Iran: Can the United States Do a Deal?
by
Geoffrey Kemp
Published in The Washington Quarterly, Winter 2001
Iran is the only country in the world that refuses to have formal contact with American officials. North Korea and Cuba – countries recently classified as "rogues" and now, "states of concern" – meet with American officials, as did the Soviet Union during the height of the Cold War. Until this fundamental and anachronistic diplomatic obstacle is overcome, it is difficult to see how the several "red button" issues that bedevil the U.S.-Iranian relationship can be addressed, let alone resolved. Nevertheless, it is in the long-run interests for both Iran and the United States to seek a rapprochment.
Yet if the relationship were improved, the benefits to both sides would be considerable. For the foreseeable future the Persian Gulf will remain a strategic prize, given its huge oil and gas resources. Iran has great geopolitical importance on account of its size, geography, and resources. It is an important Muslim country, with a long and impressive cultural history in the region. Iran, under the Shah, was considered the key pillar of American strategy in the Gulf. Better U.S.-Iranian relations would loosen the growing ties between Russia and Iran, and would open the Iranian energy sector to American and other international companies. Under such conditions it would be easier for Iran and the United States to find some accommodation on the Arab-Israel peace process and issues of weapons proliferation and could increase regional pressures on Saddam Hussein’s regime in Iraq.
However, until the political crisis in Iran between reformists and conservatives is more muted, no significant change in U.S.-Iranian relations can be expected. This does not require that the reformers win an outright victory over the conservatives, though this would be a desirable outcome. What it requires is that relations with America cease to be the "third rail" problem of Iranian politics. Currently any individual or group who advocates better relations with the United States is immediately castigated and threatened by the conservatives. It is, of course, possible that some of the more pragmatic conservatives in Iran would be prepared for better relations with the United States if they believed it would help to perpetuate their control of key Iranian political, security and economic institutions. But at this point in time when the reformers have overwhelming public support, the conservatives are on the defensive. The conservatives hope that these conditions will change if the economy continues to weaken and President Khatami and his majority in Parliament are eventually blamed for hard times.
Once the United States and Iran are able to talk to each other, six "red button" issues need to be addressed. These are: historic grievances; terrorism; the U.S. military presence in the Persian Gulf; Iran’s weapons programs; Iran’s opposition to Israel and the peace process; and U.S. energy sanctions on Iran. Since, by definition, the "red button" problems are the hardest ones to deal with, it might be preferable for the two countries to first address what might be termed "green button" issues, i.e. those issues on which common ground may be possible. Examples could include: improvements in visa procedures for travel between the U.S. and Iran; narcotics smuggling; the stability of South Asia; Saddam Hussein’s weapons programs; joint energy projects; cultural and unofficial exchanges.
Background
To understand the difficulties of orchestrating a rapprochement it is useful to review the developments over the past three years. Until May 23, 1997, the day of Mohamed Khatami’s unexpected and dramatic election as President of Iran, the Clinton administration’s policy towards the Islamic Republic was increasingly punitive and harsh. Although U.S. policy was nominally in favor of an official dialogue with authorized Iranian spokesmen, in the weeks before May 23, the United States intensified its pressure against Iran because it hoped it would now be able to enroll the key European Union countries into taking tougher steps against the clerical regime. The motive, in this case, was a decision of the German courts in April 1997 to identify Iranian political leaders, including the then president, Hashemi Rafsanjani, as guilty of conspiracy to conduct terrorism in Europe against Iranian-Kurdish dissidents who had been assassinated by the regime’s hit-men at the Mykonos Café in Berlin in 1992. Up to that time, the Europeans had pursued their own distinctively accommodationist policy towards Iran under the rubric of "critical dialogue," a concept that was instituted at the EU Edinburgh summit in December 1992.
