Sanctions on Iran are starting to bite, but not hard enough yet to force the regime to rethink its nuclear drive. Where does that leave Israel?
By DAVID HOROVITZ
In July 2007, President Mahmoud Ahmadinejad ordered the dissolution of the Management and Planning Organization of Iran, a 60-year-old, largely independent government body that had been responsible for much of the country’s economic oversight.The MPO used to prepare the national budget, draw up longterm development plans and oversee their implementation.It worked on a province-byprovince basis and was, according to expert accounts, a highly competent system of national economic management.Ahmadinejad tore it down the better to directly control his country’s economy. He set up his own budgetary planning body and centralized additional economic powers under his authority.The result has been dismal – Neanderthal management, as it was summed up to me by one of several experts with whom I’ve spoken in recent days.While Ahmadinejad is still emphatically secondary to Iran’s supreme spiritual leader Ayatollah Ali Khamenei in terms of overall power, he is undoubtedly a key economic player, and his policies are lousy.His insistence on maintaining an overvalued rial, apparently for reasons of national prestige, is harming exports.His low interest rate policies have caused heavy damage to the nation’s banking system.Unemployment is officially hovering in the 13 percent range and inflation at about 10%, though unofficial estimates suggest the true figures in both cases may be twice as bad. Unsustainably high subsidies mean, for instance, that Iran is among the cheapest places on earth to fill up your car with gas – just five or six dollars a tank. And because those levels of subsidy simply cannot be maintained, the president is replacing them with cash handouts, which in turn are proving ever-more expensive and hard to sustain.All this is unfolding in a climate of intensifying, though far from hermetic, international sanctions. No Western oil companies are active in Iran, there is inadequate technical assistance to maintain extraction, and oil and gas production are down. Financial sanctions have sent the cost of doing business soaring, and exports are being hit.
What is striking about Ahmadinejad’s economic leadership, according to the various experts with whom I’ve spoken, is that he is not strategically confronting those sanctions, not managing the resources at his disposal to most effectively minimize their impact.US Defense Secretary Robert Gates made headlines 10 days ago when, in a direct riposte to Prime Minister Binyamin Netanyahu’s demands for a “credible threat of military action” to back up the sanctions effort, he argued that military strikes could only offer a “short-term solution” that would merely render Iran’s nuclear drive “deeper and more covert.”Less noticed here was Gates’s assessment that the sanctions have “bitten much harder” than the Iranian leadership had anticipated and his striking revelation that “We even have some evidence that Khamenei now is beginning to wonder if Ahmadinejad is lying to him about the impact of the sanctions on the economy, and whether he is getting the straight scoop in terms of how much trouble the economy really is in.”The experts I’ve spoken to all agree that the sanctions are indeed starting to hurt. Recent measures are said to have significantly affected the Iranian Revolutionary Guards Corps (IRGC), the all-powerful military conglomerate which, via its various tentacles, reportedly controls as much as a third of the Iranian economy. As well as overseeing the nuclear program, missile defense and national security, the IRGC is also responsible for building the oil industry’s infrastructure, for mining activities vital to the nuclear program, telecommunications, even farming, employing a vast work force.And its room for economic and commercial maneuver is said to be increasingly constrained.Israel is understood to have been impressed by the extent of EU sanctions enforcement.Russia’s decision not to go through with the sale of S-300 missile defense systems is also recognized as a significant shift.When a regime that uses cash to grease the wheels and stay in power is facing dwindling financial reserves and is presiding over an inefficient, mismanaged economy, the consequences are clear. It has to rely increasingly on coercion. And it is losing popularity.As yet, however, the international squeeze is far from universal and the sanctions are not devastating.There is concern at China’s capacity to fill any vacuum and meet any need created by other countries’ suspension of commercial partnerships. There is dismay that India is still providing a highly significant proportion of Iran’s refined oil requirements.And there is widespread agreement, uniting Israel and the other key