Archive for March, 2009

Consider the source

March 31, 2009

RELATED Going nuclear: Before and After

Iran’s Nuclear Program 101.

Los Angeles
Tehran Bureau | analysis

From 2001 to 2003, when the Bush administration was preparing the public for the invasion of Iraq, it supported its lies and exaggerations through front-page articles in The New York Times by Judith Miller, the now discredited reporter who left “the newspaper of record.” Many of her articles were co-authored by Michael R. Gordon, The Times’ chief military correspondent. In fact, from 1998 Miller had been serving as the chief of propaganda for Ahmad Chalabi’s Iraqi National Congress, presenting in her articles, based on Mr. Chalabi’s fabrications, accounts of a terrifying Iraq with active programs for producing weapons of mass destruction, which were later proven to be nonexistent. Many internal memos from The Times leaked to the outside world indicated that Chalabi and the neocons were the only sources of Miller’s claims on Iraq.

A particularly glaring example of the lies that Gordon and Miller were propagating was in an article that they published on September 8, 2002, in which they claimed that Saddam Hussein was trying to purchase aluminum tubes for use in Iraq’s uranium enrichment program. The “evidence” was quickly challenged in an article by Joby Warrick of the Washington Post, but the lie was used by the neocons, and particularly Dick Cheney, as “proof” of Iraq’s nuclear program. It turned out later that the neocons had supplied the lies to Gordon and Miller, and then used their articles as the needed evidence for the “smoking gun.” The lie was used repeatedly for quite some time as the primary propaganda tool against Iraq.

Was Judith Miller that gullible and easy to fool? No, she was not. She was sympathetic to the neocons’ cause, despite being considered a liberal on many other issues. At the same time, she had to go along with what she was being told because otherwise she would have probably lost her sources in the administration.

A similar phenomenon is taking place with respect to Iran and its nuclear program. Lies, exaggerations and baseless speculations are rampant about how close Iran supposedly is to making a nuclear bomb. The last round of propaganda started after the International Atomic Energy Agency (IAEA) released its latest report on Iran on February 19, 2009. The report in fact reaffirmed, once again, that (i) Iran had not diverted its nuclear materials to non-peaceful purposes; (ii) there was no evidence of a secret nuclear weapons program or secret nuclear facility, and (iii) all of Iran’s nuclear facilities are monitored by the IAEA and its nuclear materials are safeguarded. The report also contained an important positive signal from Iran in that it stated that the Islamic Republic had not increased significantly the number of centrifuges that were producing low-enriched uranium (LEU). This was very likely a signal from Iran that it wished for a detente with the United States under the new administration of President Obama.

All the positive points in the report were however ignored by the usual anti-Iran crowd, because the IAEA also reported that it estimated, as of January 31, Iran had produced 1010 kg of the LEU with an enrichment level of 3.49%. Suddenly there were deafening screams about how Iran could enrich its stockpile of LEU to the level suitable for a single nuclear bomb; that is, to 90% purity. Even if Iran could miraculously do the enrichment and build a nuclear device, it would have to explode it in a test, hence finishing up its entire stockpile! Moreover, converting a nuclear device to a nuclear bomb is in itself a difficult task, and there is no evidence that Iran has such a capability.

But, the War Party has ignored all of this. In its tall tale, Iran’s one ton of LEU is the equivalent of Iraq’s “aluminum tubes.” Its allies in the latest round of propaganda are the usual crowd — the mainstream media, the Israel lobby, and the pundits who are apparently able to read the minds of the Iranian leaders better than the Iranian leaders can themselves.

That the War Party and the Israel Lobby should embark on this latest round of propaganda is expected. What is surprising however is the appearance of an entirely new source to “substantiate” that which cannot be substantiated: speculations, innuendos and skewed interpretations of what the IAEA actually reports, or what Iran may or may not have or do. This new source is David Albright and his Institute for Science and International Security (ISIS).

One would think that Albright would use his command of nuclear issues, as recognized by the American Physical Society’s Joseph S. Burton Forum Award, for objective and impartial analysis of Iran’s nuclear program. But he and his Institute have been increasingly distancing themselves from such a position, and wittingly or unwittingly becoming a tool in the hands of the anti-Iran crowd. Let me explain.

Consider, first, the ISIS itself. It monitors the nuclear programs of India, Pakistan and Iran, among other nations. Unlike Iran, the first two have not signed the Nuclear Non-proliferation Treaty (NPT), and have developed nuclear arsenals. Pakistan, with its nuclear arsenal, restive population, political instability, and strong influence of Islamic fundamentalists in its military and intelligence services, is one of the most dangerous nations on Earth; yet the main focus of the ISIS in Iran.

The ISIS, which presents itself as a scientific — hence, presumably impartial — organization, does not analyze or monitor Brazil’s nuclear program, whose navy controls its uranium enrichment program and has restricted the IAEA access to Brazil’s uranium enrichment facilities, in violation of its NPT and Safeguards Agreement obligations. Just imagine what would happen if the IAEA were to declare that Iran’s military controls its uranium enrichment program.

Nor does the ISIS analyze or follow Israel’s program. This is the same nation that, (i) has at least 200 nuclear warheads; (ii) has three nuclear submarines that can attack any nation in the Middle East (one is usually in Iran’s vicinity); (iii) kidnapped its own citizen, Mordechai Vanunu, in Italy and took him to Israel, where he was jailed for 18 years because he revealed that Israel had a nuclear weapons program; (iv) has been threatening for a long time to attack Iran and its nuclear facilities, and (v) is the main reason for instability in the Middle East. But, the ISIS apparently believes that Israel and its nuclear program do not require monitoring or analysis.

On its Web site, the ISIS claims that it “works to create a world safe from the dangers posed by the spread of nuclear weapons to irresponsible governments…” (emphasis mine). Given its 41 years of occupation of the Palestinian lands, in violation of United Nations Security Council resolutions 242 and 338, its massacre of thousands of innocent people in the occupied territories and Lebanon, and the unimaginable destruction that it has caused there, Israel must be a “responsible” government. And Iran, which has not attacked any nation for at least 270 years, and has been the victim of numerous military attacks, invasions, and foreign-sponsored coups, is “irresponsible.”

Then there is the question of the sources of funding for the ISIS. It has a staff of five, and also lists two consultants and two interns. It uses the satellite imagery provided by DigitalGlobe, a private vendor of space imagery based in Colorado. All of this needs funding. On its Web site the ISIS states that, “the vast bulk of our funding comes from public and private foundations,” but I could not find the names of its benefactors. In an e-mail to the ISIS office I asked about the sources of their funding, but I received no response.

One must also consider ISIS’s sources of information. Consider, for example, the IAEA’s reports on Iran. When Mohamed ElBaradei, the Director General, submits his reports to the IAEA’s Board of Governors, their distribution is usually restricted. Yet, the ISIS posts the reports on its sites immediately after they are submitted. Often, even before the submission of the reports, the ISIS seems to know their contents, and numerous times has posted them at the same time that they are submitted.

That brings us to the ISIS President, David Albright, his analysis, and his sources at the IAEA. I am not going to repeat Scott Ritter’s criticism of Albright. Some interpreted Ritter’s expose as a personal attack, and Frank von Hippel of Princeton University wrote a response to his piece, defending Albright.

I leave it to the readers of Ritter’s article to gauge for themselves whether his arguments have any merit. I have never met Ritter, but have tremendous respect for him and his courageous stand regarding the illegal invasion of Iraq and what the Bush-Cheney cabal tried to do to Iran. At the same time, leading an extensive and active research program in physics and engineering has given me a degree of objectivity.

