Apocalypse next

As analysts say the Iranian nuclear crisis is on the verge of getting out of control, CNBC’s Ramia Farrage asks former president Mohammed Khatami what needs to be done.

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By  Ramia Farrage Published  June 11, 2006

|~|khatami2-200.jpg|~||~|As analysts say the Iranian nuclear crisis is on the verge of getting out of control, CNBC’s Ramia Farrage asks former president Mohammed Khatami what needs to be done. Mohammed Khatami emerges from his covert meeting with UN secretary general Kofi Annan. The two share a half embrace and a genuine handshake. Then, as I lead the former Iranian president away, Annan, with a soft smile, says: “Take care of him, he’s a wonderful man.” Khatami soon proves to be so. Iran’s leader from 1997 until 2005, Khatami has little in common with the Republic’s current ultra-conservative president Mahmoud Ahmadinejad, neither in policies, ideology, nor character. He sits robed, distinguished, with a kind rosy face, yet Khatami’s tender appearance does not undermine his fierce position on America’s presence in the Arab world. “The US is spending billions of taxpayers' dollars in the Middle East and unfortunately all it’s taking back is the corpses of American youth,” he explains. “America's presence in the region has been very detrimental to the Middle East and to the Americans themselves.” Any Iranian message that may have been considered belligerent, particularly infamous statements Ahmadinejad has made since he commenced his presidential post, were dwarfed by last week’s arresting announcement out of the Republic. Ayatollah Ali Khamenei, Iran’s supreme leader, said if the US makes a wrong move energy flows in the region will be endangered, while in the past Iranian officials ruled out using oil as a weapon in their stand-off with the West. If Khamenei’s threat is carried out, it could harm Iran more than consuming nations. Iran’s government derives about 50% of its revenue and most of its foreign currency earnings from oil sales. At the end of the 2005 fiscal year foreign currency reserves sat at US$45 billion. Oil revenues grew to nearly US$42 billion in the same period. With about 10% of the world’s oil reserves, Iran is the second-largest producer in OPEC after Saudi Arabia. Iran could, however, continue to work on partnerships with the Eastern world. China, for instance, boosted Iranian crude imports by 74,000 barrels per day in the first four months of this year. Right now, Iran exports two-thirds of the four million barrels of oil it pumps each day, mainly to China, Japan and other Asian countries. Khatami meanwhile, insists American pressure has little to do with Iran’s nuclear threat. “The pressure on Iran is not because of nuclear weapons, it's political pressure,” he says. “America needs to have an enemy to convince other countries that its behaviour in this region is appropriate and today America is trying to claim that enemy is Iran. I’m afraid the Americans need to justify their behavior in the Middle East and other regions. We have to do something within the Iranian system so that we don’t give them any excuse.” Some analysts agree that America has an agenda in the Middle East, but one, which focuses on the imminent Iran Oil Bourse, which allegedly has the goal of becoming the dominant centre for the Middle East’s oil trade. Many suspect the bourse will trade for oil in powerful euros rather than fragile US dollars. International buyers would have the option of spending dollars on the New York Mercantile Exchange and London’s International Petroleum Exchange, or paying in euros on the Iranian Bourse. Such a move could lead to a huge drop in the dollar’s value, potentially putting the US economy at great risk. Iran’s circumstances are comparable to Iraq’s. In September 2000, Saddam Hussein announced he would no longer accept dollars for oil sold under the UN’s Oil for Food program, and switched to the euro as Iraq’s oil export currency. Shortly after American-led forces ousted Hussein, Iraqi oil sales were once again denominated in US dollars. American security officials confirm if the clash between Iran and the US continues to escalate the waves churned in the Persian Gulf could spawn ripples that wreak havoc on economies as far as Europe and the West. “If you look at a perfect storm, a nightmare scenario where Iraq’s oil is still effectively off-line because of the insurgency, a war against Iran or some sort of military action that disrupts the flow of oil out of Iran, on top of that reprisals, guerrilla attacks against Saudi oil facilities or Gulf oil facilities, then you can very well imagine the price of oil skyrocketing, going through the roof, I mean US$80, US$90 or US$100 dollars a barrel,” warns Scott Bates, vice president and senior fellow for national security at the US Centre for National Policy. Bates is convinced Iran is manufacturing nuclear warheads. “I believe Iran is crafting a nuclear weapon,” he says. “I believe Iran is absolutely on the road to a nuclear bomb. There’s no doubt about that and I think some of their more extreme elements would like to have that kind of power to yield. I think it’s irresponsible, I think the more hands the bomb is in the more dangerous the world becomes, as it decreases everyone else’s security. There’s a knock on effect. You saw it. When India developed