Valentina Pasquali

A pipeline deal with Turkey was taken as a step toward EU energy security, but Russia looms large.

ISTANBUL — Turkey this week celebrated the signing of a major deal on the Nabucco pipeline project as a step toward European Union membership and becoming a Eurasian energy hub.

Nabucco is expected to pump 31 billion cubic meters of natural gas from the Caspian Sea to Europe by 2014, bypassing Russia and thereby decreasing the dependence of the EU on Russian gas. Turkey is a Nabucco transit country, along with Hungary, Bulgaria, Romania and Austria.

Despite the agreement, Russia’s continued attempts to control the region’s energy resources, the lack of unified political action in the EU, and Turkey’s indecisiveness, threaten Nabucco, energy experts say.

Russia, which sits atop about 25 percent of the world’s natural gas reserves, dominates regional energy markets. To strengthen its near monopoly, Moscow buys almost all the gas produced by Turkmenistan and Kazakhstan. As a result, countries including Austria, Bulgaria and Hungary have no choice but to import most of their gas from Russia.

Turkey depends on Russia for 65 percent of its domestic gas use and is also desperate to diversify its sources: “There are gas cuts every winter,” said Necdet Pamir, a former high-level official with Turkey’s state-owned oil company and a board member of the World Energy Council.

While Moscow blames the interruptions on Ukraine, “the result is that, for whatever reason, technical or geopolitical, every winter we suffer,” Pamir added.

Russia’s remarkable reach complicates diversification efforts via Nabucco. Azerbaijan — the only supplier committed to feed gas into the pipeline — recently signed a Memorandum of Understanding with Gazprom to export its gas to Russia for at least a year.

“But Azerbaijan cannot provide both Gazprom and Nabucco with natural gas. It’s either one of them,” said Vugar Baymarov, chairman of the Center for Economic and Social Development, an Azeri think tank.

The Azerbaijan-Russia MOU comes at a difficult time for Baku’s ties to Ankara: “Our recent move to normalize relations with Armenia has complicated Azerbaijani attitudes toward Turkey and thereby Nabucco,” said Suat Kiniklioglu, spokesman of the Foreign Affairs Committee of the Turkish Parliament.

Since no other supplier has yet been signed up, the Nabucco pipeline faces a major supply hurdle.

Further, in phase two of the project Turkmenistan is scheduled to supply extra gas into Nabucco via a trans-Caspian pipeline. Considering that Turkmenistan’s economy is primarily dependent on Russia, it is unlikely that Ashgabat will sell its gas to any country but Russia, at least not without Moscow’s permission.

Meantime, the two remaining options — Iraq and Iran — are effectively off the table.

Northern Iraq is thought to have large gas reserves, but it will take years to develop them, and, said Sinan Ulgen, chairman of the Istanbul-based Center for Economic and Foreign Policy Studies, “Political instability during the past decade made it impossible to estimate how much capacity there is and how it can be channeled to Nabucco.”

While it has the world’s second largest reserves of natural gas after Russia, Iran is, according to Stanislav Tkachenko of St. Petersburg State University, a “politically impossible alternative,” because it would require “radically improved relationship between Iran and the United States.”

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U.S. sanctions have crippled Iran’s energy sector and Washington continues to oppose any use of Iranian gas for Nabucco, as U.S. energy envoy Richard Morningstar reiterated Sunday.

Turkey says it will press ahead despite U.S. objections. “Turkey is an independent country and can buy its gas wherever it wants so long as conditions are right. If there is gas in Iraq, Turkey will buy it. The same with Iran,” said Kiniklioglu, the Turkish Foreign Affairs Committee spokesman, pointing to the fact that Turkey already imports Iranian gas for its domestic market.

But Turkey might not have to go behind the U.S.: “There are signals that the U.S. is changing its Iran policy toward a more accommodating approach,” said Tkachenko, noting President Barack Obama’s reaction to the aftermath of Iran’s contested elections.

In any case, Turkey’s own energy issues might complicate things further. While insisting that Ankara can maneuver independently of Moscow, Kiniklioglu admitted that Turkey has to “get along well with a country that provides you with over 60 percent of natural gas.”

Moscow is taking advantage of its position to offer Ankara alternatives to Nabucco. The two parties are discussing the construction of Blue Stream 2, an extension of the Blue Stream 1 pipeline that brings gas from Russia to Turkey. Talks are also underway for the South Stream pipeline, a direct competitor to Nabucco that would transport Russian gas via the Black Sea to Bulgaria, Austria and Italy. By joining South Stream, Turkey could become an energy hub without endangering relations with Russia.

The fact that a central dispute between Turkey and the EU over Nabucco was pushed aside with Monday’s agreement but not solved casts doubts on Turkey’s commitment to the implementation of the deal. Ankara has been asking to divert 15 percent of gas flowing through Nabucco toward its domestic grid, but the EU opposed the request.

Since Ankara’s number one priority is Turkey’s energy security and independence, it will probably try to use Nabucco as a bargaining chip in negotiations with Russia, and its relations with Gazprom as a lever in talks with the EU.

“Turkey will remain on the agenda with Nabucco, South Stream or some other projects,” Turkey’s Energy Minister Taner Yıldız told the press Tuesday. The Turkish newspaper Hurriyet reported that Ankara and Moscow will negotiate energy projects during the visit of Russian Prime Minister Vladimir Putin to Turkey on Aug. 6.

According to Yurdakul Yigitguden, Turkey’s former undersecretary of energy, Russia shouldn’t be blamed for pursuing its own interests. “The problem is that there is a lack of leadership in support of gas companies. They can’t go at it alone,” Yigitguden added, calling for stronger political support for Nabucco across the EU and Turkey.

The agreement signed Monday might be a sign of political commitment towards Nabucco. At the same time, in the last several months the Nabucco Consortium began mentioning Russia as a potential supplier of gas for the pipeline, defying the sole reason for Nabucco’s existence.

Washington D.C. – In anticipation of the G20 meeting that will take place in London on April 2^nd and of the EU-US Summit that will be held in Prague on April 5^th, Alexander Vondra, the Czech Republic Deputy Prime Minister, visited Washington and outlined key items on the agenda of the Czechs, who currently hold the rotating presidency of the European Union. Emphasizing the fundamental role of the historic alliance between the United States and European countries, Vondra stressed the desire to strengthen cooperation, in particular in areas that the Czech Republic deems as priorities, namely security, climate change and energy, and the global economic crisis. These remarks were given just a day prior to the vote of no-confidence that caused the Czech government to fall on Wednesday. The country’s Prime Minister said he would resign. It is unclear how this unexpected development will affect the Czech agenda for the EU presidency.

“The November 4 elections provided space for the rejuvenation of EU-US relations,” said Vondra speaking at Johns Hopkins University. This opportunity to refresh bilateral relations should not be missed for any reason because, in the end, “the US and the EU are stronger together, especially in times of crisis,” Vondra said. The Czech Republic views the transatlantic relationship as a priority, he promised, reminding the audience that his country has been “one of the staunchest allies of the United States for the last twenty years.”

In the field of security, the EU-US alliance must be viewed as the relevant tool for addressing threats to international peace, primarily Afghanistan and Iran. “I have no illusion on Afghanistan, it is a very difficult challenge,” Vondra admitted. He explained that the EU is focused on approaching the issue with “dedication and realism” and with the goal of getting the Afghans ready to govern themselves. U.S. President Barack Obama took a first step by promising a ‘surge’ of troops to be deployed in Afghanistan and Vondra acknowledged that it is now the Europeans’ turn to act. It is thought that member countries will deploy more police force with the aim of training their Afghan counterpart, rather than increasing the number of soldiers on the ground. According to Vondra, Europeans are also determined to focus more on the development side of things, working to strengthen the military-civilian partnership initiated with the establishment of the Provincial Reconstruction Teams (PRTs). Overall, he argued that it will be important to “try to agree on a comprehensive EU-US strategy for the next three-to-five years.” According to Vondra, this comprehensive strategy will need to include a regional component and to include Pakistan as a key part of the equation.

Iran is, in Vondra’s opinion, the other outstanding challenge the international community is currently facing. “Obama decided to engage Iran. It is a commendable effort and we hope it will bring change,” Vondra said. The fact remains, he continued, that Iran is developing nuclear and ballistic programs, and the whole of Europe could be within reach of its missiles. Hence, the EU and the US will need to coordinate and find common ways to change Iran’s more suspicious behaviors.

Energy security also became a particularly hot issue in Europe recently, when Russia cut gas supplies traveling via Ukraine, Vondra recalled. Certain countries, especially Slovakia and Bulgaria, were harshly hit. Others, shielded from more immediate consequences, continued to view the problem as an intellectually challenging geopolitical issue. For this reason, Vondra regretted that EU members failed to reach quickly a coordinated policy, while the dispute between Moscow and Kiev went on earlier this year. But things have changed and the 27 member countries have come closer together on the issue, establishing, for example, a 5 billion Euros fund for energy that was just appropriated. Programs that will receive funding are in the fields of energy efficiency, alternative energy and planning for improved EU-wide mechanisms to respond to energy crisis. The biggest challenges, according to Vondra, remain the diversification of suppliers and supply routes.

