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Going after the Guards
07-Jul-2010
Sanctions by the United Nations Security Council left the door open for further sanctions by the US and the European Union. Recently passed US sanctions targeting energy sector of Iran is a comprehensive economic warfare strategy involving gasoline, natural gas and oil sanctions, which is Iran’s economic livelihood. What is hoped to be accomplished is to humble the regime to sit and talk about the nuclear program, stop its support of terrorism, and pay attention to the human rights of its citizens.
In view of the latest economic sanctions on Iran by the United Nations, US, and European Union, it brings forth the question of what can be different this time that might compel Iran to comply with the wishes of the aforementioned. The focus of all sanctions has been to stop Iran from enriching Uranium and clarify its nuclear intentions among other things. On the other hand, Iran contends that they have signed the NPT, allowed inspectors in, they do not possess or seek nuclear weapons and are being singled out by countries that possess nuclear weapons. And Iran has declared they will not give up their legitimate right to peaceful nuclear activity under pressure.
This time the West has tightened up its belt, short of going to war, and has come out swinging. June 9 sanctions by UN Security Council briefly involved trade and financial transactions targeted at IRGC, sale of heavy weaponry, investment of any type that may benefit the nuclear program, inspection of ships and planes transporting contra-ban, travel ban and asset freezes on 40-plus individuals. All these are an expansion of previous sanctions with some twists. The one that is most significant is the one by the US, relating to the energy sector of Iran. It is to be considered as a comprehensive economic warfare strategy involving gasoline, natural gas and oil sanctions, which is Iran’s economic livelihood. What is hoped to be accomplished is to humble the regime to sit and talk about the nuclear program, stop its support of terrorism, and pay attention to the human rights of its citizens.
Although Iran is ranked 4th in the World for production of oil (4,700,000 bbl/d), behind, Russia (9,980,000 bbl/d), Saudi Arabia (9,200,000 bbl/d), and the US (8,457,000 bbl/d), it lacks the capacity to refine sufficiently for its own use. Iran imports 40% of its refined gasoline, and previous sanctions have prevented capital investment in the energy sector and technology for exploration and development of oil and gas fields. The energy sanctions have had broad support on both side of the isle and have passed the Senate and the House.
Already a number of Iran’s suppliers have chosen to exit the market: BP (Britain), VITOL (Swiss-Dutch), TRAFIGURA (Swiss-Dutch), and GLENCORE (Swiss-based), SHELL (Dutch), RELIANCE (India), LUKOIL (Russia), and PETRONAS (Malaysia). The penalty is that they could lose business in the US, Europe, Canada, and other supporting countries as well; the risk is not worth it. You cannot transport such an expensive cargo without insurance. So far two underwriters have dropped out of the market, MUNICK RE, and ALLIANZ. Also Lloyd’s of London is on board but waiting for completion and implementation of the sanctions laws.
While Iran is trying to build its gasoline stock in anticipation of gasoline shortage, the imports have increased significantly. In addition to the high cost of importing gasoline, Iran subsidizes gasoline to the general population plus other commodities. This has put considerable pressure on the government treasury. That is where the idea of phasing out the subsidies has come about. It has been extremely controversial since the regime has been caught between a rock and a hard place. On one hand they did not want to provoke the already discontented masses and on the other hand they are strapped with a rapidly shrinking treasury. It has cost the government 100 billion dollars per year to maintain the subsidy program. That is about 30% of the annual budget. Compelled to survive, Majles passed the legislation and the Guardian Council approved phasing out the food and gasoline subsidies in stages.
With actual inflation of 20-25%, and unemployment rate of 20%, it is expected that elimination of subsidies will have an adverse effect causing higher inflation down the road. Hossein Askari, professor at George Washington University has noted in “Foreign Policy” that Iran economically is in “dire straits” and “faced with these economic realities, the regime has decided to cut energy and food subsidies…the expected price increases associated with the elimination of subsidies should send inflation soaring above the 30-40 percent rate.”
