Iran News and Discussions

[shyamd]

Up Persian creek without a strategy

01.03.2011 · Posted in Economy, Foreign Affairs, Security

India must get its act together on Iran…quickly

The apparent lack of policy co-ordination within the Indian government over Iran is really worrying.

We are referring to the RBI’s decisions in recent days closing the Asian Clearing Union (ACU) mechanism to imports—beginning with oil and extending to other goods and services—from Iran. The move not only caught the industry by surprise. And it looks like it caught the relevant government ministries by surprise as well. Given that Iran is India’s second largest supplier of crude oil accounting for around 13 percent ($12 billion) of oil imports and the risk of a short-term supply shock sending oil prices higher, the lack of policy coordination amounts to dereliction of duty.

The lack of coordination reflects a deeper malaise—the UPA government’s inability to evolve a coherent policy on Iran, with the result that New Delhi is forever in reactive mode. [See: Will the Ayatollah step behind the line?] The overall failure of Prime Minister Manmohan Singh and his government to communicate with the public—witness how they botched up the India-US nuclear deal—means that no political leader explains why the government is doing whatever it is doing, and why difficult decisions have to be made. The latter would still be acceptable if the government executed in a competent fashion—like in the case of the nuclear deal—but intolerable where execution is poor.

In this case, there is no evidence that the relevant cabinet committees ever discussed the implications of RBI’s move and took the necessary measures to manage the fallout. The RBI’s independence doesn’t preclude coordination in matters like this. A competent government would have reassured the markets and the public that although RBI’s measures against imports from Iran would put 13% of India’s supply of crude at risk, it has alternative plans to protect the Indian economy. Instead we were left working out the implications of terse press releases issued by the central bank.

What might those alternative plans be? These could involve arrangements to import Iranian oil through other currencies (or the Indian rupee), assurances from other suppliers (read Saudi Arabia) that they will make up the shortfall or both. Given Saudi interests in keeping the lid on Iran’s nuclear programme, New Delhi could have extracted the latter as the price of tightening the financial screws on Iran. Indeed, not extracting such a price is a good opportunity squandered. (LOL, and how do you know India never got anything in return?)

India must get its act together on Iran. First, it is in India’s interests to ensure that Iranian oil and gas continue to provide the economy with the supply diversity that an oil-importing country needs. If this objective is inconsistent with playing responsible global citizen then so be it.

Second, given that Iran shares an interest in preventing Afghanistan from falling under the sway of a Saudi-Pakistani-Taliban nexus, India needs to continue to engage Iran. (Fair enough)

Third, while a nuclear-armed Iran may or may not be entirely in India’s interests, it is far better to manage the consequences thereof than to countenance the use of military force in a futile attempt to stop it. (Who said it is futile? There is soo much crap happening behind the scenes, GoI knows what is happening in the region and the real picture)

Finally, while international sanctions are unlikely to prevent a determined Iran from developing a nuclear weapon, it is geopolitically costly to stay out of the Western consensus. Unless sanctions prohibit India from purchasing Iranian oil and gas, it is better for India to be part of the sanctions regime.

Reconciling these objectives is not easy, but not impossible either. The big prize in foreign policy, however, is for India to assiduously work to bridge the divide between the United States and Iran. This—more than securing a permanent seat at the UN Security Council—is a project that is worthy of a rising global power. This task of international statesmanship requires a real leadership at South Block and the PMO. Till that time we can have day-to-day issue management, not strategy.

The new year begins with a question mark on oil imports from Iran. The larger question mark though is whether the UPA government will now realise that it finds itself in a jam over Iran because it has no ideas of its own.

Folks, there is a lot of noise, a lot of things are stage managed.

[shyamd]

http://middleeast-analysis.blogspot.com ... issue.html

Just released comments on the Iranian nuclear issue. This is meant for public consumption. Look forward to hearing your views.

[somnath]

Pakistan imports 100 million worth of oil from Iran. Iran imports 20 million worth of textiles. Pakistan then exports 80 million worth of say, prostitutes, to China. China deposits 80 million in the bank in Iran's name. Everyone is happy.

Or Pakistan imports 100 million worth of oil from Iran. Iran imports 20 million worth of textiles. Pakistan supplies 80 million worth of onions and cement to India. India deposits 80 million in the bank in Pakistan's account for Iran to take.

Sounds like legal hawala to me.

WEll, both are examples of valid trade, where is the hawala? In the first instance, Pak finances its trade imbalance with Iran through a surplus on what in India is termed as invisibles. In the second case, through a trade surplus ith India..Where is the hawala?

this ACU mechanism will allow Indian dollars to be used by third party nations for oil purchases while third party nations may agree for a settlement of the account in Pakistani Rupees as long as the two countries agree to allow that.

India's "dollars" (or forex reserves) are parked in a variety of instruments - US treasuries, sovereign bonds, loans, investments in multilateral institutions and so on..For example, India recently made a 10 billion dollar investment in IMF (part of process to mak IMF more representative, gives more voting rights to India)...Now one can always argue then that the IMF bailout package to Pak was financed out of India's dollars..Or US largesse to Pak is partially funded out of Indian money as India' reserves are substantially in US treasuries!

A netting off mechanism is pretty standard in all modern clearing systems - BSE and NSE for example wors on net settlement...Bank globally transact with each other on a net settlement basis as well...And that is why they make a lot of money - most clients (of the bank) need to transact on a gross settlement basis, while the bank can "lay off" the risks of those transactions on a net basis in the interbank market - the bid offer spreads on the two legs are substantial..n ACU type mechanism tries to cut-off the banks to an extent..

Ceteris paribus, if Iran has no use for Paki rupees, it will insist on payments in dollars (or Euros), currecnies that it can trade for its net balance of trade with Pak...If Pak manages to finance that by doing a swap with the ACU, it is no different from Pak going to IMF (or World Bank, or JP Morgn) and raising a commercial/multilateral loan, or getting China to give it some friendship monies...The only difference being that for Pak, the operational process of doin a swap with ACU would be easier than raising a commercial loan..However, I am pretty sure ACU will have limits on swap lines for each country - and it is likely to be a function of the ountry's forex resreves, credit standing etc..So it isnt huge deal really...

[shiv]

Pakistan imports 100 million worth of oil from Iran. Iran imports 20 million worth of textiles. Pakistan then exports 80 million worth of say, prostitutes, to China. China deposits 80 million in the bank in Iran's name. Everyone is happy.

Or Pakistan imports 100 million worth of oil from Iran. Iran imports 20 million worth of textiles. Pakistan supplies 80 million worth of onions and cement to India. India deposits 80 million in the bank in Pakistan's account for Iran to take.