Alexander Vondra also stated that the Czech Republic’s Presidency of the EU values a proactive agenda on climate change, in preparation for the Copenhagen Summit that will be held at the end of the year. “It will be difficult to set ambitious goals in a time of crisis,” Vondra acknowledged, “but it is key that the US joins the EU on this issue,” he argued, lamenting that the openings coming from the new US administration have been significant and yet not sufficiently substantive.

Last, but certainly not least, Vondra tackled the economic crisis sweeping through Europe and the rest of the world. He insisted that “any kind of protectionism should be avoided.” Admittedly, the EU Council just survived a hard-fought battle to come to such agreement, even just internally. But finally, Vondra noted, it succeeded. “Now we should strive to impose the same principle globally, and particularly in the realm of EU-US relationships.” Responding to President Obama’s calls to the EU — Obama pressed member countries to approve additional fiscal stimulus measures — Vondra noted that the EU already spent 3% of its GDP, approximately 400 billion Euros, to help the recovery. “Additional stimuli are unlikely at this point,” he declared. The finance ministries of EU member countries, Vondra explained, are tied to stricter limits on spending than the U.S. Treasury. In particular, the EU Central Bank’s focus is on monetary stability and on avoiding inflation, while the U.S. Federal Reserve prioritizes growth. Furthermore, in Vondra’s opinion fiscal stimuli only work in conjunction with programs meant to unblock the credit markets. For those member countries that are plagued with bad assets, Vondra asserted that “a clean-up operation is the priority.” In this sense, he welcomed the announcement made the day before by U.S. Treasury Secretary Timothy Geithner on the proposed Public-Private Investment Program that should help free troubled banks of their most toxic assets. Vondra added that the international community will have to upgrade regulations, especially with regard to rating agencies and hedge funds.

In the Q&A session, Vondra quickly touched upon a few other contentious issues, but rather superficially. He confessed to being disappointed about the current lack of focus on human rights and democracy of the EU, while insisting that human rights in particular remain the basis of the EU policy on enlargement to the east, especially in the case of Belarus. Vondra also admitted to a certain “enlargement fatigue in Europe,” but said that EU officials are doing their best to keep the process moving, albeit far more slowly than it was five or six years ago. Asked about whether or not the EU had formulated a new policy on the practice of rendition – transferring foreign suspects to third countries with looser regulations on torture so that they can be interrogated or detained more easily – Vondra said that the EU is awaiting the comprehensive review being conducted by officials of the Obama Administration. “It is important to have this issue on the agenda, but discussions are only at the initial stage,” Vondra said.

Originally reported and written for Washington Prism

The results of two rounds of U.S.-led polling of public opinion in Iran, conducted in 2006 and 2008, portray a moderate Iranian people. The studies show Iranians as relatively pleased with their own system of government and electoral system, although critical of certain aspects of it. Iranians appear open to multilateralism and international organizations, even in the realm of human rights. While they are eager to push forward with the nuclear program, they don’t necessarily want to develop nuclear weapons. They long to be treated as an important regional actor but don’t wish for regional hegemony. They are suspicious of terrorist groups and even hold a generally positive view of the American people. In this overall temperate picture, deeply rooted animosity toward the U.S. Government remains as a fundamental component of the Iranian identity.

While Iran’s presidential elections approach, and as the Obama Administration and the U.S. Congress discuss opportunities for an overture toward Teheran, Washington Prism’s Valentina Pasquali spoke to Steven Kull, director of WorldPublicOpinion.org and the Program on International Policy Attitudes (PIPA) of the University of Maryland, about his experience assessing the Iranian psyche. Mr. Kull is a political psychologist who studies world public opinion on international issues. He directed both the 2006 and the 2008 surveys in Iran.

Valentina Pasquali: What would you say was the most striking result of your two rounds of surveys in Iran?

Steven Kull: What comes through quite strongly is the extent to which Iranians are not in a revolutionary mindset. There is this image of Iranians being swept up by the kind of zeal one associates with the early days of the Bolsheviks, that they have an ideology that they are aiming to spread. I just don’t see any evidence of this, in the polling data and the focus groups. Iranians are supportive of an Islamic state, but they are also reaching out to the West in a variety of ways: they endorse democracy and human rights, and endorse changes for the role of women. They are evolving and trying to integrate these liberal ideas into their own system. But it is a struggle; they are not, by any means, ready to abandon their Islamic roots. They perceive the West, particularly the United States, as exerting a destabilizing effect on them and making it more difficult for them to find their way. In short, on the one hand, the number of people who truly identify with the revolutionary Islamic mindset is quite small. On the other, I should also underscore that the idea that Iranians, underneath it all, love America, love the West, and can’t wait for the current government to fall so that they can become a western-style democracy, is also a dream unsupported by reality.

VP: Where do Iranian people stand on the nuclear issue?

SK: Both in the polling and the focus groups we found widespread determination on the part of the Iranians to acquire a capacity to enrich uranium, combined with a strong sense of the constraints that should be put on developing a nuclear weapon. A fairly large majority perceives that developing a nuclear weapon would be contrary to the principles of Islam. The Iranian elite and religious leaders have put forward this view and it would be very difficult for them to change course. Maybe public opinion doesn’t determine their decisions, but there is something to be said about the normative environment the leadership has created, rooted in the idea that it would not be legitimate to acquire nuclear weapons. I think it would require a significant trigger for them to switch course, something would have to happen that dramatically increased the threat to Iran. It’s quite unlikely that they would just abruptly cross that line.

Now, it is also clear that the Iranians are aware of the fact that having a nuclear energy program serves more purposes than just nuclear energy. They want to be one step closer to having nuclear weapons capability. They perceive that this would give them a number of benefits: greater status and a deterrent effect on other parties. Moreover, there is a widespread perception that neighboring countries are not complying with the Non Proliferation Treaty (NPT). Iranians think that others are secretly developing nuclear weapons and that the NPT regime is fragile, and, as a result, they want to be well positioned should the NPT regime collapse.

VP: In the discussion of your work in Iran, you addressed the overstated perception Iranians have of American power in the world. Were you able to assess what this perception was born out of?

SK: The majority of Iranians we polled think the U.S. controls most of what happens in the world. In the focus groups we did, some of the views that were expressed were particularly potent, for example the idea that the U.S. controls Al-Qaeda. Why? I don’t have an easy answer to that. It is a belief that seems to have a quasi-religious connotation. When Iranians use the term ‘the Great Satan,’ they honestly describe how they perceive the U.S.; something like a cosmic principle, and not just an ordinary state that happens to be rather rich and well armed. Certainly the long history of the U.S. having a highly intrusive role in Iran matters. In general, I would say that there is a tendency in that part of the world toward conspiracy theory, a tendency to see complex organizing themes behind the surface of things. Even on the Al Jazeera website there is a section called conspiracy theory. With respect to Iranians in particular, there also is a history of discovering at a later time that America was behind something that they had not previously assumed. And so it has become a kind of default position to assume that America is behind something. Iranians’ perception of being under siege works as an important glue holding their society together. I think the best comparison to try understanding Iran is America shortly after 9/11. America was so cohesive, and there was very little criticism of the government. All the polls showed that the people’s attitude toward the government or everything American became much more positive. It’s not that people were lying, or making things up. But when people feel threatened, they tend to huddle closer together. Iran has that same quality, constantly feeling under siege.

VP: What do you think is the effect of international sanctions on the psyche of the Iranian people?

SK: It’s not something we polled on directly, but based on my experience, sanctions contribute to this generalized sense of being under pressure by the West. It also justifies the economic failures of the current government and it feeds into this idea that the U.S. is hostile to Islam itself and is out to undermine it.

VP: What was the people’s view of President Ahmadinejad, at least at the time of your most recent survey?

SK: About two-thirds of the people we interviewed at the beginning of 2008 expressed a favorable opinion. Because we heard so much about people coming to Iran and hearing negative views of the president we proofed further and divided people according to income and education. People with higher education or higher income were not as positive, they were more divided about Ahmadinejad. And those tend to probably be the people that Westerners encounter more often when they come to Tehran.

VP: How would you explain the animosity of the Iranian people toward the U.S. Government?

SK: I think it is important to recognize how deep the roots of this animosity are and how far back they go. For many people in Iran the experience of the Shah was a very negative one and the U.S. was always associated with it. I don’t think other Muslim countries have a history that could trigger that depth of animosity. However, it is also true that Iran has a stronger than average attraction to the west. It’s kind of a complex love/hate relation, which you can find broadly in the Muslim world but is more common in Iran. There is some magnetism, while, at the same time, animosity toward the U.S. plays a huge role in the structure of society. So much that it would be difficult to break away from it. Many politicians and leaders embrace this national narrative rooted in a negative relationship with the U.S. An effort to change this approach would rattle fundamental structures in Iran, and could be very destructive to the Iranian identity.

