Iran and Saudi Arabia, twin peaks of capitalism’s decomposition

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The whole range of imperialist war and conflict in the Middle East, despite various truces, talks and cease-fires, continues to deepen and spread: Syria’s Assad, backed by Russia, Hezbollah and Iran, is continuing the regime’s butchery; around a hundred “rebel” groups, fighting each other as well as the Assad regime, are backed by the USA, Britain, Saudi Arabia, Qatar and Turkey; the Saudis, with US and British backing as part of a more or less willing “Coalition”, launched “Operation Decisive Storm” a year ago in Yemen, which has turned into an all-round disaster; the “Caliphate” of Isis is still a strong force in fragmented Iraq and Syria with its affiliates strengthening their positions in Libya, other parts of north Africa, the Sinai Peninsula and Yemen, while al-Qaida also strengthens in Syria and Yemen – where it effectively has a mini-state – and both are making inroads into Afghanistan;  Turkish actions in its manoeuvres against Russia have reignited the smouldering conflict between Azerbaijan and Armenia, potentially spreading the conflict to the fragile Caucasus; Turkey’s war on the Kurds has intensified while it has been giving succour to Isis and moving its Turkmen forces into Syria; different Kurdish factions have fought for the Syrian regime, the Americans, the Russians and the British, while tensions increase between the Syrian Kurds and Iraqi Kurds. Both Lebanon and Israel are increasingly in danger of being drawn into this maelstrom.

Within this general centrifugal tendency, of each against all, a myriad of national, religious, ethnic, alliances are being formed between global and regional powers, and this includes obscure alliances between various rebel groups and jihadists. The “Scorched Earth” policy practised by all the forces involved has further increased the killings, the destruction, the misery of the civilian populations, further multiplying the numbers of displaced people and refugees.

In these circumstances it is useful to look into the root of these developments within the framework of the decadence of capitalism – the context of imperialist domination and its connection to the formation the nation state in the area of the Middle East; in particular, we want to concentrate on the “Islamic Republic” of Iran and the Kingdom of Saudi Arabia, whose rivalries are becoming increasingly significant within the overall pattern of conflicts. These two countries, now arch-enemies, bear the inevitable curse on all the nation states born in capitalism’s decadent period – i.e. from around the beginning of the First World War. These two religious regimes – the first preaching a Shia version of Islam, the second the Wahabi interpretation of the Sunni Muslim tradition - co-exist perfectly well with the modern developments of internal repression and within the ever-expanding spiral of militarism. They have grown in the hundred years since they formed but, as expressions of decadent capitalism, they have grown deformed, stunted by a development that has been chained by the self-destructive nature of capitalism in decline, and are thus straightaway forced to sacrifice vast portions of their national capital to the demands of militarism and war.

Iran: stunted child of British imperialism

The establishment of Iran as a nation took place in the early conditions of decadent capitalism. It was born of war and imperialism and involved one the least-known and worst atrocities of the 20th century. An estimated 8 to 11 million Persians, roughly half the population, were killed in a famine engineered by the British – see the book by the Princeton University-based author Mohammed Gholi Madj The Great Famine and Genocide in Persia, 1917-19. The British, taking increasing control of the country, which had just lost vast parts of the Caucasus to the Russians, diverted the material resources of the country to its military effort elsewhere. Britain confiscated food, local transport, goods, oil etc., which it refused to pay for, and sent these away from the country in order to assist its war. Not a “genocide” in the strict legal framework of the bourgeoisie, which requires direct slaughter of populations, but just as deadly. Moreover, with malice aforethought, the British banned any import of food into the country, including from the local areas around Mesopotamia (Iraq) that had a surplus which it controlled. The approximate figures for the engineered famine above are based, in part, on contemporary information kept by the American Legation in the country, the US State Department, British and local sources and a later census. The British had already used starvation as a weapon against the Irish in the mid-1800’s, causing a million deaths, and Churchill was to use the weapon of famine again in his “Denial Policy” which caused the deaths of over 3 million in India in 1943.

