Public First Program


Shane Elson


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July 2008 # 1

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Back to Editorials 2008

East Timor, Oil and the Euro

Times are tough for “dictators”, “rogue states” and “failing nations”. It seems like it is not a good thing to be the head of a country that happens to sit on top of huge oil or gas reserves. Saddam was just the first to go. We find, if we believe the mainstream media, that Iran is threatening everyone with “nuclear” weapons, that Venezuela is being led by “communists” and that Bolivia is being ruled by “Soviet sympathisers” while little East Timor is about due for a “regime change”.


So what is it that links all these comparatively small and in many ways insignificant nations together? Other than their shared history of imperial colonialism and the pillaging of their wealth by foreigners ably abetted by foreign trained, domestic elites, it seems these countries share a certain attraction to the Euro and the socialist goals of equality and equity. The roll back began in mid 2000 when Saddam transferred payments for the “oil for food” program to Euros from US dollars. 


William Clark, from the Global Research Centre in California, in a 2003 essay, wrote that the reason the US was going to war with Iraq was the “administration's goal of preventing further [OPEC] momentum towards the Euro as an oil transaction currency standard.” Clare Foss, in her online Journal, noted that the Iraqi switch to the Euro had “potentially perilous consequences for the US. … If OPEC were to decide to accept Euros only for its oil, then American economic dominance would be over.” 


Saddam was not hated by the US administration for what he was doing to his own people. God knows, they had ignored that for years. What really got up their noses was that he changed the way his nation traded and seemed intent on hitching his caboose to the European currency. Indeed one of the first things the new US supported administration in Iraq did was enshrine the US dollar as the trading currency for all Iraqi foreign exchange transactions. 


Following hot on the heels of the great American Imperial push to secure a revenue stream from the Iraqi’s, Iran took the first steps, in 2004, to set up its own oil trading exchange (a bourse) based on the Euro. 


Dr. Elias Akleh, writing for the Arabic Media Internet Network, observed that, “Iran does not pose a threat to the United State because of its nuclear projects, its WMD, or its support to "terrorists organizations" as the American administration is claiming, but in its attempt to re-shape the global economical (sic) system by converting it from a petrodollar to a petroeuro system. Such conversion is looked upon as a flagrant declaration of economical (sic) war against the US that would flatten the revenues of the American corporations and eventually might cause an economic collapse.” 


The strident rhetoric we have been hearing from the top US brass over the last two to three years about Iran’s threat is not, therefore, really based on any alleged “threats” posed by non existent WMD’s or that nation’s plans to develop a domestic nuclear power industry. Rather it has been Iran’s audacity in proceeding with its plans to establish a new trading regime that would, effectively, lock the US out and thus prevent US multinationals from skimming the cream off Iran’s international oil trade. After four years of planning, set backs and political road blocks, the Iranian Euro bourse opened on the 17th February 2008. 


Writing in Petroleum World magazine, Gwynne Dyer notes ominously, “The US government knows, and is deeply alarmed by the danger, that the dollar may be losing its status as the world's only reserve currency. Given the huge deficits that plague the US economy, the US dollar's value would collapse if other countries began to see it as just another currency, so the Euro must be prevented from emerging as an alternative reserve currency. In practice, that means the Iranian experiment with a Euro-denominated oil bourse must be stopped - and the only way to do that is to attack Iran.” 


While it is obvious that Iraq and Iran got into strife for not towing the US line, what about the rest of the region? Well, in a little reported retaliation for the US Senate’s blocking of a Dubai based company’s bid to buy into US ports in 2006, the United Arab Emirates told the US to go jump and that they would switch 10% of their $US23 billion reserves to Euros thus putting a huge dent in the US money markets. 


While all this is unfolding, south of the border, down Mexico way, some South American governments are also thinking of jumping the good ship US dollar. Hugo Chavez in Venezuela and Evo Morales in Bolivia have both made it clear that they want the OPEC nations to stop trading in dollars and convert to the Euro. They are also intent on reshaping their nations internal economies by renationalising foreign owned resource companies and not paying any compensation. 


Speaking at the Euro Summit in May 2006, Moralez told reporters that, “For more than 500 years our natural resources have been pillaged and our primary goods exported. This has to be ended now.” And we wonder why the US is calling him and Chavez “communists” and a “danger” to the world. “Whose world?” is a question well worth asking. 


Finally, we come to East Timor. As the poorest nation on earth with an average income of just over $1 a day, what threat could they pose and to whom? Quite simply, they have looked beyond Australia and the US because neither our country nor the US will assist them or support their development agenda. Rather, our governments are intent on bleeding them dry. 

The East Timorese government and its top leaders, all well known to us, made an interesting decision when they penned their independence charter back in 1998 and established the National Council of Timorese Resistance. This political arm of the resistance movement contained all the current players in the so called “crisis” they and their people are now experiencing. 

What I have never heard reported was their stated aim to convert to the Euro as their trading currency in the sure knowledge that it would make investment in their nation more attractive to their Asian neighbours. What was little reported here in Australia was Mari Alkatiri’s international tour, in September 2005, to drum up Asian investment interest. 


Little was reported on the visits he made to 20 or more nations who have shown an interest in investing in East Timor’s on and off shore oil and gas fields. What is even worse in the eyes of the multinationals, who are screwing our government, is the East Timorese intention to use the wealth of their resources to “alleviate poverty, create jobs and improve education” rather than reinvest it in their money making but wealth extracting schemes. Since then, we have seen some very interesting developments in Timor Lesté… but more on this another time. 


Regime change for our impoverished northern neighbour will probably come but at the cost of more innocent lives. Like Iraq, Iran, Venezuela and Bolivia, East Timor will only become a failed state if we stand idly by and watch those who would rather it fail succeed in their quest. Do we have the same courage the East Timorese have to dream of a better, more just and equitable society or do we only care about those things that supposedly keep us safe from “dictators”, “rogue states” and “failed nations”? The first option is a possibility; the second only perpetuates the lies.

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