Khatami’s election ended all hope for more punitive measures and, instead, prompted a re-examination of U.S.-Iranian policy. During the summer of that year, a vigorous debate emerged as to how the United States should adapt its policy given the reality that no fundamental changes had been instituted in Iran, except that the new president smiled. Nevertheless, Khatami surprised everyone, including his own conservative opponents, when in an interview with CNN on January 7, 1998, he called for a "crack in the wall of mistrust" between the United States and Iran by exchanging writers, scholars, artists and thinkers. This speech was followed by a flurry of enthusiasm in the United States as several Congressmen and numerous NGO’s swamped the Iranian Mission in New York for requests for visas to visit Iran. Those of us who did get a visa and visited Iran – in the case of the author in February 1998 – were amazed at the openness they found in Teheran and the desire of many Iranians, particularly the young, to talk and engage with Americans about policy. A visiting U.S. wrestling team was given a warm welcome in February before a huge crowd of ordinary Iranian citizens.
The most high level formal U.S. response to the changes in Iran came on June 17, 1998, when Secretary of State Madeleine Albright made a speech at the Asia Society in New York calling for the United States and Iran to bring down the walls of mistrust between the two countries so that "we can develop with the Islamic Republic, when it is ready, a road map to leading to normal relations." The Iranian response was muted. Indeed, every time the United States has made a formal plea for better relations, the Khatami regime has found it difficult to reciprocate, at least publicly. There have been, however, many contacts between Iranians and Americans since 1998, and this has clearly gone some way to improve mutual understandings of the difficulties and dilemmas both countries face dealing with each other.
Hopes for better relations between the two governments did not materialize either in 1998 or 1999. Rather, in July 1999, as a result of increasing crackdowns on the reformist press by the conservatives – who still control the judiciary, the police, the intelligence services, and the armed forces – the most widespread riots in Iran since the 1979 revolution broke out and a crackdown began. During the fall of 1999, there was fear that the conservatives would engage in further repressive measures, including a coup d’etat, or, at a minimum, the cancellation of the Parliamentary elections scheduled for February 2000. Yet, the elections took place and again the pessimists were confounded. The elections demonstrated a continuing ground-swell of support for reform. Reformists candidates won the vast majority of seats. The conservative response was to challenge many of these results, especially those in Teheran where former president Rafsanjani had run and was only placed 28th on a list of 30 eligible candidates. Further runoff elections were allowed to take place in March, and the final result was an overwhelmingly pro-reformist parliament. When the new parliament of 290 seats convened in May 2000, the numbers were reformists 189, conservatives 54, independents 42, religious minorities 5.
On March 17th, 2000, Madeleine Albright gave a speech to the U.S.-Iranian Business Council in Washington at which time she announced the removal of import bans on three items: persian carpets, pistachio nuts, and caviar. Once more, the Iranian response was muted and begrudging. It certainly did not encourage the Administration to consider any further gestures at this time. Further crackdowns against the reformers by the conservatives continued through summer 2000, and this was paralleled by increasingly strident anti-American and anti-Israeli rhetoric. Iran’s domestic battles, though remarkably open and pluralistic by Middle East standards, are taking place against a backdrop of inflation, growing unemployment and falling living standards. However, while the overall economic indicators continued to deteriorate, an immediate economic crisis in Iran had been averted due to the significant increase in the price of oil over the past 18 months. This bonus can only delay, not resolve, the growing economic crisis the country faces.
Constraints on Iran’s Policy towards the U.S.
For most Iranians, the key issues that prevent better relations with the U.S. begin with to the troubled historical relationship, including the CIA’s role in the 1953 coup that overthrew the Prime Minister, Mohammed Mossadegh, and returned the Shah to power. This grievance is paralleled by the mistaken belief that the United States still controls billions of dollars of Iranian assets that were frozen at the time of the 1979 Revolution and is compounded by the fact that the United States maintains sanctions on Iran’s participation in energy projects in the Caspian. Iran is also publicly critical of the strong U.S. military presence in the Gulf and American vigilance in preventing Iran from importing nuclear technology for peaceful uses.
