FORECASTS & TRENDS E-LETTER
By Gary D. Halbert
March 28, 2006
IN THIS ISSUE:
1. U.S. & Iran Agree To Diplomatic Talks
2. Stratfor’s Analysis Of This Development
3. Interesting Points In Stratfor’s Analysis
4. Will President Bush “Finlandize” Iraq?
5. Conclusions – A Bad Situation
This week, we will turn our focus to geopolitics and specifically the issue
of whether the US and the West can stop Iran from producing nuclear weapons
– assuming they aren’t already. To the surprise of just about everyone,
Iran agreed earlier this month to sit down with US diplomats and discuss the
situation in Iraq. Supposedly, the issue of Iran’s nuclear ambitions is not
on the table; however, it is difficult to imagine that the subject will not
President Bush has squandered what little “political capital” he garnered in
the 2004 presidential election, so there is little or no chance that the US
will use military force to eliminate or damage Iran’s nuclear programs.
Yet when I look at the things I worry about, an Iran with nuclear weapons is
very high on my list.
With that in mind, we turn our attention this week to the latest
geopolitical analysis by our old friends at Stratfor.com, the global
intelligence experts. As you will read below, I am reprinting the latest
analysis on Iran from Dr. George Freidman, the founder of Stratfor.
I think you will find George’s analysis on the relations between Iran and
the US fascinating.
Putting Cards on the Table in Iraq
March 21, 2006
22 04 GMT
By George Friedman
The clouds couldn't have been darker last
week. Everyone was talking about civil war in Iraq. Smart and informed
people were talking about the real possibility of an American airstrike
against Iran's nuclear capabilities. The Iranians were hurling defiance in
every direction on the compass. U.S. President George W. Bush seemed to be
politically on the ropes, unable to control his own party. And then
seemingly out of nowhere, the Iranians offered to hold talks with the
Americans on Iraq, and only Iraq. With the kind of lightning speed not seen
from the White House for a while, the United States accepted. Suddenly, the
two countries with the greatest stake in Iraq -- and the deepest hostility
toward each other -- had agreed publicly to negotiate on Iraq.
understand this development, we must understand that Iran and the United
States have been holding quiet, secret, back-channel and off-the-record
discussions for years -- but the discussions were no less important for all
of that. The Iran-Contra affair, for example, could not have taken place had
the Reagan administration not been talking to the Ayatollah Ruholla
Khomeini's representatives. There is nothing new about Americans and
Iranians talking; they have been doing it for years. Each side, for their
own domestic reasons, has tried to hide the talks from public view, even
when they were quite public, such as the Geneva discussions over Afghanistan
prior to the Sept. 11 attacks.
What is dramatically new is the
public nature of these talks now, and the subject matter: Iraq.
Not to put too fine a point on it, but the real players in Iraq are now
going to sit down and see if they can reach some decisions about the
country's future. They are going to do this over the heads of their various
clients. Obviously, the needs of those clients will have to be satisfied,
but in the end, the Iraq war is at least partly about U.S.-Iranian
relations, and it is clear that both sides have now decided that it is time
to explore a deal -- not in a quiet Georgetown restaurant, but in full view
of the world. In other words, it is time to get serious.
The offer of
public talks actually was not made by Iran. The first public proposal for
talks came from U.S. Ambassador to Iraq Zalmay Khalilzad, who several months
ago reported that he had been authorized by Bush to open two lines of
discussion: One was with the non-jihadist Sunni leadership in Iraq; the
other was with Iran. Interestingly, Khalilzad had emphasized that he was
authorized to speak with the Iranians only about Iraq and not about other
subjects. In other words, discussion of Iran's nuclear program was not going
to take place. What happened last week was that the Iranians finally gave
Khalilzad an answer: yes.
Iran's Slow Play
As we have
discussed many times, Iraq has been Iran's obsession. It is an obsession
rooted in ancient history; the Bible speaks of the struggle between Babylon
and Persia for regional hegemony. It has some of its roots in more recent
history as well: Iran lost about 300,000 people, with about 1 million more
wounded and captured, in its 1980-88 war with Iraq. That would be the
equivalent of more than 1 million dead Americans and an additional 4 million
wounded and captured. It is a staggering number. Nothing can be understood
about Iran until the impact of this war is understood. The Iranians, then,
came out of the war with two things: an utter hatred of Saddam Hussein and
his regime, and determination that this sort of devastation should never
After the United States decided, in Desert Storm, not
to move on to Baghdad and overthrow the Hussein regime -- and after the
catastrophic failure of the Shiite rising in southern Iraq -- the Iranians
established a program of covert operations that was designed to increase
their control of the Shiite population in the south. The Iranians were
unable to wage war against Hussein but were content, after Desert Storm,
that he could not attack Iran. So they focused on increasing their influence
in the south and bided their time. They could not take out Hussein, but they
still wanted someone to do so. That someone was the Americans.