Sounds like legal hawala to me.

WEll, both are examples of valid trade, where is the hawala? In the first instance, Pak finances its trade imbalance with Iran through a surplus on what in India is termed as invisibles. In the second case, through a trade surplus ith India..Where is the hawala?

You are a terrorist in India. I am a Pakistani in the US. You need money to fund an operation. I have the money. I pay someone in the US the money you need in US dollars. That someone instructs his brother in India to pay the equivalent amout to you in INR. That is hawala.

Pakistan does not have enough dollars to pay for both AWACS aircraft and for oil. If it can get a "brother country" to accept Pakistani Rupee payments for Pakistani imports and an equivalent sum of dollars is paid to the bank by "brother country" for Pakistan to buy oil. What will the brother country do with the Pakistani Rupees? It will pay Pakistan back in PakRupees for imports from Pakistan - like textiles or prostitutes. In the meantime Pakistan's existing dollar reserves can be used for importing AWACS aircraft.

Now check how many "brother countries" Pakistan has in the ACU

[somnath]

Pakistan does not have enough dollars to pay for both AWACS aircraft and for oil. If it can get a "brother country" to accept Pakistani Rupee payments for Pakistani imports and an equivalent sum of dollars is paid to the bank by "brother country" for Pakistan to buy oil. What will the brother country do with the Pakistani Rupees? It will pay Pakistan back in PakRupees for imports from Pakistan - like textiles or prostitutes. In the meantime Pakistan's existing dollar reserves can be used for importing AWACS aircraft.

Its the same thing..

Forex reserve accretion = Exports (textiles, prostitutes, centrifuges) - Imports (AWACS, Oil) (there is capital acocunt flows as well, but ignore for now)..

So if Pak has enough markets for its textiles to finance oil and AWACS and missiles - an both textiles and AWACS will need to be valued in USD terms, as PKR is not an internationally traded ccy, then a clearing system is not adding anything to its "forex capacity"..

[shiv]

So if Pak has enough markets for its textiles to finance oil and AWACS and missiles - an both textiles and AWACS will need to be valued in USD terms, as PKR is not an internationally traded ccy, then a clearing system is not adding anything to its "forex capacity"..

Not only is the Pakistani rupee not traded - it is trash and the Pakis are free to print as much as they want. Any country that accepts Pakistani rupees as payment for exports even on the express agreement that those rupees will be given right back to Pakistan in exchange for imports it allows Pakistan to reserve its precious dollars for AWACS.

Its like this. Pakistan has USD that it wants to keep for AWACS. But it has no extra dollars for oil. So it buy dollars from a bank - say the bank of Maldives for the oil import and pays for that dollar purchase in Pakistan rupees that are deposited in the Maldives bank. Tomorrow, when Maldives wants textiles or prostitutes - it gets them from Pakistan which will accept its Rupees back. Pakistan gets its oil, exports its stuff AND has dollars left over for AWACS.

[somnath]

Its like this. Pakistan has USD that it wants to keep for AWACS. But it has no extra dollars for oil. So it buy dollars from a bank - say the bank of Maldives for the oil import and pays for that dollar purchase in Pakistan rupees that are deposited in the Maldives bank. Tomorrow, when Maldives wants textiles or prostitutes - it gets them from Pakistan which will accept its Rupees back. Pakistan gets its oil, exports its stuff AND has dollars left over for AWACS

Well, in case Maldives has requirement for Paki textiles and women then that is legit international trade..And if the Bank of Maldives considers Pakistani Rupee as a viable legal tender for conducting such trade (wonder how they would value Paki goods though in Maldivian rupee terms), then the PKR is on its way to becoming an international ccy! You just bestowed a whole lot of respectability to PKR!!

[shiv]

You just bestowed a whole lot of respectability to PKR!!

That apart - it goes to show that a system such as the ACU can be misused if "brother countries" decide to give legitimacy to a currency like the PKR for some reason or another. And it is written down in the rules of the ACU that this can be done "legally".

After all, "legitimate" and "illegal" are semantics. If you force me to part with a proportion of my income either you are a criminal (illegal extortion) or the government (legal taxation). If you make iffy rules you get iffy results.

The ACU is, after all a "system of brother countries" set up for the specific purpose of bailing out another country's foreign exchange shortage, even if it is a pretend shortage where dollars are reserved for AWACS or missile purchases or terrorist funding. And I am sure Iran benefited from the steady flow of Dollars even from nations like Pakistan because bilateral agreements between Pakistan and brother nations allowed that to occur.

[somnath]

That apart - it goes to show that a system such as the ACU can be misused if "brother countries" decide to give legitimacy to a currency like the PKR for some reason or another. And it is written down in the rules of the ACU that this can be done "legally".

Well, if there are brother countries willing to help out Pak, then there are easier ways of doing it - just cut out a check! The way US does it, or China...I any brother country is willing to use PKR as legal international trade tender, basically what he is doing is to lend Pak USD and keeping PKR as collateral - he might as well lend directly..

[shiv]

That apart - it goes to show that a system such as the ACU can be misused if "brother countries" decide to give legitimacy to a currency like the PKR for some reason or another. And it is written down in the rules of the ACU that this can be done "legally".

Well, if there are brother countries willing to help out Pak, then there are easier ways of doing it - just cut out a check! The way US does it, or China...I any brother country is willing to use PKR as legal international trade tender, basically what he is doing is to lend Pak USD and keeping PKR as collateral - he might as well lend directly..

In fact I suspect India was being used by Pakistan - but I am not sure of that. Does India accept PKR for bilateral trade under some idiotic WKK agreement?

[somnath]

That apart - it goes to show that a system such as the ACU can be misused if "brother countries" decide to give legitimacy to a currency like the PKR for some reason or another. And it is written down in the rules of the ACU that this can be done "legally".

There is nothing illegal about PKR, and ACU hasnt written any rule that is different from what is observed in international banking circles...For example, a branch of (say) Citibank in Pakistan can keep a PKR collateral and lend a client money abroad in USD, subject to country limits and so on...You seem to impute that ACU gives the benefit of a rupee-rouble type arrangement to Pakistan - thats not true, a clearing system doesnt/cannot do it...ACU simply llows Pak to borrow Fx from other member countries through swaps - and that shoudl DEFINITELY be subject to limits etc..