Many Iranians feel strongly about these questions, including the reformers, and therefore they will remain on the agenda even if the Khatami forces were to triumph over the conservatives in the months ahead. However, there is one further contentious issue which is particularly troubling to the conservatives, namely America itself. Conservative ideologues regard the United States as an existential threat. Indeed, the United States and Israel are the last "demons" that the Iranian regime officially designates. Iran will now do business with countries vilified in the early days of the Revolution, such as Saudi Arabia. Iran has ended its hostility to the Europeans, including the United Kingdom which occupied Iran with the Russians during WWII, and was the target of Iranian nationalist outbursts in the early 1950’s. The U.S., however, remains the country the conservatives cannot bring themselves to deal with. That the United States would re-establish diplomatic relations with Iran and return an ambassador to the U.S. Embassy in Teheran is unthinkable at this point in time, precisely because the United States is the world’s sole superpower. While the U.S. military has a global reach and the U.S. presides over the world’s most powerful economy, it is American cultural influence that is seen by the conservative mullahs as the most threatening attribute of the "great arrogance.." For the true hardliners, accepting America, and by implication, Israel would mean the end of the Islamic revolution. In this sense, the conservative’s fear of America is legitimate. Open the door to America and the revolution will be swept away in a cultural and political torrent that will be unstoppable. There is no doubt that Iranian youth is far more pro-American than the conservative hierarchy. Modernity and all that it implies is embraced by many young educated Iranians who make up an increasing percentage of the population.
A related problem for the conservatives is corruption. Many conservatives, particularly those who operate the "Bonyards," or foundations, that were set up after the Revolution and consist of factories and farms seized from the Shah and his supporters, would lose financially if there were major reforms of the Iranian political system. A more transparent political system and Western concepts of accountability would reveal a huge backlog of corruption. Thus, from both an ideological and a pragmatic point of view, the conservatives who have been in charge of the country since 1979 see nothing but trouble if the reformers get their way. The only exception to this would be if the situation in the country became so intolerable that they had no option but to compromise with the United States in order to save their own power bases and the Islamic Republic. This is unlikely to happen until things have gotten a lot worse than they are at present.
The conclusion would have to be that so long as the conservatives control the key instruments of power in Iran and continue to believe they will be the losers if a more open society emerges with closer ties to the United States, they will use whatever methods are necessary to put off the day when the Great Satan returns to Teheran. Thus the conditions for fundamental changes in U.S.-Iran relations will have to wait until either the reformers attain real power or the conservatives come to realize that better relations with the U.S. are necessary to save their skins.
The Choices for a New Administration
This pessimistic assessment is reinforced when viewed from Washington. Irrespective of who the next U.S. President is or whether President Khatami prevails over the conservatives, there are unlikely to be any major changes in current U.S. policy towards Iran until two basic American conditions are met. First, the Iranians agree to formal talks with American officials. Second, Iran mutes its opposition to the Arab-Israel peace process. If America is the "third rail" of Iranian politics, Israel is the "third rail" of American politics. Hostility to Israel has done more to harm Iran’s image in the U.S., especially the Congress, than any issue since the 1979-80 hostage crisis.
A dilemma for the Iranians is that they have insisted that before they can engage in official talks there must be some American gesture – such as the unfreezing of assets or an apology for past behavior. On September 6th, while at the UN in New York, President Khatami re-iterated Iran’s policy and said that U.S. gestures to date have not been adequate. The United States must acknowledge and apologize for past wrong policies, including the 1953 coup. "The Americans will have to confess to this. Through this confession—if the American’s accept to do it—I think it will be a very big step to removing our misunderstandings." Khatami also stressed that U.S. economic sanctions and opposition to Caspian pipeline routes through Iran were a grievance.
It is unlikely a new administration will be prepared for such confessions or concessions, certainly not in its early days. The exception could be if the new administration decides to put Iraq near the top of the Middle East agenda, rather than the Arab-Israel peace process. In this case a more flexible attitude towards Iran might be forthcoming. The rationale would be that better relations between Iran and the United States will make life more difficult for Saddam Hussein and his efforts to break out from under sanctions and isolation.
