JFP News 8/6 - Juan Cole: The Folly of a Gas Embargo on Iran

Just Foreign Policy News
August 6, 2009


Mousavi's Gas Embargo on Iran?
In serious contention for Dumbest Washington Consensus for September is the idea of cutting off Iran's gas imports to pressure Iran to stop enriching uranium. A majority of Representatives and Senators have signed on to legislation that seeks to block Iran's gas imports, a top legislative priority for the so-called "Israel Lobby." But it's a stupid idea for many reasons, not least of which is that it would be an albatross around the neck of opposition politicians in Iran.
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Summary:
U.S./Top News
1) Writing for Informed Comment, Juan Cole adds to yesterday's list of reasons why trying to impose a gas embargo on Iran is a really dumb idea: Iran could play spoiler for the US withdrawal from Iraq and can make trouble for the US in Afghanistan; Iraqis would line up to smuggle gas into Iran; the Iranian opposition inside Iran opposes forceful Western intervention.

2) US officials said a helicopter killed four armed men Wednesday just after midnight as they traveled on motorcycles through an open area in the Argundab district of Kandahar Province in Afghanistan, the New York Times reports. But civilians in the area told a very different story. They said the four victims were all civilians: four brothers, ranging in age from 12 to 21. After the airstrike, hundreds of angry villagers carried the bodies to a guest house owned by Kandahar's governor and chanted anti-American slogans. A correspondent for Reuters who saw the bodies said two of them appeared to be teenage boys. As described by the witnesses, the strike on Wednesday in Kohat would seem to have run counter to General McChrystal's order that airstrikes were not to be conducted on houses in populated areas, unless the lives of US soldiers were in danger, the Times notes.

3) Iran now appears almost certain to miss President Obama's September deadline to respond to his diplomatic overtures, Reuters reports. Some analysts say the US deadline is unrealistic, since the Iranian government is in no position to respond by then. Britain's Guardian editorialized that Obama need not follow the September timetable, "which is dictated more by Israel than it is by a considered U.S. assessment of Iran's uranium enrichment capacity."

4) Factories across the poor world are desperate to start producing their own cheaper Tamiflu to protect their populations from swine flu, but they are being told not to by the WHO under pressure from Western drug companies, writes Johann Hari in The Independent. "If there's a pandemic, the number of people who die will be much greater than it had to be," says Jamie Love of Knowledge Economy International.

Honduras
5) A Catholic bishop in western Honduras said members of the country's wealthy elite were behind the ouster of President Zelaya, the Catholic News Service reports. "Some say Manuel Zelaya threatened democracy by proposing a constitutional assembly. But the poor of Honduras know that Zelaya raised the minimum salary...That's why they are out in the streets closing highways and protesting (to demand Zelaya's return)," the bishop told Catholic News Service.

6) 15,000 nurses and other workers at 28 hospitals declared themselves on an indefinite strike, joining public school teachers who have been off the job for weeks in protest of the coup in Honduras, Al Jazeera reports. The OAS agreed to send a delegation to Honduras next week to press coup leaders to accept a plan to allow President Zelaya to return.

Iran
7) The companies that sell fuel into Iran include Europe-based trading firms Vitol, Trafigura, Russia's LUKOIL and Malaysia's state oil company Petronas, Reuters reports. Well-policed sanctions may stop other firms, giving an opportunity to traders with limited exposure to the U.S. and other countries that agree to the sanctions.

Iraq
8) Iraq's government announced it intends to take down within 40 days the concrete blast walls erected by the U.S. military along Baghdad's thoroughfares, the Washington Post reports.

Contents:
U.S./Top News
1) Iran: Beware Neocons Bearing Boycotts
Juan Cole, Informed Comment, August 6, 2009
http://www.juancole.com/2009/08/iran-beware-neocons-bearing-boycotts.html
[...]
Let me just add to Naiman's list of Reasons for Which this is Another Brain-Dead Neocon Idea.

You may have noticed that just last week, and despite Iran's political crisis, Russia and Iran conducted joint naval exercises in the Caspian Sea. You really think Russia is going to vote at the UN for crippling sanctions on Iran? What would happen to the value of Russian (and Chinese) investments in Iran?

