The new Persian Gulf war

I must first apologize to my editor and my audience for my long absence. Work commitments were demanding and left me little time to write these columns. I wish all of my readers and followers of this column a Happy New year. We are in a new year and we did not have to wait long for a crisis of global implications to occur. The United States, in what many consider to be an act of war, assassinated a leading Iranian general, Qasem Soleimani.

The United States from the start of this century has found itself embroiled in Middle East affairs when it decided to invade Afghanistan in 2001, and after September 11, 2001, to capture or kill Osama Bin Laden; and then Iraq in 2003 in search of weapons of mass destruction.

Those cynical few among us realized that it was about control of that region’s energy resources, which are the most easily accessible hydrocarbons in the world. There exist more petroleum deposits around the world, for instance in the Arctic Circle.  However, it is more difficult to access such deposits as these are located beneath thousands of feet of ocean.   

The profit incentive for transnational companies to exploit these resources is great: the West is the home of most of these companies which wield considerable political and economic influence.  We have only to look back at the US involvement in this region to understand the power such companies possess. Jamaica and by extension the rest of this region suffered considerable economic and social damage as a result of the influence and power of these companies.

What is different about the Middle East is that the people are willing to fight to protect their hard-won independence and have control of their energy resources. Many people are unaware that this region was dominated by Western Powers after the end of World War I.  Iran, while not a protectorate of Western powers was largely controlled by the West as a result of the British who controlled the deposits it discovered in Iran from about 1913.

The source of animosity between the West and Iran, and between the US and Iran in particular stems from the overthrow of Prime Minister Mohammad Mosaddegh in 1953.  It was not the Iran revolution of 1979.  Mossaddegh nationalized the oil industry which was under the control of the British; this led to the Central Intelligence Agency (CIA) sponsored coup which led to his overthrow. In addition, the alleged repressive rule of Mohammed Reza Shah Phalavi, Iran’s former Shah who was supported by Western powers, led to deep distrust of the West by Iranians.

The overthrow of the Shah’s regime led to the installation of a theocracy; Iranians are now ruled by their mullahs, its priestly caste.  It faced hostility from the West and some Arab countries from the inception of the theocratic regime. Among these were Kuwait and perhaps Saudi Arabia.  It is well known that Kuwait assisted the Iraq Saddam Hussein War with Iran from 1980-88, when Iraq was an ally of the US.  In Saudi Arabia’s case it stems from the traditional animosity between Shia and Sunni sects of Islam, a history steeped in blood.

The abandonment of the Iran nuclear deal by the present US President and the US’s re-imposition of sanctions against Iran caused Iran to become more militant.  This has led to increasing military escalation between these two countries via attacks on Saudi Arabia oil installations and the US military and diplomatic assets.   Furthermore, Saudi Arabia and Iran have been dueling for influence in the Middle East for quite some time.  It is alleged that the war in Yemen is as a result of this rivalry.  The US has clearly sided with Saudi Arabia in this conflict.  It is not unreasonable for the average person to assume that as this rivalry continues it threatens to bring the world’s major powers into armed conflict.  Iran has some support in that it appears to have sided with Russia and China.

The assassination of Qasem Soleimani by the US now raises the possibility of serious regional if not global conflict.  It is not unreasonable to assume that Iran is close to achieving nuclear capability and if that were to occur, the result could be catastrophic. All it takes is for nuclear weapons to be used over either Saudi Arabia or Iran’s oilfields.  The world’s commodity and financial markets would be in chaos, world trade could be crippled and the global economies would be in freefall.

The United States and the West may very well have under-estimated the will of the Iranians.  These are a people who had one of the largest empires in history.  They harassed and defeated the Roman Empire’s military; regained their independence after a period of Arab domination in the middle- ages.  These are a resilient and resourceful people.  Iran’s military may not be as powerful as the West; however, any war with Iran will result in considerable cost to those who engage them.

Edward Hunte, an Attorney-at-Law, is the holder of an MBA with concentrations in Economics & Finance. He was also an economist with the Ministry of Finance and Economic Affairs; email: edlett@hotmail.com.