political and military chaos, incompetent, corrupt and deluded Iraqi Kurdish leaders are also hoping to benefit from the situation, and are calling for Kurdish independence. Having secured temporary control of the Kirkuk oil refinery on July 1, Massoud Barzani, the president of Iraq’s autonomous Kurdistan region, told the BBC he intends to hold a referendum within months – Iraq was already “effectively partitioned”, he added. No sooner had Barzani spoken than the Israeli prime minister, Binyamin Netanyahu, promised cooperation with any new state.

The news of Netanyahu’s support initiated postings on the internet and the social media of the historical background to Israeli-Kurdish relations, including photographs from the 1960s showing Massoud Barzani’s father, Mustafa, embracing the then Israeli defence minister, Moshe Dayan. In 2004 Israeli officials met with Kurdish political leaders when Massoud Barzani, Jalal Talabani and the former Israeli prime minister, Ariel Sharon, publicly affirmed good relations with Iraqi Kurdistan.1

Soon after the Israeli statement, social-imperialist groups, ranging from the Worker-communist Party of Iran to the Alliance for Workers’ Liberty in Britain, echoed Israel’s position on the establishment of an independent Kurdish state.

Iran’s response followed soon after, with a warning to its former allies in Iraqi Kurdistan, the Kurdish Democratic Party and Patriotic Union of Kurdistan, not to declare independence, since Israel was plotting to divide Iraq. Iran’s foreign ministry spokeswoman Marzieh Afkham was quoted as saying: “Undoubtedly the vigilant Iraqi people will not allow the Zionist regime and enemies of a unified Iraq to carry out their plots and realise their immature fantasies in the region.” Deputy minister for Arab and African affairs Hossein Amir-Abdollahian said that the US is going for a Ukraine scenario in Iraq.

However, before anyone gets too excited about an ‘independent Kurdistan’ (limited to Kurdish territory in Iraq, of course), let me remind them that the biggest obstacle to such a plan will be economic considerations. Barzani clearly hopes to benefit from oil revenues generated from areas under his control, but the Kurdish authorities are currently in dispute with the central government and Baghdad is withholding payment of the share of the national budget allocated to the Kurdish regional government. Any serious attempts at separation will reduce the chances of the Kurdish authorities obtaining sufficient funds for economic survival. Moreover, the territory is landlocked, and the ‘independence’ plan is based on the income gained from the export of oil resources through Turkey. This will depend on the outcome of lengthy negotiations with Ankara. In other words, the new Iraqi Kurdistan’s economic survival will be in the hands of Ankara (not exactly the Kurds’ best friend) instead of Baghdad. Turkey’s support for such a state will no doubt include plans to control and silence aspirations for independence in Turkish Kurdistan.

Meanwhile, exaggerated stories about the role of KDP pishmargehs in fighting Isis in northern Iraq do not match reports from the region. Barzani’s initial order to his pishmargehs was to avoid conflict with Isis. It is the PKK and Pejhak guerrillas who have been taking the lead against Isis advances in Kurdish territory in Syria and Iraq. Furthermore, Barzani and his supporters should be well aware that Isis’s ambitions go far beyond defeating the Shia government in Baghdad. It is violently opposed to semi-secular Iraqi Kurdistan, where there is no state-imposed sexual segregation, where some women dare go out without a headscarf, where alcohol is openly sold and consumed …

There is also the question of Sunni Arabs living in Iraqi Kurdistan. They are fiercely nationalistic and will oppose any talk of independence. Iraqi Turkmen in and around Kirkuk are also unhappy about Barzani’s proposal and are threatening to unite against the Kurdish regional government’s attempts to fully integrate Kirkuk into the region.

No-one should take Netanyahu and his cheerleaders in the Iranian and the British left seriously when they talk of the “birth of a new Kurdish nation” in Iraq. Any unilateral attempt at declaring the current Kurdish region independent would unleash civil war.

Stability

For all the hype about Isis’s military gains in the last few weeks, we should remember that last time jihadists, in the shape of al Qa’eda forces led by Abu Musab Al-Zarqawi, controlled a large chunk of northern Iraq, they did not keep hold of it for long, because their brutality alienated the majority of the local population and they also managed to alienate the Sunni tribes who had backed them. Reports from Iraq imply the new ‘caliph’ has not learned any lessons from the previous occasion. No wonder al Qa’eda has distanced itself from its former ally.

