Wednesday, October 17, 2012


"Among other absurdities Mr Ahmadi-Nejad uttered on his New York trip were invented statistics that were meant to demonstrate the economy’s success under his seven-year stewardship. Iran, he told another interviewer, had in fact gone from being the world’s 22nd largest economy to the 17th. No sooner was he back in Tehran, however, than reality intruded on his fantasy world. Within days, he was facing a full-blown currency crisis, as the rial, which had already lost almost half its value over the past year, went into free fall. Iranians, who have seen inflation soar in recent months, were dumping the rial. America might be the Islamic Republic’s number-one enemy – but the dollar was now Iranians’ number-one friend. The merchant class in Tehran’s bazaar, never supportive of Mr Ahmadi-Nejad, closed their shops. Protests erupted in the capital in a limited show of popular discontent, rare since the mass demonstrations of 2009, when Mr Ahmadi-Nejad was handed a second term in a rigged election. Merchants in other cities could join the strike and we will see in the coming days whether the unrest will spread. Abroad, policy makers determined to curb Iran’s nuclear ambitions watched the unrest with apparent satisfaction. This was, after all, unmistakable proof that economic warfare was effective. The combination of American and European sanctions, which have isolated Iran from the world financial system and reduced its ability to export its main commodity – oil – were biting, and biting hard. No matter that the pain was borne by ordinary people and businessmen. There was uproar in the bazaar – which was instrumental in the 1979 Islamic revolution – as well as clashes with police and denunciations of Mr Ahmadi-Nejad as a dictator, images that play in favour of Barack Obama ahead of the US presidential election. It might be too soon for jubilation, however. Western nations eager to accelerate Iran’s economic decline would be wise to consider whether pushing for more sanctions – including restrictions on Iran’s exports of gas – is sound. The regime is not likely to buckle suddenly under the pressure and bow to international demands for limits on the nuclear programme. No doubt it will try to exploit intensifying economic pressures, rallying support against a vengeful west. True, Iran could already be experiencing hyperinflation, as John Hopkins’ Steve Hanke believes, estimating that inflation is running at almost 70 per cent a month. But the professor, who has been studying Iran’s currency (as well as other cases of hyperinflation, including Zimbabwe), also points out that the regime can survive while the people suffer. He expects it to wield a big stick to contain the currency crisis. Already, by Thursday, the government had announced that a dozen foreign currency traders had been arrested.... It is unlikely the supreme leader will suddenly shift his priorities or end his defiance of demands to limit his nuclear programme. But as Ray Takeyh, a former US official and expert at the Council on Foreign Relations, told Congress earlier this year, at least sanctions show that nuclear defiance has a steep price. Iran, he notes, depends on revenues from an export commodity whose price and means of transport are determined by actors beyond its control, and which requires access to customers, tankers, insurance and global financial institutions."
Roula Khalaf, "Rial slide is little cause for jubilation." The Financial Times. 5 October 2012, in
"European Union governments agreed further sanctions against Iran's banking, shipping and industrial sectors on Monday, cranking up financial pressure on Tehran in the hope of drawing it into serious negotiations on its nuclear program. The decision by EU foreign ministers reflected mounting concerns over Iran's nuclear intentions and Israeli threats to attack Iranian atomic installations if a mix of sanctions and diplomacy fails to lead to a peaceful solution. EU foreign policy chief Catherine Ashton said she hoped that turning up the heat on the Islamic Republic would persuade it to make concessions and that negotiations could resume "very soon". "I absolutely do think there is room for negotiations," said Ashton, who represents the United States, China, Russia, Britain, France and Germany in their on-and-off talks with Iran. "I hope we will be able to make progress very soon." The new sanctions mark one of the EU's toughest moves against Iran to date and a significant change of policy for the 27-member bloc, which has hitherto focused largely on targeting specific people and companies with economic restrictions. The EU has lagged the United States in imposing blanket industry bans because it says it is concerned not to punish ordinary Iranian citizens while inflicting pain on the Tehran government. Iran maintains that its nuclear project has only peaceful energy purposes and has refused in three rounds of talks since April to scale back its uranium enrichment activity unless major economic sanctions are rescinded. But governments in Europe and the United States, doubting Iran's preparedness for more than dilatory "talks about talks", are instead tightening the financial screws on Tehran and fears of a descent into a new Middle East war are growing. German Foreign Minister Guido Westerwelle was more pessimistic than Ashton about the prospect that additional economic pain might drive Tehran - whose Islamic Revolution has long thrived on defiance of the West - to make concessions. "Iran is still playing for time," he told reporters. "We don't see a sufficient readiness for substantial talks about the nuclear program." Israeli Prime Minister Benjamin Netanyahu kicked off his re-election campaign on Monday by saying Israel had new unspecified "capabilities" to act against Iran's nuclear threat".
