Monday, December 21, 2020

The Persian Gulf Crisis and the Security Dilemma

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Anant Jani

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The Persian Gulf Crisis and the Security Dilemma

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Global Views 360

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December 21, 2020

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American Assault Ship in the Persian Gulf

American Assault Ship in the Persian Gulf | Source: Cpl. David Gonzalez via Flickr

This article explains the recent tensions between Iran and the United States, and presents it as a case of the ‘Security Dilemma’ theory in practice.

The Persian Gulf Crisis 2019-20

To understand the current crisis in Persian Gulf, we must look at the Iran Nuclear Deal of 2015, also called the Joint Comprehensive Plan of Action (JCPOA).

The JCPOA was signed between The E3/EU+3 (France, Germany, the United Kingdom, the Russian Federation, and the United States, China, with the High Representative of the European Union for Foreign Affairs and Security Policy) and the Islamic Republic of Iran, to permit nuclear capabilities for Iran exclusively for peaceful purposes, in exchange for the lifting of crippling sanctions.

JCPOA terms:

International Atomic Energy Agency representative in Tehran, Iran for talks on JCPOA implementation | Source: Tasnim News Agency

Under this accord, Iran had to reduce its Uranium stockpile by 98% to 300kg, maintain its level of enrichment at 3.67%, reduce the number of centrifuges, and only keep one of its Uranium enrichment plants active. It also had to redesign its reactor at Arak, so it could not produce weapon’s grade Plutonium. Until 2031, Iran is not permitted to make heavy-water reactors.

Further, it was to permit itself to regular inspection of their nuclear site by the global nuclear watchdog, the International Atomic Energy Agency (IAEA).

In return, Iran gained over $100bn of frozen assets overseas, and was permitted to allow trading in oil in international markets and use the global financial system for trade.

Trump Administration’s Revoking of the JCPOA

In 2018, the Trump administration reimposed some of the sanctions in Iran, despite Trump's election promise to reduce involvement in the Middle East. Countering the re-impositions, Iran threatens to resume Uranium enrichment. In May 2019, Iran suspends nuclear deal commitments, and gives other signatories a 60-day deadline to protect it from US sanctions, before resuming Uranium enrichment. The International Atomic Energy Agency (IAEA) reported that Iran had already increased Uranium production, but is unclear by how much.

President Trump signing executive orders, imposing sanctions on Iran | Source: Shealah Craighead via White House

In May 2019, the US increased military deployment in the Persian Gulf, reportedly to prevent what the termed was a “campaign” between Iran and its proxies to threaten US oil shipping in the Strait of Hormuz.

The Tanker Crisis

In June 2019, two tankers were set ablaze in the Gulf of Oman, using mines. The US blamed Iran for these blasts, but Iran denied the charges.

In the same month, Iran Islamic Revolutionary Guard Corps (IRGC) shot down a US surveillance drone, escalating tensions and causing the US to name the IRGC as a terrorist organization.

In July 2019, the British Royal Marine Commandos seized an Iranian tanker off the coast of Gibraltar, as it was suspected to be en route to Syria, in violation of EU sanctions. The US declared that anyone assisting the ship would be considered an accomplice of terrorist groups, namely the Iran’s Islamic Revolutionary Guard.

In retaliation, Iran seized British-flagged tanker in the Strait of Hormuz.

The Iranian tanker was released six weeks later, on the condition that they do not unload their cargo of 2.1million barrels of oil in Syria.

December Air Strikes

In December 2019, the K-1 Air Base in Iraq was attacked by an unconfirmed party, killing one American contractor. This base hosts Americans (amongst other nationalities) who are responsible for training Iraqi troops in counter-terrorism. The Americans alleged that the attack was carried out by Kataib Hezbollah, which denies it. Kataib Hezbollah is a rebel group (recognized as a terrorist group by the US) backed by Iran. The Iraqi’s alleged that ISIL was responsible.

In retaliation for the killing of the American Contractor, the US launched air strikes on the weapons depot and command centres of Kataib Hezbollah in Iraq and Syria in the same month, reportedly killing 25 militiamen.

