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As president Obama’s outreach to Iran failed to bring positive results or a dialog on issues of concern for either side, he chose the sanctions option in a meaningful way as never before. The neocons are still hoping to turn the tide towards a military strike. With intention of paralyzing the Islamic Republic to the point that is no longer is a threat to anyone in the Middle East. The objective is, not only destroying the nuclear sites, but to abolish all military capabilities such as Navy, Air, and Ground forces. Should Iranian people took advantage of the situation and bring a regime change, much the better, and if not, no concern of theirs. Just so the Islamic Republic can no longer stand in the way of the US plans in the area or create anxiety for the Arabs and Israelis.

At a conference on International Security in Halifax, Canada, Republican Senator Lindsey Graham of South Carolina called for an all-out war on Iran that would “neuter” Tehran. He said “containment is off the table” as regards Iran’s nuclear capabilities, and attacks should be carried out in a way “not to just neutralize their nuclear program but to sink their navy, destroy their air force, and deliver a decisive blow to the Revolutionary Guards. In other words, neuter that regime. Destroy their ability to fight back”. He continued if President Obama “decides to be tough with Iran beyond sanctions, I think he is going to feel a lot of Republican support for the idea that we cannot let Iran develop a nuclear weapon.” In the same conference, Senator Mark Udall (D. Colorado), said the sanctions should continue plus the old tune “every option is on the table”, referring to military aggression. Next Israel Defense Minister Ethud Barak, pronounced Iran as “a major, major threat to any conceivable World order”. Furthermore, Tehran is “determined to reach military nuclear capability”. Which he said would be “the end of any conceivable non-proliferation regime”. Did he say non-proliferation? Doesn’t the term apply to Israel? The momentum has picked up, with Tea party extremist, conservative Republicans and Israeli lobby to cook up another war for the military industry, when the country is reeling to get out of Afghanistan, Iraq, and avoids further escalation in Pakistan.

With the change of political environment due to the recent election, and Obama’s disappointment with the Islamic Republic’s persistence in its commitment not to deal with the US, now the stage is set up for what is to come next. US will simply go through the motions of meeting and talking, offering onerous terms on any negotiations. On the next meeting of P5+1 in Vienna, US is going to demand halt in nuclear fuel cycle , meaning, no enrichment and related activity, plus Iran must give up 2/3 of all its Uranium, as presented by David Sanger of the New York Times. Why? Because US is no longer interested on “containment”. The term containment implied acceptance of enrichment and peaceful production of energy. That is no longer the goal. The objective has shifted away from soft glove sparing, to knock out strategy in the first round. In my view no one is to blame but the Islamic republic of Iran. Its culpable negligence to show the World that Iran’s nuclear resolve is for peaceful purpose. And if there was any nuclear maleficence existed at any time in the past, it’s been cleared and put behind. But dubious behavior, cat and mouse maneuvers, surprise discovery, and backing off the LEU deal etc. and unwillingness to reciprocate good will gestures by the president of the United States, have led to this.[1]

Evidently it is the sanctions that are bringing the intractable Islamic Republic to the table and not the military threats. The last series of sanctions had two provisions that made it effective beyond all sanctions before it. First the prohibition of foreign companies investing on Iranian oil and gas fields development, and the other restrictions on banking transactions, availability of credit line necessary for any business transaction or investment. Iran’s attempt to open shadow banks have not worked, and many European companies and banks that in the past simply ignored United States and continued to do business directly or dastardly, are complying and some are even going beyond and doing more. Why is that? Because of Islamic Republic’s blatant human rights violation and its stubborn stance on its nuclear dilemma. The people all over the World has witnessed the Motorcycle riders who went around bashing people, men, women, old or young with batons. They witnessed the dying of Neda. They are well aware of the rapes and killings in Kahrizac, and today everyone is holding their breath for execution of Sakineh. Islamic Republic must realize that we as human race are emotionally interconnected and all feel the pain that is being inflicted on innocent Iranian people. The World is determined to bring this regime to its knee in one form or another. In the following you’ll find a brief description of economic setbacks that are direct result of Islamic republic’s egregious violations of human rights, and its unwillingness to set the record straight on nuclear matter.