Having said that, clearly the unpopular Maleki, like Syria’s Bashar al-Assad, does not believe he can stop Isis without huge support – and in the case of Iraq almost everyone is now involved: Russian jets, Iranian planes and ground forces, as well as US drones.

Although the governments in Iran and Iraq have publicly accused Saudi Arabia of funding the jihadi movement, the Saudis, together with Jordan and Morocco, are now concerned that it could endanger their own rule. In the case of Saudi Arabia there is clearly a feeling that the monster it has created is out of control. Nothing else would explain the recent rapprochement between Iran and Saudi Arabia, with talk of a possible visit by the chairman of Iran’s expediency council, ayatollah Hashemi Rafsanjani, to Riyadh.

On July 5 Rafsanjani proposed the following: “To fight extremism … a collective effort should be made by all Muslim countries, particularly Iran and Saudi Arabia, in order to prevent a perception that Islamic nations and governments depend on foreign powers to maintain their stability and security.”2

Once again it is clear that, far from securing ‘democracy and prosperity’, the ‘war on terror’ unleashed by Bush and Blair has created such chaos that the two most reactionary countries in the region – Iran and Saudi Arabia – could soon be widely seen as forces of moderation and “stability”.

yassamine.mather@weeklyworker.org.uk

Notes

1. The Guardian June 21.

2. www.presstv.ir/detail/2014/07/06/370099/iran-ksa-must-unite-against-extremism.

Iraq: A disaster waiting to happen

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The US and Iran find themselves on the same side and ready to cooperate, warns Yassamine Mather

News from Iraq is getting worse by the hour. Many cities in the north of the country have now fallen to the Islamic State in Iraq and the Levant (Isis), working in alliance with a variety of Sunni groups and tribes. The mortar attack on Iraq’s biggest oil refinery is another example of the escalation of the conflict. On June 17 news came of an attempt to capture of the city of Baquba, the capital of Diyala province, which is just 64 kilometres north of Baghdad.

Isis already controls Mosul, Tikrit, Tal Afar and a number of smaller cities and towns. However, its gains in the north of Iraq are not just military advances: the group is now able to access government military equipment, including helicopters and Humvee military vehicles, as well as substantial funds held at banks and insurance companies in the places it has taken. It is reported that the banks of Mosul alone have increased the jihadist group’s funds by $400 million. Of course, Isis has additional regular income from the oilfields it controls in eastern Syria, the sale of antiquities looted from historical sites, as well as donations from wealthy contributors in Saudi Arabia and the Persian Gulf states.

According to David Gardner in the Financial Times, “When your second largest city is overrun by a black-shirted horde of jihadi fanatics and your army melts away, you call for a state of emergency but your parliament cannot field a quorum, what you have is a fast failing state. That is what Nouri al-Maleki, Iraq’s irredeemably sectarian prime minister, is presiding over, in what may be his afflicted country’s last gasp as a unified nation.”1

Although most reports trace Isis back to Syria in 2013, the group’s leaders have a longer history as part of an offshoot of al Qa’eda. Abu Bakr al-Baghdadi, Isis’s main figurehead, was born in Samarra, north of Baghdad, and joined the insurgents soon after the 2003 US-led invasion.

The group claims to have fighters from the UK, France, Germany and other European countries, as well as the US, and its declared aim is to create an Islamic state in Iraq and Syria. However, its main enemy is Iran – Iranian Revolutionary Guards have been fighting Isis for the last few months in Syria. Isis forces are now less than 40 kilometres from the Iranian border, threatening the Shia shrines of Karbala and Najaf in Iraqi territory. The propaganda is clear: liberate the region from the takfiri (apostates or those they accuse of being impure or adulterous Shias).

According to prince Turki bin Faisal al-Saud, Saudi Arabia’s former intelligence chief, who should know about Isis and other Jihadist groups, Isis has no more than around 3,000 fighters, so it could not have advanced so rapidly without help from local Sunni tribes and political groups. In many of Iraq’s northern cities, members and supporters of the Islamic Party, associated with the Muslim Brotherhood, have joined forces with Isis.

