A Cascade of Instability

from the Washington Institute for Near East Policy

An Iran on the brink -- or in actual possession -- of nuclear weapons would create multiple problems for Washington. In addition to deterring and containing an emboldened Iran, the Obama administration could face a cascade of destabilizing reactions by other Middle Eastern states. For nearly a year, a special Presidential Task Force of eminent Americans organized by The Washington Institute has examined how the United States can strengthen its policies to prevent, mitigate, or counteract regional instability triggered by Iranian nuclear progress -- including an increase in U.S. leverage to achieve a negotiated resolution.

Preventing a Cascade of Instability: U.S. Engagement to Check Iranian Nuclear Progress

An Iran on the brink of possessing, or actually possessing, nuclear weapons would create a multitude of problems in the Middle East. Not only would the United States have to deter and contain an emboldened Iran, it could also have to forestall a cascade of destabilizing reactions by other states, whether they were to accommodate Iran, attack it, or match its capabilities. Preventing Iran’s acquisition or development of a military nuclear capability is therefore a vital national priority. To that end, the United States should strengthen its policies to prevent, mitigate, or counteract cascading instability resulting from Iranian nuclear progress. It should also strengthen policies to increase U.S. leverage in achieving a negotiated resolution of the nuclear impasse such that Iran does not achieve military nuclear capability. Confronting the Iran nuclear program also offers other opportunities to advance U.S. interests: to demonstrate U.S. commitment to multilateral diplomacy, to deepen U.S. relationships with its Middle East friends, and to strengthen the global nonproliferation regime.

Middle East Stability andIran’s Nuclear Progress: The Problem

Even without testing a nuclear weapon or declaring the ability to do so, Iran’s progress toward nuclear weapons capability is already having a substantial impact on the Middle East. Growing self-confidence among some of the region’s radical forces comes at a time when the United States has struggled to achieve its objectives in Afghanistan, the Arab-Israeli theater, and, until recently, Iraq. Some in the Middle East—both friend and foe—wonder if the U.S. star is waning while Iran’s is waxing. (Whether these perceptions emerge from a sound reading of regional and international politics is a different matter.) Regional perceptions of the value of the United States as a principal ally are being tested. Iran’s nuclear progress despite international opposition
is leading key regional partners to worry about the effectiveness of U.S. leadership and the U.S. conviction, as well as capacity, to deal effectively with the Iranian challenge. They are concerned both that Washington is open to a deal with Tehran disadvantageous to their interests and that the United States and Iran could be headed to a dangerous confrontation.

In this environment, the Obama administration plans to conduct direct but "tough" diplomacy to address Iran’s problematic behavior, especially its nuclear program. Time is short if diplomatic engagement is to have a chance of success. Iran continues to accelerate its production of low-enriched uranium, installing more and more centrifuges that give it the capability to produce high-enriched uranium in a shorter time. With less access by International Atomic Energy Agency (IAEA) inspectors since Iran ceased observing the IAEA Additional Protocol, the international community’s already limited potential to detect Iranian clandestine facilities is declining.

If the international community appears unable to stop Iran’s nuclear progress, Israel may decide to act unilaterally. Whatever Americans may think, Israeli leaders seem convinced that at least for now, they have a military option. However, Israelis see the option fading over the next one to two years, not only because of Iran’s nuclear progress and dispersion of its program but also because improved Iranian air defenses, especially the expected delivery of the S-300 surface-to-air missile system from Russia, are seen by Israel as seriously limiting its military options. Israel therefore may feel compelled to act before the option disappears. If successful, a strike would be publicly condemned but quietly welcomed by some. Success, however, is an uncertain outcome. Even a successful strike might slow Iran only temporarily. And many would see it as both a failure of and a setback for the treaty-based nonproliferation system. The United States itself may pay a high price for an Israeli strike; many will perceive that Washington gave Israel a green light.

