Tuesday, 6 April 2010

Israel Matzav: How to overthrow the Iranian government

How to overthrow the Iranian government

Hossein Askari believes that the Obama administration could impose sanctions on Iran that would bring the regime down within a year if it wanted to. The problem is that Obama doesn't want to bring down Iran's clerical regime.

First, the United States should freeze many of Iran’s bank accounts, not only those belonging to the Revolutionary Guard and key regime figures, but also those belonging to rich Iranian merchants and businessmen living in the country. This would threaten the financial interests of all who benefit from and support the regime. The bazaar strike of businessmen against the shah’s regime was the key catalyst to toppling his government during the 1979 revolution. The United States does not need China’s blessing to pull off a similar feat. Washington should threaten any bank that refuses to cooperate, both by imposing fines that would be even stiffer than the $536 million paid by Credit Suisse at the end of 2009 for dealing with Tehran, and with exclusion from the U.S. market. Few banks would choose Iran over the US and any that did would charge so much to do business with Iranians that regime insiders would have a heart attack!

Second, the United States should further tighten Iran’s isolation from the international financial system by sanctioning every Iranian financial institution, including its central bank. Again, any country or financial institution that did not cooperate would face American fines and exclusion from the U.S. market. Commercial banks around the world are already increasingly reluctant to do business with Iran after the record fines paid by Credit Suisse. Cutting off the central bank and all Iranian financial institutions would basically increase the cost of Iranian imports because Tehran could not use letters of credit—instead, it would either have to resort to cash, literally in suitcases, to buy what it needs or rely on barter. The cost of trade would soar in time, crippling the Iranian economy and demonizing the regime.

Third, the Obama administration could spark a panic by motivating Iranians, as well as expatriates residing in the United States and overseas, to liquidate their assets in Iran and to withdraw their money from the country. The wealthy would rush to take their money out, fearing a collapse in asset prices and in the value of the Iranian currency, the rial. The regime would have no choice but to block the outflow of funds from Iran; the black-market exchange rate would jump; import prices and eventually inflation would soar.

All these measures—the financial sanctions and initiatives to spark an economic panic in Iran—should be adopted simultaneously so as to have maximum effect; adopting them one by one would not inflict the needed level of pain on the regime and its supporters.

While it would be best to have these financial sanctions adopted on a multilateral basis by the United Nations Security Council, the Obama administration could immediately and unilaterally adopt them and threaten financial institutions that circumvent them with stiff fines.

Askari also says that the focus on Iran's nuclear program is misplaced. Well, maybe, if you need support from ordinary Iranians. But for the rest of the world, one of the key motivations for bringing down the Iranian regime is to stop the nuclear program. If Iran gave it up, there would be a lot less interest in removing Ahmadinejad and Khameni from power. And it doesn't look like those two are going to be removed from power by an election.

Israel Matzav: How to overthrow the Iranian government

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