ThyssenKrupp, Germany’s largest steel company is leaving Iran. Stated they will not renew contract with Iranian customers, to be in line with the rest of European Union. This goes beyond the oil and gas sanctions. Linde, a German Industrial firm who sold Iran spare parts and did contract service work, stopped operation, and left Iran. They did not have to, but did so, on their own accord. So did Daimler auto firm and Seimens electronics.[2]

Lack of spare parts for oil production resulted in drop from 4.2 mb/d to 3.5 mb/d, in mid-2009.[3]

Global Insurance giants Munich Re, Allianz and Lloyds are no longer insuring the cargoes carrying goods for Iran. Imagine the effect on needed imports and business of exports.[4]

Iran produces 5 million square meters of carpet annually and exports 4 million of it. The largest customer was the US, buying 20 % of it. That ended July 2010. The sanctions plus copy cats, Shanghai, Pakistan and India copying Iranian designs, have devastated this business.[5]

Most of Europeans no longer are buying Iran crude oil. Buying is not against the sanctions. Only American firms are forbidden from buying Iranian crude since 1995. Again the reason is voluntary boycott, and throttled banking transactions. Banking can be worked out for a willing buyer. For instance Royal Dutch Shell bought one tanker of crude in July at a discount price of $5.5 from the published price. That is 8% below market value. Iran Needed the money and the storage space. (Both parties deny the discount).[6]

The Iranian people no longer placing much value on the Rial. Instead the public is going after the dollar, seeing it as a currency of value. As the result the government spent a great deal of its resources trying to release as much dollars into Iranian market as it could, to balance the value of Rial. This variable is gone as high as 10,900.[7]

Dubai, over the past years during the sanctions was Iran’s main trading partner. They put the stop on money transfer since August 2010, a devastating blow in transacting business.[8]

Naftiran Intertrade Company (NICO) is an Iranian firm registered in Switzerland. Its focus of operation has been to gather capital to invest in Iranian oil and gas development projects. Obama Sanctioned this firm under the Iran-Libya Sanction Act (ILSA) passed in 1966. The Act authorizes penalties on foreign firms who invest more the $20 million in any 12 month period on Iran oil and gas ventures.[9]

Pakistan entered into an agreement of gas project to import 750 million cubic feet per day of gas from Iran through a pipeline to be built by both nations. Iran says it has already laid the vast majority of the length of the pipeline in its territory. Pakistan is yet to lay a single line in that direction. A Pakistani official says the project has been delayed due to bureaucratic process. Sounds like someone with a lot more clout and influence in that country has thrown a monkey wrench into it.[10]

Venezuela has pledged to invest ¾ billion dollars in Phase 12 of Iran’s South Pars gas field project. Phase 12 provides Liquefied Natural Gas (LNG) for export. But the Business Monitor International (BMI) doesn’t believe the project will move forward even if the money materializes. BMI believes the project requires a great deal of money and advanced technology that apparently Venezuela doesn’t have. Looks like an empty talk from President Hugo Chavez to an empty head, President Mahmoud Ahmadinejad.[11]

The shortage of gasoline in Iran is becoming more an issue of concern, as it is becoming apparent that the solution is not forthcoming in the near future. Turkey supplied one-half of Iran’s gasoline import. That stopped at the end of August after other major providers decided not to do business with Iran. Those were: Swish Vitol and Glencor, the Reliance of India and Lukoil of Russia. Now the gasoline providers are Turkmenistan, China, Venezuela, and Smuggling from Iraq.[12]

As mentioned before banking restrictions cause problems in financing foreign business and trade and a normal process. Others who suspended business due to these difficulties are: Kia (S. Korea), Thyssen (Germany), Caterpillar, Daimler and Hewlett-Packard[13]

As Western companies have pulled away from Iran, it has become imperative that Iran find other supporters to sustain the economy. China provided that in the past, but they too are looking for number one first. For some time now China has been telling its three main oil companies to slow down their activity with Iran, so as to tap more significantly into American oil and gas business. With US having opened up the door to them, Bejing does not want to jeopardize these opportunities. Deals that Chinese companies have signed with Iran are only a Memoranda of Understanding (MOU) and not binding contracts. China National Offshore Oil Company (CNOOC) is landing a 1.1 billion deal with Shale Gas of Chesapeake Energy of US. This is pending government approval. China National Petroleum Company (CNPC), agreed in September to explore Australian gas fields with US Chevron Corporation. The same company CNPC had undertaken Iran’s Phase 11 operation and suppose to have started drilling by March. They are yet to do any physical work, dragging their feet with paper work, mapping, appraising reserves etc. – Simply the American business is more lucrative then Iran’s.[14]

This was not intended to be a complete list by any means. Just a few that was jot down. But it illustrates how the wheel is falling off the wagon on a rocky road. Moore significantly it is no longer our judgment as to whether Iran’s economy doing well or not. The paradox is now being manifested in revelation of secret document, a confidential report that was presented to Ayatollah Ali Khamenei regarding Iran’s state of economy. Copy of the report was first published in French publication: Yves Bourdillion, Les Echos. The report was handed to Khamenei in September 2010, in effect informing him of Iranian’s economy “collapse within one year”, due to sanctions to stop Iran from its nuclear program. It recommend for Ayatollah to take “drastic measures to avoid a deep crisis”. It puts forth in taking the following actions “urgent diverting of all foreign trade” to China, Russia, and India, “increasing the food and fuel products reserves”, and converting the Central Banks reserves from dollars and Euros “to the currencies” such as Yuan. The source of the report is informed individuals, Iranian economist, and Central Bank. The Minister of economy and Oil has confirmed that UN Sanctions plus unilateral US and European Union has had heavy impact on oil, finance and commerce. [15]

