Liana Kavsadze: “Some Armenians feel embarrassed for aggression against Azerbaijan”
Today, Azerbaijan
June 26 2006
Member of the Russian Journalists Union Liana Kavsadze is visiting
Azerbaijan at the invitation of the Caucasus Media Public Union.
Kavsadze held press conference “The role of the Baku-Tbilisi-Ceyhan
in geopolitical atmosphere, role of globalization in the Caucasus
and role of Islam and Koran in contemporary world”.
The journalist said she has long been in sympathy with Islam
criticizing Western states’ position regarding Muslims.
She underlined that Islam never propagates terrorism. Kavsadze also
said they will take some measures to unite world journalists in one
position in order to prevent Western pressure on Islam.
The Russian journalist also said she got to know Armenian society
position, which condemns Armenian policy against Azerbaijan.
“Armenia supported by foreign protectors has occupied Azerbaijani
lands. Some Armenians say they fell embarrassed before Azerbaijanis for
their country’s action. I don’t agree with accusing Russia completely
for this conflict. Western states, which wanted the USSR to collapse,
were more active in this process. On the contrary, Russia has devised
a special plan to ensure peace and solve problems in the Caucasus. I
am familiarized with this strategy and think this plan is quite
democratic,” the Russian journalists said.
Kavsadze expressed dissatisfaction with the Georgian government
providing an opportunity for the Western capitalists. She said the
western states are taking interest in making tense situation in
the region.
URL:

Iran World Cup midfielder to move to Bolton
Deutsche Presse-Agentur
July 26, 2006 Wednesday 8:22 PM EST
DPA SPORTS Football Iran Iran World Cup midfielder to move to Bolton
Tehran Iran midfielder Andranik Teymourian – the only Christian on an
otherwise Muslim national team – is moving to English Premier League
club Bolton Wanderers, the ISNA news agency reported Wednesday.
The 23-year old Iranian-Armenian, widely known as Ando, will leave
the Abu Moslem club in Mashad, northeastern Iran, and play in England
next season, ISNA said.
Ando was among his side’s best at this year’s World Cup, where Iran
lost two games and drew one, dropping out in the group stage.
ISNA said Abu Moslem president Nasser Shafaq confirmed the transfer
and said that the Bolton manager would come to Iran next week to
finalise the contact.
After Karim Baqeri, who played for Charlton Athletic in the 2000- 2001
season, Ando would be the second Iranian to play in the Premier League.
He was the second Iranian-Armenian to play for Iran in a World Cup
final round.
In 1978, defender Andranik Eskandarian played at the World Cup in
Argentina. He was signed by New York Cosmos to play with football
legends such as Franz Beckenbauer and Pele.

Armenian Airbus crash in May caused by piloting errors – officials
AFX International Focus
July 26, 2006 Wednesday 11:07 AM GMT
MOSCOW (AFX) – The crash of an Armenian Airbus plane off Russia’s
Black Sea coast in May that killed all 113 people on board was caused
by piloting errors, Russian Transport Minister Igor Levitin said.
‘Weather conditions were difficult, the human factor played its role,’
Levitin was quoted by the Interfax news agency as saying at a press
conference, held about the results of an inquiry into the crash of
the A320 liner belonging to Armavia airlines.
Tatyana Anodina, head of the intergovernmental aviation committee
that took part in the enquiry, said: ‘The main pilot did not ensure
control of the plane as far as angle and altitude were concerned.’
‘The co-pilot did not ensure necessary control on the descent,’
Anodina said, adding that an alarm system had gone off as the plane
plunged but that it was too late to regain altitude.
The Airbus A320 plunged into the Black Sea on May 3 amid rainy weather
as it was coming in to land in Sochi — a popular coastal resort city
in southwest Russia.

