by ROBERT BECKHUSEN
Iran and the P5+1 coalition of six major powers have reached a historic deal to halt Tehran’s nuclear enrichment program. Some months from now, as Iran verifies compliance with the agreement, a series of debilitating international sanctions targeting the country’s economy and military will disappear.
To be sure, the deal is good for the Iranian military. It will free Iran to make arms deals abroad, replace some of its largely 1970s and 1980s-vintage technology and increase revenue through oil exports. In short, Tehran’s armed forces are likely to strengthen.
“If the deal is reached and results in sanctions relief, which results in more economic power and more purchasing power for the Iranian regime, it’s my expectation that it’s not all going to flow into the economy to improve the lot of the average Iranian citizen,” Gen. Martin Dempsey, America’s top military officer, said during a June 9 visit to Jerusalem.
“I think they will invest in their surrogates; I think they will invest in additional military capability.”
But that’s a different thing from building up a major war machine, something which many of the deal’s critics fear.
Worry not. It will take years for Tehran to rebuild its lagging economy — and the mullahs are far from catching up to their regional rivals in terms of military spending. Of course, the biggest development is that Iran now won’t have a nuclear weapon.
The United States and most Western governments halted sales of military hardware to Iran following the 1979 overthrow of the Shah and the rise of an Islamic theocracy. It’s highly unlikely any of these governments — including the U.S. — will sell weapons to Iran anytime soon after the deal.
While the U.S. has sought rapprochement with Iran, Washington remains closely allied with Saudi Arabia and its presence in the wider Middle East depends on major naval and air bases in Bahrain and Qatar. No American administration will soon scuttle these alliances. To do so would require a major realignment of the Middle Eastern political order.
But the deal will open Iran up to make arms deals with Russia and China — both traditional weapons suppliers to Tehran. The Kremlin has been keen to sell Iran S-300 missiles, one of its deadliest and longest-range surface-to-air weapons. In the 1990s, Iran bought up Russian-made T-72 tanks, armored vehicles and MiG-29 fighters.
But in 2010, these sales came to an abrupt halt. The United Nations Security Council adopted Resolution 1929 blocking major arms sales to Iran including sales of missiles, tanks, warplanes and warships.
In 2013, the P5+1 agreed with Iran to lift these sanctions in exchange for a nuclear deal — a concession on the part of the alliance — and most likely a condition for keeping Russia and China from leaving the negotiating table. Without diplomats from Moscow and Beijing taking part, the deal certainly wouldn’t have been reached.
The problem is that Iran has to pay for its new weapons. How? Oil exports. About 65 percent of Tehran’s state revenues come from oil rents — which also helps pay for its military. A deal will likely pave the way for increased Iranian oil and natural gas exports abroad, which means more revenues for Iran.
But this should be tempered by low oil prices continuing at least for the short term. “Iran’s efforts to raise oil exports could not have come at a worse time, given the market’s lingering oversupply,” Barclays PLC energy analyst Michael Cohen told the Wall Street Journal.
Most likely, it will take another year for Iran to find buyers in Europe. Right now, much of Iran’s oil currently goes to East Asia. Once the European Union clears Iran to export its oil, Tehran could inject about 500,000 barrels per day into the world economy, further depressing prices. And that would just bring Iran back to up where it was before the sanctions.
Tehran couldn’t export much more than that. Most of Iran’s oil and gas industries are old and far less efficient than those across the Persian Gulf. It will take years of work with American and European oil companies before Iranian roughnecks have the technology to drill deeper.
Iran also has to compete with the Gulf states and Saudi Arabia in terms of both oil prices and military spending. Here Tehran’s rivals have a distinct advantage. The numbers are imprecise and by nature secretive, but Iran likely spends anywhere between $8 billion to $14 billion per year on its military, according to arms control groups.
In comparison Saudi Arabia and the Gulf states spend around $72 billion per year combined on defense, according to the Stockholm International Peace Research Institute.
These states continue to increase spending amounting to an “overwhelming advantage … in both military spending and access to modern arms,” an April 2015 paper from the Center for Strategic & International Studies stated.
CSIS estimated the Gulf states’ combined military spending amounts to $98.5 billion per year — about a 10–1 advantage over Iran. Billions in this spending go toward purchasing American and European hardware, including advanced fighter jets, helicopters and anti-aircraft defense systems.
The Iranian regime knows this, and has built a strategy around defending against an invasion by a substantially more powerful foe. Instead of posing a conventional threat, it expects a conventional threat and instructs its troops and sailors in guerrilla warfare and “swarm” tactics.
There’s no doubt the mullahs like to show off their toughness. But it’s hard to take it too seriously when the method is to show off obsolete helicopters, defective rifles and armored city buses.
Far different are Iranian operations abroad. In Iraq and Syria, Iranian military officers serve to boost the fighting strength of local forces on the ground — similar to U.S. commandos and owing in part to lessons from America’s history of military aid to monarchical Iran.
At the same time, it’s hard to see how continuing the sanctions would have stopped it. Had the P5+1 talks broken down, it’s easy to foresee Russia and Chinese resuming arms sales anyways — and there’s evidence this process was already underway.
All the while, Tehran would have continued working on a possible nuke.