Roots in 2003

Contrary to comments by the western media, none of this should come as a surprise. After all, Isis’s car bombings in Shia areas of Baghdad started last year and the group has controlled Fallujah since March 2014. More importantly, the current disaster in Iraq was predicted by anyone with even limited familiarity with the region as early as 2002, when the US and its allies began preparations for the invasion of Iraq. These events are a direct consequence of the 2003 invasion – Isis’s support from Sunnis has everything to do with the US carpet-bombing of Fallujah and its support for successive sectarian Shia administrations in Baghdad (which, ironically, allied with the west’s pariah state in the region, Iran). No amount of denial and falsification by Tony Blair and other warmongers can change this.

The invasion of Iraq in 2003 fundamentally altered the balance of forces in the region. It surgically removed the reactionary, but more or less secular, rule of Saddam Hussein and put in power a Shia government, albeit under the auspices of the US occupation.

That government was and remains very close to Iran. It was strongly opposed by Saudi Arabia, and most of the Sunni states, whose manoeuvres against it started from the very beginning. There can be no doubt that, for all its talk of inclusiveness regarding Sunnis, Turkmen and Kurds, the Iraqi government followed sectarian policies from the very start. Sunnis face routine discrimination and corruption is ripe. Initially the armed opposition to the Shia state was not jihadist – some of it was not even religious: it was simply against the occupation. It was always a question of when, not if, the jihadists would intervene.

Having said that, it would be wrong to see this as a Shia-Sunni conflict pure and simple. As Sami Ramadani has reminded us this week, “Prior to the 2003 US-led occupation, the only incident was the 1941 violent looting of Jewish neighbourhoods … The bombing of synagogues in Baghdad in 1950-51 turned out to be the work of Zionists to frighten Iraq’s Jews – one of the oldest Jewish communities in the world – into emigrating to Israel, following their refusal to do so. Until the 1970s nearly all Iraq’s political organisations were secular, attracting people from all religions and none.”2

The current conflict is about not just the instability the war created, but the balance of geopolitical forces in the region – not least the ‘Arab spring’. Contrary to Tony Blair, the Arab spring was not about the kind of deformed democracy hypocritically promoted by Bush and himself. It was a rebellion against pro-western dictators, and for better economic conditions at a time when the transfer of the worst aspects of the global economic crisis to the countries of the periphery had worsened the living conditions of the majority of the population in countries such as Egypt, Tunisia and Syria.

In the Arab world there was also shame about defeat in the Iraq war, frustration with the conciliatory attitude of pro-western rulers regarding the Palestinian issue. The Arab masses rebelled against dictators they saw as puppets or allies of the west. Many in Cairo as well as Tunis and Damascus rightly saw their rulers as being partly responsible for the whole situation. It is true that the Syrian uprising started as part of the Arab spring before jihadists, including Isis, got involved, but who financed these jihadists? The west’s main allies in the region, Saudi Arabia and the Persian Gulf states. Why? Because they were fearful of Iran’s increased influence in Iraq, Syria and Lebanon. So Blair would do better to keep quiet – every word he utters exposes not just his reactionary self-justification, but his complete ignorance of the region.

The key for us is to keep reminding people that we are in this terrible situation not because Sunnis do not like Shias, or vice versa; not because Arabs simply enjoying fighting each other. We are here because of western politicians, such as Bush and Blair, who were clueless about what was going on in the Middle East. We face this situation because of the history of colonialism and the way arbitrary borders were drawn after the collapse of the Ottoman empire – and again Blair’s comments show his blatant ignorance of that history.

We are here because the west supported the shah’s dictatorship, because it supported Saddam Hussein’s Ba’athist government in its war against Iran’s Islamic Republic throughout the 1980s – and then, when Saddam became the ‘enemy’, the US turned a blind eye to Iran’s advances in the region. Then, in the mid-2000s, wary of the change it had inadvertently caused in the balance of forces in the region and concerned about Iran’s influence, it escalated the conflict with Iran, using the excuse of the country’s nuclear programme; it punished the Iranian people (rather than the government) through stringent sanctions. Finally, now that another enemy has appeared, the west is seeking to strike an alliance with what until yesterday was its enemy. No wonder there is cynicism in the region and beyond about this latest phase of US foreign diplomacy.

The situation is, then, that the two countries directly and indirectly responsible for the creation of the current mess in Iraq and Syria – ie, the United States and Iran – are now joining forces to discuss cooperation regarding the “security situation in Iraq”. Both have already committed hundreds of military personnel to ‘advise’ Baghdad.

