Prepared Testimony by Michael Eisenstadt Before the House International Relations Committee Hearing: U.S. Policy on Iran

November 9, 1995

In 1989, following a costly eight year war with Iraq, Iran initiated a major military buildup intended to rebuild, expand, and modernize its ravaged armed forces and transform it into a regional military power. Iran's quest for nuclear weapons, coupled with the buildup of its naval forces in the Persian Gulf, efforts to undermine the Arab- Israeli peace process, and its support for radical Islamic movements throughout the Middle East, raise disturbing questions about Tehran's intentions and the long-term implications of its efforts to bolster its military capabilities.

There are several aspects to Iran's military buildup: it is seeking nonconventional (nuclear, biological, and chemical) weapons and the means to deliver them (missiles and strike aircraft) to make it a regional military power, counter U.S. influence in the Gulf, intimidate its neighbors, and bolster its deterrent capability. Likewise, Iran is attempting to expand and modernize its conventional forces, with an emphasis on developing the air and naval capabilities needed to defend its territory and airspace and dominate the Persian Gulf. Finally, Iran continues to hunt down Iranian dissidents abroad and to support radical Islamic and secular groups that engage in terrorism. Together with the Lebanese Hizballah, it has created a logistical infrastructure capable of supporting terrorist operations in the Middle East, Europe, and South America.

Iran's economic woes, however, have forced it to pare back its military procurement plans. Iran's economy is in a crisis spurred by declining oil revenues (due to low oil prices), rapid population growth (about 3 percent annually), the lingering costs of its eight- year war with Iraq, government mismanagement of the economy, and a rapidly growing foreign debt (more than $35 billion) which has hurt its access to international credit markets. These economic problems have forced Iran to reduce defense spending, cut procurement across the board by about half, cancel arms contracts, defer or stretch-out procurement of key items, and prioritize the allocation of scarce financial resources among the various services. As a result of its financial woes -- which have been exacerbated by U.S. sanctions -- Iran lacks the funds to sustain a major, across-the board military buildup. Instead, it has contented itself with selectively enhancing its military capabilities.

Iran's economic situation is likely to worsen in the coming years. Oil is central to Iran's economy and real oil prices are unlikely to rise significantly in the near- to mid-term (the next five years) while its population is expected to continue its rapid increase, leading to a long-term decline in per-capita income and a further deterioration in economic conditions. In these circumstances, Iran will find it increasingly difficult to fund military spending, and it will likely be forced to make additional cuts.

Nonconventional Capabilities

Iran's nonconventional weapons programs are among the regime's top priorities, and Tehran continues to invest significant resources in these efforts, despite severe economic constraints. Its current efforts focus on the creation of the infrastructure needed to produce nuclear weapons, the stockpiling of chemical and biological weapons, and the acquisition and production of rockets and missiles to deliver these.Iran is pursuing the acquisition of nuclear weapons, despite its membership in the Nuclear Nonproliferation Treaty. Because Iran's nuclear program is believed to be in its early stages, few unambiguous indicators of nuclear intent exist. However, the intelligence services of the U.S., Germany, Israel, and Russia are unanimous in their belief that Iran is trying to develop or acquire nuclear weapons. Iran is still probably assessing its options, and may not have settled on a particular proliferation route yet, or established a dedicated facility to support this effort. Most public estimates of how much time Iran will need to attain a nuclear capability fall within a 7-15 year timeframe -- although Tehran could probably acquire a nuclear capability before then, if it were to acquire fissile material and extensive help from abroad. Because of the uncertainties surrounding the latter possibility, it is impossible to accurately predict with any degree of certainty how long it might take Iran to develop nuclear weapons (see Appendix A). There is no question, however, that the acquisition of civilian research reactors, nuclear power plants, and nuclear technology from Russia and China will ultimately aid this effort.

How Iran would employ a nuclear capability, should it acquire one in the coming decade, is unclear. However, arguments that the logic of deterrence would moderate the behavior of a nuclear Iran, and incline its leadership to caution, thereby enhancing regional stability, seem excessively optimistic. Iranian acquisition of nuclear weapons would dramatically transform the regional balance of power, and might therefore alter the decision calculus of Iran's clerical leadership. Thus, past Iranian behavior, characterized by caution, and sometimes even pragmatism in the pursuit of extreme ideological goals, may not be a valid guide for predicting the behavior of a nuclear Iran, which may no longer feel constrained to act with caution. At the very least, Iran's acquisition of nuclear weapons would complicate U.S. power projection in the Persian Gulf; under any circumstance, this would be an undesirable development for the U.S. and its allies in the region. Averting this outcome will thus be a key U.S. interest in the coming years.

