Political observers feel the Iran government'splan to inaugurate its Oil Bourse this month had a connection with the sudden inexplicable cutting of several undersea internet cables. All internet access in Iran was cut and total internet blackout was experienced for a few days. Indian BPOs and focus of media attention for the slowdowns that nearly crippled the industry for almost a week, were probably unintentional targets of what appears to be a far deeper conspiracy.
Possibly nine cable cuts have been detected since January 23. The first report said two cables were cut off the Egyptian Mediterranean coast, disrupting three-quarters of the international communications between Europe and the Middle East. These cuts were initially attributed to hits by ships anchors. But later, the Egyptian Ministry of Communications and Information Technology said video footage of coastal waters in the region of the two cables showed there was no ship traffic for 12 hours preceding and 12 hours following the time of the cable cuts.
In view of subsequent developments, sabotage seems more likely. A few days later, another undersea cable was found cut in the Persian Gulf, 55 kilometers off Dubai. There followed reports of another damaged undersea cable between Qatar and the United Arab Emirates. Soon another report mentioned a cut undersea cable running through the Suez to Sri Lanka. As media interest caught on, the Khaleej Times reported on February 4, 2008 that as many as five undersea cables were damaged, including a cable in the Persian Gulf near Bandar Abbas, Iran; and SeaMeWe4 undersea cable near Penang, Malaysia.
There is no logical explanation for the sudden damage to nearly nine undersea cables in the course of a week. The known list so far includes one near Marseille, France; two near Alexandria, Egypt; one near Dubai, Persian Gulf; one off Bandar Abbas, Iran, Persian Gulf; one between Qatar and the UAE, in the Persian Gulf; one in the Suez, Egypt and one near Penang, Malaysia. The Bharti Airtel-VSNL-seven global telecom firms? new submarine cable from India to France via the Middle East was cut in more than one place. In fact, the most affected region is the Middle East, North Africa and South Asia.
It is striking that almost all these cuts have taken place near Muslim countries, which are naturally affected. Thus suggests the handiwork of parties capable of undersea cable sabotage, having a pronounced anti-Muslim bias, and a record of brutal aggression in the region. Most observers concur that two nations fit the bill.
Israel is in conflict with Lebanon and Syria, and the Palestinian territories. America has invaded and occupied Iraq and Afghanistan, with no signs of retreat. More importantly, Israel and America have heightened their rhetoric against Iran. Linked to this is America'sdemand to increase its military presence in Pakistan'stribal areas which border Iran.
This brings us back to the Oil Bourse that Iran planned to open in February 2008, for trade in ?non-dollar currencies?. Obviously, this has enormous geo-political and economic implications for America, as hitherto the dollar had been dominant international reserve currency for oil transactions. The American economic meltdown on account of sheer fiscal indiscipline spanning decades has, however, caused corporates, bankers, and governments to look for alternative currencies. In the age of sovereign wealth funds, no nation wants to buy the sharply falling dollar. A functional Iranian Oil Bourse, selling oil tankers in non-dollar currencies, is a terrible snub to America.
As discussed previously in these columns, members of the Gulf Cooperation Council (GCC), namely Bahrain, Kuwait, Qatar, Saudi Arabia and the UAE, propose to adopt a monetary union and single currency by 2010 (like the euro). Last May, Kuwait ended the dominance of the dollar and adopted a basket of currencies, triggering rumours that the UAE and Qatar would follow suit. In December 2007, the GCC, barring Kuwait, agreed to continue to peg their currencies to the American dollar, but experts expect this to change as the dollar continues to slide. Certainly, by 2010, they will go for the new GCC currency.
It is equally certain that if Iran manages to open its own Oil Bourse, the GCC will trade there on account of geographic proximity. This will make Iran the main hub for oil deals in the Middle East. The three damaged undersea cables in the Persian Gulf are an ex-pression of anger and frustration at the inevitability of this development. For Iran, there is an additional message that its nuclear programme is riling the falling superpower.
The Iranian Oil Bourse will hasten the speed with which major oil countries dump the dollar for the euro; thus hastening the collapse of the US economy. It is pertinent that public opinion in America and other western nations is still ignorant that Saddam Hussain'sdecision to switch from dollars to euros for the purchase of Iraqi oil was the principal factor behind the invasion of Iraq. This could have encouraged other OPEC nations, besides Nigeria, Mexico, Venezuela, to follow, and thus endangered US economy.
Despite the invasion of Iraq and the possible threat to Iran, the US monopoly over the oil trade is now in peril. Hitherto, oil has been valued in dollars and mainly traded on the New York Mercantile Exchange or London'sInternational Petroleum Exchange, both of which are owned by American corporates. This monopoly compelled national banks the world over to buy dollars, and this compulsion allowed the US to build a debt of over eight trillion dollars. Once the euro emerges as the principal oil currency, the dollar will plummet in value, sinking the American and British economies. Political observers fear a knee-jerk reaction from Washington.