Experts on Iran are repeating the mistakes made by Soviet experts, who concentrated on arms control and ignored the USSR’s economic implosion.
Filed under:
public policy • Middle East • world affairs
Yes, we can (stop Iran). Especially now, when the price of oil is so much lower, it is possible to stop or at least delay Iran’s development of nuclear weapons by further cutting its income from oil.
Iran’s economy is statist, bankrupt and disintegrating. It has to support a huge welfare population. An additional cut in oil income will force the Mullahs to choose between enriched uranium and rice for the masses. They will have to choose rice or face a revolt by millions of hungry citizens, their political backbone. The question, of course, is how to do it. The answer may be simpler than most imagine.
If so, why has not more been done to cut Iran’s oil income? Western experts dealing with Iran seem to be repeating the mistakes of the Kremlinologists, who were so busy negotiating limits over the Soviet’s nuclear arsenal that they totally ignored the less obvious but eventually more critical internal economic collapse that finally led to the implosion of the powerful Soviet empire. The same oversight may be happening now with regards to Iran.
The Iranian economy is in shambles. The government’s close to $300 billion budget reflects its ownership of over 70% of the economy. Anyone can imagine how such massive government control creates Byzantine bureaucracies, lowers productivity, increases waste, inefficiency and corruption and causes a massive brain drain. Inflation, officially at 23%, and unemployment, a whopping 20%, are probably much higher. Economic sanctions are gradually taking their bite, too.
Immediately after the revolution, a formerly prosperous agricultural sector had been ruined by price controls designed to provide city dwellers with cheap provisions. Millions of farmers immigrated to shanty towns around cities where they were kept alive by massive subsidies and welfare payments allocated by family size. This caused the population to more than double. Should further cuts in oil income force the government to cut subsidies and welfare, it could seriously undermine the regime’s support.
If not for substantial oil imports of 2.2 million barrels a day (and, recently, also natural gas) the Iranian economy would have collapsed long ago. By supporting terrorism, the Iranians cleverly pushed the price of oil constantly up, generating a fear of war that may cut gulf oil supplies. Their investment of hundreds of millions dollars in Hezbollah and Hamas paid off handsomely in many billions derived from higher oil prices.
So how can Iran’s oil income be cut? The current financial crisis is an opportunity for the U.S. to bring more effective pressure on vulnerable firms and financial institutions trading with Iran and granting it substantial credit. It could also put pressure on the Iranian currency. Admittedly, such steps are complicated and may not be sufficient. But why not try?
Then there are sanctions aimed directly at Iran’s oil export industry that would lower its output and, as a last resort, an oil embargo. An embargo, however, would be hard to enforce since Russia and China could undermine it.
If such measures are not effective enough, there is always a military solution, but a much simpler one than is usually suggested. All it would require is a relatively easy and cheap single operation to destroy half or less of the oil-loading facilities from where Iranian oil exports are shipped. Such a forced reduction in oil exports and income may be sufficient to force the Mullahs to cut their spending on atomic weapons.
Altogether, even if the reduction in oil income does not work, the military option against the atomic weapons facilities does not require the neutralizing of every plant or centrifuge buried underground—a mission impossible, as critics rightly claim. If serious damage could be inflicted on the electrical grid feeding Teheran, and on its supporting facilities, this could effectively paralyze the command and control systems of the regime. It could also make civilian life so unbearable (no running water) that the Ayatollahs might have to back down.
Despite its virulent propaganda against Israel, designed to distract Sunni Arabs by riling them up and uniting them under the banner of a Shiite jihad against Israel. Israel, the Small Satan, is not really Iran’s chief target (Israel can retaliate, so it may be safer to destroy it at a later stage through terrorist attrition and wars by proxies). Iran has much more ambitious strategic designs against the Great Satan, the West led by the U.S.
It seeks to control the flow of oil and dictate its price, a strategic goal it has pursued since the days of the Shah (It was the Shah, not the Arabs, who raised the price of oil precipitously after the ‘73 Yom Kippur War). Under a nuclear umbrella Iran could eventually dictate a constant, if gradual, rise in the price of oil. Neither the U.S., certainly not Europe would find it politically possible to risk a nuclear confrontation, let alone a threat that Saudi oil fields would be incinerated, to prevent gradual, small oil price increases.
The huge transfer of wealth such gradual increases would affect will provide the means for spreading the Islamic revolution and will greatly weaken Western resistance to it. What Arab petrodollars did to Europe would be dwarfed compared with what Iranian financial clout could do. Europe will simply be unable to resist the Islamic radicals in its midst when they are backed by such clout.
A weakened West would also not be able to prevent Iran from taking over Saudi oilfields and Islam’s holiest places, Mecca and Medina, another strategic Iranian goal. Shiite control of Islam’s Holy Places and of the Muslim jihad would finally secure a Shiite dominance over Islam and the hated Wahhabite Sunnis. The Shiite jihad could take on the West with all the Moslems in the world united under its command.
These are the strategic challenges the West must face when assessing the risks and benefits of taking timely action to stop Iran from acquiring a nuclear capability that will grant it immunity in the pursuit of its strategic goals.
