AFP: The global economy could face short-term turbulence if the United States and its allies take action against Iran over its controversial nuclear programme but it should be resilient enough to withstand the shocks, US publisher Steve Forbes said Monday. SINGAPORE, Sept 4, 2006 (AFP) – The global economy could face short-term turbulence if the United States and its allies take action against Iran over its controversial nuclear programme but it should be resilient enough to withstand the shocks, US publisher Steve Forbes said Monday.
Iran’s nuclear program, which Tehran says is for civilian purposes, is one of the most pressing issues facing the international community and a decision will have to be made soon by Washington and its allies on what course to take, including military action, Forbes said.
“Don’t underestimate the fundamental strengths (of the economy) … they will come to the fore again despite any short-term dramatic repercussions from what happens in the Middle East,” he told delegates at the annual Forbes CEO conference here.
Analysts fear imposing UN sanctions on Iran would disrupt oil supplies from the world’s fourth-largest crude producer which pumps about 4.0 million barrels of oil per day, most of it exported.
“If crisis does come to the fore … we will overcome it economically,” said Forbes, editor-in-chief of Forbes Magazine which publishes an annual list of the world’s richest people.
Iran has ignored an August 31 deadlined set by the UN Security Council to halt uranium enrichment work or face possible sanctions.
This left world powers gearing up for a fresh round of diplomacy on how to deal with Iran’s defiance, with the United States pressing the council to impose targeted sanctions.
Uranium enrichment is a process that can be used to make nuclear fuel and, in highly extended form, the core of an atomic bomb.
Forbes said the United States and its allies are likely come to a decision soon as to what to do.
“Make no mistake, that decision is coming in the next year or so. Why? Because Iran has been dispersing its nuclear assets around the country, burying them deepeer and deeper underground so airstrikes are going to become more problematical,” he said.
“So if the decision is made to either disrupt or destroy Iran’s nuclear programme, that decision is going to have to be made in the next few months because the longer we wait, the more difficult air strikes will be.
“So just be prepared for short term turbulence.”
Meanwhile, Forbes said that China will likely face stronger pressure to revalue its currency if the Democrats make major gains in US congressional polls in November, as predicted.
If the Democrats gain the upper hand, the United States is “going to pressure China for an upward revaluation of the yuan,” Forbes said.
“That’s going to increase protectionist measures … That’s the kind of environment we are going into, turbulence on the trade front.”
Opinion polls in the United States suggest the Republicans could lose control of both houses of Congress in the November polls.