Now we must examine the role of IRGC in the total economy and energy sector in particular. Khatam al-Anbiya is the largest company in Iran, known as Ghorb (Garargah Sazandegi-ye-Khatam al-Anbiya). It’s affiliated with IRGC and started as a construction and engineering company after the Iran-Iraq war for the country’s reconstruction. It employs about 40,000 and holds as many as 1700 government contracts.
Over the years IRGC expanded its enterprise to other opportunities along the lines of telecommunications, energy, logistics and services, and automobile. They also build dams, bridges, and tunnels underground for railways. Ghorb’s director is IRGC General Rostam Qasemi, and its chief executive is IRGC’s commander and chief, Major General Mohammad Ali Jafari. Ghorb’s military projects extend to the Nuclear and Ballistic missile programs. Smuggling contraband of sorts, electrical appliances and gasoline is another. But maintaining the regime with their brutal repressive measures that the world has witnessed is their specialty, as they control Basij, the military, police, and other security personnel. Ghorb was added to the list 0f 40 including 15 other companies connected to IRGC.
In October 2007, IRGC was designated as Foreign Terrorist Organization (FTO) worldwide and the US Treasury designated it as a Specially Designated Global Terrorist (SDGT). This, due to support for Hezbollah and Hamas, the attacks in Buenos Aires in 1992 & 94, assassination of Iranian dissidents in Europe, and alleged claims of arming and training insurgents in Iraq and some Taliban, plus involvement in the alleged nuclear weapons program.
How did so much wealth and power come to IRGC?
Shortly before Ahmadinejad 2005 election, Khamenei ordered the initiation of Privatization program to be implemented over a 5 year period resulting in a 20 per cent reduction in public-holdings. Such were large-scale oil and low-end gas industries, mines, banks, power generation, roads, aviation, shipping etc. – it was intended to transfer these to cooperatives with loan guarantees and tax rebates. This would amount to $110-120 billion of transfer from public assets to private.
Iranian economists expressed concern about the lack of anti-trust laws in Iran, transparency, and the fact that Iran’s Majles was making it difficult for foreign direct investment. This was not to stop Ahmadinejad moving forward and boasting about it. He expressed in an interview that prior to 2005 there was only 3 billion in privatization transactions, by April of 2010 they had conducted 60 billion through Tehran Stock Exchange. Larijani criticized Ahmadinejad for not involving “the genuine private sector”. A pie chart shows the percentage of assets purchased through privatization of state owned enterprises in Iran by purchasing sector 2005-2009 as follows: Private sector 12.5%; cooperatives 19%; Public Non-State sector 68.5%. Is there any question as to who the public Non-State sector is?
In December 2009, US House of Representative passed the initial version of the Energy sanctions. Since then, in February 2010, Ahmadinejad addressed GHORB commanders and executives to be ready “to enter high-end oil and gas activities in order to satisfy the domestic needs of the Country”.
In March, the Oil Ministry awarded Ghorb a contract worth $850 million for pipeline projects. In April a Turkish Firm withdrew from Phase Three of South Pars oil and gas, and it was awarded to Ghorb at no-bid, a $7 billion project. In May Qasemi informed Larijani that IRGC is going to replace Shell and Total in South Pars. Larijani now has jumped on board, assured him of his support in Majles. Anglo-Dutch Shell and Spanish Repsol withdrew June 4 on phase 13 & 14 of South Pars. A no-bid contract of $5 billon was awarded to Khatam al-Owsia Consortium, consisting of Ghorb and two other IRGC companies. IRGC holdings is numerous and beyond the scope of this article. But there is a critical point that we shall discuss in the following conclusion.
