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Rethinking Our Iran Policy, Part I
Friday In The Neighborhood
By Rocco Martino, For The Bulletin
Editor’s Note: This is Part I of a look at my neighbor, Mike, and the situation in Iran. Check out next Friday’s edition of The Bulletin to read Part II.
I was on my usual walk around the neighborhood when I bumped into Mike. Mike was home for a few days visiting his parents. He is an expert on Iran and works for the State Department in one of their embassies as an assistant cultural attaché. That’s doublespeak for CIA, but of course, we’re not supposed to know that.
Mike is a great big guy who would have no trouble playing fullback on any college or professional football team. I can just imagine him in a tuxedo wandering around an embassy reception in some far-off foreign location looking around for someone to talk to about cultural affairs. He must be an analyst because he certainly couldn’t be a spook standing out in the crowd as he does.
“Hey, Mike. How are you?” I said as we were about to pass. Mike stopped and we reintroduced ourselves. I told him how I remembered him playing fullback on the local high school team and then in college. I reminded him that his parents and I often discussed some of his frustrations with the State Department and their often rigid doctrinaire approach to some aspects of dealing with foreign nations.
His parents and I always took what we considered to be a realistic approach to dealing with other countries. All nations have their own way of doing things; and we have ours. They will never change their ways just because we tell them to. The best thing we can hope for is to get them to agree not to impose their ways on us, nor to upset the balance of power in attempting to control some of their neighbors economically, diplomatically or militarily.
Since Mike had spent a number of years in Iran, his parents and I often discussed the terrible situation we faced there with an intransigent president and chief of state, Mahmoud Ahmadinejad, and their apparent drive to create and acquire nuclear weapons in the means of delivering at a distance, especially against Israel. So I thought I would ask Mike’s opinion.
Mike smiled. “You’re in luck. I’ve left the State Department and have now moved on to private industry. My opinions are now my own and, so long as I stick to what is publicly known, that’s OK.”
“So Mike, what’s publicly known?”
“Well, everybody believes that Iran is on a drive to generate nuclear weapons. Whether they are really doing so or not remains to be seen; but they are developing nuclear power plants. The problem is that enriched nuclear fuel is needed for power plants or for weapons. In other words, they have to create the ability to make enriched uranium, which they could use for atomic bombs. They claim they are going to build nuclear power plants.”
“But why are they interested in nuclear power?”
Mike sighed. “They need the power. But at the same time, they are developing delivery capability with medium-range rockets. Furthermore, President Mahmoud Ahmadinejad has been very forceful in his threats to wipe Israel off the face of the earth. So, of course, there is concern.”
I suddenly got very concerned. I couldn’t help interrupting him and asking, “Why don’t we or the Israelis just take them out before they have the bomb? That would put a stop to that threat.”
Mike frowned. “I wish it was that easy, but it’s not. They might be building power plants. They need the power and their economy is in a shambles. It’s only a simple matter of putting the facts together. Here are some of them. Iran is currently importing gasoline. It does not have a capability of refining enough gasoline for its own internal use.”
“Wow. That’s an eye-opener.”
“Another fact is that Iran has severe unemployment — hard to establish accurately since the regime is so secretive with sensitive figures. It appears that the unemployment rate may be over 20 percent, but it is certainly double digit. Besides that, there is severe ‘brain drain,’ as trained people leave Iran as rapidly as they can to find jobs elsewhere that will be both free of the rigid Islamic regime and will pay more, [which] significantly increases job security. Additionally, fewer and fewer young people are going to the university. Iran desperately needs jobs, new industries and incentives to induce their young people to earn undergraduate and graduate degrees.”
“But aren’t they rolling in oil wealth?”
Mike almost burst out laughing. “Far from it. They are now in a deficit position. About 80 percent of their total revenue is derived form the export of oil. When oil was over $ 100 a barrel, they were profitable. Compare the situation with Canada. When oil was over $100 a barrel, the Canadian dollar was just about par with the American dollar. With the drop in oil prices, the Canadian dollar is now only 80 percent of the U.S. dollar.
“The same is true of all oil-exporting countries that depend heavily on oil as a source of revenue. In addition, with regard to Iran, their oil recovery systems are antiquated and not as effective as modern systems mainly developed by American ingenuity. The Iranian government has contracts with Russian and Chinese firms to update the recovery techniques in their mature fields and to initiate new drilling programs. These development programs are aimed at increasing the revenue through exporting more oil, reducing operating costs and increasing production from existing oil fields.
“But their economy is in serious trouble. They may not have the money needed for all these development programs and the resources needed to meet the demands of their population. Outside of oil, their other exports are not that large. The largest of these are pistachio nuts and rugs. There is a significant attempt at the development of heavy machinery exports, but these are in the nascent stages.”
“So has the current economic downfall affected Iran?,” I asked.
“Badly. I explained before that their revenue is down substantially. Iran needs oil to be over $90 a barrel to be profitable and to meet their financial needs. At $45 to $50 a barrel, they have a significant shortfall. In addition, other nations are cutting down on their imports of luxury items like Persian rugs. It is unlikely that people will buy pistachio nuts when they are out of work. The current scare about salmonella in pistachio nuts certainly isn’t helping that.
“On the whole, the Iranian economy is in trouble. In my opinion, the move to nuclear power is as important economically to generate electric power as it is militarily to create a bomb,” he said.
“So how do we use that to solve our problems with Iran?” I asked.
“To do that, we have to understand how the government works. Essentially it is a government of ‘maybe’. Let me explain and then propose what I think can be a workable approach.”
