Why Obama's Iran Policy Will Fail

Stuck in Bush Mode in a Changed World

By Dilip Hiro

While the tone of the Obama administration is different from that of its predecessor, and some of its foreign policies diverge from those of George W. Bush, at their core both administrations subscribe to the same doctrine: Whatever the White House perceives as a threat -- whether it be Iran, North Korea, or the proliferation of long-range missiles -- must be viewed as such by Moscow and Beijing.

In addition, by the evidence available, Barack Obama has not drawn the right conclusion from his predecessor's failed Iran policy. A paradigm of sticks-and-carrots simply is not going to work in the case of the Islamic Republic. Here, a lesson is readily available, if only the Obama White House were willing to consider Iran's recent history. It is unrealistic to expect that a regime which fought Saddam Hussein's Iraq (then backed by the United States) to a standstill in a bloody eight-year war in the 1980s, unaided by any foreign power, and has for 30 years withstood the consequences of U.S.-imposed economic sanctions will be alarmed by Washington's fresh threats of "crippling sanctions."

Most important, the Obama administration is ignoring the altered international order that has emerged in the wake of the global financial crisis triggered by Wall Street's excesses. While its stimulus package, funded by taxpayers and foreign borrowing, has arrested the decline in the nation's gross domestic product, Washington has done little to pull the world economy out of the doldrums. That task -- performed by the U.S. in recent recessions -- has fallen willy-nilly to China. History repeatedly shows that such economic clout sooner or later translates into diplomatic power.

Backed by more than $2 trillion in foreign exchange reserves, the state-owned Chinese oil corporations have been locking up hydrocarbon resources as far away as Brazil. Not surprisingly, Iran, with the second largest oil as well as gas reserves in the world, looms large in the strategic plans of Beijing. The Chinese want to import Iran's petroleum and natural gas through pipelines across Central Asia, thus circumventing sea routes vulnerable to U.S. naval interdiction. As this is an integral part of China's energy security policy, little wonder that Chinese oil companies have committed an estimated $120 billion dollars -- so far -- to Iran's energy industry.

During a recent meeting with Iran's first vice president, Muhammad Reza Rahimi, in Beijing, Chinese Prime Minister Wen Jiabao stressed the importance of cooperation between the two countries when it comes to hydrocarbons and trade (at $29 billion a year, and rising), as well as "greater coordination in international affairs." Little wonder, then, that China has already moved to neutralize any sanctions that the United States -- backed by Britain, France and Germany -- might impose on Iran without United Nations authorization.

Foremost among these would be a ban on the export of gasoline to Iran, whose oil refining capacity falls significantly short of domestic demand. Chinese oil corporations have already started shipping gasoline to Iran to fill the gap caused by a stoppage of supplies from British and Indian companies anticipating Washington's possible move. Between June and August 2009, China signed $8 billion worth of contracts with Iran to help expand two existing Iranian oil refineries to produce more gasoline domestically and to help develop the gigantic South Pars natural gas field. Iran's national oil corporation has also invited its Chinese counterparts to participate in a $42.8 billion project to construct seven oil refineries and a 1,000 mile trans-Iran pipeline that will facilitate pumping petroleum to China.

Tehran and Moscow

When it comes to Russia, Tehran and Moscow have a long history of close relations, going back to Tsarist times. During that period and the subsequent Soviet era, the two states shared the inland Caspian Sea. Now, as two of the five littoral states of the Caspian, Iran and Russia still share a common fluvial border.

Following the collapse of the Soviet Union in 1991, relations between the Islamic Republic and Russia warmed. Defying pressures from both the Clinton and Bush administrations, Russia's state-owned nuclear power company continued building a civilian nuclear power plant near the Iranian port city of Bushehr. It is scheduled to begin generating electricity next year.

As for nuclear threats, the Kremlin's perspective varies from Washington's. It is far more concerned with the actual threat posed by some of Pakistan's estimated 75 nuclear weapons falling into militant Islamist hands than with the theoretical one from Tehran. Significantly, it was during his recent trip to Beijing to conclude ambitious hydrocarbon agreements with China that Russian Prime Minister Vladimir Putin said, "If we speak about some kind of sanctions [on Iran] now, before we take concrete steps, we will fail to create favorable conditions for negotiations. That is why we consider such talk premature."

The negotiations that Putin mentioned are now ongoing between Iran and the five permanent members of the United Nations Security Council (the U.S., Britain, China, France, and Russia) as well as Germany. According to Western sources, the agenda of the talks is initially to center on a "freeze for freeze" agreement. Iran would suspend its nuclear enrichment program in exchange for the U.N. Security Council not strengthening its present nominal economic sanctions. If these reports are accurate, then the chances of a major breakthrough may be slim indeed.

At the heart of this issue lies Iran's potential ability to enrich uranium to a level usable as fuel for a nuclear weapon. This, in turn, is linked to the way Iran's leaders view national security. As a signatory to the nuclear Non-Proliferation Treaty (NPT), Iran is, in fact, entitled to enrich uranium. The key point is the degree of enrichment: 5% enriched uranium for use as fuel in an electricity generating plant (called low enriched uranium, LEU); 20% enriched for use as feedstock for producing medical isotopes (categorized as medium enriched uranium, MEU); and 90%-plus for bomb-grade fuel (known as high enriched uranium, HEU).

