Institute for Contemporary Affairs

founded jointly at the Jerusalem Center for Public Affairs

with the Wechsler Family Foundation

Vol. 7, No. 7    July 1, 2007

Economic and Diplomatic Strategies for

Isolating Ahmadinejad and the Iranian Regime

Former Prime Minister Benjamin Netanyahu

·      In many ways, people are still fixated on a model of the Middle East that has now become obsolete. For the last quarter of a century we have been in the midst of a conflict with militant Islam, which seeks to assume power and deliver a corrective to the historical decline of Islam and the rise of the West.

·      The Iranian regime is basically a messianic apocalyptic cult. There is a pathological stream to militant Islam that has suicidal elements, the cult of blood, the cult of death, and the cultivation of fantasy. An ideology based on fantasy is what makes militant Islam very different from any other ideology - including the cold war communist Russia and China, equipped nuclear weapons.

·      Is it possible that Iranian rhetoric is only meant for internal consumption? The answer is NO. Not only do they believe in it, they sacrifice themselves and others for it, happily, and therein lies the great danger.

·      The Iranian regime can be stopped. I have been encouraging divestment from Iran by U.S. state pension funds, which are a very large factor in the global investment market. These efforts have been working. And if these pension funds continue to divest their holdings from companies that do business with Iran, those companies' credit ratings will decline, their cost of credit will go up, plus they lose a component of their equity, and that is very powerful.

·      It is possible to create a very broad coalition within the U.S. on this issue by linking divestment from Iran with resolutions to divest from Sudan, linking an issue of human values and an issue of our common security.

·      Israel wants peace with the Palestinians, but if Iran acquires nuclear weapons it will have the power to shred any peace treaty with the Palestinians. It would also jeopardize existing treaties that Israel has with Egypt and Jordan.

Changing Threats in the Middle East

In many ways, people are still fixated on a model of the Middle East that has now become obsolete. For the last quarter of a century we have been in the midst of a different conflict altogether, the result of the surfacing of long-held resentments, beliefs, and aspirations of a section of Islam - the militant believers, whose great hope is to assume power and deliver a corrective to the historical decline of Islam and the rise of the West.

After the Arab world received independence after World War II, Arab and Islamic regimes came to power, but they failed to develop theocratic regimes as the militants expected, and many of them were seen as lackeys of the West.

The first major victory was when the Iranian Ayatollah regime displaced the Shah in 1979. For the first time there was an overtly Islamic republic established by believers, for believers, in what was to become a pivotal event in shaping history. Ten years later in Afghanistan, the Islamists achieved victory over the Soviet Union, the other great superpower.

The March of Islamic Militancy

The march of Islamic militancy can be seen as well in the implantation of Hamas in Palestinian politics. There is also the threat of Lebanon being taken over by Hizbullah, and regimes of its ilk.

What does this militancy want and what should we do in the face of its challenge? What it basically wants is to correct the last 500 years of the retreat of Islam and the rise of the West.

Iran is racing to develop nuclear weapons. Ahmadinejad can use or threaten to use these weapons in ways that no other nuclear power has done before. The Iranian regime is basically a messianic apocalyptic cult. There is a pathological stream to militant Islam that has suicidal elements, the cult of blood, the cult of death, and the cultivation of fantasy. An ideology based on fantasy is what makes militant Islam very different from any other ideology - including the cold war communist Russia and China, equipped nuclear weapons.

Iran may actually use nuclear weapons against Israel and is actually thinking of developing weapons that will enable it to threaten many other countries. The Iranians recently tested a sub-orbital rocket, and once they have that capability, they are en route to ICBMs. By no later than 2015, they want to have ICBMs that can reach the United States. They want to get to the point where they have the capacity to produce about 20 Hiroshima-sized nuclear bombs a year, which means that in a few years they could have an arsenal of atomic bombs and the missiles to deliver them to practically any place on earth.

What Do We Do?

Anybody who does not conform to militant Islam's twisted definition of a true believer is in danger. Arab regimes are in danger, non-fanatic Muslims are in danger, and certainly Israel and the West are in danger. They make it very clear that Israel is a prime target but the victory over Zionism is merely one step towards re-establishing a fantasy empire from Persia to Spain.

