The world economy would bear substantial costs if the United States took steps to significantly escalate the conflict with Iran over its controversial nuclear programme, according to the findings of a Federation of American Scientists’ (FAS) special report released here Friday.

Based on consulations with a group of nine bipartisan [...]]]> via IPS News

The world economy would bear substantial costs if the United States took steps to significantly escalate the conflict with Iran over its controversial nuclear programme, according to the findings of a Federation of American Scientists’ (FAS) special report released here Friday.

Based on consulations with a group of nine bipartisan economic and national security experts, the findings showed the effects of U.S. escalatory action against Iran could range from 64 billion to 1.7 trillion dollars in losses for the world economy over the initial three-month term.

The least likely scenario of de-escalation, which would require U.S. unilateral steps showing it was willing to make concessions to resolve the standoff, would result in an estimated global economic benefit of 60 billion dollars.

“The study’s findings suggest that there are potential costs to any number of U.S.-led actions and, in general, the more severe the action, the greater the possible costs,” Mark Jansson, FAS’s special projects director, told IPS.

“That being said, even among experts, there is tremendous uncertainty about what might happen at the higher end of the escalation ladder,” added Jansson, the second author of the report after Charles P. Blair, an FAS senior fellow on state and non-state threats.

The six plausible scenarios of U.S.-led actions against Iran included isolation and a Gulf blockade, which would include U.S. moves to “curtail any exports of refined oil products, natural gas, energy equipment and services”, the banning of the Iranian energy sector worldwide (incurring an estimated global economic cost of 325 billion dollars), and a comprehensive bombing campaign that would also target Iran’s ability to retaliate (incurring an estimated global economic cost of 1.082 trillion dollars).

The report is explicit in not endorsing any particular policy recommendation, although others are not so reticent.

United Against a Nuclear Iran (UANI) and the neoconservative Foundation for Defense of Democracies (FDD) are leading hardline Washington-based advocacy groups arguing for sweeping economic measures against Iran.

“The White House must build on this momentum, intensifying economic warfare in an effort to shake the Islamic Republic to its core,” wrote FDD executive director Mark Dubowitz in June.

Paul Sullivan, an economics professor specialising in Middle East security at Georgetown University, told IPS that, “The fact that the hardest core of the neoconservative ‘strategists’ have not thought through the costs of escalating conflict with Iran is proof of their group intellectual inadequacy.

“The main effects to the U.S. if there is escalation is through the price of oil and increased military and other national security costs,” said Sullivan, who evaluated the scenarios as an expert but could not comment on the specific figures due to Chatham House Rules.

“If there is an attack on Iran, with the expected counterattacks the price of oil could quite easily go to 250 dollars or higher. This could push the U.S. right back into a recession,” he said.

As tensions rise over the decades-long dispute over Iran’s controversial nuclear programme, analysts are increasingly examining a range of costs associated with escalating the so-far cold conflict between the U.S. and Iran.

The Iran Project Report released in September showed that the cost of Iranian retaliation would be “felt over the longer term” by the U.S. and could result in a regional war.

“In addition to the financial costs of conducting military attacks against Iran, which would be significant…there would likely be near-term costs associated with Iranian retaliation, through both direct and surrogate asymmetrical attacks,” according to the report, which was endorsed by a long list of high-level, bipartisan national security advisers.

The Iran Project report’s findings support the notion that greater escalatory action will result in greater costs – shown in financial terms by the FAS findings: “A dynamic of escalation, action, and counteraction could produce serious unintended consequences that would significantly increase all of these costs and lead, potentially, to all-out regional war,” notes the report.

An Oct. 19 event on the economic and military considerations of war with Iran at the Center for the National Interest (CNI) offered similar assessments.

“You could lose eight million barrels a day of production, and it would not come back quickly,” said J. Robinson West, who has also held senior positions in the White House, the Energy Department, and the Pentagon under various Republican administrations. “We believe the price of oil will go above 200 dollars a barrel.”

On Oct. 20, the New York Times reported that the U.S. and Iran had “agreed in principle for the first time” to direct negotiations.

But Tehran and Washington did have “limited bilateral talks” in 2009 “when the Iranian leadership saw a potential in the newly elected Obama administration to address some of Iran’s bottom lines regarding the country’s right to enrichment,” Farideh Farhi, an independent scholar and affiliate graduate faculty at the University of Hawai’i, told IPS.

On Wednesday, President Obama denied the Times report but did not dismiss the notion of one-on-one talks. In fact, he strongly suggested that the U.S. would seriously engage if the Iranians proved their sincerity.

“If Iran is serious about wanting to resolve this, they’ll be in a position to resolve it,” he said during his first press conference following his successful presidential re-election campaign.

“The situation is different now insofar as the Iranian leadership is much more sceptical of Obama’s words regarding his desire to resolve the nuclear issue instead of going for the Islamic regime’s jugular after a show of desire for talks,” said Farhi.

“To be sure, there will always be hardline naysayers in Tehran no matter what. A similar situation exists in the U.S.. But if the past is any guide, Tehran will come around and abandon its current resistance to bilateral talks if it sees a potential for breakthrough,” she said.

