Further Project Stagnation in Iran as Parties Clarify Nuclear Crisis Roadmap

Iranian Resolve

As Global Insight reported on Wednesday (9 April), Iran's President Mahmoud Ahmedinejad used the occasion of Iran's second national nuclear day, to launch a programme to raise Iran's future enrichment capacity radically by trebling the amount of installed centrifuges (see Iran: 9 April 2008: Iran to Triple Number of Nuclear Centrifuges, Raise Uranium Production, Says President). He also announced the introduction of a second-generation centrifuge type, internationally known as P2, but bearing the Iranian designation IR-2. These second-generation appliances are, according to President Ahmedinejad, able to enrich uranium at speeds five times higher then the currently installed P1 type machines, although international experts have put the rate closer to three times. Capacity increases were also announced further up the uranium production chain, especially with regards to expanded production capacity of yellow cake—a processed form of uranium ore, used in the production of uranium hexafluoride, which in turn is fed to enrichment centrifuges in order to produce enriched uranium.

By launching the enrichment-capacity expansion, as well as corresponding increases further up the production chain, President Ahmedinejad has confirmed his intention not to back down in the face of international pressure and also to demonstrate his nation's ability to disregard its international isolation, recently aggravated by a third package of UN sanctions. Iran’s parliamentary election recently strengthened those parts of the country's conservative factions opposed to Ahmedinejad's policies, meaning that he will increasingly face domestic criticism and scrutiny over his alleged mismanagement of the Iranian economy. Indeed, after a brief lull on the domestic political scene—as new and old parliamentarians found their bearings—the president has been heavily under fire in the past two weeks, culminating in his decision on Wednesday (9 April) to sack his ministers of economy and the interior, who increasingly had been at odds with his economic policies.

With an increasingly weakened domestic position, Ahmedinejad's best chance of asserting himself and assuaging domestic opposition lies in him being able to stoke the international conflict and play it in his favour, allowing him to drum up nationalist feelings in Iran and portray his critics as unpatriotic.

Meanwhile, Iran's Supreme Leader Ayatollah Sayyid Ali Khamenei seems likely to allow President Ahmedinejad to maintain his high profile on the issue, although ultimate power over foreign relations strategies, defence, and the nuclear portfolio lies with Khamenei. Ahmedinejad's high domestic and international profile over the past years has shielded the supreme leader from the brunt of the conflict and helped him elevate himself above the level of day-to-day political responsibility in Iran.

Continued U.S. Pressure

In a press briefing in London (the United Kingdom) attended by Global Insight yesterday, U.S. Ambassador to the International Atomic Energy Agency (IAEA), Gregory L. Schulte, affirmed the U.S. strategy in the face of the Iranian escalation. He said that the United States would continue to work multilaterally to push Iran to sign the Additional Protocols to the Non-Proliferation Treaty (NPT)—which entail updated IAEA monitoring mechanisms and a wider scope of safeguards, and has been signed by most NPT signatories—and continue with the dual strategy of giving Iran both incentives and disincentives to make it choose the path of international engagement.

The goal of the multilateral effort is to convince the Iranian leadership that the only way to gain prestige, regional security, and prosperity is through negotiations and by abiding by their commitments. The United States has shown enough flexibility by accepting Russia's sale to Iran of the Bushehr reactor, as well as now also being open to direct negotiations—albeit dependent on Iran halting its NPT-breaching enrichment process as a confidence-building measure.

The United States remains highly sceptical of Iran's intentions, with Schulte saying that a genuine Iranian wish to acquire civilian nuclear technology should have led it to pursue more Bushehr-like deals instead of developing uranium-enrichment capacities stolen and distributed by the Pakistani A. Q. Khan nuclear weapons research network, the value of which is limited in terms of civilian power generation. He also pointed to Iran's unwillingness to clear up IAEA questions about its pre-2003 nuclear weaponisation programme as an indication that Iran might want to restart the programme where it was left off, alleging that the IAEA has received indications that this might already be the case from several autonomous sources in the recent past. He did, however, also caution against taking President Ahmedinejad too literally, saying that the IAEA's estimation was that Iran's 3,000 installed P1 centrifuges were only working at 25% of their capacity, as a result of technical problems, casting doubt on the county's abilities to get the P2 type working at full speed anytime soon.

Ambassador Schulte added said that there had over the past few months been a clear increase in consensus between Russia and the United States over the level of the threat emanating from Iran. Saying that he was actually surprised about the level of international consensus over how to proceed on the issue, Schulte seemed to hint that China too was on board, albeit favouring Russia's somewhat slower approach.

Outlook and Implications

There still appears to be little for President Ahmedinejad to gain by making concessions on Iran's nuclear programme. Indeed, the issue has become probably the only area in which he can trump his conservative rivals, who have grown in strength and cannot now be rebuffed for being secular, enemies of the Iranian revolution or accused of running the West's errands. His belligerent tone has also served to take national and international attention away from Ayatollah Khamenei; a situation the latter seems to appreciate and would be minded to leave unchanged.

The United States also seems likely to continue on its current track. U.S. and UN sanctions have in the past year succeeded in bringing Iran's international oil and gas projects, foreign investment, and financial services sector virtually to a standstill. The ability of, in particular, Chinese and Russian oil and gas companies to secure oil and gas development and LNG supply contracts that would otherwise have gone to Western competitors has faltered, leading those countries to lose interest in preventing further sanctions from being imposed. It also appears that Russia especially has started to view Iran's nuclear threat as far more of a reality in the last few months, seeing it increasingly in opposition to Russian national interest.

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