April 6, 2012

When Opportunity Knocks, Shun It

Just a few weeks back, petrol surmounted diesel in the US and has stayed there since, which is quite a big deal that just cannot be emphasized enough in the run up to the elections. With the sanctions on Iran beginning to chew into the common people's greenback, maybe it is worth taking a look at ways to deal with the Iranian issue from an American perspective and more importantly, from an Indian perspective. I think every country has the right to pursue nuclear energy for satiating their energy needs. In this case, it is a tad far fetched for Iran to say their nuclear program is for peaceful purposes only; considering the bucketloads of oil they have.

For the west, the political route to bring Iran's economy to a screeching halt is through India, China, Japan and South Korea; the only countries still trading for oil with the Persians. Through persuasion that is. Unfortunately for the US, it cannot throw its weight around the foursome without solid backing from Europe. Considering the dump that is the European economy, and the size of the economies of the Asian block, arm twisting through IMF, ECB, WB or the UN would be akin to climbing the Everest barefoot. Looking more closely at the dynamics between the US and the foursome, I find one possible way the deadlock between Iran and the west can be broken.

As we know, the American industry has its hands finely entangled in the Chinese noodles, it would be impossible to fathom the astronomical effects economic action via any means will be on all sides of interest. Not to mention the ' I do whatever I want' attitude the Chinese 'government' has, making it all the more tougher for anyone to bring them into stride, policy wise. Instead, even negotiation would just goad the Chinese to 'I do whatever that annoys you' attitude. There is no weaning off Iraninan oil for the Dragon.

With the Japanese and Koreans being allies, perhaps it may just be possible to talk the two out of bartering with the Iranians. If my opinion is worth its dime, well hopefully more than a dime and a cent, the Japanese will not back off trading with Iran. The Fukushima disaster which followed the devastating quake and tsunami has pushed Japan to its knees. And with total paranoia clutching the Japanese minds (understandably), nuclear reactors are the satanic grip they want to be rid off. Come May, the last functioning nuclear reactor will be shut down with no respite in sight. Although I am a huge proponent of nuclear energy, in this case, I believe the ailing classics need to be overhauled. Most of the reactors were built in the 70s, a time that's technologically eons outdated. With nuclear energy being the biggest portion in the Japanese energy pie, the implications of shutting them all down in a span of 14 months cannot be understated. With oil and coal looming as the only alternative options in the near term, they would need every gram of lignite and every milliliter of petroleum to keep their short-circuited economy running. Don't even bother guessing when their economy will even begin an upward trend. I don't see any bargaining width for the US here. Insistence would mean flogging a sick person with steel wires.

Having deciphered the economic stake two of the four countries have in the Iranian lottery, I will be rash enough to say it could just be possible to bend the South Koreans away from the lightning rod. This would mean more dependence on Russia and other middle east nations for oil. I cannot comment on what that would mean for the Koreans to willfully throw away their stake in the Iraninan casino and wander into the Siberian unknown or the middle eastern quicksands. In any case, the South Korean imports would be dwarfed by those that of the Chinese and the Indians, to make a palpable difference in the hammer blow that is the economic sanctions.

Finally, onto the protagonist - India, in my opinion, can be the rook that can capture the queen and hasten an end to the economic and political stalemate between Iran and the rest of the world. On the surface, we can say its none of our business - a decades old 'official' policy not to butt into non contiguous international issues. But this ain't the classical era and it's very much the time to stick our noses into other people's business. India imports quite a few pints of the juice from Iran and were almost on the verge of signing a natural gas pipeline. Our energy interests are deep and have had a fairly good working relationship with Iran. The government's adamance to continue trading with Iran despite pressure from the west places us in the front foot. I believe we have the right cards to persuade Iran way better than the west to abdicate its nuclear ambitions for the sake of regional stability. It would be foolhardy to say Iran will heed to us, but the odds of failure or success are balanced. India stood by Iran many a time (please forgive the most recent back stabbing at the UNSC) and they may place a dollop of trust in us. That is just sufficient wiggle room to atleast get them talking. We need to be a good shrink here. The returns being us being an important player and not merely a spectator in foreign affairs. But, the retinue of endemic problems plaguing us only serves to deny ourselves such opportunities to rise onto the podium in the international arena. The perfect chance for us to be a bridge between the west and the east looks to have fallen by the wayside. Unfortunately, we are the rook that's unwilling to capture the queen to end the game. Checkmate and our loss.

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