“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Wednesday, December 27, 2006

Iran 's ambitions are beyond her reach. Let's keep it that way.

These are interesting times for the US relationship with Iran. Present events suggest that the US should use diplomacy and pressure. Three stories converge. The first is the story that Iran's external oil revenues are falling at the rate of 6% per year. That is without a sensible policy to reduce US imported oil consumption. In five years Iran will be working in an area of a critical reduction in cash. The National Academy of Sciences says restrictions on foreign investment, and mismanagement could eliminate Iran's oil exports by 2015. That is $50 billion a year.

The report concludes that Iran's hard-line politics have driven away many potential investors and that the welfare state has siphoned off oil profits that should have been reinvested in production. That study seems to be confirmed by a report by Reuters:

Iran finds difficulties in arranging financing for its new oil projects

Foreign banks and financiers reluctant

December 27, 2006
TEHRAN–Iran, the second-largest producer in the Organization of Petroleum Exporting Countries, is having difficulties financing oil projects because foreign lenders are reluctant, the oil ministry says.

"We are facing problems in financing oil-industry projects," the ministry's news website, Shana, reported last week, quoting Oil Minister Kazem Vaziri-Hamaneh. "The co-operation of foreign banks and financiers has declined therefore, we are seeking solutions inside Iran."

Iranian officials have said the country needs to invest tens of billions of dollars in coming years to develop new oil fields and squeeze production from aging fields to meet a planned increase in production capacity to 5 million barrels per day by 2010. Iran says current capacity is 4.2 million barrels per day.

Iran also needs to invest heavily in boosting refining capacity to reduce a growing dependence on gasoline imports.

But United States pressure over Iran's nuclear program has forced many international banks to stop dealing with the Islamic Republic in recent months. Iran denies U.S. accusations that it is seeking to build nuclear weapons.

Vaziri-Hamaneh said Iran would turn to its Oil Stabilization Fund, a rainy-day account that absorbs oil income in excess of budgeted amounts.

Despite the financing problems, Iran has a number of major projects in the pipeline.

"In the last 15 months, $28.4 billion (U.S.) worth of new contracts have been signed and some new contracts worth $62 billion are being negotiated," Vaziri-Hamaneh said.
REUTERS news agency

At the same time Iran is acting expansionist by her support for Hezbollah, the Iraqi Shiites and now in Afghanistan.

Iran making inroads into Afghanistan

Press Trust of India Hindustan Times

New York, December 27, 2006|12:36 IST

Iran, which has increased its influence in Lebanon by supporting Hezbollah and in Iraq after toppling of Saddam Hussein, has also been making inroads into Afghanistan, a media report said on Wednesday.

Since the United States and its allies ousted the Taliban in 2001, Iran has taken advantage of the central government's weakness to pursue a more nuanced strategy: part reconstruction, part education and part propaganda, the New York Times reported.

Iran has distributed more than 200 million dollars in the country. It has set up border posts against the heroin trade, and next year will begin work on new road and construction projects and a rail line linking the countries.

In Kabul, its projects include a new medical center and a water testing laboratory.

Two years ago, the Times said, foreign engineers built a new highway through the desert of western Afghanistan, past this ancient trading post and on to the outside world.

Nearby, they strung a high-voltage power line and laid a fiber-optic cable, marked with red posts, that provides telephone and Internet access to the region.

Iranian radio stations are broadcasting anti-American propaganda into Afghanistan.

Moderate Shiite leaders in Afghanistan say Tehran is funneling money to conservative Shiite religious schools and former warlords with longstanding ties to Iranian intelligence agencies.

And as the dispute over Iran's nuclear program has escalated, Iranian intelligence activity has increased across Afghanistan, the paper says quoting American and Afghan officials.

This has included not just surveillance and information collection but the recruitment of a network of pro-Iranian operatives who could attack American targets in Afghanistan.

The paper quotes Western diplomats as saying that Iran's goals in Afghanistan are to hasten the withdrawal of American troops, prevent the Taliban from regaining power and keep the Afghan west firmly under Tehran's sway.

"Keep this area stable, but make it friendly for them," said a senior European diplomat in western Afghanistan.