Does India accept PKR for bilateral trade under some idiotic WKK agreement

dont know..If at all, will be very restricted..Its a bit of an oxymoron to say I accept "X" ccy for settling trade, if there is no market for that ccy outside the country of issuance...Pak buys (say) cement from us - it costs 1000 rupees a bag, how do we get a PKR equivalent price? there is no market for INRPKR..So you impute a value through USDINR and USDPKR - a cross rate...So when the final settlement has to be made (Exports minus imports), you have to settle in dollars...That is why rupee-rouble was such an anachronism - and it took ages to unravel when it had to, and got done at terms no one quite understood..

[Virupaksha]

Shiv,

Havala is one "process" of transferring funds. The citi bank transfer is another type.

The Moneygram/western union/havala are processes of transferrring funds. In the former two banks get the cut and is through "official" channels, where as that cut in havala goes to "xyz" individuals and are not official.

What one gets for the transferred money is irrelavent to money gram/western union/hawala.

[pgbhat]

Shiv,

Havala is one "process" of transferring funds. The citi bank transfer is another type.

The Moneygram/western union/havala are processes of transferrring funds. In the former two banks get the cut and is through "official" channels, where as that cut in havala goes to "xyz" individuals and are not official.

What one gets for the transferred money is irrelavent to money gram/western union/hawala.

More importantly it can tracked by gubmints.....money trail is transparent.....hawala is not....going slightly OT..... but from Interpol Website.....
http://www.interpol.int/public/financia ... efault.asp

An effective way to understand hawala is by examining a single hawala transfer. In this scenario, which will be used throughout this paper, Abdul is a Pakistani living in New York and driving a taxi. He entered the country on a tourist visa, which has long since expired. From his job as a taxi driver, he has saved $5,000 that he wants to send to his brother, Mohammad, who is living in Karachi (3).

Even though Abdul is familiar with the hawala system, his first stop is a major bank. At the bank, he learns several things:

The bank would prefer that he open an account before doing business with them;

The bank will sell him Pakistani rupees (Rs) at the official rate (4) of 31 to the dollar; and

The bank will charge $25 to issue a bank draft.

This will allow Abdul to send Mohammad Rs 154,225. Delivery would be extra; an overnight courier service (surface mail is not always that reliable, especially if it contains something valuable) can cost as much as $40 to Pakistan and take as much as a week to arrive. Abdul believes he can get a better deal through hawala, and talks to Iqbal, a fellow taxi driver who is also a part-time hawaladar.

Iqbal offers Abdul the following terms:

A 5% 'commission' for handling the transaction;

35, instead of 31, rupees for a dollar; and

Delivery is included.

This arrangement will allow Abdul to send Mohammad Rs 166,250. As we will see, the delivery associated with a hawala transaction is faster and more reliable than in bank transactions. He is about to make arrangements to do business with Iqbal when he sees the following advertisement (5) in a local 'Indo-Pak' newspaper (such advertisments are very common):

Abdul calls the number, and speaks with Yasmeen. She offers him the following deal:

A fee of 1 rupee for each dollar transferred;

37 rupees for a dollar; and

Delivery is included.

Under these terms (6), Abdul can send Mohammad Rs 180,000. He decides to do business with Yasmeen.

The hawala transaction proceeds as follows:

Abdul gives the $5,000 to Yasmeen;

Yasmeen contacts Ghulam in Karachi, and gives him the details;

Ghulam arranges to have Rs 180,000 delivered to Mohammad.

Since many hawala transactions (legitimate and illegitimate) are conducted in the context of import/export businesses, the manipulation of invoices, as discussed above, is a very common means of settling accounts after the transactions have been made.

[somnath]

More importantly it can tracked by gubmints.....money trail is transparent.....hawala is not....going slightly OT..... but from Interpol Website.....

Small nitpick, transparency of trail is a subjective term...Even hawala at some stage uses a "normal" banking intermediary..Transfers through Western Union for example, will be notoriously diffult to track, not least because they deal in cash (and also because KY norms for clients is very very lax)...

That said, the issue of ACU vis a vis Iran is more hot air than what meets the eye..There are lots of questions on transactions with Iranian companies by the US as well as by ECB, so RBI is simply looking at other bileteral clearing mechanisms...

[abhishek_sharma]

Signs the Security Council is changing India

http://bosco.foreignpolicy.com/posts/20 ... ging_india

Sumit Ganguly sees evidence that India is shifting its stance on Iran--in a more hawkish direction.

...

[somnath]

^^^Sumit Ganguly is right on the "signaling" aspect of it..Though in material terms, nothing changes - though Indian companies (IOC, Reliance, Essar etc) now have to pay that incremental amount more for settling contracts with Iran..

[svinayak]

http://www.guardian.co.uk/world/2011/ja ... CMP=twt_fd
Shah of Iran's youngest son shoots himself
Pahlavi, 44, killed himself in Boston, US, after struggling with depression for years

[shyamd]

Iran and the Nuclear Issue

Iran has been dominating the news over the last few years, mainly due to its development of a Nuclear Program.
Lets assess the issue at large, interests of each country in the region and world at large.

Iran's Nuclear Program

Iran's nuclear program appears to be the most pressing issue for the GCC and the west.

What does Iran stand to gain by going nuclear?

It is the same reason why India and others went nuclear. In the words of Former Indian President Abdul Kalam, nuclear weapons are a "weapon of peace". First and foremost for Iran, it is to deter aggressors/bullying and protect the country from the US. Having a nuclear weapon, can deter a major war and essentially cements Irans position as a regional and international player in politics.
Secondly, I believe it allows Iran to flex its muscles regionally. Consequently this is the biggest worry for those in the GCC.

The Iranians continue to agree to talk, just in order to stall for time and keep the clock ticking so that Iranian nuclear scientists can continue to work. It’s just a question of time for the Iranians to come out and say they have a bomb ready for testing.

Will the Iranians actually use it?

You may have heard in the press of Ahmadinejad telling people that Israel will be wiped off the map etc. The west is using this as a tool to scare ordinary people and obtain support for their governments actions on stopping the Iranian nuclear program.

No nation is crazy enough to use it as it will likely be met with an equi-proportionate nuclear response, especially if the target nation has a triad of nuclear missiles (Missiles/Bombs deliverable via Land systems, Airplanes and using Submarines).

Iran and perhaps the nuclear powers too, believe in MAD (Mutually Assured Destruction). This is where both sides have enough nuclear missiles to cause serious damage to each other.

So its safe to say that Iran isn't actually getting a nuclear weapon in order to use it, its more of a deterrent and use as a support to foreign policy objectives. However, as the USSR showed us, possessing a nuclear weapon does not guarantee the regime power to rule for an infinite period. Regime change is still very much possible and will continue to be a major threat in my opinion.

