insideIRAN » U.S. Iran Relations

Is the Sanctions Debate Justifying the Military Option?

insideiran — Mon, 26 Apr 2010 19:54:25 +0000

Patrick Disney

WASHINGTON—To an outsider, it may seem like Washington is united in favor of imposing new sanctions on Iran. But, like in Iran itself, the internal wrangling over this question among Washington policymakers is much more complex and divided by factions than one may assume.

Congressional leaders from both parties have long called for new sanctions—and, bolstered by the strong support of the pro-Israel lobby, even some Democrats have undermined President Obama’s engagement strategy in their zeal for a more heavy-handed approach. Now that the administration has moved past direct talks and embraced the pressure track, one would assume that Congress, the president, and the rest of the Iran policymaking community are in harmony.

But they’re not. Not even close.

The president’s harshest critics, among them future presidential-hopeful Sarah Palin, disparage the administration’s push for sanctions as being too soft. They decry the shift away from “crippling” sanctions—which Secretary of State Hillary Clinton previously had endorsed—to a more targeted approach of sanctions that “bite.” The administration is holding firm on its decision not to pursue a unilateral or “coalition of the willing” approach until the multilateral option has been tried within the UN Security Council. And yet, many Republicans who once pressed the administration to abandon diplomatic engagement in favor of new sanctions have now soured on Obama’s version of the pressure track.

Among both liberals and conservatives, there is little optimism that new sanctions will significantly alter the situation facing U.S.-Iran relations. This is due, in part, to the administration’s inability to clarify its reasons for pursuing sanctions in the first place. Originally, the incoming Obama administration laid out a strategy of diplomatic engagement, bolstered—if need be—by economic pressure. The core of this strategy remained face-to-face talks, and sanctions were depicted as a way to gain leverage at the negotiating table.

It was impossible, however, to anticipate the tectonic shift that took place in Iran after last June’s presidential election. Without warning, a powerful movement sprang up that challenged the very nature of Iran’s theocracy. That is when the rationale for the administration’s sanctions push shifted. Officials began speaking of targeted sanctions having the potential to influence the “internal dynamics” inside Iran—providing a boost for the protest movement and possibly even bringing about regime change.

These divergent justifications for the administration’s sanctions policy have never been fully reconciled, nor has there been any clarification about what the sanctions are actually supposed to accomplish.

This lack of strategic vision came even more clearly into view when the contents of a secret memo were leaked to the New York Times this week. Written by Defense Secretary Robert Gates, the memo asserted that the Obama administration does not have an effective long-range policy for dealing with Iran’s continued development of its nuclear program, despite Western diplomatic efforts and sanctions.

Now, in the context of this strategic black hole, many in Washington are openly questioning the sanctions option, with conservatives turning sharply against President Obama’s sanctions plan.

Russia and China will never allow meaningful sanctions to be imposed, they argue, so the UN Security Council process is a waste of time. Similarly, unilateral sanctions—which have passed both houses of Congress and need only be combined for the president’s signature—are unlikely to alter Iran’s behavior. After all, Iran has long anticipated a U.S. clampdown on refined petroleum imports, and therefore has put in place a number measures designed to inoculate itself against any sort of pressure the United States and a few of its allies might impose.

Thus, no longer under the illusion that “crippling” sanctions will be a panacea, critics of Obama’s Iran policy are seeking to frame the issue as a choice between living with a nuclear Iran and taking military action to prevent it. Yet, this framing deliberately eliminates the various other options the president has at his disposal, and it is intentionally designed to make the military option seem preferable.

The challenge now for the Obama administration will be to demonstrate that this dilemma is in fact a false choice. This is sure to be difficult, however, as Iran’s nuclear program continues to grow, and in the absence of any breakthrough on the diplomatic front.

There is little doubt that the Obama administration views military options on Iran only as a means of last resort, but if conventional wisdom solidifies around this stark choice of either a nuclear-armed Iran or a military strike, President Obama is likely to find himself surrounded by members of both parties propagating the idea that all other options have, in fact, been exhausted.

Patrick Disney is the assistant policy director at the National Iranian American Council in Washington, D.C. He blogs at niacINsight.com and the HuffingtonPost.

How Likely is an Iranian Nuclear Counterstrike?

insideiran — Tue, 06 Apr 2010 18:05:34 +0000

Jamsheed K. Choksy

A preemptive attack against Iran’s nuclear facilities by the U.S., Israel, or both nations has been on the table for quite some time. Yet because Iran has at least a dozen centers related to its nuclear activities, demolishing the program would be extremely difficult. None the less, there is no dearth of war game scenarios by think tanks, universities, government departments, even magazines in the U.S. and Israel. Iran too has conducted its own large-scale defensive and offensive scenarios – including one last November involving actual military exercises.

Ultimately, how events could actually transpire remains anyone’s educated guess. At the very least, Iran will utilize technical knowledge gained over the years to rebuild its nuclear program and work feverishly toward weaponization. It probably also would officially abjure the Non-Proliferation Treaty and bar the International Atomic Energy Agency from any oversight.

Yet there is a far more devastating scenario that needs to be given much greater consideration. Iran could retaliate by actively or tacitly providing low enriched uranium (LEU) to militant and terrorists groups that are targeting the U.S., E.U., and Israel.

When physical incapacitation of nuclear facilities occurs at initial stages of construction, the damage to all parties is both minimal and manageable. Israel followed that trajectory when it struck at Iraq’s Osirak (Tammuz 1) reactor in June 1981 and at Syria’s Al-Kibar facility in September 2007. Iran recommenced its nuclear program during the early 1990s, expanding rapidly as the world dithered. So the window for a surgical strike by the U.S. or Israel has long passed. The scales of attack, devastation, and response have all increased exponentially.

In the chaos that now would surround the aftermath of aerial strikes on its nuclear sites, it is quite likely that Iran’s Atomic Energy Organization and the Islamic Revolutionary Guards Corps (IRGC) could lose control over portions of the nuclear materials inventory. Individuals and groups seeking revenge against attacking nations could spirit away radioactive materials and transfer those to Al-Qaeda via Afghanistan, Pakistan, and Iraq. The Taliban and its auxiliaries could be beneficiaries of nuclear elements too. Both terrorist organizations have tried, unsuccessfully so far, to obtain fuel for improvised nuclear devices.

Beyond the actions of rogue scientists and crazy radicals, the Iranian government may seek recourse to similar action as well. Iran’s administration, and especially its IRGC, has played a stealth and uneasy game with both Al-Qaeda and the Taliban on the basis of the U.S. and Israel being common enemies. Hezbollah and Hamas – Iran’s proxies against Israel – could find themselves in possession of dirty bombs too, courtesy of enraged Iranian military men, scientists, politicians, and mullahs.

