Monday, January 26, 2009

Consequences of a US-led War on Iran


Iran has always been an essential chess piece for expanding US influence in the Middle East and the world due to its extremely strategic location and its huge oil reserves which can be used to amass tremendous leverage against rising powers as well as maintaining the status of the dollar as the world’s preeminent currency. But since the backfiring of the US plan to support the Ayatollah, the prospect of invasion goes back to 1979. Under the Bush Administration tensions with Iran have been heightened greatly. Ever since 2003, the Bush Administration has been working hard on these war plans against Iran. These include the drawing of plans for a massive aerial assault against Iran and a massive invasion led by the US marines and the Army staged from the Persian Gulf and Azerbaijan and possibly Iraq and Afghanistan. The reason: Iran is a ‘rogue nation’ that is pursuing nuclear weapons, its President threatening Israel with its destruction and supporting terrorism ‘from Iraq to Chechnya’. Nevertheless the idea of war against Iran is now extremely foolish and will produce disastrous consequences for US soft and hard power projection in the world.

A US led war against Iran would produce unprecedented consequences for the global economy. Just recently President Ahmedinejad warned that Iran will launch a naval blockade of the Straits of Hormuz if the US or Israel were to take any form of military action against the Islamic republic. Such a provoked move by Iran could result in the blocking of some 40% of the world’s oil supply from reaching markets. The result would be a huge shock for the entire commodities market and would have a significant impact on the US dollar’s strength. Oil prices might even pass the US$250 per barrel mark and the US dollar will also fall against most currencies driving up the price of oil and other commodities even further. This could possibly send the battered global economy into a long and severe recession marked by high inflation and low growth.

With oil above US$250 per barrel, due to Iranian retaliation to US strikes, oil exporters will become massive exporters of inflation. Food prices, especially rice, wheat, and corn, will also soar driving more and more people in poor countries into poverty. Meanwhile a falling dollar would mean that inflation in America would be higher. This is due to a falling dollar resulting in foreign goods being more expensive. Japan and China too will become the biggest exporters of inflation, apart from oil exporters, due to the rise of their exchange rates. Because the US is heavily dependent on both Asian imports and oil (60% of its oil is imported), the threat of stagflation might reemerge. Many countries facing the same problems as America, which are huge current account deficits and being a net importer of commodities could also face stagflation.

Trade surplus nations too will also be affected badly. As these nations, mainly China, Vietnam, Indonesia, and Cambodia and in some cases Malaysia, depend on world trade to keep their economies growing fast, they will also be affected when world demand slows significantly. So if the US strikes Iran militarily resulting in massive oil hikes and the appreciating value of the exchange rates of China, Vietnam and other major trade surplus countries, these nations will find that their goods will be less competitive. Not only that, but falling global demand for their goods due to massive rises in inflation will also hamper these economies from maintaining their usual growth rates. This will inevitably lead to a slow down of these economies and will also result in major hikes of unemployment rates of those economies too.

Strikes against Iran by the US, would also lead to a global food crisis. As oil prices and other commodities soar, so will food prices. War torn, war scarred nations, overpopulated nations and nations with existing food deficits will be the most badly affected. Countries like Zimbabwe, Somalia, Sudan and Congo might experience the possibility of a major famine due to their over dependence on foreign food and rampant government corruption. Meanwhile the poor in fast developing but low income economies like India, China, Vietnam and elsewhere would see themselves in the tens of millions fall into poverty. This would produce major obstacles for these countries to perform in the global economy as well as before. Due to much higher poverty and unemployment levels in those nations, a new wave of social crises could emerge including food riots, protests and etc.