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How to stop Iran
Forbes
16 Mar ’09
Experts on Iran are repeating the mistakes made by Soviet experts, who concentrated on arms control and ignored the USSR’s economic implosion.
Filed under:
public policy • Middle East • world affairs
Yes, we can (stop Iran). Especially now, when the price of oil is so much lower, it is possible to stop or at least delay Iran’s development of nuclear weapons by further cutting its income from oil.
Iran’s economy is statist, bankrupt and disintegrating. It has to support a huge welfare population. An additional cut in oil income will force the Mullahs to choose between enriched uranium and rice for the masses. They will have to choose rice or face a revolt by millions of hungry citizens, their political backbone. The question, of course, is how to do it. The answer may be simpler than most imagine.
If so, why has not more been done to cut Iran’s oil income? Western experts dealing with Iran seem to be repeating the mistakes of the Kremlinologists, who were so busy negotiating limits over the Soviet’s nuclear arsenal that they totally ignored the less obvious but eventually more critical internal economic collapse that finally led to the implosion of the powerful Soviet empire. The same oversight may be happening now with regards to Iran.
The Iranian economy is in shambles. The government’s close to $300 billion budget reflects its ownership of over 70% of the economy. Anyone can imagine how such massive government control creates Byzantine bureaucracies, lowers productivity, increases waste, inefficiency and corruption and causes a massive brain drain. Inflation, officially at 23%, and unemployment, a whopping 20%, are probably much higher. Economic sanctions are gradually taking their bite, too.
Immediately after the revolution, a formerly prosperous agricultural sector had been ruined by price controls designed to provide city dwellers with cheap provisions. Millions of farmers immigrated to shanty towns around cities where they were kept alive by massive subsidies and welfare payments allocated by family size. This caused the population to more than double. Should further cuts in oil income force the government to cut subsidies and welfare, it could seriously undermine the regime’s support.
If not for substantial oil imports of 2.2 million barrels a day (and, recently, also natural gas) the Iranian economy would have collapsed long ago. By supporting terrorism, the Iranians cleverly pushed the price of oil constantly up, generating a fear of war that may cut gulf oil supplies. Their investment of hundreds of millions dollars in Hezbollah and Hamas paid off handsomely in many billions derived from higher oil prices.
So how can Iran’s oil income be cut? The current financial crisis is an opportunity for the U.S. to bring more effective pressure on vulnerable firms and financial institutions trading with Iran and granting it substantial credit. It could also put pressure on the Iranian currency. Admittedly, such steps are complicated and may not be sufficient. But why not try?
Then there are sanctions aimed directly at Iran’s oil export industry that would lower its output and, as a last resort, an oil embargo. An embargo, however, would be hard to enforce since Russia and China could undermine it.
If such measures are not effective enough, there is always a military solution, but a much simpler one than is usually suggested. All it would require is a relatively easy and cheap single operation to destroy half or less of the oil-loading facilities from where Iranian oil exports are shipped. Such a forced reduction in oil exports and income may be sufficient to force the Mullahs to cut their spending on atomic weapons.
Altogether, even if the reduction in oil income does not work, the military option against the atomic weapons facilities does not require the neutralizing of every plant or centrifuge buried underground—a mission impossible, as critics rightly claim. If serious damage could be inflicted on the electrical grid feeding Teheran, and on its supporting facilities, this could effectively paralyze the command and control systems of the regime. It could also make civilian life so unbearable (no running water) that the Ayatollahs might have to back down.
Despite its virulent propaganda against Israel, designed to distract Sunni Arabs by riling them up and uniting them under the banner of a Shiite jihad against Israel. Israel, the Small Satan, is not really Iran’s chief target (Israel can retaliate, so it may be safer to destroy it at a later stage through terrorist attrition and wars by proxies). Iran has much more ambitious strategic designs against the Great Satan, the West led by the U.S.
It seeks to control the flow of oil and dictate its price, a strategic goal it has pursued since the days of the Shah (It was the Shah, not the Arabs, who raised the price of oil precipitously after the ‘73 Yom Kippur War). Under a nuclear umbrella Iran could eventually dictate a constant, if gradual, rise in the price of oil. Neither the U.S., certainly not Europe would find it politically possible to risk a nuclear confrontation, let alone a threat that Saudi oil fields would be incinerated, to prevent gradual, small oil price increases.
The huge transfer of wealth such gradual increases would affect will provide the means for spreading the Islamic revolution and will greatly weaken Western resistance to it. What Arab petrodollars did to Europe would be dwarfed compared with what Iranian financial clout could do. Europe will simply be unable to resist the Islamic radicals in its midst when they are backed by such clout.
A weakened West would also not be able to prevent Iran from taking over Saudi oilfields and Islam’s holiest places, Mecca and Medina, another strategic Iranian goal. Shiite control of Islam’s Holy Places and of the Muslim jihad would finally secure a Shiite dominance over Islam and the hated Wahhabite Sunnis. The Shiite jihad could take on the West with all the Moslems in the world united under its command.
These are the strategic challenges the West must face when assessing the risks and benefits of taking timely action to stop Iran from acquiring a nuclear capability that will grant it immunity in the pursuit of its strategic goals.
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