Britain had a dominant role in the Middle East from the early 1900’s, pushing out the remnants of the Ottoman Empire, Germany and eventually Russia from the region. In 1907, the British and Russians divided up the region between themselves in the “Great Game” as part of the carve-up of the Middle and Near East. In 1919, Britain established the “Anglo-Persian Protectorate” with a strong occupation of the country as the forces of Russian imperialism were withdrawn in 1917, a result of the proletarian  revolution (which the British also attacked from its positions in Persia). The “Anglo-Persian Agreement” was forced on the Iranian government by Britain in 1919 as it tightened its military control on the state. In the conditions of capitalist decline, the disintegration and collapse of the Ottoman Empire could not give birth to new coherent industrial nations with a dynamic bourgeoisie, but only to fragmentation and states that were abortions; and then as now these states were not at all independent expressions but were prey to global imperialism and its machinations. Historically, capitalism needed large integral and united territories with a strong intellectual base, leading to the development of new forces of the working class, which is why Marx and Engels supported certain movements for national independence during capitalism’s rise. But there was no chance of any of this developing in the Middle East at the onset of capitalist decay, when the priority of the “old” nations was to carve up the world at the expense of their rivals and fight over what was left.

Certainly Britain was now the main power in the region but the Communist International at its 2nd Congress, at Baku in 1920, was wrong to pose national solutions and “national revolutions” against British domination, which it saw as a “greater evil”. The Comintern was already degenerating on the question of imperialism and national liberation and would soon fall into the trap of the “United Front” with the ruling class mobilising the working class for national “solutions”. In Persia any attempts at a more independent policy by local elements were swiftly and ruthlessly dealt with by the British, beginning with the latter fomenting a coup against undesirable Iranian elements in 1921. The British installed the Pahlavi clan as its chosen pawns and this clique, despite a pro-Nazi move in 1941 that was defeated by the British, remained in power from the mid-20’s to the late 1970’s. The Imperial State of Persia was established by the British and the Pahlavis in 1925, to be transformed into the Imperial State of Iran ten years later.

In the Second World War many factions of Arab nationalism flirted with the Nazis, as did certain elements of Zionism, and as did Britain’s pawn in Iran, Reza Shah of the Pahlavi clan who had crowned himself King and declared his “Divine Command”. He further declared Iran “neutral” but was getting too close to the Nazis, threatening Britain’s oil and strategic interests. Britain and a now fully-imperialist USSR invaded Iran in 1941 and replaced Reza with his son who ruled until his overthrow in 1979. A further attempt to make some sort of independent move, which could have only taken place within the confines and conditions of imperialism, was made by the Prime Minister Mohammed Mossadegh in 1953, when he attempted to reduce Britain’s influence and tried to nationalise the Anglo-Iranian Oil Company. Mossadegh was overthrown in a coup orchestrated by Britain and helped by the CIA in “Operation Boot”, which used all sorts of thugs and criminals as well as religious fundamentalists, the latter being around since the 1920’s, in order to save the Pahlavi regime. This period also marked the strengthening of the USA as the major world power, more and more supplanting Britain economically and militarily, particularly following the Second World War – a trend that had continued from World War One. Well before labelling it the “Great Satan”, the Iranian clergy kept a low profile, working primarily as forces of social control within the Iranian state that was becoming a lynchpin of US imperialist strategy in the region, above all as an outpost of the western bloc against Russian imperialism at its southern flank. But the 1963 “White Revolution” of the Shah, bringing in land and various other “reforms” including votes for women, was opposed by the Shia clergy and its particular figurehead Ruhollah Khomeini. The reforms were a sham, the proposed “trickle-down” wealth effect went the same way as all such attempts – upwards; and more and more resources went to the military and militarism with 50% of the Iranian population living below the poverty line by the early 1970s. With the traditional power of the clergy reduced by repression, backed by the USA’s strengthened position which included diplomatic immunity for all US forces in the country, the Shah declared war on the clerical opposition, resulting in some 15,000 Muslims killed and Khomeini’s exile to Iraq, Turkey and then Paris, which took in him and his clique for its own longer-term imperialist interests. Khomeini continued to call for “Islam to stand united against western and arrogant powers” and for an “Islamic revolution”.