I do think that there is a genuine desire among most Iranians to improve relations; the question is whether or not this can be done in a way that does not make Iranians feel like they are just submitting. They have a strong sense of pride and any agreement would need not to be received as some kind of defeat, or capitulation. I think that the proposition that Tom Pickering, and others, have put forward as far as the nuclear weapons program, to multilateralize it or to create some kind of structure with intrusive inspections and a limit capacity to enrich uranium, would go over. We polled on it and the majority of Iranians said they would accept it. And it has been alluded to by a few Iranian leaders. To actually bring it about would probably require a more complex bargain touching on a wide array of components, as for example the removal of some or all of the economic sanctions. From the first to the second poll we conducted in Iran, we found an increase in the readiness to support steps that would improve relations with the U.S., such as growing diplomatic contacts and more people-to-people exchanges. Probably, some combination of removal of economic sanctions, limited enrichment capacity with highly intrusive inspections, and greater cultural contacts, could be a package that, from all the indications I have, would be feasible. Clearly, giving up the idea of regime change is a key part of this grand bargain. I don’t have poll data to show this but, from everything I see, the Iranian people as well as the Islamic regime find the rhetoric of regime change annoying and threatening. Iranians don’t react thinking that the U.S. is simply going after their government but not after them. Rather, they see this as part of the American attempt to undermine their way of life. And they identify with the regime. I think this is the most important thing that U.S. government leaders can understand better. When we threaten the Iranian government, the Iranian people feel threatened too.

VP: According to your study, Iranians view most terrorist organizations in a negative light. However, this doesn’t apply to Hezbollah and Hamas, outlining a difficult relationship with Israel. What is your understanding of the general perception of Israel among regular Iranian people?

SK: There is a very negative view. The polling numbers are extremely negative and there is definitely a lot of hostility. It’s also striking that, while Iranians reject attacks on civilians quite strongly, when asked about Palestinians attacking Israeli civilians they are more divided. I think that the Israeli-Palestinian conflict is very engaging to Iranians, and other Muslims, because it is a very distinct and vivid narrative of Muslims being victimized, in their mind, by a Western based force that ultimately works on behalf of the United States. It’s not so much that they care about the Palestinians per se, but they identify with the Palestinians and the conflict strikes a very strong emotional chord.

But in all honesty, I don’t think you would find the desire to annihilate the state of Israel to be the majority opinion in Iran. My impression is that Iranians would probably be fine with the two-state solution, and that the Arab initiative that is in play right now would be attractive to them. I don’t see any real indication that Iranians are dead-set on some kind of maximal outcome where Israel is eliminated. They don’t perceive themselves as pursuing maximal outcomes at all. They perceive themselves as in a defensive mode.

VP: Do you have a sense of how consistent, or inconsistent, the mood of the Iranian public is? Your latest survey was conducted approximately 12 months ago; do you have reasons to believe that, were you to do another one now, the results would be fairly similar, or quite the contrary, completely different?

SK: All publics are pretty stable and so, as a general baseline, as a pollster you don’t expect big change. The most interesting question is what changes might be happening given the new U.S. Administration of President Barack Obama. To the extent that we have data from the Muslim world, but not Iran, I can tell you that people are hopeful, but on a wait-and-see mode. Iranians have an elaborate belief system that says it is impossible for the U.S. to change, that the U.S. is structurally the way it is, driven by lobbies, and particularly the Israeli lobby. There is this narrative that says that Obama couldn’t change these things even if he wanted to. But I still think that, underneath, there is hope nonetheless, and that, if the U.S. does offer an overture, it would be difficult for Iran not to respond in some way.

VP: While surveying people in Iran you were free to touch upon almost every topic, with the exception of the clergy and the role of the Supreme Leader. Do you have a sense of how much the lack of such discussion clouds the overall validity of the survey?

SK: To make things clear, it wasn’t the government that forbade us to ask these questions, they didn’t have any direct involvement; rather the local polling organization we selected did its own self-censorship. And I think that, if we had brought the issue of the role of the clergy up directly in the focus groups, people would have been uncomfortable. I certainly would like to understand this issue better. From what I read, I don’t see a lot of signs that people are burning to actually discuss it though. It’s not that they are fully content. In a sense, this is comparable to asking Americans about the Supreme Court. “Should we get rid of the Supreme Court?” Americans don’t really think about it. They generally like the Supreme Court, they have some respect for it, but it’s mostly just part of the furniture. In Iran, the clergy is not one of those things that people are accustomed to challenging, no more so than the Americans are accustomed to challenging the Constitution. It should be understood that the Council of Guardians can be criticized, for example, for excluding candidates from elections. People do it all the time in Parliament, and there are demonstrations against such decisions. Specific choices can be questioned. But whether the Council of Guardians ought to have any role at all, that’s probably a question beyond what Iranians are willing to discuss. This is, in a way, very similar to asking Americans whether the Supreme Court should have any role. Here, where we have a Constitution and a Supreme Court that interprets it. In Iran the idea that the clergy plays some role in the interpretation of Sharia law and the Koran is not seen as something to question. However people might have criticisms about specific decisions, like people here might have criticisms about specific Supreme Court decisions. To an extent that we have trouble understanding, Iranians don’t perceive Islam, and even the Islamic state they have, as intrinsically opposed to democracy. Again, we have constraints on democracy here as well, it’s not like the majority can make any decision it wants; it is limited by the Constitution and how the Supreme Court interprets it. Iranians would say that this is the same for them, although they would probably acknowledge that their system is more restrictive. But they don’t see it as intrinsically problematic. Words like democracy and human rights are popular words.

VP: What do you think a U.S. Government official should come away from these surveys with? What is most important to understand about the views of the Iranian people?

SK: The combination of openness to the West as well as the rootedness in the idea of an Islamic government. That democracy and an Islamic government are not contradictory. And that Iranians are not in a pre-revolutionary state, but even open to influences from the West. I think it’s very important to get rid of the notion that they are against us; they are simply struggling with the process of modernization, and that is a difficult process. They are people with very proud roots, they achieved very high level of culture, but in the current period they are not doing so well, which is humiliating to them. They are also not ready to abandon their roots. Even as they open up to Western influences. In the end, you have some rejectionists, as you might say, and you have those that are totally ready to go over to the Western model, but the big majority both wants to keep its root and be in a relationship with the West. The problem is that we are not good at talking to that group, we tend to threaten the former and seduce the latter, or treat them as some kind of ally, but we haven’t found a good voice for the middle masses. This approach is rooted in our fantasy that, underneath, everybody is like us and people really want what we have. I think we really must let go of this, while also understand more clearly that Iranians are not in a revolutionary mindset. A lot would follow from this, I think.

Originally reported and written for Washington Prism

Washington D.C. – Thirty years after the Islamic Revolution’s rise to power in Iran, a group of experts gathered last week at the American Enterprise Institute, a conservative-leaning think tank in Washington D.C., to assess the state of the government in Teheran and the future of U.S.-Iran relationships. The picture that emerged is one of a pragmatic regime, which has been shifting away from a purely ideological approach to policy, but is still solidly in the hands of the clergy; a regime that is undergoing a process of increasing militarization while the country suffers from a severe economic crisis. Iran, the speakers at AEI agreed, is by no means on the verge of a total collapse. However, it faces some internal criticism in the face of growing international isolation.

Ironically, while the stated goal of the 1979 revolution had been to break with the past, the Islamic Republic (IRI) is faced today with some of the same problems that plagued the government of Shah Mohammed Reza Pahlavi. Ali Alfoneh, a researcher at AEI and a doctoral candidate at the University Copenhagen in Denmark, believes that, not unlike the Shah, the theocratic regime has contributed to modernizing the country, especially in the field of education. Yet the population is still starved for civil liberties. “Iran comprises an urbanized population with access to both state-controlled media and foreign broadcasts, and foreign products,” Mr. Alfoneh explained. “There is now a very large, urban, educated middle class that longs for political rights,” he continued. If the regime keeps denying freedom to its people, Mr. Alfoneh argued, Iranians could potentially take on a new revolutionary turn, similar to that of 1979. Well aware of this risk, the regime shows no qualms in using force to maintain control and is increasingly relying on its military wing, the Iranian Revolutionary Guard Corps (IRGC), to curb popular demands.

According to Arash Sigarchi, an Iranian journalist who was imprisoned in Iran after publishing criticism of the government on his blog Panjereh Eltehab and recently fled to the U.S., this is a betrayal of the promises of the revolution. The Islamic Republic came to power relatively easily and with wide support from the population because it had vowed to bring human rights and civil liberties. “In the end, however, the Islamic leadership defaulted on its own promises,” Mr. Sigarchi commented. He predicts that the regime’s only hope for long-term survival is by slowly conceding democratic freedoms to the Iranian people. “If the Islamic Government chooses such course, it will enjoy a good deal of endurance,” Mr. Sigarchi concluded, “but not if it continues on its current path.”

