June 30, 2007


Khamenei plays for high stakes (David Blair, 28/06/2007, Daily Telegraph)

At present, Iran produces 4.3 million barrels of oil every day. This may sound impressive - but it could turn out another million if its drilling rigs and pipelines were not falling to pieces. The inescapable truth is that Iran is lamentably failing to exploit its own natural wealth.

The Supreme Leader, Ayatollah Ali Khamenei, is keenly aware of this. But he faces an acute dilemma. Recovery is only possible if Iran allows Western trade and investment. The vital oil sector will never reach full potential without Western money.

Yet while Iran pursues its nuclear programme, it will remain isolated, devoid of Western investment. It will also be vulnerable to outside pressure. In extremis, the United States and its allies could strangle Iran's economy by imposing a blockade in the Gulf and halting the flow of imported petrol.

But if Ayatollah Khamenei were to sacrifice the nuclear programme in exchange for investment, his troubles would not end.

If the ayatollahs lead the Reformation, and get credit for producing what would be a fairly easy to achieve recovery, they may preserve the Islamic Republic, just not in the form Ayatollah Khomeini and Mahmoud Ahmedinejad dreamed of.

Posted by Orrin Judd at June 30, 2007 6:11 AM

There is another choice - take the $300 million or so they probably spend on terror financing each year and use that to start improvements. And I'm sure that's a lowball value. Heck, they're probably spending $100 million a year just to cause trouble in Iraq.

They could also tell the boyndars (those "religious" endowments that are used for all sorts of fuzzy purposes) to each pick a refinery and make it work. Stir up a little competition, as it were. Build an economy, set the market free.

But thuggish kleptocracies don't work that way, and terror is part of their raison d'etre. So the infrastructure will rust.

Posted by: ratbert at June 30, 2007 8:25 AM

They have engineered an Eskimo ice shortage, and we are supposed to be quivering before their miltary threat.

What is it? Is it that there's nothing about gasoline in the Koran, so they can't figure it out, sort of like Amish and automobiles?

Well perhaps it is something else. Rather the spiritual jailhouse has tried to force reality into ideological constraints, as the Communists tried, and has likewise failed.

Harken to the Holy Father's words at Regensburg about this. The universe of the jailhouse is arbitrary, capricious and irrational, as befits a quack operation, some Jim Jones or Joseph Smith institution. Right reason has no place there, only submisssion to the ideology.

Well the price to be paid for blindness is bumping into things in the dark, as now transpires.

We should wish them well, and pray for their conversion and salvation, as we had for the Russian people. Love them as brothers and sisters but love not their errors.

Posted by: Lou Gots at June 30, 2007 8:32 AM

Ratbert - good point about the $ spent on terrorism.

The question is whether the coming Iranian implosion happens quietly or takes the rest of the Middle East with it. Currently it appears Iran is leaning toward the latter but more economic strife like this could lead to the former

Posted by: AWW at June 30, 2007 10:17 AM

Recovery is only possible if Iran allows Western trade and investment. The vital oil sector will never reach full potential without Western money.

It's not the money so much. The Chinese would probably be happy to supply the money. But they can't supply the technology and know-how.

Posted by: kevin whited at June 30, 2007 12:19 PM

Not just money, not just technology; they must lose the quackery, the irrationality, the arbitrariness. Think of Hobbes' peroration on the state of nature. Just so. The jailhouse system masquerades as law, but because it is arbitrary and unreasonable, it is not law but another form of chaos.

In such a state,
". . .there is no place for industry, because the fruit thereof is uncertain. . .; no navigation, nor use of the commodities that may be imported by sea. . .; no arts, no letters, no society; and worst of all, continual fear and danger of violent death; and the life of man, solitary, poor, nasty, brutish and short."

Posted by: Lou Gots at June 30, 2007 1:16 PM