On the day speculation mounted over the course of the Adrian Darya 1, an Iranian oil tanker formerly known as the Grace 1, after it turned off its tracking beacon, the country’s foreign minister Dr Javad Zarif was in Dhaka where he urged countries including Bangladesh not to bow to ‘economic terrorism’ by the United States government, and encouraged them to avail a number of alternative trading mechanisms that circumvent the US financial system to carry on trading with Iran - without falling foul of Washington’s sanctions regime.
The tanker carrying 2.1 million barrels of Iranian crude worth some $130 million has since been spotted off the Syrian port of Tartus, precisely where it wasn’t supposed to go when the Gibraltar government released it on August 15 after receiving official written assurances from Tehran that it would not unload its cargo of oil in Syria. Britain’s Special Marines, at the insistence of the US, had earlier detained the tanker off the coast of Gibraltar, a British Overseas Territory. The latest developments serve to underline the Iranian regime’s determination to defy the US moves against it, a theme its foreign minister was glad to expound in Dhaka.
“Measures that the United States is taking against Iran are punishing countries that want to observe the law, because the UN Security Council Resolution 2231 calls on member states to normalise business relations with Iran,” said Zarif, possibly the most important diplomat in the world today as the international community tries to avoid diving headlong into another war in the Middle East, during an interview with a select group of journalists at the Intercontinental Hotel.
“In the process the US is hurting those countries by preventing them from trading with an important partner, particularly in the petrochemicals market,” he continued. Zarif, who in the previous week had made a surprise appearance at the G7 Summit in Biarritz and before coming to Dhaka had just returned from Moscow, served up the example of India, saying they end up paying upto “30 percent more” on the international market to meet their petrochemical needs, when they cannot buy from Iran.
US President Donald Trump rather infamously withdrew the US from the Joint Comprehensive Plan of Action (JCPOA), more commonly known as the ‘Iran nuclear deal’ that provided for Iran to curtail its nuclear programme and subject itself to the control of the International Atomic Energy Agency, while the other contracting parties gradually relaxed sanctions against Iran, in May 2018. Some sanctions were reimposed by Washington immediately. Later in November, the so-called secondary sanctions were also reinstated.
Secondary sanctions prohibit firms and individuals in other countries from conducting commercial transactions with US citizens and businesses, to inhibit their economic relationship with the country targeted with “primary” economic sanctions. With the ultimate goal to stop Iran’s nuclear program, US secondary sanctions gave financial institutions around the world a choice to either halt transactions with Iranian banks or lose access to the US financial system - including the use of the dollar, the world’s reserve currency.
The impact of the sanctions, that Zarif referred to throughout as “economic terrorism”, was being felt “directly” in a number of economies around the world as they target ordinary citizens, he said.
The way to deal with them, according to Zarif, is for other countries to reduce their dependence on the means that gives the US such a presence in determining their own relations. He went on to predict the downfall of the dollar as the world’s reserve currency.
"Sooner or later, the excessive use, by the United States of America, of the dollar as a force - they do it with China, they do it with Russia, and they do it with us - will lead to its demise. The force of dollar in international economic relations is enormous but the excessive use of any strength will gradually reduce its impact," he said.
“Countries must be free to choose their trade and economic partners, without having other countries arm-twist them, or bully them,” said the veteran diplomat, who himself went on the list of sanctioned individuals earlier this year. His movements in New York City for example, whenever he is there for UN purposes, are now restricted within a few blocks of the UN offices in Turtle Bay.
His visit to Dhaka though, saw him spend a very busy day on September 4, including meetings with the prime minister, the foreign minister, and the speaker of parliament. Zarif was upbeat on the potential to increase bilateral trade, that currently languishes around just $160 million. The somewhat arcane-sounding barter system came up as a suggested mode of trade in goods and services between the two countries, as a convenient ploy to avoid the dollar.
To make it work, Iran could operate a bank account in Dhaka to trade using Bangladeshi Taka as a medium while Bangladesh could operate an account to trade using Iranian Rial in Tehran, an Iranian diplomat has said in the past. Iran has been engaged in barter trade with India and Russia. Zarif seemed to suggest as long as the political will was there, the ways can be found in cooperation with Tehran. “We are the experts at sanctions-busting,” he claimed, with more than just a hint of chutzpah.
Coming to the situation in the Middle East, Zarif criticised the UAE and Saudi Arabia for waging the war in Yemen with weapons bought from the West, and noted that Iran has proposed a non-aggression pact with Saudi Arabia, saying it is ready to sit with its regional rival at any moment.
"You cannot buy security from outside. The USA can be very happy to sell weapons but it can't sell security," he said, elaborating that instead of buying weapons the countries should spend the money on development.
"Saudi Arabia has spent $87 billion for buying weapons. UAE, which is a country of one million people, has spent $22 billion. And they have not bought it from us or from you or from any Muslim country. They have bought it from Western countries. We have an army of one million people but we have spent only $16 billion for our defence including the salaries of our army," he said, before adding that it is now clear that the Saudi-UAE alliance cannot win the war in Yemen. Indeed, the Houthis, who now control large parts of Yemen including the capital Sana’a, have recently taken to staging audacious attacks within Saudi Arabia itself.
"You see, only friendship and cooperation can buy security. Not weapons," Zarif concluded, on a suitable note of wisdom.