The Treasury’s Office of Foreign Assets Control (OFAC) has updated its Iran Sanctions page to include more individuals and entities, including Iran’s Ministry of Culture and Islamic Guidance (Ershad), its Press Supervisory Board and several Iranian universities and related institutions. No reasoning is provided in the official US via Lobe Log

The Treasury’s Office of Foreign Assets Control (OFAC) has updated its Iran Sanctions page to include more individuals and entities, including Iran’s Ministry of Culture and Islamic Guidance (Ershad), its Press Supervisory Board and several Iranian universities and related institutions. No reasoning is provided in the official US explanation as to why the universities were sanctioned — odd even if the sanctions regime hardly makes sense anyway.

Meanwhile, Columbia University Professor Gary Sick, who served on the National Security Council staff under Presidents Ford, Carter and Reagan, argues in CNN that the US’s Iran strategy has become tantamount to a war which may explode into a full-scale military conflict:

Yet today, the sanctions regime in Iran is resembling, more and more, the Iraqi and Cuban cases. We have arrived by a very different route. Instead of controlling all goods going into the country, we have ingeniously found ways of manipulating Iran’s banking system. That, together with regional boycotts, has the prospect of blocking a large proportion of Iran’s oil sales.

In Iran there has been a run on the currency, food prices are soaring, and every single person is beginning to experience some form of economic pain. That has been the source of considerable public satisfaction in Washington and elsewhere. It is also reminiscent of the early stages of the Iraqi experience. Add to that the serial murders of civilian scientists, cybertampering with Iran’s centrifuges, flyovers of U.S. drones, and covert assistance to Iranian separatist groups.

Forget the euphemisms. What would we think if a nation were doing all of this to us? The benign image of sanctions as graduated pressure has been transformed. In reality, it is war with Iran in all but name.

The US-led sanctions regime isn’t directly targeting Iran’s healthcare system but reports continue to suggest that critically-ill Iranians are being affected. The Al Jazeera English clip above squares with Najmeh Bozorgmehr’s Financial Times article from September about how  sanctions on Iran’s Central Bank are preventing critically-ill patients from getting crucial medical aid:

Lobe Log publishes Hawks on Iran every Friday. Our posts highlight militaristic commentary and confrontational policy recommendations about Iran from a variety of sources including news articles, think tanks and pundits.

John Bolton, Mark Wallace & Kristen Silverberg, Wall Street Journal: This week members of the via Lobe Log

Lobe Log publishes Hawks on Iran every Friday. Our posts highlight militaristic commentary and confrontational policy recommendations about Iran from a variety of sources including news articles, think tanks and pundits.

John Bolton, Mark Wallace & Kristen Silverberg, Wall Street Journal: This week members of the hawkish American Enterprise Institute and United Against Nuclear Iran were given the stage by the Wall Street Journal to advocate for further isolating Iran by barring it from the United Nations and the International Monetary Fund. Curiously, the authors begin by claiming that “Many believe that only military force will stop Iran” without indicating who that “many” may be. In fact, Israeli officials are divided about the merits of attacking Iran. Meanwhile, hawks in the US who advocate for striking Iran are outnumbered by high-level current and former Western officials who maintain that diplomacy is the best tool for dealing with Iran. Facts aside, the authors argue that their recommendation, which is “one step short of force”, should be implemented because

Iran’s continued participation in the U.N. and the IMF affords it international legitimacy and platforms to advance its agenda—gutting economic sanctions, among them—and undermines important Western foreign-policy interests.

Michael Oren, Wall Street Journal: Israel’s ambassador to the US argues for imposing more “crippling sanctions” and a “credible military threat” against Iran:

At the same time, the president has affirmed Israel’s right “to defend itself, by itself, against any threat,” and “to make its own decision about what is required to meet its security needs.” Historically, Israel has exercised that right only after exhausting all reasonable diplomatic means. But as the repeated attempts to negotiate with Iran have demonstrated, neither diplomacy nor sanctions has removed the threat.

A combination of truly crippling sanctions and a credible military threat—a threat that the ayatollahs still do not believe today—may yet convince Iran to relinquish its nuclear dreams. But time is dwindling and, with each passing day, the lives of eight million Israelis grow increasingly imperiled. The window that opened 20 years ago is now almost shut.

Read a response to Oren’s article by British diplomat and former IAEA representative Peter Jenkins, here.

David Feith, Wall Street Journal: An assistant editorial features editor at the Journal tells Americans that their government is “misleading” them about Iran and implies that the US should align its “red line” on Iran (a nuclear weapon) with Israel’s line (nuclear weapon capability) while questioning the President’s resolve to attack Iran:

Would this president, so dedicated to multilateralism (except where targeting al Qaeda is concerned), launch a major military campaign against Iran even without Russian and Chinese support at the U.N.? Do Iran’s leaders think he would? Or have they noticed that American officials often repeat the “all-options-on-the-table” mantra as mere throat clearing before they list all the reasons why attacking Iran is a terrifying prospect?

Those reasons are plain to see. An attack could lead to a major loss of life, to regional war, to Iranians rallying around their regime, to global economic pain. And it could fail.

