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Tehran Rising

By Ilan Berman
The Journal of International Security Affairs
June 1, 2002

This spring, amid growing preparations in Washington for a campaign against Iraq, the American intelligence community dropped a major bombshell. Testifying before the Senate Armed Services Committee on emerging threats to U.S. security, Admiral Thomas Wilson, Director of the Defense Intelligence Agency, revealed that “Iran’s navy is the most capable in the region and, even with the presence of Western forces, can probably stem the flow of oil from the Gulf for brief periods by employing a layered force of KILO submarines, missile patrol boats, naval mines, and sea and shore-based anti-ship cruise missiles.”

Wilson’s warning underscores a remarkable fact: Iran is back. After years of international isolation and economic decline, Tehran is rapidly reemerging as a major regional player. Through its military rearmament and its development of ballistic missiles and weapons of mass destruction (WMD), Iran has begun to redraw the balance of power in the Persian Gulf. Its officials are busy forging formidable strategic partnerships with both Russia and China, and have begun to broaden their foreign policy horizons in the direction of Central Asia. In addition, in the midst of America’s war on terrorism, Tehran has reclaimed its title of state sponsor of terrorism par excellence.
Perhaps most importantly, Iran’s leaders, whose regime was tottering toward collapse just a couple of years ago, are now convinced that their country is destined for regional hegemony.

Iran’s Return

Such optimism is hardly unwarranted. Tehran rightly sees the current Mideast environment as the most hospitable in recent memory. Militarily, Iran faces a sudden – and surprising – absence of immediate strategic competitors. America’s resounding defeat of Iraq during the Persian Gulf War eliminated Tehran’s major regional rival. Since then, international sanctions have kept Saddam Hussein, if not contained, at least preoccupied, preventing Baghdad from reemerging as a serious sustained threat to Iranian interests. Meanwhile, the Gulf Cooperation Council (GCC) states, which formed the nucleus of Washington’s anti-Saddam coalition during the Gulf War, have been all but abandoned by years of deficient U.S. policy. Not surprisingly, these countries have been forced to seek a modus vivendi with their larger, menacing neighbor. With Turkey, potentially a major adversary, Iran has managed to reestablish significant diplomatic, commercial and military contacts. Even Riyadh, which once viewed itself as a key player in the Gulf balance of power, has increasingly fallen in line with Tehran. As a result, according to Iranian officials like Rahim Safavi, Commander in Chief of Iran’s Islamic Revolutionary Guard Corps, the Pasdaran, just two countries – Israel and the United States – now pose threats to the Islamic Republic.[1]

Politically, Tehran has benefited greatly from years of haphazard, and often self-defeating, American policy. This confusion can be traced back to 1997, when the sweeping victory of “reformist” cleric Mohammed Khatami in the country’s presidential elections, and the subsequent confirmation of his hand-picked ministerial cabinet by the Majlis (parliament), redefined the way the Clinton White House looked at Iran. Stymied by decades of diplomatic silence with Tehran’s mullahs, official Washington saw Khatami’s victory as the beginning of a more moderate face to Iranian politics. This enthusiasm was reinforced by the new Iranian president’s historic January 1998 interview with CNN, in which he took the unprecedented step of asserting that Iran intended “to benefit from the achievements and experiences of all civilizations, Western and non-Western, and to hold dialogue with them.”

Washington’s joy, it turns out, was premature. With the preponderance of governmental decision-making resting with the country’s decidedly more conservative spiritual leader, Ayatollah Ali Khamenei, Khatami – quite simply – lacks power. More importantly, the Clinton administration, in equating an embrace of Khatami with support for Iranian reform in general, seriously misunderstood the thrust of Tehran’s new politics. Khatami’s rise signaled a change in the form of Iranian policy, not in its substance.

Despite its dulcet tones, Iran’s idea of “dialogue” does not include the abandonment of any core foreign policy principles. In fact, Khatami’s so-called “détente” policy has little to do with discarding Iran’s traditional foreign policy line, and everything to do with easing his country’s international isolation. Given the response from Washington, it is no wonder that Iran’s officials now sing their president’s praises.

