Economist on Iran

Iran and the Presidents announcement have been the order of the day and its clear the Iranian Nuclear program is more widespread then original feared.

Western diplomats hope that if Russia agrees to more punitive measures, China would not oppose them alone. But for the moment Beijing is wary. China imports much of its crude oil from Iran and recently signed a deal to sell back refined fuel. Its foreign minister, Yang Jiechi, said the issue of Iran's nuclear programme should be resolved through “peaceful negotiations”.

Iran's hardline president, Mahmoud Ahmadinejad, under pressure at home over allegations that his re-election in June was rigged, has championed the nuclear programme as evidence that the Islamic republic had joined the ranks of the world's most scientifically advanced nations.

He says Iran has no intention of acquiring an atomic bomb; it is only making low-enriched uranium to fuel nuclear-power stations. But the fear is that the same centrifuges could be reconfigured to make high-enriched uranium for nuclear weapons. A series of discoveries by inspectors suggests that Iran has, at the least, been experimenting with components for nuclear warheads. A secret annex to an IAEA report last month said Iran had, for instance, developed a warhead with a chamber that seemed designed to carry a nuclear bomb.

The underground plant at Natanz, filled mostly with early models of IR-1 centrifuges and monitored by the IAEA, has already produced enough low-enriched uranium which, if diverted, could make several nuclear bombs. The plant in Qom, only modest in size, may have two possible functions. It could be an alternative plant to be used in case Natanz were destroyed by America or Israel. Or it could be used secretly with more sophisticated machines quickly to turn Iran’s legal stockpile of low-enriched uranium into high-enriched uranium for weapons, for example if Iran were to withdraw from the Nuclear Non-Proliferation Treaty. Either way, the Iranian regime has a lot of explaining to do.

Now what, sanctions, negotiations, military strike. Many people have discounted the chance of war, I think they seriously underestimate the chance as Iran continually thumbs its nose at the rest of the world, the chances of conflict grow. Don't be surprised if in the next couple months Hezbollah or Hamas orchestrate attacks on Israel to build pressure and deflect from this growing crisis.