India Intelligence Report
 

Escalating War of Words about Iran

 

The Iran issue refuses to be resolved with increasingly caustic comments from Iranians President Mahmoud Ahmadinejad and equally acerbic comments from various influential circles of the US Administration. 

Ahmadinejad has been issuing a string of statements with increasing volatility on Israel, the holocaust, Jewish people, consequences of a military action against Iran, the number of trained suicide bombers ready to attack Western targets, etc. Various US Administration officials have been talking about strong sanctions, carpet bombing, plans to use tactical nuclear missiles on Iran, diplomatic isolation of Iran, etc.

Former US Ambassador to India and chief coordinator of US policy on Iran and Afghanistan and deputy national security adviser Robert Blackwill says that if diplomacy fails, there are only two options that left for the world to take. Accept the Iranian nuclear weapons program or wage war on it and both of them will be disastrous for the region and the world.

 

If Iran’s nuclear weapons program is accepted, it will raise many bad precedents and issue confused messages to the world. First, it will instigate more countries to take up such clandestine programs, act belligerent, and get away with it. South Africa, Brazil, Argentina, and Saudi Arabia are only some of the prospective nations who may follow this route. Second, it will also allow North Korea, China, and Pakistan to get away with its proliferation of missiles and encourage it to export nuclear weapons technology with delivery systems. Third, as a consequence of the above two, the world may become a very unsafe place inviting heavier investments in military robbing the poor of economic progress, development, education, and prosperity.

If Iran’s nuclear program is not accepted, then the international community having failed diplomatically has to wage war on Iran to get it to stop its program. The downsides to this option are more disastrous than the other option. First, a new war in the West Asia, especially a prolonged one, will send oil prices artificially high beyond USD 150 sending the world economy into shock and in an interdependent economic system cause a global recession of unprecedented proportions. Second, it will bring together Islamic terrorist elements and reenergize the in-hiding al Qaeda. Third, Iran may unleash its large and effective missile arsenal on Israel and occupying forces in Iraq and Afghanistan causing large scale collateral death. Fourth, Iran will also unleash a series of suicide bombs in Western nations to extract revenge, which could lead to large-scale loss of life and against damage global economy and development.

Therefore, either option will point to the same outcome—economic destruction, increased military spending at the cost of human development, and increased uncertainty from terrorism. While many in India may not realize it, the consequences for India will be disastrous. 

First, whatever economic progress has been made will be arrested immediately. Second, since India is more dependent on outsourced work, an economic recession in the West means cutbacks in Indian rolls. Third, personal finance in India is probably the weakest link of the Indian economy. Hence, there will be a string of personal bankruptcies due to excessive leveraging resulting in collapse of real estate, value of the Rupee, unemployment, and economic chaos. Fourth, these situations will be lead to a more series outcome that 1990. When incompetent Prime Ministers V.P. Singh and Chandrasekhar nearly bankrupted India, the economy was not interlinked with the world and most Indians did not feel the economic pinch. However, in the last 15 years, there are more Indians tied to the fate of the world economy than ever before. Therefore, the bankruptcy of the nation cannot be ruled out.

Therefore, India needs to undertake a more proactive role in this conflict. It has made the right diplomatic noises through various forums but is not doing as much as it could. First, it has again rightly pointed out in domestic and international forum that a nuclear Iran is not in the interest of India clearly indicating that it cannot accept the

1st option. Second, it has rightly pointed out that India would not like to see violence on Iran—in essence it is saying that it is against the war option. Third, it has again rightly said that it backs the Russian offer of nuclear enrichment in Russia in essence suggesting that a compromise formula is necessary.

India has already recognized that the two non-diplomatic options are not good for its interests and that is the reason why it has insisted on diplomacy. The major issue is that Iran has been increasingly recalcitrant and belligerent to a point of being obstinate. Even Russia and China, who have extensive economic and military interests in Iran, are not able to convince Iran to take a more malleable approach. 

Given the stalemate situation and beyond its influence of Iran, India has to take defensive measures that may shield it from the worst possible outcome. It needs to increase its oil reserves, tighten liquidity further, tighten loan norms further, find measures to reduce personal leverage, invest heavily in alternate fuels such as wind and solar energy, start mass transport systems that will minimize individual dependence on cars, and eliminate taxation that promotes owning personal vehicles or excessive leveraging.

The first option is a slow killer while the second option is instant pain that will linger for a long time.