Don’t misunderstand Khamenei’s nuclear fatwa

By Ariane Tabatabai – Iranian Supreme Leader Ali Khamenei has reiterated a number of times that the use of nuclear weapons is prohibited under Islamic law. One declaration in particular has received a lot of attention and has become known as the fatwa (a fatwa is a religious edict, which, in Shiite jurisprudence, is traditionally issued by a mujtahid – a scholar who is competent to interpret sharia – to provide an answer to a religious question).

 

 

Khamenei’s fatwa prohibiting ‘nuclear weapons’ has once again gained international attention as various Iranian officials are pushing for it to become an ‘international document.’ The former spokesman for Iran’s nuclear negotiators, Seid Hossein Mousavian, currently a research scholar at Princeton and viewed by Westerners as a moderate voice on nuclear issues, has adopted the fatwa discussion as his leitmotif, calling for it to be taken ‘seriously’.

 

 

There are several questions surrounding the ‘fatwa’ itself, its wordings, its binding nature, its date of issuance, in addition to questions arising from giving a key role to a religious edict that could have direct implications on the ongoing international negotiations regarding Iran’s nuclear program.

 

First, the Iranian authorities have never presented the text of this ‘crucial’ document and the term fatwa is in fact only used by other parties (including the Iranian Ministry of Foreign Affairs, its nuclear negotiators, and U.S. officials) and never by the Ayatollah himself. The Supreme Leader’s website, which is extremely comprehensive and includes the texts of all of his teachings, statements, and speeches, has not uploaded this piece, which is referred by others as the ultimate ruling regarding the nuclear issue by Iranian officials. This decree has been a key legal document supporting Tehran’s claims that its nuclear ambitions, the most important issue in the country’s foreign policy, are merely peaceful. The fact that its exact wordings or date of issuance has not been disclosed can be viewed as peculiar. Publishing the fatwa, as well as accurate translations of it, on the Supreme Leader’s website, providing a link to it on the new nuclear energy website, could help address these issues. 

 

Second, observers note that if such a fatwa exists, its scope has seemed to change overtime. The most relevant statement by the Supreme Leader that could be considered as the fatwa, stipulates:

 

According to our faith, in addition to nuclear weapons, other kinds of WMD, such as chemical and biological weapons also constitute a serious threat to humanity. The Iranian nation, which is a victim of the use of chemical weapons itself, feels the danger of the production and stockpiling of such weapons and is ready to employ all its means to counter them. We consider the use [کاربرد] of these weapons as haram [prohibited under Islamic law], and the attempt to immunize human kind from this great disaster the responsibility of all.

 

According to the Iranian 2005 Communication to the International Atomic Energy Agency (IAEA), the wording of the fatwa was as follows: ‘the production, stockpiling and use of nuclear weapons are forbidden under Islam.’ Yet, in Ayatollah Ali Khamenei message, which was read at the opening of the International Conference on Nuclear Disarmament and Nonproliferation in 2010, the Supreme Leader’s explicit prohibition has merely encompassed the ‘use’ of these weapons. Recent statements, by the Ayatollah himself, merely highlighting a ban of the use, with philosophical and ethical discussion about the production and stockpiling of these weapons, rather than a concrete prohibition. The possession is not mentioned in his statements, leaving a grey area in what is the key issue in Iran’s nuclear debate. The fact that the only concrete line is drawn for the ‘use’ of these weapons raises a question regarding the stance of the Supreme Leader on nuclear deterrence. Indeed, he has made it clear that he does not believe the ‘possession’ of weapons of mass destruction is in the interest of the country and raises ethical and philosophical issues with these weapons. Yet, he falls short of taking a clear legal position on the production and possession of these weapons, which may hint at his wish to.

 

This narrowing of the scope of this prohibition was later limited to the ‘use’ of such weapons, creating some confusion in the West, mainly due to inaccurate translations, which did not highlight what seems to be a shift in the leadership’s discourse. Yet, a number of observers have noted the change, which has led many to be skeptical of the fatwa. Tehran could address these concerns by publishing the exact text of the decree and highlighting its scope, by describing whether it covers the production, transfer, stockpiling, possession, threat of use, or use of nuclear weapons.

 

Third, there are also a number of pending questions regarding the significance of the fatwa itself. Mousavian argues: ‘[t]he validity of the fatwa should not be underestimated. Because of the strong bond between religion and politics in Iran, the supreme leader’s religious fatwas carry both legislative and religious importance.’ 

