US needs to change relations with Iran

Published 1/30/2012
http://dailyevergreen.com/read/opinion-US-Iran-relations

In 2002, former President George W. Bush described Iran, alongside Iraq and North Korea, as an “Axis of Evil” — a country that possesses “weapons of mass destruction” and poses a threat to world peace. After years of economic blockades placed by the U.S. that failed to stop Iran’s nuclear program, the European Union (EU) recently decided to stop purchasing crude oil from Iran.

The West has constantly shown Iran the “stick,” which does not seem to be producing results. In my perspective, it is time to show Iran the “carrot” and bring it to the negotiating table.

There is a reason as to why I believe the “stick” has failed. In March 2003, a U.S.-led coalition decided to disarm the first of the axis of evil: Iraq. The so-called “weapons of mass destruction” were never discovered, but it was already too late. The troops could not just go back home leaving the country in anarchy. The stay in Iraq cost a lot of lives and finances to all the coalition partners.

Clearly, no one wants to engage in a bloodshed in Iran, so a full-scale war is out of
question. This is one reason that both the U.S. and Iranian navy showed constraint after heightened tension in the Strait of Hormuz after Iran threatened to shut down the critical waterway.

Secondly, as far as the U.S.-enforced economic blockades on Iran’s oil are concerned, the U.S. has not purchased a drop of oil from Iran for the past 30 years. The European Union purchases $25 billion worth of oil from Iran each year, which amounts to barely 10 percent of Iran’s export. The West, especially the EU, must realize that its recession-stricken economy has not fully recovered and any oil insecurity can hit its economy hard.

The International Monetary Fund has predicted that the Iranian oil embargo could cut 1.5 million barrels a day from global supplies and push prices up by $20 to $30 a barrel. It also remains yet to be seen how effective the Saudi promise of compensating for this oil deficit.

Meanwhile, this is a windfall gain for other economic blocks like China, Japan, India and South Korea that collectively consume 59 percent of Iran’s oil export and are still mulling to impose cosmetic sanctions on importing Iranian oil. Another aspect of Iran’s economic embargo is that the West’s financial institutions have stopped dealing with Iran. To offset this, Iran is accepting payments in Japanese Yen from its Asian customers.

The “stick” has clearly failed to put a full stop to Iran’s economic growth and deter its nuclear enrichment program.

Now, the important question is will the “carrot” work? I think it will, and here is why. It is no secret that the economic embargoes are hurting Iran. It is the 18th largest economy in the world and has a vibrant information technology, manufacturing and finance industry. I believe that any attractive economic concessions given to it will surely make Iran come to the negotiating table. The West must also understand that any growing economy looks for energy sustainability and nuclear energy is the answer.

Also, the “carrot” has worked successfully in the past. Former President Bill Clinton imposed economic sanctions on India, a traditional Soviet ally, after it successfully tested its first nuclear bomb in 1998. But President Bush, during his first term, started lifting those sanctions in a bid to bring India to the table and succeeded at the end of his second term when India signed the so-called “123 Agreement.” India then stopped piling up nuclear weapons in lieu of U.S. technical and financial investment in setting up civilian nuclear plants in India. It meant energy security for India and business for the U.S.

Hence, I believe that a similar, albeit stricter, treaty can be framed for Iran as well so that it turns out to be a win-win game for all.