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.

By Mark Jansson

Although President Obama has another four years, he will surely continue to hear from Israeli Prime Minister Benjamin (Bibi) Netanyahu and a chorus of critics at home, that he has far less time to convince Iran to cooperate with the International Atomic Energy Association (IAEA). But the administration [...]]]> via Lobe Log

By Mark Jansson

Although President Obama has another four years, he will surely continue to hear from Israeli Prime Minister Benjamin (Bibi) Netanyahu and a chorus of critics at home, that he has far less time to convince Iran to cooperate with the International Atomic Energy Association (IAEA). But the administration should not let the urgency of the matter drive it to a neurotic fixation on breakout timelines, which is likely to have a dumbing-down effect on policy and push a diplomatic solution farther into the future rather than hasten it.

Throughout the President’s first term, the issue of time dominated the narrative about Iran and continues to do so. Obama himself has said that the “window is closing” for Iran to address contentious issues properly, but that there’s “still time” to do so. The focus on time has gradually become an obsession – one that crescendos intoxicatingly in the post-IAEA report number-crunching frenzies that determine the time intervals comprising the worst-case scenario of Iranian nuclear breakout. More recently, some have extrapolated (erroneously) a “cripple date” for how soon the United States must take drastic steps to force capitulation by ruining Iran’s economy.

Yet, as the nuclear drama has played out during Obama’s first term — punctuated by inflammatory speeches, abortive diplomatic initiatives, spellbinding unveilings of “Bibian” art and long intermissions for US sanctions and Iranian centrifuges to do what they do — it has left in its wake a sort of desultory urgency. Clearly, the issue is serious, but the recent history of failed negotiations is less-than-heartening and there is no obvious or specific reason to believe that talks will go better in the future.

An important step for the Obama administration before it starts grasping for diplomatic straws is to refresh the framing of the issue and think longer term. One takeaway from Obama’s first term is that the framing of engagement with Iran as a race against the clock has outlived its usefulness. The same time-delimited urgency of the Iranian nuclear issue that has led to severe economic sanctions and brought Iran to the negotiating table has, arguably, had the unintended side effect of preventing negotiations from going anywhere once they begin.

While a sense of urgency can help focus the mind, too much will lead to mistakes by forcing the adoption of approaches that are fast and simple but less accurate. At present, the consuming fear that time is running out to solve the Iranian nuclear problem seems to have become a barrier that confines the search for a solution to shallow waters, wherein the prevailing theory is reducible to one radically simple notion: just add pressure.

Pressure tactics might have been good enough to get Iran to agree to talks, but prolonging this approach in the way that we have is a recipe for escalation. Overall, US engagement with Iran has been erratic during Obama’s first term — negotiations one week, sanctions and cyber attacks the next. From what is known about the talks that have transpired, it’s apparent that neither side has shown much courage in tabling offers that stood a chance of gaining traction. If anything, the US position hardened over time rather than the other way around, perhaps because it bought into the notion that the duress Iran was experiencing from choking sanctions would eventually force it to accept anything.

But the only recent accomplishment of the ‘add pressure and wait’ approach has been to fuel a dangerous pattern of self-fulfilling prophecy whereby perceptions of Iranian intransigence become more extreme with every moment that passes between added punishment and its capitulation. The perception of Iranian defiance has now reached near-mythical status and driven supposedly mainstream policy discussion into the realm of outright belligerence. Even moderates have argued unblushingly that only “existential angst” brought on by the specter of total economic collapse (or perhaps that ever-elusive “truly credible” threat to attack) will get Iran to give in on the nuclear issue.

But it should be clear by now that the United States and Iran are far better off taking steps to moderate their behavior rather than make it more extreme. A conflict with Iran could be exceedingly dangerous for the US, Israel, and the global economy. Isolating Iran, encircling it, sabotaging its nuclear facilities and pushing its economy to the brink of collapse has become not just inhumane but strategically counterproductive as well. It has left Iran’s leaders with less to lose for retaliating aggressively if attacked, making military action riskier for the US and any threat to carry it out less believable for Iran. It’s time to give up on the machismo.

Another reason to jettison the notion that the window of opportunity for a diplomatic solution to the Iranian issue is rapidly closing is because, frankly, it is not. Even if Iran decides to “come clean” on everything, fully cooperate with the IAEA and implement the Additional Protocol, it will retain the technical talent to produce nuclear weapons, if it so chooses, for some time to come. There is no silver bullet solution — be it a collapsed Iranian economy, a successful military strike or a brilliantly orchestrated deal– that can undo that. So, letting breakout timelines drive policy — as if Iran does not really have nuclear weapon potential until it has the potential to make them quickly — actually belies the larger reality that Iran is, and will be, capable of making nuclear weapons, regardless of whether or not it ever crosses Bibi’s red line.

Getting over the preoccupation with timelines and red lines would give the US and the six power P5+1 the space to enter future negotiations with multiple options, not just one proposition, and be flexible about mixing and matching their various elements as appropriate. It is obvious that any deal must include prompt sanctions relief for Iran, but figuring out what sanctions to lift and what can be received in exchange will probably take time. As former Israeli intelligence chief Efraim Halevy recently put it, “you have to understand what it is that makes Iran tick.” Coming up with multiple options is a good way to discover what the other side really values and for zeroing in on a mutually acceptable agreement.

At the end of the day, any diplomatic progress that may be made over the next several years will only be the beginning of a very long process of convincing Iran to turn its back on nuclear weapons and, just as importantly, to not relapse. For now, it will be hard enough to figure out what will work without having to do it under stultifying pressure created by a loudly ticking clock and timelines that unnecessarily drive policy towards extremes and the desperately oversimplified solutions found there.

- Mark Jansson is the Special Projects Director for the Federation of American Scientists, the country’s longest-serving organization committed to reducing the dangers posed by nuclear weapons.