As U.S. pulls out of Iran deal, imperialist rivals swarm in for the plunder

Oct. 2019 Iran-protests 2018
A protest by Iranian working people in 2018.

By ERWIN FREED

“If I knew that attending a session or meeting someone would solve the people’s problems, I would not delay. If there is a chance of success of not even 90%, but say 10 or 20%, we have to try and go forward and not give up opportunities.” — Iranian President Rouhani

Stalking through articles on the recent G7 summit, between headlines on the U.S.-China trade war and the United States’s refusal to commit to ending the fires screaming through the Amazon rainforest, the bourgeois press is taking notice of an unexpected observer. That man is Mohamad Zarif, Iran’s Foreign Affairs Minister and the country’s highest diplomat.

Inside Iran after the deal

The governments of Iran, the U.S., and the EU have all been looking for a way out of the economic stalling created by Trump’s unilateral decision to pull the U.S. out of the “Iran Deal” last May. The Joint Comprehensive Plan of Action, also known as the Iran Deal, was an agreement signed by Iran and the major imperialist powers of China, France, Germany, Russia, the United Kingdom, and the United States. The JCPoA was supposed to trade commitments to extremely intrusive monitoring of Iran’s nuclear facilities for dropping of international sanctions and increased trade between the imperialist and Iranian economies. While the actual deal was signed under conditions of extreme economic coercion by the EU and U.S., Iranian President Hassan Rouhani had made his entire career on a platform of opening Iran to the world economy and building the domestic private sector.

One factor that led to Iran’s current strike wave and mass movement upsurge was the immediate betrayal of promises Rouhani had made with regards to positive impacts of the JCPoA for Iranian workers. Instead of a rising tide lifting all boats, increased foreign trade brought with it substituting foreign for domestic goods, which simultaneously raised prices and displaced Iranian workers. Implementing the JCPoA and new trade policies also dove-tailed with Rouhani’s general austerity measures.

Workers and oppressed nationalities have been under severe repression as they have stood up over the last year and a half to fight for everything from union representation, women’s rights, and self-determination for oppressed groups. Virtually all of these uprisings, despite the Trump administration’s posturing, have also been directly opposed to imperialist violation of Iranian sovereignty.

France leads the way to plunder

Leading the charge to bring the U.S. and Iran to the table has been French President Emmanuel Macron. During a tour of Europe beginning just nine days after signing the JCPoA, Rouhani signed deals with French companies committing to over 40 billion euros in trade between the two countries. The included purchasing high-end French products like new Airbus planes, manufacturing deals with companies like Renault, and major infrastructure investment into Iran. The last category includes everything from French buildout of railways, expansion in shipping operations, renovating wastewater treatment facilities, and, of course, technology transfer to better extract oil.

With this context of high levels of planned investment, especially into fixed capital, French capitalists are worried that the U.S.’s neck-breaking change of direction on Iran could mean big losses in future profits. They are also looking to combat competition from China and Russia, who are less encumbered by U.S. sanctions and have political relations with Iran that no EU country could maintain. China quickly became the largest importer of Iranian oil in the last five years.

Macron was the person who invited Zarif to Biarritz, France, the city where the G7 Summit took place, in an attempt to ease tensions between the U.S. and Iran. He also suggested extending a multi-lateral $15 billion line of credit to the Iranian government, for which Trump has voiced support.

Chinese imperialism takes control

China has moved quickly to take advantage of the opening left by Iran’s forced isolation. The fact of the trade war with the U.S. meant that U.S. sanctions had virtually no meaning to the Chinese economy. In this context, Chinese companies throughout the summer skirted the U.S. boycott through undercover shipments of oil from the country.

In September, following a racketing up of the Trumpian so-called “maximum pressure” campaign of sanctions and war threats, China and Iran updated their 2016 bilateral agreement to include $400 billion of new investment from the Chinese government. These investments will cover everything from updating energy and petrochemical facilities to broad infrastructural and manufacturing projects. These investments, as well as an expected $600 billion in trade, are slated to be made in renminbi, the Chinese national currency, and other “soft” currencies, potentially dealing a giant blow to U.S. hegemony in global trade.

While Iran is in desperate need of investment, discussed in the next section, Socialist Resurgence’s and other organizations’ designation of China as an emerging imperialist power is essential to understand what exactly these investments entail. The proposed terms for Iran in taking the loans is a deep discount of 12-35% on oil exported to China, as well as bringing into the country Chinese security forces to protect their investments.

What next for Iran?

Iranian capital’s fundamental problem is stalling productivity in all sectors, but especially energy production. The only solution available for the Islamic Republic is two sided. The first is to win investment from imperialist countries, whether they be France, China, or the United States. The second is to roll back social and economic benefits for Iranian workers. Rouhani has been leading the charge on both of these ends, but the entire political representation of Iranian capital is forced by necessity to support this program.

An economic counterforce against fighting sanctions is a growing black market, which enriches a section of Iranian capital, especially the mammoth parastate organization of the Iranian Revolutionary Guard Corps. This situation of middlemen and petty speculators enriches a small section of petit bourgeois and bourgeois forces that come mainly from the “hardline” and traditionalist section of Iranian society.

They also give extra ideological weight against trade liberalization because they benefit from restrictions on foreign goods, restrictions which they exploit to increase costs. However, this method of operations is untenable in the long term because it is nearly impossible to have profitable investments in this isolated economic environment. Capital accumulation—e.g., building new plants, hiring more workers, and increasing production—is very difficult.

In both cases, the contradictions of Iranian capital’s relationship with imperialism are borne in the most violent way by the workers and the natural environment. Under either trade liberalization or isolation, Iranian and imperialist capital expect to make big profits on the backs of the Iranian working class. Without breaking decisively from their own capitalists and fighting for workers’ power in Iran, the country will remain dependent on the whims of imperialism and how to reinvest its destructive oil profits.

Of course, countries suffering under the boot of world imperialism must make concessions to survive, but which class benefits from those concessions is decided by which class holds state power and controls the countries’ industries. It is only by taking the long struggle, which began last year—of strikes, uprisings of oppressed groups, and mass mobilizations in the street—to their logical conclusion, the creation of a revolutionary workers’ state, that Iran will be in a position to defend itself from imperialism.

 

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