Iran has embarked upon a shopping spree, heavily focused on its military, ahead of the billions of dollars in sanctions relief funds it expects to receive, courtesy of the nuclear deal it reached with the U.S and five other world powers, a Washington, D.C.-based think tank points out.
The Obama administration argues that Iran will use most of the sanctions relief money to benefit the people of Iran.
Some experts estimate that up to $150 billion in Iranian assets could be unfrozen once the United States and international sanctions that battered the Iranian economy and brought Tehran to the negotiating table over its nuclear program are lifted as part of the nuclear pact struck on July 14.
Meanwhile, the Obama administration claims that Iran will only have an estimated $56 billion at its disposal after paying its outstanding financial obligations, such as the billions it owes to China for infrastructure projects.
“With upwards of $100 billion in new investment now due in Tehran (even before Iran demonstrates its full compliance with the nuclear deal), Iranian authorities are starting their shopping spree, with a heavy emphasis on the military,” Michael Rubin, an Iran expert at the conservative American Enterprise Institute (AEI), recently wrote.
This shouldn’t surprise. While Obama argues that the Islamic Republic will use its financial windfall to benefit the Iranian people, recent history suggests otherwise: when the European Union flooded Iran with hard currency between 2000 and 2005 (during which time the price of oil also increased sharply), Iran invested the bulk of its windfall into military and covert nuclear programs.
The Obama administration, when talking to lawmakers, has spent time accusing the Bush administration of leading Iran to exponentially increase its nuclear centrifuge program, noted Rubin.
However, he explained that the fact is that the funds Iran received at the beginning of the century, as a result of “Western naïveté,” are responsible for the growth in Tehran’s covert nuclear activities.
“In effect, the United States is now making the same mistake twice,” he noted, adding, “Case in point, Iranian authorities are now engaged in a massive shopping spree in Russia to purchase hardware or enter into partnerships to produce new platforms.”
The AEI expert highlighted recent headlines from Iranian and Russian news outlets covering the shopping spree the Islamic Republic has embarked upon in Russia, which includes the purchase of civilian aircrafts that can be used militarily, S-300 missile systems, instructions for how to operate air defense missile systems, and a joint helicopter manufacturing venture, to name a few.
Speaking to reporters on August 25, Pentagon Press Secretary Peter Cook, said the U.S. “obviously has problems” with Russia selling the S-300 missile systems to the Iranians, adding that the Pentagon has “long expressed our concerns” to the Russians.
“We don’t see this as a positive development,” he declared.
Nevertheless, Cook stressed that President Obama will have “military options … if that system is put into place.”
He said that the Pentagon has been “tracking” the possible sale, noting, “We’re confident in our capabilities, even if that system is sold.”
Regarding Iran’s purchase of the Sukhoi Superjet 100 from Moscow, Rubin said, “While the Sukhoi Superjet is a passenger jet, almost every civilian plane has a military corollary.”
“As much as Iranian officials and their lobbyists have talked about civilian airliner safety, the fact is that every time Iran received spare parts for its civilian fleet, it cannibalized them for its military,” he added.
Besides the billions of dollars it will receive in unfrozen assets, Iran will also be able to generate additional funds once the restrictions that kept the Islamic Republic out of the Western oil markets are lifted under the nuclear deal.
Tehran’s oil minister, Bijan Zanganeh, told CNN that Iran, which has the world’s fourth-largest oil reserves, is “aiming to ramp up production faster than many expect despite a supply glut that is killing prices.”
“Given a choice between guns and butter, Supreme Leader Ali Khamenei will always choose guns. And given a choice between reality and wishful thinking, alas, the State Department and many in Congress seem inclined to the latter,” wrote AEI’s Rubin.
President Obama and top Pentagon officials have conceded that Iran, considered the most active state-sponsor of terror, will use some of its sanction relief funds to finance terrorism.