What Can be Done?
There are good reasons why the United States and Iran, in theory, should cooperate in dealing with Iraq since it does pose a threat to both in the region, particularly on the issue of weapons of mass destruction (WMD). Yet, here is the irony. One of the major conditions the United States has for better relations with Iran is that Iran stop its WMD programs. Yet it is unrealistic to expect Iran to stop its WMD programs precisely because Iraq still remains a threat. This does not mean the U.S. can do nothing to improve the environment for an eventual rapprochement. It is therefore important that the U.S. review unilaterally both the style and substance of its current policy.
The style of American diplomacy towards Iran can be changed. Formal speeches by Secretaries of State announcing unilateral measures aimed at improving the relationship have not gone down well in Teheran in part because the Iranians do not like surprises. Given his own domestic trouble, President Khatami has found it very difficult to respond in a reciprocal, positive manner. This was a message he relayed directly to German officials during his visit in July 2000. The Iranians regard as counterproductive efforts by Administration spokesmen to take sides in Iran’s domestic battles by constantly referring to the attitudes expressed by the reformers and contrasting them with the Supreme Leader Ayatollah Khamanei’s negative comments about the United States. These issues of style could be corrected by a new administration without changing American policy and its well known objections to elements of certain Iranian foreign policy and national security.
Terrorism and Weapons of Mass Destruction
Although the United States has legitimate concerns about Iran’s involvement in terrorism and its WMD programs, U.S. policy on these matters needs to be refined and more nuanced. One reason these issues will have to be addressed early in 2001 is that the Iran-Libya Sanctions Act (ILSA) which imposes penalties on foreign companies who do business with Iran’s energy sector formally expires on August 5, 2001. It will be up to the President and the Congress to renew, amend, or let lapse the legislation. The current law provides two conditions which could relieve Iran from its impact. First, if Iran were removed from the State Department’s annual list of states sponsoring terrorism. Second, if Iran were to cease its efforts to design, develop, manufacture or acquire nuclear explosive devices or related materials and technology; chemical and biological weapons; and ballistic missiles and ballistic missile launch technology.
On the issue of terrorism, Iran’s recent record is mixed. It may be polemical to classify Iran as "the most active state sponsor of terrorism," but as the State Department’s annual Patterns of Global Terrorism makes clear, its behavior towards Israel and the peace process remains unacceptable. If there were an Israeli-Palestinian agreement or a Israeli-Syrian agreement or both, the Iranian regime would be able to review its own attitudes towards its support for Hamas, Islamic Jihad and Hezbollah. If the Iranians were to cease to interfere negatively in the peace process, this would be immediately noticed by the Israelis. The problem is that the institutions in Iran responsible for sponsoring terrorism (the Revolutionary Guard Corps and the Ministry of Intelligence and Security) are controlled by anti-reformist conservatives, not by President Khatami and his allies. It is these groups, together with the youth militia, the Basij, who have also been responsible for domestic terrorism against Iranian reformers.
To be removed from the U.S. terrorist list Iran would also have to end its support for PKK operations in Turkey and support for Islamic fundamentalist groups in Arab countries such as Egypt. However its continued actions against the Iranian opposition group Mujahedin-e Khalq (MEK) should not be used to qualify it for the terrorist list since the MEK is, itself, on the U.S. terrorist list. What would then remain would be questions about Iran’s role in the Khobar Towers bombing which killed 19 American servicemen in 1996. It is unlikely any Iranian government will cooperate in an investigation of this incident absent compelling new evidence that cannot be ignored.
