Amongst the many things that has the world excited is the situation with Iran and their illegitimate president Mahmoud Ahmadinejad. While many US governments have swung the pendulum of regime change vs. ignoring regimes from North Korea to Iran through Syria, Lebanon, Libya and others, one thing is almost always clear, some regimes are definitely counter productive to their own people and the world and require adjustment of some sorts. In my book Iran is certainly one of those...without the aid of any media or government spin (ours or others).
Iran's economic health is very good and given a chance to fully participate in the world's business, it will be a thriving force. In reviewing world banks data about Iran and the CIA, I found that;
- Population: 71MM (2008)
- GDP: $258B (2008) with 2.6% (2009) growth
- Unemployment: 11% in 2009
- Per capita income of $13K
- Debt: 19.4% to 7.4% of GDP (data is suspect based on source)
- CO2 emissions higher than their neighbors
- Literacy - 82% of 15yrs or older
- Low mortality of -5 of every 1000
Based on some of these data points and more as well as the assets the nation possess, it does appear that Iran has tremendous upside if its government sheds it current approach to governing its people and relationship with the world. Like Cuba, this country is ripe for significant tourism and connection with its people as soon as the climate improves.
This basic information about Iran in mind, let us understand what the true issues are that drive us to act against it;
1. Nuclear proliferation and the opaque stance of the government - This to me is a serious issue and is exacerbated in the new world we live in where Islamic fundamentalism is perpetuating unprecedented terrorism. This is particularly concerning since Iran's stated driver for their Nuclear program is a the anhiliation of the Zionist state of Israel. That is very unnerving, if I were to live next to the threat.
2. Iran is in violation of the IAEA security standards.
3. Human right violations against its own people - No government should be allowed to treat its people poorly. On that scale and how one would define "poorly", many countries starting with China would stand out. While there are global human rights organization, they are without teeth. The only way for Iranian's to be better treated and given a fair chance of competition with the rest of the world is to have a leadership that is willing to join the world community and open itself up to change.
4. While development of nuclear energy for peaceful purposes such as energy generation, medical use is something that should be encouraged, however in the case of Iran, it has been deceitful in its claims of not enriching uranium. It has gone back and forth on its true intention and certainly hidden its development sites from IAEA which raises the level of mis-trust.
So lets talk solution then. Plenty of options that I have heard over the last couple of years that I have weighed upon and think one of those has merits. It has merits only if executed appropriately even if that is stating the obvious. Lets just review the options the world community has to force Iran to change its way;
1. Military action: Iran is a large country with targets spread all over its geography. Last count there were 10 nuclear installations, most of them well underground makin
g them even more difficult to access. A look at the adjoining map gives you an indication to how spread out the installations are. This obviously is not the super secret or latest, which I am sure would be wider and deeper. In addition Iran's military power is not to be sneezed at and would take significant effort and cost to overcome for a US led coalition. Air only incursions as an approach to minimize human life have been analyzed and shed due to the depth of the nuclear installations that even our bunker busters that were used in Afghanistan will be useless. Military experts have essentially agreed to the fact that invasion of Iran is a more costly and fool-hardy approach to resolving this crisis. Further....who really has the money without completely bankrupting themselves, considering any coalition would mean 80% US and 20% other, we are already thinly stretched to venture another adventure.2. Diplomacy: One of the tenets of diplomacy is a level of trust parties bring to the table. Considering that is an item that has eroded since the Shah was booted out in the 70's and currently is negative, it is unlikely discussions will go forward. The various interlocutors on Iran's behalf are themselves not sure about Iran's intent making it awkward for them to make a case. Iran has had several opportunities to come to the table especially from the start of President Obama's term when he famously quoted at his inguration speech, "...are willing to unclench their fist, they will find an extended hand from us" as well as eloquent Cairo university speech have clearly not encouraged Iran. Even the efforts of our partners in the EU have not received much hope. While diplomacy is certainly a window keep ajar, our next option is really the key to make the needle move.
3. Sanctions: Historically speaking sanctions are toothless dud's. However if it were to be enforced, in the case of Iran it could yield spectacular results long term while in the short term will hurt its population, a sad collateral damage. To emphasize this let us consider the map here for a moment;
- We own the eastern boundary directly or indirectly in Pakistan and Afghanistan. That said there are a few tactical challenges here but given the terrain of the region and the people's unflinching loyalty to a quick buck. The red lines indicate a tentative relationship with the nations owning those boundaries.
- In the south our naval prowess combined with already existing presence in the straits of Hormuz, the Persian Gulf, Gulf countries and Saudi Arabia gives us tremendous influence in the area.
- In the West, our new friends in Iraq and historical enemies of Iran will ensure we will continue to own that border for this purpose.
- In the North Western side, Turkey, Armenia and Azerbaijan are all US allies who want to be part of the NATO or are large US aid recipients. Time to call in those chits. In addition we have bases in the area with strong relationships and hence the green lines.
- In the north, the Caspian sea with the help of the Russians, will again be in our column.
- Lastly on the North Eastern side, Turkmenistan is a country we are most likely going to have a base in sooner or later. Right now we have an agreement for the NATO to be a supplier and transit point. We can assume we will have sufficient influence to enforce sanctions from there too.
Let us consider the implications so there is clarity on what they are and how we can mitigate them;
1. Immediate inflation in the country as traders hoard and government rations. This could hurt the majority of the population that is considered lower middle class. However it could also trigger the final assault on a unpopular regime and potentially change it for the better. One can hope.
2. Trade partners will hurt, specifically China, Russia and Dubai. This could be telling to the global financial markets but again I have to think it is temporary as the overall exposure to Iran has been limited for many years for both the EU and US.
3. Oil, most folks would think would be the largest impact. There is more myth than reality here. Reason being there are doubts about the reliability of official OPEC reserves estimates, which are not provided with any form of audit or verification
that meet external reporting standards. Further a system of country production quotas was introduced in the 1980s, partly based on reserves levels, and there has been dramatic increases in reported reserves among OPEC producers. While there is no doubt Iran has the 3rd largest known reserves in the world and hence it the 3rd largest producer, with sanctions, OPEC can increase production through its other member states. Bottomline we wont miss Iran's oil for a while....however OPEC has to sign up to ensure oil prices and futures do not sky rocket while ensuring production levels match current levels. I think it can be made possible.4. There may be a surge of terrorist activities by sympathetic groups to Iran such as the Hezbollah. There is not specific mitigation than what most governments are already engaged in.
It is necessary to help Iran change its mind when the US, Russia and other countries are taking definite steps to reduce nuclear arsenal. Infact it is President Obama's vision to see a world without nuclear weapons. In such a futuristic environment, fortified by the fact that we should be expending resources on human progress not on ways to destroy it. Iran with its intrinsic assets and potential should direct those energies to improve their peoples stock, take a leadership role to help with Afghanistan, Pakistan, Iraq, reduce its support of the Hezbollah and terrorism for what ever reasons and join the world's community. We could do with more peace.
So bottomline, I say we need to squeeze Iran...I think 30-90day's from a disciplined and enforced seize from the day it starts should be able to get Iran to;
1. Open the doors to IAEA for a thorough investigation
2. Shutting down of all enrichment plants
3. Change their stance on Israel
This could lead to Iran re-joining of the world community and more one day (hope).
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