Holiday

Bangladesh politics at crossroads

Ataus Samad

The political situation in Bangladesh has arrived at a cross-road. The government of the day has been lurching from problems to crises and bumping from there into disasters. It has now chosen brute force to silence the opposition as it has dared to take the failures of the government to the public. The ruling Awami League is also mad at the main opposition, Bangladesh Nationalist Party (BNP), as it is insisting on the restoration of the system of non-party care-taker government (CG) during parliament elections. Awami League wants the national elections to be staged with itself running the government.

The BNP has, however, shown a capacity for survival and the ability to stand its ground to challenge the road roller of governmental oppression. The crucial question as to how dangerous the political situation is going to be now depends on how much more does the ruling Awami League provoke the opposition and in reaction to that how long the latter can keep away from violent protests. BNP leader M. K. Anwar has said that the government has been planning to impose a state of emergency, suspending fundamental rights, after creating chaos in the country.

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Ataus Samad

While the senior leaders of BNP do not yet wish to take a course that will result in bloodshed, it is known that they are under pressure from some segments of the party to call general strikes to protest fatal repression by the government and ruling party cadres. This pressure increased when five protesters were killed by police firing during the BNP-led marches on January 29 and 30. The Awami League government had put an 18-hour ban on processions and rallies in Dhaka, Chittagong and a number of other places in the country on January 29 thus foiling BNP’s mass-procession programmes on the day in these places. BNP protested the government order but did not violate it. It replied by staging huge processions the next day. On the day before, however, the processions of the opposition at many of those places where there was no official ban came under physical attack by police and Awami League activists. Four persons were killed as a result of police firing on January 29. Also, more than a thousand were injured, at least hundred seriously, and several thousand were arrested.

The stark demonstration of naked abuse of governmental authority by the party in power with a view to suppressing protests created sharp reaction among the public. Together, the intensity of public condemnation and BNP’s calm but firm response to the governmental cruelty together have somewhat puzzled the Awami League leadership. With not much there to talk about, Prime Minister Sheikh Hasina has asked the people of the country to “remain watchful of attempts to subvert democracy”. She has also warned the opposition of taking ‘legal action’ against them if they, in her words, ‘keep opposing’ the ongoing war crimes trial. And joint general secretary of Awami League Mahbubul Alam Hanif has said that BNP chairperson Begum Khaleda Zia by announcing that the Awami League government will be toppled by means of a strong mass movement has in fact admitted that she is conspiring to overthrow the government. BNP has announced that its supporters from all over the country will converge to Dhaka on March 12 to demand the restoration of the CG system and the resignation of the present government as it has failed in its duties.

It may be mentioned here that although Awami League leaders describe BNP’s demand for an early parliament elections as illegal such early elections have taken place in Bangladesh in 1988, 1991 and 1996. Early national polls have also taken place in India.

The major complaints against the present Awami League government are its failures to reign in inflation, to prevent the collapse of the share market, to control the chaos in the economy, to check corruption in government , to stop widespread violence by its cadres, to improve the law and order situation, to put an end to extra-judicial killings, and to gain any advantage from India while doing that country’s bidding in every matter. Partisanship in recruitment of top government jobs is another reason for discontentment against the present Awami League government.

Meanwhile, the Bangla daily newspaper Jugantor has published a survey in which it is shown that the ruling Awami League will suffer a crushing defeat if Jatiya Sangsad (parliament) elections were held right now. According to the survey Awami League will win only 69 out of the 300 general constituencies in the country while BNP will emerge victorious at 170. The Jugantor newspaper’s correspondents carried out the survey and the paper has published a constituency by constituency analysis. The Jugantor survey is in line with the findings of surveys carried out by two newspapers last month.

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Why can’t EC resolve the issue of a fair election?

M. Serajul Islam

The search is on to choose a new Election Commission. The search has begun following the President’s discussions with the political parties during which most of the parties showed very little interest on the issue of the EC but more on reviving the Caretaker Government system. A five member committee has been formed for the search. The Committee has written to the political parties to nominate 5 names for the EC. The BNP has rejected the offer outright.

There is nothing that one can oppose in the initiative to form a search committee for the new EC. In fact, this is quite a positive idea and therefore one must welcome it. Nevertheless, every act in politics or governance is only a small part of a big canvas and whether an act is positive for the body politic or not will depend on how it fits into the political canvas.

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M. Serajul Islam

The political canvas of Bangladesh as it is now is not a straight forward one where an EC formed in the manner that the President and the Search Committee has set out to achieve it will fit into the political canvas the way the ruling party desires. For a starter, the political canvas is one where the ruling party and the opposition are at each others’ throat on many issues considered by the BNP to be more important than forming the EC. To the BNP, the issue that is of essence is the need to re-activate the caretaker government to hold the next elections instead of holding it under an interim government headed by the ruling party.

They see the EC under an interim government headed by the ruling party no matter how it is chosen to be one where it would not have the power and the independence to be the replacement of the caretaker government by a long stretch of imagination. Further, the BNP has also stated that it does not see the initiative to search for the next EC through a committee as constitutional. The BNP’s negative stance on the search for the next EC has put a spanner on the government’s initiative.

The initiative has also not received the sort of response from the other political parties that would give it the sort of credibility that the government needs to sell the idea that an EC so chosen would be an alternative to the CG. In effect therefore what is going to happen if the ruling party insists on holding the next elections under it is that the Search Committee will end up recommending those names that the ruling party would have in any case chosen. Therefore the initiative will do little to resolve the gridlock that has set on the next elections; it fact the way things are moving, it will further strengthen the gridlock.

The Government’s argument that the EC would serve the national need of a free and fair national election fails in the reality test in a major way. The EC in India is an example where a body such as the one the ruling party is contemplating could rise above partisan politics and conduct a free and fair election. There are a few important factors that have helped establish the EC in India as a very powerful body capable of holding free and fair elections in the world’s largest democracy. First, the Indian EC is a quasi judicial constitutional body whose powers are derived from the Constitution. Second, India’s democratic institutions are firmly established and not subject to manipulation by the party that goes to power. Finally, the EC in India works hand in hand with the independent judiciary whose credibility is above question and reprieve.

These inherent strengths of the Indian EC notwithstanding, it had to work hard and fearlessly to establish its credibility against the pressure of the party in power. It achieved that credibility in the turbulent decade of the 1970s when Mrs. Indira Gandhi was showing tendency of assuming dictatorial powers following her popularity in India and abroad after defeating Pakistan in the 1971 war and playing the leading role in the emergence of Bangladesh. The Court and the EC acted in tandem to stop Mrs. Gandhi from trampling with the democratic institutions of India, particularly those related to holding free and fair elections.

