American Enterprise Institute

June 30, 2006

[Edited transcript from audio tapes]

9:15 a.m.	Registration and Breakfast
9:30	Panelists:	Michael Connell, Center for Naval Analyses
		Nicholas Eberstadt, AEI
		Danielle Pletka, AEI
		Michael Rubin, AEI
		Gary Schmitt, AEI
	Moderator:	Frederick W. Kagan, AEI
11:00	Adjournment

Proceedings:

Frederick Kagan:  Let me welcome you to today’s panel discussing two issues as it turns out that are of pressing interest at the moment:  North Korea and Iran.  These are extremely important issues and I think they are very worthy or our attention, as they take place in the shadow of, and sometimes overshadowing, our commitments in Iraq, as well they may, because these are strategic problems that have been with us for a long time and will be with us yet for a long time to come.

It has long been a basic pillar of American foreign policy that the proliferation of nuclear weapons and the means of delivering them was something that needed to be contained and, if possible, prevented.  It is an effort that we have undertaken for decades with very mixed success.  Unfortunately, it is also an effort where the failures tend to stand out much more than the successes do and rightly so, because every time we allow a regime that has hostile intentions or that is unpredictable to get hold of nuclear weapons, we dramatically increase the risk to the stability and security of ourselves and also of the world.  So, for this reason if for no other, it is very much worthy of our attention to consider the problem of proliferation as it relates specifically to Iran, to look at a recent model of a failed effort at non-proliferation in Korea and ask the question if there are any lessons that we might learn.

Just to underline the gravity of this, it seems to me worth noting at all times as we talk about the Iran nuclear program, this is the only time in history that I am aware of when a state leader has declared both his intention to acquire nuclear weapons and his intention to use them as soon as he acquires them.  You will not find similar statements among the records of other states even that have nuclear weapons let alone that have been trying to get them.  For that reason if for no other, I think that it is extremely important that we address this issue.  We have a very distinguished panel today to consider it. 

Nick Eberstadt is the Henry Wendt Scholar in Political Economy at AEI.  He has a long experience with the problems of Korea and human rights problems in Korea, as well as the politics of the Korean peninsula.  He has worked at a number of organizations that have shed light on this experience in a number of ways:  the U.S. Census Bureau, the State Department, USAID, and the World Bank.  He will be leading off our panel today.

Danielle Pletka is the vice president for foreign and defense policy studies at AEI.  She has worked extensively on the Middle East and Iraq, including one of the many projects to study what would be necessary in a post-Saddam Iraq housed here at AEI.  They didn’t listen.  And she has served 10 years as a senior professional staff member at the U.S. Senate Committee on Foreign Relations.

Michael Connell is an analyst at the Center for Naval Analyses (CNA).  He was also formerly a military intelligence officer in the United States Army and he has worked extensively in the Middle East and south Asia.

Michael Rubin, another one of my colleagues at AEI, has worked extensively throughout the Middle East:  Iran, Iraq, Turkey, the Kurdish problem, and previously served at the office of the Secretary of Defense.

Finally, Gary Schmitt who recently joined us from his post as director of the project from New American Century.  He is a resident scholar here and he has a long and distinguished career in federal service as well.

My name is Frederick Kagan and I am a resident scholar.  My job is simply to moderate this panel.  To that end, I will turn it over to Nick Eberstadt.

Nicholas Eberstadt:  Thank you very much, Fred.  Ladies and gents, it is a pleasure to be with you here this morning, although I must say that I’m a little disappointed that we couldn’t get a better class of protest outside.  We live in the real world, not the ideal world.

North Korea is not usually viewed as a model for emulation by outsiders, certainly not in areas like press freedom, agricultural research, leadership, or wardrobe and fashion, but there is one area in which the DPRK may qualify as a world-leading model today and that is as a nuclear proliferator.  If you look at the record over the past decade-and-a-half, you see a very striking record for the DPRK.  Very methodically and systematically, the North Korean government has freed itself from all treaties and agreements and promises and declarations that it will desist or restrain its nuclear development programs. 

Methodically and systematically, it has drawn all of the major powers with which it must contend into negotiations where the North Korean government determines the pace and the agenda of the discussions on nuclear matters.  Very methodically, it has arranged for an increasing, improving schedule of payments on what we might see as international military extortion related to the mounting nuclear threat that is able to present to outside powers.  And just as methodically, the North Korean government has worked on amassing a nuclear arsenal. 

As of last year, as I’m sure you are aware, the DPRK government declared that it possessed nukes and under no circumstances would relinquish them.

Kim Jong-il is presumably not the only leader of an axis of evil country; you can surf the Internet or read the international papers.  When one observes the North Korean record, one sees a number of lessons that would-be proliferators in, perhaps, Tehran might want to take to heart.  Let me just mention 4 lessons that a would-be proliferator might learn from the North Korean experience.

Lesson number 1:  if you have to sign an international agreement with non-proliferators about your nuclear program, make sure it’s really a non-agreement, not an agreement.  That’s what North Korea did in 1994 when it penned a document that was called the Agreed Framework with the United States.  This was a complex document that is sometimes mistakenly referred to as an agreement; it was nothing of the sort. 

The document known as the Agreed Framework actually provided a surreal vision of parallel play between Washington and Pyongyang.  It was a document with no enforcing power and it was a document, in fact, that could not be violated.  I’m not saying this to be snide; I’m repeating the observation of the ambassador who negotiated this for the U.S. side, Ambassador Robert Gallucci, who was informed on many occasions by the legal authorities at the State Department that the document he was presenting was most specifically not an agreement – only a sort of a vision of how one might eventually get to a denuclearized North Korea.  If you have to start by getting into agreements, make sure that it’s really a non-agreement; that helps.

Second:  determine as quickly and safely as you can that there will be no penalties whatsoever for proliferation violations.  The North Korean government was very careful about doing this over the whole gradual course of its movement towards developing a nuclear arsenal.  While being seemingly quite provocative and aggressive, the DPRK government also was quite careful to make sure that no penalties would be exacted against it for its violations or provocations, and indeed, apart from the cut-off of free oil under the Agreed Framework several years ago, the DPRK has suffered no penalties for these violations.  Quite the opposite:  the North Korean government was rewarded with dividends, even for the seeming perception that it had violated its promises for non-proliferations. 

The most interesting and one might say appalling item of evidence to this effect was the so-called Kumchang-ri incident in 1998 and 1999.  It was reported in 1998 in The New York Times that the U.S. intelligence community believed it had detected signs of a covert program in violation of the understanding of the non-agreement of the Agreed Framework.  Subsequent U.S. attempts to investigate this suspect site only came to fruition after the United States government had committed over half a million tons of food aid to the DPRK.  The United States, of course, always insisted there was no quid pro quo here.  The North Korean government, to the contrary, specifically stipulated that this had been discussed and this was an inspection fee.  You can decide which account you believe.  So make sure there are no penalties for violations.

Third:  take the posture that any negotiations over your nuclear program are a gift to non-proliferating interlocutors and should accordingly be compensated.  This is the posture that the North Korean government has taken since the latest flare-up in the DPRK nuclear drama, which began in October 2002 when then-Assistant Secretary James Kelly confronted North Korean counterparts with evidence that the DPRK was in fact pursuing a covert, highly-enriched uranium program in contradiction and contravention to understandings, declarations, and promises. 

