Motives in the Middle East

Following the Iraq coup d’etat, the working class has been subjected to a tremendous amount of propaganda. The press and radio have been calling for varying degrees of support or antagonism according to whichever sectional or national interest they represent. It falls to the Socialist Party, with our unqualified opposition to every capitalist faction, to interpret the events objectively and to state the true position of the workers in relation to them.

Throughout history the Middle East has been invaded or dominated, due to its location as the bridge between Europe, Africa and the Far East. Since the demand for oil has arisen, its strategic importance has been almost eclipsed by this most essential of fuels. These are the causes of the struggle for supremacy in this area. The conflict between American and British oil interests has been overshadowed now by the threat of Russian encroachment. In 1950 the U.S. controlled only 44 per cent. of production against 53 per cent. by Britain and Holland (in Royal Dutch Shell), but by 1956 the American percentage had grown to 57 per cent, while the U.K.’s share had fallen to 35 per cent. The outstanding example is Iran. Before the Abadan incident, all Iranian oil passed through British hands. The agreement reached after the failure of out-and-out nationalisation saw the establishment of an International Consortium to buy the oil from the Iranian Government. The Consortium is divided as between Britain 54 per cent., U.S. 40 per cent., France 6 per cent. Production throughout the Middle East has doubled since 1950 so that U.K. companies are showing increased profits, but this only masks the real decline of British holdings.

In keeping with its status as a world power, the Soviet Union is greatly interested in the Middle East. As with all capitalist states, Russian foreign policy is directed at seizure of the fields. This aim—an extension of Czarist policies—came close to partial achievement following the Second World War. In 1946 a treaty was forced on the Iranian Government, forming a Soviet dominated company with concessions in Northern Iran—this area still being under Russian military occupation. After the troops withdrew Iran, with Anglo-U.S. backing, repudiated the agreement. Now posing as the Arabs’ friend, Russia has increased its propaganda in the hope of building Communist parties capable of taking over and attaching the oil nations to the Soviet bloc.

The Egyptian capitalist class, spear-headed by Nasser, is also trying to gain access to the oil sources. To gain this object they have some indisputable advantages over their rivals. Most Arab workers feel that the sole barrier to better conditions is the dominance of Western nations. Exploiting this conviction, Nasser has persuaded many Arabs that he is the only man capable of obtaining and maintaining their departure. He has been greatly assisted by Russia, which has supplied arms and money, and by the abortive Anglo-French Suez landing. Although Russia and Egypt are momentarily allied doubtless time will generate the usual frictions

Although Egyptian policy has won many supporters among the Arab workers, the capitalists of the Middle East oil producing nations are not enthusiastic about coming under Egyptian dominance. This lack of enthusiasm has led to a reluctance to join the United Arab Republic and so share the revenues with the Egyptians. Even the new Iraq Government shows no desire for integration.

Against this sordid background, shorn of the normal camouflage about “safeguarding our national livelihood” or “safeguarding the political independence of the Arab peoples,” the Iraqi rising and the subsequent manoeuvring can be seen in their true perspective. At the overthrow of the monarchy, agreements between the Royal Government and the oil companies were on the standard 50/50 basis. This 50/50 division of the spoils has recently been cracking. Earlier this year contracts between the Japanese and Saudi Arabia and Kuwait led to the Arab States receiving a 56 per cent. and 57 per cent. share respectively. Much speculation has been aroused on the outcome of these and similar agreements. In its March publication the Petroleum Press Service asked, “Are we going to see governments of some of the main producing countries seeking changes in the existing agreements?” Shortly before the revolution the Iraq Minister of Economics held talks with the Iraq Petroleum Co., after which it was announced that the Iraq Petroleum Co. would surrender certain areas held under concession. No doubt Feisal’s Government intended to lease these areas to other companies in keeping with the new rates, but as the 50/50 still applied to the I.P.C., which controls the majority of the output, the net gain was somewhat niggardly. The report on these talks was announced on the 13th July— the coup began on the 14th! Though reports suggest that the revolution was planned in advance, the timing appears more than coincidental. The rebels felt, no doubt, that Feisal and Nuri-es-Said were too bound by their earlier agreements to obtain better terms and a completely new government would have more success. Premier Kassen has stated “the new Iraqi Government would be able better to safeguard oil interests than previous governments.” We can now expect the Republicans to negotiate a fresh agreement with the I.P.C. on a par with the recent precedents.

Western capitalism is probably resigned to this course in moderation (“any Iraq Government will make greater demands on the producing companies” — Financial Times, 16/7/58), but exorbitant demands will be strongly resisted. The landings in Lebanon and Jordan after the revolt were ostensibly to bolster friendly governments, but it has not escaped the attention of the U.K. and U.S. authorities that there are advantages in controlling these countries should discussions break down. The head of the main pipeline from Iraq is situated in Lebanon and could be closed to impede any attempt by the Iraqis to market the oil themselves. And the British troops in Jordan are on hand should intervention be deemed necessary. The stakes are high enough for our masters to contemplate it!

The turnover has been approximately £150 million annually and attempts are being made to double production by 1960. As has been stated, the overwhelming proportion of Iraki oil passes through the Irak Petroleum Co. and its subsidiaries. 95 per cent. of the I.P.C.’s shares are divided equally between British Petroleum, Shell, the Cie. Francaise de Petroles (in which the French Government has a large interest), and the North Eastern Development Corporation—an American company controlled by Socony Mobil Oil and Esso. The remaining 5 per cent. is owned by the Gulkenkian Foundation, although negotiations are afoot to buy 1¼ per cent. of these by the C. F. de P. This would then make the French organisation the largest individual shareholder. The interest of the West in the welfare of the I.P.C. is evident.

Previous examples have shown that when nations are competing for such a richprize open hostilities can result. Although it is by no means certain that armed conflict, either local or world-wide, will immediately arise out of the present situation, it IS certain it will be the working class who will bear the brunt of any fighting—AND FOR NOTHING! It will make no difference to the working class whichever capitalist group controls the oil fields. Arabs, who believe that complete national control of a country’s resources will benefit the workers, are advised to study the contemporary histories of the Sudan, Indonesia, etc. Supporters of the Communist Party should compare current Russian Middle East behaviour with the Soviet/Persian Treaty of Friendship of 1921, before lending support to its imperialist policy. Article 8 of this treaty contains the following: “Federal Russia finally renounces the economic policy pursued in the East by the Czarist Government, which consisted in lending money to the Persian Government, not with a view to the economic development of the country, but rather for the purposes of political subjugation.” Western workers, instead of being bellicose on the masters’ behalf, should be concerned with the struggle against both Eastern and Western capitalism and for the establishment of Socialism; only then will oil cease to feed the flames of hatred.

ESSIG