responded to the 9/11 attacks in a predictable manner. First, Iran was as
concerned by al Qaeda as the United States was. The Iranians saw themselves
as the vanguard of revolutionary Islam, and they did not want to see their
place usurped by Wahhabis, whom they viewed as the tool of another regional
rival, Saudi Arabia. Thus, Tehran immediately offered U.S. forces the right
to land, at Iranian airbases, aircraft that were damaged during operations
in Afghanistan. Far more important, the Iranians used their substantial
influence in western and northern Afghanistan to secure allies for the
United States. They wanted the Taliban gone. This is not to say that some al
Qaeda operatives, having paid or otherwise induced regional Iranian
commanders, didn't receive some sanctuary in Iran; the Iranians would have
given sanctuary to Osama bin Laden if that would have neutralized him. But
Tehran's policy was to oppose al Qaeda and the Taliban, and to quietly
support the United States in its war against them. This was no stranger,
really, than the Americans giving anti-tank missiles to Khomeini in the
But the main chance that Iran saw was getting the Americans to
invade Iraq and depose their true enemy, Saddam Hussein. The United States
was not led to invade Iraq by the Iranians -- that would be too simple a
model. However, the Iranians, with their excellent intelligence network in
Iraq, helped to smooth the way for the American decision. Apart from
providing useful tactical information, the Iranians led the Americans to
believe three things:
1. That Iraq did have weapons of mass
2. That the Iraqis would not resist U.S.
operations and would greet the Americans as liberators.
omission, that there would be no postwar resistance in Iraq.
this was not decisive, but it formed an important part of the analytical
framework through which the Americans viewed Iraq.
wanted the United States to defeat Hussein. They wanted the United States to
bear the burden of pacifying the Sunni regions of Iraq. They wanted U.S.
forces to bog down in Iraq so that, in due course, the Americans would
withdraw -- but only after the Sunnis were broken -- leaving behind a Shiite
government that would be heavily influenced by Iran. The Iranians did
everything they could to encourage the initial engagement and then stood by
as the United States fought the Sunnis. They were getting what they wanted.
Counterplays and Timing
What they did not count on was American
flexibility. From the first battle of Al Fallujah onward, the United States
engaged in negotiations with the Sunni leadership. The United States had two
goals: one, to use the Sunni presence in a new Iraqi government to block
Iranian ambitions; and two, to split the Sunnis from the jihadists. It was
the very success of this strategy, evident in the December 2005 elections,
that caused Iraqi Shia to move away from the Iranians a bit, and, more
important, caused the jihadists to launch an anti-Shiite rampage. The
jihadists' goal was to force a civil war in Iraq and drive the Sunnis back
into an unbreakable alliance with them.
In other words, the war was
not going in favor of either the United States or Iran. The Americans were
bogged down in a war that could not be won with available manpower, if by
"victory" we mean breaking the Sunni-jihadist will to resist. The Iranians
envisioned the re-emergence of their former Baathist enemies. Not altogether
certain of the political commitments or even the political savvy of their
Shiite allies in Iraq, they could now picture their worst nightmare: a
coalition government in which the Sunnis, maneuvering with the Kurds and
Americans, would dominate an Iraqi government. They saw Tehran's own years
of maneuvering as being in jeopardy. Neither side could any longer be
certain of the outcome.
In response, each side attempted, first, to
rattle the other. Iran's nuclear maneuver was designed to render the
Americans more forthcoming; the assumption was that a nuclear Iran would be
more frightening, from the American point of view, than a Shiite Iraq. The
Americans held off responding and then, a few weeks ago, began letting it be
known that not only were airstrikes against Iran possible, but that in fact
they were being seriously considered and that deadlines were being drawn up.
This wasn't about nuclear weapons but about Iraq, as both sides made clear
when the talks were announced. Both players now have all their cards on the
table. Iran bluffed nukes, the United States called the bluff and seemed
about to raise. Khalilzad's request for talks was still on the table. The
Iranians took it. This was not really done in order to forestall airstrikes
-- the Iranians were worried about that only on the margins. What Iran had
was a deep concern and an interesting opportunity.
The concern was
that the situation in Iraq was spinning out of its control. The United
States was no longer predictable, the Sunnis were no longer predictable, and
even the Iranians' Shiite allies were not playing their proper role. The
Iranians were playing for huge stakes in Iraq and there were suddenly too
many moving pieces, too many things that could go wrong.
also saw an opportunity. Bush's political position in the United States had
deteriorated dramatically. As it deteriorated, his room for maneuver
declined. The British had made it clear that they were planning to leave
Iraq. Bush had really not been isolated before, as his critics always
charged, but now he was becoming isolated -- domestically as well as
internationally. Bush needed badly to break out of the political bind he was
in. The administration had resisted pressure to withdraw troops under a
timetable, but it no longer was clear whether Congress would permit Bush to
continue to resist. The president did not want his hands tied by Congress,
but it seemed to the Iranians that was exactly what was happening.