Since the latest flare-up in the North Korean nuclear drama 3-and-a-half years ago, there have been a number of meetings of the so-called Six Party Talks in which, surprisingly, very little progress has been made towards denuclearizing North Korea, but one very important performance item has occurred at each one of these meetings.  The North Korea government has been paid simply to show up at each one of those meetings.  The Chinese government, according to news reports, has regularly paid the North Korean government tens of millions of dollars when it shows up at these meetings.  According to some of these reports, the Russian government has also pitched in.  Lest we castigate the Chinese and Russian governments for such behavior, we should remember that in the 1990s at an earlier series of Four-Party Talks, it was the U.S. government that was coincidentally offering food aid to the DPRK every time it showed up at the table for talks.

Finally:  get lucky with the lead partner in the coalition for non-proliferation.  You can’t count on luck, but it always helps.  North Korea has been very lucky with its choice of U.S. governance that it has had to contend with since the early 1990s.  First it contended with a Clinton administration, which stumbled through a number of different approaches to the DPRK nuclear question but ended up with a policy of appeasement, which was called, I think, engagement or sunshine – under different names. 

The idea was that the DPRK might be brought into the community of civilized countries or well-behaving countries if it were offered blandishments and inducements.  That didn’t work too well.  Then, by a great stroke of faith, the DPRK had a George W. Bush administration to contend with.  This administration seemed to be rather forbidding, since it had rather unflattering things to say about the DPRK regime and its leadership, but fortunately, it had no coherent approach connecting its attitude to results – no strategy – so it was left in a position of reactiveness and almost constant surprise of DPRK moves and maneuvers. 

Exactly what leaders in Tehran will learn from the North Korean experience I suppose is an open question, but I would suggest that there are plenty of lessons for an eager would-be proliferator to learn.  Thank you.

Danielle Pletka:  I am next.  Hello, everybody.  Thank you for being here.  I am going to do something I don’t always do, which is read you some lists, but I think that they actually enormously instructive as we look at developments on Iran to actually look at a timeline for North Korea.  Having lived through the North Korea events on Capitol Hill and watched political developments, we entitled this Diplomatic Déjà vu.  I’m not sure if “diplomatic” was the right word, but I think you will all be struck as I was by just how history is happening all over again, to coin a phrase.  I’m going to read to you just a couple of things and then I will talk a little bit more about what I think is going on.

In 1993, North Korea announced that it was quitting the nuclear non-proliferation treaty amid suspicions by the rest of the world and the International Atomic Energy Agency (IAEA) that it was developing nuclear weapons.  It decided against doing that.  A year later, North Korea and the U.S. signed an agreement whereby Pyongyang pledged to freeze and eventually dismantle its nuclear weapons program in exchange for a lot of aid as Nick has outlined and 2 light-water reactors.  Four years later, North Korea fired a missile over Japan into the Pacific Ocean and 3 months after that, the United States and North Korea held the first level of high-level talks in Pyongyang.  What was the connection? 

In May 1999, a few months later, the former Defense Secretary William Perry visited North Korea and delivered a disarmament proposal.  Four months after that, Bill Clinton eased economic sanctions against North Korea.  Now, remember, North Korea had not necessarily complied on its nuclear commitments.  We had not delivered the light-water reactors, but we were busy making other deals as well.  At that point, North Korea pledged to freeze its long-range missile tests, which had been exciting Japan and making all of us very unhappy. 

In December of that year, a U.S.-led consortium signed a $4.6 billion contract for 2 Western-developed light-water reactors.  A mere 6 months later, North Korea threatened to restart its nuclear program if Washington would not compensate for the loss of electricity because the nuclear power plants weren’t built.  After all, 6 months is plenty of time to build a couple of nuclear reactors in a country like North Korea with their excellent infrastructure, road systems, and otherwise helpful attitude. 

A year later, North Korea warned it would reconsider its moratorium on missile tests if the administration of George Bush did not resume contacts aimed at normalizing relations, but a month later, the State Department reported that North Korea was going ahead with development of its long-range missile anyway.  Then they conducted an engine test of that long-range missile.

In October 2002, the Bush administration revealed that Pyongyang was operating a secret nuclear weapons program in violation of the Agreed Framework and in fact had been for some years.  I think that even we and even the Clinton administration had been aware of that.  Some months later, North Korea admitted it and removed monitoring seals that the IAEA had put in place.  In January 2003, North Korea withdrew from the nuclear non-proliferation treaty.  At that point, the 35-member IAEA board of governors – this will sound very familiar to all of you who have been following the news this year – declared North Korea in breach of atomic safeguards and referred the case to the United Nations Security Council.  North Korea, wanting us to pay more attention to them, fired a missile into the sea between the Korean peninsula and Japan; fired another one the next month; and lo and behold 6 months later, the Six-Party Talks began.  Meanwhile, back at the United Nations, nothing happened – at all – and has not, by the way, since 2003. 

We held more rounds of talks in 2004.  We held another third round in the middle of 2004.  Then North Korea, as Nick detailed, said that they would stop coming unless we started bribing them, which everybody did, but in March 2005, our current Secretary of State Condoleezza Rice said, “If efforts to persuade North Korea to give up its nuclear weapons program fail, Washington and the international community will pursue ‘other ways.’”  At that point, North Korea announced that it had a stockpile of nuclear weapons and you know the rest of the story.

It’s an extraordinarily familiar timeline.  Now I want to give you one other little piece of data to factor into that, which are a couple of quotes that we dug up, contemporaneous with this timeline.  In July 1993, then-Secretary of State Warren Christopher said, “I don’t think there is any question about the fact that the North Koreans are moving in a direction that’s worrisome to us on the nuclear front.”  This is 13 years ago.  He then put North Korea on notice:  The United States will seek “options other than negotiation” if the communist regime insists on keeping its nuclear program secret.  Later in that year, President Clinton warned North Korea that it “cannot be allowed to develop a nuclear bomb.” 

I only have a couple more of these, but they really are good.  In 1998, the U.S. team told the North Koreans that Washington “strongly objects” to the construction of their underground illegal, not-agreed-to nuclear facility.  In December 2001, President Bush warned Iraq and North Korea that they would be “held accountable.”  And in 2002, the President said and everybody will remember these ringing words:  “States like these and their terrorist allies constitute an axis of evil, arming to threaten the peace of the world.  By seeking weapons of mass destruction, these regimes pose a grave and growing danger.” 

I wanted you all to get the rich sense, as I had gotten in looking over these things, of just how familiar these things are, of how we have said the same things again and again, first to the North Koreans by President Clinton, then to the North Koreans by President Bush, to the Iraqis, and now to the Iranians.  If we look at where we ended up with North Korea, we can look forward some years and follow that timeline.

Right now, where we are with Iran is fairly familiar to everybody.  The United States and permanent members of the Security Council plus Germany have made a very generous offer to Iran, which includes – yes, everybody knows it – light-water reactors, nuclear technological assistance, aid, recognition, direct negotiations, special concessions on export, and the removal of certain sanctions that the United States has put in place.  We have made this offer in exchange for a suspension – not a permanent suspension – but a suspension of nuclear and uranium enrichment by Iran.  Iran, as we all know, has not agreed to this offer, but they have been told by the G8 that they need to answer by next week.  Their very helpful negotiator, Mr. Larijani, has said last week that they would answer and yesterday he said that they would not answer.

