IRAN: Courted But Troubled Teheran Softens its Tone Toward U.S.

By IPS Correspondents Reprint | | Print |

Analysis - Dilip Hiro

LONDON, Jul 5 1995 (IPS) - Iranian President Ali Akbar Hashemi Rafsanjani this week publicly called for an easing of tensions between Teheran and Washington, heralding a conciliatory shift in Iran’s policy toward the superpower.

At the same time, Iran’s importance as a test case by which other major powers — namely Russia, China and India — can challenge U.S. policies in world politics, has not lessened.

Rafsanjani’s placatory tone must be viewed against the backdrop of the hardening attitude of the U.S. Congress toward Teheran and the deteriorating economic situation in Iran.

The U.S. Congress is considering toughening the action President Bill Clinton took against Iran in April when he banned U.S. investment in, and trade with Iran because of what Washington views as Iranian support of international terrorism and harbouring of nuclear armament ambitions.

Clinton’s move caused a severe drop in the open market price of the Iranian rial versus the U.S. dollar, the currency in which Iran’s major export, petroleum, is sold. Drastic steps by the Iranian government salvaged the situation, but only just. Nevertheless inflation in Iran reached a record 58 per cent in May.

But so far Clinton’s efforts to secure the cooperation of other Western countries — particularly the European Union (EU) — in imposing trade sanctions on Iran have failed.

Elsewhere, Iran has emerged as the touchstone of independence for such leading world and regional powers as Russia, China and India.

Despite ongoing diplomatic and public pressure on Russia to cancel its 850 million dollar contract with Iran to complete its nuclear power project started in the late 1970s by the then West Germany, Moscow has refused to do so.

Russia argues that the nuclear reactors it would sell to Iran are the same type as the ones South Korea intends to supply to North Korea under an agreement hammered out by Washington.

The United States is also pressuring China not to equip Iran with nuclear power plants. Toward this end, Washington is using the Missile Technology Control (MTC) guidelines as leverage, as U.S. law requires imposition of sanctions against any country that breaks them.

A fortnight ago ‘The New York Times’ reported that the U.S. Central Intelligence Agency (CIA) believed that China had delivered dozens of missile guidance systems and computerised machine-tools to Iran. This was done ostensibly to help Iran improve the accuracy of its North Korean-made ground-to-ground missiles.

A White House spokesman was quoted as saying that if the U.S. administration concluded that China had violated the MTC guidelines, economic sanctions against it would apply.

But both Russia and China deeply resent the Washington’s overbearing manner.

During his visit to Moscow at the end of last month, Chinese Premier Li Peng said: “Russia and China are big countries in the world, and we will not allow anyone to teach us how to live and work.” Russian Premier Viktor Chernomyrdin, agreed: “We will decide for ourselves how to live.”

India too has flexed its independent muscle by strengthening ties with Iran recently. When Rafsanjani visited India in April, Indian premier P.V. Narasima Rao broke protocol by travelling to the Delhi airport to greet him. Among other things India and Iran signed a deal for a marine gas pipeline between the two countries.

At 20,700 billion cubic metres, Iran has the world’s second largest natural gas reserve. At the current daily consumption rate of 158 million cubic metres, it will take Iran 360 years to exhaust it. Iran’s oil reserves stand at 92.9 billion barrels; at the present extraction rate, these will last 70 years.

But natural resources are not Iran’s only bargaining chip. With a population of more than 60 million, Iran possesses a substantial domestic market. And, unlike many other Middle Eastern countries, Iran flaunts strong agricultural and service sectors.

Iran’s geopolitical importance also figures largely in the policies of the foreign and defence ministries of Russia, China and India.

Iran is the most strategically located country in the world: it occupies the entire eastern coast of the Persian Gulf, making it for all practical purposes a neighbour of the six oil-rich Gulf states; it borders Pakistan, Afghanistan, Turkmenistan, Azerbaijan, Armenia, Turkey and Iraq; and it shares its Caspian Sea littoral with Azerbaijan, Turkmenistan, Kazakhstan and Russia.

Iran’s strategic position enables it to reward those who stand by it. For instance, in the dispute about exploiting the offshore oil fields in the Caspian Sea, Iran sided with Russia against Azerbaijan.

Moscow argued that before Azerbaijan parcels out concessions in the Caspian, there should be settlement of the territorial claims of the five littoral states — Azerbaijan, Iran, Turkmenistan, Kazakhstan and Russia.

On the diplomatic front Teheran has declared that the secession of Chechnya, a Muslim-majority autonomous Russian republic, is an internal affair of Russia’s. This has helped Moscow downplay the religious aspect of the Chechen conflict.

While Iran’s assets — natural resources and geostrategic appeal — are valuable in the medium term, its economic crisis is immediate. It stems from the low price commanded by its chief export, oil, and the present value of the currency in which it is traded, the U.S. dollar.

Since Teheran has no control over either, pragmatism requires that it should show moderation towards the United States for now. Therein lies the clue to Rafsanjani’s soft approach towards Washington.