Thursday, November 08, 2007

IRAN - An Economic Solution

IRAN - An Economic Solution

We have maintained that economic warfare is far preferable to military intervention. This notion continues to gain converts. Ahmadinejad and his cronies understand that effective sanctions will put them out of business; they understand that a US strike will likely grant them enhanced standing in the Arab world.

The US has now imposed partial sanctions, the first demonstration of what will become a strangle grip on Iran’s economy if cessation and full disclosure are not forthcoming. From the Foundation for Defense of Democracies, "Under such a strategy, the Administration would impose an embargo on refined petroleum products, target the full complement of families and organizations that wield vast control over Iran’s economy, block the foreign investment on which Iran’s economy is heavily dependent, and force U.S. allies to choose between trade with America and with Iran."

We have already highlighted gasoline imports as a necessity to Iran’s economy and the single most potent candidate in the US arsenal. But before that, the recent sanctions will be expanded.
The US now has sanctions in place covering activities of Iran’s clerical army, the Revolution Guard Corps and their feared Quds Force and banks, businesses and individuals associated with them. The impact has been nearly immediate. This week the World Bank suspended $5.4MM in aid scheduled for Iran because of the sanctions, specifically because the payments were to have been made through the Bank of Melli. According to the FDD, "sanctions may be extended to the family of former President Rafsanjani, which controls copper mining and other key industrial sectors...and to the regime’s socio/religious foundations...controlled by Iran’s supreme leader Khamenei."

The goal of this first, moderate step is to discourage investment in Iran. It is working. Foreign banks and companies are scaling back financial dealings with Iran; pension funds are increasingly cutting their ties to companies doing business there.

Of course not all are in agreement with the US, France and the UK. Naturally China continues an active investment schedule with Iran, blithely ignoring the potentially perverse effects of its actions. In fact, in a statement that would appall those who do not understand this amoral country as we do, Chinese trade officials said in June that they would expect to be compensated if sanctions cost them business!!

Robert Craven

Thursday, November 01, 2007

Leverage

Today we witness this headline, a story by Mort Kondracke (ex editor of Roll Call) - "Drop War Talk, Cut Off Iran’s Gasoline Mark Kirk Urges." Kirk, a congressman from Illinois has championed the very same tool we have highlighted for months. "Ahmadinejad’s nuclear program is very popular," Kirk said, "but his domestic program is not. The moment the average guy starts to have problems running his business or getting to work, Ahmadinejad is going to have real political problems."

We cannot say it enough - let the Iranian masses act as a proxy for US policy. Is this a tough concept?