Hobbled from the outset, the Iranian economy, based on a war economy and its plentiful oil reserves, never really developed, thrusting most of its population into poverty, while corruption and high-living among its rulers were rife. The overthrow of the Shah in 1979 was not a bourgeois revolution – such times were well past; nor was it a proletarian revolution – the working class was certainly involved and combative through months of struggle but it wasn’t strong enough to become an autonomous and leading force. The army and security forces remained intact, merely adapting to the new situation. When the now Ayatollah Khomeini returned to Iran from Paris he established the Islamic Republic of Iran, ruled by a Supreme Leader. This was a theocratic state that relied not only on the clerics but on the army, the secret police and the feared Revolutionary Guards. Iran was now out of US control but, unusually, did not turn towards Russia. This was a foretaste of what was to become a feature of the new phase of capitalist decomposition where, in contrast to the certainties of the Cold War, irrationality, centrifugal forces and unpredictability would become the norm (as we saw later with the collapse of the Soviet Union and the tendencies of every man for himself in the western bloc). Today Iran has the highest per-capita execution rate in the world, and strikes and labour unrest are ruthlessly put down by the Revolutionary Guard.

Iran graduates into a regional shark

The importance of Iran as a country can be seen in its geo-strategic position: located between the Caucasus and the Indian Ocean, the country has offered its services as an alternative route for the gas and oil pipelines from the Caspian Basin without crossing Russia, with whom it has fallen out on many occasions over oil and gas issues.  The country itself has claimed to have 12% of the world’s proven petroleum reserves and also has the world’s second largest reserves of natural gas. China alone currently depends on Iran for 15% of its industrial oil and gas needs and most of Europe and Japan relies on oil that goes through the Straits of Hormuz, which are overlooked by Iran. The country has worked itself into its position of relative strength thanks to the undermining of the position of the US, not as an economic powerhouse, even with its vast natural resources, but as a militaristic regime. These resources have not been used for the modernisation of existing industries nor the setting-up of technically advanced ones, and while sanctions economic haven’t helped it, the only effective industries are those directly related to the military with the others being derelict, backward and non-competitive. Being an underdog, the country can threaten, challenge and destabilise but its formidable resources are squandered for military purposes. The clergy in particular has resorted to whipping up religious divisions and nationalism, while intensifying the dictatorship and its ruthless suppression of political dissent and social protest, such as the demonstrations of 2009.

Iran’s reliance on religious ideology is a characteristic expression of a social order which has no future, of the growth of irrationalism throughout the capitalist system But the Iranian ruling class also makes very calculated use of the Shia card in cementing imperialist alliances, for example with Hezbollah in Lebanon, and in Iraq where entire parts of the country and its capital Baghdad have been purged of Sunni influences and taken over by Shia cliques. At the same time it doesn’t want to be seen as an exclusively Shia country, preferring rather to present itself as an anti-imperialist umbrella to all, a counter-weight to the USA and Israel and to the corrupt Arab regimes. In short, the export of the Islamic Revolution was nothing other than Iranian imperialism in a new situation. The regime rejected Russia while at the same time constantly challenging the US in the region, building up alliances and backing terrorist networks that were making its rivals – and the greater powers – extremely nervous. Iran made a long-standing alliance with Syria which only briefly faltered over the question of Palestine. Iran was behind the assassination of President Gemayal of Lebanon in September 82 and two months later an Israeli military HQ in Tyre was bombed. The first modern suicide bombers hit the US embassy in Beirut in 83, followed by similar attacks against US, French and Israeli forces, forcing a withdrawal by both the US and Israeli militaries. But drained by the Iran/Iraq War and screwed down by very tight US sanctions, Iran was obliged to jettison the overtly aggressive stance typified by President Ahmadinejad with his threat to wipe Israel off the map. The regime now appears to be coming in from the cold under the “moderate” and more intelligent regime of President Rouhani. The recent nuclear deal, essentially with the US, brings Iran back as a more or less approved player in the region. Even before this deal was signed, Iran and the US were working very closely at the highest military levels in Iraq, and continue to do so, particularly given their mutual interest in opposing the advance of Isis. Allowing Iran to take a greater role may well benefit the US and may partially make up for its weaknesses in the region, but it is already causing major ripples among its local rivals, not least Saudi Arabia. This disquiet has both military and economic aspects: Iran is certainly feared as a regional military power, but the lifting of sanctions could also give Iran an edge over other regional oil-producers in the sharpening competition for a dwindling world oil market.

