Ahmadinejad in the Americas—What Is Iran Up To?

Without leaving Tehran, Iranian president Mahmoud Ahmadinejad’s upcoming tour of Venezuela, Nicaragua, Cuba, and Ecuador has already been successful at feeding fears of a minor Persian invasion. This will make a half-dozen trips he has made to the region since he was initially elected in 2005. (George W. Bush made eight during his two terms.) Some concerns expressed by Washington observers and decisionmakers are exaggerated. However, some are real, and a look at the record shows that Iran has definite objectives in courting countries in the Americas neighborhood.

Q1: What are the exaggerations?

A1: One is that Iran has never had an interest in Latin America before now. In fact, diplomatic contacts go back to the early 1900s. In the 1930s and 1940s, mutual concerns about dealing with foreign oil companies inspired relations with Mexico and Venezuela. The founding of the Organization of Petroleum Exporting Countries (OPEC), a desire to exploit nuclear energy, and a concern for the well-being of the developing world happened during the Shah’s time. Iran’s 1979 revolution merely shifted alliances away from the West and toward authoritarian and despotic regimes.

Another exaggeration is that Iranian trade with the Americas has skyrocketed. The Latin American Business Chronicle reported that trade between Iran and the region tripled between 2008 and 2009. However, Iran’s commerce with any single Latin American country is still only a sliver of that country’s pie, amounting to less than 1 percent in all cases. Moreover, it is miniscule compared to Iran’s trade with its top five partners, the European Union, China, India, Japan, and the United Arab Emirates.
Still another exaggeration is that Iran has obtained leverage through strategic investments. Though Iran has promised funding for hospitals, dams, and water purification projects, not all of it has been supplied. Iran has spent billions on oil and gas exploration projects that have been questioned within Iran. Car and tractor factories in Venezuela are unprofitable and dropping off in production. A much-touted Tehran-Caracas airline route has been suspended. And when Ahmadinejad visits Managua again, will Daniel Ortega bring up debt forgiveness for past oil shipments? The last time he visited, Ahmadinejad said he would refer the matter to Iran’s parliament.

Finally, many believe Iran’s ties to Hezbollah will lead to more terrorist acts in the Western Hemisphere. In the Americas, most terrorist activity took place in the 1990s, with the bombing of the Israeli embassy and the Jewish community center in Argentina. After that, Hezbollah activity in the region centered on raising funds by selling pirated goods and smuggling arms and drugs. Today, Hezbollah is the dominant political power in Lebanon, and its control over cells in Latin America is but an educated guess.

Q2: What are the legitimate concerns?

A2: Iran has taken a page from the United States’ playbook—using public events, senior leader visits, broadcasting, the Internet, and highly publicized foreign aid to elicit favorable reactions from general populations. So far, there is little evidence that these efforts have been effective, as public perceptions of Iran remain unfavorable and occasional blunders by Iranian officials create doubts just when things seem to be going well. Nonetheless, Iran has a presence in the Americas that seems to be surpassing that of more moderate Middle East states, and it is positioning itself to become the voice of Islam.

On the financial front, Iran has funded joint ventures that could help sidestep trade restrictions with the industrialized West. Venezuela leads other Latin American states in such arrangements. In almost all cases, joint ventures and investments seem directed at either political objectives or possible clandestine technology transfer, not profits. So far, sanctions have not necessarily kept Iran from establishing financial connections that could benefit its military or nuclear programs. Moreover, there is evidence that joint ventures have helped introduce Iranian Guard and Quds Force members into host countries.

As a signatory to the Nuclear Non-Proliferation Treaty, Iran can develop a civilian nuclear energy program. Considering some of the apocalyptic ideas of some religious leaders and statements that “Israel should be wiped off the map,” the potential for developing nuclear weapons should not be ignored. Despite a host of international sanctions, Iran has developed a uranium enrichment capability and may be close to devising a weapon. While Iran does not appear to need raw uranium from the Americas to support that end, it is possible that relaxed customs protocols with some states could facilitate the transfer of materials or technology needed to improve its enrichment program and make nuclear weapons.

Q3: What is the bottom line?

A3: For its supposed meddling in the Middle East, Tehran seeks to challenge the United States in its own neighborhood. The easiest way has been to exploit Venezuela’s Bolivarian Alternative of the Americas alliance. Within that network, joint ventures figure prominently in Iran’s high-profile assistance portfolio. Most are costly and unprofitable and seem disadvantageous from a U.S. perspective. Back home, they are meant to showcase Iran’s profile as a world power—more influential than Saudi Arabia and Israel and a check on U.S. power projection elsewhere.

A lot of what we think we know about Iran’s activities in the Americas is based on sketchy evidence, such as newspaper reports of a jointly constructed missile base planned for Venezuela’s Paraguaná Peninsula. Overstating the case for action could set back relations with friendly neighbors and make cooperation, when needed, less likely. Instead, U.S. and friendly intelligence services should boost efforts to understand the degree to which Iran is circumventing sanctions, transferring technology and materials, establishing an Iranian Guard presence, and engaging terror groups for possible attacks. Obtaining reliable information is a necessary step in mounting an effective defense. After that, maintaining links by offering a competitive relationship advantage, even with disputatious neighbors, is the best way to minimize the appeal of competing powers.

Stephen Johnson is a senior fellow and director of the Americas Program at the Center for Strategic and International Studies in Washington, D.C., and the author of Iran’s Influence in the Americas (CSIS, forthcoming).

Critical Questions is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2012 by the Center for Strategic and International Studies. All rights reserved.

Stephen Johnson