Middle East

Iran feels the squeeze
By Hooman Peimani

In her parliamentary address of last Tuesday, British International Development Secretary Claire Short suggested that, to help Iraq recover after the end of the war, Iran and Kuwait should accept smaller reparations than those approved by the United Nations Security Council. Iran has not yet received any amount of the Security Council's approved reparations for the damage that it endured during its war with Iraq in the 1980s. Given this situation, her suggestion, if it becomes Security Council policy, will likely further motivate Iran, a dissatisfied regional power, to intervene in Iraq to ensure its interests that now seem to be threatened.

Short justified her suggestion by pointing to a European experience that helped Germany turn into a dissatisfied power and pursue an expansionist policy. Accordingly, "Iraq has high levels of debt and significant reparation bills related to Iran and Kuwait. That will all have to be restructured or Iraq would be in the same position as Germany [was] at the end of the First World War."

Short's reference to the restructuring of Iraqi reparations seemed to be more than a simple suggestion. Referring to her recent talks with United Nations Secretary General Kofi Annan on the postwar reconstruction of Iraq, she added that the restructuring of the Iraqi debts and reparation was an "important issue and we will have to prepare for it".

The Security Council in 1990 declared Iraq as the instigator of the Iran-Iraq War (1980-88) and approved reparations for Iran of US$100 billion. This was a fraction of Iran's war damage of 10 times that amount, but the Iranian government accepted it as the best available option. However, Iran has not received even a dollar from Iraq thanks to the Security Council's lack of political will to demand Baghdad's compliance with its resolution. Unlike Iran, Kuwait has received about $16 billion in reparations through a Security Council arrangement as part of the reparations of $70 billion the Council approved in 1991 for Kuwait's losses during its 1990 annexation by Iraq. Since 1991, Kuwait has annually received $1.5 billion of Iraq's oil-generated revenues.

Iran's isolation and the opposition of the United States have been the two major factors for this blatant discriminatory treatment by the Security Council of its own similar resolutions involving Iraq. No wonder if Iran is unhappy about its treatment. The Council has clearly opted not to pressure Baghdad to pay at least part of the reparations, a feasible undertaking despite Iraq's severe financial problems. Since the end of the first Gulf War in 1991, the Council has fully controlled Iraq's oil exports and its proceeds to ensure Baghdad's compliance with the Security Council resolutions banning Iraq from rearming itself.

As a likely prelude to a Security Council policy, Short's suggestion is certainly bad news not just for Iran but also for Kuwait. However, Iran would likely be more affected given Tehran's estranged ties with Washington. As a permanent Security Council member aligned with another permanent member, the United Kingdom, the US could influence any Council decision in this regard against Iran and in favor of Kuwait. Given Kuwait's role as a reliable US ally in the Persian Gulf from whose land the Americans and the British are now launching their war against Iraq, the Kuwaitis could count on US assistance. Hence, they could be excluded from any new Security Council resolution on Iraqi reparations, or at least be given the best possible reparations deal.

On the other hand, Iran's status as one of three members of the "axis of evil" along with Iraq and North Korea should guarantee the worst possible deal, if any reparations at all. The latter is a very realistic scenario, as a major objective of the US government since 1979 has been the weakening of Iran through a variety of means, including those aimed at reducing its revenues. The US opposition to Iran's military programs, including missile development, and its peaceful nuclear program for its alleged military implications has been a major justification for such US policy.

Apart from its implications for strengthening a future pro-American Iraqi regime, Short's suggestion probably reflected a US plan to prevent Iran from addressing its financial and economic problems by receiving hefty reparations. Quite possibly, it also indicated a first move toward dealing with another member of the "axis of evil". Of its three members, the Americans are fighting a war with one (Iraq) and seemingly leaning toward taking some sort of action against North Korea. Iran is the only remaining member with which the Americans will somehow have to deal in the near future.

Of course, dealing with the "axis of evil" members may not be as easy as the Americans hope. They are far from winning their war against Iraq, and the expanding global anti-war movement will create barriers to their launching another war. A war with militarily strong North Korea, if it ever happens, will be extremely costly for the Americans in human lives, military hardware and financial resources. However, there is still a ground to suggest that the US government has at least an intention to take action against Iran, as reflected in a significant increase in its rhetoric against Iran's non-military nuclear program.

Iran's growing concern over the long-term plans of the US government in its surrounding regions will probably convince it of a hidden agenda behind Short's suggestion. Major factors justifying that concern include an emerging aggressive US policy toward Iran and a phenomenal increase in the US military presence in Iran's proximity. In addition to a concern about the Americans' success in turning Iraq into a pro-American and anti-Iranian state under US military occupation, Short's suggestion reflecting both US and British consensus will undoubtedly motivate Iran to take measures.

Iran already has incentives to intervene in Iraq to ensure its long-term interests, including denying the Americans the opportunity to turn Iraq into a US-backed anti-Iranian regional power. Its fear of a total loss of its reparations should provide an additional strong incentive to intervene. An intervention with a bearing on the ongoing war and long-term US plans for Iraq could give Tehran a bargaining chip for its negotiations with two Security Council permanent members (the US and the UK) capable of blocking any reparations for Iran, given their sensitivity about those issues. Without a bargaining chip, Iran's receipt of any reparations seems highly unlikely if the Americans succeed in placing a pro-US regime in Baghdad.

Tehran's intervention, if it happens, will not likely take a direct military form, lest it provide a pretext for a US war on Iran. It would more likely take the form of backing certain Iraqi opposition groups, mainly the pro-Iranian Supreme Assembly of the Islamic Revolution of Iraq, to secure a big share of the post-Saddam Iraq and/or of helping the Iraqi Kurds meet Turkey's challenge. Among many other factors, such developments will ensure further unforeseen difficulties for the Americans and the British in pursuing their ultimate objectives in Iraq.

Dr Hooman Peimani works as an independent consultant with international organizations in Geneva and does research in international relations.

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Apr 1, 2003



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