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Analysis

BICOM Focus: The US and the Iranian threat: Between diplomacy and economy

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This is the final instalment of our four-part BICOM Focus on the US presidential elections. Please follow the links below for the previous three briefings:

 

The Iranian regime’s nuclear aspirations have become one of the main items on the American foreign policy agenda in recent years. However, several factors have prevented the current administration from translating otherwise strong rhetoric into effective, concrete measures. First, the engagement of US military forces in two simultaneous fronts in Iraq and Afghanistan has strained US resources and shifted US and global public opinion against the use of military force until diplomatic routes have been exhausted.[1] In addition, other international players are challenging the American stance and continuing their diplomatic and economic contacts with Iran. Russia’s insistence on following independent policies with Iran, and China’s dependence on Iranian oil reserves have played a leading role in fracturing the international front. Furthermore, the Bush administration’s policy towards Iran was gaining only limited support at home and partial cooperation around the world. Despite recent efforts by the UK and French governments to assist the US in re-establishing a united international front against Iran, no consensus is in sight.

Beyond these geopolitical considerations, the events of the recent weeks highlight economic aspects that will affect future relations between Iran and the US. It is ironic that the same global crisis that exposed the fragility of the US economy will also fracture Iran’s confidence and future economic and political resilience. Already, Iran suffers from an inflation rate that nears 30%[2] and the deterioration in oil prices means that Tehran may not be able to sustain its buoyancy in the face of ongoing international sanctions. As a result, future engagement between the US and Iran will not necessarily see Tehran in a position of advantage, having perhaps more to lose from ongoing isolation.

The altered economic atmosphere in global markets will also have an affect on the internal status of the hard-line Iranian leadership. Iranian President Mahmoud Ahmadinejad owes much of his current status among Iranian voters to the populist spending policies upon which he was elected, promising to “put oil revenues on the table of the Iranian people.” With oil prices nearing those of summer 2007, Ahmadinejad will find it harder – perhaps impossible – to fulfil his promises to the Iranian electorate. According to some analysts, Iran’s economic instability may open the way for more moderate Iranian elements to engage in substantial international negotiations, to ensure Tehran will not face economic meltdown similar to that experienced by the Shah’s regime in the 1970s.[3] Additionally, economic incentives presented by the international community may have more appeal to an Iranian leadership placed under growing financial pressure.

Fundamentally, both Democratic presidential candidate Barack Obama and Republican candidate John McCain agree that in terms of US strategy regarding Iran, the ultimate goal remains preventing Iran from attaining military nuclear capability. In a recent discussion, the candidates’ senior foreign policy advisors agreed that the US policy of deterrence, which was employed during the Cold War against the Russian nuclear threat, is not an option when it comes to Iran.[4] Additionally, there is agreement between the candidates that Iran’s strive for regional hegemony is a grave concern and should be placed at the top of the US foreign policy agenda.

However, there are substantial differences between the candidates on the methods that should be employed to prevent the Iranian regime from obtaining nuclear weapons. First, Senator Obama has made his willingness to directly engage in talks with the Iranian leadership one of the key features of his foreign policy. Obama’s advisors have clarified that he is guided by the need to employ “all elements of national power” to dissuade Iran from pursuing its nuclear ambitions.[5] These include diplomatic, economic and potentially military measures, as well as strategically communicating American intentions and views to the world.[6] The explicit purpose of this policy would be to dissuade the Iranian regime from proceeding with its nuclear programme; however, this is also an attempt to expose the true intentions of the regime. If these various measures fail, the American administration will be able to convincingly make the case for additional actions to deal with Tehran.

Senator McCain strongly objects to Obama’s diplomatic view. Last year he told Fox News that “The most overrated aspect of our dialogue about international relations is direct face-to-face talks.” Whilst the Arizona senator does not exclude the possibility that low-level talks may be held, he has said that dialogue on a presidential level, advocated by his Democratic rival, will reflect weakness on behalf of the US and reward its enemies.[7] Instead, more pressure needs to be placed on the Iranian regime in the form of sanctions, preferably through a “League of Democracies” that will include Britain, France and Germany.

Contrary to McCain, Obama stresses that a broad diplomatic effort will be needed to provide substantial results on the Iranian issue. “The reality is that effective sanctions require a community of nations and that cannot be done by the US and the EU alone. We need [the cooperation of] Russia, China and India,” Obama’s foreign policy advisor Richard Danzig said in September.[8] Also referring to the potential role Russia and China can play in this future process, Obama said, “Our diplomacy should aim to raise the cost for the Iranian regime of continuing its nuclear programme by applying tougher sanctions and increasing pressure from its key trading partners.”[9] The actual details of these policies are yet unknown. Although Russia may still pursue independent policies in international forums like the UN Security Council, its current economic weakness may reduce its willingness and ability to block international motions pushed forward by the US and its allies in Europe.

For the outside viewer, these differences are minute, with only direct engagement constituting the main issue of dispute. However, it is hard to overestimate this aspect, mostly because it constitutes a sharp change of course in the American foreign policy of the past eight years, and is seen by many as a crucial feature of the face of American diplomacy in the next decade. Interestingly, initial reorientation of the Bush doctrine has already been indicated by Under Secretary of State for Political Affairs William Burns’ attendance at the E3+3 meeting with Iranian officials in July.[10]

One issue both candidates remain clear on is that they will not hesitate to use military force to protect American interests around the world, though they remain vague about the possibility of a US military strike on Iran. This is understandable, as neither would risk committing to a complicated endeavour of this sort, without first receiving the role of commander in chief and weighing the full consequence of such action. However, both have agreed that the imminent threat of a nuclear Iran will pose a direct compromise of US interests, and that military force can and should be used in these cases.

Among the many regional issues that will demand the attention of the next president, the strategic magnitude of the Iranian matter, and the danger it poses to a wide variety of American goals in the region, are likely to place it at the very top of his agenda.


[1] Yitzhak Benhorin. “Poll: 63% of American support Israeli strike on Iran.” Ynetnews, 28 August 2008. According to this poll, commissioned by the Israel Project organisation, support for an American military strike was lower, with 55% supporting such a move.

[2] “Iran’s oil party is over.” AFP, 23 October 2008.

[3] Thomas L. Friedman. “Sleepless in Tehran.” New York Times, 28 October 2008.

[4] “America’s Grand Strategy in the Middle East: Views from the Campaign,” debate featuring Max Boot, advisor to the presidential campaign of Sen. John McCain, and Richard Danzig, advisor to the presidential campaign of Sen. Barack Obama. Washington Institute for Near East Studies, 20 September 2008.

[5] Ibid.

[6] John R. Mills. “‘All Elements of National Power’: Re-organizing the Interagency Structure and Process for Victory in the Long War.” Strategic Insights, Vol. 5 No. 6 (July 2006).

[7] Daniel Dombey. “McCain advocates Iran talks.” Financial Times, 28 September 2008.

[8] “America’s Grand Strategy in the Middle East: Views from the Campaign,” debate featuring Max Boot, advisor to the presidential campaign of Sen. John McCain, and Richard Danzig, advisor to the presidential campaign of Sen. Barack Obama. Washington Institute for Near East Studies, 20 September 2008.

[9] Barack Obama. “Renewing American Leadership.” Foreign Affairs, July/August 2007.

[10] “US reverses course, will send envoy to talks with Iran.” CNN, 16 July 2008.