When you think that you finally have a good idea about the state of affairs in the Middle East, something comes along to show you that things are really not what they seem and the simplistic images we get from corporate media hide a very complicated reality.
This is my first example.
Every Middle East expert claims that Turkey and Iran are at each other's throat over their respective regional power status.
You already know the story.
Last year, Turkey allowed the US install a missile shield and everyone knows that it was directed towards Iran.
Turkey is supporting Northern Iraq in its effort to remain autonomous and is actively undermining the authority of al-Maliki government (who is a protege of Iran). They even provided safe haven to Tariq Hashemi the former Iraqi VP who was sentenced to death in absentia.
For its part, Iran has been assisting Assad in Syria to prevent Turkey to start a regime change operation. Also, it has been rumored that Tehran has finally gave the green light to PKK to operate from within its territory.
Moreover, almost weekly a religious leader in Iran chastises Turkey for being the tool of Western interests.
Yet, surprising, behind this façade of animosity, an interesting trade relationship has been flourishing.
Selling Gold to the Ayatollahs
Turkey continues to buy oil and gas from Iran. They have an agreement that Iran will supply 10 million cubic meters of gas on a daily basis for the next 25 years. There is even a pipeline project that will carry Iranian gas to Europe via Turkey.
Because of the sanctions, Turkey cannot pay for its purchases in Euro or in Dollars. So, it pays in Turkish Liras. Which is not a very useful currency to buy stuff in international markets.
The solution? Well, Iran has been using these Liras to buy gold bullion from Turkey in huge quantities:
In March this year, as the banking sanctions began to bite, Tehran sharply increased its purchases of gold bullion from Turkey, according to the Turkish government's trade data.When you think about it, if your country was kicked out of the international banking system what better way to circumvent sanctions:
Direct gold exports to Iran from Turkey, long a major consumer and stockpiler of gold, hit $1.8 billion in July - equivalent to over a fifth of Turkey's entire trade deficit in that month.
"Every currency in the world has an identity, but gold means value without identity. The value is absolute wherever you go," said a trader in Dubai with knowledge of the gold trade between Turkey and Iran.This has been going on since March 2012. But recently, they added a new twist.
In August this year, this $2 billion a month bullion sale came to an abrupt stop. Unlike the preceding five months where Turkish gold shipments to Iran hovered around $1.5 billion mark, in August that figure was only $180 million.
But the same month, Turkey sold $1.9 billion or 36 metric tons of gold ingots to Dubai. How much gold was it selling to the same country just a month earlier? Just $7 million's worth.
Since there was no increase in the local gold supply, analysts believe that the shipments were simply redirected to Iran.
As for the reason behind this detour,
A trader in Turkey said Tehran had shifted to indirect imports because the direct shipments were widely reported in Turkish and international media earlier this year. "Now on paper it looks like the gold is going to Dubai, not to Iran," he said.
Iranian gold buyers may want to conceal their Turkish gold deliveries for fear of attracting attention from the United States, which is pressing countries around the world to shrink their economic ties with Iran.In other words, it looks like the two mortal enemies, the rival regional superpowers and the defenders of Sunni vs Shia Islam are in a cozy trading partnership behind the scenes, helping Iran sidestep sanctions.
In an ironic turn this also makes Iran a lot more dependent on Turkey as this gold trade is probably a very important lifeline for its ailing economy. With major unrest that followed the recent devaluation of Iranian currency, it is not too far fetched to envision the possibility of this lifeline becoming a leverage.
Perhaps even to discourage Iran from helping Assad too much. Or the Hezbollah. Or Hamas.
As Alice said, curiouser and curiouser.