From the Iranian point of view, if ever a man has needed a deal, it is
Bush. If there are going to be any negotiations, they are to happen now.
From Bush's point of view, he does need a deal, but so do the Iranians --
things are ratcheting out of control from Tehran's point of view as well.
For domestic Iraqi players, the room to maneuver is increasing, while the
room to maneuver for foreign players is decreasing. In other words, the
United States and Iran have, for the moment, the unified interest of
managing Iraq, rather than seeing a civil war or a purely domestic solution.
The Next Phase of the Game
The Iranians want at least to Finlandize
Iraq. During the Cold War, the Soviets did not turn Finland into a
satellite, but they did have the right to veto members of its government, to
influence the size and composition of its military and to require a neutral
foreign policy. The Iranians wanted more, but they will settle for keeping
the worst of the Baathists out of the government and for controls over
Iraq's international behavior. The Americans want a coalition government
within the limits of a Finlandic solution. They do not want a purely Shiite
government; they want the Sunnis to deal with the jihadists, in return for
guaranteed Sunni rights in Iraq. Finally, the United States wants the
right to place a [permanent military] force in Iraq -- aircraft and perhaps
40,000 troops -- outside the urban areas, in the west. The Iranians do
not really want U.S. troops so close, so they will probably argue about the
number and the type. They do not want to see heavy armored units but can
live with lighter units stationed to the west.
Now obviously, in this
negotiation, each side will express distrust and indifference. The White
House won the raise by expressing doubts as to Tehran's seriousness; the
implication was that the Iranians were buying time to work on their nukes.
Perhaps. But the fact is that Tehran will work on nukes as and when it
wants, and Washington will destroy the nukes as and when it wants. The nukes
are non-issues in the real negotiations.
There are three problems
now with negotiations. One is Bush's ability to keep his coalition intact
while he negotiates with a member of the "axis of evil." Another is Iran's
ability to keep its coalition together while it negotiates with the "Great
Satan." And third is the ability of either to impose their collective will
on an increasingly self-reliant Iraqi polity. The two major powers are now
ready to talk. What is not clear is whether, even together, they will be in
a position to impose their will on the Iraqis. The coalitions will probably
hold, and the Iraqis will probably submit. But those are three "probablies."
All wars end in negotiations. Clearly, the United States
and Iran have been talking quietly for a long time. They now have decided it
is time to make their talks public. That decision by itself indicates how
seriously they both take these conversations now. END QUOTE
Interesting Points In Stratfor’s Analysis
There are several very interesting aspects to Dr. Freidman’s analysis above.
First, it is interesting that the US and Iran have maintained a
“back-channel” diplomatic dialogue over the years, despite public disdain
for each other since the years of the Shah of Iran.
Second, it is very interesting that it may well have been the Iranians who
led both of the Bush administrations to attack Iraq. Specifically, Dr.
Freidman believes it was Iran that convinced the current Bush administration
that Saddam Hussein had weapons of mass destruction.
Sidebar: We may never know if Saddam had WMDs or not. There
is still compelling evidence that he moved his WMDs to Syria prior to the
war in late 2002 and early 2003. But we may never know for sure.
Third, Dr. Freidman suggests that the Iranian nuclear threat may have been
only a negotiating ploy, rather than a reality, to bring the US to the
diplomatic table. We can only hope so, but I believe the Iranians will
continue to pursue nukes regardless what they may promise the Bush
administration. Let’s hope the Bushies realize this.
Fourth, Dr. Freidman seems to suggest above that the US has the capability
to destroy Iran’s nuclear program pretty much whenever it wants. He states:
“But the fact is that Tehran will work on nukes as and when it wants, and
Washington will destroy the nukes as and when it wants. The nukes are
non-issues in the real negotiations.”
This assumption flies in the face of other intelligence I read which
suggests that Iran’s nuclear program is largely buried deep underground and
therefore relatively safe from conventional weapons delivered by US (or
Israeli) aircraft. Therefore, I question this assumption.
Fifth, Dr. Freidman repeats once again his position that the Bush
administration wants to establish a permanent military force in Iraq, so as
to be able to project US power across the region and spread democracy in the
Middle East. George has maintained this position since the very beginning
of the war in 2003. One has to wonder, however, three years into this war
and no end in sight, whether this is still a top priority for the
beleaguered Bush administration.
Will Bush “Finlandize” Iraq?
As Dr. Freidman concludes, at the end of the day, it will likely come down
to: 1) negotiations between the US and Iran; 2) whether those negotiations
produce an agreement; and 3) whether the Iraqi government – divided as it is
– will accept any such deal.