NEW POLL SHOWS ARMENIANS EQUALLY SUPPORTIVE OF RUSSIA, WEST
Eurasia Daily Monitor, DC –
June 26 2006
By Emil Danielyan
A U.S.-funded opinion poll released this month paints an interesting,
if contradictory, picture of the geopolitical preferences of Armenia’s
population. It shows that the vast majority of Armenians continue to
support the close political and military ties with Russia maintained
by their government. At the same, they regard the European Union as
the most trustworthy international institution and would like their
country to eventually join the bloc. Public support for Armenia’s
eventual accession to NATO likewise seems to be considerably stronger
than it was in the past.
The voter survey, commissioned by the U.S. Agency for International
Development, was designed and conducted in early May by the Gallup
Organization, the U.S. International Republican Institute, as well
as the Armenian Sociological Association. Some 1,200 people randomly
interviewed across Armenia were asked to weigh in on a wide range of
issues mainly relating to domestic politics and economic development.
It emerged that most of them feel the tiny South Caucasus state is
on the wrong track, despite being optimistic about its future.
The poll suggests that ordinary Armenians also want two seemingly
irreconcilable things: continued alliance with Russia and integration
into European and Euro-Atlantic structures. Eighty-six percent of
respondents described Russia as Armenia’s most important international
partner, considering it, with varying degrees of conviction, to
be a “trustworthy ally.” Not surprisingly, public support for the
presence of a Russian military base on Armenian soil is still strong,
with almost two-thirds of those polled saying that it has a positive
impact on their country’s independence and stability. Only 6% referred
to Russia as an external threat.
These figures reflect a traditionally strong pro-Russian sentiment
in Armenia, where many people have for centuries looked to Moscow
for protection against hostile Muslim neighbors. It has only been
reinforced by Armenia’s unresolved conflict with Azerbaijan over
Karabakh and extremely strained relations with Turkey. Still, there
are clear indications that this sentiment has been slowly but steadily
eroding not least because of Moscow’s hard bargaining in economic
dealings with Yerevan and the Russian authorities’ perceived reluctance
to tackle racially motivated attacks on Armenian immigrants. Russia’s
waning influence in the South Caucasus and Armenia’s increased contacts
with the Council of Europe, the European Union, NATO, and the United
States have also been a major factor.
The USAID-funded poll offers more proof of this trend. It shows in
particular that Armenians trust the EU more than their army and the
ancient Armenian Apostolic Church. Armenian state institutions and
political parties are trusted by barely one-third of the electorate.
By contrast, 87% and 51% think well of the EU and NATO, respectively.
Accordingly, 80% are in favor of Armenian membership in the EU.
(Curiously, roughly as many respondents want Armenia to remain in
the increasingly moribund Commonwealth of Independent States.)
Public support for NATO membership is much weaker: only 40%
said Armenia should “definitely” or “probably” join the U.S.-led
alliance in the future, with another 45% less than enthusiastic
about such a prospect. Yet the very fact of Armenian public opinion
being essentially split down the middle on the issue marks quite a
significant change from the not-so-distant past when the military
alliance with Russia was hardly even questioned by Armenian
policymakers and ordinary people alike. The change was exposed by
other surveys conducted in the country in recent years.
One such poll, conducted a year ago by the Armenian Center for
National and International Studies (ACNIS), a private think tank,
found that Armenians are evenly divided over NATO membership,
with approximately 34% of them backing or opposing the idea and
the remaining 32% undecided. According to another poll released by
the Yerevan-based polling organization Vox Populi in October 2004,
only 38% percent of the public thought that military cooperation with
Russia should remain the bedrock of Armenian security policy. Earlier
in 2004 ACNIS questioned 50 local political and public policy experts
and found that two-thirds of them stand for Armenia’s accession to
NATO within the next decade. Most of those experts also felt that
Moscow limits their country’s independence.