Looking to Iran from the outside in, Alex Vatanka — senior Middle-East analyst at Jane’s Information Group — outlined some of the latest developments with regard to Teheran’s posture on the regional and global stages. Vatanka described an increasingly daring regime, especially in its foreign policy. “Teheran used to just desperately try to reduce its isolation. Today, instead, the IRI is much bolder, and is aggressively trying to expand its influence,” Vatanka argued. In his opinion, the West should reassess its widespread overstatement of Iran’s ideological nature and begin looking at it as a pragmatic force driven by self-interest. “Ahmadinejad’s foreign policy is, at times, almost devoid of Islamist ideology,” Vatanka said. Beyond rhetoric, he claimed, there is no trace of any attempt by the Islamic regime to export the revolution. Despite this increased influence on the regional stage, the Islamic Republic is paying a high price for the maintenance of its independence, in the form of international isolation. “Isolation hampers economic growth and creates resentment among the population,” Vatanka pointed out.

The economy remains the Achilles’ heel of President Ahmadinejad. According to Patrick Clawson, an economist at the Washington Institute for Near East Policy, the revolution of 1979 has been followed by 30 years of abysmal economic performance. This has been caused, in chronological order, by the war with Iraq, the decline in oil prices of the 1980s, and, more recently, because of the economic policies adopted by the regime. With a touch of monarchic nostalgia, Clawson attacked the widespread understanding among the Iranian people that the economic performance under the Shah had been at least as terrible. During the 1960s, Clawson argued, Iran’s economy was growing at the fastest rate in the world. “Iran is, by no means, on the edge of economic collapse,” Clawson said, taking note of the country’s modest growth. “However, modest growth has left Iranians terribly dissatisfied, since they expected extraordinary growth and since even the modest growth has been mismanaged by the regime,” Clawson commented.

In spite of its large reserves of oil and natural gas, Iran continues to be reliant on global oil prices. The regime has done an exceptionally poor job at developing the country’s oil fields, causing its oil production to be extremely rigid. “Just consider that, over the last ten years, Iran’s oil revenues increased seven-folds, while production remained stagnant,” pointed out Michael Makovski, the foreign policy director at the Bipartisan Policy Center. According to Makovski, its incapacity to rapidly increase oil output exposes the regime to a series of vulnerabilities. A budget surplus, for example, can quickly become a budget deficit, hampering the ability of the government to give subsidies in exchange for favors. It also decreases Iran’s leverage against oil importing countries. Finally, it makes a military strike on Iranian nuclear facilities less costly for the international markets, since only a relatively small percentage of global oil production comes from Iran.

In order to respond to growing challenges in the field of economics, the regime in Teheran has been pushing for an increasing militarization. According to Ali Alfoneh, this trend dates back to 1988 and the end of the Iran-Iraq war. At the time, IRGC soldiers had to return to a distraught Iran after paying great personal sacrifice on the altar of an unsuccessful holy war. “President Rafsanjani knew that these frustrated troops could stage a coup,” Aloneh explained. Rafsanjani then decided to help the IRGC carve an influential role within the Iranian economy, a way to bribe officers to stay out of politics. The IRGC’s growing relevance in all realms of life in the Islamic Republic has continued steadily over the following decades, peaking under Ahmadinejad: “Today the IRGC as an ideological army has gone completely out of control,” Ali Alfoneh declared.

Recently, the head of the IRGC Ali Jafari ordered a major restructuring of the corps. According to Michael Connell, director of the Iran project at the Center for Naval Analyses, Jafari’s main concern is the possibility of a “velvet revolution,” triggered by internal discontent brought upon the regime by U.S.-led soft-power operations. The basic principle of Jafari’s reform is one of decentralization. The leadership of the IRGC plans on giving lower-level officers more latitude. “More autonomy might guarantee longevity to the regime in case of an attempted coup or a decapitation from the top,” Connell explained. At the same time, he warned, this approach “exposes the regime to the threat of individual units going rogue.”

Where does the U.S. stand with regard to this picture and in what direction are U.S.-Iran relations headed? The bottom line, outlined Professor John Limbert of the U.S. Naval Academy, is that the United States and the Islamic Republic of Iran have been estranged for thirty years: “we have been exchanging insults, calling each other names and we have misused history to make the other look like the perfect enemy; devious and evil.” In order to heal this very difficult relation, both parties must move past their long-standing grievances towards one another.

From the U.S. perspective, it was at the beginning of the revolution that the bilateral relation was almost fatally wounded. The hostage crisis of 1979-1981 — Iranian revolutionaries took over the U.S. Embassy in Teheran and kept 52 American officials (John Limbert among them) hostage for 444 days — had more of an impact on the psyche of the Americans than even the toppling of Shah Mohammed Reza Pahlavi, a close ally for over two decades. “The hostage crisis was the biggest mistake in the history of Iranian diplomacy,” claimed Mohsen Sazegara, an Iranian political activist that returned to Teheran from Paris on the same plane as Ayatollah Ruhollah Khomeini on February 1^st 1979 and held several high-ranking positions during the earlier years of the Islamic Republic. Today Sazegara, who tried to run for the Iranian presidential elections in 2001 until the Guardian Council rejected his application, lives in the U.S. Sazegara also lamented that too many Iranians still appear unwilling to put the 1953 coup behind them and continue resenting the U.S. for having facilitated the overthrow of the democratically elected government of Prime Minister Mohammed Mosaddeq.

“In the history of diplomacy,” said Michael Metrinko, “thirty years is a very long time.” Metrinko, who was among the hostages taken at the U.S. Embassy in Teheran and now serves as a Ministry Reform Advisor at the U.S. Army Peacekeeping and Stability Operations Institute, noted that within Iran’s very young population there is little personal memory of the 1979 crisis and, therefore, this is an opportune moment for Washington and Teheran to move forward. “I don’t believe there is a place for emotions in politics, and for demonization in the relationship between countries,” he argued.

According to Ambassador Limbert, the way forward must start with leaving the “sermonizing and moralizing at the door.” The U.S. must stop asking Iranians for a change in behavior: “I can’t think of a language that sounds more condescending that that,” Limbert declared. Washington should also show more respect for the history of Iran, one of grandeur and grievances. In the last 100 years, the latter have taken the front seat, affecting Iran’s political mood. “Iranians believe that the West is always out to cheat,” Limbert pointed out. Finally, in the eventuality that the Obama Administration will act on its pledge to open up a direct diplomatic channel with Teheran, Americans must be prepared for the overture to be turned down at first. “We must expect progress to be slow and difficult, yet we must also abandon our misconceptions and expect Iranians to be professional and pragmatic in pursuing their self-interest,” Limbert concluded.

Less optimistic was Jon Alterman, director of the Middle East program at the Center for Strategic and International Studies. “We can’t fix the U.S. – Iran relation because anti-Americanism is too deeply engrained in the genes of the Iranian Revolution,” Alterman said. However, he continued, the U.S. can manage the hostility far better than it has in the past. This can only happen through increased contacts. “Our policy of isolation has not worked, to the contrary. Sanctions have had increasingly less effect,” Alterman claimed.

AEI’s Michael Rubin put forward some of the questions that the Obama Administration will be confronted with in the case it decides to push forward with a diplomatic overture toward Iran. In particular, Rubin discussed the matter of timing and advised against entering talks before Iran’s presidential elections scheduled for this upcoming June: “We don’t want to interfere, one way or another, or let Ahmadinejad claim negotiations with the U.S. as his own personal victory,” Rubin argued.

There was surprisingly little talk about other options on the table. With a new U.S. administration that just entered office and with a president that has promised to engage directly with Teheran, the speakers at AEI decided to address the ifs and buts of negotiations rather than entering a discussion about alternative courses of action. They were asked at one point about the reaction of the Iranian people in case Washington decided to pursue the military option. Most experts agreed that, independent of whether or not the people of Iran like the Islamic regime, in a scenario of a U.S.-led invasion of Iran, the population would rally behind its government because of national pride. “Any military action would feed in the Iranians’ long sense of grievance for the humiliation brought upon them by foreigners,” John Limbert argued. “Against an invasion, the people of Iran would defend the regime, even if they disagree with it,” echoed Michael Rubin. In any case, nobody argued for the full lifting of sanctions, but simply for a more varied and multi-faceted “carrot and stick” approach.

Despite widespread acceptance, even among these conservative analysts, of the intentions by the Obama Administration to pursue direct and high-level engagement with Iran, a sense of unease and suspicion towards Teheran remained palpable. This was made particularly clear by the words of the key-note speaker, President of Radio Free Europe/Radio Liberty Jeffrey Gedmin. Addressing issues of public diplomacy, Gedmin advocated for as large an engagement as possible with the people of Iran, using soft-power to mobilize public opinion from the bottom up. Quoting former Undersecretary of State for Political Affairs Nicholas Burns, Gedmin said: “In Iran today the critical divide is not between hard liners and moderates but between society and the regime.” He encouraged the use of foreign broadcasts, such as Voice of America, BBC Persian and his own Radio Farda to bypass the regime and speak directly to the Iranian people. Gedmin also advised the U.S. Government to open discussions with Iranian trade unions, environmentalist groups, cultural institutions and with women’s and minority rights groups. Advocating the use of soft power aimed at influencing the internal balance of power in Iran, Gadmin though seemed to miss a fundamental point: it will be hard for President Obama to convince the leadership in Teheran to talk openly and negotiate honestly, if the Islamic Republic continues to feel that the U.S. is simultaneously trying to overthrow the regime.

