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Commenter German_reader summarizes an anonymous Iranian journalist about the protests there.

The protests were started by “radicals” (of an Islamic kind) with ties to the supreme ayatollah and the military; originally they were only directed against president Rouhani. However the “radicals” quickly lost control of the protests (which according to the journalist weren’t monitored at first by the police) which spread to other sectors of dissatisfied Iranians and took on a generalized anti-regime character.

Hilarious if true.

And it just might be: Comment from an Iranian on Patrick Lang’s blog:

Evidently, the protests were initiated by political enemies of Rouhani in Mashhad. That city is referred to in Iran as a “hizbollahi city” – “Party of God City”. That is, in Iranian idiom, a city of conservative thuggish doctrinaire Muslims.

One Mr. Alm-al-Hoda, son-in-law of Raisi, the presidential contender, and the Friday Prayer Leader appointed by Ayatollah Khamenei, had organized it. During the first 15 minutes, hizbollahis got what they wanted; “Death to Rouhani” slogan was shouted. Then the protesters moved on to other slogans, “Death to Dictatorship!”, etc. – which was not part of the script.

Then the protests spread to other cities due to deep anger and frustrations with this governing system’s failure on economic front as well as civil liberties enshrined in the Iranian Constitution but abridged by successive Iranian governments.

I think this could be a bigger challenge than 2009 protests, which only encompassed Tehran but not other Iranian cities.

Here’s a map of the progression of the Iran protests day by day:


Congrats on the 666D chess move, LOL.

I have been reading the Russia war blogger El Murid on Iran in the past couple of days.

Don’t know if he has any special expertise, but according to him, this has more of the markers of 1979 than 2009. The protesters are lower class, not liberal urban hipsters like in 2009, which makes using the Basij (which he describes as being “militarized titushki“) against them much more difficult because of their common low class origins.

As I suspected, the protesters aren’t all that hot for Russia; apart from Death to Rouhani and Death to the Dictatorship, they also want Death to Russia.

Anyhow, according to the latest post from him, they have settled on hardcore suppression, with at least hundreds of arrests just in Tehran and dozens more deaths.

There seems to be a general consensus – apart from El Murid himself, but he’s always been a pessimist – that the regime will survive. The main exception are the posters at /r/iran, but my impression is that they are strongly urban liberal and diaspora with overly romantic (unrealistic) views of Iranian political realities. For instance, the stickied post there speculates that the mullahs have already fled the country.

That said, this will surely bring political changes. For instance, Bloomberg’s Leonid Bershidsky suggests a limited liberalization: “That may mean concessions and a partial liberalization are likely. Just as the protests were starting, Tehran police announced that they would no longer arrest women for breaking the country’s strict Islamic dress code. Economic measures to pacify protesters unhappy about rising prices, corruption and inequality may well follow.

Of course, those economic measures aren’t going to pay themselves, and the difference will have to be made up somewhere.

• Category: Ideology • Tags: Color Revolution, Iran 
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Epistemic status: Low. I don’t know Farsi. I don’t particularly follow Iran.

That said, I am hardly alone in this.

Bryan MacDonald: “Even I’m kinda astonished by how many American “Russian experts” have suddenly become “Iran experts” in the past 48 hours. молодцы товарищи!! #ачтивмеасурес”

1. Widely divergent reports about how many people are protesting. Some say mere hundreds, others are saying entire towns have been seized.

2. Revolutions need to turn some part of the elites to succeed – otherwise, you just have a raging mob whose energy gradually fizzles out.

In the late Soviet Union, national leaders came out against a disintegrating center. In the Orange Revolution, it was the Ukrainian Supreme Court that ruled Yanukovych’s election win invalid due to fraud. In Euromaidan, a critical mass of Party of Regions deputies “owned” by pro-EU oligarchs defected.

There do not appear to be any Iranian regime elements sympathetic to revolution, nor any popular leaders around whom the opposition is uniting. This suggests its prospects are bleak.

3. There are differing explanations for the protests: They generally stress economic hardship, especially in the context of Iran’s costly foreign interventions.

a) Unfortunately, getting to what Iranians “think” is hard, since there don’t seem to be any independent pollsters regularly operating in the country – at least so far as sensitive questions are concerned.

The Iranian diaspora makes no secret of its strong dislike for the mullahs, but as persecuted political emigres, they are hardly representative of the average Iranian.

b) I just checked Iran’s economic statistics.

Since sanctions were dropped, growth has been high: An amazing 12% in the past four quarters, which I assume reflects post-sanctions recovery. Inflation, currently running at 10%, is also near historical lows by post-Shah standards.

Their economy is not exactly thriving from a long-term perspective – GDP per capita (PPP) has been about flat for the past decade (and real incomes have fallen by 15%), unemployment typically ranges between 10%-12%, the economy is over-regulated and state-dominated.

Still, it doesn’t strike me as absolutely catastrophic, and its now on an upsurge, anyway.

c) Many of us can sympathize with Iranian secular nationalists who have no interest in supporting their Shiite Arab coreligionists, let alone the Sunni Palestinians (many of whom repaid Iran’s kindness by joining the Islamic State), in the name of some obscurantist “anti-imperialist” and “anti-Zionist” grand strategy foisted on them by unelected ayatollahs.

Still, it has to be said that now of all times is a strange time for them to express such sentiments.

The US is currently far more hostile towards Iran than under Obama, and is drawing up an anti-Iranian alliance with Israel and Saudi Arabia. Shouldn’t there be more of a fortress mentality now?

Besides, the regime should have gained foreign policy legitimacy with their successes against Islamic State in 2017. While people don’t tend to like costly foreign entanglements, they like them a great deal less when they are losing them. But Iran has been winning, not losing, of late. Iraq has a friendly government, and Assad’s reconquests have reopened a direct overland route from the Iranian border to Lebanon. Meanwhile, it is the Saudis who have gotten humiliatingly bogged down in Yemen.

Very suspicious timing, as I said.

5. Prediction: These protests aren’t going to be any more significant than the abortive “Green Revolution” in 2009.

That said, I was also sure that Yanukovych would remain in power until late January 2014. I don’t have a great predictive record on identifying successful color revolutions.

6. If it does succeed: Russia’s entire position in the Middle East goes pretty much kaput.

Assad will probably be doomed. The Syrian regime is kept afloat by Iran transfers on the order of $1 billion a month, and Iranian militias play an important role in ground operations. Moreover, not clear that Hezbollah will stay in Syria either, since its own position will become suddenly imperilled. So either Russia will have to take up Iran’s slack there – a frankly unrealistic prospect, if the Kremlin has any sanity left – or sign off as well.

A liberal/nationalist Iran that does not have a bone to pick with Israel or the United States will be inherently hostile to Russian interests. A reorientation towards ethnic rather than religious ties will bring it into conflict with Russia in Central Asia, especially with respect to Tajikistan. It will also put pressure on Russia’s position in Armenia, since such an Iran will be far friendlier with Azerbaijan. The prospect of competing Iranian gas pipelines to Europe – which can also be hooked up to Turkmenistani production – will also suddenly become very realistic.

• Category: Foreign Policy • Tags: Color Revolution, Iran 
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This is an argument that is doing the rounds on the Internet after Iran’s condemnation of the Saudi execution of 47 people (including at least 4 “politicals”) to mark the New Year and the ensuing breakdown in Iranian-Saudi diplomatic ties.

After all, they say, Iran executes a lot more people than the Saudis.



One example is Peter Tatchell, the British LGBT campaigner, whose ideas of promoting gay rights in the Middle East center around the toppling of its secular autocrats (the only significant political forces there who aren’t much interested in throwing homosexuals off the top of high buildings).

There are more than a few problems with such simplistic soundbytes.

The most obvious one is the difference in population: Iran – 77 million; Saudi Arabia – 29 million. Adjustment for capita values alone narrows the execution disparity from sixfold to just a bit more than twofold.

Second, and even more significantly, Iran is a considerably more criminalized society than Saudi Arabia. Its homicide rate of 3.9/100,000 is 5 times bigger than Saudi Arabia’s homicide rate of 0.8/100,000. Ipso facto, as states that both prescribe the death penalty for murder, Iran will have many more executions just on that account, by an order of magnitude or so. Since the world’s two largest developed democracies – the US and Japan – both have the death penalty for murder on the books, you can’t view this as uniquely barbaric.

Unlike Saudi Arabia, Iran also has a massive heroin epidemic; by some measures, the world’s largest. By far the largest share of Iran’s executions are in fact related to drug trafficking. To be sure executing people for drug traficking might be viewed as overly draconian in liberal Western societies, but it is still not exceptional by developed world standards – as a matter of fact, Singapore’s drug traficking laws are if anything more hardline than Iran’s. In any case it is not political.

Here is a breakdown of Iranian executions in 2015 by type of crime according to a resource that tries to tally unregistered executions and is not friendly to Iran by any stretch of the imagination.


The vast majority of executions are for “normal” capital crimes like murder, armed robbery, rape, and drug traficking that are not atypical for tough law & order-type states. One guy was executed for corruption (“peculation”).

Of the 22 Iranian executions that touched on political matters, six of them were for “assassination,” and one was for “kidnapping,” so they can be reasonably excluded. Of the remaining 15 cases, one was marked “political,” and 14 were marked Moharebeh (“war against God”) of which 5 were for belonging to armed separatist groups. These are also the specific cases which make Iran truly distinct in a human rights sense from typical liberal democracies, which it shares in common with Saudi Arabia, and with which the figure of 47 executed in Saudi Arabia several days ago should actually legitimately be compared to.

This is not to imply that Iran is awesome, but it is important to keep things in perspective – no, Iran is not worse than Saudi Arabia from a human rights perspective when adjusted for demographic and criminological factors, and probably significantly better. And far more importantly, it has now largely ceased trying to export its deranged ideology to more civilized parts of the world, while Saudi funded madrassas and mosques promote hate from Luton to Lahore. It is necessary to repeat these things so long as they help to subvert the propaganda efforts of Western neocon elites who will be happy to grasp at any straw if it helps them bring down Assad.

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It might happen this June or later, reports RT citing Israeli media. Obama and Netanyahu are at least discussing the prospect.

In previous years I was sure that it would happen eventually, probably before year end 2012. That is because that was the most convenient window between the fielding of the Massive Ordnance Penetrator (early 2012) and the completion of most of Iranian hardening efforts (about now). But this hasn’t happened yet, so I think the chances are diminishing fast that it ever will – because the returns to it (in terms of significantly setting back the Iranian nuclear program) are also diminishing fast in tandem.

FWIW, the gamblers who put their money where their mouths are think there is a 10% chance it will happen before June 2012, and a 25% chance it will happen before the end of this year. Those are not odds I would take, however.

If it does happen, however… I think the effects will be rather muted. Iran probably doesn’t have the capability to block the Straits of Hormuz for any significant amount of time and it will probably refrain from even trying (because then the US will have to intervene in a big way). In a just world, types like the BRICS bloc would bank together to punish the US/Israel for acting like rogue states, but I am almost certain that will not happen either. And not because they particularly need trade with the US (even in China’s case – see Myth 3). But because they don’t have any particularly interest in Iran becoming too big for its boots.

Oh they’ll huff and puff alright. But Iran really isn’t a reliable partner to anyone, including to ostensible-allies-but-not-really-or-at-all-actually like Russia. And no nuclear power has an interest in other countries obtaining the capability, because even if their relations aren’t hostile, it still serves to diminish their nuclear power in relative terms. After all having an American Airlines at a poker table doesn’t do you much good if all the others have it too. Furthermore, a nuclear armed Iran would be geopolitically much stronger. Russia doesn’t want that because it will then be less dependent on it. Ideally, Russia wants an Iran that is quite hostile to the West, but not independently strong. The same goes for China. Furthermore, if Russia and China express too much support for Iran, the Iranians may be emboldened to try and close the Strait of Hormuz after all as a fuck-you to the West, delusionally counting on more than rhetorical support from China and Russia. As China and Russia definitely won’t intervene in that one, what will happen in the end is Iran’s total military nullification and perhaps the installation of a pro-Western puppet in Tehran. And that isn’t in their interests at all.

So there will not be any significant reaction from China or Russia to an imperialist attack on Iran.

(Republished from by permission of author or representative)
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At least if you take Michael Bohm’s arguments in his latest Moscow Times missive on how Russia Is Turning Into Iran to its logical conclusion.

Look, I’m not a fan of blasphemy laws. The First Amendment is a wonderful thing and something that makes the US truly great… even exceptional, to an extent. Although it should be noted that there are limits even in the US: Some quite appropriate in my opinion, others ridiculous such as the taboo on boobs on TV.

Still, if Russia’s moves to criminalize blasphemy brings it “another step closer to becoming like Iran and other Muslim theocracies”, then we have to admit that the likes of Germany, Poland, Israel, and Ireland are already long there – and contrary to what Bohm claims, it doesn’t seem that any of those countries have ended up in “chronic economic stagnation, decline and high poverty rates.”

Just look at the Wikipedia article. About half the Western world has blasphemy laws on the books. In Germany, a man was sentenced to one year in prison (suspended) in 2006 for insulting Islam. In Poland, the singer Doda was fined 5,000 złoty for the fairly innocuous comment, made well outside church, that the Bible was written by “people who drank too much wine and smoked herbal cigarettes.”

Also back in 2006 in Germany, a Berlin man was imprisoned for 9 months for disrupting a church service – but unlike the case with Pussy Riot, nobody nominated the poor bloke for the Sakharov Peace Prize. Nor did The Guardian hire a German journalist to write an oped about how Germany was becoming a “Protestant Iran” (as did Oleg Kashin).

Yet no Western commentator thinks to compare those countries to Islamic societies where apostasy is punishable by death and mobs demand the deaths of 12 year old girls who (supposedly) burn the Koran. And quite rightly so. Regardless of one’s view on the precisely where the boundaries between free speech and protecting religious feelings and social order are, it is intuitively obvious there are stark and clear lines separating today’s Christian civilization from a large chunk of the Dar al-Islam.

Russia on the other hand has yet to even sign the blasphemy bills into law, but shills like Michael Bohm are already rushing in to bracket it in with Iran. If this isn’t double standards then I really don’t know what is.

PS. I am not even going to comment on Bohm’s bizarre and absolutely illiterate musings regarding GDP.

(Republished from Da Russophile by permission of author or representative)
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This is the Karlin Freedom Index for 2012, a political classification system I formulated more than a year ago in response to systemic bias on the part of traditional “freedom indices” such as Freedom House and The Economist Democracy Index (hint: they give massive bonus points for neoliberalism and pro-Western foreign policy orientations).

The explanation: Reconciling democracy with liberalism is really hard: since people are illiberal by nature, there is usually a trade-off between the two. The more frequent result is Semi-Liberal Democracy (describes most “Western” countries), which in turn can degenerate into a full-blown Illiberal Democracy (as did Russia around 1993, or the US and Hungary around 2011). Oligarchy is meant in the sense of rule by a few. It should be noted that some legislation ostensibly enacted to protect the public interest, such as libel laws, surveillance laws and anti-terrorist laws – in practice serve more to undermine liberalism. When they go too far, there appear Semi-Authoritarian states of permanent emergency. In the lower rung, Authoritarianism consolidates all political power unto the state (Semi-Authoritarianism tries to, but isn’t as successful). Totalitarianism extends the political realm over all spheres of life, bringing us into the realm of (Viereck’s) Metapolitics.

Liberal Democracy

  • Iceland – In the wake of its post-financial crisis constitutional reforms, this small country may claim to have the most direct democracy on Earth.
  • Netherlands
  • California (state government)
  • Germany
  • Finland
  • Sweden – Not as high as it might have been due to the politically-motivated prosecution of Assange.
  • Spain
  • Czech Republic

Semi-Liberal Democracy (tends to be corrupted by moneyed interests and/or other influential interest groups)

  • Canada – A good democracy, but a whiff of a downwards trend under Harper. ↓
  • Belgium
  • Italy – Not a personalistic regime once Berlusconi left, but not helped by the fact that an appointed technocrat now runs it.
  • Portugal
  • Australia
  • Brazil – Arbitrary power structures; extra-judicial murders.
  • France – Paternalistic; corporatist surveillance state; discrimination against minorities. ↓
  • Chile
  • Estonia – Has excellent Internet democracy ideas, but is hampered by discrimination against Russophone minorities.
  • Japan – Paternalistic; ultra-high conviction rates; no gun rights; but ceased being an (effectively) one-party state with recent election of DJP. ↑
  • Bulgaria
  • Mexico – Drug cartels challenge to the state may lead to curtailment of freedom. ↓
  • Switzerland – The last canton only gave women the right to vote in the early 1990′s, and the banning of minarets restricts religious freedom.
  • UK – Corporatist surveillance state; repressive libel & PC laws, regulations; no gun rights; strongly trending to Illiberal Democracy. ↓↓
  • India – Strong tradition of debate & power diffusion, marred by caste inequalities, privilege, political cliquishness, bottom-up free speech restrictions.
  • South Korea – Paternalistic; surveillance state; restrictive regulations, freedom of speech restrictions.
  • Poland
  • Indonesia
  • Latvia
  • Colombia – Pursued illiberal policies vs. FARC, but transitioned to a Semi-Liberal Democracy with recent transfer of power. ↑
  • Romania ↓
  • Argentina – New sweeping media laws bring Argentina close to the bottom of the Semi-Liberal Democracy rankings. ↓
  • Ukraine – In “anarchic stasis” since independence; arbitrary power structures; recently trending to Illiberal Democracy. ↓

Illiberal Democracy (tends to feature oligarchies and personalism)

  • USA – Highest prison population; corporatist surveillance state; runs transnational Gulag; increasingly arbitrary power structures; despite strong freedom of speech protections and surviving separation of powers, it can no longer be considered a Semi-Liberal Democracy after its formal legalization of indefinite detention under the NDAA 2012. ↓
  • Armenia
  • Israel – Severe national security-related civil liberties restrictions; growing influence of settler & fundamentalist agendas over the traditional Zionist foundation; severe new NGO laws, and discrimination against Palestinians makes Israel a downwards-trending Illiberal Democracy. ↓
  • Hungary – The recent Constitutional reforms in Hungary have effectively ended separation of powers, constrained the media, and established a basis for indefinite one-party dominance. It is now the only EU member to qualify as an Illiberal Democracy. ↓↓
  • Russia – Super-presidentialism with no real separation of powers; arbitrary power structures; surveillance state; and as recently shown, elections are subject to moderate fraud. However, new reforms (e.g. opening up of the political space), technical measures (e.g. web cameras at polling stations) and permits for opposition protests at the end of 2011 portend an upwards trend. ↑
  • Venezuela – Increasingly illiberal, especially as regards media laws. ↓
  • Thailand
  • Georgia – Arbitrary power structures; opposition protests broken up; main opposition candidate to Saakashvili stripped of Georgian citizenship.
  • Algeria
  • Turkey – Maintains severe restrictions on free speech (a country that has the world’s largest number of imprisoned journalists, many under bizarre conspiracy charges, can’t really be any kind of liberal democracy); ethnic discrimination; arbitrary power structures; paradoxically, both authoritarian & liberal principles strengthening under influence of Gulenists & AKP. ↓

Semi-Authoritarianism (tends to feature permanent states of emergency)

  • Egypt – Despite the revolutionary upheaval, the military retains wide influence and shoots at protesters in Cairo; this cannot be a democratic state of affairs. The future is uncertain. ?
  • Libya
  • Pakistan
  • Singapore – Overt political repression; repressive laws (esp. on libel); surveillance state.
  • Kazakhstan – Overt political repression; Nazarbayev is Caesar.
  • Azerbaijan – Overt political repression; Aliyev is Caesar.
  • Belarus – Elections completely falsified; overt political repression, and getting worse. ↓
  • Iraq – ↓
  • Iran – Overt political repression; though Velayat-e faqih has embedded democratic elements (under formal clerical “guardianship), in recent years, the system is strongly trending to Authoritarianism as the IRGC clan tries to wrestle the old clerics out of power. ↓


  • Vietnam
  • China – Overt political repression; no national elections (but exist at village level & in some municipalities); the Internet is restricted by the “Great Firewall”, but print & online getting freer to discuss issues unrelated to a few unacceptable topics (e.g. Communist Party hegemony, Tiananmen, etc); may implement new form of political model of “deliberative dictatorship”; trending towards Semi-Authoritarianism. ↑
  • Cuba – Overt political repression; pervasive Internet & media censorship.
  • Uzbekistan
  • Syria
  • Saudi Arabia – Overt political repression; pervasive censorship; very repressive laws; political Islam permeated everyday life, esp. in regard to women’s rights; one law for the Saud family, another for the rest.

Totalitarianism (the realm of metapolitics)

  • North Korea – Not much to say here.
(Republished from Sublime Oblivion by permission of author or representative)
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It’s been a great year! To recap, in rough chronological order, 2011 saw: The most popular post (with 562 comments and counting; granted, most of them consisting of Indians and Pakistanis flaming each other); Visualizing the Kremlin Clans (joint project with Kevin Rothrock of A Good Treaty); my National Comparisons between life in Russia, Britain, and the US; my interview with (now defunct) La Russophobe; interviews with Craig Willy and Mark Chapman; lots of non-Russia related stuff concerning the Arctic, futurism, Esperanto, and the Chinese language; possibly the most comprehensive analyses of the degree of election fraud in the Duma elections in English; TV appearances on RT and Al Jazeera; and what I hope will remain productive relationships with Al Jazeera and Inosmi. Needless to say, little if any of this would have been possible without my e-buddies and commentators, so a special shout out to all you guys. In particular, I would like to mention Alex Mercouris, who as far as I can ascertain is the guy who contributed the 20,000th comment here. I should send him a special T-shirt or something.

In previous years, my tradition was to review the previous year before launching into new predictions. I find this boring and will now forego the exercise, though in passing I will note that many of the defining traits in 2010 – the secular rise of China and of “The Rest” more generally; political dysfunction in the US; growing fissures in Europe, in contrast to Eurasian (re)integration; the rising prominence of the Arctic – have remained dominant into this year. The major new development that neither I nor practically anyone else foresaw was the so-called “Arab Spring”, as part of a pattern of increasing political stress in many other states: Occupy Wall Street and its local branches in the West; the Meetings for Fair Elections in Russia; Wukan in China and anti-corruption protests in India. I don’t disagree with TIME’s decision to nominate The Protester as its person of the year. However, as I will argue below, the nature of protest and instability is radically different in all these regions. I will finish up by reviewing the accuracy of my 2011 predictions from last year.

tsar-putin 1. There is little doubt that Putin will comfortably win the Presidential elections in the first round. The last December VCIOM poll implies he will get about 60%. So assuming there is no major movement in political tectonics in the last three months – and there’s no evidence for thinking that may be the case, as there are tentative signs that Putin’s popularity has began to recover in the last few weeks from its post-elections nadir. Due to the energized political situation, turnout will probably be higher than than in the 2008 elections – which will benefit Putin because of his greater support among passive voters. I do think efforts will be made to crack down on fraud so as to avoid a PR and legitimacy crisis, so that its extent will fall from perhaps 5%-7% in the 2011 Duma elections to maybe 2%-3% (fraud in places like the ethnic republics are more endemic than in, say, Moscow, and will be difficult to expunge); this will counterbalance the advantage Putin will get from a higher turnout. So that’s my prediction for March: Putin wins in the first round with 60%, followed by perennially second-place Zyuganov at 15%-20%, Zhirinovsky with 10%, and Sergey Mironov, Mikhail Prokhorov and Grigory Yavlinsky with a combined 10% or so. If Prokhorov and Yavlinsky aren’t registered to participate, then Putin’s first round victory will probably be more like 65%.

2. I will also go ahead and say that I do not expect the Meetings For Fair Elections to make headway. Despite the much bigger publicity surrounding the second protest at Prospekt Sakharova, attendance there was only marginally higher than at Bolotnaya (for calculations see here). So the revolutionary momentum was barely maintained in Moscow, but flopped everywhere else in the country – as the Medvedev administration responded with what is, in retrospect, a well balanced set of concessions and subtle ridicule. Navalny, the key person holding together the disparate ideological currents swirling about in these Meetings, is not gaining ground; his potential voters are at most 1% of the Russian electorate. And there is no other person in the “non-systemic opposition” with anywhere near his political appeal. There will be further Meetings, the biggest of which – with perhaps as many as 150,000 people – will be the one immediately after Putin’s first round victory; there will be the usual (implausibly large) claims of 15-20% fraud from the usual suspects in the liberal opposition and Western media. But if the authorities do their homework – i.e. refrain from violence against peaceful protesters, and successfully reduce fraud levels (e.g. with the help of web cameras) – the movement should die away. As I pointed out in my article BRIC’s of Stability, the economic situation in Russia – featuring 4.8% GDP growth in Q3 2011 – is at the moment simply not conductive to an Occupy Wall Street movement, let alone the more violent and desperate revolts wracking parts of the Arab world.

3. Many commentators are beginning to voice the unspeakable: The possible (or inevitable) disintegration of the Eurozone. I disagree. I am almost certain that the Euro will survive as a currency this year and for that matter to 2020 too. But many other things will change. The crisis afflicting Europe is far more cultural-political than it is economic; in aggregate terms, the US, Britain and Japan are ALL fiscally worse off than the Eurozone. The main problem afflicting the latter is that it suffers from a geographic and cultural rift between the North and South that is politically unbridgeable.

The costs of debt service for Greece, Portugal, Italy, and Spain are all quickly becoming unsustainable. They cannot devalue, like they would have done before the Euro; nor is Germany prepared to countenance massive fiscal transfers. The result is the prospect of austerity and recession as far as the eye can see (note that all these countries also have rapidly aging populations that will exert increasing pressure on their finances into the indefinite future). Meanwhile, “core Europe” – above all, Germany – benefits as its superior competitiveness allows it to dominate European markets for manufactured goods and the coffers of its shaky banking system are replenished by Southern payments on their sovereign debt.

The only way to resolve this contradiction is through a full-fledged fiscal union, with big longterm transfers from the North to the South. However, the best the Eurocrats have been able to come up with is a stricter version of Maastricht mandating limited budget deficits and debt reduction that, in practice, translates into unenforceable demands for permanent austerity. This is not a sustainable arrangement. In Greece, the Far Left is leading the socialists in the run-up to the April elections; should they win, it is hard to see the country continuing on its present course. On the other side of the spectrum, the Fidesz Party under Viktor Orbán in Hungary appears to be mimicking United Russia in building a “managed democracy” that will ensure its dominance for at least the next decade; in the wake of its public divorce with the ECB and the IMF, it is hard to imagine how it will be able to maintain deep integration with Europe for much longer. (In general, I think the events in Hungary are very interesting and probably a harbinger of what is to come in many more European countries in the 2010′s; I am planning to make a post on this soon).

