The New Geopolitics of Energy
POLICY TOWARD IRAN AND IRAQ
The Persian Gulf is one of the few regions whose importance to the United States is obvious. The flow of Gulf oil will continue to be crucial to the economic well-being of the industrialized world for the foreseeable future; developments in the Gulf will have a critical impact on issues ranging from Arab-Israeli relations and religious extremism to terrorism and nuclear nonproliferation. Every president since Richard Nixon has recognized that ensuring Persian Gulf security and stability is a vital U.S. interest.
The Clinton administration's strategy for achieving this goal during the president's first term was its attempted "dual containment" of Iraq and Iran. This is more a slogan than a strategy, however, and the policy may not be sustainable for much longer. In trying to isolate both of the Gulf's regional powers, the policy lacks strategic viability and carries a high financial and diplomatic cost. Saddam Hussein is still in power six years after his defeat at the hands of a multinational coalition, and the international consensus on continuing the containment of Iraq is fraying. The strident U.S. campaign to isolate Iran, in turn, drives Iran and Russia together and the United States and its Group of Seven allies apart. Finally, the imposing U.S. military presence that helps protect the members of the Gulf Cooperation Council (GCC) from external threats is being exploited by hostile elements to take advantage of internal social, political, and economic problems. The advent of the Clinton administration's second term, together with the imminent inauguration of a new administration in Iran following this May's elections, provides an opportunity to review U.S. policies toward the Gulf and consider whether midcourse corrections could improve the situation.
The first step in such a reevaluation is to view the problems in the Gulf clearly and objectively. In Iraq, the United States confronts a police state led by an erratic tyrant whose limited but potentially serious capacity for regional action is currently subject to constraint. In Iran, the United States confronts a country with potentially considerable military and economic capabilities and an imperial tradition, which occupies a crucial position both for the Gulf and for future relations between the West and Central Asia. If Iraq poses a clear and relatively simple immediate threat, Iran represents a geopolitical challenge of far greater magnitude and complexity.
Consultation with leaders of some Persian Gulf countries has made it plain to us that they do not share an identical view of the threat posed by Iraq and Iran. Hence no U.S. Gulf policy will satisfy everyone in every respect. That makes it all the more essential that any adjustment in U.S. policy toward Iraq and Iran be preceded by extensive consultations with friendly Gulf leaders. Inadequate dialogue and unilateral action have caused some insecurity in the region and weakened trust in U.S. steadfastness.
When the British withdrew from the Persian Gulf in 1971, the United States became the principal foreign power in the region. For almost three decades it has pursued the goal of preserving regional stability, using a variety of means to that end, particularly regarding the northern Gulf powers of Iraq and Iran.
At first the United States relied on Iran as its chief regional proxy, supporting the shah's regime in the hope that it would be a source of stability. This policy collapsed in 1979 with the Iranian Revolution, when Iran switched from staunch ally to implacable foe. During the 1980s, the United States strove to maintain a de facto balance of power between Iraq and Iran so that neither would be able to achieve a regional hegemony that might threaten American interests. The United States provided some help to Iraq during the Iran-Iraq War of 1980-88, moved in other ways to counter the spread of Iranian-backed Islamic militancy, and provided -- with Israeli encouragement -- some help to Iran, chiefly in the context of seeking the release of American hostages. This era ended with Iraq invading Kuwait in 1990 and the United States leading an international coalition to war to restore Kuwaiti sovereignty and defeat Iraq's bid for dominance.
The Clinton administration came into office in 1993 facing the challenge of ensuring Gulf stability in a new international and regional environment. The disappearance of the Soviet Union gave the United States unprecedented freedom of action, while the Madrid Conference, sponsored by the Bush administration, inaugurated a fundamentally new phase of the Middle East peace process, offering hope that the Arab-Israeli conflict might eventually prove solvable. The Clinton team's initial Middle East policy had two aspects: continued support for the peace process and dual containment of Iraq and Iran. These strands were seen as reinforcing each other: keeping both Iraq and Iran on the sidelines of regional politics, the administration argued, would protect Saudi Arabia and the smaller Gulf monarchies and enable Israel and the moderate Arab states to move toward peace, while the burgeoning Arab-Israeli détente would demonstrate that the attitudes of the "rejectionist front" were costly and obsolete.