Concerning the WMD problem, as long as the United States maintains a simple mantra that Iran must disband its WMD programs, including its surface-to-surface missile activities, it will be impossible to reach any understanding with any regime in Teheran about the complexities of these issues. Iranian WMD activity has four major components, each requiring different interpretations and responses. Unlike Israel, Pakistan, and India, who have never signed, and are therefore not obligated to the Nuclear Non-Proliferation Treaty (NPT), Iran is a treaty member in good standing and has been one of the key advocates of the non-proliferation regime at various international fora, including the Committee on Disarmament in Geneva and the review conferences of the NPT held every five years in New York. Iran has argued strongly on these occasions – and with considerable support from other third world countries – that there is a double standard reflected by U.S. policy concerning the non-proliferation regime. The U.S., for instance, never raises the problem posed by Israel’s nuclear program despite the persistent rhetoric from the Arab world that Israel’s nuclear weapons motivate Iraq and Iran to follow suit.
The five existing nuclear powers, the U.S., Russia, United Kingdom, France and China, were grandfathered into the Treaty –i.e. they could keep their nuclear weapons – but they were also obligated under the terms of the NPT to make serious efforts to reduce their own nuclear arsenals (Article VI), and at the same time agree to provide nuclear civilian technology to non-weapon States’ Parties to the Treaty to assist them in their civilian nuclear programs for both energy and research (Article IV). Herein lies the dilemma.
Four of the official nuclear weapons states are also members of another group called the Nuclear Suppliers Group that is designed to prevent the export of nuclear technologies to countries who have not signed the NPT, including civilian nuclear technologies. In theory, this should be no problem for Iran, who is a states’ party in good standing. However, the United States has insisted that Iran should not be supplied with civilian nuclear technology, and has put great pressure on other members of the supplier groups to conform, which they mostly have. However, Russia does not agree with this policy and argues that its nuclear supply relationship with Iran is perfectly legal under terms of Article IV of the NPT. The Western response is that, while indeed Iran is still in compliance with its NPT commitments, it is nevertheless undertaking a covert nuclear weapons program that, as yet, has not crossed any significant red lines that have been detected by the International Atomic Energy Agency (IAEA). In other words, Iran has a long-term program to build the bomb. This is confirmed by at least four intelligence services – the United States, the United Kingdom, Germany, and Israel. There is some debate as to what the purpose of the Iranian program is and as to when it will actually come into service, but there is no debate about the fact that Iran is undertaking activities that contribute to the development of nuclear weapons.
One way for Iran to improve its standing in international eyes would be to agree to ratify two additional protocols to the IAEA which were introduced following the disastrous experiences with Iraq. It was discovered that prior to the 1991 war, Iraq, while in good standing with IAEA inspections, initiated a major covert nuclear weapons program and deceived IAEA inspectors. The two new provisions of the IAEA protocol, sometimes known as Program 93+2, is designed to close this loophole and to make it much more difficult for states’ parties to hide suspicious activity from IAEA inspectors. Iran has refused to ratify the 93+2 provisions on the grounds that it is still being denied civilian nuclear technology for its Bushehr reactor. Hence, we have a vicious circle. Without compliance with 93+2, the IAEA inspections of Iran’s existing facilities are not taken too seriously by Western intelligence agencies, who believe there is a covert program underway. Yet Iran will not sign the 93+2 until and unless it gets full commitment to provide it with civilian nuclear technology. U.S. officials do not believe that this tradeoff is presently worthwhile, because they do not trust the Iranian government. They believe that if Iran ratifies 93+2 and then can receive civilian nuclear technology, it will further short-circuit the time it takes to build the bomb. The only way to break this logjam would be for the U.S. and its allies to disclose more details of Iranian violations of the NPT. Yet this would compromise important intelligence sources and put at risk the entire spectrum of counter-intelligence operations.
Iran has also signed and ratified the Chemical Weapons Convention (CWC). This has inspection provisions far more intrusive than any other international arms control treaty. All countries that have ratified the CWC have to submit a statement to the OPCW (Organization to Prohibit Chemical Weapons), indicating what chemical capabilities it had in the past and in the present and what steps it is taking to get rid of them. Iran has disclosed that it had a chemical weapons program in the closing months of the Iraq-Iran war, but claims that it has no chemical weapons and that all the facilities developed during the war have been destroyed. Many Western observers dispute this statement. Iran has not yet been subject to surprise inspection, which it is subject to under the terms of the Treaty, primarily because several other countries are still not fully in compliance with the ratification requirements, including, until recently, the United States. Iranians argue with great emotion that they, more than any other country, have an interest in seeing the CWC succeed since they were subject to intense chemical attacks by Iraq during the war. On the other hand, few analysts believe Iran will forgo a chemical weapons option as long as Iraq remains a maverick state with a chemical weapons capability.