Maybe not in 2012, but in the longer term it is becoming likely that the future Europe will be multi-tier (not multi-speed). The common economic space will probably continue growing, eventually merging with the Eurasian Union now coalescing in the east. However, many countries will drop out of the Eurozone and/or deeper integration for the foreseeable future – the UK is obvious (or at least England, should Scotland separate in the next few years); so too will Italy (again, if it remains united), Greece, the Iberian peninsula, and Hungary. The “core”, that is German industrial muscle married to Benelux and France (with its far healthier demography), may in the long-term start acquiring a truly federal character with a Euro and a single fiscal policy. But specifically for 2012, I expect Greece to drop out of the Eurozone (either voluntarily, or kicked out if it starts printing Euros independently, as the former Soviet republics did with rubles as Moscow’s central control dissipated). The other PIGS may straggle through the year, but they too will follow Greece eventually.

I expect a deep recession at the European level, possibly touching on depression (more than 10% GDP decline) in some countries.

4. How will Russia’s economy fare? A lot will depend on European and global events, but arguably it is better placed than it was in 2008. That said, this time I am far more cautious about my own predictions; back then, I swallowed the rhetoric about it being an “island of stability” and got burned for it (in terms of pride, not money, thankfully). So feel free to adjust this to the downside.

  • The major cause of the steep Russian recession of 2008-2009 wasn’t so much the oil price collapse but the sharp withdrawal of cheap Western credit from the Russian market. Russian banks and industrial groups had gotten used to taking out short-term loans to rollover their debts and were paralyzed by their sudden withdrawal. These practices have declined since. Now, short-term debts held by those institutions have halved relative to their peak levels in 2008; and Russia is now a net capital exporter.
  • I assume this makes Russia far less dependent on global financial flows. Though some analysts use the loaded term “capital flight” to describe Russia’s capital export, I don’t think it’s fair because the vast bulk of this “flight” actually consists of Russian daughters of Western banking groups recapitalizing their mothers in Western Europe, and Russians banks and industrial groups buying up assets and infrastructure in East-Central Europe.
  • The 2008 crisis was a global financial crisis; at least *for now*, it looks like a European sovereign debt crisis (though I don’t deny that it may well translate into a global financial crisis further down the line). There are few safe harbors. Russia may not be one of them but it’s difficult to say what is nowadays. US Treasuries, despite the huge fiscal problems there? Gold?
  • Political risks? The Presidential elections are in March, so if a second crisis does come to Russia, it will be too late to really affect the political situation.
  • Despite the “imminent” euro-apocalypse, I notice that the oil price has barely budged. This is almost certainly because of severe upwards pressure on the oil price from depletion (i.e. “peak oil”) and long-term commodity investors. I think these factors will prevent oil prices from ever plumbing the depths they briefly reached in early 2009. So despite the increases in social and military spending, I don’t see Russia’s budget going massively into the red.
  • What is a problem (as the last crisis showed) is that the collapse in imports following a ruble depreciation can, despite its directly positive effect on GDP, be overwhelmed by knock-on effects on the retail sector. On the other hand, it’s still worth noting that the dollar-ruble ratio is now 32, a far cry from what it reached at the peak of the Russia bubble in 2008 when it was at 23. Will the drop now be anywhere near as steep? Probably not, as there’s less room for it fall.
  • A great deal depends on what happens on China. I happen to think that its debt problems are overstated and that it still has the fiscal firepower to power through a second global crisis, which should also help keep Russia and the other commodity BRIC’s like Brazil afloat. But if this impression is wrong, then the consequences will be more serious.

So I think that, despite my bad call last time, Russia’s position really is quite a lot more stable this time round. If the Eurozone starts fraying at the margins and falls into deep recession, as I expect, then Russia will probably go down with them, but this time any collapse is unlikely to be as deep or prolonged as in 2008-2009.

new-eurasia 5. Largely unnoticed, as of the beginning of this year, Russia, Belarus, and Kazakhstan became a common economic space with free movement of capital, goods, and labor. Putin has also made Eurasian (re)integration one of the cornerstones of his Presidential campaign. I expect 2012 will be the year in which Ukraine joins the Eurasian common economic space. EU membership is beginning to lose its shine; despite that, Yanukovych was still rebuffed this December on the Association Agreement due to his government’s prosecution of Yulia Tymoshenko. Ukraine can only afford to pay Russia’s steep prices for gas for one year at most without IMF help, and I doubt it will be forthcoming. Russia itself is willing to sit back and play hardball. It is in this atmosphere that Ukraine will hold its parliamentary elections in October. If the Party of Regions does well, by fair means or foul, it is not impossible to imagine a scenario in which accusations of vote rigging and protests force Yanukovych to turn to Eurasia (as did Lukashenko after the 2010 elections).

6. Russia’s demography. I expect births to remain steady or fall slightly (regardless of the secular trend towards an increasing TFR, the aging of the big 1980′s female cohort is finally starting to make itself felt). Deaths will continue to fall quite rapidly, as excise taxes on vodka – the main contributor to Russia’s high mortality rates – are slated to rise sharply after the Presidential elections.

7. Obama will probably lose to the Republican candidate, who will probably be Mitt Romney. (Much as I would prefer Ron Paul over Obama, and Obama over Romney). I have an entire post and real money devoted to this, read here.

The US may well slip back towards recession if Europe tips over in a big way. I stand by my assertion that its fiscal condition is in no way sustainable, but given that the bond vigilantes are preoccupied with Europe it should be able to ride out 2012.

8. There is a 50% (!) chance of a US military confrontation with Iran. If it’s going to be any year, 2012 will be it. And I don’t say this because of the recent headlines about Iranian war games, the downing of the US drone, or the bizarre bomb plot against the Saudi ambassador in the US, but because of structural factors that I have been harping on about for several years (read the “Geopolitical Shocks” section of my Decade Forecast for more details); factors that will make 2012 a “window of opportunity” that will only be fleetingly open.

  • Despite the rhetoric, the US does not want to get involved in a showdown with Iran due to the huge disruption to oil shipping routes that will result from even an unsuccessful attempt to block of the Strait of Hormuz. BUT…
  • While a nuclear Iran is distasteful to the US, it is still preferable to oil prices spiking up into the high triple digits. But for Israel it is a more existential issue. Netanyahu, in particular, is a hardliner on this issue.
  • The US has withdrawn its troops from Iraq. In 2010, there were rumors that the US had made it clear to Israel that if it flew planes over Iraq to bomb Iran they would be fired upon. This threat (if it existed) is no longer actual.
  • The US finished the development of a next-generation bunker-busting MOP last year and started taking delivery in November 2011. But the Iranians are simultaneously in a race to harden and deepen their nuclear facilities, but this program will not culminate until next year or so. If there is a time to strike in order to maximize the chances of crippling Iran’s nuclear program, it is now. It is in 2012.
  • Additionally, if Europe goes really haywire, oil prices may start dropping as demand is destroyed. In this case, there will be an extra cushion for containing fallout from any Iranian attempt to block off the Strait of Hormuz.
  • Critically, the US does not have to want this fight. Israel can easily force its hand by striking first. The US will be forced into following up.

The chances of an Azeri-Armenian war rise to 15% from last year’s 10%. If there is any good time for Azerbaijan to strike, it will be in the chaotic aftermath following a US strike on Iran (though the same constraints will apply as before: Aliyev’s fears of Russian retaliation).


[Source: The Oil Drum].

9. Though I usually predict oil price trends (with great and sustained accuracy, I might add), I will not bother doing so this year. With the global situation as unstable as it is it would be a fool’s errand. Things to consider: (1) Whither Europe? (demand destruction); (2) What effect on China and the US?; (3) the genesis of sustained oil production decline (oil megaprojects are projected to sharply fall off from this year into the indefinite future); (4) The Iranian wildcard: If played, all bets are off. But I will more or less confidently predict that global oil production in 2012 will be a definite decrease on this year.

If investing, I would go into US Treasuries (short-term) and gold to hedge against the catastrophic developments; yuan exposure (longterm secular rise) and and US CDS (potential for astounding returns once SHTF). Property is looking good in Minsk, Bulgaria, and Murmansk. Any exposure to Arctic shipping or oil & gas is great; as the sea ice melts at truly prodigious rates, the returns will be amazing. I do think the Euro will survive and eventually strengthen as the weaker countries go out, but not to the extent that I would put money on it. Otherwise, I highly agree with Eric Kraus’ investment advice.

10. China will not see a hard landing. It has its debt problems, but its momentum is unparalleled. Economists have predicted about ten of its past zero collapses.

11. Solar irradiation was still near its cyclical minimum this year, but it can only rise in the next few years; together with the ever-increasing CO2 load, it will likely make for a very warm 2012. So, more broken records in 2012. Record low sea ice extent and volume. And perhaps 100 vessels will sail the Northern Sea Route this year.

12. Tunisia is the only country of the “Arab Spring” that I expect to form a more or less moderate and secular government. According to polls, 75% of Egyptians support death for apostasy and adultery; this is not an environment in which Western liberal ideas can realistically flourish. Ergo for Libya. I can’t say I have any clue as to how Syria will turn out. Things seem strange there: Russia and Israel are ostensibly unlikely, but actually logical, allies of Assad, while the US, France, the UK, and the Gulf monarchies are trying their best to topple him. These wars are waged in the shadows.

I've got some ways to go before I reach Navalny's demagogic stature.

I’ve got some ways to go before I reach Navalny’s demagogic stature.

13. As mentioned in the intro, 2011 has been a year of protest. As I argued in BRIC’s of Stability, in countries like China, Russia, or Brazil they will remain relatively small and ineffectual. Despite greater scales and tensions, likewise in Europe (though Greece may be an exception); these are old societies, and besides they are relatively rich. They won’t have street revolutions. I do not think Occupy Wall Street has good prospects in the US. By acting outside the mainstream (as part of a “non-systemic opposition”, to borrow from Russian political parlance) it remains irrelevant – the weed smoking and poor sartorial choices of its members works against its attaining respectability – and municipalities across the US are moving to break up their camps with only a few squeaks of protest. (This despite the arrests of 36 journalists, a number that had it been associated with Russia would have cries of Stalinism splashed across Western op-ed pages). I say this as someone who is broadly sympathetic with OWS aims and has attended associated events in Berkeley.

The nature of protest in the Arab world is fundamentally different, harkening back to earlier and more dramatic times: Bread riots, not hipsters with iPhones; against cynical and corrupt dictators, not cynical and corrupt pseudo-democrats; featuring fundamental debates about reconciling democracy, liberalism and religion, as opposed to weird slogans like “Occupy first. Demands come later.” Meh.

14. The world will, of course, end on December 21, 2012.

What about the 2011 Predictions?

1) My economic predictions were basically correct: “Today I’d repeat this, but add that the risks have heightened… The obvious loci of the next big crisis are the so-called “PIGS” (Portugal, Italy, Greece, Spain), and Ireland, Belgium and Hungary.”

2) Neither the Iranian war (chance: 40%) or an Azeri-Armenian war (chance: 10%) took place. If they don’t happen in 2012, their chances of happening will begin to rapidly decline.

3) Luzhkov still hasn’t been been hit with corruption charges, but merely called forth as a witness. Wrong.

Prediction of 3.5%-5.5% growth for Russia was exactly correct (estimates now converging to 4.0%-4.5%).

With headlines this December cropping up such as “End is nigh for Russia’s ‘reset’ with US“, my old intuition that US – Russia imperial rivalry couldn’t be set aside with a mere red plastic button may have been prescient: “In foreign policy, expect relations with the US to deteriorate.”

4) Pretty much correct about the US and the UK, though I didn’t predict anything drastic or unconventional for them.

5) “Oil prices should stay at around $80-120 in 2010 and production will remain roughly stable as increased demand (from China mostly) collides with geological depletion.” Totally correct, as usual.

6) China will grow about 9.4% this year, well in line with: “China will continue growing at 8-10% per year. Their housing bubble is a non-issue; with 50% of their population still rural, it isn’t even a proper bubble, since eventually all those new, deserted apartment blocs will be occupied anyway.”

7) 2011 was the warmest La Nina year on record, so in a sense thermometers did break records this year.

“Speaking of the Arctic, as its longterm ice volume continues to plummet and sea ice extent retreats, we can expect more circumpolar shipping. I wouldn’t be surprised to see up to 10 non-stop voyages along the Northern Sea Route from Europe to China, following just one by MV Nordic Barents in 2010.” If anything, I low-balled it. 34 ships made the passage this year! Sea ice cover was the second lowest on record, and sea ice volume was the lowest. So in the broad sense, absolutely correct.

“Likewise, expect the Arctic to become a major locus of investment.” This year, plans were announced to double the capacity of the Port of Murmansk by 2015.

8) Wrong on the Wikileaks prediction. The insurance file was released by The Guardian’s carelessness (whose journalists, David Leigh and Luke Harding, then proceeded to mendaciously lie about it), not by Assange. And the extradition proceedings are taking far longer than expected, though my suspicions that his case is politically motivated is reinforced by US prosecutors’ apparent pressure on Bradley Manning to implicate Assange in the theft of the State Department cables.

9) On Peter’s enthusiastic reminder, I did get my Russia Presidential predictions for 2012 wrong. Or 75% wrong, to be precise, and 20% right (those were the odds that I gave for Putin’s return back in May). I did however cover it separately on a different post, here. That said, I do not think the logic I used was fundamentally flawed; many other Kremlinologists ended up in the same boat (and most didn’t hedge like I did).

(Republished from Sublime Oblivion by permission of author or representative)
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This is the first post in a series of three, in which I will analyze the major trends that will define the next ten years and their likely impacts on global regions. To put these forecasts into context, I must first describe the narrative through which I view the history of the post-WW2 era (the Oil Age, the Age of Hubris, or as John M. Greer aptly described it, the “age of abundance industrialism” – now on the verge of meeting its Nemesis, the waning of Pax Americana and the demise of global Western hegemony), which is dominated by the concept of “limits to growth” – the 1972 Club of Rome thesis that finite resources and pollution sinks will ensure that business-as-usual economic growth can never continue indefinitely on planet Earth.

A Short History of Abundance Industrialism

Driven by an electro-mechanical revolution powered by a windfall of cheap oil, the world registered its highest GDP growth rates in the 1950-1973 period. The era was defined by self-confidence and a secular “myth of progress”, which reached its apogee with the 1969 moon landings. But the next decade saw the arrival of major discontinuities. American oil production peaked in 1970, and went into decline. Saudi Arabia settled into its role as the world swing producer, enabling it to inflict a severe “oil shock” on Western economies in 1973 to punish them for their support for Israel, to be followed by another in 1979 coinciding with the Islamic Revolution in Iran. The decade also saw milestones such as the publication of Limits to Growth, the ending of hyperbolic growth of the world system, and a new emphasis on conservation and sustainability (which led to significant improvements in fuel efficiency and pollution control – back then, the fruits were all low-hanging, so impressive results were not hard to achieve). Yet the first tentative steps towards sustainability were not to be followed through, as the newly-elected Reagan took office proclaiming “Morning in America!”, with its implicit promise of a return to a past with no future. It was a false dawn.

Thus began the “age of diminished expectations”. In the US, physical production by volume and real working class wages stalled in the 1970′s, and have since been on a plateau (slightly tilted up according to official statistics, slightly tilted down according to unofficial ones). The age of Mammon saw rising inequality, both within and between nations (the sole major exception being China whose ascent to world power began in the late 1970′s). As the American industrial base entered its long atrophy, its economy shifted towards construction, services, and finance, – symbolized by metastasizing suburbia – and made possible by new drilling by the oil majors in remoter areas like Alaska, the Mexican Gulf, and the North Sea, a political-security rapprochement with Saudi Arabia, the IT revolution, and the rise of multinational corporations exploiting globalizing markets and cybernetic technology in a flattening world. Sustainability went out the window; quite literally, as Carter’s solar panels were removed from the White House roof in 1986. Finally, the US harnessed its new role as the focal point of the emerging global neoliberal system to open up their economies to the world, unleashing China’s “surplus armies of labor” and the former USSR’s energy resources in the service of Pax Americana.


[Source: Tracking the ecological overshoot of the human economy, PNAS.]

This new era of international neoliberalism and developed country post-industrialism coincided with the genesis of humanity’s ecological overshoot of the carrying capacity of the Earth. Though the first global pollution alarm in the form of the “ozone hole” led to an impressive response involving a global agreement on the withdrawal of CFC production, the reaction to the growing specter of runaway climate change caused by man-made CO2 emissions – which is ultimately a far more serious issue – has been muted right up until 2009′s Copenhagen fiasco and today. Instead, the party continued in full blast throughout the 1990′s, for the US was too busy basking in the glow of the ostensible end-of-history triumph of “Western liberal democracy as the final form of human government”.

These hubristic visions of imminent utopia, of global drive-in democracy, collided with hard reality in the first decade of what was supposed to be a “new American century”. The United States is in a state of severe economic disequilibrium and has been in rapid decline relative to its competitors – a condition reminiscent of the USSR in the 1980′s. The probable decline and fall of the global order of which it is the locus will constitute the defining trend of the next decade.

Shifting Winds: The End of Pax Americana

What is Pax Americana? It is the liberal, internationalist, post-Cold War order, which has extended its reach throughout the whole world barring a few socialist holdovers like Cuba and North Korea. Globalization, rule of law, human rights, liberal democracy, free markets, economic growth – these are its self-defined values, which it considers to be the apex of humanity’s socio-political evolution. Its critics, from Western leftists to Third World nationalists, decry it as an exploitative, ruinous, imperialist, hypocritical, end-of-history theology, with voluminous references to the inconsistent ways in which these values are practiced by their own sponsors, or wielded as weapons against its ideological and geopolitical competitors.

But these arguments will soon become academic. As demonstrated by Robert Ayres, there is a glaring hole at the center of modern macroeconomic theory – accounts of growth neglect the vital role of “useful work” (a function of exergy and technical efficiency), whose contribution far outweighs that of labor and capital combined. Both factors have been flattening in the US in recent years, making further growth unsustainable. Furthermore, studies in systems dynamics indicate that brittle systems, with poor “shock absorbers”, can be subject to so-called “cascade collapse“, in which failures at one node produce a self-amplifying resonance that causes many other nodes to fail. If this is an accurate description of the global System, then a setback in any one sphere – be it economic, financial, geopolitical, etc – could usher in a vicious spiral into anarchic apolarity on the international stage.

Pax Americana and its neoliberal ideological superstructure rests on three pillars: cheap oil, American dollars, and the US Navy. Like the legs of a tripod, they all survive – or fall – together. And today, they are crumbling. Let us examine the forces that will be undermining these pillars in the next decade:

Peak Oil

Contrary to the “doomer” worldview, it is almost certainly possible to sustain an industrial civilization without a drop of oil (though ceteris paribus it will be a materially poorer one, because of oil’s uniquely high EROEI). The problem is that today’s industrial system, especially in the US, is built in such a way – gas-guzzling SUV’s on asphalt roads slithering across endless vistas of soulless suburbia – that cheap oil is indispensable to making the commutes and credit flows, the jet flights and JIT production systems, function. An even bigger problem is that Hubbert’s predictions of a global oil peak are (roughly) on schedule: though delayed by the 1970′s oil shocks, it is likely that either 2008 or 2010 was the all-time peak, and oil production will now decline at an accelerating rate – even without accounting for possible discontinuities like a global credit implosion, a sudden collapse of Ghawar, the spread of revolution to Saudi Arabia, or Iranian mining of the Straits of Hormuz.


[Source: World Oil Production Forecast - Update November 2009, Oil Drum. Click to enlarge.]

The US spent prodigious sums to fight a war to open up Iraq’s oil reserves, but today its oil production is no higher than in 2000 (and hopes of massively increasing it are probably unrealistic). Russia has reconsolidated state control over its hydrocarbon deposits, discounting Western recriminations over its “resource nationalism”, and has successfully pushed back against Washington-backed “color revolutions”. Central Asia never proved to be the black gold lode of American geostrategic fantasy, and in any case it has since been closed off again by Russia. Due to their immense capital costs, environmental impact, and low energy-return-on-energy-invested (EROEI), there can be no salvation in tar sands or shale. Nor have there been any efforts at mitigation of the kind recommended in the Hirsch report. Any energy transition will be a very drawn-out process, considering the sheer scale of the infrastructure that will have to be replaced – and using continuously lower-EROEI energy sources!

As such, it can be said with a high degree of certainty that the world will soon experience a severe shortfall in liquid fuels. Because of its high degree of dependence on cheap oil, this will affect the US disproportionately, which will have to make good with demand destruction. The consequences will include major knock-on effects on consumers, who constitute the mainstay of American economic power.

State Insolvency

The geological realities of peak oil (2005-2010), in combination with soaring demand from industrializing Asia, have led to the worst crisis since the Great Depression, with the free-fall only being checked by a dizzying panoply of monetary flooding, fiscal stimulus, and government bailouts. As if this weren’t enough, the US faces rising entitlements costs as the baby boomers start retiring, a bloated military-industrial complex, and increasing commitments to Afghanistan with no timetable in sight (where there are now more US troops than there were at the peak of the Soviet intervention).


[The US budget deficit is predicted to permanently remain in the red even under the rosiest assumptions. As of now, it is the more pessimistic scenarios that are being born out - Republican refusals to raise tax rates or cooperate on Medicare; Soviet-like rhetoric about "defense cuts" while real military spending continues rising; etc.]

Now the major reason why the US has been able to afford both guns (the US military) and butter (its double deficits) in the face of deindustrialization was by giving its many foreign investors an atrocious rate of return, which they accepted in return for America’s “alpha” – its reputation as the largest economy, sole superpower, and global financial center, in other words, the “safe haven” par excellence. It also draws immense strength from the US dollar’s role as the global reserve currency, for instance by allowing it to comfortably buy oil at $-denominated prices even when the currency is weak. But with its “imperial overstretch” (see Afghanistan), moribund financial system, and a budget deficit north of 10% of GDP and projected to remain in the red for the foreseeable future – by some measures, US debt and fiscal metrics are worse than those of the PIGS on aggregate – will this American “alpha” survive? Probably not for much longer.

The creeping monetization of US debt will destroy investor confidence that they will ever make a positive return on their US bond investment. The withdrawal of a single major investor, especially if it coincides with a geopolitical shock, could set off a “cascading collapse” as other investors scurry away from US Treasury bonds. This will leave the US incapable of generating the primary surpluses to service its negative net foreign investment position, leading either to a compound debt trap or a classic emerging market-style currency crisis. Ice or fire? Given America’s democratic system and the bipartisan consensus on fiscal profligacy, I would bet on the latter.

Economic Decline

The collapse of what in some respects resembles an informal tributary system, channeling global (i.e. Asian) savings to the American consumer, will sound the death knell for Pax Americana. As Paul Kennedy argued in The Rise and Fall of the Great Powers, military power is ultimately subordinate to the economic base which supports it. The industrial base that won the Second World War and forged the American superpower has been in decline since the 1970′s – though on paper it boasted a high productivity growth rate, it masked a huge decline in the size and complexity of its “industrial ecosystem”. Mundane manufacturing, the automotive industry, and machine building have all experienced rapid decline; the heavily-subsidized aerospace and defense industries constitute the only major exceptions to this trend.

Now as long as globalization, free trade, and stability reigned, this did not portend international decline. Industrial hallowing out simply freed up workers into sectors that were more in demand, like restaurants, construction, services of all kinds, etc; and women gained many more economic opportunities. The US could get its manufactures from abroad, like Spain during its (literal) Golden Age. Furthermore, the transition from manufacturing to consumption and finance is historically not without precedents, being observed in the halcyon days of empires like Holland and Great Britain. After these former empires had established their initial industrial supremacy through mercantile means, they transitioned to free-trade regimes designed to reinforce their economic hegemony – and in so doing “kicked away the ladder” from countries trying to catch up. (The United States itself was one of the world’s most protectionist nations until the Second World War, at the end of which it accounted for half of global industrial output and drastically reduced tariff rates).

However, as pointed out above, the crumbling of two pillars of Pax Americana, cheap oil and the US dollar, makes the survival of today’s comfortable globalization highly unlikely. When the inflows of cheap credit from abroad cease; when oil flows decline due to geological, political, and geopolitical factors – the US will no longer be able to maintain its privileged position as the world’s “market dominant minority“, its overstretched armed forces will no longer have access to the lavish funding of the days of yore, and the neoliberal world order they upheld will come to an end.

Geopolitical Shocks

Facing the twinned specter of peak oil and fiscal insolvency and supported by an atrophied industrial base, Pax Americana could in fairness be described as a “brittle system” under a growing threat of collapse. Though it may yet fade away gradually into the night, to be slowly displaced by the state-centered, neo-Westphalian, mercantile reality of “world without the West“, it is altogether possible that geopolitical shocks will make the transition far more abrupt and chaotic than expected.

Though nothing’s certain, it is possible, likely even, that the biggest shock will emanate from a confrontation between Iran and the US in the Persian Gulf. Since 2005, the hardline IRGC paramilitary / intelligence clan, whose figurehead is Ahmadinejad), has been in the ascendant in Iran. Their power was further reinforced in 2009 when the Supreme Leader Khamenei sided with the IRGC in the aftermath of the abortive “Green Revolution” spearheaded by the waning “moderate” clerical clan (headed by Rafsanjani), in response to Mousavi’s electoral loss. These internal Iranian developments occurred in tandem with the rising tensions with Israel, Saudi Arabia, and the US over Iran’s pursuit of an nuclear bomb, amidst the window of opportunity left open to the Islamic Republic by the US quagmire in Iraq. Iran sees the Bomb as the best guarantor of regime security by allowing it to establish a regional hegemony in the Persian Gulf region.

This is unacceptable to everyone in the region. Israel views an Iranian bomb as an existential threat; Ahmadinejad expresses the opinion of 62% of Iranians when he says the Israel state should be wiped off the map. The Jewish state is now ruled by Benjamin Netanyahu, a man who in 2007 opined: “It’s 1938, and Iran is Germany, and Iran is racing to arm itself with atomic bombs”. Not much room for compromise there. The rulers of Saudi Arabia, beset by Iranian-stoked ferment amongst their Shi’ite population and undermined by the Iran-backed al-Houthi insurrection on their Yemeni border, view the prospect of an Iranian bomb with similar trepidation. Though they will protest in public, they will be quite happy to see an Israeli-American strike on Iran; rumor has it that Saudi officials have given Israel permission to fly over their territory via backdoor diplomatic channels.

