This article was published by Alliance (Marxist-Leninist) as part of the publication Alliance, issue #51, “Pan-Arabic or Pan-Islamic ‘Socialism.’”
Originally written 1992
Since the end of World War II (WW II), the contradiction between the working classes and the developing capitalist class of the Middle Eastern nations was linked to a second contradiction – that between the different imperialists and the indigenous developing capitalists. On top of these, there were contradictions between the imperialists themselves, reflecting the decline of British imperialism, and the rise of USA imperialism. After World War II explicit deals took place between the British and US, regarding future developments in the Middle East:
“In response to Winston Churchill’s questions about America’s interests in Iranian oil, Franklin Roosevelt wrote in March 1943 that:
‘I am having the oil studied by the Department of State and my oil experts, but please do accept my assurances that I am not making sheeps’ eyes at your oil fields in Iraq or Iran.’
‘Thank you very much for your assurances about no sheeps’ eyes at our oil fields in Iran and Iraq. Let me reciprocate by giving you the fullest assurances that we have not thought of trying to horn in upon your interests or property in Saudi Arabia.'”
James A. Bill “The Eagle and the Lion-The Tragedy of Iranian-American Relations”; New York , 1988. p.29
Unfortunately, with a small working class, the national bourgeoisies largely had no opposition to its leadership over a struggling peasantry. But the national bourgeoisie was also weak, because as the power of imperialism grew, the objective role for the national bourgeoisie was steadily getting smaller. Furthermore the previous history of Oriental Despotism of the Ottomans, had ensured a very weak development of the industrial forces necessary for nation development. Finally the many divisions between factions in the area were skilfully exploited by the imperialists to effectively divide and rule.
ANTI-COLONIAL STRUGGLES IN COLONIAL COUNTRIES
Imperialism used local indigenous rulers and leading individuals as their surrogates. These indigenous agents were usually buyers and traders whose livelihood depended upon the Imperialists. Often landed feudal gentry were also allied to imperialism. They were termed COMPRADOR BOURGEOISIE.
Inevitably some indigenous capitalists wished to displace imperialism, so that they can then retain all the colony’s profits for itself. They were termed NATIONAL BOURGEOISIE. Because they were usually very weak, they tried to enlist the masses ie. working classes and peasantry. The weak and nascent national bourgeoisie of the Middle East struggled at first, in the main against British and French; then in the main against USA imperialism.
The line of Communists in the National Liberation movement dervies from the positions of Lenin at the Second Congress of the Comintern in 1921. Lenin thought that in the first stage of the revolution, the bourgeois democrats had a useful role to play:
“All the Communist parties must assist the bourgeois democratic liberation movement in these (ie colonial type countries-ed).. The Communist International (CI) must enter into a temporary alliance with bourgeois democracy in colonial and backward countries.”
V.I.Lenin: Preliminary Draft of Theses on National and Colonial Questions, 2nd Congress CI in “Selected Works”, Volume 10, London, 1946; p. 236-7.
But Lenin and Stalin pointed out, that these national bourgeoisie, flinch from the final steps, as the unleashing of mass movements arouses socialist movements. Therefore, class coalitions of national bourgeoisie with working class organizations can only be temporary. They are also prone to sabotage by the national bourgeoisie. The working class organisations must remain independent, even in a United Front. It is imperative to find and ally only with and for long as, the sections of the bourgeoisie are genuinely in struggle with imperialism:
“I would like to particularly emphasise the question of the bourgeois democratic movements in backward countries. It was this question that gave rise to some disagreement. We argued about whether it would be correct, in principle and in theory, to declare that the CI and the CP’s should support the bourgeois-democratic movement in backward countries. As a result of this discussion we unanimously decided to speak of the nationalist-revolutionary movements instead of the ‘bourgeois-democratic’ movement. There is not the slightest doubt that every nationalist movement can only be a bourgeois-democratic movement.. But it was agreed that if we speak about the bourgeois-democratic movement all distinction between reformist and revolutionary movements will be obliterated; whereas in recent times this distinction has been fully and clearly revealed in the backward and colonial countries, of the imperialist bourgeois is trying with all its might to implant the reformist movement also among the oppressed nations.. In the Commission this was proved irrefutably, and we came to the conclusion that the only correct thing to do was to take this distinction into consideration and nearly everywhere to substitute the term “nationalist-revolutionary” for the term “bourgeois-democratic”. The meaning of this change is that we communists should, and will, support bourgeois liberation movements only when these movement do not hinder us in training and organising the peasants and the broad masses of the exploited in a revolutionary spirit.. The above mentioned distinction has now been drawn in all the theses, and I think that, thanks to this, our point of view has been formulated much more precisely.”
Lenin. Report Of Commission on the National and Colonial Questions, Ibid, p 241.
This Leninist line was further developed by Stalin, who in 1925, distinguished “at least three categories of colonial and dependent countries”:
“Firstly countries like Morocco who have little or no proletariat, and are industrially quite undeveloped. Secondly countries like China and Egypt which are under-developed industries and have a relatively small proletariat. Thirdly countries like India.. capitalistically more or less developed and have a more or less numerous national proletariat. Clearly all these countries cannot possibly be put on a par with one another.”
J.V.Stalin; “Works” Volume 7: “Political Tasks of the University of the People’s of the East. Speech Delivered at a meeting of Students of the Communist University of the Toilers of the East”, May 18th, 1925. pp. 148.