The apparent change in public mood has proceeded parallel to a
deepening of Yerevan’s cooperation with the EU, NATO, and the United
States as part of what the administration of President Robert Kocharian
calls a “complementary foreign policy.” The Armenian government
launched an individual partnership action plan (IPAP) with NATO last
December and is currently negotiating with the EU on a plan of action
stemming from its inclusion in the bloc’s European Neighborhood Policy
(ENP) program. Kocharian signaled his intention to accelerate Armenia’s
integration into Western structures on July 13 as he presided over a
meeting of a high-level government commission tasked with coordinating
the process. He instructed its members to come up with a timetable of
“concrete activities” resulting from Yerevan’s commitments to the
Council of Europe, the EU, and NATO within the next two months.
How far the Kocharian administration can go in trying to maintain
equally close relations with Russia and the West has been a matter
of contention in Armenia. Pro-Western opposition leaders and other
government critics say Yerevan will sooner or later have to make a
clear strategic choice in favor of one of the parties to the ongoing
geopolitical game in the region. But as the latest poll suggests,
most Armenians share the “complementarity” of their rulers.
(Statement by the Armenian president’s office, July 13; Armenia
National Voter Study, USAID, IRI, Baltic Surveys/The Gallup
Organization, ASA, May 2006; Haykakan Zhamanak, July 2, 2005; RFE/RL
Armenia Report, May 27, 2004)
From: Emil Lazarian | Ararat NewsPress

Safe from harm
Blacktown Advocate (Australia)
July 26, 2006 Wednesday
AS 15-year-old Annette Mazmanians ran into her family’s arms at the
arrivals lounge of Sydney airport last week, she gave way to the
pent-up emotion of her week-long ordeal in the Middle East.
The Quakers Hill resident was one of 67 teenagers from the Armenian
dance group Hamazkayeen Sevan, who became trapped in Beirut when the
brewing conflict between Israel and Hezbollah erupted.
The exhausted dancers and their chaperones were greeted by hundreds
of emotional family members bearing flowers and balloons when they
arrived shortly after 11pm on Thursday night.
“I felt the wheels land into Sydney, I was really relieved and happy
home sweet home,” Annette told reporters. “As much as you’re far away
from your parents and you have your friends around, you just want to
come back home as soon as you can.”
Over the course of six highly-fraught days, the dance troupe hid in
their hotel in the city’s Christian quarter before travelling by bus
to Jordan via Syria. They then boarded three planes in Bahrain for
the long flight back to Sydney.
“As soon as we got into the bus to go to Jordan, and just to escape,
to evacuate from there, we felt one bomb and that was the closest. We
saw the buildings just go off and we felt the vibration, it was pretty
scary,” she said.
Annette’s father Karl said the group had been on the last stop of a
tour which included Armenia and Syria and which should have brought
them home on July 14.
“They were only there for a brief stop over, just two days, but once
the bombs started coming in they had to stay in the hotel,” he said.
“Even when you hear that they are OK and they are coming back you
still don’t 100 per per cent relax until you see them coming through
the gate.”
Life is gradually returning to normal in the Mazmanians household.
Annette has returned to St Gregory’s Armenian School in Rouse Hill
and is catching up with friends and relatives.
“She won’t be going anywhere alone for a while that’s for sure,”
Mr Mazmanians chuckled. “The family is just looking to put this
behind us.”
At the time of going to press, about 2,600 Australian citizens had
been evacuated from Lebanon.

The Abattoir and Gandhiji
Chennai Online, India
June 26 2006
Closer to the YMCA is the Golf Course of Chennai. A little away
from this is the city’s abattoir. It is a French word and should be
pronounced “abathwa”. Do you know what happens here? Daily hundreds
of cattle are being slaughtered for their flesh. Even though this
abattoir or slaughterhouse is located at Saidapet, you can say that
you cannot spot any shop that sells mutton in Saidapet. Can it be
said that the Saidapet residents’ deference towards Gandhiji could
be the reason for this? Gandhi’s birthday will be celebrated in a
very modest way. But you still find about 20 persons who follow in
the footsteps of Gandhiji. Of them, one person runs a tailoring shop
from 9 in the morning to 5 in the evening. From 7 to 9 in the morning
and 5 to 8 in the evening it transforms into a library. He runs this
library with the books that he has collected and there are certain
books and collections, which you cannot find elsewhere.
