Iran to promote barter trade for boosting exports

Iran aims at implementing ‘oil for goods’ barter trade program. Under this program country’s private and government owned export companies will be given oil to sell to potential buyers and import basic goods in return.

The details of this plan were announced by the Oil Minister Bijan Namdar Zanganeh in a joint meeting with the Governor of the Central Bank of Iran (CBI) Abdolnasser Hemmati, the Industry, Mining, and Trade Minister Alireza Razm Hosseini, and the Agriculture Minister Kazem Khavazi.

In the meeting, Zanganeh informed that President Hassan Rouhani has accepted the proposal to create a Single Window System to carry out all the necessary processes for the mentioned program, adding: "We will start operations next week.”

CBI Governor Hemmati also supported the idea and announced plans for increasing the use of oil for goods agreements between Iran and other countries.

"The use of barter exchanges of oil for basic goods needed by the country will be expanded along with current methods of trade, to increase the volume of foreign trade and for a better usage of domestic production facilities," Hemmati wrote in an Instagram post.

To disseminate more details on the matter, the Tehran Times conducted an interview with the Secretary of Iranian Oil, Gas and Petrochemical Products Exporters' Union (OPEX) Hamid Hosseini.

According to Hosseini based on the Oil Ministry decision, several capable candidates among the country’s top export companies will be chosen after assessments by the mentioned ministry and the Industry, Mining and Trade Ministry, and will be authorized to use the mentioned single window system to export oil in exchange for importing the country’s necessary commodities.

“The government should provide the export/importers a list of the country’s needed commodities and allow them to export goods (in this case oil) provided that they import only the commodities determined by the government,” Hosseini explained.

Iran has experience in this regard and this barter trade program has been used several times in the country, for instance, a program exactly like the one recently proposed, was implemented in the Iranian calendar year 1370 (started in March 1991), the official added.

“In the program implemented that year the government allowed traders to export whatever goods they could manage but expected them to import only the commodity items specified by the government,” he explained.

In the current scheme, the government has started with crude oil at the first stage, and traders are only supported to export crude oil in exchange for other commodities, according to the official.

Hosseini noted that the supply of essential goods and raw materials required by the production sector is the government's priority in the mentioned barter agreements.

Underlining the CBI governor’s remarks on the matter, he noted that barter trade has been, for long, a way to deal with sanctions while developing the countries' foreign trade.

It should be noted that Iran is already exporting significant amounts of oil despite the US sanctions and other external problems like the pandemic.

The latest reports on Iran’s oil exports indicate that the country increased oil exports sharply in September in defiance of the US sanctions.

Data from Tanker Trackers and two other firms indicated exports were rising in September, although the figures fall into a wide range of between 400,000 bpd and 1.5 million bpd, Reuters reported.

It is expected that this method, along with other ways of exporting oil, which the country is currently using, would increase Iran’s foreign trade significantly in the near future.

 

Russia accused of enabling a proxy army on Israel border

In a wide ranging interview with The Jerusalem Post, H.R. McMaster, former national security advisor to Trump administration talked about the strategy to deal with Iran, China, Russia and the Palestinians over the long term.

McMaster made it clear to the Post that the deal was significantly flawed, saying, “The idea that weaving Iran into the global economy would moderate the regime’s behavior turned out not to be the case,” but he viewed it as a chip that could be used to force Iran to make a choice between “becoming responsible” or “remaining a pariah.”

This was the reason when Trump wanted to pull out of the nuclear deal even in 2017; the former NSC chief believed that – with all of its flaws – this was squandering an opportunity. He preferred to continue to use the threat of pulling out of the deal as a pressure point, which could be stronger than pulling out prematurely at the time.

Maybe McMaster’s most original contribution to the Iran issue is his readiness to challenge the premise that the Iranian people cannot be reached sufficiently to change their orientation to the West.

On one hand, he would disparage those who think just engaging with Iran will get anywhere if there is no “credible military threat” alongside possibly a smarter version of Trump’s “maximum pressure” campaign.