In each country the conditions were different and had to be concretely studied before deciding the exact tactic:
“In countries like Egypt and China, where the national bourgeoisie has already split up into a revolutionary party and a compromising party, but where the compromising section of the bourgeoises is not yet able to join up with imperialism, the Communists can no longer set themselves the aim of forming a united national front against imperialism. In such countries the Communists must pass from the policy of a united national front to the policy of a revolutionary bloc of the workers and the petty bourgeoisie. In such countries that bloc can assume the form of a single party, a workers and peasants’ party, provided, however, that this distinctive party actually represents a bloc of two forces – the Communist Party and the party of the revolutionary petty bourgeois. The tasks of this bloc are to expose the half-heartedness and inconsistency of the national bourgeoisie and to wage a determined struggle against imperialism. Such a dual party is necessary and expedient provided it does not bind the Communist Party hand and foot, provided it does not restrict the freedom of the Communist Party to conduct agitation and propaganda work, provided it does not hinder the rallying of the proletarians around and provided it facilitates the actual leadership of the revolutionary movement by the Communist party. Such a dual party is unnecessary and inexpedient if to does not conform to all these conditions for it can only lead to the Communist elements becoming dissolved in the ranks of the bourgeoisie to the Communist Party losing the proletarian army.”
J.V.Stalin Works Vol 7; “Tasks of University of People’s of East”, Ibid; pp. 149-150
If a large working class presence was felt, this strengthened the revolutionary prospects. When this happened, the most uncertain and vacillating elements of the bourgeoisie tended to desert the revolution, and form a bloc with imperialism:
“The situation is somewhat different in countries like India. The fundamental and new feature of the conditions of life in countries like India is not only that the national bourgeoisie has split up into a revolutionary part and a compromising part, but primarily that the compromising section of the bourgeoisie has already managed, in the main, to strike a deal with imperialism, Fearing revolution more than it fears imperialism, and concerned with more about its money bags than about the interests of its own country, this section of the bourgeoisie is going over entirely to the camp of the irreconcilable enemies of the revolution, it is forming a bloc with imperialism against the workers and peasants of its own country.”
J.V.Stalin Works Vol 7; “Tasks of University of People’s of East”, Ibid; pp. 150.
Such blocs between vacillating “national bourgeoise” and imperialisms, should be smashed:
“The victory of the revolution cannot be achieved unless this bloc is smashed, but in order to smash this bloc, fire must be concentrated on the compromising national bourgeoisie, its treachery exposed, the toiling masses freed from its influence, and the conditions necessary for the hegemony of the proletariat systematically prepared. In other words, in colonies like India it is a matter of preparing the proletariat for the role of leader of the liberation movement, step by step dislodging the bourgeoisie and its mouthpieces from this honourable post. The task is to create an anti-imperialist bloc and to ensure the hegemony of the proletariat in this bloc. This bloc can assume although it need not always necessarily do so, the form of a single Workers and Peasants Party, formally bound by a single platform. In such centuries the independence of the Communist Party must be, the chief slogan of the advanced communist elements, for the hegemony of the proletariat can be prepared and brought about by the Communist party. But the communist party can and must enter into an open bloc with the revolutionary part of the bourgeoisie in order, after isolating the compromising national bourgeoisie, to lead the vast masses of the urban and rural petty bourgeoisie in the struggle against imperialism.”
J.V.Stalin Works Vol 7; “Tasks of University of People’s of East”, Ibid; pp. 150-151.
But despite these warnings, organisations took part in un-principled coalitions, and led the working classes into massacres. The failure of the working class to organise along correct lines ensured that the many anti-imperialist struggles in the Middle East, never achieved the socialist – or even to the national democratic revolution.
After World War II imperialism was even stronger, and even more rapacious. This was as its markets were threatened by the Socialist USSR leading some European countries towards socialist development. Responding to imperialisms’ demands, the weak national bourgeoisie of the Middle East attempted to overcome their weaknesses by several tactics that would avoid harnessing the revolutionary masses. All these tactics would prove unsuccessful. These are detailed below; and culminated in a movement of cartelisation for oil selling – Organisation for Petroleum Exporting Countries (OPEC).
THE WEAK NATIONAL BOURGEOISIE OF THE MIDDLE EAST TO SEEK TACTICS TO FIGHT IMPERIALISM
Tactic Number One: Wahda and Nasserism, Pan-Arabism; A Political Combination of Weak National Bourgeoisie
Given the bourgeois fear of rousing the working class movement too far, only a vacillating movement against imperialism was possible. Ultimately the national bourgeoisie always capitulated in the face of social revolution. This allowed the imperialist powers to retard the development of the states concerned. Coupled with this was the power of monopoly interests, of the imperialist companies. So that even in favourable situations, where these states led by national bourgeoisie could nationalise the major resource in the area (oil) the imperialist consortiums were able to dictate their demands.
Despite these failures, the nascent bourgeoisie of the area continued to harbour resentment against imperialism. To compensate for their unwillingness to fully enrol the working classes, they attempted to unite across “national” borders. This entailed a mystical PAN-ARABISM which preceded NASSERISM. For example the formation of the BA’TH PARTY in Syria took place in 1947, led by Michel ‘Aflaq, Salh al-Din Bitar and also Wahib al-Ghanim.