Dual containment was envisaged not as a long-term solution to the problems of Gulf stability but as a way of temporarily isolating the two chief opponents of the American-sponsored regional order. Regarding Iraq, the policy involved maintaining the full-scale international economic sanctions and military containment the administration had inherited, including a no-fly zone in southern Iraq and a protected Kurdish enclave in the north. The Clinton administration stated that it merely sought Iraqi compliance with the post-Gulf War U.N. Security Council resolutions, particularly those mandating the termination of Iraq's weapons of mass destruction programs. In practice, the administration made it clear that it had no intention of dealing with Saddam Hussein's regime, and seemed content, for lack of a better alternative, to let Iraq stew indefinitely. The administration responded to Iraqi provocations, but saw little opportunity to oust Saddam except at great cost in blood and treasure.
The dual containment policy initially involved mobilizing international political opposition against Iran, together with limited unilateral economic sanctions. The Clinton administration asserted that it was not trying to change the Iranian regime per se but rather its behavior, particularly its quest for nuclear weapons, its support for terrorism and subversion in the region, and its opposition to the peace process. By early 1995, however, the U.S. attitude toward Iran began to harden. The Iranian behavior at issue had continued. But the real impetus for a shift seems to have come out of American domestic politics, in particular the administration's desire to head off a challenge on Iran policy mounted by an increasingly bellicose Republican Congress.
Congressional initiatives were designed to increase pressure on so-called rogue states such as Iran and Libya, to the point of erecting secondary boycotts against all parties doing business with them, including American allies. Hoping to deflate support for such action, in spring 1995 President Clinton announced (with an eye on domestic politics at the World Jewish Congress) that he was instituting a complete economic embargo against Iran. The move achieved its intended domestic effects in the United States, but only temporarily. Late in 1995 pressure from Congressional Republicans, led by House Speaker Newt Gingrich (R-Ga.), called for covert action against the Iranian regime, and last year Congress passed the Iran and Libya Sanctions Act, which the president signed. This legislation mandates U.S. sanctions against any foreign firm that invests more than $40 million in a given year in the development of energy resources in Iran or Libya. Not surprisingly, it has been strenuously opposed by America's allies as an unjustifiable attempt to coerce them into following a hard-line policy.
At the start of President Clinton's second term, therefore, U.S. Persian Gulf policy is at an impasse. Saddam Hussein remains in power in Iraq and has even regained some control over the Kurdish areas of the north, while the Gulf War coalition that defeated him is eroding. Toughened U.S. sanctions against Iran, although doing some damage to the Iranian economy, have produced no major achievements and increasingly isolate America rather than their target. The continued willingness and ability of some members of the GCC and others to help implement these policies is open to question. What, then, is to be done?
BEYOND AGGRESSIVE TYRANNY
The continued rule of Saddam Hussein poses a danger to the stability and security of the region. He has threatened his neighbors while doing everything possible to acquire weapons of mass destruction in direct violation of international law, even during the last several years, when subject to the most restrictive supervision in the history of international arms control. Although there are real costs involved in maintaining Iraq's pariah status, it is difficult to see how any policy in the military sphere other than continued containment can be adopted so long as Saddam remains in power. The United States should be prepared to maintain Iraq's military containment unilaterally should the will of others falter. Similarly, while there are costs to keeping Iraq's oil off the world market, retaining the economic embargo in general is necessary, because with unrestricted access to large profits Saddam would likely embark on further military development.
The United States may, however, need to consider a revised approach to the political and economic aspects of Iraq's containment, because not all of them can be implemented unilaterally. Furthermore, they have unfortunate consequences on the humanitarian situation in Iraq, which especially concerns some members of the GCC. While America's basic goal should continue to be keeping Saddam's Iraq in a straitjacket, the United States may need to adjust the fit to ensure the straitjacket holds. There should thus be five corollaries to the basic containment policy, not all of which the Clinton administration has adequately stressed.
First, the international community must credibly demonstrate its concern for the Iraqi people even if their own ruler does not. Sanctions against Iraq continue to be necessary, but the United States and others should try to mitigate the sanctions' effects on ordinary Iraqis. The offer to permit Iraq to sell some oil and use the proceeds to alleviate its humanitarian problems has been on the table since the end of the Gulf War and remains a good idea. Saddam's recent willingness to accept stringent conditions on the disbursement of the funds from such oil sales has led to the deal enshrined in U.N. Security Council Resolution 986, which was designed to address this problem. If it becomes necessary or appropriate to ease Iraq's economic containment, the sanctions should be suspended rather than lifted completely, so that the international community can easily reimpose them should unacceptable Iraqi behavior resume.