Assassination of Iranian Major General

Late Iranian General, Qasem Suleimani | Source: Tasnim News Agency

Iraq and Iran condemned the attack, and on 31 December, 2019, Iraqi militia attacked the US Embassy in Baghdad. In response, the US conducted airstrikes at the Baghdad International Airport in January 2020, killing the Commander of Iranian Quds Force, General Qasem Suleimani, the second most powerful man in Iran.

These escalations, placed within the context of US invasions of Iraq and Afghanistan, provide a good example of the Security Dilemma theory and how it plays out in practice.

What is the Security Dilemma?

Before delving into the theoretical definitions it is worth reminding ourselves that States do not behave as they do because a theoretical model demands them to. Rather, most theoretical models are based on observations of real-world behaviour of states, and seek to explain said behaviour. The Classical Realist theory, of which the Security Dilemma is a part, is amongst one of these, and I endeavour to highlight some of the key points of this theory.

The Classical Realist theory holds that States (or State-actors) are the basic unit of any international system. They are the most important actors, as there is no authority higher than them. The international system is fundamentally anarchic, with every actor left to their own devices with no supranational oversight. Each State finds it in their own self-interest to provide their own means for security. Security comes with the ability of the State to exercise its power, and thus Power Hegemony and Security are inextricably linked. In other words, since no State can rely on a supranational authority to provide security (an every-man-for-himself scenario), it is in each State’s best interest to understand the power distribution across all state-actors and maximize power for themselves, as the ultimate security. This results in a zero-sum game, with one actor’s loss being another’s gain. In providing absolute security for one’s own State, one leaves others insecure. The resulting power imbalance manifests in conflict, and for the Realist it follows, therefore, that Conflict is the natural state of affairs.

This, in essence, is the Security Dilemma: Striving for absolute security leaves others absolutely insecure, thus providing powerful incentives for an arms race, leading to further conflicts. It is little wonder that this is also called the Spiral Model, for in the very process of striving for security, one gives birth to escalating conflict.

How does this relate to the Persian Gulf Crisis?

The US has long followed the Realist model, believing that in a state of fundamental anarchy, it is justifiable to have nuclear capabilities and have intense militarization, as a means of gaining absolute security (justified by ‘offense is the best defence’). However, the US is also known for disallowing Weapons of Mass Destruction and nuclear capabilities in other countries, despite having such resources by itself. Here we see the Security Dilemma: to maintain absolute security, the US cannot allow others to be similarly armed. This is seen clearly in the signing of the JCPOA.

Consider the case from Iran’s point of view. As a result of the US war against Al Qaeda and Taliban in Afghanistan and overthrow of Saddam Hussain in Iraq, there has been constant American presence in both the countries bordering Iran since almost two decades. That this poses a threat to Iran is obvious: the US caused fundamental regime changes in Iraq after the war; with its manpower and firepower, alongside its strategic placement on both sides of the Iranian border, the US is at a vantage point to attack Iran – placements that are, paradoxically, intended to guarantee American security.

The American show of strength and the impending danger of conflict leave Iran with two choices: Forge alliances with US adversaries, such as China or Russia, to deter Iran-US conflict, or be nuclear-armed. Iran managed both, causing, in effect, a nuclear arms race that culminated in the JCPOA.  In retrospect, the JCPOA seems like the perfect solution to the Security Dilemma in US-Iran conflicts: not only does it allow Iran to benefit from its suspensions of nuclear capabilities, it also ceases the arms race and de-escalates the conflict. In short, it is the Diplomat’s way out of the Security Dilemma, guaranteeing security without arms.

The Trump administration’s call to reimpose sanctions on Iran only serves to re-ignite security concerns for both countries. With Iran having ousted its JCPOA commitments as of January 2020, we can only hope that de-escalations will soon follow to prevent the otherwise inevitable spiralling into arms race and false absolute security.

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July 15, 2023 10:28 AM

Locating India’s Mandi System in Historical and Contemporary Contexts

Since August 2020, the farmers of India are protesting against three new Agriculture bills (now acts) passed by the Parliament—one of the reasons stated is the potential of the new legislation affecting the Agricultural Produce Market Committee (APMC)’s Mandi system. APMC regulates and manages the agricultural market.

The farmers have covered some major highways around Delhi and have set up camps as well. They demand that the Mandi System should remain the same and want the new legislations to be unconditionally taken back.