 I think we all have a good sense of what is going to happen.  The Iranians are, as the North Koreans did, playing for time.  What they are looking for is ways to continue the dialogue, to continue the process in order to continue working and perfecting their nuclear program so that at a certain point they can tell us to go jump in a lake, and we will be afraid to respond in a way that we are ready to respond now, because in fact at that point they will either have or be so close to having nuclear weapons that we will need to recalculate our interests in the region.

The analogy to the Security Council is, to my mind, a particularly piquant one, because what happened with North Korea was that once the IAEA found North Korea in non-compliance with its obligations by treaty by the implementing legislation of the non-proliferation, then what happens is this gets referred to the Security Council.  In the Security Council, what happened with the North Koreans was that China blocked all progress.  The Chinese said, we want to pursue diplomacy; I’m not quite sure why the United Nations is not diplomacy, but the Chinese said they wanted to pursue diplomacy and they would block everything, including a presidential statement on the question of North Korea.  The United States agreed to that at the time and we have never, ever returned successfully to the United Nations to address this issue, the nuclear non-proliferation treaty withstanding.

We were teed up to do exactly the same thing with Iran.  We had the referral.  We went to the Security Council.  We actually obtained a presidential statement, and what was supposed to happen next was a binding resolution under Chapter 7 of the U.N. Charter.  Yet, a permanent member of the Security Council – not China this time, but Russia – stood up with China behind them and said, you are not going forward, and we did exactly the same thing we did in the case of North Korea, which is we said, oh, all right.  I guess we will accept what you’re saying.  We won’t push you to veto.  We won’t press you on this.  Instead, we will embrace this idea of making generous offers to this miscreant, to this country, and thereby, in my view, encouraging them to move forward with their own process of negotiating.

The history of this diplomacy is really instructive as to where things are going to come out.  What happens in these situations is that we talk a lot about diplomacy.  We move into this multilateral phase.  We move into what you can call the bizarre system of making offers to them and increasing those offers and dickering about the nature of those offers all over a period of time. 

We’re talking about 13 years now with North Korea.  Even the CIA believes that in 13 years, the Iranians will indeed have nuclear weapons.  What is this multilateral diplomacy all about?  We thought, in the Six-Party Talks, perhaps naively, perhaps foolishly, that this would be about us getting together with our allies in Asia and other concerned parties and pressuring the North Koreans, but that has not been the dynamic of the Six-Party Talks at all.  Instead this has been all about other countries pressuring the United States:  offer more; do more; North Korea is in the right because you are not doing enough. 

This is something that many of us urged the United States government to avoid in the case of Iran.  Instead we are now in a situation where we and not the Iranians and their violation of their obligations under their safeguards agreements – not the Iranians are the focus – we are the focus:  have you offered the Iranians enough; can’t you offer them more; don’t you understand their legitimate fear that you are not offering them a genuine security partnership, the elimination of the state of Israel, full trade relations, the honor of recognition – whatever it is. 

And you’ll hear all that rhetoric.  But from now on, this story is about how the United States isn’t willing to do enough to get the Iranians away from the brink, much as it has been in the Six-Party Talks all about our allies and partners on the Security Council, not pressuring Iran, but pressuring us.  The outcome will be exactly the same as it was with North Korea.

I want to say one last word and I know Fred is starting to jump up and down, as I often do as a moderator when everybody is talking too long.  Why is this a huge problem for the United States other than the obvious?  Because at the end of the day, multilateral diplomacy in the absence of momentum, in the absence of progress, only for the purpose of pursuing diplomacy to say that you are doing something without success is the hallmark of a weak state. 

We, the United States, are behaving like a weak state.  We can all sit here and speculate for the rest of the day about why:  perhaps it’s because we’re tired in Iraq; perhaps it’s because midterm elections are coming; perhaps it’s a change in personnel or President Bush has thought better of it.  I honestly don’t know the answer, but I would say this:  the results for weak states are very clear in this world.  I think everybody here knows what they are.  Thank you and sorry for going on so long.

Frederick Kagan:  Thanks, and I deny that I was in any way fidgeting.  Michael?

Michael Connell:  Thank you.  Today I’m going to talk a little bit about Iranian decision making on the nuclear issue, who the key players are, and what some of the factors are that are motivating their approach to the nuclear issue and kind of speculating on the Iranian viewpoint on the issue.  As many of you probably know, Iran’s government is not a proletarian regime in the strict sense.  It is a decentralized web of competing factions and interests in which decision making is often convoluted and spread among many actors.  Personal ties between individuals often trump formal institutional links.

 Formally and constitutionally, the supreme leader presides over foreign policy and the national security apparatus.  He has the power to mobilize Iran’s armed forces.  He appoints the heads of all the military branches.  And he also appoints the secretary of the supreme national security council.  The supreme leader actually lacks formal religious credentials.  He is very weak in this area.  He has been somewhat of a weak supreme leader.  You could never really fill the shoes of Ayatollah Khomeini.

Now their president also has a role to play in the decision making regarding Iran’s nuclear program.  His role is actually much more circumspect than is commonly assumed.  He has the power to appoint and dismiss ministers – the Minister of Foreign Affairs.  He controls the planning and budget organization, and so the purse strings of the Iranian government.  But traditionally, the president’s influence is confined mainly to social, economic, and cultural spheres.  Under Khatami‘s administration, prior to current Ahmadinejad, the conservative leadership in Iran more or less bypassed Khatami entirely by creating a shadow apparatus to deal with the nuclear issue. 

Even though Ahmadinejad has played a prominent role in the press, making statements on the nuclear issue, I would still argue that his actual influence is somewhat limited.  He is more, I would say, a mouthpiece for the regime than a key player.  In fact, I don’t know if you have seen in the news in the past week, the supreme leader created a new institution called the Strategic Council for Foreign Relations.  This appears to be yet another attempt to bypass the office of the president on foreign policy.  It’s still unclear what exactly its functions are going to be, but it includes many foreign policy experts, both from the radical side and from the reformist side.

Now the key institution when you’re talking about nuclear decision making in Iran is the National Security Council.  This body determines national security and defense policy in lines with the supreme leader’s directives.  It coordinates all activities related to national security between the various organs of government.  It took the lead on the issue in 2003 when Iran suffered a series of diplomatic setbacks with the IAEA.  It was decided that the Ministry of Foreign Affairs would no longer have jurisdiction over the nuclear issue; they had done a bad job.  This, as you will see, a typical Iranian approach.  They will create new institutions whenever they’re running into the blocks, and you’re never really sure who you are negotiating with on the nuclear issue.  It’s constantly shifting.  It’s a very nebulous network of competing interests.

I should also point out Ayatollah Hashemi Rafsanjani who was trounced in the last election still does play a role in the nuclear issue.  He is not out of the picture yet, even though his formal role is to head the expediency council, which really doesn’t involve national security, but he has ties to the supreme leader and he has ties to the military and the security apparatus, which makes him a key player.