Second, the United States should reassure Iraqis and their neighbors that while America continues to seek political relief for the Iraqi people, it is committed to the integrity of the Iraqi state. The ultimate goal of U.S. policy should be an Iraq that retains its existing borders and that at some point after Saddam has left the scene can take its rightful place as a legitimate member of the international community. Any doubts about this should be dispelled.
Third, the United States should consult more closely with Turkey on areas of common interest. Turkey's continued support for U.S. policy in northern Iraq is crucial, and to secure it Washington should confer on how best to stabilize the situation in Iraqi Kurdistan. If the Turks are not comfortable with the status quo, including the arrangements for Operation Northern Watch, the United States should discuss with them what might be done to address their concerns.
Fourth, the United States should send a clear signal that it is prepared to work with a post-Saddam Iraqi regime. That such a regime be benign and democratic is desirable but unlikely, so these factors should not be prerequisites for Iraq's reintegration into regional politics. American officials should state that they would be prepared to deal with any Iraqi regime -- including one that emerged from within the military or the Baath Party -- that is ready to fulfill Iraq's basic international obligations. To start relations from as clean a slate as possible, the United States should consult with interested parties about whether a post-Saddam regime should be offered relief from Iraq's enormous debts or Gulf War reparations. Such a gesture would be a sensible way to deal with the problems of Iraqi reconstruction, and it might even help induce aspiring successors to step forward.
Fifth, if and when Saddam's regime crosses clearly drawn lines of appropriate behavior, particularly with regard to its weapons of mass destruction programs and its threats to other countries, the United States should punish it severely and effectively. For several years the United States has responded to Iraqi provocations with more bluster than action; the precedent of Operation Desert Storm shows the reverse is a better strategy. With his behavior incurring militarily insignificant penalties, Saddam may have concluded that he can continue to maneuver with relative impunity to heighten the contradictions in the allied coalition. This cat-and-mouse game should stop. There must be no doubt in anyone's mind that should Saddam try to break his containment through force, he will be punished. Accompanying such resolve must be a serious diplomatic effort to nurse the Gulf War coalition of European and Arab countries and Japan back to robust health. Forceful American action can and should build on multilateral consultation and a sense of purpose and necessity; it should not be conditioned on allied approval, but neither should the United States be perceived as ignoring allies' concerns or taking their support for granted.
BEYOND HOSTILE FANATICISM
Iran's geopolitical importance is greater than Iraq's, and the challenge it represents is more complex. Given the American military presence, Iran does not currently pose a threat of military aggression, but its long-term policies could destabilize the region.
Several areas of Iran's behavior are frequently cited as sources of concern: its conventional military buildup, its opposition to the peace process, its promotion of Islamic militancy, its support of terrorism and subversion, and its quest for nuclear weapons. Terrorism and nuclear weapons, especially the latter, directly threaten U.S. national interests. Both issues, however, can be addressed by specific policy instruments, rather than the current crude and counterproductive attempt to cordon off the entire country. A more nuanced approach could yield greater benefits at lower cost.
Concerned about traditional military threats to regional security, some observers have worried about increases in Iran's conventional military capabilities. So far, there is little reason to believe that Iran's conventional military buildup will pose a direct challenge to U.S. regional supremacy. And for years to come, the United States will retain the capability to rebuff any such challenge.
Continued progress in the Middle East peace process is indeed an important American interest. Still, opposition to that process by another country should not be grounds for international excommunication. Israel itself has found it useful to have dealings with Iran on various occasions, most recently with the help of German mediation, and the United States should not feel constrained from doing the same when its interests so dictate.
Although Iran has often used religion as a cloak for subversion and terrorism, the United States must be careful not to demonize Islam, worrying simplistically about a "green menace" comparable to the old red one. The Iranian regime, unable to govern effectively, has lost appeal both at home and abroad. Sectarian, ethnic, and geographic cleavages within the Islamic world militate against the rise of a unified, Iranian-led threat.
Iran's support of violence and subversion abroad should, however, concern the United States. Iran has provided backing for terrorists and fomented unrest in other countries, and the international community should continue to harshly criticize Iran for these acts. Direct attacks on American citizens would constitute a special provocation and call for clear retaliatory measures. As a response to terrorism in general, however, containment is not a solution.
