Your humble blogger is a busy man. There are books to write, referee reports to complete, committee meetings to attend, grant proposals to craft,
silver prices to fix at the behest of the Council on Foreign Relations, tweets to tweet, witty blog posts to devise, and petty acts of professorial revenge to enact. He doesn't have time to revisit an ongoing international crisis with no changes in the dynamic.
So, after reading Thomas Erdbrink and David Sanger's front-pager in the New York Times and Jason Rezaian's story in the Washington Post, I think we're at the stage where it's possible to automate any blog post on the Iran crisis. Here are the seven key points to make in any \post of this nature going forward, with quotes from one of these two stories as evidence:
1) There is a deal on the nuclear issue that can be agreed upon any time both sides are interested in an agreement. From Erdbrink and Sanger:
The outlines of a nuclear deal have been clear for months: an Iranian agreement to limit the number of centrifuges that produce uranium, a cap on the amount of fuel in Iranian hands, and an agreement to ship its most potent stockpiles — the stuff that can be quickly converted to bomb fuel — out of the country. It would also have to agree to expose its history of nuclear work, including any on weapons technology, which it has refused to show international inspectors. In return, Iran would get an acknowledgment that it has a right to peaceful nuclear enrichment, and a gradual lifting of the sanctions.
2) The sanctions against Iran will be tightened until there is a nuclear deal. From Erdbrink and Sanger:
The existing sanctions on financial transactions have also forced Iran to engage in unfavorable oil-for-goods barter trade with its biggest customers, China and India. Chinese goods and medicine from India are prominently featured in stores and pharmacies across the country.
And now Iranian economic ingenuity will be tested again. Under the new crackdown, the United States is tightening the rules governing countries it has allowed to keep buying Iranian oil, as long as they show they are weaning themselves of it. From now on, when China, Japan, South Korea and India, among others, pay for oil deliveries, they will be required to put that money into a local bank account, which Iran can use only to buy goods within that country.
It is a way of keeping the money from ever being repatriated to Iran, even through third parties.
3) Iran will reject any linkage between negotiation and coercion, even though any final deal will be a function of both factors. From Rezaian:
Supreme Leader Ayatollah Ali Khamenei said that will not solve the dispute over Iran’s nuclear program.
"I’m not a diplomat, I’m a revolutionary, and speak frankly and directly,” said Khamenei, according to a report by Iran's Mehr News agency. “You Americans have pointed guns toward Iran, but at the same time you want to negotiate. The Iranian nation will not be intimidated by these actions."
4) American officials will express concerns in public about the rationality of the Iranian leadership. From Erdbrink and Sanger:
Obama administration officials were disturbed by a new analysis, prepared for the president and his staff, that paints a picture of the supreme leader as so walled off from what is happening with his country’s oil revenues that he is telling visitors that the sanctions are hurting the United States more than they are hurting Iran.
“The people may be suffering in Iran,” one senior official involved in Iran strategy said last week, “but the supreme leader isn’t, and he’s the only one who counts.”
5) The sanctions will continue to inflict serious damage on the Iranian economy without beinging the regime to its knees. From Erdbrink and Sanger:
The Iranian economy’s resiliency could surprise Westerners. The way Iran’s economy is structured, with strong links between state bodies and semiofficial and private businesses, helps shield the country, said Saeed Laylaz, an economist and columnist for the Sharq newspaper, which is critical of the government....
Others are more pessimistic, saying the effects of the sanctions have still not been fully felt.
“If the sanctions, government mismanagement and inflation continue naturally in the future, we will encounter serious difficulties,” said Mohsen Farshad Yekta, a professor of economics at the University of Economic Sciences in Tehran.
6) Force will be brandished as an option but not used against Iran. Nick Burns is not known for being a terribly militaristic diplomat, but here's what he told Erdbrink and Sanger about how to deal with Iran:
[T]he U.S. must remain patient and commit to direct talks at the highest levels. But, ultimately both Obama and Netanyahu also need to make the threat of force more credible to Tehran. Combined with sanctions, this may be the most effective way to convince Iran to agree to a peaceful, negotiated settlement.
Chuck Hagel said similar things during his confirmation hearing. No U.S. official is gonna take force off the table -- but short of a deliberate Iranian provocation in the region, it's not gonna be used.
7) And the last, most important point: everyone involved -- with the possible exception of Israel -- is pretty comfortable with the status quo. The U.S. is delighted to keep Iran contained. The Iranian leadership is content to blame the U.S. for all of its woes and possess a nuclear breakout capacity, without actually having nuclear weapons. Iran's economic elites are delighted to engage in sanctions-busting -- more profit for them. And Iran's neighbors are happy to see Iran contained and not actually develop a nuclear weapon. I think even Israel would be copacetic with the current arrangement if they knew that the Iranian regime had no intention of crafting an actual weapon unless it felt an existential threat.
So... unless and until there's a change in the status quo -- and there hasn't been for some time -- I'll just link back to this post when I need to post my quarterly musings on What to Do About Iran. Or I'll program a bot to cull the updated version of the quotes above to point out that nothing fundamental has changed.
The latest issue of The Washington Quarterly is just lousy with China essays -- it's like there's a theme or something. Andrew Scobell and Andrew Nathan tackle China's (apparently overstretched) military, and Guoyou Song and Wen Jin Yuan review China's response to the burgeoning Trans-Pacific Partnership.
James Reilly has an essay on China's use of unilateral economic sanctions that really caught my eye, however. The overwhelming bulk of economic sanctions that have been threatened and used during the past century have been from the United States. From a scholarly perspective this is somewhat disturbing, as general theories about economic statecraft become tough to distinguish from theories of U.S. foreign policy. If another great power starts being profligate with its economic statecraft, there's the promise of a lot of new data.
China has deplored the use of economic sanctions in the past, but as Reilly notes, "Over the past few years, Chinese experts have begun to clear some of the legal, moral, ideological, and practical hurdles to Beijing’s use of unilateral sanctions."
So... how effective are they? Well, at best, it's a mixed bag. Here's Reilly's key paragraph:
Ultimately, China uses sanctions for the same reasons other countries do: they are a relatively low-cost, low-risk way to signal dissatisfaction, increase the costs to those who take undesired actions, and satisfy domestic demands to respond to those actions. Sanctions can assuage domestic criticism while not undermining broader economic and diplomatic interests. For all these reasons, China has increasingly resorted to unilateral sanctions in recent years on issues like Taiwan, Tibet, human rights, and maritime disputes.
If you read the article, it's pretty clear that any concessions made by other countries have been pretty modest --more modest than Reilly seems willing to admit (compare Reilly's take on the 2010 Nobel Prize sanctions with, for example, Erik Voeten's).
But there are three caveats to this observation. First, if China views the sanctions as mostly symbolic and for domestic consumption, then it wouldn't be surprising that they're ineffective. Symbolic sanctions aren't supposed to work, they're supposed to be for show. Second, Reilly notes that China likes threatening sanctions more than using them, and sanctions threats are more likely to work as a form of pre-emptive coercion and deterrence than actually compelling the actor in this particular case.
Third, as with its economic statecraft more generally, China is just beginning to understand this foreign policy tool. Indeed, as Reilly observes, the problem with issuing empty threats is that "the credibility of Beijing’s bluffs risk eroding over time." It will be veeeery interesting to see how China's approach to economic statecraft evolves over time.
In the Boston Review, Natasha Bahrami and Trita Parsi take a long look at the economic sanctions literature and conclude that the ever-more-stringent sanctions regime won't lead to a democratic transition in Iran. One can quibble with their review (they don't cite Nikolai Marinov's work, for example), but they do state the current state of play on Iran rather cleanly:
The official objective of the sanctions is to compel Iran to negotiate with the West toward the implementation of existing U.N. Security Council resolutions calling for Iran to suspend its nuclear enrichment program. Unofficially, there are hints that the sanctions are aimed at collapsing the Iranian regime and bringing about democratic change.
That sums up the situation rather neatly -- the problem is that these goals are somewhat incompatible. If the aim if to negotiate a deal on the nuclear program, then Iran's regime has to be persuaded that the United States is not trying to topple the regime. If the administration keeps up the ambiguity regarding the purpose of sanctions, then Iran's current regime has zero incentive to negotiate. In that case, the only way sanctions work is via regime collapse.
Based on Robert Worth's front-pager in the New York Times on the effect of sanctions in Tehran, however, it looks like the negotiation option might already be closed off. The effect of the sanctions put in place (and the ones that will kick in over the summer) are, well, a mixed bag:
Already, the last round of sanctions on Iran’s Central Bank has begun inflicting unprecedented damage on Iran’s private sector, traders and analysts say, making it so hard to transfer money abroad that even affluent businessmen are sometimes forced to board planes carrying suitcases full of American dollars.
Yet this economic burden is falling largely on the middle class, raising the prospect of more resentment against the West and complicating the effort to deter Iran’s nuclear program -- a central priority for the Obama administration in this election year…
The rising economic panic has illustrated -- and possibly intensified -- the bitter divisions within Iran’s political elite. A number of insiders, including members of the elite Islamic Revolutionary Guards Corps, have begun openly criticizing Iran’s supreme leader, Ayatollah Ali Khamenei, in recent weeks. One of President Mahmoud Ahmadinejad’s aides indirectly accused Ayatollah Khamenei of needlessly antagonizing the West in ways that pushed down the rial’s value, the latest sign of a rift between the president and the supreme leader that is helping to define the parliamentary elections, which are scheduled for March 2.