BA’TH means “re-birth” and took the notion as central, to mean the renaissance of the Arab movement. But it was Gamel Abdul Nasser who most effectively utilised this idea of pan-Arabism. Starting in the context of a nationalist movement in Egypt alone, Nasser struck a renewed hope for liberation from imperialism throughout large sections of the Middle East, using instead of Ba’th – the notion of Wahda, to mean ultimately the same.
The Nasserite movement aimed at WAHDA (Arabic for union). It was to be a renewal of Arabic “culture,” under a twentieth century guise of nationalism.
As a strategy of the national bourgeoisie in the Middle East, it aimed to contain the mass movement, it emphasised notions of an Arab peoples, denying any class content.
Revisionism in the parties of the area had effectively deprived the working class of capable leadership. Nasserism was only able to consolidate itself because the Egyptian Workers Party, the Communist Party, was itself under the influence of the now Soviet-revisionist leaders.
Wahda called for unity of several different struggling national bourgeoisie against imperialism. It hoped to be able to avoid the social revolution, by using nationalistic demagogic slogans. Effectively a class coalition was to be created, of all the national bourgeoisies, and the working classes of the different countries, led by the national bourgeoisie.
That way it was to be hoped apparently, that the singly weak national bourgeoisie, together, would be strong enough to fight imperialism, and yet still be able to contain the social revolution.
But ultimately Pan-Arabism failed, as there was a single dominant national bourgeoisie, which itself tried to create “comprador” relations with the other weaker national bourgeoisie. This dominant national bourgeoisie was Egyptian and it was led by Nasser. It was successful for a time, as evidenced by the short lived creation of the UNITED ARAB REPUBLIC– consisting of Egypt and Syria. However the dominant Egyptian bourgeoisie, could not suppress the Syrian national bourgeoisie of the coalition. The experiment thus failed.
Tactic Number Two: Playing on Contradictions Between Imperialists
The imperialists had long squabbled amongst themselves as to how to divide up the Middle East. French and British supremacy in the Middle East was surreptiously attacked by USA imperialism. After the death of Stalin the hegemony of revisionism in the USSR was rapidly completed. With the overthrow of socialism in the Soviet Union, the relations between the Soviet Union and dependent nations became imperialist. This was exemplified by the relations within the Warsaw Pact nations. In the semi-colonial and colonial nations, the USSR attempted to act as a brake on Western imperialism. This resulted in a struggle between US and Soviet social imperialism for control of these areas, including the Middle East.
In this context, the various timorous struggling national bourgeoisie would frequently switch “temporary masters.” Being interested in control of “their own” profit, the national bourgeoisie were viewed as unreliable by the imperial super-powers. But they were used as pawns by the super powers to control the area. This allowed the national bourgeoisie some limited bargaining power. Ultimately, his strategy also failed to effect the national revolution.
American policy recognised the strength of the anti-colonial movements. Their plan was to disrupt the movement by using the compradors. To further blunt the movement they used the veneer of neutrality offered by the UNITED NATIONS. John Foster Dulles, US Secretary of State, said just prior to the Suez War :
“The USA cannot be expected to identify itself 100% either with the Colonial powers or the powers uniquely concerned with the problem of getting independence as rapidly and as fully as possible.. any areas encroaching in some form or another on the problem of so called colonialism find the US playing a somewhat independent role (Ed – of UK and France). The shift from colonialism to independence will be going on for another 50 years, and I believe that the task of the United Nations is to try to see that this process moves forward in a constructive, evolutionary way, and does not come to a halt or go forward through violent revolutionary processes which would be destructive of much good.”
Cited Carlton. “Antony Eden”. London 1981. p.426
After the SUEZ WAR, the USA and the USSR all contended in the area. Each super power developed its’ primary sphere of influence. But since neither power was able to totally control the area, they were for long periods content for an armed stalemate.
The major states in the area that were spheres of influence for the Soviet Union were Iraq, Syria, Egypt (until Nasser’s death), Yemen and Libya.
These countries often adopted a mask of “socialism”.
The main countries that supported the USA were Israel, Saudi Arabia, Jordan, and under Sadat – Egypt.
Examples of a national bourgeoisie that attempted the game of playing one imperialist off against another include Egypt under Nasser, Iraq under Hussein and Syria under Assad.
Due to the serious demise of the fortunes of the Soviet imperialists in the late 1980’s, the USA was able to exert a far more dominant role than previously, and for the first time saw an opportunity to be unopposed. It tested the waters for an exertion of its’ direct military presence in the Arab world by bombing Libya.
EGYPT, AND THE “FREE OFFICERS MOVEMENT”
The case of Egypt illustrates how a balancing act, was able to win a short term gain, for the nationalist bourgeoisie. But ultimately the short term gains could not be maintained. In Egypt the nationalist faction was represented by the Free Officer Movement, to which Nasser belonged. This movement, was supported initially by the USA, as a weapon to be used against the British superpower.
“The Free Officer movement originated within the regular army; its leaders were then preparing to oust the appointed military chiefs, seize all the command posts and present their program for national renovation to the entire army. They also tried to make sure that should they be successful, the US ambassador would not be hostile and would exert pressure on the British ambassador.”
Mahmoud Hussein . “Class Conflict in Egypt 1945-1970”. London , 1977. p.85-6 .
“The US hoped to capitalize on the situation to become the new protector of Egypt and force it to accept a military alliance which would officially recognize the need for national sovereignty.”
M.Hussein , Ibid. p.96.