On June 17 the US dispatched USS Mesa Verde, which carries combat helicopters, to the Persian Gulf to join other naval ships, including the aircraft carrier, USS George HW Bush. President Barack Obama has, after all, said that no option is off the table – and that includes military air strikes.

Iran is already militarily involved. A senior member of the Revolutionary Guards has been in the country for the past three weeks to advise the government of Nouri al-Maleki and, according to some reports, he is leading military operations in Baghdad. On June 13 it was confirmed that hundreds of Revolutionary Guards were already fighting in Iraq, and Iranian president Hassan Rowhani has said that Iran is ready to step up its intervention. Let us not forget that until a few months ago the US was supporting the Syrian insurgents against the pro-Iran regime of Bashar al-Assad.

Hillary Clinton thinks military strikes are unlikely and suggests the US should work with the Maleki government to get its army fit for purpose. She claims the Iraqi army must become more disciplined, less sectarian, less corrupt. Clearly, she is delusional. The US occupation has relied on a sectarian Shia state to rule post-war Iraq, so it is a bit late now to worry about sectarianism in that country.

What about corruption? The army learnt what it knows about corruption from the likes of former defence secretary Donald Rumsfeld and other representatives of the US-led occupation. They saw how ‘Iraqi democracy’ meant allowing companies like Halliburton to make billions out of war. The Iraqi army is proving spectacularly useless in fighting the jihadists, but it is able to suppress and execute civilians. The idea of ‘retraining’ a force like this is akin to the notion of retraining the Mafia.

None of this excuses the barbaric acts of the jihadists – they are from another era. But it does underline the correctness of the position that we in Hands Off the People of Iran have consistently taken on the reactionary nature of both imperialism and political Islam.

New context

The situation in Iraq has changed the whole context of the negotiations on Iran’s uranium enrichment activities. The US is now in a far more precarious situation – Republicans have been pointing this out very forcefully. If a week ago there was doubt as to whether the interim deal could be extended in the absence of any agreement before the July 20 deadline, suddenly we hear of the drafting of a final agreement. All obstacles seem to have been removed.

Meanwhile, the United Kingdom has rushed through plans to reopen the British embassy in Tehran and David Cameron is going the extra mile – admitting to MI5’s role in the coup that overthrew the government of Mohammad Mossadegh in 1953. However, all this can change overnight if discussions about Iraq fail or a new enemy is identified in the region. There is nothing stopping US foreign policy taking another turn.

Whatever the outcome of the current conflict, the future looks bad. The Iraqi government has had to rely on hard-line Shia militias, including those who previously fought against the US occupation. If they survive, such forces will demand a greater role in state affairs – and stricter implementation of Shia Islamic legislation. Without some sort of progressive movement from below we are looking at the possibility of barbarism. And it will not just blight Iraq: it will spill over into Syria and Lebanon, Turkey and Iran.

This will not be a straightforward civil war. The jihadists have found allies amongst former Ba’athists and tribal forces opposed to the Iraqi state. But these forces will soon be alienated by the extremism of Isis, as in Syria. There, it formed alliances with moderate Islamic and secular groups fighting Assad. However, soon it began to dominate those groups, expecting them to adhere to strict sharia law. It is the same in Iraqi cities where Isis has the upper hand. So it will not be a case of a straightforward conflict between Sunni and Shia. There will be infighting amongst Sunnis and Shias and the likelihood of further fragmentation.

The situation is even more complicated in the Kurdish areas. The jihadists have largely left the Kurds alone and have taken the opportunity, for example, to move on Kirkuk, in the oil-rich part of Iraqi Kurdistan. There are unconfirmed reports that Kurdish Democratic Party leader Masoud Barzani has ordered his forces to hold their fire against Isis. But Kurds should not be fooled. The jihadists have an absolute programme of imposing sharia everywhere. From that point of view, they actually have more in common with Maleki as the head of a Shia state than with the Kurdish government.

An Iraq divided into three or more separate countries might suit the pro-imperialist, Masoud Barzani, along with western arms manufacturers and oil companies. But it would be a disaster for the peoples of these ethnically mixed regions, producing a situation of permanent conflict.

The lesson that this disastrous situation underlines yet again is the need to be implacably opposed to imperialism and its military adventures, while at the same time standing against political Islam in all its shades – from moderate, through radical to jihadist. We say no to US intervention, no to Iranian intervention. They and other reactionary forces have caused this tragedy and, even if their intervention were to secure military victory against Isis, it would not diminish support for the Islamists – quite the opposite.

