Way forward for India- Declare Pakistan a rogue state

For the last few decades, India has been losing lives, money and economic opportunities due to the terrorist activity emanating from the land of Pakistan. Since , terrorism is not limited by geographies , it is high time, that India initiates a “Global partnership to fight terrorism” . Forms an international coalition of military forces that fights terrorism across borders . Let all countries sign the partnership, contribute to this military force , and let these forces enter any member country, and take all steps to ensure that none of the countries allow its land to be used for terrorist activities. This is the only way to fight terrorism. Am sure that Pakistan will always avoid to join this . This could be done under the auspices of UNO. The burden on individual nations would not be much , but the outcomes would be phenomenal.

Else, there is a more harsh way to deal with it- which we should avoid. Attack Pakistan and countries that indulge in terrorism. If i were the PM , probably , i would have given a 24 hour ultimatum to Pakistan to handover the most wanted terrorists. In case, it failed to do that , i would have bombed Pakistan and taken the India’s political map back to pre 1947 days. Why let our billion population live under constant fear of dying any moment with bullets , when we have already given what Jinnah wanted and shared our culture , people and natural wealth more than 60 years ago. We lost millions then , and we continue to lose now . We have already divided the nation in 1947 based on religion. Why not decide either ways now. If India wants to be secular , it has to be safe or else , let it be a Hindu nation . if that let’s poor Indians to live in peace – We have tried all peace processes , our options are running out ! Why lose lives after lives every day because we have chosen to be a secular nation. Are we paying the price of being a secular nation !! Our politicians should not forget that we are not dying with terrorism but living with terrorism , and that’s more dangerous . We are dying every moment , psychologically. Why ? What is our fault.

In any case, after terrorist attacks in Mumbai, we must snap all ties with Pakistan and declare it a ‘Rogue and Terrorist state’. If we want to have a milder approach . Let it be declared a ‘Terror watch list nation’ and take this issue internationally.

Peace is the first pre-condition to progress and development . How long we will continue to live under the fear of dying with bullets ? Any nation that has the potential to develop and grow exponentially is a victim of terrorism today. I am not too sure who is behind the ‘Terrorism’. But the first suggestion is the most practical .

I want all Indians to not waste any more time . But get organised locally and form chapters to take the nations issues in our hands. It is high time we do it. If we fail to act in the next general elections , we will lose another five years and push India behind by another 30-50 years . Do we have that luxury ? We have a billion + population and majority of them are frustrated with the current system. Let’s change it . It is only in our hands. We have a big responsibility and people have expectations from educated people like us who can use the internet , write and read and connect. Let’s not betray them. More than 99 % of India wants us to bring about the change , do we ditch them ???

You all must be expecting that these politicians will act. No , they will not . Till date, the person who was sentenced to death for attacks on parliament is not hanged. We have politicians who make tall media statements and fail to act where they need to. They want their stupid and ugly face and words to come every now and then on the media …………We cannot be silent spectators anymore . Act now.

Each one of us has the potential to change this moment and this nation. We need to take the first step. The first step is to act immediately and connect with all our friends and start a wave, a moment to redefine the role of each one in building a nation. India has always shown the world the way to learn and lead . We can do it now and you will have to start.

Note this ,

One mind can awaken another, the second can awaken their next-door brother, three awake can awaken the town, by turning the place upside down, and many awake can make such a fuss, that they finally awaken the rest of us. – Helen Kromer

Best ,

Rajendra Pratap Gupta
Cell : + 91- 9323109456
+ 91- 9867300045
(USA) +1515-450-6165
Skype: rajendra.india
E-Mail: mail@rajendragupta.org / rajendragupta@aol.in

Indian Economy headed for a severe historic recession

Indian Economy – Getting into worst ever recession ??

