Why Is the United States Subsidizing Iran?

It's a veritable international mystery: How did Washington end up funding its adversaries in Tehran?

U.S. President Barack Obama has often spoken of the ever-tightening ring of sanctions against Iran. The hope is that the sanctions will eventually bring the Islamic Republic to the bargaining table, if not to its knees. The effort, however, would be more effective if these sanctions did not go hand in hand with a longstanding and lucrative annual bonus to Iran from Washington. That's right: The United States is effectively funding its adversary.

This bonus takes the form of a subsidy that arises from the United States and NATO's tacit support for Iran's ports on the Persian Gulf and the Gulf of Oman. The United States has largely failed to open any alternative route connecting Afghanistan and the great sea lanes that traverse the Arabian Sea, or between Afghanistan's northern neighbors in Central Asia and those same warm-water corridors of trade. Thanks to this failure, shippers from China, Russia, India, and Europe have no alternative but to use the Iranian port of Bandar Abbas, from which some 90 million tons of goods annually are transported by rail to Turkey, the Mediterranean world, Europe, and Russia. Business at that old entrepôt on the Persian Gulf has boomed to such an extent that Iran, with help from India and Russia, has built an even more convenient port and free trade zone on the Gulf of Oman, at the city of Chabahar, from which goods will proceed overland by road and rail to Afghanistan.

Many goods from Afghanistan and further north traverse Afghanistan to get to the Iranian ports, deepening Afghanistan's dependence on Iran. Meanwhile, new rail routes that run northward from Chabahar across Iran will cause most cargo shipped by land from India to bypass Afghanistan entirely on its way to Central Asia, Russia, or Europe. Again, Iran wins, while Afghanistan and the United States lose. For a full decade, the United States has turned a blind eye to this bizarre situation.

This is not for lack of a viable alternative. The Pakistani port of Karachi and its newer rival, the new port of Gwadar, less that 125 miles east of Chabahar, both feed directly to Afghanistan. Both provide a shorter and more effective land link between India and Southeast Asia, on the one hand, and Europe, the Mediterranean, and Russia, on the other. Karachi and its ports are directly connected by road and railroad to routes that traverse Afghanistan. Up until now, Gwadar has lacked facilities to handle large-scale shipments and been plagued by silting, but the Chinese firm that took over its development and management last week promises to address these shortcomings promptly.

These ports present the United States with a potential win-win situation: Using them would weaken Iran, while simultaneously boosting America's Afghan partners. Instead of subsidizing Iran, these ports could put substantial sums into Kabul's coffers in the form of tariffs and duties. The land routes across Afghanistan from Pakistan could also create thousands of jobs for Afghans in such fields as freight forwarding, storage, logistics, insurance, and transport services.

But the United States has failed to push for the opening of these natural land routes from the Arabian Sea to the north across Afghanistan. True, it provided solid support during the preparation of the Afghanistan Pakistan Transport and Trade Agreement, which goes far toward resolving the problems that have kept these land routes blocked. But this pact remains a dead letter, largely due to half-hearted and ineffective advocacy from Washington since the treaty was signed.

This situation is all the more bizarre because on this issue, the interests of Pakistan, Afghanistan, and the United States converge. Everyone benefits by opening Pakistan ports to large-scale transit across Afghanistan -- except Iran, of course. Afghanistan will emerge as a major transit hub, and thousands of Afghans will find lucrative alternatives to fighting and drug trafficking; the Afghan government will gain a desperately needed income stream; and Pakistan's powerful freight forwarders will gain lucrative new contracts to replace those with the U.S. military, which will dry up after the NATO pullout in 2014. The opening of the new routes across Pakistan and Afghanistan will also be immensely attractive to Indian shippers, providing a powerful stimulus for Pakistan and India to move beyond their current stalemate on trade links.

Skeptics could reasonably point out that this isn't the first time Pakistan seems not to recognize and advance its own interests. But until Washington makes a more convincing case for it to take this obvious step -- and until Washington indicates that it is committed to the opening of these continental trade routes for the long term -- the United States is playing into the hands of the do-nothing forces in Islamabad.