If the US really wanted to deal with the Jihadists, then logically it should settle accounts with their paymasters in Saudi Arabia and the Persian Gulf emirates. The problem is that, when they were fighting Assad, the west was more or less unconcerned with their ‘extremism’ and adherence to jihadist political Islam. Now it might be too late.

Notes

1. Financial Times June 13.

2. www.theguardian.com/commentisfree/2014/jun/16/sectarian-myth-of-iraq.

Is it the oil, stupid?

To say that oil figures prominently in the Middle East is to state cyrusbinathe obvious. However, does this mean that the politics of imperialism in the region should be solely or mainly explained through attempts to gain control over oilfields and pipelines? That has certainly been the approach of much of the left in Britain and elsewhere. Noted US-based academic Cyrus Bina, author of The economics of the oil crisis, disagrees with such crude simplifications. Having studied the oil industry, international relations and global economics for many years, he has developed a sophisticated Marxist theory of the oil crisis, oil rent, and monopoly and competition in the oil industry. Here, in this short, representative, article, first published in 2004, he makes a convincing case that the US under George W Bush was not concerned with obtaining direct control over oilfields.1 With the ongoing US-UK campaign to impose tougher sanctions on Iran, including its huge oil industry, plans for regime change brought about from above and, failing that, a devastating military strike, the left urgently needs to correct past mistakes. Cyrus Bina is about to embark on a speaking tour of Britain that will include meetings in Manchester, Glasgow and London. In particular he will be addressing the November 28 annual general meeting of Hands Off the People of Iran

Saddam Hussein was an ideal enemy and Iraq was an easy target. Iraq had already lost nearly two thirds of its forces and more than 80% of its infrastructure and civil society in the 1990-91 Gulf War and, if that was not enough, it was subjected to frequent American and British bombings, along with nearly 12 years of stringent sanctions. The war against a weak symbolic enemy seemed inevitable.2

In the May 12 2003 issue of The Nation, there appeared a tiny piece entitled, ‘It’s the oil, stupid’, by Michael T Klare, who – like much of the majority of the popular left – is obsessed with oil in connection with the deceitful invasion of Iraq by the Bush administration.

To be sure, the motivation of the Cheney-Wolfowitz gang and the impeachable actions of the president himself all point in the direction of personal gain. Similarly, the fact of the transfer of tens of billions of dollars from the public coffers to the willing hands of a handful of favourite companies that were readily chosen as the beneficiary of this destructive creation is beyond dispute. Yet, to be worthy of analysis, one needs to be brave enough to go beyond surface phenomena in order to grasp the complexities associated with deeper epochal understanding of this bizarre tragedy.

Writers like Klare and George Caffentzis (the latter, incidentally, holds that oil is a “metaphysical” commodity) should realise that their oil scenario, firstly, ignores the analytical periodisation of oil history into: (a) the cartelisation of oil; (b) the transitional period of 1950-72; and (c) the globalisation of the entire oil industry since the mid-1970s. Secondly, it overlooks the distinction between ‘administrative pricing’ and value theoretic price formation. Thirdly, it neglects the nature of property relations, formation of differential oil rents, and character of the Organisation of Oil-Exporting Countries (Opec) in the (post-1974) globalisation of oil. Fourthly, it discounts the pivotal role of the least productive US oilfields that is key to the worldwide pricing of oil. Fifthly, it fails to recognise that Opec prices are constrained by worldwide competitive spot (oil) prices, and thus Opec oil rents are subject to global competition. And finally their oil scenario fails to realise that the unqualified usage of words, such as ‘access’, ‘dependency’ and ‘control’, in the context of a globalised oil industry, is anachronistic.3

Hegemony and mediation

The concept of hegemony is indivisible and ‘organic’ in respect to its constituent economic, political and ideological counterparts. And it is due to the consensual internal dynamics and intrinsic ideological power of the whole that one can exert minimal external and antagonistic power projection. This, in a broad measure, defines hegemony and its relevance to international relations, for instance, during the rise and fall of Pax Americana (1945-79). Gramsci, nevertheless, focuses on the “organic intellectuals” and examines their relationship with the “world of production” mediated through the complex intricacies of “civil society” and “political society”.4

Hegemony, in my view, has four characteristics. It must be: (a) organically consensual; (b) internally driven; (c) historically endowed; and (d) institutionally mediating. The focus here is upon the rise and fall of Pax Americana, a historically specific inter-state transnational system that rose after 1945 and fell in the late 1970s. The matter of hegemony and hegemonic structure is the mutual characteristic of the system as a whole, and not a separate property of the hegemon. Therefore, given the demise of Pax Americana, the claim of American hegemony remains baseless.

