Saturday, March 6, 2010

On New Sanctions against Iran

By Nader Uskowi

In the midst of a diplomatic flurry among members of the UN Security Council to find a consensus in dealing with Iran’s nuclear program, two probable outcomes are emerging: UNSC will pass a watered-down sanction resolutions against Iran and Iran will continue with its nuclear program; the Round Four of an on-going match between the West and Iran being played at UNSC.

But the implications for each side of the fourth round of sanctions are not equal. The West does not have much to lose. A nuclear Iran can co-exist with the West and its neighbors in the current state of international affairs. It’s a different story for Iran. The country’s economic and financial ties to the global markets are the price Iran would pay for its nuclear policy.

Restrictions against Iranian banking activities abroad will be increased and for the first time the UNSC is expected to call for global “vigilance” against Iran’s Central Bank. The latter will be hurtful for Iran. Although a step short of blacklisting the country’s central bank to appease China, the resolution would create major hurdle for Iran to operate in major global markets dominated by the West. The cost of having a robust nuclear program will considerably jump for Iran.

Countries much like individuals need to continually make difficult choices. Iran could have accepted the enriched uranium swap taking place in Turkey and by doing so it could stop the tightening of sanctions against its financial institutions. The end result would not have been much different for Iran. Its uranium enrichment program in Natanz would have remained intact and it could still opt to follow the Japanese option of being ready to make the bomb when it wanted to.

But the Iranian government is once again overplaying its hand. It wants to use its nuclear program not just for its intended purpose, but also as a tool internally to further strengthen its position over its competitors, both inside and outside the Green movement, and adds to its prestige as perceived in the region. It could have swapped the uranium abroad, however, without jeopardizing those goals.

And in the midst of all this, the economic and financial implications of such policy are pushed aside. The current Iranian government does not believe “it’s the economy, stupid” but that the economy is the domain of the stupid.


Anonymous said...

Mr Uskowi

Thank you for the insightful article.

I would like to draw your attention to this news item from Iran:

It shows that, despite fiery rhetoric, the regime's mismanagement of economy and industry, due to its very nature, as well as the incompetent dominance of the IRGC/intelligence services in key sectors of the economy, have in fact left the country vulnerable to gasoline embargo.

So, as often is the case, those who shout loudest about "national interests" are the scoundrels who undermine these very interests.

b said...

I for one never heard of a serious swap offer In Turkey Iran could have taken.

The U.S. said give us your LEU and later you MAY get back juice for the TRR.

The point for Iran is the MAY.

It, understandably, can not agree to that.

Nader Uskowi said...


The Russians pushed hard for Turkey option after Iran refused to swap it in Russia. The Turkish foreign minister also reiterated his country's willingness to be the venue for exchange. If Iran had agreed, this particular issue would have ended. Some of the Iranian officials, including Iran's foreign minister, at first actually welcomed the idea, but later under the pressure by Larijani and Shariatmadari and other conservatives moved away from it.

The very first person ever discussing the idea of "swap" with a foreign country was actually Ahmadinejad. But then a number of politicians, even the Greens, made it into a political issue and killed the idea.

Anonymous said...

The swap proposal was essentially accepted by the Iranian government in principle. Within days of its announcement, Mr Ahmadinejad lauded it as a sign of Iran's "strength" and later IRGC General Firouzabadi, the longstanding chairman of joint chiefs, also supported it in public.

Given the above, and the fact that the deal was put together with Mr Jalili, Secretary of the Supreme National Security Council and an appintee of Mr Khamenei, it is very likely that the Supreme Leader also was in favor of it.

However, it started to unravel, not when Mr Ali Larijani complained about it, but when Mr Mir-Hossein Mousavi and other dissidents called it almost treacherous and achieving very little for Iran, after the high price the country has paid for the small amount of LEU.

Even one of the managers of Iran's Atomic Energy Organizaion spoke out and said publicly that, under Mousavi's premiership, the country had imported some 600 tons of uranium, without much fuss, whereas, for 200 kg, they were expecting hand out nearly all of their LEU.

This put the regime right on the spot as it could not be seen as "soft" compared with the opposition.

So, with all respect to Mr Uskowi, I suggest that the internal power struggle and the crisis of legitimacy played a bigger part in the regime backtracking from this deal, than sniping from Mr Larijani.

Nader Uskowi said...

Anon 1:49,

Your well-written narrative makes a lot of sense. In my response to our friend b, I also said that theGreens were among the politicians who made the issue political. But I big to differ on two points:

1. The opposition was not in any position to dictate official policy. Their position on this issue was indeed a contributing factor in killing the swap deal, but could not possibly be the only, or even the main factor here.

2. The opponents within the conservative ranks were very powerful. Larijani only served as their spokesman. The majority of Majlis was behind him. Shariatmadari and ultra-conservatives were opposed to the deal. I don't believe Ahmadinejad expected such strong opposition from the conservatives. Khamanei, who had kept silence on the issue, must have caved in.

Anonymous said...

I think you are all "hoping" that Iran wil be hit by sanctions. Remember you have to lose in order to win and in the end ran wil achieve its aims of having nuclear energy. The world is more aware this time about the Zionist hidden agenda and so pushing sanction might not be as easy to get through as the West Press makes out.

NEO-SOMKA said...

Sanction This !!!! (imagine what I am holdin)

Anonymous said...

This is how the regime responds to criticism of its economic policies:

Amoui, who is an economic journalist, has just seen his prison sentence reduced from 7 to 5 years.

He was also sentenced to be flogged.

Anachronistic? Moi?!!