Besides that, a global energy crisis will take place if the US decides to attack Iran militarily. This is because Iran will block the flow of oil from the straits of Hormuz and will attack Saudi oil installations in retaliation to maximize damage inflicted on the world economy. The consequences of it will be massive inflationary pressures which have been mentioned above. The other would be crippling of economies that rely too much on oil based power plants. As countries like Pakistan rely too much on oil for electricity generation, an oil shock like the one mentioned above could cause Pakistan’s government (an important ally in the war in Afghanistan) to go bankrupt. Pakistan nearly went bankrupt in 2008 due to massive oil price hikes which approached US$150 but survived with IMF aid, but with oil at US$250 per barrel, Pakistan won’t survive. As a consequence many of these nations which are too dependent on oil will face punishing power cuts that may devastate their economies and cause a rise in capital flight from those nations. Other than that an energy crisis will also cause massive unemployment surges in the Middle East, China, and in many of the impoverished nations as factories and businesses go bankrupt on an enormous scale due to surging manufacturing costs. As consequence a shortage of goods could take place in developing nations and if it gets out of hand it could also affect Western consumers and this would also devastate the world economy . And rising unemployment could lead to more social unrest in Asian countries while severe shortages of supplies in African countries could also lead to more violence.

Now to an entirely different area, US military warfare against Iran will directly prop up the hawks and mullahs of Iran. Despite the horrendous human rights record of the Islamic regime in Iran, the Iranian people are still relatively loyal to the Islamic system that governs them. As a consequence any attack on Iran will be seen as an attack on Islam and the Iranian people will unite under one banner and put aside their ethnic and political differences. This will directly embolden the Iranian regime in Iran and in the Middle East making it more difficult for the West to defeat Iran. Besides that, US strikes against Iran would (as many experts believe) make an overt case for an Iranian nuclear weapons program. Iran seeing airstrikes on its nuclear facilities might be compelled to build its first batch of nukes by working on a crash nuclear program that would produce a bomb in a period of 3-5 years. Such a fast acquisition of nuclear weapons by Iran could probably trigger a nuclear war between Iran and Israel that could result in the destruction of much of the Middle East. It could also trigger a major conventional and nuclear arms race between Iran and Sunni Arab states like Saudi Arabia Egypt and Turkey. But an arms race with Saudi Arabia could only be possible if the Saudi regime survives Iran‘s massive retaliation due to a US led war on Iran.

Now on to the geopolitical consequences of a US led war with Iran will also be devastating. Any form of US military action against Iran triggering massive Iranian retaliation would embroil the entire Middle East and certain parts of Central Asia into a state of war and sectarian strife. This is because of the recent violent Sunni Shiite relations in many parts of the Middle East and Iran’s massive retaliation would target Sunni Arab states that support America’s hard-line approach to Iran currently. The Sunni Shiite civil war could break out from the Persian Gulf right up to Pakistan and beyond. Retaliation by Iran could well involve an invasion of Iraq and Afghanistan with over 1 million Basij fighters each where US troops are conducting military operations to defend the weak and dysfunctional governments of Afghanistan and Iraq. The results could be a government collapse in both Afghanistan and Iraq where both US and Government forces are overwhelmed by the unprecedented waves of Iranian suicide attacks. In Iraq where Bush’s The New Way Forward project has brought significant change, things could take a U-turn. With an invasion of Iraq and Afghanistan by Iran, the situation in both of those countries would disintegrate into brutal civil wars involving tribes, ethnic groups and religious sects as the Sunni populations of Iraq and Afghanistan would vow for revenge.