Factors to keep in mind:
- It takes more than one test to perfect the weapon (The West have conducted 100's of tests to perfect theirs)
- Even once you have a weapon, you need a credible delivery vehicle that can reach your intended enemy. This can take many years.

Anyone interested in understanding why India went nuclear and how it outsmarted the US in going nuclear, please read Weapons of Peace: The Secret Story of India's quest to become a Nuclear Power by Raj Chengappa.

The US

The views of the senior leadership in Iran is that the US cannot afford another major war. The US has announced timelines to pull out of Iraq and any increase in violence in Iraq will probably slow this process. Iran can obviously make it difficult for the US to pull out. An attack on Iran will in all likeliness cause an upsurge in violence in Iraq by Al Qods forces (Iranian special forces troops controlled by the Iranian Revolutionary Guard Corps). and Iranian controlled militia - specifically the Mahdi army (Officially disbanded but highly active in the South of Iraq) who have been undergoing training with the Hezbollah/IRGC in Iran.

Of course this is also a similar situation in Afghanistan, where certain part of the Taliban are backed by Iran. Evidence of Iranian made shells, weapons etc have showed up in Afghanistan[1]. Members of the Taliban still receive training in Iranian bases close to the border with Afghanistan.

Now the biggest reason why the US can't afford another war is because of its economy. Recent data published by the US Department of Labor of high unemployment (9.8%[2]) Some people go as far as to say that the unofficial US unemployment rate taking into consideration those that have not claimed unemployment benefits is around 1 in 5 people. The economic situation is not improving very much either, this can be witnessed by recent remarks of Ben Bernanke and further stimulus plans.

Imagine if the US was to go to war with Iran, would ordinary people in the street in the West be happy with this? Probably not. Public opinion would frown at such an idea, and will not be happy with a significant portion of their budgets/taxes being spent on "another war!”. Tehran also appears to agree with the idea that US cannot afford another war[3]. In my opinion this is also the same reason why Israel is being held back from attacking Iran, simply because Israel would not be doing itself any favours with the West (support that it needs for its very survival).

The GCC

The GCC is the one that is most worried about the Iranian threat. One can witness the statements from the recent wikileaks saga: HM King Abdullah of Saudi Arabia repeatedly exhorted the United States to "cut off the head of the snake" by launching military strikes to destroy Iran's nuclear program.

HM King Hamad of Bahrain argued "forcefully for taking action to terminate Iran's nuclear program, by whatever means necessary". "That program must be stopped," he was quoted as saying. "The danger of letting it go on is greater than the danger of stopping".

An Iranian nuclear weapon will provide a lot of power on foreign policy. Each nation in the GCC approaches the issue of Iran differently:

KSA

A crux of the issue for the Saudi's appears to be that Iran is a challenge for their regional power and a leader of Islam.

There are also worries that Iran will be able to meddle in the internal affairs of the Kingdom, especially amongst the significant Shia population in the East of the Kingdom (the majority of saudi oil is located in this region). Worst comes to worst Iran could back a succession movement in the East of the Kingdom.

Bahrain

Similar to the Saudi's, there is a significant Shi'ite population in the island nation. Bahrain has a long history with Iranian meddling in Internal affairs of Bahrain. The majority of the population in Bahrain is Shi'ite and the rulers are Sunni. I'll go into Iranian activities in the GCC as a whole in another post.

Qatar

Main issue for Qatar is believe it or not NATURAL GAS! Both Iran and Qatar share the worlds largest natural gas fields. They are competitors, in this way and are trying to extract as much gas as possible. As the sea borders are not actually demarcated by either Iran or Qatar, this can be a source of conflict. Iran has displayed aggression here by routinely sending IRGC personnel in boats to damage Qatari Gas infrastructure[4].

UAE

Lesser Tunb, Greater Tunb and Abu Mussa Islands that are claimed by the UAE but currently under occupation of Iran.

The GCC

I have left out Kuwait, Oman and Qatar on purpose as most of the issues are covered above. Iran has made threats of attacking GCC nations in the event of any US/Israeli strike coming from their territory. Iranians have also made it clear that they have covert cells in the GCC, in the event of war, will be activated to damage infrastructure (electricity, roads, etc), conduct suicide attacks.

Is this threat for real? Bahrain has faced these threats from the 80s and have dismantled many cells since. Even to this day, building construction work in Manama usually ends up finding buried cache's of professionally packed weapons[5].

Trained in Iran or in Hezbollah camps in the Oronte valley in Lebanon, the elements aim to launch sabotage operations against American and European interests in the event of an attack against Iran. In the event of a war, Iran will use these sleeper cells to launch a civil disobedience movement and send people to the US embassy and to the HQ of the 5th fleet in Manama5.

The Saudi decision to set up a force to protect oil facilities came because of the discovery of Iranian infiltrated operatives in the East of the Kingdom.

So in short, Yes the Iranian threat is very real.

Conclusion

Will there be war?

Mmm.... Not sure. At this point in time, the US can't afford a war and neither will the US let anyone else launch any attacks against Iran. But Israel and the West will probably continue to use other methods to slow Iran down - Stuxnet and other covert means.

Does Iran want war?

Despite all the loud noises from Iranian generals of how they will strike their enemies, the Iranians do not want war. Iranians know that they will come out worse in any major war with the US. Iranians are happy to make gutsy moves, like the recent visit to the Lebanon - Israel border by Ahmadinejad, use IRGC boats to intimidate US Navy ships in the Straits of Hormuz. But in my opinion Iran will not do anything major to provoke the US.
In short, neither US or Iran wants a war! Neither will provoke the other in any big way.

What will happen if Iran does nuclearise?

The GCC will make peace with Iran and satisfy their needs. Game theory tells us that the GCC will probably nuclearise (How? Thats a different matter altogether). We have also seen this in the past between India and Pakistan. India was first to nuclearise and Pakistan responded with attaining nuclear weapons[6].
The cheapest option is probably to strike an agreement with one of the nuclear powers - Probably India, Pakistan and the US as the most reliable partners out of the nuclear nations to provide an umbrella. However, will these nations risk getting involved in nuclear war? You decide.
There are a lot of side issues related here that I could not talk about due to time constraints. I hope this has provided readers with a useful basic understanding on what is happening, what the world leaders are thinking about Iran and what we can expect to see in the future.

Thank you for reading.

Folks, this is my post regarding Iran. I left a few tidbits on how senior strategywallah's of GCC are thinking. Look forward to hearing your views.

[ShauryaT]

This is exactly where India comes in. PDF Link. Posting excerpts.
Can India Facilitate a US-Iran Rapprochement?