Economically, the Islamic Republic has profited from our misreading of Iranian politics. Even prior to Khatami’s “dialogue of civilizations” interview with CNN, the Clinton White House – flush with optimism about a sea-change in Iranian politics – had already begun a rollback of its sanctions policy. Thus the newly minted Iran-Libya Sanctions Act (ILSA), passed by Congress in July of 1996 to “deny Iran the ability to support acts of international terrorism” or “fund the development and acquisition of weapons of mass destruction and the means to deliver them,” fell out of vogue almost before the ink was dry. In the afterglow of Khatami’s dramatic televised overture, the Clinton administration cemented its policy drift by failing to enforce secondary sanctions against French and Malaysian companies for investment in Iran’s energy sector. Nor did it pay even lip service to what had until then been the centerpiece of its Mideast policy – the “dual containment” of Baghdad and Tehran.

This backsliding was instructive, underscoring the malleability of U.S. policy. The subsequent, abortive Iran Missile-Proliferation Sanctions Act, passed by Congress in June 1998 but promptly vetoed by President Clinton, did nothing to reverse Washington’s direction. Or Iran’s. Though fiscally still in dire straits, Tehran has gained substantially from half-hearted U.S. sanctions. A rise in oil prices since the late 1990s, and a rush of foreign – mainly Russian and European – investment, has given Iran the economic breathing room to once again become a regional player.

Against this backdrop, Tehran has quite understandably adopted an ambitious vision of its international role. As Foreign Minister Kemal Kharrazi made clear in a recent speech, Iran sees itself as both a “regional power” and “a factor of stability in the region”;[2] the natural center of gravity in the Persian Gulf.

This could, perhaps, be chalked up to mere bluster. After all, Iran is still a long way off from either diplomatic or economic self-sufficiency. Yet, a careful reading of Tehran’s moves indicates that, despite existing constraints, its leaders have set about making regional dominance a reality.

Gulf Dreaming

Largely unfettered by sanctions, Tehran has commenced a massive, sustained national rearmament. Seeing its ability to project power into the Gulf as the barometer of its regional – and indeed its global – standing, Iran’s leaders began to reconstruct their country’s armed forces immediately after the 1980-1988 Iran-Iraq war. Until recently these efforts were largely stillborn. When surveyed in 1998, for example, the state of Iran’s conventional weapons was at a virtual standstill – a victim of international isolation and economic decline.[3]

But Russia has managed to change all that. The Kremlin – plagued by the post-Cold War eruption of Islamic fundamentalism in its “near abroad” and apprehensive over Iran’s traditional role as a sponsor of terrorism – has embraced strategic cooperation as the best way to eliminate Tehran’s potential for troublemaking in Central Asia and the Caucasus. (Also notable is the fact that arms sales to Iran provide a significant source of income for Russia’s flagging defense industry.)

In exchange for such cooperation, Russia has proven itself willing to satisfy Iran’s arms appetite. As the spectre of sanctions receded, and rallying oil prices revived its economic fortunes, Iran has become the third largest recipient of Russian arms (after China and India), with an estimated annual trade of $500 million in 2001.[4] And recently, reflecting Tehran’s rising ambitions, the pace of this relationship has quickened considerably.

• In mid-March of 2001, Iranian President Mohammed Khatami headed a major defense delegation visit to Moscow, where he concluded a landmark accord on arms and defense cooperation worth a projected $7 billion over the next few years. Among other things, the two countries agreed on the modernization of Russian aircraft in use by the Iranian air force and a resumption of Russian assistance for Iranian naval development. Tehran and Moscow also came to terms on deliveries of Russian air-defense systems, radar stations, infantry fighting vehicles, modernized fighter aircraft, and naval equipment. Fulfillment of this agreement alone is expected to make Iran’s 25-year military modernization plan possible.

• Less than seven months later, Iranian Defense Minister Ali Shamkhani was lavishly received in Moscow by Russian Defense Minister Sergei Ivanov. Their very public four-day October meeting yielded a far-reaching accord on security and arms (valued in the neighborhood of $2 billion), and marked the official Russian abandonment of the Gore-Chernomyrdin Agreement, under which Moscow had pledged in 1995 to curtail military cooperation with Tehran. During his talks with Ivanov, Shamkhani reportedly aired Iran’s requests for major upgrades to its army, navy and air force, including fighter aircraft, helicopters, tanks, and the purchase of air-defense and battlefield missile systems.