In the case of the Biological Weapons Convention (BWC), Iran again is a signatory but since the biological convention has not yet been revised and the protocols for inspection agreed to, it has no binding effect at this point in time. Nevertheless, Iran claims, like everyone else, that it is in compliance. Few American analysts believe this to be the case.
There are a number of conditions under which Iran might be persuaded to abandon its nuclear, chemical and biological programs dependent upon its international and domestic situations. If clear, unequivocal evidence of Iranian violations of its treaty commitments were produced, preferably by non-American-non-Israeli sources, the key European countries and Japan might be willing to join the U.S. in demanding Iran end its violations in a verifiable manner or be subject to international sanctions. This could ultimately include oil sanctions, though it is unlikely this would happen at times of global oil shortages. Nevertheless, the threat of UN sanctions might be sufficient to change policy in Teheran. An Iranian economic crisis and social unrest could persuade the Iranian leadership that access to foreign economic assistance is more important than WMD programs. It could also happen that after thorough review of the benefits and costs of WMD programs Iran’s leaders might conclude that the potential political and economic costs are too high. Finally, a dramatic improvement in the regional security environment, including a change of regime in Baghdad and an end of the Arab-Israeli conflict, could lead to a more receptive climate for regional dialogue and compromise on WMD.
When it comes to the Iranian missile program, a different set of problems emerge. There is no international treaty to which Iran is a party that limits its capacity to develop missiles. While there is a Missile Technology Control Regime (MTCR) which is designed to prevent the transfer of technology from the advanced powers to the aspiring missile powers, this does not apply to the recipients of such technology. Thus, while Russia and China, both members of the MTCR, may have supplied Iran with missile technology, it is they who may not be in compliance with the MTCR rather than Iran.
Iran regards its missile programs as important adjunct of both its political and security policy. Two categories of missiles are relevant: the cruise missile program which is based on a design originally provided by China, the Silkworm anti-ship missile, and the surface-to-surface missile (SSM) program derived variants of the Soviet Scud and the North Korean No-Dong. The latest SSM, the Shahab IV, has been tested twice and is believed to have a range sufficient to reach Israel. Iran has publicly displayed these missiles on several occasions with interesting political statements literally painted onto the missile. Messages on the missiles have been written in English clearly for the world to see and have referred to the impending destruction of Israel and the United States. Other messages written in Farsi refer to the omnipotence of the Supreme Leader and are more designed for domestic consumption. There is a debate among Western analysts as to how advanced the missile program is. Certainly the Russians have been helping with propulsion and guidance systems, but Iran is a long way away from achieving a fully-fledged missile production capability. Nevertheless, this may not be important. If all Iran wants is one or two missiles that could, with nuclear warheads, threaten virtually anyone in the neighborhood, this might well serve their purposes. While it would have little direct military utility, it would, in the case of Israel or a smaller neighbor, be an existential weapon. While the reliability factor for such a missile may be very low, this is no consolation to the potential addressee. Hence, countries like Israel take such programs extremely seriously.
The other difficulty is that Iran, like other countries in the Third World, see missiles, particularly surface-to-surface missiles as a symbolic substitute for advanced combat aircraft. U.S. allies such as the United Arab Emirates, let alone Saudi Arabia, have many more sophisticated advanced combat aircraft in service than Iran since Iran cannot purchase advanced Western equipment because of embargoes. Hence, from an Iranian point of view, one can see that there is a case for developing missiles that have both conventional and unconventional warheads for an array of military options against an array of different adversaries.
