Revisiting the 'Axis of Evil' - Part I

Oil futures are extremely sensitive to the state of play in the hydrocarbon-rich Persian Gulf. Within days of the news that William Burns, a US State Department official, would join the diplomatic team, led by the European Union's foreign policy chief, Javier Solana, for July 19 talks with Iran's Saeed Jalili in Geneva, the price of oil fell by 12 per cent.

With the soaring price of oil leading to a spurt in the cost of everything, from food to consumer items, the scene is set for inflation to climb. Buffeted by the sub-prime mortgage crisis for the past year, a slump in the housing market and rising inflation, US Federal Reserve Bank and Treasury Department chiefs are scrambling to defuse one crisis after another and keep recession at bay.

Recent history shows that when the US is in recession, the party in power in Washington loses. That's what happened to President Jimmy Carter, a Democrat, in 1980 and to George H.W. Bush, a Republican, in 1992.

A decline in oil price is a prerequisite for circumventing recession. And that’s linked with excluding military action against Iran.

As it is, of the four top-most policymakers in Washington, Gates and Secretary of State Condoleezza Rice remain committed to pursuing diplomacy, with Vice President Dick Cheney favouring military strikes. Bush continues to display a split mind - a contrast to what happened in 2003, when Bush, Cheney and Defense Secretary Donald Rumsfeld were all for invading Iraq and ignored the ambivalent Secretary of State Colin Powell. Now, fearing a calamitous petroleum price hike caused by nervous oil traders, Bush is tilted toward a multilateral approach to Tehran.

In the diplomatic arena, however, the key missing element is the security guarantee for Iran. It was left to Thomas Fingar, director of the US National Intelligence Council, to point out this lacuna. "Iran has real security needs," he said July 9, adding "We are part of the reason Iran feels insecure".

When, in the course of preparing a package of incentives for Iran by six nations in mid-May, Russia raised the idea that the group should give Iran security guarantees to ease Middle East tensions. Bush dismissed the idea summarily.

As a veto-wielding permanent member of the UN Security Council, Russia counts. Its foreign minister, Sergei Lavrov, has pointed out that neither the US nor Israel offers any evidence that Iran is pursuing a nuclear-weapons program. Indeed, Washington's own National Intelligence Estimate, released in December, stated that Iran had ceased working on a nuclear military program in autumn 2003.

While politicians and experts dabble in speculation, military commanders are mandated to prepare plans for dealing with worst scenarios.

So what Retired General John Abizaid, commander of CENTCOM from July 2003 to March 2007, has to say is worth pondering. "I believe that we have the power to deter Iran, should it become nuclear," he said in his talk at the Center for Strategic and International Studies, a Washington think tank. "There are ways to live with a nuclear Iran. We lived with a nuclear Soviet Union, we've lived with a nuclear China, and we're living with [other] nuclear powers as well."