Finally, I would like to bring up a very important institution regarding Iran’s nuclear program:  the Islamic Revolutionary Guard Corps (IRGC).  The IRGC was created shortly after the revolution as a parallel military.  It’s charged with safeguarding revolution as opposed to the regular military, which is charged with safeguarding Iran’s borders and defense.  Its leadership is composed of a closely-knit core of zealous devotees who fought in the Iran-Iraq war, and right now the IRGC seems to be functioning as a kind of recruiting ground for the Iranian government – a bit like the Skull and Bones Society.  As you know, Ahmadinejad himself was an IRGC veteran – a lot of the key leadership in different positions.  Their fortunes appear to be in the ascent right now.

I could go on to lots of other institutions and the nebulous structure could be talked about for weeks, but what does all this mean?  It’s overlapping change of authority; it’s emphasis on personal networks over formal institutions; relatively weak centers of power.  All of this means that security-related issues rarely move forward without at least a tacit consensus among the political elite.  This means there will be great reluctance on the part of leadership to step out in front of issues such as the nuclear program and relations with the United States unless all the factions agree.  In this case, all the factions are not likely to agree on either negotiations with the U.S. or ceasing the military program.

The few instances in which the government in the past has stepped out ahead of the radical factions in the government, the radical factions have sabotaged the effort.  Three years ago, Iran opened a new airport, Imam Khomeini International Airport in Tehran.  The IRGC immediately closed it down because one of the key interests in the airport was a Turkish company, and they said the Turkish company, therefore, because they have relations with Israel, represents a security threat. 

Without the president’s authorization, they stepped in and stopped the process.  At least on the nuclear issue, and I would even argue on the military program in Iran, there seems to be widespread support for the nuclear program.  The Iranians are unlikely to forgo the program unless regime survival is at stake.  They may commit; they may follow the North Korean model, but they are very unlikely to cease enriching uranium or developing their nuclear program. 

I would argue that the regime’s rationale for obtaining nuclear weapons is based on 3 key factors.  The first one is deterrence.  Basically, with Saddam Hussein’s regime effectively removed and the Taliban regime also removed, two of Iran’s previous key security concerns disappeared.  The only principle remaining threat as far as the Iranian regime and the Iranian military sees is the United States. 

Now, although Iran’s conventional forces are rather large by regional standards – at least in terms of personnel – their ability to wage conventional war against the United States is virtually nil.  They are aware of this.  There are statements by Iranian military officials saying that they are not going to be able to take on the United States toe to toe in a military conflict, but they have developed other options. 

Those other options are on the two extremes of the spectrum of contract.  On the one hand, you have asymmetric warfare – the use of terrorism, guerrilla warfare if the U.S. was to invade.  On the other end of the spectrum, you have the WMD and nuclear weapons.  Iran has invested heavily in its WMD and ballistic missile programs, and if both of these areas, the IRGC has taken the lead. 

Israel, too, figures in Iran’s strategic deterrence policy, although I would argue it is less than generally assumed.  Despite the harsh rhetoric directed against the Zionist entity, the regime in Tehran does not generally regard Israel as a direct threat to its survival.  This is what I’ve heard from most of my contacts in Iran.  The anti-Israeli rhetoric mostly stems from an attempt to garner support for the regime’s nuclear policies in Islamic world at large and particularly the Arab world.  If you’ve seen some of the polls, actually Ahmadinejad is doing very well in the Arab world.  He is liked more in the Arab world than he is actually is by the Iranian population. 

I should also mention Pakistan fits into Iran’s nuclear deterrent strategy, but this is purely speculative on my part.  The Iranians, I believe, are worried that if Musharraf's regime was to fall and a Taliban style was to replace Musharraf’s government and also armed with nuclear weapons, that would also be a serious concern, and it is motivating Iranians to develop their own program.  Now, of course, North Korea also figures into this.  \

The Iranians are watching North Korea closely.  They’ve concluded, I believe, that a game of high-stakes brinksmanship will pay off.  According to Ali Larijani, who is the secretary of the National Security Council, speaking on North Korea’s tactics, said, “What was the result of such tough policies?  After 2 years, we ended up accepting its programs so you” – meaning the Europeans – “should accept ours right now and maybe we wouldn’t have to go through all this.”  He actually said that. 

I’d argue another factor in addition to deterrence for Iranian thinking on the nuclear program is power, prestige, and influence.  As anybody who knows Iranians or has spent time in Iran knows, Iranians are intentionally nationalistic.  Ahmadinejad has proven adept at harnessing the power of nationalism in regards to Iran’s nuclear program.  He has couched the issue in terms of Iran’s right to the fuel cycle, and this has gathered a lot of support from all ends of the Iranian political spectrum.  Some editorials in Iran commonly point to Iran’s right to a nuclear fuel cycle and they compare it to what they conclude as a double standard in regards to Pakistan, India, and Israel.

Finally, I would argue that another factor motivating the Iranians is self-sufficiency.  This stems from the Iran-Iraq war.  The Iran-Iraq war continues to play a pivotal role in shaping the attitudes of Iranians towards their own security, specifically on the WMD issue.  Iranian policy makers will often refer to the fact that Iraq used nuclear weapons and the world didn’t do anything about it.  They say the U.N. much later issued a resolution condemning Iraq’s use of weapons, but this took a long time.

 The policy makers and the key players in the Iranian WMD issue have concluded that the international community cannot be trusted to safeguard their interests when they are threatened with WMDs.  It is important to remember here, too, that many of the key decision makers are former IRGC veterans.  They fought in the Iran-Iraq war.  They have kind of a personal stake in this issue.

I could add one more factor and that is that institutionally, the IRGC has a vested interest in preserving Iran’s nuclear program, simply because they control it.  As anybody knows from Washington politics, any bureaucratic entity is unhappy about giving up the privileges in certain areas.  That’s it.  Thank you.

Michael Rubin:  You will notice that when Michael mentioned Skull and Bones, no one on the panel got up and left, so I just want to make that clear so that the American prospect or someone else doesn’t start engaging in yet one more conspiracy theory in that regard.

Back around May 27 I think it was, shortly before Secretary Rice announced the new approach to Iran, Richard Armitage, the former Deputy Secretary of State, was quoted in The New York Times saying something to the effect of:  diplomacy is not just about talking to your friends; it’s also about talking to people who aren’t your friends.  He said something to the effect that’s the bread and butter of diplomacy; it never hurts to talk. 

What I would like to suggest is that while perhaps some people can make that argument and that there are times when it is appropriate to talk not just to friends but to adversaries as well, what the U.S. has traditionally lacked, what our mantra of “let’s engage, let’s engage, let’s engage,” falls short is over a sense of timing. 

Now, the U.S. has traditionally been blind to the issue of timing.  I think Danielle had mentioned momentum as well.  Both are important.  For example, with regard to the Indian nuclear deal, the fact that we announced it when we did, at a time when we were trying to sort of broaden a harder line, no-nonsense stance among our European allies and Western Europe as well, undercut our negotiation position in a way that wasn’t so beneficial to us or to U.S. national security, because in a world of moral equivalency, which so many other states often engage in, there is no difference between India and Iran when it comes to issues of nuclear proliferation and so forth, that if India can have a deal whereby its military and nuclear program is exempt from inspections, why shouldn’t Iran in certain people eyes? 

The fact that, as Fred said in his introduction, in Iran you’ve had actually 3 successive presidents now, one of whom was an ex-president when he said it, who have threatened to use violence in a first-strike capacity – Rafsanjani with regard to the nuclear weapons; president Khatami on October 24, 2000, on state television once he got back from negotiations in Italy; dialogue of civilizations [sounds like] was good for abroad, not necessarily good for at home; and most recently Ahmadinejad. 

