18 March 2012

Will Israel Attack Iran?

A good friend of mine asked me why I was not commenting on Israel's very public air strikes countdown against Iranian nuclear facilities.

I told him that I didn't say anything because I didn't think a strike is a real possibility and I still don't. I already explained my reasoning in a detailed manner last November and I believe my points are still valid.

He was not moved. But, he said, how do you explain the extreme sound and fury that surrounds this issue. How do you explain the fact that eminent experts got together to establish an Iran War Clock and it is ten minutes to midnight (i.e. 48 percent chance of a strike).

The panel is indeed impressive:

Daniel Byman, Shahram Chubin, Golnaz Esfandiari, Azar Gat, Jeffrey Goldberg, Amos Harel, Ephraim Kam, Dalia Dassa Kaye, Matthew Kroenig, John Limbert, Valerie Lincy, James Lindsay, Marc Lynch, Gary Milhollin, Trita Parsi, Paul Pillar, Barry Rubin, Karim Sadjadpour, Kenneth Timmerman, Shibley Telhami, Stephen Walt, and Robin Wright.

To break my complacency, my friend added that just yesterday, it was reported (in Hebrew) that Netanyahu held a vote in his cabinet and eight ministers voted in favor of a strike without American support and six against.

I have pushy friends.

I suppose there are enough new developments to warrant a revisit. Just to defend a contrarian position to contradict that eminent panel might be worth the effort.

First, let me recap some of the recent highlights.

The Recent Strike Narrative

Ever since IAEA declared its mission in Iran a failure in February, we heard from a number of sources that a strike was imminent. Even before the publication of the IAEA report, Israel's Minister of Defense Ehud Barak was saying that "later might be too late."

Shimon Peres warned that on this issue Israel would act decisively to defend itself and would win. Netanyahu made so many declarations on the subject -each more threatening than the next- that it is impossible to link to them all. Just take my word that he sounded like he meant it.

Before Netanyahu's highly anticipated trip to Washington a couple of weeks ago, Obama went to talk to Atlantic's Jeffrey Goldberg to deliver a message to both sides. He chose Goldberg because as an American citizen who served in IDF during the first intifada, there is no doubt about his allegiances. But the message Obama delivered was that the US, while siding with Israel on the nuclear Iran issue, would vastly prefer a peaceful solution. He repeated the same message, somewhat more vigorously, to AIPAC and later to Netanyahu.

Upon his return, Netanyahu made it clear that he did not share Obama'a preference for a peaceful solution.
"So the American clock regarding preventing nuclearisation of Iran is not the Israeli one. The Israeli clock works, obviously, according to a different schedule."

He added: "The result has to be that the threat of a nuclear weapon in Iran's hands is removed.
"It is forbidden to let the Iranians get nuclear arms. And I intend not to allow that to happen."
And his former security adviser, (the aptly named) Uzi Arad added: "What's left? A matter of months."

All the sources I read regularly had articles about how such an offensive would be conducted and the pros and cons it entailed, this is just one example. While these pieces were written with the assumption that a strike was very likely, they all repeated the same caveats: it was a very risky operation and, even if all went smoothly, such a strike would not do much to stop Iran's nuclear program. And in the aftermath of such a strike there would be a prolonged period of near chaos in the region.

In other words, the benefits of the operations were not clear at all. It seemed like a huge pile of downsides with no real upside. Yet, everyone acted like it was more or less an inevitability.

In fact, Sefi Rachlevsky, writing in Haaretz, reiterated all of these negative points but predicted that Netanyahu was going to pull the US into the conflict by launching the attack before the US elections. He called it Netanyahu's conspiracy to drag the US to war. The theory is that if Israel carried out the attack in the summer, there was such a unified discourse on this in the US that no US president could avoid going to war. As he put it:
If numerous missiles land on Tel Aviv and American assets in the region are hit, the carefully chosen timing, right before the U.S. elections, is supposed to compel Obama to send the only military force capable of destroying Iran's nuclear program.
 Sometime between early June and mid-August, just before the Republican nominating convention, will be the ideal moment to drag the United States into war, the planners believe.
He also suggested that there was a consensus on this among Netanyahu's adviser and even a man like Uzi Arad appeared dovish in that debate, as he was fired for suggesting more prudent courses of action:
Faced with this gamble, even former National Security Advisor Uzi Arad - the man who once gave Haaretz the most extremist interview ever on the nuclear issue, in which he spoke of the sexual pleasure derived from war games involving tens of millions of casualties - is now showing himself to be a comparative moderate. Even Arad insists on coordination with the United States, and thus found himself to the left of Prime Minister Benjamin Netanyahu on the question of whether to attack. That, in his view, is why he was ousted: Netanyahu didn't want position papers offering other options.
Very convincing.  But, seriously, does any of this make sense?

