Iran’s Power Play

November 26, 2005

Iran is splitting more than atoms in its quest to achieve nuclear power—it’s splitting the world’s major power alliances and is showing signs of a chain reaction within its own government. While it has yet again avoided referral to the UN Security Council, Iran isn’t going to fade away from the headlines.

By Sherry Harbert

Since the victory of the Conservative hardliners in the June 17 election, Iran has become overtly intransigent in its pursuit of nuclear technology. President Mahmoud Ahmadi-Nejad ignited a power struggle with the West soon after his victory. He was only in office 10 days when Iran broke the final UN seals to its Isfahan uranium conversion facility to resume its uranium enrichment program. It was in direct defiance of the European Union’s negotiated 2004 Paris Agreement. Since then, Ahmadi-Nejad’s bipolar foreign policy has made for continuous headlines, but little progress.

The November 24 meeting of the International Atomic Energy Agency (IAEA) did not offer any immediate solution, except to give more time for negotiations. With Ahmadi-Nejad’s fracturing alliances showing more signs of a power struggle, referral to the UN Security Council would only serve to antagonize the situation. Even the U.S. has slowly moved toward a more conciliatory attitude.

In September, the IAEA issued a resolution for Iran to produce all nuclear-related documents, ratify an inspection agreement and access all nuclear sites. The resolution passed 22 to 1, but 12 members, including Russia and China abstained. Venezuela voted against the measure. Iran has indicated a willingness to abide by those mandates by handing over more documents and allowing IAEA inspectors inside their facilities over the last two months. But, there has been no movement in the most important mandate, suspension of its uranium enrichment activities. Ahmadi-Nejad, along with his chief negotiator, Ali Larijani, and spokesmen from Iran’s Supreme National Security Council claim the West is denying Iran a peaceful means to nuclear energy, while insisting it will remain in the Nuclear Non-Proliferation Treaty.

Although there has been no shortage of accusations and threats between the U.S., European Union and Iran, they are hollow without an actual referral to the UN Security Council. Yet, that seems as difficult for most of the players as it was back in 2003 when Iran first publicly resumed its nuclear activities. After two years of fruitless negotiations, it would seem there are no winners. Or just maybe, there are many winners.

Player 1: United States

Iran plays a curious role in U.S. foreign policy. When students stormed the U.S. Embassy in Tehran, Nov. 4, 1979, effectively deposing the Washington-backed Mohammed Reza Shah Pahlavi and held American hostages for 444, the U.S. officially broke off all ties with the new Iranian government. Yet, each administration from Presidents Ronald Reagan to Bill Clinton conducted low-level talks. The Clinton Administration even eased sanctions and promoted cultural exchanges during the 1990s during the time when political reformers in Iran were slowly gaining some power.

Any gains from the last decade were abruptly turned back when President George W. Bush gave his 2002 State of the Union address. Iran was named as one of the "Axis of Evil" states, sandwiched between references to Iraq and North Korea. Bush intended to convey a strong-arm approach to the axis in his first State of the Union after Sept. 11, but his stark rebuff was taken more as a challenge by those he denounced.

It was Bush’s second reference to Iran that is more curious. He referred to the Iranian government as "unelected," when the U.S. Department of State, the CIA’s World Fact Book and the Senate’s Iran Freedom and Support Act of 2005 all cite an overwhelming participation of voter turnout in the 1997 election. Bush’s statement was slight on the positive progress achieved by the reformers. The 1997 election saw more reformers gaining power in the public side of the Iranian government. Their achievements were short-lived. The hardliners fought back, stifling many of the reforms.

By the 2005 election, the reformist movement was in disarray. The Guardian Council, made up of elected and appointed members, rejected over 1,000 reformist candidates. With a sagging economy and the lack of reforms promised by the former government, Ahmadi-Nejad and many hardliners gained back much of the power in June. Straw told the British Foreign Affairs Committee last month that the most recent Iranian elections in June were imperfect, but produced results. Despite U.S. Congressional resolutions this summer to promote democracy, uphold freedom of expression and voice concern over the lack of dialogue with Iran, the U.S. administration appears more ready for a showdown, including inferences to military action.