It is high time , we acted fast by reducing fuel prices, drastically reducing loan rates and take all possible measures to ease out of a severe recession. Every where, there is a job loss, loss of contract, shrinking consumer spends , production cuts, halting growth plans, adding to this , the recent terror strikes have crippled our already bad travel and aviation sector. We need to convince the consumer that all these steps would be long term. Trust me, we are headed towards a severe recession that will blow out the India story. We don’t need a nuclear deal or a moon mission as a priority today, what We need is ,to keep our feet on our ground. India needs to be pragmatic. This road to recession can be a good turning point for the Indian Economy if used as an opportunity

Why is Indian economy in recession? Indian economy was known as the most intriguing economy for the last three years. There was a lot of hype and hoopla created around the same, everyone wanted to ride the booming India. Some called it the ‘rise of the east’ or ‘a billion under-served customers’. It was the country no one wanted to miss. What happened? What went wrong and why at all?

Firstly, a few things led to a sudden hype. Rise of Infosys and Wipro’s, TATA Tetley acquisition, Arcelor Mittal takeover, Indra Nooyi taking over PepsiCo as CEO, Arun Sarin took over Vodafone etc… This was backed by a lot of media coverage.

Secondly, the triumvirate of Manmohan Singh , P. Chidambaram & Montek Singh talking of a double digit growth excited a lot enthusiasm of politically connected ( and not so politically connected ) business groups to enter into ‘businesses of future’ like infrastructure , power, retail etc… This was based on ‘Big Talk’ of the triumvirate. We all know how many people pumped in money at unrealistic valuations and market was heated up beyond logic, banks were also enjoying the party, share market was expanding like a balloon, manpower was charging anything and still jumping for tempting offers, retail was spotting everywhere. Result: competition became suicidal. Money got pumped into real estate and supply increased and the prices soared. Brands started fighting for space and not profits. Finally, reality was surfacing; growth was not double digits; which the triumvirate shouted for three years. We saw profits were not as projected, corporates were missing numbers, shutting the outlets and man power layoffs. Just forcing Jet airways to take back air hostesses will not cover the reality…………how unfortunate!!!

Thirdly, the ‘Big consulting majors’ were talking in 2007 -8 about the multi-billion dollar markets suddenly growing three fold or four fold by 2012-15. How stupid of CEO’s who believed these news releases of these so called ‘big consulting majors’ and spent millions to buy their reports & finally presented their boards with these rosy projections and raised funds. Now they are shying about the current share prices and valuations (let’s not even talk about growth achievements versus plan or the crazy profits numbers!!!)

All the three factors basically did no good but just created a ‘sexy story’ about a nation like India, where more than 70 % people don’t have access to basic healthcare, only 3 % dabble in stock markets, only 10 towns can boast of a retail revolution, has 36 billionaires and more than 800 million living on about a dollar a day.

Let’s evaluate a little more ……..When people talked of India in 2007 they talked about big IT giants , call centre’s high paying jobs to teen agers, overseas acquisitions of TATA’s & Mittal’s, Mumbai becoming like Shanghai, Big malls coming , dollars flowing as FDI, Big brands coming to India , MNC’s coming to India, ballooning stock markets, BPO’s multi million outsourcing contracts & the great retail revolution. Now with US / Europe in recession and may be, with Barack taking over as the next US President. India will have to take a big hit. We just saw the first wave of negative effects of the US Financial market collapse. India’s stock market crashed almost to a third of its high. With India’s IT / BPO shying and taking to lay off’s, we know the real estate sector would be hit as the entire 2 BHK ( Two bed room , hall & Kitchen ) flat story was built on these young ‘Ripe aged’ employees buying flats at the age of 25-30. Splurging on mobiles and white goods by credit cards …………all this is over (believe me!!)

The hype was more of a story of 36 billionaires , Infosys, TATA, Arcelor, stock market manipulations , FDI and not the story of economic development & and the 800 million population. What we see happening was a foregone conclusion. It was not a ‘bubbling economy’ but an ‘economic bubble’. And it got burst

When the banks started hiring recovery agents, it was the start of the default / delinquency crises (credit card delinquency has gone up to as high as 14 %). Loan defaults would follow shortly and this will be a big blow to the banking / loan system. When the government has to get in to pump in money or the so called confidence, It’s a sure shot sign of crisis or recession or both.

