Iran’s got 99 problems, and that’s an opportunity

Iran is under pressure and we know it because its president and foreign minister won’t shut up about how they won’t negotiate under pressure, the Islamic Revolutionary Guard Corps (IRGC) has been caught mining oil tankers, and Obama administration alumni are coaching the Iranian regime on how to deal with President Donald Trump.

Last week Trump deescalated the tension between Iran and the U.S. by electing not to kill 150 Iranians in a retaliatory attack after Iran shot down a U.S. surveillance drone. The U.S. is still leaning forward so it struck back against an IRGC cyber unit, and announced more sanctions against Iran’s supreme leader.

The best U.S. approach is to be ready to talk to Iran while keeping the pressure on.

The inspiration of the U.S. effort should be the “30 percent solution” which argues that an opponent becomes battlefield ineffective when it loses 30 percent of its military age males, and enters a “catastrophic decline marked by falling birth rates and declining population, wealth and power after the cessation of hostilities.” Demographic exhaustion isn’t a prospect for Iran — yet — but its birth rate of 1.6 is below replacement rate (2.1) and is a solid indication of street level sentiment. That, plus a deteriorating medical system and an environment “on the brink of crisis” would be a grim prospect for a secular society but it’s panic time for the leaders of a millenarian regime.

The U.S. has three pressure points: the economy, public health, and water and the environment. If done correctly, the effects will be severe and long-lasting, and will force Iran to be inward-looking and less of a threat to its neighbors and U.S. interests.

There’s no literal battle between American and Iran other than the offstage action by the spies, and the proxy wars in Iraq, Syria, and Yemen. But there is a battlefield of sorts — it’s in Iran — and U.S. negotiators should be explicit about its goal: to remove 30 percent of the country from productive economic activity if Iran doesn’t agree to reasonable proposals.

Iran’s elites act on the basis of consensus, so a more likely goal isn’t to change Iran’s policy, which would be near-impossible given the faction-ridden system — it’s to make it difficult to execute policy.

The U.S. pulled out of the JCPOA in May 2018, and in November 2018 reimposed sanctions — on energy, shipping and shipbuilding, and the financial sector — waived under the JCPOA, and imposed new sanctions against 700 individuals, entities, aircraft, and vessels. The U.S. followed up in 2019 by refusing to grant waivers to buyers of Iranian oil and imposing a second round of sanctions against Iran’s metals industry. 

Because of sanctions, but mostly due to economic mismanagement, Iran’s economy is expected to contract by 6 percent in 2019, with inflation of almost 40 percent. Iran’s unemployment rate has hovered around 12 percent, adding to social tensions.

Iranians have suffered from shortages of medicines and medical equipment due to sanctions, and what is available costs four to five times more than in the past.

There is unlikely to be any movement on this, even with sanctions waivers, as financial institutions will demand a road map for transactions that won’t provoke prosecution later, so the health profile of Iran population continues to deteriorate, adding to future costs and possibly reducing the number of youth fit for military service. That may already be happening, and may be a reason Iran had to recruit Shia foreign fighters to defend the Bashar Assad regime.

In a sad irony, Siamak Namazi, an Iranian-American imprisoned in Iran, wrote “Sanctions and Medical Supply Shortages in Iran” which forecast the current situation and urged changes in the sanctions regime to limit unintended effects on at-risk Iranians.  

Iran is a byword for “water mismanagement” because it gave the contracts for construction of waterworks to IRGC-affiliated companies which proceeded to damn rivers and change water flows to benefit insiders. Iran has consumed over 70 percent of its ground water and faces the prospect of desertification and loss of cropland, requiring the import of food which no one will want to sell due to sanctions.

Sanctions may force the regime to give more money to IRGC-linked companies to shore up support, so more useless public works projects will exacerbate the water problem. The flash floods in early 2019 were aggravated by inadequate drainage and portend future floods, crop losses (which will add to food shortages), and forced migration to the cities, where there are no jobs.  

Shortages of medicine, shortages of food, but no shortage of corruption: The Revolution was for naught.

Iran’s got 99 problems, but Trump wants to “Make Iran great again.” Ayatollah Khomeini “drank poison” to end the war with Iraq. Will his successor, Ayatollah Khamenei, do the same to end Iran’s war with the world?

James Durso (@james_durso) is the Managing Director of Corsair LLC, a supply chain consultancy. He was a professional staff member at the 2005 Defense Base Closure and Realignment Commission and the Commission on Wartime Contracting in Iraq and Afghanistan.  Mr. Durso served as a U.S. Navy officer for 20 years and specialized in logistics and security assistance. His overseas military postings were in Kuwait and Saudi Arabia, and he served in Iraq as a civilian transport advisor with the Coalition Provisional Authority.  He served afloat as Supply Officer of the submarine USS SKATE (SSN 578).