Pointless Posturing

Here we go again. President Mahmoud Ahmadinijad, Iran’s stubborn and mercurial leader, is flaunting his country’s military might in the face of growing international resentment. This time around the threat of conflict is more palpable than ever. Although the Iranian government insists that its nuclear constructs are for purely civilian purposes, recent actions do not lend credibility to this assertion. Ahmadinejad says he wishes to cooperate with the west, but his gestures have seemed more hawkish than conciliatory. His supposed display of diplomacy becomes more farcical when the Iranian leader accuses the United States of trying to deter Iran’s nuclear program in order to “save the Zionist entity.” Issuing such assertions does little to advance the dialogue between the sides—after all, why would the “Zionist entity” need to be saved if the nuclear program had only peaceful intent. Iranian leadership must come to the realization that pursuing its nuclear ambitions will bring no gains to its global sense of authority. Rather, the quest for the bomb is both economically and geopolitically debilitating for Iran.

Ahmadinijad’s rhetoric aside, what insights can one glean from Iran’s economic interests? As it turns out, there is really only one to thing to note here: the one-dimensional nature of Iran’s economy. Largely dependent on oil exports, it cannot expect to maintain its current economic trajectory without its most valuable resource. This is exactly why the sanctions imposed by the west carry so much weight. Obviously, a short term spike in oil prices is inevitable. Iran will do everything it can to inflict wallet shock on the western citizenry. This strategy, however, is unsustainable. In addition to the European oil embargo, the U.S. has frozen all central banking transactions with Iran. The west has effectively put the regime in a stranglehold, clenching the Iranian economy in a vice grip. Although the regime has considerable geopolitical leverage with its oil reserves, western economies can collectively take the hit from a blip in oil prices to force Tehran to yield. According to the U.S Energy Information Administration, Iran is not even among the United States’ top five foreign sources of oil. Other options exist for the west in the short term.

President Obama recently released a statement reassuring U.S. allies that world markets have enough crude oil to allow the U.S. to proceed with imposing more sanctions on Iran. Even in an election year, the Obama administration has been steadfast and resolute in issuing sanctions. There is clearly a high enough level of confidence in alternative sources of oil, since the last thing Obama would invite is a Republican campaign focused on exorbitant gas prices. Furthermore, the International Energy Agency projects that the embargo will slash Iran’s oil exports by 50 percent. The presence of energy alternatives gives the west the clear advantage in the game of chicken that Iran wants to play. So what economic incentives exist for Iran? To even the most jaded Iranian official, this all must be very clear. If Iran’s leadership recognizes the blatant economic peril of losing oil revenue, it should make concessions.

Along with the direct consequences of its actions, Iran must also concern itself with the more subtle outcomes of its policies. Its clandestine pursuit of a nuclear weapon will rattle the cages of many neighbors. As history shows us, acquiring nuclear capability has consistently proved to be a shock for the surrounding countries of armed nations, typically leading to a reassessment of relations. Iran is already short on allies in the region—relying largly on the embattled Assad regime in Syria—and making others wary is not a smart thing to do. Countries in the Middle East may cut off diplomatic proceedings with the nation, and impose sanctions of their own. Such regional instability, in the long term, will be a great cost to Iran. It is up to Ahmadinejad’s discretion whether the benefit of annihilating its enemies on the basis of zealotry is worth this cost.

The international community understands that it has limited options to deter a country hell bent on acquiring nuclear weapons. Diplomacy can only go so far when dealing with fringe leaders like Ahmadinijad. If only Iranian leadership could acknowledge that there are very few long-term benefits to building a nuclear weapon, the entire global community would be better off. Ahmadinejad and company have taken the narrowest of perspectives on the welfare of the nation. The Iranian people, many of whom are fed up with the direction of the country, will be the ones who pay the price of poor decision-making. All we can do is hope that the current situation does not reach such a precipice.


Sidhant Misra ’14, a Crimson editorial writer, is an Economics concentrator in Leverett House.


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