Such talk has reinvigorated the Ahmadi-Nejad government. The U.S. has officially softened its rhetoric over Iran in the last few months to backing the EU negotiations. In the November 14 hearing of the 9/11 Public Discourse Project Third Report, Chairman Thomas Keane asked why the president or Congress wasn’t talking about the nuclear threat.

No one was also talking about the U.S. implications in Ahmadi-Nejad’s infamous "World Without Zionism" conference in October. The world rightly condemned the leader for his statements of Israel, but were silent on images of the U.S. at the conference. While photos of Ahmadi-Nejad flashed over television, print and the internet, only a small part of the graphic on the podium was shown. What the world missed, yet fortunately was captured by an Iranian blog, Regime Change Iran, is the sophisticated, yet chilling graphic in its entirety. Towering behind Ahmadi-Nejad as he ranted for the eradication of Israel was an hourglass holding the world in the top bulb, a falling globe with Israel’s flag streaming downward and a shattered U.S. globe already at the bottom.

Player 2: International Atomic Energy Agency

Established in 1957, the IAEA is the United Nation’s arm for controlling nuclear energy and weapons in the world. It relies on the 1968 Nuclear Non-Proliferation Treaty (ratified by the U.S. in 1969) and subsequent additions. There are 189 parties to the treaty, including Iran and North Korea.

The NPT has not deterred some nations from acquiring nuclear technology. Take note that India and Pakistan, both possessing nuclear weapons, have never signed on to the NPT, yet have support from the U.S. and other nations in their nuclear activities. The U.S. issued new initiatives to support Indian nuclear energy in September.

In 2003, the IAEA began on-site inspections of Iranian nuclear facilities. A 2003 report lists 22 sites operating, under construction, dismantled or closed down. After a two-and-a-half-year investigation, IAEA Chief Mohamed ElBaradei’s 2005 report to the United Nations, Sept. 3, revealed the agency’s frustration with much of Iran’s nuclear activities. The investigation could not substantiate claims that Iran has actually worked on uranium enrichment, the last stage to developing a nuclear weapon. Iran claims it is only at the uranium conversion stage. Yet, it was still unable to verify Iran’s true nuclear activities. ElBaradei met with Iran’s new chief nuclear negotiator, Ali Larijani, before the report’s release. One week later at the IAEA Conference in Vienna, he oversaw a resolution again warning Iran to abide by the NPT rules.

ElBaradei was awarded the 2005 Nobel Peace Prize for his work negotiating within the NPT for its member states. The prestigious honor was not ignored by Iran. Shortly after the award was announced, Iran began overtures to again begin negotiations. But ElBaradei still has much more work to do with Iran. Fortunately, he is well prepared and patient.

Player 3: Russia

Russia and Iran share a curious relationship. Russia has many economic ties to Iran, most notable the nearly completed Bushehr Nuclear Power Plant, estimated at a cost between $800 million to $1 billion. The U.S. is pressuring Russia to end its ties to the nuclear plant, but stops short of condemning it, as it needs Russian muscle over North Korea’s nuclear activities.

At least Russia and Iran enjoy direct dialogue. Though Iranian President Ahmadi-Nejad posed with world leaders for photos during the UN World Summit in September, it was only Russian President Vladimir Putin who met with him. But, Russia plays it both ways, much to its economic advantage.

Russia’s Atomic Energy Minister Aleksandr Rumyantsev informed members of the IAEA in Vienna that Iran has not reached capacity to enrich uranium and that Iran’s Natanz Pilot Fuel Enrichment Plant would take a year to bring it back online. Russia has actively opposed the latest push to refer Iran to the Security Council, yet had sided with the U.S. and European Union over curtailing Iran’s nuclear activities.

Russia and Iran expanded their economic cooperation November 9, signing an agreement to broaden cooperation in commerce, banking, insurance, transportation and exchange of information. There is also a proposal floating in diplomatic circles for Russia to take over Iran’s uranium enrichment process.

But Russia has nuclear problems of its own. Its former Atomic Energy Minister, Yevgeny Adamov, was arrested in Switzerland in May under a warrant for defrauding the U.S. of $9 million intended to improve safety and security at Russian nuclear facilities. Switzerland announced it would extradite Adamov to the U.S., much to the dismay of Russia. A statement by Russia’s Foreign Affairs Ministry accused Switzerland of political bias for ignoring Russia’s request to have Adamov extradited back home. Russia has its own corruption inquiry into Adamov’s affairs. Yet, its greatest fear is their former minister revealing Russian nuclear secrets to the U.S.