China has also gotten into the game, albeit on a smaller scale. Arms trade between Beijing and Tehran has risen by 50 percent (to $150 million annually) since the mid-1990s, and the two countries have concluded deals on an array of advanced weapons, ranging from C-802 anti-ship cruise missiles to F-7 combat aircraft. In addition, Beijing, along with Pyongyang, has contributed significantly to what has become the central element of Iran’s military rearmament – a massive revitalization of its naval forces. Tehran has taken delivery of Chinese naval missiles and patrol craft, as well as North Korean torpedo gunboats, in purchases that have boosted its ability to project power into the Hormuz Strait and along Persian Gulf shipping lanes.

This has led to a remarkable development: Iran, if it has a mind to do so, is now capable of virtually controlling, albeit briefly, the flow of oil from the region. With around 20 percent of world oil located in the Persian Gulf, this gives Tehran tremendous leverage, not just over its weaker Gulf neighbors, but over the U.S. and the EU as well.

The transformation of Iran’s ground forces has been no less momentous. Since 1996, the military’s stock of tanks and aircraft has increased by approximately 30 percent – with the total number of tanks topping off at more than 1,500. Even more dramatic has been the country’s mushrooming small arms arsenal; in the past six years, the Iranian supply of artillery, like rocket launchers and mortars, has grown by more than 64 percent.[5] At this rate, and with escalating assistance from Moscow and Beijing, Iran could soon eclipse Iraq as the dominant military power in the Gulf.

Missiles and Mullahs

But Iran’s rearmament has not stopped there. Tehran has also embarked upon a serious quest for ballistic missiles and weapons of mass destruction. Iran sees these weapons, and the means to deliver them, as the key to achieving military parity with its principal nemesis – the United States. The Gulf War was watched closely from Tehran, and Iran’s clerics saw the rapid dismemberment of the Iraqi army by U.S.-led forces as proof positive of Washington’s overwhelming military might. Baghdad’s Scud strikes against coalition forces in Saudi Arabia during the course of the conflict, however, exposed America’s “Achilles heel” – a serious vulnerability to unconventional attack. Not surprisingly, since then Tehran has made the search for such weapons a top priority.

Accordingly, Iran’s ballistic missile arsenal, depleted by its costly eight-year war with Iraq, is now the focus of serious attention. While exact details are sketchy, all signs point to the fact that Iran has already amassed quite a formidable missile stockpile, including 200-300 Soviet-era short-range Scud B rockets more than 60 longer-range Scud C missiles. And with foreign assistance from Moscow, Beijing and Pyongyang, Tehran has been able to chart some significant successes of its own. It has accumulated notable quantities of the indigenously-developed Zelzal, Samid and Fateh-class medium range rockets, and development of its medium-range Shahab-3, derived from North Korea’s No Dong rocket and capable of hitting Israel, India and Turkey, is widely believed to be in its final stages. According to Israeli assessments, Iran now has the capability to produce around 20 of the 1,300-mile range Shahab-3 annually.

Iran has managed to cobble together a substantial chemical weapons program as well. Tehran’s efforts, which began in the mid-1980s in response to Iraqi chemical weapons attacks, have yielded notable stockpiles of choking, blister and (reportedly) even nerve agents, as well as the means to deliver them. By all indications, with Russian and Chinese assistance, Iran is also forging ahead with plans for a self-sufficient chemical weapons development capability.
Iran’s biological weapons tell a similar story. Tehran’s program – which is believed to have commenced sometime during the Iran-Iraq War – has now reached a significant degree of maturity. After years of intensive development, American officials are reasonably certain that Iran now has the ability to produce small quantities of biological agents, as well as having some capacity to weaponize it.

But it is on the nuclear front that Iran has made the most significant – and alarming – gains. Tehran’s atomic weapons drive, which began in earnest in the mid-1980s, kicked into high gear in 1996 with the signing of a $800 million deal with Moscow for the construction of a water-cooled nuclear reactor. The resulting reactor at Bushehr, which serves as the centerpiece of Iran’s nuclear program, is slated for completion in 2003. But Bushehr is only the beginning. Russia, which assumed effective operational control over the site in November of 1998, has since pledged to construct a second reactor there once the first unit is completed. And Tehran, according to a variety of reports, has at least six other atomic research and development facilities, in varying degrees of operability, scattered throughout the country. Supplemental assistance from abroad (principally China) has filled the remaining voids, allowing Iran to operate a sizeable clandestine nuclear program.

The result is chilling. While continuing to warn publicly that Tehran is on the cusp of being a nuclear power, American officials are no longer confident that the Islamic Republic has not already become one. In fact, back in early 2000, a much-circulated CIA report speculated that Iran could already have the potential to field a nuclear weapon, given its activities on the global nuclear black market.