But the question that counts is whether these risks outweigh the risks of a nuclear-capable Iran. That’s a hard question for any democratic government and its citizens to grapple with. The Obama administration’s rhetorical snow job only makes it harder.

Feith’s line of reasoning will only seem curious to those who are unfamiliar with the Journal’s regularly hawkish editorial board pieces about Iran.

Mark Dubowitz, Foreign Policy: The executive director of the hawkish Foundation for Defense of Democracies, who recently advocated for waging “economic warfare” against Iran (read a response here), warns institutions and individuals against doing business with Iran:

Would-be sanctions busters beware: Any and all profits derived from Iran’s lucrative energy sector are now officially illegal unless you have received a waiver from the Obama administration. Congress and the White House recently closed significant loopholes in Iran’s energy, finance, shipping, insurance, and nonproliferation-related sanctions. The bottom line: Anyone doing business with Iran is putting themselves and their businesses at risk.

While Dubowitz refers to himself as “humble” in his article, he is a self-styled Iran sanctions “expert” who has reportedly done much to shape the US’s Iran policy. Yet, after years of enthusiastically calling for crippling sanctions against Iran, Dubowitz still expresses doubts:

In the end, the success of the sanctions depends not on the sanctions busters, who may have little material impact on Iran’s ability to extend its economic day of reckoning, but rather on the one question that has yet to be answered about sanctions’ efficacy: whether the regime’s economic expiration date — when Iran’s Supreme Leader Ali Khamenei’s cash hoard falls low enough to set off a massive economic panic — occurs before it has developed the capability to cross the threshold to a nuclear weapon.

via the Federation of American Scientists

I have been less than a week in the medium-sized city of Neishabour, Iran, visiting relatives, and I can see no sign of a country hunkering for intensifying sanctions and looming difficult times. Sidewalks are full of shoppers and people seem to go [...]]]> By Djavad Salehi-Isfahani

via the Federation of American Scientists

But all is not well, not by a long shot. The dollar has gone through the roof, food prices have skyrocketed, industrial production is down, and unemployment is rising. The oil embargo has cut into Iran’s oil revenues and financial sanctions have limited the country’s access to the global economy. Spot shortages and sharp price increases for key food items are already being felt across Iran. This provincial city was rocked on July 23 when hundreds marched down its main street protesting the shortage of chicken at the official price. There is no doubt that ordinary Iranians will pay a heavy price as sanctions intensify; the big question is how sanctions will influence Iran’s behavior in the international stage.

When sanctions were “smart” and aimed to make life difficult for Iran’s leaders, ordinary Iranians acted as disinterested bystanders. But now that sanctions aim to make life difficult for them, they will have to take sides. Or so goes the theory: put pressure on the people — “economic warfare,” as one conservative commentator told the New York Times — so they get their government to compromise.

Since this theory is about to be put to an extremely costly test, it is important to consider a few things before we commit to this path.

First, international sanctions only work when the population they are imposed on identifies with the objective of the sanctions. This is the big difference between the sanctions to end apartheid in South Africa and those to force Iran to abandon nuclear enrichment. Most Iranians are not all that invested in nuclear enrichment, one way or the other, but few would see stopping Iran’s enrichment as their cause.

Furthermore, history shows that, when threatened by sanctions, Iranians are unlikely to rise up against their own government. In 1952, a Western-imposed embargo on Iranian oil devastated Iran’s economy, but people tolerated the pain and stood with their government. It took a US-sponsored coup a year and a half later to topple the nationalist government and help Western powers achieve their objectives.

True, Iranians are more polarized today, especially after the rise of the Green movement following the controversial election of 2009. But it is a misreading of Iran’s political scene to believe that sanctions will revise or strengthen the protest movement. The opposite may be true. The Green movement was built on economic growth and an expanding middle class. Thanks to economic growth fueled by rising oil revenues, 40percent of Iranians have joined the middle class and the lower 40 percent aspire to the same. The economy has not been doing well lately, the average Iranian still enjoys a decent standard of living, has access to basic services, health, and education. Significantly, last year’s Human Development Report that ranks countries based on income, health, and education placed Iran above Turkey, which is the best performing country in the region.

Sanctions are slowly transforming Iran from a country with an expanding middle class and a rising private sector into a country with a shrinking middle class and private sector. Financial sanctions have placed private firms at a disadvantage relative to government-owned firms in making global transactions. Where the private sector withdraws, the state is often ready to move in.

More severe sanctions will go beyond hurting the private sector and threaten the living standards of the middle class. As basic services deteriorate, and the shortages and long lines that were common sights during the Iran-Iraq war reappear, the government will once again become not the source but the remedy to their problems.

The sanctions will do much to undermine the belief among Iranians about the benefits of the global economy. Such beliefs are what distinguish India from Pakistan. If there is hope for Egypt and Tunisia after the Arab Spring to become stable societies it is the belief in the benefits to their citizens of remaining connected to the global economy. The short-term gains from nuclear gamesmanship must balance the long-term cost of alienating the Iranian middle class.