Add another interesting twist: Switzerland is named as representative of U.S. interests in Tehran by the State Department.

With U.S-Russian relations strained at best, Russia is determined to conduct foreign relations without U.S. influence. Since the Iraq War, Russia has sided with most of Europe’s opposition. Its growing alliance with the EU now includes a pledge to supply oil and a momentous agreement to lifting visa restrictions on travel between 11 EU nations and Russia. All the while, Iran just motioned its interest in renewing talks with the EU.

Player 4: European Union

A year ago, European Union negotiators from Britain, Germany and France, known as the EU-3, were lauded with success over the so-called Paris Agreement with Iran. With the agreement, Iran voluntarily suspended its nuclear activities. But, on Aug. 10, Iran broke the UN seals to its Isfahan facility and resumed uranium conversion.

After all its work, the EU-3 cancelled an important August meeting with Iran in protest. Iran rebuffed the EU’s action, then arranged a meeting with IAEA Chief ElBaradei.

The EU-3 sided with the U.S. and threatened to push Iran to the UN Security Council during the 2005 World Summit in September, but subsequently backed down. Now, with renewed interest in resuming talks, the EU may revise its ties with Iran without the U.S. Britain’s Foreign Secretary Straw recently stated his government isn’t interested in referring Iran to the Security Council when negotiations are still an option.

The other two in the EU-trio, Germany and France, account for much of the world’s foreign trade with Iran, according to the CIA World Fact Book. It is economically advantageous to both nations to continue trading with Iran. It may have convinced the EU-3 to ease up on its rhetoric against Iran. After the EU blasted Iran for its refusal to adhere to IAEA resolutions and the recent border bombings implicating Britain, a non-confrontational approach is the strategy de jour.

Player 5: Pakistan

The U.S. war on terror has drawn Pakistan into the forefront of international events. Since 2003, the U.S. has rescheduled or reduced billions of Pakistani debt. The U.S. began a five-year, $3 billion assistance package to Pakistan in 2002. President Pervez Musharraf was a key subject of praise by the Bush Administration in the 2002 State of the Union address which named Iran in the "Axis of Evil."

But, Pakistan has its own agenda. It is one of the few nations not part of the NPT that actually possesses a nuclear bomb. Pakistan was embarrassed last year when evidence surfaced that a former nuclear scientist, A.Q. Khan, sold Iran nuclear technology. Pakistan is recognized as the official representative of Iran’s interests in the U.S.

Pakistan indirectly cleared Iran this year of direct confirmation of weapons-grade uranium found by IAEA inspectors when it confirmed such traces were due to importation of Pakistani equipment purchased on the black market.

After the region was ravaged by an earthquake, Musharraf has become frustrated with its U.S. ties. He chided the U.S. and the world for ignoring the impending desolation. If the world doesn’t react to near the response afforded the Indonesian quake in 2004, Musharraf will be squeezed even more by those around him to abandon the policies supporting the U.S. and its war on terrorism.

Player 6: India

India is probably the most adept at playing it both ways with the U.S. and Iran. For the U.S. part, India has become a key outsourcing destination for major U.S. companies. It retains special privilege in the U.S. Most recently, that includes a nuclear energy cooperation initiative announced during the September visit of Prime Minister Manmoham Singh to Washington, D.C.

In an unprecedented move, the Bush Administration proposed changing U.S. law to support nuclear programs with India. Currently, it is illegal for the U.S. to conduct such activities with a non-signatory of the NPT, who also happens to have a nuclear bomb. Nicholas Burns, Under Secretary of State for Political Affairs, announced in early September that the administration would be busy lobbying Congress for the modifications in the law to allow the initiative to move forward. And just on cue, the following days brought resolutions from Representatives Alcee Hastings and Tom DeLay commending the improvement of relations between the two countries.

Burns’ testimony to the House International Relations Committee on Sept. 8, cited the strong economic components of India’s relationship with the U.S., India’s democratic traditions and energy. He requested changes in U.S. law to facilitate the participation of fusion energy research. (Currently, fission is the only viable means of producing nuclear energy.)