I wish that congress leaders should have thought well before announcing a Rs.60000 crore write off for farmers. This has put a pressure on banks and it will manifest in banking / loan crises. Now imagine, I am a farmer with an Rs.10000 loan for my sister’s marriage or due to a crop failure (trust me, farmers crisis has come due to rise in social costs as much as crop failure). If my loan was waived off what it did to me? Firstly, it gave me nothing to raise a healthy crop and earn for the season so my problem would be standing as such on my head. Has it given me seeds or irrigation which i needed? I could have earned and paid for the loans in the next few years (a moratorium on payments & Interest was more than enough). Moreover, it has set a precedent for me not to pay my loans and hope for future waivers. When politics drives finance, chaos is the only outcome.

Take a cue from USA . They have pumped 700 billion dollars ( India cannot think of even a tenth of this amount in the case of a crises !!! ). This pumping of funds actually helped the banking system in the US and not the economy as people have been made to believe in !

We can knock off any crises if India develops an indigenous model for growth in which technology only becomes the enabler and not the key driver or determinant. What i am pointing is that, we need not depend on FDI totally. When FDI came in, we were roaming the whole world and shouting about it. Now that these economies are under crises, they will take care of their home first, and may even exit from our country as we have seen in the case of FII’s exiting the stock market and leading to a sudden crash. We must have started our economy with 75 % dependence on domestic and 25 % on foreign fund generation besides a host of infrastructure & ground level measures. We need a ‘self reliant India growth model’ and not a USA – Europe dependent-driven growth model. Hope the policy makers will learn from the crises & take steps to correct it.

Now a day’s the most talked about line from the ruling politicians is, that India is fundamentally strong economy. Which ‘Fundamentals’ are they referring to ? Our consumer sentiment is low, stock markets have crashed, industrial production is low , inflation is high, uncertainty is looming over every corporate , retrenchment is happening , rupee is weak against the dollar, farmers that constitute 65-70 % of the population are committing suicides , IT & BPO industry is hit hard due to US –Europe recession, terrorism and lawlessness is rampant. I am still trying to get which fundaments appear to be strong !!! Is it the large suffering population that is being referred to ?

Coming to the most happening sector – The great Indian retail story : I see some retailers having burnt their fingers in metros , now are planning of moving to class II & III towns for the next cycle of growth. Let me express boldly, that this will be a big loss making proposition. In towns like Mumbai and Gurgaon, retailers are having a tough time, how come they will survive in smaller towns with more ‘service class’ & ‘Small time traders’ people. At least , bigger towns have industries and other corporates to support higher spending opportunities. Some learned Advisors have informed these retailers that 70 % of India lives in rural areas so rural India is a bigger market than urban India (calculating that rural India with USD 530 income per capita is three times the population of urban India with the per capita income of USD 1200). What an ‘unintelligent logic’. The 530 USD that the rural India earns is not even enough to spend on basics, unlike urbanites who have the basics already and can afford to spend on the new class of products which supports the modern retail formats. It is analogous to three boys of seven years marrying a girl of eighteen years (3 boys x 7 years = 21 Years, marriageable age!!!). Intelligent logic isn’t!!! That’s what our great retailers are trying to do . Only smart ones are Pantaloon and Wal-mart. Rest all are smart looking idiots !!!

Retailers must realise that they are making investments for 2012-15 market projections. The figures of these projections are not even validated. But the cash burnout is happening now. Imagine this , rentals going up by 5 % every year , salaries by 20-30 % , cash burnout for new openings , increasing offering –SKU’s, reducing margins to attract customers or wash off old inventory. However can a retailer survive ? Adding to this , move to class II towns!!!

