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14 July 2019

Iran Goes All in for a Game of Nuclear Chicken

By Matthew Bey

Iran has taken the provocative step of reaccelerating aspects of its nuclear program, yet its end goal is not necessarily to develop nuclear weapons but to increase its leverage and reenter talks for sanctions relief. Unlike North Korea, Iran is not structured to survive as an isolated pariah state, meaning sanctions will hurt Tehran much more than they would hurt Pyongyang. Iran has previously refrained from taking the final steps to construct a nuclear bomb, although its strategy has depended on refusing to rule out the possibility entirely. Tehran, accordingly, is likely to resume activities that make those final steps more attainable. Both the United States and Iran are walking a tightrope in the latest game of nuclear brinkmanship, but the latter appears to have calculated that it can accept the risk of a potential U.S. — or Israeli — strike inside the country.

Once again, the United States and Iran find themselves in a familiar position: a high-stakes game of chicken over the Islamic republic's nuclear program. Iran's announcement this week that it had begun enriching uranium to 5 percent, which is above the limits set by the 2015 nuclear accord with the United States and five other global powers, is likely just the start of Iran's move to (re)accelerate its civilian nuclear program. Among other measures, Tehran has said it could increase enrichment to 20 percent, which would drastically shorten the timetable for a nuclear breakout — the moment when a country acquires enough fissile material to construct an atomic bomb. 

Although expanding its nuclear activities will only increase the probability of a military confrontation with the United States — or, at the very least, a limited military strike on its nuclear facilities — Iran has a clear objective in the long term: Restart negotiations with the United States to ultimately reach an agreement that would lift the sanctions while also safeguarding its national security. But with such a hawkish administration in the White House, Tehran's strategy may be fraught with risks — even as escalation may be Tehran's only feasible option for getting what it wants.

The Big Picture

In May 2018, the United States withdrew from the Joint Comprehensive Plan of Action nuclear deal, three months before it began reimposing sanctions on Iran. Initially, Tehran chose to continue implementing the deal in the hopes of obtaining some sanctions relief from the other parties to the agreement. But in May, the United States refused to extend any waivers for Iran's oil customers, prompting the Islamic republic to up the ante and resume some suspended nuclear activities that will only draw the ire of the international community.

Compensating for Shortcomings

Tehran views itself as a regional hegemon that wants to project influence in its vicinity. Such a self-regard didn't develop with the Islamic Republic of Iran. Its immediate predecessor, the Pahlavi dynasty, held a similar view — as did previous Persian empires dating back to antiquity. Today, however, Iran is finding the deck stacked against it. Iran may boast a large economy and the biggest population in West Asia, but its conventional military power is limited. Prior to the Islamic Revolution of 1979, Iran relied heavily on its security partnership with the United States for military equipment, spare parts and training. But as a result of the anti-American tinge of the revolution, Washington naturally severed its relations with Tehran, imposing arms embargoes that have left Iran's conventional military arsenal decades behind its regional peers — if not in deep disrepair. Moreover, U.S.-backed Saudi Arabia and Turkey perceive Iran as a regional rival whom they are endlessly seeking to outmaneuver on the Middle Eastern chessboard. 

Unsurprisingly, Iran is attempting to compensate for its conventional military shortcomings through its defense and security strategy. Militarily, this means Iran supports both Sunni and Shiite proxies in the region, such as Hamas and Hezbollah, which harry America's biggest ally in the region, Israel (a strategy that is especially likely to reap rewards in the near future as Israel's relationship with Arab Gulf monarchies becomes more overt); it also means Tehran has sought to directly train militias and provide support in places in Iraq. Furthermore, it explains why Iran has invested so much on ballistic and cruise missiles, cyber warfare and ways to mine and disrupt shipping in the Strait of Hormuz. Ultimately, through each of these actions, Iran is seeking to increase its strategic deterrence by raising the costs for a regional foe or the United States to take military action against it. 

Of course, such a strategy could culminate with the desire to develop nuclear weapons and build up a small arsenal. In so doing, however, Iran would have to consider the ultimate pros and cons of acquiring even a limited arsenal. Indeed, while Iran possessed a nuclear weapons program in the past (by all accounts, it ended its program in 2003, pursuing only tangential efforts to specifically develop a weapons program since), its actions have shown that it is not particularly willing to aggressively develop nuclear weapons and accept the associated risks — at least in comparison to North Korea.