A New Activism

None of this has been lost on Iran’s neighbors. Some – like Libya and Syria – have already begun to drift into Tehran’s orbit. (Iran has stepped up missile cooperation with both countries, allowing Tripoli to forge ahead with its missile program and granting Damascus access to advanced missile technologies).

Others have been forced to seek an accommodation with the Islamic Republic. In March 2001, Saudi Arabia – until then a serious rival for Gulf influence – came to terms with Iran on a much-delayed agreement regarding security cooperation, narcotics interdiction, and terrorism, with the effect of giving Iran a significant degree of control over Saudi security policy. Explaining Riyadh’s decision, Saudi Interior Minister Prince Nayef Bin Abdul Aziz hinted at a mature understanding of the new balance of power in the Gulf when he said the House of Saud had embraced the idea of “Iran’s security as our security.”[6]

In addition to its efforts in the Gulf (which Iranian officials, in a distinct understatement, characterize as “a pact for regional security and development”[7]) Iran has also begun to look further afield.

In Central Asia, Tehran is hard at work on an anti-NATO coalition capable of countering American influence. As long ago as 1999, Iran had already made overtures to Armenia about the possibility of an enhanced strategic relationship in the context of such a grouping. Since then, Iranian officials have consistently – and successfully – pushed for deeper relations with both Moscow and Yerevan as part of what they envision to be a “north-south” axis to dominate the region. These efforts have led to a significant convergence of policies regarding Caspian energy issues, as well as regional security, between all three countries.

In the Caspian Basin itself, Iran has adopted an increasingly aggressive posture. In a recent example, Iranian military chief Mohammed Salimi issued what amounted to a declaration of sovereignty over regional resources when he warned in May of 2001 that the Islamic Republic was ready to respond militarily to outside interference in Caspian affairs. Subsequently, in a blatant display of gunboat diplomacy, Iran menaced neighboring Azerbaijan through a series of military moves that led to the effective – albeit temporary – pull-out of several Western multinationals from the region. This kind of behavior makes a good deal of sense. Iran’s efforts don’t just keep it in the good graces of its strategic ally, Russia, by retaining Moscow’s current de facto monopoly on regional energy. They have also put a damper on energy plans (such as the Baku-Ceyhan pipeline promoted by Turkey) which do not include Iran as a transit route for Caspian oil.

As part of its expanding foreign policy agenda, Iran has also tightened ties with China. Khatami’s June 2000 visit to Beijing, only the third such of any Iranian president, laid the groundwork for an expanded “strategic partnership” between the two countries. In addition to agreements on energy and expanded military-to-military contacts, Tehran successfully pressed for a deeper missile relationship with the PRC. There can be little doubt about the organizing principle behind this cooperation. In the words of one conservative Iranian paper, “the strengthening of the Tehran-Beijing axis is of great importance” in the context of “confronting the unipolar world being considered by America.”[8]

Amid America’s war against terrorism, Tehran has redoubled its support for a variety of radical groups and insurgencies. In addition to a noticeable quickening of support for Lebanon’s Hezbollah guerrillas, Iran has forged a newfound – and ominous – alliance with Yasser Arafat’s Palestinian Authority (PA) in its war on Israel. In January, Israel’s interdiction of a Palestinian freighter, the Karine-A, while en route to Gaza revealed upward of 50 tons of Iranian arms – including anti-tank grenades and short-range Katyusha rockets – destined for the PA. Through its proxy of choice, Hezbollah, Iran also appears to be responsible for a steady arming of the Palestinian opposition. In a recent interview, Hezbollah General Secretary Hassan Nasrallah revealed that the group has been actively attempting to redraw the military equation between Israel and the Palestinians by supplying terrorist groups like Hamas and Islamic Jihad with short-range Katyusha rockets.[9]

Persistent reports have even surfaced about the harboring of Taliban and al-Qaeda terrorists in Iran, as well as the active deployment of insurgents – supported by Iran’s Pasdaran – to destabilize and foment opposition to the interim government in Afghanistan. That this is counterintuitive is self-evident: until very recently, Shi’ite Iran considered the Sunni regime in neighboring Afghanistan to be a serious competitor for influence in the Gulf and Central Asia. Nonetheless, Iran’s ayatollahs have now ratcheted up cooperation with their ideological rivals, based on the notion that a truly pro-American regime in Kabul would substantially shift the balance of power in the region – and not in their favor.

