Iran's Economy Vulnerable, Experts say

Iran's economy is vulnerable to outside pressure, giving the Bush administration and its allies more opportunities than generally believed for compelling the regime to halt its nuclear weapons program, a panel of U.S. experts said.

"There has been no serious discussion of what lies between doing nothing and doing everything," American Enterprise Institute scholar Danielle Pletka said on Wednesday.

By doing nothing, she cited calls by the Baker-Hamilton Iraq Study Group and others to open a direct dialogue with Tehran, which many analysts view as appeasement.

By doing everything, she meant a U.S. military campaign against Iran.

The debate between advocates of those positions "has become a caricature of U.S. foreign policy choices," Pletka said.

Instead, there was a broad range of economic pressures the U.S. and its allies could bring to bear that could do serious damage to the regime.

AEI yesterday released an on-line data base compiled by researcher Omeed Jafari listing more than 300 companies from 38 countries that were doing significant business in Iran.

An examination of Iran's business relationships showed that unlike North Korea, Iran's economy was "tightly dependent on buying and selling ... and on the good will of export credit agencies," Pletka said.

As an example, she noted that Italy's export credit agency has extended $6 billion in export credits and political risk insurance to Italian companies doing business in Iran.

If Iran defaults on any of its commitments to those companies, "it's the Italian taxpayer who is left holding the bag."

Pletka and other experts praised recent efforts by the U.S. Treasury Secretary Hank Paulson and Undersecretary Stuart Levy to increase the pressure on Iran by limiting Iran's access to international financial markets.

In the year or so that Treasury has been active on Iran they have been "far more effective than the State Department has been" for all the years it's been working on Iran," Pletka said.
Source : http://www.newsmax.com