Just to make a note that if in towns like Panvel in Navi Mumbai, the two supermarkets owned by Foodland have closed within a year due to opening of ‘MORE’ supermarkets, D’mart & Reliance Fresh stores, how can small kirana stores survive? If i don’t go wrong, even ‘More’ & Reliance will have to shut down in the times to come in the area or make perpetual losses . So the retail story in its current form is not a lasting one. But the lessons are to be learnt . One thing that has happened in India which is totally wrong is that, we have tried to CCP (cut, copy and paste) foreign retailers. But we have missed to note the most important point , that foreign retailers were pretty slow in the first ten years in their country. Even Mukesh Ambani made a strategic mistake; he announced 5 billion dollar investment in retail only to face the back lash from local traders. No one expected seasoned businesses houses to make such tall claims ….This gives us a clear feeling that Indians are unaware and unprepared for the hype that has been created by the media and neither are they guided by the realities . I would call Wal-Mart the smartest retailer in India. They have just done a retail tie up in India without using its brand name . So that the Indian partner has the expense & experience and Wal-mart has the learning’s. Moreover, their growth plans are practical. Just 15 stores now compared to 600 + stores of Reliance and Birla’s. What if the Ambani’s & Birla’s want to change the strategy or make changes backwards because of their learning’s?? It is easier to correct and make changes in 15 stores of Wal-Mart then 600+ stores of Reliance or Birla’s.

We must note:

85 % of the rural India does not have the power to consume very much at the prices that currently prevail in the market.
30 % of urban India constitutes 75 % of the GDP.
70 % of the rural India constitutes 23 % of GDP
According to the Central Statistical organization, in 2001, 48 % of the rural GDP was agricultural.

In 2001, the NDP contributors were: agriculture 46 % , industry 21 % and services 33 %.

If India needs to grow sustainably, we need to make a prudent choice between education, vocational training and SSI. Needless to mention that, India’s growth will be driven by creating more jobs in lowest rungs of the society. They will build the real consumption led growth for a ‘Shining India’. The earlier, the better.

India today is in a recession and we must accept the fact. By closing our eyes the problems will still remain. We must build growth models not based on dollars , stock markets , urban India but go in for holistic models of growth that suit the local conditions and requirements , are broad based for all sections of society and industry , and just don’t reflect isolated figures .

Rajendra Pratap Gupta
Cell : + 91- 9323109456
+ 91- 9867300045
(USA) +1515-450-6165
Skype: rajendra.india
E-Mail: mail@rajendragupta.org / rajendragupta@aol.in

US economy, Recession , terrorism, Economic fundamentals, Barack Obama, Recession in Indian economy, Terrorism , Curruption.

US Economy, War against terrorism, Crude oil & Iraq War – The real reason

People do not realize that the real reason for Iraq war and the current war threat against Iran was not the nukes , not terrorism and not the Oil. It is all about protecting and propping up of the greatest con-job in the recent history, the US petro dollar scam

Back in 1971, the USA printed and spent far more paper money than it could cover by gold

• Few years later, French demanded redemption of its paper-dollar holdings in gold. But the USA rejected as it actually didn’t have enough gold for the dollars it had already printed and spent all over the world, thus committing an act of bankruptcy.
• So the USA went to the Saudis and cut a deal – OPEC denominate all sales of oil in US dollars
• From that point, every nation that needed to buy oil had to firstly hold US dollars, which meant that they exchanged their goods and services for dollars, which the Americans just printed.
• The Americans brought their oil literally for free by printing those dollars. The ultimate free lunch for the Americans at the expense of the rest of the world.
• However, the scam began to unravel when Saddam Hussein started selling Iraq’s oil directly for Euro, abrogating the cozy arrangement the Americans had with OPEC. Thus Saddam had to be stopped. How?
• USA concocted up a pretext to wage war (drama of twin tower blast) and invade Iraq and the first thing the Americans did was to revert sales of oil back to dollars. The currency crisis was averted for the moment.
• But Hugo Chavez (Venezuela President) also started selling Venezuelan oil for currencies other than dollars, so there were a number of attempts on his life and “regime change”, traceable right back to the CIA. The petrodollar cat was out of the bag.
• Iran President (Ahmedinejad), watching all of this, decided to kick The Great Satan in the goolies and do the same thing – sell oil for every currency EXCEPT US dollars.
• The shell game is coming to an end for the Americans. As the nations of the world find that they can buy oil for their own currencies instead of holding paper US dollars, more OPEC nations will abandon the dollar.
• The worst thing for the Americans is that eventually, they will also have to buy their oil with Euro or Rubles instead of just printing paper money to get it.
• That will be the end of the American Empire, the end of funding for the US military and the destruction of the US economy.
• The great scam is coming to an end and there’s not a lot that the USA can do about it, except start another world war!!!
• Wait and Watch… Only few years/months ahead.