Coping with Iran

On the threshold of its campaign against Iraq, Washington thus faces an unexpected development. After years of lackluster policy, Iran is well and truly “out of the box.” And, as a result of its rising regional ambitions, Tehran is on a collision course with American policy.

Crafting a cogent response could turn out to be one of the Bush administration’s greatest challenges. After years of neglect, a serious policy on Iran on the part of the White House is noticeably absent. And the current administration, embroiled in a worldwide war on terrorism, has not yet turned its attention to Tehran. It is no wonder that Iran’s mullahs don’t seem overly concerned about concrete actions from the White House, the President’s rhetoric about an “axis of evil” notwithstanding.

Whatever the specifics, the U.S. policy that does emerge must be premised on two broad realizations. The first is that engagement, at least as attempted by the Clinton administration, is futile. The past six years of Iranian
rearmament have been proof enough of that. True, widespread protests against the regime in Tehran continue to underscore a groundswell of popular discontent on the part of more democratically-minded reformers. But just as clearly, Iran’s current president is not part of the solution. In fact, despite the initial promise of liberalization, Iran under Khatami appears rapidly headed in the opposite direction: reforms have faltered, censorship has expanded and repression has intensified. And internationally, Tehran is charting an increasingly ambitious – and ominous – policy course. At best, therefore, Khatami is ineffectual. At worst, the Iranian “reformer” has made rescuing the Islamic Revolution his top priority. Either way, the White House would do well to abandon the notion that Khatami is the key to a pro-Western Iran. Instead, the U.S. should target the true glimmers of pro-Western reform within the Islamic Republic, those found on the Iranian street, through a robust public diplomacy campaign – economic, political and cultural – aimed at loosening the grip of the ayatollahs.

The second realization is that Iran is positioning itself to act as a spoiler to American regional policy. And through its drive toward ballistic missiles and WMD, its broadening foreign policy agenda and its strategic expansion into the Persian Gulf, Tehran has already come much of the way toward this goal. The White House must stop it from going any further. To do so, Washington has to demonstrate, both in word and in deed, a renewed commitment
to zero-tolerance with regard to Iranian rogue behavior. This means a return to true “containment” – a separation of the Islamic Republic from its external sources of support – manifested through potent sanctions and the creation of an international policy consensus in favor of Iran’s isolation. The most critical part of that consensus is undoubtedly Moscow, whose alignment with Tehran is largely responsible for the latter’s reemergence. Washington must redouble its efforts to convince the Kremlin that this relationship is ultimately not in its interests. In this, the Bush administration will find assistance from a growing number of Russian policymakers, who are becoming steadily aware that Iran’s international ambitions could soon make it a threat to Russian interests in the Gulf and Central Asia. Washington should unequivocally add its voice to this domestic chorus of concern in pressing for an end to the Moscow-Tehran connection.

Through these moves, Washington could strike the needed balance between isolating Tehran’s mullahs (including depriving them of their military might) and demonstrating its commitment to Iranian democracy. Ultimately, however, one thing is clear: Washington can no longer afford a passive approach. After years of neglect, Tehran is rising – rapidly. Without an adequate response, U.S. Mideast policy could become a victim of Iran’s success.


1. Xinhua, May 16, 1998.

2. Kemal Kharrazi, Address to the Annual Persian Gulf International Conference, January 7, 2001.

3. Michael Eisenstadt, “The Military Dimension,” in Patrick Clawson et al. Iran Under Khatami: A Political, Economic and Military Assessment (Washington: Washington Institute for Near East Policy, 1998), pp. 74-78.

4. Vedemosti (Moscow), March 12, 2001.

5. Based on figures provided in Michael Eisenstadt’s Iranian Military Power: Capabilities and Intentions
(Washington, DC: Washington Institute for Near East Policy, 1996) and Anthony Cordesman’s “The Arab-Israeli Military Balance in 2002” (Washington, DC: Center for Strategic and International Studies, 2002).

6. Middle East Newsline, April 18, 2001.

7. Hoseyn Kazempur-Ardabili, a senior advisor to the Iranian Defense Ministry, as cited in Al-Sharq al-Awsat (London), April 22, 1999.

8. Abrar (Tehran), June 29, 2000.

9. Sunday Times (London), March 17, 2002.

Related Categories: Terrorism; Radical Islam; Military; Iran

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