A wholly united Shiite population under the Supreme Leader of Iran would not stop in Iraq or Afghanistan but would try march into the Sunni Arab states of the Persian Gulf unless Iran is met with extreme military opposition from the US and the world. The results would be a protracted civil war in the Middle East of unprecedented proportions involving the different factions of Islam. The US could also loose its important ally which is Saudi Arabia in the process. And if the US loses the Saudi monarchy, America’s dollar status as the world’s reserve currency could also fade away as Arabia in a state of anarchy or under Iran would probably result in the pullout of more than 2 trillion dollars worth of US based assets and the halting oil of trade in US dollars. This will cause the entire dollar system to implode because the 2 trillion dollars worth of assets parked in the US that are owned by the Saudi government are equivalent to 7- 10% of the US economy and the US could fall into a violent depression if these assets are taken out of the US economy in a very short period of time . Anti Americanism would rise all over the world especially in the Middle East making it more difficult for the US and its allies to win the “war on terror”. In Afghanistan where US efforts to stabilize the country and strengthen its government could also fade away as civil war breaks out across Afghanistan due to a major Iranian incursion and increased anti Americanism. As a consequence military operations in Afghanistan could become unfeasible due to Iranian retaliation. Besides that a period of total anarchy in Afghanistan could also allow Al-Qaeda to regroup and increase its influence as well as resurrecting the Taliban into a powerful force that is stridently anti Shiite.

The situation in Pakistan which is the central front of the War on Terror will also be catastrophic in an event of a US led war on Iran. This is because a war with Iran would cause a Sunni Shiite conflict inside Pakistan. With Sunni Shiite strife spreading across the country, Pakistan’s civilian government would be under threat and the possibility of anarchy in Pakistan could become a reality. The Taliban in Pakistan which is fiercely anti Shiite and opposed to the US backed civilian government in Pakistan would be strengthened adding up to the turmoil. Besides that, Iran funded Shiite interests in Pakistan would also rise going mostly to the Shiites of Pakistan. With a huge increase of sectarian strife in Pakistan between Sunnis and Shiites, government power will wane and instead more power will be concentrated in the hands of tribal leaders, militant organizations, and religious leaders. Tribal and Sunni Shiite conflicts could break out in Baluchistan, and North West Pakistan and other parts of the country, pushing Pakistan further towards a civil war. As a consequence the number of terror pockets in Pakistan would soar and Al Qaeda will gain additional strength making it more difficult for the US to defeat terror and will worsen the situation in Afghanistan. Besides that, the threat of an Islamist takeover could also rise. Such a thing could result in Pakistan’s 40-50 nukes and launch systems to be in the hands of Islamic radicals, increasing the prospect of a nuclear war in South Asia to break out involving India and Pakistan and of the use of nuclear weapons against US troops and its allies. Both of which would require US intervention into Pakistan. And as Dr Brzezinski said the ‘US will be stuck in Afghanistan, Iran, Iraq and Pakistan for 20 years’ and would produce tremendous losses for the US in both blood and treasure. Any planned withdrawal of US troops from either Iraq or Afghanistan will be very costly if Iran sends its fighters into these respective countries because tens of thousands of fighters will target US troops and military checkpoints. The only possible means of redeploying US troops from Iraq or Afghanistan would be by air. But even that would be costly and very risky as Iranian fighters are armed with very sophisticated anti aircraft missile technology.

On the other hand, a US led war on Iran will inflame tensions and the prospects of war in the Levant region. The possible peace talks, and plans for peace between Israel and the Arabs will disintegrate in an event of a US air campaign or war against Iran. This is because pro Iranian and Iranian financed Hezbollah will retaliate in the most devastating manner against Israel. Hamas leaders seeking to increase their standing in Palestine might decide to launch rocket attacks into southern Israel. And most of all Iran would also use its sophisticated ballistic missile technology to attack Israel. Israel in return will quickly launch a series of airstrikes and incursions into Gaza and possibly invade Lebanon. And if things get out of hand due to possible intervention of Iran’s stalwart ally which is Syria in the defense of Hezbollah the war could spill over into Syria creating another major Arab Israeli war that could cost thousands of lives, destabilize and weaken Israel, embolden Iran further and therefore weakening US influence in the Middle East.