The same failure of U.S. leadership that has channeled so much land transport to Iranian ports also threatens to place the transport of Central Asian gas to Pakistan and India into Iran's hands. The proposed pipeline to bypass Iran, which would carry gas from Turkmenistan across Afghanistan to Pakistan and India, has always depended on a coalition of unlikely allies. Back in the 1990s, both the Northern Alliance and the Taliban agreed that this was an important national priority and agreed to support it -- even as they fought each other. Later, India joined Pakistan in supporting the project -- a rare example of cooperation between those two fractious states.

But neither Obama nor the National Security Council has championed TAPI, as the pipeline is known, and without top-level commitment and leadership this crucial energy corridor cannot be built. Instead, they have left it in the hands of Foggy Bottom bureaucrats and slow-moving international financial institutions, who have allowed it to drift aimlessly. Both Chevron and Exxon Mobil tried to push TAPI forward, but without strong backing from the White House, their efforts have flagged. Meanwhile, Iran proposes to move ahead with a speedy alternative, sending its own gas to Pakistan and India by a route that completely bypasses Afghanistan. With no breakthrough on TAPI, and given their urgent need for gas, both India and Pakistan are ready to move on this, and are restrained only by the U.S. embargo on Iran. If Washington can offer no alternative, how long will that embargo hold?

If the United States is serious about its embargo on Iran, and if wants to make good on its rhetoric about strengthening the Afghan economy, it will move at once on both these land and gas corridor projects. But can the United States afford to pursue this when it is grappling with a $16 trillion national debt?

The answer is yes. What is needed from Washington to resolve this problem is effective leadership, not money. Many donor countries and institutions will lend their support to these initiatives if they sense that Washington is serious about them. Private investors in many countries will also climb aboard once they see that these new channels of continental transport can become a reality.

But as of now, none is convinced that the United States has the commitment or leadership ability to make them happen. They note that both the White House and the National Security Council have sat on their hands on these crucial issues, waiting for someone else to take the initiative. If such passivity continues, Washington should not be surprised when someone else steps forward on both projects -- and brings them about in ways that serves the purposes of America's enemies.



What to Expect from a North Korean Nuclear Test

Pyongyang is about to make some more trouble. Here's what to look for when Kim Jong Un debuts his new bomb.

Pyongyang lashed out harshly at the United States following the most recent U.N. Security Council resolution condemning its December missile test. The Kim Jong Un regime threatened to increase its nuclear deterrent both quantitatively and qualitatively and vowed to conduct a third nuclear test at a "higher level." So what might we expect from another test? Why, what, how will we know, when, and what difference will it make?

First, why test? Without additional nuclear tests, North Korea is greatly limited in its ability to miniaturize a nuclear device to fit on one of its missiles. The 2006 and 2009 tests demonstrated that North Korea can build a nuclear device, but that its nuclear arsenal is likely limited to bulky devices that would need to be delivered by plane, boat, or van, thereby greatly limiting their deterrent value. To make its nuclear arsenal more menacing and provide the deterrent power Pyongyang's vitriolic pronouncements are aimed to achieve, North Korea must demonstrate that it can deliver the weapons on missiles at a distance.

During my previous visits to the Yongbyon nuclear complex, which housed both its plutonium production and its uranium enrichment facility, North Korea's nuclear specialists told me that the first two nuclear devices tested used plutonium as the bomb fuel. Pyongyang voluntarily suspended its plutonium production in 2008 and I estimate it has only 24 to 42 kilograms of plutonium, sufficient for 4 to 8 primitive nuclear devices, with no more in the pipeline. Yet with only two plutonium tests, one successful and one only partially successful, they need more tests to have confidence that they can build a smaller nuclear warhead.

The next test, however, could just as well be designed to demonstrate a highly enriched uranium (HEU)-fueled bomb. For years, Pyongyang had consistently denied having a uranium enrichment program, but in 2010 North Korean officials showed my Stanford University colleagues and me a modern centrifuge facility for uranium enrichment, ostensibly dedicated to making low-enriched uranium reactor fuel for electricity production. Based on what we were shown and our subsequent analysis of the time scales for constructing this facility, I concluded that Pyongyang must have a covert centrifuge facility, and that it has likely also produced HEU. I believe the amount of HEU produced to date is relatively small, but quite likely sufficient for a nuclear test.