In the hands of the Tehran regime, an actual nuclear weapon or the capacity to produce one quickly could profoundly destabilize the region. Given the past behavior of Iranian radicals, Iran on the nuclear brink could exacerbate fears among Gulf Arab states of sabotage and subversion, particularly across the Sunni-Shiite divide, and possible disruption in the flow of oil to world markets. Iran’s threats and actions could push oil prices up and intimidate its Gulf neighbors to bend to its will on issues ranging from border disputes to the presence of third-party military bases throughout the Gulf.

Beyond the Gulf, radical groups in Syria, Lebanon, and Gaza, all allies of Iran, would be emboldened by Iranian nuclear progress. A nuclear Iran might more actively portray itself as the voice of Islam by, for example, questioning the status quo on volatile issues like custodianship of key Muslim shrines or Jerusalem, or portraying itself as a champion of Muslim radicals standing up to pro-Western regimes. Shielded by a nuclear deterrent, Iran might be emboldened to step up its support to terrorist groups. In the worst case, Iran might share its technology and nuclear material with its radical friends.

If Iran "gets away" at low cost with years of safeguards violations and defiance of UN Security Council resolutions, nonproliferation norms likely will further erode across the globe. Other countries may consider taking the same path, especially if Iran’s programs gain legitimacy. If the Nuclear Nonproliferation Treaty (NPT) is seen as fraying, it may be difficult to make progress on supplementary means to shore up the nonproliferation regime. The greater the number of countries with nuclear weapons, the higher the risk that misperception and miscalculation could lead to a nuclear confrontation, with horrible consequences. In the Middle East, those who see themselves as regional powers may want nuclear capabilities matching those in Iran—including enrichment or reprocessing facilities—for both strategic and prestige-related reasons. To be sure, Middle East states would need many years to build an indigenous nuclear infrastructure, but the pursuit of a broad range of nuclear capabilities could be destabilizing by creating the impression that the military nuclearization of the region is inevitable.

Acting on Simultaneous Fronts to Shore Up Regional Stability and Global Nonproliferation

To shore up regional stability, the United States, its Western allies, and its Middle Eastern friends need to act simultaneously on many fronts. Not only will these actions reduce the risk of cascading instability if Iran continues its nuclear progress, but they also offer the best prospect for convincing Iran that its nuclear program is bringing it little strategic advantage at an increasing cost. Vigorous action to reinforce America’s friends and to check threats from Iran gives the international community leverage, and such leverage creates the best environment for successful engagement with Iran. Specific steps the Obama administration should consider include the following:

Factor regional calculations into the definition ofIran strategy. Unintended effects of policies aimed at resolving the standoff with Iran could complicate relations with other Middle East states. Much as they worry about worsening U.S.-Iranian tensions, Israel and the Gulf Cooperation Council (GCC) states also worry that the United States may reach an agreement with Iran that does not adequately take into account their interests. They are concerned that if Washington and Tehran reach a deal on nuclear issues, the United States may ignore other challenges posed by Iran, such as its support for radical groups. The GCC states worry that an agreement between the United States and Iran may herald a return to close U.S.-Iranian ties. They are already prone to accept the view, exacerbated by anti-Shiite prejudice, that America gave Iraq to Iran; some worry that the United States would similarly sacrifice them to an Iranian sphere of influence.

It is important to keep in mind that whatever gains Iran is permitted to preserve in any eventual deal, many states in the region will want to match them, for both prestige- and security-related reasons. Civilian nuclear power plants are a case in point. So long as the United States firmly opposed Iran’s Bushehr facility, no friendly Arab state actively pursued civil nuclear power. But once Washington accepted that Iran could have a nuclear power plant, the United States was in no position to press its friends not to pursue a capability it had agreed Iran could have. Turkey and several Arab states are actively considering the use of nuclear power.

On the basis of this experience, if an agreement is reached legitimizing even limited enrichment on Iranian soil, other countries may well be interested in having the same capabilities, and it could be difficult diplomatically to dissuade them from this pursuit.