“According to Miles Copeland, an American CIA official posted in the Middle East in the 1950’s – the CIA knew as early as March 1952 that a ‘secret military society’ was plotting a coup. ‘ Before the coup the CIA’s Cairo station, headed by Kermit Roosevelt, had three meetings with some of the officers of the group. ” the large area of agreement reached by Roosevelt and this (Egyptian ) officer, speaking for Nasser himself, is noteworthy,” writes Copeland.”
Dilip Hiro “Inside the Middle East” London. 1982. p. 297.
The aims of the Free Officer movement were to modernise and develop, and to get rid of the British military occupation of Egypt. Of course, even the first goal was unacceptable to either the British, or to those who immediately took their place, the USA imperialists. But for their own short term goals – to get rid of the British – the USA did help the Free Officers, by forcing the British to evacuate their 70,000 strong troops. However, in partial appeasement of the British, Eisenhower ensured a clause in the Anglo-Egyptian Agreement that entitled Britain to reoccupy the Suez zone with “Egypt’s agreement” in the case of an attack on Egypt by any outside power.” (Hiro Ibid p.298.)
Nasser tried to exploit the tensions between the British and the Americans, and at the same time get maximal financial aid. Nasser from then on used both the US and UK imperialists for financing. But to retain his independence and to get the “best deal”, Nasser then also asked for financing from the revisionist USSR. Even the provision of USSR made arms via Czechoslovakia, did not however deter the West:
“Not wishing to alienate the charismatic leader of Egypt, a most strategic country in the region, Washington and London continued discussions with Cairo on financing the Aswan Dam- with the International Bank for Reconstruction and Development (known as the World Bank) offering credits for $ 200 million and America and Britain together another $70 million in hard currencies- matching $900 million to be provided by Egypt in local services and goods. An agreement was signed in February.”
Hiro Ibid p.298.
However, the Western imperialists certainly feared that Egypt was becoming drawn into the USSR sphere of influence. This was a more urgent fear for the weaker British, than it was for the USA. So the British exerted a considerable pressure on the USA, to tangibly support an anti-Russian policy. This pressure came from Antony Eden, then the Conservative Prime Minister of Britain. Winston Aldrich, the US ambassador to London said:
“Eden.. asked me to see him on a matter of the greatest importance and urgency. Eden told me that the emergency has arisen in connection with the Egyptian proposal, namely that the Russians had offered to finance the dam. Eden feared that this would give the Egyptians a dangerous foothold in an area vital to the interests of Great Britain. He asked me to take up at once with Washington the question of whether the US would underwrite the obligations which Great Britain would assume in making such a guarantee (of financing the dam).”
Cited David Carlton “Antony Eden” London 1981 p.391.
Eisenhower was more shrewd, and being the more dominant of the imperialists, was in less need of hasty action. His diary showed that he had already recognised that this was a doomed policy. He had concluded that Egypt was moving away from the likely control of the USA, and that the Saudis should be firmly lassoed into the USA sphere:
“We have reached the point where it looks as if Egypt, under Nasser is going to make no move.. the Arabs (ie Egypt – Ed) absorbing major consignments of arms from the Soviets are daily growing more arrogant and disregarding the interests of Western Europe and the US.. It would appear that our efforts should be directed towards separating the Saudi Arabians from the Egyptians and concentrating, for the moment..in making the former see that their best interests lie with us, and not with the Egyptians and with the Russians..”
D. Eisenhower , Diary , Cited by David Carlton Ibid p. 404.
Of course each of the imperialists were fully aware that they were being “two-timed.”
Nasser was forced to keep trying to find yet another “imperialist” or social-imperialist dancer, to help him fend off the last ardent suitor.
Nasser finally overstepped the lines, by recognising the People’s Republic of China in May. By the 20 th July, both the USA and the British rescinded their offers of financial aid. This prompted Nasser to attempt a retaliation, by nationalising the Suez Canal (Hiro Ibid. p.64). Naturally this provoked a loud uproar from the French owners (Universal Suez Maritime Canal Company), and at the same time, the British and Israelis.
These powers had already been planning an attack upon Gaza aiming at taking the Suez Canal. But for their own interests, these moves were not supported by the USA, who according to Eden himself were verbally offering him merely:
“Moral support and sympathy”, and “did not want to know the details of the Anglo-French plans.”
Cited Carlton , Ibid . p. 412.
However, attempting to assert Britain’s “rights” or self-interest, Eden deliberately misled the USA about Britain’s aggressive intentions. Eisenhower had expressly warned Eden against war, writing to Eden that:
“The use of military force against Egypt under present circumstances might have consequences even more serious than causing the Arabs to support Nasser. It might cause a serious misunderstanding between our two countries.. the most significant public opinion is that..the United Nations was formed to prevent this very thing.. I assure you that we are not blind to the fact that eventually there may be no escape for the use of force.”
Carlton Ibid. p.419-20.
But in spite of this warning from the USA, the war was launched. But the revisionist USSR, correctly strongly condemned the war of aggression launched by Britain, France and Israel. In order to finally seize the Middle East away from British imperialism, the USA at the United Nations, also strongly condemned the invasion and called for a cease fire. Behind closed doors, the USA prompted a currency speculation against sterling, by the U.S. Federal Reserve Bank selling, and also refused to give either IMF or direct USA financial aid, to the United Kingdom. Further, and finally, the USSR threatened to enter the war:
“We are fully determined to use force to crush the aggressors and to restore peace in the Middle East.”