There was a reason for the United States to pass antitrust laws. It simply wanted to prevent any particular company from getting too big and the threat of becoming a government within a government, as well as promoting and protecting competition. This is beneficial to people because the companies no longer can set their own wages, benefits and safety standards. People have the choice to shop and buy the best product and services for the least amount. Good for the people and good for the economy. It ensures the fundamental liberty of the people. When you have a company who owns nearly a quarter of the total wealth of the nation and practically runs every industry, in addition, it controls the nations’ muscle (the various forces); you have a giant swallowing the nation. There are no checks and balances and no regulatory government agency to oversee their work. They could cut corners to maximize profits. Who has the gumption to question it?
The two top figures in Iran are trying to buy IRGC’s loyalty by giving them anything they want. Call it privatization or contracts. It is giveaway for the service of keeping them in power at the expense of the people. Also, IRGC is designated as a terrorist organization. With sanctions in place, any company dealing with IRGC would pay the price. Those who are involved with projects are pulling out, and others who have interest in Iran cannot step in and invest, because of IRGC. Iran’s present economic shortfall requires $25 billion per year of foreign investment to maintain status quo. Under the present circumstances that is not likely to happen. Privatization was turned into militarization and once a robust economy is now turning to a dead-beat.
SOURCES
UN Adopts New Sanctions on Iran, Neil MacFarquhr, The New York Times, June 9, 2010.
Foundation for Defense of Democracies (FDD), The Iran Energy Project. iranenergyproject.org
Law Information: The True Purpose of Antitrust Law, Lawyers Attorneys, November 2007. legalcatch.wordpress.com
American Enterprise Institute For Public Policy Research (AEI),The Revolutionary Guard’s Looting of Iran’s Economy, Ali Alfoneh, June 2010. aei.org
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Mullah's Economy
by kujirasan on Tue Jul 20, 2010 07:56 PM PDTMaster you and your favoured car are such a disaster!
Iran is building dams in Nicaragua, supplying trains to Cuba and
building a massive sewerage treatment plant around Havana , donating
tractors to Zimbabwe,
None of this has happened
The Tractors are already operational, they have been assmebled at the former MAZADA assembly plant/ factory in Harere , the joke in Havana is that the President of Cuba: Raul Castro has changed his name to Raulolah!
The Iranian military should bomb
by Fair on Sat Jul 10, 2010 08:29 PM PDTand destroy the IRGC. The IRGC is the most anti Iranian and anti nationalistic force our country has seen since its inception. The duty of the Iranian military is to protect Iran from invasion, and it has done so quite bravely in the past.
I invite all Iranian military commanders to stand solid with the Iranian people and to fight our oppressors alongside us. We have empty hands, you don't. History is watching.
CLAIM: The military in the US dominates the economy
by thexmaster on Fri Jul 09, 2010 09:40 PM PDTWhat aspects of the US economy does the military dominate or control? Automobiles? Civilian construction? Medical insurance? Wall street? The media? Illegal ports importing cheap goods? Has the US military ever taken control of an airport because they were cut out of the business.
I think you are incredibly mistaken if you believe the roles of the military in the economies of the US and Iran are similar.
Mullah Economy
by thexmaster on Fri Jul 09, 2010 07:48 PM PDTIran is building dams in Nicaragua, supplying trains to Cuba and
building a massive sewerage treatment plant around Havana , donating
tractors to Zimbabwe,
None of this has happened
100 Million gift to North Korean Great Leader,
How embarrasing
not to mention has
quickly rebuilt all ruined village of South Lebanon ,
Yet BAM is still in ruins
you never feel home sick, Iranian government does have total free
accommodation and free food
supplied! well EVIN is one of the most favoured of them all. An beating
a day keeps doctor away, so the proverb goes, but around Tehran
streets, is a bullet a day keeps the doctor well away, who needs a
doctor.