 

Yet, whether or not Khamenei has the authority to even issue such a decree has been debated. Some argue that he is not a marja’ in the traditional sense, but rather a member of the Shiite clergy, who has received much of his authority not from his religious education and status but from his political power. They note that until his presidency in 1981, Khamenei was merely a hojjat al-Islam and has, until now, not received the approval of any major marja’. In fact, the requirement set by the first Constitution of the Islamic Republic, according to which, the supreme leader needed to be a marja’ was removed in the second version of it, as the founder of the regime, Ayatollah Khomeini, knew well that otherwise no one would be able to succeed to him, as among his followers were no prominent religious authorities. For this reason, an institution was established under the Islamic Republic, called shora-ye fatwa or the Fatwa Council is in charge of issuing fatawa. Hence, the Supreme Leader’s fatawa (plural of fatwa) only have a political and ideological weight and nonreligious grounds. To address this issue, Tehran could take a key step. Indeed, while a number of Iranian Shiite clerics have spoken on the matter, supporting the view that nuclear weapons are indeed prohibited by the faith, a number have not expressed their views on the matter. Collecting the views of prominent Shiite maraje’ would help shed light on this issue.

   

Fourth, a key argument against the fatwa is that it does not constitute an absolute and irreversible rule. Furthermore, the idea of maslahat-e nezam, the rough equivalent of Raison d’Etat in the Islamic Republic’s political ideology (the notion in its modern, abstract form does not exist in the Islamic tradition), enables the supreme leader to overrule any religious rule, including temporary suspension of explicit Qur’anic prescriptions – even in the cases of the foundations of the faith – in order to safeguard the regime, let alone fatawa. Indeed, the supreme leader’s ultimate goal is to preserve the Islamic state and the notion of maslahat-e nezam provides him the tool to do so. It was with this idea in mind that the founder of the regime, Ayatollah Khomeini, had formulated this notion: the preservation, at all costs, of the Islamic state. In other words, critics argue that should Iran be attacked, threatening the Islamic Republic, it could resort to not only producing but also using nuclear weapons. However, it is important to note that the reversal of such a decree would come at a great political cost. Indeed, not only has the decree been issued by the highest political power in the country, it has been relied upon as the key plank of the Iranian nuclear narrative for over a decade.

  

The Iranian campaign for the international community to take the fatwa seriously is based on the Islamic Republic’s ideology and strategy: the portrayal of international law and the will of the international community as that of few ‘arrogant’ and ‘imperialist’ powers that need to be overcome. International law and institutions are often depicted by the Islamic Republic as obstacles to overcome, rather than means of promoting international peace and security. Therefore, the fatwa is an extension of this worldview, a way of defying the international community and undermining its will and norms. In the words of Hassan Rouhani, ‘[t]his fatwa is more important to us than the NPT [Nuclear Non-Proliferation Treaty] and its Additional Protocol, more important than any other law.’

 

Iran’s invocation of its religious stance to justify its compliance with international law is similar to a private citizen invoking his faith in court to support of his case. Indeed, as one’s faith cannot constitute evidence of one’s guilt or innocence, a state actor’s official religion cannot be seen as viable evidence supporting its claim to compliance with its international obligations. Additionally, a private citizen’s case cannot be supported by a religious decree as evidence of his good will in court. Likewise, a state actor’s good will cannot be measured with such a decree, may it be issued by a town cleric or its highest political power. However, the fatwa can be instrumental as a confidence-building measure. Tehran could further empower this tool by making it into a piece of national legislation, banning nuclear weapons.

 

Some current and former Iranian officials have tried to give an international dimension to the fatwa. For instance, in January 2013, Ramin Mehmanparast, spokesperson of the Ministry of Foreign Affairs suggested the country was ‘ready for this fatwa being registered as an international document.’

 

This statement made ahead of the meeting between the IAEA and Tehran is unlikely to be taken seriously. It shows that Iran’s leaders expect the international community to take steps toward them rather than the opposite, and, rather than prove their compliance with international law, find it easier to create their own norms. It shows that Tehran is less than ready to accept and implement said law and cooperate with said institutions. Taking a unilateral by focusing on a piece of national legislation prohibiting nuclear weapons, based on the Supreme Leader’s fatwa, and officially releasing the text of said decree would be more effective measures to build trust. 

 

 

Ariane Tabatabai is a Ph.D. candidate at King’s College, London, researching nuclear proliferation. She specializes in Iran and the ongoing nuclear negotiations with the P5+1.  