In the old Chennai, the Saidapet market was a very important one.
Today modern markets are functioning in every part of Chennai. But
if you need to buy a mud pot now you should go to Saidapet. A small
trading company went from door to door and transformed the face
of salesmanship in India. That is the VGP Brothers. They made the
“Murphy” radio affordable even to a poor man by their easy monthly
instalment scheme, with which the less fortunate had access to all
radio programmes. It will not be an exaggeration if we say that, the
advent of the VGP Company brought out a new dimension in the daily
life of the Tamil people. After radio, they started selling various
household products in the easy monthly instalment scheme. This grew
up to such a great level and they started selling house sites also.
Today this instalment scheme has become a very common aspect of life.
This VGP Company is also running a large entertainment park today.
The VGP Square at Saidapet was a needed change to that place. The
few metres occupied by the VGP Square are the only modern structure
in Saidapet which otherwise reflects obsoleteness everywhere.
If one boundary of Saidapet is the Adyar River, then a significant
place in it is the Maraimalai Adigal Bridge. It was called the
Marmalong Bridge for over 200 years. The Armenian trader who built
the steps in St. Thomas Mount constructed this bridge. In the 1970s
this bridge was broadened. This was a time when Tamil enthusiasm was
prevalent everywhere and every non-Tamil name was replaced by a Tamil
name. This bridge was also renamed. Even then for many it is just the
Saidapet Bridge. But Saidapet itself is a very big bridge. It is the
bridge that links the South Tamil Nadu and Chennai.
Let us scan Chennai again….
Ashokamitran (Translated by Sujatha Pradeep)
es/2006/remi12.asp

Terror in hotel; Lebanon is such a beautiful country and it has been destroyed
Hill Shire Times (Australia)
July 25, 2006 Tuesday
NOTHING could have prepared 16-year-old Peter Kolokossian and his
brother Garbis for what they saw in Lebanon.
The Castle Hill teenagers were trapped in an hotel in the Christian
area of Beirut with the Sydney Armenian Dance Group, as the warfare
between Israel and the militant group Hezbollah in Lebanon escalated.
The trip of a lifetime lived up to all their expectations, with the
dance group lauded and applauded throughout the international festival
in Armenia, taking part in both the closing and opening ceremonies.
“The atmosphere was huge dancing in front of 20,000 people in Armenia,”
Garbis said.
“We were on Syrian, Armenian and Lebanese television. It was the most
amazing experience.”
The group performed several concerts in Armenia during their three-week
stay and then a special concert in Syria before returning to Lebanon
for another concert before they flew home.
The had performed in Beirut when Garbis heard of the kidknapping of
two Isreali soldiers.
“I knew straight away that something would happen. Then 20 minutes
later my mum called and she was crying on the phone,” he said.
The group was due to fly out the next day. It was that day Beirut
airport was bombed and the airport closed.
They and their families then waited five agonising days before
Australian consulate staff got them on to three buses and on the road
to Jordan through Syria.
Garbis said: “People were crying. One of the mums thought she’d never
get back for her son’s wedding.
“It was frightening.”
He said they could not leave the hotel for two days, because when
they knew when they were evacuated, it would be quick.
“A lot of people didn’t want to go by bus because they knew one had
been blown up by the border and 20 people killed,” Garbis said.
When the buses came, escorted by Australian Federal Police, it was
met with mixed emotions.
Peter said: “We had grown so close to some of the families [in
Lebanon’s Armenian community] our hearts were breaking leaving them
behind.”
Garbis said he watched families clutching their young children as
the buildings shook around them.
“Lebanon is such a beautiful country and it has been destroyed,”
he said.