In Bangladesh, the conditions that have helped the Indian EC emerge as the custodian of free and fair election do not exist. The way politics has emerged in the country, no one would believe that the EC in its right mind would consider declaring election of either Sheikh Hasina or Khaleda Zia void no matter what evidence there would be to take such punitive action. The slight possibility of taking punitive action against leaders of the stature of these two politicians would vanish if one of them would happen to be the Prime Minister.

Our EC, even if it is chosen in a bipartisan manner and given power and independence, would have to depend entirely on the administration over which it would have no control to conduct the election because it does not have the manpower recruited by it and answerable to it to perform its functions. It would have to depend on the civil bureaucracy for the purpose. The ruling party, by general admission, has politicized the bureaucracy and has shown every intention to place bureaucrats loyal to it in the district and local level administration who would play key roles in conducting the next elections. Therefore, no matter how the next EC is chosen, it would be dreaming for the unexpected for it to rise above the party that would be conducting the next elections.

A major reason that those who reject the CG system suggest that its members are un-elected. They hold the view that a democratic election cannot be held under unelected people. As a debating issue, there could be strong augments in favour of such a view. However when our politicians make this argument, it sounds hypocritical. The idea of the CG did not originate in the civil society. It came from the politicians themselves who argued against their own character to force this concept on the country at great economic costs. The AL with Jamat that championed the CG system argued that under a party government, a free and fair election was impossible because of the ease with which it would be able to manipulate elections.

By all counts, the tendency of the party in power to manipulate the elections to return to power has become stronger. The quality of politics has deteriorated and the impatience of the two mainstream parties for each other has worsened. This worsening quality of politics encouraged the Supreme Court, while recommending the abolition of the CG system, to also recommend that the next two elections should be held under the CG system because it did not believe that the ruling party would refrain in interfering in the elections it would conduct.

The argument that the ruling party makes that it has not interfered in the municipal elections to argue that it would not interfere in national elections held under it does not stand against serious scrutiny. First, municipal elections do not change a government. Second, the media, particularly the electronic media made it impossible for any interference in the municipal elections by its round the clock vigilance. Third, the media cannot play such a role in national elections because of the large number of seats and the huge number of voters involved. Finally, the ruling party proved what it is capable of doing by refusing the EC army support that the Government was constitutionally obliged to provide in case of the Narayanganj election. The EC asked for the army support to ensure free and fair election.

To replace such a system that the Supreme Court feels is necessary for at least two more elections and ask people to believe that the EC would be a democratic substitute is arguing the case by turning a blind eye to the sad state of our politics and reality. Then again, the EC in which the ruling party is placing all its faith is itself an un-elected body. One fails to understand how the case of democracy would be furthered by holding elections under it where the dangers of manipulation by the ruling party with total control over the administration that it has politicized upon which the EC would be dependent for conducting the elections, is blatantly apparent.

The last elections under the CG brought to surface some serious flaws in the system without compromising its usefulness to a free and fair election. Those flaws need to be addressed. In that context, the present initiative for a strong EC chosen by consensus is very important and could overcome the major flaws in the CG system. Nevertheless, such an EC would be able to play a proactive role in conducting a free and fair election only within the framework of the caretaker government and not under a party government. The reason for such a conclusion rests in the fact that the quality of politics in the country remains conflict ridden where the element of trust and the mindset in both the mainstream parties in accepting defeat, is simply and sadly absent.

Therefore the need of the hour is revive the CG first and then deal with matters related to the EC. In any case, with the BNP making its case against the interim government and in favour of the CG system, the ruling party has no alternative but to sit down with the BNP and resolve the gridlock over the issue unless it wants to push the country to the sort of crisis the consequences of which are too dangerous even to contemplate. Selecting the EC and forgetting the CG would be putting the cart before the horse.

The writer is a former Ambassador to Japan

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Tehran has ‘obligation’ to intervene in Syria

M. Shahidul Islam

A senior commander of the Iranian Revolutionary Guard said Iran is obliged to intervene militarily to save the Syrian regime. “We’ve a treaty obligation to do so,” the military commander said, insisting anonymity.

In a clear reference to the support being given to the embattled Syrian regime by the Iraqi premier Nouri al-Malikil’s government and the Hezbollah fighters of Lebanon- both allies of Iran- the commander added, “We and our brethren in Iraq and Lebanon are protecting Syria.”

A reliable source confided that the emphatic comment came from Maj. Gen. Qassem Suleimani, commander of the Revolutionary Guard’s al-Quds Force, which specializes in international military operations.

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M. Shahidul Islam

The source said “The treaty obligation referred to a December 2009 Defence Pact signed by Iranian Defence Minister, General Ahmad Vahidi, and his Syrian counterpart, Lieut. Gen. Ali Mohammad Habib, to jointly face ‘Israeli and US threats’ against either of the signatories.”

Other sources say the pact was a modified version of the joint defence treaty signed in Tehran in June 2006 by former Syrian defence minister, Hassan Turkmani, and his Iranian counterpart, Mustafa Mohamed Najjar.

The news of Iranian readiness to intervene militarily in Syria follows Syrian expulsion from the Arab League and the recent Arab League move to get a tougher UN Security Council Resolution to compel President Bashar Assad to step down within 15 days, or face further unspecified actions.

The draft Resolution is opposed by both Russia and China, two of the five permanent members of the Security Council.

Besides voicing opposition to the tougher Security Council Resolution against Syria, Russia provides the Syrian regime with sophisticated arms to face any external threat. “Moscow is under an obligation to upgrade Syria’s military, pursuant to a military pact signed on February 3, 2010 by President Vladimir Putin and President Bashar Assad,” says an Iranian diplomat.

On Tuesday, a Russian flotilla berthed at the Syrian port of Tartus, led by the Admiral Kutznetsov aircraft carrier, to send a clear signal to the US in the wake of the expected Security Council Resolution. Russia’s Deputy Foreign Minister, Gennady Gatilov, warned that pushing the Arab League’s UN Resolution was “the path to civil war in Syria.”

The suspicion of Iranian military aid to Syria surfaced last week when an official at the Turkish Foreign Ministry announced that Turkish customs officers had confiscated four Iranian trucks suspected of transferring weapons to Syria.

Meanwhile, the US seems nervous about a pre-emptive move from Iran, using Syria, that could embroil Israel into a broader Mid-East war. Washington is also wary of terrorist attacks against the USA.