I believe that Albright has made many valuable contributions to the debates on nuclear arms, nuclear materials, etc. Albright relies, however, too heavily on baseless (not educated) speculations, and, quite often, nothing more that mere guesses. Moreover, he has been silent on important and sensitive issues that any experienced analyst and expert should be able to comment on. And he has published on the ISIS Web site analysis that seems to serve one and only one purpose — adding dangerous fuel to the debate over Iran’s nuclear program. These may not have been a problem by themselves, but we are talking about a serious international issue, namely Iran’s nuclear program and the fact that the War Party, the Israel lobby, and Israel itself are looking for any excuse to provoke and justify military attacks on Iran. In such a situation, anything other than solid, objective scientific analysis, backed by legitimate documents and credible sources is extremely dangerous. But, unfortunately, when it comes to Iran, Albright has increasingly distanced himself from being such an expert and analyst. Let me explain.

To begin with, let me point out that an analyst of Iran’s nuclear program, and the president of a supposedly impartial and scientific institution, cannot consort with AIPAC, the leading Israel lobby in the United States and an organization that is behind practically all the anti-Iran rhetoric that is coming out of Washington and, at the same time, present himself everywhere as an objective and impartial analyst. But, that is exactly what Albright did. On March 5, 2006, he spoke to AIPAC, making a presentation entitled, “Nuclear countdown: what can be done to stop Iran?” That, by itself, is very revealing, but Albright has not stopped there.

When it comes to talking about Iran’s nuclear program, Albright either sensationalizes the issue without putting much substance behind it, or tells half the story, leaving behind important details. As an example of the former, consider all the nonsense that he said about the Parchin site near Tehran in September 2004. This is an industrial complex in southeast Tehran that has been producing conventional ammunition, high explosives, and rockets for Iran’s armed forces for decades, going back to the 1950’s. In an article, Albright and Corey Hinderstein made all sorts of allegations about how Parchin was being used by Iran for nuclear-related work. But, the IAEA visited the site in January 2005, and reported no discovery of nuclear-related activities. What did Albright and Hinderstein do? Instead of retracting what they had written, they demanded further visits to the site!

More examples of how Albright is telling only half the story, consider the following. On the question of how much yellow cake (the uranium oxide that is converted to uranium hexafluoride for enrichment) Iran has, Albright has been saying recently that it is enough to make tens of bombs, but does not say that going from the yellow cake to the bomb is a long, tortuous process, fraught with all kinds of scientific difficulties, requiring advanced nuclear technologies, many of which Iran does not currently have, or at least there is no evidence that it does. When he is asked about Iran’s stockpile of enriched uranium, he responds that it is enough to make one nuclear bomb, but does not usually say that what Iran has is LEU, not highly-enriched uranium (HEU) that is needed for the bomb, and that so long as Iran’s enrichment facilities and stockpile are safeguarded by the IAEA, there is no way that Iran can obtain the HEU, even if it wants to (there is no evidence that it does), or has the facility for producing it (which it does not). It is clear that if Iran were ever to enrich its LEU to HEU, it would not do it at the well-known Natanz site. But, even if it were to do so, Iran must do extensive re-piping and some redesigning, which it would not be able to do under the watchful cameras of the IAEA.

In a recent interview, Bernard Gwertzman, consulting editor at, said to Albright, “You’ve been following Iran’s nuclear activities for years. Could you provide an update on its progress so far?”

Here is his response:

Iran continues to move forward on developing its nuclear capabilities, and it is close to having what we would call a ‘nuclear breakout capability.’ That’s a problem because once Iran reaches that state then it could make a decision to get nuclear weapons pretty rapidly. In as quickly as a few months, Iran would be able to have enough weapons-grade uranium for nuclear weapons. And if a breakout occurred, they would not likely do so at the well-known Natanz enrichment plant. Rather, the Iranians would most likely take low-enriched uranium that’s produced at that plant and then divert it at a secret facility that we wouldn’t know anything about. And at this secret facility, the Iranians would produce this weapons-grade uranium. And so if you were in the camp that said, ‘Well, we’ll have to strike militarily,’ you won’t actually know where to strike because you won’t know where that secret facility is. Whatever camp you are in, the situation is bound to grow more tense. So for 2009, probably the big technical issue is when Iran establishes this breakout capability. It could be soon. They don’t need that much more low-enriched uranium before they reach the first level of breakout capability, namely enough low-enriched uranium to make one nuclear weapon.

To the untrained eyes of a layman, the above paragraph seems very “innocent” and, at the same time, very “authoritative.” It is neither, however.

(1) Albright’s statement about the breakout capability is misleading, because he does not mention a lot of important details. A nation has that capability when it has enough LEU for conversion to HEU to make a bomb, and the facilities to do so. But as I discussed above, the process of converting LEU to HEU is long and tortuous. Even if Iran has everything in place, and everything works without any glitches or outside intervention, the breakout time — the time needed to convert the LEU stockpile to HEU — is 6 to 9 months, ample time for the international community to negotiate with Iran.

(2) But, that is not the most misleading part of Albright’s response. He knows that the Natanz facility is not currently equipped to enrich the LEU to HEU and, even if it were, Iran could not convert the LEU to HEU there. So, he says, with seeming 100% certainty, that the process of converting LEU to HEU will take place in a secret facility. That is, he is sure that such a facility already exists. The IAEA has certified time and again that there is no evidence of the existence of a parallel enrichment program in Iran. So, apparently Albright knows something that the rest of the world does not. I’ll come back to this point shortly. He also does not mention that Iran’s stockpile of the LEU is safeguarded by the IAEA. So, the only way for Iran to actually produce HEU from LEU is, (a) to leave the NPT and expel the IAEA’s inspectors from Iran, and (b) to take the LEU to the secret facility so quickly that all the satellites that are hovering over Iran, watching every move, would miss such a monumental event.

(3) All Albright is talking about is one nuclear bomb. So, assuming that Iran could fool the entire world, that it has everything that it needs, and with tremendous luck produce one nuclear bomb — after going through another difficult process (and there is no evidence that Iran does have the capability to do so), namely, converting a nuclear device to a nuclear bomb — it would have to explode it to test it. That would finish off Iran’s stockpile of enriched uranium!

Still, Albright did not stop there. The ISIS recently posted an analysis in which it claimed that Iran was running out of yellow cake. When Albright was asked by Gwertzman about this issue, he responded by saying,

Iran has never really had the uranium resources to support an indigenous nuclear electricity program. So they are dependent on importing the fuel. If you consider the Bushehr reactor, that’s what they did. They bought the reactor from Russia, and they bought the fuel for at least ten years.

Assuming that the first part of Albright’s response is correct (which it is not), the second part is totally misleading. Iran bought the fuel for the Bushehr reactor because when it signed the agreement with Russia, it had no enrichment plant. In addition, Iran bought the fuel for ten years, because it would take that long (at the current pace) to set up an industrial-scale enrichment plant with 50,000 centrifuges.

Then, he continued,

From our point of view, the best thing they can do is work out a solution with the international community so they can proceed with the nuclear electricity and import the low-enriched uranium fuel that they need for those reactors.

Aside from suggesting that Iran should give up its rights under Article IV of the NPT, Albright makes one wonder whom he is talking about when he says our point of view. If he is talking about himself and the ISIS, that is all right. But, if he considers himself part and parcel of the U.S. government and more generally the West, then he should stop all pretense to leading an impartial scientific institution, interested only in objective analysis of solid facts.