It’s a real problem.  While Washington tends to have a deaf ear or a tin ear when it comes to issues of timing, I would argue that the Iranian leadership is very astute when it comes to timing.  Danielle Pletka talked about issues about whether or not Iran would respond to some of the nuclear issues.  It looks like the date that the Iranian government has now said that it will respond coincides with the anniversary – I think it’s the 27th of Rajab – the anniversary of Muhammad’s Night Journey, which is full of symbolism in many ways. 

No matter what Iran’s response is at that point in time, I suspect it will be the response of leading us on:  let’s talk about the possibility of talking about talk.  You have a situation where they can rally the domestic public behind them in a way that so far, for whatever reasons, the White House and many in Europe haven’t been able to accurately describe the real threat to U.S. national and regional interests coming from Iran.

The other problem with our timing is that we tend to negotiate often from a position of weakness, and it matters in the Middle East.  It is actually something which on June 4 Ayatollah Khameini said when he was speaking at the Shrine of Ayatollah Khomeini on the anniversary of Khomeini’s death.  He said, “Why doesn’t Washington just admit their razor is blunt?  Why don’t they just admit that they failed in Iraq and everywhere else in the Middle East?”  That is not the way you want to go into negotiations, and perhaps it is no surprise then that Ayatollah Khameini is once again casting doubts on the efficacy of negotiations now. 

In many ways, Iran is holding us hostage.  On one hand, when you see the punditry that comes out of Washington, it’s almost not just the Washington commenting community but also people within government when you talk to them and within the military, are trying to come up with reasons why A) we can live with the nuclear Islamic Republic of Iran; B) convince themselves that the White House’s weak approach is actually a correct approach in this regard.  Some of the reasons you hear is that Iran could close the Straits of Hormuz, forgetting the fact that Iran needs to import gasoline to function.  That Iran is holding us hostage could harm us in Iraq.

I just came back from Iraq about a week-and-a-half ago now and rather than ameliorate tensions in Iraq using this time period of negotiations, Zalmay Khalilzad’s much ballyhooed outreach to Iran and so forth, it’s consolidating its control in Iraq.  It’s using its momentum.  For example, the currency that is most frequently used in Basra right now isn’t the Iraqi currency anymore – it’s the Iranian currency. 

That’s all well and good; I mean, in Najaf or Karbala, you would have the currency exchange and that’s reasonable when it comes to the amount of pilgrimage traffic.  Other issues aren’t.  A lot of Iraqi businessmen and NGO leaders take offense when Iranian delegations who identify themselves as Iranian delegations come into their businesses and offices and ask whether they have a permit to operate from its Ettelaat. 

This is in Iraqi territory.  Some of them will be intimidated and will either close down or try to get a permit from Ettelaat, Iranian intelligence.  Others say no and then often, as in Chicago in the 1930s, find that they have some militias turned against them.  This is also becoming a major problem in Kirkuk where it seems that rather than try to ameliorate tension, the Muqtada al-Sadr’s people have taken specifically to killing Kurds as a leverage against federalism. 

Putting that aside, the big picture, when it comes to Iranian-U.S. relations has to do with red lines.  We are constantly giving Iran red lines, and red lines are the basis of any diplomacy:  how far can you push, not just in your talk, but in your actions?  Well, so far, I would argue that Iran doesn’t really take seriously any red lines we give, no matter whether it’s Nick Burns, Warren Christopher, Madeline Albright, Secretary Powell, Donald Rumsfeld, or George Bush that gives them anymore.  We’ve hemorrhaged our creditability.  We’ve given Iran, I think, I’m counting 5 or 6 now last chances.  What is the meaning of “last chance”?  The last time I can think of where we actually made a red line matter was back in 1992 in Bosnia, when we told Iran not to push any further and when they did, we took action – in this case, forcing down a Boeing 747 filled with Iranian men, arms, and money and dealt with them.

What about this idea that why can’t we just talk this through; why do we have to take anything more robust [sounds like] if the White House is still serious about preventing Iran from going nuclear, and I for one am not any longer sure that the White House is determined to keep Iran from going nuclear, despite what Bush may say?  The lesson Iran learned with regard to Germany’s original critical engagement:  when Germany announced this new approach of offering Iran further carrots to become more engaged in diplomacy and to be a more responsible international partner, what ended up happening shortly thereafter was the assassinations in the Mykonos café because the lesson Iran learned wasn’t that the West is welcoming us with open arms; it’s that we can get away with murder. 

They don’t care anymore.  All they care about is reintegrating Iran into the international system, doing business regardless of who happens to be those people that we are doing business with.

We’ve talked about this AEI, so it is just an observation that, since I heard it at a private breakfast a couple of weeks ago, has taken on greater resonance:  one of the problems that the United States seems to be facing in its negotiations – not just with North Korea but also with Iran – is the fact that we can’t get wedded to the process and we tend to ignore all evidence that might interfere with our diplomatic process, so once we commit negotiations – once the White House or more importantly the State Department commits to negotiations – all policy analysis is conducted through the prism of what can we do to keep this declared policy from going on the rocks, from being derailed? 

In this case, what it does is it creates a dilemma where we tend to ignore all evidence of Iranian cheating, such as what is going on in Iraq right now.  You can look back to any number of Iranian agreements going back to before the world of pledges of non-interference.  You spend any time on the ground in Iraq right now and you will see what’s going on – or anything regarding to the nuclear program.  We have conditioned Iran to being rewarded for noncompliance, so I don’t know why we would suddenly expect to have more compliance.

Lastly, let me just conclude before turning the podium over to Gary that sometimes people have accused the Bush administration of being too ideological.  I guess if the ideology is preventing rogue states from having nuclear weapons, preventing proliferation, preventing people who have threatened to use nuclear weapons from actually acquiring them – if that is an ideology the Bush administration, the Bush administration is being ideological.  And others say that the realists aren’t ideological, but I would argue that one of the most dangerous ideologies that permeates Washington today, and Europe has already succumbed to it in many ways, is this ideology that talk always works, regardless of the sincerity of the negotiating partner and regardless of all evidence of failure. 

Unfortunately, it seems to be a mistake that we make again and again and again as we relive the North Korea experience and we see how the nuclear-armed North Korea experience has turned out now.  Thank you.

Gary Schmitt:  Good morning.  When I came here this morning, Fred Kagan told me that I was going to be batting clean up on the panel and all that brought to mind was that the last time I batted clean up was when I was senior in high school and playing baseball – I went 0 for 5, so hopefully I do better today.  You have been very patient, so I’ll try to make my points as quickly and succinctly as I can. 

The first point I was to make is that when I first came to town, I worked for Senator Pat Moynihan from New York, a relatively famous politician but also a scholar.  One of his more famous arguments was that in the social sciences we had begun to define deviancy down, so I want to begin by suggesting that we look at the North Korea and the Iranian situation and we’ve begun to define strategic deviancy down.

When one looks at the difference between North Korea and Iran, one of the striking things to me is that one can make an argument that when the Bush administration came into office that the options for North Korea were fairly limited.  North Korea was not a country where we were going to be able to exercise a lot of leverage over it; there wasn’t much to leverage in its economic system, so if you have a system of rule that allows your people to starve, then that kind of leverage isn’t likely.  It wasn’t any kind of real sense that regime change was in the offing. 