The epochal measure of hegemony

In order to see the concrete manifestation of hegemony in the then-ascendant Pax Americana,5 one has to focus on the application of the (tripartite) ‘doctrine of global containment’ after World War II. This doctrine embodied: (a) the containment of the Soviet Union; (b) the containment of democratic/nationalist movements in the ‘third world’; and (c) the containment, cooption and moulding of the social, political and intellectual atmosphere in the United States.6

The example of the first containment is the forceful confinement of the Soviets behind the ‘iron curtain’ and imposition of cold war. The cold war was a multidimensional hegemonic phenomenon, spanning the economy, polity and the entire realm of culture and ideology worldwide.

Evidence of the second type of containment is the declaration of an anti-colonial policy, on the one hand, and subversion of the democratic national movements in the ‘third world’, on the other. This doctrine often led to covert campaigns and coup d’etats that brought a number of dictatorial regimes to power whose contradictory material existence and discursive mirror image have, nevertheless, become an embodiment of Pax Americana itself.7 At the same time, America’s deliberate attempt at the speedy economic transformation of these social formations – for instance, via the introduction and forceful implementation of universal land reform programmes – has led to their hasty inclusion within the capitalist sphere of transnational exploitation and transnational markets.

Finally, the third containment strategy was implemented in terms of US domestic thought control and marginalisation of independent and militant institutions and labour unions within America’s ‘civil society’. Thus, historically, the American state smashed the militant labour unions and political and professional institutions of the left in order to universalise a ‘hegemonic model’ of intellectual emulation that shifted the entire American political spectrum significantly to the reactionary right. McCarthyism was just the tip of the iceberg in this regard.8 Here, underpinning social relations, on the one hand, and the mediating economic, political and ideological institutions, on the other hand, have reflected the measure of hegemony embedded in this system.

At a more concrete level, since the 1970s, it is through the particular historical relationship of state and the manifold social, political and economic integration and disintegration vis-à-vis transnational capital that the US-dominated hierarchy of Pax Americana and thus American hegemony has come to an end. Yet during the ‘golden age’, Soviet containment had its own manifold objectives that proved successful. The containment of democracy and independence in the third world chunk of Pax Americana had, nonetheless, left some degree of formal national sovereignty. And post-war containment of people’s political thought and action in US domestic ‘civil society’ had not led to the establishment of a police state with arbitrary, pre-emptive and systemic totalitarian objectives, if not practices.

In December 2001, the Bush administration unveiled its ‘National strategy to combat weapons of mass destruction’.9 The Bush administration used the unfortunate events of September 11 2001 as a convenient cover in order to advance toward its ‘permanent war’ policy.10 This was a formal annunciation of the Doctrine of pre-emption, a fundamental policy break from the Doctrine of containment, as follows:

“An effective strategy for countering WMD [weapons of mass destruction], including their use and further proliferation, is an integral component of the national security strategy of the United States of America. As with the war on terrorism [ie, invasion of Afghanistan, etc], our strategy for homeland security, and our new concept of deterrence, the US approach to combat WMD represents a fundamental change from the past ….

“Because deterrence may not succeed, and because of the potentially devastating consequences of WMD use against our forces and civilian population, US military forces and appropriate civilian agencies must have the capability to defend against WMD-armed adversaries, including in appropriate cases through pre-emptive measures. This requires capabilities to detect and destroy an adversary’s WMD assets before these weapons are used” (emphasis added).11

The mismeasure of ‘blood for oil’

Institutionally, the traditional petroleum cartels must be viewed as a precursor to, and not a substitute for, the highly developed contemporary global oil market. Today’s oil sector is globally structured and competitive.12

Here, contrary to the bourgeois reading of the term, competition is neither perfect nor imperfect. It rather reflects the coercive aspect of concentration and centralisation of capital in the oil industry. Yet, the myth of the war-for-oil scenario is hard to resist.