Albright and the ISIS have continuously published analysis in which they insinuate preordained conclusions based on totally unrelated facts. An example is a recent analysis by him, Paul Brannan and Andrea Scheel entitled “Iranian Entities Illicit Military Procurement Networks.” They describe a network of companies that allegedly purchases items that cannot be exported to Iran. There is not a single item in the analysis that has anything to do Iran’s nuclear program. Even they do not make such a claim. In a second analysis, Albright et al. claimed Iran was illicitly procuring a vacuum pump for its uranium enrichment program. No shred of evidence, no matter how flimsy or indirect, was presented for the claim. Even a cursory check of the Wikipedia, indicates that there are at least 16 very different usages of such pumps (and, importantly, Wikipedia does not even list centrifuges as one of them). But Albright and company decided on their own that this purchase must have been for Iran’s uranium enrichment program. Any reasonable expert would object to such so-called analysis because, (i) they are utterly unscientific and based on sheer speculation. (ii) They have little to do with the stated mission of the ISIS. (iii) The time of their release is very suspicious, and (iv) therefore, they can have one and only one goal: to add dangerous fuel to an already heated debate over Iran’s nuclear program.

One of the most contentious issues between Iran and the IAEA is the laptop that was supposedly stolen in Iran and turned over to the United States, which allegedly has incriminating evidence of Iran’s non-existent nuclear weapon program. The IAEA has repeatedly called on the United States to provide Iran copies of the documents that were supposedly in the laptop. The Americans have refused. The computer has never been analyzed for its digital chain of custody to reveal the dates in which the documents were stored in the laptop. These are two crucial issues that go to the heart of the subject. Yet, Albright has been totally silent about them. Why? The answer brings us to last piece of the puzzle, namely, Albright’s source at the IAEA.

Albright’s current contact at the IAEA, with whom he is “extremely tight” (in the language of several sources), is Olli Heinonen, the IAEA’s deputy director for safeguards, who is in charge of the current inspection in Iran. Heinonen, who tries to deceive people into believing that he is impartial by reminding them that he is from Finland, has been leading a crusade against Iran. Against the IAEA protocol for his high position, Heinonen constantly leaks sensitive information to the press, and spreads baseless or at least unproven allegations about Iran’s nuclear program.

As one example of Heinonen’s bias, consider the following: In February 2008, ElBaradei submitted a report to the Board of Governors of the IAEA in which he declared that Iran’s six minor breaches in its Safeguards Agreement have been addressed to the IAEA’s satisfaction and that, as a result of Iran’s cooperation, the IAEA had gained a better understanding of the history of Iran’s nuclear program. Right after that report, Heinonen made a provocative and tainted presentation to the Board of Governors, based entirely on the laptop. “Alarming,” he called it. This enabled the U.S. Ambassador to the IAEA, Gregory Schulte, who is a master at exaggerations and innuendos, to declare that
As today’s briefing showed us, there are strong reasons to suspect that Iran was working covertly and deceitfully, at least until recently, to build a bomb. Iran has refused to explain or even acknowledge past work on weaponization. This is particularly troubling when combined with Iran’s determined effort to master the technology to enrich uranium. Uranium enrichment is not necessary for Iran’s civil program but it is necessary to produce the fissile material that could be weaponized into a bomb.

In addition to Schulte’s utter arrogance in deciding that Iran does not need its own uranium enrichment, one must ask, how can Iran explain a document that has never seen? How can Iran acknowledge something that it has not done? It is really straightforward to confront Iran on this issue: Present copies of the documents to Iran, and analyze the laptop’s digital chain of custody.

What is Albright’s position regarding all of this? Silence! He probably knows that at least some of the documents were fabricated and inserted in the laptop and, therefore, an analysis of the laptop’s digital chain of custody would easily reveal that. He knows most definitively that given Iran’s history of having its scientists assassinated, its experts would not carelessly reveal the names of important personnel in a memo, which is supposedly in the laptop. But, Albright has kept silent because he is “tight” with Heinonen. Just like Judith Miller, if Albright says anything about this issue that Heinonen does not like, he will lose his source inside the IAEA, the same source who presumably gives him ElBaradei’s reports on Iran and other information that are not supposed to be distributed publicly.

Heinonen is “tight” with Albright because he realizes that leaking information to Albright and ISIS to present to the public gives it a veneer of legitimacy. It is better for a former UN weapon inspector and nuclear expert and his “scientific, non-profit” institution to spread unproven “facts,” than the deputy IAEA chief for inspection. Heinonen is a true heir to Pierre Goldschmidt, who served in the IAEA in the same capacity, and who has made many ridiculous statements regarding Iran since moving to the Carnegie Endowment for International Peace.

In addition to Albright and Heinonen being “tight,” there might be another factor at play. Many times in the past Albright claimed that Iran could not reach certain milestones in its nuclear program, because it just does not have the technological and scientific capabilities. Yet, time and again he was proven wrong. That is because he and other Western experts have a hard time accepting that Iran, a nation that has been under the most severe U.S. sanctions for more than two decades, has succeeded in setting up a complete indigenous cycle for producing nuclear fuel. As the author told William Broad and David Sanger of The New York Times in an article that was published in the Times on March 5, 2006,
We’ve made mistakes in underestimating the strength of science in Iran and the ingenuity they show in working with whatever crude design they get their hands on.

Some may point to Albright’s opposition to attacking Iran’s nuclear facilities as an indication that he is against war with Iran. But, if the article by Albright, Paul Brannan, and Jacqueline Shire, is studied carefully, one finds that it is not that they are against war per se, but that they do not think bombing will solve the “problem.” Instead, they advocate sanctions. But sanctions are low-intensity wars. Sanctions killed at least 500,000 Iraqi children in the 1990’s. The number of civilians killed as a result of invading and occupying Iraq ranges anywhere from 200,000 to 1 million, which is completely comparable with the number of the Iraqi children killed in the 1990’s.

It would be a pity if David Albright continues down this path and allows himself to be used as a tool like Judith Miller. He can still contribute usefully to the debate on Iran’s nuclear program, provided that he does not sacrifice objectivity for the sake of having a source at the IAEA — and a discredited and prejudiced one at that.

The Afghan War Rationale

March 28, 2009

Some Strategists Cast Doubt on Afghan War Rationale.

Washington, D.C.
IPS | analysis

The argument for deeper U.S. military commitment to the Afghan War invoked by President Barack Obama in his first major policy statement on Afghanistan and Pakistan Friday — that al Qaeda must be denied a safe haven in Afghanistan — has been not been subjected to public debate in Washington.

A few influential strategists here have been arguing, however, that this official rationale misstates the al Qaeda problem and ignores the serious risk that an escalating U.S. war poses to Pakistan.

Those strategists doubt that al Qaeda would seek to move into Afghanistan as long as they are ensconced in Pakistan and argue that escalating U.S. drone air strikes or Special Operations raids on Taliban targets in Pakistan will actually strengthen radical jihadi groups in the country and weaken the Pakistani government’s ability to resist them.

The first military strategist to go on record with such a dissenting view on Afghanistan and Pakistan was Col. T. X. Hammes, a retired Marine officer and author of the 2004 book “The Sling and the Stone,” which argued that the U.S. military faces a new type of warfare which it would continue to lose if it did not radically reorient its thinking. He became more widely known as one of the first military officers to call in September 2006 for Defense Secretary Donald Rumsfeld’s resignation over failures in Iraq.