Spreading faith in global cooperation used to be the White Man’s Burden, but no longer. Leaders in Brazil, China, India and Turkey have done a lot to persuade their people that working within the global economy is not a threat but an opportunity. Many leaders of the Islamic Republic have pushed a similar view. The year President Ahmadinejad took office, in 2005, the Fourth Development Plan he inherited was subtitled “In Conformity with the Global Economy.” These leaders believed in the Islamic Republic as a development state. They built infrastructure and schools and promoted family planning. Naturally, they do not want to gamble all they have achieved in a high stakes nuclear game. If by chance they are contemplating to revive the Islamic Republic as a development state, the world should help them succeed, not undermine their effort.

Michael Ledeen, Foreign Affairs: The neoconservative pundit has been arguing for years that the US should foment regime change [...]]]> Lobe Log publishes Hawks on Iran every Friday. Our posts highlight militaristic commentary and confrontational policy recommendations about Iran from a variety of sources including news articles, think tanks and pundits.

Michael Ledeen, Foreign Affairs: The neoconservative pundit has been arguing for years that the US should foment regime change in Iran byway of direct or indirect US support to Iranian dissident groups. This month he reiterates that argument while evaluating the Green Movement as a potential carrier for his proposal. The following are some of Ledeen’s key points (notice how he begins by stating that sanctions have been ineffective and will likely remain so and ends by arguing that the US’s “sanction regime” should continue anyway):

- Yet history suggests, and even many sanctions advocates agree, that sanctions will not compel Iran’s leaders to scrap their nuclear program.

- And, although war might bring down the regime, it is neither necessary nor desirable. Supporting a domestic revolution is a wiser strategy.

- Given the potential for a successful democratic revolution in Iran — and the potential for a democratic government to end Iran’s war against us — the question is how the United States and its allies can best support the Green Movement.

- …the time has come for the United States and other Western nations to actively support Iran’s democratic dissidents.

- Meanwhile, the West should continue nuclear negotiations and stick to the sanctions regime, which shows the Iranian people resistance to their oppressive leaders.

- Iran’s democratic revolutionaries themselves must decide what kind of Western help they most need, and how to use it. But they will be greatly encouraged to see the United States and its allies behind them. There are many good reasons to believe that this strategy can succeed. Not least, the Iranian people have already demonstrated their willingness to confront the regime; the regime’s behavior shows its fear of the people. The missing link is a Western decision to embrace and support democratic revolution in Iran — the country that, after all, initiated the challenge to the region’s tyrants three summers ago.

Editorial Board, Wall Street Journal: For months the Journal’s editorial board published hawkish articles about Iran on a weekly basis. We highlighted some of them here, here and here. Then they stopped, perhaps due to the heating up of the presidential campaign and the crisis in Syria. But in July the board returned to reminding readers about its hawkish position on Iran, first by arguing that current sanctions are not strong enough and filled with “loopholes” while advocating for more “pain”, and then by claiming that Congress should propose the “toughest” sanctions bill possible to the President, considering how he may be a “pretender on sanctioning the mullahs”. (The “Iran Threat Reduction and Syria Human Rights Act” was passed this week and is expected to be signed into law by Obama shortly. As noted by the Jewish Telegraph Association, “for the first time in actionable legislation, the measure defines the capability of building a nuclear weapon as posing a threat to the United States”, which of course brings the US closer to the Israeli “red line” on Iran):

The Administration will resist these stiffer penalties, as it has consistently resisted previous Congressional attempts to impose the harshest possible sanctions. But that’s all the more reason for the conferees to present the President with the toughest bill possible, and see where he really stands.

If Mr. Obama is a pretender on sanctioning the mullahs, then you can be sure he isn’t inclined to stop their nuclear program by other means. The Israelis will draw their own conclusions, if they haven’t already.

Foundation for Defense of Democracies: The neoconservative-dominated Washington think tank that has been working hard to shape the Obama administration’s Iran sanctions policy (through executive director Mark Dubowitz) congratulates Congress for passing the “compromise bill” mentioned above because it brings the US closer to implementing Dubowitz’s recipe for ”economic warfare” against the Iranian regime:

“But Iranian nuclear physics is beating Western economic pressure and diplomacy, as the centrifuges keep spinning, and the Iranian regime continues its campaign of murder abroad and at home. While this bill is an important step towards economic warfare against the Iranian regime, much more needs to be done. Iran’s leaders need to be persuaded that the U.S. is committed to using every instrument of state power to counter the Iranian threat.”

Dan Senor, New York Times: The former Iraq war hawk turned Mitt Romney foreign policy adviser (see two recent profiles here and here) drew media attention last week for alleging that Romney respected Israel’s right to pre-emptively strike Iran’s nuclear facilities. According to the NYT’s politics blog:

“If Israel has to take action on its own, in order to stop Iran from developing that capability, the governor would respect that decision,” Mr. Senor said.

Previewing Mr. Romney’s remarks, Mr. Senor explained: “It is not enough just to stop Iran from developing a nuclear program. The capability, even if that capability is short of weaponization, is a pathway to weaponization, and the capability gives Iran the power it needs to wreak havoc in the region and around the world.”