Decision about Iran, in spite of its complexity, has come down to three distinct choices all having its own advocates: Military action, Sanctions, and further attempts at negotiations. You probably have read many articles about the consequences of military action on Iran and its adverse effect on the region and for the US. Those pushing for this option primarily want air strike on nuclear sites and military installations. This option would be very similar to the first Gulf War. Here is a brief description: US air and ground forces destroyed all military hardware, tanks, aircraft, missiles etc. from one end of the country to the other and subdued any resistance with the idea to neuter Sadam Hussein. (Same strategy being suggest by Sen. Graham).

Operation was a huge success and ended abruptly for political reasons (beyond the scope of this article). The cease-fire came much earlier than scheduled end of operation. The Republican Guards that were pinned down around Basra put down their arms and fled. In February 1991 with the war in progress, President H.W. Bush sent a message to the military and people of Iraq, “And there is another way for the bloodshed to stop, and that is for the Iraqi military and the Iraqi people to take matters into their own hands and force Saddam Hussein the dictator to step aside”. Within hours after signing the cease-fire agreement, Iraqi Shiites in Basra revolted against Saddam’s government. In the north, Kurds also rebelled by driving Iraqi garrison forces out of their villages and out of Kirkuk. In matter of days, Saddam and His surviving Republican Guards slaughtered both with atrocities beyond imagination. US found itself back in square one with many Generals frustrated for not having finished the job. In a book entitled “Triumph without Victory”, published by the U.S. News & World Report, it described it this way “There would be no doubt that America and its allies had triumphed over Iraq’s army on the battlefield. But inasmuch as victory suggests the decisive defeat of an opponent, there was none. This triumph without victory was perhaps the most striking irony of the entire conflict”.

Air strike on Iran is not going to accomplish a thing. Iran has been manufacturing its own military hardware some of which is up to par technologically with any you find elsewhere. By all likelihood the nuclear implements are hidden and scattered all over. They will restart the next day. Now they will have the sympathy of many who are ashamed at the collateral damage. Help start coming from everywhere, overtly and covertly. Islamic Republic will kill all its opponents. At the end, the Islamic Republic will come out smelling like roses. [16]

The next option is to try very hard to convince the Islamic Republic, their best interest is served through negotiation and showing some degree of good will towards their adversaries in order to avoid serious conflict for the good of its people and everyone else. Isn’t that what the West has been doing, for the most part, in the last thirty-plus years? Here is what you are dealing with: Islamic republic is driven by “Ideology” and not pragmatism. The Islamic Republic’s Ideology is a collection of thoughts based on Islamic principles. It has goals, expectations and a vision. It has a dominant class of clergy with its own hierarchy, ruling a society with definite consciousness, inherent in ideas of self-sacrifice, martyrdom, and conformity. Its system of abstract thought has become central to its politics. Religion is its politics and politics is its religion. The economy, health care, education and justice system all are driven from the same source. When ideology is the driving force in a theocracy, it doesn’t matter if George W. Bush directs insults at Iran by labeling it the “Axis of Evil”, or Barak Obama paying respect by sending nowrouz messages. Because neither one, is of substance to this ideology. Islamic Republic may show up for talks out of economic desperation. No matter what is said or done, at the end, it is the incompatible ideology that succeeds. [17]

Lastly, it is the sanctions. The narrative in this issue demonstrated to an acceptable degree that present sanctions are taking its toll. History has shown that the greatest empires have collapsed at the end, not by military defeat, but by fragmentation from within and collapse of the economy; both of which are evident in the Islamic Republic. That is the prevailing situation. We must wait to see how this drama unfolds.

Sources:

[1],[3],[4] Mounting US war threats against Iran, Bill Van Auken, Global Research.ca, November 8, 2010 //www.globalresearch.ca/index.php?context=va&aid=21833

[5], [2], [6] Iran Times, US shots door on more imports of Persian carpets; ThyssenKrupp…; Most of Europe…October 1, 2010

[9] Iran Times, US imposes first ILSA sanction ever, Warren L Nelson, October 8, 2010

[10], [14] Iran-Times, Paks motionless on Iran Gas pipe; China Tells… November 5, 2010

[12], [13], and [15] Confidential Report Forecasts Collapse of Iranian Economy, Yves Bourdillion, Les Echos, translation: Siavosh Jallili, Persian2English, November 5, 2010

[16] Triumph without victory, The History of the Persian Gulf War, Peter Cary, Brian Duffy, Joseph L Galloway, U.S. News & World Report, pp. 138, 399, 400, Washington, DC, January 16, 1993

[17] Ideology: //en.wikipedia.org/wiki/ideology