Transporting LEU onto the U.S. mainland, while not impossible, will be difficult and so Americans may be the least directly affected by Iranian retaliation through its terrorist cohorts. Smuggling nuclear fuel across highly porous land and maritime borders into Iraq, Afghanistan, and Pakistan for use against coalition forces, western diplomats, and foreign aid-workers may prove harder to prevent. Likewise, from Iran via Iraq and then Syria, LEU may end up in Hezbollah short-range rockets shot into Israel. A similar route overland to the Mediterranean coast and then via boat to Gaza could place LEU in the hands of Hamas suicide bombers entering Israel. Carried by militants across Iran’s border with Turkey and from there into European cities, small dirty bombs could spread terror across the E.U.

Such nightmare scenarios are not merely hypothetical. Intelligence and news reports suggest that Iran’s leaders are preparing an array of responses to possible attacks by the U.S. and Israel. Tehran keeps warning the world of a “devastating” response. As early as 2003, Iran’s Supreme Leader Ali Khamenei declared: “A military attack against Iran would be suicide for the aggressor.” More recently his aides suggested Iran’s government would retaliate by “blowing up the heart of Israel.”

Despite their belligerent rhetoric, most Iranian clerics, politicians, and generals are not bent on provoking a military confrontation with the U.S. They regard preservation of their power as paramount. Yet, if attacked and weakened, their reactions could be unpredictable and perhaps irrational. So their bellicoseness should not be taken lightly though those words produce a conundrum for the world wherein both inaction and action can have deadly consequences.

Iran lacks the conventional military capacity to retaliate by itself against the U.S., European Union or Israel in an overwhelming manner. Nor does it have nuclear weapons at present. Yet its revolutionary elite remain deeply hostile to the U.S. and Israel. For those reasons, Iran’s leaders may conclude they have nothing to lose by working through terrorist organizations to wreck multiple small-scale radiation havoc on attackers. Even if no such official decision is reached, as noted previously, non-state actors could spirit away some of the radioactive materials from the wrecked sites to assemble and detonate improvised nuclear devices.

So if the U.S. or Israel chooses to go down the martial path vis-à-vis Iran, with or without cooperating together and with or without assistance from the E.U., preemptive planning must be undertaken for a nuclear retaliation. It is absolutely essential to be fully prepared for what could lay ahead if any portion of Iran’s LEU deliberately or accidentally falls into the hands of non-state militants.

Jamsheed K. Choksy is professor of Iranian and International studies and former director of the Middle Eastern Studies Program at Indiana University. He also is a member of the U.S. National Council on the Humanities at the National Endowment for the Humanities. The views expressed are his own.

Obama’s One-Year Anniversary of Outreach to Iran Shows Need for Realpolitik

insideiran — Mon, 08 Mar 2010 18:48:24 +0000

Riccardo Redaelli

COMO, Italy—If proper “timing and tuning” are essential during negotiations, over the past decade, neither Washington nor Tehran has managed to tune their political mood into the same wavelength. When the Islamic Republic was ready to enter into negotiations, the White House was not, and vice-versa.

For years, I criticized the United States’ attitude towards Iran, in particular its inability to understand the Iranian threat perceptions and sense of isolation. During the Bush administration, the mantra was “we do not speak with the devil,” as then-Vice-President Dick Cheney dismissed any direct negotiation with Tehran. The U.S. policy of refusing direct talks with Iran, and its unrealistic and dogmatic stance on its low enriched uranium (LEU) program contributed to the disastrous results of the E3-EU (France, Germany and Great Britain) negotiations of 2003 to 2006. The refusal of the spring 2005 offer by the Iranian nuclear chief negotiator, Hasan Rowhani, has proven to have been a huge mistake: today, we could have had an Iran implementing the Additional Protocol of the Non-Proliferation Treaty (NPT) and running a few dozen centrifuges. Instead, we find ourselves frantically looking for an agreement with a radical government that possesses thousands of them and that no longer implements the Additional Protocol.

In brief, U.S. containment strategies have failed in the past and have had huge geopolitical costs in the region, which indirectly led to a consistent Iranian foreign policy not in the United States’ interest, rather than a policy that would have weakened Iran’s ultra-conservatives. The result has created huge difficulties for Iranian reformists and pragmatic conservatives domestically as well as internationally.

The New U.S. Policy toward Iran and the Green Movement

The new U.S. administration, therefore, decided to offer Tehran direct negotiations without preconditions (always perceived as an intolerable humiliation to national pride by Iran’s post revolutionary political elite). President Obama’s message on the occasion of the Nowrūz festival almost exactly a year ago was an unprecedented move, aimed at overcoming the standstill in nuclear negotiations. Unfortunately for Obama, the Iranian electoral crisis exploded shortly after his offers had been made. Massive electoral fraud deprived Mir-Hossein Moussavi, the main reformist candidate, of millions of votes, as is easily demonstrated by a detailed analysis of the turnout figures. In the Islamic Republic, such an alteration of the electoral results represented an unpleasant and shocking degeneration of the Islamic Republic’s power mechanisms.

This was the main reason behind the rise of the so-called Green Movement, with pacific public protests and gatherings asking for new elections and the removal of an illegitimate president. The government reacted in the usual way, with a mixture of violent response from its security forces, arrests, harassment and threats. The electoral fraud had also polarized the Islamic Republic to an unprecedented degree, with its political elite deeply fragmented and with mass protests occurring that recall those of the 1970s against the Pahlavi monarchy.

The Present Mistake

For the international community, the dilemma was whether to back the popular protests or not. The West—and Washington in particular—decided to maintain a very low profile regarding Iranian domestic troubles, with the idea, as cynical as it is naïve, that a weakened regime might have been softer on the nuclear negotiations. The result was the meetings in Geneva and Vienna in the autumn of 2009, when Iran initially accepted the idea of a swap of its LEU stockpile to Russia and France, in exchange for already processed LEU at 20 percent for its research reactor. To the West’s discomfort, Tehran eventually refused the compromise, after confused and still unclear domestic debates.

During the past months, the hope that, following the domestic electoral turbulence, the Iranian government was ready to seriously engage with the Obama administration and that President Mahmoud Ahmadinejad was able to reach a compromise and deliver it at home (that is, getting the consensus of the rahbar and of the obscure Iranian “nuclear inner circle”) did not materialize, probably due to domestic political divisions. According to less benevolent interpretations, these diplomatic moves were simply another Iranian bluff: Tehran needed time to deal with the chaotic domestic situation. The offers made in Geneva and Vienna in Fall 2009 were part of a scheme for avoiding international pressure while the regime was cracking down on the protesters.