IRI has a lot of money to spend...on South Lebanon
by Onlyiran on Fri Jul 09, 2010 09:17 AM PDTcase in point: a brand new, $4 million amusement park showcasing Hezbollah's great achievements:
//iranian.com/main/news/2010/07/09/resistance-land
Iran Economy
by kujirasan on Fri Jul 09, 2010 09:08 AM PDT
. -->//www.abisource.com
Iran is building dams in Nicaragua, supplying trains to Cuba and building a massive sewerage treatment plant around Havana , donating tractors to Zimbabwe, 100 Million gift to North Korean Great Leader, not to mention has quickly rebuilt all ruined village of South Lebanon ,
despite it lack refining capacity and imports refined fuel, for some strange reason it is building 5 refineries in Syria! well to all those clowns that under estimate Mullah’s economical prowess,
they should open their blind eyes, and not listen to Western Great Satan, Zionist Cliques, etc.
Oh, what about in Iranian or for Iranians? well there is always a nice home away from home,
you never feel home sick, Iranian government does have total free accommodation and free food
supplied! well Avin is one of the most favoured of them all. An apple a day keeps doctor away, so the proverb goes, but around Tehran streets, is a bullet a day keeps the doctor well away, who needs a doctor.
wow.....
by shushtari on Thu Jul 08, 2010 10:00 PM PDTlook at this idiot's picture.......I bet he used to sell hendoone before the revolution....
absolute disgrace that such morons are 'running our nation'
iran will be free soon.......the choking off has begun
The US military does not dominate the US economy
by Fair on Thu Jul 08, 2010 12:30 PM PDTin fact, weapons production and military industries are dwarfed by private sector, consumer and business centered industries such as computers, semiconducters, energy, agriculture, and so on. Show me one US general or military branch which owns any of these.
If anything, certain US corporations own the US military and have influence over it, quite the opposite of the fascist rapist IRGC situation in Iran.
The Chinese military on the other hand controls many non military industries as well as government centers, and lines its pockets handsomely. Because it is a military fascist dictatorship just like the Islamic republic.
-Fair
Zionism's fronts
by Khashayarsha on Thu Jul 08, 2010 12:16 PM PDTSOURCE:
Foundation for Defense of Democracies (FDD), The Iran Energy Project. iranenergyproject.org
Enough said!
Becaue Hass
by Onlyiran on Thu Jul 08, 2010 09:57 AM PDTThose countries are murdering, plundering, imperialists, Zionists, colonialists and all other kinds of "ists". Now, you don't want a divine, pure, righteous, religious government like the IRI to follow in those footsteps, do you?!!! Because the way you make it sound is as if you want the IRI to be just like the Great Satan. Shame on you, you Zionist tool!!!!
So what? Compare to US military
by hass on Thu Jul 08, 2010 09:52 AM PDTThe military in CHina makes washing machines. THe military in the US dominates the economy (even a US president warned of the "military-industrial complex") so why shold the military in Iran be any different?
COP: You're most welcome. I
by vildemose on Wed Jul 07, 2010 11:26 PM PDTCOP: You're most welcome. I hope the two corrupt anti-Iran factions (IRGC and the clergies) destroy each other.
IRGC and all related offices must dissolve
by Sia Homayon on Wed Jul 07, 2010 08:20 PM PDTI think IRGC dissolves itself the sooner the better.
They know that their time is almost over, it would be for their benefits to get passport, chose a country where they want to spent rest of their life in piece and enjoy the money they stole, and then get the hell out of Iran. This is a free advice to all Islamic Regime’s, leader, Sardars, president, ministers and all those responsible for killing all Iranian from the day after Bahman 22, 1979.
Sadam did not listen to Mr. Bush and you know what happened to him?
The way to know who is anti Iranian
by IRI on Wed Jul 07, 2010 06:08 PM PDTIs when they talk they refer to Iranians as "they". Like this dude ET, just re-read his comment:"If you want more Iranians to revolt, hit their pocket books!"
How can you be more a$$holish? sitting far and wanting people to suffer so they bring a pro-western regime back in power?
Again, note this important word: THEIR rather than "our"!
