Iran: Persian Gulf Stability Hinges on U.S.-Iran Dialogue

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Iran: Persian Gulf Stability Hinges on U.S.-Iran Dialogue

By Hooshang Amirahmadi

The Persian Gulf will remain unstable and conflict-prone until Iran is incorporated into the region's economic and security arrangements. Iran possesses over 750 miles of shoreline on the Persian Gulf and the Gulf of Oman, is the Gulf's most populous country, overlooks the Strait of Hormuz and, by regional standards, has a diversified economy. It also is the only state that has played a major role in the region for centuries.

Considering the positive developments in Iran's foreign and domestic policy, the country can be included in regional groupings and this will, in fact, benefit the states in the region and beyond. This perspective underscores the necessity of a dialogue between Iran and the United States. Unfortunately, however, current U.S. policy toward Iran is misguided and counterproductive.

As a very frequent visitor to Iran, I have had numerous talks on the subject both with Iranian officials and with dissident leaders in the country, as well as several years of involvement with U.S.-Iran relations and Gulf affairs.

Since 1980, the Gulf has witnessed the costliest and bloodiest wars of the second half of this century. These wars have cost the region over a million lives and over $1 trillion in destroyed wealth. In the same period, the countries surrounding the Gulf have spent over $300 billion on importing and maintaining weapons systems--and this is a conservative estimate. It is reported that the Pentagon spends some $50 billion a year on its deployments in the region.

The legacy of this staggering economic waste hits at a time when Gulf states are experiencing dwindling oil revenues. In 1981, OPEC members enjoyed a per capita oil income of about $800. By 1994, this figure had declined to a mere $290.

Meanwhile, the global demand for Persian Gulf oil is growing rapidly, a fact that necessitates major investment in the region's oil sector. According to Dr. Subroto, OPEC's former secretary-general, the organization's members will need to invest $100 billion in their respective oil sectors if OPEC production is to reach the necessary 35 million barrels a day by the turn of the century. Economic mismanagement and declining oil revenues have combined to make the need for foreign investment greater than ever before.

The political costs of economic problems are even more pressing. Thus far, the legitimacy of the region's states has rested on their investment capacity and the generous subsidies they have paid to their citizens. But these practices are no longer affordable. Even Saudi Arabia faces troubling budget deficits and foreign debt. As a consequence, the internal stability of the Persian Gulf states has eroded significantly.

Simultaneously, the Persian Gulf suffers from bilateral and multilateral antagonism. Five years after Desert Storm, the Gulf states are more divided than they have ever been. Border and territorial disputes, manifest or latent, are a major source of this interstate conflict. Meanwhile, the geopolitics of oil is changing as Asia's growing economies and populous countries look to the Gulf for their rapidly expanding energy needs.

While Iran and Iraq adhere to the U.N.-brokered cease-fire agreement, they have yet to sign a comprehensive peace treaty. Even though Iran's adventurism abroad has subsided, the Gulf monarchies still feel threatened by the specter of Islamic fundamentalism permeating their shores. Iran's dispute with the United Arab Emirates over the Tunbs and Abu Musa has expanded to a dispute with the GCC and the Arab League, including Syria, traditionally Iran's leading Arab ally.

Therefore, to Iran, Iraq and Saudi Arabia, the main regional powers, lasting peace and regional cooperation seem unattainable. Complicating the tense situation is the spiraling conflict between the United States and Iran, a conflict that threatens to escalate beyond redemption. …