As the United States draws down from Iraq, stability is contingent on the cooperation of the
Iranians and their satisfaction that Iraq will not be used as a base to attack them....

Second, a transport link through Iran to Afghanistan would reduce Western dependence on an unreliable Pakistan. Since 2001, more than 70% of NATO’s supplies and 40% of its fuel have passed through the mountains of northern Pakistan,5 a precarious supply line that has been repeatedly attacked by Baluch and Taliban insurgents.6 This is the only transport link between the Arabian Sea and International Security Assistance Force (ISAF) troops in Afghanistan, and as a result, the West is reliant on Pakistan and subject to attack from the anti-ISAF forces therein. An Iranian alternative to Pakistan’s unstable highways would diminish this reliance. Thereafter, the US would be at greater liberty to put pressure on Pakistan to end support for pernicious groups such as the Taliban.

Since Iran’s economic resources and geostrategic strengths will enhance the country’s position regardless, it would only help the US to ensure this influence aligns with its own interests. This was the case at the beginning of both the Afghan13 and Iraqi14 campaigns, when Iran ensured the cooperation of its local allies and provided intelligence to the United States. Moreover, engaging with Iran would open up its 60-million strong population to US trade after decades of sanctions. A lack of US engagement with Iran, on the other hand, leaves the field open for US competitors such as Russia or China to fill the gap.

In the 1990s, many saw a “Tehran- New Delhi Axis” emerging through political, economic, and technological exchanges.16 As the US and India strengthened their partnership in the early 2000s, however, India sided with the US in opposing the Iranian uranium enrichment programme in the United Nations (UN) and the International Atomic Energy Agency (IAEA). With these votes, India effectively chose Washington over Tehran, weakening the burgeoning Iranian connection.

A strong US-Iran-India understanding would also distance Iran from China and counter the Chinese ‘string
of pearls’ strategy—in which China has courted Pakistan, Bangladesh, Myanmar, Sri Lanka, and the Central Asian members of the Shanghai Cooperation Organisation (SCO)—with India’s own enhanced set of alliances. With China’s recently inaugurated Turkmenistan-Uzbekistan- Kazakhstan-China pipeline22 and talk of an Iran-Pakistan- China pipeline,23 this imperative is even greater.

On the ‘Arab street’, Iran is not the infallible demigod of Islamic revival it once was. Even the European Union, in spite of the support it once lent in the face of American pressure, has joined the anti-Iran bandwagon.27 Despite its strategic assets, the country needs allies.

As Trita Parsi argues, since the 1960-80s period in which Israel cultivated ties with Turkey and Iran to balance its hostile Arab neighbours, Jerusalem has reversed course. In its post-1993 “New Middle East” doctrine, Israel has warmed up to Arab regimes while framing Iran as a rising regional threat.37 Today regional dynamics are bifurcated: Sunni Arabs, most prominently Saudi Arabia, have endorsed the Palestinian and Lebanese factions that are closer to Israel and the United States, while the Iranians influence the anti-Israel Levantine groups: Hamas, Hizbullah, and the Bashar al-Assad regime in Damascus. An Iranian nuclear weapon would decidedly tilt this balance in one direction, limiting the flexibility of the other faction.

Nuclearisation aside, a warming of American and Indian relations with Iran may upset Israel, India’s burgeoning strategic partner and number one military supplier;42 raise Pakistan’s threat perceptions; and worry the Gulf Cooperation Council (GCC) nations,43 which employ over three million Indians and provide India with foreign exchange and a great deal of its imported petroleum.
I disagree on the above. This is exactly where the US comes in. It has the needed leverage to make the GCC states comply and hold the ba!!$ of the Pakis

Iran was a spoiler to the 1993 Oslo Accords precisely because it was not included in the process and recognised as a regional pivot, while its harmful manipulation of Shi’a politics throughout the Middle East originates from Washington’s post-2003 isolation.

India should be the key interlocutor, and use its good offices to enhance the trust between the United States and Iran. This is not a pipe dream, but a proven, effective option. Turkey, for instance, a country with many cultural influences, has used its immense soft power to bring conflicting parties together: Syria and Israel, Israel and
Palestine, and others.56 India, at the crossroads of multiple civilisations, could play a similar role.

Indian oil imports from Iran increased by 9.5 percent in 2008-09, accounting for 16.5 percent of India’s crude oil imports; Iran is currently India’s second largest supplier of oil.59 By 2008, bilateral trade reached $9 billion per year, while India’s Oil and Natural Gas Corporation (ONGC), along with other Indian firms such as the Hinduja Group, have entered into negotiations to develop the offshore Farzad B gas field as well as the South Pars gas field, an investment of more than $11 billion over the coming years.60 Meanwhile, despite being one of the world’s largest petroleum producers, Iran lacks a significant refinery infrastructure of its own, forcing it to rely on imports for over 40 percent its own consumption. By some accounts, 40 percent of the oil imported by Iran is from refineries in India61—no insignificant matter.

There have been disputed reports that under US pressure, Reliance Industries, India’s main supplier of gasoline to Iran, ceased or curtailed its sales of gasoline to Iran in mid 2009.

India’s government, think-tanks, and business community should initiate a joint back-channel diplomatic venture to facilitate a rapprochement between the United States and Iran, based on economics and shared regional interests. Key Indian stakeholders in Iran that would be central to this process include the Border Roads Organisation of the Ministry of Defense, Reliance Industries, Oil and Natural Gas Company (ONGC), Gas Authority of India Ltd (GAIL), and Essar Oil. A détente initiative must not be one of carrots and sticks, but based on mutually beneficial futures defined by the following vectors:
l Cessation of US-Iranian political enmity
l Transparency in Iran’s nuclear programme
l US disengagement from anti-Iranian activities
l Enhanced Indian investment, on agreeable terms, in
Iranian transport and hydrocarbon infrastructure
l Development of an Iran-based transport link from the Arabian Sea to Afghanistan
Trilateral cooperation vis-à-vis Afghanistan in the realms of intelligence sharing, counter-terrorism cooperation, and countering narcotics trafficking
l Indo-Iranian economic partnership (hydrocarbons trade, strengthening of the North-South Corridor, further exploration of the IPI Pipeline)
l US-Indo-Iranian strategic cooperation in Central Asia and the Indian Ocean
l US-Iranian coordination in Iraq and the Levant
l US-Indo-Iranian nuclear energy cooperation

Conclusion
Former Iranian Foreign Minister Kamal Kharrazi once expressed the hope that both the US and Iran may be ready for an opening, but “for that to happen, we must be able to trust” one another.67 Motivated by the opportunities that would come with strong trilateral ties, India must use its conviviality with both countries to bridge the trust gap. After Prime Minister Manmohan Singh’s recent trip to the United States, Indian pundits were left unsatisfied asking what India can get from the United States. They did not give a thought to what India will bring to the table. But with a trilateral initiative inaugurated and facilitated by New Delhi, Washington would see India as the keystone to an Iranian rapprochement that would open up a region of opportunities. Meanwhile, India can forego its bifurcated view of the world, in which one country is chosen over another, and begin to forge a long-term regional and global strategy in which its own
interests are served.