international players pushing the sanctions effort, that for all the economic distress, there is absolutely no sign at present of Iran changing course.To the central question, Will Iran abandon its nuclear weapons drive as a result of sanctions?, the answer for now is an emphatic no. To the subordinate question, Will Iran slow or suspend its nuclear weapons drive as a result of sanctions?, the answer for now is sadly no as well.As Netanyahu told the Jewish Federations’ General Assembly in New Orleans, “We have yet to see any signs that the tyrants of Teheran are reconsidering their pursuit of nuclear weapons.”IT GETS worse.Fiendish computer viruses might be wreaking all kinds of havoc within the Iranian nuclear program. Centrifuge operations might be stalling intermittently. Bizarre accidents might continue to occur.Nevertheless, should the Iranians choose to do so, the experts believe that, within six months, they could “break out” and become a member of the nuclear club. That is not to say that, within six months, they could definitely weaponize – fashion a nuclear warhead and fit it to an effective delivery system.Rather, they could enrich their stocks of low-enriched uranium to create a nuclear device and test it – a test that would be immediately picked up by international monitors and hailed by Iran as proof that it had now gone beyond the point of no return.Will Iran choose to do so? Nobody claims to have a definitive answer to that question.But there is widespread dismay at Iran’s apparent sense of emboldenment, and I encountered no little criticism of the role of the United States – under both president George W. Bush and President Barack Obama – in encouraging that Iranian confidence.Time and again, I was told that the Iranian regime is pragmatic. That it is not suicidal.That among the prime motivations for its nuclear quest is the desire to ensure that it will not be vulnerable to what happened in Iraq – to its speedy demise at the hands of outside interventionist forces. That when it truly feared the US was heading its way, between 2003 and 2005, it froze its nuclear program.But Iran has watched trifling North Korea – throwing its weight around again this week – ignore warnings of international hellfire and expose the US as a paper tiger. And it delighted in the fact that Obama recognized Ahmadinejad’s election victory 17 months ago, essentially legitimizing a regime that the US hadn’t recognized for the previous three decades, and doing so precisely when the Iranian people were staging their most determined effort to date to break free of it.The bottom line: Two years ago, the Iranians were wondering whether the US and/or Israel might seek to intervene militarily to stop them. Now, they believe that the US is out of the equation.Israel thinks so too. The view here is that opposition in the US to a military strike at Iran extends far beyond the Democratic administration and deep into Republican ranks as well. The US doesn’t want to attack, I was told, and that includes much of the political Right. Gates’s thinking – that military intervention would only unify the Iranian people behind their currently unpopular government and its nuclear quest, and that it could not cause a long-term collapse of the program – is supplement by the wider regional argument that it will bring Shi’ite and Sunni Muslims closer together in opposition to the West, legitimize Iran’s claims that the West cannot be trusted and must be confronted, and spark much-intensified nuclear weapons programs throughout the Middle East.The US wants to build deterrence, I was told. The US wants to replicate the conditions of mutual assured destruction that kept America and the Soviet Union just the right side of sanity during the Cold War. The trouble is, this is not the Cold War, and the Islamists are not the Communists.SO WHERE does that leave Israel? The short answer is ambivalent. The slightly longer answer is extraordinarily worried, and ambivalent.Israel mistrusts the Iranians more than the Americans do, maybe because it understands them better. It still believes in the potential for sanctions to force at least a suspension of the nuclear program if the regime feels its hold on power is disintegrating. But it knows that, as things stand, Iran is closing in on the bomb faster than the sanctions are forcing a rethink.Israel regards a nuclear Iran, under this regime, as a monumental threat, a catastrophe, a devastating change. An Iran unbound would be an extreme danger to us, to the region, to the world. Iran regards itself as one of the world’s great nations, and certainly as the rightful leader of the Islamic world, and a nuclear capacity would give the regime far greater capacity to advance its ambitions.With its own oil reserves depleting, it would also be more capable of imposing itself on weaker