Col. Hammes dissected the rationale for the U.S. military presence in Afghanistan in an article last September on the Web site of the “Small Wars Journal,” which specializes in counterinsurgency issues. He questioned the argument that Afghanistan had to be stabilized in order to deny al Qaeda a terrorist base there, because, “Unfortunately, al Qaeda has moved its forces and its bases into Pakistan.”

Hammes suggested that the Afghan War might actually undermine the tenuous stability of a Pakistani regime, thus making the al Qaeda threat far more serious. He complained that “neither candidate has even commented on how our actions [in Afghanistan] may be feeding Pakistan’s instability.”

Hammes, who has since joined the Institute for Defense Analysis, a Pentagon contractor, declined to comment on the Obama administration’s rationale for the Afghan War for this article.

Kenneth Pollack, the director of research at the Saban Center for Middle East Policy of the Brookings Institution, has also expressed doubt about the official argument for escalation in Afghanistan. Pollack’s 2002 book, “The Threatening Storm,” was important in persuading opinion-makers in Washington to support the Bush administration’s use of U.S. military force against the Saddam Hussein regime, and he remains an enthusiastic supporter of the U.S. military presence in Iraq.

But at a Brookings forum Dec. 16, Pollack expressed serious doubts about the strategic rationale for committing the U.S. military to Afghanistan. Contrasting the case for war in Afghanistan with the one for war in Iraq in 2003, he said, it is “much harder to see the tie between Afghanistan and our vital interests.”

Like Hammes, Pollack argued that it is Pakistan, where al Qaeda’s leadership has flourished since being ejected from Afghanistan, which could clearly affect those vital interests. And additional U.S. troops in Afghanistan, Pollack pointed out, “are not going to solve the problems of Pakistan.”

Responding to a question about the possibility of U.S. attacks against Taliban sanctuaries in Pakistan paralleling the U.S. efforts during the Vietnam War to clean out the Communist “sanctuaries” in Cambodia, Pollack expressed concern about that possibility. “The more we put the troops into Afghanistan,” said Pollack, “the more we are tempted to mount cross-border operations into Pakistan, exactly as we did in Vietnam.”

Pollack cast doubt on the use of either drone bombing attacks or Special Operations commando raids into Pakistan as an approach to dealing with the Taliban sanctuaries in Pakistan. “The only way to do it is to mount a full-scale counterinsurgency campaign,” said Pollack, “which seems unlikely in the case of Pakistan.”

The concern raised by Hammes and Pollack about the war in Afghanistan spilling over into Pakistan paralleled concerns in the U.S. intelligence community about the effect on Pakistan of commando raids by U.S. Special Operations forces based in Afghanistan against targets inside Pakistan. In mid-August 2008, the National Intelligence Council presented to the White House the consensus view of the intelligence community that such Special Forces raids, which were then under consideration, could threaten the unity of the Pakistani military if continued long enough, as IPS reported Sep. 9.

Despite that warning, a commando raid was carried out on a target in South Waziristan Sep. 3, reportedly killing as many as 20 people, mostly apparently civilians. A Pentagon official told Army Times reporter Sean D. Naylor that the raid was in response to cross-border activities by Taliban allies with the complicity of the Pakistani military’s Frontier Corps.

Although that raid was supposed to be the beginning of a longer campaign, it was halted because of the virulence of the political backlash in Pakistan that followed, according to Naylor’s Sep. 29 report. The raid represented “a strategic miscalculation,” one U.S. official told Naylor. “We did not fully appreciate the vehemence of the Pakistani response.”

The Pakistani military sent a strong message to Washington by demonstrating that they were willing to close down U.S. supply routes through the Khyber Pass talking about shooting at U.S. helicopters.

The commando raids were put on hold for the time being, but the issue of resuming them was part of the Obama administration’s policy review. That aspect of the review has not been revealed.

Meanwhile airstrikes by drone aircraft in Pakistan have sharply increased in recent months, increasingly targeting Pashtun allies of the Taliban.

Last week, apparently anticipating one result of the policy review, the New York Times reported Obama and his national security advisers were considering expanding the strikes by drone aircraft from the Tribal areas of Northwest Pakistan to Quetta, Baluchistan, where top Taliban leaders are known to be located.

But Daniel Byman, a former CIA analyst and counter-terrorism policy specialist at Georgetown University, who has been research director on the Middle East at the RAND corporation, told the Times that, if drone attacks were expanded as is now being contemplated, al Qaeda and other jihadist organisations might move “farther and farther into Pakistan, into cities.”

Byman believes that would risk “weakening the government we want to bolster”, which he says is “already to some degree a house of cards.” The Times report suggested that some officials in the administration agree with Byman’s assessment.

The drone strikes are admitted by U.S. officials to be so unpopular with the Pakistani public that no Pakistani government can afford to appear to tolerate them, The Times reported.

But such dissenting views as those voiced by Hammes, Pollack and Byman are unknown on Capital Hill. At a hearing on Afghanistan before a subcommittee of the House Government Operations Committee Thursday, the four witnesses were all enthusiastic supporters of escalation, and the argument that U.S. troops must fight to prevent al Qaeda from getting a new sanctuary in Afghanistan never even came up for discussion.

Gareth Porter is an investigative historian and journalist specializing in U.S. national security policy. The paperback edition of his latest book, “Perils of Dominance: Imbalance of Power and the Road to War in Vietnam,” was published in 2006.

Official: Iraq to move Iranian opposition group

March 27, 2009

The Associated Press
Iraq says it will move members of an Iranian opposition group from a camp north of Baghdad to remote areas elsewhere and encourage them to leave the country peacefully. continue reading…

Showdown with Iran

Vali Nasr, Hillary Mann, Richard Armitage, Mohammad Jafari, Nicholas Burns, Alireza Jafarzadeh on the MEK

The Iranian Mojahedin
By Ervand Abrahamian

The Hero and Heroin (Part 2)

March 27, 2009

Photo/Kamin Mohammadi

var pageTracker = _gat._getTracker(“UA-6470445-1”);
pageTracker._trackPageview();A war veteran loses the drug battle.


Tehran Bureau | dispatches

Read Part 1 here.

In the autumn of 1980, Iraqi forces invaded Iran, still in the throes of its 1979 Revolution. Saddam Hussein’s decision to invade was not just an exploitation of Iran’s post-revolutionary vulnerability and attempt to place Iraq as the dominant power in the Persian Gulf, but also motivated by the fear that Iran’s new leadership would threaten Iraq’s delicate Sunni-Shia balance and would exploit Iraq’s geostrategic vulnerabilities – Iraq’s only access to the Persian Gulf is via the Shatt al-Arab. The historic animosity between the two countries stretches back to the pre-Islamic rivalry between the Achaemenid and Babylonian empires. More recently, the 1937 treaty between the two countries resolved the ancient dispute about the Shatt al-Arab waterway. However, as the last Shah grew more confident in his power and determination to make Iran the ‘guardian of the Gulf’, in 1969 he overrode the 1937 treaty’s rules on navigation in the Shatt al-Arab, leading to the two countries to deploy military forces along the delta.

However, Iraq and Iran came to terms in 1975 with the signing of the Algiers Agreement, in which the Shatt dispute was settled, terminating the armed confrontation, and Iran promised to withdraw its support from the Iraqi Kurdish separatist movement. According to the agreement, the joint border would be demarcated to imply Iraqi renunciation of its claim to Khuzestan (called Arabistan by the Iraqis).