The single most worrisome aspect of Iran's behavior is its apparent quest for a nuclear weapons capability. The United States should respond by pushing the controls and inspection provisions of the existing nuclear nonproliferation regime to their limits and continuing to make counter-proliferation efforts a top priority. It should focus more narrowly on the nuclear threat as opposed to other issues, which might strengthen its case for controls and achieve greater success in stemming the flow of support for the Iranian nuclear weapons program. Finally, it should explore the notion of using carrots in addition to sticks in getting Iran to shift course.
There seems little justification for the treatment the United States currently accords Iran because of its nuclear program. Instead of simply punishing the country, the United States should consider whether a tradeoff might be feasible in return for Iran's acceptance of restrictions on its civilian nuclear program or intrusive inspections by the International Atomic Energy Agency of its nuclear facilities. Since the economic rationale for nuclear power has diminished in recent years, it may be possible to get Iran to limit its civilian nuclear energy program enough to give outsiders reasonable confidence that further military progress is not being made. Such an outcome, possibly arranged with Chinese or Russian support, would leave both the United States and Iran better off and significantly ease tensions in the region.
The policy of unilateral U.S. sanctions against Iran has been ineffectual, and the attempt to coerce others into following America's lead has been a mistake. Extraterritorial bullying has generated needless friction between the United States and its chief allies and threatened the international free trade order that America has promoted for so many decades. To repair the damage and avoid further self-inflicted wounds, the United States should sit down with the Europeans, the Japanese, and its Gulf allies and hash out what each other's interests are, what policies make sense in trying to protect those interests, and how policy disagreements should be handled. Only such high-level consultation can yield multilateral policies toward Iran that stand a good chance of achieving their goals and being sustainable over the long term.
One negative consequence of current policy is the damage inflicted on America's interest in gaining greater access to the energy sources of Central Asia. An independent and economically accessible Central Asia is in the interests of both the United States and Iran. The United States should do nothing to preclude Central Asia's eventual emergence, nor stand in the way of deals that might facilitate it. The United States should therefore refrain from automatically opposing the construction of gas and oil pipelines across Iran. Here, as with policy toward Iraq, the United States must consult more often with its Turkish ally and fashion a regional policy that makes sense on the ground.
Another area of common interest is the resuscitation of U.S.-Iranian commercial relations. To this end, Washington should be open-minded regarding the resumption of activity by American oil companies in Iran. In 1995, for example, the U.S. government forced the cancellation of a $1 billion deal between Iran and Conoco; this served no one's interests except those of the French firm Total. Future commercial deals should be evaluated on an individual basis and permitted unless they contribute specifically to Iranian behavior the United States opposes.
A NUANCED CONTAINMENT
However one judges its achievements to date, dual containment cannot provide a sustainable basis for U.S. policy in the Persian Gulf. A more nuanced and differentiated approach to the region is in order, one in tune with America's longer-term interests. This new policy would keep Saddam boxed in, but would supplement such resolve with policy modifications to keep the Gulf War coalition united. The new policy would start with the recognition that the United States' current attempt at unilateral isolation of Iran is costly and ineffective and that its implementation, in the words of one recent study, "lacks the support of U.S. allies and is a leaky sieve." The United States should instead consider the possibilities of creative tradeoffs, such as the relaxation of opposition to the Iranian nuclear program in exchange for rigid and comprehensive inspection and control procedures.
This new course would not involve a dramatic policy reversal and is not likely to yield vast benefits in the immediate future. What it would do is enable the United States to sustain its policy and keep options open for the long term. America may have to consider modifying certain aspects of Iraq's economic containment to keep its military straitjacket securely fastened. On the other hand, flexibility would facilitate diplomatic contacts, presuming an Iranian interest in better relations. Absent such statesmanship, it is all too likely that U.S. policy in the Gulf will continue to be driven by domestic political imperatives rather than national interests, with the hard line of recent years making long-term goals increasingly difficult to achieve.
The foundation of America's policy in the Persian Gulf should continue to be a commitment to ensuring the security of its allies and protecting the flow of oil. Few doubt that the United States has the power to sustain this commitment, but some question whether it has the will. In such circumstances, a recommitment by President Clinton to the principles of the Carter Doctrine -- a renewal of U.S. vows to the Gulf -- might be both welcome and appropriate. It is imperative that all parties understand an important strategic reality: the United States is in the Persian Gulf to stay. The security and independence of the region is a vital U.S. interest. Any accommodation with a post-Saddam regime in Iraq or with a less hostile government in Iran must be based on that fact.