Iran Chooses Guns Over Butter Every Time

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Members of Iranian armed forces march during the Army Day parade in Tehran, April 18. Hamid Forootan/ISNA/Handout/Reuters

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:

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.

Michael Rubin is a resident scholar at the American Enterprise Institute. A former Pentagon official, his major research areas are the Middle East, Turkey, Iran and diplomacy.