“They criticize Ahmadinejad and even the supreme leader by name now; it’s not like before,” said Javad, the 45-year-old manager of a travel agency in north Tehran…
Ordinary Iranians complain that the sanctions are hurting them, while those at the top are unscathed, or even benefit. Many wealthy Iranians made huge profits in recent weeks by buying dollars at the government rate (available to insiders) and then selling them for almost twice as many rials on the soaring black market. Some analysts and opposition political figures contend that Mr. Ahmadinejad deliberately worsened the currency crisis so that his cronies could generate profits this way…
Many Iranians are also skeptical about the Western preoccupation with Iran’s nuclear program. “The economic pressure will not push Iran to a nuclear settlement,” said Kayhan Barzegar, the director of the Institute for Middle East Strategic Studies, who has taught in the United States. “The nuclear file is a nationalistic issue; it’s too late for Iran to backtrack. Domestic politics will react negatively to any negotiation — candidates in the elections will say: you sold the nuclear program!”…
[T]he businessman also noted that when Iran last suffered similar privations, in the 1980s, the economy was far smaller, and the revolutionary zeal for self-sacrifice far greater. Iran’s leadership was also far more unified than it is today.
“The question is, when this panic translates into a real diminution in the living standard, will Iranians be willing to take it?” the businessman said. “That’s when these guys will really be in trouble.”
The above report suggests that the sanctions themselves have effectively eliminated the more modest goal of negotiating on the nuclear program. The primary effect of the sanctions to date has been to exacerbated divisions within Iran's regime. Because of these divisons, there's no point to negotiation -- at this point, the United States could ever be sure that the entire Iranian state could credibly commit to any bargain (for advocates of negotiation, it should be noted that this was already a problem; the sanctions just bring it into high relief). The economic effect of the sanctions has also accentuated Iran's nationalist pride in the nuclear program among the middle class.
It's still possible for the sanctions to work. Those that are imposed multilaterally tend to take a longer time to have a policy effect. The target state will first try to break the multilateral coalition apart -- and only after that policy fails will they consider concessions. Recent reportage suggest that Iran was not expecting this kind of multilateral pressure -- and so it's possible that Tehran will reconsider.
That said, the sanctions policy is pushing the United States into a policy cul-de-sac where the only way out is through regime change. In the abstract, that might sound great, but in reality, pushing for that option could be both messy and expensive.
It's been a busy week for Iran-watchers. The European Union is mulling a phased-in oil embargo, prompting Iranian officials to label the move as "an economic war" against Iran. Now Iran's Asia customers are trying to diversify away from Iranian oil. These expectations of future cutoffs, combined with pre-existing sanctions, are taking their toll on the Iranian economy in the form of dollar-hoarding and a free-falling national currency. Fareed Zakaria sums up the current state of play nicely:
[T]he real story on the ground is that Iran is weak and getting weaker. Sanctions have pushed the economy into a nose-dive. The political system is fractured and fragmenting. Abroad, its closest ally and the regime of which it is almost the sole supporter -- Syria -- is itself crumbling. The Persian Gulf monarchies have banded together against Iran and shored up their relations with Washington. Last week, Saudi Arabia closed its largest-ever purchase of U.S. weaponry.…
The Obama administration has put tremendous pressure on Iran on a variety of fronts -- far more pressure than the Bush administration was ever able to muster. This is, in part, because the pressure has been brought to bear, wherever possible, with other countries. The United States does not buy oil from Iran. But European nations, Japan and South Korea do, and if they go along with a new round of sanctions, Iran faces the real prospect of an economic freefall.
Iran's response to these moves has been a mixture of tough talk, empty gestures, backtracking on threats, and an acknowledgment of economic difficulties. It's therefore no wonder that the Washington Post reports, "U.S. officials are increasingly confident that economic and political pressure alone may succeed in curbing Iran's nuclear ambitions." Walter Russell Mead observes that, "public opinion in Iran does not seem to be rallying behind its unpopular government as the economic storm intensifies."
At the same time, however, Iran is trying to demonstrate that its uranium enrichment will continue unabated. Trita Parsi argues that overconfidence in the sanctions track will cause the Obama administration to rebuff any negotiated breakthrough on the nuclear issue. This leads to the obvious question: What's the endgame in Iran? Will sanctions "work"?
To get Clintonian, this depends on your definition of "work." One could argue that the current and projected actions taken by the EU and Pacific Rim might have been a wake-up call to Tehran that it's more isolated than it had previously thought. Iran is not merely facing the United States; it's facing a multilateral coalition that's growing stronger, not weaker. Unless potential benefactors like China take proactive steps to function as a "black knight," these sanctions really will cripple Iran's economy. The alienation of Iran's bazaari from the leadership in Tehran would ... let's say complicate the domestic situation in Iran.
That said, I'm skeptical that it will push the current regime toward making a substantive accommodation on its nuclear program. Based on how the leadership has treated domestic unrest, it seems clear that the top leadership is perfectly comfortable following The Dictator's Handbook approach to staying in power. More-powerful sanctions will therefore simply lead to more-powerful crackdowns. If Iranian elites view the nuclear program as the key to preventing outside attempts at forcible regime change, there's no way they'll compromise.
So would negotiation work? I'm skeptical here too. In part the problem is determining whether the Iranians are capable of negotiating in good faith. I don't mean that Tehran will act duplicitously; I mean whether the fractious regime can act in a coherent manner. Its behavior over the past week or two suggests otherwise. So does Zakaria:
The Obama administration seems to have concluded that the Iranian regime is not ready or able to make a strategic reconciliation with the West. The regime is too divided and Ayatollah Ali Khamenei, the ultimate authority, the Supreme Leader, is too ideologically rigid. So for now Washington wants to build pressure on Iran in the hopes that this will force the regime into serious negotiations at some point.
I suspect the Obama administration's hopes are more ambitious. They want the sanctions to be so crippling that Khamenei's ultimate authority comes under challenge, to the point where factional divisions open up space for a substantive change in the regime.
This might work, but I'd put the odds of this happening at less than 1 in 3. Still, this is the thing about instances in which economic sanctions are deployed. Even if their prospects don't look great, they're usually employed because the other options have even worse odds. For the next, say, six months, pursuing this course of action makes sense. It weakens Iran at a key moment in the Middle East, and it might lead to some positive developments down the road. That said, even if the sanctions work in crippling Iran's economy, they likely won't work at altering Iran's objectionable nuclear policies -- the expectations of future conflict are too great. At that point, the United States is going to need to consider whether it's prepared to pursue a longer-term containment strategy or alter course.
What do you think?
I could point to full-blown reports, news stories, or portentious weather forecasts, but American residents already know the truth -- Thanksgiving travel is an ordeal. Traffic jams, crowded flights -- it seems everyone is trying to get somewhere in the days before Turkey Day.
With the general mantra of "hurry up and
place your hands in a surrender position wait" governing these next 36 hours, I thought it would be worth considering how a better appreciation of the tools of stateraft might help those of you on the road to avoid unnecessary frustrations.
Let's say that another actor -- which we'll call the target -- is pursuing a course of action that conflicts with your interests in world politics. This presumably means that all your attempts to avoid this clash of interests in the first place have failed. What are your options in developing a policy response?
Well, there's always the denial option -- physically preventing the target from doing the thing that is bothering you. Of course, denial often requires the overpowering, sustained use of force, and therefore is massively expensive. Very few actors have this option available to them.
If denial is not possible, another possibility is compellence. In this case, the goal is to punish the target such that it recalculates the costs and benefits of doing what it is doing and acquiesces to you. While less costly than denial, punishing the target will often involve punishing yourself, albeit not as severely. Some actors possess this option, but its success rate is far from guaranteed
Compellence and denial sound very coercive -- what about inducements? Surely the most efficient way to alter the target's behavior is to buy them off! Not so fast -- sometimes the price is extraordinarily steep. Sometimes the target doesn't want to be thought of as for sale. And sometimes the target might con you.
There's always the possibility of persuasion -- using sweet reason to get the target to reconsider their motives and reverse their actions. Of course, what seems eminently reasonable to you might not look so smart to the target, so this is hardly a surefire recipe for success.
Finally, one should always consider acceptance -- allowing that the costs of trying to change the target's behavior far outweigh the costs of adjusting to the target's behavior. Intuitively, this is a very frustrating outcome -- but if you lack the capability or the budget to pursue the other options, then it still might be the best course of action.
What, you might ask, does this have to do with Thanksgiving travel? Quite a lot, actually. Let's say you're stuck in a traffic jam on I-95, or you're on a plane with a crying toddler sitting next to you. The natural instinct is to declare that the situation is "unacceptable" and that "failure is not an option." All well and good, but let's run through our list of generic policy options and see what's feasible if you're, say, stuck in a traffic jam:
1) Denial: If you're on the road, sure, you could use RPGs to blast a hole through the traffic. That would require an awful lot of them, however, and I hear they're expensive and illegal to use. Good luck having enough of them to force your way through the tri-state area.
2) Compellence: Lot of drivers seem to believe that there are forms of punishment that could be pursued: constant horn-honking, hanging right on someone's bumper, and so forth. This can work with a few drivers, but more often than not it simply creates reciprocal bellicose behavior/minor fender-benders/West Coast shootings by the targets.
3) Inducements: The proffering of inducements on clogged interstates is exceptionally rare, for two reasons. First, what can be offered? Snacks? Drinks? A video player? These are all exhaustible resources -- so in a traffic jam, this will only get you a few car lengths ahead.