I like the article. One major thing missed is, India will need to build strong military ties with Iran and almost provide a nuclear cover to Iran, in case of contingencies from other GC.

[shyamd]

- If they do want to deal with TSP, they will need Iran temporarily.
- Iran need to be satisfied Iraq won't be used as a base against Iran? I think the author needs to study Iranian assets in Iraq before he makes that claim
- Before we even reach some of those issues. Once Iran goes nuclear, GCC will satisfy them - similar to Qatar and Oman recently.
- So, will the US be happy to allow Tehran to use Hamas/Hezbollah as a proxy?

- Look the US/GCC game plan is this: Before we reach any of some of the suggestions in thearticle, all the US have to do is force concessions on Israel such as building an effective permanent palestinian state. Give up part of the Golan in a phased approach. They want to take away the reason for Hezbollah and Hamas to exist. That defuses Hezbollah completely.

But of course Israel says Hezbollah will just find another pretext to attack Israel. Which is a valid point. Ultimately Hezbollah and Hamas will have to be dealt with politically or militarily, which is where King A talked about an arab force in Lebanon backed by US/NATO airpower to take out Hezbollah. Hamas is actually a lot easier to handle than Hezbollah. Hamas has its weak points which can be put under pressure politically and some of their leaders are a lot more open to negotiation (Haniyeh branch).

All this is why Washington is working on a phased approach with Syria. Now King A and Assad have started coming together, washington has appointed an ambassador to Damascus. Now, US will give Syrians the carrot.

Iran isn't going for nukes to use them but to support foreign policy objectives - its about the region for the GCC.

India shouldn't really play this re-pproachment card yet. The reapproachment between Iran and US may come from other countries like Qatar or Oman who enjoy closer/direct relations with Iran. they have already shown it with hostage releases and other incidents in the last 2 years.

Problem is, US has sort of backed away from creating a Palestinian state all of a sudden and literally nothing is happening on the ground. So everyone is just wondering WTF Obama is doing. As things stand, war on Iran is a likely possibility - probably via Israel dealing with Iran. Israel announced today that Iran has 3 years at least before Iran goes nuclear. Dagan spoke his mind and said Israel SHOULD NOT go after Iran unless its head is on the chopping board.

So if Obama plays this right, he could get away with defusing Iran's ME threat. Sort out Hezbollah/Hamas. Create a Palestinian state, Syria - Israel peace track with Golan being given back to Syria in a phased approach that protects Israeli security interests. A pro US Syria. Iran all of a sudden left without friends.

AS it stands war could happen.

[putnanja]

RBI says it is facilitating trade with Iran, not curbing it

The RBI officials have sought to clear the air over recent payment rules which some suggest will curb India's trade with Iran, especially in the oil sector, saying that the central bank actually aimed at facilitating it.


The move is aimed at helping importers, who are facing difficulties in settling payments through dollar or euro due to sanctions against Iran for nuclear proliferation, a key RBI official explained.


...
...
While the US has imposed ban on various imports from Iran and importers were finding it difficult to settle the payment in dollars, Europe has allowed oil imports from Iran.
However, European nations insist on a certificate from the importers that payment will be made only for oil imports. But importers are encountering problems because it is not clear as to who has to give the certificates, central banks or the bank which is guaranteeing the payment.

Also, the payments are made on net basis, making it difficult to go through the composition of trade. Under this method, if country A buys goods worth Rs 200 from country B, and country B has bought goods worth Rs 100 from country A, then A has to give only Rs 100 to B.

...
...
"... The RBI was first to identify the problem and battle the problem. RBI was ensuring that oil supplies come from Iran," Subbarao had said at the Second Business Standard Annual Lecture here
...
...

[abhishek_sharma]

Obama and Clinton's Iran strategy: More there than meets the eye?

http://rothkopf.foreignpolicy.com/posts ... ts_the_eye

However, when last week, the departing boss of Israel's intelligence service, Meir Dagan, stated that in his view the Iranian program had in fact been set back to the point that it would not be able to develop nuclear weapons until 2015 at the earliest, it suggested that whatever was being done was working.

[Christopher Sidor]

India should not get entangled in the mess that is US-Iran relationship. Both of these countries are perfectly capable of cleaning this mess up. We should have good, if not great relationships, with Iran and US, but avoid getting in the middle of these two.

[Prem]

UPDATE 1-India's ONGC sees more delay in Iran South Pars deal
http://af.reuters.com/article/energyOil ... 7P20110112

NEW DELHI, Jan 12 (Reuters) - Difficulties in securing funding will delay India's Oil and Natural Gas Corp (ONGC) finalising a deal to take a 40 percent stake in Iran's South Pars Phase 12 gas project, a source at the state-run oil explorer said on Wednesday. Banks are unwilling to fund the gas project as the Middle East country faces U.S. and UN economic sanctions, the source said. This comes after an Indian central bank clampdown on funding for payment of oil imports from Iran threatened to disrupt supplies of crude. [ID:nSGE70904V] With Western firms wary of investing in the Islamic state due to its nuclear row with the United States, Tehran has increasingly been looking towards energy-hungry Asian countries for investment to help exploit its vast gas and oil reserves. India, which imports about four-fifths of its crude oil needs, is scouting for oil and gas assets abroad to meets its growing fuel demand and to expand its refining capacity. "We signed the MoU in December 2009. Thereafter, we have been in dialogue. We have to take care any initiative from us has to be in conformity with government policy," R.S. Sharma, chairman .Last year, the managing director of Petropars, the Iranian company that manages the gas project, said Indian firms had until December to finalise the deal and hoped it would be signed by the end of March 2011. He said development of the project is expected to cost $7.5 billion. [ID:nSGE6A007O] "It is not that it is a closed chapter. It is very much on our table but we have to see to the funding issue," the source told reporters on condition of anonymity. He said the company needs to transfer funds to Iran for sharing the cost of the gas field development. "We have to spend money without violating sanctions... It is not easy." The source said internal funding was not suitable. "We can not fund it through ONGC's balance sheet as we keep scouting for attractive assets. We need to have banks involved for transferring and to partly fund our share of development costs to Iran which is done in dollars," he said.