What will they test? The most likely choice is an HEU device. Pyongyang threatened to increase the size of its nuclear arsenal; it can only do so with HEU, but it has a limited plutonium inventory and has decided to suspend plutonium operations. One can only speculate why it made that choice. Its plutonium facilities could have continued to produce one bomb's worth of plutonium per year. It is possible that the North Koreans believe they can develop a significantly larger HEU production capacity. In addition, the reactor operations necessary to produce plutonium are fully visible from satellite imagery because the reactor's cooling tower emits a visible steam plume, whereas the location and operations of uranium centrifuge facilities cannot be monitored from a distance, as was clearly demonstrated when we were shown the previously undiscovered Yongbyon centrifuge facility.

The apparent decision to pursue HEU devices is also puzzling because plutonium bomb fuel is more suitable for miniaturized nuclear devices than HEU (which is why the modern nuclear arsenals of established nuclear powers use plutonium). Yet Pyongyang may have decided it would require too many tests and too much plutonium, which is in short supply, to demonstrate a miniaturized plutonium device. And, it is likely that A.Q. Khan sold the North Koreans a Pakistani HEU design that could be mounted on some of North Korea's short or medium-range missiles. If Khan provided both design and test-performance data, Pyongyang may have decided that HEU, albeit less effective than plutonium, was a quicker and more certain route to miniaturized nuclear devices.

In an article co-authored last summer with Frank Pabian in the Bulletin of the Atomic Scientists, we speculated that it is possible that the North Koreans may decide to test both plutonium and HEU devices -- simultaneously in one test tunnel. One more plutonium test provides valuable information on the yield-to-weight ratio, critical for miniaturized designs. An HEU test allows them to move to a possibly expanded future arsenal. Multiple simultaneous tests have been conducted by the United States and the Soviet Union, and most recently in 1998 by India and Pakistan. Such tests have some technical limitations and are more challenging to conduct, but they have the huge advantage of not incurring additional political cost -- in other words, they can get two for the price of one.

Pyongyang had previously announced that it has mastered nuclear fusion technologies, prompting some observers to predict that the next test could be a fusion-boosted device or possibly even a thermonuclear device, typically referred to as a hydrogen bomb. North Korean nuclear specialists are undoubtedly familiar with these technological advancements and likely have tried their hand at designing such devices, but I consider application of these concepts to be still out of reach of their specialists, unless they are prepared to conduct multiple nuclear testing campaigns.

How will we know? A successful nuclear test will be easily detected because its seismic signals will be monitored around the world by the International Monitoring System established under the Comprehensive Test Ban Treaty to monitor potential clandestine nuclear tests anywhere in the world. Both the 2006 and 2009 tests gave indisputable seismic evidence of nuclear tests. This one may be even easier to detect because Pyongyang has vowed to test at a higher level.

But what exactly did Pyongyang mean by a "higher level?" Was it just a higher explosion yield? That is possible, because much of the international community dismissed the 2006 test as a failure and the 2009 test as not very successful. The yield of the 2006 test is estimated at somewhat less than 1 kiloton (1,000 tons of TNT equivalent). Experts are still divided on the yield of the 2009 test; our best estimate is between 2 and 7 kilotons. In any case, if the North Koreans can explode a device with a yield in that range, then they most likely can produce a Nagasaki-like bomb with a yield of 20 kilotons. Perhaps that is what Pyongyang means by a higher level.

More likely, however, and consistent with Pyongyang's pronouncement that it will also increase its nuclear deterrent qualitatively, is an attempt to test a more sophisticated, miniaturized design. How will we know? Pyongyang will almost certainly claim that the test was successful and will tout its sophistication. It will be difficult to distinguish truth from propaganda, but experience shows there is often a nugget of truth in North Korea's claims. It will also be difficult to discern from seismic signals if one or two devices were tested if they are simultaneous and closely spaced.

