10:00 am EDT - 1:00 pm EDT

Past Event

Beyond Sanctions: Russia, China and Iran Workshop

Friday, July 09, 2010

10:00 am - 1:00 pm EDT

The Brookings Institution
Saul/Zilkha Rooms

1775 Massachusetts Avenue, NW
Washington, DC

On July 9, 2010, under the auspices of a grant from the Carnegie Corporation of New York, three Brookings policy research centers – the Center on the United States & Europe, John L. Thornton China Center, and the Saban Center for Middle East Policy – convened an off-the-record workshop to examine relations between Russia, China and Iran. Bringing together experts from Russia, China, and the Middle East as well as specialists from DC-based think tanks, the workshop looked at the implications for current U.S. policy, including the U.S.-sponsored June 9, 2010, U.N. sanctions resolution (Resolution 1929).

Entitled “Beyond Sanctions,” the workshop focused on how Russia, China and Iran interact with each other on a range of political, economic and security issues. It considered the main drivers and determinants of the various sets of relations; how the three states view each other as major regional (and potentially global) players; how external variables such as relations with the United States, relations with the EU and with other major international players factor into Russian, Chinese and Iranian calculations about their respective relationships; and how Russia and China’s roles in multilateral institutions (for example, in the UNSC, IAEA, NPT), may influence their decision making and policymaking as regards Iran. Participants also discussed how Russian and Chinese policies toward Iran might converge or diverge on key issues; Russian and Chinese attitudes toward sanctions; and what the prospects are for sustaining U.S. and EU cooperation with Russia and China on efforts to curb and constrain Iran’s nuclear aspirations. In addition, there was considerable discussion of Iran’s perspective on this set of issues and what might influence Tehran’s calculations on its nuclear program and its relations with the broader international community and its institutions.

For Russia, participants analyzed the new complexities of a rapidly changing geopolitical environment and how Moscow—like Washington––is trying to adapt to the new landscape of rising powers as its former superpower status fades into the background. While Russia has come to terms with the rise of China (and India), Moscow sees Iran as an aspiring regional power, not as a rising global power. Russia considers Iran to be both an important player in the broader Middle East, and a “rational actor” with a long history––a history also marked by difficult episodes in the bilateral Russian-Iranian relationship. Participants concluded that Russia’s Iran policy is determined by a combination of Moscow’s own interests in the region and Russia’s relationship with the United States, and that the importance of Russia’s economic interests in Iran should not be exaggerated. Economic issues were dismissed as primary or even major drivers of Russia’s foreign policy toward Iran. Russia’s relations with China were also not seen as a primary determinant of Moscow’s policy.

Participants reviewed the state of recent Russian-Iranian relations, noting that Russia and Iran worked closely on the resolution of the civil war in Tajikistan in the 1990s; that Russia appreciated Iran’s open rejection of any kind of involvement in Chechnya and the North Caucasus during the series of wars there; that Iran went so far as to lobby for a Russian seat at the Islamic Conference; and that Russia condones Iranian support for Hamas and Hezbollah as “part of the game that people play in that part of the world when they have a weak hand” rather than condemning it outright. In terms of how Russia’s relations with Iran factor into U.S.-Russia relations, participants concluded that when the bilateral relationship with the United States deteriorates, Moscow always finds the idea of closer relations with Tehran more attractive and seeks to thwart America’s policy toward Iran. From 2003-2008, for example, Moscow used Tehran to balance against Washington, but Russian experts noted that––with the Obama Administration’s “reset” of the relationship––Russia has now downgraded the importance of Iran. Participants also underscored the fact that Iran’s application for actual membership (rather than its current observer status) in the Shanghai Cooperation Organization (SCO) has been consistently rejected by China and Russia nominally on the basis that any country under international sanctions cannot be a member, but actually because neither of the two countries wanted to rupture relations with Washington. The experts suggested that Russia will always prioritize its relations with the United States if given a clear choice. Participants cautioned, however, that if Russia feels it is threatened by the United States in areas where it believes that it has a vital interest––such as in Georgia and Ukraine, or on critical Russian energy security issues––then there would be a reversal in Moscow’s current Iran policy.    

