This article first appeared on the American Enterprise Institute site.
When negotiations on the Joint Plan of Action began, the Iranian economy had just shrunk 5.4 percent.
Rather than utilize that leverage to win an agreement with favorable terms, President Barack Obama and Secretary of State John Kerry sought to shower Tehran with incentives. With upwards of $100 billion in new investment now due in Tehran (even before Iran demonstrates its full compliance with the nuclear deal), Iranian authorities are starting their shopping spree, with a heavy emphasis on the military.
This shouldn’t surprise. While Obama argues that the Islamic Republic will use its financial windfall to benefit the Iranian people, recent history suggests otherwise: When the European Union flooded Iran with hard currency between 2000 and 2005 (during which time the price of oil also increased sharply), Iran invested the bulk of its windfall into military and covert nuclear programs.
Indeed, while Obama and Kerry tell senators that the Bush administration’s refusal to deal with Iran led Tehran to increase its centrifuge program exponentially, the truth is that the money Iran had as a result of Western naïveté best explains the growth in Iran’s covert programs. In effect, the United States is now making the same mistake twice.
Case in point, Iranian authorities are now engaged in a massive shopping spree in Russia to purchase hardware or enter into partnerships to produce new platforms.
Consider the latest headlines—just from a single day, August 26—from the Iranian and Russian press:
Fars News: “Tehran in Talks With Moscow to Purchase Sukhoi Superjet 100.” While the Sukhoi Superjet is a passenger jet, almost every civilian plane has a military corollary. As much as Iranian officials and their lobbyists have talked about civilian airliner safety, the fact is that every time Iran received spare parts for its civilian fleet, it cannibalized them for its military.
Fars News: “Iran, Russia Reach Initial Agreement on Joint Helicopter Manufacturing.”
Fars News: “Tehran, Moscow to Manufacture Airplanes.”
Interfax/AVN Online: “Russia to Sell to Iran Modernized S-300 Missile Systems Antey-2500—Source.”
Interfax/AVN Online: “Russia to Coach Iranian Specialists to Operate New Antey-2500 Air Defense Missile Systems.”
Given a choice between guns and butter, Supreme Leader Ali Khamenei will always choose guns. And given a choice between reality and wishful thinking, alas, the State Department and many in Congress seem inclined to the latter.