The US is hesitant. Striking Iran carries great risks. First, no matter how good and accurate your bombs are – the US has accelerated the development of a bunker-buster capable of penetrating 60m of reinforced concrete – they are only worth their weight if you know precisely where to strike. Iranian nuclear facilities are highly dispersed and concealed, making the extent of US intelligence on them uncertain. Second, Iran can mine the Strait of Hormuz and harass oil tankers with coastal shore batteries, diesel submarines, and merchant raiders. This will put at risk 20% of the global oil supply; even if the blockade proves ineffective, as predicted by most analysts, soaring insurance rates may result in oil prices spiraling into new highs due to unprecedentedly tight supplies. Third, the Islamic Republic has a panoply of retaliatory options at its disposal: a renewed Hezbollah missile barrage against Israel, increased support for Shi’ite insurgencies in the Arabian peninsula, and above all a resurgence of political violence and state instability in Iraq. As mentioned above, hopes have been pinned on Iraq to delay global peak oil by another decade. Yet it has always been a land of unfulfilled potential, its imminent oil production takeoff regularly stymied once per decade – in 1979 with the outbreak of the Iran-Iraq War, in 1991 with the Gulf War, in 2003 with the US invasion. It would not be out of character for its oil production to plummet again in 2012, in the face of renewed internecine warfare, Iranian incursions, and mining of the Strait of Hormuz.

Given all these risks and uncertainties, it is not surprising that the US is pursuing a cautious approach, restraining Israel and pushing for “crippling” sanctions on Iran, targeting its gasoline imports. However, the latter will not achieve much, especially since Russia – which has not received the firm recognition of its sphere of influence over the post-Soviet space that it really wants from Washington – will be able to torpedo any sanctions by allowing Iran to import gasoline through its Central Asian surrogates. Israel may grow impatient and eventually jump the gun without US permission. But Iran will likely consider Israeli and US actions to have been coordinated, and will embark on its “Project Mayhem.” The US may be forced to rush in and respond unprepared to contain the fallout as best it could. Now it is true that alarmist predictions that the US Navy will be crippled by Iranian low-tech swarm attacks are largely unsubstantiated, and there is no question that the US will have no trouble in gaining full air superiority over the obsolete Iranian integrated air defense system. However, defeating Iran’s dispersed retaliatory assets in detail may be a difficult and prolonged undertaking, perhaps even requiring the military occupation of strategic Iranian regions such as Khuzestan and Kish Island.

The US finds itself caught in a Catch-22 situation. Let Iran be, and it develops a nuclear deterrent allowing it to make a bid for regional hegemony – if it is not preempted by an Israeli strike. Attack Iran, and needless to say, anything worse than the most optimistic scenarios (in which the Strait of Hormuz only remains blocked for a few days) will constitute a tremendous physical and psychological shock for Pax Americana, a shock in which all its three pillars come under strain in the form of oil supply disruptions, financial turbulence, and prolonged aeronaval operations.


In conclusion, given the inherent fragility of the neoliberal world order and the mounting stresses on it in the years ahead, stresses that could be explosively released in a major geopolitical crisis – possible in Iran, though major clashes in other hotspots like the Caucasus or the East China Sea cannot be dismissed – it is unlikely that Pax Americana will survive the decade.

Yet its collapse will not herald a global collapse and a sudden descent into the Olduvai Gorge, for Pax Americana is ultimately just a subsystem of a larger system – that of global industrialism, the System that encompasses virtually the entire world, with the sole exception of hunter-gatherer remnants in the Amazonian fastnesses and a few mystical recluses. The American empire, much like the Soviet one, will retreat from globalist pretensions, while maintaining a continental hegemony. In the meantime, powered by domestic coal and a new kind of resource tributary system – one based on bilateral deals instead of open markets – China will be well on its world-historical “great reconvergence” with the West, making it the preeminent superpower of the age of scarcity industrialism.

The geopolitics of scarcity industrialism are the topic of the next monograph in this series.

(Republished from Sublime Oblivion by permission of author or representative)
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This might well be my favorite cable so far – perhaps even better than the Caucasus wedding – courtesy of US ambassador to Iran Bruce Laingen in August 1979. Now maybe US diplomats are culturally West-centric and insular today, but they’ve got nothing on their predecessors. “Perhaps the single dominant aspect of the Persian psyche is an overriding egoism. Its antecedents lie in the long Iranian history of instability and insecurity which put a premium on self-preservation. The practical effect of it is an almost total Persian preoccupation with self and leaves little room for understanding points of view other than one’s own.” No wonder the US hasn’t had much luck communicating with the Islamic Republic

Reference ID Created Released Classification Origin
79TEHRAN8980 1979-08-13 04:04 2010-11-28 18:06 CONFIDENTIAL Embassy Tehran
R 130458Z AUG 79

E.O. 12065: GDS 8/12/85 (TOMSETH, VICTOR L.) OR-P

















(Republished from Sublime Oblivion by permission of author or representative)
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Another Wikileaks cable – a secret one, not merely confidential – from our Caucasus ethnologist and bestest bud at the State Department, William Burns. Dated October 2007, it describes America’s perception of Russia’s global arms trade and emphasizes its concerns that many of its partners are “rogue” or “anti-American” states like Syria, Iran and Venezuela. However, Burns is intelligent enough to acknowledge that the Russians have their own economic, political and cultural reasons for doing things they way. Though obliged to provide suggestions on how to make Russian politicians see eye to eye with the US on the matter, it is likely a quixotic endevour.

Russia is expanding arms exports, seeking ties beyond its traditional partners India and China. (Burns correctly predicted that the Russia – China arms relationship will wane due to Chinese reengineering, copying and reproduction of Russian military products). The capture of most NATO and former Soviet markets by US and European military companies is the primary economic agent behind Russia’s courting of states that Washington has bad relations with. In reply to Western objections, Russia tends to reference “multilateral arms controls regimes (e.g. Wassenaar Group, MTCR, etc.), UN resolutions, or Russian law” in justification; and US protests against its entertainment of “Chavez’s grandiose regional visions” are believed, by the RF Foreign Ministry and Russian defense experts, to spring from “a “Monroe doctrine” mentality, and not real concerns over regional stability.” Finally, a lack of economic diversification actively PUSHES Russia into the arms trade: as Anatoly Kulikov pithily notes, “Russia makes very bad cars, but very good weapons.”

Burns then notes that the Russian MIC is an “important trough at which senior officials feed”, citing as an example “Russia’s decision to sell weapons that the Venezuelan military objectively did not need.” If true, isn’t this just Venezuelan stupidity or corruption? But according to Burns, this is because it’s in the “interest of both Venezuelan and Russian government officials in skimming money off the top.” Color me skeptical. According to Burns’ own sources, the 2006 arms trade between Russia and Venezuela totaled more than $1.2bn, and included “24 Su-30MK2 fighter-bombers and 34 helicopters”; more recently, the two countries began to negotiate the “sale of three Amur class submarines” in a prospective deal worth $1bn. This implies price tags of c.$50mn per fighter and c.$350mn per sub. However, according to my calculations, despite having unit production costs similar to Russia’s, the prices of US gear sold to Arab states are several times higher – c.$170mn per F-16 fighter to Iraq and a cool $360mn per F-15 fighter to Saudi Arabia. This implies that the US sells fighter jets of 1970′s vintage to at least one country AT A HIGHER UNIT PRICE than at which Russia sells its most modern diesel SUBMARINES to Venezuela! So not much spare room at Russia’s side of the “feeding trough”, at any rate…

Then it’s argued there is also a cultural element to Russia’s arms trade policy, namely, an “inferiority complex” with respect to the US that translates into a kind of overcompensating need to prove itself as an independent Great Power in the eyes of the world and its own citizens. This is meant to explain its desire for the “thrill of causing the US discomfort by selling weapons to anti-American governments in Caracas and Damascus.” These arguments are mostly sociological truthiness that I think don’t merit detailed rejoinders.

The analytical decline towards the end is reflected in toothless recommendations, such as a more concerted policy by European, Sunni Arab and Latin American governments, as well as the US itself, to pressure and cajole Moscow into easing back on its weapons sales to “rogue” and US-unfriendly states. Whether or not the recommendation was followed, it is evident that it’d be destined for failure, and I think Burns himself acknowledged this in the cable (“American concerns are interpreted cynically, as the disgruntled complaints of a competitor, and viewed through the prism of a 1990′s story line in which the West seeks to keep Russia down”).

Ultimately, with today’s Russia, it is geopolitics and quid pro quo deals that influence its conduct. To take one germane and ongoing example: The US made concessions during the Reset, e.g. easing back on US companies getting involves with Russia’s modernization and even mooting selling Russia some of its military techs; in return, Russia formally declined to sell the S-300 air defense system to Iran, thus (ostensibly) losing a major lever against Washington. But with the recent Republican victory and rumors of covert US rearming of Georgia, there appeared countervailing rumors of S-300 radar parts making their way to Iran via Russia’s proxy states. The lesson is one that Burns no doubt understands, but cannot state forthright: one rarely gets a free geopolitical lunch.

Reference ID Created Released Classification Origin
07MOSCOW5154 2007-10-26 02:02 2010-12-01 23:11 SECRET Embassy Moscow
DE RUEHMO #5154/01 2990225
P 260225Z OCT 07

S E C R E T SECTION 01 OF 04 MOSCOW 005154



EO 12958 DECL: 10/09/2017
REF: A. STATE 137954 B. MOSCOW 3207 C. MOSCOW 3139 D. MOSCOW 3023 E. MOSCOW 557 F. MOSCOW 402

Classified By: Ambassador William J. Burns. Reasons 1.4 (b) and (d).

1. (C) Summary: FM Lavrov’s disinterest in establishing an expert level dialogue on arms sales begs the question of how best to address our concerns over Russia’s arms export policy. Russian officials are deeply cynical about our motives in seeking to curtail Russian arms exports to countries of concern and the threatened imposition of U.S. sanctions has not proven successful so far in modifying Russian behavior. Russia attaches importance to the volume of the arms export trade, to the diplomatic doors that weapon sales open, to the ill-gotten gains that these sales reap for corrupt senior officials, and to the lever it provides the Russian government in stymieing American interests. While Russia will reject out of hand arguments based on the extraterritorial application of American sanctions, Russian officials may be more receptive to a message couched in the context of Russian international obligations and domestic legislation, the reality of American casualties, and the backlash to Russian strategic interests among moderate Sunni governments. In making our argument, we should remember that Russian officialdom and the public have little, if any, moral compunction about the arms trade, seeing it instead as a welcome symbol of Russia’s resurgent power and strength in the world. End Summary

Russian Arms Sales Matter

2. (C) Russian arms sales are consequential, totaling approximately USD 6.7 billion in 2006, according to official figures. This amount reflects a 12 percent increase over 2005, and a 56 percent increase since 2003. Russian arms sales are expected to total at least USD 8 billion in 2007. Russia has made a conscious effort to improve after-sales customer service and warranties, which has added to the attractiveness of its weapons. As a result, Russian weapons command higher prices than previously. Russia is ranked second only to the United States in arms sales to the developing world, and a sizeable portion of its arms trade is with countries of concern to us.

3. (C) While no sales were reported in 2006 to Iran, Syria, or Sudan, in 2007 Iran reportedly paid Russia USD 700 million for TOR-M1 air defense missile systems. While Syrian economic conditions are a natural brake on trade with the Russians, as a matter of principle the GOR is prepared to sell “defensive” equipment such as anti-tank missiles and Strelets (SA-18) surface-to-air missiles, as well as upgrade MiG-23 fighters. The GOR barred the sale of Iskander-E tactical missiles to Syria only after intense international pressure. Venezuela remains a growth market, with arms transfers in 2006 totaling more than USD 1.2 billion, including 24 Su-30MK2 fighter-bombers and 34 helicopters. Russia has an “open arms” approach to Venezuela, and whether it’s the transfer of more than 72,000 AK-103 assault rifles or negotiations for the prospective sale of three Amur class submarines (valued at USD 1 billion), Russia is prepared to entertain Chavez’s grandiose regional visions.

4. (C) Defense experts emphasize that the American and European domination of traditional NATO markets and capture of new entrants (and old Soviet customers) from Central and Eastern Europe means that Russia must court buyers that fall outside the U.S. orbit. By definition, Iran, Syria, and Venezuela are good markets for Russia because we don’t compete there.

5. (C) While concrete numbers are hard to come by, our best figures indicate that Russian arms sales to its traditional big-ticket customers — China and India — are growing. Russian experts, however, predict a declining trajectory in the medium term. In 2006, Russia completed approximately USD 1.4 billion in sales to China, including eight diesel submarines and 88 MI-171’s, which means the PRC only narrowly edged out Chavez as Russia’s most important customer. Russian defense experts underscore that as China’s technological sufficiency and political influence grow, the PRC will develop increasing military self-sufficiency and greater ability to challenge Russia as a supplier. At the same time, sales to India totaled only USD 360 million. Russia and India, in fact, have signed arms deals worth USD 2.6 billion, but not all deliveries and payments have been made. While Russian experts still downplay the ability of the U.S. to displace Russia in the Indian arms market, for reasons of cost and the legacy of decades’ old dependence, they recognize increasing American inroads and growing influence. Other notable Russian markets include Algeria, Czech Republic, Vietnam, South Korea and Belarus.

A Legalistic World View

6. (S) As the recent 2 2 consultations confirmed, Russian officials defend arms sales to countries of concern in narrow legal terms. In answering our demarches, MFA officials always identify whether the transfer is regulated by one of the multilateral arms controls regimes (e.g. Wassenaar Group, MTCR, etc.), UN resolutions, or Russian law. Senior officials maintain that Russia does take into account the impact on the stability of the region in determining whether to sell weapons and shares our concern about weapons falling into terrorists’ hands. This Russian decision-making process has led to a defacto embargo on weapons transfers to Iraq, where Russia is concerned over leakages to Iraqi insurgents and Al-Qaida; to a hands-off policy towards Pakistan, the country Russia views as the greatest potential threat to regional stability (with then-Russian Foreign Minister Igor Ivanov ruling out weapons sales to Pakistan as far back as 2003); and to a moratorium on “offensive” systems to Iran and Syria. Concern over leakage has prompted Russia to tighten its export controls, with the recent institution of new provisions in arms sale contracts for Small Arms and Light Weapons (SALW) that require end-user certificates and provide Russia the right to inspect stockpiles of weapons sold.

7. (S) What Russia has not done is accept our strategic calculus and rule out the possibility of sales to Iran, Syria, Sudan, or Venezuela. The arguments made are broadly similar:

– With Iran, we are told that that Russia will not sell any weapon that violates a multilateral or domestic regime, nor transfer any item that could enhance Iranian WMD capabilities. Sales, such as the TOR-M1 air defense missile system, are justified as being defensive only, and limited by their range of 12 kilometers. While DFM Kislyak told us October 18 that he was unaware of any plans to sell Iran the S-300 long-range surface-to-air missile system, MFA officials previously told us that such sales, while under review, would not violate any Russian laws or international regimes.

– With Syria, Russia also argues that its transfers are defensive in nature, and points to its decision to halt the sale of MANPADS. The MFA maintains that Russian weapons used by Hizballah in 2006 were not a deliberate transfer by the Syrian government, but involved weapons left behind when Syrian forces withdrew from Lebanon. Russia argues that tightened end-user controls will prevent any future transfers.

– With Sudan, the GOR denies any current arms trade with the regime, and maintains that Russia has not violated UN sanctions or Putin-initiated decrees. However, based on our demarches, it is clear that — in contrast to Syria — Russia has adopted a “don’t ask, don’t tell” approach to Sudan’s adherence to its end-use requirements for its existing inventory of Russian/Soviet weapons.

– With Venezuela, both MFA officials and Russian experts believe that a “Monroe doctrine” mentality, and not real concerns over regional stability, is behind U.S. demarches.

What Is Behind the Russian Calculus

8. (C) A variety of factors drive Russian arms sales, but a compelling motivation is profit – both licit and illicit. As former Deputy Prime Minister and senior member of the Duma Defense Committee Anatoliy Kulikov told us, “Russia makes very bad cars, but very good weapons,” and he was among the majority of Russian defense experts who argued that the laws of comparative advantage would continue to propel an aggressive arms export policy. While Russian defense budgets have been increasing 25-30 per cent for the last three years, defense experts tell us that export earnings still matter. The recent creation of RosTechnologiya State Corporation, headed by Putin intimate Sergey Chemezov, which consolidates under state control RosOboronExport (arms exports), Oboronprom (defense systems), RusSpetsStal (specialized steel production), VSMPO (titanium producer), and Russian helicopter production, is further proof of the importance the Putin government places on the industry.

9. (C) Likewise, it is an open secret that the Russian defense industry is an important trough at which senior officials feed, and weapons sales continue to enrich many. Defense analysts attribute Russia’s decision to sell weapons that the Venezuelan military objectively did not need due to the interest of both Venezuelan and Russian government officials in skimming money off the top. The sale of Su-30MK2 fighter-bombers was cited as a specific example where corruption on both ends facilitated the off-loading of moth-balled planes that were inadequate for the Venezuelan Air Force’s needs.

10. (C) A second factor driving the Russian arms export policy is the desire to enhance Russia’s standing as a “player” in areas where Russia has a strategic interest, like the Middle East. Russian officials believe that building a defense relationship provides ingress and influence, and their terms are not constrained by conditionality. Exports to Syria and Iran are part of a broader strategy of distinguishing Russian policy from that of the United States, and strengthening Russian influence in international fora such as the Quartet or within the Security Council. With respect to Syria, Russian experts believe that Bashar’s regime is better than the perceived alternative of instability or an Islamist government, and argue against a U.S. policy of isolation. Russia has concluded that its arms sales are too insignificant to threaten Israel, or to disturb growing Israeli-Russian diplomatic engagement, but sufficient to maintain “special” relations with Damascus. Likewise, arms sales to Iran are part of a deep and multilayered bilateral relationship that serves to distinguish Moscow from Washington, and to provide Russian officials with a bargaining chip, both with the Ahmedinejad regime and its P5 1 partners. While, as a matter of practice, Russian arms sales have declined as international frustration has mounted over the Iranian regime, as a matter of policy, Russia does not support what it perceives as U.S. efforts to build an anti-Iranian coalition.

11. (C) A third and related factor lurking under the surface of these weapons sales is Russia’s inferiority complex with respect to the United States, and its quest to be taken seriously as a global partner. It is deeply satisfying to some Russian policy-makers to defy America, in the name of a multipolar world order, and to engage in zero-sum calculations. As U.S. relations with Georgia have strengthened, so too have nostalgic calls for Russian basing in Latin America (which Russian officials, including Putin, have swat down). While profit is still seen by experts as Russia’s primary goal, all note the secondary thrill of causing the U.S. discomfort by selling weapons to anti-American governments in Caracas and Damascus.

Taking Another Run At Russia

12. (C) As FM Lavrov made clear during the 2 2 consultations, Russia will not engage systematically at the expert level on its arms export regime. While the prospect of Russia changing its arms export policy in response to our concerns alone is slim, we can take steps to toughen our message and raise the costs for Russian strategic decisions:

– Although U.S. sanctions are broad brush, the more we can prioritize our concerns over weapons sales that pose the biggest threat to U.S. interests, the more persuasive our message will be. Demarches that iterate all transactions, including ammunitions sales, are less credible. Since Lavrov has rejected an experts-level dialogue on arms transfers, it is important to register our concerns at the highest level, and to ensure that messages delivered in Moscow are reiterated in Washington with visiting senior GOR officials.

– In the context of potential violations of international regimes and UNSCR resolutions, Russia needs to hear the concerns of key European partners, such as France and Germany. (In the wake of the Litvinenko murder and subsequent recriminations, UK influence is limited.) EU reinforcement is important for consistency (although Russia tends to downplay the “bad news” that European nations prefer to deliver in EU channels, rather than bilaterally).

– Regional actors should reinforce our message. Russian weapon sales that destabilize the Middle East should be protested by the Sunni Arab governments that have the most to lose. Given Russia’s competing interest in expanding sales to Saudi Arabia and the Gulf states, the protests of our moderate Arab partners could also carry a price tag for Russian defiance. The same is true for Latin America, whose leaders to date have not made sales to Chavez an issue on their bilateral agenda with the Russians.

– The appearance of Russian weapons in Iraq, presumably transferred by Syria, and the prospect of American and coalition casualties as a result could change the calculus of Russian sales to Damascus. The more evidence that we can provide, the more Russia may take steps to restrict the Asad regime. At the same time, we need to be prepared for the Russian countercharge that significant numbers of weapons delivered by the U.S. have fallen into insurgent hands.

– Finally, providing the Russians with better releasable intelligence when arguing against weapons transfers to rogue states is essential. Our Russian interlocutors are not always impressed by the evidence we use to prove that their arms are ending up in the wrong hands. While we doubt Russia will terminate all its problematic sales for the reasons described above, more compelling evidence could lead the GOR to reduce the scope of its arms transfers or tighten export controls.

Final Caveat

13. (C) There are few voices in Russia who protest the sale of weapons to countries of concern and no domestic political constraints that tie the hands of Russian policymakers on this score. The pride that Russian officialdom takes in the arms industry as a symbol of Russia’s resurgence is largely shared by average Russians. American concerns are interpreted cynically, as the disgruntled complaints of a competitor, and viewed through the prism of a 1990’s story line in which the West seeks to keep Russia down, including by depriving it of arms markets.


(Republished from Sublime Oblivion by permission of author or representative)
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It’s sad, but not unexpected, to see the usual motley of neocons, freepers and general creeps crawling about the interwebs, baying for Assange’s blood and calling for him to be disappeared into the Nacht und Nebel. But it is absolutely tragic that, misled by the MSM and dulled by their own cynicism, so many people who in other times might have resisted those right-wing thugs, instead just content themselves with making smartass remarks about how Cablegate has revealed nothing new or consequential (or even, implausibly and disingenuously, accuse Wikileaks of being a CIA front tasked with spreading pro-US disinformation).

Now even if this charge were valid, it would be no reason to dismiss a project that is enabling the rise of “contemporary history” and opening up the cynical workings of geopolitical actors to a public that is nowhere near as familiar with them as those smug commentators. And it’s no reason whatsoever not to condemn the enraged lunatic fringe calling for Wikileaks to be branded a terrorist organization (with all the attendant consequences for its members’ life expectancy), or not to confront the “moderates” like Joe Lieberman who intimidate private enterprises into joining the crusade against Wikileaks and through their actions enable the extremists. [BTW, a fun factoid: one of old Joe's biggest hobbies is bashing Russia for its human rights abuses, such as breaking up (unsanctioned) protests: such atrocities never happen in the US, of course.]

But even that isn’t all there is to it, because if you look deeply enough, there ARE many, many very interesting revelations in these cables. It’s just that the Western MSM, beholden to the corporate and political elites that provide it with audiences, sources and funding, is actually COLLUDING with their governments, and above all the US government, to conceal or ACTIVELY DISTORT the content of many of these cables. And with great success, as even the skeptics and free thinkers are drawn into the resulting narrative.

Even the Empire's satirists are its (unwitting) servants...

Even the Empire’s satirists are its (unwitting) servants…

Take a look at that cartoon above. See that “flabby old chap” Kim Jong-il of North Korea handing a nice fat missile to Iranian President Ahmadinjad (the one about to be stabbed by the fat Arab with shades)? That part of the cartoon reflects an NYT story that – based on a cable that it refused to reprint under pressure from the Obama administration – supposedly claimed that “secret American intelligence assessments have concluded that Iran has obtained a cache of advanced missiles, based on a Russian design, that are much more powerful than anything Washington has publicly conceded that Tehran has in its arsenal.” So it’s politically accurate and cynically subversive artwork, right?

Unfortunately, no. Thanks to yeoman investigative journalism by Gareth Porter, the NYT story WAS MISSING A CRITICAL HALF: the tight Russian arguments that in fact no such missiles were known to exist in North Korea (let alone Iran), and that a weapons transfer of such magnitude between the two countries was impossible. His article Wikileaks Exposes Complicity of the Press is a rare example of what real journalist is about and cannot be recommended enough. It also illustrates that, by deliberately overlooking the Russian objections to American assessments of Iran’s missile capabilities, the authors of the NYT article deliberately slanted their coverage, in such a way that “a key Wikileaks document which should have resulted in storiescalling into question the thrust of the Obama administration’s ballistic missile defense policy in Europe based on an alleged Iranian missile threat has instead produced a spate of stories buttressing anti-Iran hysteria.”

But it gets even darker. Thanks to the commendable efforts of our freedom-protecting friends at the Department of Homeland Security to intimidate companies “hosting WikiLeaks to immediately terminate its relationship with them,” – BTW, any chance that the Tea Party will get up in arms over this latest intrusion of the Obama socialist regime into private business? LOL. – by the time I tried to access the original cable, the original site was down.

Though you can still browse Wikileaks through the IP quad, I couldn’t find that cable there. AFAIK, the only remaining online copy of the offending cable – at least now, if and until Wikileaks restores it – is in the Internet graveyard that is" href="">Google Cache. But not any longer. I’m reprinting the whole thing below in solidarity with the Wikileaks idea. (In particular, please read #26 and #29).

(And expect more in the future. Like Sean Guillory and Russian Reporter, I too intend to cover many more leaks in what promise to be some very fun and interesting next few weeks.)

Reference ID Created Released Classification Origin
10STATE17263 2010-02-24 22:10 2010-11-28 18:06 SECRET Secretary of State
R 242212Z FEB 10
S E C R E T STATE 017263 


E.O. 12958: DECL: 02/24/2035


REF: 09 STATE 082572 

Classified By: ISN Acting A/S Vann H. Van Diepen.  Reason 1.5 (D)


1. (S) A U.S. interagency team — lead by ISN Acting
Assistant Secretary Vann H. Van Diepen — met with a Russian
interagency team lead by Vladimir Nazarov, Deputy Secretary
of the Russian National Security Council (full participants
list is provided in paragraphs 76-77 below), on December 22,
2009 for a second round of discussions on a Joint Threat
Assessment (JTA), as agreed by Presidents Obama and Medvedev
in the 2009 U.S.-Russia Summit Joint Statement on Missile
Defense Issues. The Russian delegation came prepared to
engage seriously, and made presentations on their evaluation
of the missile programs of Iran and the DPRK; a conceptual
framework for evaluating the risk posed by various missile
programs; Russian concerns about instability in Pakistan and
the security of nuclear weapons and missiles there; and the
work of the FSB (Federal Security Service) in countering
efforts by Iranian and North Korean agencies to either obtain
nuclear and missile technologies and materials in Russia or
to transship the
m through Russian territory. While the Russians were
prepared for discussions of cooperation at a strategic level
on countering missile proliferation, their position remained
the same: in their analysis, the missile programs of Iran and
the DPRK are not sufficiently developed, and their intentions
to use missiles against the U.S. or Russia are nonexistent,
thus not constituting a “threat” requiring the deployment of
missile defenses. The discussions included a vigorous
exchange of questions and answers, and concluded with an
invitation by the Russians to hold the next round of the JTA
in Moscow in March or April 2010. The discussions lasted the
full day. End Summary.