Even a US ally such as the UK, which is seeing depletion of the North Sea fields, is increasingly interested in Iran as a source of natural gas. In part, this interest derives from a desire to avoid being hostage to Russia. Draconian sanctions on Iran would have the effect of actually strengthening Russia's near-monopoly position with regard to supplying natural gas to Western Europe.

Moreover, the Iranians can play spoiler for the US withdrawal from Iraq, both in the Shiite south and in Kurdistan. They helped rein in Muqtada al-Sadr, they can unleash the special groups of the Mahdi Army. As the US military draws down over the next year, it becomes more and more vulnerable in Iraq. Moreover, Iran has plenty of clients in Afghanistan and can make lots of trouble for US and NATO troops there. Obama could go into the 2012 election season with two quagmires on his hands if he provokes Iran too much.

And, Shiite-dominated Iraq would not go along with a gasoline embargo on Iran. In fact, Iraqis would line up to smuggle gasoline into their neighbor, both on economic and ideological grounds. And Venezuela among other potential exporters would not cooperate. Since gasoline is easily transported and transformed into cash (what the economists call 'fungible'), a gasoline embargo would be among the more difficult policies to implement that you could imagine, especially if much of the world is against it.

As Naiman notes, if the US Navy stopped third parties from delivering gasoline to Iran, that would be an act of war in international law. We've got two or three too many wars going on as it is.

The Neoconservatives, as with any cult, work by gradually drawing their victims into an unrealistic world view with assertions that in their own right seem reasonable. The regime in Tehran is horrible. It would do the Iranians themselves a favor to get rid of it. It is vulnerable on gasoline imports. The regime is a threat to world peace (even though it has not launched any wars of aggression), just Because It Is. It is trying to get nukes (even though all the evidence points to the opposite conclusion). There is therefore a window within which the West must move. Now, now, strike now! And then the victims drink the cool-aid.

But in fact, the Iranian opposition inside the country universally opposes forceful Western intervention in Iran. The regime is not militarily aggressive. It doesn't have any near-term capacity to produce nukes. There is no crisis, and what problems exist cannot be resolved militarily.

But in fact, the Iranian opposition inside the country universally opposes forceful Western intervention in Iran. The regime is not militarily aggressive. It doesn't have any near-term capacity to produce nukes. There is no crisis, and what problems exist cannot be resolved militarily.
[...]

2) Road Bomb Kills Afghans; U.S. Airstrike Is Disputed
Dexter Filkins, New York Times, August 6, 2009
http://www.nytimes.com/2009/08/06/world/asia/06afghan.html

[...]
In the second episode, American officials said a helicopter killed four armed men Wednesday just after midnight as they traveled on motorcycles through an open area in the Argundab district of Kandahar Province.

The men were carrying plastic jugs in an area where roadside bombs are common, suggesting that they were carrying explosive materials, according to a communiqué released by the American-led force here. The Americans said that the men were killed by bullets and rockets and that no bombs were dropped.

But civilians in the area, a village called Kohak, told a very different story. They said the four victims were all civilians: four brothers, ranging in age from 12 to 21. A fifth brother, age 13, was slightly wounded in the attack.

"These people were sleeping - the entire village knows, the entire village knows," said Obaidullah, the uncle of the dead brothers. He spoke by telephone from the hospital in Kandahar, where he was tending to his wounded nephew. "I want to announce to ISAF and NATO forces who are here that they are like blind and deaf people," Obaidullah said, referring to the International Security Assistance Force. "They cannot investigate, they cannot evaluate who they are attacking and why they are attacking."

"So deaf and blind people, the only thing they can do is bomb, because they cannot hear or see," he said. "If these kinds of things continue, we will be forced to take guns against them and join the other side," he said.

After the airstrike, hundreds of angry villagers carried the bodies to a guest house owned by Kandahar's governor and chanted anti-American slogans. "These are the enemies of Muslims!" the crowd roared.

A correspondent for Reuters who saw the bodies said two of them appeared to be teenage boys. "They were civilians killed by the airstrike, while fast asleep," Jan Mohammed, one of the men who carried the bodies, told Reuters. Afghan and American authorities said they were looking into the accusations.

