Mazzuca: Should we talk to Iran? | VailDaily.com
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Mazzuca: Should we talk to Iran?

By now most of us have made up our minds regarding George Bush’s comments to the Israeli Knesset and the Democratic response. So instead of belaboring the issue, I thought it worthwhile to look at the substance of the matter rather than the politics. And a good place to start is to acknowledge the fact that the Bush administration has been engaged in back-channel negotiations with Iran on a variety of topics since October 2003.

In one instance the Iranians provided the CIA with much needed intelligence about al-Qaida; in another, we sent a humanitarian mission to Teheran after the 2004 earthquake in the city of Bam, so it’s patently disingenuous to imply there’s no communication between the states. Consequently, the notion that the administration is not “talking” with Iran is unfounded.

In the high-stakes game of geopolitics there are times when political dialogue isn’t meant for public consumption. Let’s not forget that Richard Nixon’s historic face-to-face meeting with Mao Tse-Tung in 1972 began with back-channel negotiations, followed by Secretary of State Henry Kissinger working with his Chinese counterparts to set the preconditions for the meeting; then and only then, could meaningful dialogue between the two heads of state take place.

To provide context for the Iranian issue it’s necessary to understand the economic dynamic within that Persian nation. The Iranian oil sector accounts for 85 percent of Iran’s total exports. But at the same time, Iran is the world’s second-largest importer of gasoline due to its out-dated and faltering refining sector. Last year alone, Iran imported nearly 3 billion gallons of gasoline at a cost of $5 billion to meet public demand. Iran is also a major food importer.

However, gasoline costs 35 cents a gallon in Teheran because it is subsidized from public funds, as are most staples. In essence, Iran receives billions in petro-dollars from oil exports, then turns around and spends most of those billions on subsidies to maintain domestic stability.

Meanwhile, theocracies aren’t very efficient. Under the Shah, Iran pumped six million barrels of oil a day; today that figure has shrunk to less than four million. In addition, because the massive subsidies are artificially keeping domestic energy prices low, Iranians are using more oil. The combination of continued reduced output and increased usage will result in a halving their oil exports by 2011. Of even more concern to the mullahs is the fact that if Iran continues to reduce its oil exports at the current rate, those exports could be entirely eliminated by 2014. This then, is the nightmare scenario for the regime ” if Iran cannot export oil, it cannot pay for social peace.

Exacerbating the situation for the mullahs is the fact that Iran cannot get at much of its oil reserves (second largest in the world) because it lacks the foreign investment and technology necessary to increase, or even to sustain its petroleum output. And without food and gas subsidies financed by oil revenues, the Iranian people, (half of whom are under 30 and non-Persian minorities) will become increasingly restive.

Many younger Iranians are already complaining that Ahmadinejad’s policies have led to global isolation, stymied economic growth and little upward social mobility. Meanwhile, opinion surveys indicate that while most Iranians support the regime’s nuclear aspirations, they are not willing to pay a price of international isolation, rising food prices and inflation.

The Bush administration understands this, as do European leaders Angela Merkel, Nicolas Sarkozy and Gordon Brown. And it’s this economic dynamic that the administration is trying to exploit. The most effective way we can exert leverage on this rogue state is by furthering their citizens’ sense of isolation, continuing the U.N.’s economic sanctions, and disinvesting in Iran’s energy, technology and banking sectors.

To paraphrase former Clinton administration advisor Dick Morris, it’s important to understand that Iran has an incredibly delicate social stability index to manage. And the way they manage it is through a combination of military force and heavy state subsidies. If the regime is already having trouble sustaining its oil exports, and its economic problems continue to worsen, that nation runs the risk of losing its ability to function as a state, much less an aggressive one.

The question now becomes whether it is better to meet with Ahmadinejad without preconditions, the operative words being “without preconditions,” thus elevating him to the status of world statesman in the hope that something good will come out of it; or is it better to maintain the sanctions, continue disinvesting and allow the citizenry’s feelings of international isolation to fester?

The fact that millions of Iranians already feel Ahmadinejad has caused their nation to be viewed as a pariah within the international community should be used to our benefit, because a state with a failing economy, rising prices, and a restive population isn’t going to remain a viable government for long.

We don’t need to bring down the regime; the people will.

Quote of the day: “Try? There is no try. There is only do or not do.”-Yoda

Butch Mazzuca is a business consultant and writes a column for the Vail Daily. He can be reached at bmazz68@earthlink.net..


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