Why Iran Isn't Like North Korea

For Iran, there is a trade-off between pursuing an aggressive nuclear strategy — one that could eventually develop atomic weapons — and coping with the economic costs of the resulting sanctions. And unlike North Korea, Iran is simply not structured to survive as an isolated pariah state in the long term. For one, Iran's political system provides legitimate avenues for the populace to express discontent with the government — a factor that can shape policy. In this, Tehran does not possess an all-pervasive security state that can limit internal dissent to the extent that Pyongyang can. What's more, North Korea is a small country in the shadows of much larger nations — China, Russia and Japan — with little-to-no desire to project regional influence in the same way that Iran wishes to. The lack of a giant neighbor also means Iran has no immediate protector to shield it from the effect of sanctions, as North Korea does with China. 

But perhaps most importantly, Iran's economy is deeply dependent on international trade. The country's oil exports remain the government's most critical source of foreign exchange, which Tehran needs to import half of its food, as well as many industrial products it cannot manufacture at home. Simply put, while Iran does want to limit its connections to the outside world, such as by controlling state media and the internet, the level of isolation that Iran can tolerate is more comparable to that of China than that of North Korea or even Cuba. 
What Iran Hopes to Achieve

From a tactical perspective, the U.S. strategy to hurt the Iranian economy through sanctions is working. Iran is facing an economic contraction this year that could reach 6 percent of the country's gross domestic product. And inflation, which Iranian President Hassan Rouhani had previously succeeded in taming, is now running at around 50 percent. Nevertheless, the sanctions have yet to trigger a major economic crisis that would propel citizens onto the streets to demand change. Tehran, accordingly, feels like it has years to maneuver before that happens.

By upping the ante against Washington, Iran is trying to narrow U.S. demands and attain a better bargaining position so that its leaders can make cosmetic concessions during negotiations.

Still, Tehran knows it must engage with the United States and/or pressure other countries enough to introduce mechanisms that allow Iran to evade U.S. sanctions. Right now, the prospect of engagement with Washington is unappealing, especially as hawkish elements in the Trump White House are still calling for a strike on Iran. Indeed, shortly after the United States abandoned the Joint Comprehensive Plan of Action (JCPOA) in May 2018, U.S. Secretary of State Mike Pompeo presented 12 stringent conditions to end the sanctions, demanding that Tehran abandon its nuclear program and radically alter its regional strategy, among other measures; ultimately, from Iran's perspective, the demands were tantamount to calls for regime change. Moreover, even though the vast majority of potential Democratic challengers to President Donald Trump in the 2020 presidential elections have promised to rejoin the JCPOA if they win, the U.S. Senate will likely remain in the hands of Republicans who will push for a strong line on Iran. What's more, many of the JCPOA's sunset clauses will have already entered effect, thereby removing or reducing some restrictions on Iran's nuclear activities. In such a situation, any new U.S. president, regardless of party, would almost certainly demand either an extension of the JCPOA or a new deal, rather than merely rejoin the Iranian nuclear deal.

By reducing its commitments and returning to the nuclear game of chicken reminiscent of the Mahmoud Ahmadinejad era, Tehran's strategy is twofold. First, it is hoping to push the European Union to rapidly provide a mechanism to guarantee Iranian trade or cajole the United States into again extending small-scale waivers for Iran's oil customers. Second, it builds up leverage for future, and likely inevitable, talks with Washington over Iran's nuclear program and other issues. By upping the ante against the United States, the Islamic republic is trying to narrow Washington's demands and attain a better bargaining position so that Iranian leaders can make cosmetic concessions during negotiations, all while obtaining sanctions relief and protecting more essential objectives: supporting regional militias and maintaining its ballistic missile program.

In fact, Iran effectively succeeded with such a strategy before the JCPOA, as it whittled the Obama administration's position down so that the eventual deal focused solely on Iran's nuclear program, completely omitting any discussions about ballistic missiles. As it is, the agreement permitted Iran to maintain a limited level of uranium enrichment and lifted a U.N. embargo on weapons sales to the country in exchange for robust monitoring.


For Iran, there have even been signs that the strategy — particularly when coupled with the country's aggressive actions in the Persian Gulf and Gulf of Oman — is working with Trump, if not with all of his advisers. Notably, Pompeo and Trump are no longer demanding that Iran accept the 12 demands outlined last year. In his tweets and statements, Trump has suggested that his main demand is that Iran not develop nuclear weapons. Of course, the goal posts could shift once negotiations start given the presence of figures like national security adviser John Bolton in the White House, yet Iran must prepare for possible negotiations in a potential second Trump term.

