An atomic argument

Massoud A. Derhally reports on increasing international concern over Iranian’s uranium enrichment programme, and how possible sanctions are likely to affect the embattled country’s economy.

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By  Massoud A. Derhally Published  February 12, 2006

|~|Bushehr2-200.jpg|~|CENTRE STAGE: Iran says its massive nuclear power plant in Bushehr will help its energy industry become more efficient, despite international doubts over the claim.|~|For two years now, Iran has been jockeying with the international community about its uranium enrichment programme. Several crises have been averted through European mediation, with Tehran agreeing to suspend its enrichment programme as part of a deal with Britain, France and Germany. But now, nearly seven months after the controversial Mahmoud Ahmadinejad was elected as president — a move that has further radicalised the political landscape of Iran — the Bush administration and politicians in Washington are only too eager to crack the whip at the pariah state. No doubt, statements by Ahmadinejad that Israel must be “wiped off the map” and his denial of the Holocaust have intensified the pressure on Iran, and congruently added to existing suspicions that some countries have of Tehran and its hard-line leader. Though the US is certainly adding to the pressure on the country, it is by no means the only player that has attempted to force Tehran to be transparent in its dealings with the international community with respect to its uranium enrichment programme. While the world is concerned about Iran having nuclear weapons, Tehran has persistently argued its aims are purely to generate electricity, in line with the Nuclear Non-proliferation Treaty (NPT) that it ratified in 1970. Under the NPT, Iran is permitted to have a civilian nuclear energy programme and is building a massive nuclear power plant in Bushehr, which it claims will help its energy production become more efficient. But the Americans and the Europeans have and continue to argue that a country that is rich with oil reserves is in no in need of a nuclear energy programme. More importantly, they contend that such a programme can serve two purposes, including the acquisition of nuclear weapons. “The EU adopted the American position early in 2005, in which it insisted that the only objective guarantee Iran could provide was to refrain from enriching uranium to begin with," explains Trita Parsi, a Middle East specialist at Johns Hopkins University. “In short, the Western position has been that the only objective guarantee Iran could provide that would assure the West that it wasn’t abusing its rights, was for Iran not to exercise its rights in the first place. Since neither side has been willing to soften its position, and since the US has refused to participate directly in the negotiations and couple the Western demands with American security incentives, an escalation has been more or less unavoidable since the spring of 2005.” Last week’s decision by the International Atomic Energy Agency (IAEA) to report Iran to the UN Security Council seems to have had little effect. If anything, it appears to have strengthened the resolve of the Iranian president — who has ordered an end to IAEA inspections and the resumption of the fuel cycle that allows for enrichment. The day after the IAEA announced it was referring Iran to the UN Security Council, Ahmadinejad lashed out the nuclear watchdog. “You can pass as many resolutions as you like and be happy about it, but you cannot stop the progress of the Iranian people... We thank God that our enemies are idiots,” he was quoted by Iranian news agencies as saying. “We don’t need you. It is you who need the Iranian people. This is the funniest decision I’ve seen… They are angry at the Islamic Republic, because the Iranian people have reached the summit of science and technology. You know you cannot do anything, because the era of domination and repression is over and we are no longer in the Middle Ages.” But like the Americans, who see Iran with a nuclear bomb as a threat to the security of Israel and the world, the Europeans are less than happy about the prospect of religious Ayatollahs holding nuclear technology that could enable them to arm intercontinental ballistic missiles, capable of hitting the European continent. Iran had offered to suspend enrichment for a period of two years while negotiating with the Union, but it (along with the rest of Iran’s offers) was rejected, according to Kaveh L. Afrasiabi, a prominent scholar on Iranian issues. Iran told the EU3 (Britain, France, and Germany) that its nuclear programme is for peaceful purposes, not nuclear bombs; that it would get the legislative approval in its parliament of the Additional Protocol to the NPT and would continue with IAEA inspections, and that it would stay within the realm of the NPT. It also offered not to resume enrichment prior to the next IAEA meeting; that its nuclear research would be subject to monitoring by the IAEA; and that it would continue negotiating with the EU3 regarding enrichment issues for two years. After that, if the negotiations failed, it said it would resume the enrichment. The EU refusal lends further credence to some observers' view that the present crisis is merely a pretext for a showdown with Tehran at the UN, which could ultimately lead to economic sanctions or possible military action. The strategic implications of a nuclear Iran also worries neighbouring Gulf States, who have been engaging Tehran through backdoor channels in conjunction with their allies in the West. Mustafa Alani, director of national security at the Gulf Research Centre, says Gulf States are of the view that Iran's real aim is to develop a nuclear military capability and that the civilian side of the initiative is really a smokescreen. “The civilian programme's purpose is mainly to camouflage the real programme. This is exactly the Iraqi Saddam Hussein scenario. There is a deep conviction in the region's leadership that this is the ultimate goal,” says Alani. Prince Saud, the Saudi foreign minister, revealed the growing fears of Gulf States in an interview with the Times of London last month. “We are urging Iran to accept the position that we have taken to make the Gulf, as part of the Middle East, nuclear free and free of weapons of mass destruction. We hope that they will join us in this policy and assure that no new threat of arms race happens in this region,” he