Per contra the government claims the bills are good for farmers, Amit Shah, the Union Home Minister of India said about the farm bills “They will liberate them from the clutches of middlemen, and the Modi govt. is committed to keeping its promise of doubling farm income.”

The middleman here is perhaps the arhathiyas who facilitate and manage all kinds of procurement related transactions in the mandis between the seller (farmer) and the buyer (government or private traders) of the APMC Mandi. Arhathiyas thrive due to the current APMC Mandi system, therefore, in order to understand the current discourse on the farm bills, it is crucial to understand how the APMC Mandi system works and locate it in a broader historical as well as contemporary context, which is what this article attempts to do.

The History of APMC: From Royal Commission of 1928 to Implementation Post-Independence

Although, the institution of wholesale Mandis—as described by Harsh Damodaran in his The Indian Express column—is “since time immemorial,” the implementation of exclusively government controlled Mandis is a newer practice. The idea is grounded in the 1928 royal commission report on agriculture that mentioned the following on the need of a regulated market:

“The establishment of properly regulated markets should act as a powerful agent in bringing about a reform which is and much needed, primarily in the interests of the cultivator and secondarily, in that of all engaged in trade and commerce in India. From all parts of India, we received evidence of the disabilities under which the cultivator labours owing to the chaotic condition in which matters stand in respect of the weights and measures in general use in this country and of the hampering effect this has upon trade and commerce generally. Needless complications and unevenness in practice as between market and market tend to prejudice the interests of the cultivator.”

One of the first implementations of the government regulated agricultural markets—now known as APMC—is credited to Sir Chhotu Ram, a farmer leader and the then Development Minister in the provisional government of Punjab. The Punjab Agricultural Produce Markets Act, which sets up APMC in Punjab was initiated by him in 1939.

In the 1960’s, when India was a newly independent country, many of its citizens were starving due to food shortage. Adding on to the already existing hunger—droughts made the situation even worse. To fix this problem, the government started the Green Revolution, in which it tried to modernize the Indian agriculture. The Government took the help of advisors from the United States and introduced several reforms in agriculture. India had a food surplus during the Green revolution. The Indian Government decided to go back to the 1928 report and developed a nationwide food marketing system to ensure fair prices. The system differs from state to state. Farmers take their produce to wholesale markets called APMC Mandis to sell their produce to traders through open auctions with transparent pricing.

In the APMC Mandis—to protect farmer’s interests—the government fixes Minimum Support Prices (MSP)—a price floor—for some crops and makes arrangements from their purchase under the state account whenever prices fall below the support level.

The idea of MSP as well was implemented during the same period. Whereas its implementation is credited to the then-finance minister C Subramaniam, the idea is the brainchild of Dr Frank W Parker.

APMC System: Inefficiencies and Reforms

APMC system as well has got its own set of problems. The “golden period” for APMC markets lasted till around 1991. With time, there was a loss in growth in market facilities and by 2006, it had declined to less than one-fourth of the growth in crop output after which there was no further growth. This increased the problems of Indian farmers as market facilities did not keep pace with the increase in output and regulation did not allow farmers to sell outside APMC market.

The farmers were left with no choice but to seek the help of middlemen. Due to poor market infrastructure, more produce is sold outside markets than in APMC mandis. The net result was a system of interlocked transactions that robs farmers of their choice to decide to whom and where to sell, subjecting them to exploitation by middlemen.

Over time, APMC markets have been turned from infrastructure services to a source of revenue generation for the middlemen.

Furthermore, the market committee has excessive powers to give licences to the traders. A lot of licencing led to a 'licence Raj' kind of situation. The licensed commission agents started forming cartels, to collectively decide the prices at which they would or would not buy the produce from the farmers, so that the farmers aren’t left with any options—leading to creation of what supporters of the farm bill today call “mandi mafia.”

In the year 2003, the government brought some reforms allowing for better liberalization in the Model APMC Act, Indian Economic Service’s online Encyclopedia, Arthapedia, describes the reforms as:

“An efficient agricultural marketing is essential for the development of the agriculture sector as it provides outlets and incentives for increased production and contribute to the commercialization of subsistence farmers. Worldwide Governments have recognized the importance of liberalized agriculture markets. Keeping, this in view, Ministry of Agriculture formulated a model law on agricultural marketing - State Agricultural Produce Marketing (Development and Regulation) Act, 2003 and requested the state governments to suitably amend their respective APMC Acts for deregulation of the marketing system in India, to promote investment in marketing infrastructure, thereby motivating the corporate sector to undertake direct marketing and to facilitate a national  market.