Again, North Korea was quite remarkably totalitarian in a way that nobody else on Earth seemed to be at the time, so your ability to maneuver inside that country to make political changes was very limited.  Finally, of course, the military situation was extremely dicey.  We are fairly certain that North Korea by that time had nuclear weapons and, what’s more, there was a massive North Korean military sitting just above Seoul, so taking military action might well have caused massive casualties and the kind of a conflict that any administration would be worried about and wary of.

When you turn to Iran, as difficult as it is, none of those things really apply.  The truth is, in terms of leverage, Iran has an economic system that is very vulnerable.  The real question isn’t whether we have leverage over them; it’s a question of whether we, with European allies, are capable of using that leverage.  Regime change, again, Iran is not as bad as it is.  It is not a totalitarian system.  In fact, there is plenty of evidence that there is considerable discontent in the population.  It is probably the one place in the Middle East where America is more popular, not less.

Finally, on the military front – and, again, as difficult as a military conflict with Iran might be, the truth is, it is not nearly as serious as if it would have been with North Korea and, again, there is no evidence that Iran had nuclear weapons.  In some ways, we are going down the same road as others on the panel have spoken about, but I would suggest that it is kind of a unique situation in that if you really set up the parallels between North Korea and Iran, you would see an administration that has grown weaker in time and less steady.  Partially that has to do with the problems in Iraq and Afghanistan, but it also has to do with the normal as administrations get a little bit older, they just get tired.  We’re seeing that in spades when it comes to Iran. 

When Nick was speaking, I was thinking about my comments this morning.  I remembered the 1950s Polish World War II movie comedy, “The Mouse That Roared.”  The punch line was that the leader of a very small, poor, backward European country looked around after World War II and saw that Germany and other countries were getting massive amounts of American aid and assistance, so he decided that the best thing to do to help his country was to declare war on the United States, immediately surrender, and ask for aid.  We’re not headed that way on the proliferation front, but that is the general direction I think we drift.  We’ve gone from North Korea to Iran and I suppose in the next 10 years we’ll see a mouse that roared from a different country.

Very quickly, I want to turn now to this issue of talks.  There is no expectation on my part that we’re going to get a yes or a no from Tehran on the offer.  What we will get is something ambiguous that then will inevitably, as Michael pointed out, will lead to people saying, well, we still need to plug away; we have to take the chance that negotiations can open things up and maybe chance the direction. 

I firmly believe that it’s not going to work, but nevertheless that could be the road we travel.  At the heart of these negotiations, when push comes to shove, what you see is the rhetoric of the grand bargain, which is explicitly Iran will give up its weapons of mass destruction in exchange for the United States giving security guarantees to Tehran so that it would not have to have weapons because it wouldn’t feel insecure. 

A couple of things about the grand bargain:  one is that I’m always struck when I talk to Europeans or others about the grand bargain and security guarantees how it is just a vague term.  When you actually ask them to spell out what those would be, you realize just how impossible a grand bargain is on 2 counts.  The first one has to do with simply that nothing that we would put on paper is going to convince Tehran that we have a friendly Washington, so it can’t be a paper agreement.

 It will have to be real things.  What would the real things be?  We would probably have to mean U.S. troops out of the region, which is not going to happen.  It would have to mean accepting Iranian homogeny in the Persian Gulf – the banding of our smaller Gulf allies.  That’s not going to happen.  And it would mean leaving Israel much more vulnerable.  That’s not going to happen.  From the U.S. end, the grand bargain is just a non-starter. 

Then, the other thing that is wrong about the grand bargain is the idea that somehow the Iranian insecurities are based upon what’s being done to Iran as though Iran and its new leadership is one of status quo power.  The truth is, the insecurities that are on fields are more directly related to the fact that it sees its role in the Persian Gulf as much larger than it is today.  It has ambitions both religious and political.  As a result, the insecurities that it feels are directly related to the fact that those are the policies that it pursues.  Again, I think when people talk about this grand bargain, the reality is that it’s a pretty empty promise.

Finally, let me just talk a little bit about the strategic alternative of containment.  Again, when you think about North Korea and you think about Iran and containment, my own view is that the situation in North Korea is such that whether we like it or not, containment is essentially the policy we have to adopt.  It’s not the one we would want and certainly there was the possibility of doing something different I think 10 years ago, but right now the policy largely has to be one of containment, absent being help from either Beijing or Seoul to change that. 

It’s not the perfect policy, but given the isolation of North Korea politically and geographically it is more viable than in the case of Iran.  Iran fits into neither of those categories.  It is not isolated geographically and it is not economically isolated either.  Even if we were to have a strong nuclear deterrent posture toward Iran, the fact that Iran had a nuclear weapon would free it up to be a much more aggressive actor in the region. 

Again, I would remind folks that people tend to turn towards containment and think about the 40-plus years of successful containment of the Soviet Union, that is all well and good and it was true, except that those 40 years were really quite bloody below major conflict.  It was not the case that it was a peaceful 40-year period.  It may not have resulted in a huge nuclear exchange between the Soviet Union and the United States, but there were a lot of people who died over large parts of the globe as a result of the policy of containment.  When people talk about our situation with Iran and talk about the viability of containment, they should remember that in fact this will not be the solution for peace that they think it would be.

For my final point, I guess I will go back to my baseball analogy.  In 2002, President Bush referred to North Korea, Iran, and Iraq as the axis of evil.  Given the difficulties we’re having in Iraq and the lack of progress with North Korea and Iran, this President could walk out the door in 2008 having gone 0 for 3.  Even in baseball, that is a bad thing.  Thanks.

Frederick Kagan:  Gary, thank you very much.  Thank you to the panelists.  I’m very eager to get to questions, but I’m even more eager to make a couple of comments on my own.

I think it is worthwhile zooming out even a little bit further – Gary has done a great job of pointing out the larger implications of all this, and I would like to continue that process a little more.  We are still behaving as though it is a luxury for us to involve ourselves in the world.  We are still talking about whether or not we feel like winning in Iraq.  We are still behaving in Iran as though it might be okay for us to allow them to have nuclear weapons. 

We have already basically decided that it is okay for the North Koreans to have nuclear weapons.  It is a policy of luxury.  It is not a war-time policy.  It is not a policy that recognizes that there are things that we simply cannot allow to have happen in the world.  The reason for that, in my opinion, is that we are dealing with problems now at a relatively early stage. 

Is it a major, huge crisis in American national security the day the Iranians get a nuclear weapon?  Well, in a certain sense it is.  But in another sense, life will go on in a way that will be very recognizable.  Down the road, it will not be.  It will introduce a fundamental change into the international system and it is a change that will be very much to our detriment.  We now have the option of addressing this potential change before it has occurred and saving future administrations and our children and potentially our grandchildren from having to deal with a massive problem.  Right now it looks like an option. 

Right now it looks like something that we could maybe be okay, because we are taking a very shortsighted view of it.  In the long-term, it is not okay for this regime to have nuclear weapons.  It’s really not okay for the North Koreans to have nuclear weapons either, but we’re probably past the point where we can reasonably do anything about that, although they keep pushing the envelope where they continue to highlight exactly how not okay it is for that to happen.