Assessing external threats facing the US, Director of National Intelligence, James Clapper, reported on Tuesday that some Iranian officials might be willing to launch terror attacks on America. The report followed dispatching on Jan. 29 a US nuclear submarine, USS Annapolis (escorted by guided missile destroyer USS Momsen) to the Red Sea to warn Tehran to stay out of Syria.

Despite fear of the impending collapse of the Syrian regime, many analysts believe the regime is well entrenched and the Arab League has under- estimated the regime’s resolve by equating the Syrian scenario with that of Libya.

They say, bolstered by military support from Iran, Russia, Hezbollah in Lebanon and the Shiite regime in Iraq, the Assad regime is in a much better position militarily to fend off both internal and external aggressions. Others fear a military coup instigated by Israel and the US could plunge Syria and the region into a bigger conflagration.

President Assad, however, remains defiant, composed and confident. In August 2011, he had warned the visiting Turkish Foreign Minister, Ahmed Davutoglu that within six hours after the first shot fired against Syria, Syria would “destroy Tel Aviv and set the entire Middle East on fire.”

Assad also met with Iranian advisers, and, in late November 2011, Syrian army established a 20 km military zone, deployed thousands of tanks, artillery and missiles along the borders with Turkey and Jordan. The move occurred within few hours of the arrival in Damascus of an Iranian military delegation.

In a regional collaboration aimed at pursuing the USA not to fiddle with the Assad regime, President Ahmadinejad also invited to Tehran the Chief of Staff of the Iraqi army, Gen. Babakir Zebari, to discuss about joint efforts to help the Syrian regime against what the Iranian media claimed ‘joint Israeli-US conspiracy’ against regional peace and stability.

And, on May 10, one of Assad’s close relative and an international tycoon, Rami Makhlouf, warned: “If there is no stability in Syria, there will be none in Israel. No one can be sure what will happen after that. God help us if anything befalls this regime.”

The depth of unity among Syria, Iran and Iraq manifested further on November 19, 2011 when Tehran threatened Turkey with war alongside Syria while Iraq clamped an embargo on Turkish aircrafts landing in Iraqi territory.

Iran, Syria and Iraq posses a veritable geopolitical card against Turkey by virtue of their ability to rekindle the Kurdish insurgency inside Turkey, if the latter collaborated with the NATO forces in any military assault against Syria.

While the Turkish border with Syria has been in relative calm in recent weeks, latest reports from the region confirmed the Hezbollah fighters have already engaged in battles with the Syrian opposition forces along the Syria-Lebanon borders (globalreview.ca).

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Dark shadow chasing economy: Muhith

Faruque Ahmed

A three-pronged debate on the economy surfaced last week involving the Finance Minister, Commerce Minister and the president of the FBCCI as each of them spoke on the economy, however from different contexts. Finance Minister AMA Muhith said a ‘dark shadow’ is looming over the country’s economic horizon while replying questions on the Parliament floor.

FBCCI president AK Azad has asked the government to keep politics cool in the streets to give pace to the economy, while Commerce Minister GM Quader said politics is not hurting economy and business. Rather if the business is not properly running things, it may leave impacts on the economy, he said advising the business to keep on running whatever happens in the political landscape.

Muhith however, blamed the media and the civil society for circulating critical views on the economy saying, although there is a slowdown it is not as bad as they are talking about giving an unnecessary bad impression about the government.

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Faruque Ahmed

Business leaders in a discussion at the FBCCI on the ‘state of the economy’ on Wednesday blamed the finance minister for failing to provide business friendly policy supports but the minister in turn heaped back all those blames on the media and the civil society for portraying the government failures more than anything else.

Most business leaders in the meeting had moreover asked the government to pursue peaceful politics to ensure a stable environment of doing business. Many of them in their discourse made indirect reference to Awami Leagues’s counter-programmes to BNP’s scheduled mass demonstration in the city which it had to shift from January 29 to 30 and for the ruling party’s rally on the day BNP held its rally and mass processions in the city giving rise to tension and uncertainties.

Analysts say BNP is avoiding hartal programmes despite provocations to keep the business environment unaffected but the ruling party is only provoking the opposition to resort to violence. They demanded conciliatory moves in politics in greater national interest.

FBCCI president AK Azad was very much candid. Not only in the apex body meeting, on the closing of the Dhaka International Trade Fair on January 31, he was also very critical to the killing of five opposition political workers saying, the projection of dead bodies in the media has only passed wrong signals to the global community.

Picking from the Finance Minister’s comment that a dark shadow is slowly shielding the economy and his views that a slowdown in foreign investment and development assistance is the major challenge for the government, Azad said political instability will not only discourage foreign investors but also pull back local business from making new investments. This in turn will slow down GDP growth, he said.

Azad criticised the huge government borrowing from banks saying this in turn is drying the private sector from credit supply to new business and investment and thereby slowing down new job creation and income generation activities. The government should stop borrowing from banks while trying to float loans from overseas banks, he said.

Moreover pointing to the soaring rate of interest on bank lending to business, he said banks have been forced to borrow at all time high rates of interest on deposits now to shore up their faltering capital base. They are now in a huge liquidity trap. Consequently, they have been forced to demand more interest on lending to maintain the five per cent spread on depositors’ interest.

But this high cost of capital is not sustainable to business, he said adding it stands at 20 per cent now in many cases. This is the crisis the banking sector is now passing through and the government is largely blamed for it, he said.

Muhith has however asked the business community not to compare the present state of the economy with anytime in the past. He reminded them of the difficulties in securing foreign investments, specially at a time when the recession is hitting the developed nations impacting their business and banking.

Chamber leaders has, moreover, blamed the government for taking trade friendly decisions and the government failures to consult them on important issues on only creating distance of the business community with the government. Muhith however blamed the economists for portraying a misleading picture of the foreign exchange market and flight of capital out of the country. They are making highly exaggerated statements, he said.

The sources said. Muhith has at least conceded now to the fact that the economy is facing a dark shadow. Economists and fiscal experts were cautioning him of the approaching downturn only to invite sharp rebuff from him at times. When World Bank said 7 per cent growth target this year may be uncertain, he slammed the forecast with angry words. When IMF said so he was unmoved.

Even he contradicted himself last month at first saying he doubted whether the 7 per cent GDP growth target will be achieved this year. But later in the week he shifted from the views saying he was convinced the target would be achieved with serious efforts behind it.

Analysts say achieving of the target or not depend on many factors at home and abroad; it is not only the making of the Finance Minister or even his entire government. In fact the private sector driven economy plays the most significant role in GDP growth to which the government can only plays the best supportive role.

