Monday, March 26, 2007

Iran feels the pinch

Diplomacy is starting to have an effect on Iran.

First, Russia suspended assistance for Iran's civilian nuclear program -- not out of principle, but because of a dispute over getting paid -- although today Russia said Iran had resumed payments.

More concretely, both Russia and China are urging Iran to accept United Nations demands, although they have both insisted that the problem be resolved peacefully and have tended to water down sanctions that would harm their lucrative commercial relationships with Iran.

Still, those sanctions got tougher over the weekend, with the U.N. Security Council unanimously voting to ban arms sales to or from Iran, ban access to international funding and impose travel restrictions on prominent Iranian officials.

Finally, Iran is starting to discover that it just doesn't have the pull in world markets that we do.

More than 40 major international banks and financial institutions have either cut off or cut back business with the Iranian government or private sector as a result of a quiet campaign launched by the Treasury and State departments last September, according to Treasury and State officials.

The financial squeeze has seriously crimped Tehran's ability to finance petroleum industry projects and to pay for imports. It has also limited Iran's use of the international financial system to help fund allies and extremist militias in the Middle East, say U.S. officials and economists who track Iran.

A paragraph worth noting:

The campaign differs from formal international sanctions -- and has proved able to win wider backing -- because it targets Iran's behavior rather than seeking to change its government. "This is not an exercise of power," Levey said in the interview. "People go along with you if it's conduct-based rather than a political gesture."

In other words, saber-rattling doesn't always help much. A credible threat of force often is necessary to force movement on difficult issues; but too much of it actually harms our cause by reducing support from people who might otherwise help. Thus the "speak softly" part of Theodore Roosevelt's "big stick" phrase.

The initiative was helped by Iran's repeated insistence on painting a target on itself, first by defying the United Nations and then with the rhetorical excesses of President Mahmoud Ahmadinejad.

This is how diplomacy works: gradually ratcheting up the pain level for noncompliance, while dangling carrots for compliance. At some point Iran will have to decide if its nuclear program is worth it -- especially because completing the program becomes increasingly difficult with each turn of the screw, there is the threat of military action if they get close to succeeding and they can expect to be an international and economic pariah as long as they keep trying. If the pain level is high enough, and we also provide a face-saving way out (such as the plan to have Russia take back Iran's spent fuel so it can't be reprocessed), we might yet curb their nuclear ambitions without firing a shot.

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