All this suggests that it is going to be difficult for the United States to stop the Iranian missile program, even if relations improve. What one would hope is that Iran will forgo any efforts to build ICBM’s that could theoretically threaten the United States and that Iran will, in parallel, take measures to assure Israel that it is not the target of their programs. Since Iran is not violating any international laws by developing its missiles, this issue falls into a different category of concern than activities in the nuclear, chemical and biological arena.
So where does this leave the Iranian WMD problem? So long as Iran vehemently denies it is in violation of its NPT, CWC and BWC commitments, the issue remains opaque and will only be resolved, one way or another, if Iran unilaterally ceases the covert activity that Western intelligence sources insist – albeit with different levels of certainty – it is undertaking. Or, alternatively, these same Western sources could make public their findings and present the case to the UN that Iran is in violation of its treaty obligations. The missile case is clearer. Iran is developing and will continue to develop and produce missiles. All the United States can do is put pressure on third parties such as Russia to stop cooperating with Iran. This would slow down but not stop the programs.
Ultimately the preferred way to address Iran’s WMD is within the context of a regional security framework. The alternatives include an enhanced U.S. deterrent and defensive posture against Iranian WMD programs or a re-examination by Iran of the benefit and costs of such programs and a decision to end, or strictly limit, them.
Energy: The Caspian Basin Problem
The new administration should review current American policy towards the Caspian energy projects. These have been characterized by a single-minded effort to deny Iran oil and gas routes from the Caspian and participation in Caspian development schemes while at the same time promoting a Trans-Caspian energy pipeline for both oil and gas. The purpose is also to dilute Russia’s control over these key strategic routes. The Trans-Caspian pipeline has two components; a gas pipeline to Turkey via Azerbaijan to meet the growing Turkish demand for gas, and an oil pipeline that would run across the Caspian to Baku and then to the Turkish port of Ceyhan on the Mediterranean.
The administration’s focus on the east-west route is based on a number of premises. First, that there is sufficient exploitable oil and gas in Azerbaijan, Kazakhstan, and Turkmenistan to make such pipelines profitable. Although there has been a potentially huge new oil find in Kazakhstan’s section of the Caspian, it is too early to tell whether this new field will be sufficient to make Baku-Ceyhan profitable, especially now that the main export oil pipeline from Tengiz to Novorossisk through Russia has started construction. It may be that in the future, the administration’s arguments make better economic sense, namely that one should develop trans-Caspian routes , particularly if the oil discoveries turn out to be as impressive as some people believe. On the other hand, the Administration’s rejection of Iran as a possible route contradicts the argument that one needs redundancy in the pipeline system and no Russian monopoly.
The second premise of the Administration’s case for the trans-Caspian route is that pipelines through Russia and Iran raise both environmental and security problems. The Russian route ends ends at Novorossisk on the Black Sea, which means oil must go on to market in tankers. Increased tanker traffic through the Bosporous runs the risk of serious environmental harm. Furthermore, as long as the crisis with Chechnya is unresolved, pipelines through Russia could be subject to terrorism. Likewise, pipelines that go through Iran and end up in the Gulf will be vulnerable to new crises in the Gulf, including actions by Saddam Hussein. While these arguments are fair, the reality is that the routes the Administration supports are vulnerable, particularly since the Baku-Ceyhan pipeline would go through Eastern Turkey, very close to the Azeri-Armenian border. As long as this crisis is not resolved and Turkey’s problem with the Kurds remains a reality, there’s no guarantee that Baku-Ceyhan will be more secure than any other routes.