the bomb, then Pakistan had to have the bomb, and on and on.” Khatami is clearly bothered by Western accusations and criticism over Iran’s appetite for nuclear energy, particularly because it is a member of the non-proliferation treaty while Israel, Pakistan, and India, who all have nuclear programmes, are not. He vehemently denies his country is building an atom bomb. “If the real concern is towards nuclear weaponry we must first divert this concern to powers which have nuclear weapons not Iran, which doesn’t have nuclear weapons,” he asserts. “Under no circumstances does Iran want to have nuclear weapons and even if God forbid we did want to have nuclear weapons it would take many years to achieve.” Shortly after Iran’s week of naval war games this past April, where it test fired a radar-evading missile, a high-speed underwater projectile that Iranian officials claim can outpace any enemy warship, and a torpedo, a potential US air strike on its nuclear facilities dominated crisis talks, with good reason. Those warheads were fired on the route for about two-fifths of the world’s globally traded oil, the Strait of Hormuz. Experts cannot be sure when Iran’s commanding position over the narrow entrance to the Gulf, which gives it the ability to disrupt the world’s oil supplies, will drive the US to make the ultimate judgment: whether to hold, or drop the ammo. “I think nothing can be ruled out in terms of a strike on Iran’s nuclear facilities and I have to say that the situation is on the verge of getting out of control,” says Bates. “The US is not formally talking with Iran on the nuclear issue; they’re doing it through international agencies. I think it’s time for us to talk turkey with Iran. They really need to sit down one-on-one and realise that Iran’s not going anywhere. They’ve been around for 2500 years as a very strong presence in the Gulf, they’re going to be around for a lot longer, and we really need to make some kind of deal because this is not good for the world economy.” Even Khatami does not seem to have any inkling of whether or not America will strike his country. “When America invaded Iraq it received the opposite of the outcome it had expected. That’s delivered a message to America and hopefully it now understands it’s not wise to take critical action and to create clashes. I hope this situation doesn’t arise in Iran, and doesn’t make the current misunderstandings between Iran and America even worse. When asked what Iran would do in retaliation for an American attack, Khatami offers an eerie smirk and a one sentence answer. “I don’t want to ever imagine that happening.” With President Bush’s approval ratings falling, some are casting doubts on his administration’s ability to handle another conflict in the Middle East. “I think they’d better be up for the challenge because we certainly have our hands full in Iraq and the last time I checked Iran was about two to three times bigger than Iraq,” says Bates. “If it comes to violence at the end then that’s what happens but the US cannot be seen as the power that led to another crisis in the Middle East. It will hurt our long-term relationships and [create] instability in the Gulf. What I’m afraid of as an American is that our leadership and our judgment may be questioned by our partners out here if we act precipitously, if we act too quickly without thought, and without real attempts at negotiation.” Either way, Iran’s nuclear programme has been long in the making. Before the Islamic Revolution, during the time of Iran’s American-backed Shah and the Nixon and Ford administrations, the US allegedly not only helped, but encouraged Iran to embark on its nuclear programme. Khatami pledges America sold Iran its first nuclear reactor and encouraged the Shah to acquire nuclear energy. “The Americans had done research on nuclear energy and reactors and they advised us that we would benefit from between 8000 and 10,000 megawatts of nuclear energy,” he confides. “So yes, there was American based research and before the revolution we had even been negotiating contracts with the French and the Germans to build nuclear plants in Iran, in Bushier. “There was also a plan to build another nuclear power plant outside of Bushier but after the revolution the Western countries backed-off from the second plan so the current Iranian nuclear power plant is the same plant we had before the revolution. Now we’re finalising it with the help of the Russians. The US said it was economical to have nuclear energy so we stuck to that plan because oil is going to run out and we can use nuclear energy in much more effective ways.” But Khatami cannot produce evidence to back his claims of American collaboration in Iran’s nuclear programme. “We don’t have any documents to prove that the Americans offered to sell us a reactor to build a power plant,” he explains. “Also, the Americans weren’t willing to sell Iran nuclear technology; they were only willing to sell us the material we needed to create our own.” Nuclear aspirations are not uncommon among the international community. The US and France have the highest nuclear energy production rates in the world followed by Japan, which plans to produce 40% of its electricity using nuclear power by 2010. Germany operates nineteen reactors which produce one-third of its total electrical needs. Lithuania derives 77% of its electricity