The Model APMC Act, 2003 provided for the freedom of farmers to sell their produce. The farmers could sell their produce directly to the contract-sponsors or in the market set up by private individuals, consumers or producers. The Model Act also increases the competitiveness of the market of agricultural produce by allowing common registration of market intermediaries.”

The Model APMC Acts were implemented by some states, but not all.

When APMC was repealed: A look at Bihar

States like Punjab and Haryana, which have the richest farmers in the country, have the regulations play an important role in the industry. But Bihar, where markets were eliminated in 2006, has the poorest farmers in India. This clearly shows the failure of the removal of this system.

Before the abolition of the APMC Mandis, Bihar had 95 market yards, of which 54 had infrastructure such as covered yards, godowns and administrative buildings, weighbridges, and processing as well as grading units. In 2004-05, the state agricultural board earned 60 crore INR through taxes and spent 52 crore INR, of which 31% was on developing infrastructure. With no revenue to maintain it, that infrastructure is now in a dilapidated condition.

In a 2019 study by the National Council for Applied Economic Research, it was reported that in Bihar, there was an increase in the volatility of grain prices after 2006, which negatively affected the crop choices and decisions of farmers to adopt improved cultivation practices. It concluded, “Farmers are left to the mercy of traders who unscrupulously fix a lower price for agricultural produce that they buy from [them]. Inadequate market facilities and institutional arrangements are responsible for low price realisation and instability in prices.” Farmers who were in immediate need for money had to sell their produce at the price that was forced upon them by the private traders. Also, there were reportedly high storage costs at private warehouses.

A farmer from east Champaran, Somnath Singh, told Down To Earth, “Earlier we would get a good price for our produce but the situation has deteriorated after the abolishment of the APMC Act. The PACS simply refuse to buy our produce citing moisture; even if they procure them, they take months to pay the dues.”

APMC and Farm Act

Farmers marching to Delhi | Source: Randeep Maddoke via Wikimedia

Coming back to where we started—the farmers protests—right now, the farmers are sitting in the cold on the highways of Delhi, living in tents. They are being provided food by the langars in Gurudwaras and have received support from them. Several farmers in fact died since September—some in the protests; and others due to accidents, illness, or cold weather conditions.

One of the central demands as mentioned earlier is to let the APMC Mandi system stay as it was. Yet, one of the three Farm acts—Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, creates free, unregulated trade spaces outside the markets. The act is actually creating two parallel markets, one being the regular mandis and the other, with free, unregulated trade.

According to data by NSSO, around 6% farmers get MSP (can be even more), who mostly sell their produce in state-government regulated mandis and 94% farmers sell outside mandis. Therefore, already the majority is selling outside the markets. Moreover, in the new act, there will be no tax outside APMC pushing more farmers to leave the mandis and opt for the trade markets, eventually leading to the collapse of the Mandi system.

However, we must remember, the markets outside APMC do not provide MSP—they work on the principles of supply and demand—therefore in case the prices fall to an extent making selling the produce loss making—there will be no safeguards—potentially leaving richer traders farmers to exploit economically vulnerable farmers.

Furthermore, the tax in the APMC Mandis is collected by the state government, if this system collapses, the states won’t be receiving any taxes from the sale of agricultural produce. Moreover, agriculture currently is in the state list, however, the new act gives the center the power to regulate the agriculture across India, making the federal structure of the country in question.

Talking about the arhtiyas (or the middlemen) who are projected as the adversaries of farmers by the government and the supporters of the Act, we have to remember that’s just one side of the story. As Chaba and Damodaran explain in their column on The Indian Express:

“The arhtiya isn’t a trader holding title to the grain bought from a farmer. He merely facilitates the transaction between a farmer and actual buyer, who may be a private trader, a processor, an exporter, or a government agency like the Food Corporation of India (FCI). That makes him more akin to a broker.

The arhtiya, however, also finances the farmer. That, plus his income from commission being dependent on the quantity and value of produce routed through him, aligns the arhtiya’s interests much more with those of the farmer.”

Therefore it is safe to conclude that the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act will create more problems than to solve them.

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