by Farideh Farhi
From the looks of it, the second round of talks with Iran in Almaty, Kazakhstan was a complete failure, with both sides unable to even find a common language to begin a process of give and take. The sense I get is that the US side is rather [...]]]>
by Farideh Farhi
From the looks of it, the second round of talks with Iran in Almaty, Kazakhstan was a complete failure, with both sides unable to even find a common language to begin a process of give and take. The sense I get is that the US side is rather unhappy, even more than expected, with Iran. After all, it made a slight move during the first round by reportedly not demanding the complete dismantling of Fordo and rather asking for its suspension with provisions that would make its return to operation difficult. In return, it offered some sanctions relief regarding the gold trade and petrochemical industry.
The Iranian leadership did not think this was a balanced offer even if they acknowledged the US move as a positive step. The closure or non-operation of Fordo is a key component of a solution to the nuclear conflict while the slight sanctions relief offered in return hardly impacts the complex web of trade and financial sanctions that have been imposed on Iran. More importantly, for negotiation purposes, Fordo — an under-mountain site built in reaction to the repeated refrain of “all options are on the table” — is Tehran’s most important leverage for the talks. So, giving it away cheaply is just bad negotiating strategy.
There were attempts by some members of Iran’s foreign policy establishment to sell the US offer as a good first step to the Iranian public but that didn’t work out. In private conversations, even those hoping that Tehran would take the offer talked about the need for the Leader to take the “poisoned chalice,” a reference to Islamic Revolution founder Ayatollah Khomeini’s famous words when he accepted a ceasefire with Iraq in 1988. In other words, even those hoping for the acceptance of the offer considered it unbalanced and only necessitated through circumstances.
Subsequent efforts to make the offer more balanced during the technical talks in Istanbul failed. Hence, as they have done before, the Iranian negotiating team shifted gears and began talking about a comprehensive solution to the Iran question that will address other regional issues (i.e. Syria and Bahrain) as well as delineate what the end game will be. The endgame for Tehran since everything began in 2003 has always entailed the right to enrich uranium on Iranian soil. In retrospect, we should have expected Iran’s shift back toward a comprehensive discussion — which also happened in Moscow — after efforts during the technical talks to make the revised proposal more balanced failed.
As a result, the question of “now what?” will have to be on the table for the US. By moving a bit, the Obama administration has acknowledged that just making demands without at least appearing to address some of Iran’s bottom lines won’t move the process forward. Similarly, the presumption that a successful sanctions regime will convince Tehran to accede to a perceived bad deal in order to rescue Iran’s economy also just received a solid beating.
The US can of course continue to tighten the economic noose on Iran, although it is not clear how much more “useful” damage that will actually do. Two recent reports from completely divergent outlets — the National Iranian American Council and the Washington Institute for Near East Policy — suggest that Iran’s economy is adapting to the limits that have been imposed on its oil exports. Neither of these reports deny the harm sanctions have inflicted or the opportunity costs that have resulted, but they do acknowledge that Iran has been able to adjust and limp along at least in terms of macro trade and budget numbers. Even a recent joint-report by the Carnegie Endowment for International Peace and the Federation of American Scientists — while focusing on the costs and risks of Iran’s nuclear program — ends up acknowledging that costs from the loss of oil exports and opportunity costs resulting from the loss of foreign investment has been absorbed by Iran.
Indeed, continuing with what hasn’t worked in the past with the hope that it will one day work is what Gary Samore, Obama’s former nuclear advisor, expects. I guess the hope is that something magical will happen with Iran’s June 14 election and a newly elected president who will take charge by August. Perhaps he will be able to convince the Iranian leadership across the board that the offer Iran just designated as neither balanced nor comprehensive needs to be accepted.
This expectation or hope is a risky one. It is premised on the belief that Iran is a contested political environment and the harshness of sanctions will eventually pave the way for folks who think it’s time to abandon Iran’s nuclear program in favor of economic riches to gain the upper hand or argument. But the logic of Iran as a contested political terrain actually brings us to the opposite conclusion. One can more easily argue that the inability to begin a process of give and take on the nuclear issue before Iran’s election provides incentive to those who insist on Iran’s nuclear rights — and also happen to be in charge of the country — to make sure that a president is elected who will continue to toe their established line. In other words, the further escalation of sanctions may end up impacting the Iranian election, but not in the way that was intended.