V.Trukhanovsky. ” Antony Eden ” Moscow, 1974; p.332.
These moves combined to ensure the withdrawal of the 3 nation intervention. This fiasco for British and French imperialism, signalled their final retreat from the Middle East, as imperialist forces independent of the USA. America then was able to fill what Eisenhower described as a “vacuum” in the Middle East.
Eisenhower’s Doctrine promised to aid any Middle Eastern state seeking protection against:
“Overt armed aggression from any nation controlled by international communism.”
Cited Hiro p.299
This blocked any moves to a regional Wahda, or Unity attempts. Yet, it was sufficiently elastic to interpretation to be acceptable, whilst still detering Egypt in particular. The Eisenhower Doctrine:
“Was applied 3 times: to solve the internal crisis of Jordan in April 1957, to pressure the nationalists – leftist regime of Syria.. and to provide troops to Lebanon in July 1958..In the case of Jordan and Lebanon, the American move was made to check the rise of the Nasserite forces there.”
Hiro, Ibid p. 299.
Therefore, despite the early hopes of the Nasser forces in Egypt, they were checked. Egypt now became compradors for the USSR. The USA imperialists, who having just expelled the USA and France, did not have the necessary energy at that moment to expel Russia also. The economic relations between Egypt and Russia, were thereafter classic imperialist relations, raw goods given by Egypt, cotton – in return for finished goods, for military and economic aid. This dictated a colonial type relationship with the USSR (Hussein. Ibid. p.286).
But to counter the threat of “excess” USSR influence, the USA unleashed war. The USA moved vigorously, through their client states in the area, wishing also to check those various national bourgeoisie. As part of this policy, the USA heavily endorsed the Israelis, as their lynch pin in the area. The revisionist USSR, sought to maximise its own “area of influence”, and acted as a countervail in the cases of Syria and Egypt. But Israel was heavily armed by the USA and Britain.
In response, Egypt and Syria, signed a joint defence treaty fearing Israeli attack.
They were quite right to fear this.
When King Hussein of Jordan joined the Egyptian-Syrian Defence Pact on 30 May, Dean Rusk then American Secretary of State clearly signalled war:
“I don’t think it’s our business to restrain anybody.”
(Cited Hiro p.301).
The USA knew what was to be the likely outcome of such a war.
As President Johnson put it to an aide:
“Israel is going to hit them (the Arabs)..” Whilst (he was ) publicly responding positively to a Soviet appeal the next day for restraint.”
Cited by Hiro p.300.
The Israelis following the USA plan, launched a pre-emptive strike on the eve of a peace mission by the Egyptian Vice-President Zakaria Mohieddin. Nasser’s forces were effectively crushed.
This sealed the future role as to who would be the key agent of the USA in the area – Israel.
TACTIC NUMBER THREE: ECONOMIC COMBINATION. OPEC- A WEAK BOURGEOISIE ATTEMPTS TO FIGHT BACK
The creation of OPEC in 1960 was another attempt by the weak indecisive national bourgeois to find a “Third Way”. One that did not rely on the active involvement of the masses, nor one of total capitulation to the imperialists. OPEC attempted to bargain, or to horse trade; by forming a combination, or a cartel.
This was designed to deal with the cartel of the major Oil companies- the Seven Sisters. These had simply to refuse to buy oil from any producer country that challenged the price offered. The price “posted” was agreed to by the Seven Sisters. Even nationalisation could not help if the producer country could not market the oil. This tactic was used viciously against Iran.
The oil producing nations varied in the intensity with which they fought the Seven Sisters and the imperialist nations. In 1960 one of the weakest was Iran, ruled by the Shah Pahvlavi whose compliance to the USA was assured following CIA intervention in 1951. This had been necessary to prevent the nationalist Muhammed Mussadiq effecting nationalisation of Anglo-Iranian Oil Company (AICO) later the Anglo-Persian Oil Company. Musaddiq believed that:
“The Iranian must administer his own house.”
Cited J.A.Bill ” The Eagle and the Lion”; Ibid; New York 1988 p.56.
But in fact, Mussadiq clearly was not a fully committed nationalist. The mass movement was compelling him to go further than he perhaps would have otherwise. As John Foster Dulles said in February 1953:
“Musaddiq could not afford to reach any agreement with the British lest it cost him his political life.”
J.A.Bill, Ibid p. 78
When he became Prime Minister of the Majlis (the Iranian Parliament) in April 1951, he inherited a Bill that nationalised AICO. Refusing to rescind it, he was held to ransom by AICO which refused to allow Iran to sell its oil on the international market:
“This boycott was effective. Iran’s oil export income dropped from more than $400 million in 1950 to less than $2 million in the 2 year period from July 1951 to August 1953..Musaddiq faced a deteriorating economic and political situation in 1953..and was forced to rely on the radical left and the communist ( revisionist -ed) Tudeh party.. On May 28th Musaddiq wrote to President Eisenhower requesting economic aid..the answer was negative.”
J.A.Bill Ibid; p.66-7.
The British then persuaded the USA to participate in a putsch, termed Operation Boot by the British and Ajax by the US. The Chief British operative, Major C.M.Woodhouse was conscious of difficulties in getting the US to take part:
“Not wishing to be accused of trying to use the Americans to pull British chestnuts out of the fire, I decided to emphasis the Communist threat to Iran rather than to need to recover control of the oil industry. I argued that even if a settlement of the oil dispute could be negotiated with Musaddiq, which was doubtful, he was still incapable of resisting a coup by the Tudeh party, if it were backed by Soviet support. Therefore he must be removed.”