4) Persuasion: As Tom Vanderbilt so wonderfully explained in Traffic, communication across cars is difficult. There's that horn, and of course gesticulations with one's fingers can also often be used. Neither of these really persuades, however.
Unfortunately, but logically, this leads us to acceptance as the best approach to handling Thanksgiving traffic jams. It's the best of a bad set of policy options -- much like modern-day statecraft.
[What about the crying toddler on the plane?--ed. Oh, then this metaphor works even better -- crying toddlers are the uncontrollable rogue states of travel. The parent could try denial, but suffocating children still carries serious legal penalties in most states. Compellence is popular, except if the idea is to get a screaming child to stop screaming, punishment isn't really going to work well. Inducements -- "here, have some chocolate!" -- can work, but the child quickly figures out the associated moral hazard and has an incentive to act out again to get more inducements later in the flight. Using persuasion on crying children is something that non-parents are convinced will work -- until the moment they become parents themselves and realize their own utter stupidity. No, if a child is bawling uncontrollably during a flight, it's not because the parent is derelict in their parenting -- it's because they've already exhausted the first four policy options and have no recourse but acceptance.]
Safe and sane travels to one and all!
The Washington Post's Liz Sly has been doing some excellent reporting on the ground in Syria, and her latest report suggests that the latest batch of sanctions are starting to hurt Syria badly:
The dramatic decision by Arab states to turn against President Bashar al-Assad could further damage Syria’s economy at a time when it is already unraveling, posing perhaps a graver challenge to Assad’s survival than the country’s nearly-eight-month-old popular uprising, analysts say....
The extent of the damage is difficult to measure, and Syrian government officials say they don’t have indicators. But they do not play down the gravity of the situation.
Syrian Economy Minister Mohammad Nidal al-Shaar said at a conference last month that the economy is in a “state of emergency,” according to comments quoted by the Damascus-based Syria Report. In a recent interview in Damascus, Adib Mayalah, governor of the Central Bank of Syria, described the situation as “very serious” and ticked off the problems the economy is facing.
“Unemployment is rising, imports are falling, and government income is reduced,” he said. “In areas where there are protests, there is no economic activity — so people aren’t paying tax. Because they aren’t working, they are not repaying their loans — so the banks are in difficulty. And all this is weakening the economy.”
Merchants interviewed recently on the streets of Damascus report a 40 to 50 percent fall in business as consumers hoard cash and cease spending on all but the most essential items. Tourism has skidded to a halt, representing a loss of $2 billion a month to an economy worth $59 billion last year, Mayalah said.
“The whole system has been shrinking — and very fast,” said Rateb Shallah, a prominent Damascus businessman. “The sanctions are squeezing us, and it is definitely affecting us quite a bit.
To what extent the downturn is due to the sanctions isn’t clear, however.
Until now, only the United States, the European Union, Canada and Japan have imposed sanctions on Syria, with relatively limited measures mostly targeting individuals and financial services. The most serious measure, a European embargo on oil purchases imposed in August, goes into effect only on Tuesday because Italy sought to ensure that its existing contracts were honored.
But the experience of the oil embargo illustrates the broader crisis of confidence confronting Syria. European nations, which account for a vast majority of Syrian oil exports, immediately halted their purchases, even though they were not required to do so for three more months. And oil pumped since then has gone unsold, despite Syria’s boasts that it would easily find other customers. Syria has curtailed its oil production by more than 25 percent, Mayalah said (emphasis added).
Turkey threatened to cut off supplies of electricity to its neighbor Syria Tuesday, as the Damascus regime found itself under growing pressure from Arab, Turkish, European and North American governments for its ongoing lethal crackdown on pro-democracy demonstrators.
"We are supplying them (Syria) with electricity at the moment. If they stay on this course, we may be forced to re-examine all of these decisions," Turkish Energy Minister Taner Yildiz said Tuesday, according to Turkey's semi-official Anatolian Agency....
Observers warn the protest movement in Syria, which struggled peacefully for months, is growing increasingly "weaponized" as more and more Syrian soldiers desert from the armed forces and join the opposition.
There's just a whiff of the Ivory Coast in how things are playing out right now. Effective sanctions + regional cooperation + weaponization of the opposition = eventual dictator downfall. It's not as neat and tidy as that equation, of course, but you get my drift.
There's an interesting irony here. Historically, the leaders of resource-rich economies have had greater leeway make mischief and resist waves of democratization. In the current climate, it would seem that these are the very economies most vulnerable to active economic pressure.
Obviously I'm not expecting an oil embrago on Iran anytime soon -- there are costs to sanctioning a major oil exporter. Still, these events are no doubt disturbing in Tehran and elsewhere.
What do you think? Is Assad doomed?
The nasty piece of work that is the Syrian regime has been amping up the repression of its own population as well as its overseas diaspora. What can be done about it? Well, this is a purely theoretical question, since
China and Russia the United Nations Security Council ain't willing to take action. Still, for the thrill of it, let's put on our thinking caps and ponder what measures could and should be taken short of force.
Although the Assad regime has essentially declared war on much the Syrian population, there is one coveted demographic that they have yet to alienate -- the business elites in Aleppo and Damascus. By and large the anti-Assad movement has yet to penetrate Syria's two largest cities. If sanctions could be designed to target those sectors of the population in particular, then the Syrian regime might feel its "selectorate" slipping away, undermining the regime even further.
As it turns out, these kind of sanctions were imposed on Syria for a short spell. What's surprising is that it was the Syrian government that imposed them:
The Syrian government on Tuesday revoked a recent decision to ban imports of most consumer goods, a move that had sent prices soaring and provoked outrage among a business elite that has until now backed the leadership of President Bashar al-Assad in his nearly seven-month contest with anti-government activists....
Analysts said that the ban imposed last week on imported merchandise, which included cars, household appliances and even food items, underscored a deep sense of anxiety among the authorities as Syria faces some of its most dangerous political unrest in four decades of dictatorship. Officials said it was needed to protect foreign currency reserves.
Analysts said the ban had been ordered without any study of the potential effects on the Syrian market or on Syria’s trade agreements with neighboring countries. Some economists in Syria said the import ban and its reversal were indicators that the Syrian leadership remained uncertain in the face of the uprising and its ramifications for the Syrian economy.
“The ruling caused a domestic uproar that was very important,” said Nabil Sukkar, a former senior economist at the World Bank who now leads the Syrian Consulting Bureau for Development and Investment, based in Damascus. “They realized that they can’t do that because it will lead to soaring prices, smuggling, unemployment and harm the credibility of the reforms.”....
[An] Obama administration official, speaking on the condition of anonymity following diplomatic protocol, contended that despite the reversal, “the damage has already been done.” The official said inflation had tripled and smuggling had surged since the decision was made, unsettling the business elite in Syria, which has largely sided with the government.
The “well-to-do are completely dismayed with Assad,” the American official said. “They don’t think he knows what he’s doing. Inflation has gone up. He can’t fix it.”
If the Assad government is truly this self-defeating, then maybe there's hope for regime change after all. All we can hope for is that further bloodshed is kep to aminimum, and that no one gives the Assads a copy of Bruce Bueno de Mesquita and Alistair Smith's The Dictator's Handbook.
Keith Bradsher reports on the latest move in Chinese economic statecraft:
China, which has been blocking shipments of crucial minerals to Japan for the last month, has now quietly halted some shipments of those materials to the United States and Europe, three industry officials said this week.
The Chinese action, involving rare earth minerals that are crucial to manufacturing many advanced products, seems certain to further intensify already rising trade and currency tensions with the West. Until recently, China typically sought quick and quiet accommodations on trade issues. But the interruption in rare earth supplies is the latest sign from Beijing that Chinese leaders are willing to use their growing economic muscle.
"The embargo is expanding" beyond Japan, said one of the three rare earth industry officials, all of whom insisted on anonymity for fear of business retaliation by Chinese authorities.
They said Chinese customs officials imposed the broader restrictions on Monday morning, hours after a top Chinese official summoned international news media Sunday night to denounce United States trade actions....
The signals of a tougher Chinese trade stance come after American trade officials announced on Friday that they would investigate whether China was violating World Trade Organization rules by subsidizing its clean energy exports and limiting clean energy imports. The inquiry includes whether China's steady reductions in rare earth export quotas since 2005, along with steep export taxes on rare earths, are illegal attempts to force multinational companies to produce more of their high-technology goods in China.
Despite a widely confirmed suspension of rare earth shipments from China to Japan, now nearly a month old, Beijing has continued to deny that any embargo exists.
Industry executives and analysts have interpreted that official denial as a way to wield an undeclared trade weapon without creating a policy trail that could make it easier for other countries to bring a case against China at the World Trade Organization.
So far, China seems to be taking a similar approach in expanding the embargo to the West.
Hat tip to Will Winecoff, who asks, quite reasonably, "What in samhell is China thinking?"
Assuming that the New York Times story is accurate, there are three ways to think about what Beijing is doing. First, this could just be all about domestic politics. Bradsher notes that the decision was made after a Central Committee meeting. It's possible that as the currency wars heat up, and as the U.S. starts complaining to the WTO, there was a need to assuage some nationalist outrage. Of course, no one really knows what Chinese domestic politics looks like, so who the hell knows how much validity to give to this argument.