Russia and the United States are also not on the same page regarding when and how to deal with Iran’s nuclear program. Moscow has little respect for the Iranians’ technological expertise; although it recognizes that much of the necessary technology can be procured. At this particular juncture, Russian experts noted, Russia has a much longer time horizon for Iran’s ability to build a nuclear weapon and, therefore, does not have the same sense of urgency as the United States, whose ally, Israel, is directly threatened by Iran. While Russia is not interested in Iran becoming a nuclear power in the military sense, the complexities of Moscow’s relationship with Tehran rule out contemplating a military strike, and Russia has already learned to deal with the reality of a “nuclear Pakistan,” which Russia considers far more unstable and threatening than Iran.

In Russian minds, there is a high probability that the existential threat to Israel will lead to a strike by the United States and/or Israel. During the Bush Administration, for example, Moscow opposed the application of sanctions against Iran in the belief that the United States was in favor of regime change in Tehran, and would also use the failure of sanctions to justify a military strike by Washington ex-post facto. Russian policy is currently focused on dissuading Iran from taking steps toward obtaining a nuclear weapon, but also on supporting Iran’s right to acquire civilian nuclear power capacity under the direct supervision of the United Nations and the International Atomic Energy Agency. Experts argued that Russia would be willing to accept the “Japan Model” for Iran––i.e. Tehran acquiring the capability to produce a nuclear weapon but not actually moving to produce one––although this is clearly not an acceptable model for the United States, Israel, or other key regional players.

Russian experts argued that Moscow has grown increasingly frustrated with Iran over the last several years and especially over the last several months. Given the change in U.S. policy and the Obama Administration’s early overtures to Iran, Moscow’s current view is that Tehran should be more accommodating toward the United States, the U.N., and the international community, as this is “the best deal they are going to get.” Russia supported sending a strong signal to Iran with the June U.N. sanctions resolution to prod Tehran back to the negotiating table, but Moscow is not likely to support imposing more stringent sanctions on Iran.

As far as Russia’s relationship with China is concerned, participants discussed the dramatic and positive transformation in bilateral relations over the course of the past decade, but also the fact that after a long history of Russian preeminence, the tables have turned and Russia is now confronted with the challenge of dealing with a strong China. Russian experts did not see particularly close coordination between Russia and China on Iran, and argued that Russia’s relations with the United States, Europe, and other international players, including Israel and Saudi Arabia, were greater drivers of Moscow’s decision making on sanctions. One expert argued that Russia’s leaders do not yet believe the ‘world of tomorrow’ belongs to China; they still have a lot of respect for the American economy and the United States’ ability to innovate. Participants also pointed to increasing competition between Russia and China in Central Asia, seeing the creation of the SCO as an affirmation of China’s presence in Central Asia; but no great competition over Iran in the energy sphere.

Russian experts asserted that Russia is not worried about China’s energy interests in Iran, as Chinese demand may help divert Iranian gas exports away from Europe. Russia wants to retain its position as the dominant European supplier and Iran, with the world’s second largest gas reserves (after Russia), has its own ambitions to export energy to Europe that would bring it into direct competition with Russia. Energy analysts in the group underscored that Russia is content with the status quo with Iran, where Tehran is prevented from becoming a major gas exporter even if this means China is increasing its stake in Iran’s energy sector. The final prognosis was that, given this range of issues, U.S-Russia cooperation on Iran would continue for at least the subsequent six months (July-December 2010).

For China, participants focused on the fact that the application of U.N. sanctions now make it more likely that Beijing will have to make some harder choices in its relations with both Tehran and Washington. Participants concluded that China does not view sanctions as an effective tool of statecraft and has serious qualms about supporting their application after being the repeated target of sanctions post-Tiananmen Square and again in the 1990s. Like Moscow, Beijing does not want to see Iran with a nuclear weapon, but Beijing also does not see Tehran as close to acquiring a nuclear weapon as Washington does. In addition, Beijing does not perceive Iran as a security threat and has no great sense of urgency to counter Iran.