But here if the chamber leader complains of the failure of the government to providing the business friendly policy support, its impact may be far reaching at all sectors of the economy.

The Finance Minister’s problem or broadly speaking the problem of his entire government is that they are always right and they cannot be wrong. But when they concede to their shortcoming, it often proves to be too late, critics said.

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Will Iran kill the petrodollar?

Marin Katusa

The official line from the United States and the European Union is that Tehran must be punished for continuing its efforts to develop a nuclear weapon. The punishment: sanctions on Iran’s oil exports, which are meant to isolate Iran and depress the value of its currency to such a point that the country crumbles.

But that line doesn’t make sense, and the sanctions will not achieve their goals. Iran is far from isolated and its friends – like India – will stand by the oil-producing nation until the US either backs down or acknowledges the real matter at hand. That matter is the American dollar and its role as the global reserve currency.

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Marin Katusa

The short version of the story is that a 1970s deal cemented the US dollar as the only currency to buy and sell crude oil, and from that monopoly on the all-important oil trade the US dollar slowly but surely became the reserve currency for global trades in most commodities and goods. Massive demand for US dollars ensued, pushing the dollar’s value up, up, and away. In addition, countries stored their excess US dollars savings in US Treasuries, giving the US government a vast pool of credit from which to draw.

We know where that situation led – to a US government suffocating in debt while its citizens face stubbornly high unemployment (due in part to the high value of the dollar); a failed real estate market; record personal-debt burdens; a bloated banking system; and a teetering economy. That is not the picture of a world superpower worthy of the privileges gained from having its currency back global trade. Other countries are starting to see that and are slowly but surely moving away from US dollars in their transactions, starting with oil.

If the US dollar loses its position as the global reserve currency, the consequences for America are dire. A major portion of the dollar’s valuation stems from its lock on the oil industry – if that monopoly fades, so too will the value of the dollar. Such a major transition in global fiat currency relationships will bode well for some currencies and not so well for others and the outcomes will be challenging to predict. But there is one outcome that we foresee with certainty: Gold will rise. Uncertainty around paper money always bodes well for gold, and these are uncertain days indeed.

The petrodollar system

To explain this situation properly, we have to start in 1973. That’s when President Nixon asked King Faisal of Saudi Arabia to accept only US dollars as payment for oil and to invest any excess profits in US Treasury bonds, notes, and bills. In exchange, Nixon pledged to protect Saudi Arabian oil fields from the Soviet Union and other interested nations, such as Iran and Iraq. It was the start of something great for the US, even if the outcome was as artificial as the US real-estate bubble and yet constitutes the foundation for the valuation of the US dollar.

By 1975, all of the members of OPEC agreed to sell their oil only in US dollars. Every oil-importing nation in the world started saving its surplus in US dollars so as to be able to buy oil; with such high demand for dollars the currency strengthened. On top of that, many oil-exporting nations like Saudi Arabia spent their US dollar surpluses on Treasury securities, providing a new, deep pool of lenders to support US government spending.

The “petrodollar” system was a brilliant political and economic move. It forced the world’s oil money to flow through the US Federal Reserve, creating ever-growing international demand for both US dollars and US debt, while essentially letting the US pretty much own the world’s oil for free, since oil’s value is denominated in a currency that America controls and prints. The petrodollar system spread beyond oil: the majority of international trade is done in US dollars. That means that from Russia to China, Brazil to South Korea, every country aims to maximize the US-dollar surplus garnered from its export trade to buy oil.

The US has reaped many rewards. As oil usage increased in the 1980s, demand for the US dollar rose with it, lifting the US economy to new heights. But even without economic success at home the US dollar would have soared, because the petrodollar system created consistent international demand for US dollars, which in turn gained in value. A strong US dollar allowed Americans to buy imported goods at a massive discount – the petrodollar system essentially creating a subsidy for US consumers at the expense of the rest of the world. Here, finally, the US hit on a downside: The availability of cheap imports hit the US manufacturing industry hard, and the disappearance of manufacturing jobs remains one of the biggest challenges in resurrecting the US economy today.

There is another downside, a potential threat now lurking in the shadows. The value of the US dollar is determined in large part by the fact that oil is sold in US dollars. If that trade shifts to a different currency, countries around the world won’t need all their US money. The resulting sell-off of US dollars would weaken the currency dramatically.

So here’s an interesting thought experiment. Everybody says the US goes to war to protect its oil supplies, but doesn’t it really go to war to ensure the continuation of the petrodollar system?

The Iraq war provides a good example. Until November 2000, no OPEC country had dared to violate the US dollar-pricing rule, and while the US dollar remained the strongest currency in the world there was also little reason to challenge the system. But in late 2000, France and a few other EU members convinced Saddam Hussein to defy the petrodollar process and sell Iraq’s oil for food in euros, not dollars. In the time between then and the March 2003 American invasion of Iraq, several other nations hinted at their interest in non-US dollar oil trading, including Russia, Iran, Indonesia, and even Venezuela. In April 2002, Iranian OPEC representative Javad Yarjani was invited to Spain by the EU to deliver a detailed analysis of how OPEC might at some point sell its oil to the EU for euros, not dollars.

This movement, founded in Iraq, was starting to threaten the dominance of the US dollar as the global reserve currency and petro currency. In March 2003, the US invaded Iraq, ending the oil-for-food program and its euro payment program.

IMF’s DSK drama

There are many other historic examples of the US stepping in to halt a movement away from the petrodollar system, often in covert ways. In February 2011, Dominique Strauss-Kahn, managing director of the International Monetary Fund (IMF), called for a new world currency to challenge the dominance of the US dollar. Three months later a maid at the Sofitel New York Hotel alleged that Strauss-Kahn sexually assaulted her. Strauss-Kahn was forced out of his role at the IMF within weeks; he has since been cleared of any wrongdoing.

War and insidious interventions of this sort may be costly, but the costs of not protecting the petrodollar system would be far higher. If euros, yen, renminbi, rubles, or for that matter straight gold, were generally accepted for oil, the US dollar would quickly become irrelevant, rendering the currency almost worthless. As the rest of the world realizes that there are other options besides the US dollar for global transactions, the US is facing a very significant – and very messy – transition in the global oil machine.

