[Marxism] US economic warfare

[Marvin Gandall <marvgandall@xxxxxxxxxxxx>]

Given its uncertain military options, the US is relying on its financial
power - based on the role of the USD as the world's reserve currency - to
isolate Iran and North Korea from world markets.

The US already prohibits the export of capital and equipment to the two
countries by its own nationals. (It isn't true, as asserted below, that
sanctions on North Korea were "effectively lifted" in 2000). US Treasury
officials are now aggressively "asking" foreign banks and governments to
follow suit - on the understanding, of course, that their own access to
American capital markets could be jeopardized if they don't comply. The
sanctions are also designed to provoke splits within the Iranian bourgeoisie
and ruling clergy and within the North Korean ruling party and armed forces
and a turn away from confrontation with the US.

If you can get past the shrill propaganda in the column by the Washington
Post's Jim Hoagland below, it's a good window on the current strategy being
pursued by the US in relation to these foreign policy crises.
=========================================

The Squeeze on North Korea
By Jim Hoagland
Washington Post
Thursday, October 12, 2006

North Korea has, in its own inimitable fashion, paid tribute to a
little-noticed U.S. push to get the world's bankers to isolate regimes that
promote nuclear proliferation and terrorism. Who else would claim to have
conducted a nuclear weapons test and then threaten more blasts to get their
way in a $24 million banking dispute?

Don't they have any good lawyers in Pyongyang?

North Korea's efforts to blame its crossing of the nuclear-testing threshold
on U.S. "economic hostility" would be laughable if the regime weren't led by
world-class paranoids and fantasists capable of believing their own odious
propaganda. Americans do not have to believe it, however.

Such a regime may be beyond reasoning with or, even worse, deterring in a
conventional sense, as the Bush administration seems to believe.

But Pyongyang's threats -- if not its excuses -- must be taken seriously and
met with new forms of containment and pressure. The same is true of Iran,
the other major target of the Treasury Department's efforts "to isolate bad
actors from the global financial system" by calling attention to their use
of banks for rogue operations.

That description comes from Stuart Levey, Treasury undersecretary for
terrorism and financial intelligence. I happened to call on him yesterday a
few hours after Pyongyang had threatened more nuclear and verbal blasts if
the United States continued its "sanctions" policy.

"If the objective was to put pressure on North Korea, well, we succeeded,"
said Levey, who has joined Deputy Treasury Secretary Robert Kimmitt in
traveling the globe to persuade other governments to examine and, where
appropriate, cut financial links to the two remaining members of President
Bush's "axis of evil."

But the purpose of this effective new effort at using soft power as pressure
is much broader. According to Levey, Treasury is targeting people who are
eminently deterrable: "People who are in business are very concerned about
their reputations and do not want to get involved in illicit activity that
is under scrutiny. They will make the decisions about whether they continue
doing business or not. We don't make the decision for them."

So Levey disputes North Korea's characterization of U.S. policy as being one
of politically driven "sanctions." Treasury's efforts are targeted at
specific illicit transactions, such as the counterfeiting of U.S. currency;
the transfer of funds involved in the smuggling of drugs, arms or even
nuclear-weapons components; and the financing of terrorist operations.

"The United States effectively lifted sanctions against North Korea in 2000,
and the Bush administration has not reimposed them," Levey asserted. "What
we are doing is calling attention to the risks involved in being involved in
these transactions."

The first use of the heavy U.S. financial hammer was against the Macao-based
Banco Delta Asia, which Treasury identified last year as a "primary
money-laundering concern" for Pyongyang. The bank, which operates under the
control of the Chinese government, froze an estimated $24 million in North
Korean assets rather than risk losing U.S. and other business. Pyongyang is
still boiling over this perceived affront, as its angry statements this week
indicated.

"It is important to look beyond this week's developments," Levey said, after
asking rhetorically if he now needs a security detail. "Look at the
receptivity of the world's finance ministers to accepting that they have a
major role to play in the area of global security and intelligence. That is
the future."

However much its self-imposed isolation might seem to protect it from them,
North Korea clearly takes these financial pressures seriously. So must Iran.
Squeezing the regime financially is probably the only hope (however forlorn
it may turn out to be) of keeping Tehran from going nuclear in a few years.

Iran was forced to announce in August that its oil production will soon
begin to decline because of a lack of new investment in the oil industry and
the difficulty of getting new technology from abroad for its aging fields.

Access to foreign capital and advanced equipment will not have been helped
by the U.S. decision last month to exclude Bank Saderat, one of Iran's
largest state-owned banks, from buying or selling dollars and other
financial instruments from U.S. banks. This is in response to Bank Saderat's
role in transferring millions of dollars to terrorist groups.

In the early days of the Soviet Union, Lenin predicted that capitalists
would eagerly sell him the rope he would use to hang them. He lost the bet
when Moscow proved unable to pay for ruling an empire. Treasury's
sophisticated efforts to deny gangsters in North Korea and Iran access to
global capital should not be abandoned because of the nuclear bluster from
Pyongyang and Tehran.




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