The consequences of war with Iran stretches beyond the borders of Middle East as a war on Iran would increase anti American anger all over the world. As the entire Middle East and certain parts of South Asia explode into a state of anarchy, hundreds if not thousands of new terror pockets would emerge all around the Middle East with proper financial backing as Iran and Sunni Arab governments sponsor terrorist organizations to tear each other down. Terrorism would expand aggressively in this period of anarchy making it a more potent threat than ever which is tougher to defeat. As the economic effects of a war with Iran produce massive inflation, food crises, and social unrest, food riots will occur in poorer nations especially in Africa, the Middle East, and South Asia. Political instability in countries around the world along with anarchy in the Middle East will produce dictators with hateful ideologies. The result will be more wars around the world, greater diplomatic tensions around the world and a worldwide economic slowdown.

However, out of the ashes of the war shall emerge its biggest winner and that is Russia. When oil prices soar to levels that have not come to pass, the Kremlin will have more money than ever to spend on its military. Besides that, with civil war going on in the Middle East and the devastation of Middle East oil infrastructure due to Iranian missile attacks on Arab oil fields, the world will be ever more dependant on Russia for oil and gas supplies. This will allow the Kremlin to attain a lot more leverage and control over weaker nations. The corrupt KGB apparatchik regime will also be further entrenched thus creating a more aggressive Russia that is tougher to contain and that will continue to bully its neighbors and use its oil and gas reserves to threaten Europe and manipulate world oil and gas prices.

A war with Iran will also be an environmental disaster. First of all any war with Iran will involve a massive aerial assault on Iran’s 12- 24 nuclear facilities that are either fully operational or in development process. As a consequence large amounts of radioactive dust from the bombed nuclear sites will spread to highly populated areas of the Middle East, South Asia and East Asia. The intensity of the nuclear fallout due to airstrikes against Iran’s nuclear facilities would produce the worst nuclear disaster in history. According to an estimate by the Union of Concerned Scientists any air campaign on Iran’s nuclear facilities for 3 weeks would result in an estimated 3 million deaths. Meanwhile the radioactive fallout from the bombing campaign will also last for 700 million years. Besides that, oil spills in the Persian Gulf could also take place if Iran decides to launch a naval blockade of the Straits of Hormuz and lob missiles at oil tankers. As a consequence the water supplies of Arab states could be severely threatened as Sunni Arab states depend on the desalination of sea water to provide them with their water requirements. In an event of war with Iran, massive oil fires will take place which would result in a horrible haze in the Middle East if Iran decides to attack the oil fields of Iraq and Arabia. This is because the Iranians might want to inflict maximum damage on the US economy and Sunni Arab states. As a consequence the air quality of the Middle East will deteriorate and acid rains will pour over the Middle East and certain parts of South Asia damaging buildings and cars in the process.

So with the potential of such a devastating loss of human life, adverse effects for the global economy and the global geopolitical order, the US, Britain and especially Israel must avoid starting a war with Iran and continue to pursue tough diplomacy with Iran. This could be done by tightening sanctions on Iranian banks, freezing Iran’s overseas assets along with the assets of top members of Iran’s nuclear program, top government officials, and politicians. But the US and the international community should also directly negotiate with Iran and provide it with the opportunity to do business with the West as usual if it gives up its nuclear weapons ambitions.
( Though the threat of a US initiated war with Iran has been significantly downplayed, the threat still exists and will persist as Israel is now run by neo-fascists. And they would do anything to to get the US to fight Iran militarily.)

Monday, December 22, 2008

The Richest Man In Zimbabwe

       As Zimbabwe faces it's worst economic disaster in it's history due to decades of misrule by the country's only leader President Robert Mugabe, an elite group of businessmen are consolidating their power in the ruling Zanu PF. One of them is John Arnold Bredenkamp. He is the richest man in Zimbabwe and also the most powerful among the Zimbabwean business elite.