American officials told the Times that they are watching closely, and no evidence has emerged of recent arms shipments to Iranian proxies, as there have been in Iraq, or of other efforts to destabilize the country.
Comment and Conclusion: Iran is a major concern of US foreign policy. It is a country that in many ways poses a major regional threat to the Middle East. It is also a country with big problems internally and economically. It is also no match for the United States. We should not waste our advantages with an ill conceived policy. There is no economically successful Islamic country that is not an oil producing state. Iran is no exception. Iran is Persian and not Arab so it has no natural allies in most of the ME. Iran has a restless middle class that is aspiring to a normal secular life and many are fed up with the mullahs. The US would be very wise to be patient and help Iran accelerate the downward economic spiral. This is a real opportunity for the US to get back to a sane steady policy of diplomacy and economic pressure. Part of that policy should be a serious attempt to enact a real energy policy that has some bite and crunch. It also will give us an opportunity to regroup and rethink our military needs and policies. This is a good thing.


  1. With each of the Axis oil producers, Iran and Venezuela, there are continued reports of a production drop off. But the reserves of both countries are still there.

    The thirstiest country on the globe, China, has made deals with each. The Chinese do not lack for either technicians or cash to help these fellows out.

    The Venezuelans have ordered the tankers it needs to transit the Canal, from East to West, from Chinese shipyards. Reportedly Chinese engineers are moving into the Venezuelan fields.

    As regards China, in Iran, they committed in '04 and reaffirmed last February to fund Iranian oil field development. The Iranians will also be needing more LPG tankers, most likely supplied by China.

    Just part of the Game.
    Since the US is not at war with Iran.

  2. Some Iranian legislators had pushed for a bill that took a more aggressive line against the IAEA, which they accused of being dominated by the United States.

    “The draft is not appropriate to the United States' animosity to Iran,” legislator Hassan Kamran said. “This is a weak draft. It should be stronger.”

    Parliament Votes

  3. Yeah, sam, but, from the same story ...
    “The bill gives a free hand to the government to decide on a range of reactions – from leaving the Nuclear Non-Proliferation Treaty to remaining in the International Atomic Energy Agency and negotiating,” he said during the debate in parliament, which was broadcast live on state radio.

    He said 161 out of 203 legislators present voted in favor of the bill, 15 voted against and 15 abstained. The opponents and abstainers were reformists and moderate conservatives.

    December 27, 2006 -- THE sanctions adopted by the United Nations are too weak, too puny and too late to have any deterrent effect on Iran's drive to build a nuclear bomb. But there is something the U.S. government, state governments, labor unions, pension funds and each of us as individuals can do: We can stop investing in companies that help Iran exploit the oil and gas resources on which its economy depends. ...
    Frank Gaffney, a Reagan-era Pentagon official, is pioneering the way via his group, Sarah Steelman, Missouri's state treasurer, has followed his lead - the billion-dollar state pension funds have pulled investments in any company that abets terrorism.

    Among Steelman's first targets were the Swiss giant UBS Finance and the French firm BNP Paribas Finance Inc. Both got kicked off the Missouri funds' list of approved brokers. UBS got the message and pulled out of Iran; it's now seeking readmission to Missouri's list. But BNP Paribus still works there.
    Gaffney's targets include Royal Dutch Shell, the multinational oil conglomerate. It has extensive holdings in the key Iranian offshore oil fields Soroush and Nowruz, where its investments have been pivotal in raising oil output by 190,000 barrels per day - about an 8 percent increase in total Iranian output. (In October, Shell diversified its terror portfolio - winning contracts to search for and pump oil in Syria.)

    Boycott Shell and Citgo, it's the least we can do.

  5. Thanks for the tip on Shell and Citgo. Will do.

  6. A top aide to the radical Shiite cleric Muqtada al-Sadr was killed in a raid by U.S. troops Wednesday in the Shiite holy city of Najaf, an Iraqi lawmaker said.

    The U.S. military said the death occurred during a joint operation by American and Iraqi troops. It described the man, Sahib al-Amiri, as a criminal involved in the use of roadside bombs.

    Top Aide Killed

  7. Sam, check your link , it is going to Saddam's fairwell letter.

  8. It's o.k. 2164th. Go to page 2 of that article.

  9. sam,

    Thanks for that Rice link at the BC. Where she goes, nothing grows.

  10. possum

    "Mesbah-Yazdi" is the "new" name to learn, or so says the bartender.

  11. Rat,

    The neighborhood Citgo station is the only place I know of in town where I can get free water and air, so a Citgo boycott is out.