Justyna Pawlak & Sebastian Moffet, "EU tightens Iran sanctions, Ashton sees more talks." Reuters. 15 October 2012, in
The story line on the situation in Persia is janus-faced: on the one hand the regime of Mullahs appears to be suffering from the ongoing and increasingly severe sanctions regime as applied by the Western Powers (The EU and the USA). On the other hand, as was widely reported in the Western press, the Washington, DC-based, Institute for Science and International Security has stated categorically, that the Persian regime has now in effect assembled enough nuclear materials that its 'breakout potential' can now be timed as merely:
"that Iran [Persia] would require at least 2-4 months to produce one SQ of WGU at the Natanz Fuel Enrichment Plant and would need to utilize its stocks of 3.5 and near 20 percent LEU. The quickest estimates are 2 to 2.3 months" 1.
Given this state of affairs, with the Persian regime seemingly determined, come what may to obtain a nuclear arsenal, regardless of the costs, both economic, social and political, what are the Western Powers options in the next twelve months? Objectively speaking, the regime in Tehran is indeed 'hurting', but per se that does not it would appear on the surface mean that the Mullahs who run the country will necessarily agree to some type of modus vivendi with the Western Powers 2. Indeed, as per a statement by the Persian foreign ministry yesterday, the net effect of more Western sanctions is practically nil, as it relates to getting Tehran to agree to constructive talks with the Europeans and Americans 3. Of course it could be argued that this statement is merely an anticipatory pour parler and that after a satisfactory diplomatic equivalent of a 'decent interval', the Persian regime will climb down `a la its climb down in 1989, when it agreed to a humiliating conclusion to the Iran-Iraq War. In which case, the current and common Western policy of increased and heavy sanctions on the regime, will bear fruit soon enough. Perhaps so. Equally, it could be argued that the regime, for reasons of Primat der Innenpolitik, will forgo the path of rationality and insist upon going down the road of obtaining nuclear weapons, or at the very least being able to produce them on very short notice. In which case, au fond, the argument of the Israeli Prime Minister, Mr. Netanyahu is if nothing else accurate:
"We will know if the sanctions are achieving their goal if the centrifuges will stop spinning and the program is rolled back" 4.
The sub-text of this statement being that in the absence of Persia's nuclear programme stopping, then the time to employ force as the ultimate force majeure, has arrived. How plausible in turn is this particular scenario? I for one, am skeptical that in fact, force, at least by the Israelis themselves will ever be employed. Why is that the case? For the simple reason that all of the indicators seem to show that solely by itself, Israel lacks sufficient military capacity to strike hard enough at all the necessary Persian targets to destroy effectively all the Persian nuclear reprocessing sites. As the always knowledgeable American military expert, Mr. Anthony Cordesman has recently noted:
"The payloads required to hit underground enrichment facilities with a high level of damage, to carry out the scale of initial and follow‐up attacks, and providing resources such as near real time intelligence required to detect and destroy other potentially lethal Iranian [Persian] military weapons, for instance ballistic missiles that could be used in a retaliation, can only be carried out by the United States"5.
In other words the likelihood of an Israeli military strike without American backing and support is next to nil. And the likelihood of American support for any military strike on Persia's nuclear processing facilities is less than nil. And, indeed perhaps that is as it should be. The upshot is that for the foreseeable future, economic sanctions, backed up, one would hope, but not necessarily expect by a naval blockade, will have to do the work that military force would under other circumstances would do. It is not of course an ideal situation by any means. But given alternatives available it is to my mind at this juncture an acceptable faite de mieux.
1. William C. Witt, et. al., "Iran [Persia]'s evolving breakout potential." The Institute for Science and International Security. 8 October 2012, in
2. See for this the following analysis: Alireza Nader, "The Iranian [Persian] regime is in trouble." The Rand Corporation. 4 October 2012, in
3. For this lastest statement, see: Haaretz, "Iran [Persia] Official says new EU sanctions won't force Tehran into nuclear talks." Haaretz. 16 October 2012, in
4. Barak Ravid, "Netanyahu: EU sanctions will prove effective if Iran [Persia] stops program." Haaretz. 16 October 2012, in
5. Anthony Cordesman & Abdullah Toukan. "Analyzing the Impact of Preventative Strikes against Iran's [Persia] nuclear capability." The Center for Strategic & International Studies. 10th of September 2012. in


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