Civilian deaths have been a source of extreme animosity between the American-led coalition and their Afghan hosts, particularly those caused by airstrikes. Gen. Stanley A. McChrystal, the overall commander here, recently tightened the rules covering airstrikes in order to lower the number of civilian deaths.

The essence of General McChrystal's new order was that airstrikes were not to be conducted on houses in populated areas, even if militants were seen to be fleeing inside, unless the lives of soldiers were in danger. As described by the witnesses, the strike on Wednesday in Kohat would seem to have run counter to that.

3) Little hope Iran will meet U.S. diplomatic deadline
Ross Colvin, Reuters, Thu Aug 6, 2009 9:49am EDT
http://www.reuters.com/article/GCA-Iran/idUSTRE5750VQ20090806

Washington - Iran now appears almost certain to miss President Barack Obama's September deadline to respond to his diplomatic overtures, but it seems equally unlikely Washington will rush to impose tougher sanctions.

Iranian President Mahmoud Ahmadinejad was sworn into office on Wednesday, greatly weakened and facing questions about his political future after a disputed election that sparked the worst unrest since the 1979 Islamic Revolution.

"To think that at the same time as putting together his cabinet in the midst of the largest uprising since the Iranian revolution, and oh by the way, figure out a way to respond to the United States, that is just not going to happen," said Reza Aslan, an Iran expert and author in Los Angeles.
[...]
Obama had initially set an end-of-year deadline to review his administration's policy of engagement with Iran but then brought that forward to late September, to coincide with the next G-20 gathering of rich and emerging nations.

U.S. officials have been watching the post-election turmoil in Iran, trying to assess how it might affect prospects for diplomacy with its long-time foe.

"They have been forced to see how things are going to shake out in Iran before taking any steps," said Steven Cook, a senior fellow for Middle Eastern studies at the Council on Foreign Relations in Washington. "I think the administration is going to have to wait longer than some of these deadlines to see what direction Iran's system is going to go," he said.

Even so, American officials, including Secretary of State Hillary Clinton, have kept up the pressure, emphasizing the September date and the threat of "crippling action" if Iran fails to respond in time.

Iran watchers see those statements aimed primarily at appeasing U.S. ally Israel, which has reluctantly backed Obama's engagement policy while hinting it may take pre-emptive action against Iran's nuclear facilities if it believes U.S. diplomacy is going nowhere.

"One way and another, Mr Obama has been bounced into setting an early September deadline for Iran to reply to the U.S. offer of talks. (He) does not need to follow this timetable, which is dictated more by Israel than it is by a considered U.S. assessment of Iran's uranium enrichment capacity," Britain's Guardian newspaper said in an editorial.

The Obama administration has been deliberately vague in talking about sanctions and has not publicly endorsed an effort in Congress to restrict Iran's imports of gasoline and other refined oil products. But no one is under any doubt that is one option being considered.

U.S. officials say that any sanctions would take time to negotiate with allies and put into effect. Getting Russia and China, two major trading partners of Iran, to agree to them will be difficult if not impossible, analysts say.
[...]

4) The Hidden Truth Behind Drug Company Profits
Ring-fencing medical knowledge is one of the great grotesqueries of our age
Johann Hari, The Independent, Wednesday, 5 August 2009
http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-the-hidden-truth-behind-drug-company-profits-1767257.html

This is the story of one of the great unspoken scandals of our times. Today, the people across the world who most need life-saving medicine are being prevented from producing it. Here's the latest example: factories across the poor world are desperate to start producing their own cheaper Tamiflu to protect their populations - but they are being sternly told not to. Why? So rich drug companies can protect their patents - and profits. There is an alternative to this sick system, but we are choosing to ignore it.

To understand this tale, we have to start with an apparent mystery. The World Health Organisation (WHO) has been correctly warning for months that if swine flu spreads to the poorest parts of the world, it could cull hundreds of thousands of people - or more. Yet they have also been telling the governments of the poor world not to go ahead and produce as much Tamiflu - the only drug we have to reduce the symptoms, and potentially save lives - as they possibly can.

In the answer to this whodunnit, there lies a much bigger story about how our world works today.

Our governments have chosen, over decades, to allow a strange system for developing medicines to build up. Most of the work carried out by scientists to bring a drug to your local pharmacist - and into your lungs, or stomach, or bowels - is done in government-funded university labs, paid for by your taxes.