This is the continuous pattern of democracies.  This is what we do.  We allow problems to build up.  We don’t address them early on.  When we do address them, it’s hard even to say early on as we did in Iraq, but sort of at a middle stage but in a preemptive fashion, then the administration comes under enormous fire and takes enormous criticism for having addressed the problem before it had become a massive issue.  This may be the way that we have to behave; there may not be another alternative, but we should recognize that the price for this kind of behavior over the long-term can be tremendously high.  It really will be world-transforming when the Iranians have a nuclear arsenal. 

There is no question about that.  And it will be transforming very much to our detriment.  It will be an infinitely more intractable problem when we’ve allowed that to happen.  Any sound American foreign policy at this point, I think, has to proceed from the recognition that this is not optional.  This is not an optional engagement that we can try to convince ourselves might be okay.

I would add, finally, I think Danielle made a terrific point about how weak the United States is looking, how much we’re acting like a weak state.  I think it’s a very important point.  I think we are acting like a weak state because I think we feel ourselves to be weak now for a variety of reasons.  But there is another reason also that I think we are acting like a weak state. 

It is inherently difficult to pursue non-proliferation programs.  It is inherently a very difficult thing to do, because it requires a long-term commitment against regimes that will work very hard and cleverly over the long term to subvert all the international support for the non-proliferation regime and at any moment it looks unreasonable or can be made to look unreasonable to take action to prevent the next specific stage and the collapse of the non-proliferation regime. 

Yet, if you are serious about non-proliferation, and I think you have to be in the world as it is today, then you have to recognize that even actions that seem unreasonable at the moment are reasonable in a larger context, or if you decide that they’re not reasonable, you’ve effectively decided that you don’t care about non-proliferation.  If that’s what we’ve done, then I think we should be explicit about it, but I think we should think long and hard before we actually make that decision.

With that, I will turn it over to you.  Please wait until the microphone comes, identify yourself, and be sure to ask a question.  Gentleman over here, please identify yourself.

Nicholas Gallagher:  Nicholas Gallagher [phonetic] with St. Albans.  You’ve detailed today some of the failed or impossible diplomatic options we might take.  What specific military options do we have in the case that we decide to use them?

Gary Schmitt:  Military options with Iran?  It’s no question that like all the other actors on the world’s stage, the Iranians have begun to learn that it’s better to hide and bury than not.  With that said, the uranium nuclear program is a very large industrial infrastructure that is required to carry out these programs.  Without knowing anything of a classifying nature, I would suspect that there were probably a number of keynotes that could be sort of attack militarily that would not destroy the program but slow it down considerably.  But again, it’s not an easy military option, but it is one that probably still exists. 

The really critical issue on that is less in some ways the industrial infrastructure, because at a certain point once you’ve got that industrial infrastructure up and going and you’ve learned how to manufacture and also process uranium and the like, that know-how doesn’t go away.  You can’t bomb that know-how out of existence.  We are reaching the critical point at which taking military action against Iran would again maybe slow the program down, but more decisively it may not stop the program because we wouldn’t be stopping their learning curve.

Michael Rubin:  I would just add that while there may be some military options, and no one is suggesting that they would be easy or good option, I would just reiterate what Gary said.  At best, what they could do is create a bit of delay in Iran’s nuclear program.  Then the question for the White House and the State Department is, do you have a policy in place to implement during the time you bide or is it just going to be a couple more months or a couple more years of kicking the can down the road?

Tulin Daloglu:  Thank you.  This is Tulin Daloglu [phonetic] with Turkey’s Star Newspaper.  We talk about North Korea but not the South Koreans, so I wonder if they care whether North Korea goes nuclear; do they see it as a security threat to the South; how do they prefer this issue to be resolved; and are there any policies that indicate that they are getting ready for the day when the whole Korean peninsula becomes one; and simply what is their role in this whole debate?  Should we care what the South Koreans think about this?  Thank you.

Nicholas Eberstadt:  There was a TV show in the 1960s called I Dream of Jeannie.  You may remember it.  You may have seen it on reruns.  The way that Jeannie would deal with things is that she would cross her arms and blink.  Things would be solved.  That more or less is the South Korean government’s approach to the North Korean nuclear question.  It is heavy in wishful thinking but rather light on “what if’s” if the wishful thinking doesn’t work. 

That being said, I should note that South Korea, like the United States, is a deeply polarized and divided society in which the opposing polls have almost equal weight.  The current policy toward North Korea is the consequence of two successive presidential elections that were decided by razor-thin margins.  A different and perhaps more pragmatic approach might take place if there was a different outcome in the next presidential election in South Korea, which is scheduled for December 2007.

Jim Luciere:  I’m Jim Luciere [phonetic].  There seems to be a consensus on the panel that diplomacy will not be able to get the result that we desire in Iran, particularly the kind of diplomacy that the State Department is capable of.  Also, Gary Schmitt pointed out that containment is not really a viable option.  We’ve just heard that military action is just kicking the can down the road.  What is the option?  What about all these various factions within the country – the conflicts between the different parts of the government and the military?  Is there some hope that one of these factions might emerge and dislodge this policy?

Danielle Pletka:  I think some of my other colleagues might like to answer, and I’m just going to answer you very briefly.  One of the biggest problems that we have discovered in the modern world is that it is really not the weapons that people – it’s the governments that have them.  That’s why you see a divergence of attitude on the question of India’s nuclear program, which the United States has embraced and pledged to support and Iran’s nuclear program. 

At the end of the day, while getting there certainly is no easy thing, the only real full solution to this problem in both North Korea and Iran is to have a different government in place – not just a different government but a different kind of government.

 How to get there is a very nuanced, difficult, debatable question, but as I think Gary outlined correctly, in Iran there is a strong basis to begin to think about that, because regularly polled, 70 percent of the population is extraordinarily hostile, not just to the people in their government but to their form of government.  That is something that the United States should work with.  If we had started working on that in 1979 rather than in March or April of this year, perhaps we would be further down that road.

Michael Connell:  I would agree with most of what Danielle said.  I would point out, however, that opposition to the government in Iran does not necessarily mean support for, say, U.S. military intervention or something like that.  I’ve met lots of Iranians in Iran who would say, yes, we love Americans; we want you back.  But they would actually draw a distinction between the government and Americans.  There tends to be a general paranoia among Iranians of conspiracy theory. 

This is true across the Middle East but particularly in Iran.  I think we have to be careful how we proceed if we were to support opposition groups.  We have to stand off policy perhaps offering monetary support, but military intervention to support these troops to be there is a problem.  Also, there’s a factor that the opposition in Iran is horribly fragmented and disunited, so there is really no one group.  It’s not like Afghanistan where you have the Northern Alliance you could back.  In Iran there really isn’t a unified opposition in any stretch of the imagination. 

As far as groups within the system who oppose the nuclear program, I would point out that even the reformers under Khatami, the program proceeded at pace without their input.  If we were to rely on another reformist coming to power, perhaps Ahmadinejad’s policies will fail on the economic side.  It doesn’t necessarily mean that there is going to be a chance on the nuclear program.

Michael Rubin:  Just a quick joke from the latter years of the Khatami administration about how an Iranian woman was getting married.  On her wedding night, she told her husband, “I should have told you this before, but this is actually my second marriage.”  Her husband says, “What?”  She says, “No, no, no, don’t worry.  I’m still a virgin.”  The husband says, “How can that be?”  She says, “Well, my first husband was like Mohammed Khatami.  He just kept promising to do it, promising to do it, promising to do it, and 8 years later, absolutely nothing.” 

