Iran: How to Circumvent Sanctions Now and in the Future

PressTV Interview with Peter Koenig (Enhanced Transcript)

Background

Iran’s President Ebrahim Raeisi says the first priority of his administration during the Persian New Year is boosting employment and creating new jobs.

He made the remarks in his New Year message aired live from the Grand Mosque of the southwestern Iranian port city of Khorramshahr on Sunday evening, March 20.

“My first Nowruz message as the servant of the public is the message of round-the-clock and incessant work to build a powerful and advanced Iran,” he said.

“No nation and no country has achieved anything without intensive work and the maximum use of human and natural resources. The New Year and the new century should be the beginning of a new era of productive, useful, fruitful, and progressive work for all of us,” the president added.

“During the current year, God willing, the issue of employment will be our first and foremost issue,” Iran’s president said, adding that unemployment is the root cause of all economic and social plights. As a result, he noted, supporting domestic production is at the top of his administration’s agenda.

Raeisi noted that during the seven-month lapsed since his administration was inaugurated, it has proven it is determined to do what it says.

“We said that with the help of God and people, we would contain the coronavirus [pandemic], [and] thanks God, it was done,” Iran’s president said.

He added, “We said that the country and the economy would not be left in limbo pending [the conclusion] of the JCPOA [Iran’s deal with world powers]. Everybody saw that while engaging in negotiations [with other parties to the JCPOA] and taking advantage of political and legal means to dealing with the crime of sanctions, we also put our focus on thwarting sanctions.”1

He pointed to the emerging signs of economic growth and stability as well as a significant increase in the volume of foreign trade and non-oil exports under his administration, saying, “We increased trade with our neighbors for the benefit of the people.”

“We said that we will set the production wheel in motion, [and] official statistics, released up to the end of the third quarter even show that economic growth has reached above 5%,” Iran’s chief executive said.

“We said that we will not trade the interests and security of the people with anything, [and] everyone saw that we gave priority to boosting the country’s defense, missile, and space capabilities, because the country’s security is a priority,” he added.

Raeisi also said the balance in the country’s foreign policy has been restored through an active diplomacy pursued under his leadership.

According to the president, the greatest foreign policy achievement of the country in recent years has been the disgraceful failure of the United States’ maximum pressure policy in the face of the Iranian people’s resistance.2

Back in 2018, the administration of the former US President Donald Trump unilaterally withdrew the US from the 2015 Iran deal, officially known as the Joint Comprehensive Plan of Action (JCPOA) and re-imposed the anti-Iran sanctions that were lifted under the accord while piling on with new ones. He said he was adopting a “maximum pressure” policy to force Tehran to negotiate a new deal.

In spite of his fierce criticisms of the “failed maximum pressure” campaign pursued by his predecessor, Biden has not only kept all the sanctions imposed under Trump but has also added new ones as well.

“We began running the country in the right direction. We do not see the fate of the nation in the hands of foreigners,” Raeisi stressed.

He noted that his administration did away with polarization, which he said undermines the nation’s strength, and instead demonstrated that the power of the [operations in the military] field is in line and parallel to the power of diplomacy.

“We used foreign relations in the service of [the country’s] economy, and that is the meaning of a transform-seeking and justice-oriented administration,” he added.

Elsewhere in his remarks, the Iranian president wished for the new Iranian year to be the end of the coronavirus pandemic around the world and also an end to wars in every corner of the world.

PressTV Interview with Peter Koenig

PressTV:  What would be possible ways to neutralize sanctions, regardless of the result of negotiations in Vienna [IAEA Nuclear Negotiations – ongoing]?

Peter Koenig:  Thank you.  Please let me begin, if I may, with a quote from President Ebrahim Raeisi, after referring to Iran’s spectacular 5% growth, when he said: that we will not trade the interests and security of the people with anything, [and] everyone saw that we gave priority to boosting the country’s defense, missile, and space capabilities, because the country’s security is a priority.”

This is crucial. Iran’s Security must be a priority. This refers not just to military and geopolitical security, but also to economic security.

To neutralize sanctions current and potential future ones, it is important that Iran fully orient herself towards the east, towards China and Russia; in essence, towards the Shanghai Cooperation Organization, of which Iran is now a full-fledged member, and away from the west.

Remember, I have said this before – the SCO comprises about half of the world population — in other words, a huge market — and controls about 30% or more of the world’s GDP.