So far, what Iran has produced at its Natanz nuclear plant is LEU. At the Iran-Six Powers meeting in Geneva on October 1st, Iran agreed in principle to send three-quarters of its present stock of 1,600 kilograms (3,500 pounds) of LEU to Russia to be enriched into MEU and shipped back to its existing Tehran Research Reactor to produce medical isotopes. If this agreement is fleshed out and finalized by all the parties under the aegis of the International Atomic Energy Agency, then the proportion of Iran's LEU with a potential of being turned into HEU would diminish dramatically.

When it comes to the nuclear conundrum, what distinguishes China and Russia from the U.S. is that they have conferred unconditional diplomatic recognition and acceptance on the Islamic Republic of Iran. So their commercial and diplomatic links with Tehran are thriving. Indeed, a sub-structure of pipelines and economic alliances between hydrocarbon-rich Russia, Iran, and energy-hungry China is now being forged. In other words, the foundation is being laid for the emergence of a Russia-Iran-China diplomatic triad in the not-too-distant future, while Washington remains stuck in an old groove of imposing "punishing" sanctions against Tehran for its nuclear program.

Tehran and Washington

There is, of course, a deep and painful legacy of animosity and ill-feeling between the 30-year-old Islamic Republic of Iran and the U.S. Iran was an early victim of Washington's subversive activities when the six-year-old CIA overthrew the democratically elected government of Prime Minister Muhammad Mussadiq in 1953. That scar on Iran's body politic has not healed yet. Half a century later, the Iranians watched the Bush administration invade neighboring Iraq and overthrow its president, Saddam Hussein, on trumped-up charges involving his supposed program to produce weapons of mass destruction.

Iran's leaders know that during his second term in office -- as Seymour Hersh revealed in the New Yorker -- Bush authorized a clandestine CIA program with a budget of $400 million to destabilize the Iranian regime. They are also aware that the CIA has focused on stoking disaffection among Sunni ethnic minorities in Shiite-ruled Iran. These include ethnic Arabs in the oil-rich province of Khuzistan adjoining Iraq, and ethnic Baluchis in Sistan-Baluchistan Province abutting the Pakistani province of Baluchistan.

Little wonder that Tehran pointed an accusing finger at the U.S. for the recent assassination of six commanders of its Revolutionary Guard Corps in Sistan-Baluchistan by two suicide bombers belonging to Jundallah (the Army of Allah), an extremist Sunni organization. As yet, there is no sign, overt or covert, that President Obama has canceled or repudiated his predecessor's program to destabilize the Iranian regime.

Insecure regimes seek security in nuclear arms. History shows that joining the nuclear club has, in fact, proven an effective strategy for survival. Israel and North Korea provide striking examples of this.

Unsure of Western military assistance in a conventional war with Arab nations, and of its ability to maintain its traditional armed superiority over its Arab adversaries, Israel's leaders embarked on a nuclear weapons program in the mid-1950s. They succeeded in their project a decade later. Since then Israel has acquired an arsenal of 80 to 200 nuclear weapons.

In the North Korean case, once the country had tested its first atomic bomb in October 2006, the Bush administration softened its stance towards it. In the bargaining that followed, North Korea got its name removed from the State Department's list of nations that support international terrorism. In the on-again-off-again bilateral negotiations that followed, the Pyongyang regime as an official nuclear state has been seeking a guarantee against attack or subversion by the United States.

Without saying so publicly, Iran's leaders want a similar guarantee from the U.S. Conversely, unless Washington ends its clandestine program to destabilize the Iranian state, and caps it with an offer of diplomatic acceptance and normal relations, there is no prospect of Tehran abandoning its right to enrich uranium. On the other hand, the continuation of a policy of destabilization, coupled with ongoing threats of "crippling" sanctions and military strikes (whether by the Pentagon or Israel), can only drive the Iranians toward a nuclear breakout capability.

During George W. Bush's eight-year presidency, the U.S. position in the world underwent a sea change. From the Clinton administration, Bush had inherited a legacy of 92 months of continuous economic prosperity, a budget in surplus, and the transformation of the U.N. Security Council into a handmaiden of the State Department. What he passed on to Barack Obama was the Great Recession in a world where America's popularity had hit rock bottom and its economic strength was visibly ebbing. All this paved the way for the economic and political rise of China, as well as the strengthening of Russia as an energy giant capable of extending its influence in Europe and challenging American dominance in the Middle East.

In this new environment expecting the leaders of Iran, backed by China and Russia, to do the bidding of Washington means placing a bet on the inconceivable.

Dilip Hiro is the author of Blood of the Earth: The Battle for the World's Vanishing Oil Resources (Nation Books), among other works. His forthcoming book, After Empire: The Birth of a Multipolar World, will be published in January 2010, also by Nation Books.