You know about sanctions; you also know America is the emperor of sanctions. You also know most sanctions were imposed on Russia amounting to 12,772 and still growing. Do you know who the second largest recipient is? Your guess is right, Iran. And ironically she is also the great sanctions buster.
According to statista.com Iran has about 4953 sanctions on her head. Pity you will say. Wait a minute. Let me tell something about sanctions and sanctions busting before I proceed to give you Iran’s business strategy amid geoeconomics.
Sanctions are imposed by way of penalty or punishment against bad guys by good guys. The objective is to force the bad guy to behave in a manner acceptable to the good guys. Sanctions busting is defined as deliberate disregard of them by the bad actors. Iran has earned the notoriety as the great sanctions buster. She has learned the art very well as she was under sanctions of one form or another since Iranian Revolution of 1979.
Applying the logic of geoeconomics deterrence, Iran started to develop what we call as resistance economy at the strategic kevel. In geoeconomics this is not the first time such resistance economy was inaugurated. Since Korean Armistice Agreement came into force in 1953 North Korea experimented with this concept and has survived so far.
But Iranian brand of resistance economy is totally different. Iran applied both legal means as well as the ones beyond the pale of law. On the side of law, she embarked upon two limbs self-sufficiency and self-development. As she went on hot pursuit of the goals set in these areas a huge effort was made in the field of science, technology, engineering and mathematics (STEM) and scores of men & women graduated earning Iran the credit of having highest percentage of STEM graduates per Capita. On the extra-legal side Iran introduced and developed the art & science of reverse engineering.
At the tactical level Iran began to use a global network of dummy companies & banks to evade sanctions in terms of financial, investment and trade flow. In addition, exchange houses were established to channel funds to and fro Iran without getting caught by the sanctions imposers. Of great use is the Russian System for Transfer of Financial Messages (STFM) developed in 2014.
Oil exports initially at low levels, began to rise higher later on using tankers registered elsewhere in contravention of the sanctions. Though few get caught by and large many tankers had reached their destinations intact. When China officially ignored sanctions and contracted to buy huge volume of crude oil Iran got the legitimacy she badly needed.
Trade with regional countries within the Persian Gulf went on unabated especially with Oman and UAE. The biggest break came when Russia officially ignored sanctions and both trade & financial flow between both skyrocketed. Three developments in the field of geoeconomics gave Iran fillip to bust all these sanctions:
One, a free trade zone agreement between Iran, Russia and several countries in the Eurasian region was initialled in June 2023
Two, Iran was invited to join the Shanghai Cooperation Organisation (SCO) as the ninth member in July 2023
Three, Iran was permitted to join the BRICS on January this year
Now Iran can boldly declare to the Global North “no more sanctions busting; go fly with your sanctions”. Geoeconomics is ultimately a two way traffic!
Cheers!
Muthu Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
No comments:
Post a Comment