Reckoning With Iran

Keywords: George Friedman; Iran; Iraq; George W. Bush; Hezbollah; Shia; Sunnis; oil; invasion; oil bourse; Euros; US dollar; military superiority.

Boy oboy, that George W. Bush really walked into Iran’s trap! And, as bad as his predicament looks now, it’s probably going to get worse. Ours too, as a result.

George Friedman, that astute fellow at Stratfor, came out today with a pretty complex analysis of the Iranian’s place in the Middle Eastern morass. He starts with the miscalculations of the current Bush administration about invading Iraq. Friedman says the Bushies expected to be embraced by the Iraqi Shiiteswhen they invaded, but when the event happened, the Shiites wanted too much. They weren’t satisfied with a high position in the new regime, but wanted to translate the US victory over Saddam Hussein into a real Shiite government. The US could hardly countenance such a lop-sided outcome, wanting instead to position itself comfortably midway between the Shia and Sunnis. As recently as six months ago, there was some prospect that Bush’s political hopes for Iraq might come true. The Sunnis seemed to be acquiescing to a government that would be dominated by the Shia.

But this solution came apart when the Shia of the Basra area began fighting amongst themselves as well as with the Sunnis. Some prominent Iraqi Shia fear the influence of Iran and dislike the idea of a civil war, which might end by breaking Iraq up into three states. Yet the fighting at present is less a civil war, Friedman says, than a free-for-all brawl involving many diverse parties. And to understand the whole Middle Eastern dynamic, you have to look behind the scenes at the aspirations of Iran’s current regime, which is pulling the winning strings.

Tehran did not want to settle for a neutral Iraq along the lines of the newly elected, relatively democraticgovernment, for they had a game plan that might win more – much more. They began by encouraging Iraqi Shiite parties to fight against the Sunnis. At the same time, they prepared Hezbollah for a conflict. (Friedman doesn’t exactly say which side started the recent conflict, but he does say that Hezbollah was ready for it while Israel was not.) When Hezbollah in effect won that war, suddenly

“the Iranians held the whip hand in Iraq, had dealt Israel a psychological blow, had repositioned themselves in the Muslim world and had generally redefined the dynamics of the region. Moreover, they had moved to the threshold of redefining the geopolitics in the Persian Gulf.”

Iran now has the most powerful military in the Gulf region (apart from the US), and this is not a result of their presumed development of nuclear capability. Iran’s ground forces are more “numerous and more capable than all the forces of the Arabian Peninsula combined, asserts Friedman. And the success of Hezbollah may embolden the Shia throughout the region. Their intensified assertiveness might result in the break-up of Iraq into three parts, which would give the Shia control over the Basra oil fields and open the door for Iran to Kuwaitand Saudi Arabia— at least if the US forces were to leave. Indeed, they might seize the oil throughout the whole region. Friedman calls this the reason why Bush cannot withdraw his troops, however much the US voters may demand it. Ultimately, of course, the Americans’ “Vietnam syndrome” mentality may force that outcome, much to the benefit of Iran.

Hence the Iranians have every motive for keeping the chaos in Iraq going. Friedman maintains that the options now open to Bush are reduced to these four:

“1. Reach a political accommodation that cedes the status of regional hegemon to Iran, and withdraw from Iraq.

“2. Withdraw forces from Iraq and maintain a presence in Kuwait and Saudi Arabia – something the Saudis would hate but would have little choice about – while remembering that an American military presence is highly offensive to many Muslims and was a significant factor in the rise of al Qaeda.

“3. Halt counterinsurgency operations in Iraq and redeploy its forces in the south (west of Kuwait), to block any Iranian moves in the region.

“4. Assume that Iran relies solely on its psychological pre-eminence to force a regional realignment and, thus, use Sunni proxies such as Saudi Arabia and Kuwait in attempts to outmaneuver Tehran.”

Obviously, none of these options are attractive, which explains Bush’s intransigence, so dangerous to the Republican candidates. There are no good choices. Iran is ahead.

However one may feel about this state of affairs, the real prospects are even more threatening to the US than Friedman noted. His analysis left out of account the whole business about Iran’s nuclear capability (which is analyzed to death everywhere else these days) and an even more serious prospect: Iran’s forthcoming opening of an oil bourse that would trade in Euros, not dollars.

The US economy has been propped up for years by two main factors: the reluctance of China to cash the chips it has amassed in the US economy. The US is deeply in debt, especially to China. In part this unsustainable situation has been sustained because the world’s economy depends on the stability of the only real world-wide currency, the US dollar. If its value crashes, it will bring down not only the US but potentially the whole global economy as well.

But Iran, still a top producer of oil, is planning to open an oil exchange on the island of Kish, where the trading will be carried on in euros, not dollars. This bourse was supposed to open earlier this year but was postponed until September. If it does open, it may not amount to much – but then again, it may. Ultimately, the shift from dollars to euros will weaken the value of the dollar, with consequences that may not please many Canadians – or others in the Western world. Coupled with the aforementioned geopolitical strength of Iran, it may be an especially threatening development to the Bush administration. It may be recalled that the US attack against Iraq was launched shortly after — and possibly to forestall — Saddam Hussein announced plans to trade Iraq’s oil in Euros. If this happens, even Bush’s most ardent enemies should hope that it happens in a gradual way, like releasing air from a balloon slowly instead of popping it.