    Why should Iran sweat declining revenues and foreign investment? What with the coming 12th imam & umpteenth caliphate & 2nd holocaust and all that business...

  12. rufus,

    Oakleaf, agrees with you: it is time to bring the Army home, says he. Man, what a difference an election makes.

    Instead of “Go Home,” the Politicians Plan is “Go Small and Short”


  13. Happy New Year

    He'll hang before the New Year, I think.

  14. rufus,

    I just cannot reconcile myself to buying the same real estate twice. Iraq holds no allure for me other than its strategic location. Since I never subscribed to the "Democracy Project", there is no personal bitterness associated with its failure. No doubt, we are on our way out of Iraq and I do not fault those who, for many excellent reasons, support this. I just get a knot in my gut thinking about it.

  15. rufus,

    I hope nothing I said led you to think I considered your position stupid. If so, I did not make myself clear and, therefore, apologize.

    Having had decades to study Muslims, I have the advantage over many Americans. Therefore, I was not surprised by their killing of the Golden Goose offered by the Bush administration. Most Americans, even those in government, just don't get it. As you have repeatedly pointed out, they are ingrates.

  16. Gasoline, which reached a three-month high last month, is unlikely to put a floor under oil prices this far from summer motoring season, Altavest's Hartmann said.

    ``It's too early to be anticipating the spring inventory build,'' he said.

    Oil at 1 Month Low

  17. Well, free air and water do over ride individual action on National Security matters, saving fifty cents will make all the difference in your retirement program, aye...

    But then again, you could always just take the free air and water, buying gas else where.

    It is a good thing that neither of the Axis powers are meeting their OPEC production quotas. But then again, Iraqi oil monthly revenues are still off their summer highs. Their production seems to have stagnated at 2.1 million barrels per day, also down from the summer highs of 2.4 million.

    Iraqi Oil Exports Peaked in April 2004, at 1.8 million barrels per day, (2005 average is 1.4 million bpd).

    The Brookings Iraq Index supplies the figures.

    Iran's OPEC production quota is 4.11 million bpd, while Venezuela is allotted 3.2 million bpd.
    Iran now produces about 3.7 million barrels a day, about 300,000 barrels below the quota, while Venezuela is producing around: The state oil company, PDVSA, reports production of 3.3 million barrels a day. There is no way to independently confirm this, and most outside analysts, including the International Energy Agency, say PDVSA's numbers are inflated and production is closer to 2.6 million barrels per day. … ...But whatever the real output, Venezuela - because of the high price of oil - is raking in more petrodollars than ever before. When Ch├ívez came into office in 1999, the country reported production of 3.5 million barrels per day and, with oil selling at about $15 per barrel, was making just over $18 billion a year. This month( May ‘06), with oil at about $70 a barrel, PDVSA Finance Director Eudomario Carruyo told Reuters he expects revenue to top $85 billion this year.

    So, even if Chavez is running short on production his cash flow situation is strong.

  18. Westhawk has a piece concerning the reorganization of Iraq that is going on as we lament the goings on there. This map of Baghdad from the NYTimes shows the changing sectarian areas of occupation. Westhawk provides other links and analysis.

    The Iraqi are not, for the most part evil, rufus, they are seriously at War.
    Mostly amongst themselves, neither side desires a cease fire. Let alone a negotiated Peace.
    We removed Saddam and then did not adequately fill the Power void, either by ourselves or with Iraqis. That created the conditions for the civil war, mix in cross border sanctuaries and funding and civil sectarian war is what you've got.

    We should have taken a Pinochet course, with exiles that at least had visited the US, instead of France.

  19. This comment has been removed by a blog administrator.

  20. DR's map link reminds me of the hysteria on the Left caused by the maps of apartheid in South Africa.

    The Left has a real hard time accepting that people are by nature, tribal. When that tribalism suits there predisposition, that is ok, but when it does not, you get the bombing of Serbia and Kosovo to stop the ethnic cleansing of Albanian/Muslims by Christian/Serbs, but when the dust settles and you get ethnic cleansing of Christian/Serbs by Albanian/Muslims, you get silence.

  21. After reading a Veterans Day story by reporter Janet Hefler on The Martha's Vineyard Times web site, Major Sean M. Smith e-mailed The Times to say how refreshing it was to know that Islanders remember the sacrifices of their nation's armed forces. Major Smith is an Islander himself, a 1991 graduate of Martha's Vineyard Regional High School and the son of Lucie and Mike Smith of Edgartown.

