25 February 2009

Time to rethink our approach to Iran

As the Obama Adminstration's foreign policy team settles in to address its key agenda, a threshold question is whether the approach that the West has collectively adopted towards Iran over the last four decades really serves our interests.

 My critique centres on: the outrage about Iran’s assumed nuclear intentions ignores the fact that the major powers have degraded the Nuclear Non-Proliferation Treaty (NPT); the efforts to bluster Iran into dropping its indigenous program are unrealistic and doomed to failure; and the costs associated with any military strike would be completely unacceptable – to all parties.

The NPT was a logical corollary of the Eisenhower-era Atoms for Peace program. The central bargain was that if nations foreswore the nuclear option, the United States and other nuclear powers would spread the benefits of the peaceful uses of nuclear technology throughout the world, and would themselves undertake nuclear disarmament. NPT members (Iran is one) have a right to peaceful nuclear programs, and the nuclear weapon states have an obligation to disarm.

Aside from the fact that the nuclear arms race accelerated and enthusiasm for assisting peaceful nuclear programs evaporated, the West, and the US in particular, has been highly selective in its outrage about nuclear proliferation. The force of the proposition that any proliferation whatsoever is unacceptable has been undermined by an attitude that who was proliferating mattered more than the proliferation itself.

 Iran has historical, commercial and energy security reasons to want as complete a commercial fuel cycle as it can achieve.

The experience of the 1980s war against Iraq left Iran obsessed with self-reliance. Veterans of that war believe that Iran’s interests cannot be safeguarded by adhering to international treaties or appealing to Western public opinion. In this, it mirrors Israel’s position.

 The commercial backdrop is that in 1974 Iran lent $US 1 billion to the French Atomic Energy Commission (CEA) to build its Eurodif enrichment facility, and acquired a 10 per cent indirect interest in Eurodif through the Franco-Iranian company Sofidif – a stake that still exists. Iran paid another $180 million for future enrichment services to fuel its nuclear power plants.

After the 1979 Islamic Revolution, the Khomeini regime cancelled the Shah’s nuclear program and sought refund of this investment. There followed a decade of bitter litigation, as a result of which Iran was reimbursed a total of $1.6 billion for its 1974 loan plus interest. It remains an indirect shareholder in Sofidif, but under the 1991 agreement which settled the litigation it has no access to technology and no right to take enriched uranium. It has the shareholder’s right to dividends, but financial sanctions against Iran mean that it cannot receive these dividends.

This whole experience has left Tehran deeply distrustful of any proposal that it rely on others for a critical component of its nuclear electricity program.

Regarding energy security, the suggestion that Iran should rely on Russia for enrichment services looks profoundly unattractive when one considers Russia’s intransigence in turning off the gas supply to its Ukrainian neighbour, a move which has left the EU anxious about its reliance on Russian energy sources.

 It may well be that Iran is also establishing for itself a nuclear weapons option, an intent which the Shah expressed in 1974 but subsequently repudiated. A better way to persuade Iran to forego the option would be to offer security rewards for its acceptance of full-scope safeguards, and for the US to warn Israel that any unilateral attack on Iran would force the US to reconsider its bilateral treaty arrangements.

 Despite its shrill rhetoric, Iran does not look like a country bent on war. As a proportion of GDP it has the second lowest military spend in the Middle East – less than half of Turkey’s GDP share, about one third of Israel’s.

Anyone with even the most superficial knowledge of Iran’s history and culture will know that it will not be bribed or bullied into doing what the West wants. It has no reason to trust Western promises, and having endured the appalling suffering of the Iran-Iraq War, it is unlikely to buckle under any pressure, military or economic, that the West would be prepared to impose.

Regarding nuclear proliferation, no self-respecting country would accept the proposition that its nuclear program is a problem because that state itself is a problem – that, for example, an Indian, Israeli or Pakistani nuclear capability is acceptable because they are the right kind of people, but an Iranian capability would be unacceptable because of the nature of the Iranian state. The only way in which to establish a manageable relationship with Tehran is to understand its world view, to recognise its legitimate interests, and then deal with the problematical issues on the basis of equality and mutual respect.

Iran’s demonisation by the Bush Administration only served to undermine Iranian reformers, including pragmatic conservatives who see value for Iran in a more rational relationship with the US. And the constant brandishing of military options is completely counterproductive. Iran has too many means of means of retaliation, both overt and covert - cutting back oil production, closing the Straits of Hormuz, and/or inflaming the civil strife in Iraq and Lebanon. It will be an indispensable partner in any Iraq settlement.

A strategic approach to the issue would see a more dispassionate and mature attitude to Iran, dealing with it as an important power in a critical region, one which is here to stay and is to be taken seriously.

To those who might regard such an approach as ”idealistic”, I would simply observe that we have been trying the robust confrontationist approach for the last 30 years, and ask when we might expect it to begin working?

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