[krisna]

X post from af pak thread
The coming conflict

The US and Iran may pump up the Af-Pak terrorists to meet their own narrow ends, further destroying Pakistan, says N.V.Subramanian. India beware.

Whichever way this writer looks at the emerging situation in the Af-Pak region, it spells greater trouble for India. The Af-Pak region may become a new battleground for Iran and the United States as Iran strives to assert its supremacy in the Middle East but particularly in the Gulf.

This can only be countered with greater safeguards against terrorism emanating from Pakistan, and pronounced internal Indian political unity, which appears to be missing now especially in the wake of the 2G scandal. The analysis for all this runs as follows.

He(Ombaba) let himself be guided by the defence secretary, Robert Gates, and the secretary of state, Hillary Clinton, to approve a surge. But with no clear signs of military victory against the Taliban or Al-Qaeda, he is bending to the "wisdom" of his vice-president, Joe Biden, who has won him new bipartisanship with the Republicans.

Biden wants out of Afghanistan. He wants any campaign against the Af-Pak terrorists restricted to drone and other forms of aerial attacks preferably conducted from outside of Afghanistan, with no American fighting presence in that country.

Biden's strategy will fail. But it is not a strategy for victory anyway. It is merely to get America out of the Afghanistan war which is clearly unsustainable.

As long as the American mainland is safe, and US soldiers are back or out of the war, it gives Obama a fighting chance for re-election. At least that is the reasoning.

India's trouble comes from the certainty that a substantial portion of the bribe money given to the Pakistan military and ISI will be ploughed back into the terrorist campaign against it. It has happened in the past with American aid to Pakistan and it will repeat.

But there is the Iran angle which complicates matters. Iran is opposed to the Sunni Al-Qaeda/ Taliban. But to spite the Americans, it has provided material support to the Af-Pak terrorists.

(Iran supported the NA not the taliban/al keedas in the past which are mainly sunnis)

Without provoking another American intervention in the region (after leaving Iraq), Iran will do everything to destabilize Saudi Arabia to establish its supremacy. In the Al-Qaeda, Iran has a powerful instrument to torment the Saudi rulers. Along with the Americans, Iran would be tempted to nurse the Al-Qaeda but against Saudi Arabia just enough to soften its opposition to it.

(enemy's enemy is my friend)

At some stage, the competitive bribers, the US and Iran, will clash, because Saudi Arabia is a key American ally. The clash may be localized to the Af-Pak region or could manifest in the Middle East where the Al-Qaeda conceivably radiates with Iran's assistance.

With all this money and arms flowing, and with emerging competing interests, the Sunni terrorist movement will splinter, leading to a bloodbath. To the extent that the internal terrorist war (with the Shia forces joining the fray) is located in Af-Pak and within Pakistan proper, Pakistan will be affected. It will further descend into turmoil and destruction.( Give peace a chance destroy TSP by 1000 cuts- ekonomy, terrorism,bious abduls, soosai bums ......)

For India, this will come as more of the same, but with heightened levels of terrorism. Hence the cautionary advice in the beginning of this piece. India has to be more on guard than before, and the internal political squabbling has to end if peace is to be preserved.

(the intelligence and security related issues should not be made hostage to the political squabbling. they should be separated. somehow does not jell with the overall scenario. I hope the writer is terribly wrong )

[Raghavendra]

Israel tested Stuxnet on Iran, with US help: Report
http://www.zeenews.com/news680865.html

[chiragAS]

http://www.telegraph.co.uk/news/worldne ... nobyl.html

[pgbhat]

Iran to continue crude supply to India

TEHRAN -- Iran will continue to supply crude oil to India until a final settlement on a payments issue is reached, Indian Oil Secretary S. Sundareshan said on Monday.

""Iran payment is very, very important for the ministry of petroleum and natural gas and oil companies, including private companies. We are in discussions with NIOC (National Iranian Oil Company) to resolve the issue,"" Sundareshan said.

[abhishek_sharma]

Revealing cable on Iran's nuclear ambitions

http://www.foreignpolicy.com/articles/2 ... ian_nurses

In the November cable, Davutoglu, coming fresh from two long "harsh" sessions with the Iranians in Istanbul, gave Gordon quite an unusual picture of what was really going on in Iran. Based on their very candid discussions, the Turks saw Iranian President Mahmoud Ahmadinejad as "more flexible" on this issue than others inside the Iranian government but still under "huge pressure" from conservatives. Despite all the bad blood, the Iranians told the Turks that they would prefer to get the reactor fuel directly from the United States rather than from Russia and that they trusted the Americans more than the British. The Turks asked Ahmadinejad point blank if the core of the issue was psychological rather than substance. Ahmadinejad said that it was, yes, basically a matter of public perception.

[Philip]

WikiLeaks: US advised to sabotage Iran nuclear sites by German thinktankAs Stuxnet cyber attack pinned on US and Israel, US embassy cable reveals advice to use undercover operations

http://www.guardian.co.uk/world/2011/ja ... an-nuclear

"Compared to military action, such acts have the advantage that the leadership of a country that is affected wouldn't need to respond – everybody can agree that there was a technical failure, no one needs to shoot or bomb. And at the same time, everybody has understood the message – about what developments are unacceptable to the other side.

"My sense at the beginning of 2010 was – without having any specific knowledge – that some countries were indeed preparing to slow down the Iranian nuclear programme by acts of sabotage, or computer hacking."

US and Israeli officials refused to comment on their reported involvement with Stuxnet yesterday. However, the leaked cables show that more covert methods of infiltrating Iran's nuclear programme – including powerful cyber attacks – was a proposal gaining traction inside US diplomatic circles last year.

[ramana]

That was the most stupdiest attack for it exposes all hitech infrastructure to retaliatory attacks. There is a reasonw hy nukes are not in space. Similarly such attacks on nuke power plants etc should be off limits.
However when people think they can do it and get away they will claim the righ to do it.

[JE Menon]

It is the utmost stupidity. The attack itself is the business of whoever did it, but certainly the way the media has been managed since then to suggest that certain countries were behind it is tantamount to begging for world war. Literally. The problem with the people who apparently oversee this - and you can bet your arse that if they wanted to keep this quiet they could have - is that they seem to have sacrificed strategic prudence on the altar of public gratification. There will be a heavy price to pay, a heavy price - and who now knows which country will be the test bed and on what scale? How unplugged are these people who continually underestimate the capabilities of their enemies to innovate, circumvent and retaliate? More than anything else, sadly, it is this public crowing and preening that suggest the erosion of power and confinement of strategic autonomy.