The point of this is that it is important when analyzing Iran not to confuse – sorry, I’m going to be talked to later – [laughter] the Iranian people with just the reformers.  Too often I’ve seen in some of the major U.S. newspapers comments that U.S. aid to civil society groups and so forth always backfires according to this person who is a reformer. 

The reformers in Iran are an important political class, but they are not necessarily representative of all the Iranian people, just like in the Soviet Union you had communists, you had reformed communists, and you have anti-communists.  You have some of them same situations.  I would agree with many of the panelists in saying we shouldn’t be supporting any particular political group.  The way I would always envision it when supporting civil society when pursuing something like the Gdansk model is the CIA can spend billions trying to figure out in advance, for example in the case of China, who the name of that guy was that in Tiananmen Square stood in front of that line of tanks.  But what’s important is not to know in advance the guy’s name but to create a template where people are willing to agitate for their own rights by themselves, much as they did in Ukraine, much as they did before in Poland, Hungary, and Eastern Europe, in Georgia and Lebanon.  That’s the type of thing. 

What I would argue in direct response to your question, as in Gdansk there is a whole issue of independent labor movements.  There’s the whole issue of independent civil society, and I stress “independent” because what Iran has done, which is similar to what Egypt has done, Bahrain has done, and other regional countries have done, is decided to adopt the rhetoric of democratization, the rhetoric of civil society, but insist on licensing of specific groups, and it’s a charade that both Washington and Brussels should see through.

Frederick Kagan:  I just want to add one quick point to that, which is, you want to be careful in these scenarios as you think forward into the future not to hold things constant that could be changing.  The fact that a lot of Iranians today support the nuclear program does not mean that they will continue to support the nuclear program if the government falls, if there is a major change, and if we and the international community have made it plain that there will be a major price that Iran will have to pay for doing that.  We can really make a mistake of imagining that the bad things in the situation are just constants that we can’t affect. 

The truth is, people don’t tend to support programs atavistically and without any question when it becomes clear that those programs are not in their interest.  One of the reasons I think a lot of Iranians support the nuclear program today is because it looks like it’s very much in their interest, and we’ve made it look like it’s very much in their interest.  We’ve got to change that before there is any hope that any future government is going to change its attitude.

Gentleman in the white shirt?

Will Amatruda:  Will Amatruda, Catholic University.  This question is primarily for Dr. Schmitt and Connell, but anyone else is welcome to comment.  You made the statement that the U.S. government really has nothing to offer Iran that would be realistic for us to offer, and you specifically mentioned withdrawing troops from the Middle East, backing off support for Israel.  What about the issue, first, of the development of Iranian energy resources?  Certainly the private sector in this country has the capital and technology to do that better than anyone else. 

Second, much has been written about the energy resources of the Caspian Sea area and how remote they are and how you have to build pipelines every which way and the strategic factors involved with that.  Usually what’s not said is of course that a pipeline through Iran would actually be the shortest to the world market.  Finally, there is the issue of offering nuclear fuel at below-market prices that, for instance, Graham Allison has written about in his book on nuclear terrorism.  I’m not necessarily advocating these, but it seems that our bag of chips is not entirely empty.  Would you care to comment?

Michael Connell:  A short comment on that:  I think there are definitely things that Iran would love to see, particularly in developing its energy sector.  Interesting point, I think that Iran is looking increasingly toward the East to substitute the U.S.  There has been a lot of talk in Iranian foreign policy circles about looking towards China and looking towards Russia to fill in the gap that it cannot get from Europe somewhat and definitely from the U.S. 

Now I think that the U.S. could fill these areas and I think the Iranians would be happy about that.  I don’t think it necessarily means that they would abandon their nuclear program over the issue.  They might even agree to this and agree to a rigorous inspection regime, but still hide development on the nuclear program like North Korea did.  We offered reactors to North Korea, so I don’t necessarily if it would buy what we want on the issue.  It might buy better relations with Iran.

Michael Rubin:  Just a very quick response to that.  In many ways, and you’ve voiced several good ideas, but the biggest impediment to Iran’s economic development is the structure of Iran’s own economy, corruption, and so forth – the interference of the Bunyas, the revolutionary foundations.  It’s not just a matter of getting Western companies in; it’s a matter of the Iranian government being able to basically abide by its own agreements and so forth.  You will notice two things. 

First of all, with oil at $72/barrel and with Iran reaping a windfall in profits, as well as the tripling of Iranian e-trade between 2000 and 2005, it had very little impact on modernizing Iran’s economy and several industries within.  That’s not the outside world’s fault; that’s the Iranian leadership’s fault. 

There is also in general a big difference between deals that are made and the implementation of those deals.  It’s very important to look at Iran on Iran’s own terms rather than what often happens in Foggy Bottom is looking at it as a template to figure out some magic formula and not seeing all the variables that exist within the Iranian system itself.

Gary Schmitt:  Two points.  I don’t think whatever we on the economic front is going to solve their security dilemma.  I think they think they have a real security dilemma and in a certain way they do because of their own policies.  We can’t solve that by having them be given goodies because fundamentally that won’t solve that problem. 

The second thing is to revert back to the North Korean example.  We’ve tried that with these kinds of regimes and instead of North Korea collapsing of its own weight economically, we’ve propped it up and it has become a more dangerous regime, not a less dangerous regime.  Promises of trying to help Iran’s energy sector A) doesn’t buy you moving them away from the nuclear program and B) in fact will present us with a regime that’s going to be more lasting, not less.

Frederick Kagan:  Remember the old joke about what makes an honest politician?  He stays bought.  It’s a major problem with dealing with regimes like this.  We can make all sorts of concessions.  We can give all sorts of things, but unless one of two things happens, it’s not going to move us forward.  Either we have to be able to combine the concessions with a sufficient pain on the regime to persuade them that it is worthwhile adhering to any deals that they make, or you have to have a fundamental change in the way the regime interacts with the world.

This regime has been an extremely irresponsible regime.  It has not been a decent member of the international community.  It is violating the norms of the international community in a wide variety of areas.  It is very difficult to negotiate with such a regime with any degree of confidence.  I think the point Gary made about containment is valid, and I would add to it. 

We can talk about whether the Soviet Union was a responsible member of the international community, but they were an extremely conservative, cautious, risk-averse regime.  Throughout the Soviet Union’s existence, every time it was faced with anything that might pose a fundamental challenge, even to its primacy let alone to its survival, the Soviet shied away.  The one leader who took a different course, Khrushchev, was punished accordingly.  They took him out precisely because he had run the risk and failed. 

The Iranian regime does not seem to be functioning in that way.  This does not seem to be remotely as conservative and cautious a regime.  This is a regime that is embracing a tremendous amount of risk for what it sees as a high payoff.  Containment policies don’t tend to work, in my opinion, against regimes like that. 

Fortunately, I can end the panel here without telling you what I think I should do, because I don’t have any bright ideas either for solving this problem neatly.  But I think it is tremendously that we continue to discuss it, recognize its gravity, recognize the need to find a real solution and not just put a happy face over this area as we have done so often before. 

With that, I thank you very much for coming.

[End of transcript.]