On the US side, it remains to be seen if President Bush will agree to
“Finlandize” Iraq, thus putting it somewhat under the control of the
Iranians. Personally, I think this is a very bad idea.
The US has lost over 2,300 soldiers in the war in Iraq, with another 17,000+
wounded. These losses, we are told, are justified by the effort to bring
democracy to Iraq. If we are to hand over defacto control of Iraq to the
crazy Iranians – the Iraqis’ arch enemy – what have we achieved?
Speaking of crazy Iranians, here is a small excerpt from the latest Time
Magazine article on the subject:
“That is why Iran’s arriving at the threshold of nuclear weaponry is
such a signal historical moment. It is not just that its President says
crazy things about the Holocaust. It is that he is a fervent believer in the
imminent reappearance of the 12th Imam, Shi’ism’s version of the Messiah.
President Mahmoud Ahmadinejad has been reported as saying in official
meetings that the end of history is only two or three years away. He
reportedly told an associate that on the podium of the General Assembly last
September, he felt a halo around him and for ‘those 27 or 28 minutes, the
leaders of the world did not blink ... as if a hand was holding them there
and it opened their eyes to receive’ his message. He believes that the
Islamic revolution’s raison d’Ãªtre is to prepare the way for the messianic
redemption, which in his eschatology is preceded by worldwide upheaval
and chaos. How better to light the fuse for eternal bliss than with a
Depending on your own beliefs, Ahmadinejad is either mystical or
deranged. In either case, he is exceedingly dangerous. And Iran is
just the first. With infinitely accelerated exchanges of information helping
develop whole new generations of scientists, extremist countries led by
similarly extreme men will be in a position to acquire nuclear weaponry. If
nothing is done, we face not [nuclear] proliferation buthyperproliferation
. Not just one but many radical states will get weapons of mass extinction,
and then so will the fanatical and suicidal terrorists who are their
brothers and clients.” [Emphasis added, GDH.]
Remember, this is the liberal-leaning Time Magazine sounding the warning
about Iran getting nukes. You should read this entire article in the links
at the end.
Is a small, permanent US military presence in western Iraq (assuming Iran
agrees) worth handing over defacto control of Iraq to the Iranians? Dr.
Freidman has maintained from the beginning that having a permanent force in
the region was a big part of the rationale for the war. But as we’ve seen,
even 130,000 troops have not been able to bring peace to Iraq.
On the Iranian side, would they agree to postpone their nuclear enrichment
programs in order to gain defacto control over Iraq? I think they will, at
least on paper. And why not? They get what they fought eight years and
lost over 300,000 soldiers for. And who is to say that Iran, a charter
member of the Axis of Evil, will honor any such agreement to curtail their
One would hope that the Bush administration is not so desperate for a
“deal” (as George puts it) that they are willing to sell
Iraq down the river, so to speak. One would hope that the worsening
political prospects facing the GOP in 2006 and 2008 are not driving the bus
when it comes to Iraq and the possibility of ending the war by handing
defacto control over to the Iranians.
Another argument some have made recently is that President Bush has no other
choice. There is a credible chance that Congress may refuse to approve the
spending to continue the war. Arguably, that won’t happen this year, but
who is to say, especially if the Republicans take a drubbing in the mid-term
elections later this year?
The Bush administration may not feel they have any choice at this point.
Conclusions – A Bad Situation
It remains to be seen if the US and Iran will actually meet at the
bargaining table, or if anything can or will be agreed upon. Clearly, a lot
more is unknown than known at this point. Thus, it may be too early to be
critical of the Bush administration.
What we do know is that the religious leadership in Iran vehemently despises
the West, and America – the Great Satan – in particular. For Iran to agree
to negotiations – in public talks, no less – this suggests the Iranians
believe there is something “big” on the table.
Dr. Freidman suggests that the Iranians are coming to the table primarily
because they see events spinning out of control in Iraq, and some
cooperation with the US may be justified. But as noted above, I do not
believe the Iranians can be trusted.
The Iranians say they are coming to the table only to discuss the
situation in Iraq, and that talks on their nuclear program are not on the
agenda. However, it is very hard to imagine that the subject will not come
up. If US negotiators could convince Iran to postpone its nuclear programs,
that would be a big political victory for the Bush administration.
But at what price? Hopefully not defacto control over Iraq.
It’s a bad situation. We should monitor these developments closely.
In closing, my thanks as always to Dr. Freidman and the intelligence corps
at Stratfor. If you are not already a subscriber, I highly recommend that
www.stratfor.com and check out their many services.
Barring any other geopolitical developments, next week we’ll get back to the
economy, along with the latest thinking from The Bank Credit Analyst.
Very best regards,
Gary D. Halbert
Realism pushes U.S. and Iran a bit closer.
Nukes: Today Tehran, Tomorrow The World
Why Iran oil embargo would be suicidal.