The time for diplomacy with Iran is over - bring on the sanctions
It would come as a major surprise, even for the most optimistic of commentators, if anything more than yet another date for more negotiations comes out of the Istanbul talks.
The "technical experts" meeting starting today in Istanbul between the representatives of Iran and the five permanent members of the UN Security Council, along with Germany (P5+1) are just a last-gasp attempt to keep the diplomatic channel between the international community and Iran open. Yet the chance that these low to mid-level diplomats will succeed in achieving a breakthrough where the senior negotiators failed in three rounds of well-prepared talks is next to nil. You can blame the intransigence on Iran's determination to build a nuclear weapon or on Barack Obama's election circumstances which wont' allow him any flexibility; it will be a major surprise, even for the most optimistic of commentators, if anything more than yet another date for more negotiations comes out of the Istanbul talks.
That doesn’t mean that the next act in the play is a military strike by the U.S. or Israel on Iran's nuclear facilities. There is one more stage that has to play out before we cry havoc and let slip the dogs of war. As of the beginning of this week, Iran is facing the toughest set of sanctions and embargo regimes yet, and as they continue to cripple the country's increasingly fragile economy, will they finally force Iran to back down? Is there a chance that sanctions will work where diplomacy failed?
I have a big piece in today's Haaretz on the extent of Britain's ongoing economic war against Iran, which while being very low-key, is second only to the American efforts. The British may have lost an empire and given up most of their military capability, but the City of London is still one of the world's main financial hubs and it is the marine insurance capital of the globe, giving the British multiple levers with which to pressure Iran, including cutting off nearly all its foreign banking services and making it extremely hard - not only for Iranian ships, but for the ships of any other country carrying Iranian oil - to get the necessary insurance coverage.
One of the experts and diplomats I interviewed for my piece was Sir Richard Dalton, a former British ambassador to Iran and currently a fellow at Chatham House. Based on his knowledge of Iran, Sir Richard does not believe the sanctions will achieve their goal.
"They are relying too much on sanctions – they overestimate the impact on Iran's bottom line of sanctions. They have to recognize that the only way out of the impasse is the sanctions' suspension. You can't simply bludgeon Iran to give up the position they have held for seven years. They have to find a way to put some substance and reciprocity. The sanctions are being used in an ineffective way because they are not offering Iran any incentive."
My friend, Israeli analyst Amotz Asa-El, has an opposite view. He writes in Marketwatch that the sanctions are not only going to work, but that they will cause upheaval in Iran. He points to two main factors. The first, that while Iran is the world's second-largest producer of oil, cutting them off from the world energy market has not caused the price of gas to rise, it has actually gone down and Iraq's customers are finding it relatively easy to secure alternative suppliers. Not only is Iran exporting now less of its oil, but it is receiving far less income for the oil it is still managing to sell. The second factor is the collapse of the retail sector within Iran, due to the government's shrinking ability to subsidize food prices and the absence of a free economy within Iran that isn't based on petro-dollars. Asa-El predicts that this will lead to hyperinflation very soon and then –
"Watching their money evaporate between their fingers, a growing number of Iranians increasingly ask why they need a leadership whose adventurism’s main cheerleaders are Hugo Chavez and Bashar Assad. Moreover, the millions in Iran who believe the ayatollahs stole their votes three years ago have since seen people power drive other inept Middle East leaders from office.
Between the increasingly restless masses and the economically dilettante ayatollahs, change from within is on its way to Iran, either in the wake of next year’s election or before it, whether peacefully or not."
But will there be sufficient time for that outcome to emerge? The buildup of additional American naval forces in the Persian Gulf and the official announcement that Austere Challenge, the joint U.S-Israel missile defense exercise set to take place this October in Israel, are clear indications that America is putting all the necessary pieces in place, in case Obama decides on an election-eve operation against Iran. In other words, the sanctions have about four months to force Iran to concede, and then its finger on the trigger and shoot when you see the whites of their eyes.