In fact, the West kept a very low profile on the issue for months. A commonly held view in Western political circles was that the reformists could easily be sacrificed on the altar of a nuclear compromise. The gamble did not, however, pay off: we did not get any agreement.
The harsh reality is that, in the meantime, the radicals in Tehran had increased the level of repression and brutality, with thousands of members of Iranian civil society arrested, threatened, raped, or tortured, and several people killed or sentenced to death by an increasingly overconfident, oppressive regime.

Break the Vicious Circle of Always Offering Ahmadinejad Something More

These events oblige the international community—and the West in particular—to reconsider their strategy. For instance, President Obama is facing growing opposition in Washington toward his policy of engagement, and the nuclear negotiations with Iran cannot be allowed to distract us from what is happening in Iran. First of all, it is crucial to prevent our declarations against the repression from being counterproductive, since the Iranian government is already accusing the reformists of being “fifth columnists” of enemies of the Republic. However, there are ways and means of making Tehran understand that the West is not looking for a regime change, but cannot tolerate such a level of domestic violence.

In other words, since Ahmadinejad and the pasdarans have deeply polarized the Iranian political scenario, we should carefully send messages to the Rahbar that Ahmadinejad represents a much greater risk for the Islamic Republic than the reformists, and that we are ready to negotiate with Supreme Leader Khamenei, but we will adopt a tougher stance (at every level, nuclear negotiations included) if he lends his support to such bloody repression. Some of the main religious and political leaders, such as Rafsanjani and, to a certain extent, Mohammad Khatami himself, are attempting the same, trying to de-polarize the domestic political spectrum in the hope that the Rahbar might decide to rebalance the system, adopting a more moderate position. It is probably the last chance Khamenei has to avoid a dramatic transformation of the Islamic Republic and far more severe international isolation.

At the same time, it is time to end our obsession with the uranium enrichment conundrum: it is clear that the only way to keep Iran latent at the nuclear weapon level is through verifications and political confidence, not merely technical solutions, such as the recent proposed swap with Russia, France, Turkey, or elsewhere. Without decreasing the level of mistrust, resistance to a comprehensive agreement will be insurmountable.

For years I backed track-2 programs with Iranians, and I still believe they represented a useful tool of communication, taking into account the antagonistic postures of Washington and Tehran. But the current scenario is radically different: the technical package offered in Vienna and Geneva to Iran represented an honorable compromise, based on the best diplomatic effort of recent years. The package is still on the table, and some minor amendments might be made in order to give extra guarantees to the Islamic Republic’s obsessions. However, we should resist the idea of acquiescing to new Iranian requests or looking for other, smoother “technical solutions” for convincing Iran. The offer is already favorable: it has been almost accepted, almost refused, renegotiated, reneged, and all other degrees of unclear response. In the meantime, Iran continues with its paranoid policy of repression and intimidation of reformists, intellectuals, professors, students, women’s’ rights activists, and simple citizens. And the West continues to stick to its past policy of ambiguous silence over it.

Lack of credibility was one of the main failures of the past U.S. administration’s policy toward the Middle East, since its rhetorical insistence on democratization was a far cry from an ambiguous policy of double standards. We should now avoid the risk of embarking on a pathetically weak new form of realpolitik .

Riccardo Redaelli is the Director of the Middle East Program at LNCV and Professor of Geopolitics at the Catholic University of Milano. He has participated in Track 2 talks with Iran.

Tehran Thumbs Its Nose at Gasoline Sanctions

insideiran — Mon, 01 Mar 2010 18:25:53 +0000

Hossein Askari

WASHINGTON—In Washington, politicians and Iran experts have been pounding the table for what they claim to be the mother of all sanctions on Iran—a gasoline embargo. While in Tehran, Ahmadinejad and his supporters dare President Obama to go ahead and impose a gasoline embargo on Iran. They claim Iran has adequate gasoline storage and enhanced gasoline production capacity to withstand an embargo. Is there substance to Iranian claims? Would a gasoline embargo bring the Tehran regime to its knees?

Iran has the second-highest level of proven oil reserves in OPEC after Saudi Arabia, and also ranks a distant second to Saudi Arabia in oil production. These are today’s OPEC reserves and production standings. Although Iran is a major exporter of crude oil, it is a net importer of refined products, especially gasoline and diesel fuel, from a variety of sources, including China.

This surprising situation is due largely to two policy decisions made by Iran: gasoline and diesel fuel are sold by the government at heavily subsidized prices (significantly below world prices, at about 40 cents per gallon for gasoline), encouraging wasteful fuel consumption and smuggling to neighboring countries, where prices are higher. At the same time, Iran’s domestic refining capacity (1.5 million barrels per day) has not kept up with rapidly growing demand (1.7 million barrels per day), a gap of about 200,000 barrels per day of refined capacity at the light fuels end of the refining process (especially gasoline). To fill the gap, the government imports gasoline and diesel fuel at world prices and turns around and sells it in Iran at the lower subsidized price charged for domestically produced products, putting serious pressure on the government’s budgetary balance.

Facing this domestic shortfall in refined products, Tehran decided some time ago to expand its refining capacity. As a result, it seems that in about three years Iran’s refining capacity will double to close to 3 million barrels per day. This expansion, along with planned domestic price increases for gasoline and diesel fuel, should allow Iran to eliminate imports of refined products and even enable the country to become a net exporter of refined products.

These figures would indicate that Iran today has a domestic shortfall of about 10 percent in its diesel fuel needs (or roughly 60,000 barrels per day) and about 30 percent in its gasoline needs (or roughly 125, 000 barrels per day). Because of smuggling, it is difficult to confirm that this entire apparent shortfall is “real.” Namely what would be the shortfall if smuggling were eliminated? While there is no hard data on how much of this apparent shortfall is due to smuggling, one thing is certain: the Revolutionary Guards (IRGC) and the Intelligence Services are involved in smuggling. As a result, if they see it in their interest to eliminate smuggling, they could reduce it to a trickle. In other words, a part of the 180,000–200,000 barrels per day of apparent domestic shortfall could be eliminated if the IRGC and the Intelligence Services decided to reduce the smuggling of gasoline. How much would this reduction represent? That’s anybody’s guess. But I would venture to say that the real shortfall might be more on the order of 125,000–150,000 barrels per day. And smuggling would all but evaporate if the government allows fuel prices to rise in the event of an embargo.

In a recent statement, Farid Ameri, Managing director of National Iranian Oil Products Distribution Company, claimed that a fuel embargo will achieve little, and pointed out that:

• Iran has increased its stockpile of gasoline by about 1 billion liters, to 2.4 billion liters (roughly 15 million barrels), and
• Iran is using its petrochemical plants to produce 14 million liters (roughly 94,000 barrels) of gasoline per day.

