August 26, 2006

Who exactly will Iran invade?

"Spengler" has been claiming for some time that because of Iran's rapidly falling birthrate (the number of babies per woman in Iran is now lower than in the U.S.), Iran must lash out at its neighbors in a string of conquests to secure its prosperity before it runs out of cannon fodder. (Of course, that raises the questions of why the mullahs began promoting birth control in the early 1990s if they were planning on a campaign of conquest, but never mind that for now ...)

I've been pointing out, however, that Iran doesn't seem to be doing much of anything to prepare itself for the military offensives that Spengler sees in its future. Instead, it's devoting itself to strengthening its defensive capabilities, which is what you would do too if your east and west neighbors had both been conquered in the last half decade.

Maybe I'm wrong and Spengler is right. But who exactly would Iran conquer?

It shares a border with nuclear-armed Pakistan, but the only reason for fighting a war over the Baluchi Desert would be to force the loser to take more of it. West Asia is full of horrible places, but Baluchistan, I hear, is special even in that league. And that's just the landscape, climate, and scorpions. The Baluchis themselves are worse.

Iran has a long border with Afghanistan, but, folks, while the Iranians might be crazy, they aren't so crazy that they want to try to occupy that place. Afghanistan is a fun setting for a few of your less-housebroken countrymen to wage the Great Game, as Kipling called the British-Russian rivalry centered over Afghanistan, but there's nothing worth the cost of occupying the godforsaken place. Afghanistan appears to be the last foreign country that a Persian Army went deep into, but that was over 150 years ago, and they may have been invited in.

And then there's Turkmenistan. Verily, it is written: "The nation that rules Turkmenistan shall rule the world!" Verily, it is wrong.

Moving counterclockwise along Iran's borders, we come to little Azerbaijan, which has oil. It also has a nasty post-Communist hereditary dictatorship, so I guess the Iranians could announce that they were invading to spread democracy to Azerbaijan. But big oil brings big friends, like the U.S., and the Iranians remember what happened to the last guy in the region who invaded a small oil country.

Iran has a 20 mile border with Armenia, which has an important natural resource: Armenians. For poorly understood reasons, Armenians can make money anywhere in the world ... except Armenia (although Armenia's economy is finally taking off, and Armenia should soon reach half of Mexico's per capita income).

Iran borders Turkey, but, trust me, Iran will not invade Turkey. (See the Mel Gibson movie "Gallipoli" for details.)

Then there's Iraq, where Iran has close ties with influential members of the Shi'ite majority that was recently installed in power, to the joy of the Iranian mullahs, by ... America.

Iraq has oil, but it is also full of American troops, who would much more enjoy a mission of obliterating an Iranian tank assault than their current mission. I'm not sure quite what the current mission is, but it's definitely less fun than would be squaring off in open country against a shooting gallery full of Shah-era tanks and planes.

Finally, beyond Sunni-dominated and American-garrisoned Kuwait, there's a real prize: the oil field region of Saudi Arabia, which is heavily populated by Shi'ites.

One advantage of being an old coot like me is that when the latest worries come along, after awhile you remember that you already worried about it long ago ... and got bored. Folks, I was worrying about Iran taking over the Shi'ite oil zone of Saudi Arabia in 1979. Despite all the complex theories I constructed at the time about how this was about to happen, it didn't. And it didn't happen over the last 27 years. Will it happen over the next 27 years?

The basic problem, as far as I can tell, is that Arab and Persian Shi'ites are Arabs and Persians. They speak different languages, have different cultures outside of religion, and have different relatives.

Then there's the changing economics of oil.

Obviously, the best thing is to own the oil, because then you can be rich, like President Bongo of oil-exporting Gabon, plus enjoy other perks, like renaming your hometown Bongoville, which would be fun to do even if you were not named Bongo.

If you grabbed ownership of an oil country, you could, presumably, use the proceeds to buy weapons to take over another country, and so on. That's what we theorized Saddam was intending in 1990 after seizing Kuwait (although I haven't seen much evidence merge recently that he really intended to keep going on a chain of conquests).

From America's economic standpoint, however, it doesn't particularly matter who owns the oil because oil is fairly fungible and the price is determined, more or less, by the global balance of supply and demand.

However, we don't want any one government owning too large a fraction of the oil because that makes monopoly price hikes more feasible. Saudi Arabia's huge share of the world's reserves and low population made OPEC's oil price rise feasible in the 1970s -- OPEC was less a true cartel than Saudi Arabia and a bunch of hanger-ons. If Saudi Arabia was willing to cut production radically, the world price went up, even if Iran and other countries pumped more than they agreed. Likewise, Saudi Arabia could singlehandedly cut the price of oil to $10 in 1986 at the Reagan Administration's behest to strangle the Soviet economy.

Theoretically, you wouldn't need ownership to exercise this kind of pumping restraint to drive up prices -- if Tehran could put the word out to the new Shi'ite oil regimes that they were all going to cut back, a Shi'ite consortium might be able to have sufficient market power to boost prices.

But, that all seems terribly theoretical. I strongly doubt that separate Shi'ite states could or would coordinate that much, sacrificing their own sales because they trust the others to cut back too. There are good reasons people in that part of the world aren't very trusting.

Of course, the most likely outcome of instability in the Gulf is simply more chaos, more vandalism and corruption, fewer repairs, and lower production for all concerned, as we've seen in Iraq.

This could drive the world price of oil into 3 digits, but as a strategic or economic weapon, an oil boycott, in these days of large populations in the OPEC countries, is akin to holding their breath until they turn blue.

A reader writes:

You wrote that American GDP is about 20 times higher than Iranian GDP. This is true if we use purchasing power parity, but if we use exchange rates, then the American GDP is about 68 times bigger, 12300 billion / 180 billion. The question is, what should we use for comparing military spending? GDP at PPP or GDP at exchange rates? Iran's military spending, being 3.3% of GDP, would be 6 billion if we use exchange rates and 18.5 billion if we use PPP.

I suggest that we use the average of the two. Military spending consists of personnel costs and hardware purchases. Iran's personnel costs are determined by Iran's wages, which are low, but Iran's weapons expenditures have to made at international prices. If we assume that personnel costs are about half of Iran's budget, then using the average of miltary spending at PPPand that at exchange rates makes sense. Anyway, the average of the figures is about 12 billion, which is less than 3% of American military spending. Obviously, the neo-con warmongers have cause to be worried.


My published articles are archived at iSteve.com -- Steve Sailer

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