Saudi Arabia: more thanks to the British Empire

Like Iran the origins of this Kingdom lie in imperialist rivalries and war, the defeat of the Ottoman Empire and the various manoeuvres around it. In 1912 the religious Ikhwan (Brotherhood) based on Wahhabism gave its support to the al-Saud family exiled in Kuwait by the Turks. The Saud-backed forces took control of Riyadh and by 1924, the holy cities of Medina and Mecca, consolidating their power in the region then known as Hijaz. The Ikhwan turned against their rulers because of their plans for modernisation, but were defeated, resulting in the 1932 establishment of the Kingdom of Saudi Arabia led by Abd-al-Aziz, aka, Ibn Saud. Britain’s India Office had already secretly agreed to support Ibn Saud and his tribal forces while betraying other anti-Turkish forces and the idea of a unified Arabia being promoted by Lawrence of Arabia. In 1914, the Earl of Crewe, Britain’s Secretary of State for the Colonies, summed up the approach of British imperialism: ”What we want is not a unified Arabia but a disunited Arabia split into principalities under our suzerainty”. In the following year Britain, along with France, achieved this aim by, as elsewhere, partitioning this country along meaningless boundaries and carving up territories in a classic divide and rule strategy, forming the Kingdom as an absolute monarchy under Islamic law.

The regime was a gerontocracy replete with anachronisms, and the ruling sheiks have never been part of a class of industrially-minded capitalists, but are a highly privileged clique, enriching themselves at the expense of the population as a whole, a trend which increased even more spectacularly with the discovery of oil in the 1930s. Britain had been the initial protector of the Saud regime and the US wasn’t much interested until the oil started flowing; by the early 30s the US established bilateral relations and shortly after full diplomatic relations. In common with the global squeezing out of the interests of British imperialism, the US Quincy Agreement of 1945 guaranteed Saudi security on condition that the latter provided the US with most of its oil. The Saudi regime, apart from some secondary spats over Israel during the 1970s, continued to be a stable and faithful ally of the US until relatively recently. The situation began to change with the fall of the Shah of Iran in 1979, when amidst the acceleration of decomposition in international relations, Saudi Arabia began to defend its own imperialist interests much more independently and voraciously.