           Bredenkamp now aged 68 is a South African born white of Dutch ancestry. It has been reported that Bredenkamp holds South African, Zimbabwean and Dutch passports. His story goes back to the 1970s when he made his first big fortune. In 1976 he founded Casalee group which became the world's biggest tobacco firm outside the US. The company made huge profits selling Rhodesian tobacco abroad through the evasion of sanctions. Rhodesia at that time had been place under UN sanctions due to the Unilateral Declaration of Independence (UDI) grip on power due to white minority rule. Despite the odds of international sanctions targeting the UDI regime in Rhodesia, Bredenkamp befriended Ian Smith, who was the Rhodesian PM at that time, to provide weapons and military supplies to the UDI regime which had been fighting the Rhodesian Bush war through a series of sanction busting schemes. However these actions by Bredenkamp which gained notoriety internationally was legal under the Rhodesian law. Bredenkamp brokered the export sales of Rhodesia, mostly tobacco, and used the proceeds to purchase weapons for the UDI regime. His sanction busting schemes often involved complex barter trades that helped the UDI regime to sustain itself for a longer period of time. 

               After Rhodesia's independence in 1980 which led to the birth of Zimbabwe and the rise of Robert Mugabe as it's president, Bredenkamp fled the country and moved his base of operations to Belgium. But in 1984 he made peace with the leaders of Zimbabwe and was allowed to return to Zimbabwe. Though President Robert Mugabe is claimed to be an anti white racist, Bredenkamp, of white descent, became Mugabe's biggest crony.

       In 1993, Casalee group of companies which had been involved in arms deals was sold by Bredenkamp to Universal Leaf Tobacco earning him over 70 million pounds. He then constructed a new group of companies called Breco. In 1998 he was involved in President Robert Mugabe's decision to send Zimbabwe's armed forces into neighbouring Democratic Republic of Congo in the defence of Laurent Kabila's regime. At that time, Kabila, who successfully overthrew Mobutu Sese Seko from power in 1997, was at war with his former backers Rwanda and Uganda. That war which came to be known as Africa's deadliest left 7 million dead. However Zimbabwe's intervention was deeply rooted in the desire of the political and business elites of Zimbabwe to exploit Congo's natural resources, most notably diamonds. In return, the Kabila regime rewarded more than US$5 billion in mining concessions to businesses belonging to the closest advisers and family members of President Mugabe including Bredenkamp, according to a UN report on the looting of Congo's resources. Though he strongly denies war profiteering during the war, a lot of evidence shows that he is guilty. It has also been alleged that Bredenkamp purchased arms and supplies from Bulgaria for the Zimbabwean military during the height of the Second Congo war.
              
                  While he and the other members of Mugabe's inner circle lined their pockets from the war, huge financial burdens were created to fund the war. To pay for the war, Zimbabwe's central bank printed hundreds of trillions of Zimbabwean dollars. This ultimately resulted in the collapse of Zimbabwe's currency and the hyperinflationary problems facing Zimbabwe today. To avoid prosecution, as many of his business dealings have been considered shady, he used Zimbabwe as his base of operations to do business with other countries in Africa and the Middle East. It has been revealed that Bredenkamp is now a force behind the scenes in the ruling Zanu PF belonging to Robert Mugabe. According to the latest revelations, John Bredenkamp was involved in plot to overthrow Mugabe and replace him with former security minister and Speaker of the Parliament Emmerson Mnangagwa. It has also been alleged that Bredenkamp paid out $7 billion to the Mnangagwa campaign to help Emmerson Mnangagwa to become the deputy of the ruling Zanu PF. 

                   Despite John Bredenkamp's rise as one of the most powerful  in Zimbabwe, he has not got everything he wanted. As Zimbabwe's economic situation draws coverage from around the world so does the exposure of his corrupt business dealings. Just recently the US Treasury, accused John Bredenkamp of being a "regime crony". The US Treasury also accused John Bredenkamp of being a "well-known Mugabe insider whose group of companies has financially propped up the Mugabe regime" and froze his US based assets as well as banned him and three other cronies of Mugabe from doing business with the US. The British Foreign Office has also been working with the EU to consider several options against Mugabe's cronies including Bredenkamp.  