 

 

Interview with Bruce Hoffman on today’s global terrorism threat

By Bilal Y. Saab – How do we assess the global terrorism threat in today’s world? One can make a case that the threat of spectacular, 9/11-like terrorism has decreased because several terrorist masterminds and senior operators including Al Qaeda chief Osama Bin Laden have been killed or captured. But on the other hand, the threat of low-to-mid-intensity terrorism seems to be on the increase because Al Qaeda has re-emerged in hot spots in the Levant and Africa. Has the threat of WMD terrorism worsened over the years or remained the same? It is not clear either. To get a better picture of the severity and map of international terrorism in today’s world, I talk to terrorism specialist Dr. Bruce Hoffman, an old friend.

 

Professor Hoffman is internationally recognized for his scholarship on terrorism and political violence. He is currently Director of the Center for Security Studies, Director of the Security Studies Program, and a tenured professor at Georgetown University’s Edmund A. Walsh School of Foreign Service, Washington, DC. Prof. Hoffman previously held the Corporate Chair in Counterterrorism and Counterinsurgency at the RAND Corporation and was also Director of RAND’s Washington, D.C. Office. For more about Bruce’s impressive bio, I refer you to his Georgetown profile page. But if I could just highlight one more accomplishment of Bruce, it is his founding directorship of the Centre for the Study of Terrorism and Political Violence (CSTPV) at the University of St Andrews, a center and university dear to my heart. By the time I joined CSTPV in 2004 as Middle East editor and chief officer, Bruce had already left but his legacy endured. With Paul Wilkinson (God rest his soul), Bruce turned CSTPV into a first-rate institution that was internationally known for its terrorism research and scholarship. I find it hard to admit it, but without Bruce, Paul, and Magnus Ranstorp (another old friend), the CSTPV today, though still a very good center with a unique history, is no longer what it used to be.

 
 1- Many scholars, analysts, and government officials have viewed the Al Qaeda threat to U.S. interests as waning after the killing and capture of several terrorist leaders including Al Qaeda chief Osama bin Laden. How do you assess the threat today in light of the historic changes in the Middle East? Is it the same? Worse?

 

 
It is dynamic. What we have seen is the decline of Core al Qaeda, but the rise of al Qaeda-ism. In other words, even while Core al Qaeda has suffered since bin Laden’s killing, its ideology and brand have clearly prospered. Today, al Qaeda’s affiliates and associates are present in more places than al Qaeda was ten years ago. And, as the French intervention in Northern Mali has again shown: once al Qaeda entrenches itself, Western intervention is invariably required to remove it. In sum, the historic changes in the Middle East and North Africa of the past two years have created new opportunities for the spread of al Qaeda-ism and, potentially, the resurrection of the threat that al Qaeda poses. In this respect, no al Qaeda affiliate or associate has ever remained completely local: all have eventually become regional players and have internationalized in one respect or another—whether by recruiting Westerners (including Americans) into its ranks or aspiring to attack beyond its local and even regional confines.

 
 2- State capacity, specifically in the domain of counterterrorism, has always been a problem in the Middle East and other under-developed regions around the world. As nonproliferation analysts, we are interested in studying the capacity of Middle Eastern states to implement various measures related to WMD counterproliferation, and particularly United Nations Security Council Resolution 1540, which calls for the prevention of the spread of WMD to non-state actors. Do you see progress in that area or have Middle Eastern states lagged even farther behind given the unrest in the region? What can the United States realistically do to bolster the capabilities of states in the region?

 

 
Iran’s continued development of a nuclear capability clearly shows the limits of international counterproliferation efforts in the region. As if that were not bad enough, the threat of Syria’s chemical and biological weapons stockpiles falling into the hands of both radical Sunni as well as Shi’a terrorists (mainly, respectively al Qaeda and Hezbollah) is fundamentally alarming.

 
 3- With Syria burning and Al Qaeda elements actively involved in the fight, is the threat of the terrorist organization capturing chemical weapons and other WMD material overblown or very real? Is this the closest example we have in Al Qaeda’s history of the organization possibly acquiring WMD? What about any episodes of the jihadists’ history in Pakistan?

 

 
Yes, this is a real and extremely serious threat. Al Qaeda sees Syria generally and its unconventional weapons stockpiles in particular as offering the best chance for it to revive its waning fortunes and once again become as threatening and consequential as it appeared in the aftermath of the September 11th 2001 attacks. Indeed, I would argue that al Qaeda has pinned its faith and hopes to the demise of the Assad regime and, in turn, its acquisition of deadly weapons from that country’s vast unconventional weapons arsenal.