Originally reported and written for Washington Prism

Washington D.C. – Ever since the Islamic Revolution of 1979, the United States Government has been hard-pressed to solve the riddle posed by Iran and, more recently, to curb Teheran’s nuclear ambitions and support for international terrorism. The latest American attempt centers on the implementation of economic sanctions tailored to hurt Iran’s private sector. This new refined sanctions policy is an idea of Stuart Levey’s, the Undersecretary for Terrorism and Financial Intelligence at the Department of the Treasury. More sophisticated than the traditional reliance on comprehensive sanctions imposed on countries as a whole, Levey’s creation is yet to yield definite results.

“Entities that engage in nuclear proliferation, as well as terrorist organizations, need access to the global financial system in order to fund their activities,” Levey explained at a recent conference organized in Washington D.C. by the Woodrow Wilson International Center for Scholars. As a consequence, the thinking is that if the U.S. Government manages to constrain these organizations’ transactions with recognized financial institutions, it can successfully curtail their unlawful activities.

The premise to Levey’s philosophy is that banks and financial institutions are risk-averse and are dependent on their credibility among clients to conduct business in a profitable way. If they were to recognize that a partner engaged in bad behavior, they would sever ties in order to preserve their standing. “In the case of Iran the evidence of bad behavior is very extensive,” Levey commented, claiming that Iran regularly abuses the financial system to pursue uranium enrichment and to fund organizations such as Hezbollah and the Palestinian Islamic Jihad. Once the Iranian entities involved in this back-door transactions are identified and sanctioned by the U.S. Government, and once their names become known to all financial institutions wishing to comply with international regulations, the latter will necessarily withdraw their support, protecting their business with the Americans and leaving the sinful to scramble for money.

Since the launch of the program, Stuart Levey has visited over 70 financial institutions worldwide, trying to convince them to cut off relations with selected Iranian entities. Since 2006, the U.S. Treasury Department designated, among others, banks Saderat, Sepah and Melli. “There is now a wide consensus that Iran poses a threat to the international financial system,” Levey said, noting that Foreign Direct Investments (FDIs) in Iran have dried up because nobody is willing to finance them anymore.

According to former Washington Post correspondent Robin Wright, who was also part of the discussion at the Wilson Center, an example of how the lack of foreign investments is already hurting Iran’s economy can be found in the South Pars gas field. The South Pars field, which Iran shares with Kuwait, is one of the biggest gas reserves in the world. “Yet, many multinational oil companies have been recently cutting their pledged funding and, as a result, Iran’s portion of the field is underdeveloped,” Wright pointed out.

Despite expressing harsh criticism of the Bush Administration’s policies toward Iran, Wright defended Stuart Levey’s endeavor: “Levey’s story is good,” she declared, noting that what started as a U.S.-only strategy is now being slowly embraced by many international partners. These include the European Union and Australia, but also multilateral organizations such as the United Nations and the Financial Action Task Force – the world’s financial watchdog based in Paris and representing the 34 largest economies. Citing her own independent research, Wright said that over 90 major financial institutions worldwide have limited, if not entirely cut off, business with Iran – other than for those goods that are exempt from the sanctions regime, such as agricultural goods and medicines. “Iran has become a dangerous business,” Wright added.

If the slow siege brought onto the regime in Teheran by its financial isolation is progressively hampering Iran’s development, noted the speakers at the Wilson Center, the mismanagement of the country’s own resources perpetrated by the current leadership is rapidly accelerating the crisis. “President Mahmoud Ahmadinejad has squandered Iran’s reserves,” Robin Wright said. By some measures, she maintained, Iran currently holds only eight to nine billion dollars in its Oil Stabilization Fund, the country’s rainy-day account. Official government figures put this number around 25 billion, still much less than what it should have been considering the massive spike in gas prices this past summer.

In the meantime, falling oil prices in recent months have threatened Iran’s oil revenues, upon which the country’s economy is heavily dependent. The budget of the Islamic Republic relies on minimum price of about $60 a barrel. The International Monetary Fund (IMF) has predicted that Iran will face an unsustainable deficit if oil remained under even $75 per barrel. In any case, Iran cannot afford current prices of around $46 a barrel. President Ahmadinejad’s first response to the crisis has been to lower interest rates below inflation levels, which, for economists worldwide, is the recipe for disaster. “Timing is on the side of the U.S. for the first time,” Wright commented.

As a result of a faltering Iranian economy, an increasing number of prominent figures, from senior clerics, to economists, to former government officials, have spoken out against the performance of President Ahmadinejad. According to both Stuart Levey and Robin Wright, this should be taken as an indication that an internal debate has been unleashed creating strong incentives for the leadership to change its behavior. This, ultimately, is Levey’s and the Department of Treasury’s goal.

However, according to former IMF Executive Jahangir Amuzegar, this interpretation overlooks other important facts. According to Amuzegar, in recent years Teheran has scored a series of successes, especially in the political and economic arena. First of all, Iran emerged from the two U.S.-led wars in Afghanistan and Iraq as a much stronger player and is seen increasingly as the predominant power in the region. Teheran also managed to defy resolutions of the UN Security Council without serious repercussions, was invited to join the Gulf Cooperation Council – which ironically was first established to counter Teheran during the Iran-Iraq war – and to take on observer status at the Shanghai Cooperation Organization. Iran has also been courted by India, China and a few countries in South America, primarily Venezuela, for its unparalleled oil reserves.

At the military level, Amuzegar explained, Iran is equipped today with more developed technology and has increased its number of active nuclear centrifuges. Even from the economic standpoint not all the news from Teheran has been gloomy. Some of its dollar-denominated transactions have simply been moved to Euros and Yen. Iran’s reserves in the European Union have gone up while Teheran’s liability against them has gone down. Big banks that have curtailed service to Iran have been substituted by smaller boutique institutions, especially banks based in the Far East that have few contacts with the U.S. And finally, U.S. exports to Iran have increased more than tenfold under George W Bush’s watch, particularly those traveling via Dubai.

“Iranians are very good at adapting,” commented Robin Wright, who agreed that many businesses already found their way around even the latest round of U.S. sanctions. To avoid the restrictions imposed on them by the international financial system, Iranians have been increasingly relying on an informal structure for transactions, an unofficial version of Western Union that is known as the Hawala system. Anybody can send money into Iran by using a network of private individuals that will pass it along a chain of personal connection until it reaches the final recipient. The money never goes through regular financial institutions and, as a result, is particularly hard to trace. In addition, many Iranian businesses hurt by the sanctions have simply been moved to Dubai, which now has a population of Persians as large as that of locals. Recently, Wright pointed out, Dubai has been collaborating more with the U.S., taking small steps in limiting the number of visas granted to Iranian citizens or enforcing stricter security controls on them. Nevertheless Dubai has become Iran’s number one trading partner and, as a result, is deeply invested in its relation with Teheran.

Sanction regimes also present another, fundamental challenge: their ability, or inability some would say, to hit the right target. According to Stuart Levey’s of the Treasury Department, this new strategy, comprising measures aimed at the private sector, should contribute to drying up financing for Iran’s businesses that operate at the international level. “Although it might not be the perfect target,” Levey conceded, “It is still a pretty good target, since these are people that have means and leverage.” In his opinion, these influential Iranians, unhappy at the consequences of the behavior of their own government, would pressure Teheran into adjusting its policies. As a consequence, they would help the U.S. achieve its goals.

Nevertheless, it appears that even Levey’s carefully crafted sanctions plan is failing to protect ordinary citizens in Iran. “Ali the plumber and Amid the carpenter, who eat rice and bread; that’s who has been hurt by the sanctions,” said Amuzegar, referring to Iran’s staggering inflation and rising cost of staple food. “The people who are suffering are precisely those that the U.S. Government keeps saying will not be touched,” Amuzegar continued, “everybody else is thriving.” The risk, Robin Wright noted, is that the U.S. could be alienating the people who least like the regime already, while government-controlled businesses are much better equipped to weather the storm. “So far we are targeting the 20% of businesses in private hands in Iran. But the 80% of the economy is in the hands of the government,” Wright commented.

Undoubtedly, President Ahmadinejad is facing rising criticism even within Iran, and his position has been severely weakened by the ongoing financial crisis. “If we continue on this trajectory, the regime might start considering Ahmadinejad as a liability,” argued Robin Wright. However, even if Ahmadinejad loses the upcoming presidential elections, scheduled for June of 2009, politics in Iran is not bound to change very much, maintained Amuzegar, especially with regard to nuclear proliferation and support for terrorism. “I agree that Ahmadinejad might lose, but I doubt that anybody different would take his place,” Amuzegar insisted.

Despite the appreciation for Levey’s effort, there is widespread agreement that the ongoing attempts of the U.S. Government aimed at undermining the Iranian leadership might not pay off. While the development of a nuclear weapons program by Iran might still be negotiated and maybe prevented, “the U.S. will have to learn to live with uranium enrichment,” Robin Wright avowed. A recent report by the Peterson Institute of International Economics titled “Economic Sanctions Reconsidered,” says it best: “It’s hard to bully a bully with economic measures,” the authors suggest.