The Iranian Dilemma

Iran may be isolated from the United States and Western Europe, but Tehran still has some pretty staunch allies. Iran and Venezuela are advancing $4 billion worth of joint projects, including a bank. India has pledged to continue buying Iranian oil because Tehran has been a great business partner for New Delhi, which struggles to make its payments. Greece opposed the EU sanctions because Iran was one of very few suppliers that had been letting the bankrupt Greeks buy oil on credit. South Korea and Japan are pleading for exemptions from the coming embargoes because they rely on Iranian oil. Economic ties between Russia and Iran are getting stronger every year.

Then there’s China. Iran’s energy resources are a matter of national security for China, as Iran already supplies no less than 15% of China’s oil and natural gas. That makes Iran more important to China than Saudi Arabia is to the United States. Don’t expect China to heed the US and EU sanctions much – China will find a way around the sanctions in order to protect two-way trade between the nations, which currently stands at $30 billion and is expected to hit $50 billion in 2015. In fact, China will probably gain from the US and EU sanctions on Iran, as it will be able to buy oil and gas from Iran at depressed prices.

So Iran will continue to have friends, and those friends will continue to buy its oil. More importantly, you can bet they won’t be paying for that oil with US dollars. Rumours are swirling that India and Iran are at the negotiating table right now, hammering out a deal to trade oil for gold, supported by a few rupees and some yen. Iran is already dumping the dollar in its trade with Russia in favour of rials and rubles. India is already using the yuan with China; China and Russia have been trading in rubles and yuan for more than a year; Japan and China are moving towards transactions in yen and yuan.

And all those energy trades between Iran and China? That will be settled in gold, yuan, and rial. With the Europeans out of the mix, in short order none of Iran’s 2.4 million barrels of oil a day will be traded in petrodollars.

With all this knowledge in hand, it starts to seem pretty reasonable that the real reason tensions are mounting in the Persian Gulf is because the United States is desperate to torpedo this movement away from petrodollars. The shift is being spearheaded by Iran and backed by India, China, and Russia. That is undoubtedly enough to make Washington anxious enough to seek out an excuse to topple the regime in Iran.

IAEA clearance

Speaking of that search for an excuse, this is interesting. A team of International Atomic Energy Agency (IAEA) inspectors just visited Iran. The IAEA is supervising all things nuclear in Iran, and it was an IAEA report in November warning that the country was progressing in its ability to make weapons that sparked this latest round of international condemnation against the supposedly near-nuclear state. But after their latest visit, the IAEA’s inspectors reported no signs of bomb making. Oh, and if keeping the world safe from rogue states with nuclear capabilities were the sole motive, why have North Korea and Pakistan been given a pass?

There is another consideration to keep in mind, one that is very important when it comes to making some investment decisions based on this situation: Russia, India, and China – three members of the rising economic powerhouse group known as the BRICs (which also includes Brazil) – are allied with Iran and are major gold producers. If petrodollars go out of vogue and trading in other currencies gets too complicated, they will tap their gold storehouses to keep the crude flowing. Gold always has and always will be the fallback currency and, as mentioned before, when currency relationships start to change and valuations become hard to predict, trading in gold is a tried and true failsafe.

2012 might end up being most famous as the year in which the world defected from the US dollar as the global currency of choice. Imagine the rest of the world doing the math and, little by little, beginning to do business in their own currencies and investing ever less of their surpluses in US Treasuries. It constitutes nothing less than a slow but sure decimation of the dollar.

That may not be a bad thing for the United States. The country’s gargantuan debts can never be repaid as long as the dollar maintains anything close to its current valuation. Given the state of the country, all that’s really left supporting the value in the dollar is its global reserve currency status. If that goes and the dollar slides, maybe the US will be able to repay its debts and start fresh. That new start would come without the privileges and ingrained subsidies to which Americans are so accustomed, but it’s amazing that the petrodollar system has lasted this long. It was only a matter of time before something would break it down.

Finally, the big question: How can one profit from this evolving situation? Playing with currencies is always very risky and, with the global game set to shift to significantly, it would require a lot of analysis and a fair bit of luck. The much more reliable way to play the game is through gold. Gold is the only currency backed by a physical commodity; and it is always where investors hide from a currency storm. The basic conclusion is that a slow demise of the petrodollar system is bullish for gold and very bearish for the US dollar.

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Haqqani’s dramatic escape from Pakistan

Shireen M. Mazari in Islamabad

The departure of Husain Haqqani to United States reflects the sorry state of affairs of the government and state of Pakistan. In fact the whole ‘Memogate’ issue was a reflection of the depths of absurdity and sleaze that the state of Pakistan and its rulers have sunk to.

Two of the sleaziest characters were being used to invite American intervention into the most sensitive issue-areas of Pakistan.

To see the affairs of State being conducted through such unsavoury conduits was a reflection of the bizarre state of affairs in Pakistan today. To see the Prime Minister’s House become a sanctuary for all manner of alleged criminals was yet one more insult hurled in the face of the people of Pakistan for electing the present set of rulers.

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Shireen M. Mazari in Islamabad

Two of the sleaziest characters were being used to invite American intervention into the most sensitive issue-areas of Pakistan.

Now with Hussain Haqqani going off to the US scot-free it appears that no justice will ever be done in this case. The government as well as the military seem to have compromised not only with the US once again in a long list of damaging compromises but also put their own personal interests before those of the nation.

The US media and government started targeting the Pakistan military and judiciary from the moment Haqqani’s case was taken up with a blatant intrusion into the country’s internal affairs.

Yet there was no need for any state institution to have succumbed to this blatant US interference and attempt to obstruct justice.

The military leadership especially has once again come out looking bad with promotions and other such interests leading to what is a major national compromise of the most despicable kind given how it were Pakistan’s security interests that were being bargained with in the notorious Memo.

Husain Haqqani himself has a record of selling out Pakistan’s national interests to the US in the past. For instance, when he was Pakistan’s High Commissioner in Sri Lanka, he revealed a highly sensitive piece of information to then US Ambassador to Sri Lanka Teresita Schaeffer regarding one of our covert operations. This almost destroyed Pakistan-Sri Lankan relations.

His book on Pakistan, written now it appears through a hefty payment from a US sponsor, also targets the Pakistani state. And the language in the Memo is similar to the Haqqani style of writing in his book.

Whatever the real truth behind the Memo, especially how far up the ruling hierarchy it went, the fact is that sleaze has come to dominate Pakistan’s state today with underhand deals, all manners of compromises with foreign powers and cronyism and criminals running free to conduct serious business of government and state.

Husain Haqqani symbolises this sleaze factor; but he is simply one of many in the same category who are ruling the roost today and with whom the civil and military leadership is making all manner of deals. Thus the Pakistani state and nation stand preyed upon from those meant to protect and safeguard their interests and their lives.