J.A.Bill, Cited, Ibid. p.86
Fully involved in the putsch was General Norman Schwarzkopf, former US adviser to the Iranian Gendarmerie (J.A.Bill. Ibid, p.90). He was the father of the US General – “Storming Norman” – in the 1991 USA Gulf War of aggression (See Alliance 2).
The coup resulted in the Shah of Iran being bought back to Iran. He understood who had placed him on the Peacock Throne, and remained indebted to US imperialism. Musaddiq was treated with relative leniency – he was not killed, but after 3 years in jail, was allowed to return to his home village Ahmadabad under house arrest (J.A.Bill Ibid p.101).
This episode influenced tactics in the Middle East for some years. The national bourgeoisie had been warned that nationalisation was not adequate to ensure marketing of the oil from the producer nations without the cooperation of the Seven Sisters. An alternative strategy was needed.
The CARTEL STRATEGY was first proposed by the national bourgeoisie of VENEZUELA, after the successful military led coup of 1948. This coup was precipitated 12 days following an act which imposed 50-50 split of the profits from oil, between Venezuela and the oil companies. After the coup, the new dictatorship, naturally, favoured the interests of the US imperialists, and it now dispensed new major oil concessions to the Oil companies.
Despite this failure, the 50-50 rule became a standard, in any dealings with oil-exporting nations. For instance Aramco (Arabian American Oil Company ) used this formula in Saudi Arabia in 1950 (J.A.Bill, op cit, p. 61). However even this partial retreat, still left considerable super-profits for the Seven Sisters.
The national bourgeoisie of Venezuela recognised, that a key factor in their defeat during prolonged negotiations with the companies, had been the erosion of Venezuela’s selling power by Middle East countries that could produce oil. Oil companies, when they were faced with demands for a fairer distribution of profit, simply expanded production from the Middle East. The leader of the “horse trading” strategy, Perez Alfonzo had:
“Only envisaged an ‘extent ‘ an ‘arrangement’ between a few producing countries to establish, links of solidarity between them, reduce the oil companies capacity for manoeuvring and prevent them from playing one country off against another.”
Statement in Petroleum Weekly, New York May 1 1959 p.19. Cited by Pierre Terzian; “OPEC : the inside story.” London 1985.
The national bourgeoisie of Venezuela returned to power in 1959 and again took up the cause of combination. Now they had significant support in the Middle East, from the Director of the Permanent Oil Bureau, Mohammed Salman of Iraq. The Permanent Oil Bureau had been set up by the Arab League in 1953. A secret agreement known as the Maadi Pact was concluded at the first Oil Arab Congress in Cairo on 16th April 1959. The reaction to the open Congress session, was frankly sceptical by the oil business:
“Venezuelan delegates arrived with high hopes of lining up Middle East producing states in a front to limit production and prevent further decline in prices, but were finally resigned to the fact that Arabs were more interested in other problems now and that all Venezuelans were supposed to do was to observe.”
Platts Oilgram News, New York; Cited by P.Terzian, Ibid, p.25.
However the secret Maadi Agreement between the UAR, Iraq, Venezuela, Kuwait and Saudi Arabia included the following:
“Agreement was reached … on:
1. Improvement of the oil producing countries participation on a reasonable and equitable basis. The consensus of opinion was that said government should tend to at least a 60-40 formula to be on a par with the recent Venezuelan attitude..and with other countries ..the price structure should be..maintained..any change in prices should be discussed with precedent in time and be approved by all parties concerned.
2. Convenience of arriving at an integration of the oil industry..to ensure stable markets to the producer countries avoiding transfers of gains from one phase of the operations to another, affecting the oil revenue of the governments.
4. Establishment of National Oil Companies that would operate side by side with the existing private companies.”
P.Teerzian. Ibid , p.27-8.
The most energetic of the group, Perez Alfonso, also arranged that the USSR would support the OPEC move. This was important because the Oil companies were constantly citing:
“The USSR’s tariff policy as a pretext to justify their own decision to cut prices.”
P.Terzian, Ibid, p.34.
After initial disbelief, the major oil companies, led by Shell, tested the OPEC resistance, by announcing cuts in the posted prices of oil that they were prepared to pay. The vigorous resistance they met, along with announcements of a meeting of producer nations at Baghdad in September, 1960, induced them to withdraw their price cuts. The Financial Times concluded:
“In effect Shell is.. paying a premium to the Governments of the producing states. What the countries particularly objected to was the fact that they were not consulted.”
Cited, Terzian. Ibid. p.53.
However efforts to involve the Middle East nations in effective combative combination were doomed to failure. This was evident, since combination had to involve both:
Countries that were ruled by comprador bourgeoisie ( eg Saudi Arabia and Iran );
as well as the countries that were ruled by national bourgeoisie (eg Iraq).
The Baghdad Meeting in September 10th 1960 started off very tensely. The Venezuelan nationalists were in the midst of fending off a coup at home. Even more dramatic was the fact that the Iraqi nationalists President Kassem was also besieged by a coup. He arrived for an honourary dinner wearing two revolvers in his belt! But tension rose even further, as it was clear that Iran was going to block any agreements, that would go further than the agreement already reached at Maadi. The Iranian representative Fuad Ruhani said he had been given:
“Very precise instructions from my Government.”