On the other hand, he believes that given enough time, a concerted messaging strategy can reconnect Iranians with the time period around 1979 when theocrats “did not have uncontested” control.

Questioned about what concrete measures would need to be taken to present Tehran with a credible military threat, McMaster said, “We already have an incredible military capability in the region. The US does, and Israel certainly does. The US must demonstrate the capability and that it is willing to impose costs on Iranian forces and the regime.”

McMaster did not take the opportunity to endorse suggestions pushed by JINSA to publicize contingency plans for striking Iranian targets, such as its nuclear program. But he gave the example of the January targeted killing of Islamic Revolutionary Guard Corps Quds Force chief Qasem Soleimani as sending the right kind of message that the US “knows the return address” when Iranian proxy forces attack US bases in Iraq or elsewhere.

Pressed that his ideas of a long-term strategy to convince Iran to reorient its attitude toward the US, the West and Israel might take too long, and that Iran could break out to a nuclear weapon in the meantime, he hinted with a veiled threat, “I don’t think it would be in their interest to do so.”

At the same time, he said, “I think it’s wrong to trust the regime,” saying progress would be achieved by conveying a message that the West has greater staying power than the ayatollahs have to outlast concerted pressure.

Asked how such a campaign could work when economic powerhouses like China and Russia are committed to keeping Iran afloat economically despite US sanctions, he said “it is possible to impose costs on” Iran that the ayatollahs would succumb to.

He said it is also crucial to get through to the Iranian people that most of their economic woes stem not from global sanctions but from the regime’s adventurism in foreign countries and corruption.

His formula for peace between Israel and the Palestinians requires the end of Hamas rule in Gaza and significant shifts in flexibility by both Israel and the Palestinian Authority, along with a return of the US to the role of a neutral and honest broker.

“There have been positive developments. The outside-in approach has been working. The recognition of the Gulf Arab states that Israel is not a security problem and that working with Israel is in their economic and security” interest, leading to “the Abraham Accords is worth celebrating,” stated McMaster.

He accused China of covering up the outbreak of the coronavirus. “During the pandemic, it [China] became even more aggressive oppressing freedom in Hong Kong and the extension of cultural genocide in Xinjiang,” said McMaster. Continuing, he stated, “Externally, China carried out massive cyberattacks against pharmaceutical companies, attacked and bludgeoned Indian soldiers to death, rammed vessels in the South China Sea and threatened Taiwan and Japan.”

To address this threat, he said, “What is necessary is a high degree of economic cooperation. If the US, the EU, Japan and the UK work together, they can compete effectively with China. It must be a competitive approach.”

In terms of losing ground to Chinese influence around the world in recent years, McMaster said that the US abandoned and was not even really present on the playing field, having been consumed by internal issues and a poor strategic understanding of the Chinese.

Talking about challenges presented by Russia, McMaster said, “It is really important to impose costs on the Kremlin and enablers that exceed the costs they factor into their decision-making process.”

“Putin’s playbook is designed not to challenge the US directly, but to drag everybody else down” so he can be the proverbial last man standing.

He said that “Russia preys on perceived weaknesses in democratic societies, takes advantage of divisions... lessens confidence in who we are as a people.”

Continuing, he said, “The Kremlin believes it’s succeeding. Putin has become more aggressive as his situation is becoming more challenged and tenuous with the stagnation of the Russian economy and with protests especially in the eastern part of the country. In order to alter Russian behavior, he recommended joint sanctions from the US, EU, Japan and others on Putin’s inner circle.

McMaster said he was perplexed at why “Israel’s economic relationships with Russian companies are deepening when the Kremlin is acting like a pariah state. Russia is a key enabler of Iran across the region. It is enabling a proxy Iranian army on the border of Israel. It is allowing the strengthening of Hezbollah.”

Pressed that Russia came in only when the US made it clear it would not expend sufficient military force to finish off ISIS and stabilize Syria, he said, “Russia lies about fighting jihadist terrorists. It is in league with the Assad regime, who released jihadist terrorists from prison so he could portray the civil war as jihadists.