U.S. interests in the region are too important not to have strong bilateral relationships. With several key regional states—Turkey, Egypt, and Saudi Arabia—high-level, bilateral strategic dialogue needs to be reinforced. A particular problem with the GCC states is that at times, the United States has acted on major issues and then expected the GCC states to fall in line. Building on the Gulf Strategic Dialogue, the United States should explore opportunities to help GCC states with what they see as their strategic vulnerabilities. An excellent initiative in this direction comprises the new agreements concerning critical infrastructure protection programs with Saudi Arabia, including the establishment of a new U.S. military assistance office and a State Department–run program to make available to the Saudis the services of many U.S. agencies, such as the departments of Energy and Homeland Security.

At the same time, strategic consultation needs to be a two-way street. It is entirely appropriate, and also necessary, to ask friendly states—some of which are aspiring regional powers—to consult Washington before taking any major steps in response to Iranian nuclear advances. Washington should focus, in particular, on heading off further WMD proliferation, such as Saudi-Pakistani nuclear weapons cooperation. The United States should be ready to offer robust security guarantees and cooperation, as discussed below, to address the security concerns that would lead Egypt, Saudi Arabia, or any other regional state to consider such proliferation.

The United States and other international suppliers of nuclear technology need to work together in conjunction with Middle Eastern states to channel the region’s nuclear energy interest in ways that are not destabilizing. This could include bilateral or multilateral binding commitments to forego enrichment and reprocessing, to adhere to the IAEA Additional Protocol, and to provide model transparency in their programs.

Some in the Middle East worry about the quality of U.S. leadership on the Iran nuclear problem. Regional actors may have no better ideas about how to confront the issue, but they expect the United States to use its many faculties—its insight, its international clout, its diplomatic savvy, and if need be its strength—to resolve the problem. The smaller GCC states, in particular, feel they must look to the United States to propose the solution to a problem that affects them acutely but which they are in no position to address on their own. The region is receptive to following steps that the United States judges to be necessary. But many are nervous about how much effort Washington will bring to bear and how thoroughly it will follow through on its initiatives.

Engage Iran so as to advance U.S. interests. While one objective of engagement is to reach a negotiated resolution to the Iran nuclear problem, another important goal is to show the Middle East and the world that the United States will go the extra mile to resolve the Iranian nuclear issue. Some circles in countries friendly to the United States now wonder—without reason—if Washington is as much an obstacle to resolving the nuclear impasse as is Tehran. They may wrongly see Washington as too haughty, stubborn, or ideological to negotiate with Iran. This perception creates difficulties for America that go well beyond the Iranian nuclear issue. In addition, restoring confidence in U.S. willingness to make extraordinary efforts to resolve the international standoff with Iran is important in the event that Washington, after careful consideration of the advantages and disadvantages of any course of action, opts for other policy instruments to prevent Iran’s development of a nuclear weapon.

Another important objective in engaging Iran is to jump-start a process that leads to a bargain over the nuclear issue. Gaining strong international support for diplomatic initiatives focused on Iran’s nuclear program is perhaps the single best way to increase the prospect that Iran will accept a compromise. Iran does not want to be isolated on the international stage: it is not North Korea. The broader the international consensus, the better. The repeated shows of unanimity by the UN Security Council seem to have impressed Iran more than the limited economic or security impact of the sanctions imposed thus far. If faced with broad and deep international consensus about what constitutes a reasonable offer, Iran would, at a minimum, have a vigorous internal debate about whether it should postpone its nuclear ambitions.

The prospects for such a debate in Iran, as well as for broad international appreciation of the U.S. engagement effort, are much improved by engagement that includes realistic incentives as well as credible penalties. While the United States has concerns that go far beyond the nuclear issue, Washington should come to the table with a list of specific items on which it is prepared to work positively with Iran. These include shared problems, such as piracy and smuggling in the Persian Gulf, which also involve America’s regional friends. In addition to identifying positive incremental steps, the United States should lay out a picture of what Iran could gain if outstanding issues are resolved, including participation in a regional security dialogue, as discussed below.