Opening remarks

2. (S) Van Diepen recalled that the July 2009 U.S.-Russia
Joint Statement called for U.S. and Russian experts to work
together to analyze ballistic missile threats and that the
U.S. side had provided analyses of Iran’s and North Korea’s
missile programs at the September JTA. He said that the U.S.
side looked forward to receiving Russian perspectives on
these programs and discussing areas of agreement and
disagreement. He added that the U.S. hoped that development
of a more shared perspective on these issues would help
inform how the U.S. and Russia address missile threats
bilaterally and multilaterally. Consistent with the Joint
Statement and the non-paper U/S Tauscher provided to Russia
in November, this effort also could help the U.S. and Russia
assess how to defend against missile threats if that becomes
necessary. Van Diepen ended by underscoring that the U.S.
looked forward to detailed discussions and then deciding on
potential next steps.

3. (C) Nazarov thanked Van Diepen for reminding both sides of
the context for the work of the JTA. He noted that the July
6 Joint Statement said that experts of both countries would
analyze threats of the 21st century and make recommendations
for political and diplomatic means to address them. Russia
takes this seriously, and President Medvedev has given the
highest priority to this work and has instructed that this
work be coordinated under the Security Council of the Russian
Federation. Accordingly, Nazarov said, the Russian
delegation includes representatives from all of the Russian
agencies responsible for tracking missile threats and
countering them. He added that the Russian side planned to
make presentations, focusing primarily on Iran and North
Korea. After that, the Russian delegation would be prepared
to comment on the presentations made by the U.S. at the last
JTA meeting in July. He said the Russian delegation had
studied these materials closely and had several comments and

4. (S) Nazarov concluded by noting that Russia looked forward
to a creative dialogue and robust exchange of opinions
between the experts of both sides. He said Russia would
focus primarily on the threats from Iran and North Korea,
noting that Russia believed the long-term strategic interests
of the U.S. and Russia largely coincide and that the
acquisition of nuclear and/or missile capabilities by Iran,
North Korea, or other threshold states is unacceptable.
Nazarov hoped that the discussions would be productive and
potentially lead to the drafting of a joint assessment, and
perhaps to the creation of a joint document.

Russian Presentations on Iran and North Korea


5. (S) Evgeny Zudin of the Russian Ministry of Defense gave
detailed presentations on the Russian assessment of the
Iranian and North Korean missile programs, and the degree to
which Russia believes these programs constitute threats
requiring missile defense responses. For Russia, the bottom
line is that, in essence, neither program constitutes a
threat at the moment or in the near future.

NOTE: Russia did not provide paper copies of either
presentation to the U.S. delegation. END NOTE.

6. (S) On Iran, Zudin made the following points concerning
Scud missiles:

–Given the challenging and complex situation of the regional
context that surrounds Iran, Iran’s leaders view acquiring a
missile capability as a deterrent to existent threats. To
that end, they also consistently exaggerate Iran’s
achievements in missile production.

–The core of the Iranian missile program has been the
evolutionary development of liquid-fueled missiles based on
Soviet Scud technology from the 1960s.

–Tehran acquired Scud B systems from a number of countries
during the 1980s.

–The Iranian version, called the Shahab-1, has a range of
300 km and a reentry vehicle of 1 ton.

–With scientific and technological assistance from North
Korea, Iran acquired production capabilities for both the
Scud B and the Scud C.

–The Scud C, called the Shahab-2 by the Iranians, has a
range of 550 km with a 700 kg payload.

–Iran has also developed and commissioned a medium range
ballistic missile (MRBM) called the Shahab-3, based on the
North Korean No Dong-1 and using Scud-based technologies.
The Shahab-3 has a range of 1,500 km and a 700 kg payload.

–Iran has done a good deal of work to improve the precision
and range of this system, creating the Shahab-3M, which Iran
claims has a range of 2,000 km, although so far the confirmed
range is only 1,600-1,700 km.

–Russia’s analysis indicates that this was achieved by
reducing the re-entry vehicle weight to 250 kg and improving
the engine.

– Russia also believes that this very nearly exhausts the
potential for Iran to increase the range of the Shahab-3 or
make further improvements to Scud-based missile technology.

7. (S) Moving on from Scud-based technology, Zudin made the
following points on Iran’s development of a 2,000 km-range
solid propellant system:

–Iran has been developing solid propellant MRBMs/IRBMs with
better operational capability since 2000.

–Currently, Russia is seeing the development of a two-stage
intermediate (2,000 km) solid propellant missile.

–The first test of this system in November 2007 failed.
During the second test on November 12, 2008, Iran
successfully accomplished the uplift stage of the missile.

–Following the third test of the missile in May 2009, Iran
announced that the launch was successful and that it would
begin serial production of this missile.

–This system was tested again on December 16, 2009, and Iran
also claimed this test was successful.

–The Russian assessment is that regardless of optimistic
statements from Iran, the test of this missile was actually
just a test of a successful prototype and that what the test
did was allow Iran to practice first stage operation and
stage separation.

–Russia believes Iran will need another 2-3 years of testing
to perfect the missile. Russia believes it will not actually
be deployed for 5-6 years.

8. (S) Zudin said that another potential success indicator
for Iran’s missile program is the Safir space launch vehicle
(SLV) program. He said the Safir launch on February 2, 2009
was successful in putting the Omid (26 kg) satellite into
orbit. However, Iran’s first attempt to launch the satellite
into orbit on August 17, 2008 was unsuccessful. Russia
assesses that in order to achieve the successful launch, Iran
had used
the maximum potential of its liquid-propellant technology
(the first stage of the Safir was a Shahab-3). As for Iran
developing combat/offensive long-range missiles based on SLV
technology, Russia believes, in theory, this is possible.
However, from a military technological perspective, Russia
believes this is unviable due to low throw weight of the
system. In addition, Russia believes that development of a
long-range missile based on its SLV efforts would require
Iran to intensify its research and development, conduct a
series of test launches outside its territory, and increase
throw weight and accuracy. Thus, in Russia’s view, despite
Iran’s successful launch of a satellite, it is premature to
talk about Iran successfully developing the technology for a
militarily useful long-range ballistic missile capacity.

9. (S) Zudin summed up his presentation on Iran by noting
that over the last four years, Iran has successfully launched
a 26 kg satellite into orbit and conducted several successful
launches of a solid propellant MRBM, according to unconfirmed
information. However, Russia believes Iran’s “success” boils
down to creating Shahab-3-class liquid propellant missiles
with an accuracy of several kilometers that can reach targets
in the Middle East and Southeastern Europe, but given
conventional warheads, these missiles cannot do substantial
damage. Under favorable conditions, Russia believes Iran
might be able to begin a program to develop ballistic
missiles with ranges of between 3,000-5,000 km after 2015,
but Russia does not see Iran taking any steps in this
direction. Rather, Russia has concluded that Iran’s
ballistic missile program continues to be directed toward
developing combat ready missiles to address regional concerns.

North Korea:

10. (S) Zudin made the following points with regard to the
DPRK’s missile program:

–Over the last two decades North Korea has paid increased
attention to developing and producing ballistic missiles and

–The DPRK has commissioned the production of liquid
propellant missiles such as Scud Bs and Cs (which North Korea
calls the Hwasong 5 and 6), the No Dong I, the short-range
KN-02, and the “Luna-M” tactical missile, plus solid
propellant battlefield and tactical rockets.

–The core of North Korea’s missile capability is missile
technology from the 1960s.

–The potentially outdated No Dong-1, with a range of
1,000-1,300 km and a reentry vehicle of one ton, is the most
advanced missile commissioned by the North Korean military.

–In Russia’s assessment, only the KN-02, with a range of
less than 100 km, is relatively modern.

–Since early in the 1990s, North Korea has slowly developed
missiles of the Taepo Dong class.

–Russia estimates that the Taepo Dong-1 (TD-1) was a
prototype two-stage liquid propellant missile with a
2,000-2,500 km range.

–The TD-I first stage used a No Dong-1 engine, and the
second stage used a Scud engine.

–The only flight test of the TD-I was conducted on August
31, 1998, during which the DPRK practiced separation of
missile stages. North Korea declared this test to be an SLV

–The Taepo Dong-2 (TD-2) MRBM is a two-stage liquid
propellant missile with a range of 3,500-6,000 km, depending
on the weight of the warhead.

–A July 5, 2006 test launch of the TD-II failed as the
missile exploded 40 seconds into flight.

–Russia estimates that North Korea tested elements of the
Taepo Dong-2 with its April 5, 2009 SLV launch.

–Russia believes North Korea has demonstrated a certain
level of progress in the missile area by creating a first
stage engine with a thrust of 100 tons.

–North Korea conducted tests of nuclear devices on October
9, 2006 and May 26, 2009. However, it remains unproven
whether North Korea can make a nuclear warhead of the size
and weight that would allow it to be carried by a ballistic

11. (S) Zudin said that in Russia’s view, the widespread
claims about North Korea’s achievements in the missile area
are dubious. In particular, Russia notes that it is claimed
that North Korea has a new missile based on the Soviet R-27
(NOTE: SS-N-6. END NOTE) submarine-launched ballistic
missile (SLBM) that is capable of reaching ranges of
2,400-4,000 km. However, the many published reports
regarding this missile, which is known as the BM-25, contain
claims that are made without reference to any reliable
sources. Moreover, Zudin said, the fact is that there have
been no successful tests of this missile in either North
Korea or Iran. Russia also is unaware that this missile has
ever been seen. There are claims that 19 of these missiles
were shipped to Iran in 2005, but there is no evidence for
this and concealment of such a transfer would be impossible.

12. (S) Zudin said Russia believes the real missile potential
of North Korea is an impressive arsenal of outdated missiles
with ranges no greater than 1,300 km and that are only a
threat to countries in the region that North Korea considers
to be enemies. Russia estimates that in the years to come
North Korea will devote considerable effort to improving and
perfecting its SLV. To this end, it will use the launch
facility near the community of Tongchang-Dong (NOTE: Known to
the U.S. as the Yunsong facility. END NOTE). Russia
assesses that North Korean development of long-range
ballistic missiles based on SLVs is possible in principle,
but perfection will take years. The prospects for North
Korea developing a combat operational system from such a
process is not likely due to the inability to conduct
concealed preparations for launch and the long preparation

13. (S) Summing up, Zudin said Iran’s and North Korea’s
missile programs can be characterized as follows: the only
real successes are liquid propellant intermediate range
missiles with ranges of 1,300 km, and both countries would
face real technical difficulties in trying to make additional
advances to increase the range of their systems.

Discussion on Iranian and North Korean Missiles

14. (S) Van Diepen thanked the Russian delegation for its
presentations, noting that there appeared to be some areas
where both sides agree, other areas where the two sides see
the same thing a little differently, and areas where the two
sides disagree. He said it is good to have the opportunity
to examine the differences and the reasons for them, and
urged that this be done in a structured way. Van Diepen
proposed discussion begin with Iran and North Korea
generally, and then move to specific categories of
short-range, medium range, and long-range missiles. On Iran,
he said it appeared that both sides had similar assessments
at the technical level with regard to short range missiles in
Iran. On medium range missiles in Iran, both sides agree
there is the original No Dong, a modified No Dong with longer
range – although the U.S. and Russia have different ideas of
the modifications made to achieve that longer range. And
both sides seem to agree that Iran is developing a two-stage
solid propellant missile.
Beyond that, U.S. and Russian assessments seem to diverge.

15. (S) Based on the Russian presentations, the U.S.
delegation posed a number of questions. The Russian
delegation also raised a number of questions about U.S.
comments and the U.S. presentations on Iran and North Korea
from the September JTA talks. The topics raised and
follow-up discussions were as follows:

16. (S) Shahab-3 Reentry Vehicle Mass

The U.S. noted that based on modeling, it assesses that the
modified Shahab-3 has 600 kg re-entry vehicle mass at a range
of 2,000 km, and asked for Russia to explain the basis for
its assessment of 250 kg re-entry vehicle mass. The U.S. also
asked how useful such a missile would be as a military
weapon. Russia responded that there is some uncertainty in
its estimate, conceding that the 250 kg is at the low end of
Russia’s estimate. However, Russia believes that the low
weight of the Shahab-3 warhead makes it pointless as a
military weapon. Although the range could be further
increased with a lighter warhead, Russia’s view is that such
a missile also is pointless. Additionally, while Russia
views the U.S. 600 kg estimate as being close to the 700 kg
weight of the basic Shahab-3 warhead, it assesses that the
range of the system with that warhead is 1,300 km, not 2,000
km. Russia does not believe that if the weight of the
warhead is decreased by just 50 kg, it is realistic to assess
that the Shahab 3 would
achieve a 2,000 km range.

17. (S) Aluminum Airframe

The U.S. said that its assessment of a 2,000 km range for the
Shahab-3 is achieved through the use of an aluminum airframe
instead of steel and increased engine thrust. Russia asked
whether the assessment that the Shahab 3 airframe is made
with aluminum rather than steel is based on speculation or
fact. The U.S. responded that the assessment derives from
information relating to Iran seeking various aluminum alloys.
Additionally, during the Information Exchange (IE) portion
of the Missile Technology Control Regime (MTCR) Plenary, a
number of presentations, including by the UK and France, also
assessed that the Shahab-3 has an aluminum airframe and
described a number of Iranian attempts to procure aluminum
for this purpose. For this reason there also have been MTCR
proposals to add the types of aluminum sought by Iran to the
MTCR Annex.

18. (S) Safir Airframes

The U.S. noted that it appears that the first stage of the
Safir SLV is the Shahab-3, and asked whether Russia believes
the Safir could achieve orbit with a steel airframe. Russia
answered that the facts are that the Safir was used to put a
satellite with a very low mass into orbit. It is likely that
the technologies used to achieve this were exploited to their
utmost. Russian analysis showed that the size of the Omid is
the limit of what Iran could put into orbit. The U.S. agreed
that a very low weight satellite was all that the Safir
could put into orbit, but assessed that even orbiting such a
small satellite could only be done using an aluminum
airframe. In U.S. modeling of the launch using a steel
airframe, the Safir was not able to get close to putting
anything into orbit.

19. (S) Russia remarked that even if the U.S. and Russia
disagree over the materials used in the airframe, both sides
can agree that the capability of this missile was used to its
maximum to get a satellite into orbit. If there is agreement
on this point, then both sides should be able to agree that
using this system as a weapon is pointless. The U.S.
responded that this was not necessarily so and would depend
on how the rocket is used. The Safir launch might have
been a technology demonstrator. If one clustered or stacked
the Shahab, it could be used as a longer-range system. The
U.S. added that something using a single Shahab as its first
stage will have limitations, but that is not the only option.

20. (S) Using Clustered Engines

Russia noted that during the JTA talks in Moscow, the U.S.
discussed several options Iran would have with regard to a
cluster scheme. However, in Russia’s view, the problem with
a cluster scheme is that it makes the missile nonviable for
military purposes. The U.S. responded that a cluster scheme
would make the system less mobile, but noted that it would
provide a possibility for putting a missile further
downrange. However, the basic U.S. point is that the Safir
could have been a technology demonstrator for staging,
separation, ignition, and control of an upper stage. Russia
noted that it views the Safir launch as a success and has
stated this. Additionally, Russia agrees there are ways to
increase the throw weight, including the clustering of
engines, but the goal of the Russian review of Iran’s missile
capabilities was to examine whether the Iranian program could
create a combat ready missile that meets certain
specifications. In Russia’s view it cannot, and talking
about the Shahab-3 as a long-range
combat missile is unrealistic.

21. (S) The U.S. agreed it is not realistic for a mobile
missile, but thought it would be realistic for use in a silo
or underground. Russia responded that such a missile would
require a fixed launch pad. Fifty years ago fixed launch
pads deep inside a country were survivable, but now that is
not realistic. The U.S. countered that both Russia and the
U.S. still have hundreds of such launch sites. Russia said
that was a topic for another discussion, not JTA.

22. (S) Iran Not Capable of Producing Longer-Range Missiles

Russia said its bottom line is that Iran lacks appropriate
structural materials for long-range systems, such as high
quality aluminum. Iran can build prototypes, but in order to
be a threat to the U.S. or Russia Iran needs to produce
missiles in mass quantities, and it lacks materials
sufficient for the type of mass production needed to be a
security threat. Russia further noted that the technology
for longer-range missiles is sophisticated and difficult to
master. For example, the elongated airframes Iran is using
might not survive the stresses of a ballistic flight path,
and the guidance system for the missile (Shahab-3) is
outdated and does not allow for precision steering.
According to Russian calculations, if the control system is
used at a range of 2,000 km, it could veer as much as 6-7 km
off its target; at 5,000 km, the accuracy could be off by
50-60 km. In addition, the liquid propellants used by the
Iranians are of low efficiency. Iran is working to improve
the power of the engine and develop
more efficient kinds of fuel. However, it faces significant
challenges. Iran also has problems with launch preparation
times, although it has made some recent improvements.

23. (S) Launching from Silos

Russia said it does not think a Shahab-3 derived system could
be launched from a silo. Ground launch sites that are for
SLVs are not suitable for military launches, and missiles
with side-based vent engines and clustered engines cannot be
silo-based. The U.S. responded that this might be an area
where U.S. and Russian assessments differ. For example, the
U.S. thinks the Taepo Dong-2 is a clustered missile that can
be launched from a silo or underground launcher, adding that
there are scenarios to compensate for shortcomings of this
technology should the Iranians or North Koreans choose to
pursue them.

24. (S) Iranian Solid Propellant MRBM

The U.S. said it does not see the solid-propellant MRBM as a
technology demonstrator. This system has been tested four
times in the past two years, and the U.S. assesses Iran will
be ready to field it in less than the 5-6 year timeframe
Russia envisions. Russia asked how soon the U.S. thought the
system could be ready. The U.S. said that it would not be
surprised if a two-stage system with a range up to 2,000 km
were fielded
within a year, at least in limited numbers. The U.S. also
noted that not all countries follow the same testing
procedures as the U.S. and Russia. North Korea is an extreme
example, but Iran does not have the same test philosophy as
either the U.S. or Russia.

25. (S) The Path to Long Range Missile Development in Iran

The U.S. said the main potential avenue for Iran developing
long range missiles is by using current systems as building
blocks. For example, using the Shahab-3 with clustered or
stacked engines could be one path. Another path might be the
so-called BM-25 missile that the U.S. believes was sold to
Iran by North Korea. A third path might be development of a
solid-propellant MRBM with more powerful motors. Russia said
that its views on the Shahab 3 had already been discussed.
Russia had some questions about the other two paths the U.S.
had identified. In addition, Russia thinks it also will be
very important to consider the intentions of Iran and North
Korea that could lead to creation or improvement of its
missiles. This will affect what each side (U.S. and Russia)
does to monitor what these countries (Iran and North Korea)
do to acquire missile technologies, including procurement
methods. It also will help define the key technologies
required by these countries now and in the future and in
finding a means for protecting these technologies.

26. (S) The BM-25

Russia said that during its presentations in Moscow and its
comments thus far during the current talks, the U.S. has
discussed the BM-25 as an existing system. Russia questioned
the basis for this assumption and asked for any facts the
U.S. had to provide its existence such as launches, photos,
etc. For Russia, the BM-25 is a mysterious missile. North
Korea has not conducted any tests of this missile, but the
U.S. has said that North Korea transferred 19 of these
missiles to Iran. It is hard for Russia to follow the logic
trail on this. Since Russia has not seen any evidence of
this missile being developed or tested, it is hard for Russia
to imagine that Iran would buy an untested system. Russia
does not understand how a deal would be made for an untested
missile. References to the missile’s existence are more in
the domain of political literature than technical fact. In
short, for Russia, there is a question about the existence of
this system.

27. (S) The U.S. repeated its earlier comment that Iran and
North Korea have different standards of missile development
than many other countries, including the U.S. and Russia.
North Korea exported No Dong missiles after only one flight
test, so it is not unimaginable that it would build and seek
to export a system that has not been tested. This is
especially true for North Korea because of its need for hard
currency. In the U.S. view, the more interesting question is
why would Iran buy a missile that has not been tested. One
possible answer is that Iran has recognized that the BM-25′s
propulsion technology exceeds the capabilities of that used
in the Shahab-3, and that acquiring such technology was very
attractive. Iran wanted engines capable of using
more-energetic fuels, and buying a batch of BM-25 missiles
gives Iran a set it can work on for reverse engineering.
This estimate would be consistent with the second stage of
the Safir SLV using steering engines from the BM-25 missile.

28. (S) Safir and BM-25

The U.S. explained that based on a comparison of Internet
photos of the second stage of the Safir, the U.S. assessment
is that the steering (vernier) engines on the Safir are the
same as on the R-27. The weld lines and tank volumes from
the Safir second stage show that the ratio of oxidizer to
propellant is not consistent with Scud propellants and more
consistent with unsymmetrical dimethylhydrazine (UDMH) and
nitrogen tetroxide (N2O4), which were used in the R-27. The
U.S. does not have any information on why Iran has not flight
tested the BM-25. It may be due to difficulties assembling
the missiles, but it appears that they have at least done
work with the steering (vernier) engines. Russia asked if
the U.S. was saying that its case for the existence of the
BM-25 missile is that individual elements of the Safir
resemble the steering engines of the R-27 missile.

29. (S) The U.S. said that is only part of the case. In the
media, and more importantly in the MTCR Information Exchange,
countries have offered direct evidence of the transfer of the
BM-25 from North Korea to Iran. Russia asked if the U.S. had
pictures of the missile in Iran. The U.S. did not, but noted
that North Korea had paraded the missile through the streets
of Pyongyang. Russia disagreed. Russia said it had reviewed
the video of the North Korean military parade and concluded
that North Korea had shown a different missile. Russia does
not think the BM-25 exists. The missile appears to be a
myth, and some say that it is based on a Russian missile.
However, no one has seen it, and Russia cannot find traces of
it. The U.S. said it would endeavor to provide further
information on the existence of the BM-25 at the next round
of talks, noting that reaching agreement on this point will
affect the joint assessment of Iranian and North Korean
missile capabilities.

30. (S) Safir Fuel

Russia asked whether the U.S. had any clear images of the
Safir that allow for the assessment of tank volumes and the
ratio of fuel to oxidizer. The U.S. said that the weld lines
of the second stage are clear in the pictures Iran put on the
Internet, and U.S. analysts were able to make pretty good
calculations based on this information. Russia questioned
this, saying that the photos did not allow for accurate
measurements of distances. The U.S. undertook to provide
more information on this point at the next round of talks.

31. (S) The U.S. then asked Russia for its assessment of the
types of propellant used in the Safir second stage. Russia
said it thinks that hydrazine is used. The U.S. asked
whether Russia thought UDMH might be involved. Russia did
not. It said that there might be different combinations of
fuel and oxidizers, but the base is hydrazine.

32. (S) More on Propellants

The U.S. asked whether Russia assesses that Iran is moving
beyond Scud propellants. Russia responded that it believes
Iran is trying to move in this direction because it wants
something more powerful – something that can lift 40-50 tons.
With bigger engines, Iran can improve missile range. Thus,
Iran has been working to acquire more-energetic fuels and
trying to produce UDMH and N2O4. However, Iran has been
working on this for approximately 10 years, and Russia has
not seen any serious results. Russia further noted that
Malik Ashtar University in Tehran has been working on fuel
combinations, but it apparently has not been successful. The
fact that Iran has not succeeded in this area is evident in
Iran’s effort to seek this technology from abroad.

33. (S) The U.S. noted that it was significant that both the
U.S. and Russia assess that Iran is working on more-energetic
propellants, even if the two sides differ in how far along
they are. Russia responded that this is due to the fact that
Iran has not yet launched any longer range missiles. There
have been no tests, and statements from Iran that it has
missiles that can fly 2,000 km have not been substantiated.
The longest range that Russia has seen is 1,700 km, and that
was achieved only because of a reduced throw weight. If the
U.S. has additional data to share, Russia would be
interested. The U.S. agreed to look into the matter and
elaborate further at the next JTA talks.

34. (S) However, the U.S. also noted that modeling shows that
achieving a greater range is possible. Just because a
capability has not been demonstrated operationally does not
mean that it is not possible. Once a program has achieved
1,500 km, going a few hundred kilometers more is not that
much of an obstacle. Going from 1,700 to 2,000 km is not a
great technological stretch. Russia said it could not agree
because with a longer flight, various parts of the missile
could burn through, the missile could fall apart, or it could
go off course. It needs to be tested at its maximum range.
As discussed earlier, the U.S. believes Iran can achieve the
increased range due to a combination of increased thrust from
more powerful engines, a slightly reduced payload, and the
use of aluminum instead of steel.

35. (S) Russia disagreed with the U.S. assessment that Iran
has been able to buy technology to produce solid propellant
engines. Russia believes Iran continues to work on the
technology to mix and pour the propellant. This is a very
difficult process. Solid fuel has to be very evenly mixed to
work properly. It must be put into the motor case and then
allowed to solidify, and the resulting fuel must be
homogeneous. In addition, fuel loading is more complicated
for larger engines, and Iran has not mastered this. Russia
also believes Iran is experimenting with fuel composition,
how long fuels can be preserved, and how temperatures can
affect the mixture. Russia does not think that Iran has
solved the problem of thermal isolation of the engine from
the airframe, as the junction with the engine tends to burn
through. Russia also does not think that Iran has solved the
problem of thrust vector control and gas steering
technologies. The old technologies are not reliable, and
Iran has had a hard time getting
components from abroad. In addition, Iran cannot produce
high-quality spherical aluminum powder and without this it
cannot reliably produce solid fuel. Russia noted that even
Israel needs to buy ammonium perchlorate from abroad. Iran
has been trying to produce it indigenously, but Russia has no
information indicating it has been successful. In Russia’s
view, Iran appears to be having very serious problems with
engine development.

36. (S) The Ashura

Russia said that in June 2008, it had received information
from the State Department that within the framework of the
Ashura program, Iran is producing a 3-stage missile called
the Ghadr-110. At that time, the U.S. told Russia that this
missile is very similar to the Pakistani Shaheen-II and has a
range of 2,000 km with a throw weight of one ton. Testing of
the Ghadr-110 may have started in 2008, and Russia would like
additional information on this system. The U.S. said that
there appeared to be some confusion: the Ashura is a
two-stage solid propellant missile with a 2,000 km range, and
the Ghadr-110 is the Fateh-110, a single-stage SRBM.

37. (S) Sejjil

Russia asked whether the Sejjil was part of the Ashura
program. The U.S. said it thinks the Sejjil is another name
for the Ashura. In addition, Iran also has a short range
solid propellant system called the Fateh-110. The experience
gained from that program has been used in the development of
the Ashura and helps explain how Iran acquired the capability
to develop larger motors. In the 1990s, Iran received
production technology and infrastructure from China to
develop solid propellants. That infrastructure was used in
the Fateh-110 and now is being used as the technological
basis for the Ashura. While the U.S. would agree that a
larger solid propellant engine is challenging, Iran has over
a decade of experience producing solid propellant motors and
it got an important head start from China. Independent of
what Iran has since acquired, this head start allowed Iran to
develop the Ashura, which has been flight tested
successfully, and also to work toward longer-range systems.
Russia did not fully agree,
saying that the technology for an SRBM is quite different
from medium and longer range systems.