With bombs exploding close by, the brothers found themselves in two
different buses for the 17-hour journey to Amman in Jordan .
“We were packed like sardines,” Peter said. “It was quiet,” Garbis
said. “People were praying.”
The brothers arrived most of the majority of the dance troupe at
Sydney airport at 10.30pm on Friday Garbis’s 19th birthday.
They were met by family, parents Silvia and Reg, plus younger brothers,
Michael and John sister Saree and aunts uncles, grandparents and
friends.

Crew responsible for Armenian A320 crash near Sochi – Levitin
Interfax News Agency
Russia & CIS Military Newswire
July 26, 2006 Wednesday 12:14 PM MSK
The crash of an Airbus A320 passenger jet belonging to the Armavia
airline near Sochi on May 3 happened due to the fault of the crew,
Transportation Minister and head of an ad hoc government commission
investigating the crash Igor Levitin said at a press conference in
Moscow on Wednesday.
“The human factor played its role in difficult weather conditions,”
Levitin said.

Crew responsible for Armenian A320 crash near Sochi – minister (Part 2)
Interfax News Agency
Russia & CIS Military Newswire
July 26, 2006 Wednesday 2:10 PM MSK
MOSCOW July 26
The crash of an Airbus A320 passenger jet belonging to the Armavia
airline near Sochi on May 3 happened due to the fault of the crew,
Transportation Minister and head of an ad hoc government commission
investigating the crash Igor Levitin said at a press conference in
Moscow on Wednesday.
“The human factor played its role in difficult weather conditions,”
Levitin said.
Tatyana Anodina, the head of the Interstate Aviation Committee, a CIS
organization investigating air incidents, told journalists that “the
plane was landing on autopilot and strictly following the glide slope
in a landing configuration, when it received a report from air traffic
control that the cloud base was lowering. The plane stopped descending
at a speed of around 340 meters, and started a right climbing turn.
While performing this turn, the captain switched the autopilot off
and made the plane to descend.”
“These actions by the captain were not properly controlled by the
second pilot, and the crew’s following actions were uncoordinated
and inadequate to roll the plane out,” Anodina said.
As for suggestions that the crash could have been caused by a
mechanical fault, the commission’s conclusion reads, “There were no
malfunctions in the aircraft’s engines and systems, and the plane
normally responded to both the autopilot’s commands and the crew’s
actions. There was enough fuel on board to safely complete the flight.”
The A320 crash near Sochi at 2:13 a.m. Moscow time on May 3 (2213
GMT on May 2) killed 105 passengers and eight crewmembers.

Congressional Quarterly,
CQ Congressional Testimony
July 25, 2006 Tuesday
COMMITTEE: HOUSE JOINT ECONOMIC
HEADLINE: ENERGY AND THE IRANIAN ECONOMY
TESTIMONY-BY: ILAN BERMAN, VICE PRESIDENT
AFFILIATION: AMERICAN FOREIGN POLICY COUNCIL
Statement Ilan Berman Vice President for Policy American Foreign
Policy Council
Committee on House Joint Economic
July 25, 2006
Chairman Saxton, Vice-Chairman Bennett, distinguished members of the
Committee: It is a privilege to appear before you today to discuss
the subject of the Iranian economy and U.S. policy options.
There is no greater foreign policy challenge facing the United States
today than the one posed by the Islamic Republic of Iran. The Iranian
regime’s persistent work on its nuclear program, and its intransigence
in the face of international demands, has catalyzed a growing crisis
that threatens international peace and security. So far, however,
there has been little public discussion about the economic dimension
of the current crisis, or of the financial levers available to the
United States and its international partners to alter Iranian behavior.
WHAT FUELS IRANIAN INTRANSIGENCE?