 
 4- There seems to be some confusion in the media about the dangers of failed states versus weak states. Which ones are worse in your judgment as far as terrorism formation and which ones are more likely to produce long-term terrorist threats? Can you please give us a brief comparison of the two with some real examples?

 

 
A failed state is Somalia (or, more accurately, was Somalia). A weak state is Libya, for example, and a failing state is Syria. They all pose dangers of varying kinds and degrees. Failed states have neither the will nor the capacity to police their borders, maintain law and order internally, and fulfill even the most basic requirements of governance. They are generally incapable of receiving international assistance in support. Weak states may perhaps have the will, but not the capacity to discharge these same functions but are often amenable to international assistance and support. Failing states are the most dangerous categories because their only concern is holding onto power at whatever the cost. To survive they must by definition go rogue. Hopefully, as in Libya, the tide of history sweeps along the forces of revolution and reform, who can relatively quickly subdue the existing authorities and begin to establish a new order. Syria, with the external involvement of Iran and Hezbollah, and its stockpiles of chemical and biological weapons and vast conventional arsenal –on a scale that certainly eclipses Libya and likely surpasses Saddam’s Iraq–presents perhaps the ultimate nightmare scenario.

 
5- Overall and in your opinion, are we witnessing a resurgence of Al Qaeda in the Middle East and North Africa? It seems that every time we pronounce the organization dead it comes back with a vengeance. Is it more about its own capabilities or simply the result of the crisis conditions that have swept the Middle East since the Arab uprisings began? Or is it both?

 

 
Yes, we are witnessing a resurgence of the al Qaeda ideology and brand across the Middle East and North Africa. It is of course limited to a small number of fanatics but that in essence is the appeal of terrorism: you don’t need divisions or brigades to have an impact or arguably even to change the course of history. Rather, a handful of persons can fundamentally do so if they are sufficiently disciplined and able to perpetrate even only one or two dramatic, significant, jarring acts of violence. That is the age-old conceit of terrorists and their driving motivation. What concerns me is that the threat of terrorism seems to have increased rather than diminished in the Maghreb and Levant in particular over the past two years and appears to be growing elsewhere as well. It is nascent today–but far more serious and salient than it was even a year ago. I shudder to think to what extent it may have grown by next year.

 
Both in answer to the second question. Al Qaeda has always been as opportunistic as it is instrumental. That is, capable of taking advantage of whatever available opportunities for intervening in local conflicts and engaging in terrorism. Across the Middle East and North Africa the movement has demonstrated its ability repeatedly to seize and exploit opportunities either to re-entrench or establish itself in a variety of long-favored or new venues, to capitalize on the instability and uncertainty in the region’s countries, and create local toe-holds that it hopes to transform into regional foot-holds. Whether it will fail or be successful is the most pressing question today. How the US, the West, and regional governments react will determine the outcome.

 

 

Identifying enemy target: what was the IAF really after in Syria?

By Egle Murauskaite – On January 30, 2013 at approximately 4:30 GMT (early dawn) four Israeli jets conducted a strike in Jamraya, Syria – that’s about the only thing that is known with certainty. As the story unfolds, a myriad of questions is raised about the attack; throughout this article I will point out the indicators to watch for, in an attempt to understand the intended target and purpose of this attack, as well as the reasons behind the rhetoric coming from all concerned parties.

 

Questions about the attack started with the first press reports on this incident. The narrative of Western officials has emphasized the target was a convoy transporting SA-17 missile. On the other hand the Syrians have consistently drawn attention to the “military research center” that has been attacked, initially denying that a convoy was hit. Meanwhile, a few suggested both were the targets. The operation seemingly involved extensive Israeli preparations: the week prior to the attack an Iron Dome battery has been shifted to the north. Vice Prime Minister Silvan Shalom said the transfer of weapons to violent groups, particularly Hezbollah, would be a game changer demanding a different approach, “including preventive operations.” Israeli officials flew to Washington D.C. to discuss their plans and get U.S. approval. According to Haaretz, Israel had also informed Moscow and was not reprimanded either, which could explain why Russian response to the attack was limited to rhetoric. The way this operation was planned suggests that either Israel must have believed the missiles the convoy was carrying would provide an enormous enhancement to Hezbollah, or that the convoy was not the main target.

