SPEAKING FREELY Rhetoric and reality on Iran By Chris Cook
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There is rhetoric and there is reality, and nowhere is that more the case than
Iran.
For some two and a half years now I have been working with the
Iranian government to implement a new Persian Gulf-based oil-pricing benchmark
less open to manipulation by intermediary traders. While this is in the
interests of the Iranian people and, come to that, consumers globally as well,
it has met entrenched resistance from the Iranian Oil Ministry because
transparency is the enemy of private profit.
President Mahmud Ahmadinejad has never been criticized for venality - and is
strongly in favor of the transparency a benchmark price represents. He recently
lost patience with the current bourse manager put in place by the Oil Ministry,
who is continuing to implement the ministry's strategy that the best way to
prevent the project proceeding is simply not to pay the consultants responsible
for carrying it out.
The president therefore acted decisively to advance the project by transferring
responsibility for it to the Ministry for the Economy, and I returned to Tehran
recently to recommence the process where I left off.
Having experienced Iran, and having had privileged access, with my Iranian
business partner, at the highest level (we met former president Mohammad
Khatami, hope to see his successor Ahmadinejad very shortly, and have been
invited to address the parliamentary Energy Commission), I felt I should put
forward an alternative view based on experience rather than perception.
This is particularly the case because when I visited the British Foreign and
Commonwealth Office before my recent trip to Iran, it was made quite clear that
its focus is on sanctions and that constructive action is a long way down the
list of priorities.
I know of few places less "radical" than Iran. Its Islamic Revolution was 27
years ago and two entire generations have grown up since. The result is that
70% of Iran's population is under 30 - and they are deeply dissatisfied with
the unequal distribution of oil wealth and the dysfunctional economy. In large
part, they want the material things we in the West take for granted. While
there is intense national pride, there is very little evidence of the
ideological fervor that, from reading most British and US comments, one would
think is rampant in Iran.
There are two deep-seated problems that hold back Iran (putting US sanctions to
one side): first, there is a deep-seated conflict between Islamic values and
the "Western" financial system and "enterprise model"; second, there is a
massive managerial vacuum in Iran due to the hierarchical and bureaucratic
decision-making structure and the fact that many decision-makers are not
necessarily appointed for their managerial competence.
The worst thing that the United States could ever do is to bomb Iran: it is
probably the only thing that would swing these patriotic people squarely behind
their government and galvanize a tidal wave of destruction, particularly in
Iraq.
Instead, the US should explore how it may engage constructively with Iran, by
bringing to bear a form of capitalism that more closely reflects Islamic values
than the existing structures we in the West take for granted.
Anyone engaged in the "social enterprise" sector may have some feeling as to
how this may be achieved, and I have for instance been working with our Iranian
partners to develop, first, new, innovative, "asset-based" financial contracts
(based on actual ownership of oil, oil products or even liquefied natural gas)
as opposed to conventional "deficit-based" margined futures contracts, and
second, to develop new "partnership-based" legal structures (not dissimilar to
the British limited-liability partnership, or LLP) that share risk and reward
differently from more conventional Western forms such as the joint-stock
limited-liability company or "corporation".
The top priority of President Ahmadinejad - indeed, it was the reason he was
elected - was to improve the lot of the average Iranian. There is no stomach in
Iran for continued "revolution" domestically and even less prospect of
exporting it in the absence of a US attack.
While it may well be that Iran has acted tactically, eg to support resistance
in Iraq, its strategic interests lie in a stable government in that country
with secure borders, and the Iranians wish the US to guarantee that security.
The United States and the United Kingdom must engage with Iran, without
precondition, to enable Iran to interact economically in partnership with other
nations and thereby to rebuild and develop the Middle East. That is the only
road to peace: bombing Iran would be a disaster of epic proportions and would
inevitably lead to the very outcomes that those in favor of military action
against Iran most fear.
In summary, there is no more desire within Iran for an Islamic hegemony than
there is in Beijing for a communist one: that is the reality, all else is
rhetoric.
Chris Cook is a former director of the International Petroleum Exchange.
He is now a strategic market consultant, entrepreneur and commentator.
Reprinted with permission from www.energybulletin.net.
(Copyright 2006 Chris Cook.)
Speaking Freely is an Asia Times Online feature that allows guest writers to have
their say.
Please click hereif you are interested in
contributing.