Enter Ayatollah Khomeini in 1979, still bitter over his expulsion from Iraq in 1977 after 15 years in exile in Najaf and vowed to avenge Shia victims of Baathist repression. Once installed, the revolutionary leader started to call on Iraqis to rise up against their leader. By 8 March 1980, relations had deteriorated to the point that Iran withdrew its ambassador from Iraq. Skirmishes along the border followed until, in September, Iraq abrogated the Algiers Agreement and declared full sovereignty over the Shatt al-Arab waterway. On 23 September, Iraqi forces invaded Iran. On 22 October Abadan was besieged by the Iraqi army and on 24 October Khorramshahr – then Iran’s largest port – fell to the Iraqis.

Baghdad planned a swift victory, expecting the native population of ethnic Arabs living in Khuzestan to rise against the new Islamic regime. However, the uprising didn’t come, the Arab minority remained loyal to Iran. Saddam also knew that despite the Shah’s stockpiled arsenal of the latest weapons, Iran had just executed or lost to exile all its top military personnel – between 1979 and September 1980, some 12,000 senior officers had been purged – and so lacked cohesive leadership, and, in the event, spare parts for the equipment as well as the knowledge of how to assemble or use them correctly – the Iranian air force was only able to fly half of its aircraft by the start of the war. Iran’s military was thus depleted and the Pasdaran (Revolutionary Guards) were led by clerics with little or no military experience and often armed only with light infantry weapons and Molotov cocktails, so Iraqi morale was certainly running high in the first few months of the war. In spite of this, it dragged on for eight long years, a protracted and very costly war – a war in which trench warfare was seen for the first time since World War I and nerve gas was used – by Iraq – in combat operations for the first time ever.

What Saddam perhaps underestimated was the extreme passion of his opponents for their land and the strength of the ideology that Khomeini immediately employed to motivate the populace. Iraqi forces were repulsed from entering Abadan by a small Pasdaran unit and its fierce inhabitants and Khorramshahr was only captured after a house-to-house fight so bloody that the town was nicknamed khunistan (town of blood). Some 6,000 Iraqis fell in the battle for Khorramshahr, Iranian death tolls were even higher, with 7,000 dead and seriously wounded.

Another unforeseen factor was the Basij, the People’s Militia, what Ayatollah Khomeini called the ‘Army of Twenty Million’. By the end of November 1980, some 200,000 new Pasdaran and Bajis were sent to the front, troops so ideologically committed that some carried their own shrouds in expectation of impending martyrdom.


In Tehran I meet Hassan, a veteran of the war. Courteous and serious, Hassan has an almost imperceptible limp, a result of the war years. Hassan is from Tehran, so unlike Ebby he never lived through the early horror of the war. Like Ebby, Hassan is from a secular middle class family, not particularly religious. But, as a teenager during the Revolution, he became a fervent supporter of Ayatollah Khomeini. He believed in the Revolution and he believed in the Islamic Republic. He saw Saddam’s invasion as a threat to the values of the Revolution and he longed to defend Iran.

We are sitting in the Laleh Park in central Tehran and I am chaperoned by an uncle: for a devout man like Hassan it would be wrong to be alone with me, an unmarried woman, especially in a park, the setting for so many illicit meetings these days. ‘The Imam called it a “holy war”‘, he says quietly. ‘He promised us that anyone who died in the war would be a martyr and go instantly to paradise.’ He laughs. ‘I know how it sounds now but at the time, whenever a mullah came to talk to us about the war at school, I was burning to join up.’

The regime used aggressive recruiting techniques, particularly in mosques and schools in lower income urban and rural areas where passionate talk of religious sacrifice and martyrdom fired up the populace. Iranian television broadcast pictures of young men – boys – with their red Basij headbands and guns, saying how wonderful it was to be a soldier for Islam, to fight for freedom and your country. There were films of women saying how proud they were that their sons had died martyrs for the cause. The Basiji orders were founded to absorb young men who were not old enough to join the regular military. Although Hassan was 16 when he joined up, he says there were plenty of much younger boys. ‘There was a kid who was 12,’ he says. ‘He lied about his age but they let him join anyway. He said he had his parents’ permission but I can’t imagine any mother would willingly let their child go to war like that.’

The cult of martyrdom is still in evidence in the mass of published books, the towering poster-art billboards in every town with names and pictures of the dead, the street names changed to commemorate the martyrs. In a country where getting ahead is often a matter of who you know, veterans of the war benefit from preferential treatment – university places, government jobs – as do the martyrs’ families. There is a sense of resentment from the general public who tend to exaggerate the benefits, but nonetheless this signifies a change in attitude to the war and those who fought or died in it. Duel, a film made by Ahmadreza Darvish and released last year was remarkable for two things: it was the most expensive film ever made in Iran and, unlike the multitude of earlier war films, it made no attempt to glorify martyrdom and sacrifice. In fact it made a pretty good case for the futility of war.

Hassan went to the front in 1981. He won’t talk to me about the actual fighting, but I know that in the rain and mud of that winter, Iran first employed what would become a trademark tactic, the suicidal ‘human wave’, when thousands of ecstatic soldiers would storm the Iraqi lines without any artillery or air support, chanting ‘Allahu akbar’. An Iraqi officer once described the effect this had on his men: ‘They come on in their hundreds, often walking straight across the minefields, triggering them with their feet as they are supposed to.’ He said that his men would cry and try to run away from these men – most of them very young: ‘my officers had to kick them back to their guns.’

The Basiji had a piece of white cloth pinned to their uniforms as a symbol of a shroud, and wore a plastic key around their necks, issued as a symbol of their assured entry to paradise. At first they had little or no training and were used mostly as human minesweepers, but as the war raged on, they became more sophisticated in their training and preparation.

In July 1982 Iran launched Operation Ramadan on Iraqi territory, near Basra. Although Basra was within range of Iranian artillery, the clergy – who had taken charge of operations earlier that year – used ‘human-wave’ attacks by the Pasdaran and Basij against the city in one of the biggest land battles since 1945. Ranging in age from only nine to more than 50, these eager soldiers swept over minefields and fortifications to clear safe paths for the tanks. Unsurprisingly, the Iranians sustained an immense number of casualties, and it is from this battle that Hassan has his limp.

Despite what were horrific injuries, he went back a few years later, towards the end of the war. I ask him why and he hesitates. ‘It’s hard to explain if you weren’t there,’ he says, looking into the distance. ‘But it was hard to get back to normal life. People in Tehran were scared of the bombing and my family wanted to go north to be safe. I just kept thinking of my friends and wondering what was happening.’ He looks embarrassed and clears his throat. ‘You know, I felt close to God there.’

As Hassan contemplates this state of higher being, identified by one psychiatrist who has worked with war veterans as a common phenomenon, I watch a young couple walking by. They are giggling and well dressed.

Like most of the girls I have seen, especially in Tehran, this girl’s hejab consists of a short, tight coat that skims her mid-thigh, while the obligatory headscarf perches precariously at the back of a towering hairstyle, all topping off an exquisitely and elaborately made up face. Her man is clean-shaven, his longish locks slicked with plenty of gel and he clutches a mobile phone. They may be married but it is more than likely that they are out on a date, and as they walk by, they throw Hassan, with his short beard and collarless shirt a glance, muttering to each other. These are the children of the Revolution, the under 30s that make up 70% of Iran’s 68 million population. They didn’t live under the Shah and didn’t long for Revolution and didn’t fight in the ‘holy war’. They have grown up in the Islamic Republic and now, the majority are impatient for change.