Terzani , Ibid. p.41.
Suddenly on 14th September the Shah sent new instructions to the Iranian team. This agreed to the creation of a permanent organisation. Moreover, the Shah even had a name for it – The Organisation of the Petroleum Exporting Countries (OPEC ).
But this about face indicated a new tack on the part of the Oil Companies.
They now accepted the inevitability of the cartel, but they emasculated it from within.
OPEC was therefore hijacked.
As Perez Alfonso found when he met the directors of the Seven Sisters :
“My impression is that the main companies recognise that the Baghdad Agreement was necessary, or at least inevitable.”
Theoretically the OPEC countries were in a very strong position controlling 82 % of world crude exports. But The Times could accurately see the situation :
“The strength of these producing countries is not as great as might appear.. (There are) two reasons.. the surplus of supply over demand in the world oil market and the divergent interests of the 5 countries concerned, some of who wanted to increase production whilst other sought a reduction.”
The Times 15 September, 1960. Cited by Terzian p.44.
- Of course, in addition the oil imperialist companies and their nations had the marketing and distribution monopoly.
- Also they began to exploit other sources of oil.
- The comprador states were key to the strategy of the oil companies.
- Saudi Arabia was and is a reactionary state with strong elements of Muslim feudalism.
- It is a key state representing USA interests in the Middle East.
- As the US Senate Committee on Energy and Natural resources commented:
“The US, by virtue of its commercial oil interests ‘ long standing monopoly over the disposition of Saudi crude, now reinforced by the 1974 conclusion of a “special relationship” embracing economic and military agreements, is very widely regarded amongst its allies and by Arab and Iranians as having secured preferential and near- exclusive access to Saudi oil. Given the extraordinary importance of Saudi oil production to the world generally, the US relationship is considered key to supply security.”
US Senate : ” Access to oil – the USA relationships with Saudi Arabia and Iran.” Washington DC US Government Printing office , Publication No. 95-70. 1977 (p.xi). Cited by Petter Nore and Terisa Turner in : Oil and the class struggle “. London 1980
At critical times the Saudis have refused to allow the OPEC to raise prices in accordance with the demands of the more nationalistic of the OPEC countries such as Iraq and Libya. Saudi Crown Prince Fadh has pretentiously revealed his unwillingness to be an effective member of the cartel:
“My country which possesses the largest oil reserves in the world will not be the cause of a weakening in the capacity of humanity to live in stability and prosperity. In view of this lofty aim, commercial considerations cease to exist and consequently the methods which are used to increase or lower prices will likewise disappear.”
Frankfurter Rundschau. 1 April 1975. Cited by Mohssen Massarrat. The Energy Crisis p.67. in ” Oil and the class struggle” Ed. P.Nore and T.Turner. London, 1981
It is not surprising that:
“Saudi foreign policy consists largely of support for Washington in the Middle East.”
Sunday Times, 5th August 1990. p.12.
Nor is it surprising that given the membership of nations like Saudi Arabia in OPEC, that OPEC would not reflect the interests of the oil producing national bourgeoisie.
As Henry Kissinger commented:
“OPEC was not perceived as a serious cartel.”
Jack Anderson and James Boyd. ” Fiasco. The real story behind the disastrous worldwide energy crisis- Richard Nixon’s “Oilgate”;1983; Toronto; p.163.
In fact as, the manufactured oil crisis of the 1970’s shows, OPEC was transformed into an agency that performed objectively in the interests of the USA imperialists.
THE PSEUDO OIL “CRISIS” OF THE 1970’s
It is widely believed that it was the pressure of the OPEC countries that led to a dramatic price rise and so called ” oil crisis ‘in the 1970’s. Certainly determined nationalist countries like Libya and Algeria increased the pressure inside OPEC for a price rise.
Though the oil exporting countries had their interest in a price rise, their effectiveness as a cartel has already been shown to be limited, due to the inclusion of “weak” member state such a Saudi Arabia. In reality, the manipulation of oil prices has followed the various requirements of the Seven Sisters, the minor oil companies and the USA monopoly capitalists.
“For the oil companies an increase in the general price of oil was also of great importance, not least because they had seen their distributional share steadily diminish over time..as a result of higher level of taxation by the oil-exporting countries..which was difficult to pass on to the consumer in a situation characterised by a global excess supply.”
Petter Nore and Terisa Turner, Editors;.”Oil and the class struggle”; London 1980, p.72.
The problems of the Major Seven Sisters, were compounded by the competition they now faced:
“Due to a three fold challenge.. the rise of the independents following the US import quota system in 1958; the emergence of important state oil companies in Europe like Italy’s E.N.I. which tried to outbid the concessions offered by the majors; and the increase in Soviet oil exports to the West.. resulting in a drop in the profit per barrel for the Majors. The reduction was only partly overcome by a sharp increase in total production. Profit rates for US direct foreign investment in the petroleum industry dropped from a 30 % return in 1955 to 14.7 % in 1963 and an all time low of 11.1 % in 1969.”
Nore; p.72 Ibid.
Added to this was the high cost of extraction from areas such as Alaska and the North Sea. This posed a problem for the major Oil companies. The oil crisis was “manufactured”, to raise the available oil profits, up to a point where it would become economically viable to begin extraction from the oil shales of the USA. This entailed the profit interests of both the major oil companies and their smaller rivals who were not in the cartel known as the Seven Sisters.