On the basis of its gigantic oil revenues, Saudi Arabia has become ”the world’s largest oil producer and exporter, controlling the world’s second largest oil reserves and the sixth largest gas reserves... (it) has the fourth highest military expenditure in the world and in 2010-14 was the world’s second largest arms importer” (Wikipedia). Its command economy is petroleum-based: “roughly 75% of budget revenues and 90% of export earnings come from the oil industry” (Ibid). The ruling class has been unable to develop any substantial industrial base and has failed to integrate the greater part of its 28.7 million people into any meaningful productive process. There is virtually no production of commodities or heavy goods for the internal or export market. The population is fed and looked after by a work-force of 8 million relatively cheap migrant workers who are mainly employed in oil-related industry along with foreign experts and contractors. Hundreds of thousands of undocumented foreign workers, Yemenis, Ethiopians and Somalis, have been detained, deported and expelled. Thousands of highly-trained Saudi youth, often expensively tutored abroad, are mostly unemployable because their wages would be far higher than foreign workers. The Saudi ruling clique invests much of its considerable wealth in speculative foreign dealings and, of course, the arms sector. Because of a lack of broader industrial development – closely tied to the general conditions of decadence – there has been no development of a classical bourgeois sector able to act as a political or social buffer, and brutal repression with its religious police and ubiquitous secret services are the order of the day: the horrible practice of beheading, so decried in the west when carried out by Isis, is a routine means of instilling terror in Saudi, as is the amputation of hands for those accused of theft.  The appalling oppression of Saudi women has been fairly well documented. A system of clans run the country and it has been able to buy social peace at the cost of massive state subsidies. In 2011, King Abdullah announced “a series of benefits for citizens amounting to $36 billion” and a few months later “a package of $93 billion which included 500,000 new homes.... in addition to 60,000 security jobs” (Ibid). Whatever its specificities, Saudi Arabia shows the same development of militarism and repression, the same state capitalist tendencies inherent in all nation states in decadence. But the problems with the economy that appeared a couple of years ago have developed dramatically since. For the second consecutive year the country faces a deficit and cuts in state expenditure and increases in taxes are being implemented for the first time. For the country to avoid a budget deficit the price of oil would have to be $106 a barrel. At the moment it’s just about making $40.

While much of Saudi youth, who have the money to do so, study abroad in relatively liberal circumstances, at home the contrary tendency is for the increasing domination of religious indoctrination. “As of 2004 approximately half of the broadcast air-time of Saudi state television was devoted to religious issues. 90% of the books published in the Kingdom were on religious subjects and most of the doctorates awarded by its universities were in Islamic studies. In the state school system about half of the material taught is religious... assigned reading over 12 years of primary and secondary schooling devoted to covering the history, literature and culture of the non-Muslim world comes to a total of about 40 pages” (Ibid). Saudi Wahabism, which does everything it can to maintain the Sunni/Shia divide, is hostile to any reverence given to historical or religious places of significance for fear of idolatry (“shirk”) and the most significant Muslim sites in the world, Mecca and Medina, are located in the western Saudi region. While the west, which has caused the most global devastation to historical and cultural monuments, hypocritically criticises Isis for its cultural destruction, it is estimated that the Saudi regime has destroyed 95% of Mecca’s historic buildings, most of them over a thousand years old.  Fewer than 20 out of 300 sites linked to Mohammed and his family survive after being demolished by the regime in the name of religious purity. The dazzling skyscrapers and shopping malls that have become a feature of economic “growth” not only in Saudi Arabia but in the other oil-rich sheikhdoms in the region are a better indication of the true religion of these “puritans”: the worship of money and worldly wealth. On the imperialist level Saudi Arabia has exported its Wahhabi ideology throughout the world, not least through the development of well-funded terrorist factions. Though overshadowed by the Sunni/Shia split, the conflict between the Saudis and Iran is one between two imperialist sharks. During the 2011/12 protests in Bahrain the Saudi government sent shock troops in British-supplied Armoured Personnel Carriers not only to quell the social unrest but also to send a bloody warning to Iran in case the latter used the protests to rally Shia resistance to the Saudi regime. The Saudis’ execution of the dissident Shia cleric Sheikh Nimr al-Nimr at the beginning of 2016 was an even more explicit message aimed at Iran, which responded by staging massive demonstrations calling for the Sheikh to be avenged.