The Regional and Global Consequences of an Israeli  Strike

Let's run the proposed scenario. Israel strikes Iran. Done. Let's stipulate that it is successful within the parameters we are given. Let's also assume (as it is done by most analysts) that the operation damages but does not destroy Iran's nuclear capabilities.

As expected, Iran tries to retaliate. But its missiles are intercepted by Israel's Iron Dome (which successfully stopped the vast majority of missiles from Gaza during recent clashes with Hamas and should easily destroy Iran's antiquated ballistic missiles).

Iran tries to hit American assets in the region but the two missile shield systems in Turkey and Israel easily stop them. Iran tries to use its proxies in the region, i.e. Hezbollah and to some extent Hamas and their missiles are stopped as well.

So far, Netanyahu's hawkish advisers look good. Mission accomplished but Israel paid no heavy price for it.

But, if all went according to plan, without serious Israeli casualties, how do you pull the US in to finish off the job? Why would the US jump in at this point? In fact, if they did, would they be willing to accept these highly probable outcomes:

-Egypt's government (military or Muslim Brotherhood if the June transition takes place) might find itself under tremendous pressure to pull out of Camp David Accord and might have to do so.
-Turkey's fake belligerence towards Israel might turn into actual hostility.
-The power struggle within Hamas might be resolved in favor of Haniyeh and against Meshaal radicalizing the Palestinian population further.
-Hezbollah could destabilize Lebanon and begin posing a security threat for Israel.
-All other Arab countries in the region, including Jordan might find themselves aligned against Israel.

In other words, we are asked to believe that Israeli leadership would be willing to risk the complete isolation of their country and the revived animosity of Egypt, Jordan and Turkey just to undertake an operation that might, at best, yield inconclusive and ephemeral results.

We are also asked to believe that the Americans would risk decades of chaos, uncertainty and terror in the region just to help Israel achieve these dubious results.

And this is not all the Americans would be risking.

Let's go beyond the region and let's look at what might happen if the US were to decide to get involved in the absence of Israeli casualties and to carpet bomb Iran to complete the mission.

One of the global consequences of such a move would almost certainly be a new arms race with Russia and China. Already Putin announced that he is increasing Russia's military spending drastically to counter "the American threat." China has been doing just that for years as their military budget has just topped $100bn.

It might sound ironic but with a $15.5 trillion debt and $1.3 trillion budget deficit, I think the US is as ill prepared for a new arms race as was Gorbachev during Reagan years.

Moreover, these two minor super powers would likely try to increase their influence and involvement in the region and extend the arms race to their clients. Russia could provide Iran with better missiles and could bolster the Assad regime with a large infusion of cash and potent arms. This, coupled with Arab and Muslim hostility in the region, would effectively kill every peace possibility for decades to come.

Finally, there are economic consequences: A strike is very likely to create a highly speculative environment for oil prices. Any further increases in oil prices would destroy the fledgling recovery and push the global economy back into recession.

My question is this: Why do we think Israeli planners are incapable of seeing any of this? Why do we assume that the decision will be based on chutzpah? And why do we think that the Americans will go along with this despite all these consequences?

My Jewish friends like the idea because it is cast in David and Goliath terms, with tiny Israel defying everyone and defending itself. It also feels like a glorious new chapter in Entebbe mythology. After many millenia of discrimination, persecution or worse, the idea is empowering. I get it. I do.

But this is not a rational basis for such an operation. And with all the downsides I enumerated I cannot fathom a rational decision maker going ahead with such an operation.

So, going back to the original question, if the rewards are so dubious and consequences so grave why all that sound and fury?

My Contrarian Take on the Blustery Rhetoric

In November I suggested that there are two main reasons for the blustery rhetoric. One was operational, the other strategic. The operational reason is still the same, namely the desire to keep the Iranian government on alert and on the defensive.

But this time around it serves two distinct purposes. One, as before, it forces Iran to make changes to its nuclear facilities, to move things around and to add more layers of defense capabilities against an eventual attack. These activities yield a wealth of intelligence, as I am sure both the Americans and Israelis are watching everything constantly and very carefully. The information they gather must be very useful in the covert war that has been going on.