Source: PakNationalists.net

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Dhaka’s arbitration law same as in West: Griffith QC

M.I. Ali

The Bangladesh International Arbitration Centre (BIAC) recently held a round table on investment arbitration where Dr. Gavan Griffith QC was the keynote speaker. He is a former Solicitor-General of Australia and has extensive experience in international arbitration in Commonwealth countries, especially in and around this region. He has also been an agent and counsel at

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M.I. Ali

the International Court of Justice.

This was his first visit to Bangladesh and his first introduction to the Arbitration Laws of Bangladesh. He said that he had read the Arbitration laws and found them to be the same as those of the developed countries. He also said that he would have no hesitation in recommending his clients to go for arbitration in Bangladesh.

His presentation was followed by a lively discussion, most of the participants being former judges and lawyers. Several legal issues came up and the Law Minister Shafique Ahmed, who was the Chief Guest, suggested that these should be addressed to his Ministry for resolution.

Addressing the round table Dr. Kamal Hossain said that in a water related dispute between Malaysia and Singapore, where he represented Malaysia, they were not making any progress. Therefore he and his opposing counsel decided to call in the technical persons on both sides and let them try to resolve the matter. The experts met and were able to suggest ways to resolve the issues. It all ended with a dinner.

Barrister Rafiqul Huq pointedly mentioned at the high cost of arbitration in this country. There was some discussion on what drove the cost up.

The arbitrators’ fees, the counsels’ fees or the length of time it took to finish it. These are the three factors that made arbitration very expensive. It came out that there were instances where the arbitrator, who happened to be a retired judge, tripled his normal fees because he knew the litigants to be rich. Countering this it was said that the counsels were also charging an arm and a leg for their services. Snide remarks were also made suggesting that arbitration was a vehicle to provide employment to retired judges. It was much more lucrative too.

It was also said that arbitrations dragged on, even for more than three years. This defeated the very purpose of arbitration, which is to dispose of the matter quickly, something not possible at the regular courts. It also pushed the costs up many folds. Someone then commented that the BIAC charges were very high. To this the Chairman of BIAC, Mahbubur Rqhman, clarified that their charges for the state of the art, purpose built facilities was only Tk. 3,000.00 per hour, which was much less than similar facilities elsewhere in the city. Here one could enjoy first world facilities and ambience while participating in the arbitration procedures.

Arbitration is an important factor in business, it is rare that a contract is drawn up without an arbitration clause. Arbitration is a preferred means of business dispute resolution as it is supposed to be transparent and quick. Arbitration laws are taken into consideration when and investor looks for a new country to invest in. No businessman wants to get stuck indefinitely in legal quagmires in foreign lands.

Now that Bangladesh has international standard arbitration laws and facilities to practice in place, it can be used not only to attract foreign investments but also to attract international business disputes for their resolution here. The positive impression that Dr. Griffith is taking back with him is one small step in that direction, many more like him need to visit Bangladesh to promote against the negative image created over the years.

Investors in developed countries are wary of investing in third world countries, let alone the least developed countries the category in which Bangladesh belongs, mainly because their legal systems are deemed corrupt, inefficient and influenced. This makes their investment risky and drives their costs up, making them look for safer havens for their money. Having good laws in place is clearly just not enough, it is now for the Law Minister and his Ministry to assure the investors that their investments in Bangladesh are safe and any dispute can be resolved fairly and quickly.

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Locally assembled solar panels to save foreign currency

Shamsul Huda

The installation of equipments to generate solar power panels is gradually changing the peoples’ lifestyles in the off grid zones where people do not get power supply from the national power grid.

Demand for solar panels are increasing every day as people are installing solar home systems in the remote and dispersed areas with the help of the government and Non-Government Organizations (NGO) through Infrastructure Development Company Limited (IDCOL), a foreign donor-funded public sector company.

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Shamsul Huda

The installation of equipments to generate solar power panels is gradually changing the peoples’ lifestyles in the off grid zones where people do not get power supply from the national power grid.

The development company provides loan to the NGOs at a low rate of interest and its NGO partners have so far installed more than one million solar home systems (SHS) across the country which is a success story of the government. Grameen Shakti being the pioneer and market leader of SHS has so far installed 7,50,000 SHS accounting for about 60 per cent of the total SHS installations.

A World Bank source said, huge amount of panels are being imported every year to meet the growing demands of solar system power generation.

Mahboob Sarwar-E-Kainat, DG power cell of the ministry of power and energy said that the government has planned to generate 500 megawatt power by 2015-16 from solar panels and has also planned to install solar panels in all government establishments and on the roof tops of the urban buildings to generate solar power. He said that the government’s scheme is so large that the demand for import of solar panels would accelerate. Asian Development Bank is going to provide technical assistance for the establishment of the proposed solar park project.

To meet the growing demand for solar panels, a few private entrepreneurs are already assembling solar panels locally. This would surely save foreign currency and also develop expertise and create employment opportunities.

The World Bank sources said currently only one- third of the rural households in Bangladesh have access to electricity with about 16 million households yet to be electrified.

To enable such a huge number of rural households to use power, the government has planned to strengthen the SHS scheme. Apart from SHS, solar power generation is also helping solar-powered pumps for irrigation. The mobile phone operators’ Based Transceiver Station towers are also being powered by the solar panels. The Acting Managing Director of Grameen Shakti (GS), the largest SHS installing company Abser Kamal said by using foreign and locally assembled mono crystalline panels for solar power system its cost would not be reduced significantly. While analyzing cost and benefit he said, as all the raw materials for assembling mono crystalline solar panels are being imported, so a small amount of local value would be added to the panels. Costs of imported panels would be almost same with the locally produced panels. He also said, local assemblers of panels are yet to maintain the quality and their efficiency is less compared to the imported ones.

In response to GS MD’s remarks, a manufacturing source said that as the equipments would be imported on individual basis, after assembling costs of a complete unit of panels would be lesser than the imported ones and substantial foreign currency could be saved. To popularize solar energy, the government has already cut tariff on solar panel imports. However, tariff on accessories and on energy-saving bulbs are still 30-35 per cent.

He suggested that to make the solar system cheaper, tariff on import of equipments should also be further reduced

Kamal of GS said, prices of panels are now affordable. Now per watt installation cost is TK 120. Research and development is being strengthened and it is hoped that in a short while the cost will also be further reduced.

While giving his view on the type of panel for power generation, the power cell DG said, currently the government is using crystalline panels. Thin film is not in the government’s card at the moment. The government and related organizations need time to study on the use of thin films for solar panels and its cost benefit analysis should also be available to the officials.