They watch illegal yet ubiquitous satellite television beaming Persian pop music programmes from Los Angeles, they surf the internet and watch Hollywood films that they buy on the black market. They are tired of uncertainty and repression: they want their social freedoms.

Hassan catches their look and says to me: ‘Look, I have a family of my own and I am a liberal father. But I have friends from the war days who are very devout. And they look at these kids today and they wonder what it was we were fighting for.’ He considers before going on. ‘My children are very respectful but I still don’t talk about the war. I prefer to leave it in the past. But I know when I see some of their friends that they don’t care about our sacrifice. They don’t have respect.’

Click here for Part 3.

An abridged version of this article first appeared in the Financial Times magazine.

Kamin Mohammadi’s first book, a family memoir and modern history of Iran, is slated for publication in the spring of 2010.

Iran to join talks on stabilizing Afghanistan

March 27, 2009

Los Angeles Times

The Islamic Republic announced Thursday that will join the United States in dispatching official delegations to two international conferences on Afghanistan in the coming days, including one in the Netherlands to which the Obama administration has welcomed Tehran’s presence. continue reading…

The Sequel

March 26, 2009

Media get it wrong, again

March 25, 2009

Editorial: The Daily Star

U.S. President Barack Obama’s effort to begin a dialogue with the Islamic Republic of Iran has already hit a brick wall. But the obstacle that stands in the way of rapprochement is not, as the American media would lead one to believe, the mullahs in Tehran. Rather, it is the American media itself.

U.S. newspapers and television stations reported over the weekend that Iran’s supreme leader Ayatollah Ali Khamenei immediately “rebuffed,” “brushed aside,” “dismissed” or flat-out “rejected” Obama’s recent video appeal for talks. But the reality is something quite different.

Khamenei in fact delivered a carefully crafted address in which he welcomed Obama’s offer for talks, but also set specific parameters in which negotiations can happen. He even identified concrete steps that the United States can take to demonstrate that it is interested in a genuine dialogue based on an open exchange of views. Continue reading

Hot times and cool heads

March 24, 2009

In an unprecedented step, Ayatollah Khamenei responds to President Obama’s Nowruz message himself. Pictured above, before a gathering in Mashhad, his hometown, on the first day of Nowruz. Photo/

As Ayatollah Khamenei endorses possible talks with the United States, Iran’s pragmatic conservatives hope the presidential election will help trim Ahmadinejad’s international role.

Tehran Bureau | election coverage

There are many asymmetries in the U.S.-Iran relationship. The United States is a huge military power and a massive economy. Iranians have a sense of history and geography that Americans simply do not understand.

And there is another asymmetry, at least for now. Barack Obama is a new president elected on a slogan of change — while Iran is approaching a presidential election in June.

The interplay between the international situation and Iranian domestic politics is exorcising the minds of many in Iran’s political class as they contemplate the possibility of talks with Washington.

Ayatollah Ali Khamenei’s measured, and near instant, response to president Obama’s video message to Iranians has signaled that Iran is open to dialogue. Tehran, said the supreme leader, is willing to change if the United States does. This is now well understood in Iran, even if many western commentators claimed Ayatollah Khamenei had “dismissed” Obama’s overture.

For Iran’s pragmatic conservatives, the prospect of president Mahmoud Ahmadinejad being involved in such a dialogue is an uncomfortable one. This partly explains the current talk in Tehran of broadening out the government after June’s election.

The idea of a “unity” government seems to have originated with Mohsen Rezaie, the former commander of the Revolutionary Guards, but was taken up last week by Ali Larijani, the parliamentary speaker, who is fast becoming the bête noire of Ahmadinejad supporters.

The experienced hands in Iran’s political class know very well that the maneuvering in the new international situation requires diplomacy and calm heads (even though Iran’s approach will continue to be set by the leadership group, in which Ayatollah Khamenei is pre-eminent). Those acting for Iran should therefore be experienced, trustworthy and reliable.

Ahmadinejad and his closest allies, like Mojtaba Hashemi-Samareh, do not fit the bill. For many regime insiders, talks with the United States should be handled by seasoned hands — the likes of Hassan Rowhani, the former top security official, Larijani or even Rezaie.

Such pragmatic conservatives probably consider it is likely Ahmadinejad will continue as president after June, but they want him as hemmed in as possible. They would welcome a broader range of ministers in domestic portfolios, and they would also like to ensure that what they see as Ahmadinejad’s excitability and populism do not affect Iran’s diplomacy.

In essence, this reflects the dilemma Ahmadinejad has posed for them, and indeed for Ayatollah Khamenei, since he came to office.

On the one hand, Ahmadinejad invigorated Iran’s politics. The 2005 election confounded those expecting a low turnout and showed that a fundamentalist, loyal to the ideals of the 1979 revolution, could appeal to the people.

As president, Ahmadinejad has reached out to every corner or Iran through high-profile trips and made the nuclear programme into a popular mission with an appeal throughout the Muslim world.

But on the other hand, Iran finds itself in a delicate period, potentially more dangerous than at any time since the 1979 Revolution. Washington under Obama may be ready for compromise over the nuclear issue — or it may be ready for further sanctions or even military attacks. And so Ahmadinejad’s radicalism needs to be managed.

The president himself was clearly hoping to breeze through the election campaign by attacking Mohammad Khatami, the former reformist president. The spectre of Khatami sparking “social unrest” — as in his previous presidency — was a nightmare for many fundamentalists and was driving them behind Ahmadinejad.

But Khatami’s withdrawal removed a negative pressure for unity in the fundamentalist, or principle-ist, camp. It eased political tension.

It is now more likely that another fundamentalist candidate — possibly Mohammad Bagher Ghalibaf, Tehran’s mayor — could run, or that some price can be extracted from Ahmadinejad for avoiding such a challenge.

These are busy days for the president. At the same time as dealing with conservative critics, Ahmadinejad needs a new plan to defeat the two surviving reformist candidates, Mehdi Karrubi and Mir Hossein Mousavi, both of whom will emphasize day-to-day economic issues rather than Khatami’s “social freedom.” Mousavi is arguing for a kind of “third way” between reformism and fundamentalism, an Islamist version of the Blairite-Clintonesque appeal for the center ground.

As he struggles also to get his budget through parliament, Ahmadinejad has his hands full. His conservative critics hope they will be so full that he will have to keep them away from where they are not wanted.

Copyright © 2009 Tehran Bureau

Dialogue or Dictating to Iran?

March 23, 2009

Tehran Bureau | comment

U.S. President Barack Obama continues to make intriguing gestures in the Middle East that seem to soften or even reverse the policies of the George W. Bush administration, the latest being his video taped message to the Iranian people and leaders on the occasion of the Nowruz holiday that ushers in Spring. Obama should be commended for his initiative, which started from his first moments in office when he made a gesture to the people of Iran during his inaugural address.

Obama said in the message that, “My administration is now committed to diplomacy that addresses the full range of issues before us, and to pursuing constructive ties… This process will not be advanced by threats. We seek instead engagement that is honest and grounded in mutual respect.”

He made this intriguing gesture in the context of his administration earlier this month extending sanctions against Iran for one more year, on the basis that Washington sees Iran as posing a threat to U.S. national security. If sticks and stones speak louder than words, the American sanctions against Iran would seem to convey a much tougher posture than the reconciliatory video message. This would seem to be the first contradiction the United States needs to sort out in its overtures to Iran.