According to McMaster, “Russia, by enabling Iran, really perpetuates the problem of jihadist terror organizations because the fear of Iran allows these jihadists to portray themselves as protectors of Sunni Arab communities. The fear of Assad and Iran’s proxy army perpetuates the jihadist problem.”

Bahrain faces anti normalization protest

Reportedly, anti normalization protests erupted in the streets of the Bahraini capital of Manama after Friday prayer. 

Protesters held up banners denouncing normalization, with the unified slogan “Anti-normalization Friday”, along with a photo of a masked Palestinian militant.

Bahrain’s normalization agreement with Israel was met with widespread anger, despite tight security restrictions, as well as the summoning of the demonstration organizers and participants, forcing them to sign an order to stay off the streets and not to engage in disruptive activities.

The protesters expressed their rejection of normalization by carrying banners with the slogans: “Normalization is treason”, “We reject submission, humiliation and surrender to the instructions of the US and Britain” and “Israel is a cancer that must be eradicated, and we will”. Other slogans stated: “We will never surrender” and “Normalization is shameful, it is a betrayal”.

After Bahrain announced normalizing relations with Israel, the hashtag “Bahrainis against normalization” was widely circulated by Bahraini activists on Twitter.

The Emirati and Bahraini normalization agreements with Israel were categorically rejected by the Palestinian authorities and factions, who considered the decision as a betrayal of Al-Aqsa mosque, Jerusalem and the Palestinian cause.

Zarif urges neighbors to choose peace over tension

Iranian Foreign Minister, Mohammad Javad Zarif has urged neighboring countries to choose peace, security, stability and prosperity for all instead of remaining prisoners of the past and perpetuate instability and tension in the region.

Zarif made the remarks in an address to a virtual debate of the United Nations Security Council under the title “Maintenance of International Peace and Security: Comprehensive Review of the Situation in the Persian Gulf.”

Pointing to the Hormuz Peace Endeavor—or HOPE—that was proposed by President Rouhani in his address to the UN General Assembly last year, Zarif said Iran stands by that initiative which is the culmination of various Iranian proposals for security and confidence building in the Persian Gulf region.

He said in the past couple of decades, the region has been the scene of several wars, massive foreign military buildups, ensuing nightmare of extremism and terrorism, dangerous accumulation of the most sophisticated weaponry, and aggression and power projection by various actors.

The foreign minister added, “The disparities in power, geographic size, and natural and human resources are very real. Historical anxieties and rivalries among many regional countries cannot be overlooked.” 

“We know that most of our neighbors prefer peace and dialogue, but it cannot be achieved if one or two pursue confrontation and wishfully wait for alien vampires to ‘cut their neighbor’s head’. That delusion will never be realized.”

He named three flawed prescriptions that have caused catastrophic consequences, saying, “First, that you can purchase security from others: Be it from Saddam Hussein invading Iran on some of our neighbor’s behalf; or from the US coming to rescue our neighbors from the monster that they had together created; or through unprecedented purchase of military hardware.”

According to Zarif, the second flawed prescription is, “you can have security at the expense of the insecurity of your neighbors: Be it Iran, Kuwait or Qatar at one time or another.”

The third, he continued, “you can establish regional hegemony: Be it in Yemen, North Africa or the Horn of Africa.”

He condemned extra-regional actors for looking at the regional disparities, unending rivalries and new hegemonic illusions as opportunities to expand their military presence and to sell more weapons.

The United States has deployed nearly 50,000 troops in the Persian Gulf region in 29 military installations with more than 300 combat aircraft, he said, adding, “The US has at least one aircraft carrier patrolling our waters at any given time, as well as tens of destroyers and other vessels with four Central Command Headquarters for its Army and its Special Forces, Air Force and Navy.”

Zarif also voiced Tehran’s appreciation to the overwhelming majority of Security Council members for rejecting US efforts to kill the JCPOA and Security Council Resolution 2231. 

Iran does not intend to engage in any arms race in the region and start a buying spree in spite of the end of Security Council restrictions, the foreign minister highlighted.