oil-producing neighbors; its evident interest in muscling-in on Bahrain is a mild harbinger of what might follow.Netanyahu has placed Israel at the forefront of the international chorus of alarm, in contrast to Ariel Sharon, who preferred to work behind-the-scenes in alerting the international community to the scale of the danger.Netanyahu has drawn parallels between the ayatollahs and the Nazis, and rightly notes that we did not gather the majority of the Jewish nation to this historic sliver of land after the horrors of the Holocaust only to be rendered vulnerable again, 70 years later, to another regime’s genocidal ambitions.And yet there are many highly influential voices in Israel that urge a return to the lower profile. Let’s put ourselves in the background again, they say. Don’t lead the global struggle, or we’ll turn ourselves into the first target.Some of these men of influence claim, like Gates, to detect cracks in the regime, including between Khamenei and Ahmadinejad.They see the first faint signs that Iranian public thinking on the nuclear issue is becoming more nuanced as the economy sinks. There is still overwhelming support for Iran’s right to nuclear energy, but not necessarily, if this is the economic cost, for its need for nuclear weaponry.These Israeli voices argue that, since the regime seeks the bomb primarily to ensure its survival rather than primarily to destroy Israel, then – however implausible this sounds – the challenge for the international community, in the upside down world of diplomacy, is to construct a framework in which the regime would feel that by backing down on nukes it would be “enhancing its survivability.”As things stand, to get into regime’s head, it regards defying international will as giving it more power and leverage, while capitulating to pressure would likely presage more demands, more concessions and ultimately its demise. This echoes the Gates approach: “The only long-term solution to avoiding an Iranian nuclear-weapons capability is for the Iranians to decide it’s not in their interest.”FOR NOW, the widely (though not universally) held assessment here is that the regime would likely not fire at Israel if it got the bomb, and would not supply a non-state actor either, for fear of bringing the entire international community violently down upon its head. And while the preparation of all necessary potential military measures is deemed essential, Israeli military intervention is not currently regarded as advisable.The Washington-based Politico website reported on Wednesday, indeed, that “Some Israeli officials say the country’s fingers are off the hair-trigger that would launch a strike on the Iranian nuclear program” and referred to “the apparent willingness of the Israelis to postpone a demand for confrontation by months – at least.”Echoing former US defense secretary Donald Rumsfeld’s somewhat incoherent talk of things we know, things we don’t know, things we know we don’t know, and things we don’t know we don’t know, Israel thinks it doesn’t know where a not-insignificant proportion of the Iranian nuclear program is located. And Israel worries that there are other facilities that it doesn’t know it doesn’t know about.In a best-case scenario, if Israel destroyed the majority of the Iranian nuclear program – the part it knows it knows about – Iran has the expertise and the capacity to rebuild, and would be back where it is today in three to five years.Politico quoted Yossi Kuperwasser, the deputy director-general of Moshe Ya’alon’s Ministry of Strategic Affairs, to underline the contention that Israeli fingers are off the hair-trigger for now: “Everybody understands that you have to give some time for the sanctions to bear their full fruit.”Indeed Ya’alon himself, along with fellow septet ministers Dan Meridor and Ehud Barak, not to mention Netanyahu, have all publicly indicated that they support giving sanctions more time, while The Jerusalem Post reported last month that Avigdor Lieberman’s Foreign Ministry is even preparing policy options for the “day after” Iran passes the nuclear threshold, in a “first admission that the government is giving serious thought to adjusting to a reality where Israel is no longer, according to foreign sources, the sole nuclear power in the region.”For his part, the current chief of staff, Lt.- Gen. Gabi Ashkenazi, it is believed, cautions against military intervention as things stand.Whatever their thinking, it is a safe bet that the entire Israeli leadership would be mightily relieved if they were spared the fateful decision. If, that is, the sanctions regime were ratcheted up further and more widely imposed, if the Iranian economy nosedived further, and if the Iranian regime – or a desperate Iranian public – concluded that the country was being devastated by its pursuit of nuclear weapons.