Another one is the tendency to reach out with happy words that preach friendship and mutual respect, while also laying down the law on what Iran must do if it wants to be invited for tea at the White House. Obama said the United States wanted Iran to take its “rightful place in the community of nations,” but he also laid down some markers for Iran’s behavior, noting that Tehran would have to do its part to bring about reconciliation.

“You have that right — but it comes with real responsibilities, and that place cannot be reached through terror or arms, but rather through peaceful actions that demonstrate the true greatness of the Iranian people and civilization,” he said.

He went on to add, “And the measure of that greatness is not the capacity to destroy, it is your demonstrated ability to build and create.”

We should not underestimate the courage and self-confidence it took for Obama to move in this direction and to make several gestures towards Iran since taking office. He reflects real strength, political realism and much humility in being able to reverse many aspects of the belligerent Bush approach and instead to reach out to Iran.

Yet the persistent flaw in the Obama approach that might prove to be fatal is a lingering streak of arrogance that is reflected in both the tone and the substance of his message. This is most obvious in his insistence — after telling the Iranians that they are a great culture with proud traditions, which is presumably something they already knew, experienced and felt on their own — on lecturing Iran about the responsibilities that come with the right to assume its place in the “community of nations”, and then linking Iran’s behavior with “terror of arms” and a “capacity to destroy.”

It is difficult to see how Washington feels the positive gestures of reaching out can be reconciled with the American president’s irrepressible need to lecture others about the rules of righteous nationhood. One of the principal complaints that Iran has against the United States — and this is mirrored in widespread Arab and Islamist resistance to the United States and its allies — is the lingering colonial tendency by the leading Western powers to feel that they write the rules for the conduct of other nations.

This complaint is exacerbated by hearing the Americans warn against the “ability to destroy” and the danger of using “terror or arms” — while Washington sends hundreds of thousands of its troops around the world on destructive yet dubious missions, backs its allies in various Arab countries with a gusher of arms, and enthusiastically stands by Israel in the latter’s actions in Lebanon and Palestine in what many see as a policy of state terror.

The American gestures to Iran seem sincere and serious, but from the Iranian perspective they still suffer from the persistent structural weakness of dictating the rules of the game to Iran and others in the Arab-Asian region, rather than engaging in a genuine dialogue. This flaw should not detract from the constructive effort that the Obama administration is making or blind us to the real shifts it has already initiated. At some point, though, Obama has to decide if he wants to dictate rules, or engage in real dialogue, because the two cannot happen together — especially if the standards of behavior the United States wants to see from Iran are often ignored by Washington itself along with its closest allies, such as Israel.

We can celebrate Nowruz together and usher in a genuinely new Spring, or we can soon celebrate April Fool’s day, but in the world of diplomacy and political relations we cannot do both at the same time.

Rami G. Khouri is Editor-at-large of The Daily Star, and Director of the Issam Fares Institute for Public Policy and International Affairs at the American University of Beirut, in Beirut, Lebanon.

Copyright © 2009 Rami G. Khouri – distributed by Agence Global

The Prize?

March 21, 2009

Tehran Bureau | comment

Some argue that oil has been the single most important discovery in the history of modern Iran. It was more than a century ago that oil was discovered in the hills of Zagros and ever since every aspect of Iranian life has been affected by it. The primary interest of world superpowers in Iran is its oil. It was the main reason that Iran was involved in the Second World War. The allies invaded Iran to provide a supply line to the Soviet Union, as well as to insure a steady flow of Iranian oil to their countries and war machines. One of the outstanding moments in the history of Iran has been the nationalization of its oil industries by the great Mohammad Mosadegh. In sum, it could be said that nothing has influenced Iran in the past century more than oil.

The development of the world in the 20th century has been completely dependent on the supply of oil and gas. No modern country can function without adequate and affordable access to these raw materials. However, the main question is the link between oil-based economies and development. To a naïve optimist, oil is a blessing, an undeniable source of wealth that can propel a country into a state of prosperity and success. On the other hand, a pessimist may view oil or any other natural resource as a curse. It can hinder the development of a country and render the society as well as the government oblivious to the problems at hand.

The argument for considering oil a blessing is obvious. Take Iran for example: We produce 4 million barrels of oil a day, out of which we export 2.84 million barrels (making Iran the 4th largest exporter of oil). This constitutes 80 percent of all Iranian exports — the largest and most important of our exports. A considerable amount of Iran’s GDP is made up of oil revenue. Oil not only pays for government expenses, but it has also been the source of many subsidies that Iranians have enjoyed longer than they care to remember.

Iran also has one of the largest proven oil and gas reserves in the world. At current extraction rates, Iranian reserves are estimated to last for many decades to come. It can be argued that oil is a treasure that can bail Iran out of many problems for years to come. The other good news is that in the years to come, there will probably be no downward trend in demand and thus no reduction in the price of oil. There will be highs and lows but the overall trend for oil prices will be upward. Although the current economic crisis has prompted oil prices to fall from record highs to an average of USD $40 per barrel, as the global economy comes around, so will oil prices.

However there is another side to oil and oil-dependent economies, a dark and troublesome side that fundamentally questions reliance on oil. Oil severely affects the economy and the politics of a country, so much that many consider oil a curse. I will first describe the devastating effects oil has on the economy.

Adam Smith postulated a concept known as “rent” in reference to unearned profits or income; or as he put it, “profits reaped by those who did not sow.” Economists regard rents as earnings in excess of all relevant costs, including the market rate of return on invested assets. Natural resources including oil, due to their limited availability, have rents, and this rent is what makes them so attractive as a source of income.

In the 1960’s, “the rentier state” thesis was articulated by Hossein Mahdavi, an Iranian, to refer to the economy of pre-revolutionary Iran. In the 1980’s, Giacomo Luciani further developed this idea. A rentier state is a state that lives from externally generated rents rather than the surplus production of the population. In oil-exporting states, this is measured by the percentage of natural resource rents in total government revenues. Dependence is also reflected in export profiles, with oil in dependent countries generally making up from 60 to 95 percent of a country’s total exports. 85 percent of all Iranian exports are comprised of oil and oil-based products. Thus, by definition, Iran is considered a rentier state.

Rentier states tend to do poorly in development measures. As the development economics professor Erwin Bulte puts it, “Because of the on average poor quality of their institutions, resource-rich countries tend to do worse with regards to various development policies and performance in comparison to other countries.”

There is a considerable amount of evidence to support this. Between 1970 and 1993, countries which were resource-poor grew four times more rapidly than countries which were resource-rich, despite the fact that these resource-poor countries had half the savings. (Auty, “Natural Resources, the State and Development Strategy,” Journal of International Development, pp.651-663). In the same period, OPEC members experienced an average 1.3 percent decrease in their per capita GNP, whereas lower and middle-income developing countries as a whole grew by an average rate of 2.2 percent over the same period.

Among OPEC members, Iran has fared better. It has managed to maintain an average yearly growth rate of 3 percent (around the global average). However, the average per capita income of Iranians is still lower than 30 years ago.

One of the biggest problems associated with high reliance on raw materials, including oil and gas, is the large price swings in world market prices. In 2008, we witnessed a classic example of this phenomenon. Oil prices, which had peaked at near USD $150 a barrel, fell almost $100 within two months. There are too many factors affecting the supply and demand of oil in the world. A rebel faction targeting an oil line in Nigeria can cause a price hike of ten dollars per barrel. On the other hand, speculation about China’s slowing growth rate can spark a drop in oil prices by tens of dollars per barrel. The result is of course a highly volatile oil market.