At this time despite the apparent oil shortage, the oil companies had stocked up supplies, in many tankers that lay outside New Jersey in the midst of the so called shortage as prices were driven up by the companies.
This tactic was portrayed as the work of the OPEC cartel.
But the general line was clearly supported by the oil companies :
“Though the oil companies created the appearances of fighting OPEC tooth and nail..they recognised that their best hopes of future profitability..depended upon successful cooperation..thus OPEC/oil companies cooperation became a fact of life..with the positive encouragement of the USA.”
P.R.Odell. “Oil and World power” London , 1980. p. 215.
But the USA Government representing the combined monopoly capital had its’ own reasons for seeing a price rise:
“From 1970 onwards the US clearly pressed for an increase in the general price of crude oil.”
Nore, Ibid, p.73.
THE USA INTERESTS IN THE RAISING THE PRICE OF OIL REVOLVED AROUND THREE MAIN ISSUES
Firstly, both the leading sections of American capital had major profit interests tied up in raising the price of oil. The big Northern Yankee financiers were involved with the oil Major Seven Sisters companies. The Cowboys who represented newer capital reliant on oil and arms, formed the smaller independent oil companies.
Secondly, the USA wanted to ensure a renewed attempt at peace – on their terms of an acceptable status quo to them – in the Middle East:
“The USA.. sought to provide stability..as basis for a renewed effort to find a political solution to the Middle East conflict, and argued that higher revenues and a greater degree of economic certainty for the Arab oil-producing nations would, make it easier for them, to accept a compromise in the their dispute with Israel.”
Odell , Ibid , p. 215.
But Thirdly this manoeuvre was also aimed at the competitors of American imperialism as recognised by the Economist:
“The Economist 7th July, 1973; under the title ” The Phoney oil crisis “voiced the suspicion that the US had capitulated only to readily to the OPEC demands for an increase in oil prices because such an increase would slow down the Japanese economy. Japanese exports were out-competing American demands at the time and its economy was more vulnerable to rises in the price of oil than any other nation.”
Cited by Petter Nore p.86; ” Oil and the Class struggle .” London, 1980.
As Odell points out:
“The USA was fed up with a situation in which the rest of the industrialised world had access to cheap energy. It deliberately initiated a foreign policy which aimed at getting oil – producing nations’ revenues moving strongly up by talking incessantly to the producers about their low oil prices and by showing them the favourable impact of much higher prices. It was of course assured..that these cost increases, plus further increases designed to ensure higher profit levels for the companies, were passed on to the European and Japanese energy consumers, so eliminating their energy cost advantage over their competitors in the USA..the actual timing..coincided with unusual circumstances..namely a strong demand for most oil products in most markets in a period of general economic advance, a shortage of oil refinery capacity in Europe and Japan and a temporary scarcity of tankers.”
Odell p. 215-216.
GERMAN INDUSTRY HAD ALREADY CAUSED PROBLEMS FOR THE MAJOR COMPANIES BY FLIRTING WITH THE RUSSIANS. USA GOVERNMENT PRESSURE HAD BEEN REQUIRED TO PREVENT FURTHER EROSION OF THE EUROPEAN MARKETS:
“In 1969 only the intervention of the Federal West German Government under severe pressure from the USA, thwarted an agreement between the Soviet Union and the Bavarian state government. Had this agreement gone through, the Soviet Union would have been in a very strong position to put in branch pipelines to the other countries..of Western Europe.. Soviet oil exports to Western Europe.. steadily increased form only 3 million ton in 1955 to over 40 million ton in 1969.. Under 1978 conditions the amount of oil in Western Europe is supply rather than demand constrained.”
Odell, Ibid; p.58-60.
In this context, in 1991, it was of significant aid to the USA imperialists that the USSR was then, unable to exploit its’ oil reserves, owing to the enormous dislocation in the state:
“Production from Siberian oil fields is dropping so rapidly that the Soviet Union, the world’s largest petroleum producer may begin to import expensive world price crude within 2 years Kremlin officials say..”We are talking catastrophic failure here ” one Western diplomatic observer said.. oil exports have been the Soviet Unions’ primary source of hard currency income, and the only bright spot..in trade,..the troubles appear to be related to a decaying infrastructure, including an inefficient distribution system vulnerable to sabotage. Production from the giant Tyumen oil filed of Western Siberia, which supplies about half of the country’s oil for export has dropped 10% since 1988, Pravda said ..former allies in Central and Eastern Europe are being hit the hardest with cuts of 30-50 %. The cuts, coupled with the significantly higher prices Moscow began charging Poland, Hungary and Czechoslovakia on January 1st are hobbling economic reforms in these countries.”
Jeff Sallot; In “Globe and Mail”; Toronto; Business Report; Feb 12th 1991.
The USA Senate recognised the oil demand in Europe and Japan as a vital issue for the general policy to be followed by the USA in the Middle East:
“One can argue that while the oil benefit is nowhere near so great to the US as it is to the European and Japanese importers, for which it is vital, the US relationship with Iran and Saudi Arabia serves the collective security interests of its allies in helping assure a continuous and adequate flow of oil.. But.. will the US government come to affect the destination of these 7 million barrels per day, exercising its influence through the Americans oil companies? Or will the companies be able to continue to supply, unhampered by considerations other than the meeting of their contractual commitments?”
US Senate Cited by P.Noore and T. Turner, Ibid p. 9.
THIS OIL SAGA WILL BE BROUGHT UP TO DATE SHORTLY