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Iranian nuclear weapons program

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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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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 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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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.