If one were to take these claims at face value, the stockpile of gasoline would be equivalent to 100–120 days of fuel imports (assuming 125,000–150,000 barrels per day of fuel imports after the elimination of smuggling). The claim of gasoline from petrochemical plants would reduce the need for imports down to an even more manageable 30,000–55,000 per day, in turn stretching out the life of the gasoline stockpile to 270–480 days in case of a fuel embargo. If both Iranian claims were credible, one could conclude that Iran has a reasonable chance to survive a gasoline embargo, because it also has porous borders and, realistically, it would be impossible to enforce an airtight embargo for 270–480 days.

However, the Iranian regime’s claim about producing gasoline from petrochemical plants is too farfetched even for the most imaginative among us. To the best of my knowledge, no one has figured out a way to make such “flexible” petrochemical plants. Petrochemical plants take as their input the output of refineries (and natural gas) as feedstock, but they don’t produce gasoline and diesel fuel. Mr. Ameri may have meant that they could cut their petrochemical output and thus their intake from oil refineries, enabling an increase in gasoline output.

Even if this is what he meant, this may or may not be true, as most simple oil refineries cannot just flip a switch and overnight change the mix of their refined output; refineries are configured to produce certain mix of products and refine specific types of crude oil. It would appear that Iran could withstand an airtight embargo for about 100–480 days, depending on its ability to increase gasoline output by reducing petrochemical output. Again, the sufficiency of gasoline and diesel fuel in Iran would be further enhanced if it turns out to be difficult to maintain an airtight embargo for an extended period of time. Based on these considerations, it would appear that the regime in Tehran has built itself a reasonable cushion in preparation for a gasoline embargo.

While these may represent the prevailing supply-demand balance of gasoline and diesel fuel in Iran, there are important policy considerations that also can affect realities in Iran. The Iranian government long has realized that it should eliminate the fuel subsidy in order to reduce the growth in gasoline and diesel consumption, eliminate smuggling, improve air quality, increase oil exports, and above all improve the government’s budgetary position. Over the past ten years, the fuel policy has cost Iran in the range of 10 to 20 percent of GDP annually, depending on world prices and the government mandated pump price—an astounding figure. In need of additional revenues, the regime has wanted to eliminate this subsidy by increasing the price at the pump to world levels, but the government has been paralyzed because of the specter of a domestic backlash. It has managed only marginal price increases and adopted a rationing scheme that has slowed down the rate of growth in demand.

While talk of an embargo by politicians is cheap, an effective gasoline embargo can only be implemented through a naval blockade of Iran. Such a blockade would require UN Security Council approval. Mindful of Russian and Chinese ties to Iran, this would be a lengthy and tortuous process, and approval would be by no means certain. An embargo without the UN Security Council would be considered an act of war, and Iran already has declared that it would be met with force and the potential closing of the Strait of Hormuz.

Even assuming that a gasoline embargo were effective in cutting off Iran’s imports, what would happen? Consumption of gasoline would decline by 30 percent. If the government allowed the reduced supply of gasoline, namely, domestically refined gasoline, to be sold at a price that would equate demand to supply, the price would increase to a level that would eliminate the subsidy, meaning no subsidy for imported gasoline and no subsidy for domestically refined gasoline. There would be no incentive to smuggle gasoline to neighboring countries. The government would have higher revenues to spend on other priorities and projects. Low and behold, the sanctions would have done what Tehran has wanted to do for years, and the government would not be held responsible.

What does all this mean? Is a gasoline (and diesel fuel) embargo the mother of all sanctions? Will it cripple the Iranian economy and encourage the population at large to rise up and overthrow the regime?

Based on the above, I would conclude that:

1. An airtight gasoline embargo is difficult to implement, as Iran’s borders are long and porous.
2. China is unlikely to sign on at the United Nations without extracting too high a price from the United States.
3. Even if China does acquiesce, UN negotiations are likely to be long and painful.
4. Iran clearly is expanding its refining capacity, increasing its storage of gasoline (and diesel), preparing to reconfigure its refineries to produce a little more gasoline, preparing the ground to reduce gasoline smuggling, and in the event of an embargo would allow prices to increase, at least somewhat. All of these measures would blunt the impact of a gasoline embargo.
5. An embargo would be blamed on the United States, while shoring up government finances.

The most puzzling question has been why there is so much talk of a gasoline sanction and other unnamed crippling sanctions when financial sanctions, which could deal a mortal blow to the Iranian regime itself, are soft peddled? Some say that the Obama Administration wants to hurt the regime, but not the opposition, so it is treading carefully to find the smartest sanction. I beg to differ. The concern for the impact of sanctions on the opposition is a smoke screen. There are financial sanctions that would have little negative impact on average Iranians while raising havoc for regime insiders and their business partners. Yet we don’t talk of these, much less take action. To my mind, the likely answer is that, at least for now, President Obama still wants to cut a deal with Iran and the IRGC and is not prepared to embark on a road that could lead to confrontation. He wants to appear tough but not be tough. The gasoline sanction is only a smoke screen to buy more time, while Iran becomes less and less dependent on imported fuels and continues to trample on the human and legal rights of its citizens.

Even this puzzle was recently answered in a statement on February 25 as reported by Reuters: “It is not our intent to have crippling sanctions that have . . . a significant impact on the Iranian people,” State Department spokesman P. J. Crowley told reporters. “Our actual intent is . . . to find ways to pressure the government while protecting the people.” It would, therefore, appear that we will continue to talk tough and pretend that we are pressuring the Tehran regime and supporting the suffering people of Iran.

Hossein Askari is Iran Professor of International Business and International Affairs at the George Washington University. During the mid 1980s he was director of a team of international energy experts contracted to design an energy plan and energy planning capabilities for Saudi Arabia.

Q & A: Fatemeh Haghighatjoo on How the United States Should Respond to Iran’s Opposition Movement

insideiran — Wed, 20 Jan 2010 19:45:31 +0000

Fatemeh Haghighatjoo was a member of Iran’s Parliament from 2000 to 2004, and a prominent advocate of women’s rights and political reform. She resigned in 2004 after a crackdown on reformers and left Iran in 2005. She is now a visiting scholar at the University of Massachusetts–Boston.

Q: The Obama administration has been reluctant to express support for the opposition movement out of fear that doing so would end Iran’s cooperation in the nuclear negotiations. But now that those talks are at an impasse, what should the United States do regarding the opposition?

A: I would say the United States should carefully and delicately support the opposition movement based on United Nations conventions, because Iran is a signatory to many UN human rights conventions.

Second, the United States can help the flow of information in Iran by providing technical support for Internet and satellite access. For example, one important question is how to increase the security of domains, hide the identity of dissidents who run websites and social networking sites, and also provide a free place to move blocked websites from different servers, once the authorities shut down opposition websites. This would help the dissidents. There are many volunteers who are running the websites and they need to deal with the blockade on the Internet. The Internet and other forms of information are having a huge impact on the opposition movement. Look at the impact of BBC Persian TV during the past six months.

