The sanctions have been in place since the fall of the Shah of Iran's regime. This left Iran isolated and the economy reliant on state capitalism. The failure of the sanctions can be seen in Irans successful development of a Fordist economy. It is the only industrialized nation in the region, and one that has car manufacturing.
All other regimes in the region rely upon guest workers for their proletariat, including Lebanon. Outside of Iraq, Iran is the only Arab country with a developed traditional industrial capitalist economy and consequently a developed proletariat.
Economy of Iran
The Iranian government is attempting to diversify by investing revenues in other areas, including, car manufacturing, aerospace industries, consumer electronics, petrochemicals and nuclear technology. Iran is also hoping to attract billions of dollars worth of foreign investment by creating a more favorable investment climate, such as reduced restrictions and duties on imports and the creation of free-trade zones like in Chabahar and the Island of Kish. Modern Iran has a solid middle class and a growing economy but continues to be plagued with high inflation and unemployment.
What US sanctions did was to maintain Irans state capitalist regime. Even when it tried to privatize, that resulted not in greater production and productivity, that is development of its existing manufacturing ability, but distorted the marketplace by the introduction of imported goods, displacing home grown manufacturing.
Iran - Economic analysis of government's policies, investment ...
At the conclusion of the '89 war between Iran and Iraq, a movement of 'Economic Adjustment' took place. This was to transfer large productive units of economy to the entrepreneur of the private sector or restore the confiscated property to its owners, which partially did take place on the confiscated properties. Some business owners, rather than improving the quality of goods and services, crossed the lines and joined the growing number of businesses importing the same foreign goods. This resulted in closure of factories and massive layoffs. The factories that went into production, facing stiff competition form the importers, adopted other measures to be able to sustain a profitable business. Reducing the cost was the ultimate goal. To be able to achieve this, internal costs had to be trimmed to a minimum to turn a profit. Workers were layedoff as redundant; more disciplinary regulations were put in place which enhanced severity. The remaining workers were hired on contracts rather than permanent positions which reduced or eliminated the fringe benefits. These changes exerted more pressure on the workers and let to intensification of exploitation. These conditions lowered the standard and style of living of the workers. The workers were put under direct pressure. One way was to increase the speed of production not by means of modern and efficient machinery, but by tampering with the existing equipment and increasing its speed. With self-imposed regulations, manipulations and increased work hours they further endangered the workers safety and well being. Statistics have shown that these acts in fact did result in accidents. According to a local newspaper, Kar-o Kargar, 3000 fingers were cut off within a period of four months.
The current threat of increased sanctions means a continuation of America's economic war against Iran becoming a developed Industrial capitalist country, a major competitor to America and its client states like Saudi Arabia.
The use of domestic nuclear power is seen by Iran as crucial for both home use, domestic electricity, and for electrical power for manufacturing. Key to increasing Irans transformation into an industrialized economy. When Iran signed on to the IAEA Non Proliferation Declaration its economy boomed.
The current discussion of sanctions, is laughable. The American sanctions in place since 1979 have had negligble effect on Irans economic development, except to create a Stalinist State contrary to the ideology of free trade and free markets. Ironic that. Any further attempt to impose sanctions will not work either. What they will do is hurt the Gulf Emirates and other Persian Gulf Oil exporting economies, America's client states
Sanctions just one danger for Iran's economy
"Economic sanctions create problems, but the Iranian economy has learned to circumvent them, especially through third countries," said the chairman of the Atieh Group consultants, Bijan Khajehpour.
Laylaz said that under the worst-case scenario, with sanctions touching oil exports, the magnitude of such a decision would not only hurt Iran, currently producing 4.08 mln barrels per day of oil.
"Iran's military maneuvers in the Strait of Hormoz hold this message that the country is capable of blocking oil traffic. This could then affect the oil producers in the region," he said after Iran's recent war games in Persaian Gulf waters.
Why is the US declaring economic war on Iran over an issue which would seem ridiculous anywhere else. For instance if the US told Ontario to end its expansion of nuclear energy for domestic purposes. And identifying the enrichment of uranium for those purposes as being used for production of nuclear weapons.
The reality is that US Imperialism needs and wants an underdeveloped capitalism in the region. That region is not just the Middle East but the area's surrounding Iran, the 'Stans. It's occupation of Afghanistan allowed it a geopolitical expansion into the areas once controled by the old Soviet Union.
This Caspian basin region is rich in oil.Washington encourages multiple pipelines from Central Asia
If Iran was to become a major industrial power in the region, exporting cars, technology, consumer goods, it would be a competitor with India, Pakistan, Israel, as well as now becoming a supplier to the oil emirates. All American clients.
Regardless of the regime in power, Iran is America's major economic competitor in the region. With the destruction of the State Capitalist economy in Iraq, Iran remains the only developing industrialized country in the region. While a country like Dubai is booming, its boom is based on transportation and real estate developement. It is a place to invest capital not to produce capital. And it too relies upon guest workers.
Suadi Arabia and Kuwait remain underdeveloped resource economies, reliant on imported guest workers. There is a population of 4 million in Kuwait, three million are guest workers. Jordan, which is really Palestine, is an under-developed economy, one that also relies upon guest workers, the majority of those being Palestinians.
Only Iran is developing an industrialized fordist economy in the region. As such it is America's biggest competitor.
This is the real reason America is declaring war on Iran at this time. It used Iraq as its client state to attack Iran, thus encouraging an internecine battle between the only two developed industrialized countries in the region.
When Iraq was becoming an economic threat the U.S. attacked it on the pretext of its invasion of Kuwait. The reality of the 1991 war was that it could have been settled diplomatically by allowing Iraq access to the Persian Gulf. While the Americans and their UN allies attacked Iraq the ruling class in Kuwait left to party in discos in Egypt.
The Iraq sanctions like their Iranian counter part, were counter productive. They did little to halt the state capitalist development of Iraq. Thus in order to crush a competitive capitalist state in the region the Bush regime did Israel a favour, and bombed Iraq back to the stone age in 2003.
Israel did America a favour in return, bombing its neighbour Lebanon into the stone age, in order to make sure the region has no Arab capitalist economies that could compete with Israel or America.
Imperialism demands a region that is empty, that can be filled by a particular national capitalism, in this case American capitalism. Its corporations which are rebuilding Iraq, like Haliburton and Bechtel. Corporations which are competitors with Arab capitalists like Bin Laden Inc.
Iran uses irregular military operations to destablize its competitors as well. Funding Hezbollah, supporting and giving succour to Afghanistan mujahdin as well as succour to Mujahdin and Shia rebels in Pakistan. The result has been an increase in opium addiction amongst the poor and the unemployed in Iran. An irony that. The fact is that the Mujihadin relied upon opium production in Afghanistan and Pakistan to pay for weapons supplied to it by the CIA for its war against the Soviet Union. Thanks to the creation of narco terrorism in the region the chickens have come home to roost in Iran which supports these irregular armies.
However if the world really wants Iran to change, it would forgo the Americans demand that Iran give up its domestic nuclear progam, and actually aid Iran in developing as a capitalist economy.
Then the working classes would continue to revolt as they have before, leading to the collapse of the US puppet regime of the Shah and continue to under the mullahs. The only real change that can occur in Iran is if it is allowed to become a major capitalist economy in the region. Thus the proletariat will be able to launch a real reform campaign from a position of real power.
America's sanctions and threats of war will not do that. And of course that is not what they are intended to do.
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