Tehran is particularly sensitive about perceived slights to its national pride and the perception of U.S. respect for Iran. Ways should be found to demonstrate U.S. respect without suggesting that the United States either turns its back on Iranian reformers, democrats, and human rights campaigners or that the United States regards Iran as the region’s great power—a suggestion which would upset Washington’s Gulf friends and unnecessarily enhance Iran’s regional status.

A common front presented by influential members of the international community, including Russia and China, is particularly important for affecting Iran’s willingness to compromise, but looks quite difficult to achieve. Any U.S. engagement with Iran must be closely coordinated with the five other countries active to date on the Iranian nuclear issue (the UK, France, Russia, China, and Germany). Any offer on the nuclear issue should come from that group, not from the United States alone. It is also useful to show that Arab countries, Turkey, and Israel are on the same page as the key powers. This will require a series of multiple and overlapping strategic dialogues with allies and friends.

Unilateral offers to Iran are problematic because they could lead Tehran to believe that the international community is divided in a way that works to Iran’s advantage. Furthermore, incremental improvements in the offers to Iran carry the grave risk of feeding Tehran’s impression that the longer it waits, the better the offer will be, creating a powerful incentive for Iran to sit tight, awaiting further improvement in the proposed terms. For this reason, offers to Iran should be coordinated with steps to increase pressure on Iran’s nuclear program, as discussed below.

Iran may for some time refuse to forego enrichment. In that case, whatever else it does, the United States should promote within the international community a policy of "resist and deter" rather than "acquiesce and deter" in order to prevent Iran’s development of nuclear weapons. That is, if engagement fails to produce an agreement, a strategy of tightening economic sanctions and international political pressure in conjunction with all other policy instruments provides a basis for long-term containment of Iran’s nuclear ambitions.

To offer Iran a fallback option that legitimizes enrichment within Iran would not reduce the proliferation risk. Iran’s having a latent capability to quickly make nuclear weapons could lead to much the same risk of cascading instability as an Iran with an actual weapon. By avoiding an agreement that leaves Iran with such a latent capability, the international community would ensure that Iran’s nuclear program would continue to have an outlaw status. Demonstrating how seriously the international community is concerned about Iran’s actions might discourage imitators. Continued pressure may also limit Iran’s ability to use its nuclear status as an umbrella to cover other destabilizing activities.

Use deterrence as an instrument ofdissuasion. Many in the Middle East are worried that if the United States will not confront a non-nuclear Iran, it cannot be trusted to check a nuclear Iran. Talk among Washington’s policy elite of potential reliance on deterrence as a strategy to deal with a nuclear Iran, especially without strong action to back it up, risks being seen as a smoke screen to mask a massive concession to Tehran.

U.S. officials should take the lead in placing any discussion of deterring Iran within a framework of how to dissuade Iran from pursuing its nuclear program as well as how to persuade Middle East states not to proliferate. Talk of deterrence should be used to make Iran’s nuclear program less attractive to its leaders. Through discussion of political and military countermeasures, the United States and its Middle East friends should sow doubts in Iranian minds—and those of others Iran may wish to intimidate—about whether Iran’s nuclear program will ever be militarily effective or politically useful.

The enhancement of the modern missile defenses already being deployed in Israel and purchased by several GCC states may introduce uncertainty into the minds of Iranian leaders about the military utility of Iran’s nuclear and missile programs. Such systems would also reassure Washington’s friends of the strength of the U.S. security commitment, reducing the temptation in Gulf states to proliferate and in Israel to strike Iran’s nuclear infrastructure prematurely. Building on that success, Washington needs to continue its efforts to persuade its Arab friends to link their air and ballistic-missile defenses. Such links would improve the effectiveness of each country’s systems.