On the right, in an interview, James Schlesinger remarked: “The United States [Bush, the father] has gone to war now, and the American people presume this will lead to a secure oil supply. As a society we have made a choice to secure access to oil by military means. The alternative is to become independent to a large degree of that secure access.”13 On the left, Michael Klare declared: “Two key concerns underlie the administration’s [Bush, the son] thinking: First, the United States is becoming dangerously dependent on imported petroleum to meet its daily energy requirements, and second, Iraq possesses the world’s largest reserves of untapped petroleum after Saudi Arabia.”14

Thus, the positions of the right and the left on the cause of these wars are remarkably identical. The question is, why? Is it because of the correctness of rightwing neoclassical theory in revealing the universal truth? Or is it because of the fallacious economic ideology that is uncritically accepted by the theoryless and clueless left?

Finally, the Indian leftist electronic journal Aspects of India’s economy devoted its entire December 2002 double-issue to ‘What is behind the invasion of Iraq’.15 The authors conclude, among other things, that the attempted conversion of oil revenues from the US dollar to the euro prompted the invasion of Iraq by United States. As Krugman pointed out in a short note, any possible shift from the US dollar to the euro on the part of Opec will result in a “small change”.16

However, the fly-by-night authors do not lose any opportunity to grasp this straw in the midst of dreadful confusion. The globalisation of oil since the mid-1970s has rendered the sui generis categories of ‘access’ and ‘dependency’ meaningless.17 Based on my value-theoretic framework, I distinguish between what is ‘organic’ and what is ‘conjectural’ in the pricing of oil. To be sure, the price of production of the highly explored oilfields within the US lower 48 states is the global centre of gravity of oil prices everywhere. As a result, in competition, the more productive oilfields in the world are potentially able to collect additional profits in terms of oil rents.

Let us look at a simple exercise, attempting the calculation of the value of all Iraqi proven oil reserves in today’s prices.18 Given the Iraqi proven oil reserves of nearly 110 billion barrels, in two separate assumptions, let us assume two alternative production schedules of 2.5 and 5 million daily barrels, as follows:

If the rate of utilisation of these reserves, ceteris paribus, will be set at 2.5 and 5 million average daily barrels, these oil reserves would be exhausted within nearly 120 years and 60 years, respectively. Accordingly, our respective annual production schedules are:
1. (2.5 x 365 = 912.5) 912.5 million annual barrels
2. (5 x 365 = 1,825) 1,825 million annual barrels.

Assuming $20 per barrel for the price of Iraqi oil (viz the 1990s average market price) and about $10 for the Persian Gulf differential oil rent.19

Let us further assume:
1. an 8% real discount rate;
2. a 3% annual inflation rate;
3. a 3% annual growth rate of addition to the proven reserves.

Scenario 1

1. The assumption of 2.5 million daily barrels: Given an annual production volume of 912.5 million barrels within 120 years and $10 of differential oil rent per barrel, the value of differential oil rents for 120 years is as follows:
912.5 million x 120 = 109.5 billion barrels
109.5 billion x $10 = $1.095 trillion

Given an 8% annual discount rate, a 3% annual rate inflation and a 3% annual growth rate of addition to proven reserves, we have applicable rate of discount of 8%. Thus, the present value of $1.095 trillion at 8% discount rate to be received in a lump sum after 120 years is $106.8 million.

2. The assumption of five million daily barrels: Given an annual production volume of 1,825 million barrels within 60 years and a $10 differential oil rent per barrel, the value of differential oil rents at the end of 60 years is as follows:
1,825 million x 60 = 109.5 billion barrels
109.5 billion x $10 = $1.095 trillion

Given an 8% annual discount rate, a 3% annual rate inflation and a 3% annual growth rate of addition to the proven reserves, we would have applicable rate of discount of 8%. Thus, present value of $1.095 trillion at 8% discount rate to be received in lump sum after 60 years is $10.81 billion.

Based upon the second, much larger figure of the two, the price tag for differential oil rents in Iraq is slightly less than $11 billion. Now, let us assume that the Iraqi oil reserves are underestimated: say, that they are five times the reported figures. Thus, ceteris paribus, one would arrive at $11 billion x 5 = $55 billion. Now, let us double our reasonable figure of $10 for differential rent per barrel. Again, we would never arrive at a figure much larger than $110 billion for the present value of all differential oil rents to be paid to the Iraqis. In other words, the ‘Iraqi oil price tag’ does not exceed $110 billion to be received in lump sum at the end of the period. This is indeed chump change, given the staggering costs associated with prosecuting the war and the unanticipated financial and incalculable human costs of the occupation of Iraq.