Zarif called on regional countries to envisage a broad spectrum of cooperation and confidence building measures that include water management, environmental protection, nuclear safety, energy security, education, tourism, economic cooperation, trade, investment, poverty eradication and people empowerment.

 “We all have anxieties and grievances. Certainly, Iranians will never forget 8 years of an imposed war: the aggressor fully financed by our neighbors,” Zarif reminded the regional countries.

“We can choose to remain prisoners of the past and perpetuate instability and tension. Or, all of us—and I stress all—can choose peace, security, stability and prosperity for all. The choice, surely, should be obvious to everyone,” he concluded.

Iran marks end of arms embargo

On October 18, the global ban on the sale of conventional arms to Iran expired and opened the way for the Islamic Republic to import weapons, including warplanes and helicopter gunships, missiles, tanks, artillery and other weapon systems. The ban was imposed by UN Resolution 1929 in 2010. It was lifted as part of the 2015 nuclear deal – enshrined in UN resolution 2231 – as one of the incentives for Tehran to cooperate on its nuclear program. Iran was also allowed to export its domestically produced arms for the first time in a decade. 

Iran hailed the expiration of the arms embargo. “As of Sunday, we can purchase or sell arms from and to anyone we desire,” President Hassan Rouhani said. He noted that the United States had failed to extend the arms embargo in a new UN resolution. “Today is a momentous day for the international community ... in defiance of the US regime’s effort,” Iran’s foreign ministry said in a statement. In a tweet, Foreign Minister Mohammad Javad Zarif said “normalization of Iran’s defense cooperation with the world is a win for the cause of multilateralism and peace and security in our region.”

 In April, the Trump administration launched a diplomatic initiative at the United Nations to extend the embargo on the sale of conventional arms indefinitely. But on August 14, the Security Council roundly rejected the US resolution in one of the worst diplomatic defeats ever for Washington. Only two countries (the United States and the Dominican Republic) on the 15-member council voted for the resolution; two (Russia and China) rejected the resolution, and 11 nations abstained. To win passage, a Security Council resolution needs nine votes in favor and no vetoes from the Council’s five permanent members – Britain, France, China, Russia and the United States. In September, after the UN vote, the United States unilaterally reimposed UN sanctions despite criticism for other world powers.

As the embargo expired in mid-October, Secretary of State Mike Pompeo threatened to sanction any individual or company that supports Iran’s conventional weapons program. “Any nation that sells weapons to Iran is impoverishing the Iranian people by enabling the regime’s diversion of funds away from the people and toward the regime’s military aims,” he warned in a statement.

“Today is a momentous day for the international community, which in defiance of the U.S. regime’s efforts, has protected UN Security Council Resolution 2231 and the Joint Comprehensive Plan of Action (JCPOA). As of today, all restrictions on the transfer of arms, related activities and financial services to and from the Islamic Republic of Iran, and all prohibitions regarding the entry into or transit through territories of the United Nations Member States previously imposed on a number of Iranian citizens and military officials, are all automatically terminated.

In one of the JCPOA’s innovations, the definitive and unconditional termination of arms restrictions and travel bans requires no new resolution, nor does it require any statement or any other measure by the Security Council. The lifting of arms restrictions and the travel ban were designed to be automatic with no other action required. This was achieved after painstaking negotiations, and with a prescient anticipation of the possibility of a breach of obligations by one or more of the other parties to the JCPOA. The very same procedure is applied for the termination of missile-related restrictions in the year 2023, and the subsequent conclusion of ‘consideration of the Iranian nuclear issue’ in the Security Council in the year 2025.

“Therefore, as of today, the Islamic Republic of Iran may procure any necessary arms and equipment from any source without any legal restrictions and solely based on its defensive needs, and may also export defensive armaments based on its own policies. It should be underlined here that rejecting imposition in any form is the cornerstone of Iran’s foreign policy. Therefore, the imposition of any restriction on any field—including finance, the economy, energy, and armaments—has never been recognized by Iran.