Drug companies usually come in late in the process of development, and pay for part of the expensive, but largely uncreative final stages, like buying some of the chemicals and trials that are needed. In return, then they own the exclusive rights to manufacture and profit from the resulting medicine for years. Nobody else can make it.

Although it's not the goal of the individuals working within the system, the outcome is often deadly. The drug companies who owned the patent for Aids drugs went to court to stop the post-Apartheid government of South Africa producing generic copies of it - which are just as effective - for $100 a year to save their dying citizens. They wanted them to pay the full $10,000 a year to buy the branded version - or nothing. In the poor world, the patenting system every day puts medicines beyond the reach of sick people.

This is where the solution to the swine flu mystery comes in. Ordinary democratic citizens were so disgusted by the attempt to deprive South Africa of life-saving medicine that public pressure won a small concession in the global trading rules. It was agreed that, in an overwhelming public health emergency, poor countries would be allowed to produce generic drugs. They are the exact same product, but without the brand name - or the fat patent payments to drug companies in Switzerland or the Cayman Islands.

So under the new rules, the countries of the poor world should be entitled to start making as much generic Tamiflu as they want. There are companies across India and China who say they are raring to go. But Roche - the drug company that owns the patent - doesn't want the poor world making cheaper copies for themselves. They want people to buy the branded version, from which they receive profits. Although not obliged to, they have licensed a handful of companies in the developing world to make the treatment - but they have to pay for license, and they can't possibly meet the demand.

And the WHO seems to be backing Roche - against the rest of us. They are the ones best qualified to judge what constitutes an overwhelming emergency, justifying a breaching of the patent rules. And their message is: Don't use the loophole.

Professor Brook Baker, an expert on drug patenting, says: "Why do they behave like this? Because of direct or indirect pressure from the pharmaceutical companies. It's shocking."

What will be the end-result? James Love, director of Knowledge Economy International, which campaigns against the current patenting system, says: "Poor countries are not as prepared as they could have been. If there's a pandemic, the number of people who die will be much greater than it had to be. Much greater. It's horrible."
[...]

Honduras
5) Honduran bishop says wealthy elite were behind ouster of president
Catholic News Service, Aug-4-2009
http://www.catholicnews.com/data/briefs/cns/20090804.htm

Eugene, Oregon - A Catholic bishop in western Honduras said members of the country's wealthy elite were behind the ouster of President Manuel Zelaya. Bishop Luis Santos Villeda of Santa Rosa de Copan also said the country needs a dialogue between the elite and Honduras' poor and working-class citizens. "Some say Manuel Zelaya threatened democracy by proposing a constitutional assembly. But the poor of Honduras know that Zelaya raised the minimum salary. That's what they understand. They know he defended the poor by sharing money with mayors and small towns. That's why they are out in the streets closing highways and protesting (to demand Zelaya's return)," the bishop told Catholic News Service. In a July 30 telephone interview, he said it is misleading to consider Honduras a democracy, either before or after the June 28 coup. "There has never been a real democracy in Honduras. All we have is an electoral system where the people get to choose candidates imposed from above. The people don't really have representation, whether in the Congress or the Supreme Court, which are all chosen by the rich. We're the most corrupt country in Central America, and we can't talk about real democracy because the people don't participate in the decisions," he said.

6) Clashes at Honduras student protest
Al Jazeera, Thursday, August 06, 2009
http://english.aljazeera.net/news/americas/2009/08/20098602218406376.html

Riot police in the Honduran capital Tegucigalpa, have used tear gas and water cannon to disperse students rallying in support of the country's ousted president, Manuel Zelaya. Up to 400 students gathered in protest near the Autonomous University of Honduras in the city on Wednesday, some of them throwing rocks at police. At least four people were arrested.

Clashes have erupted more frequently in Tegucigalpa since the country's interim government warned last week it would no longer tolerate street blockades that have snarled traffic on a near-daily basis since the June 28 coup.

Further protests are expected in the coming days with more Zelaya supporters marching to Tegucigalpa from various regions of Honduras, expecting to converge on the capital on August 10.