“Of course it hasn’t worked yet,” Stuart Levey said trying to respond to the criticisms of his sanctions plan. “But, as a government official, what I can do is keep going. We are getting the right signals,” he concluded.

Originally reported and written for Washington Prism – Persian Edition

Washington DC –Republican and Democratic Presidential candidates John McCain and Barack Obama will battle each other on Friday in the first of three Presidential debates scheduled to take place before Election Day. On the backdrop of the financial meltdown that is sweeping through Wall Street, Friday’s face-off at the University of Mississippi will center on Foreign Policy, and McCain and Obama will have to address issues such as Russia, nuclear proliferation, Iran, energy, climate change and the Middle East.

“Complexity is the key word to describe today’s world, a complexity that could spiral out of control,” said Zbigniew Brzezinski at an event organized last Friday by New America Foundation, a liberal leaning think tank in Washington DC. The former National Security Advisor to President Jimmy Carter dissected the more pressing concerns in today’s foreign policy arena and gave recommendations to the next President of the United States in a discussion with General Brent Scowcroft, former National Security Advisor to Presidents Gerald Ford and George H.W. Bush.

Despite the many significant challenges to the role of the United States as the world superpower emerging from the international stage, all predictions are that the crisis of the international financial markets will take the center stage at Friday’s debate and that the two opponents will use every opportunity to bring the discussion back to this issue and tie the global economic crisis with the domestic turmoil, which is the highest priority on the voters’ minds. “This Great Depression 2.0 will redirect the focus of the campaign towards domestic issues,” said Michael Gerson at another similar event organized by the Council on Foreign Relations on Monday and that saw the participation of several of the Council’s Senior Fellows.

The collapse of major institutions on Wall Street during recent months unveiled structural flaws in the foundations of the American economy. A highly-indebted United States, holding a current-account deficit of the value of about 67% of its GDP, is now relying on foreign governments to subsidize its ever-growing debt, hoping that countries like China, Japan and Russia will keep buying dollar-denominated assets. “We should be very worried about this,” said Sebastian Mallaby, Director of the Maurice Greenberg Center for Geoeconomic Studies. Mr. Mallaby warned that those foreign governments make investment decisions not simply based on the ratio of risk versus return, but for political reasons as well. “This kind of decisions can always be reversed if new political considerations arise,” Mr. Mallaby noted. If foreign central banks were to start selling their US assets, the value of the dollar would crash, bringing down with it the whole of the American economy. Mr. Mallaby said he hopes to hear McCain and Obama tackling the economic crisis both on the level of immediate crisis management and on that of longer-term restructuring of international finance.

On the background of these dire economic conditions, the next US President will also be faced with many other contentious situations. Michael Levi, Director of the CFR Program on Energy Security and Climate Change, weighted in on nuclear proliferation and nuclear terrorism. Mr. Levi portrayed the relation with Iran as being at a very important, yet tense, crossroad: “Negotiations aren’t really going anywhere, sanctions aren’t really going anywhere,” he said. Mr. Levi expects that the candidates on Friday will be asked at least one question on what they would do as President if Iran were to get a nuclear weapon. “I hope that McCain and Obama will both be cautious enough to push a definite stance into the future, saying that they will decide on the situation depending on the conditions at the time something was to happen.” At the discussion hosted by New America Foundation, Mr. Brzezinksi and Mr. Scowcroft had expressed similar opinions: “We have to be serious about negotiating and I don’t think our posture thus far is one of serious negotiations, since we are asking the Iranians to stop enrichment as a pre-condition to talking about enrichment,” Mr. Brzezinksi said. Mr. Scowcroft tied the stand-off with Iran to a wider problem with nuclear proliferation: “If Iran enriches uranium, even if it doesn’t build a weapon, it will trigger proliferation in the region, by countries such as Egypt,” he said, while both speakers worried about the impact of the US-India nuclear deal on this worsening of proliferation activities world-wide.

Sheila Smith, CFR Senior Fellow for Japan Studies, also focused on the nuclear issue, and in particular on North Korea. Highlighting that the US has been grappling unsuccessfully with this problem since the mid-1990s, Ms. Smith noted that the situation is stalled: “I’m not confident that we are moving in the right direction.” New concerns come from the knowledge that Kim Jong Il might be very sick and to some extent incapacitated. Ms. Smith fears that the future holds some sort of regime change beyond the control of the United States and in the context of a North Korea armed with nuclear weapons.

On the upside, speakers at both the Council on Foreign Relations and at New America Foundation emphasized the importance of the relation between the United States and greater Asia, particularly China and particularly from an economic standpoint. “We take this relationship for granted,” CFR Sheila Smith argued, “and it is indeed a positive one.” However, Ms. Smith worries that Washington is not fully aware of how dependent the US is on Asia for its own economic vitality and as a result might not be ready to take the steps needed to continue fostering the relation. General Scowcroft believes that there are many areas in which the US and China could pursue an expansion of their bilateral dealings: “The Chinese work within the system even when they don’t agree with it,” he said, noting that they seem to possess a sense of historical evolution based on optimism that allows them to move slowly and progressively. Mr. Brzezinski agreed: “China is not trying to overturn the world order,” he said pointing to the profoundly interdependent relations with the United States, one in which both actors hold high stakes.

Russia instead is a different story and a concerning one at that. Jim Goldgeier, CFR Senior Fellow for Transatlantic Relations and Russia advisor to the Obama campaign, argued that the vision that the US had for America-Europe-Russia relations after the end of the Cold War, one of a wholesome and free Europe and a peaceful Russia, is not holding up. “Simply saying that Russia is isolating itself is just a lecture but it is not a policy,” Mr. Goldgeier said expressing the hope that the candidates on Friday will talk about a plan to rebuild the US relationship with Russia from the bottom up. Both Mr. Scowcroft and Mr. Brzezinski worried about the imperial nostalgia of the Russians: “Russia went from superpower to a cataclysmic collapse, which has introduced a great sense of humiliation and of grievance,” said Mr. Brzezinski at New America Foundation last Friday, “now they have regained strength and they want to make up for it.”

Finally Obama and McCain should also address energy security and climate change as one issue and frame it in the context of Foreign Policy, where traditionally Americans think of them as separate problems and most often in domestic policy terms. CFR Michael Levi argued that it would be important to acknowledge that this is not necessarily a win-win situation but that there are tensions between these two different facets of the same coin, and candidates must show that they can navigate these tensions.

Amidst the financial chaos, even defense policy has taken the backseat in the Presidential campaign and candidates have been “surprisingly muted so far,” said Stephen Biddle, CFR Senior Fellow for Defense Policy. In Biddle’s opinion, however, this development is mostly positive since a campaign would be the worst possible venue to make specific decisions on military strategy. It is also too easy to use defense policy as a means of threat mongering and, as a result, the fact that other issues are somewhat obscuring war-like talks should not be dismissed as negative. Nevertheless there are a number of bigger questions on which it would be important to hear the candidates speaking: “Are we at war with terrorism world-wide? What scale of risk are we willing to accept to reduce the risk to our homeland? What level of effort are we willing to undertake in order to reduce the risk to our homeland?” Mr. Biddle said.

The list of foreign policy challenges that will confront the next US Administration goes on and proves one important fact: that the campaign has already lived through many unexpected turns and it will continue to do so. This also tells us how hard it is to predict what issues the next President will actually have to deal with: “History makes a lot of choices for you,” said Michael Gerson at the Council on Foreign relations on Monday. As a result the debate will provide an important opportunity for the two candidates to show voters their character, values and judgment, all of which will be determinant of the types of decisions they would make as a President, independent on the actual context.

Finally, experts at both the Council on Foreign Relations and New America Foundation dared addressing the situation in the Middle East, although timidly: “Many problems in the region have become interlocked,” General Scowcroft noted, “the biggest ones of which are Iraq and Iran.” According to Scowcroft the peace process and a resolution to the Israeli-Palestinian conflict could greatly help with them, by re-energizing a more constructive relation with the Arab world and by isolating groups such as Hamas and Hezbollah. However, the peace process has dropped off the radar of the campaign. The fellows at the CFR event explained this by noting that the conflict between Israel and Palestine seems to defy a solution and, hence, that there is no political benefit to be had from engaging in a debate on this issue, other than using it for political platitude.

Pointedly framing the gloomy state of the world one month before Americans will elect their new President, Sebastian Mallaby said: “It is still a mystery to me why anybody would want to win this election.”

Originally reported and written for Washington Prism

Washington DC – Only a day before early voting begins in Virginia, with a host of other states following next week, a group of Republican-leaning analysts gathered Thursday at the American Enterprise Institute (AEI) — a conservative think tank in Washington DC — to assess the state of the 2008 Presidential Campaign. AEI Fellows Michael Barone, Karlyn Bowman, Norman J. Ornstein and John Fortier discussed issues ranging from the selection of Sarah Palin as the GOP candidate for Vice-President, to the ongoing financial crisis.