[Johann]

Ramana,

The first unconventional attack to halt a nuclear programme was in 1942-43 when SOE went after the Nazi controlled heavy water plant in Norway. There is no question that Israel sees slowing the Iranian program in the same epic terms that the Allies saw the German programme in WWII.

The issue is not so much that these are nuclear facilities, but that the SCADA controllers targeted are very common worldwide. Hacking tools proliferate, and stuxnet's code is now in the open domain. What is to stop a deliberate Bhopal-type tragedy from being preciptated anywhere in the world by either state or non-state actors? Insurgents in Iraq have already used off the shelf hacking software to grab the unencrypted videofeeds of Predators.

JEM,

In the Wikileaks era it is not so easy to 'manage' the media. Do you think anyone wanted the pictures from Abu Ghraib released? It happened anyway. Stuxnet's proliferation worldwide was something bound to be investigated by commercial IT security professionals, and bound to generate chatter.

Consider the strike on the Syrian nuclear facility in Deir az-Zour in September 2007. No government was willing to talk about it, especially the Syrians, but it leaked in the end. The same way with the long-range UAV strikes in Sudan in early 2009.

There's only so many countries that have both the means, the will, and the interest to carry out these attacks. As long as the attacks themselves can not remain secret, the rest is inevitable.

Its the same thing with Stuxnet. Ahmadinejad and the Mullacracy were absolutely furious when the IAEA reported publicly that enrichment activities were much lower than expected. You would think they would try to use the news as proof that they were NOT rushing to build a bomb, but the problem is that it undermined the regime's rhetoric that the IIR's nuclear progress was unstoppable by any combination of countries, and any combination of measures. Because if it is stoppable, then perhaps Ahmadinejad and co. ought to cut a deal instead of egging on international opposition.

[Christopher Sidor]

The point that everybody is overlooking is that this is a setback only. It does not prevent the Iranians from acquiring the capability. They already have the design of a nuke, thanks to Pakistanis. This situation is similar to the Israel-Iraq during the saddam era. Israel did bomb the Iraqi reactor, but this did not bring the Iraqi nuclear program to a halt.

For Iran the worry is something else. In spite of Soviet Union possessing one the biggest nuclear arsenal in the world it imploded spectacularly. The same fate awaits Iran, if US and it allies are able to squeeze Iran economically.

[Johann]

CS,

I don't think anyone in power has any illusions to the contrary. The benefits of attacks (overt or covert) have always been spoken of in terms of setbacks and delays. Osirak probably delayed things at most by about 8-10 years. But that turned out to be enough.

Meir Dagan, the Mossad's chief publicly reported before he retired recently that Israel has at least five years before Iran can build a weapon. Israeli estimates were much, much more dire until recently.

The Americans are prepared to depend on nuclear deterrence with Iran, and have been for some time. The Israelis see deterrence as the last ditch defence (well apart from the Arrow-Green Pine ABM). Israel's physical size, Jewish memories of near extinction in the holocaust, and the rhetoric of the IRI's leadership give them a very different threshhold.

Back in the 1960s the specialists involved in building Egypt's new special weapon program had some very unfortunate accidents. The same thing happened to Iraqi scientists and engineers 1981-91, including Gerald Bull. The same thing has been happening to the Islamic Republic of Iran's nuclear scientists and engineers.

If North Korea had faced resistance as determined, it would not have reached where it has reached today. Fortunately or unfortunately South Korea and Japan are not willing to go to such lengths. After all both Iran and North Korea are under international sanctions, but sanctions have utterly failed to slow down NK progress.

[abhishek_sharma]

Report: Stuxnet could cause Iranian 'Chernobyl'

http://blog.foreignpolicy.com/posts/201 ... _chernobyl

[wig]

Iran could have nuclear weapons next year-The West should assume the Islamic Republic will be nuclear-armed by 2012 and “act in accordance” with that timetable, the Defence Secretary of UK, Liam Fox has observed

In the House of Commons, Dr Fox was asked about the assessment of Meir Dagan, the former Israeli intelligence chief, that Iran will be unable to develop a working nuclear weapon until 2015.

Dr Fox, a hawk who has repeatedly raised public concerns about Iran’s nuclear programme, told MPs that he thought Mr Dagan’s assessment could be too optimistic.

Instead, the West should plan on the basis that Tehran is much closer to developing a working nuclear weapon, he said.

“We know from previous experience, not least from what happened in North Korea, that the international community can be caught out, assuming that things are more rosy than they are,” Dr Fox said.

“We should therefore be entirely clear that it is entirely possible that Iran may be on the 2012 end of that spectrum, and act in accordance with that warning."

http://www.telegraph.co.uk/news/worldne ... -year.html

[krisna]

^^^^
This view likely has come from the report of IISS based in London.
Iran nuclear weapon two years away, says think tank

Iran is at least two years away from producing a single nuclear weapon, according to an in-depth report published by the London-based International Institute for Strategic Studies (IISS) Thursday.
“The totality of the evidence indicates beyond reasonable doubt that Iran also seeks a capability to produce nuclear weapons should its leaders choose to take this momentous step,” said the strategic dossier on Iran’s Nuclear, Chemical and Biological Capabilities.

The IISS estimate, which had been reviewed by international experts, ‘is neither worst-nor best-case’, the report concluded. The assessment that a single weapon would take at least two years from now to build assumes that Iran would be relying on the equipment at its Natanz uranium enrichment plant and would employ methods used by other nuclear proliferators, it said.

[Sanku]

I had some time back proposed a ACU type arrangement between FSU and India and Indian bloc counties too.

[shiv]

http://wikileaks.ch/cable/2006/12/06NEWDELHI8387.html

Former RAW officer B. Raman told Palmer that the
Mumbai bombing investigation had become more complicated than
past investigations because the terrorist groups involved had
changed their tactics to better cover their infiltration
trail from Pakistan. While the Indian police were able to
find a direct paper trail of the movement of the perpetrators
of the 1993 Mumbai bombings through flight manifests from
Karachi to Dubai to Mumbai, the investigators of the July
2006 attacks in Mumbai did not have the same evidence. He
said those involved in the attacks went first through Iran by
road so there would be no record of their travel from
Bahawalpur, Pakistan, to Tehran. He said the intelligence
services had strong evidence, however, of a connection
between the attack and Lashkar-i-Taiba training camps in
Bahawalpur.

Shows how the Eyraininans can play things both ways.

I think an independent Baluchistan is a good idea.