Iran politics: Not bothered
FROM THE ECONOMIST INTELLIGENCE UNIT
The sanctions imposed on Iran as part of UN Security Council Resolution 1737, which was passed unanimously on December 23rd, will not, in themselves, seriously inconvenience the Iranian government as it continues down the path of developing its nuclear industry. The price of maintaining a unified international front on the issue has been to incorporate fully the views of states, such as China and Russia, which favour gentle persuasion over coercion in their approach to Iran.
Nevertheless, Iran's insistence on forging ahead with its nuclear programme on its own terms is by no means cost-free. There is scope for tougher sanctions to be imposed should Iran refuse to suspend its uranium enrichment activities, and eventual military action against Iran's nuclear facilities cannot be ruled out. Even without such punitive measures, the nuclear-stand-off is imposing a heavy opportunity cost on Iran's economic development, slowing down investment in the oil, gas and petrochemical sectors, as well as in critical infrastructure projects, including electricity.
The resolution seeks to enforce a ban on the supply of equipment or technology to Iran which could contribute to the enrichment effort or to heavy-water related activities and the development of nuclear weapons delivery systems. This is unlikely to bother Iran, as it seems that most of the materials and know-how it requires has already been procured. The resolution also provides an exception for equipment and supplies needed for the start-up of the 1,000-mw nuclear power station being built by Russian firms at Bushehr. The low-enriched uranium for the plant is to be provided by Russia, which will also handle the spent fuel rods.
The other main measures included in the resolution are a freeze on funds and assets of a number of designated entities and individuals tied to the nuclear programme and to Iran's military industries and a travel ban on these individuals. Again, this is hedged around with numerous exceptions, including one framed to ensure that contractual payments to Russia for work on the Bushehr project are no affected.
IGRC connection?
The list of entities and individuals provides some insights into the concerns harboured by the International Atomic Energy Agency (IAEA) as to the risks of Iran's nuclear programme having a possible military dimension. The entities include the Defence Industries Organisation, "some of whose subordinates have been involved in the centrifuge programme making components, and in the missile programme," according to an annex to the resolution. The individuals are listed as either being involved in the nuclear programme or involved in the ballistics programme--with one exception, Major General Yahya Rahim Safavi, the commander of the Islamic Revolutionary Guards Corps, who is listed as being involved in both programmes.
Iran has responded to the resolution by announcing plans to accelerate its enrichment programme. The Majlis (parliament) has also passed a law calling on the government to "revise" its relationship with the IAEA. There has been no suggestion of any counter-measures, for example withdrawal from the Nuclear Non-Proliferation Treaty (NPT). The relatively low-key reaction suggests that Iran sees no real threat in the resolution, which was passed almost five months after the expiry of a deadline set by the UN Security Council for Iran to suspend its enrichment activities. Resolution 1737 states that the director-general of IAEA has been requested to submit a report within 60 days on whether Iran has complied with the renewed call for it to suspend enrichment. If it is found not to have complied, further measures will be considered. In light of the laborious progress towards passing this mildest of sanctions resolutions, Iran can be fairly confident that it has plenty of time to press forward with its nuclear plans without risk of serious penalties. The Iranian government can take comfort from the fact that the resolution was adopted under Article 41 of Chapter VII of the UN Charter, which covers measures to be taken not including the use of armed force
End game?
Iran's commitment to mastering the nuclear fuel cycle appears to be unshakeable. The central question is whether the government is prepared eventually to give ground in negotiations about safeguards against nuclear weapons proliferation. Such concessions could be forthcoming if Iran were genuinely not interested in developing nuclear weapons--and satisfied with merely a theoretical capability to do so--or if the international will to block Iran's plans were to weaken to the extent that lax safeguards would be deemed acceptable. It seems more likely that Iran will continue to brazen it out, on the assumption that the united international front against it will crumble.
Forging ahead regardless exposes Iran to the risk that the affair will inexorably lead to a military confrontation. This risk can be mitigated by subtle diplomacy, spreading the message that even supposing Iran were pursuing nuclear weapons capability, its purpose would be entirely defensive. However, the rhetoric of Iran's president, Mahmoud Ahmadinejad, and the actions of Iran's allies in the Middle East suggest a more expansionary theme--that a nuclear-capable Iran would be intent on regional domination. Recent comments by the UK prime minister, Tony Blair, to the effect that "those presently in charge of the Iranian government's policy" posed a strategic threat to regional stability, produced a sharp rejoinder from the Iranian authorities, who summoned the British ambassador in Tehran to receive a dressing down.
Own goals?
If Iran does succeed in warding off a military attack on its nuclear facilities, it still has to reckon with the economic effects of continuously strained relations with the outside world. Investment in Iran's oil, gas and petrochemical sectors has lagged in the past few years, as Western firms have grown more circumspect and the management of these sectors has been affected by internal political upheavals. The government's hopes for large inflows of investment from Asia have yet to materialise, and shortages of refining capacity, combined with the pernicious effects of subsidies, have left Iran depending on imports to meet more than 40% of its petroleum products demand. The slowdown in developing Iran's gasfields has raised questions about where Iran is to source the fuel for future power projects. Nuclear power may indeed be an appropriate solution. However, as the IAEA has repeatedly observed, the logical approach for Iran would be to start the process by initiating nuclear power station projects--in addition to Bushehr, which was started in the 1970s--rather than producing the fuel.