Russia argues that its potential transfer of the S-300 air-defense system to Iran is stabilizing because it would greatly complicate any Israeli plans to strike Iran. However, this approach gives rise to the grave risk that Israel could feel compelled to act before the cost of doing so is too high. If the transfer proceeds, Washington should rebalance the strategic equation through more sophisticated arms transfers. That is, if Iran deploys advanced air defenses, the United States should promptly provide Israel with the capabilities to continue to threaten high-value Iranian targets—for instance, with more modern aircraft. Such a U.S. arms transfer offer could be used to gain leverage in pressuring Russia not to transfer the S-300, although this should be set within a fresh effort to put U.S.-Russian relations on a more cooperative footing. Any such offer should be structured to make clear that the U.S. objective is to delay an Israeli attack on Iran’s nuclear facilities while the international community continues its efforts to convince Iran to abandon its program.

A component of a policy of "resist and deter" should be clarifying the advantages to Iran of compromising with the international community. The United States should support international initiatives to offer Iran a better future if it abandons its nuclear weapons ambitions. These could include talks on regional security, perhaps eventually leading to some form of mutual security assurances advantageous to Iran, the region, and the United States—for instance, about the free flow of shipping through the Strait of Hormuz.

Deterring Iran should not be seen as an alternative to a policy of pressing Iran to give up its destabilizing nuclear activities. The international community should maintain its aim of ending Iranian enrichment and stopping Iranian reprocessing, and should not foster debate among its members about what a compromise acceptable to Iran might be. Instead, Iran should be told that if it wants further incentives, it should set out what it would like. To be sure, if Iran demonstrates that it has made the basic strategic decision to give up its nuclear ambitions, the international community should be prepared to provide Iran with face-saving measures that do not compromise the international community’s basic interests.

Deterrence in the post–Cold War world is a complicated matter. According to the 2009 report of the Task Force on Nuclear Weapons Management chaired by former defense secretary James Schlesinger, the United States has not thought much in recent years about nuclear deterrence. The report says that some U.S. capabilities have atrophied. It is not clear if the United States has thought through the hows and whys of extended deterrence for the Middle East. Nor is it clear how much consultation about extended deterrence Washington has held with regional states.
One issue needing much more thought is how a U.S. nuclear guarantee (or "umbrella") would work and whether it is appropriate in the Middle East. Many in the Gulf seem to think that the region already benefits from a de facto U.S. guarantee; they may welcome its formalization. But it is by no means clear that Tehran shares this perception and therefore feels deterred. For its part, Israel is not enthusiastic about a declared U.S. nuclear guarantee. First, Israel has its own deterrent capabilities. Second, a declared U.S. guarantee would clarify a situation of ambiguity that may already work to Israel’s advantage. And third, many Israelis fear that a declared U.S. guarantee could come at the price of circumscribing Israel’s freedom of action in confronting existential dangers.

To be effective, extended deterrence must be credible in the eyes of both Iran and America’s regional friends. Political commitment is an important component; perhaps such a commitment should be embodied in an agreement or treaty. The Cold War experience suggests that deployments of weapons and troops are often necessary to make pledges credible. However, it is not clear that this approach would apply to the Middle East. Regional states are often unenthusiastic about the presence of large U.S. forces. Any consideration of moving U.S. nuclear weapons to the region, such as putting nuclear cruise missiles on navy ships, would raise complex issues. Therefore, further thought and consultations will be needed to see how to make extended deterrence credible in a way that satisfies other U.S. interests. Any nuclear deterrence will require reliable, safe, and effective U.S. nuclear weapons.

Extended deterrence is most effective and credible if there is a broad U.S. domestic consensus about the policies being adopted. The administration should engage Congress so that pledges offered by the executive branch can be promptly and fully delivered. Congressional endorsement of any U.S. security guarantees could do much to make those words more convincing. It would also not be useful to have prolonged tussles about arms transfers.