It is several years that a plan for establishment of an oil exchange center under the title of “Iran Oil Bourse” (IBO) is under discussion. (1) The most important point about the plan is that it wants to replace dollar with euro for the currency that is used for oil transactions. According to the existing schedule, the IBO will start functioning from March 2006. Some sources have claimed that the US is so sensitive to this move against dollar that it is going to attack Iran before the IOB starts working. These sources claim that the same issue instigated the US attack against Iraq.

I do not think that IOB will be a real source of threat for anyone and source of interest for Iran at the present conditions and under the control of the Islamic Republic of Iran. The government of the Islamic regime of Iran, as an inefficient, unpopular, undemocratic, anti-human rights, corrupt, non-transparent, illogical (ignoring the national interests and defending the hardliner religious zealots all over the world), un-elected, tyrannical, mismanaged, isolated, sanctioned government, which is hostage to the religious ideology of the Arabs of 1400 years ago, is not able to start such a plan. At the same time, the engineers of the conspiracy theories of “petrodollar wars” are neglecting (probably intentionally) many important issues in this case. Most of these theories are based on false assumptions.

The Iranian oil Bourse will not start at the time claimed. It will not be able to make any changes in the oil market and it is not able to do any thing important against dollar. The countries like Russia, China, Europe and many others are not so na�ve to wait until a corrupt and inefficient system like the Islamic Republic of Iran makes a change that they like. If they were interested in doing something like this (changing the dollar base with euro for oil transactions), they would have done it much before. There are several attempts, including by Putin in Russia and the UAE for doing this and they were stopped due to the existing difficulties. The I R of Iran has not solved those difficulties and at the same time it has thousand of important problems over them. Which country or reputed company is ready to establish a brokerage unit for oil (as matter of fact for anything else) in the Kish Island of Iran and put its personnel and establishment subject to the jurisdiction of the revolutionary courts of Iran? Or the illegal acts of the disciplinary forces of the Iranian regime or the irresponsible actions of the “organized thugs” called Bassijis (note the attacks of the organized thugs against the foreign embassies in Iran due to several unimportant cartoons).

That is the petrodollar wars?

Hadi Zamani (2) in his informative and detailed series of articles about the Iranian oil bourse (written in Persian and posted consecutively in http://news.gooya.com) has mentioned: “according to the theory of petrodollar wars, the monopolistic situation of dollar for the foreign exchange reserves of the world imposes a great burden over all countries… It allows the USA to continue to have its structural economic imbalance and lets it keep its hegemony over the international economy… therefore keeping the status of dollar is at the top of the foreign policy priorities of the United States. At the moment, due to the risks and dangers that threaten the status of dollar, the US is following a militaristic policy in the Middle East region in order to stop the collapse of its economic, political and military hegemony… on the basis of the arguments related to the petrodollar wars, the reason for US attack against Iraq� was not combat against international terrorism or stopping Iraq from getting the nuclear weapons. The US aim was keeping the hegemony over the international economy. For the same reason, immediately after the occupation of Iraq, the US officials ordered the oil transactions of Iraq back to the dollar system…”.

Professor Krassimir Petrov (3), from the American University in Bulgaria (his article on this subject has been used by countless sources and websites as an academic argument for the validity of petrodollar wars theory) writes: “… Bush’s war in Iraq was not about existing weapons of mass destruction, about defending human rights, about spreading democracy, or even about seizing oil fields. It was about defending the dollar, ergo the American Empire; it was about setting an example that anyone who demanded payment in currencies other than U.S. Dollars would be likewise punished….The Iranian government has recently proposed to open in March 2006 an Iranian Oil Bourse�If so…The Europeans will not have to buy and hold dollars in order to secure their payment for oil, but would instead use with their own currency. The Chinese and the Japanese will be especially eager to adopt the new exchange. It will allow them to drastically lower their enormous dollar reserves and diversify them with Euros… The Russians have economic interest in adopting the Euro… Russians have also revived their nationalism; if embracing the Euro will stab the Americans, they will gladly do it and smugly watch the Americans bleed. The Arab oil-exporting countries will eagerly adopt the Euro as a means of diversification against rising mountains of depreciating dollars. Should the Iranian Oil Bourse gain momentum and accelerate, the interests that matter…will eagerly adopt the Euro, thus sealing the fate of the dollar. Americans cannot allow this to happen, and if necessary, will use a vast array of strategies to halt or hobble the exchange�s operations: Sabotaging the exchange, coup d’etat, Negotiating acceptable terms, joint UN war resolution, unilateral unclear strike, and unilateral total war. [this section is made brief]”