38. (S) Iranian Challenges

Noting that Russia had mentioned several problems with Iran’s
efforts to develop larger motors, the U.S. asked for the
basis of Russia’s assessment and specifically whether it
derived from the results of ground testing. Russia responded
that Iran is having problems generally because it did not
develop the technology in Iran and is trying to work off of
North Korean technology. The U.S. then asked how Russia
would explain
the Ashura having been flight tested twice successfully.
Russia said there is nothing special there as the technology
is all old technology as described in detail in the
literature of the Chinese Long March 4 engine. The U.S.
pointed out that the Long March is a liquid propellant
system, and the Ashura is a solid propellant system. If Iran
has successful tests, it shows Iran has built MRBM rocket
motors. Russia countered that all it shows is that Iran is
testing parts of the missile. Iran may have claimed success
but that is not the reality. If Iran wants it to be
reliable, the missile has to be tested many times before it
can be deployed. This is what Russia believes. Russia
understands the U.S. has a different point of view and this
can be discussed again another time.

39. (S) North Korean Scuds

The U.S. said it seemed that both sides had a common
evaluation of what types of short range systems North Korea
possesses: the Scud B, Scud C, and the new solid propellant
MRBM. Russia said that in 2008, the U.S. indicated that
North Korean Scuds were launched at longer ranges. Russia
asked for any specific data on these missile launches and for
U.S. thinking on why these systems are extended range Scuds
and not Scud C missiles. The U.S. said that it would try to
provide more information on this issue at the next round of
talks. However, it is known that there have been at least
two cases of North Korea helping other countries to develop
Scuds with longer ranges than the Scud C. One example is
Libya. When Libya gave up its MTCR-class missile programs in
2003, it showed the U.S. a missile it called the “Scud-C.”
However, it had a longer range than the missile we refer
generally refer to as the Scud-C. Additionally, many
presentations in the MTCR Information Exchange have reported
that North Korea is helping other countries, particularly
Syria, develop a Scud with a longer range. These
presentations have referred to this longer range system as
the Scud-D.

40. (S) No Dong

The U.S. thought that both sides had similar assessments of
the No Dong. Referring to the U.S. presentation from the
previous JTA talks, Russia noted that the U.S. said there
were seven launches of the No Dong in July 2009 by North
Korea. Russia has no information on such tests, and wondered
if there U.S. had been referring to 2006. The U.S. said that
there had been tests of the No Dong just after July 4, 2009,
and that there had been plenty of South Korean and Japanese
reporting at that time. Russia agreed there were July 4
missile launches, but of missiles with shorter ranges, not
Scuds or No Dongs. Given the confusion on this point, Russia
urged that the issue be revisited during the next round of

41. (S) UDMH

Russia asked whether the U.S. thinks North Korea is trying to
develop a new engine that uses UDMH. The U.S. said it
believes this effort is connected with a new system North
Korea is working on. The U.S. thinks this new system is an

42. (S) IRBM

Russia asked whether the U.S. has any specific data on this
system. The U.S. said it believes the system exists and has
been sold to Iran as the BM-25.

43. (S) Taepo Dong

The U.S. agreed with Russia that the Taepo Dong-1 was a
technology demonstrator that is no longer being used, and
that the Taepo Dong-2 has had two tests that have been
unsuccessful. However, there is not agreement on the purpose
of the Taepo Dong-2 system. In tests, the intent has been
billed as putting a satellite into orbit, but the U.S. also
thinks it is very much intended as part of the development of
an intercontinental ballistic missile (ICBM). Russia noted
for clarification that North Korea calls the Taepo Dong-2 the

44. (S) Russia believes the system has an engine with a 100
ton capacity that uses clustered designs based on old
technology, and asked whether the U.S. thought the Taepo
Dong-2 uses any new technology. The U.S. responded that it
has not seen any new technology associated with this system.
Nevertheless, one path to acquiring a longer range system
would be to cluster or stack engines for the new IRBM in the
same way North Korea used Scud and No Dong engines in the
Taepo Dong-2. Russia pointed out that so far this has not
been observed and there is no new technology associated with
an ICBM in North Korea. The U.S. agreed that no new
technology has been observed in the ICBM, but it has been in
the IRBM.

45. (S) Russia noted that in its presentations the U.S. had
given a range of 10,000 km – 15,000 km with a 500 kg warhead
for the Taepo Dong and asked how the U.S. had calculated
this. The U.S. said that for the 10,000 km range, it had
assumed a clustered first stage and a No Dong second stage.
For the 15,000 km range, it assumed a 3-stage configuration
with the same clustered engines and second stage.

46. (S) Taepo Dong-2 and Military Applications

Russia pointed out that the Taepo Dong-2 would be hard to use
for combat due to a lack of sites and its long launch
preparation time. The U.S. noted that North Korea could
mitigate those problems by placing it in a silo or using it
as a first strike weapon. These would not be optimal
approaches but if North Korea is sufficiently desperate, it
would go with the systems available to it. Moreover, North
Korea puts great political value on these systems. In the
wake of the nuclear test and the UNSCR that followed, North
Korea threatened to conduct an ICBM test. This is another
manifestation of the political value of this program for
North Korea.

47. (S) North Korean Path to an ICBM

The U.S. said it saw three potential paths for North Korea to
follow to obtain an ICBM: 1) use the Taepo Dong-2 as an ICBM;
2) further develop the technology for an IRBM based on their
new MRBM, in the same way the No Dong was a path to the Taepo
Dong; and 3) use the very large launch facility that is being
constructed on the west coast of North Korea to launch a very
large missile. Russia said that the first two paths could be
discussed at a later date.

48. (S) With regard to the third path, Russia wonders whether
North Korea is building the new launch site to avoid
launching over Japan and for safety reasons. The U.S.
responded that the size of the facility is of concern. It
does not simply replicate other sites. This facility is much
larger than the Taepo Dong launch facility. This is not to
say there is evidence of a new missile system larger than the
Taepo Dong-2 being developed, but it suggests the
possibility. North Korea does not spend money on things
unless they really matter. Russia noted that North Korea
does not have so much money, so it must economize. However,
Russia can probably agree that the new site is being built to
test new missiles. That said, Russia still thinks North
Korea has problems developing more-powerful engines and
accurate guidance systems. This merits further observation
and analysis.

49. (S) General Comments

Russia said it sees it as significant that Iran and North
Korea are trying to buy more materials abroad and trying to
get around existing export control regimes. However, each
country is different and Russia cannot say they are working
according to the same principles. On clustering, Russia has
a different point of view than the U.S., but will look
further into this. Russia also has a different view on
silos, but that can be discussed in more detail next time.
In short, North Korea is complex and neither the U.S. nor
Russia fully understands its capabilities. Both sides need
to monitor this carefully and work together on this issue.

Russian presentation of a framework for evaluatingmissile risks, dangers and threats; and discussion

50. (S) Nazarov said Russia believes any missile assessments
should be based not only on modeling, but also on
consideration of the real technical barriers faced by Iran.
Serious attention must be given to these technical problems.
Otherwise, we will use erroneous assumptions to evaluate the
problem. For example, we can count the number of
centrifuges, multiply by production capabilities, and say
Iran can produce enough uranium for several warheads.
However, this would not be correct because the models do not
take into account the technical difficulties in cascade
technologies that Iran has not worked out yet.

51. (S) In the same way, Russia thinks that when talking
about the Shahab-3, there is no possibility of Iran using
these missiles in a launch silo configuration. Also, Russia
does not see Iran increasing the throw weight or range to the
declared capabilities. Thus, as regards attempting to draft
a joint report, Russia foresees no problems in an evaluation
of the basic systems, but does foresee a difference in the
evaluations of the technical barriers faced by the Iranians.
With regard to timeframes, Nazarov said that if we talk about
real threats, and not just potential challenges, then we need
to think about all the systems that need to be developed and
tested. To facilitate this, Russia thinks the JTA
discussions should be divided into discussions on missile
risks and missile threats. The two sides should agree on
what these are and then work to prevent missile risks from
growing into missile threats.

52. (S) Nazarov then asked Vladimir Yermakov, Director for
Strategic Capabilities Policy, Russian Ministry of Foreign
Affairs, to introduce Russia’s proposed methodology for
evaluating missile risks and missile threats. Yermakov said
Russia views the December JTA talks as the first step in
implementing the goals of the July 2009 Presidential Joint
Statement. These consultations build on many years of work
with the U.S. on missile defense, including missile threat
assessment, and Russia would like to underscore that the
dialogue and close collaboration on missile defense is due to
the positive decisions taken by the new administration on
missile defense. Russia’s official assessment of Obama’s
missile defense policy is that it is a step in a positive
direction. Russia commends the U.S. decision to drop the
fielding of missile defense elements in Poland and the Czech
Republic and replace it with a multi-phased program for
missile defense in Europe. Russia will only be able to give
its assessment of the new
project after it has seen the implementation of the first
phase. Further collaboration in missile defense will depend
on how the project will be developed on the U.S. side. But a
key part of our collaboration will be the joint assessment of
missile threats.

53. (S) Continuing, Yermakov said Russia believes that any
further practical cooperation on missile defense will be
based on a concrete joint assessment of the missile threats.
The U.S. and Russia need to have a clear understanding of
whom we are cooperating against and we need to make clear
distinctions between missile risks, missile challenges, and
missile threats. Russian and U.S. perceptions may coincide
and may differ, that is understandable. We can work together
to address threats we both agree on. But there may be
threats the U.S. sees as real and Russia sees only to be
perceived ones, and vice versa. In such cases, the extent of
our cooperation may be less or lower, but we can still do
something jointly to address these threats as well.

54. (S) Yermakov said that Russia sees as an end-goal of the
JTA consultations a document outlining jointly assessed
missile threats and challenges. Naturally, in working on
such a document, the U.S. and Russia will recognize that
their views differ and those differences will have to be
reflected in this document. We can take as an example our
record of cooperation within the NATO Russia Council (NRC).

55. (S) Yermakov then distributed a paper on a framework of
criteria for assessing the level of risk of a given missile
program. He explained that the material on the first page is
a graph presented in simplified form in which Russia presents
two categories – a threat and a challenge. In order for
there to be a threat, it is necessary to have two components:
intention and capabilities. Only when both components are
present does a threat become real. From the Russian point of
view, lack of either component makes the threat hypothetical.
When both components are lacking, the threat is only
“perceived,” and the threat of a nuclear missile strike is

56. (S) Yermakov noted that on the second page, Russia
suggests four categories: missile challenge, missile danger,
missile threat, and missile strike. Russia views a missile
challenge as an aspiration to obtain capabilities in the
field of rocketry to fulfill one’s legitimate national goals.
These goals can be a space program or missiles as weapons.
A missile danger emerges when nations envision in national
guidelines a doctrine that they could/could use missiles. A
missile threat is a more advanced category in which a country
has the intention to use its missile capability to further
its national military and political goals. A missile strike
is self evident. Yermakov urged the U.S to review the paper
and, at a later stage, provide an assessment of this
approach. At that point, the two sides can compare views,
theoretical approaches and assessments of threats, and use
this framework to develop a joint document of challenges,
risks, and threats.

57. (S) Nazarov thanked Yermakov for his presentation, saying
that he believed the U.S. and Russia needed to continue their
joint work based on a shared methodology. The methodology
proposed in the Yermakov presentation will allow us to
address challenges and threats concretely, and to overcome
differences of opinion. Nazarov said he did not see U.S. and
Russian differences as significant for a joint document and
thought they could be overcome. In this context, Russia has
prepared a memorandum with respect to drafting a joint
assessment. The essence of the paper is that the two sides
would work together to draft a document on a joint
understanding of the problems of missile proliferation. It
would be an assessment of the current trends, conditions, and
factors that make up today’s situation, and appropriate

58. Nazarov suggested the two sides agree on a timeframe for
drafting the document, which would lay the foundation for
cooperation and make it more dynamic. Russia thinks the JTA
work could finish by the end of 2010 and believes that
following this round, the group could come up with a draft
report and then work to improve it and flesh out some of its
provisions. Based on the principle of rotation, Russia also
thinks the next round of JTA talks should be in March or
April, 2010 in Moscow. Finally, given the sensitive nature
of the eventual final document, it should be treated as
confidential and only made available to third parties with
the consent of both our parties. (Passed over non-paper.)

59. (S) Van Diepen appreciated the thought put into the
Russian document and the invitation to Moscow, which he
accepted. He said the U.S. would study the paper and provide
comments at a later date. This will lay the groundwork for
productive meetings in Moscow. However, he also cautioned
that the two sides must be careful not to let process get in
the way of substance. He said the U.S. and Russia need to
share assessments first and then think about what to do with
them. He also said the two sides should identify the
differences in our assessments and the reasons for those
differences, rather than get bogged down in wordsmithing and

60. (C) Nazarov said Russia shares the opinion that the JTA
study has a practical goal. He said Russia is serious about
the problem of future missile threats and that the JTA work
is under the close scrutiny of the President of the Russian
Federation, who demands that the Russia side give an
impartial and objective assessment. Russia believes there is
a danger in over- or underestimating the threat as it could
prod us to move in the wrong direction. When it comes to
missile and nuclear threats, errors in estimation in both
directions are dangerous.

61. (S) Yuriy Korolev, an expert from the Russian Ministry of
Foreign Affairs, explained that during a meeting in Budapest
in February 2008, Russian experts presented a collection of
interesting approaches on assessing missile proliferation
threats. Using that document, Russia thought one could give
a more unbiased assessment of missile threats. However,
there has been no reaction from the U.S. This may be due to
the fact that only limited numbers of the document were
distributed and they did not reach all appropriate senior
U.S. officials. Russia continues to believe this document is
interesting and would appreciate U.S. views, analysis,
comments, and proposals on how to make our efforts on
countering missile proliferation more effective. Russia’s
view is that the methodology presented would make assessments
of missile threats more impartial (handed over copies).

Russian presentation on the security threat presented byinstability and Islamists in Pakistan and discussion

62. (S) Korolev noted that while the focus of the discussions
had been on the missile threats from North Korea and Iran,
Russia did not think discussion should be limited to only
those threats from Iran and North Korea. In the Russian
view, there is another serious threat that should be
discussed: Pakistan. Pakistan is a nation with nuclear
weapons, various delivery systems, and a domestic situation
that is highly unstable. Russia assesses that Islamists are
not only seeking power in Pakistan but are also trying to get
their hands on nuclear materials. Russia is aware that
Pakistani authorities, with help from the U.S., have created
a well-structured system of security for protecting nuclear
facilities, which includes physical protection. However,
there are 120,000-130,000 people directly involved in
Pakistan’s nuclear and missile programs, working in these
facilities and protecting them. However, regardless of the
clearance process for these people, there is no way to
guarantee that all are 100% loyal
and reliable.

63. (S) In addition to the Islamist interest in these
facilities, Russia also is aware that Pakistan has had to
hire people to protect nuclear facilities that have
especially strict religious beliefs, and recently the general
educational and cultural levels in Pakistan has been falling.
Due to these facts, extremist organizations have more
opportunities to recruit people working in the nuclear and
missile programs. Over the last few years extremists have
attacked vehicles that carry staff to and from these
facilities. Some were killed and a number were abducted and
there has been no trace seen of them. Also, even if places
are well protected, transportation of materials is a
vulnerable point. In Pakistan, it is hard to guarantee the
security of these materials during transportation. For these
reasons, Russia thinks Pakistan should also be a particular
focus of JTA discussion.

64. (S) Nazarov clarified that Russia believes the focus of
the JTA discussions should be the missile programs of Iran
and North Korea. Russia assumes the nuclear and missile
programs of Pakistan are regionally oriented and thus outside
the scope of the current JTA discussion. However, Russia
recently hosted a delegation led by Senators Hagel and
Harkin. The Senators told a meeting of the Russian Security
Council that Pakistan poses the greatest threat to the world.
Therefore, Russia would appreciate any additional
information the U.S. can provide on the actual situation with
regard to the protection, storage, and transportation of
nuclear and missile weaponry in Pakistan.

65. (C) Van Diepen appreciated Russia’s concern with Pakistan
and interest in getting further information but noted that
the issue as described is primarily nuclear materials being
acquired by terrorists, it is more of a nuclear issue and
less related to ballistic missiles. He undertook to report
back and facilitate a response from the appropriate office
outside the context of the JTA.

66. (S) Nazarov said Russia is interested in using all
channels to cooperate with the U.S. on this subject. First
and foremost, Russia is talking about the threat of nuclear
terrorism. If the scenarios include future development, the
threat of missile technology getting into the hands of
terrorists should also be considered. Russia would like to
put its concern on the record, and particularly with regard
to the possibility of Islamists coming to power in Pakistan.
Russia would appreciate the U.S. providing additional
information on the subject – perhaps at the follow-up meeting
in Moscow.

67. (C) Van Diepen said he would report Russia’s concerns but
noted that the U.S. response would likely come through
diplomatic channels rather than at our April/March meetings.
He also urged that Nazarov raise his concerns with Special
Advisor Holbrooke or his Deputy.

Russian presentation on FSB work to interdict Iranian andNorth Korean attempts to buy restricted technology, or totransship third party materials through Russia

68. (C) Anatoliy Raikevich, First Deputy Department
Director, Federal Security Service (FSB), said that both Iran
and North Korea appear to depend heavily on illegally
obtaining equipment and technology from abroad for missile
and WMD programs. The FSB has information that Iran and
North Korea both have programs to try to acquire Russian
technology. One of the basic tasks of the FSB is to prevent
them from acquiring WMD-related production technology in
Russia. To do this, the FSB takes action based on Russian
law and export controls. In particular, the FSB monitors and
takes measures to prevent WMD technology exports. This
includes criminal investigations of attempts to export
contraband and items on the prohibited list. Russian
analysis shows that that these efforts have significantly
reduced the achievements of the Iranian security services in
this area. However, the Iranians continue to try to use the
territory of Russia for transits and reexports of such

69. (C) A key effort of the Iranian services is the company
to company approach, whereby they use fake companies run by
the Iranian security service to procure Russian goods. The
FSB has set up sting companies to uncover Iranian activities.
In the past two years, the FSB has cut off a good deal of
the exports of such technology.

70. (C) The FSB has determined that Iran is trying to get
equipment such as measuring devices, high precision
amplifiers, pressure indicators, various composite materials,
and technology to create new missile engines from Russia and
from sources in Western Europe. To produce these items
itself, Iran would need to seriously modernize its
technological base. To combat this, the FSB must cooperate
with the U.S. and European security services. Russia has
many years experience cooperating with U.S. security services
and has moved from information exchanges to operational
activities. The FSB thinks U.S. services are very
professional and well prepared, and hopes cooperation will

71. (C) Van Diepen thanked Raikevich for his presentation,
noting that he had had lots of experience during the 1990s
working with Russian counterparts on the problem and trying
to reduce the success of Iran in acquiring missile
technology. Van Diepen said he was impressed by the people
in Russia working on export controls and appreciated that
Russia recognized that Iran is still trying to acquire
technology from Russia. He said he would pass on to U.S.
security services the FSB’s interest in continued
cooperation. He added that the U.S. would want to work with
Russia in those channels as well as in diplomatic channels as
the need arose to address specific shipments of concern.

72. (S) Raikevich replied that discussing these issues with
the U.S. will help Iran and North Korea to “boil in their own
oil.” He said Iran and North Korean may have small successes
here and there with procurement, but the FSB will see to it
that their successes remain small. The FSB is grateful for
information the U.S. passes along regarding various Russian
organizations that may be working with Iran or North Korea,
and wants continue to work together to prevent the spread of
this technology from Russia and other countries.

Concluding remarks

73. (S) Yermakov said that Russia thought the discussions had
been productive and cooperative. He noted that both sides
have significant homework assignments to complete before the
next round and can test the results at the end of
March/beginning of April. He then offered concluding remarks
on behalf of the Deputy Secretary of Russia’s National
Security Council:
– With regard to Iran, Russia believes the possibility of
improvement of its liquid propellant missiles is nil.

–It is impossible from the Russian point of view for Iran to
put a nuclear device on existing missiles with an improved
range and throw weight.

–Iran has no ballistic missiles capable of carrying nuclear
weapons at this time, and Russia sees no threat from missiles
in Iran.

–In Russia’s view, Iran presents a missile challenge.

–A missile threat would only develop if Iran seceded from
the Nuclear Non-Proliferation Treaty, and successfully
developed an MRBM with a 3,000 km range and a warhead of one

–Iran does not have the military-industrial capability to
develop such a program. If Iran could gain access to foreign
technology, it might develop such a program but this is
unlikely due to export controls.

–In any case, even with the assistance of foreign
technology, Russia assesses it will take Iran 6-8 years to
gain the ability to launch an MRBM with a nuclear warhead.

–With regard to an ICBM, Russia considers this purely
hypothetical and does not see the possibility of Iran having
this capability for the next 10 years.

–For North Korea, Russia assesses that its only real
capabilities are outdated missiles with ranges of no more
than 3,500 km.

–While it is possible to develop missiles with greater
ranges based on an SLV program, that would take many years,
even with a successful program.

74. (C) Yermakov said these were the basic conclusions Russia
wanted to make. If the conclusions are agreeable to the U.S.
side this could be noted. If not, they can be discussed
again at a later date and will be the basis for future work,
to continue successful bilateral cooperation. He said Russia
is not at all concerned about differences regarding various
aspects of these programs. Russia sees this as natural.
Having differences just means that we need to meet more often
and exchange information through appropriate channels.
Russia looks forward to a U.S. interagency delegation coming
to Moscow. Until then the two sides can communicate through
diplomatic channels or even just by telephone.

75. (S) Van Diepen thanked the Russia side, especially
Nazarov, for its thorough preparation and professionalism.
He said the U.S. was pleased with the interagency character
of the Russian delegation and appreciated that Russia had
given a lot of thought to both conceptual issues and
technical matters. The challenge going forward – as shown in
the contrast between the technical discussions and Russia’s
concluding remarks – will be to come to a greater shared
understanding of the issues. On the technical side, there is
a fair amount of agreement, but as we go up in range, our
views diverge. Based on common data, we have different
perceptions. The conclusions the U.S. would draw would be
different in each case from the conclusions Yermakov
outlined. That is not bad, but both sides need to work to
understand the conceptual and technical basis for these
views. There is a great deal to discuss, and we will need to
be well prepared for fruitful and informative discussions in
Moscow in the spring. The U.S.
will study the Russian papers and follow up through
diplomatic channels. The U.S. also will do its homework
assignments, propose specific dates for the next round of
talks, and be prepared for “our exams” next time in Moscow.


76. (SBU) U.S. Delegation:

Vann H. Van Diepen, Acting Assistant Secretary, ISN
(Head of Delegation)

Frank Rose, Deputy Assistant Secretary, VCI

Pamela Durham, Director, ISN/MTR

Kimberly Hargan, ISN/MTR

Michael Kerley, ISN/MTR

David Hoppler, ISN/MDSP

Steve Rosenkrantz, ISN/MDSP

Kathleen Morenski, Deputy Director, EUR/PRA

Caroline Savage, EUR/RUS

Michael Fogo, EUR/RUS

Joshua Handler, INR/SPM

Anita Friedt, Director for Arms Control and
Non-Proliferation, National Security Council (NSC)

Daniel Menzel, Intelligence Analyst

Michael Barnes, OSD Office of Russia, Ukraine and Eurasia
Policy, Defense/OSD

Dimitry Zarechnak, Interpreter

77. (SBU) Russian Delegation:

Vladimir Nazarov, Deputy Secretary of Russia’s Security
Council (Head of Delegation)

Vyacheslav Kholodkov, Deputy Department Director, Security

Oleg Khodyrev, Senior Counselor, Security Council

Vladimir Yermakov, Director for Strategic Capabilities
Policy, Ministry of Foreign Affairs

Andrey Shabalin, Second Secretary, Ministry of Foreign Affairs

Yuriy Korolev, Expert, Ministry of Foreign Affairs

Anatoliy Raikevich, First Deputy Department Director, Federal
Security Service

Alexander Novikov, Deputy Department Director, Ministry of

Evgeny Zudin, Office Director, Ministry of Defense

Alexander Derevlev, Senior Officer, Ministry of Defense

Alexander Serenko, Deputy Department Director, Roscosmos

Evgeny Bobrovskiy, Counselor, Russian Embassy

Oleg Pozdnyakov, First Secretary, Russian Embassy

Vadim Sergeev, Interpreter, Russian Embassy


End Cable Text

(Republished from Sublime Oblivion by permission of author or representative)
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I was recently interviewed on Middle East geopolitics and the Iran Question by Marat Kunaev, a blogger and translator at InoForum. I would like to thank him for the opportunity to express my views on the topic and providing a possible gateway into the geopolitical commentary on Runet. I’m reprinting the interview from here, with a few very minor edits; Marat made a Russian translation here.

What do you think about the situation in the Middle East?

The mainstream media likes to make generalizations about this very diverse region. Most of these are idiotic, simplistic tropes (oil, Islam, terrorists, etc). I don’t think this is productive, so instead I’ll highlight two things that get little traction in the Western mainstream media.

First, water scarcity is the root of many of the region’s problems. The Middle East is the world’s only major region perennially incapable of feeding itself, forcing it to import “virtual water” in the form of food. One of the main causes of the Israeli-Palestinian Conflict is over the unfair distribution of water, which is skewed towards Israel and Israeli settlers in the West Bank. On a bigger scale, water flows are almost as important to the region’s strategic balance as the distribution of oil deposits. Control of the headwaters of the Jordan, Euphrates and Tigris rivers, coupled with the biggest economic base in the region, gives Turkey immense strategic clout. To the contrary, Egypt’s food production deficits make it potentially vulnerable, as seen in the food riots of 2008 when global grain prices spiked. The urban poor who are hardest hit tend to resent their secular authoritarian rulers and support Islamists such as the Muslim Brotherhood. As such, making good with Israel and seeking US protection and subsidies makes perfect sense for the Egyptian political elites: resources can be freed up from military spending towards maintaining domestic stability.

Second, the “Islamic Resurgence” is rather simplistically portrayed as single-minded opposition to the West. The real situation is a lot more complex. The movement takes a variety of guises, from the moderate Islamism of Turkey’s AKP to Al-Qaeda’s franchise-based terrorist cells to the internal clan-based conflicts of Shi’ite Iran’s “Velayat-e faqih” system. It is inaccurate to treat them as a hostile monolith. And many of their grievances do sound genuine to ordinary Muslims. For instance, even Osama bin Laden doesn’t hate the US for its “freedom”, but for its support of Arab elites that he sees as corrupt, anti-democratic and hostile to Islam — e. g., the House of Saud’s acquiescence in stationing US troops in the holy lands of Mecca and Medina to protect the oil exports whose proceeds overwhelmingly benefit influential cliques. But arguing that this interpretation has some validity to it is a sure road to a wrecked career in American mainstream journalism.

