Tuesday, September 26, 2006

Pushing the economic button

An Economic Coalition of the Willing - Ilan Berman
Washington has not yet seriously tackled the economic dimension of the current Iranian nuclear crisis, or explored the financial levers by which Iran can be confronted.

Iran's first vulnerability is its dependence on foreign investment. The regime in Tehran currently needs $1 billion a year to maintain current oil output levels... By complicating the flow of foreign investment into Iran, the U.S. and its allies can force the regime to draw down its hard-currency reserves, reducing the resources that it has available to forge ahead with its nuclear program - or to fund radicalism in the region.

Iran's second weakness stems from its centralized economic hierarchy. The vast majority of the regime's wealth remains concentrated in the hands of a very small number of people.

Far and away the biggest chink in Iran's economic armor is its reliance on foreign gasoline. 40% of gasoline in Iran now comes from foreign sources. A comprehensive gas embargo could quickly wreak havoc on Iran's industrial sectors.

Instead of relying on the UN, the White House should be thinking creatively about an economic "coalition of the willing" capable of implementing the specific financial levers that are most likely to alter Iranian behavior, and of doing so without further delay.

(Wall Street Journal, 26Sep06)

1 comment:

LHwrites said...

This article highlights why conservatives, such as those at the Wall Street Journal, just don't understand life in this world in the 21st century. Calling for the US to ignore the UN and seek a "coalition of the willing" would merely expose the US to the humiliating fact that the only significant member of such a coalition would be the US---except that we already suspend activities with Iran (Halliburton not withstanding). What little credibility we once had to get people behind us in mideast policy is, sadly, long gone (about 3 years gone). Unfortunately, we threw the dice by handling Iraq as we did, and now the world, Israel and America will pay for that by having to move slowly and cautiously. I do not believe the world wants a nuclear Iran so diplomacy must be focused on Russia and China, the biggest impediments to corrective UN actions.