India Intelligence Report



   Iran Stalemate Intensifies With More Sanctions

  So called permanent U.N. powers and Germany, weary of Iran's hardening position on its nuclear program, agreed "in principle" on a new set of sanctions on Tehran for continuing to defy world demands to abandon its enrichment program.



Hot Topics

Indian Economic Reforms
Naxal Violence
SAIL to Invest in WB
Indo-Iranian Relations & US
Energy Deficiency
Indo-Pak Anti Terror Mechanism
ISI & Terror from Pakistan


Other Stories

Areva sweetens bid for REpower
Bangladesh ex-Army officer held in US
Biocon arm to set up research facility for Bristol Myers
FACT JV with Adi Group of Syria
IBM to invest $6 b
India leads in salary hike: survey
India toughens Pak policy
Infrastructure industries output up 8.4% in April-Jan
Israel Says It Won't Work With Coalition
M&M plans to buy an auto component firm
Nepal Maoists still have 7,600 weapons
NTPC wants to make power equipment, plans subsidiary
Officers in dock after terrorists’ confession
SAIL proposes JV to ensure long term security of inputs
Second round of Pak-US talks postponed
Siemens-BHEL bags PowerGrid order
SJC chief: Chaudhry is still CJ
Suicide bombers’ new target: Pakistan
US Senate votes to debate Iraq troop plan
UTI Bank aims pan-Asian branch presence
We can't demilitarise Kashmir: Manmohan

So called permanent U.N. powers and Germany, weary of Iran's hardening position on its nuclear program, agreed "in principle" on a new set of sanctions on Tehran for continuing to defy world demands to abandon its enrichment program. The caveats are that their respective governments still to need to approve these new sanctions and also be accepted by the other 10 rotational members of the Security Council.

Acting U.S. Ambassador Alejandro Wolff said that the nuclear powers have agreed on a "package approach" that would be "the way forward in a resolution." Russian U.N. Ambassador Vitaly Churkin concurred that all nuclear powers had agreed "by and large" but some of them wanted confirmation form their governments but said that "they will get a positive response from the capitals." Moscow recently closed ranks with the West by refusing planed delivery of nuclear fuel to Iran this month and also announced that the September completion of a Russian-built nuclear power plant will be postponed. Russia says that the delay is because of Tehran's failure to remit the monthly USD 25 million on the USD 1 billion plant in Bushehr but Iran cries foul saying that it has paid all the money as required. Independent observers say that Moscow is merely adding to the pressure on Tehran to comply, After all, Russia has publicly said that they do not support a "nuclear Iran or an Iran with the potential to create" nuclear bombs.

In December 2006, the Security Council unanimously voted to impose limited sanctions against Iran and required all countries to stop supplying Iran with materials and technology that could contribute to its nuclear and missile programs, It also froze assets of 10 key Iranian companies and 12 individuals related to those programs and held out a promise of additional non-military sanctions if Iran did not accede to these demands.

Discounting concerns from the U.S., European nations, and the U.N. nuclear watchdog International Atomic Energy Agency (IAEA) continues to maintain that its enrichment program is peaceful and is to produce nuclear energy. Iranian President Mahmoud Ahmadinejad warned that the West is committing a serious mistake in thinking that its sanctions will "isolate the Iranian nation" because this will not "hurt Iran" but end up isolating itself make itself "more hated." It has refused to even acknowledge the December 2006 sanctions and has now hardened its position by comparing itself to India and Israel-two other countries that have nuclear weapons programs but have not been involved in any proliferation. An Iranian spokesman refused to acknowledge the dangers of additional sanction as "It will not affect our work and will not concern our people" and that "it is not worrying." Ahmadinejad's reformist predecessor Mohammad Khatami warned on Monday that Iran should act with caution and even compromise to prevent the adoption of a second UN resolution.

Israel's Israel's Foreign Minister Tzipi Livni and Defense Minister Amir Peretz met with U.N. Secretary-General Ban Ki-moon to discuss Iran's nuclear program. Livni later said that the world must impose tougher sanctions on Iran because of its public promise of destroying Israel and denying the horrors of the Holocaust. She said that such an antagonistic policy endangers her nation and Arab neighbors.

While the text of the new resolution has not been released, leaked reports talk of asking member states to exercise "vigilance and restraint" on arms imports and on the entry or transit through their territory of Iranians subject to the asset freeze. It would also require member-states not to make new commitments of "grants, financial assistance, or confessional loans" to Iran. Of course, Western nations will prefer harsher sanctions but Russia and China, with large commercial and military ties with Tehran, have been reluctant to oblige. China's U.N. Ambassador Wang Guangya has already said that he was not happy with the additional Iranians and entities that will face travel bans but concedes that "to reach agreement" there "has to be a package."

There are signs that Ahmadinejad may be losing support for him at home. Recent elections saw his candidates being routed and this has been attributed to weakening economic conditions, unemployment, high inflation, and domestic violence springing from disagreements with Azeri population in the north. Many feel that such conditions are due to gross neglect of the oil and natural gas producing infrastructure and the hostility with the West is stopping investment from coming through. The theory goes that because of the lack of investment and economic progress, people feel that Ahmadinejad is responsible for their poor economic condition and they voted his candidates out.

Tehran continues to be defiant and taking more and more hostile positions against the impression of the world community. A recently released 50,000 Rial note has an image of an atom surrounded by a field of electrons over the map of Iran. Released just before the Persian New Year, the note which was meant to excite the people and rally support for the nuclear program has instead created worry and anger. The value of the Iranian Rial has plummeted with this 50,000 note valued at USD 5.40 and independent economists say that such large denomination notes merely confirms world view of runaway inflation.

As Iran struggled economically, politically, and diplomatically, talks of a military solution has been hushed and does not look imminent. The U.S. is simply incapable of assuming a more versatile and capable enemy than the ones in Afghanistan and Iraq. Stretched as it is at home, abandoned by most allies in Europe, and facing increasingly hostile domestic political pressure, the George Bush Administration has little recourse to adopt halted steps towards getting Tehran to comply.

The question is whether these sanctions will really stop Iran from its nuclear goals or merely slow the pace. If the Pyongyang negotiation is any indication, the U.S. will likely like to throw money at the problem and hope the Iranian issue will disappear. However, Iran's economy is not where the North Korean economy is at. At the same time, Iran is also isolated in the Islamic world and is increasingly looking to gain support from other U.S. haters such as Venezuelan President Hugo Chavez and Cuban strong man Fidel Castro. Nor does it have a benefactor as North Korea does that can stop harsher sanctions or facilitate a diplomatic and negotiated settlement out.

The increasingly evident stalemate can only be broken if one of two things happen. One scenario is that the U.S. and the West achieve military successes in Iraq or Afghanistan and reach consensus on military option on Iran-an option that is extremely unlikely. The other scenario is one where Iran's economy worsens substantially that forces domestic pressure to remove Ahmadinejad and his hard-line coterie from power and creating a space for a negotiated settlement. The West seems to be going for the second option which all told may be better for the world. The sooner Ahmadinejad sees this outcome the better it is for Iran and the world.