So are there other options? Yes, according to another recent report by the Atlantic Council called Time to Move from Tactics to Strategy on Iran. It calls upon the Obama administration to “lay out a step-by-step reciprocal and proportionate plan that ends with graduated relief of sanctions on oil, and eventually on the Iranian Central Bank, in return for verifiable curbs on Iranian uranium enrichment and stocks of enriched uranium, and assurances that Iran does not have undeclared nuclear materials and facilities.”
Various sections of the report appear like they have been written by different members of the Council’s Iran Task Force, but the process laid out is pretty close to what the Iranians have articulated; if the issue is Iran’s nuclear program, then let’s lay out a roadmap and endgame for how the nuclear issue can be resolved to the relative satisfaction of all sides. The report also calls for opening an US Interests Section in Iran and increased people-to-people contact. Although it doesn’t come right out and say it, it effectively endorses various improved relations (people-to-people or government-to-government) as a companion to or simultaneous with a clearly defined step-by-step framework that reduces pressure on Iran in exchange for limitations on its nuclear program.
I’m not sure if the individuals who wrote the section on people-to-people contact and the need to use stepped-up public diplomacy to make Iranians “aware of the real reasons for sanctions” (to ensure the peacefulness of Iran’s nuclear program) understand how hard it is even for the most adept propaganda machine — and our country does have a pretty good one — to sell the idea that the US is justified in collectively punishing Iranians for the policies of their leaders. Nevertheless, making the case that the US is really not that bad while the sanctions regime is being relaxed through a step-by-step process of negotiations is a whole lot easier than what is being done right now: escalating the process of squeezing Iran while denying responsibility for it.
The Council report curiously does insist on maintaining one aspect of the Obama administration’s approach. It says that the majority of the Iran Task Force favors maintaining the military option as a last resort. It calls on the Obama administration to make sure that the option remains credible despite the acknowledgment that “While the drawbacks of a nuclear Iran are grave, the ramifications of a premature military strike—what the US military refers to as “second- and third-order effects”—could also be dire.” My dictionary tells me that “dire” is much worse than “grave” and I guess the report tries to ignore this by highlighting its rejection of a “premature” strike, whatever that means. But the dire effects of the premature strike are the same, I suppose, as a rightly timed strike.
Beyond this, I am truly puzzled by the inability of those promoting this type of public discourse to understand the corrosive impact that the language of “all options are on the table” has on the so-called international community that the Obama administration claims to represent, as well as various stakeholders in Iran, including the “Iranian people” who we apparently love and are so interested in establishing contact with. These fighting words do nothing to make the threat of military attack credible to those who run Iran’s nuclear policy precisely because of the “dire” effects that the Council report lays out. They also undercut any claim to righteousness regarding the nuclear row for the people who occupy the land and buildings that are being threatened. I cannot claim to know what the “Iranian people” think, but I can say that the overwhelming majority of Iranians I know, inside and outside of Iran, consider this language vulgar and appalling and reflective of an utter disregard for other people’s lives and livelihoods. Who else speaks this way nowadays? North Korea?
America’s “now what?” moment regarding Iran could be a productive moment if it begins to come to terms with the fact that the sanctions regime has not changed the calculation of the Iranian government — as evidenced by what just happened in Almaty. It can only do so, however, if it acknowledges that the military option cannot be made credible because the idea is both stupid and offensive.
]]>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 [...]]]>
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.
]]>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 [...]]]>
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 about their business as usual. People are complaining about rising prices but they keep buying. There are extravagant wedding parties every evening as hopeful couples tie the knot before the holy month of Ramazan starts, on Friday July 20. Looking at the pace of normal life, one can understand why Iranian leaders seem in no hurry to throw in the towel in the nuclear standoff with the West, and why Western claims of imminent economic doom are exaggerated.
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.
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