from nuclear power, with two of the world’s most powerful reactors in its territory. Iran’s Natanz facility is commonly highlighted in Western arguments as proof of its supposed ruthless intentions. Western officials say Iran failed to declare Natanz to the International Atomic Energy Agency for 18 years, while the NPT states no country is obliged to announce its facility until 180 days before nuclear material is introduced to it. “All our nuclear activities have been carried through under the eyes of the IAEA,” he says. “The IAEA was constantly monitoring Natanz and we acted exactly within NPT guidelines. Yes it’s true we didn’t sign the IAEA’s additional protocol at the beginning but later on we accepted the new protocol and as of then we haven’t done anything outside of its procedures.” Khatami claims Iran could not provide the IAEA with all the documentation it required because the papers were lost during the Revolution. “Immediately following the Revolution we began conducting some nuclear research and activities, many years worth,” he explains. “That’s why there was a delay in gathering all that info that the IAEA requested. We have since given a clear report to the IAEA and executed all activities under their observation. We haven’t done anything outside of that. Both Iran and the IAEA accepted that and the IAEA mentioned that it was satisfied with our nuclear activities.” Just one year ago, during Khatami’s ninth and final year serving as president, Iran was holding trade talks with Europe, and the US was willing to back nuclear negotiations led by France, Great Britain, and Germany. America offered Iran economic incentives such as the lifting of a decade-long block on its World Trade Organisation membership, providing it gave up its nuclear ambitions. Although Khatami rejected the proposal arguing Iran would never forfeit its right to nuclear technology, it was the first signal of a major US policy change towards Iran since the Shah was forced to leave the country 1979. Khatami proudly takes credit for that hint of American diplomacy, no matter how fruitless it proved to be. “During my presidency I removed the problems and conflicts between us and Western countries,” he beams. “I believe we were very successful in doing so. When I took the position at the beginning there was no European ambassador in Iran and we couldn’t secure credit from outside the country. We had problems with the world and all those problems dissolved. During my presidency Iran secured over US$30 billion worth of foreign investment contracts and most of those investments have been realised.” Khatami’s leadership marked an era where Iran opened up to the West. Political, cultural and economical ties improved and religious influence over lifestyles and freedom of speech was eased. He is devastated by the actions of his country’s new government, saddened when he reflects on his work and how it is now destroyed. “We have many old conflicts between Iran and America but in my time when I was president, Bill Clinton and I took steps to bring America and Iran closer together,” he says. “It’s a real pity that the new conservative government in Iran has taken such radical actions which led to the current situation. “The new conservative government has erased all the progress that we made previous to it. I hope both sides try to resolve the conflict. They have to find the sources of their problem and they have to change their policies towards one another to create an atmosphere of trust. “Hopefully we’ll reach a day when we find all the conflicts have been nullified between Iran, America and the citizens of both countries. Instead of facing-off they should stand side by side.” Iran is listed by the US State Department as the world’s most active state supporter of terrorism, mainly because it arms the Lebanese Shiite group Hezbollah and supports Palestinian groups Hamas and Islamic Jihad. Khatami refuses to brand Iran’s allies as extremists and says the only true Muslim militants are those who were produced by the Americans to fight for them during the cold war. “We know and everybody knows that these radical Muslims have nothing to do with real Islam and are people against the Islamic Republic of Iran,” says Khatami. “They were created by the Americans to stand up to the West’s old enemies during the cold war, the Soviet Union. Americans already know that these radical terrorist Muslims have had political problems with Iran since the beginning.” Despite Ahmadinejad’s constant threats to the international community, Khatami insists the fundamental structure of diplomacy Iran’s latest government is exercising is no different from the foreign policies employed when he led the nation. He says if the US had a better understanding of the Middle East, Iran and America would be allies, not adversaries. “We still really want to increase our relationships with Europe and with the whole world, even America,” he says. “If they change their foreign policy towards Iran, if America can accept and admit the truth and the truth of Iran and the truth of the region, the path to solving our problems will be reopened. “But I regret that the American method of diplomacy, to find enemies, has created a great barrier to communication between Iran and the US and between the US and the region.” ||**||

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