More than any other factor, Iran’s defiance in the current stand-
off with the West over its nuclear program has been made possible by
energy. Over the past several years, the Islamic Republic has emerged
as a bona fide energy superpower. Home to approximately 10 percent of
world oil, Iran is the second largest exporter in the Organization
of Petroleum Exporting Countries (OPEC), producing an average of
3.9 million barrels of oil per day. At the same time, Iran sits
atop the world’s second-largest reserves of natural gas (some 940
trillion cubic feet). As a result, Iran’s economy is overwhelmingly
energy-based. Today, the vast majority (80 to 90 percent) of Iran’s
export earnings, as well as about one half of its budget and a quarter
of its gross domestic product, is derived from energy exports to the
international community.
In the past, this energy-dominated economy has led to wild fluctuations
in Iran’s financial fortunes. During the late 1990s, plummeting
world oil prices left the Iranian regime nearly bankrupt.2 Today,
however, quite the opposite is true; the rising price of world oil
generated by political instability associated with the War on Terror
has provided Iran with a staggering fiscal windfall. As of March
2006 (the end of Iranian calendar year 1384), officials in Tehran
were publicly estimating their country’s hard currency reserves at
some $50 billion.3 These added resources and financial cushion can be
expected to dramatically increase the Iranian regime’s willingness to
engage in risky regional behavior, as well as to accelerate the pace
and scope of its strategic programs, in the months and years to come.
Iranian officials have attempted to solidify this economic status
through a major expansion of their country’s international energy
profile. Over the past two years, Iran has signed two massive
exploration and development accords, worth an estimated $100 billion
over the next twenty-five years, with China alone.4 A growing number
of other nations, including France, Malaysia, Japan, Canada, and
Italy, are now engaged in the development of existing oil fields
within the country, and this involvement is expected to increase
as recent discoveries including the Azadegan field and Bangestan
reservoirs in southern Iran, as well as the offshore Dasht-e- Abadan
site near the southwestern port city of Abadan begin to come online.
Iran has also commenced efforts to become a major global exporter
of natural gas. Since 2002, it has supplied Turkey with substantial
natural gas deliveries via a bilateral pipeline link and, according
to official Turkish government statistics, could provide roughly 20
percent of total Turkish natural gas consumption by the end of the
decade.5 A similar arrangement is emerging between Iran and Armenia as
part of a pipeline, currently under construction, that could supply
Armenia with up to 47 billion cubic meters over a period of 20 to 25
years, beginning in 2007.6 Iran has opened similar discussions with
Georgia, and has even taken steps to coordinate natural gas policy
with Moscow as part of a Russia-led natural gas cartel now emerging
in the post-Soviet space.
At the same time, the Iranian regime has dramatically increased its
ability to leverage its strategic location in the Strait of Hormuz,
the principal passageway for roughly two-fifths of world oil trade.
According to U.S. intelligence estimates, a sustained national
military rearmament over the past several years has provided Iran
with the ability to temporarily shut off the flow of oil from the
Persian Gulf, even with a Western military presence in the region.
It is a testament to this energy clout that, as the international
crisis over Iran’s runaway nuclear ambitions has deepened, Iranian
officials have repeatedly raised the specter of a disruption of energy
trade in the Persian Gulf. Regime officials such as Mohammed-Nabi
Rudaki, deputy chairman of the Iranian parliament’s national security
committee, have warned that the Islamic Republic has the power to
“to halt oil supply to the last drop from the shores of the Persian
Gulf via the Straits of Hormuz” should serious measures be undertaken
against the Islamic Republic at the United Nations.9 Similarly, Iranian
president Mahmoud Ahmadinejad has warned the United States and Europe
that the global price of crude has not yet reached its “real value.”10
Even Iran’s Supreme Leader, the Ayatollah Ali Khamenei, has threatened
the West with disruptions in fuel shipments from the Persian Gulf in
the event of a “wrong move” against Iran.11 And regime officials have
concretely demonstrated their capacity to do so, holding a week-long
series of aerial, naval and ground maneuvers in the Persian Gulf in
April 2006 to showcase the force-projection capabilities of their
elite clerical army, the Pasdaran.