The second way to look at it is that China's leaders have been reading The Sanctions Paradox. I argued in that book that high expectations of future conflict between the sanctioning and the sanctioned state would lead to frequent episodes of economic coercion, but each attempt would yield only minimal concessions. So far, this model holds up: the past month of China's rare earth export controls have yielded them exactly one returned fishing boat captain. Maybe they are hoping that extending the ban to the United States will force Washington to back down in their WTO complaints. Given rising conflict expectations, that's about the most they're going to get from this action.
The third way to think about it is that China is being ridiculously short-sighted in their use of economic coercion. As Patrick Chovanec notes at Seeking Alpha:
[China] really shot itself in the foot. By flexing its muscles so eagerly, over a relatively minor incident, it alarmed its customers and possibly frightened them off, when a softer approach might have lulled them into continued and deepening dependence. There's no question that China can extract rare earths at the cheapest price, in purely monetary terms. But now China's trading partners must be seriously wondering, what could the real price amount to, when the bill eventually comes due?
China's foreign economic policies with respect to raw materials suggests that Beijing doesn't think market forces matter all that much -- what matters is physical control over the resources. This is a pretty stupid way of thinking about how raw materials markets function, and it's going to encourage some obvious policy responses by the rest of the world. Non-Chinese production of rare earths will explode over the next five years as countries throw subsidy after subsidy at spurring production. Given China's behavior, not even the most ardent free-market advocate will be in a position to argue otherwise.
More importantly, China's perception of how economic power is wielded in the global political economy is going to have ripple effects across other capitals. If enough governments start reacting to China's economic statecraft by taking similar steps to reduce interdependence with that country, then China will have created a self-fulfilling prophecy in which geopolitics trumps economics. Another possibility is that the rest of the world will operate as before in dealing with each other, but treat China differently, developing CoCom-like structures and fostering the creation of explicit economic blocs.
That really would be the worst of both worlds for Beijing. China is growing, but the economic weight of countries that prefer market-oriented ways of doing business is still much, much larger.
In going for the short-term gain, China is inviting a long-term containment policy. That might allow for some rally-round-the-flag support at home, but it's going to be a massive net loss for their economy.
Hey, remember last week, when I was blogging about how China was threatening Japan with a rare earth ban because the Japanse government had a Chinese boat captain in custody? And remember how I said that, "given the spate of flare-ups between Japan and China as of late, the last thing Tokyo will want to do is back down in the face of Chinese economic coercion"?
Japanese prosecutors have released the captain of a Chinese fishing boat, two weeks after a collision in disputed waters sparked a dramatic deterioration in ties between Beijing and Tokyo....
Prosecutors on the southern Japanese island of Okinawa, where Zhan was detained, said they would monitor both governments' response to their decision before deciding whether to indict him, but that course of action is looking increasingly unlikely.
They said the row caused by Zhan's detention and the possible impact on Japan-China ties had been a factor in their decision....
Japanese officials had earlier warned that the swift deterioration in bilateral ties posed a threat to the economies of both countries.
China was Japan's largest trading partner last year and Japan was China's third largest. Bilateral trade reached $147bn (£93.6bn) in the first half of this year – a jump of 34.5% over the same time last year, Japanese figures show.
"A cooling of relations between Japan and China over the Senkaku problem would be bad for Japan's economy, but it would also be a minus for China," Japan's finance minister, Yoshihiko Noda, said.
"It's desirable that both sides respond in a calm manner."
A few commentors to my last post took this opportunity to tell me to
go suck a lemon the errors of my ways. To which I must respond.... not so fast.
I had four points to make in that post:
A) Japan was unlikely to bow to economic pressure from China;
B) China's use of a rare earths export ban was not likely to have much leverage;
C) China was overestimating its overall ability to translate economic power into political leverage; and
D) Because of these actions, the rest of the Pacific Rim was going to start getting much closer to the United States.
Now, let's go through these in the context of this Associated Press story about the latest in this Sino-Japanese kerfuffle:
Tension between China and Japan bumped back up a notch Monday when Tokyo asked Beijing to pay for damages to patrol boats hit by a Chinese fishing vessel in disputed waters, countering China's demand for an apology over the incident.
The diplomatic back-and-forth shows that nationalistic sentiments stirred up by the incident — and the territorial dispute behind it — are not fading even after Tokyo released the ship's captain Friday amid intense pressure from China.
Welcoming the skipper home as a hero, China stunned Japan over the weekend by demanding an apology and compensation over his arrest, a move that reflects Beijing's growing self-confidence and its attempts to test the resolve of key neighbors like Japan, Washington's closest ally in the region.
Criticized at home for caving in to Chinese pressure, Prime Minister Naoto Kan's government responded by issuing its own demand for compensation and calling on Beijing to decide whether it wanted to repair frayed ties.
"At this point, the ball is now in China's court," said Chief Cabinet Secretary Yoshito Sengoku....
Some experts saw China's demand for an apology as overreaching — and bad publicity in a region where neighbors are already concerned about the nation's expanding military and political clout. China is embroiled in several other territorial disputes.
"Beijing has scored an own-goal here. It really reflects badly on them," said Jeff Kingston, director of Asian studies at Temple University's Tokyo campus. "All that smile diplomacy, reassuring regional neighbors that the rise of China is unthreatening, has just gone up in smoke."
More broadly, the dispute and others like it has created openings for greater U.S. engagement in Asia as China begins to vie with the U.S. for dominance in the region.
On Friday, President Barack Obama and Southeast Asian leaders sent China a firm message over territorial disputes, calling for freedom of navigation and peaceful resolution of disputes in seas that China claims as its own. Obama said the U.S. plans to "play a leadership role in Asia."
Hmmm.... well, Japan did hand over the captain, so it seems that I was pretty wrong on (A). That said, this story also suggests I'm a little right on (A) and very right on (C) and (D). China overreached -- again -- in demanding compensation and an apology (though looking past this latest episode, there are some indications that China recognizes its overreaching vis-a-vis the USA). This caused Japan to dig in its heels. And, finally, all of this is pushing the region closer to the United States.
[What about the rare earth lever?--ed.] Damien Ma knows more about this than I do:
Given the expansive universe of Japanese high-tech sectors, Japan depends on China for the bulk of its RE supplies. Now, China produces roughly 95% of global RE supplies, but has only about 1/3 of the world's total reserves. Having such immense control over a particular resource naturally leads to suspicion, especially among buyers, that China could wield "supplier leverage" to manipulate prices and supplies, much like how a cartel would behave....
China's supply dominance was driven by market dynamics in the first place. Other RE mines closed production, in part because of environmental issues, while China continued to produce at a low price. Now that price is rising in China, it might be more cost-effective to start mine development elsewhere. If China really is trying to be the "OPEC" of rare earth elements, then global markets would react to cartel-like behavior, probably by accelerating development, eventually undermining Chinese monopoly on supply. Problem is, development takes time, so for now, it's tough to get off Chinese supply.
At worst, I was slightly wrong on (B) in the short term -- and this doesn't get into Japan's stockpiling of rare eaarths. Furthermore, I am going to be much less wrong about this over time. China's market power over rare earths is clearly temporary. Regardless of whether they were trying to use their monopsony power to extract concessions from Japan, the perception of China's economic statecraft is going to encourage a lot of countries to subsidize their domestic supply.
So, to sum up: I was more right than wrong. I hereby dare my thoughtful and cantankerous readers to
go suck two lemons demonstrate the error of my interpretation yet again in the comments section.
I think it's safe to say that Venezuela's economy has seen better days. The government has been issuing something that looks an awful lot like food rationing cards. Now the Financial Times' Benedict Mander reports that Venezuela's new currency controls are affecting its import sector in a really sensitive area:
Unable to access enough dollars, local importers are feeling the pinch across a wide range of goods, from Scotch whisky, the nation’s favourite drink, to luxury foods and swanky cars....
Each month, whisky importers – some of the worst hit – say they can legally get only as much foreign currency as they would normally use in a day. Bars and restaurants fear the reaction when they run dry. “We’ve got enough boxes to last a few more weeks, but after that, I’m worried about what will happen,” said the manager of one bar.
The irony, of course, is that Venezuela is doing to itself what the United States has been trying to do to North Korea for years (and re-emphasized in the past few months) -- denying access to luxury goods for the elites.
Let's call these kind of measures Mad Men sanctions, shall we? Anything that embargoes sumptuous indulgences -- including alcohol, cigarettes, and Christina Hendricks -- counts as a Mad Men sanction. The question is, whether self-imposed or externally imposed, do they make a difference?
With respect to North Korea, I think the answer is pretty clearly no. This is mildly surprising. Even though I'm pretty skeptical about these kind of sanctions in general, the DPRK is one of the few countries where Mad Men sanctions truly are "smart." The North Korean elite leads a very segmented life, and making it harder to get Johnny Walker Blue affects very few average North Koreans. That said, while the North Korean elite appears to be tottering just a little, it's not because they're going into Scotch withdrawal.
Of course, there is a difference between an external actor imposing a Mad Men embargo and an internal actor screwing up the economy to the point that a petrostate needs to husband foreign exchange reserves. For IR grad students out there, it's a good test: is a regime hurt more from an externaly-created embargo or from an internally-created one?
[And what about the IR effects of Christina Hendricks?--ed. Definitely a question that begs for further research. Dibs!!--ed.]
