Global Policy Forum

Iran: West Torn Over Carrot and Stick Approach

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By Ahmad Rafat*

Adnkronos International
July 28, 2007

In New York, the 5+1 contact group (the five permanent members of the UN Security Council and Germany) have been involved in deep discussions for days on the third draft resolution against Iran regarding its nuclear programme. Yet the Western countries which ought to be working cohesively together find themselves torn between punishment and business opportunities.

The divergences do not just regard what sanctions should be included in the latest warning from the international community to Tehran over its nuclear ambitions. On the effects of the previous two reprimands from the UN there is no common view, not even within the European Union. Britain is convinced that the sanctions against Iran to date have hampered the economic capacity of the government of Mahmoud Ahmadinejad, other countries, like Italy, take a different view. Italian foreign minister Massimo D'Alema has frequently underlined the futility of these sanctions, which from his viewpoint have not produced the desired effect that is to force Tehran to halt its uranium enrichment.

The sanctions imposed by the Security Council, with resolutions 1696 and 1737, are certainly not enough to stop Iran's nuclear ambitions especially if there is no solid cooperation between Western nations, many of whom are significant trading partners of the Islamic Republic. Certainly the sanctions do not apply to oil deals and this allows Iran to continue to have immense cash reserves. Accords like that which the Austrian company OMV are certainly not going in the direction indicated by the Security Council regarding ties with Tehran.

This deal foresees Austrian energy sector investments in Iran to the value of 18 billion dollars, a colossal deal for OMV. An agreement that is politically and economically relevant for Iran which has seen some of its most important oil and gas partners disappear, such as Dutch Shell, which appears to be ready to give up on a potential deal worth some 10 billion dollars. Unlike OMV, Shell cannot flout the US laws which from 1996 have fixed a limit of investments in the Islamic Republic to 20 million dollars. The energy multinational of Dutch origin has a significant shareholding of US pension funds. "We must respect only Austrian and EU law", said OMV's spokesman "and neither of these fix limits for investments in the energy sector in Iran".

Even the French firm Total, like Italian state-controlled energy giant ENI, seem intent on remaining in Iran or even reinforcing their presence there. In recent days, a high level delegation from the French company has been visiting Tehran where it has met the leaders of the state petroleum company to discuss joint projects.

About the Author: Mr. Ahmad Rafat is a veteran Iranian-Italian journalist with long experience in Iranian and Middle Eastern affairs. He is also the author of several books on Iranian press and politics.

 

 

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