Q: How do you view the opposition at this stage?

A: The green movement encompasses a wide spectrum of protestors. At one side of the spectrum are protestors who are loyal to the regime and just have objections to the fraudulent election, and their ultimate goal is the removal of President Ahmadinejad. And at the other side are dissidents who fight to bring the regime down. Although the opposition is incoherent, it does have the common goals of removing Ahmadinejad, ending the violation of people’s rights, and releasing all political prisoners.

The internal leadership of the Green Movement is loyal to the foundation of the regime, so after increased demands that threaten the nature of the regime, movement leaders may be increasingly concerned about both the fundamentalists inside the government and the extremists within the movement. Former presidents Mohammed Khatami and Hashemi Rafsanjani have warned against radicalism. Also, there is an effort to have negotiations between opposition leaders and Supreme Leader Khamenei, even though Khamenei still talks tough and tries to convince all influential figures to condemn the protests.

The situation today is very different from past unrest. Even if the authorities arrest Mir Hossein Moussavi and Mehdi Karroubi, the protests will continue. There are more cracks now among the political elites than ever before. There is a rift between Khamenei and former President Hashemi Rafsanjani. We also see a crack between the regime and the clergy. In every aspect of the regime, you will see that the crisis is deepening. The movement is deep and spreading. On the one hand, the regime’s strategy is the continuation of the crackdown, the arrests of activists and political leaders, to block the flow of information, and not allow any protests in the near future; and, on the other hand, the regime is trying to attract people to state-run TV by running debates at least through the end of the anniversary of the 1979 Islamic Revolution in February and to recruit people for a huge pro-state rally on February 11.

It is important for the West, especially for the United States, to act correctly.

Q: Can traditional conservatives, such as Rafsanjani and Parliament Speaker Ali Larijani reform the system?

A: I do not see that they have such ability to reform the system because of the contradiction within the system. Khamenei does not tolerate any initiation for reform. They are unable to meet the people’s needs.

Q: Given the political instability inside Iran, what are the options available to the United States in dealing with Iran?

A: I understand that the United States wants to see progress on the nuclear side, while wanting to help the opposition movement, and these two things can be at cross-purposes. Inside Iran, because of the crisis and the cracks among political elites, they can’t reach ultimate decisions on international affairs. In domestic issues, the Supreme Leader, Khamenei, prefers to use his power to make decisions, and to some extent, he may be successful for now through the branches of government. However, he has not fully succeeded in gaining the support of most clergy, prominent politicians, and influential figures.

We see this lack of agreement on the nuclear issue because members of the regime keep changing their position. This, more than anything, shows the splits among the factions. Since 2005, Iran has bought time. But this time, it is different. First, they know that some countries do not like Iran’s regime, especially the current government. Khamenei fears that, in the future, the West might do something against him. But he believes that if he can acquire knowledge on building a nuclear weapon, this would give Iran the upper hand in future nuclear negotiations with the West. I guess the ultimate goal of some of Iran’s hardliners is a nuclear weapon, either to counter a likely air attack or to force toleration of the actions of a nuclear Iran.

But right now, Khamenei can’t reach an agreement on the nuclear issue because he can’t manage two crises at once, and for him the domestic issue is more important.
He understands that this movement, the opposition, could overthrow his government. He understands that the dissidents are not just about removing Ahmadinejad from power; now, the dissent is about much more than that.

Iran is in the process of transitioning to democracy. Supporting smooth transition would strengthen regional security. However, any sort of attack on Iran under any circumstance would dramatically hurt the movement. The Obama administrative and his allies, aside from maintaining negotiations with Iran regarding the nuclear program, should pay more attention to human rights issues in Iran and put more pressure on Iran’s government to release all political prisoners and stop the executions.

Iran’s Economic Vulnerability: Self-Inflicted, not Sanction-Driven

insideiran — Tue, 10 Nov 2009 14:40:13 +0000

Hossein Askari

WASHINGTON—Iran analysts recently have focused on Tehran’s economic vulnerability as the system’s Achilles’ heel. They are right on this point. But they, and a clear majority of Iranians, are wrong in believing that sanctions are the reason for Iran’s dismal economic conditions.

Iran’s economic failures are largely self-inflicted. The country’s less than stellar economic performance is well documented: real per capita income in 2007 was about what it was at the time of the revolution in 1979; income distribution is worse today; unemployment and inflation rates probably exceed 20 and 30 percent respectively; there have been natural gas shortages for winter home heating and electricity shortages for summer cooling; the social infrastructure to provide universal access to health care and higher education is inadequate; dire government budgetary pressures are necessitating a drastic cut-back in consumer subsidies that have sustained the poor; and rapidly declining foreign exchange reserves, which are threatening the stability of the Iranian currency, the rial, may require currency controls in the not too distant future, further fueling inflation.

Iran’s oil output is about 60 percent of its pre-revolutionary level, and its natural gas development is pitiful when compared to its tiny neighbor Qatar. It is estimated that 150,000 educated Iranians are leaving the country every year to seek better opportunities elsewhere. All of this in a country that is a major exporter of oil, with the second largest reserves of natural gas and third largest oil reserves in the world.

How did Iran fail its people so badly? What could the removal of sanctions do? The key strangleholds in Iran today are government policies—subsidies, regulatory and price controls—and corruption and institutional limitations.

Consumption subsidies in Iran are all pervasive—fuel, electricity and food—with direct and indirect subsidies adding up to well over 25 percent of Iran’s GDP, a truly staggering figure for any country. These are resources that could have been invested to enhance economic growth and development and create much-needed jobs, but have, instead, been squandered. The policy prescription is simple: eliminate subsidies, especially those on energy products. This is easier said than done. Although government officials have wrestled with various approaches, they have always backed away at the last minute. They are afraid of a public backlash. Their fear has been evident to me during many hours of one-on-one discussions with the most senior members of the Iranian state since 1991.

In Iran, factor and product markets are heavily administered and regulated. The labor markets are highly inflexible, as exemplified by the cost of firing workers. The government sets numerous product prices. Financial markets are dominated by state-owned banks, with rates of return “dictated” by the government. The exchange regime is inflexible, and is supported by government regulation and intervention.

The government’s control over rates of return on deposits and exchange rates requires further elaboration. Rates of return at commercial banks have been in the range of 15–25 percent per annum for roughly a decade. At the same time, although Iran’s exchange rate system is officially a managed float, it is more accurately a managed fixed system, with a total nominal fluctuation of only about 15 percent of the rial in five years. The government is reluctant to let the rial become more flexible because of inflationary pressures and backlash from powerful domestic constituencies that benefit from an overvalued currency. Exchange rate policy as the prime policy to control inflation is misplaced (it is akin to scratching one’s face with one’s feet). Tighter monetary and fiscal policies are needed to reduce inflation.