What was most surprising in Burn’s testimony was his justification for nuclear energy relationship with India. He stated that India currently produces 51 percent of its energy from coal and "the environmental benefit of nuclear power in India would be significant and help curb global warming." Burns went on to state that nuclear energy offered a clean alternative. Surprising findings after the sweeping U.S. Energy bill did little to offer any alternative to fossil fuel use in the U.S.

Nothing in the initiative requires India to become a member of the NPT. Only mentions of placing its civilian nuclear facilities under IAEA safeguards is offered—not its military nuclear facilities.

Such friendly ties make it less of a surprise that India recently voted alongside the U.S. to admonish Iran for its nuclear program. Yet, India has energy ties of its own with Iran. It has a long-term contract with Iran for the supply of natural gas. According to the Irano-Hind Shipping Company (owned by Iranian and Indian sources), negotiations are in the final stages for the formation of an Iran-Indian shipping consortium. There is also a proposed Iran-India-Pakistan pipeline to be considered. Iran’s nuclear negotiator, Ali Larijani, stated the IAEA vote would not hinder relations between the two countries.

The Eastern Front

Japan, China and South Korea are also players. Though Japan is more likely to succumb to U.S. pressure to divest itself from energy deals with Iran, Energy Information Agency finds it still receives at least six percent Iranian oil.

China’s growing demand for oil gives it great incentive to deal with Iran. It has been one of the major powers threatening to veto actions taken against Iran by the Security Council. According to reports from Iran’s hard-line daily, Keyhan, China holds large energy contracts with Iran. According to the Irano-Hind Shipping Company, China is in the last stages of negotiating a tanker vessel and bulk carrier sale with Iran. Opening up its activities with Iran in front of the Security Council is enough reason for China to keep blocking sanctions or other actions against Iran.

Even South Korea plays a major role in Iranian trade. Although Iran is denying recent threats to sanction the country for its vote for the IAEA resolution in September, it won’t affect the oil exports to South Korea. According to the Korea Trade Investment Promotion Agency (KOTRA), Iran is one of South Korea’s top five oil suppliers. In return, South Korea exported $2.1 billion in goods to Iran last year.

The World Awaits a New Round of Talks

That leaves Iran in main view of the U.S., European Union and United Nations. Situated between Iraq and Afghanistan, Iran’s leadership is tightening its grip on its people inside the country and becoming more overtly confrontational because of the regime changes outside its borders. But, it has something the other nuclear newbies don’t possess—oil. And with oil, comes the money to finance a nuclear program.

Ahmadi-Nejad insists Iran is only interested in the peaceful means of nuclear power. But, with an oil production capacity that far extends beyond its current output, the need for nuclear energy is questionable. Both 2004 and 2005 reports by the U.S. Energy Information Administration state Iran produces around 3.9 million barrels of oil each year, with net exports around 2.5 million. It is far from the 6 million barrels Iran was producing in the 1970s. The report also stated that U.S. economic sanctions and political pressure were undermining Iran’s efforts to attract foreign investment in its oil industries, especially at its Azadegan field. Japan pulled out in Feb., 2004, even though it was projected that the Azadegan field would provide as much as 6 percent of the country’s oil imports.

If Iran wants to convince the world of its peaceful energy needs, it will first have to drop its antagonistic approach. That also applies to the West, if it truly wants to include Iran in meaningful dialogue.

But, there is another critical dimension to Iran’s latest nuclear challenge. The world largely ignored the strides reformers accomplished over the past decade. The world is now ignoring the dismal economic conditions in the country that helped sweep the new hard-liners into office. There is little time to remain on the sidelines. Iran’s population is well-educated, yet lacks economic stability and progress—important ingredients for shaping a nation that could either turn increasingly defiant towards the West or one that can reshape a new strategy in the Middle East.

© 2005 Foreign Interest. All rights reserved.

Suggestions for further investigation:

One of the thousands of Iranian blogs: http://regimechangeiran.blogspot.com

International Atomic Energy Agency: www.iaea.org

International Crisis Group: www.crisisgroup.org

U.S. Department of State 2005 NPT Review Statement: www.state.gov/t/ac/rls/rm/45518.htm