As the Times notes, the Romney campaign tried to walk back those comments somewhat, but Robert Wright at the Atlantic didn’t buy the damage control effort.

The International Civil Society Action Network (ICAN) has published a useful brief aptly subtitled “Killing them softly” about the impact of sanctions on the lives of ordinary people who live in Iran, particularly women and other vulnerable groups such as Afghan refugee women and children. I recommend [...]]]> via Lobe Log

The International Civil Society Action Network (ICAN) has published a useful brief aptly subtitled “Killing them softly” about the impact of sanctions on the lives of ordinary people who live in Iran, particularly women and other vulnerable groups such as Afghan refugee women and children. I recommend it to everyone who thinks that sanctions can be potential instruments for positive change in Iran.

To be sure, most individuals and organizations that push for “crippling” sanctions do so in the name of Israeli security and/or non-proliferation with little or no regard for the resulting impact on the Iranian population and civil society. In a world where economic warfare is considered diplomacy, more sanctions will apparently be the name of the game “until Iran begins to negotiate seriously” or “chooses a different path” — whatever that means. Pretensions or hope regarding the utility of blunt and wide-ranging sanctions for changing the way the hardline leadership in Iran treats its population, or, even better, for bringing about a change of regime in a “peaceful” way, are also out there.

The ICAN brief, while using the words of activists in Iran, does a good job of explaining how draconian sanctions imposed by the United States and the European Union ultimately harm Iranians who are caught in the middle of a battle that has very little do with their dreams of living decent lives and impacting their government’s policies through civil activism.

This is not to suggest that the Iranian government has escaped the impact of sanctions unscathed. The leadership is held responsible for the mishandling of an economy which, by all accounts, is faced with both stagnation and hyperinflation. And, if we take at face value the words of parliamentary speaker Ali Larijani, 20 percent of Iran’s current problems can be attributed to sanctions that have limited Iran’s access to the foreign exchange needed for the import of strategic goods from abroad due to the reduction of oil exports and Iran’s inability to acquire exchangeable currency for the exported products. Larijani attributed the remainder of the problems, mostly related to rampant inflation, to the poor implementation of a subsidy reform plan that did not give enough attention to production in both industry and agriculture.

The right or wrong belief that better economic management can help Iran overcome the impact of sanctions perhaps explains why internationally imposed draconian pressure has not led to a change in the leadership’s calculations regarding the nuclear program. In fact, according to Iran’s Leader Ali Khamenei, Western governments

…openly say that it is necessary to force the Iranian government officials to revise their calculations by intensifying pressures and sanctions, but looking at the existing realities causes us not only to avoid revising our calculations, but it also causes us to continue the path of the Iranian nation with more confidence.

In other words, instead of a recalculation on the part of the Iranian government, the Iranian population is going to have to get used to a “resistance economy”. What does that entail? Mr. Khamenei’s answer:

Putting the people in charge of our economy by implementing the general policies specified in Article 44 of the Constitution, empowering the private sector, decreasing the country’s dependence on oil, managing consumption, making the best of the available time, resources and facilities, moving forward on the basis of well-prepared plans and avoiding abrupt changes in the regulations and policies are among the pillars of an economy of resistance.

Considering how these objectives have been in the books since at least 2006 when privatization, empowerment of the private sector and efficiency became official policy — and produced little in the way of concrete results — it’s not clear what an administration that is working through its last year can achieve beyond perhaps “managing consumption.”

A few steps have already been taken towards that goal. This week, several economy-related ministers as well as the head of the Central Bank of Iran (CBI) met with members of parliament in a closed session. Parliamentary meetings are by law open and publicly broadcasted. Article 69 of the Constitution only allows for closed sessions under “emergency conditions, if it is required for national security”. This closed meeting and Khamenei’s words clearly suggest an understanding of the emergency situation that Iran is facing.

The first decision that resulted from this meeting was the CBI’s elimination of what is called “travel currency”. Until now, Iranians could get $1,000 a year at the lower government exchange rate of 12,260 Rials per dollar for their trips abroad (the lower $400 per year for pilgrimage travel to Iraq and Saudi Arabia was maintained). According to the head of the Majles’ Economy Commission, Arsalan Fathipour, the $10 billion worth of travel currency that leaves the country every year has no economic justification and has been halted. Travelers now have to rely on an unofficial, but not illegal, floating market rate that has hovered between 19,000 and 20,000 Rials per dollar during the past couple of months.

The lower official exchange rate will remain for the import of basic and strategic goods from abroad in order to limit spiraling inflation. But everything else will probably be imported at the higher rate. As pointed out by Virginia Tech economist Djavad Salehi Isfahani, this multiple exchange rate system, despite inefficiencies, makes some sense when a country is being denied access to global markets, provided action is also taken to:

…minimize misallocation and corruption, for example by publishing a complete list of all official foreign exchange sold to private importers along with the list of the items they import.  The alternative, which is to sell all currencies at the rate set in the parallel market, is to give too much influence to sanctions and to sentiments that underly capital flight.