The government’s exchange-rate policy coupled with high inflation has encouraged speculation in real estate, even by Iranians living abroad. The overvalued rial has hampered the development of an export-oriented manufacturing sector and is making Iran’s agricultural exports increasingly uncompetitive on world markets. The policy prescription is simple: deregulate and free all markets. But the regime is afraid of further fueling inflation.

Corruption is rampant in Iran. Every official expects something to process and advance any routine request. Under President Mahmoud Ahmadinejad, the Islamic Revolutionary Guard Corps (IRGC) have been a major beneficiary. Sweetheart contracts have been awarded to the IRGC in areas where they have no expertise or track record. Smuggling (of gasoline to neighboring countries and imported goods) is pervasive. Permits for illegal construction are routinely bought. And of course the oil and natural gas industries provide officials with a multitude of opportunities. All of these corrupt deals, and much more, have deprived the economy of much needed productive investments to stimulate growth.

All Iranian institutions are weak and ineffective and are further corrupted by oil revenues, as the discovery of oil within a country may actually frustrate institutional development. In countries that had strong institutions when oil was discovered, such as Norway and the United Kingdom, oil has been a blessing. But in countries that had weak institutions, such as Iran and Nigeria, the discovery of oil gave those in power the incentive to block institutional development to protect their personal interests, and oil may be more of a curse.

Iran needs to reduce its reliance on oil by promoting the non-oil private sector and using oil to benefit all generations. This policy has not been implemented, in part because Ahmadinejad has subverted it with impunity and no one has had to courage to challenge him. Iran has an Oil Stabilization Fund (OSF) designed to protect government revenues from fluctuating with oil prices and to carry the benefits of oil to all future generations. The OSF has been plundered whenever the government needed funds. Its current holdings are estimated to be around $10-15 billion, but should have been around $60 billion if the government had followed the prescribed rules over the past four years.

About five years ago, Iran adopted a policy to reduce government reliance on oil revenues by 10 percent per year so that, at the end of ten years, it would not need oil revenue. The government has made no progress on this most fundamental policy. Taking oil revenues away from the government would force the authorities to adopt the needed policies, as has been done in non-oil exporting countries. If 100 percent of the oil revenues were placed into the OSF and proceeds were distributed to all eligible citizens in the form of an annual payout that maintains the same real purchasing power, then oil would benefit all generations, subsidies could be eliminated, and the government would have to rely on taxation for revenues.

In sum, to enhance Iran’s economic performance and treat all generations equitably, the government needs to implement a number of policies simultaneously: establish an effective oil fund to eventually receive all oil and gas revenues, establish an efficient tax system, deregulate factor and product markets, privatize nationalized industries, eliminate most subsidies, adopt better macroeconomic policies including a more flexible exchange rate system, and crack down on corruption.

Can removal of sanctions improve Iran’s economic performance significantly? In my mind, the removal of sanctions under prevailing conditions and realities in Iran will not improve economic performance significantly. Instead, such a move may hurt the Iranian people and help the leadership.

Sanctions have had a limited impact on Iran. There has been no real impact on oil exports. Iran’s non-oil exports may have been reduced in value by about 5 percent because of lower prices. With the embargo of U.S. exports to Iran, Iran has turned more to Europe and Asia for its import needs and has secured U.S. goods through third countries, principally Dubai (the UAE). By my estimates, the cost of U.S. goods (not those normally imported from other countries) has increased for Iran by a maximum of 10 percent. Financial sanctions have taken a additional toll on Iran, including increasing Iran’s cost of all (not just from the U.S.) imports by about another 10 percent. All in all, existing sanctions may have increased Iran’s import bill by about 15 percent.

While sanctions may have adversely affected foreign investment in Iran’s energy sector, the major reason for the slow development of Iran’s oil and gas reserves has been the perception of Iran as unstable country. Iran’s own policies have also deterred foreign investors.

To my mind, a beneficial effect of sanctions has been to limit Iran’s access to external borrowing. Governments such as Iran’s, caught in a financial bind, are apt to resort to external financing and use the proceeds to buy local support today and to line the pockets of high officials, leaving future generations in the hole. The regime in Tehran has already gone through such a cycle. In Iran’s revolutionary constitution, external borrowing was prohibited. But in the aftermath of the Iran-Iraq War, the government engaged in massive borrowing of about $35 billion. Much of this money was wasted. Iran has since paid this back. The lifting of sanctions could ignite another borrowing binge to the detriment of average Iranians, as the government is unlikely to use such funds productively.

What should the Obama administration do, given Iran’s economic, as well as political, realities? There are two schools of thought—one idea is to lift all sanctions, and the other to put further pressure on Iran.

The first option is based on the following considerations: Iran’s economy and internal conditions are so fragile that further economic pressures would impose unbearable pain on average Iranians and could ignite further social unrest. The second option would leave sanctions in place and see the United States enforcing existing laws for U.S. citizens and permanent residents to initiate a run on the Iranian rial, which would ultimately result in the collapse of the Iranian economy.

I subscribe to the second option for a number of reasons. If the United States adopts the first option at a time when the state treats Iranians with unimaginable brutality, the message we are sending to Iranians is that their treatment matters very little to us as we see rapprochement with this regime in our national interest. We would alienate the majority of Iranians for years to come and they could even see a resemblance to 1953 when the CIA overthrew Iran’s government and embraced what many saw as a dictatorial regime. Many Iranians said as much to President Obama: “Obama, with them or with us?” in demonstrations on November 4, 2009.

While the U.S. administration must adopt the policy that is in America’s national interest, this is one time when the long-term interests of the Iranian and American people coincide, as the government in Tehran does not serve the interests of Iran or afford the U.S. government with a reliable partner in the region.

Hossein Askari is the Iran Professor of International Business and International Affairs at the George Washington University.

U.S. Engagement with Iran Legitimizes Authoritarian State

insideiran — Mon, 26 Oct 2009 15:24:50 +0000

Hossein Askari

WASHINGTON—The Obama administration now can boast that it has delivered on another one of its campaign promises—engaging Iran. After meetings in Geneva and in Vienna, the administration seems to be well on its way to tying the knot with yet another authoritarian state.

Although there is history impeding better relations, the new administration in Washington was presented with a unique opportunity to chart a new course with Tehran—an opportunity that is about to be wasted in the name of a campaign promise and the empty quest to halt the regime’s nuclear enrichment project.

The recent Iranian election on June 12 exposed the soft underbelly of the state in Tehran as never before—its illegitimacy, its unpopularity, its brutality, and, indeed, its vulnerability, even among regime loyalists. As I wrote elsewhere three days after the election, the Iranian Revolutionary Guard Corps (IRGC) assumed most levers of power, essentially emerging as a military dictatorship.

