EconVue Spotlight - Iran Podcast & China's New Long March
posted by Lyric Hughes Hale on May 26, 2019 - 12:00am
As some of my more patient friends know, I have been toiling away at a book on Chinese monetary history during the Interwar period off and on for some years. Immersing myself in the public and private words of the historic figures of the 1930’s has perhaps sensitized me to the propensity of even well-intentioned leaders to glide into chaos. That which is unthinkable inexorably becomes inevitable.
While everyone has been focused on the impasse in US-China trade negotiations, the specter of war with Iran has resurfaced--if not directly with us, via proxy. US sanctions are biting; I’m told by recent returnees that economic conditions in Iran are worse than during the Iran-Iraq War. Narimon Safavi, EconVue Iran expert who is also a commentator for Worldview on NPR, is this month’s Hale Report guest. At the conclusion of our podcast, we agreed that neither the US nor Iran wants a war. Narimon believes that the chances of one happening this year are less than 10%. Japanese media is reporting today that Prime Minister Shinzo Abe might visit Iran to mediate after his discussions with President Trump as early as next month.
To many, recent events look and feel like the US buildup to the Iraq War with a twist: the involvement of both Russia and China, which have vital interests in the Middle East. China, Iran’s largest trading partner and importer of crude oil, was unhappy about the loss of its oil waivers at the beginning of May. Things became bellicose, with very senior Chinese officials suddenly claiming they were able to take over Taiwan. North Korea’s missile program was reactivated. Each of these events, including the breakdown in recent US-China trade negotiations, affect each other. In fact as our interview was taking place, Iranian Foreign Minister Mohammad Javad Zarif had just met with Chinese Foreign Minister Wang Yi in Beijing. Iran is actively enlisting the support of its other trading partners.
Although talk of war is simmering on low, there are limitless possibilities for each player to underestimate the other side. Any conflict that affects the Strait of Hormuz will create an oil price shock that could finally untether inflation and also deal a blow to China’s slowing economy. In the buildup to World War II, a separate train of events in both Europe and Asia suddenly converged into global conflict. At the very least, momentum for the US-China trade talks has all but stopped, and Xi Jinping has told the Chinese people to be ready for another Long March. Iranians are already living that reality.
HALE REPORT PODCAST
Guest: Narimon Safavi Iran’s Political Economy and Prospects for War
In spite of talk about war between the US and Iran, EconVue Expert Narimon Safavi says that neither side really wants a conflict, even in the face of fierce internal debates in both countries. Iran’s economy is suffering, but Iran’s trade with other large nations---China, India, and Japan, as well as the EU matter and in fact might create a pathway to peace.
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