This is very bad news specially for rentier states. Such price swings make longterm planning almost impossible. Take Iran, for example. In late 2007 and early 2008, boosted by high oil prices, President Mahmoud Ahmadinejad declared an ambitious program of eliminating government subsidies and replacing them by an $80 check to eligible families each month. However, the fall in oil prices put an end to such plans.

Another problem plaguing oil-dependent economies is the poor links existing between resource and non-resource sectors. This essentially means that growth is insulated in oil and oil-based industries, leading to neglect and mismanagement in other sectors. However, the money generated by oil exports can be used to foster such links, as well as developing infrastructures upon which other sectors are able to thrive. Unfortunately many oil-exporting countries have failed to do so. Further, by mishandling oil revenues, a very hostile environment is created in other sectors of the economy.

Iran again provides a good example. For years, starting from the pre-revolutionary era, the government has used oil revenue to import basic goods. This has severely weakened domestic sectors, including the agricultural one. To offset this, the government has been paying farmers subsidies and buying their products at higher than market prices. This however has considerably reduced the capacities of the agricultural sector and its ability to compete in global markets.

The previous problem is part of a very well known phenomenon called “Dutch Disease.” Dutch disease means that oil windfalls can hurt other sectors of the economy by pushing up the real exchange rate of a country’s currency and thus rendering most other exports noncompetitive. Diminished competitiveness in agricultural and manufacturing exports crowds out other productive sectors and makes the diversification of the economy particularly difficult. This in turn reinforces dependence on oil, and over time it can result in a permanent loss of competitiveness.

However, the misfortunes brought about by oil are not limited to the economy. The politics of a country is also highly influenced by oil. The windfall from oil cushions the mistakes made by governments. This means oil-exporting governments are rarely answerable to their people. Evidence shows that most oil-exporting countries are autocracies, or at the very best, factional democracies heavily plagued by fraud and mismanagement.

Governments of oil-dependent states usually undertake overambitious development programs. One such program was initiated by the former Shah of Iran in the 1970’s and backed by high oil prices brought about by the Arab states’ oil embargo. The Shah took on an overambitious industrialization and development program that caused huge inflation in the country, led to rapid urbanization and slum development and finally brought about the fall of the Pahlavi regime.

The state-centered approach associated with oil-dependent countries means that the private sector remains weak and uncompetitive. Politically-motivated appointments usually means incompetent CEOs running state-owned corporations to the ground. Furthermore, oil-rich areas have long been sources of dispute and conflict. The damage inflicted upon Iran during the eight years of the Iran-Iraq war over oil rich Khuzestan was estimated at near a trillion dollars. This far surpasses the bulk of wealth oil has ever produced for Iran.

Oil exploration, extraction and production have other serious effects: They impose a heavy burden on the environment. During the process of oil production, natural habitats are destroyed. Oily salt water is discharged, which frequently pollutes fresh water sources. Oil spills and sludge contaminate the environment for decades. The flaring of associated gases produces toxic fumes, and so on.

I understand why so many are against further drilling in Alaska in search of oil, as it can irreversibly destroy the wildlife there. In Iran, there are plenty of examples as well. Masjid-e-Soleiman is a city in southwestern Iran. One of the oldest oil production sites in the country, it is known as the cradle of oil in our country. Last year, the city was declared to be in a state of emergency, as it is slowly sinking in the unstable ground beneath it. For many years now, oil has leaked to a sandy plateau that the city is based upon. It is almost too late to save the city.

The Caspian Sea is another example. As a consequence of excessive pollution produced by oil rigs, especially those in Azerbaijan, the sea is in a state of biological emergency.

So when I hear the Saudi oil minister, Sheikh Ahmad Yamani, state that “I wish we had discovered water,” I just can not help but agree with him. I can end this here, probably leaving you disillusioned about the riches oil has brought Iran, but I will proceed to providing simple solutions that can turn around this glum outlook. I am a pragmatist. S o to me, oil is neither a blessing nor a curse. It is merely an opportunity that should be made the most of.

Interestingly enough, Islam has provided clear guidance on dealing with land, natural resources and depletion of minerals. In Islam, it is believed that since God has created the earth, land in its natural form, with no improvements by man, belongs to everyone in society. This applies to minerals and natural resources as well. Islam is adamant not only about intra-generational justice, but also inter-generational justice. Thus if the current generation is benefiting from the revenues of oil, future generations should also have access to sustainable sources of revenue. So under Islamic guidance at least a part of current oil revenues must be saved and invested, domestically or abroad, to even out the Net National Product (NNP) and to avoid a decline in national output in the future.

However, in an oil-based economy, if the income from oil is consumed (and, as is the practice, if oil output is counted as a part of NNP), then NNP declines as oil reserves are depleted. In a sense it could be said that Norway and the U.S. state of Alaska are more Islamic in their handling of oil than a country like the Islamic Republic of Iran.

Oil can have a positive impact on development if governments can capture the value of their resources and make the best use of the revenues generated through their effective management, distribution and utilization. Five countries (Australia, Canada, Norway, the U.K., and the U.S.) rank at the top of a variety of governance indicators. Although they hold only 5 percent of all proven oil reserves, they are using their natural resources to the best effect. On the other hand, 12 countries (Algeria, Angola, China, Iran, Iraq, Kazakhstan, Libya, Nigeria, Russia, Saudi Arabia, Venezuela, Yemen) rank at the very bottom of governance indicators, but they hold more than 68 percent of the world’s proven oil reserves.

Norway is a notable example of good governance. Norway has a political system that is based on egalitarian views. Based on such views, it has managed to restrain itself from spending the oil windfall and instead has been saving it as capital in a Government Petroleum Fund. The fund is used to finance investments on infrastructure as well as subsidizing social services such as healthcare and education.

The best way to manage oil revenues is to place all oil revenues into a fund; invest the resources of the fund; issue a check to every citizen from this fund (the amount calculated in a conservative manner and subject to change annually in order to ensure the same real benefit to all future generations); and allow the government to borrow up to a fixed maximum percentage of the fund at an annual cost to be paid to the fund. There are formulas that can calculate the saving rate for oil dependant countries. In the case of Iran, the saving rate is calculated at around percent, which means 60 percent of oil revenues should be captured in a national fund.

In Iran, a few years ago, such an attempt was made by establishing a foreign currency fund to capture the surplus of oil revenues. However, until now, the government has failed to achieve the 60 percent saving rate. Morever, it has extensively used the savings in the fund, making the fund practically ineffective. During the price hike of 2006-2007, Arab states such as Kuwait and Saudi Arabia managed to save almost a trillion dollars each in their national funds. In the same time period, Iran has barely added to its foreign currency fund. The situation is so grave that the actual amount in the fund is considered top secret. Hopefully this will be changed as the fund is destined to change to the “National Development Fund,” with more restricted access imposed upon it.

Such a fund is the first step in escaping the rentier state. The Iranian economy is however in desperate need of an overhaul. I will not address the necessary reforms nor will I address the necessity of political reforms as they are out of the scope of this article. However change and reform is what Iran needs right now. I want to be an optimist, especially as the Persian New Year is upon us. A new president has taken office in the United States with promise of change. Soon there will be presidential elections in Iran. So who knows, maybe change is around the corner here too.

recommended reading:
Middle East Oil Exporters: What happened to Economic Development?
Hossein Askari (author)