Seeing an opportunity for change, Iranians are risking their lives as never before to confront the system peacefully. They want to choose their leaders with fair and transparent elections. They want their freedom. They want respect for their human rights. They want a better future for themselves and for their children. In other words, they want a true republic with transparent institutions—what they thought they had fought for in 1979 as they overthrew the Shah.

So now that there is a real chance for a more democratic regime in Tehran, what does Washington do? It appears that, yet again, the United States has chosen a dictatorial regime over the Iranian people.

Candidate Obama promised to engage Iran, but circumstances and conditions have changed. Washington’s timing for engaging Iran could not be worse. The United States has not had a dialogue with Iran for nearly three decades, but is courting Tehran feverishly under these circumstances. Consider the signals this sends to Iranians and to the wider Muslim world. After Iranians have been robbed of a fair election, after peaceful demonstrators have been treated with unprecedented brutality, and after a large number of citizens have been imprisoned under inhumane conditions, many tortured, raped, or killed, after the emergence of a military dictatorship, now the United States chooses to engage Iran. What exactly does this tell oppressed people around the world? Is this how we plan to begin rapprochement with the Muslim world? Is this to be the legacy of President Obama’s Cairo speech?

Realists would dismiss what I have said as the words of an idealist. They would argue that this is the best opportunity to seal the best deal we can to halt Iran’s quest for nuclear weaponry. While I may be an idealist, they are without a doubt wishful thinkers in believing that they can stop Iran’s quest for mastering the nuclear fuel cycle through an agreement on a piece of paper.

No matter what, Iran’s leaders will not believe that the U.S. government is not secretly working to overthrow them. Iran’s leaders believe that the best deterrent to their removal from power by external forces is mastering the nuclear fuel cycle and supporting powerful surrogates, such as the government in Baghdad, Hezbollah, and Hamas. While Iran’s leaders might fool Washington into believing that they are now compromising and giving up this leverage, they will never do so.

In their quest to master the nuclear cycle, Iran’s leaders have without a doubt taken all the precautions that any prudent regime would take. If they agree to give up 2,500 lbs. of low-enriched nuclear fuel, you can be sure that they have an undeclared stockpile in addition to their remaining declared stockpile, or have the ability to replace the shipped fuel with newly enriched fuel at the same rate.

You would think that the Obama administration must have a special channel to Tehran to have such confidence in the viability of agreements signed with the Iran, but this seems pretty unlikely. The administration has advisers who have little intimacy with the people who determine policy in Tehran. While some advisers may have visited Iran once or twice since the revolution, or others that have Iranian heritage, this hardly addresses the difficulties of the negotiations, which require familiarity with the other side, a familiarity that cannot be acquired in libraries.

The Obama administration should change its direction before it is too late. If the United States throws a lifeline to the Iranian state, solidifying its control of power, generations of Iranians will remember America’s betrayal.

Instead, the Obama administration should support the Iranian people’s quest for fair elections and for human rights. If Iran is isolated through financial sanctions and U.S. laws are enforced to cause a collapse of the Iranian currency, Iranians may realize their dreams of a democratic state, if not of a true Republic of Iran, and the United States may in turn gain a true friend and partner in the region.

Hossein Askari is the Iran Professor of International Business and International Affairs at the George Washington University.

Gasoline Embargo on Iran: Another Sanction Destined to Fail

insideiran — Thu, 08 Oct 2009 21:13:28 +0000

Hossein Askari

WASHINGTON—Today’s calls for “crippling sanctions” on Iran—a country that has been sanctioned by the United States for the past thirty years and by the United Nations for about three years—if negotiations fail should be called in question. What have ongoing sanctions achieved? Why do these Iran policy experts in New York and Washington calling for a gasoline sanction think that it will accomplish what the U.S. government has been unable to accomplish with previous sanctions?

The latest recommendation is that a gasoline embargo on Iran would “cripple” the country. Just read the op-eds of all our foreign policy experts. A gasoline embargo will do the trick, the experts say, if only the United States could get China and Russia to support it.

In my opinion, a gasoline embargo would be difficult to enforce, but much more importantly, it would be counterproductive because it would help the Iranian regime. Consider these facts: Iran imports roughly 30 to 40 percent of its domestic gasoline consumption at world prices, and then sells it to Iranian consumers along with its domestically refined gasoline at a government-subsidized price. Because gasoline is sold at a fraction of the world price in Iran, fuel conservation is not pursued, and gasoline frequently is smuggled by individuals with the backing of the Islamic Revolutionary Guards Corps into neighboring countries and sold there. Over the past ten years, this policy of selling gasoline at government-subsidized prices has cost Iran in the range of 10 to 20 percent of GDP annually, depending on world gasoline prices and on the government mandated pump price.

For years, the government has wanted to eliminate this subsidy, to increase the price to world levels and reduce consumption, but fearing a domestic backlash, it always has moved with caution.

Even assuming that somehow a gasoline embargo could be effective in cutting off Iran’s gasoline imports, what would happen? Consumption of gasoline would decline by 30 to 40 percent and government revenues would go up, because no payments would have to be made for gasoline imports. If the government allowed the reduced supply of gasoline—namely, domestically refined gasoline—to be sold at a price that would equate demand to supply, the price would increase to a level that would eliminate the subsidy (no subsidy for imported gasoline and no subsidy for domestically refined gasoline). The smuggling of gasoline from Iran to its neighbors would no longer be profitable.

Not only would the sanction offer the regime cover to eliminate the subsidy, the regime also could call this turn of events an act of war and a national crisis caused by the United States. A significant number of Iranians would rally behind the regime. This is the last thing the U.S. should want.

So, instead of a gasoline sanction, what type of sanction might work? Additional financial sanctions by the U.S. Treasury could squeeze Iran—cutting off all Iranian bank access to the international financial system. This would require the cooperation of the Europeans, but more importantly of Iran’s partners—China, Russia, Dubai, and Malaysia—as these countries could facilitate Iran’s financial transactions by fronting for Iran.

The U.S. government has been hard pressed to get even our European allies to cut off Iranian banks, but it could enlist Saudi Arabia, Kuwait, and other Gulf Cooperation Council countries in getting Chinese and Russian support. We also could pressure Dubai. It would be easier to get their backing to cut off Iranian banks than it would be to get their backing for a gasoline embargo that could boomerang.

An examination of thirty years of sanctions demonstrates how ineffective they have been. In 1979, the United States froze Iranian financial assets, but returned them after the Algiers Accord in 1981, which was an agreement brokered by Algeria between Iran and the United States to solve the hostage crisis. Washington confiscated military equipment that Iran had paid for—some of it the United States used and some rotted in storage—and since then has been engaged in a tedious process at The Hague to compensate Iran on a line-by-line basis.