Finally in late 2008 Mr Bredenkamp's South African properties had been raided due to allegations that British arms giant BAE Systems paid out more than 40 million pounds to companies linked to John Bredenkamp between 2003 and 2005 in exchange for help to promote a 1.6 billion pound warplane contract for South Africa when Jacob Zuma's ANC party comes to power. So with the world's eyes focused on Zimbabwe due to it's economic and humanitarian collapse and the impending investigations of John Bredenkamp's dealings, what will be his next series of moves?

Sunday, December 7, 2008

Why China Can't Dump The Dollar

As America's burgeoning debt levels soar, its mammoth trade deficits on the rise and a budget deficit that will hit U$1 trillion to U$1.5 trillion or 7% to 11% of it's GDP FY 2009, questions about the credibility of the US Dollar are on the rise.With China holding U$1 trillion worth of these dollar denominated debt assets, some politicians and economists fear that China might dump these assets due to the weakening dollar and slumping interest rates of these assets. Such a move could trigger the total collapse of the US real economy and send the world into a depression. But is that probable for China to do in the near future?

First of all if China dumps it's US treasury bonds and other dollar denominated assets, the US economy being an economy that China is very dependent on would implode. The global economy would also crash and world trade would collapse. Such a move by China, followed by the mentioned consequences above would have extremely adverse effects on the Chinese economy. As China's economy is very dependent on exports and trade especially with the US (which buys more than 21 percent of China's exports) China would also see it's economy go bust due to a collapse in demand for Chinese goods. As a result business bankruptcies in China would soar on an unprecedented scale. In 2008 some 65000 Chinese factories have closed down due to the fallout of the credit crunch in the West and if China aggravates the situation by dropping the dollar, the entire Chinese manufacturing industry will head for a meltdown. To make matters worse unemployment rates in China would also surge followed by job riots, a phenomenon that the Chinese ruling elites are afraid off. Surging unemployment could also mean the development of a social crisis in China. This is because hundreds of millions of rural Chinese citizens who have flocked to China's cities in a search for greener pastures are dependent on China's industrial powerhouse. As a consequence if these industries fail many of these workers would be laid off and they would the first to participate in social unrest movements such as riots, crime and the building of illegal squatters. Such a thing would be a nightmare for China's government officials.

Secondly if China decides to dump the dollar, where else could they park these hundreds of billions of dollars worth investments as the dumping of those assets would send economies and stock markets across the world crashing. So all of China's hard work, it's investments in it's economy for over 30 years would just vanish. China could also find it extremely difficult to trade with other nations as most export goods are invoiced in dollars. China will also see commodity prices surge as the dollar weakens tremendously. Such a thing could mean the end of massive food and energy subsidies in China. As a consequence China's inflation rates will skyrocket as the prices of food to consumer durables surge. And this will directly result in surging Chinese poverty levels, the destruction of China's middle class purchasing power and the obliteration of China's economic potential in the near future.

Thirdly, China could fall into a painful debt crisis if it's dumps the dollar. This is because during the past 30 years the Chinese government has given out hundreds of billions of dollars in loans to inefficient state owned enterprises and ordinary Chinese businesses. Because of that China has fallen into the trap of overproduction. With too many loans given to too many businesses producing the same goods or providing the same services which has encouraged overproduction, China drastically needs world trade soaring and strong global economic growth to keep these businesses operational. Keeping these businesses operational is the only way for China to recover those hundreds of billions of dollars in loans. If China dumps the dollar resulting in the collapse of world trade, many of those businesses and state owned enterprises that took government loans would fail. And that would result in the Chinese government and state owned banks being stuck with hundreds of billions of dollars if not trillions of dollars in non performing loans or bad debts. To make matters worse, state banks ( which hold a vast portion of China's 2 trillion dollars in household savings) will bear the full brunt of the debt crisis and may fail or require massive central bank intervention. Both of which will result in depositors and pensioners losing their deposits and retirement accounts. These problems compounded by skyrocketing inflation and surging unemployment could well produce an economic disaster.