Jerome R. Corsi (4) has stated in his writings: “Iran and Venezuela have joined forces in an effort to undermine the U.S. dollar. In October 2005, Venezuelan President Hugo Chavez announced that Venezuela was ready to move the country’s foreign-exchange holdings out of the dollar and into the euro. He also called for the creation of a South American central bank designed to hold in euros all the foreign assets.”

Also, Mike Whitney (5) in his article dated Feb. 4 2006 claims: “Many war-weary newshounds are probably wondering why Russia caved in at the IAEA board meeting and agreed to have Iran sent before the UN Security Council� Obviously, Russia’s foreign minister comment that the referral to the UNSC is “only a warning” doesn’t adequately explain why Russia would have placed its ally in such grave danger of a preemptive attack. It may be, in the words of the Godfather, that the Bush administration made Putin “a deal he couldn’t refuse”. For one thing, Most News reports just yesterday that “Lukoil will replace the disgraced Halliburton” in providing fuel in Iraq…The truth is, that even the control of oil is not nearly as critical to the US as maintaining it’s continued dominance in the exchange of oil in greenbacks. If Iran is allowed to open its oil bourse (exchange) in March and openly compete with the US’s monopoly on trading oil in petrodollars, the central banks across the globe will dump hundreds of billions of dollars overnight, and the American economy will disappear beneath the waves.”

In his other article, Mike Whitney (6) has added: “…The [US] administration has no hope of securing the votes needed for sanctions or punitive action. The trip to the Security Council [of the Iranian nuclear case] is purely a ploy to provide the cover of international legitimacy to another act of unprovoked aggression… We should now be focused on how Washington intends to carry out its war plans, since war appears to be inevitable. Bush has no intention of occupying Iran. Rather, the goal is to destroy major weapons-sites, destabilize the regime, and occupy a sliver of land on the Iraqi border that contains 90% of Iran’s oil wealth. Ultimately, Washington will aim to replace the Mullahs with American-friendly clients who can police their own people and fabricate the appearance of representative government. But, that will have to wait. For now, the administration must prevent the incipient Iran bourse (oil-exchange) from opening in March and precipitating a global sell-off of the debt-ridden dollar..”

The answers to the theory

Paul Craig Roberts has written “readers keep asking if Bush is attacking Iran because it plans to open an oil bourse that would permit oil to trade in Euros…, the answer is no…, the dollar’s value depends on the world’s willingness to hold dollar denominated assets, not on the currency used to pay oil bills.” (7)

Once again looking at the articles of Hadi Zamani on the subject makes many points clear. He writes in the articles mentioned earlier that: “…those who oppose this doctrine argue [I have put the reasons that Zamani has mentioned in numbers changed some words accordingly]:

1- This doctrine exaggerates the status of dollar for the US economy.

2- The doctrine is ignoring the elements that have resulted in the present role of dollar as the reserves currency in the world and coasts of staying in such a position.

3- The euro is not able to tolerate the costs of being a currency for exchange reserve and the European countries are not ready for such a burden.

4- This doctrine is not taking into consideration the realities and complex mechanisms of the oil market

5- The doctrine is based on several handpicked evidences and it degrades the functions of the global economy into several conspiracies.

6- The first reason for the present role of dollar as the dominant currency in exchange reserves is the power of the American economy, not political conspiracies. The UIS produces almost one third of the Gross Global Products.

7- In the long run, dollar has more stability as compared to the other currencies.