Michael Buckner/Getty Images for Belvedere Vodka
Appropos of yesterday's blog post, I see that Matthew Yglesias, Rob Farley, and Kindred Winecoff have all posted thoughts about how to get the U.S. policymakers to better understand the domestic politics of other countries. Farley makes a particularly trenchant point:
It’s not quite right to say that academy has figured out how to successfully integrate domestic politics into theories of foreign policy behavior, but we’ve certainly worked on the question. The policy community, however, seems almost utterly uninterested in this literature, to the extent that “well, Ahmadinejad/Putin/Chirac/Chavez/Milosevic/Calderon/Netanyahu/Kim could comply with our demands, but his domestic coalition would almost certainly fracture, and it’s tough to expect leaders to do things that will lead to their downfall” becomes a repetitive refrain.
Farley is absolutely right that the academic community has made greater strides than the policy community in this way. That doesn't mean that anything has been conclusively decided; many of the most discussed/cited works are also the most disdained. But where progress has been made it's been by analyzing how domestic political constraints can cause leaders to act in ways that are, quite frankly, perplexing to outside audiences....
I've never felt it was my place to proffer policy advice, even into the seldom-read tubespace that this blog lives in. But the last half-century of American foreign policy reveals, to me, the importance of disaggregating the politics of foreign regimes, of closely examining political structures and constraints in other places, and of crafting nuanced policy that takes those factors into account. This is much harder than blustering, of course, but also much more beneficial.
I'll have more thoughts on this later, but towards that end, let's discuss the stupidity of Congress' latest foray into foreign policy waters:
Several members of Congress have moved to block United States aid to the Lebanese military, saying they are concerned that it may be working with Hezbollah in light of last week’s deadly skirmish between Lebanese and Israeli soldiers on the border between the two countries.
The United States has pledged hundreds of millions of dollars in aid to the Lebanese armed forces in recent years, but members of Congress have often expressed unease that the weapons could fall into the hands of Hezbollah, the militant Shiite movement that fought a monthlong war with Israel in the summer of 2006.
Representative Howard L. Berman of California, the Democratic chairman of the House Foreign Affairs Committee, put a hold on $100 million in appropriations to the Lebanese Army on Aug. 2, a day before the border clash, and expressed further concerns on Monday.
“Until we know more about this incident and the nature of Hezbollah influence on the L.A.F. — and can assure that the L.A.F. is a responsible actor — I cannot in good conscience allow the United States to continue sending weapons to Lebanon,” Mr. Berman said in a statement.
At least three other members of Congress have placed holds on the money or called for the Obama administration to review military aid to Lebanon, including Representative Nita M. Lowey, Democrat of New York, and two Republicans, Representatives Howard P. McKeon of California and Eric Cantor of Virginia. A hold has no legal effect on the aid, which has already been appropriated, but it is rare for an administration to ignore one.
Now, I understand the Congressional impulse to do something here -- I really do. What I don't understand is how Congress thinks that withholding aid from the Lebanese military will weaken Hezbollah. Congress seems to think that anything that aids the Lebanese Armed Forces (LAF) will concomitantly aid Hezbollah. The latter group, however, has independent sources of financial, political and military support. It's better to think of the LAF as a competing power base than as a conduit to Hezbollah. Anything that weakens national institutions in Lebanon empowers the groups that can survive in a more anarchical environment -- and gee, whaddaya know, that would include Hezbollah.
It's possible that these thoughts have passed through the staff of Berman, Cantor, Lowey and McKeon. It's also possible that these staffers simply sad "f*** it, this will look like our member of Congress is doing something." I can certainly respect the raw political calculation involved here. But it's a stupid, counterproductive move in terms of the national interest -- and they should know better.
Over the weekend, Paul Krugman trotted out his "let's pressure China" argument but expanded it to Germany. This prompted some quality IPE snark from Kindred Winecoff, followed up by the same points written in less snarky fashion.
Ordinarily, I would be eager to enter this debate full of vim and vigor. Unfortunately, I spent the weekend
at my college reunion at an important networking conference in which I drank a lot and caught up with old friends a lot of retrospective analysis and discussion took place over cocktails and I'm still exhausted from pretending to be a 21 year old for a few days still processing the exciting intellectual synergies that took place during the free-flowing dance party breakout sessions.
Fortunately, I really don't have to add too much. I'll just link to my old post about this debate and note that the questions I raised in that post have yet to be answered.
Well, I'll say one more thing. Between then and now, I've had the opportunity to enjoy a conversation with Krugman over dinner on these questions, and I think I can say where, exactly, we disagree. He believes that, as the deficit country, the U.S. has vast reservoirs of economic power that can be exercised over China. I would argue that the U.S. position is such that America can deter China but can't unilaterally compel the country to alter its own policies.
More importantly, Krugman -- and most economists engaged in this debate -- are seriously underestimating the extent to which nationalism will affect China's response to any unilateral move by the United States. Even if China's response to an increase in U.S. trade barriers would be counterproductive to their own economic interests, it might serve the regime's political interests. In an ordinary world economy, China wouldn't want to do anything to upset its expoert engine. In a world where the leading open economy basically says "f**k it," well, they're going to reassess. Riding the nationalist tiger will look politically appealing in a slow-growth world.
I'm behind the curve on this, but as someone who's written a bit on sanctions I feel the need to comment on the latest round of UN sanctions applied against Iran.
At FP, Christopher Wall and Kori Schake effectively douse any enthusiasm optimists like Gideon Rachman might have had about the sanctions working in an of themselves. One could argue that the true assessment depends on how much and how effectively the United States and European Union are able to leverage the sanctions resolution language into effecive action against the Iranian Central Bank and other financial entities. That said, David Sanger's NYT story suggests the gloom that pervades this foreign policy problem:
So what, exactly, does President Obama plan to do if, as everyone expects, these sanctions fail, just as the previous three did?
There is a Plan B — actually, a Plan B, C, and D — parts of which are already unfolding across the Persian Gulf. The administration does not talk about them much, at least publicly, but they include old-style military containment and an operation known informally at the C.I.A. as the Braindrain Project to lure away Iran’s nuclear talent. By all accounts, Mr. Obama has ramped up a Bush-era covert program to undermine Iran’s nuclear weapons infrastructure, and he has made quiet diplomatic use of Israel’s lurking threat to take military action if diplomacy and pressure fail.
But ask the designers and executors of these programs what they all add up to, and the answer inevitably boils down to “not enough.” Taken together, officials say, they may slow Iran’s progress toward a nuclear weapon, which has already run into far greater technical slowdowns than anyone expected. If the pressure builds, Iran might be driven to the negotiating table, which it has avoided since Mr. Obama came to office offering “engagement.”
But even Mr. Obama, in his more-in-sadness-than-anger description on Wednesday of why diplomacy has so far yielded nothing, conceded “we know that the Iranian government will not change its behavior overnight” and went on to describe how instead the sanctions would create “growing costs.”
So no, this ain't going to accomplish much. One thing I would like this episode to do is force a reconsideration of the whole idea of "smart sanctions." I've been reviewing the literature on this subject, and further study is clearly needed. Nevertheless, the evidence to date suggests that smart sanctions are no better at generating concessions from the target state. In many ways they are worse.
The comparative advantage of smart sanctions is that they appear to solve several political problems for sender countries. Smart sanctions really do reduce the suffering by civilian populations. Because they are billed as minimizing humanitarian and human rights concerns, they receive only muted criticism from global civil society. Because they do not impede significant trade flows, smart sanctions can be imposed indefinitely with minimal cost. They clearly solve the political problem of "doing something" in the face of target state transgressions. What they don't do is solve the policy problem of coercing the target state into changing its policies.
The comparative disadvantage of smart sanctions is their ability to lull policymakers into believing that they're doing something when they're not. Now, to be fair, sometimes that's the idea -- maybe policymakers don't want to take more aggressive or risky action against a target state. In that situation, smart sanctions are perfect. My concern, however, is that policymakers believe that another multilateral round of smart sanctions will actually force the Iranians to do what the rest of the world wants it to do -- because it won't. Short of comprehensive sanctions, nothing in the economic statecraft policy tool kit will work.
PHILIPPE LOPEZ/AFP/Getty Images
So, in the past 36 hours there has been news about two deals involving Iran. The first one involved an arrangement brokered by Turkey and Brazil:
In what could be a stunning breakthrough in the years-long diplomatic deadlock over Iran's nuclear program, Tehran has agreed to send the bulk of its nuclear material to Turkey as part of an exchange meant to ease international concerns about the Islamic Republic's aims and provide fuel for an ailing medical reactor, the spokesman for Iran's foreign ministry told state television Monday morning.
Whether this was really a breakthrough or just a last-minute dodge by Iran to fend off sanctions, commentators mostly agreed on two things: A) This showed how Turkey and Brazil were new heavyweights in international relations; and B) This would complicate and delay a new round of United Nations sanctions.
All well and good, except that now there's another breakthrough.... on a new round of Security Council sanctions:
The United States has reached agreement with Russia and China on a strong draft resolution to impose new United Nations sanctions on Iran over its uranium-enrichment program, Secretary of State Hillary Rodham Clinton announced Tuesday.
Appearing before the Senate Foreign Relations Committee in a scheduled hearing on a new strategic arms reduction treaty with Russia, Clinton shrugged off a surprise deal announced Monday in which Iran would swap a portion of its low-enriched uranium for higher-grade uranium to power a research reactor that produces medical isotopes. The deal, brokered by Turkey and Brazil during a high-level visit to Tehran, was meant in part to assuage concerns over Iran's nuclear program and discourage new U.N. sanctions.