In many respects, Chinese experts argued, China has more of an interest in the ‘Iran issue’ not being resolved quickly so Beijing can benefit from the uncertainty and not be forced to make decisions. Chinese experts noted that China only fell into line on Security Council Resolution 1929 once all other major countries had effectively agreed and signed on. China would have much preferred to remain at the edge of the coalition lining up against Iran––nominally committed to it, but holding back from any firm commitments that would spoil relations with Tehran. This posture comes, in part, from a sense of insecurity in Beijing, especially at being pushed by the U.S., the EU and others to assume more global responsibility. The Chinese are not quite sure what they want to do, or should do. Participants argued that, eventually, China would want to play a larger political role in the world, but for now, Beijing is interested in increasing its influence without increasing its responsibilities––especially if the definition of “responsibility” is seen as being dictated to Beijing by Washington, Brussels or elsewhere.

Like Russia, China has a complicated relationship with Iran. While North Korea involves a range of vital security interests for China, Iran is more ambiguous, although China does consider Iran as a potential ally in curbing a resurgent Taliban’s potential influence in its vulnerable western province of Xinjiang. Ultimately, participants concluded that energy is the main driver for China’s relationship with Iran and top Chinese leaders have to balance the interests of the powerful energy sector with those of the Ministry of Foreign Affairs.         

Energy experts in the group highlighted the fact that Iran is both an important supplier of crude oil for China and a country where Chinese national oil companies (NOCs) can participate in the discovery and exploration of natural gas and oil fields and not face competition from International Oil Companies (IOCs) thanks to U.N. and other sanctions. The heads of Chinese NOCs have ministerial rank and constitute a considerable domestic political lobbying force. Iran, along with Iraq, has become central to NOCs upstream energy growth and the new sanctions create an opportunity for Chinese NOCs to secure a dominant position in the Iranian upstream. As a result, Iran is also pushing Chinese companies to move ahead with major investments in the hope of diluting the impact of sanctions. Even without the application of U.N. sanctions, Chinese energy demand and capacity for massive investment, which other international players cannot match, makes China an especially attractive partner for Iran in its energy sector.

Chinese experts noted that China’s energy security concerns notwithstanding, the U.S.-China relationship is a major factor in Beijing’s relations with Tehran. China is aware of the importance of the Obama Administration’s nonproliferation policy and the central role countering Iran’s nuclear program plays in the U.S. agenda. Chinese companies and officials previously used the lack of a clear resolution on Iran sanctions to sign numerous non-binding agreements to lock in deals so they could invest more heavily in Iran at a more propitious time. Now, however, the new U.S. sanctions legislation that supplements the U.N. resolution will require the Obama Administration to scrutinize Chinese NOC investments in Iran more closely than before. Participants discussed the difficulties also posed for the United States if Chinese NOC investments are discovered to contravene U.S. secondary sanctions legislation. Should the U.S. sanction the NOCs and irritate Beijing, or give them a pass and irritate the U.S. Congress as well as European companies that have been forced to disinvest from Iran? In general, the conclusion was that Beijing will have to establish priorities between its energy interests and the relationship with Washington and that Beijing’s commitment to the June U.N. resolution will be difficult to maintain.

For Iran, participants discussed Tehran’s perspective against a changing geopolitical outlook in the Persian Gulf. Middle East experts noted that 10 to 15 years ago, the Persian Gulf was an “American lake,” and the U.S. clearly demonstrated its power, influence and support of the Gulf States in the first Gulf War. At the time, there was little that Iran or other would-be regional powerbrokers opposed to U.S. dominance could do about it. Now, participants pointed out, the U.S. has to work hard to secure support from a variety of local and international actors with various interests in the region. Ten to 15 years ago, the U.S. did not care about China and Russia’s thoughts on the Gulf. Now they are of critical importance, even if the U.S. still dominates the regional security sphere. Regional experts argued that the ‘story’ of the next five to 10 years will be how the U.S. deals with the new calculus in the Gulf, especially China’s influence, and they debated whether the U.S. will eventually have to start making concessions in the Gulf to ensure good relations with China.       