Should we wait for radical change in Afghanistan?

No. Even Ronald Reagan and Rambo were pessimistic, back in the 1980’s! :) Americans don’t want to stay in Afghanistan for much longer, and their finances won’t allow them to anyway. In a few years, the Afghan government will have to sink or swim without US ground forces to support it.

However, I doubt the Taleban will seize central control again. Afghanistan has $1 trillion in untapped mineral reserves, and regional giants China, India, Russia and Iran have no interest in fundamentalists blocking access to them — especially in our world of increasingly scarce, harder-to-get resources.

How real is the possibility of US or Israeli strikes on Iran?

It’s one of those things that everyone talks about all the time, but never happens: until a spark sets of the bonfire, the Big Thing happens, and acquires the tinge of inevitability as viewed in the rear-view mirror of our common history. Kind of like World War One…

I wrote about this in my post The US Strategic Dilemma and Persian Deadlock. The key players are the US, Russia and Iran (the “triangle”) and Israel (the “wildcard”). Each have diverging interests that are hard, if not impossible, to reconcile.

The Strait of Hormuz.

The Strait of Hormuz.

Iran wants nuclear weapons to secure its mountain base, acquire the capability to project influence through its proxies (e. g. Hezbollah) with impunity and become the hegemon over the oil riches of the Gulf. Russia wants to keep the US occupied in the Middle East as it rebuilds its Eurasian sphere of influence, but all things considered, it would rather Iran not get the Bomb. The US is firmly against both Iranian hegemony in the Gulf and Russian hegemony in Eurasia: however, the tools at its disposal are insufficient to prevent both (it doesn’t have the hard power to contain Russian influence within its current borders, while a strike against Iran will have severe repercussions — up to and including a blockade of the Strait of Hormuz, through which pass 40% of the world’s oil exports, the commodity underpinning America’s own global hegemony). As such, the US, Russia, and Iran are locked into an uneasy, but potentially sustainable, strategic “triangle”.

However, this “triangle” is broken by the “wildcard”, Israel. While the Israelis couldn’t care less what Russia gets up to, it sees an Iran armed with nuclear weapons as an existential threat: not exclusively in a military sense — Israel has 200 nukes of its own (though Ahmadinejad’s apocalyptic rantings aren’t reassuring) — but in a political and cultural one. If Iran gets the Bomb, a nuclear race will break out in the Middle East. A sense of doubt and uncertainty will seep into Israel. Hezbollah will grow bolder; the possible entrenchment of political Islam in Turkey or Egypt will create a strategic nightmare for Israel. Educated Jews will start leaving the Jewish homeland, undermining the tax base needed for increased military expenditures (e. g. on anti-ballistic missile systems), as well as the Jewish nature of the Israeli state itself. In short, a nuclearized Middle East will make Israel’s foothold in the Levant vulnerable, even untenable.

If Israel feels that the US is wavering in its commitment to prevent the emergence of a nuclear Iran, then it will go it alone — perhaps with the covert agreement of states like Saudi Arabia, which aren’t much interested in seeing a hostile, nuclear-armed Shi’ite state on the other side of the Gulf either. The US will almost certainly be drawn into the fight in the aftermath — e. g. by an Iranian attempt to block the Strait of Hormuz, Iranian missile attacks on US bases in Iraq, or even false flag Israeli attacks on the US.

In my opinion, the dates of likely Israeli action are from early-2011 (when the US acquires its Massive Ordnance Penetrator bomb capable of busting concrete bunkers 60m deep) to end-2012 (the date by which Iran is likely to have developed workable nuclear weapons). Otherwise, the stage is set for the eventual nuclearization of the Middle East.

Should we expect a further strengthening of sanctions against Iran?

President Medvedev said on 23 September, 2009, “sanctions rarely lead to productive results, but in some cases, sanctions are inevitable.” What he means by this Aesopian language is that it is Russia that will be able to decide whether the results of strengthened sanctions are going to be “productive” (however you define that). Russia’s position is crucial because it is the only country with the spare refining capacity and secure trans-Caspian transport routes to successfully break any gasoline sanctions against Iran.

But even Russia’s participation will not dissuade Iran from working on the Bomb. To the contrary, it can even increase Iranian resolve if it creates the conditions for a “siege mentality” within the Islamic Republic. Furthermore, sanctions are in the interests of both the US (it would prefer accommodating with Iran to fighting it, if possible) and even Russia (to appease the US in exchange for concessions on other policy fronts). As such, sanctions are a very convenient pretext for delaying military action. But for understandable reasons, Israel is unlikely to be as patient.

What do you think are the real Russian, Indian and Chinese positions on Iran?

Though Russia might have a few more friends than just her Army and Navy, Iran certainly isn’t one of them. It’s just a lever to be used for extracting concessions from the US. At this time, supporting sanctions is good for Russia because the Americans are compromising on many spheres (e. g. on modernization, START, Georgia). However, a time may come when Russia performs volte face, e. g. if the US shows signs of reaching a reconciliation with Iran in order to refocus its energies on containing Russia, or ceases supporting Russia’s modernization drive.

China and India are both interested in cooperating with Iran to develop its hydrocarbons sector and lock in its oil and LNG exports. Both countries espouse non-Western values of “national sovereignty” and non-interference. Furthermore, India is interested in recruiting Iran as a western counterweight against its rival Pakistan. As a result, neither country has any interest whatsoever in stringently enforcing sanctions against Iran out of pure altruism.

What do you think are the positions of Georgia and Azerbaijan on military action against Iran and its aftermath?

Since Iran is in a “cold war” with Azerbaijan and supports its prime enemy Armenia, the Azeri elites would probably secretly welcome military action against Iran. Furthermore, there are twice as many Azeris in Iran than in Azerbaijan, and though they enjoy equal rights with Persians, it is Islam — or the system of Guardianship of the Islamic Jury — that really keeps Iran united (with help from the security apparatus). If Iran were to suffer military defeat, the regime may be discredited, and a liberal democratic one may even take its place.


Map of Iran’s ethnicities.

In that case, centrifugal tendencies may become predominant — as in the last years of the Soviet Union — and maybe even a Greater Azerbaijan will emerge on both sides of the Caspian Sea in alliance with Turkey to the west. On the other hand, Azerbaijan can’t be too openly enthusiastic about undermining Iran because it borders Russia to the north, which is friendlier with Iran. That is why the Azeris categorically refuse to let Israeli planes fly over its airspace in a strike on Iran.

Georgia’s position is much harder to decipher, as it maintains fairly good relations with everyone except Russia — against which it is irrevocable opposed because of its liberation / occupation (cross out as you wish) of S. Ossetia and Abkhazia. Though in previous years they’d have supported Israel, their current interests aren’t clear, since the Israelis stopped delivering arms to Georgia in exchange for Russia not delivering the S-300 air defense system to Iran. I don’t think a strike against Iran by either Israel or the US will cardinally change Georgia’s situation.

What do you think about the situation in the Russian North Caucasus and the Caucasus region in general?

Russia’s North Caucasus remains bloody and unstable, but secure under Russian control. Kadyrov is the Kremlin’s vassal in Chechnya: should he turn renegade, they’ll find another baron to replace him easily enough.

I doubt there’ll be another Georgia-Russia war. Its clear that the Ossetians and Abkhazians prefer implicit Russian control to explicit Georgian rule, and Saakashvili has no chance of changing this reality by military force. On the other hand, he remains genuinely popular amongst Georgians and secure in his rule. The cold war between Russia and Georgia will continue, but it’s unlikely to turn hot again; not unless Saakashvili is a total loon and tries to replay 08/08/08.

Another war between Armenia and Azerbaijan is also unlikely. Though Azeri military spending, bolstered by its oil wealth, now exceeds the entire Armenian state budget, the latter has had fifteen years to reinforce its positions in Nagorno-Karabakh. (Furthermore, direct Azeri attacks on Armenia proper will probably provoke a Russian military response through the mutual defense provisions of the Collective Security Treaty Organization). Aliyev is a rational, calculating leader and would much rather enjoy Azerbaijan’s oil bounty than run the risk of military defeat and popular uprisings against his regime.

How would you interpret the recent Brazil-Turkey-Iran deal in the context of multipolarity?

It’s an ideological statement: the voices of formerly peripheral countries rejecting the Western consensus on nuclear rights and proposing an alternative project amongst members of the “Rest”. As such, it is a very strong endorsement of the multi-polar ideal. But in real life, the actors playing the key roles are the countries with both interests in the issue and power projection capabilities in the region: Israel, the US, Iran, and Russia. West or Rest, it doesn’t matter: only power and the will to power.

I’d like to thank Marat Kunaev for this interview. I tried to make my answers as thought-provoking as his questions, and though I might have failed in that endevour, I hope the gap is not unbridgeable.

Interviewed by Marat Kunaev.

(Republished from Sublime Oblivion by permission of author or representative)
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This is the second article of a three-part series about the Iranian Question – that is, the question of how the world is going to deal with the Islamic regime’s pursuit of a nuclear bomb, which is likely to be one of the defining processes of global geopolitics in the next five years. The first part, The Approach of the Next Persian Empire, attempted to paint a picture of the internal structure, trends and divisions within the country. This article will analyze the geopolitics of the region from the perspectives of the key players (Iran, the US, Israel and Russia) in greater depth and will try to assess the chances of dissuading Iran from going nuclear. This effort will likely fail, in which case Israel will probably decide it has no choice but to strike against Iran’s nuclear facilities. The consequences of this, which will draw in the US into a full-fledged aeronaval war with Iran, will be explored in the third part. Read the Conclusions at the bottom if you don’t want to slog through this rather quickly and poorly-written text.

The Iranian Regime and Its Strategic Culture

To recap from the first article, the most important things to know about the Iranian political system is the following: a) it is “a unique hybrid of Velayat-e Faqih (rule by Islamic jurists) and modern parliamentary democracy”, b) it is deep, murky and highly factionalized along the following lines: The old, corrupt clerical elites centered around Rafsanjani (chairman of the Assembly of Experts), the conservative technocrats represented by Larijani (Majlis speaker), and the Islamist hardliners represented by President Ahmadinejad, to whom answer the Armed Forces (Artesh) and the Islamic Revolutionary Guards Corps (IRGC) paramilitary / militia / intelligence service, c) these factions are supposed to be balanced by the Supreme Leader, Ayatollah Khamenei, but his sympathies clearly tilt towards the hardliners – which partly explains why they have been in the ascendant since Ahmadinejad’s electoral win in 2005, d) this ascendancy was reinforced by the state’s paranoia over the abortive “Green Revolution” in support of the defeated Mousavi in 2009, who is Rafsanjani’s creature and e) pro-Western liberals have next to no backing or popular support, media hype to the contrary – though Rafsanjani’s and Larijani’s cliques are more enthusiastic about reaching an accommodation with the US, all political forces strongly support the development of an indigenous nuclear infrastructure and pushing Israel into the sea (so to speak). As such, an understanding with Israel is almost certainly out of the question.

[The dense, complex labyrinth of power in Iran. Source: Stratfor]

Iran’s strategic culture – the sum of beliefs and assumptions shared and used by its political elite uses to formulate a foreign policy – can be defined by the following elements: a need for a strong centralized state with competent security forces to preempt ethnic separatism, the conception of Shia Islam as bedrock of the national identity, belief in Iran as a leader of Islamic civilization against Western encroachment (at times verging on the millenarian), a striving for regional hegemony and an acute sense of vulnerability and encirclement by the US (which has troops in Iraq, Afghanistan, and the Gulf States) – which gives Iran an incentive to exaggerate its real military strength to dissuade an attack. This sense of vulnerability is especially acute because Iran is not a monolithic state – though its internal, Persian heartlands, walled in by mountains from all sides, are secure, it has three potential chinks in its armor.

The above map shows Iran’s nationalities and Sunni minorities. Though Persians constitute the majority at around 55-65% of the population and occupy the heartlands of Iran’s mountain fortress, there are potential flashpoints of separatist unrest in Balochistan (Balochs), Khuzestan (Arabs) and the northwest (Kurds). And although the Azeris are tightly integrated into the Iranian nation-state – the Supreme Leader, Khamenei, is himself half-Azeri, as was the failed 2009 Presidential candidate Mousavi – they still make up 20-25% of the population, occupy a geographically coherent position bordering Azerbaijan (whose pan-Turkic elements look up to Turkey), and have a moderately different political outlook (in the recent elections, the race between Mousavi and Ahmadinejad was much closer in majority-Azeri areas than it was in majority-Persian). In the case of a full democratization and rejection of its Islamist legacy, it is perhaps not unlikely to expect a “velvet divorce” between the Persians and Azeris in Iran. (It should also be noted that tellingly, all Iran’s major nuclear facilities are within the Persian heartlands, just like the USSR tended to concentrate WMD development within Russian or at least Slavic areas).

Iran’s Pursuit of the Nuclear Bomb

There are credible reports that the US has tried to stir up ethnic insurrections against Tehran since the Islamic Revolution, including by providing them with weapons and intelligence, and rumors that its intelligence services use Azerbaijan as a base to stir up Azeri dissent within Iran. In this secret war, Iran counters by maintaining powerful internal security and intelligence forces, assassinating perceived traitors abroad and maintaining a siege mentality. This starts a circle of confrontation with the US – from manipulating religious and ethnic fault lines in Iraq to force the US to the defensive (though not eschewing cooperation on shared interests like defeating the Taleban), to the ultimate bone of contention – Iran’s pursuit of an indigenous nuclear weapons production capacity and delivery systems. If it is successful in this, then it will severely undermine the US position in the strategically-critical Persian Gulf region since a) the moderate Arab states will observe the American lack of resolve and will move to guarantee their own security through self-help – perhaps ditching the US in the process or swapping it for other partners, and b) it will make Iran near strategically invulnerable to military attack because of the threat of nuclear retaliation. For this reason, it is hard to see the US – not to even mention Israel – ever allowing an Iranian bomb.

[Blue diamonds = uranium mining, read diamonds = nuclear research facilities]

Unlike Iraq’s or Syria’s nuclear weapons programs, which are / were relatively simple and limited, Iran seems to be pursuing the bomb on a larger scale, aiming to develop an indigenous capability over the entire nuclear fuel cycle and maintaining redundant, hardened nuclear facilities. It should be noted that developing nuclear weapons is rather hard, since they have to be robust, reliable, miniatured and married to delivery systems (gravity bombs, cruise missiles or ballistic missiles launched from platforms ranging from truck beds to nuclear subs). Iran has been having problems with mastering the nuclear fuel cycle, and most current estimates indicate it is still around five years from acquiring its first nuclear weapon.

Uranium nuclear fuel enrichment consists of four main steps. The first involves extracting uranium ore and processing (also known as milling) it into uranium oxide, commonly known as yellowcake. Second, most enrichment efforts — including Iran’s — then subject the yellowcake to a series of chemical reactions to create toxic uranium hexafluoride (UF6), which is useful for a variety of enrichment techniques. Third, in many cases — again including Iran’s — the UF6 then is run through “cascades” of centrifuges, or long chains of individual centrifuges connected together in a vacuum in gaseous form. Through this process, the percentage of the fissile isotope uranium 235 is increased to the point where the uranium can be used for power production. (Iran reportedly has aimed for an enrichment level of 3.5%, which is considered low-enriched uranium.) Fourth and last, once the uranium has been enriched to the desired level, it is then converted into fuel rods or pellets for use in a reactor.

It is important to note that low-enriched uranium is not the same thing as highly enriched uranium (which is considered to be greater than 20%) — or uranium enriched to levels of 80-90% uranium 235 — which is considered sufficient for use in a crude nuclear device. Producing highly enriched uranium is not simply a matter of running the cascade cycle describe above over and over again. As the uranium becomes more enriched, the technology becomes increasingly delicate. Fine separation of the UF6 molecules and the minute calibration of the centrifuges necessary to carry this out, is required for this, and it is not clear that Iran’s centrifuges are of sufficient quality to attain these high levels of enrichment.

One of the advantages of uranium is that it is easier to build a working bomb with it, since it can do with a simple gun-type explosion to create a critical mass of fissile material needed to produce a nuclear blast – but as written above, acquiring Highly-Enriched Uranium (HEU) is difficult. That is not so much the case for plutonium, a byproduct of nuclear reactors whose enrichment can be accomplished through a simpler chemical reaction (instead of very precise calibration of centrifuges). However, there are two problems in this direction: a) you need a near perfectly symmetrical implosion to compress plutonium core to supercritical mass, necessitating “the precise “lensing” of high-grade explosives” – unlike for HEU, which can do with a simple gun-type design, and b) even though Iran has got the reactor at Bushehr up and running, producing plutonium as a byproduct, it is supposed to be repatriated back to Russia and be subjected to international monitoring – diverting part of the flow will be tricky.

Iran continues to have problems in mastering the nuclear fuel cycle, relying on the 600 tons of yellowcake it bought from S. Africa three decades ago (now 75% depleted) and Russian deliveries of low-enriched uranium (subject to disruptions and even full cessation depending on the status of Russian-American relations). Iran is hobbled by poor-quality uranium reserves – its mine at Saghand contains 3000-5000 tons of uranium oxide at a density of just 500 ppm, well below the 750 ppm usually thought to be the limits of commercial viability, and there has been a slowdown in both yellowcake conversion into UF6 at Isfahan and centrifuge installation at Natanz. There have been reports that the slowdown is partly attributable to Iran’s loss of high-quality bearings imports for its centrifuges under US pressure on the suppliers, forcing it to rely on lower-quality domestic ones.

On the other hand, there are many sources saying that Iran’s activities are at a more advanced stage than generally believed:

…Ahmadinejad announced that Iran had 6,000 centrifuges operating at its uranium enrichment facility at the underground Natanz facility, double the number operating less than a year ago, a worrisome development that shows the progress Iran has made toward developing a nuclear weapon (Washington Post, July 26, 2008). The August 2009 IAEA report said the number of centrifuges had grown to 8,300 (Haaretz, August 31, 2009). El Baradei, the director general of the IAEA, told the group’s 35-nation board that Iran had not stopped enriching uranium or answered lingering questions about its nuclear program (New York Times, September 7, 2009).

In September 2008, IAEA officials reported that enough enriched uranium to make six atom bombs (if processed to weapons grade level) disappeared from the main production facility at Isfahan. The officials suspect the material may have been moved to one of the installations spotted by American spy satellites, which intelligence officials believe are being used for covert research (Telegraph, September 12, 2008). …

David Albright of the Institute for Science and International Security said in 2008 that Iran has solved many of the problems it had with its centrifuges and they are now “running at approximately 85% of their stated target capacity, a significant increase over previous rates.” The IAEA’s 2008 report said Iran has produced nearly 1,000 pounds of low-enriched uranium; Albright says it needs a minimum of 1,500-pounds for a simple nuclear bomb, a figure it could reach in six months to two years (AP, September 24, 2008). …

The IAEA reported on November 19, 2008, that Iran had produced 1,390 pounds of low-enriched uranium suitable for nuclear fuel. That milestone is enough to produce a single nuclear weapon, about the size of the bomb dropped by the U.S. on Nagasaki according to Thomas B. Cochrane of the Natural Resources Defense Council. He noted, however, that they still needed the technological knowhow to purify the fuel and produce a warhead (New York Times, November 19, 2008). …

On September 25, 2009, it was disclosed that it had a second fuel enrichment plant. The United States was apparently aware of the facility, but it was hidden from weapons inspectors (Jerusalem Post, September 25, 2009). Meanwhile, Iran’s exiled opposition movement reported the day before that it had learned of two previously unknown sites in and near Tehran that it says are being used to build nuclear warheads (Agence France-Presse, September 25, 2009).

Separating the truth from the spin is amazingly hard, considering that Iran has motives for both exaggerating (to dissuade Israel / the US from attacking it if they know that they will fail to destroy its nuclear program anyway) and concealing (to not invite an attack, duh!, and to give propaganda ammunition to its defenders) its true strength.

The American Strategic Dilemma

As mentioned previously, the US has no intention of allowing Iran to get the bomb. If that were to happen, the new Persian empire would soon displace the US as the regional hegemon in the Middle East – the keystone of the global oil system whose cheap, liquid energy flows underwrite the trinity of globalization, US military predominance and Pax Americana. The moderate Arab states will be spooked into either setting up their own nuclear programs (permanently dooming the anti-proliferation system) or bandwagoning with the new power. Iran will be strategically invulnerable as rarely before, protected not only by its mountain walls but by the threat of nuclear retaliation – this will allow it to meddle in the affairs of its neighbors far more aggressively than it had previously dared (by supporting Hezbollah and Shia militants around the Gulf) and suborn a vulnerable Iraq to its will.

However, bombing Iran will not solve problems either. First, its nuclear program is built around deception, redundancy and hardening. Like the recent revelation of a second enrichment built under a mountain on a military base at Qom, Iran only admits to covert efforts at nuclear weaponization when it realizes its cover has been blown. Speaking of which, the facility at Qom also illustrates another feature – the amount of redundancy in its nuclear program. Since the US knew of Natanz, having a second site would have also made sense (and perhaps a third, and fourth, etc, whose existence has not yet been revealed). That way, limited bombing sorties of the sort that crippled the nuclear programs of nations like Syria or Iraq would not work in Iran. They make sure to harden these facilities against US bunker-busters, allowing a margin of safety to account for any black US capabilities. However, in the final analysis the main issue relates to how good US intelligence is on the Iranian nuclear program – if you don’t know the precise coordinated of an underground, hardened target, then no bunker-buster is strong enough to destroy it. Though the US has excellent space-based reconnaissance capabilities, they cannot pick up everything, since “research and development associated with a limited, clandestine nuclear weaponization effort can be smaller and better concealed than industrial-scale facilities for nuclear-power generation”. That would require a sophisticated human intelligence effort in Iran itself, in which the US is rather weak and relies on Mossad. Besides, the Iranians have a plethora of experienced intelligence agencies and are proficient at anti-espionage.

Second – and much more important – are the tools of retaliation at Iran’s disposal. This includes destabilizing Iraq through the use of Shia proxies, activating Shia sleeper cells in Saudi Arabia to attack its oil exporting infrastructure, missile attacks against US military bases and Gulf oil infrastructure, coordinating renewed attacks on Israel by Hezbollah, and most importantly blockading the Strait of Hormuz by anti-ship missile batteries and having its big fleet of patrol boats lay down mines. Iran’s production of 3mn barrels per day will vanish overnight, and even a few successful attacks on the 20 oil supertankers leaving the Gulf per day could in effect cut the flow of oil out of the Gulf by dramatically raising insurance rates. Considering that 17mn barrels per day, or 40% of the world’s oil exports pass through the Strait – a figure that accounts for 20% of world oil consumption – even small disruptions will be catastrophic.

Not surprisingly, Washington would prefer to first try everything possible to reach a diplomatic solution. The initial signs were seen during the past year, when Obama tried reaching out to Iran and Muslims in general (Cairo speech), but like all idealistic projects there have been no real, positive effects. If anything, Iran’s hostility hardened after what the hardliners perceived as the Western-incited unrest following Ahmadinejad’s summer electoral victory. Having failed in getting the Iranians around him in a circle singing Kumbaya (although Obama did create an impression of benign moderation (liberals) or weakness (conservatives)), things are now going to get more serious.

This will be on display in the P5 + 1 (UN Security Council and Germany) talks with Iran in Geneva from 1 October. If the Iranians refuse to budge on the nuclear issue, the US plans to impose “crippling” gasoline sanctions, for which it has been laying the framework for the last several months. It is believed this will put pressure on the Iranian regime, which massively subsidizes gasoline (to the huge detriment of its public finances) and whose automobile ownership has exploded in the past decade. However, the argument could be made that this would just reinforce Iran’s siege mentality and make it more aggressive.

Alternatively, the sanctions can be rendered ineffective. Russia appreciated the US giving up on its ABM plans for Poland, but realized it for the symbolic concession it really is and has no desire to reciprocate by handing over its leverage over Iran by cooperating with Washington on sanctions. To ditch Iran, Russia will need more concrete moves like Washington dropping support for Ukraine’s and Georgia’s membership in NATO, halting its plans for Polish military modernization and informally acknowledging Russia’s sphere of influence over the post-Soviet space. As long as these conditions aren’t met, Russia can easily supply Iran’s gasoline needs by pressuring Turkmenistan and Azerbaijan.

Similarly, China is unimpressed with rising US protectionism (e.g. recently introduced import tariffs on tires) and also has the spare refining capacity to help bust gasoline sanctions on Iran. Even France has recently voiced reservation after a flurry of high-level meetings between the two, a surprising twist given that France has moved much closer to Washington since 2007 under Sarkozy – though given France’s hardline anti-Iranian position, this may simply be showing its displeasure over Obama’s lack of resolve.

Then there is also the question of Afghanistan and Israel. The Taleban have a deep-rooted presence in Afghanistan and are convinced the Americans will have to leave eventually, just like the Greeks, British and Soviets before them. The idea that this place could be pacified and built into a model liberal democracy is nonsensical to say the least. Meanwhile, it is a drain on US military and fiscal resources that benefits Russia and Iran before anyone else, and one that is going to increase as NATO pulls out and if the US increases its troops there. Continuing the campaign in Afghanistan is a strategic blunder and after a face-saving surge the US will likely begin to pull out.

The Centrality of Israel

First, even as Obama superficially tried to improve relations with the Muslim world by pressuring Israel on halting the expansion of settlements in the West Bank, he made some in Israel question the strength of the US commitment to Israel’s security (despite the fact that this issue has little bearing on it). Second, Israel cannot and will not accept an Iranian bomb, not even if it leads to a clash with the US – to the US, it would be a major annoyance; to Israel, an existential risk, even despite its strengths in ABM. If Iran continues to progress on its nuclear and missile development, an Israeli strike is almost certain. And who can blame them?

If a day comes when the world of Islam is duly equipped with the arms Israel has in possession, the strategy of colonialism would face a stalemate because application of an atomic bomb would not leave any thing in Israel but the same thing would just produce damages in the Muslim world… in the future it will be the interests of colonialism that will determine existence or non-existence of Israel… Jews shall expect to be once again scattered and wandering around the globe the day when this appendix is extracted from the region and the Muslim world.

Not Ahmadinejad (he of the Holocaust denial) or Khamenei. Rafsanjani, 2003 (chairman of Assembly of Experts and main supporter of Mousavi).