Use the risk of cascading instability to produce more action now. The existing UN sanctions against Iran are modest, but much more could be done to give teeth to their considerable restrictions on dual-use items. The UN sanctions committee should organize a process by which actionable intelligence is provided to member states on Iranian clandestine acquisition of dual-use goods necessary to expand its centrifuge program. The present sanctions committee—consisting of Belgium, Burkina Faso, and Costa Rica—is in no position to do this. The United States and like-minded powers should offer to provide assistance—sharing intelligence as appropriate, training customs officials, and supplying needed technical equipment—in implementing the UN sanctions to midsize countries for which the Iranian nuclear issue is not a priority, or that lack the capabilities to track problematic materials.

Some in the United States complain loudly, with much justification, about inaction in the United Arab Emirates and other Gulf states to prevent Iranian acquisition of dual-use items. The United States would be in a better position to obtain cooperation in this area if it offered more assistance.

In parallel, the United States should build on the successes of the Treasury Department’s effort to discourage financial firms from doing business with Iranian agencies by initiating a similar effort by the Commerce and State departments aimed at pointing out to industrial and trading firms the risks to their reputations if their products are found in Iran’s nuclear or missile programs.

President Obama said during the campaign that he is interested in using Iran’s dependence on refined petroleum products as a point of leverage. Specifically, the U.S. government should discourage countries and companies from building oil refineries in Iran, or exporting refined petroleum products to Iran, until the impasse with the international community over its nuclear program is resolved.

At the same time that it steps up pressure on Iran, the United States should clarify and expand on its offers to address various concerns Iran has raised. To respond to Iranian worries about ensuring access to fuel for its civilian nuclear power plant if it gave up enrichment, the Obama administration should follow through on its announced intention to bring to fruition the international nuclear fuel bank, to which the United States has pledged $50 million. In parallel, the administration should follow through on the U.S. commitment to negotiate a fissile material cutoff treaty. While Iran may not think these measures are much as incentives, they provide a way to use the Iran crisis as an opportunity to shore up parts of the global nonproliferation regime. And if the international community sees the proposals on the table as effectively addressing Iran’s concerns, Iran is more likely to accept the deal, because Iran does not want to be isolated. To the extent that nonproliferation efforts are global in scope, Iran is more likely to accept their vigorous application to Iran as well.

The pressure on Iran and the incentives to Iran are more likely to be successful if they come from the international community rather than from the United States alone. Europe is acutely aware of the risks posed by the Iranian nuclear program, but it is deeply torn about how to proceed and has done as much recently as could have been hoped for. The Obama administration is well positioned to press for more European action, especially if it shows a willingness to work with Europe on acceptable inducements to Iran.

Progress at the UN Security Council would be easier if Washington could convince China that Iran’s nuclear program is a strategic threat to its own interests and could persuade Russia that its interests are best served by cooperating fully with the West on this problem. Motivating these governments to join the United States and its allies in increasing international pressure on Iran will require skillful diplomacy. More cooperative relations in areas of mutual interest will help in this endeavor.

The Gulf states—especially Saudi Arabia—may be well positioned to sway China, which cares deeply about access to export markets and energy supplies. The United States should urge its Gulf partners to become more actively engaged in the international diplomacy surrounding Iran’s nuclear program.

Conclusion

Engagement has the best chance of working if Washington has greater leverage with which to move Tehran. Reinforced security measures, closer consultation and coordination with friends, and tougher international sanctions enforcement all provide leverage and therefore enable negotiations. Furthermore, taken together, such measures reduce the risk of cascading instability in the event of further Iranian nuclear progress. Leverage is also created by building trust with Iran and offering credible incentives.

The Iranian nuclear standoff is not only a major problem but also in some ways an opportunity. As part of its incentives to Iran, Washington could propose measures that would also serve to strengthen the global nonproliferation system. Furthermore, the Middle East is looking for strong U.S. leadership and reenergized relationships. Vigorous steps to shore up regional stability could check unfounded perceptions by some that the U.S. star is waning.

PDF Downloadable Version Here