Whether these steps will also be taken is yet to be seen. Another announcement after the close of the Majles meeting was that some sort of command center comprised of representatives from of all branches of government has in effect been created for the resolution of economic problems and will soon gain implementation powers through legislation. According to Donyaye Eqtesad, the country’s most influential economic daily, the push by some influential MPs is for this command center to have “special powers so that in the coming year it can take the necessary steps for the implementation of the strategy of resistance economy.”

To my mind, this also means that there is not much confidence among the Iranian political class in the Ahmadinejad Administration’s ability to steer the country in a positive direction during the last year of its tenure. This political class holds President Ahmadinejad responsible for his incompetent handling of the country, but due to the urgency of the escalating sanctions regime, no longer considers challenging him and his ministers a useful way of expending their energy. Talk of “working together” and “unity” has permeated the language of the conservative and hardline politicians who are currently running Iran. This language is not meant to extend to the reformist and even centrist politicians and technocrats who have been essentially purged since the 2009 presidential election, but does indicate a closing of ranks among an even narrower circle of politicians in the face of adversity and in the name of resistance.

If ICAN’s analysis is accurate, it also foretells harsher economic realities for the most vulnerable elements of Iran’s population, a harsher political environment for those agitating for change, and a more hostile setting for those who have tried to maintain historical links between Western societies and Iranian society.

Sanctions impact calculations, but usually not in the intended fashion.

via Lobe Log

In numerous op-eds and in testimonies before congressional audiences Mark Dubowitz, the executive director of the Foundation for the Defense of Democracies (FDD), has called for “crippling sanctions” against the Islamic Republic and its controversial nuclear program. Only days prior to the official commencement [...]]]> By Eskandar Sadeghi-Boroujerdi and Muhammad Sahimi

via Lobe Log

In numerous op-eds and in testimonies before congressional audiences Mark Dubowitz, the executive director of the Foundation for the Defense of Democracies (FDD), has called for “crippling sanctions” against the Islamic Republic and its controversial nuclear program. Only days prior to the official commencement of the European Union embargo on Iranian oil, Mr. Dubowitz penned one such op-ed in Foreign Policy titled “Battle Rial” wherein he called upon the United States to step up “economic warfare” against the Islamic Republic and by extension its over 75 million inhabitants. Due to the many dubious assertions and conclusions presented in this article we feel a rebuttal is in order. But let us first examine the FDD and the type of democracy and freedom that it claims to defend and promote.

History repeating?

The FDD’s leadership council includes three people who played a role in advocating policies that resulted directly or indirectly in much of the destruction and carnage that has swept across the Middle East in the last decade. Namely former CIA Director R. James Woolsey, neoconservative pundit William Kristol and Senator Joseph Lieberman, a longtime proponent of some of the most aggressive policies against Iran in Congress. Woolsey and Kristol persistently spread falsehoods regarding Saddam Hussein’s non-existent weapons of mass destruction in the run up to the American-led invasion. Ironically, the results of invading Iraq—aside from destroyed infrastructure and civilian deaths which by some estimates number in the hundreds of thousands—include the rise of a Shi’ite dominated regime now closely allied with the one in Tehran that the FDD is intent on destroying. The FDD’s advisory board also lists prominent neoconservative Richard Perle whose resume includes the advising of a firm that worked to “burnish Libya’s image and grow its economy” during Muammar Qaddafi’s brutal rule.

While the FDD is heavily focused on Iran, it is Mr. Dubowitz who has spearheaded its sanctions campaign against the country. In his article he contradicts statements by senior Obama administration officials including Defense Secretary Leon Panetta, the Director of National Intelligence James Clapper and CIA Director David Petraeus when he asserts that the Iranians are pursuing nuclear weapons. By implying that the clock is rapidly ticking until Iran obtains the bomb, he is also recycling what has become an infamous metaphor associated with the US’s legacy in the Middle East. His unsubstantiated claims even conflict with assessments from IDF chief Benny Gantz and the former heads of both Mossad and Shin Bet. Indeed, despite questions regarding the possibility of past weapons research, the international Atomic Energy Agency (IAEA) has found no evidence of the diversion of fissile material from Iranian nuclear sites for non-peaceful purposes. Apparently Mr. Dubowitz knows something others do not.

To lay the foundation for his arguments Mr. Dubowitz states that recent rounds of negotiations in Istanbul, Baghdad and Moscow did not result in tangible progress. But he does not bother to address a fundamental question: how can the United States and its allies expect Iran to seriously engage while they wage what is by Mr. Dubowtiz’s own admission “economic warfare?” This is not to absolve the Islamic Republic of its own contributions to the impasse, but balanced diplomacy must include give and take; it cannot be all stick and no carrot.

What have the US and its allies offered to Iran that can induce it to compromise? Besides fabricated fuel in exchange for the shipment of Iran’s approximately 150kg stockpile of 19.75% uranium, along with spare aviation parts and support in beefing up safety at the Bushehr power plant, not much else was offered. If President Obama’s dual-track policy is to prove effective, it needs to be recalibrated during the course of negotiations so that Iran has a reason to stay invested in the process.