 

What was the convoy carrying?

 

According to U.S. and Israeli officials quoted in the media, the target of the attack was a convoy carrying missiles from Syria to Hezbollah in Lebanon. SA-17, the main system discussed in the media as the subject of this transfer, is a road-mobile system of medium-range surface-to-air missiles. It has reportedly been given to Syria by Russia, following the 2007 Israeli strike on al-Khibar, a suspected site of Syria’s nuclear reactor.

 

Seeing how frequently Hezbollah has been moving missiles within and out of Syria, it is somewhat surprising that this particular convoy would set off the alarms. Several scenarios, however, can be considered that could have made the missile transfer a special case meriting an attack. Indeed, reports that Israeli jets had approached the area a few hours earlier, hovered in wait, and were then replaced by another set of jets that finally carried out the strike could suggest that the jets were waiting for their target to appear, rather than circling around a fixed facility.

 

It has been suggested that the transfer of SA-17 missiles to Hezbollah would be a “game changer,” allowing Hezbollah to challenge Israel’s air superiority from Lebanese territory. However, it is unclear what type of missiles the convoy was carrying. Notwithstanding Shalom’s statement three days before the attack, none of the reports so far have suggested the missiles were tipped with non-conventional warheads. In fact, reports that came out last year actually raising concerns about chemical weapons movement have not prompted a military response from Israel.

 

Other plausible versions of what the convoy was carrying include Yakhont anti-ship missiles or short range Scuds, which are said to pose challenge to Israel’s naval superiority or threaten residential areas respectively, once they are moved to Lebanese territory. The pictures and videos released by Syrian state TV after the attack show only an SA-8 missile launcher destroyed in the attack – no imagery of the alleged SA-17 has been made public. The IDF apparently believed that Hezbollah had already obtained truck-mounted SA-8 surface-to-air missiles in January 2012. Moreover, estimates of Hezbollah’s arsenal indicate that the organization may be able to present a comparable challenge with the weapons systems it already has, so an SA-8 transfer would hardly be a sufficient cause for an Israeli attack. In addition, the 2010 Syrian transfer of Scud-D missiles to Hezbollah was also called a “game changer” by Israeli officials, but one that did not prompt a military response at the time. So if Israel has successfully kept up to this constantly changing game so far, why the sudden strike?

 

Syria has reportedly allocated a number sophisticated missiles (such as Scud-D or SA-17) and weapons systems to Hezbollah and trained its member in their use, but presumably none of this arsenal has left Syria – Israel repeatedly threatened to attack if such a transfer was attempted. Another possibility is that Hezbollah only had a limited stockpile of surface-to-air missiles in Lebanon and the cargo in question would have been a significant boost. It is also possible that Hezbollah had limited capacity to operate the systems in its possession, and the convoy that came under attack carried not only missiles, but also personnel to operate them and/or provide training. Ascertaining what happened to the cargo following the attack – if, indeed there was a cargo, and not just SA-8 missile launchers regularly stationed to protect the facility – would help shed more light on the competing explanations.

 

If the SA-17 indeed was the target and the transfer was not approved by Russia, it is possible the Syrian government tried to deflect attention and denied the existence of a convoy and its transfer plans by focusing on the damaged facility. Alternatively, the full U.S. support to the story that the convoy was the target could suggest an attempt to deflect attention from what was an opportunistic operation to take out a key Syrian conventional and unconventional weapons research facility – something the U.S. or its Gulf allies would likely not do themselves, but would not be unhappy to see done by someone else.

 

Finally, a possibility that has not received a lot of attention so far is that the convoy had originated in Iran, and was just transiting through Syria on its way into Lebanon. This would imply that the missiles it was transporting were not of Russian origin, but were perceived to give a significant enough boost to Hezbollah to merit a strike – further emphasizing the importance of understanding what it was the convoy was carrying. At this point it is not even known if the strike succeeded in destroying the convoy. If it did, the absence of any imagery of the debris could suggest that the cargo was such a sensitive or advanced system, that if it were revealed that Hezbollah nearly obtained it, it would raise the threat level in the region. Seeing how carefully the U.S. has been treading, extremely limited availability of information surrounding the fate of the convoy’s cargo of weapons could be an attempt to manage the regional threat perceptions. The more concerning question is what if the attempt to destroy this sensitive cargo had failed, and whatever was on it is now in Hezbollah’s hands? If the U.S. and Russia were originally concerned enough to look the other way while Israel conducted this strike, what can we expect next, if these fears had materialized?