There is no need to continue depending on the west, the US and her allies or better, her vassals, the Europeans. They will always do what the Anglo-American empire dictates because they are afraid themselves of sanctions.

The current case – the war between Ukraine and Russia – speaks for itself. The US dictates the sanctions for Russia and the European Union has to follow suit – or else. What is the result?

It’s a kind of economic suicide for the west; more for the Europeans than for the US. But also, the US suffers more from their imposed sanctions than does Russia. Because, Russia has gradually detached herself from the dollar-euro economy, and oriented her trade and geopolitical relations towards the east, China and the SCO.

This is true, despite of the contrary the western Russia phobic media want you to believe.

Of course, unplugging one’s economy from the west, from the dollar-euro hegemony, is a process – it doesn’t happen from one day to the next.

But Iran has already begun. In my opinion, it has to be continued immediately and fervently and carried out persistently. In that sense, in achieving economic independence – Russia may be an example. The current US-EU sanction regime hurt Europa and the US more than they hurt Russia, especially in what energy supply is concerned.

PressTV:  Also, considering the energy crisis in Europe, there may be possibilities for Iran to supply natural gas to Europe.

PK:  Of course, there may be possibilities. But knowing what we know about Europe, the US and sanctions, my recommendation is to abstain from supplying Europe with energy. There will be the day when they are told that now Iran needs to be sanctioned, and all the contracts you, Iran, sign now, would be cancelled, or simply disregarded, invalidated. And, as you know, this is not new for Iran, the cancellation of contracts due to sanctions.

There is no reliance on Europe, nor, of course, as you know, on the US.

A good example is the Russia-Germany Nord Stream 2 gas pipeline, which is practically finished. Yet, Germany is being told not to buy Russian gas. However, Germany depends to about 50% of Russian hydrocarbons. Now what will happen – of course, they go begging around the world, to fill the gap, possibly at much higher prices than the gas supply from Russia.

The Saudis have already said they would rather sell to China in Yuan. And they have categorically refused President Biden’s request to increase their oil production.

One must add, the Russian gas supply has always been reliable. Whatever the geopolitical differences, so far Russia has always maintained her contractual agreements and obligations.

Under the circumstances, Russia has already successfully diverted the supplies destined for Germany to China.

Another important factor is the currency in which such contracts would be established, either in US dollars or in euros, the little brother of the dollar.

To the extent possible, Iran may want to stay away from these fiat currencies. These are also the currencies with which sanctions are dished out. So, its not a good idea to deal with these currencies. The Chinese Yuan – which will be rolled out still this year as a digital international payment mode, is much-much safer. –

The Yuan is backed by a solid Chinese economy. The US-dollar and the Euro are backed by nothing – literally by nothing – not even by trust.

PressTV:  And finally, the possibilities of developing relations with countries that they themselves are already under US sanctions?

PK:  Like what countries?  If you are thinking of the East bloc, like the members of the SCO, like China and Russia, yes, of course. They soon will have their own international payment system – actually it already functions between some countries; for example, between China and India it’s already established – and that is SANCTION-FREE!!!

So, again, to stay away as much as possible from US sanctions:

  • do not trade in US-dollars or in Euros
  • stay away from dealing with the US and Europe.
  • Also do NOT keep your reserves in western countries – see what happened to Russia?

Half of Russia’s reserves, stored in London and NYC and possibly some other western countries, have been confiscated – in other words: stolen.

Keep you reserves in your own treasury or in an SCO country where they are not accessible to the west – where they are safe from western sanctions.

Peter Koenig is a geopolitical analyst and a former Senior Economist at the World Bank and the World Health Organization (WHO), where he has worked for over 30 years on water and environment around the world. He lectures at universities in the US, Europe and South America. He writes regularly for online journals and is the author of Implosion:  An Economic Thriller about War, Environmental Destruction and Corporate Greed; and co-author of Cynthia McKinney’s book When China Sneezes: From the Coronavirus Lockdown to the Global Politico-Economic Crisis (Clarity Press, November 1, 2020).  Peter is a Research Associate of the Centre for Research on Globalization (CRG), and he is also is a non-resident Senior Fellow of the Chongyang Institute of Renmin University, Beijing.

  1. See:  Washington says its “maximum pressure” campaign against Iran has been an abject failure.” []
  2. See:  Nation’s maximum resistance defeated US maximum pressure, Iranian president says. []
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