Scenario 2

Let us further assume that the proceeds from differential oil rents in Iraq will be received on an annual basis: say, for 55 years. In other words, assume that the Bush administration and its future successors are able to invent a pill that tranquillises not only the people of Iraq, but also the people of the entire world in order to calmly and comfortably steal the Iraqi oil rents for 55 years, till 2058. Now we need to calculate the summation of the present value of annuitised annual Iraqi oil rents for the period of 55 years. This scenario is more realistic, since the payments of oil rents are made on an annual basis. Again, for the sake of argument, we have chosen a much larger average figure of 5 million daily barrels, assuming a very optimistic production schedule:
5 million x 365 = 1.825 billion annual barrels
1.825 billion x $10 = $18.25 billion

The present value of $18.250 billion annual payment, to be paid for 55 consecutive years is equal to $224.8 billion.

According to the Nordhaus estimates, the direct and indirect costs of forceful occupation of Iraq would range somewhere between $120 billion and $1.6 trillion over a 10-year period.20 Should my estimated value of Iraqi oil warrant such a huge undertaking? As we can see, the reductionist view of ‘no blood for oil’ is hardly an answer to the complex objective forces that – despite the misleading intention of new US foreign policy – are underlying the upheavals of present global polity. Rather such misleading intention, and prior and subsequent actions on the part of the US government, are readily explicable by the underlying epochal forces that so irreversibly led to America’s loss of hegemony, on the one hand, and American refusal to accept it gracefully, on the other hand.

This is the main and real cause of the new world disorder rather than this ad hoc ‘oil scenario’ that the popular left harps on about.

Notes

  1. This article originally appeared in Union for Radical Political Economics Newsletter of spring 2004. See www.urpe.org/index.html
  2. See, for instance, a neo-conservative view by Kenneth Adelman: ‘Cakewalk in Iraq’, The Washington Post February 13 2002.
  3. For theoretical underpinnings see C Bina The economics of the oil crisis New York 1985.
  4. A Gramsci The prison notebooks New York1971, p161.
  5. See R Steel Pax Americana New York 1977.
  6. See GF Kennan Memoirs: 1925-1950 Boston 1967.
  7. The 1953 and 1954 CIA coups against Mossadegh and Arbenz are but the two prime examples.
  8. See MB Levin Political hysteria in America: the democratic capacity for repression New York 1971.
  9. One has to distinguish between epochal and temporal reflections of the Bush administration.
  10. The Wolfowitz-Berle neo-conservative project of permanent war, particularly for ‘redrawing’ the map of the Middle East, was formulated long before September 11 2001.
  11. White House The national security strategy of the United States of America September 17 2002, pp1,3.
  12. Here competition is defined in Marxian terms.
  13. J Schlesinger, interview: ‘Will war yield oil security?’ Challenge March-April 1991.
  14. MT Klare, ‘Oiling the wheels of war’ The Nation October 7 2002. As a corollary, the ‘necessity’ of oil exploration from Alaska’s wildlife can also be justified by such arguments.
  15. ‘Behind the invasion of Iraq’ Aspects of India’s economy No33-34, December 2002.
  16. See P Krugman, ‘Nothing for money’, March 14 2003: www.wwsprinceton.edu/~pkrugman/oildollar.html
  17. MT Klare, ‘Oiling the wheels of war’ The Nation October 7 2002.
  18. This is a rough exercise just for the sake of illustration and approximation of the order of magnitude of Iraqi oil rents. One or two points in the discount rate or inflation rate would not make a significant difference in the basic argument. The figure of $224.8 billion is for 55 consecutive years. If the occupation of Iraq is assumed to be for a 10-year period or so, then a fraction of this figure will be relevant, which in turn will be even much smaller in magnitude than the commonly estimated cost of US war and occupation of Iraq.
  19. See C Bina The economics of the oil crisis New York 1985.
  20. WD Nordhaus, ‘Iraq: the economic consequences of war’ New York Review of Books Vol 49 (19), December 5 2002.