"Today I am pleased to announce to this committee we have reached agreement on a strong draft with the cooperation of both Russia and China," Clinton said in an opening statement. She said the United States has been working closely for several weeks with five other world powers on new sanctions and plans to "circulate that draft resolution to the entire Security Council today."
Well, this is an interesting development. What's going on?
I think the key is that Russia was not persuaded by the Turkey-Brazil-Iran deal:
Sergei B. Ivanov, the deputy prime minister of Russia, was similarly skeptical at a lunchtime speech in Washington. He said he expected the sanctions resolution to “be voted in the near future,” and said that the new Iranian accord should not be “closely linked” to the sanctions effort. “Iran should absolutely open up” to inspectors, he said. That statement was significant because Russia had been reluctant to join sanctions several months ago. China, which has also been hesitant, issued no statement.
With Russia firmly on board, and China apparently unwilling to ge the lone P-5 holdout, Monday's Iran deal had no effect on the calculus of the Security Council.
Why was Russia unpersuaded? To date, Russia and China have taken advantage of any Iranian feint towards conciliation as an excuse to delay sanctions. What's different now?
I'd suggest three possibilities, which are not mutually exclusive:
1) Russia is genuinely unpersuaded that Monday's deal is anything more than marginally useful;
2) Russia is just as annoyed as the United States at the
young whipperrsnapper countries rising powers of the world going rogue in their diplomacy. Russia is, in many ways, more sensitive to questions about prestige than the United States;
3) Cynically, there's little cost to going along with the United States on sanctions that will have very little impact on the Russian-Iranian economic relationship.
Commenters are encouraged to provide additional explanations below.
The Washington Post's Philip P. Pan had an excellent story today on the ways in which Russia used economic coercion to aid and abet regime change in Kyrgyzstan last week. This part stands out in particular:
After the opposition announced plans for nationwide protests, Putin provided a final spark by signing a decree March 29 eliminating subsidies on gasoline exports to Kyrgyzstan and other former Soviet republics that had not joined a new customs union.
When the tariffs kicked in April 1, Russian fuel shipments to Kyrgyzstan were suspended, said Bazarbai Mambetov, president of a Kyrgyz oil traders association. Within days, gas prices in Bishkek began to climb, enraging residents already angry about sharp increases in utility fees.
As the Kremlin leaned on Bakiyev, it also consulted the opposition, hosting its leaders on visits to Moscow, including in the days before the protests. On the eve of the demonstrations, the Kyrgyz prime minister accused one, Temir Sariev, of telling police that he had met with Putin and had won his support for efforts to overthrow Bakiyev.
What's interesting about this is that Russia didn't rely on "smart sanctions" that would only hurt the ruling elite. They clearly imposed sanctions designed to roust the mass public into action.
Sometimes, dumb sanctions aren't actually all that dumb.
[So you're saying that similar sanctions should be imposed against Iran?--ed. No. Iran is not Kyrgyzstan, and the United States is not Russia. There are too many differences between the two cases to make that facile comparison. I'm just pointing out that there is more than one way for sanctions to change a targeted state's behavior.]
Anyone else intrigued by this BBC report?
Imposing more sanctions on Iran over its nuclear programme would not be a quick enough solution, Saudi Arabia's foreign minister has said.
Prince Saud al-Faisal said the threat posed by Iran demanded a "more immediate solution" than sanctions....
Speaking at a joint Riyadh news conference with Mrs Clinton, Prince Saud said: "Sanctions are a long-term solution. They may work, we can't judge.
"But we see the issue in the shorter term maybe because we are closer to the threat... So we need an immediate resolution rather than a gradual resolution."
While the Saudi minister did not detail his vision of a quick solution in public, it is likely that options were discussed behind closed doors in the meeting between Mrs Clinton and King Abdullah, says the BBC's Kim Ghattas, who is travelling with the top US diplomat.
Um.... beyond appeasement, what exactly are the policies that could lead to an "immediate resolution" of the Iranian nuclear program?
Seriously, I'm stumped on this point. All of the possible "immediate" options on the table -- Israeli airstrike, a Saudi deterrent capability -- seem equally ludicrous.
UPDATE: This Financial Times story by Abeer Allam appears to be an attempt at clarification:
Saudi foreign policy official told the French press agency on Tuesday that the kingdom was not advocating military action when Prince Saud said that sanctions were not a solution.
Riyadh was arguing that the Middle East peace process was a faster and more effective means to ease tensions in the region, the official said.
”There is no point in our spending all our time on sanctions which will not have an effect in the short term. We need something more tangible,” the offical told AFP.
”We don’t want a military strike ... A military strike, we still believe, will be very counterproductive,” he said. (emphasis added)
Um..... I agree that sanctions are not a quick fix, but does anyone, anywhere believe that the Middle East peace process will be faster than other policy options? Anyone?
Here is a quick list of things that I believe will happen more quickly than a successful Middle East peace process:
1) Cold fusion;
2) Bermuda wins gold medal in men's luge;
3) Miley Cyrus nominated for Best Actress Oscar
Mom!! Dad!! Kids!! Want to go somewhere fun for the winter, but tired of the same old vacation destinations?
Have I got the place for you!! Try.... Pyongyang!!
North Korea will allow more tourists from its arch-foe the US to visit this year, seeking alternative sources of hard currency as sanctions bite deeper.
North Korea at present allows US groups to visit only for the Arirang mass games, when tens of thousands of impeccably choreographed gymnasts and performers create colourful mosaics and slogans with painted cards. This year, the shows are scheduled to begin in August.
However, Pyongyang has said that it will also allow visits throughout the rest of the year, according to Simon Cockerell of Beijing-based Koryo Tours. Koryo, which says it escorts about 80 per cent of US travellers, was informed of the decision by its local partner in North Korea, he said. Koryo took about 280 US visitors into the country last year.
Somewhat more seriously, this appears to be one of several small signs that the regime in Pyongyang is not quite as secure as it used to be:
Further denting Pyongyang’s dollar income, Thai authorities last month detained an aircraft packed with arms being smuggled from Pyongyang. Diplomats saw this as a severe threat to the cash flow of Kim Jong-il, the country’s leader. Reports from defectors also suggest a recent currency redenomination has caused economic chaos during a bitter winter.
In a very rare admission that the country needed to improve its economic record, Mr Kim this month confessed that the nation had failed to deliver “rice and meat soup” to the people. He vowed to improve people's lives.
Just so I'm clear on this, in the past two months there have been protests in North Korea, and the country's leader has publicly admitted being unable to feed the country.
This is still the DPRK we're talking about, right?
I've been having some fun at economists' expense as of late, but it's mostly been a form of friendly teasing. The neoclassical economic framework provides some serious leverage to understanding how the world works. It remains an incomplete approach to political analysis, however.
Take, for example, Daron Acemoglu's Esquire essay on the importance of governance to economic development, which is abstracted from his latest project with Jim Robinson. Acemoglu is a top-flight political economist -- which is why I found the following passages so strange:
Andrew Sullivan has been blogging about Iran juuuust a wee bit the past 48 hours. Now he asks a question:
The Green Movement has strongly resisted all sanctions against Iran, and even more passionately opposes any military strikes. If Israel strikes, it will effectively kill the Iranian opposition movement, and set off a global wave of Jihadism which will kill many American soldiers and civilians. So how to respond to the Revolutionary Guards' continuing and mounting brutality?
He also links to some useful Spencer Ackerman posts, which contains the following two points of interest:
What to do? I think two big questions need to be asked. First, how are the sanctions supposed to work? Is the idea to squeeze the elite coalition ruling Iran just hard enough to get the current leadership to cut a deal? Or is the idea to cause enough discontent with the regime such that it collapses, and then a deal can be struck with the next regime?
The process by which sanctions are supposed to work matters. If the hope is to still do business with the current regime, then targeted or "smart" sanctions make more sense. They're less likely to impact the broader Iranian population -- though, like precision-guided munitions, there will always be collateral damage.
If the goal is regime change, well, then broad-based sanctions might make more sense. If these reports are any indication, then it appears that the Khamenei regime is alienating an ever-larger swath of the population. Obviously, the regime could try to use the prospect and implementation of broad-based sanctions as a way to rally around the flag. If the regime's popular support is badly eroding, however, and that erosion is partly explained by economic hardship, then you want sanctions to target a somewhat larger segment of the populace.
Of course, as I've said before, this is all sophistry unless you get Iran's major trading partners on board. And my hunch is they won't go for the "heavy" sanctions option. This is a shame, because at this point, I think it's the option that's somewhat more likely to work.
Let's not kid ourselves, however: we're talking about policy options that will change the probabilities by a few percentage points either way. There is no magic bullet -- or bomb, for that matter -- on this policy quiestion.
Am I missing anything?
Nader Mousavizadeh, a special assistant to U.N. Secretary General Kofi Annan from 1997 to 2003, writes in The New Republic that the United States should prioritize democratization over de-nuclearization in Iran:
The fracturing of the Islamic Republic’s traditional elite, and the persistence and power of Iran’s democratic awakening six months later, make clear that a regime change is under way in Iran--one that is indigenous, sustainable, democratic in spirit, and peaceful in its means. It is the most promising development in the broader Middle East in the past quarter-century. Rather than being viewed as a sideshow, the uprising should be at the core of every policy decision regarding Iran. Western leaders should ask themselves just one question whenever faced with a new set of measures toward Iran: Will they help or hurt the Green Movement?