 

Why did Damascus insist the facility was the target?

 

Turning to the facility in question, the building that was reportedly damaged during the attack was likely the Syrian agency responsible for national missiles and chemical weapons programs, Centre d’Etudes et de Recherches Scientifiques (CERS). The aforementioned convoy was supposedly parked there on its way to Lebanon. CERS is a large research complex, and it is not known with certainty whether its principle value stems from the materials and weapons it stores, the R&D activities conducted inside, and materials it produces, or whether its most significant role is as a coordinating hub and network center for other facilities in the country – or all of the above. Satellite images released thus far show the complex undamaged. Video footage released by the Syrian TV shows what seems like an office space, and a large room with steel beams, but it is unclear if the video conveys the extent of the damage to the complex as a whole. It seems reasonable to presume not all of the center has been “flattened”, given the sheer size of the facility, but at least two additional strikes were reported the same night, without indication of their targets. Still, seemingly there was no attempt to “carpet bomb” the entire complex, and the planes did not appear to have engaged in gratuitous destruction once they were in the area, all of which points to a high precision strike – and no imagery so far suggests a direct hit on the facility.

 

If Israel’s concern was an impending Syrian attack, or its advanced weapons stockpile, another facility near Hama, where DPRK and Iranian experts reportedly continue to collaborate with Syria on developing Scud-D capabilities, would have potentially been a higher priority target. What can be inferred from Israel’s choice of the site in Jamraya instead? How come Israel issued warnings and prepared ahead of the attack for potential Syrian retaliation? And why has this attack prompted Assad to say Syria is ready to respond militarily?

 

The damaged facility, shown by state-run Syrian TV is not what one would expect from a shattered chemical (or biological) weapons research lab. First, if Israel believed it was bombing such a site (or even if it were targeting a convoy close to a building housing sensitive materials), it would likely have used high incendiary explosives – to destroy any potentially released harmful substances in a fire – but the damage shown does not indicate the use of such explosives. While the video shows no damaged analytical equipment, tanks or fermenters, commonly used in such labs, the sheer size of CERS complex would likely allow putting together a sequence of shots without revealing anything sensitive, as Syria continued to deny having chemical or biological weapon programs. Still, reports of a higher rate of illnesses or unusual diseases over the next few weeks in the areas downwind from the site could point to a release of hazardous materials in an accidental hit.

 

Perhaps the significance of the struck building primarily relates to missile research, storage or production? In 1999 the DPRK had reportedly delivered 10 tons of powdered aluminum (used in missile propellants) to CERS. Gaging the relative size of the explosion would be helpful, as a facility housing missile-related materials could be expected to go out in a bigger blast than a regular office or residential building.

 

Amidst conflicting narratives, the important question to ask is why Syrians are speaking so openly about the destruction of a facility at the center of their chemical weapons and missiles programs. Assad’s initial rhetoric that chemical weapons would be used only against invading forces have certainly made the international community  uneasy about a possible intervention – so maintaining the impression of a continuous capability would seem in his interest. On the other hand, the prospect of chemical weapons’ use against the Syrian people has lent more urgency to rebel pleas for foreign pressure on Assad’s government. Could this be Assad’s attempt to show that there is no more need for international concern as the weapons labs have been destroyed, and wait for the already limited interest in the conflict to die down? This could be a convenient front for driving the program underground, similarly to the Iraqi nuclear program after an Israeli strike on Osirak. Or perhaps attempt to deflect attention from the transfer plans?

 

Finally, it is worth considering reverberations of this strike in the context of concerns about Iran. Israel itself has emphasized the incident as a message that ‘we take action, like we promised, when red lines we have identified are crossed.’ But the bigger picture seems to be that Israel will not shy away from using force, in a manner similar to the 2007 attack on Al-Kibar, and – as indicated by Israel’s evidently productive consultations with the U.S. and Russia – it can get away without serious international repercussions, despite expressions of allegiances or concerns by the global powers. Aside from communicating that ‘your proxy is of limited use’ and ‘your allies won’t protect you’, Israel has also demonstrated intelligence and technical capabilities in identifying the time and place of this transfer with sufficient precision, as well as evading the Russian anti-aircraft guns in the vicinity of the target. If these actions were indeed geared towards Iran, the timing is particularly curious, given the reports earlier that week on Israel feeling reassured about the U.S. contingency plans for an Iranian strike, alleviating the need for Israel’s own unilateral action.