“Sarah Palin’s choice undoubtedly electrified the Republican base,” said Norman J. Ornstein, “I think she is the prettiest candidate for Vice-President since John Edwards,” he joked. Although everybody agreed that the selection of the Alaska Governor as his running mate helped McCain’s resurgence in the polls – the Republicans enjoyed a much more significant ‘convention bounce’ than the Democrats – the panelists acknowledged that the Palin effect is already fading. “Now the race looks very much like it did before the conventions,” Senior Fellow Karlyn Bowman commented. “Palin has been a great phenomenon but the polls have already shifted back,” echoed John Fortier, “we know in general that people don’t vote for the Vice-Presidential candidates and the receding of the polls indicate that the Palin effect might be dying down already.”

Undoubtedly the story of the week is the financial crisis, the bankruptcy of investment bank Lehman Brothers and the government rescue of insurance giant A.I.G. and of mortgage lenders Freddie Mac and Fannie Mae. “If the Campaign stays focused on the economy then Obama has a lot of traction,” Mr. Ornstein noted. Economic distress generally moves voters towards the Democratic Party, added Michael Barone. However, he also pointed out, a look at state polls seem to suggest a different reality: “Obama is doing well in economically vibrant places such as Colorado and Virginia, which were not on the Democratic map four years ago. And yet, in Ohio, Pennsylvania and Michigan, among the hardest hit by the crisis, the race looks like a dead-heat,” Mr. Barone said.

Despite the depth of the turmoil on Wall Street, the speakers at AEI agreed that it is too early in the campaign to state with certainty whether the financial crisis will remain the most pressing issue on the mind of the voters: “We will have many more surprises ahead that will suddenly shift what’s in front of the voters’ radar screen,” Mr. Ornstein said, “even if only temporarily.”

As far as the electoral map is concerned, panelists’ view on what should be expected diverged. While Mr. Barone predicted a surprising and unprecedented outcome, with states such as West Virginia potentially within reach of the Democrats, “This is a time of open field politics, when voters are moving around, candidates are moving around and many unexpected things happen,” he said. John Fortier argued that, in the end, the map won’t look too different from what it has been in the last few elections cycles. “I see history reasserting itself, especially if the results are close,” he said.

Norman J. Ornstein had a different explanation for the apparently tight race, one that other Conservative pundits have been making recently: “I see many similarities with the campaign of 1980 between President Carter and Ronald Reagan,” Mr. Ornstein said asserting that the desire for change is strong and it is in the direction of Obama, but that voters are still waiting to learn more about him. According to this perspective, support for Obama could be underrepresented in the polls conducted thus far. Mr. Ornstein believes that the reactions to the first of the three Presidential debates, hosted next Friday at the University of Mississippi, should give us a better grasp of what’s to follow.

Although there is still over a month before Election Day, early and absentee voting could impact the results in a way that is hard to predict. “Both campaigns are already targeting those voters whom they want to get to the polls early,” Mr. Fortier said recalling how he has been receiving e-mails from the McCain campaign inviting him to cast his early ballot in Virginia. In truth, most early voters wait until the last two weeks before Election Day. However, the AEI Fellows warned that it is important to remember, when making predictions, that there are Americans who will have voted even before any of the debates scheduled takes place.

Washington D.C. – The Bush Administration announced on Wednesday that it will send Ambassador William Burns, Undersecretary of State for Public Affairs and the White House specialist on Iran, as an observer to the talks that will take place between Iranian officials and the representatives of the P5 plus 1 (the permanent members of the UN Security Council and Germany) in Geneva, Switzerland, on July 19^th. Moreover, on Thursday, the British newspaper The Guardian reported that the US Government plans to return its diplomats to Iran for the first time since the Islamic Revolution and that it might staff a US interest section at the Swiss Embassy in Tehran beginning next month.

In order to continue promoting dialogue, the Stimson Center in Washington D.C. hosted Wednesday an event organized by the Stanley Foundation, bringing to the US capital two European experts, Riccardo Redaelli of Italy and Anoush Ehteshami of Great Britain. They outlined the European argument in favor of engagement with Iran and advocated the need for Washington to open up a diplomatic channel with Teheran.

Director of the Middle East program at the Landau Network – Istituto Volta, a think tank based outside of Milan, Mr. Redaelli emphasized the complexities of the Iranian constitutional, political and cultural systems, and argued the need for an elaborate policy in dealing with Teheran. Although the Iranian political elite appears to be fragmented and as having contradictory goals, especially as it tries to integrate an agenda for the promotion of a pan-Islamist ideal, while protecting its own identity as a Shiite Persian state and trying to secure its strategic national interest, it certainly doesn’t have “suicidal tendencies.” The main goal of the leadership in Teheran is, Redaelli said, “to guarantee the survival of the regime and as such it should be viewed as quite rational.”

A Western tendency toward the demonization of Iran is, according to the Italian researcher, at the roots of dangerous misinterpretations of the Islamic Republic. Western observers often over-simplify the Iranian political system and lack a real understanding of the delicate dynamics at play between the elected and un-elected institutions in Teheran. Furthermore, Mr. Redaelli believes that the labels normally used to explain the politics of Iran, such as the reformists, the pragmatists, the conservatives, fail to grasp the true essence of the regime and instead “they are very useful only not to understand Iran,” Mr. Redaelli said on Wednesday.

As a result of these misunderstandings, those in Iran who have always opposed engagement with the West are succeeding in what Redaelli called “the securization of all aspects of Iran’s foreign policy.” Teheran’s paranoia with its own isolation has become an important driver of its decision-making process. President Ahmadinejad has risen and held on to power, despite a fairly poor performance, thanks to the people’s fears. “He is able to exploit the atmosphere of isolation we have created,” highlighted Professor Anoush Ehteshami, Director of the Department of Political Sciences and International Affairs at the University of Durham in the United Kingdom.

“This is the time to speak to Iran,” Riccardo Redaelli advocated at the Stimson Center. It is precisely in a time of troubles that diplomacy becomes the most useful tool. After all, the other various policy alternatives have been already tried out at some point, echoed Mr. Ehteshami; “Washington first decided to ignore Iran, but that didn’t work, then it tried containment but in the long run containment ended up turning against Washington,” he continued. “Confrontation has been in the mix for a while,” he added, noting that preparing for a conflict would be too long and too costly for both Iran and the United States. “Overtime the policy options have been reduced to no-policy at all,” Mr. Ehteshami pointed out, concluding that engagement is the only alternative left.

Despite an apparent willingness on all sides to try talking to one another, deep mistrust remains and the moment where a “grand bargain” could be discussed hasn’t yet been reached. The parties should focus on developing a minimal agenda of a limited set of issues with the goal of building mutual trust, a plan which Mr. Redaelli called “selective engagement.” Among the areas that could be approached, he suggested the fight against drug smuggling from Central Asia, on which Teheran has already proved willing to cooperate, and the opening of a US consulate in Iran to ease and quicken the processing of visa applications. Finally, it is important that an agenda of regime change is taken off the table by Washington; otherwise the Iranians will never agree to talk. “If you want to engage them, they might be interested, but if you want to keep them in a corner until their current political system crumbles, they won’t accept that,” Mr. Redaelli warned.

Despite the opening on the part of the US Administration and the EU continued support for negotiations, Congress maintains an aggressive posture, focusing on an agenda of punitive measures. On July 15^th, Senators Dodd (D-CT) and Shelby (R-AL) announced that they will introduce a bipartisan proposal for the expansion of the Iran Sanctions Act, entitled the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2008. Simultaneously Congress is considering the draft of a resolution that would empower the Administration to enforce sanctions at all costs, a measure that many believe could lead to war with Iran. H. Con. Res. 362 e S. Res. 580, respectively at the House and the Senate, grant the Executive the authority to pursue the isolation of Iran via a naval blockade, which in military terms is considered an act of war.

“Not even during the Cuban Missile Crisis did President Kennedy order a naval blockade against the Soviets. Instead he called it ‘naval quarantine’ to try avoiding war,” Doctor Lawrence Korb told Washington Prism in a phone interview on Wednesday. Dr. Korb is former Assistant Secretary of Defense, now a senior fellow at the Center for American Progress, and one of the three co-signatories of a letter urging lawmakers to abandon the resolution. Dr. Korb, with retired Navy Vice Admiral Jack Shanahan and retired Army Lt. General Robert G. Gard, Jr., Chairman of the Center for Arms Control and Nuclear Nonproliferation, wrote that the resolution “clearly risks sending a message to the Iranians, the Bush Administration, and the world that Congress supports a more belligerent policy toward, and, potentially, belligerent actions against, Iran.”

Dr. Korb believes that the resolution is a way for Congress to protect itself from potential criticisms of being too soft on Iran, in case anything tragic happens. “It’s their way of saying to the Executive: ‘we gave you all the authority you need so, from here on, Iran is your responsibility.” Despite the noise that H. Con. Res. 362 and its sister Senate draft S. Res. 580 have created, it is unlikely that the resolution will clear the floor any time soon, “unless its language is significantly changed,” Dr. Korb told Washington Prism.

Originally reported and written for Washington Prism – Persian Edition

Washington D.C. – On Wednesday morning Iran test-fired a series of missiles supposedly capable of hitting Israel. Later in the day, during a hearing at the Senate Foreign Relations Committee in Washington, Congress and the Executive seemed to be coming closer on a new approach toward Teheran, with a stronger agreement between the two branches of the US government on the idea that “engaging Iran and sanctioning Iran are not exclusive, but could be mutually reinforcing,” like Senator Biden, who presided the hearing, said.

