Iran- US rapprochement: Not If, But When

By: Meir Javedanfar

20/08/2008

Even without tough sanctions, Iran’s infrastructure seems to be falling apart. Its somewhat embarrassing for some Iranians when president Ahmadinejad praises the launch of the recent satellite as a scientific leap, while his government is doing such a lousy job of running Iran’s national infrastructure (and as it later turned out, with the satellite as well).

The problems with the electricity sector are just one example. Although sanctions are responsible for a small part of this, mismanagement and corruption amongst Iran’s ruling elite are the biggest causes. Everyday, Tehran is without power for 2 hours. Although people are given notice, a city of 10 million people can not suddenly stop functioning without any consequences. Also, people travel between neighborhoods, so its difficult for them to coordinate their activities, in order to avoid the blackouts.

As a result, Tehran’s economy is taking a major hit. For example, I have been told that bookings in dentists are down, because people don’t want to go under sedation after several injections, only for the dentist to suddenly realize that he can’t operate any of his tools.

Same goes for traffic. Many a times people have been waiting behind a traffic light, for it to go out with the power cut. Much like drivers in Israel, Iranian drivers also have the obsession of not wanting to be thought of as suckers. So all of a sudden, hundreds of cars, all competing to be the first to get out, create a massive gridlock.

Furthermore, according to the Iranian news agency Tabnak, people have stopped using lifts because so many have been caught out by the outages. To make things worst, there are also water outages as well, thus making things only more unbearable.

According to Advar news, yesterday, 70 people from a Tehran satellite town near Varamin demonstrated against the authorities. One can safely guess that in terms of number of people being fed up with the situation, this is a tip, of the tip, of the iceberg.

Iran’s plans to build extra nuclear power stations would theoretically help, however, this will not solve all the country’s energy problems. For example, when Bushehr goes on line, it will only resolve 50% of the shortfall in energy production. Other power plants are likely to take longer to build, due to sanctions. Therefore the shortfall will remain for a number of years.

With growth in demand for energy reaching 8% a year, Iran needs to import foreign technology and know how to run its industries, especially its energy sector, otherwise its economy will in most likelihood reach crisis point, which could threaten internal stability.

This will mean that the regime will have to markedly improve its relations with the West, especially the US. This may even include full diplomatic relations. It will have no other choice. It is not a question of if, but when.

The more important question is: will this crisis point arrive before the administration reaches it nuclear weapons goal or after? If before, then sanction and diplomacy will have a much better chance. However, with the price of oil being at record highs, and the fact that this enables the Iranian government to spend its way out of the crisis for the time being, in all likelihood, rapprochement from Iran will take place after it has the bomb.

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Iran and Russia in the Medvedev Era

In this highly informative article, Iran Diplomacy analyzes “Tehran and Moscow in Medvedev’s era”. The conclusions, listed below, are very interesting, in as far as they show that some elements in Iran are becoming concerned about Iran’s over reliance on Russia.

Amongst other things, the article concludes:

The conditions are now prepared for making changes in Iran-Russia relations. Therefore, we must allow for the following issues in future of bilateral ties:

1. Russia is not enough for Iran. Any attempt to expand ties with Russia must take relations with West into consideration.

2. In Medvedev’s age, Russia will move towards nationalism, since Medvedev has more nationalistic tendencies compared with Putin.

3. Medvedev is not after confrontation with the United States and the European Union. But if that happens for any reason, he may be ready to get closer to China, Iran and India.

4. In areas such as energy market (especially gas) and Middle East (Iraq and Lebanon) and the Muslim World, Russia tends to increase cooperation with Iran. Iran is also interested in expanding bilateral ties in areas such as defense aerospace technology, and regional collaboration in the Caspian Sea and Shanghai Pact.

5. It is likely that because of his professional background as Gazprom’s chairman, Medvedev shows interest in accessing Iran’s market.

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