The oil-reliant economies of both Iran and Saudi are ill-suited to compete on a world market saturated with over-production. Iran may have had a certain respite with the ending of sanctions and the new deals and openings that this may bring, but its economic base remains fundamentally weak. Even more precarious is the economic reality of Saudi Arabia whose trillion-dollar attempt to move away from oil dependency, the “National Transformation Programme”, proposed by the Crown Prince Mohammed, has been called “manic optimism” by the Economist. Moreover this doomed strategy has already upset the clergy who, like Iran, still hold great power within the state. These types of tensions, in the land that gave us al-Qaida and thus Isis, can only get worse where an estimated 3 million Saudis themselves live in poverty. State subsidies will end or be severely cut back and direct taxes have been imposed for the first time. One of Saudi’s largest companies outside of the oil industry, the construction giant the Saudi Bin Laden Group, was recently unable to pay its workers, summarily sacking 77,000 of them. In short, the economic situation will impact on the social situation and imperialist rivalries.

Developments over Syria and Iran increase imperialist tensions

Ever since the fall of the Shah, the Saudis have been supporting any enemy of Iran, firstly spending $25 billion in supporting Saddam Hussein in the Iran/Iraq War of the 1980s. In March 2015 “Saudi spearheaded a coalition of Sunni Muslim states, starting a military intervention in Yemen against the Shia Houtis and forces loyal to the former President Ali Abdullah Saleh who was deposed in the 2011 social uprising”(Ibid). It has stationed over 150,000 forces on the heavily fortified Saudi/Yemeni border and launched devastating air-strikes on the poverty-stricken inhabitants of this country while taking severe losses itself. At the same time, “together with Qatar and Turkey, Saudi Arabia is openly supporting the Army of Conquest, an umbrella group of anti-government forces fighting in the Syrian Civil War that reportedly includes the al-Qaida linked al-Nusra Front and another Salafi coalition known as Ahrar ash-Sham ...” (Ibid). We should also mention the close relationship that Saudi has with Pakistan with much speculation that the Kingdom has bankrolled Pakistan’s nuclear programme and is looking to purchase atomic weapons from it in the near future.

The recent nuclear deal between the US and Iran, the Joint Comprehensive Plan of Action (JCPoA), as well as the spectacle of these two old foes fighting alongside each other against Isis in Iraq, has dealt quite a blow to the Saudis and added a dangerous twist to imperialist developments in the region. The Saudis are very worried about losing their standing with the US and the weakening of the US overall has allowed the Iranians to make significant gains in Syria. The Saudis have been forced to look for new alliances: Turkey, Egypt and even the arch-enemy, Israel, have been courted. The economic plight of the country will hamper its imperialist reach somewhat but this doesn’t make the situation any less dangerous – on the contrary. In April the Saudis did a deal with Egypt, who it’s been subsidising to the tune of billions a year, offering it two Red Sea islands, Sanafir and Tiran, as a sweetener. The deal had to be agreed by the Israeli government, which it did. In fact Saudi support for the new Egyptian butcher el-Sisi in overthrowing Morsi’s Muslim Brotherhood government, which went against the wishes of the USA, was a further indication of the weakening of the latter and the strengthening of every man for himself.

The tendencies to war in the region are speeding up and spreading: in early spring the Turkish Prime Minister explicitly warned the Russians that it would make trouble for them and their Armenian clients in the enclave of the High Karabakh in Turkish-backed Azerbaijan, spreading potential war and uncertainty to the South Caucasus. Should the war currently going on at a low level between Saudi Arabia and Iran intensify – and we cannot rule out open military clashes – then this would be an important qualitative step in the further decomposition of the region, destabilising the whole of trade and traffic around the Persian Gulf and the Straits of Hormuz, including oil supplies, which in turn would have an enormous impact on the world economy.

If we have gone into detail about the historical development of Iran and Saudi, it is because they are almost a showcase of the totally decadent character of the world capitalist system. Instead of being able to draw on the natural riches of the region, the ruling classes, caught in a spiral of war and imperialist rivalries, has been forced to feed large parts of their profits into the military machine. And if the two biggest regional rivals are now clawing at each others’ throats, it is because imperialism in its advancing decay has turned the Middle East into a true nest of vipers.

Boxer. 8.6.16 (This article was contributed by a close sympathiser of the ICC)



Imperialism and Social Decomposition