Mohammad-Reza Behzadian on Sanctioning Iran’s Central Bank
While sanctions against Iran’s central bank - an idea that has already reverberated through the country’s economic sector - have not yet been signed by the US president, a review of the Iranian media indicates the constrains that exist in debating this issue. To clarify the meaning and consequences of sanctioning the central bank, Rooz interviewed two prominent economy specialist in Tehran, Mohammad-Reza Behzadian and Kamal Athari.
Behzadian believes that while such sanctions cannot take place against Iran right now, they can within the next six months if Iraqi, Saudi and Libyan oil make up Iran’s absence from the oil market. Behzadian who is associated with reformers, ran in the Tehran’s chamber of commerce elections with the slogan of “change” and claims to have unlodged the body from its conservative elements such as Ali Naghi Khamushi, Mir-Mohammad Sadeghi and Asadollah Asqar-Owladi. Read on for the details.
“When I made myself a candidate to run for the chamber’s elections, Ahmadinejad’s government initially rejected my credentials. But when it suspected that this rejection could result in a drop in voters, it confirmed my credentials to run. After the elections when they saw that I had received the highest number of votes, they annulled my election. They did this through their agents in the chamber.”
Behzadian does not believe that the central bank will be sanctioned yet. In This regard he says, “Since sanctioning the central bank will result in a suspension of oil exports and a rise in oil prices at the global level, I do not believe it is therefore possible to do this now. But in six months time if oil from Iraq, Saudi Arabia and Libya can produce an additional two million barrels of oil to compensate for Iran’s oil, then unfortunately this decision will materialize.”
Rooz: Is this unavoidable?
Behzadian: Not yet. Now is an opportunity for Iran to try to realign its relations with the world on a different basis and thus prevent this from happening. If it wants to continue its path, then it has time to think about things.
Rooz: And what is the meaning of this sanction if it takes place?
Behzadian: The SWIFT (Society for Worldwide Interbank Financial telecommunications) mechanism will be denied to Iranian banks. To transfer funds between international banks, a bank sends transfer messages or requests through the SWIFT system, which is located in New York. So when a bank wants to send money to another bank, in reality it sends a coded message for the transfer of an amount of money from bank A to bank B. The place where these coded messages are decoded is in the US. So, if the US closes this channel to Iran, all Iranian international banking operations will stop. So sanctioning Iran’s central bank means denying SWIFT operations which means stopping any financial transaction to and from Iran.
Rooz: But such restrictions exist even today.
Behzadian: Such restrictions exist, but it is still possible to engage in transactions. It is not possible for individuals to send money to or from Iran but as you see all those who buy Iranian oil are making payments to Iran. Other than China and India who do not send money and wait until Chinese goods are sent to them, others such as Japan, Spain, Italy etc send money to Iran for the oil they purchase on a daily basis.
Rooz also spoke on the same subject to Kamal Athari, another economist, writer and translator. He believes sanctioning Iran’s central bank is a necessary step in the pre-war condition against Iran.
Rooz: Do you think the possibility of higher oil prices and more economic woes for the West will prevent the materialization of this act (sanctioning the Iranian central bank)?
Athari: I do not think so. Such talk also existed before the invasion of Iraq or the events in Libya. In reality, Iran’s oil, like that of Iraq or Libya, may also be temporarily stopped. As you see, OPEC just now kept its total production ceiling. This means that even if Iran’s oil stops flowing, OPEC has to make up the difference and export 30 million barrels a day. Iran has agreed to this arrangement, and I do not know whether they did this knowingly or not. But I was surprised. So with Iran’s own approval, other countries can (at the right time) make up Iran’s difference.
Rooz: What is the significance in sanctioning Iran’s central bank?
Athari: In the words of the German war strategist Clausewitz, war is regarded as nothing but the continuation of state policy with other means. Similarly, one can say that politics is the continuation of economics. Today’s sanctions against Iran are pre-war and destructive conditions that are imposed on the country. The goal of this policy must be identified. One must identify which policy are these sanctions fulfilling and what is their goal. Let’s look at other similar situations. The Salafis whom the US does not like get votes and are now equal to the secularists in Egypt. Just like the Taliban that were not. In the words of Fukuyama, the road to democracy in the Middle East is through Iran. Mr. Bush did not hear this message, just as Mr. McCain does not hear it today. Mr. Obama will be ashamed from leaving Iraq in time. He can say that while he does not want to pursue a militaristic policy, but he has not alternative. Note that Mr. Obama had opposed sanctioning Iran’s central bank. But in any case this is what the Congress has called for. It was also against troop withdrawals from Iraq. The US must now think that had it not called Iran as part of the axis of evil, would we be where we are today? These examples show that the right policies are not being pursued. I do not wish to defend the policies of the Islamic republic but I do want to point out to those who want to pursue the sanctions policies and ask them who has benefited from the sanctions so far. So I have to say that if these sanctions have such goals behind them, and on the other hand this policy has resulted in a global crisis, then it is questionable from every angle.
... Payvand News - 03/25/16 ... --