Israel doesn’t care if Russia regains hegemony over the former Soviet. It doesn’t care if East-Central Europe becomes Finlandized. And though it faces the prospect of attacking Iran and facing retaliation from Hezbollah, spiking oil prices and renewing its status as an object of hatred in the Islamic world with trepidation, all that is nonetheless dwarfed by the prospect of Iran attaining a nuclear bomb.

Most commentators believe Iran is around three to five years behind the bomb, which allows Israel time to stay quiet and let the US indulge in diplomacy and arm-twisting. But this will not be the case indefinitely. There will come a critical point when it judges the Iranian program to be too far advanced already, based on information conveyed by Israel’s extensive human intelligence apparatus in Iran. And it will make the decision to strike, unilaterally if need be, but preferably involving the US at the earliest possible date to a) maximize the damage to Iran’s military infrastructure and hence constrict its ability to close the Strait and b) to more thoroughly damage Iran’s nuclear program. In any case the Israelis will have to fly over Iraqi airspace controlled by the US, and since it’s not exactly going to shoot them down, the world will believe the US was complicit in the strike on Iran anyway whatever it does. Hence the rational American response would be to coordinate the attack with Israel from the very start. It’s entirely possible this will be preceded by false-flag operations against American military or even civilian targets that will be blamed on Iran.

This gives the impression that the US is going to be prodded into this by Israel, but the reality is that by the early 2010′s its intentions may well have shifted in favor of an attack on Iran by themselves due to domestic unrest (economic problems, Obama’s “socialism”, etc), continuing Iranian intransigence (pursuit of a bomb, closer relations with Russia), Russia’s resurgence (probably) and Chinese expansionism (perhaps). At this point, it will become clear that the optimal strategy for the US would be to a) ease its imperial overstretch by pulling out of Afghanistan, b) deal with the Iranian challenge for Middle East hegemony once and for all, and c) use the resulting freeing of resources to focus more attention on containing its two aforementioned peer competitors, by rerouting military assets to East-Central Europe / the Black Sea region to counter Russia or reinforcing its presence in East Asia to counter China – whichever is perceived to be the more pressing threat to US interests at the time. With time, the US elites will realize the logic of this strategy, and will embrace it.

Potential Pitfalls of a Strike

However, there are two negative factors that might end up making an attack on Iran extremely damaging for US global power. By then, Russia will be getting more paranoid about US intentions, assuming it refuses to make real concessions on granting Russia a sphere of influence over the post-Soviet states and continues arming Poland and trying to draw Ukraine, Georgia, Central Asia, etc, closer into its orbit. Russia may up the ante by helping Iran modernize its generally obsolete military equipment, even at a commercial loss, e.g. by arming Iran with modern AA systems such as upgraded S-300, which could make life difficult for all but the most advanced, stealthy and expensive US aircraft like the F-22 Raptor and B-2 bomber (Iran already has 29 Tor M-1 systems, which have a relatively limited engagement envelope but are otherwise very good), or the latest anti-ship cruise missiles, which can pose a significant threat even to the American CVBG’s Aegis defense systems (let alone lumbering oil tankers). Today, as a militarily weak nation Iran makes a show of strength to dissuade hostile powers like the US from attacking it; tomorrow, its strength may become more real than illusory.

Second, the consequences of a shutdown of the Strait of Hormuz will only deteriorate even independently of improvements in Iran’s military potential. The reason is that world oil output peaked and will decline relentless after 2011. Meanwhile, the world economy will “recover”, pulled along by the monetary torrent unleashed during the economic crisis. This will again put immense upward pressure on oil prices, which can be expected to rise back up to around 150$ by 2011 or higher (also note that the US dollar will be weakening). The world economy will not long be able to withstand such prices; a war in the Gulf may be the straw that breaks the camel’s back.


This is an extremely convoluted issue which revolves around the complex interactions of a number of key actors, foremost amongst them the US, Israel, Iran and Russia, whose policies are shaped by domestic trends, ingrained strategic cultures and their perceptions of the actions, words and thoughts of other actors in the Middle East arena. The idea that the more you know the less you know, and that the only true predictions is that there will be no true predictions, is especially valid in this case.

Iran is unequivocally pursuing a nuclear bomb. The military program is camouflaged by a genuine civilian endevour and is highly redundant and hardened against attack, though it faces problems and is still 3-5 years behind maturation. Iran hopes that by acquiring the bomb and mating it with reliable delivery systems (ballistic missiles), it can obviate its chronic sense of insecurity and reinforce its claim to Islamic leadership – a claim that will acquire more credence if backed by the gun.

Unlike the US, Israel sees no big difference between Iran’s factions (both viewpoints are justified – though Rafsanjani’s clique is better disposed to the US, all favor nuclear power and the end of Israel). Understandable, Israel is adamantly against the idea of an Iranian bomb, viewing it as an existential threat, and it has made it quite clear that it will strike if Iran does not cease and desist. By necessity, this will also pull in the US into a general aeronaval confrontation with Iran. Considering the threat Iran poses to the Strait of Hormuz, through which 40% of the world’s exports pass, the US sees war as the last resort; however, the prospect of a nuclear Iran is no better, because it would fatally weaken its position amongst the moderate Arab states.

Hence, the US will try its best to solve this without resorting to war. Obama’s early charm offensive, grounded in idealism, was unsuccessful and gained him approval from the Kumbaya crowd and a reputation for weakness amongst realists. Unfortunately for him, the Iranians, the Russians, and indeed all serious nations, are ruled by realists. Meanwhile, its perceived support of Iranian “reformists” in the June elections – that is of Rafsanjani’s protégé, Mousavi – enraged the revolutionary-conservative hardliners centered around Ahmadinejad and the IRGC, further reinforced their political ascendancy and drove Iran closer to Russia.

Failing to resolve these issues diplomatically, the US will now push for “crippling” sanctions on Iran’s gasoline imports, with the quiet approval of an Israel that is feeling increasingly spurned by the US on other matters (but which likewise wants to avoid war unless everything else fails). What will happen next on this front will be decided within months at the latest, and their success or lack thereof will depend on the actions of states whose interests are if not opposed, then at least orthogonal, to those of the US. The chances of success of presenting a united stance on sanctions on the part of the “international community” are minimal – too many different actors with different goals for multilateral cooperation.

The Russian President, Medvedev, in the Aesopian language typical of Russia’s rulers, said on 23 September, “sanctions rarely lead to productive results, but in some cases, sanctions are inevitable”. The irony is that Medvedev will be the one who decides, to a large extent, whether the sanctions will lead to “productive results” – however you define that. He is interested in getting the US to recognize its sphere of influence over the former USSR and back off from militarizing Poland. It is likely that Russia will agree to the sanctions in principle (to give the US the incentive to accede to Russia’s aforementioned wishes in its Near Abroad) – hence their “inevitability”, but considering that Russia believes the US is unlikely to give those concessions, it will likely end up not honoring those same sanctions it agreed to – hence his observation that sanctions “rarely lead to productive results”.

This is because, despite America’s problems and quagmires, it is unlikely in the extreme to give Russia the breathing space for recreating a Eurasian empire – a construct it spent half a century trying to contain and undermine (“though Washington is maneuvering considerably now, balancing wars in Iraq and Afghanistan, a resurgent Russia, an intransigent Iran and a global economic crisis, Poland remains a long-term priority”). As such, any US-sponsored sanctions regime will be torpedoed by Russia, which can use its influence over Turkmenistan or Azerbaijan to circumvent any sanctions – and the results of the sanctions will be productive neither for the US (Iran will still get its gasoline) nor for Russia (no fundamental reversal of US policy towards its resurgence).

Even if Russia refrains from helping out Iran and honors the sanctions, it could still realistically hope for help from China, which has enough spare gasoline refining capacity to supply Iran’s needs, or it could cut its subsidies. This would be uncomfortable for a regime that buys social stability with gasoline subsidies, amongst other things. This is unlikely to lead to revolution by itself, however – if anything, Iran will try to diminish unrest by increasing the national sense of siege and becoming more aggressive.

Whatever the result of the sanctions, Iran is unlikely to renege on its nuclear program. This is unacceptable to Israel, and it will become ever more unacceptable for the US too. The latter will have its hands more untied by the gradual removal of troops from Iraq (plans are to leave just four “superbases” behind after a decade of occupation) and from Afghanistan (if it’s rational), and increasing domestic troubles (economic, government intrusions, etc) may push Obama towards a more bellicose foreign policy to compensate. The US will come to the conclusion that the time has come to strike. And Russia would be perfectly happy to see the Gulf burn, considering that it would massively set back Iran’s acquisition of nuclear weapons (it doesn’t want that) and lead to a massive spike in oil prices (it doesn’t mind)…

The third and last blog post on the Iranian Question will be a fictionalized account of how a US-Iranian military conflict will pan out, the weapons that will be used and how they will perform, how players like Iranians, Israelis, Saudis, Americans, Russia, etc will perceive it, the decisions taken by political leaders, and its economic and geopolitical consequences.

(Republished from Sublime Oblivion by permission of author or representative)
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Every once in a while, there occurs a major shift in the international arena. The First World War and its consequences were the seminal change of the last century, collapsing ancient empires and ushering in a new era of ethno-nationalist clashes, political radicalism and emerging powers challenging the established order of Versailles, forces that were fully unleashed in the aftermath of the Great Depression. From the middle of the Second World War, it became clear that the new world order would be defined by a bipolar competition between the USSR and the US. The next major shift occurred with the oil shocks of the 1970′s, when growth throughout the industrialized world, capitalist and socialist alike, declined, and they were beset with increasing social problems, while the beginning of the rise of China and the economic re-emergence of Western Europe and Japan heralded a new, globalizing multipolarity that was confirmed by the end of the Cold War and the collapse of the USSR.

The next two decades saw the triumph of “Western liberal democracy as the final form of government” and the spread of the neoliberal consensus, all underwritten by American military dominance and the new resources unlocked by the opening of formerly autarkic economies. Generally speaking, this was a rather peaceful and prosperous time. Though wars continued and there was the occasional genocide in Rwanda or Darfur, the overall incidence of violence declined sharply in all categories, the sole exception being terrorism. Similarly, the opening up of world trade sharply increased consumer power in the US and Europe as China’s reserve armies of labor set about producing cheap goods, a process lubricated by cheap oil, gargantuan freighters and developments in supply-chain management. And though its flowers still bloom and the politicians smile and exude the air that nothing’s much amiss, the winds of time are shifting, the sun is already setting on this world, and darkness is about to creep in.

Quite literally. The cheap oil that underpins industrial civilization is ending, as the world approaches peak oil production – the point when about half of recoverable reserves have been taken out of the ground. The remaining half lies in remoter places and will be much harder to extract, especially taking into account that the resources for doing so will be significantly more limited due to the collapse of the world credit system, a system that should have died a free-market death in late 2008, but which limps on, zombie-like, sustained by governments whose solvency now hangs by a thread only maintained by investors still naive enough to believe in their credibility.

This is because the defining feature of this crisis is not so much even the collapse of world industrial output and trade, which was by itself unprecedented in its magnitude this century except by the Great Depression, but the sheer burden of bad debts and fiscal obligations accumulated by governments in the developed world, especially in the Anglo-Saxon world. First, they are running unprecedented peacetime budgets – both as a consequence of their disastrous pro-cyclical spending during the fat years, and to fund the stimuluses with which they hope to get their economies out of the rut. Second, they printed lots of money under the euphemism of “quantitative easing”. Third, they carried over private losses and bad debts onto the public account – socialism for the rich, capitalism for the rest.

In the next few years, according to commentators like Willem Buiter, these reckless policies are going to lead to classic emerging-market currency crises in the Anglosphere, or “submerging markets” as he calls them. This is not surprising. Taking the United States as the most significant and typical example, to run the kind of deficits projected – 13% of GDP this year, over 10% again in 2010, and red into the rest of Obama’s term even under the rosiest projections – requires a very credible commitment to returning to a balanced budget within a limited timeframe.

First, this requires a rapid economic recovery. However, all the monetary and fiscal tools for accomplishing this have already been used at and beyond their limits. In the 1980′s, once the task of breaking inflation was accomplished, interest rates were eased back and the economy recovered rapidly. Today, interest rates have already been cut to minimal levels and the economy seems to have bottomed, but even so it remains extremely feeble, with the real unemployment rate (“U-6″) currently at 16.8% and rising. Recovery is likely to be slow as households begin to pay off their debts instead of increasing consumption, the linchpin of the US economy. If it is politically feasible (uncertain) and should there be high inflation brought on by the recent monetary splurge and once-again soaring oil prices (almost certain), interest rates will have to be raised, which risks short-circuiting a feeble recovery.

Second, even during the mis-named “Bush boom” growth was large jobless and inequality-enhancing, with half coming from distribution (the “Wal-Mart effect) and the other half from better productivity from financial services!, as measured by the number of transactions undertaken. These are not going to be repeated, the first because rising energy prices are increasingly making the JIT distribution model untenable, the second because the financial system, outside of a few well-connected insiders like Goldman Sachs and JPMorgan, now lives on government guarantees.

Third, the next years are going to see rising demands for social spending as younger Americans make themselves heard, whose worldviews are relatively more socialist and European-like. The rising number of retiring baby boomers will necessitate far more Social Security, Medicare and Medicaid spending, out of funds that will simply not be there because the cookie jars were looted a long time ago. Then there’s the whole chimera about greencollar jobs. In principle, as a convinced peakist with serious concerns about the consequences of anthropogenic global warming, I support subsidizing green industries like renewable energy and hybrid automobiles. But these are luxuries only a more prudent economy could afford, like China. In the US, it will result in very few jobs being created and will constitute further drains on its fiscal credibility – and hence the means of sustaining this very program. More spending on healthcare? The sector is already horrifically bloated, and should if anything be reduced and rationalized.

So in conclusion, the US faces years of relative stagnation, and no credible way of paying back its metastasizing public debt. As long as investors stick it out and rates remain low, this remains a sustainable, albeit unsatisfactory, state of affairs. The reason the US Treasury rates fell so low and the country even tipped over into deflation was that the global equity collapse had investors fleeing to the perceived haven of last resort – US Treasury bonds. Yet as I pointed out in Decoupling from the Unwinding, one of the effects of this crisis will be to decisively sever the links between the West and the Rest (emerging markets). In a few more years, investors will realize that whereas China has real long-term growth prospects, they are unlikely to ever see positive returns on their US bond investments, as the US gradually monetizes its debt. They will jump ship, resulting in rising rates on US debt and making it increasingly unaffordable to service. Unless they inflate it away, of course. Would you like to die by ice or fire?

Let’s whimsically set the date for this collapse for August 2012. The liberal international order, Pax Americana, will collapse with it. However, there will be numerous signs of its slow demise well beforehand, which will be reflected in geopolitical events.

The focal point is the Middle East, that great intersection of energy, power, instability and hatred. Iran is continuing in its efforts to build a nuclear bomb to consolidate the new Persian empire. It is currently strong, demographically, but destined to get weaker as the younger, sub-replacement level generations become adults. The regime is also increasingly ideologically insecure. The nation is currently at around where the Soviet Union was in the early-1980′s on its belief matrix – the egalitarian, totalitarian ideals of the Islamic Revolution are now a distant memory, clouded over by the drugs, lasciviousness, and Westernization now typical of its larger cities. Part of the population yearns for the West, disillusioned with their own society and skeptical of the clear evidence of clerical corruption. Yet the most influential clerical elites have retrenched around the hardline Ahmadinejad and the Islamic Revolutionary Guard Corps (IRCG), who want to return to a future of austere Islamic government. Thus there is currently a revival of radicalism in the Islamic Republic, less potent than in the 1980′s, yet now married to its greater technological capabilities. This revival is almost certainly destined to be short-lived, but has the potential to go out with a bang.

This possibility must be considered especially seriously given that Israel is now ruled by Benjamin Netanyahu, a man who in 2007 opined: “It’s 1938, and Iran is Germany, and Iran is racing to arm itself with atomic bombs”. It is likely that were it not for US restraint, the Israelis would have long since bombed Iranian nuclear and military facilities. They have received permission from Saudi Arabia, via backdoor diplomatic channels, to fly over their territory to do so. This is unsurprising, because the Gulf monarchies face a significant challenge from Iran, which foments Shi’ite unrest in Bahrain and parts of Saudi Arabia, and is suspected of funding a Shi’ite insurgency in northwest Yemen that threatens to spill over the borders. Though moderate Arab rulers pay lip service to Islamism, they certainly have no intention of allowing it to infringe on their political power. Iran’s other lever is its control of Hezbollah, an impressively disciplined organization that managed to (arguably) win a war against Israel in 2006. Though they do not pose an existential threat to Israel, they can create an serious political and strategic problem through massed rocket attacks, to counter which Israel is now assembling a multi-layered, world-class ABM system.

If Iran gets the bomb, it will unleash a Middle Eastern arms race, in which Saudi Arabia, Egypt and Turkey will feel compelled to build up arsenals of their own. Iran will become much more confident about sponsoring Shi’ite separatism and drawing Iraq closer into its fold. In the endgame, the US cannot allow this challenge to its hegemony in the oil-rich Middle East to go unanswered, in particular the dependence of the Gulf States and now Iraq on its military tutelage, no matter the cost of meeting the call. It will strike Iran, or give Israel the go-ahead, well before Iran comes close to testing its bomb.

The pressure will be ratcheted up gradually. If talks scheduled for 1st October 2009 fail to achieve any Iranian compromises on its nuclear program, as usual, then the US will probably activate what it calls “crippling” sanctions on Iran with the connivance of Britain and France, especially targeting the 40% of gasoline it imports. In practice, this is unlikely to achieve much, especially since Russia – having received no firm guarantees from Washington recognizing its desired sphere of influence over the post-Soviet space – will likely help Iran shrug off sanctions by allowing Iran to satisfy its shortages through imports from Russia’s Caspian ports.

This talk of Russia’s role brings us to another point. The US is currently in a profound strategic dilemma, having to choose three areas in which to exert its strength – in particular its limited manpower: a) Afghanistan / Pakistan and the “war on terror”, b) blocking the arrival of a new Persian Empire with nukes and c) containing a resurgent Russia possibly intent on rebuilding its own old empire.

The recent American successes in Iraq have generally stabilized the country, though smaller-scale violence lingers on and might well flare up again should pressure be loosened up. This necessitates that the bulk of US military manpower remains locked up in Iraq, which gives nations like Russia, which desires to reverse its post-1991 geopolitical losses, a “window of opportunity” to make its challenge. And although the US presence in Iraq is winding down, it is simultaneously becoming pressured by requirements elsewhere – as of today, counting contractors, there are more Americans fighting in Afghanistan today than the Soviets deployed at their peak. (A common counter-argument is that of the 120,000 armed US personnel stationed there, some 68,000 are contractors who mainly do things like fixing electrical lines or washing pots and pans; however, the comparison remains valid because these would be the functional equivalent of Soviet “Class C” divisions mostly concerned with logistical issues).

The Afghanistan quagmire will likely be seen by future historians as an American strategic blunder of the first magnitude. First, it developed as a simple reaction to al-Qaeda’s use of Afghanistan as a base to plot out the 9/11 attacks, yet apart from that, the expansionist Taleban were a much bigger problem for Iran and Russia than for the US (even as the US oil corporation Unocal, with the backing of the CIA, was negotiating with the Taleban over the construction of a Trans-Afghanistan Pipeline to carry natural gas from Turkmenistan to the Indian subcontinent in 1998, Iran was seriously threatening war with the Taleban for the murder of Iranian diplomats). By keeping Afghanistan and the Central Asian jihadi threat suppressed, the US uses its own resources to spare Russia’s and Iran’s from the necessary work of patrolling Afghanistan’s borders, aiding the Northern Alliance and other anti-Taleban insurgents, intercepting jihadi aid to their domestic Islamic militants and maintaining the stability of the Central Asian republics. Hence Russia’s generally quiescent attitude towards allowing the US to transport non-military supplies to Afghanistan and usage of Central Asian bases.

Second, and more importantly, the US is not fighting to win. Afghanistan is not Serbia, and it is not even Iraq. It is a proud tribal society with a total fertility rate of nearly 7 children per woman. Trying to instill “liberal democracy” is a quixotic endeavor. Preaching, let alone practicing, “human rights” is (correctly) interpreted as a sign of moral weakness, and an incentive to up the pressure. The only way to actually win in Afghanistan is through burned-earth like brutality and ruthlessness, like Cromwell’s pacification of Ireland. Anything else is a waste of time and money. As it is, the US is pouring its resources like water into the sands of the “graveyard of empires”, and taking NATO along for the ride – a strain that threatens the very survival of the alliance. This would not be nearly as critical if the jihadi threat was the only storm-on-the-horizon the US-centered world order faced; yet in combination with Iranian brinkmanship, the Russian resurgence, the Chinese mercantile challenge and the increasing reflection of the limits to growth onto the world economy, the days of Pax Americana may well be numbered. Let’s return to Iran.

From this year, the countdown will be really on as Iran reaches for the bomb, Israeli hysteria (understandably) rises and the US becomes ever more desperate for a radical solution. By 2011-12, Obama will be coming under increasing conservative pressure – an again worsening economic position and a “patriotic-reactionary” movement to counter the perceived intrusion of government onto an ever expanding array of economic and social activities – which will if anything make his administration more conductive to the thought of a foreign adventure to take the population’s mind of economic stagnation, rising poverty and perhaps by that point, capital flight. The Israelis will receive the signal to strike. Since this would draw in the US anyway, it will decide that it might as well strike Iran itself, and degrade the Iranian military as much as possible so as to circumscribe the Islamic Republic’s retaliation capabilities.

The US will have no problem in gaining air superiority and destroying a vast array of fixed Iranian targets, because the Iranian integrated air defense system is relatively obsolete and can be eluded by stealth, defeated by electronic countermeasures and neutralized. However, given the dispersed nature of Iran’s military forces it will retain a significant amount of retaliatory capacity – in particular, the ability to mine the Strait of Hormuz using fast attack craft and harass shipping with coastal shore batteries, diesel submarines in the shallow waters of the Strait, and perhaps suicide attacks from civilian-appearing vessels armed with explosives. Iran’s development of an indigenous UAV capability, by enabling it to scout out the presence of oil tankers, represents a significant force multiplier, especially if Iran also has the technological capacity to network its findings with its other military assets.

This is not to say that the War Nerd is correct when he says that any US naval assets off the coast of Iran will be blown to smithereens, which referred to a rather artificial and improbable scenario. In all likelihood the Iranian threat will be contained within weeks, the country will be thoroughly bombed into submission and perhaps the regime will be overthrown. But in its death throes, it could also kill the world economy:

Most importantly, it would not have to be effective. The mere possibility of mines — the uncertainty factor — would not only slow down the movement of tankers in the Gulf, but also spike insurance rates. Tankers cost a lot of money and their cargoes these days are incredibly expensive. Risking both ship and cargo is not something tanker owners like to do. They buy insurance. If the possibility of mines in the Gulf existed, insurance rates would not only rise, but might become altogether unavailable. Insurance and re-insurance companies these days do not have enormous appetites for unpredictable risk involving large amounts of money. And without insurance, as we saw during the tanker wars in the 1980s, owners won’t take the risk themselves.

Iran’s counter could be to increase the potential risk to the point where insurers back off. At that point, governments would have the option of insuring tankers themselves. Given how quickly governments move, particularly in what would have to be an international undertaking, oil supplies could be disrupted for days or even weeks. At this point, speculators and psychology aside, prices would spike dramatically. The creaking sound would turn into a cracking sound for the world economy.

Ergo, oil prices spike well north of 200$ per barrel in a time of global economic weakness and all-round instability. The psychological effects cannot be anything but extremely negative, and such a scenario may constitute the signal for global investors to finally throw in the towel on the US.

The third key element in near-future geopolitics, in addition to the Afghanistan imbroglio and the Iranian Question, is the continuing resurgence of Russian power across Eurasia. Far from being weakened by the economic crisis, it has used it to build up its relative strength, from politically-motivated loans to Belarus, to its decision to only enter the WTO as part of an economic bloc encompassing Belarus and Kazakhstan, to continuing pressure against Ukraine. It has also consolidated its military position in Abkhazia and South Ossetia and the state has reinforced its control over the commanding heights of the economy, suborning the last of the independent-minded oligarchs to its will. Driven by a belated recognition of its immutable geographic and climatic disadvantages that doom it to eternal backwardness and submission within the context of Westernization, it is slowly but inexorably returning to its “steady state”, its past-and-future as a Eurasian empire defined by political sovereignty, economic autarky and spiritual sobornost. The only thing still missing is an ideology, but that can be re-invented. The collapse of liberal globalization can only accelerate these trends.

As long as Washington stands in the way of this reassertion – which it has, from its unleashing of an infowar against Russia following the Yukos Affair in 2003 to its persistent championing of NATO membership for Ukraine and Georgia – it will remain Russia’s “prime enemy”, at least in the minds of those who matter. As such, Russia will do absolutely nothing to help the US maintain the current world order, which is not favorable to Russia’s interests. Expect a tense, uneasy game of give-and-take and tit-for-tat involving Russian arms sales to Iran and Venezuela, covert American support for colored revolutions across the post-Soviet space, intrigues over Central Asian allegiances and the placing of natural gas pipelines, Russian revanchism in the post-Soviet space, Russian and Chinese stalling of Western-promoted sanctions in the UN, etc… Above all, bear in mind that the Western view on Russia is fundamentally wrong, since Russia’s leaders distrust the “liberal interventionists”, “end of history” ideologues of the Clintonian era at least as much as they dislike the neocon “New Cold Warriors”.

Herein lies the gulf between the West and the Russians. The West divides the world between the Cold War and the post-Cold War world. It clearly prefers the post-Cold War world, not so much because of the social condition of Russia, but because the post-Cold War world lacked the geopolitical challenge posed by the Soviet Union — everything from wars of national liberation to the threat of nuclear war was gone. From the Russian point of view, the social chaos of the post-Cold War world was unbearable. Meanwhile, the end of a Russian challenge to the West meant from the Russian point of view that Moscow was helpless in the face of Western plans for reordering the institutions and power arrangements of the region without regard to Russian interests.

… Russians saw their efforts as a deliberate attempt to destroy Russia and the degree to which Russians are committed never to return to that time. It is hard to imagine anything as infuriating for the Russians as the reset button the Clinton administration’s Russia experts — who now dominate Obama’s Russia policy — presented the Russian leadership in all seriousness. The Russians simply do not intend to return to the Post-Cold War era Western experts recall so fondly. …

While Russia’s concerns with Georgia are the noisiest, it is not the key Russian concern in its near abroad — Ukraine is. So long as the United States is serious about including Ukraine in NATO, the United States represents a direct threat to Russian national security. A glance at a map shows why the Russians think this.

Russia remains interested in Central Europe as well. It is not seeking hegemony, but a neutral buffer zone between Germany in particular and the former Soviet Union, with former satellite states like Poland of crucial importance to Moscow.