Aside from seismic signals, which tell us only the size of the explosion and do not allow us to differentiate between plutonium and HEU, nor tell us anything about the sophistication of the device, there are only a few other signals that can be monitored. If the nuclear blast carried out in the tunnel deep underground causes sufficient fissures in the overburden rock, then gaseous fission products can escape and may be detected by airborne instruments or radiological monitoring stations around the world. The U.S. government reported that it picked up such signals after the 2006 test with offshore airborne monitors. It announced that these signals gave definitive proof that North Korea had detonated a nuclear device, but did not specify whether it was plutonium or HEU. There are different telltale signatures for HEU and plutonium devices, but they must be detected and analyzed very rapidly to allow conclusive identification. There were no reports that anyone detected radiological signals after the 2009 test. This could likely be a result of better containment or just bad luck of not having the detectors in the right place at the right time.

If a next test is well contained, then we may learn nothing about the device detonated. However, one of the risks Pyongyang takes in trying to demonstrate a test at a higher level is that they may produce fissures that allow radioactive seepage or possibly cause a major blowout from the tunnel. The U.S. testing program experienced such problems even after having conducted hundreds of tests. Unrecognized complex geological conditions apparently led to a blowout during the 1970 underground Baneberry nuclear test at the Nevada Test Site. The blowout released a radioactive cloud nearly 10,000 feet high. Were something similar to happen in North Korea's next test, we would be more likely to learn technical details about the type of device detonated due to radiological contamination. However, spewing a radioactive cloud over the skies of Northeast Asia would create an enormous political storm from the nearby countries.

When will they test? Overhead imagery of the Punggye-ri nuclear test site demonstrates conclusively that North Korea is prepared to test. A third test tunnel, identified by the south portal, has been ready for nearly a year. It has been kept prepared through summer floods and winter snow. There has been a flurry of recent activity there and at the west portal, site of the 2009 test, and a nearby support area. Security appears particularly strict around the west portal, potentially indicating that the test device is or will be housed there until emplacement into the south tunnel. Everything we can see indicates North Korea is technically ready to test with little notice. When to test is now largely a political decision.

What difference will a test make? A successful test will make Pyongyang's nuclear weapons appear more threatening and make its deterrent more credible because it may then possess a missile-deliverable nuclear weapon. It may also set North Korea on a path of substantially expanding its nuclear arsenal through stepped-up HEU production. It may make Pyongyang more aggressive and provocative in dealing with South Korea and Japan. However, one more test does not fundamentally change the security threat North Korea poses. Pyongyang can threaten South Korea, Japan, or U.S. regional assets, but it can only use its nuclear weapons if it is prepared to accept the destruction of the regime.

A successful test will, however, destabilize the region -- precisely the scenario China has tried to avoid by supporting Pyongyang over the years, and the reason it is in China's interest to use all its influence to stop the test. The combined military forces of South Korea, Japan, and the United States will be forced into higher alert status. A test will likely drive them to increase their ballistic missile defense protection against North Korea, which will clearly complicate relations with China.

One of the most damaging results of another test will come from potential cooperation with Iran. Sharing Pyongyang's nuclear test experience with Tehran similarly to how it has shared missile technologies will greatly increase the Iranian nuclear threat. Iran now has the capacity to enrich uranium to weapons grade, although it has claimed to have enriched it only to lower levels for peaceful purposes. It would be very difficult for Iran to continue its peaceful nuclear façade if it tested to further its nuclear weapons capabilities. However, if Pyongyang were to involve Iran or share its testing experience, that would change the picture dramatically. Should Iran make the decision to build nuclear weapons, it is more likely to do so without necessarily testing its own device.

But perhaps the greatest impact of another North Korean nuclear test is that it will signal that the new regime, like its predecessors, has chosen bombs over electricity. Another nuclear test will make it impossible for the new South Korean government or the second Obama administration to look for resolution of long-standing enmities by focusing on issues beyond the nuclear dispute. Normalization of relations, a peace treaty, access to energy and economic opportunities -- those things that come from choosing electricity over bombs in the nuclear arena and have the potential of lifting the North Korean people out of poverty and hardship -- will be made much more difficult, if not impossible, for the next five years, if not longer.

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