The United States banned the importing of Iranian crude into the United States, but allowed refined products to enter the country. Then there was a ban on importing refined products and of all non-oil products from Iran, so Iran sold all it had to sell to other countries, albeit in the case of non-oil exports at a slightly lower price. Iran hardly felt even a side blow.

In the mid-1980s, the United States embargoed all U.S. exports to Iran. You surely wouldn’t know it if you have been to Tehran, where most American goods are abundantly available, sometimes at a lower price than even in the United States. Dubai is forever the fan of our sanctions policies because most imports from the United States go through Dubai, and their merchants take a 5 to 10 percent commission, which hurts Iran very little. More importantly, U.S. sanctions have afforded Iran’s intelligence services and the Revolutionary Guards another source of revenue, because they also take a cut of these transactions.

Under President Bill Clinton, the Iran Libya Sanctions Act (ILSA, now ISA after the removal of Libya) was enacted in 1996. This act banned investment in Iran’s energy sector and threatened third countries with sanctions if they did not do the same. This slowed Iran’s oil and gas development, which also has hurt the United States and its allies by causing higher oil prices. However, these sanctions had minimal effect in terms of domestic pressure from Iranian citizens. Iran’s leadership hardly has used oil revenues to advance and develop the country—what money they have earned instead has been squandered and a good chunk has been squirreled away in the foreign bank accounts of regime insiders—so the absence of that revenue results in no public pressure for the regime to change its ways.

There are simple lessons to be learned. Sanctions on the exports of a country will do little if that country’s main export is a commodity in global demand. Simply put, others will buy Iran’s oil if we don’t. Sanctions on the imports of a country will do little if the country can buy its American goods from third countries. Iran gets most of what it needs from Europe, Japan, and China. Sanctions to change a target country’s policy that the majority of its citizens support is unlikely to succeed. For example, Iranians support the regime’s nuclear program, but targeted sanctions to change Iran’s human rights policies might be much more likely to succeed.

Starting in 2007, the U.S. government began to develop more targeted financial sanctions. The U.S. Treasury reduced the access of Iranian banks to the international financial system. This has increased Iran’s cost of letters of credit and thus the price of imports by about 15 percent.

On November 6, 2008, the U.S. Treasury further tightened restrictions on Iran by revoking a special financial arrangement referred to as a “U-Turn License,” Ever since the Islamic Revolution in 1979, U.S. administrations have allowed Iran to sell oil to non-U.S. entities for dollars. Thus, when a foreign entity bought Iranian oil, it issued instructions to a U.S. bank to issue funds to an Iranian bank. The fund transfers to Iranian banks were achieved through what has been coined a “U-Turn.” The revocation of this license means that U.S. banks cannot make such dollar transfers to Iranian financial institutions. Until recently, the U.S. Treasury had been persuaded of the advantage of this financial U-Turn License because it added to the demand for dollars and afforded the United States the benefits of seignorage (the costless issuing of paper money to buy something tangible).

But after all this effort, have sanctions worked? Has Iran changed its objectionable policies? The answer is a resounding no.

Hossein Askari is the Iran Professor of International Business and International Affairs at the George Washington University.

A Policy Suggestion When Iran Talks with the West: Invite the Green Movement

insideiran — Wed, 23 Sep 2009 17:26:08 +0000

Kazem Alamdari

LOS ANGELES–The United States and its allies correctly have pledged to engage with Iran. That is good news; there is no viable alternative. However, considering that the results of the June 12 in which President Mahmoud Ahmadinejad was declared the winner are widely disputed, any talks should include a leader of the opposition movement. Who can say with certainty that Ahmadinejad, not Mir Hossein Moussavi, the leader of the Green Movement, is truly Iran’s president?

Since the election, the Islamic Republic is experiencing the most serious, unprecedented challenge in its thirty-year history, from within and without. The system faces a crisis of legitimacy, which is the outcome of a gap between the ruled and the rulers and a rigged election. Hatred against the ruling power is so obvious that in the mass rally on “Quds Day,” September 18, Iranians in the opposition responded with new chants to the slogans from pro-government demonstrators. While the pro-government demonstrators chanted, “Death to America” and “Death to Israel,” opposition supporters responded with chants of “Death to Russia” and “Death to China.” These slogans refer to Iran’s two key allies, both of which supply Iran with technological and diplomatic strength.

It is apparent from the proposal Iran submitted earlier this month to the 5+1, the permanent members of the U.N. Security Council plus Germany, that the ruling powers in Iran are unwilling to negotiate over the nuclear issue. Their proposal was primarily an instructive document for peace, justice, and progress in the world. The five-page proposal called for “joint efforts and interactions to help the people of Palestine to draw a comprehensive, democratic and equitable plan.” It also sought reforms within the United Nations “on the basis of principles of democracy and justice.”

One reason Iran is not interested in negotiating over the nuclear issue might be surprising to many Americans: having a nuclear capability plays well with Iranians at home. Iranians generally believe their country has a right to a nuclear program, if not a nuclear weapon, so this is one issue upon which Iran’s rulers and its citizens agree.

During talks with Iran, the United States should raise issues that place Iran in a weak position at home and abroad. These include the brutal repression of protesters, reports of torture and rape inside Iranian prisons, and the forced confessions from defendants who have participated in demonstrations and now face charges, including espionage and attempts to overthrow the state.

The gross human rights violations committed by the regime since the June demonstrations have produced perhaps the greatest damage to Iran’s leaders. Even some of the conservatives’ long-standing, prominent supporters have turned against them. For example, Mohammad Nourizad, a filmmaker and long-time believer in Supreme Leader Ali Khamenei, issued a condemnation of the ruling establishment. According to the Associated Press, he wrote: “As commander in chief of the armed forces, you didn’t treat people well after the election. Your agents opened fire, killed the people, beat them and destroyed and burned their property. Your role in this can’t be ignored. Your apology can cool down the wrath of the people.”

In a meeting organized by Khamenei’s office for artists and movie directors, Majid Majidi, a leading movie director and Oscar nominee, spoke of atrocities and violence in the country and complained to the leader, while weeping, “I am not well, . . . many other film makers are also not well and refused to come to this session. . . . Sir! Where are we heading? We are shredding everything into pieces. . . . It looks like we’re now in a real war . . . where there is hatred and violence. . . . We are losing everything.”

The survival of Iran’s leaders requires a major change—either profound reform or more repressive action. Thus far, the ruling power has chosen the latter option. Under such political circumstances, negotiations by Western powers with Iran will legitimize an illegitimate government and hurt the movement for reform. This could be mitigated to some degree if the West demands the presence of reformist leaders in talks with Iran.

Kazem Alamdari is a professor at California State University