ASSESSING IRANIAN VULNERABILITIES
Given such posturing, it is not surprising that some analysts have
concluded that energy is Iran’s “trump card” in its dealings with the
West. This economic leverage, however, is a two- way street and on
at least three fronts, Islamic Republic is susceptible to economic
pressure from the international community.
Commodity shortages
Despite massive oil exports of some 2.5 million barrels a day, Iran
currently imports more than a third of its annual consumption of over
64.5 million liters of gasoline from a variety of foreign sources
(among them India, France, Turkey and China) at an estimated cost
of more than $3 billion annually.13 These imports are not surplus;
Iran reportedly maintains just 45 days worth of gasoline domestically,
and requires steady supplies of refined petroleum products from abroad
for the continued functioning of its economy. Mounting international
pressure, moreover, is already raising the costs of these deliveries.
One leading Iranian policymaker has predicted that the regime will
need to spend an extra $5 billion this year alone to maintain its
established policy of deep subsidies on the sales of gasoline and
avoid domestic rationing.15 This suggests that the imposition of an
embargo on foreign gasoline supplies to Iran could achieve rapid
results ranging from the depletion of hard currency reserves to a
work stoppage in many of Iran’s industrial sectors.
Centralized economic hierarchy
Today, the vast majority of regime wealth is concentrated in the
hands of a very small number of people, whose associates and relatives
dominate the Iranian economy. The extended family of former Iranian
president (and current Expediency Council chairman) Ali Akbar Hashemi
Rafsanjani, for example, now virtually controls copper mining in Iran,
the regime’s lucrative pistachio trade, and a number of profitable
industrial and export- import businesses. A related economic
power center is Iran’s bonyads, the sprawling, largely-unregulated
religious/social foundations overseen by Iran’s Supreme Leader, which
account for between 10 and 20 percent of Iranian national GDP. Given
this economic hierarchy, targeted financial measures that restrict the
ability of these individuals and organizations to access international
markets and curtail their capacity to engage in commerce are likely
to have an immediate and pronounced effect on regime decision-making.
Foreign direct investment
The dozens of billions of surplus dollars collected by the Iranian
government over the past two years as a result of the rising price
of world oil have done little to diminish Iran’s need for foreign
direct investment. According to authoritative estimates, Iran’s energy
sector still requires some $1 billion annually to maintain current
production levels, and $1.5 billion a year to increase capacity.
Without such sustained capital, studies say, Iran could revert
from an energy powerhouse to a net energy importer in the span of
very few years.19 Given the scope of current investment in Iran,
it is unrealistic for the U.S. and its allies to expect to be able
to achieve a comprehensive economic isolation. However, if broad and
forceful enough, multilateral sanctions may complicate Iran’s access
to foreign funding, and/or force a depletion of the hard currency
reserves that the regime has amassed over the past several years.
THINKING BEYOND THE UNITED NATIONS
Today, the United States has the ability to capitalize upon these
vulnerabilities. International economic sanctions can help to slow
Iran’s nuclear progress and signal the international community’s
opposition to an Iranian bomb. If coupled with effective public
diplomacy, such measures can also drive a wedge between the Iranian
government and its people over the prudence of nuclear acquisition.
Moreover, history has shown that the effectiveness of sanctions can
be enhanced by the speed and scope with which they are applied.
It is becoming exceedingly clear, however, that the United Nations
is not the optimal vehicle by which to apply such pressure. Already,
protracted diplomatic wrangling has provided Iran with valuable time
to reduce its economic vulnerabilities. In recent months, Iran has
carried out large-scale transfers of assets from Europe to financial
institutions in China and Southeast Asia, as well as initiating a
major privatization of governmental funds. Most recently, Iran’s
parliament has approved a new fiscal budget that calls for a halt to
imports of refined petroleum products and the institution of gasoline
rationing starting this Fall.3 The goal of these efforts is clear:
to limit Western economic leverage over Iranian behavior.