Now do you wonder this idiot would have said the same thing if their was changed to his? meaning, would he say:
"If you want more Iranians to revolt, hit OUR pocket books!"
Traitor and big wuss.
Ban all IRGC contacts
by Fair on Wed Jul 07, 2010 04:53 PM PDTThis is a fascist, apartheid, anti Iranian, and anti human organization and should be internationally recognized as such. All international entities should be banned from any transaction with the IRGC and all IRGC subsidiary entities. All current and former IRGC members should be banned from travel and their assets outside of Iran frozen, and any of them found outside Iran should be arrested and tried immediately. The IRGC should be approached no differently than the Nazi party of Germany in WWII.
The prime opponent to such a policy of course will be China, who benefits handsomely from the rape of Iranians by IRGC. Therefore Iranians everywhere should focus attention on the atrocities commited by China in Iran, Tibet, and elswehere against innocent people. China has got a free ride for too long, and so have its little brother the rapist mafia in Ghom and Tehran.
Very informative
by abtin on Wed Jul 07, 2010 10:31 AM PDTThanks, great article Nasser.
Brother Sargord P.: Case in point, Sad'dam's gone!
by pastor bill rennick on Wed Jul 07, 2010 08:50 AM PDTAnd your ilk will be gone soon as well! Q.E.D.
Pastor, that's exactly what
by Sargord Pirouz on Wed Jul 07, 2010 08:46 AM PDTPastor, that's exactly what Saddam said during the Imposed War! So you're in bad company.
Good article
by fooladi on Wed Jul 07, 2010 08:42 AM PDTNot sure if I agree with some of conclusions. For instance I do not think that sanctions (at least overtly) are targetting the Khamenei's Guard mafia due to concern for their human rights crimes. They are targetted, because they own the entire Iranian economy as another reader pointed out.
In short, dont wait for US and west to hand you back your human rights and country. Go get it yourself, like the millions of young Iranians have been doing on streets of Iran.
It is imperative that IRGC be completely destroyed...!
by pastor bill rennick on Wed Jul 07, 2010 08:39 AM PDTSanctions won't do it alone, it will have to be followed with military strikes and take over of its command and control, installations, armament, tools, etc. just like Sad'dam's Republican Guard had to be destroyed!
Remember the IRGC is different than the Regular Iranian Army. The latter should be supported and untouched!
Good article but still no answer to "HOW?"
by eroonman on Wed Jul 07, 2010 08:26 AM PDTThanks for the history lesson. The key title in your piece led me to think you would illuminate the "HOW?" Technically you stated the "WHAT", in the explanation of what the IRGC did to gain so much economic and industrial power in Iran. I don't think this is the answer to "HOW?"
From your piece I can glean that the assignment to administer the oil industry and then expanding that assignment to administering the various key industries inside Iran was somehow "given" in an official and temporary intended manner (either by the President a former IRGC commander himself, or the Supreme Leader) in the wake of the revolution and the expertise vacuum that followed, as well as to address the inadequacy of eslam and the qoran to answer a commercial or business-economy administrative related issue.
The IRGC was an expedient means to an end, that has now blossomed into a windfall of corrupt gang-land style profit taking and an utter feeding frenzy for the now highly capable IRGC administrators who have adapted their skills from basic security to running the biggest businesses at the very top of Iran's prized industrial jewels.
That is HOW, and a bit of WHY.
Getting off the past and fast forwarding to the here and now, the IRGC as a collective team of business administrators, or a better descriptor would be Mafia Bosses, is now firmly in charge of Iran from head to toe, which is precisely why the US sanctions amendment targets them specifically.
vildemose, thanks for the link
by Cost-of-Progress on Wed Jul 07, 2010 06:34 AM PDTIt is an interesting article. Who'd have thought that the infestation of mullahs is so rampant in Iran. These people are like cockroaches...everywhere. Once the people have had enough of the looting of their country, the mullahcracy will be no more. Apparently, there's still more capacity to take shit from these murderers and thieves.