This notwithstanding, there is still a risk that the United States could launch a military strike on Iran, particularly given the many hawks in the White House who have supported such a policy in the recent past. But Iran's actions — both with its nuclear program and its attacks on tankers and an unmanned U.S. aerial vehicle in the past two months — has shown that it is willing to accept that risk. And in some ways, a limited strike on a set of Iranian nuclear facilities could actually reinforce popular support for Iran's leadership at home by allowing it to play the nationalist card in the face of economic pressure. 
Tehran's Next Steps

In its contest with the United States, Iran will maximize its leverage the closer it comes to a nuclear breakout. To develop a nuclear weapon, Tehran essentially has two routes it can follow: pursue uranium enrichment or acquire plutonium. The former would likely be Iran's easiest course of action. To build one bomb, Iran would need to produce just over 25 kilograms of weapons-grade uranium that is enriched to at least 90 percent. The JCPOA was designed to block this route in several key ways. First, it limited Iran to only enriching uranium to 3.67 percent (mainly for use in power plants) and capped its stockpiles at just 300 kilograms. On July 1, however, Iran announced that its stockpiles had begun to exceed the JCPOA's limits; seven days later, it said it would enrich uranium up to 5 percent. Second, the nuclear deal also capped the number of centrifuges that Iran could use, limiting its operations merely to unreliable, outdated centrifuges. The agreement stipulated that Iran could only use 6,104 IR-1 centrifuges and not more advanced IR-2m, IR-4 or IR-6 centrifuges, which are more efficient at enriching uranium.


Iran has yet to announce that it will install more centrifuges or use more advanced versions in the future, but it has threatened to increase the level of enrichment to 20 percent — a level that is crucial to enrich uranium to weapons-grade level. Before the JCPOA, Iran had been producing 20 percent enriched uranium (about 250 kilograms of which is needed to produce 25 kilograms of weapons-grade uranium), but the deal barred Iran from continuing to do so.
Iran may have more difficulty in developing plutonium — which can be obtained by using natural uranium in a heavy water reactor, obtaining the spent fuel and then extracting the pure version of the element through reprocessing — as the JCPOA featured more comprehensive measures to dismantle the necessary facilities and equipment. Iran's Arak Heavy Water Reactor could have produced enough plutonium for about one bomb per year, but as part of the JCPOA, Iran agreed to modify the facility's design so that it would become a light water reactor, which produces far less plutonium in its spent fuel rods, thereby requiring the country to build up years of stockpiles to recover enough material for one device. Iran also agreed to pour cement into the reactor's core, rendering it inoperable. As part of the current standoff, Iran has threatened to alter the Arak reactor's design back to the original, although it has yet to take action. And while it has exceeded its limits on heavy water stockpiles, it would need to conduct more research on reprocessing, obtain assistance from an outside actor and build related facilities if it wished to pursue the plutonium route to construct an atomic bomb.

Over the past 15 years, Iran has refrained from pursuing a nuclear program that is solely oriented toward the military; nevertheless, the technology it is using is dual-use, while the country is currently taking steps that make a nuclear breakout possible at some point. The JCPOA, however, delayed the timetable for doing so, meaning Iran is at least one to two years away from acquiring enough material for a nuclear test. Moreover, if Iran were to attempt to covertly obtain a sufficient amount of material for a test, it would have to develop a whole nuclear supply chain in secret as the international community continues to strictly monitor Iran's declared nuclear facilities as part of the JCPOA.

Iran has taken clear, methodical steps that will give it the option of one day developing nuclear weapons but, in contrast to past years in which it concealed its activities, it has acted transparently in communicating its intent to the world. In so doing, Iran is hoping that it will accumulate leverage in a public manner, as it essentially tells the world that it does not intend to develop weapons surreptitiously. But barring a diplomatic breakthrough with the Europeans and the United States agreeing to a partial reduction in sanctions, Iran is likely to continue playing its long-term game of chicken. The question may ultimately center on whether the Trump administration is willing to acquiesce to Iran's activities or strike back. Iran has steeled itself for the latter prospect, but such a strike could ultimately ignite a broader conflict in the Middle East and draw in neighboring countries — and convince Iran to ultimately to take the fateful step to develop nuclear weapons capabilities.

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