Timing should also be a major consideration. In late May, Secretary
of State Condoleezza Rice signaled a sea change in American policy
toward Iran when she announced that the United States would join
Europe in proffering a “package” of incentives aimed at bringing
the Islamic Republic back to the nuclear negotiating table. Iran,
in turn, has maintained that it is studying the offer and will
provide a formal reply in late August.24 It is unclear whether
the international community will wait until then to seek Security
Council action against Iran, but it is reasonable to expect that
forceful international action still remains some weeks or months
away allowing Iran to continue minimizing economic vulnerabilities
and forging ahead with its nuclear effort. All of this means that,
if and when economic sanctions are again on the table, their stated
task to alter the regime’s behavior with relation to its nuclear
program will be even more difficult to achieve than it is today.
Moreover, if and when United Nations sanctions do materialize, they
are likely to be deeply influenced by politics. Russia and China both
wield veto power over Security Council action against Iran, and while
Moscow and Beijing appear to have endorsed more robust measures against
Iran should the current negotiations fail, any steps taken will need
to be carefully calibrated so as to preserve the support of those
states. As a practical matter, this means that the economic pressure
applied against Iran will be both gradual and limited in scope.
Given these difficulties, Washington would be far better served by
the establishment of an economic coalition outside of the confines
of the United Nations. Through such a construct, the United States
would have far greater ability to control the timing, extent
and application of economic pressure on Iran, without Security
Councilimposed constraints. It would also provide the U.S. and its
coalition partners with greater political flexibility to apply those
specific measures most likely to alter Iranian behavior.
THE LIMITS OF IRANIAN OIL POWER
Today, Iran holds the ability to exert a high price from the world
if it is stymied in its nuclear efforts. But political and economic
realities suggest that Iran’s oil power is far more limited than
commonly understood.
Iran could indeed curb oil exports, as regime officials have repeatedly
threatened. However, if the Islamic Republic withdraws oil from world
markets, it faces the prospect of losing much- needed long-term energy
clients, such as China and India, which can be expected to quickly
seek replacement suppliers. Moreover, the resulting perceptions that
Iran is an “unreliable” energy partner are likely to reduce foreign
direct investment flowing into the country thereby placing Iran’s
current status as a global energy player in jeopardy.
By the same token, a cut-off of oil exports is likely to reverse
Iran’s recent political gains abroad. Simply put, should Iran’s
energy brinksmanship hurt the economies of its political allies,
those countries are far less likely to unconditionally support Iran
on the perceived source of the economic turbulence: Iran’s nuclear
program. This change will be true in spades for major investors into
Iran’s energy sector (such as Japan, China and France).
Most of all, Iranian officials despite official bluster understand that
actual use of the “oil weapon” is likely to carry dire consequences
for their regime. The international community’s current diplomatic
overtures toward Tehran have been generated in no small part by
problems attaining consensus on more robust measures. Substantial
Iranian interference with the global energy market could change all
that, galvanizing a consensus for aggressive containment or even
regime change on the part of numerous energy-hungry nations.
Is there a guarantee that sanctions will succeed in altering Iranian
behavior and curbing its nuclear efforts? The answer is no. On the
contrary, American policymakers should refrain from seeing economic
sanctions as an isolated measure; historically, a strong correlation
exists between the imposition of sanctions and the subsequent
escalation to the use of force (e.g., Panama in 1989, Iraq in 1991,
and the Balkans during the mid-1990s). However, what is clear is that a
failure by the international community to promptly utilize its existing
economic leverage vis- a-vis Iran will make other, less attractive
solutions chief among them the use of force much more likely.
Ultimately, the United States must make a choice. Is it, and the world,
willing to pay the political and economic price associated with a
serious strategy to confront Iran? The alternative is to internalize
a permanent hike in the cost of doing business with a region dominated
by an atomic Islamic Republic.