Dr. Martino is Founder and CEO of CyberFone Technologies, Inc.; and a Senior Fellow of the Foreign Policy Research Institute. He can be reached via e-mail at rmartino@thebulletin.us.
I was on my usual walk around the neighborhood when I bumped into Mike. Mike was home for a few days visiting his parents. He is an expert on Iran and works for the State Department in one of their embassies as an assistant cultural attaché. That’s doublespeak for CIA, but of course, we’re not supposed to know that.
Mike is a great big guy who would have no trouble playing fullback on any college or professional football team. I can just imagine him in a tuxedo wandering around an embassy reception in some far-off foreign location looking around for someone to talk to about cultural affairs. He must be an analyst because he certainly couldn’t be a spook standing out in the crowd as he does.
“Hey, Mike. How are you?” I said as we were about to pass. Mike stopped and we reintroduced ourselves. I told him how I remembered him playing fullback on the local high school team and then in college. I reminded him that his parents and I often discussed some of his frustrations with the State Department and their often rigid doctrinaire approach to some aspects of dealing with foreign nations.
His parents and I always took what we considered to be a realistic approach to dealing with other countries. All nations have their own way of doing things; and we have ours. They will never change their ways just because we tell them to. The best thing we can hope for is to get them to agree not to impose their ways on us, nor to upset the balance of power in attempting to control some of their neighbors economically, diplomatically or militarily.
Since Mike had spent a number of years in Iran, his parents and I often discussed the terrible situation we faced there with an intransigent president and chief of state, Mahmoud Ahmadinejad, and their apparent drive to create and acquire nuclear weapons in the means of delivering at a distance, especially against Israel. So I thought I would ask Mike’s opinion.
Mike smiled. “You’re in luck. I’ve left the State Department and have now moved on to private industry. My opinions are now my own and, so long as I stick to what is publicly known, that’s OK.”
“So Mike, what’s publicly known?”
“Well, everybody believes that Iran is on a drive to generate nuclear weapons. Whether they are really doing so or not remains to be seen; but they are developing nuclear power plants. The problem is that enriched nuclear fuel is needed for power plants or for weapons. In other words, they have to create the ability to make enriched uranium, which they could use for atomic bombs. They claim they are going to build nuclear power plants.”
“But why are they interested in nuclear power?”
Mike sighed. “They need the power. But at the same time, they are developing delivery capability with medium-range rockets. Furthermore, President Mahmoud Ahmadinejad has been very forceful in his threats to wipe Israel off the face of the earth. So, of course, there is concern.”
I suddenly got very concerned. I couldn’t help interrupting him and asking, “Why don’t we or the Israelis just take them out before they have the bomb? That would put a stop to that threat.”
Mike frowned. “I wish it was that easy, but it’s not. They might be building power plants. They need the power and their economy is in a shambles. It’s only a simple matter of putting the facts together. Here are some of them. Iran is currently importing gasoline. It does not have a capability of refining enough gasoline for its own internal use.”
“Wow. That’s an eye-opener.”
“Another fact is that Iran has severe unemployment — hard to establish accurately since the regime is so secretive with sensitive figures. It appears that the unemployment rate may be over 20 percent, but it is certainly double digit. Besides that, there is severe ‘brain drain,’ as trained people leave Iran as rapidly as they can to find jobs elsewhere that will be both free of the rigid Islamic regime and will pay more, [which] significantly increases job security. Additionally, fewer and fewer young people are going to the university. Iran desperately needs jobs, new industries and incentives to induce their young people to earn undergraduate and graduate degrees.”
“But aren’t they rolling in oil wealth?”
Mike almost burst out laughing. “Far from it. They are now in a deficit position. About 80 percent of their total revenue is derived form the export of oil. When oil was over $ 100 a barrel, they were profitable. Compare the situation with Canada. When oil was over $100 a barrel, the Canadian dollar was just about par with the American dollar. With the drop in oil prices, the Canadian dollar is now only 80 percent of the U.S. dollar.
“The same is true of all oil-exporting countries that depend heavily on oil as a source of revenue. In addition, with regard to Iran, their oil recovery systems are antiquated and not as effective as modern systems mainly developed by American ingenuity. The Iranian government has contracts with Russian and Chinese firms to update the recovery techniques in their mature fields and to initiate new drilling programs. These development programs are aimed at increasing the revenue through exporting more oil, reducing operating costs and increasing production from existing oil fields.
“But their economy is in serious trouble. They may not have the money needed for all these development programs and the resources needed to meet the demands of their population. Outside of oil, their other exports are not that large. The largest of these are pistachio nuts and rugs. There is a significant attempt at the development of heavy machinery exports, but these are in the nascent stages.”
“So has the current economic downfall affected Iran?,” I asked.
“Badly. I explained before that their revenue is down substantially. Iran needs oil to be over $90 a barrel to be profitable and to meet their financial needs. At $45 to $50 a barrel, they have a significant shortfall. In addition, other nations are cutting down on their imports of luxury items like Persian rugs. It is unlikely that people will buy pistachio nuts when they are out of work. The current scare about salmonella in pistachio nuts certainly isn’t helping that.
“On the whole, the Iranian economy is in trouble. In my opinion, the move to nuclear power is as important economically to generate electric power as it is militarily to create a bomb,” he said.
“So how do we use that to solve our problems with Iran?” I asked.
“To do that, we have to understand how the government works. Essentially it is a government of ‘maybe’. Let me explain and then propose what I think can be a workable approach.”
Dr. Martino is Founder and CEO of CyberFone Technologies, Inc.; and a Senior Fellow of the Foreign Policy Research Institute. He can be reached via e-mail at rmartino@thebulletin.us.
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