The third premise of the Administration’s policy is that countries of Central Asia wish to be less dependent on Russia and Iran, and establishing a Trans-Caspian route provides them with independence. This is certainly true and there can be no doubt that there is a great appeal among the Central Asians, as well as the Caucasus countries, to not be too dependent on Russia. However their attitude may be changing. The reality is Russia is a Central Asian power. Russian president Vladimir Putin has prioritized establishing closer relationships with the Central Asian countries, especially Kazakhstan, Uzbekistan, Tajikistan, and Krgyzistan, all of whom have worries of their own about Islamic fundamentalism and ultimately, a potential Chinese threat. Russia is next door; the United States is thousands of miles away. Certainly the countries around the Caspian cannot ignore the fact that Iran is a neighbor and that the United States, with its proxy, Turkey, are limited in what assistance they could bring to bear if there were a serious military crisis.
A review of American interests in the Caspian suggests that while this is an important area for the United States, it is certainly not vital – whereas for Russia and Iran it is. Thus, if it is assumed that one of the priorities of the new administration will be a major review of policy towards Russia, it makes more sense to be understanding of Russian aspirations in Central Asia in exchange for Russian cooperation on critical issues such as national missile defense and Russia’s supply of advanced technology to Iran. The irony is that if the United States and Russia reached some modus vivendi whereby Russia reestablishes its preeminent position in the Caspian, this could cut both ways for Iran. On the one hand, with the United States taking a lower profile and being less concerned about keeping Iran out, Iran would be able to benefit from new access and American companies would be welcomed back. On the other hand, Russia and Iran might now enter into a more competitive mode, particularly if Russia were prepared to cut back on its military support for Iran.
If the United States were to revise its Caspian strategy and be more flexible about routes through Iran and the participation of U.S. companies in the Iranian energy sector, it would be welcome news for the Islamic Republic. Influential Iranians frequently argue that once America and Iran have reestablished sound economic relationships – which means the end of sanctions – it will be more difficult for the conservatives to demonize America.
Yet it is hard to believe a new administration will end oil sanctions unless there is some reciprocal gesture by Iran to make the deal acceptable. Clearly the issue that would have most immediate impact on American politics would be a change in Iran’s anti-Israel policy and reversing the sentences on Iranian Jews accused of espionage. But this will be unlikely unless and until there has been much further progress in Syrian-Israeli and Palestinian-Israeli negotiations at which Iran could well conclude that it is in its own interests to mute opposition to Israel and reap the benefits that would come from Washington.
This said, the unpleasant reality is that the next administration may face a much more negative situation, namely a breakdown in the Arab-Israel peace process. This could lead to escalating anti-Israeli violence with Iran as a strong supporter of such actions. Under these circumstances there would be no chance of a breakthrough in relations and a good possibility that sanctions will not only be continued, but intensified.
Conclusion
Absent any fundamental changes for the better, or worse, in the attitudes and policies of both sides, the best that can be expected in the coming months is that the two countries continue a slow and limited engagement. This should not prevent greater efforts to ease visa restrictions and bottlenecks in travel between the two countries. The U.S. policy of finger-printing many Iranians who come to the U.S. should be reviewed, and except in special circumstances, ended. It is unnecessarily humiliating and has caused deep resentment on the part of the very Iranians the United States should be welcoming to this country. Likewise, Iran’s refusal to permit a low-level American official to return to Teheran to handle the numerous visa requests from an unobtrusive desk in the American Interests Section in the Swiss Embassy should be flagged again and again as an obstacle to better relations. Track Two diplomacy, as well as cultural, academic and sporting exchanges, should be promoted and encouraged by the U.S. government and U.S. foundations. In addition, the new administration should avoid the temptation to take sides in Iran’s domestic quarrels and be prepared, if necessary, to deal with the pragmatic conservatives if it appears they, rather than the reformers, can and will implement changes in Iran’s policies that harm American interests.
The history of the Islamic revolution shows that when necessary even the most avid ideologues understand the need for change. It was, after all, Ayatollah Khomeini who agreed to purchase arms from the hated Zionist entity, Israel, at the height of the Iran-Iraq war. Most Iranian leaders know that without reform and better relations with the United States, they will face the growing prospects for a major domestic upheaval that could be very violent. If they come to believe that in the long run they cannot retain power and vestiges of the revolution without compromises they may be willing to accept serious reform as the lesser of evils.
