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business newsIran President Skirts Serious Talk During Latin America Tour
Ahmadinejad spent last week in Venezuela, Cuba, Nicaragua, and Ecuador joking with allies there, while tensions between his own country and the West considerably deteriorate.
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The problems are primarily centered on Iran’s alleged quest to build a nuclear weapon, a point of laughter between Ahmadinejad and Venezuela’s President Hugo Chávez last weekend. “Ahmadinejad and I are going into the … basement now to set our sights on Washington and launch cannons and missiles,” Chávez said laughing with Ahmadinejad at his presidential palace in Caracas.
The International Atomic Energy Agency (IAEA) is taking the threat of an Iranian nuclear bomb a little more seriously. The agency's August 2011 report declaring its “serious concerns” about Iran’s nuclear program was denied by the Iranians, though it spurred Washington on New Year’s Eve to sign its toughest sanctions yet on Iran.
In response to heightened rhetoric from Washington, Tehran has threatened to shut the strategically important Strait of Hormuz, the choke point for one-fifth of the world’s oil. This could have huge consequences for the world’s markets.
The price of a barrel of oil could double to more than $200, which would lead the US to open up its strategic reserves, as well as spur the International Energy Agency (IEA) to release up to 14 million barrels per day of government-owned oil. The move by Tehran could cripple countries such as China, India, Japan, and South Korea, which rely on supplies from the Persian Gulf.
However, “To block the Gulf would verge on economic suicide,” writes Bloomberg. “Petroleum products account for 20% of Iran’s GDP, 80% of exports and 70% of its government revenue. Any attempt to close the Gulf could also provoke a war with the U.S. and vaporize what diplomatic support and leverage Iran gets from countries (and clients) such as China.”
During the five-day tour of Latin America, Ahmadinejad failed to talk about the Strait of Hormuz as well other key issues such as the murder of an Iranian nuclear scientist and the death sentence handed out by Tehran of a former US Marine accused of spying. The president also failed to respond to questions on how Iran would deal with the new sanctions from Washington and Europe.
Neither did Latin American leaders offer any thoughts on Iran’s threat to close the Strait of Hormuz or anything on whether they would provide resources to Tehran in order to offset economic sanctions.
In Cuba, Ahmadinejad claimed that Iran was being punished without reason. “Have we assaulted someone? Have we wanted more than we should have? Never, never. We have only asked to speak about and establish justice," Ahmadinejad said, as he spent time with Cuba’s Fidel and Raúl Castro.
“The four countries [visited] are united with Iran primarily in their antipathy toward the United States,” writes Jeff Franks of Reuters. “Political and economic ties with the Islamic Republic have expanded in recent years. They also have endorsed Iran's right to develop nuclear energy.”
Venezuela’s links with Iran are worth more than $5 billion, with factories across the country extolling the economic ties. Chávez has signed more than 100 bilateral deals between the two nations. Their relationship is lubricated by oil, in plentiful supply in both nations. In fact it is oil that lubricates many of the ties across the region with Iran. Ecuador’s economy is also heavily dependent on oil exports while Cuba and Nicaragua are keen to import it, writes Simeon Tegel in GlobalPost.
The warmth toward Iran is not shared across the region, however. Brazil was notably absent from the visit. Its newspapers were full of speculation as to why the relationship between Brazil and Iran has worsened despite popular former president Luiz Inácio Lula da Silva having worked hard at boosting ties. Iran has more than doubled trade with Brazil since 2005, and in 2010, Lula voted against United Nations Security Council sanctions on Iran.
Ties between the two nations have cooled under incumbent President Dilma Rousseff, who condemned Iran for plans to stone a woman to death for adultery as well as backed UN investigations into human rights there. Ahmadinejad apparently wasn’t invited, nor did he offer to make his way to Brazil.
With Brazil, Argentina, and Mexico out of the loop, Ahmadinejad’s links to Latin America appear to be little more than rhetoric, as is typical of much of Latin America’s left. The impact of Washington’s sanctions and Tehran’s response to them is likely to be more important than jokes shared in the gardens of Chávez’s presidential palace.
Twitter: @jammastergirish
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