 

Egle Murauskaite is a Research Associate at the Center for Nonproliferation Studies (CNS).

 

 

Finance and nuclear energy in the Middle East

By Chen Kane – The decision to pursue a domestic nuclear energy program is typically motivated by a myriad of political, economic and strategic factors. But financial considerations seem to top the nuclear agendas of some Middle Eastern countries and divide them into two groups: the “Haves” and the “Have-Nots.”

 

 

There are those who have plentiful oil and gas resources but choose to generate power for their own people using nuclear energy so as to be able to maximize their carbon-base production and exports for profit. The other group is operating in a radically different reality. They are resource poor Middle East nations who have limited capital and know-how, and desperately need affordable electricity and power to fuel their societies. Possible safety and security implications for these programs stem from the financial choices made by leaders.

 

The countries in the Middle East that have abundant indigenous energy resources of oil and natural gas prefer to sell them abroad for profit rather than consume and use them to generate electricity for domestic consumption. For these countries, their nuclear energy programs are intended to provide for their growing domestic energy needs in order to free up fossil fuels for export and significant profit. This group of “haves” includes states like Saudi Arabia, the United Arab Emirates (UAE), and, potentially, Iran.

 

Historically, only one other country has made such an economic election and developed nuclear energy for similar reasons – – the Soviet Union. In the 1980s, the Soviet Union prioritized the development of nuclear power and a nuclear grid in order to free up more oil reserves for export. This was necessitated by higher production costs and the loss of convertible currency that had resulted from the significant drop in the global oil prices. By way of contrast, the UAE and Saudi Arabia started their latest pursue for nuclear energy in 2006 as a result of the peak in oil prices. There is great profit to be generated in selling oil rather than consuming it domestically for electricity and gasoline.

 

This economic dynamic is fostered in no small part by the availability of financial resources to fund nuclear programs, and the enormous latent energy resources that lay in reserve awaiting production and sale on the global markets. This economic dynamic as a motivation for developing nuclear energy is one that is generally unique to the Middle East region.

 

The second group of “have-not” Middle Eastern states pursuing nuclear energy programs includes Egypt, Jordan, and Turkey – – countries that desperately need additional energy sources due to insufficient domestic resources. Jordan, for example, imports 95% of the energy it consumes at a cost to its economy of more than 25% of its GDP. Due to their weak economies, have-not countries in this group cannot afford to pursue nuclear energy programs without significant financing primarily by external debt funding.

 

However, the financing of nuclear power plants differs from other infrastructure or mega-projects in a number of ways.

 

First, the initial phase of a program to construct nuclear reactors entails high capital costs and considerable technical complexity. The estimated cost of constructing nuclear power plants in a “new nuclear state” range from $2 billion to $9 billion for each 1,100MW plant. Aside from the massive cost arising from potential overruns and delays, the widely varying interest rates available to particular countries on the global financial market significantly affect the final cost of these projects. For example, Ashok Pasricha, a senior technical adviser at the U.S. Export-Import Bank, estimates that because of Jordan’s lack of financial resources, it would have to pay significantly more compared to the UAE to finance a reactor. While the UAE would pay an “all-in cost” of 2.91 percent under a hypothetical 18-year, US$5 billion loan, Jordan would have to pay 4.13 percent. Jordan’s classification as “high risk country” (with a 5 out of 7 rating in the OECD classification on its risk-scale) could further increase the financing costs, especially following political events in Jordan and in the region of late, that have led to the downgrading by Moody’s of the country’s risk profile and credit worthiness.

 

Second, it takes a long time before returns can be generated, the investment recouped, and the loans repaid. According to the International Atomic Energy Agency (IAEA), bringing a nuclear power program online entails a commitment and investment lifetime of at least 100-years, with a planning phase – before inviting vendors to compete for the supply contract – of between 10-15 years, and an additional five to seven years for the plant to come online. In comparison, large coal plants can be built in half that time and the construction period of plants powered by natural gas can be as little as two years.

 

Third, nuclear energy projects are generally sensitive to public reactions and politically controversial. Public safety fears and political controversy have typically accompanied any recent nuclear energy program; which adds political and financial risk to such ventures.  For example, Jordan moved its nuclear reactor site three times – – once due to active seismicity and earthquake risk of the selected area and twice due to local tribe’s resistance to having a nuclear power plant in their proximity. There is still no agreed site today for the planned Jordanian reactor.  