    Major Smith agreed to discuss his job and Iraq in an e-mail interview with Times news editor Nelson Sigelman. His answers arrived in an e-mail dated Dec. 17.

    Please tell me about your current job and responsibilities.

    - Right now I am the logistics advisor on a Border Transition Team. I also serve as second in command of the team. Our job is to train, coach, and mentor an Iraqi Border Patrol battalion that has 340 officers and men...

    Like Americans across the country, many Vineyarders question our country's continuing involvement in Iraq. What is your reaction to the apparent erosion of public and political support for the war?

    - I can understand the frustration that Americans have with this war, and it's easy to see how parallels can be drawn with Vietnam. I think the frustration is rooted mainly in a few things: the fact that this was a war of choice, that it seems we keep redefining success when we fail to achieve the current definition, and the lack of an exit strategy...

    Do you think the people back home have an accurate picture of the situation?

    - Yes and no. I hate to put it this way, but Americans only know what they read in the newspaper or see on television. Of course, depending on what news you like to watch, you get a different point of view. This is where the media has lost its way in recent years. I don't feel they report objectively enough...

    Edgartown Soldier

  22. An interesting post on the previous thread. I copy it for y'all. Good read:

    Bob W. said...
    Hey, pretty good blog, Elephant Bar. I bookmarked it to check it out from time to time. I run a similar establishment over at Bob W's blog (sorry, I don't have my html book in front of me, and I can't remember the damn tags for a link!!!)

    ppab, there is an article on COIN on my site that links to the new counterinsurgency manual, FYI.

    I respectfully disagree with some aspects of this post, however, as well as the opinions posted in the comment section.

    While Lieutenant General Petraeus and his crew in Kansas may take credit for producing a new Field Manual, the fact that only now, several years into two very different COIN fights, has the military actually produced Counterinsurgency doctrine is unfathomable.

    Since the military had no doctrine to help describe the environment and prescribe a manner to deal with it, most of the mid and senior level leadership who make decisions face a brave new world. The numerous stability operations of the 1990s may have helped provide a bit of experience, but none were of the scope/scale of the herculean tasks facing us in Iraq, militarily or politically.

    Thus, this manual, coming as late as it has, may well help the tactical leaders (Lieutenants, Captains, and Majors), but the senior commanders of the military who are making policy and determining strategy simply "got what they got" however, and no manual, brilliant or not, is going to help them at this stage in the game.

    Too bad this manual isn't the third draft of one published in 1993 or something.

    Also, there seems to be cognitive thread here that the new doctrine and the demands of conducting COIN operations are going to turn the military into a bunch of weak sisters or something, and that the requirements for operating in this manner are something brand spanking new (I summarize comments from rufus and habu1, Catherine, et al). I respectfully believe that you are wrong on both counts, esteemed commenters!

    First of all, unless you are the former Soviet Union, you simply cannot bomb, shoot, and generally kill your way out of a COIN fight (and look where it got them in Afghanistan!); the kinetic fight is only a small part of the process of defeating the insurgency and removing all vestiges of political violence from the society we are trying to protect.

    In the Iraq/Afghanistan cases, rebuilding (or building, actually) viable political and government institutions, getting the strategic messages out, and doing work like repairing infrastructure are other critical parts of the effort, whose long term importance is equal to or greater than the effect of a bullet in the head of any insurgent foot soldier.

    Unfortunately, the U.S. military is the most effective element of the government when it comes to these types of tasks, and even the military is not that great at it (see Haiti, Balkans, Iraq, Afghanistan, etc).

    This does not mean that the military (especially the U.S. Army) is not preparing its soldiers for combat. Far From it! It is harder than ever now to schedule a range on any given Army post now because EVERYONE is going out and shooting! Soldiers are doing more combat training, and getting more critical skills training (ie combat trauma for treating of wounded soldiers) than ever before. And the average infantryman is better equipped than I've seen in the last 16 years.

