Why Obama's Grand Schemes for Iran Are Doomed to Fail

By Dilip Hiro, Tomdispatch.com. Posted October 30, 2009.

While the tone of the Obama administration is different from that of its predecessor, and some of its foreign policies diverge from those of George W. Bush, at their core both administrations subscribe to the same doctrine: Whatever the White House perceives as a threat -- whether it be Iran, North Korea, or the proliferation of long-range missiles -- must be viewed as such by Moscow and Beijing.

In addition, by the evidence available, Barack Obama has not drawn the right conclusion from his predecessor's failed Iran policy. A paradigm of sticks-and-carrots simply is not going to work in the case of the Islamic Republic. Here, a lesson is readily available, if only the Obama White House were willing to consider Iran's recent history. It is unrealistic to expect that a regime which fought Saddam Hussein's Iraq (then backed by the United States) to a standstill in a bloody eight-year war in the 1980s, unaided by any foreign power, and has for 30 years withstood the consequences of U.S.-imposed economic sanctions will be alarmed by Washington's fresh threats of "crippling sanctions."

Most important, the Obama administration is ignoring the altered international order that has emerged in the wake of the global financial crisis triggered by Wall Street's excesses. While its stimulus package, funded by taxpayers and foreign borrowing, has arrested the decline in the nation's gross domestic product, Washington has done little to pull the world economy out of the doldrums. That task -- performed by the U.S. in recent recessions -- has fallen willy-nilly to China. History repeatedly shows that such economic clout sooner or later translates into diplomatic power.

Backed by more than $2 trillion in foreign exchange reserves, the state-owned Chinese oil corporations have been locking up hydrocarbon resources as far away as Brazil. Not surprisingly, Iran, with the second largest oil as well as gas reserves in the world, looms large in the strategic plans of Beijing. The Chinese want to import Iran's petroleum and natural gas through pipelines across Central Asia, thus circumventing sea routes vulnerable to U.S. naval interdiction. As this is an integral part of China's energy security policy, little wonder that Chinese oil companies have committed an estimated $120 billion dollars -- so far -- to Iran's energy industry.

During a recent meeting with Iran's first vice president, Muhammad Reza Rahimi, in Beijing, Chinese Prime Minister Wen Jiabao stressed the importance of cooperation between the two countries when it comes to hydrocarbons and trade (at $29 billion a year, and rising), as well as "greater coordination in international affairs." Little wonder, then, that China has already moved to neutralize any sanctions that the United States -- backed by Britain, France and Germany -- might impose on Iran without United Nations authorization.

Foremost among these would be a ban on the export of gasoline to Iran, whose oil refining capacity falls significantly short of domestic demand. Chinese oil corporations have already started shipping gasoline to Iran to fill the gap caused by a stoppage of supplies from British and Indian companies anticipating Washington's possible move. Between June and August 2009, China signed $8 billion worth of contracts with Iran to help expand two existing Iranian oil refineries to produce more gasoline domestically and to help develop the gigantic South Pars natural gas field. Iran's national oil corporation has also invited its Chinese counterparts to participate in a $42.8 billion project to construct seven oil refineries and a 1,000 mile trans-Iran pipeline that will facilitate pumping petroleum to China.

Tehran and Moscow

When it comes to Russia, Tehran and Moscow have a long history of close relations, going back to Tsarist times. During that period and the subsequent Soviet era, the two states shared the inland Caspian Sea. Now, as two of the five littoral states of the Caspian, Iran and Russia still share a common fluvial border.

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Dilip Hiro is the author of Blood of the Earth: The Battle for the World's Vanishing Oil Resources (Nation Books), among other works. His forthcoming book, After Empire: The Birth of a Multipolar World, will be published in January 2010, also by Nation Books.

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