For all the concern about a fitful and still highly vulnerable nuclear program, a far greater prize is now in sight: a freer society and an accountable government under the rule of law. An opportunity now exists to encourage the evolution of a democratic Iran--through careful, calibrated, and principled policies that refuse to be baited by the crude and bellicose behavior of a usurper president.
Now, I'm sure Flynt Leverett and other purebred realists would vehemently disagree with this assessment. And I'm sure that William Kristol and other neoconservatives would vehemently agree with this sentiment.
For the rest of you, does this preference ordering make sense? To me, it seems that you need to take the following variables into account:
None of this is to say that a carrt-and-stick appoach on the nuclear issue is going to work either. If you're comfotable with risk, an approach that marginally boosts the likelihood of a Green Revolution taking place might be the best play.
I bring up these questions, however, because it's possible that a carrot-and-stick approach that prioritizes the nuclear issue over the regime change issue is the best of a really lousy set of policy options.
Seth Robinson has a interesting essay over at The New Republic that explains why Russia is loathe to sanction Iran over nuclear issues. The key part:
How does Russia benefit from its nuclear cooperation with
? Simple economics provides a compelling first answer: The Russian economy has not only reaped the benefits of the Bushehr deal, but it has also been bolstered by the sale of fuel and the potential sale of additional reactors. What's more, the nuclear project is only one of many economic agreements between the two countries. Total bilateral trade hovers around $2 billion, as Iran Russiasupplies with consumer goods, oil and gas equipment, and military technology. Iran Russiaalso enjoys privileged access (along with China) to 's Southern Pars gas fields.... Iran
Iranis still a powerbroker in the Caspian oil trade; its position on the Caspian Sea, which is estimated to hold more than 10 billion tons of oil reserves, makes it an important and influential partner for . Russia has been extensively involved in coordinating transnational oil and gas deals, arranging transportation of exports with a number of regional states. Tehran Russiais in a position to use its good relations with Iranto challenge 's efforts to create new pipelines and foreign direct investment in the Caspian region. Washington Iranhas already proven an effective regional ally for Russia--in addition to cooperating on energy deals, Tehranhas pointedly refrained from criticizing Moscow's Chechnyapolicy and has held strategic meetings with on the Taliban. Moscow
Finally, Russian nuclear cooperation with
Iranprovides the Kremlin with leverage over the . United States remains guarded against Western advances into its "near abroad," and has fought to keep neighboring states from being brought into the NATO fold. By dangling the Iranian nuclear issue in front of the Moscow United States, may believe it has a means to maintain regional dominance. Russian leaders have already extracted concessions from Moscow Washington, as the United Statesrecently altered plans for missile defense in Polandand the . Yielding on the Czech Republic Iranissue would strip Moscowof the ability to coerce the and damage its own ability to reassert local influence. United States
The first reason is both sufficient and compelling; I'm not entirely sure I buy the latter two. Iran's nuclear program gave the United States just cause to insert missile programs into Eastern Europe in the first place -- so Iran's nuclear ambitions have caused as many problems for Russia's near abroad as they have ameliorated. As for the Caspian argument, it's not clear how a Russian-Iranian axis challenges U.S. energy diplomacy in the region. If anything, that axis probably incentivizes the smaller energy producers to find a viable pipeline alternative that flows outside of Moscow and Tehran's orbit.
That said, the economic interest argument is pretty powerful. So, does this mean sanctions would be fruitless? Not necessarily. The paradox about economic sanctions is that although allies are more reluctant to coerce each other, they are also more successful once they make the decision to coerce. At the same time, successful sanction efforts almost always end at the threat stage. So if Russia ever signaled that it would seriously contemplate a cut-off in bilateral exchange, the Iranians would be likely to concede before implementation.
This is the outcome the Russians would prefer the most -- a mild threat from the P5 + 1 prods Tehran into taking just enough action to avoid further isolation, and any further implementation of sanctions.
But I could be wrong. Persuade me in the comments.
So, how should you interpret the first round of P5 +1 negotiations with Iran that took place yesterday?
The hard-working staff here at drezner.foreignpolicy.com would never want its readers to view material outside their ideological comfort zone -- that would be crazy talk. Therefore, please go down this list of different ideological approaches to Iran and read only the one that fits you.
Liberal internationalism: An excellent first round of talks. At a minimum, the Iranian pledge to permit IAEA inspectors into its Qom facility, and the agreement to have fuel encriched outside of Iran, help to lessen fears of a breakout capability. This shows how a multilateral approach, linked to the threat of sanctions, can successfully bring Iran into a cooperative relationship with the West.
Neoconservatism: These talks were a feckless and futile exercise. Iran agreed "in principle" -- which means that it will likely not honor its pledges. This also covers part of the uranium that we know about, and only the facilities that we know about. Anyone who thinks that this lying, odious, anti-Semitic regime is showing all of its cards on the nuclear question is deluding themselves. The only thing these talks will accomplish is sapping the will of Americans to use any means necessary to overthrow the regime.
Realism: Iran's concessions reinforce the point that this regime a perfectly rational actor that is worthy of even deeper engagement. We still have no evidence that Iran is trying to develop nuclear weapons, so we should not go looking for red herrings that do not exist. A deal can be made with this government once we are able to ignore how its rulers treats its own citizenry. Any failure from here on in is entirely the fault of Israel and the Israel Lobby in the United States.
So, did I miss anything?
You know how so many in the blogosphere bitch and moan about the ability of neoconservatives to get their policy proposals published even after screwing up on Iraq?
I'm kind of curious how these people feel about Flynt Leverett and Hillary Mann Leverett's op-ed in the New York Times today about Iran. I mean, this is a scant few months after they served as apologists for Mahmoud Ahmadinejad after the controversial June election. I guess the Leveretts know Gwen Pollard well.
Others can debate whether the Leveretts deserve the prime real estate on the NYT op-ed page. I'd like to focus on the fact that the op-ed itself makes no f***ing sense whatsoever.
Let's take a look at it, shall we?
[T]he meeting on Thursday in Geneva of the United Nations Security Council’s five permanent members and Germany with Iran (the “five plus one” talks) will not be an occasion for strategic discussion but for delivering an ultimatum: Iran will have to agree to pre-emptive limitations on its nuclear program or face what Secretary of State Hillary Clinton calls “crippling” sanctions.
However, based on conversations we’ve had in recent days with senior Iranian officials — including President Mahmoud Ahmadinejad — we believe it is highly unlikely Iran will accept this ultimatum.
Oh, wow... senior Iranian officials told the Leveretts that they would not concede? Well, I'd definitely take that at face value. I'm sure these were the same people who told the Leveretts that Ahmadinejad was the legitimate victor back in June. Clearly, these are reliable sources with zero incentive to dissemble to regime-friendly pundits in the United States. And it's not like they have anything to hide. Oh, wait....
American officials tend to play down Iranian concerns about American intentions, citing public messages from President Obama to Ayatollah Ali Khamenei, Iran’s supreme leader, as proof of the administration’s diplomatic seriousness. But Tehran saw these messages as attempts to circumvent Iran’s president — another iteration, in a pattern dating from Ronald Reagan’s Iran-Contra scandal, of American administrations trying to create channels to Iranian “moderates” rather than dealing with the Islamic Republic as a system.
Wow again. See, I would view these exchanges with Khamenei as attempts to talk to the person with actual control over Iran's nuclear program, as opposed to the guy who rants on and on about how the Holocaust was just a big myth.
Indeed, the Obama administration is "dealing with the Islamic Republic as a system" -- and they are trying to talk to the people with genuine foreign policy power. The Leveretts, on the other hand, seem to be convinced that the only way to talk with Iran is through Ahmadinejad.
Unfortunately, the Obama administration was enticed by the prospect of regime-toppling instability in the aftermath of Iran’s presidential election this summer. But compared to past upheavals in the Islamic Republic’s 30-year history — the forced exile of a president, the assassination of another, the eight-year war with Iraq and the precipitous replacement of Ayatollah Khomeini’s first designated successor, Ayatollah Hussein Ali Montazeri, with Ayatollah Khamenei — the controversy over this year’s election was hardly a cataclysmic event.
Seriously, how did this paragraph get past the op-ed editors? First of all, beyond a rhetorical flourish or two and asking Twitter to hold off on their scheduled maintenance, what exactly did the Obama administration do to foment regime-toppling instability? Second, if the largest street demonstrations since the 1979 revolution don't qualify as a big event, what would convince the Leveretts of the import of the June election? More YouTube videos? Hand puppets?
Instead of pushing the falsehood that sanctions will give America leverage in Iranian decision-making — a strategy that will end either in frustration or war — the administration should seek a strategic realignment with Iran as thoroughgoing as that effected by Nixon with China. This would require Washington to take steps, up front, to assure Tehran that rapprochement would serve Iran’s strategic needs.
On that basis, America and Iran would forge a comprehensive framework for security as well as economic cooperation — something that Washington has never allowed the five-plus-one group to propose. Within that framework, the international community would work with Iran to develop its civil nuclear program, including fuel cycle activities on Iranian soil, in a transparent manner rather than demanding that Tehran prove a negative — that it’s not developing weapons. A cooperative approach would not demonize Iran for political relationships with Hamas and Hezbollah, but would elicit Tehran’s commitment to work toward peaceful resolutions of regional conflicts.
This seems as propitious a moment as any to cave to popular demand that I articulate some thoughts on the sanctions question with regard to Iran. I would expect some somewhat more utility in the sanctions process than the Leveretts. If the U.S. can foster cooperation among the P5 + 1, and the Iranians see the extent of this cooperation, then I think they'd be willing to deal. That's not an easy proposition to pull off, and would require both diplomatic skill and will. That does not mean it should't be tried, however. Even the effort to build momentum in the Security Council might prompt serious bargaining from the Iranians.
