Learning From Past Blunders

By Paul Barratt
The Age, 09/07/08

(Paul Barratt is a former Australian secretary of the Department of Defence and former trade negotiator. He visited Tehran in 1978 to discuss the conditions for supply of Australian uranium to the Shah's regime.)

AS WE become accustomed to higher petrol prices resulting from Israeli threats to attack Iran, it is timely to ask whether the West's current approach to Iran really serves our interests. My critique centres on three points: the outrage about Iran's assumed nuclear intentions ignores the fact that the major powers have degraded the nuclear Non-Proliferation Treaty; the efforts to bluster Iran into dropping its indigenous program are unrealistic and doomed to failure; and the costs associated with any military strike would be completely unacceptable-to all parties.

The NPT was a logical corollary of the Eisenhower-era Atoms for Peace program. The central bargain was that if nations forswore the nuclear option, the US and other nuclear powers would spread the benefits of the peaceful uses of nuclear technology throughout the world, and would themselves undertake nuclear disarmament. NPT members (Iran is one) have a right to peaceful nuclear programs, and the nuclear weapon states have an obligation to disarm.

Aside from the fact that the nuclear arms race accelerated and enthusiasm for assisting peaceful nuclear programs evaporated, the West-and the US in particular-has been highly selective in its outrage about nuclear proliferation. The force of the proposition that any proliferation whatsoever is unacceptable has been undermined by an attitude that who was proliferating mattered more than the proliferation itself.

Iran has historical, commercial and energy security reasons to want as complete a commercial fuel cycle as it can achieve. The 1980s' war against Iraq left Iran obsessed with self-reliance. Veterans of that war believe that Iran's interests cannot be safeguarded by adhering to international treaties or appealing to Western public opinion. In this, it mirrors Israel's position.

The commercial backdrop is that in the 1970s Iran lent $US1 billion to the French Atomic Energy Commission to build its Eurodif enrichment facility, and acquired a 10% indirect interest in Eurodif-a stake that still exists. It paid another $US180 million for future enrichment services.

After the 1979 Islamic Revolution, the Khomeini regime cancelled the Shah's nuclear program and sought a refund of this investment. There followed a decade of bitter litigation, from which Iran was reimbursed $US1.6 billion for its 1974 loan plus interest. It remains an indirect shareholder in Eurodif, but under a 1991 settlement has no access to technology and no right to enriched uranium. It retained its right to dividends, but financial sanctions prevent it from receiving these dividends.

This experience left Tehran deeply distrustful of any proposal that it rely on others for a critical component of its nuclear electricity program.

Regarding energy security, the suggestion that Iran rely on Russia for enrichment services looks profoundly unattractive considering Russia's intransigence in turning off the gas supply to Ukraine, a move that left the EU anxious about reliance on Russian energy.

It may well be that Iran is also establishing for itself a nuclear weapons option, an intent the Shah expressed in 1974 but subsequently repudiated. A better way to persuade Iran to forgo the option would be to offer security rewards for acceptance of full-scope safeguards, and for the US to warn Israel that any unilateral attack on Iran would force the US to reconsider its bilateral treaty arrangements.

Despite its shrill rhetoric, Iran does not look like a country bent on war. As a proportion of GDP, it has the second-lowest military spending in the Middle East-less than half Turkey's, about one-third of Israel's.

Anyone with any knowledge of Iran's history and culture will know that it will not be bribed or bullied into doing what the West wants. It has no reason to trust Western promises, and having endured the suffering of the Iran-Iraq War, is unlikely to buckle under any pressure, military or economic, that the West would be prepared to impose.

Regarding nuclear proliferation, no self-respecting country would accept that its nuclear program is a problem because that state itself is a problem-that an Indian, Israeli or Pakistani nuclear capability is acceptable because they are the right kind of people, but an Iranian capability would be unacceptable because of the nature of Iran. The only way to establish a manageable relationship with Tehran is to understand its world view, to recognise its legitimate interests, and deal with problematic issues on a basis of equality and mutual respect.

Iran's demonisation by the Bush Administration only serves to undermine Iranian reformers, including pragmatic conservatives who see value for Iran in a more rational relationship with the US. And the constant brandishing of military options is counterproductive-Iran has too many means of retaliation. It will be an indispensable partner in any Iraq settlement.

A strategic approach to the issue would see a more dispassionate and mature attitude to Iran, dealing with it as an important power in a critical region, one that is here to stay and is to be taken seriously. To those who regard such an approach as "idealistic", I would observe that we have adopted the confrontationist approach for 29 years, and ask when it might begin working?