Adding to the pressure, some 15,000 nurses and other workers at 28 hospitals declared themselves on an indefinite strike, joining public school teachers who have been off the job for weeks.

The OAS wants to see Zelaya return to Honduras ahead of new elections [EPA]
The protests come as the Organisation of American States agreed on Wednesday to send a delegation to the central American nation sometime next week.

It hopes to persuade the Honduran interim president, Roberto Micheletti, to negotiate with mediators seeking to return the ousted president.

They want Micheletti to accept a Costa Rican plan under which Zelaya would return to power until new elections could be held.

Jose Miguel Insulza, the secretary-general of the OAS, said that the organisation would name a group of up to five foreign ministers of member countries who would travel next week to Honduras.

Iran
7) U.S. fuel sanctions to hurt Iran, a boon for traders
Simon Webb and Chris Baldwin, Reuters, August 6, 2009
http://www.reuters.com/article/reutersEdge/idUSTRE5752W420090806

Dubai/London - U.S. sanctions against suppliers of fuel to Iran would drive up the price the Islamic Republic has to pay for imports and provide a big money-making opportunity for oil traders able to flout the measures.

Sanctions busting has proved lucrative in the past for the less scrupulous in the opaque world of oil trade and could do so again if new measures seek to limit sales into Iran. "Oil flows are really determined by market forces rather than politics and that's the bottom line," said analyst Raja Kiwan of PFC Energy. "Politics can be an obstacle, but can't block the flow."
[...]
The companies that sell fuel into Iran include Europe-based trading firms Vitol, Trafigura, Russia's LUKOIL and Malaysia's state oil company Petronas, oil traders said.

India's Reliance has also supplied Iran, but has shipped nothing since May, traders said, possibly to avoid any future restrictions on sales to the U.S. under sanctions.

Well-policed sanctions may stop other firms, giving an opportunity to traders with limited exposure to the U.S. and other countries that agree to the sanctions. "There are many one-man ship trading companies out there who can sleeve the business," said one Singapore-based oil trader. "Are you going to sanction them? It's not practical. It's good for politics but it makes absolutely no sense."

Of those that would lose a share of Iran's 120,000 bpd of gasoline imports, Reliance would perhaps be the hardest hit, Troner said. Reliance has a giant new 580,000 barrels per day (bpd) refinery on the west coast of India.

It needs to keep the refinery running as it tests new units, and needs to sell bigger volumes even as global fuel demand declines due to the economic downturn.

The UAE port of Jebel Ali, where companies import gasoline and then blend it for export to Iran, would also likely see disruption to its trade, analysts and traders said.

Iraq
8) Iraqi Authorities To Remove Baghdad's Blast Walls
Ernesto Londoño, Washington Post, Thursday, August 6, 2009
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/05/AR2009080503788.html

Baghdad, Aug. 5 - Iraq's government announced Wednesday that it intends to take down within 40 days the concrete blast walls erected by the U.S. military along Baghdad's thoroughfares, a move that could backfire on the country's prime minister, who has tied his reelection hopes to keeping violence at a manageable level as American troops withdraw.

Removing miles of the blast walls that have turned this capital into a grim, bunkered city would ease traffic and help restore the sense of normalcy that Iraqis yearn for after six years of war.

But it also could help insurgents by making bombings deadlier and getaways easier. Many of the walls were erected to block access to areas used by militias to launch rocket attacks on the Green Zone and on U.S. military facilities.

Violence has increased slightly in Iraq in recent months, according to U.S. military officials. Two incidents Wednesday highlighted the security challenges that continue to bedevil Iraqi forces. A high-ranking American officer's convoy was struck by a grenade in western Baghdad. No one was hurt, the military said. Late Wednesday, powerful bombs in the capital's western neighborhood of Mansour destroyed one of the main cellphone towers of the Asiacell telecommunications network, Iraqi police officials said.

Maj. Gen. Qassim al-Moussawi, a spokesman for the Baghdad security command, said the blast walls would vanish from highways and secondary roads within 40 days, marking the first time the government has provided a timeline for their removal.
[...]

-
Robert Naiman
Just Foreign Policy
www.justforeignpolicy.org

Just Foreign Policy is a membership organization devoted to reforming US foreign policy so it reflects the values and interests of the majority of Americans.

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