… As the United States causes discomfort for the Russians, Russia will in turn cause discomfort for the United States. The U.S. sore spot is the Middle East, and Iran in particular. Therefore, the Russians will respond to American pressure on them where it hurts Washington the most.

The Cold Warriors don’t understand the limits of Russian power. The post-Cold Warriors don’t understand the degree to which they are distrusted by Russia, and the logic behind that distrust. The post-Cold Warriors confuse this distrust with a hangover from the Cold War rather than a direct Russian response to the post-Cold War policies they nurtured.

Finally, there’s China. Over the last decade, the world economy came to be powered by a powerful global symbiosis termed “Chimerica”, a state of affairs in which Americans spent and lent China money to build up the industrial capacity to produce ever more goods for Americans to spend on. Now as long as the limits to this unsustainable, imbalanced growth kept put – limits as in affordable oil and other commodities, access to credit, etc – the party continued.

This is no longer the case. The world economy has crashed. Chinese students laughed in the Secretary of the Treasury Tim Geithner’s face when he tried to assure them the US would keep the US dollar strong and that the trillions of dollars of Chinese investments are safe in the US. The Chinese leadership seems to agree and has started to massively step up its acquisitions of natural resource companies, farmland and foreign elites (via politically-motivated loans at preferential rates). Though there is little overt evidence of a ditching of the dollar, this is to be expected – given that China has so much invested in the US, trying to get out visible would provoke a catastrophic scramble in which it will lose more than it gains. That said, the signals of retreat are certainly visible, especially when set against the typical opacity of China’s rulers.

Globalization allowed China to build up a massive industrial base – as of 2008, it produced 48% of the world’s steel and 50% of its cement – and it has already bought up, or stolen, the majority of key technologies needed to build an advanced industrial system. They can now afford to gradually stop subsidizing American purchases of their products and concentrate on the development of a consumer consciousness among their own, 1.3 billion strong population. This decision to reorient their political economy will complement current rhetoric about building the “harmonious society“, with its emphasis on reconciling socialism, regional and internal inequalities, democracy and environmentalism. From now on, growth will be slower as it is curbed by stagnant world demand, accumulating bad loans, diminishing returns, etc, – it will likely be around 5-7% a year in the 2010′s, rather than the 10% typical of the 1980′s to 2000′s. Nonetheless, it should continue at a fast enough rate to soak up the new landless labor, ease social tensions and enable it to launch a geopolitical breakout. The inevitable transition from a centrally-weak, disbalanced and commercialized nation to a centralized, internally-peaceful hegemonic empire will not be smooth, but China’s forward momentum is simply too large to derail its rise to superpower status.

Externally, China will use its rapidly growing relative strength to create a new geopolitical reality, especially as the retreat of American power becomes ever more evident in the early to mid-2010′s. As the only major industrial nation still enjoying rapid growth, it will now be the main setter of world demand for oil and other strategic commodities, putting a floor on most commodity prices in the years ahead – especially since the state is now taking advantage of low prices to diversify itself from US Treasuries and lock in or accumulate the reserves needed to power its industrialization in the decades ahead. (A related recent story is China’s plans to restrict rare earth metal exports, which if rapidly implemented could create a hi-tech crunch in the decade before mines elsewhere could reopen and ramp up production to meet global demand). China’s influence in South-East Asia, East Asia, East Africa and the Middle East will rise in counter-balance to the US, but the process is unlikely to lead to military clashes because both nations will be much more preoccupied with managing internal tensions.

In conclusion, the geopolitical winds are shifting. There is a gathering storm that will sweep away the current liberal globalized order, and a new reality of econo-political blocs competing for markets, land and resources will take its place. The root cause is the accelerating fiscal and economic collapse of the system’s underwriter, the United States. (The even deeper reason would be that limited oil and energy reserves would be more efficiently used in China to make things than spent on American gas-guzzlers).

However, these changes will appear to observers as an incomprehensible cascade of failings of the international system and spreading chaos: jihadi successes (mounting losses in Afghanistan, continuing terrorist attacks carried out by al-Qaeda’s “franchises”, the possible collapse – or radicalization (Turkey?) – of moderate Muslim governments); state collapses (peak in world food prices, out-of-control insurgencies, falling revenues from energy exports and climatic catastrophes like drought – watch Pakistan, Mexico); the confrontation with Iran (whether or not it ends with a Middle Eastern war, this saga is only beginning to get played out); the Russian resurgence (may be manifested in renewed expansionism in the post-Soviet space – Georgia, Crimea and the Baltics are potential flashpoints – and the race of countries like Germany, Finland, Turkey and / or Japan to reach some kind of accommodation with Russia, contrary to US interests) and the continuing secular ascent of China (due to its gradual nature, this is unlikely to result in any “big events” (although a flareup over Taiwan or the South China Sea is always a possibility) – that said, in the longer run this is going to be one of the most significant geopolitical trends).

By 2019, we will look out upon a new world as different from 1989, as 1944 was from 1914, or 1991 was from 1961. A partially revived American superpower will face a real “peer competitor” in China, though their competition will be restrained by domestic troubles and a shared concern for global stability and the future of industrial civilization. Many of the world’s least developed regions will have begun to fall apart, forsaking the torturing lights of civilization for the comforting darkness of simplistic barbarism. The European Union will have fallen apart under the stresses of its contradictions and its constituent nations will have reverted to their traditional balance-of-power rivalries, while Japan decides it would be better off band wagoning with China. A more insular, nationalist and powerful Russia is a wildcard, either in the throes of demographic and economic stagnation – or enjoying new, unprecedented power accruing from its energy wealth and warming landmass. By then, the clouds will be gathering for an even greater storm – the point sometime in 2030-2050 when the limits to growth make themselves really felt, and industrial civilization falls into its moment of greatest peril. The shifting winds will have become a gale.

(Republished from Sublime Oblivion by permission of author or representative)
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With the recent election of the controversial (to put it mildly) Ahmadinejad to the Iranian Presidency, it is time to look at what this portends for the future of Iran and the Middle East region in general.

The first question we need to ask is whether Ahmadinejad’s victory was free and fair. Stratfor believes it may well have been, describing it as a “triumph of both democracy and repression“. According to this narrative, Western liberals misread sentiment in Iran, seeing it in Manichean terms of a struggle between iPod youth (anyone who blogs, tweets, etc) and corrupt Islamist crustaceans. Yet in reality, except for a few urbane Anglophone professionals, there is no Iranian audience for Western iCivilization. Ahmadinehad appeals to a solid bloc based on his platform stressing Islamic piety (a return to the glory days of the early Revolution), combating corruption (in which many of the “liberal” clerics, as typified by Rafsanjani – an ally of Mousavi, are believed to be implicated in), promoting rural development and curbing inequality, and a strident foreign policy aimed at establishing Iran as a regional and nuclear Great Power. US Iran expert Flynt Leverett in Spiegel argues that allegations of fraud are based on nothing more than an extraordinary amount of wishful thinking by the US.

That said, there’s some pretty damning evidence to the contrary. Juan Cole compiled six reasons in Stealing the Iranian Election, where there is now a heated ongoing discussion. For instance, his support in the Azeri provinces was inexplicably high, considering that Mousavi, an ethnic Azeri, was popular there; he also won over the cities, where he isn’t as popular (on the other hand, the regional election results do show that the race was much closer in the Azeri areas and Tehran; in the Persian provinces, Ahmadinejad’s margin of victory was as high as 3:1). Other irregularities from established form, such as a suspicious uniformity paving over traditional regional and ethnic fluctuations. (Muhammad Sahimi notes that the election data shows “a perfect linear relation between the votes received by the President and Mir Hossein Mousavi” over time, with the incumbent always leading by a 2:1 ratio, which he argues is highly unlikely due to the fragmented character of Iran’s ethnic composition; however, it should be noted that this approach is flawed since much the same argument could be made for Obama’s win). Khamenei immediately approved the alleged results, foregoing the customary 3-day waiting period. The counting happened very quickly and Ahmadinejad declared a 64% victory immediately after the polling closer, not far from his official 62.6%. Etc, etc… you get the idea.

But then again… researchers Ken Ballen and Patrick Doherty from the Terror Free Tomorrow outfit conducted a poll three weeks before the elections. It showed Ahmadinejad leading by a more than 2:1 ratio, even amongst Azeris. As such, Ahmadinejad actually did worse in the polls than the survey may have indicated. Furthermore, support was highest for Ahmadinejad amongst that most networked (and supposedly pro-West, but not) age group, the 18-24 year olds. The leading candidates were Ahmadinehad (34%) and Mousavi (14%), with Karroubi and Rezai polling insignificant support. 27% were in the “I Don’t Know” category, 15% didn’t answer and 8% said none, folks whom the pollsters expected to lean heavily towards Mousavi. As covered by Langer,

Rather it leaped in another direction, noting that “the race may actually be closer than a first look at the numbers would indicate,” because more than six in 10 respondents who expressed no opinion “reflect individuals who favor political reform and change in the current system.” It went on to predict “that none of the candidates will likely pass the 50 percent threshold.”

And though this question on whether the elections is fascinating in its own right, I suspect pursuing it further will just lead to ever more circles of claim, refutation and counter-claim, frequently colored by ideology (whether it be neocon, revolutionary-Islamist, conservative-”liberal”-Islamist, or Westernism). For the record, I believe the weight of the evidence indicates that Ahmadinejad would have probably won anyway, with around 50% of the vote and a small risk of a runoff against Mousavi. Electoral engineering and use of administrative resources ramped it up by 10-15% to provide Ahmadinehad with a safe win.

Now, I’ll turn to a second, and more interesting, question – what does it mean for Iran’s political development, and the geopolitics of the region?

But first, a quick guide. Unlike Russia or Venezuela, there is little doubt that Iran is an authoritarian state. Though there is an active electoral process for the Majlis and the Presidency, it is heavily circumscribed by the unelected Guardian Council of clerics, now headed by Khamenei (the system is a unique hybrid of Velayat-e Faqih (rule by Islamic jurists) and modern parliamentary democracy). He has the supreme executive power over matters of state. Khamenei is seen as the real power in the land and is an ally of Ahmadinejad. These hardliners draw support from the Iranian Revolutionary Guard Corps (IRCG), a paramilitary organization that controls lucrative shares in the national economy and encompasses the Basij reserves forces. According to the Guardian,

Superimposed on this picture has been the widely-held belief – now surely established as accurate – that Khamenei has had the backing of a hard core of radical mullahs, revolutionary guards and intelligence officers who may not have been in the vanguard of the Islamic revolution but cut their teeth in Iran’s bloody 1980-88 war with Iraq.

The group, which has coalesced around Ahmadinejad, harbours dreams of transforming Iran from an Islamic republic to an Islamic government, a distinction which would do away with elections and the need to observe the late Ayatollah Khomeini’s invocation to respect the “people’s will”. By this vision, Iran would forever take its guidance only from the divine, in the form of an all-powerful spiritual leader.

Opposed is a conservative-Islamist (not to be confused with “moderate”, never mind “liberal) faction centered around Rafsanjani, the second most powerful man in the Islamic Republic, who is allied with Mousavi and former President Khatami. They favor business interests and reconciliation with the West. They have a reputation for corruption and their power is declining relative to Khamenei and the IRGC.

Stratfor believes the Iranian political system is approaching an impasse. According to their analysis, the “the cohesiveness of the Iranian state has been deteriorating, with a rift between the president’s ultra-conservative camp and the pragmatic conservative camp led by Rafsanjani”. This struggle, already inflamed by Ahmadinejad’s radical Presidency, has been brought to the fore by Obama’s offer of rapprochement – opposed by the hardliners, welcomed by the pragmatic conservatives. Furthermore, the clerics as a class are under pressure from all sides, hardliners, reformers and (small and weak) outright pro-Western liberals alike:

Because he is the first Iranian president who is not also a cleric, Ahmadinejad sought to strengthen his position by claiming that his policies were guided by the highly revered and hidden 12th imam of the Shia, the Mahdi. This claim has unnerved the clerics: It undermines their privileged position, not only in the Iranian political system but also in religious terms. The implication of this is that if laypeople have access to the messiah, there is no need for them to rely on clerics — who historically have had tremendous influence among the masses.

Meanwhile, the elite Islamic Revolutionary Guards Corps (IRGC) is emerging as a powerful player in Iran, currently second only to the clerics. But as the clerical community becomes marred by internal disagreements and the aging ayatollahs who founded the republic anticipate the day when they will be succeeded by a second generation, the IRGC is very likely to emerge as the most powerful force within the state. The ayatollahs have used their religious position to control the ideological force; if they should become weaker, the non-clerical politicians and technocrats will have a tough time dealing with the IRGC.

It should also be pointed out that Ahmadinejad, far from being a driving force, is but a reflection of deeper dynamics at work. Ranj Alaaldin does not imagine President Mousavi would institute any real changes:

Even with Mousavi in power, Iran’s foreign policy would likely be no different than it has been under Ahmadinejad. A 20-year absence from the public eye, coupled with dazzling words of change that skillfully capitalize on the “Obama effect” gripping the world, does wonders to beguile a young generation of supporters who never knew or have forgotten the radicalism and bloodshed that marked Mousavi’s tenure as prime minister from 1981 to 1989 (the Iranian Revolution’s most significant years).

Indeed, anyone believing Mousavi would be the one to unclench the Iranian fist for a hand-in-hand partnership of peace with the United States is guilty of wishful thinking. It was Mousavi, after all, who was at the center of the Iran hostage crisis and remains complicit in an operation he commended as “the beginning of the second stage of our revolution.” And it was Mousavi who was the protégé of Ayatollah Ruhollah Khomeini (chief architect of the Iranian Revolution and founder of theocratic Iran), a former member of Hezbollah’s leadership council, sworn enemy of Israel, and a prime minister under whose watch thousands of political prisoners were massacred in 1988. And finally, it was Mousavi who initiated Iran’s nuclear program in the 1980s and likely would be intent on carrying through Iran’s nuclear ambitions, the foremost issue central to any improvement in relations with the West.

All of this discussion assumes that it is even worth debating whether Mousavi would bring change to Iranian foreign policy when he would have no authority to do so in the first place. Supreme Leader Ayatollah Ali Khamenei has the final say on matters of foreign policy, not the president. Given Khamenei’s clear approval of what he called a “glittering” Ahmadinejad victory, and because it is the theocracy that verifies the count in the absence of any outside monitors — meaning that any election rigging was done with the supreme leader’s backing — it is he who will need convincing if Iran is to divert from a path of nuclear capability, hostility toward the United States, and support for terrorism.

(It should be noted that Rafsanjani does not refrain from using extreme language either.)

However, he pins hope on the “tenacious middle-class, educated, and youthful Mousavi supporters who have cried foul and rallied and bled in the streets” to force the theocrats to bring about real change. Though overall he’s pessimistic…

More likely, however, the unelected mullahs who rule Iran behind the scenes will be concerned about a galvanized army of reformists who have undermined its authority in recent weeks by, for example, entering the squares and openly mixing and dancing in groups of males and females in direct contravention of clerical law. The leadership might therefore double down on its hard-line foreign and domestic policies, starting with a ruthless endeavor to keep Ahmadinejad in power through any means necessary, so long as the end remains a theocratic Iran.

Returning to the aforementioned poll from Terror Free Tomorrow, 77% of Iranians want all leaders, including the Supreme Leader, to be elected, and similar percentages welcome Western investment and humanitarian aid to Iran (who wouldn’t?). Some 83% strongly favor nuclear energy – that’s OK, nuclear power is a great idea, especially for Iran since it could then export more of its hydrocarbons. Besides, big majorities would acquiesce to inspections of nuclear facilities if accompanied by trade liberalization. Support for cooperation with the US, like stopping funding insurgents in Iraq and to Hizbullah and Hamas, is also very considerable.

These positive attitudes aren’t extended to Israel, however. Though 27% support recognizing Israel if a Palestinian state is established, another 62% would oppose any peace treaty with Israel and favor all Muslims fighting on until there is no State of Israel in the Middle East. And although Christians are almost as popular as Sunni Muslims, opinions on Jews are split in half, with 40% having a positive attitude and a stunning 32% having a negative one.

So now we move onto our last analysis – what’s going to happen in the region?

Iran is split into three social groups. The main one, which is further growing in power, is the hardline element that embraces pursuit of regional hegemony, nuclear weapons and confrontation with the West. It’s main protagonists are Ahmadinejad, the IRGC, and the hardline clerics. Khamenei is increasingly tilting in this direction, the latest evidence for which is his condemnation of Obama’s palm leaf extending Cairo speech.

The second one is that of the old-school clerics, fiery revolutionaries when younger, now willing to reach an accommodation with the US while enjoying the finer things in life. Though some parts of this grouping have become discredited, there is wide grassroots support for reformers who want to make the system more democratic.

The third group are the pro-Western liberals, who are and will almost certainly remain marginal – though they are sure to continue getting the best exposure in the Western media.

This election shows that Iran has purposefully chosen the path of confrontation. There will be a purge of the pragmatic conservative and reformist clerics and, buoyed by increasing oil prices, Iran will accelerate nuclear development, intensify its rhetoric and perhaps increase its funding of terrorist and insurgent groups. Cognizant of its current strength (a still unstable Iraq next door; an excellent demographic profile for war that will fade away as its current fertility rate of 1.7 makes itself felt on the size of future generations; a US Navy for now vulnerable to its asymmetrical developments in drones, torpedoes and anti-ship missiles), the hardliners are going to use the next few years to try to establish Iran as a regional hegemon.

This will not ultimately be acceptable to the US – though it can abandon Israel, it cannot abandon the Middle Eastern oilfields. Yet paradoxically, the election of Ahmadinejad has been a boon for Israel – a symbolic victory that underlines the rising existential threat it faces from Iran, which exists whether or not Ahmadinejad is actually in charge or not.

…Israeli Defense Minister Ehud Barak has said that there is not much to be expected from Mousavi. Israeli Mossad chief Meir Dagan told the Knesset that if Mousavi had won, Israel would have had a more serious problem trying to make a case to the world about the threat from Iran, because the international community views Mousavi as a moderate.

It is estimated it will take Iran perhaps another four to five years to develop nuclear weapons. During this time, the chances of an Israeli strike will grow; in particular, the US is likely to come around to its way of thinking, particularly if the economic crisis further intensifies and Obama has to give freer rein to hawkish elements with his administration in order to retain his grip on domestic matters. Iran will grow increasingly emboldened and aggressive on once-again soaring oil prices.

Eventually, this might well end in a major aero-naval assault on Iran’s nuclear facilities (a few strikes won’t do given that the facilities are dispersed and hardened, unlike Osirak in Iraq in 1981) carried out by Israeli with passive or even active US support. The moderate Arab states will condemn this, but will secretly be very happy. Iran retaliates by again destabilizing the fragile foundations underlying the recent peace in Iraq, intensifies support to Hamas and Hizbullah and perhaps attacking US military bases and oil export terminals in the region; with the international situation spiraling out of control, Syria may even make another attempt for the Golan Heights, using the new asymmetrical war concepts displayed by Hizbullah in 2006 into action.

Or Iran’s new Islamist wave may pass by without major consequences. In any case in the long-term a US-Iranian rapprochement is likely. Conflict between Iran and the West prevents the effective exploitation of Iran’s natural gas reserves, which are the world’s joint-second largest (with Qatar) after Russia’s. Given current trends towards the concurrent resurgence of the Russian Empire, it is in the interests of Europe and in extension to US to reach an accomodation with at least one of them. Considering that the Persian Empire is much farther away, less powerful and hence less threatening, Iran is counter-intuitively likely to become the West’s friend within the decade, for the current radicalization now stirring up cannot be sustained in the long-term. Another sea change is that a weakening Israel may seek closer connections to Russia – there is already a visa-free regime between the two countries, and Israel has stopped supplying Georgia with weaponry in acquiescence to Russian wishes.

(Republished from Sublime Oblivion by permission of author or representative)
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Watching the US presidential candidate debate this Friday has only further confirmed my belief an American would have to be either a moron or a traitor to vote for him.

What he would do as President:

1) Stay on in Iraq

And leave Russia (and every other competitor) a free hand. Even the success of the Iraqi campaign depends on the continued quiescence of the Sunni tribes that were bribed into becoming America’s friends. If relations further deteriorate, it would not be unimaginable to envisage Russia selling Iran S-300′s, which in turn could escalate anti-US attrition in Iraq from under that umbrella.

Obama plans to send more combat brigades to Afghanistan. I am not sure about the wisdom of this, considering the historically-based chances of long-term success in that region of the world are around zero. I also don’t think hunting down Osama is worth tens of billions of dollars. If I were a US policy-maker I would reduce military spending and global over-extension to focus on a) preserving the nuclear deterrant, b) intensively developing the RMA, c) maintaining a small expeditionary force so as to be able to protect national interests in small, weak countries and d) spend more on cultivating positive perceptions of the US. But since I’m not in the running to be President the choice is between Obama and McCain, and on that note a planned withdrawal from Iraq to focus on terrorism is somewhat better than continuing massive, costly deployments in Iraq and “muddling through” in Afghanistan.

Of course, given the current financial crisis which by some measures rivals the one preceding the Great Depression, questions have to be asked whether even Obama’s more modest imperial ambitions are sustainable in practice, and on that note…

2) Refuse to raise taxes

As house prices and the derivatives tied to them continue to plummet, bank liabilities soar and we are seeing bankruptcy after bankruptcy. Considering that there’s still plenty of distance before they hit the ground with a thud, things will get worse before they get better. And this isn’t just a financial problem. Faced with liquidity problems, the credit system have gone into cardiac arrest, with interbank lending drying up and “Main Street” businesses facing difficulties borrowing. Portents of recession are sprouting up all over, the latest indication being a 4.5% drop in durable goods orders for August, declining home sales and rising unemployment. If I were to guess, this is going to be comparable to Sweden’s severe recession in the early 1990′s (albeit if energy prices continue rising as fast as they have been during the past 7 years, there appears the spectre of a long depression).

Now generally speaking raising taxes during a recession is not a good idea, but with the budget deficit, debt levels and international confidence in the dollar as they are, there is little room for manouvre. (Not to mention the potential cost of the bail-out and falling revenues due to the looming recession). Obama’s proposal to raise taxes on the super-rich and closing corporate tax loopholes is far better than McCain’s potentially catastrophic continuation of the Bush-Cheney line. Aggressive investments into revitalizing the decrepit infrastructure and modernizing the energy system is costly, but vital for long-term strength and cannot be avoided any longer. McCain’s proposal to drill in Alaska is nothing but a populist gimmick, which will only make a pinprick upon US dependency on foreign oil, and even that only in a decade or so. Meanwhile the confrontational foreign policy and dearth of investment into alternative energy sources under a McCain Presidency would help contribute to soaring oil prices, and we all know who that will benefit.

3) How to lose friends and alienate people

The same qualities that induce moronic rednecks to vote for McCain repel America’s West European partners, its most important allies. And I don’t even want to think about what Sarah will get up to. Without them firmly on board, all it has left to counter Russia are the likes of The Medvedev Doctrine and American Strategy, the US now faces four geostrategic choices:

1. Attempt to make a settlement with Iran that would guarantee the neutral stability of Iraq and permit the rapid withdrawal of U.S. forces there. Iran is the key here. The Iranians might also mistrust a re-emergent Russia, and while Tehran might be tempted to work with the Russians against the Americans, Iran might consider an arrangement with the United States — particularly if the United States refocuses its attentions elsewhere. On the upside, this would free the U.S. from Iraq. On the downside, the Iranians might not want —or honor — such a deal.

2. Enter into negotiations with the Russians, granting them the sphere of influence they want in the former Soviet Union in return for guarantees not to project Russian power into Europe proper. The Russians will be busy consolidating their position for years, giving the U.S. time to re-energize NATO. On the upside, this would free the United States to continue its war in the Islamic world. On the downside, it would create a framework for the re-emergence of a powerful Russian empire that would be as difficult to contain as the Soviet Union.

3. Refuse to engage the Russians and leave the problem to the Europeans. On the upside, this would allow the United States to continue war in the Islamic world and force the Europeans to act. On the downside, the Europeans are too divided, dependent on Russia and dispirited to resist the Russians. This strategy could speed up Russia’s re-emergence.

4. Rapidly disengage from Iraq, leaving a residual force there and in Afghanistan. The upside is that this creates a reserve force to reinforce the Baltics and Ukraine that might restrain Russia in the former Soviet Union. The downside is that it would create chaos in the Islamic world, threatening regimes that have sided with the United States and potentially reviving effective intercontinental terrorism. The trade-off is between a hegemonic threat from Eurasia and instability and a terror threat from the Islamic world.

McCain basically wants all of the above – the war against terrorism, the war against Iran, the war against Russia (and against drugs, against China, against Chavez and Castro, etc). Obama shows signs of being able to compromise with Iran to reinforce positions in eastern Europe (i.e. No.1 and No.4).

Granted this essay makes simplistic assumptions, namely that Russia is intent upon reclaiming an empire, and I’m not really sure how the presence of US forces in eastern Europe are going to hinder Russia if it indeed is. (Even Yushenko is against foreign bases, including NATO/American, on Ukrainian soil, at least for now, and in any case the war there is fought via the media). But it does demonstrate well how cringeworthily McCain’s bark is much worse than his bite

In conclusion, McCain’s blustery toothless rhetoric can be laughed off, and even should he succeed in kicking Russia out of a few international institutions would be no great injury. Meanwhile, his neglect of investment in improving infrastructure and human capital and pathetic attempts to “muddle through” America’s geopolitical problems are going to supercharge US relative decline and should pave the road to the tombstone of American power on the Eurasian World Island within another decade.

As such, and rather paradoxically, Russia’s hawks are actually McCain’s best buddies. And they have the WMD to help him win. They can proclaim support for Obama.

Granted, I predicted in my other blog that Obama will almost certainly win. But of late I’ve been having my doubts. The whole sordid Palin affair has led to me believe that I have overestimated the intelligence of the American electorate. Obama may well be crushed between the Scylla of the Republican propaganda machine and the Charybdis of the Bradley effect. By praising Obama and condemning McCain, Putin, Medvedev and their buddies (Ahmadinejad, Chavez, etc), could tighten that vice on longterm American power even tighter.

(Republished from Sublime Oblivion by permission of author or representative)
Anatoly Karlin
About Anatoly Karlin

I am a blogger, thinker, and businessman in the SF Bay Area. I’m originally from Russia, spent many years in Britain, and studied at U.C. Berkeley.

One of my tenets is that ideologies tend to suck. As such, I hesitate about attaching labels to myself. That said, if it’s really necessary, I suppose “liberal-conservative neoreactionary” would be close enough.

Though I consider myself part of the Orthodox Church, my philosophy and spiritual views are more influenced by digital physics, Gnosticism, and Russian cosmism than anything specifically Judeo-Christian.