“Definitely we want to save the out going foreign currency by using low cost and good quality locally assembled or manufactured solar panels,” he added.

Sirajul Islam, Dy. MD of Project Builders Limited said that thin film will be cost effective and the films can even generate power in cloudy and shady weather. In hot environment like in Bangladesh the thin films can generate twenty per cent more power. Currently crystalline is being widely used. So we are thinking about crystalline panels.

He said local panels assembling plants would reduce the cost by at least 20 per cent. Islam is working on solar energy and has also prepared investigative document and data on cost effectiveness of using solar panels.

He said by using thin film for generating solar power, cost would be reduced by at least 40 per cent. Use of locally assembled solar panels would save the government substantial amount of foreign currency and the manufacturing/assembling plants would also create employment opportunities.

Solar energy sources estimate that currently all the installed solar panels are producing about 60 megawatts of power. All crystalline panels are being imported. Costs of the import of panels to produce one MW power were TK300 million. If the panels were of thin film the costs could have come down to TK85 million only.

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Power struggle in Pakistan

Mohammad Ali Sattar

Pakistan’s beleaguered Prime Minister Yousuf Raza Gilani finds himself in multifarious troubles. From handling the unpopular President, the ever imposing army, the Supreme Court to the socio-political turmoil and the US pressure on Taliban issue, he has been fighting a lone battle on all fronts.

The situation is volatile. What happens in forthcoming weeks is hard to tell, but by now Gilani has made his intentions clear. He is trying hard to keep reins in the hands of a civil government. He is reaching out to everyone and calling upon his fellow politicians to allow democracy to function and flourish.

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Mohammad Ali Sattar

Meanwhile, Tehreek-e-Insaf leader Imran Khan has stepped up his movement while Parvez Musharaf is contemplating a comeback. More faces are likely to emerge in a short wile.

Asif Ali Zardari may have to quit and may not be able to come back any time soon, or never again. Once again stage is set for an interesting bout among the contenders new, old and disgraced.

Man in the centre is Gilani. Shortly after the Supreme Court served him the notice for contempt of court, Gilani offered to resign. He told a meeting of top leaders of the Pakistan People’s Party and its partners in the ruling coalition that he was ready to quit if it strengthened the government and parliament. But many question as to how will the PM’s resignation help settle the crisis. Rather it is likely to make things intricate.

Is Gilani under pressure from the military and the judiciary? If military is not happy with him it is because Gilani wants the civilian rule to continue. The judiciary is accusing him of failing to comply with orders related to reopening corruption cases and summoned him to appear in person.

On the one hand, the civilian government, led by Gilani, is fighting hard to keep the army at bay; on the other, judiciary is putting up pressure on the Prime Minister on various issues.

The issue which the Supreme Court has been putting up as a red herring to corner Gilani could have waited. Ideally, the judiciary should have backed the civilian rule until the next election was due.

Asif Ali Zardari is also under pressure form an investigation into who was behind efforts to solicit American help to prevent a coup apparently feared in the aftermath of Osama bin Laden’s death and to clip the power of the army.

The matter is enormously complex. The civilian, military and judicial authorities in Pakistan are locked in a scuffle coloured by political positions.

The army is unhappy with Gilani because he wants the continuation of civilian administration. The sacking of the army officer who served as the defence secretary earned the wrath of Gen. Kayani. The army is unhappy with Zardari because of his alleged secret contacts with the US to prevent army from taking over.

Judiciary is discontented with Zardari’s corruption records. The court also thinks Gilani is not doing enough to follow up on the corruption cases against Zardari.

All guns are now pointed at Gilani, who is the symbol of a civil government and democracy. Although Gilani has survived the no-confidence motion in Parliament, he is still far from the safety zone. Who knows, he might be sacrificed at the altar of army and the court by his party colleagues in the name of a conciliatory move to avoid confrontation. However, many in Pakistan want Zardari to go, instead of Gilani.

People will be left wondering, how the army and judiciary can be on the same boat.

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US PRESIDENTIAL POLLS

The contest of the ordinaries

Mohammad Ali Sattar

That there has been dearth of ‘good men’ and ‘able statesmen’ in the US for more than a decade has been lately endorsed by quite a number of columnists in the US press.

They lament that in spite of being a large nation of 300 million, the country with thousands of political activists, volunteers, organizers, would-be officeholders and hundreds of thousands of elected officials- there is serious crave for competent candidates to run for the White House.

Most of the Americans believe they have run out of quality leadership. And there’s short supply of a prospective head for the big job.

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Mohammad Ali Sattar

That there has been dearth of ‘good men’ and ‘able statesmen’ in the US for more than a decade has been lately endorsed by quite a number of columnists in the US press.

Most of the Americans believe they have run out of quality leadership. And there’s short supply of a prospective head for the big job.

The absence of quality has been seriously felt during the ongoing quest for a person who could lead the Republicans to the White House. A few contenders for the presidential nomination race on Republican tickets have failed to make any impact upon the supporters and the political circle, far less inspiring them.

There has been a foregone conclusion drawn by political columnists and democracy experts that, this time too, Barack Obama will have an easy sailing, more because of absence of a first-rate challenger.

However, there are schools of thoughts that differ. People involved in US election surveillance or enthusiasts who are involved in its entire process, say, the Republican candidates this time are not that much weaker as the Democrats were in 1988 and 2004 or the Republicans in 1996.

Interesting observation is, the likes of Reagans and Clintons are exceptions and rarely found these days. American politics have been taken over by typical mediocrity.

America is surely missing a person or a group of higher thinking individuals, who will not only make an excellent squad of workforce, both in management and politics; they will also be able to construe and re-discover people’s democracy.

As leader of the lone super power, the president needs to be more understanding than merely aggressive. Most of American politicians, especially the ones who aspire for the moon, mainly bank on the ‘policy of economic aggression’. Prospective presidential candidates seldom display their interest in effectual management.

Fund raising, micro-management and delegation of duties – all these have to be handled with precision by the would-be president. He has to be a good manager and an impressive personality with a clearly spelt out vision. They follow rules that are hardly appreciated by the national and international press or their own people.

He’s not expected to be dissolutely aggressive hitting out at his rivals, demonizing the ones he doesn’t like and castigating the so-called foes.

Today, the US leaders are mostly engrossed in metaphoric and self-advertising sides of politics. Rarely they speak or act like responsible individuals. However they leave no stone unturned to seduce the voters with high-pitched rhetoric.