Though perhaps better than the US-Russia deal offered to Iran in October 2009, the precipitous increase in economic sanctions—particularly those against Iran’s Central Bank and its energy sector—have made acceptance of a comparable deal or even a relatively more advantageous one incompatible with Iran’s domestic decision-making calculus. Too much pain has already been inflicted upon a long-suffering economy. The P5+1 (the five permanent members of the UN Security Council plus Germany) also continue to resist recognizing Iran’s right to enrich uranium for peaceful purposes. While by no means unconditional, uranium enrichment for peaceful purposes is a basic right guaranteed under the Non-Proliferation Treaty (NPT).

Rather than addressing the differences that impede the diplomatic process Mr. Dubowitz rings sensationalist alarm bells and pushes draconian economic measures which, while impacting Tehran’s cost-benefit analysis, can also devastate the lives of ordinary Iranians and result in a military conflict. Recall the effect of other extreme sanctions that were imposed on Iraq in the 1990s including the deaths of hundreds of thousands of Iraqi children, the depredation of the Iraqi economy and the dilapidation of all sources of resistance to the Baathist regime. Needless to say, those sanctions were only interrupted by the 2003 US-led invasion.

Questionable recommendations

Mr. Dubwoitz argues that “[f]or sanctions to work, Khamenei must be forced to make a fundamental decision between his nukes and his regime.” Apart from repeating the baseless assertion that Iran has nuclear weapons, Mr. Dubowitz’s main point is that the sanctions imposed thus far have not been sufficiently harsh. He accordingly calls upon the Obama administration to support legislation introduced by Reps. Ted Deutch (D-Fla.), Robert Dold (R-Ill.) and Sen. Mark Kirk (R-Ill.) that would blacklist the entire Iranian energy sector as a “zone of primary proliferation concern”. This legislation attempts to link Iran’s entire energy sector to its non-existent nuclear weapon program, an unprecedented move that seeks to deliver a knockout blow by further eroding revenues obtained through oil sales. Iran’s oil revenues account for 80% of its export earnings and allow it to purchase basic foodstuffs such as wheat and grain to feed the population, as well as prevent millions of households from being plunged into deprivation and hunger through government subsidies. In recent weeks the price of bread, the basic foodstuff of poorer Iranians, has increased by as much as a third, in large part as a result of the sanctions that Mr. Dubowitz so enthusiastically promotes.

The effort to blacklist any industry that facilitates the preponderance of the Iranian nuclear program, even if indirectly, can only be described as a concerted perversion of international law. Mr. Dubowtiz’s rationale can also be used to justify the embargo of foodstuffs or medicine that sustain Iran’s nuclear scientists and personnel so that they become incapable of furthering the technical development of Iran’s nuclear program. One might even make the case that this logic lies behind the assassination of a number of Iranian nuclear scientists, the culprits for whom are widely believed to be the Mojahedin-e Khalq (MEK) working in coordination with Israel. The MEK is a mortal enemy of the regime in Tehran, and currently on the State Department’s list of foreign terrorist organizations. The attacks it has coordinated against the regime and the Iranian lives it has endangered have not only resulted in their unpopularity among the vast majority of Iran’s population, they have also given the regime the perfect excuse to crack down on legitimate dissenters.

While sanctions at least initially directly targeted Iran’s nuclear program and later the Islamic Revolution Guards Corp (IRGC) and related organizations, they have turned out to be an all-encompassing iron fist hell-bent on destroying Iran’s most vital source of revenue which is not only important for Iran, but also the world economy. In this way Mr. Dubowitz’s key arguments also demonstrate the many dangers associated with so-called “smart sanctions”.

But Mr. Dubowitz even advocates targeting Iran’s automotive industry, which provides jobs to thousands of Iranians:

Economic warfare should not be limited to the energy sector. The United States and its allies should also target other areas of the Iranian economy, including the automotive sector, which is the largest part of Iran’s economy outside the energy industry.

The mind boggles at what connection he might contrive between Iran’s automotive sector and its nuclear program. What rationale can he offer other than pummeling Iran’s economy and thereby inflicting collective punishment on its people?

Goals and benefits

If Mr. Dubowitz’s aim is not a diplomatic solution but rather to drive an already angry and restive population to the point of despair so that it rises up and overthrows the ruling theocracy, he should state so. But is that achievable? The aftermath of Iran’s hotly contested and by many accounts fraudulent 2009 presidential election saw unprecedented protests and the rise of the Green Movement which was not a foreign induced uprising but one that had been in the making for some 20 years. It has not succeeded because the opposition is inadequately organized, does not have a comprehensive program or plan for realizing its goals and its leadership and advisers have been rounded up, jailed and silenced. The disorganized and divided opposition, both inside and outside the country, is now in an even weaker state than before. But the Green Movement has still rejected foreign intervention and sanctions as a form of collective punishment, and their enfeebled position certainly isn’t helped by the constant threat of foreign invasion. If Iran’s economy declines further and major budgetary shortfalls arise and inflationary pressures persist, bread riots of the kind witnessed during the Rafsanjani era can indeed result. But aside from the ethics associated with inducing a population to revolt by bringing them to the brink of starvation, such riots, without a political program or set of objectives, that uprising will also be quickly repressed and controlled by the security forces. What then can be gained from this approach other than inflicting pain upon an innocent population?