I would also like to know how the Iranian opposition feels about sanctions. If they reject them as a policy tool, well, that's a good argument against their imposition. On the other hand, if this is a replay of South Africa, then that's something else to consider.
One final point -- the analogy with Nixon's opening to China makes zero sense in the current context. Nixon was trying to outflank the Soviet Union during the Cold War by cozying up to their most powerful bordering state. What the Leveretts seem to be proposing is a multilateral move to bring Iran in from the cold -- which benefits Russia and China far more than it benefits the United States. In other words, I'm not sure how a Nixon strategy works in the P5 + 1 framework.
I suppose that the Obama administration could attempt secret shuttle diplomacy with Iran to outflank Moscow and Beijing. Such a gambit would infuriate our European allies and push Israel into panicking, however -- and I'm not sure that's worth whatever strategic gains would be had by a rapprochement with the regime in Tehran.
So, to review, I give the Leverett op-ed an "I" -- for being inchoate, inconsistent, and idiotic.
The Financial Times' Simeon Kerr and Harvey Morris report on one of those stories that the Bush administration would have killed for about, oh, seven years ago:
The United Arab Emirates has seized a ship secretly carrying embargoed North Korean arms to Iran, say diplomats.
The interception comes at a sensitive time. North Korea has invited the US for bilateral talks on nuclear issues and the UN Security Council’s western members are pressing for greater Iranian co-operation over its nuclear programme.
The UAE has reported the seizure of the vessel to the UN sanctions committee responsible for vetting the implementation of measures, including an arms embargo, imposed against North Korea under Security Council resolution 1874, according to diplomats in New York. The committee, chaired by Turkey, has made no formal announcement about the case.
Diplomats at the UN identified the vessel as the Bahamian-flagged ANL-Australia. The vessel was seized some weeks ago. The UN sanctions committee has written to the Iranian and North Korean governments pointing out that the shipment puts them in violation of UN resolution 1974.
The authorities seized “military components”, but the vessel has since departed, a person familiar with UAE thinking said. The seizure took place in the UAE, but not the shipping hub of Dubai, the person added.
So, in the past two years, North Korea has been linked to arms build-ups in Syria, Myanmar, and Iran.
Come to think of it, maybe it's not an Axis of Evil so much as North Korea desperately trying to export the one thing they make that has market value.
Reports like these are actually good news, I suspect. It suggests that the enhanced sanctions regime is making it tougher for North Korea to export its ilicit wares. Which means that the status quo favors the other members of the Six-Party Talks more than it favors Pyongyang.
Gosh, maybe there's something to this containment idea.
UPDATE: More info on the shipment itself here.
In a legen -- wait for it -- dary blog post, Belle Waring mentioned the pony problem in public policy. Namely, "an infallible way to improve any public policy wishes. You just wish for the thing, plus, wish that everyone would have their own pony!"
I bring this up because of David Sanger's New York Times story about the prospects of imposing a gasoline embargo on Iran:
The Obama administration is talking with allies and Congress about the possibility of imposing an extreme economic sanction against Iran if it fails to respond to President Obama's offer to negotiate on its nuclear program: cutting off the country’s imports of gasoline and other refined oil products....
But enforcing what would amount to a gasoline embargo has long been considered risky and extremely difficult; it would require the participation of Russia and China, among others that profit from trade with Iran. Iran has threatened to respond by cutting off oil exports and closing shipping traffic through the Strait of Hormuz, at a moment that the world economy is highly vulnerable.
The rest of the story is kind of irrelevant -- because without China and Russia, this is just a theoretical exercise. In fact, here's a good time-saver: if you read any story about a gasoline embargo o Iran, just scan quickly and get to the part where the reporter explains how and why Russia and China would go along. If it's not mentioned, the story is inconsequential.
If you want China and Russia to agree to sanctions, should you wish for the free pony as well? Here the growth of dissent in Iran complicates an already complicated picture. I'm betting that Moscow and Beijing have observed the "Death to Russia!" and "Death to China!" chants among the protestors. This is likely going to make them even more reluctant to do anything that undermines the current regime (even if this hurts their long-term interests). Which a gasoline embargo would most certainly do.
Do I think a gasoline embargo is a good idea? Absolutely. Do I think it will happen? No, I don't.
In the past 24 hours, there's been some interesting stuff coming out on both North Korea and Israel.
On the North Korea issue, Bob Gates' chat with an FT reporter is worth reading just to savor the man's obvious efforts to signal to the North Koreans that they can't control the agenda. However, Mark Landler and David Sanger's New York Times story today suggests that China is thinking about putting the economic and financial hurt on North Korea.
Meanwhile, the United States and Israel appear to be at loggerheads on the question of West Bank settlements. This is particularly interesting:
[T]he tenor of Mrs. Clinton’s comments Wednesday indicated to some analysts that the Obama administration was unlikely to budge from its position, even at the risk of putting Mr. Netanyahu’s government into jeopardy.
“She is stripping away whatever nuance, or whatever fig leaf, that would have allowed a deeply ideological government to make a settlement deal that is politically acceptable at home,” said Aaron David Miller, a public policy analyst at the Woodrow Wilson International Center for Scholars. “They’ve concluded, ‘We’re going to force a change in behavior.’”
Within the Israeli government, however, there is a consensus that the ever-growing settler population must be accommodated.
No one is talking about sanctions just yet on Israel, but the historical precedent here is telling. The last time the U.S. sanctioned Israel was in 1991 on the question of housing settlements. The eventual result was the fall of the Yitzhak Shamir government.
So China is contemplating sanctions against North Korea, and the United States a step away from doing the same thing vis-a-vis Israel. This highlights a cruel irony when it comes to the use of economic pressure -- it works on your friends a lot better than it does against your foes.
[I see where this is going. Stop it!--ed.] Of course, countries are understandably more reluctant to pressure their allies than their adversaries. [I'm warning you!--ed.] Why, it's almost like there's a paradox when it comes to economic sanctions. [All right, that's it, this ridiculously self-promotional blog post is over!!--ed.]
UPDATE: Ed Morse and Michael Makovsky have an excellent essay in The New Republic on the prospects of sanctioning Iran.
By Daniel W. Drezner
I think the Obama administration has come up with a novel way of dealing with the North Koreans -- get everyone to talk about something else.
Half-seriously, this is not a bad idea, because I'm not sure that anything else is going to work better (beyond my modest Britney Spears proposal). For this decade, the following facts have held:
The one thing that seems different this time around is that North Korea is really pulling out the stops this time to strip away the "pleasing illusion" that the U.N. Security Council will do something. Paradoxically, this might actually goad China and Russia into doing something -- sanctions that might increase the likelihood of a DPRK collapse but also increase the likelihood of Pyongyang altering its behavior before that happens.
If I, rather than my boss, were advising the Obama administration on this issue, the one other deliverable I would aim for in response to this latest provocation would be to get China to join the Proliferation Security Initiative. China has resisted this for a whole bunch of reasons unrelated to North Korea. If Beijing were to reverse course, it would make it much easier to engage in interdiction activities along North Korea's coast. It would also signal to Pyongyang that, yes, there actually are some serious costs to thumbing one's nose at the U.N. Security Council.
Am I missing anything?
One big change is that it's now at foreignaffairs.com. Until recently, their website was only located at foreignaffairs.org. If you went to foreignaffairs.com, you arrived at a website that... well, how to put this.... interpreted the words "foreign affairs" to mean something involving attractive, heavly made-up Asian women. [Really, he only went to the site once, though!!--ed.]
Anyway, my little contribution to the new website is a reading list -- Five Things to Read About Economic Sanctions. Go check it out.
Sanctions experts are encourgaged to post, in the comments, what they would have put on that list (I was limited to five books or essays).
Bowing to a request from the German government, a German company that has been supplying Zimbabwe's embattled regime with bank note paper has stopped its deliveries, further increasing pressure on President Robert Mugabe. The Munich-based firm Giesecke & Devrient, which reportedly supplies about half the southern African country's skyrocketing needs for paper to print money, made the decision after its president received a phone call Tuesday from German Foreign Minister Frank-Walter Steinmeier. "We have taken this step in response to an official request from the German government and calls for sanctions on Zimbabwe from the European Union," Heiko Witzke, a company spokesman, said Wednesday. A Foreign Ministry spokeswoman said that in his call to CEO Karsten Ottenberg, Steinmeier underlined the deteriorating situation in Zimbabwe and the mounting calls for stiffer sanctions on the Mugabe regime. She said the ministry had been holding talks with the company for several weeks.Will this make a difference? According to Reuters, no:
"The banking and transacting public should go about their business in the usual manner, as the above-mentioned development will not have any impact to the economy," central bank Governor Gideon Gono told the Herald newspaper.... Gono said the government made alternative plans before the German firm, which supplied Zimbabwe with the special paper for 40 years, announced the decision. He did not give details. The central bank would "innovate and try to plough around all obstacles placed in its way", he said, although did not say how and where the country would source material to print money.This sanction is likely not going to change anything -- the elites that matter already have ways of hedging against the current hyperinflation and the people who don't matter have already made their choice. The armed forces have made it pretty clear that they'd be delighted to rough up those who get in their way. This more, therefore, won't accomplish much except:
Daniel W. Drezner is professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University.