said. The long time diplomat said Iran’s nuclear reactor, which is being built at Bushehr, posed a danger to its neighbours. “[The Iranian reactor] is on the Gulf and being built with Russian technology. Just think if a Chernobyl accident happened here.” Wary of Iran’s nuclear ambitions, the six nation Gulf Cooperation Council (GCC) made its position clear at a two-day summit in Abu Dhabi last December. And though no substantive discussions will be taking place at the UN Security Council until March 6, when the IAEA delivers its report, it is almost certain that Arab states will back the implementation of sanctions — if they are tabled. The catalogue of sanctions that have been implemented by the Arab world on Iraq and Libya in the past, makes it less likely that Iran will be able to sustain its current policies, analysts say. “There is an interest in implementing these resolutions. There is no question that an Arab country will not try to implement or listen to the [decisions of the] Security Council,” says Alani. The onset of sanctions could further drive the price of oil up and have a wide scale, economic impact on the global economy. By some estimates, such a crisis could increase oil prices to as much as US$90 a barrel. Iran, which is a member of the Organisation of Petroleum Exporting Countries (OPEC), accounts for 10% of the cartel's output, producing around four million barrels a day of crude. Despite the reluctance of Russia and China to support the implementation of sanctions on Iran, the two countries are likely to come around should all diplomatic measures to diffuse the situation fail. “Continued hard-line Iranian rhetoric and provocative moves related to their nuclear programme will make it less difficult for the US, UK and France to persuade the Russians and Chinese to go along with a stronger resolution than might have been the case otherwise,” says Wayne White, the former deputy director of the US State Department Bureau of Intelligence and Research’s Office of Analysis for the Near East. The Russians — who have offered Iran to carry out its uranium enrichment at a facility in Russia under its supervision (a scenario Iran has considered but not agreed to) — are nonetheless hesitant about cornering Tehran at the Security Council. “Iran is unlikely to accept the Russian proposal in its current form, since it does not want to lose the right to enrich uranium, does not want to become dependent on Russia for fuel, and because it does want to have a nuclear option as deterrence against a potential US attack,” says Parsi. “The Iranians are not convinced that accepting the Russian proposal will be the end of this issue. Once they agree to it, the US may raise the bar by accusing Iran of pursuing a clandestine programme inside of Iran.” Still, the Russians, who have tried to deter Iran, recently warned the international community not to isolate Tehran. In response to comments by US defence secretary Donald Rumsfeld that the military option remains viable in dealing with Iran, the Russian foreign minister Sergey Lavrov warned: “I think that, at the current stage, it is important not to make guesses about what will happen and [it is] even more important not to make threats.” If Iran goes nuclear, the overwhelming fear is that other states in the region will feel compelled to follow in its footsteps. “If one country introduces WMD to the region other countries will feel the urge and the need to develop [the bomb]," says Alani. “This is what happened with Iran when Iraq developed WMD. The Iranian programme was triggered by an arms race between the two countries. Iraq is now out of the question. There are six UN Security Council resolutions preventing the country from developing WMD capabilities forever. “The Iranian programme now has no justification in the region apart from the fact that it is going to be used as a political instrument to terrify other countries and dominate the region.” In the weeks up to March 6, when the IAEA director general Mohamed El-Baradei will deliver his report on Iran to the UN Security Council, the country’s position could become even more tenuous as the US and other permanent council members will be in the process of drafting a resolution that mirrors the Iraq scenario. “They will give Iran a multi-stage deadline,” says Shahram Kholdi, a fellow at the University of Manchester, referring to the five permanent Security Council members. “The P5 will perhaps insert several different sanction regimes. The severest is likely to be imposed not earlier than a year from now, so that they can secure reliable energy resources in the mean time and control the possible surge in the price of crude oil. “[This is] because the possibility of Iran pre-empting them by turning the oil taps off or attempting to meddle with the Persian Gulf and Strait of Hormuz oil tanker traffic might increase as time passes.” What is clear is that the Iran situation is near to spiralling out of control. The pressure that is being levied on Tehran is serving to increase its fears of what it considers are hostile US intentions. And these fears in turn are fuelling its urge to have a deterrent against the US. “The pressure must be coupled with incentives that will allay Iran’s fears. Otherwise, the fears are likely to take over which may spark a wider arms race in the region,” says Parsi. But Iran cannot afford to be defiant of the entire world. Its options are limited. The youth complain of unemployment. The country’s main trading partners are European. The economy is in tatters, in desperate need of reform and diversification. Though Tehran may be reaping US$42 billion in annual oil revenue — which account for 80% of the country’s export earnings and 40% of the government’s budget — the public debt of the country is draining its productivity. The Economist Intelligence Unit, a London based consultancy estimates the Iranian economy will grow by only 4.6% in 2006 — down from 5.5% in last year. These are all factors that suggest a less than ideal situation for a country that allegedly wants to take on the world. The Europeans and the Arab world are adamant like America to prevent the emergence of another nuclear power in a region already marred by a series of wars. If it chooses to be non-compliant and test the will of the international community, Tehran faces economic sanctions at best, and a military reaction at worst. Both may be too high a price for it to pay.||**||

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