While there is little doubt that hardliners around Ayatollah Ali Ali Khamenei’s office along with authoritarian elements of the radical clergy have and will continue to repress opposition to their grip on power, the constant threat of war and a state of emergency can only benefit the security forces and legitimize their raison d’être in the face of an external enemy. Meanwhile oil revenues which mainly flow into the country from China, Japan and India will remain firmly in the hands of the authorities and the repressive organs of the state. Youth unemployment, which accounts for 70% of the unemployment in Iran, will increase and the state of the underprivileged and retirees reliant on state handouts will decline further under the brunt of such policies. One should also point to the clear failure of comparable sanctions regimes in the case of Cuba and also Iraq, which ultimately resulted in a military invasion to impose regime change at great human cost. While states under such sanctions regimes might be weakened in relative terms to other states in the international system, vis-à-vis their respective populations and civil societies they actually become more powerful.

What exactly is Mr. Dubowitz’s desired endgame for US policy on Iran and the “democracy” that the FDD supposedly supports for the Iranian people? The answer is in a piece published by the Los Angeles Times where Mr. Dubowitz is paraphrased as saying, “[the sanctions] could take until the end of 2013 to bring Iran’s economy to wholesale collapse.” In other words, spurring chaos in a geopolitically important middle eastern country by destroying its economic infrastructure is fair game.

Under such conditions Iran’s dwindling middle class, already under great pressure, finds itself between a rock and a hard place: a theocracy that denies its basic political and civil liberties at home and economic desolation exacerbated by unparalleled and crippling sanctions. Though the Iranian government’s own incompetence and endemic corruption in managing the economy has had a major hand in accelerating chronic inflation, it is undeniable that a decline in oil revenues will further harm what’s arguably the most pro-American population in the Middle East.

Will Mr. Dubowitz’s recommendations result in more US-friendly concessions from the Iranian government? Khamenei has heavily invested in the development of Iran’s nuclear program. Many other regime officialdom including former President Ali Akbar Hashemi Rafsanjani have also praised Iran’s technical achievements over the years and emphasized the importance of the program to Iran’s role as a regional player. Due to the regime’s shortcomings elsewhere and growing legitimacy deficit, the program’s “technological prowess” and importance to Iran’s future energy needs have also been overstated and oversold to the general public, many of whom are no doubt skeptical of the expediency of current state nuclear policy. That being said, because of the extent of political capital invested in the programme it is highly unlikely that Khamenei will make major concessions without a deal that offers a face-saving formula.

But instead of reconsidering the paradigm of engagement with Iran, Mr. Dubowitz pushes for even more “crippling sanctions” and ultimately a military attack by writing that Obama “needs to unite the country in moving beyond sanctions and preparing for U.S. military strikes against Iran’s nuclear weapons program.”

Through the course of a single article we witness a slide from the call for intensifying already crippling sanctions to preparation for military conflict which, in the absence of a UN Security Council resolution authorizing military force, would be a clear violation of international law. But flying in the face of any call to arms is the fact that the nuclear knowledge already acquired by the Iranians cannot be destroyed simply because some installations are razed to the ground. A military attack could also compel the Iranians to withdraw from the NPT, kick out IAEA inspectors and begin hurried weapons research underground. This point has been widely noted by many experts and analysts including former Mideast Pentagon advisor to the Obama administration, Colin Kahl.

But since the IAEA has not been able to identify any facility in which Iran is verifiably working on nuclear weapons, where does Mr. Dubowitz suggest either the US or Israel attack if the further ramping up of “crippling sanctions” fails to convince Iran to acquiesce to his demands? Moreover, there is no such thing as an attack on Iran’s nuclear infrastructure only, as the infrastructure in question sprawls across much of the country and is in many cases close to major population centers. Therefore any attack on Iran’s nuclear infrastructure could result in tens of thousands deaths or more that will in all likelihood prompt the population to rally around the government and provide a perfect excuse for Tehran’s hardliners to further suppress all dissenting voices and prolong its rule. Not to mention the fact that while attacks on Iran can be initiated by others, the termination of hostilities will not lie solely with them. Tehran will likely retaliate and could spread the conflict further into Middle East, if not beyond.

Before writing op-eds that advocate policies which increase the likelihood of a military conflict that both the US and Iran claim they want to avoid, perhaps Mr. Dubowitz should also consider the devastation, calamity and human cost that would likely follow.

–Eskandar Sadeghi-Boroujerdi is Iran researcher at the Oxford Research Group, and a third year doctoral candidate at the University of Oxford and has published widely on Iran. His latest with Paul Ingram and Gabrielle Rifkind is “Iran’s Nuclear Impasse: Breaking the Deadlock”. He tweets at www.twitter.com/essikhan

–Muhammad Sahimi, a professor at the University of Southern California, is a columnist for Tehran Bureau and contributes regularly to other Internet and print media.

*A version of this article appeared on July 5 on www.foreignpolicy.com