Regional experts also highlighted the fact that there is considerable complexity in the Gulf States’ approach to Iran and evident divisions among regional players. Shi’ite majorities in Gulf countries see Iran as a symbol, as the first Shi’a fundamentalist state, with considerable “soft power” in the form of religion and religious authority. They feel that weakening Iran will weaken their culture. As a result, many Sunni leaders in the Gulf worry that more international pressure on Iran could lead Shi’ite populations to increase support for non-state groups such as Hezbollah, which are increasingly seen as legitimate players in regional affairs. The prevailing view in the Gulf is that U.S. policy in the Middle East is shortsighted and lacks clarity. Given increasing trade with China, not just in energy, Gulf States are beginning to look toward the PRC as an alternative political as well as economic force in the region. Experts conceded, however, that China would not be an easier power to deal with than the United States, and other states with considerable “soft power” like Turkey were also investing heavily and raising their profile in the Middle East and the Gulf. In short, however, U.S. authority in the region is more diluted than before yielding negative implications for efforts to maintain support for its stance toward Iran. The regional and international diplomatic landscape for Iran is no longer Washington-centric. It is more of a mosaic. Tehran, realizing this, can use shifts in the balance of power to its benefit.

In this context, experts concluded that Iran’s policies were driven by a heightened sense of insecurity and considerable mistrust towards the United States. Maintaining the regime’s power at home and abroad was seen by many at the table to be of the utmost importance. Participants analyzed how the international debate on Iran has also shifted over the course of the last ten to 15 years. At first, the key question was who had power in Iran: who should the United States and the international community deal with? Iran specialists asserted that this question has largely been answered by history, and power now belongs to the Iranian conservatives’ instruments of repression. Iran is ruled by the defenders of the orthodoxy of the system and the Islamic Republic. Today, the question is “what moves Iran?” or what influences Iranian behavior? Participants discussed how various ideas that Iran makes decisions using a cost-benefit analysis, and analyses of major policy changes in Iranian history––such as accepting a ceasefire with Iraq––suggested that “persuasion” and finding the “right mix” of persuasion would move Iran. Other perspectives on the same set of issues suggested that “pressure” and ratcheting up pressure was the right approach to stop Iran from pursuing nuclear weapons. The prevailing view now seems to be that addressing the regime’s insecurity directly will move Iran. However, as Iran experts stressed, we do not really know how the Iranian leadership assesses its own security.

Participants discussed how the Iranian regime has made what many would consider to be risky domestic moves, including rigging the 2009 presidential election and rationing gas, but it also seems to have calculated that it could manage these risks. The prospect of dramatic regime change in 2010 is now less of a threat for the Iranian leadership than it was in June 2009. The Green Movement has not translated into a viable popular movement on the ground, although divisions in the Iranian leadership––especially the fracturing of the hard-line group at the top––remain a threat to regime stability.

Iran experts in the group stressed that Tehran already sees itself engaged in a “soft” war with the United States, which is viewed as encouraging the domestic Iranian opposition to the regime, promoting sanctions and aligning the international community against Iran, as well as engaging in actual military action along Iran’s borders in Iraq and Afghanistan. The Iranian response is multifaceted––to poke holes in sanctions and bargain, but not for a deal. Iran experts argued that Tehran’s goal was to buy time and also use economic relationships to shore up diplomatic support, undermine the sanctions, and insulate themselves from the sanctions’ impact. Finally, Iran would also seek to raise the cost to the United States of its policy against Iran by supporting terrorist groups in the Middle East.

As Russia and China seem to have aligned, for now, against Iran, the situation is more difficult than for Tehran, but participants also underscored that Iran had taken close note of the fact that China was the main obstacle to the U.N. sanctions resolution, and that it took the Obama Administration six months to put the resolution together because of Chinese opposition. As a result, Iran is turning its diplomatic and economic focus toward China, but also targeting other important mid-size powers, such as Brazil and Turkey, to secure support.

In the wrap-up to the workshop, participants cautioned that the current international confluence of interests and broad consensus on pressuring Iran would not likely last. The Obama Administration had to pull out all the stops to bring the present coalition together. Future sanctions would require a similarly momentous effort. Participants also noted that this concerted international effort had still not been sufficient to persuade Iran. Regional experts concluded that Iran sees itself as having the wind at its back in the Persian Gulf and should be able to hunker down against sanctions and international pressure for three to five years, even if it means bankrupting its long-term future in doing so. Participants recommended additional meetings to discuss new approaches for dealing with Iran, including bilaterally, through the U.N., and through intermediaries, to address the question of what moves or drives Iran in more detail.