    This doctrine, and the requirements of these two wars, simply mean that American Soldiers are being asked to do much more than they have been in the recent past. A Rifle platoon leader may do an assessment for installing a sewage line in a village one day, which leads him to interact with the populace, and receive intelligence on a bombmaker in the village, which then leads him to plan for and lead a raid that night in the village to kill or capture the bombmaker, which then leads him to think of additional things he will have to do to assuage the populace in the aftermath of the raid. . . and it goes on. All in all it is a pretty good argument against the draft, is it not??

    My second point of disagreement is that this is anything new; it most certainly is not. While the scope and scale of Iraq may be something we have not seen since Vietnam, the U.S. military has been involved in low intensity warfare for well over a century.

    The U.S. intervened militarily in places like Haiti, the Philippines, Mexico, Nicaragua, and elsewhere throughout the 20th century, and at many times military commanders were the de facto government; at any given time in the late 1980s, there were 110 advisors on the ground in El Salvador ( a country, by the way, that is currently repaying the favor by providing a battalion of combat troops in Iraq); we intervened in the Balkans and Somalia in the 1990s to varying degrees of success, and our efforts in places like Colombia and elsewhere are a testament to the fact that use of the military in operations like Iraq and Afghanistan are historically the norm, NOT the exception. Read Max Boot's "The Savage Wars of Peace" for some historical background, it is a pretty good read.

    Wow, long comment from Bob W! Again, I think this is a great blog, and I enjoyed my black and tan while reading and responding to this post.
    Check out my blog if you get a chance, and keep providing spirited discussion.

    Wed Dec 27, 11:00:24 PM EST

    Comment, welcome to the elephant. don't forget to pay your bar bill.

  23. Our job is to train, coach, and mentor an Iraqi Border Patrol battalion that has 340 officers and men. They patrol a 54-kilometer stretch of the Iran-Iraq border. Our purpose is to mature the unit to a point where they can become self-sufficient and capable of conducting their border interdiction mission without coalition forces supporting them. As you can imagine, this is a daunting task. Their level of expertise is much lower than ours, they are poorly equipped, and most of the officers and soldiers lack the institutional training that U.S. soldiers take for granted. We've had to power down our expectations and take things one step at a time. This is also complicated by the language barrier. We do have four interpreters, but anything technical must often be explained a multitude of times to ensure proper execution.

    Our team has 11 officers and NCOs. We all have a different specialty and are responsible for training the battalion in different areas.

    Interesting teases you use, sam.

    Why did these fellows not get Institutional Training from US, from the day they hired on?

    That is really the core of the Iraqi challenge, we did not build an Iraqi Force, in 45 months, excluding the preInvasion era, when Congress authorized and funded training an Iraqi exile force.
    A Force for a Civil Society, with a Turkish style Army, dedicated to a secular government.
    A force that was never built.

  24. bob w has a link to the stick man presentation that describes how to win in Anbar.

    Boils down to use the locals.
    Who'd have guessed.

  25. No teasing intended, Rat. Stumbled across it. Thought it interesting. Too long to post everything so just a couple of clips and throw the link at you guys to read for yourselves if interested.

  26. That is a big deal Habu. Write it up and I'll put it up on the next post.

  27. Hooray! Its December 28th Carternalia has arrived!

    The apology cards hang dangle and sparkle from the garland that wraps railing to bannister.

    We'll don sweaters and lower the thermostat to 65 Degrees, and watch as the youngest yanks the electrical cord out from the socket, blackening the wasteful display of yuletide luminescence in the name of energy convervation!

    We'll blindfold grandpa and parade him in front of the camera, and doddering from age and Beefeater, he'd chuckle and curse himself, "This is what I get for Eisenhower! Death to me!"

  28. "In Mexico, the construction, mining, electricity and water industries are more dependent on domestic demand now because of a massive expansion in the market," explained David Franco, a specialist in U.S.-Mexico trade relations for JP Morgan.

    Another factor in Mexico´s growing economic independence is the nation´s construction industry.

    Mexican Economic Independence

  29. I read the article and I for one think there are many questions that need to be answered.

    Someone is shitting green apple splatters into hurricane force winds but is it America or is it the SPP?

  30. Yes sir, the Security and Prosperity Partnership.

    The Common Market would never become the EU, either.

    There is a difference between the 50 States of the US and the rest of the World, rufus.

    Integrating the Americas into one economic and political entity, that is the "Plan". Incrementally the Planners are moving ahead with the Program.
    It is after all, only subversion of US Law and Customs, nothing to be concerned about.
    Strawberry Fields, forever.