Is it possible that Iranian rhetoric is only meant for internal consumption? The answer is NO. Not only do they believe in it, they sacrifice themselves and others for it, happily, and therein lies the great danger

What Do We Do About It?

The Iranian regime can be stopped. It is a lot weaker internally than it appears. It stays in power by brute force, but Iran is very vulnerable economically. Iran's oil production has declined by ten percent every year for the last three years. Their oil industry desperately needs new investment. Investments are coming primarily from Western countries like France, Germany, and Britain, which are keeping Iran's economy afloat.

The American government has begun to act, primarily with the Treasury Department's curtailment of banking activities, in order to put economic pressure on the regime. The goal is to have the people of Iran understand that Iran's additional economic hardships come from the fact that this regime, under Ahmadinejad, is pursuing a mad policy that is hurting its own citizens economically.

I have been encouraging divestment from Iran by U.S. state pension funds, which are a very large factor in the global investment market. For example, California has a state pension fund of about $200 billion. If this pension fund divests its holdings from companies that do business with Iran, those companies' credit ratings will decline. Their cost of credit goes up immediately, plus they lose a component of their equity, and that is very powerful.

It is possible to create a very broad coalition within the United States between liberals and conservatives across the political divide on this issue, together with dealing with the problem of genocide in Darfur, by linking divestment from Iran with resolutions to divest from Sudan. Efforts to divest from Sudan and Iran could bring Democrats and Republicans together by linking an issue of human values and an issue of our common security. UN resolutions had their place vis-à-vis the apartheid regime in South Africa, but what really had an impact was the growing divestment campaign against the South African regime.

Equally important are efforts to bring Ahmadinejad to justice under the Genocide Convention of 1948. It bans not only the practice of genocide but also incitement to genocide, and Ahmadinejad is clearly guilty of that. If not brought to The Hague, at the very least he could be put on a watch list. This will further delegitimize his regime, his tactics, and his ideology. Judicial action, economic sanctions, and diplomatic measures are all components in isolating the Iranian regime.

Defeating Islamic Militancy Is the Central Issue of Our Time

This is the central issue of our time and we should not be diverted by lesser concerns. Israel wants peace with the Palestinians, but if Iran acquires nuclear weapons it will have the power to shred any peace treaty with the Palestinians. Hamas Prime Minister Ismail Haniyeh proclaimed that Iran is their strategic backbone in his last visit to Teheran. If Iran has nuclear weapons, its influence would be magnified and would make new peace treaties or the emergence of moderate partners amidst the Palestinians impossible. It would also jeopardize existing treaties that Israel has with Egypt and Jordan.

Eventually, militant Islam will be defeated because of the information revolution, because Arabs and Muslims are human beings and because they pray for a real life for their children and for themselves. They don't necessarily want to sacrifice it for the trappings of a twisted militant Islamic heaven.

For the Jewish people this means that we have to act to prepare our own defenses, but we also have to act in international forums, to mobilize governments and harness judicial and economic means. The only difference between today and 1938 is that today we are forearmed with knowledge. How do we act to stop this threat to our common civilization? Through economic sanctions, political pressure, and, if need be, by stiffer measures - but let us begin now.

Given Iran's enormous internal problems, the only thing that is really keeping this regime in place is the flaunting of nuclear weapons. In many ways the situation in Iran is similar to the internal rot that preceded the collapse of the Soviet Union. The Soviet Union extended its demise by about two decades because they could parade gleaming nuclear-tipped missiles in Red Square that masked the rot and that gave them a fictitious aura of invincibility

The Iranian threat has superseded the Arab-Israeli conflict for a lot of Arab countries. This may enable alliances between Israel and Arab governments and between Israel and moderate Palestinians. There is an understanding that we are all involved in a battle between moderates and extremists.

Israel's role is first of all to protect itself, but also to alert others to the danger of militant Islam. They intend to go after Israel, but for them Israel is merely the "little Satan," one stepping stone on the march to world domination. For Ahmadinejad's Iran, Europe is a "middle-sized Satan" and the United States is the "great Satan."

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Benjamin Netanyahu served as Prime Minister of Israel from 1996 to 1999. This Jerusalem Issue Brief is based on his presentation at the Institute for Contemporary Affairs in Jerusalem on February 27, 2007.

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