“At the same time, Iran’s defense doctrine is premised on strong reliance on its people and indigenous capabilities. Ever since the eight-year imposed war on Iran by Saddam Hussein’s regime—during which the Iranian people were victims of sophisticated and lethal weapons provided to Saddam by the West while Iran was deprived of procuring even the most basic defensive weaponry—the Islamic Republic of Iran has provided for its defensive needs through indigenous capacities and capabilities.

This doctrine has been and will continue to be the principal driver behind all measures of the Islamic Republic of Iran in maintaining its strong defensive power. Unconventional arms, weapons of mass destruction and a buying spree of conventional arms have no place in Iran’s defense doctrine. The country’s deterrence stems from native knowledge and capability, as well as our people’s power and resilience.

Israel had a secret embassy in Bahrain for more than a decade

While the signing of the Abraham Accords signifies the first official diplomatic ties between Israel and Bahrain, the Jewish state has, in fact, been operating a secret embassy in the Bahraini capital of Manama for over a decade, according to a report.

For 11 years, Israel has worked to conduct diplomacy with Bahrain in secret, through the use of a front company. However, this secret diplomatic office's existence was classified and has only recently come to light following a short report recently.

According to this investigative look at over a decade's worth of clandestine diplomatic ties between Israel and Bahrain, the idea of a secret diplomatic mission was brought up in 2007-2008 during a series of meetings with Bahraini Foreign Minister Khaled bin Ahmad Al Khalifa and his then-Israeli counterpart, Tzipi Livni. The decision to open the mission in Manama was preceded by the closing of an Israeli mission in Qatar.

According to the report, the mission was registered on July 13, 2009, under the name of the front company known as The Center for International Development, though it has since changed its name and its current name remains classified. Bahraini records registered the firm as a company providing marketing, promotion and investment services, and its website explained it was a consultant to Western companies interested in non-oil investments in the region.

Like all companies, The Center for International Development had employees. However, the employment criterion was extremely narrow: Israeli diplomats possessing dual nationality. This can be seen in some of its shareholders and board-members. One of its shareholders detailed in public records, Brett Jonathan Miller, is South African, but he would later be appointed Israeli consul general to Mumbai. Another shareholder was Belgian citizen Ido Moed, who currently serves as cyber coordinator in the Foreign Ministry. Even its CEO was a diplomatic officer, though his identity remains classified save for the fact that he was an American national. He was only appointed in 2018, and has recently been replaced. To keep up the charade, all diplomats involved possessed cover stories backed by profiles on the popular business and networking social media platform LinkedIn.

And though this mission was small and clandestine, it was incredibly profitable, with hundreds of business deals struck by Israeli companies in Bahrain due to the mission's activities. What will the existence of this mission mean for Israeli-Bahraini relations going forward?

 Immediately after relations were officially established, Israel sent a formal request to open an embassy in Manama. However, this undertaking has been made incredibly simple by the existence of the mission, as all the groundwork and infrastructure is quite literally already in place. All they have to do is change the sign on the door.

USD witnessing persistent selling

With 13 days until the US Presidential election, it is no surprise to see investors selling greenback. President Trump and Democratic presidential nominee Joe Biden are locked in a tight race. There are growing fears, if Biden wins by a narrow margin, Trump may not leave office willingly. 

Despite a raging second virus wave in many Eurozone nations, the common currency is on a tear. It is almost hard to believe that EUR/USD hit a one month high on Wednesday. Some of the biggest countries in Europe have implemented new restrictions and Europeans are staying at home as much as possible. This behavior will undoubtedly weigh on growth.

There have been some comments suggesting that the European Central Bank (ECB) is not ready to ease policies, but if the economy freezes up from a second wave, it will have no choice. The only reason EUR is strong is because of its attracting demand from investors selling USD. 

GBP also hit a one month high versus the greenback. Brexit deal hopes and mixed inflation data helped to lift the currency. Consumer prices rose in September, which was less than expected but stronger than the previous month. Producer prices beat expectations and rose at a faster pace. The durability of EUR and GBP rally will hinge upon Friday’s PMI reports.

Recently, the New Zealand and Australian currieries saw strong gains today on the back of USD weakness. There’s a very clear trend of improving NZ data and weakening AU data that should continue to drive these currencies lower.