 

Last, some aspects, such as financing schemes and radioactive waste management and disposal can only be decided by a government itself.

 

Past experience shows that there are two basic types of financing schemes for the construction of nuclear power plants: debt and equity. Most infrastructure projects involve a combination of these two, in different proportions. The key difference among them is the ownership pattern they establish, which in turn, governs the degree to which such deals seek to protect the interest of investors and creditors, and the ways in which they allocate risk. So far, each of the three Middle Eastern countries that recently launched new nuclear bids has chosen a different structure for ownership and financing.

 

The UAE adopted a version of a build-operate-and-transfer (“BOT”) model. In 2009, the UAE selected a consortium led by Korea Electric Power Corporation (KEPCO) to build and jointly operate four APR-1400 reactors (Generation III+ design) in Barakah. Of the $20 billion contract, Abu Dhabi will provide $10bn in equity, and another $10bn is likely to come as debt from export-credit agencies. In August 2012, the Export-Import (Ex-Im) Bank, the U.S. official export credit agency, approved a $2 billion direct loan to underwrite the export of American equipment and service expertise for the construction of the first unit. KEPCO was invited to purchase shares in the Emirati government affiliated company that will operate the power plants.

 

Jordan has been negotiating with two potential nuclear suppliers. Russia’s Atomstroyexport is offering the AES-92, a Generation III reactor, while a French-Japanese consortium is offering a Generation III+ reactor, the Atmea1. Constrained by limited government funding, IMF restrictions for additional borrowing and providing sovereign guarantees (which are likely to be required), Jordan has adopted a Public Private Partnership (PPP) model. Under this model, the strategic partner helps defray up-front capital costs and profits from the sales of electricity. Jordan is looking for a strategic partner that will provide equity funding for the project (49%-74%), mobilize financing, manage the project, and operate the reactor in its initial phase. Jordan would retain a minimum of 26% of the equity and will provide a Power Purchase Agreement. The supplier, equity share and identity of the ultimate owners is still being negotiated.

 

Turkey chose a build-own-operate (“BOO”) model, the first ever to be used in the nuclear industry. Russia and Turkey signed an agreement in May 2010 for the Russian firm, Rosatom, to lead a consortium to build-own-operate four 1200 MWe VVER (AES-2006) units at a cost of $20 billion. The reactors, which are Generation III design, will be 100 percent Russian owned, though Rosatom has indicated that it may sell a 49 percent stake in the managing company to a local Turkish company. Turkey will buy 70 percent of the energy from the first two reactors for 15-years and 30 percent of the output from reactors three and four for 15- years at a very low price ($12.35 cent per kWh). Russia will be free to sell the excess energy at market rates. After the contract expires, and Rosatom recoups its initial investment, the firm will pay the Turkish government 20 percent of the profits made from the Akkuyu site. Rosatom has agreed to go ahead with construction without receiving financial guarantees from Ankara, and, backed by the Russian government, has assumed all of the financial risk in the project.

 

Based on statements by the Turkish minister for energy, China is a front-runner to build the second nuclear site in Turkey – – a very surprising choice for a number of reasons, if it materializes. First, it would bring China to the nuclear export market years earlier than experts have predicted. Second, the deal may involve a reactor design that is relatively old today (Generation II+). Finally, China may be the second state that agrees to construct nuclear reactors based on a BOO scheme, without government guarantees, and providing its own financing.

 

So far, Turkey’s decision on design and supplier has been heavily influenced by financing constraints. While in the short-run such a move may offer a fast-track to achieving energy security, it also comes with a significant long-term safety and security cost. China can only export older models developed domestically. It is barred from exporting the most modern reactors currently built in the country which are copyrighted by Westinghouse and Areva. If indeed Turkey chooses the Generation II+ model, it will not only violate Ankara’s promise to acquire the safest and most advanced technology but will also introduce greater safety risks into the region. The more advanced Chinese design, the CAP1400 is still under construction in China itself, never been tested and may require Westinghouse approval for export.

 

So far, Jordan and Egypt have avoided a BOO scheme despite the economic temptation. It also opted for Generation III and III+ designs with more advanced safety and security features. Turkey should know that there are no real, painless shortcuts in developing nuclear energy and avoid at all costs old or untested designs. It should also reconsider whether its planned BOO model will actually bring it into partnership with the safest and most reliable nuclear suppliers and operators. Lastly, Jordan and Egypt should make a clear commitment to using the safest available technology when move forward with their nuclear programs.