The second purpose it serves is to slowly destroy the Iranian economy. With an imminent threat of strike, Iranian leaders are spending frantically to speed up their nuclear program and to bolster their defenses. In this vein, they have decided to increase their military spending by 127 percent in order to acquire many defensive and offensive weapons.

Under normal circumstances, that kind of increase in spending might have been manageable, especially if it was accompanied by rising oil prices. The problem is that Iranian economy is boxed in very tightly and in that setup, every dollar spent on military equipment is a dollar siphoned off from the general economy.

What do I mean by that?

Iran has now been effectively removed from the global financial system. SWIFT (the Society for Worldwide Interbank Financial Telecommunications) which is the main outlet for all commercial transactions in the world has announced recently  that it was removing Iran from its system.  And as of this Saturday (17 March), Iran is cut off from the global commercial network, as it is close to impossible to buy and sell goods outside the SWIFT system.

As far as I know, this is the first time an entire country was kicked out of the SWIFT system. The consequences will be dramatic and far reaching. Iran can still sell its oil in government to government operations but it will have to jump through some major hurdles.
China and India have said they will still take Iranian oil, but the only obvious way for Iran to be paid for it is now in gold. 
It will also face serious difficulties in importing goods.
One Iranian businessman said Swift's move would make it now impossible to conduct business with Iran.
Morteza Masoumzadeh, a member of the executive committee of the Iranian Business Council in Dubai and managing director of the Jumbo Line Shipping Agency, told the Reuters news agency: "If Iranian banks cannot exchange payments with banks around the world then this will cause the collapse of many banking relations and many businesses." 
Even before all of this, the Iranian economy was in trouble. Inflation has been hovering around 20 percent for a few years and until this January, interest rates were fixed at 12 percent. Faced with a negative interest rate, Iranians pulled their money out of banks and purchased gold and foreign currency with their savings. As this was starving the economy, the government finally relented and moved interest rates to 21 percent in January. But it might be too little, too late:
The rial has shed about 50 percent of its value relative to the dollar over the past month, a decline that the central bank governor, in a moment of rare candor, attributed at least partially to the “psychological effects” of the US sanctions. The currency, which was trading at 15,000 rials to the dollar on the black market at the start of the year, hit a record low of 22,000 rials to the US currency by the weekend.
No economic figures have been published since the second half of 2008, possibly because they are dismal (pdf). Officially unemployment is around 14 percent. Youth unemployment is over 25 percent (pdf). Or to put it differently, 70 percent of all unemployed persons are under the age of 30.

In my opinion, forcing Iran to increase its military spending by 127 percent while facing such a dire economic situation is more effective than any strike on its nuclear facilities. It increases domestic discontent, makes the regime even less popular and obliges the leadership to make unpalatable policy choices.

It is a minor thing (given the sums involved) but this might also hamper Iran's ability to provide material support to Hezbollah and Hamas.

As for the strategic reason behind the rhetoric, it has something to do with Hamas and my highly contentious claim that there will be a peace agreement between Israel and Palestinians in the near future (probably before the end of the year).

I suggested previously that Netanyahu will call early elections sometimes in the summer and once he has a solid mandate he will start negotiations with Palestinians. I also maintained that there are imminent changes within Hamas with Meshaal trying to oust the pro-Iranian Haniyeh faction to realign Hamas with Mahmoud Abbas' vision, which is a prerequisite for such talks.

Within that context, the blustery rhetoric serves multiple purposes.

It provides Netanyahu with street cred within the Israeli public. Just like my Jewish friends feeling empowered by all this, ordinary Israelis feel proud of their government's ability to claim that they can take out any target in the region and push back any country. It will give him more unified support as people will assume that he is asking for a mandate to strike Iran.

It enables him to pick a fight with Hamas in Gaza while keeping Iran on its toes. The current Prime Minister Ismail Haniyeh is supported by Iran and weakening him would help Meshaal take over the organization. In my view, the heavy handed response to recent Gaza rockets was mostly motivated by this imperative.

The third purpose is to make Iran blink. That is Cuban missile crisis terminology or "the Annals of Blinkmanship"  so everyone understands the basic idea. After this relentless campaign, if Iran blinks and offers to negotiate, they look weak. And that relegates them to a minor power status in the region.

But, perhaps more importantly in the current climate, this makes Iran's clients in the region look weak. And that is a problem for the Haniyeh fraction in Hamas.

To recap, other clocks notwithstanding, I don't expect a strike any time soon.

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