U.S. urged to contain Iran with Gulf coalition strategy

WASHINGTON, Dec. 15 (UPI) -- The Obama administration should plan to lead an international coalition to impose the strongest possible targeted economic sanctions against Iran.

The United States should try to toughen sanctions against Iran outside the U.N. framework by working directly with its Japanese and European allies to impose the strongest possible bans on foreign investment, loans and trade with Iran.

The Achilles' heel of Iran's theocratic regime is its mishandling of the economy. There is growing dissatisfaction with this mismanagement and with corruption, high unemployment and soaring inflation -- officially reported at a 30 percent annual rate in September but believed to be higher.

There is also rising labor unrest. In October tire-factory workers demonstrated in front of the Labor Ministry to protest the failure of factories to pay six months of unpaid back wages. That same month bazaar merchants rebelled against the imposition of a value-added tax, closing down the bazaars in many cities and forcing the regime to postpone its implementation. The bazaaris had been a cornerstone of support for the revolution against the shah in 1978.

Ayatollah Ruhollah Khomeini, the leader of Iran's Islamic Revolution, famously said, "We did not create a revolution to lower the price of melons." But Iran's current leaders lack the personal charisma, religious authority and popular support needed to ignore the growing backlash against their dysfunctional economic policies, repression of human rights and failure to meet the needs of the Iranian people. Falling oil prices will further aggravate Iran's festering economic problems and make sanctions more painful.

An international ban on the import of Iranian oil is a non-starter. It is unrealistic to expect oil importers to stop importing Iranian oil in a tight, high-priced oil market. Instead, the focus should be on denying Iran loans, foreign investment and favorable trade deals. The United States should cooperate with other countries to deny Iran loans from such international financial institutions as the World Bank and any loans for a proposed natural gas pipeline to India via Pakistan.

Although Iran is one of the world's leading oil exporters, it must import approximately 40 percent of its gasoline needs because of mismanagement and inadequate investment in refinery infrastructure. An international ban on gasoline exports to Iran would drive up the price of Iranian gasoline and underscore the shortages.

The incoming Obama administration also will need to mobilize allies to contain and deter Iran. Iran's continued support for terrorism and its prospective emergence as a nuclear power threaten many countries.

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(Part 6: The case for Washington acting to strengthen Gulf regional security against Iran)

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(James Phillips is senior research fellow for Middle Eastern affairs in the Douglas and Sarah Allison Center for Foreign Policy Studies, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, and Peter Brookes is senior fellow for national security affairs in the Davis Institute at The Heritage Foundation.)

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(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)