Finally, if China decides to drop the dollar, the Communist party's grip on power would diminish. This is because a US economic collapse followed by China's own one will cause the Chinese people's tolerance of totalitarian state to fade away. Social crises, job riots, and anti government protests would follow on suite on a massive scale across China. As a consequence China's elite will have no choice but to either allow the riots to continue and see their power wane or launch a bloody crackdown which will cost China it's political standing in the world and increase the resentment of the Chinese people against their government. Not only that, with the turmoil taking place throughout China and the iron fisted one party rule on the decline, the Dalai Lama could use this as an opportunity to further his agenda and declare Tibet's independence from China, an autonomous province that serves as a buffer against India and its mountains being the main source of China's water supply. The Islamist separatist movement in Sinkiang province will also be emboldened and become much more aggressive causing China's rule of that autonomous province which is rich in oil and gas deposits to decline. At last China's ruling party's biggest nightmare could become a reality, which is Taiwan's declaration of independence from China. If China dumps the dollar and China's economy starts to decelerate, the most badly affected parts would be the southern provinces of China (Kwantung , Fujian, Hunan and Zhejiang) as it houses China's mammoth industrial powerhouse and Taiwan which is still considered to be a part of Red China. As a consequence Taiwan might use the period of turmoil on the mainland as an opportunity to declare it's independence, a move that could set off a chain of reactions, which include the revival of the Chinese civil war and a possible fragmentation of China due to the southern Chinese provinces breaking away from Beijing to join Taipei.

Wednesday, December 3, 2008

How The Iranian Revolution Accelerated The Collapse Of The USSR

While most historians and readers of history look at the Iranian Revolution as a disaster of US foreign policy where by the US lost a vital chess piece in the global contest for supremacy which weakened US power in the Middle East and the hostage crisis that followed, there were still silver linings.

Firstly a theocratic Iran under the leadership of the Ayatollah with the immense popular support from the Iranian people did act as a strong buffer against the southward projection of Soviet power. Iran under the Shah technically served as a buffer against Soviet expansionism too, but it was not as effective as Iran after the Revolution due to the Shah's unpopularity, the refusal to aid the Afghan resistance movements and the growing power of the Marxist movement inside Iran. A strong Iran as a buffer was needed to prevent the Soviets from conquering the oil fields of the gulf and from gaining a warm water port.

Secondly the Iranian Revolution of 1979 finally paved the way for the destruction of the growing pro-Soviet movements inside Iran. The CIA did give a list of communist suspects to the theocrats of Iran to silence, though the US broke relations with Iran on that same year. Therefore, it completely eradicated Soviet influence inside Iran.

Finally the Iranian Revolution of 1979 accelerated the growth of the emerging arc of crisis that was unfolding in Central Asia which directly contributed to the collapse of the USSR. When the theocrats of Iran came they dramatically increased financial aid to the Afghan resistance movement as well as absorbing most of the Afghan refugees from the war. As a consequence the Afghan resistance movement became stronger than ever and the Soviets became bogged down in Afghanistan. With the war now favouring the freedom fighters of Afghanistan, economic stagnation in the USSR turned into economic decay due to the tremendous cost of financing the war and the health of Soviet war veterans who served in Afghanistan. Meanwhile the theocratic Iran which shared a border with Soviet Azerbaijan enabled the spread of Islamic fundamentalism into the Central Asian republics of the USSR. This, in a way helped the people of Central Asia who were ethnically divided to finally unite under a common cause, which was Islam and led them to reject Soviet domination of their lands. As a result the simultaneous processes of the Soviets being unable to project power into the heartlands of US influence which is Arabia, the Soviet forces being bogged down in Afghanistan which paved the path for Soviet economic decay, and the massive decline in Soviet control of Central Asia all led to the demise of the USSR and the birth of the world's first truly global power,which is the US.