The sanctions imposed on Iran as part of UN Security Council Resolution 1737, which was passed unanimously on December 23rd, will not, in themselves, seriously inconvenience the Iranian government as it continues down the path of developing its nuclear industry. The price of maintaining a unified international front on the issue has been to incorporate fully the views of states, such as China and Russia, which favour gentle persuasion over coercion in their approach to Iran.
Nevertheless, Iran's insistence on forging ahead with its nuclear programme on its own terms is by no means cost-free. There is scope for tougher sanctions to be imposed should Iran refuse to suspend its uranium enrichment activities, and eventual military action against Iran's nuclear facilities cannot be ruled out. Even without such punitive measures, the nuclear-stand-off is imposing a heavy opportunity cost on Iran's economic development, slowing down investment in the oil, gas and petrochemical sectors, as well as in critical infrastructure projects, including electricity.
The resolution seeks to enforce a ban on the supply of equipment or technology to Iran which could contribute to the enrichment effort or to heavy-water related activities and the development of nuclear weapons delivery systems. This is unlikely to bother Iran, as it seems that most of the materials and know-how it requires has already been procured. The resolution also provides an exception for equipment and supplies needed for the start-up of the 1,000-mw nuclear power station being built by Russian firms at Bushehr. The low-enriched uranium for the plant is to be provided by Russia, which will also handle the spent fuel rods.
The other main measures included in the resolution are a freeze on funds and assets of a number of designated entities and individuals tied to the nuclear programme and to Iran's military industries and a travel ban on these individuals. Again, this is hedged around with numerous exceptions, including one framed to ensure that contractual payments to Russia for work on the Bushehr project are no affected.
IGRC connection?
The list of entities and individuals provides some insights into the concerns harboured by the International Atomic Energy Agency (IAEA) as to the risks of Iran's nuclear programme having a possible military dimension. The entities include the Defence Industries Organisation, "some of whose subordinates have been involved in the centrifuge programme making components, and in the missile programme," according to an annex to the resolution. The individuals are listed as either being involved in the nuclear programme or involved in the ballistics programme--with one exception, Major General Yahya Rahim Safavi, the commander of the Islamic Revolutionary Guards Corps, who is listed as being involved in both programmes.
Iran has responded to the resolution by announcing plans to accelerate its enrichment programme. The Majlis (parliament) has also passed a law calling on the government to "revise" its relationship with the IAEA. There has been no suggestion of any counter-measures, for example withdrawal from the Nuclear Non-Proliferation Treaty (NPT). The relatively low-key reaction suggests that Iran sees no real threat in the resolution, which was passed almost five months after the expiry of a deadline set by the UN Security Council for Iran to suspend its enrichment activities. Resolution 1737 states that the director-general of IAEA has been requested to submit a report within 60 days on whether Iran has complied with the renewed call for it to suspend enrichment. If it is found not to have complied, further measures will be considered. In light of the laborious progress towards passing this mildest of sanctions resolutions, Iran can be fairly confident that it has plenty of time to press forward with its nuclear plans without risk of serious penalties. The Iranian government can take comfort from the fact that the resolution was adopted under Article 41 of Chapter VII of the UN Charter, which covers measures to be taken not including the use of armed force
End game?
Iran's commitment to mastering the nuclear fuel cycle appears to be unshakeable. The central question is whether the government is prepared eventually to give ground in negotiations about safeguards against nuclear weapons proliferation. Such concessions could be forthcoming if Iran were genuinely not interested in developing nuclear weapons--and satisfied with merely a theoretical capability to do so--or if the international will to block Iran's plans were to weaken to the extent that lax safeguards would be deemed acceptable. It seems more likely that Iran will continue to brazen it out, on the assumption that the united international front against it will crumble.
Forging ahead regardless exposes Iran to the risk that the affair will inexorably lead to a military confrontation. This risk can be mitigated by subtle diplomacy, spreading the message that even supposing Iran were pursuing nuclear weapons capability, its purpose would be entirely defensive. However, the rhetoric of Iran's president, Mahmoud Ahmadinejad, and the actions of Iran's allies in the Middle East suggest a more expansionary theme--that a nuclear-capable Iran would be intent on regional domination. Recent comments by the UK prime minister, Tony Blair, to the effect that "those presently in charge of the Iranian government's policy" posed a strategic threat to regional stability, produced a sharp rejoinder from the Iranian authorities, who summoned the British ambassador in Tehran to receive a dressing down.
Own goals?
If Iran does succeed in warding off a military attack on its nuclear facilities, it still has to reckon with the economic effects of continuously strained relations with the outside world. Investment in Iran's oil, gas and petrochemical sectors has lagged in the past few years, as Western firms have grown more circumspect and the management of these sectors has been affected by internal political upheavals. The government's hopes for large inflows of investment from Asia have yet to materialise, and shortages of refining capacity, combined with the pernicious effects of subsidies, have left Iran depending on imports to meet more than 40% of its petroleum products demand. The slowdown in developing Iran's gasfields has raised questions about where Iran is to source the fuel for future power projects. Nuclear power may indeed be an appropriate solution. However, as the IAEA has repeatedly observed, the logical approach for Iran would be to start the process by initiating nuclear power station projects--in addition to Bushehr, which was started in the 1970s--rather than producing the fuel.
posted by Marko at 12/28/2006 08:52:00 AM
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