8- Transferring the euro into the currency for the global reserves will increase its value 20 to 40 percent, and such an increase will weaken the exports of the euro countries considerably. The European economy is not powerful enough to tolerate such a pressure.

9- There is no serious indication that the countries of the world, including the oil exporting countries are ready to accept a euro based oil market. Since 1986 the oil prices are determined according to complex tables and spot changes in the New York and London exchange markets (called New York Mercantile Exchange, or NYMEX and International Petroleum Exchange or IPE correspondingly.)

10- OPEC countries are not ready to change the basis for oil transactions so easily. OPEC has tried several times to change the basis for the oil prices to euro, or Special Drawing Rights (SDRs of the IMF) or a basket of currencies and each time it has been abandoned.

The plan for establishment of Iranian Oil Bourse was first tabled in 2000� The IOB will include petrochemical products and gas too. In the initial phase the transactions does not include crude oil (perhaps up to three years). Later it will include all oil transactions including the swap operations of the Caspian Sea oil. According to the claims of the Iranian government the IOB will turn into a major oil transactions center in the Middle East. The transactions will be in euros and the monopoly of dollar over the global oil markets will be ended.

However, entering this business requires a reform and preparation in the economic, legal and administrative structure of the country. At the moment Iran lacks proper financial, banking, insurance, customs, and commercial structures, proper tax laws, the dominance of the governmental sector, lack of competition in market, weakness in attraction of foreign investment, lack of necessary expert manpower, lack of necessary advanced technology, weakness in the electronic commerce structure, lack of necessary economic, legal and technical infrastructures, lack of system of the credit cards in global level, lack of commercial customs, Iran is not still a member of the World Trade Organization (WTO), Iran is already under American sanctions, Iran is not in a proper situation in the global economy, Iran has to observe the OPEC quotas, and this limitation cannot work in an international oil bourse. The IOB is based on the good market for the producers, but the fluctuations in the oil prices may put the same countries in a difficult situation.

Zamani adds an important point for those who care about the religious aspects of the IOB and he says, “It seems that the IOB is against the religious rules of Islamic Shari’a in Iran. The IOB faces problems based on the Islamic jurisprudence limitations and stumbling blocks…oil bourse is in fact a future market. One of its aims is to reduce risks of the oil transactions… according to the studies of the Iranian experts, the mechanism of future oil bourse transactions is basically contrary to the Islamic jurisprudence of the Islamic Republic of Iran (please refer to the article in Persian by Hojaolislam Ghanimi Fard, and Mohammad Aram Bonyar in the site of Imame Sadegh University regarding the “Feasibility Study of the Establishment of the Oil Bourse by the Islamic Republic of Iran).” Zamani concludes: “The success of the oil bourse depends on transparency of the economic structure and rationalization of the Iranian foreign policy.” (8)

Also, Colin Nunan has written in the Energy Bulletin “…However, others have claimed that the idea that the currency in which oil is sold matters at all is based on a poor understanding of economics…Those arguing that the denomination of sales is crucial to dollar strength have tended to say that countries are forced to save dollars so that they have dollars to buy oil. Their critics, however, reply that you do not have to save in dollars to buy oil since you can save in whichever currency you want and then buy dollars on the foreign exchange market whenever you want to buy oil. What matters, say the critics, is in which currency people ultimately save rather than in which currency they trade�So can we conclude that an Iranian oil bourse trading oil in euros is the real reason for the current crisis? Perhaps this is prematurely jumping to conclusions… I have yet to see a clear statement on this from the Iranian government.” (9)

The IOB is a good idea. In the hands of a proper Iranian government that establishes good relations with many countries, including and especially the USA, it could turn in the long run into a profitable center. The present day Iran lacks the necessary preparations for such a move. Even if taking steps for such reforms are started today, it will take sometime to make the necessary grounds ready. However, the government of the Islamic regime of Iran is not even walking in the direction of those reforms. Unfortunately the IOB is a stillborn.

Rajendra Pratap Gupta
Cell : + 91- 9323109456
+ 91- 9867300045
(USA) +1515-450-6165
Skype: rajendra.india
E-Mail: mail@rajendragupta.org / rajendragupta@aol.in