Undersecretary of State for Political Affairs William Burns, the Bush Administration point man on Iran, brought forward what appeared like a mitigated version of previous American policies. Ambassador Burns stressed the Administration’s renewed commitment to negotiations and emphasized the importance of multilateral cooperation on the issue of Iran’s uranium enrichment program. Acknowledging that “the behavior of the Iranian regime poses serious threat to the stability of the world,” Burns proposed a strategy of so-called carrots and stick, where the United States and its allies would need to make clear to Teheran what the potential gains are if Iran cooperates with the International Community, as well as the consequences of defiance. “Our policy is based on tough-minded diplomacy,” Ambassador Burns said. The US should maximize pressure on the issues at stake while ensuring that “the Iranian people see clearly how committed Washington is to reconciliation.”

“I’m convinced that we cannot do it alone and that a strong international coalition is essential,” Undersecretary Burns said in his testimony, highlighting the second major shift in Washington’s stance toward Teheran. The Administration, Ambassador Burns said, welcomes recent moves on the part of the European Union to strengthen its sanctions program on Iran. The Administration is also aware of the need to bring China and Russia fully onboard. Repeatedly questioned on the issue by various Committee members, Ambassador Burns said; “The Russian and Chinese do share the same strategic objectives, neither government needs to be convinced that it would not be a positive development if this Iranian leadership developed nuclear weapons.” Then he pointed out that both countries have worked with the US, although admitting that they have done so not as rapidly as Washington had wished. “When you look at the challenges in the nuclear field there is no partner with whom our cooperation can produce more than Russia,” Undersecretary Burns said.

With an ongoing economic crisis and deepening international isolation, Iran finds itself in an increasingly tight spot. Encouraged by such context and pressed by Congress, the Bush Administration seems more open to pursuing diplomacy over Iran, even allowing for the possibility of direct engagement with Teheran. However, the Administration policy on bilateral diplomatic relations with Teheran remains consistent with what Secretary of State Condoleezza Rice has said publicly, “that she’d be willing to engage in ministerial level negotiations on the basis of suspension for suspension (where the suspension of Iran’s enrichment program would be the precondition for the suspension of the UN resolutions),” Ambassador Burns explained. Teheran opposes this plan. In an effort to try bringing the two parties together, the European Union foreign policy chief Javier Solana recently introduced the concept of freeze for freeze, an initial stage which would simply require Iran not to expand its enrichment capabilities, for a period of six months, while the international community would pledge not to seek further UN resolutions during the same six months. Undersecretary Burns seemed to suggest that Washington would be receptive if Teheran went along. “If we go the extra-diplomatic mile,” Sen. Biden said, “the world is much more likely to go along with us if, god-forbids, diplomacy should fail and we should need to take military action.”

Overall members of the Foreign Relations Committee welcomed the adjustments in the Administration’s approach. “Your statement is music, at least to my ear,” Senator Biden commented on Undersecretary Burns opening testimony. However, the Senators appeared concerned that the change in the Administration’s policy is coming too late; “I wish we had heard that statement in 2005,” Senator Biden pointed out. And Senator John Kerry echoed; “Your testimony is a change from the very disturbing approach of this Administration, but is a change that comes in mid-July and with the elections coming up in November.” What can really be achieved before the new Administration takes office remains to be seen.

Originally reported and written for Washington Prism

Washington D.C. – In an effort to assess the impact of Iran’s domestic political developments on the country’s future security policies, experts from the United States and Europe spoke Thursday at the Woodrow Wilson International Center for Scholars, a Washington-based think tank. Ali Ansari, Professor of History and Director of the Institute for Iranian Studies at University of St. Andrews in Scotland, and Suzanne Maloney, Senior Fellow at the Saban Center for Middle East Policy of the Brookings Institution, a research center based in the national capital, exchanged their views on Iran’s growing nationalism, the Iranian people’s increasing de-politicization and the importance of the upcoming national elections.

Ari Ansari expressed concerns that electoral politics is steadily losing its significance and that the Iranian leadership is reverting the trend toward democratization that the country had embraced in recent years. “The experiment of the Republic has been suspended,” Mr. Ansari commented. The Iranian people are suffering from what Mr. Ansari called de-politicization; an active effort on the part of the ruling elite to estrange regular citizens from the democratic process. The lower-than-average voters’ turnout at the most recent parliamentary elections is a worrying indication of the success of this policy. While electoral politics seems to be losing ground, nationalism has been gaining centrality and now contributes more substantially to the way the Iranian state defines itself. According to Mr. Ansari, this renewed wave of nationalism is not merely a state-led phenomenon. Irrelevant of the fact that President Mahmoud Ahmadinejad has been efficient in exploiting people’s feelings, Iranian nationalism reflects changes in the texture of society and is here to stay. Concurrently Iran has been witnessing a rebirth of revolutionary purity – Mr. Ansari claims – and people are being given positions of responsibility on the basis of their adherence to ideological principles rather than their professional abilities.

Suzanne Maloney took a slightly different view on the issue of elections, pointing to the fact that the Parliament still matters, and that it has decision-making power on things such as the national budget, the impeachment of government ministers and the selection of magistrates. “The four-year turnover,” Ms. Maloney said, “injects a decent amount of fresh blood into the parliament.” In the opinion of the Brookings scholar, Iranians still show a strong commitment to voting and “the Islamic Republic has institutions that will survive even this very irresponsible leadership.”

Both scholars agreed on a negative assessment of Ahmadinejad’s Presidency, under whose watch Iran has experienced increasingly strained foreign relations and a dwindling economy. “Ahmadinejad is an existential threat indeed,” Mr. Ansari commented, “but for Iran alone.” Beyond its President, Iranian politics is characterized by a certain degree of pluralism and by the coexistence of many centers of power. The reform movement appears to be at a crossroad. The reformists’ cards, Ms. Maloney believes, are relatively limited and their hope for regaining power exclusively centered on former President Mohammad Khatami. It isn’t clear yet whether or not he will participate in the next presidential elections and thus far he has publicly flirted with both the idea of running and that of retiring. “Khatami is the only personality that can take on Ahmadinejad in 2009,” Ms. Maloney claimed, while recognizing that he is viewed by a significant number of Iranians as an outdated politician symbol of a bright past but not of the future.

The conservative movement is going through its own difficult moment, mostly due to internal divisions. Such divisions, Ms. Maloney said, “will play out in the person of Ari Larijani and in how the parliament will relate to the government.” At the same time Suzanne Maloney warns that we should not overstating the degree of internal squabbling and predicts that there will be a higher level of cooperation than there has been with the current legislature. One cannot forget that, in the end, Larijani was elected Speaker of the Parliament with the support of Ahmadinejad’s adversary faction. A development that could have significant consequences for Iran’s relations with the West is the loss of political clout by Akhbar Rasfanjani. “He is no longer a figure who can direct the machinations of Iranian politics from behind the scene,” Ms. Maloney said. Rafsanjani had always been, among the conservatives, the one who appeared open to engagement.

Independently of internal power struggles, there are a few elements that continue characterizing the whole of Iranian politics, Mr. Ansari thinks. Among them it’s an imperial mentality and the understanding that Iran is the status-quo power in the region. These, combined with a traditional and ever growing suspicion toward the West and the current political landscape, is at the basis of what Ms. Maloney called an increasing securization of Iranian politics. Ahmadinejad personally embodies this trend and this “wonderfully imperial attitude,” as Mr. Ansari defined it. The Iranian President has always shown more interest in the foreign policy arena than in domestic politics and his bias becomes even stronger in a time such as this, when the country is experiencing many crises, particularly at the level of the economy. In this context, the rhetoric of a potential confrontation with the United States is even more relevant in diverting the public’s attention. It doesn’t help that Ahmadinejad, and more importantly the Iranian clergy – which remains the fundamental depository of power -, also nurtures a worldview based on the idea that the US is a declining power.

The exact repercussions this domestic scenario will have on Iran’s security policies are hard to forecast. “It will be an interesting six months,” Suzanne Maloney thinks. Iran is faced with a number of difficult questions, while it also experiences a time of internal transition, especially with the upcoming presidential elections. In the end, “Ahmadinejad is a master of propaganda,” Ms. Maloney commented, “and he is very well positioned to take another four years,” she predicted.

What is certain is that Iran cannot simply be ignored, and for different reasons; because of its oil and gas reserves, for one. Or because of its increasing influence in Iraq, which Ari Ansari described as the “perfect example of its imperial mentality.” As far as the nuclear issues, Europe and the United States will have to accept that, as Ms. Maloney pointed out, “we are not in 2005 anymore and anyone who is looking for a serious long term suspension of Iran’s enrichment program must face reality.” In this respect, the November elections in the United States will be an important stepping stone; “Iran is hedging its bets and waiting for the new American Administration before accepting to engage in serious diplomacy,” Suzanne Maloney concluded.

Originally reported and written for Washington Prism