With the change of time and needs a new culture has set in, where the concept, definition and modus operandi of politics, economy and society have undergone an immense metamorphosis.

The 20th century presidents like, McKinley, T. Roosevelt, Wilson, Harding, Hoover, F. Roosevelt and Truman are still regarded as true leaders with longer visions. Even Andrew Johnson, who never went to school and learned to read when he was already earning, is considered to be a person who had visions for America.

Today the Americans are deeply worried over the vanishing breed of quality leaders. They would like to see the ability of a leader, persuader, thinker, manager and a guide in one personality.

The parties (Republicans and Democrats) are exhausted in that they do not have candidates like Roosevelt and Franklin. The contenders, who are daring to come out, are simply unable to reach out to the people with concrete plans and promises. A formidable candidate is not around for the Republicans.

Neither Sarah Palin alone is good enough nor is Jon Hunstman for the Republican nominee. One of them should have had the qualities of both. Two in one, that is.

And why do the candidates end up in losing side? Because they somehow do good in the primaries and is looked upon as great hopes, but fail to excel in the final race at the centre. They succumb to their own inabilities to rally their base and win the final showdown.

Now what? Can Mitt Romney pull off in the end? Who will be his opponents in November? Can he manage to defeat the insiders and go on to face the democrat candidate? Even if his first sailing is smooth can he finally out-inspire and out-play the final opponent?

If it is Barack Obama versus Mitt Romney, it will be a contest between ordinaries, Americans say.

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The writer is a journalist and peace activist. Email: malisattar@hotmail.com

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Everyone should be placed in their proper place

Shancho Panza

A beehive must have worker bees to produce honey. You need worker bees to produce honey, said my friend.

I had to agree that he had a very valid point. No question about it but I wasn’t quite sure what he was getting at.

Our education system is in a total mess, he said, everybody wants to get educated, this is crazy.

You mean everybody should not be educated? I ventured very tentatively.

Education is one of the most important pillars of a country. It must not be taken lightly.

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Shancho Panza

A beehive must have worker bees to produce honey. You need worker bees to produce honey, said my friend.

I had to agree that he had a very valid point. No question about it but I wasn’t quite sure what he was getting at.

Our education system is in a total mess, he said, everybody wants to get educated, this is crazy.

You mean everybody should not be educated? I ventured very tentatively.

Education is one of the most important pillars of a country. It must not be taken lightly.

Yes, I agreed, education is definitely not a trifling matter. No country can progress without an educated mass of people.

Exactly, he said, education is the foundation on which the prosperity of a nation is built.

No question there, I said.

You tell me, he asked, can such an important thing be left in the hands of the uninitiated? In the past, the zamindars and the rural rich used to make sure that the peasants and the peons knew where they belonged. They and their children were the worker bees – work, reproduce and be happy. No unnatural aspirations for them like education and knowledge. Knowledge leads to instability in the society. How wonderful were the days of yore when people use to know their stations in life, there was peace and tranquillity in the land. You see, he continued, in early 1911, when the British decided to set up a university in the then Dacca, the educated gentry in Calcutta were so upset that they held a public meeting at Gorer Math for the annulment of that decision. What will the people of East Bengal do with education? Who will then cultivate the land, what will we eat?

You don’t say, I said.

And thank God for Dacca University, otherwise we would not have this country.

Very true, I said.

But Dhaka University has served its purpose and now we have to move on to the next phase. What next phase – Private universities. That is the next phase. Education is too important a matter to be left to those who can’t afford it. Children of those who can afford can study in private universities to learn the skills needed to succeed in the world today, and those who can’t should send theirs to public universities.

What would they learn in private universities, I asked.

They can learn to be the leaders who will lead this country in future, captains of business and industry. And when they have enough money, they can buy their nominations to the Jatiyo Sangshad elections and be future leaders of the country.

What about the public universities? I asked again.

Public universities can produce the cadre the private university graduates will need to propel them to power.

Are you sure?

Of course, in fact Jahangirnagar University has started a programme where the teachers have demonstrated the art of beating each other up.

Changing the subject I asked, you have used Dacca and Dhaka as two separate universities, why?

Of course they are two separate universities, Dacca University produced the leaders who led the people against Pakistan, to freedom, to glory. And the less said about Dhaka University the better.

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Iran may stop oil exports to Europe next week

Rick Gladstone

Escalating retaliatory threats over the West’s nuclear sanctions, Iran warned on Friday that it could terminate oil sales to Europe as early as next week, and it bluntly advised Arab oil producers that any attempt by them to replace Iranian exports would be considered unfriendly.

The threats came as Iranian officials repeated their willingness to re-engage in negotiations with the Western powers over Iran’s uranium enrichment program, although the prospects for such a resumption appeared to grow more uncertain. Iran also was preparing to play host this weekend to a team of inspectors from the International Atomic Energy Agency (IAEA), the United Nations nuclear monitor, which issued an incriminating report about Iran’s uranium enrichment program two months ago.

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Rick Gladstone

That report elevated Western suspicions that Iran was laying the groundwork to build an atomic weapon despite Iran’s repeated assertions that its uranium enrichment program is for peaceful ends.

The European Union decided on Jan 23 to boycott Iranian oil as of July 1, its most aggressive step yet in a series of sanctions, coordinated with the United States, to punish Iran economically over its nuclear program. The delayed start of the boycott was meant, in part, to give European importers time to arrange alternative sources of supply and avoid sudden disruptions in the market that could cause prices to spike.

But Iran’s parliament signaled on Jan 26 that it was considering legislation that would immediately stop oil sales to Europe to retaliate for the planned boycott, and that the European buyers of Iran’s oil would suffer mightily if such a measure were passed.

On Jan 27, a senior Iranian lawmaker, Hossein Ibrahimi, sought to raise the pressure further, telling Iran’s Fars News Agency that the legislation would be debated and approved in Parliament on Jan 29 and “could halt exports of oil to the European Union as early as next week.”

Another legislator, Moayed Hosseini Sadr, was quoted by Fars as saying that passage of the legislation would make Europe “understand the power of Iran.”

The Iranians also directed some anger at other Middle East oil producers, notably Saudi Arabia, that have signaled in recent days that they have the ability to compensate for any shortfall in the market because of an absence of oil from Iran, the world’s fourth-largest exporter. Hossein Amir-Abdollahian, the Iranian deputy foreign minister for Arab and African affairs, said in remarks reported by the Mehr News Agency “if any country takes such a decision it will not be regarded by Iran as a friendly move.”

International oil markets appeared to shrug off the news, with benchmark prices changing little.

Courtesy: International Herald Tribune

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