Have you read the blog comments? The Islamist are everywhere. ____________
IRAN FIRST
____________
Sanctions can work
by David ET on Wed Jul 07, 2010 05:06 AM PDTYou will see all the supporters of IR, its apologists and so called "eslahtalaban" opposing economic sanctions, because they all want IR to stay, because they know that without financial resources this regime can not survive and also Iranians when it comes to their livelihood, they all join hands regardless of their beliefs!
The sanctions , the economic sanctions work two way:
1- Reduce the financial resources of the IR militray machine and Mullahs
2- Make Bazaar and people who get effected to act against the regime and its policies.
If you want more Iranians to revolt, hit their pocket books!
At the end of the day , this expressions still remains valid: "It's the economy, stupid"
Sanctions and embargos helped collapse of the apartheid regime in South Africa but the sanctions must be wide and effect oil and gas industry on top of everything else.
Who's in Charge? by
by vildemose on Wed Jul 07, 2010 04:51 AM PDTStruggle for power builds between clerics, Revolutionary Guards.
Excerpts:
The Guards' Economic Might
The Khatami administration prevented the Guards from intervening in the official economy. To finance their activities, the Guards began illegally importing goods worth around $12 billion a year, making huge profits. During Karroubi's tenure as Majles speaker in 2000-2004, he stated that 63 seaports were not under the government's control, but were being used by "others" -- the Guards -- for illegal imports. The Guards also wrested control of Tehran's new international airport from the Khatami administration, closing it by force and threatening to shoot down any aircraft that tried to land. It was also during this period that the Guards made their first attempt to enter Iran's lucrative oil and gas sector. It staged a helicopter attack on an offshore platform, terrifying the employees of a Romanian company that was working there.
With Ahmadinejad in power, there is no need for such operations. In addition to the Guards' import operation, now valued at $70 billion annually, he has allowed them to practically devour the national economy. Under the guise of implementing Article 44 of the Constitution, which mandates privatization of major industries, his administration has held fire sales of major national assets, including telecommunications, "selling" them to Guard-affiliated organizations and giving them contracts worth billions of dollars in fields such as oil, gas, and rail. According to a reliable estimate, the Guards control about 60 percent of the official economy, in addition to its tight grip on the black market.
There are two additional aspects of the Guards' business activities to keep in mind. By law, the military does not pay any tax. And, according to the Constitution, any organ of the state that is controlled directly by the Supreme Leader cannot be monitored or inspected by the Majles or other oversight organizations, unless the Leader orders it. Since the Supreme Leader is the commander-in-chief of Iran's armed forces, there is no effective monitoring of the Guards, which has allowed their affiliated firms to perform very low-quality work.
//www.pbs.org/wgbh/pages/frontline/tehranbureau/2010/06/fissures-in-the-regime.html
IRBS
by Fred on Wed Jul 07, 2010 04:59 AM PDTWhile the author recounts some instances where Islamist Rapists’ armed enforcers were granted “legal” exclusive authority in some segments of national economy, he fails to portray a more accurate picture of IRBS, Islamist Rapist Brown Shirts’ domination of the nation’s economy.
It would be an exercise in futility were one to search for a segment of economy where IRBS overtly or covertly is not ruling supreme.
There are no, none, ongoing businesses of any considerable size where a bunch of IRBS, either active or retired, do not own the whole enterprise or are not paid off for protection.
This trend started from the early days of Islamist Rapist Republic and during Rafsanjani’s “presidency” was speeded up.
When speaking about Iran’s economy, one is speaking about a conglomerate wholly controlled by IRBS.
¿Privatization Program?
by AgaPablo on Wed Jul 07, 2010 03:52 AM PDTVery good analisys indeed! But, who where the private capital owners that were supposed to bid for the government assets at stake?
Weren't they the big heads behind the Green Movement?