The evidence for Iran's involvement in the production of chemical and biological weapons is less ambiguous than that relating to its nuclear effort. Iran has a significant chemical warfare capability. It can produce several hundred tons of chemical agent a year, and may have produced as much as 2,000 tons of agent to date, including blister (mustard), choking (cyanidal), and possibly nerve (sarin) agents. It produces bombs and artillery rounds filled with these agents, and probably has deployed chemical missile warheads.

Iran is also developing biological weapons. It probably is researching such standard agents as anthrax and botulin toxin and it has shown interest in acquiring materials which could be used to produce ricin and mycotoxins. At this time, Iran can probably deploy biological weapons, and disseminate them via insect vectors, terrorist saboteurs, or spray tanks on aircraft or ships, although more advanced means of dissemination -- by unmanned aircraft or missiles for instance -- may currently be beyond its means. Biological weapons can be produced quickly and cheaply, and are capable of killing hundreds of thousands in a single attack. Moreover, no early warning capability for biological weapons exist, and vaccines are not stocked by the U.S. in sufficient numbers nor variety to be of use in an emergency. Thus, Tehran's biological warfare program provides Iran with a true mass destruction capability for which the U.S. currently lacks an effective counter. In light of the uncertainties confronting its nuclear effort, Iran's biological warfare program assumes special importance, since it provides Tehran with a strategic weapon whose destructive potential rivals that of nuclear weapons.

The backbone of Iran's strategic missile force consists of 200 Chinese CSS-8 missiles (with a 150km range) and 200-300 North Korean produced SCUD-B and -C missiles with ranges of 320km and 500km respectively), armed with conventional, and perhaps chemical warheads. Iran's missiles can reach major population centers in Iraq, Saudi Arabia, and the smaller Arab Gulf states. In addition, it is funding the development of the North Korean Nodong-1 missile (with a range of 1,300km) which will have the range to reach major population centers in Israel. However, technical and financial problems have reportedly plagued the program, and it may be some time (perhaps a year or more) before the missile attains operational status and is transferred to Iran.

Iran is working to acquire a capability to produce ballistic missiles locally in order to end its reliance on external sources of supply. To this end it has obtained equipment, machinery, components, and special materials required to produce missiles from North Korea and China. At present, it assembles SCUD-C missiles acquired in kit form from North Korea.

Conventional Capabilities

Iran's conventional capabilities are -- by contrast to its nonconventional arsenal 'relatively modest. It would take tens of billions of dollars o- which Iran simply does not have at this time -- to make it a major conventional military power. And due to financial problems, it has acquired only a fraction of the items on its military wish list (see Appendix B). Major transfers since 1989 include 25 MiG- 29 fighters and 12 Su-24 strike aircraft from Russia; 20 older F-7 fighters from China; small numbers of SA-2 SAMs from China and SA-5 and SA-6 SAMs from Russia; 34 T-72 tanks from Poland and 150 T-72 tanks from Russia; 80 IFVs from Russia; 106 artillery pieces from China; five Houdong class fast attack craft from China; and two Kilo class submarines from Russia. In spite of these constraints, Iran is trying to build on its strengths, while attempting to redress its most critical weaknesses through the selective modernization of its armed forces.

Iran's offensive options are limited. Iran does not pose a ground threat to any of its neighbors, due to the small size and poor condition of its ground forces, although it can launch limited air strikes into neighboring countries (and has done so several times in Iraq in recent years). The main conventional threat from Iran is in the naval arena; specifically, the threat posed by Iran to the flow of oil from the region, the security and stability of the southern Gulf states, and the ability of the U.S. to project force in the region. Iran could disrupt maritime traffic in the Persian Gulf using its submarines, coastal missiles, and mines, and it could temporarily close the strait were it willing to use chemical or biological weapons against shipping. It cannot, however, block the strait, which is too wide and too deep to be obstructed. Moreover, although the Gulf itself is a significant barrier to major acts of aggression against the southern Gulf states, Iran could conduct limited amphibious operations to seize and hold lightly defended islands or offshore oil platforms in the Gulf. Finally, its naval special forces could sabotage harbor facilities, offshore oil platforms and terminals, and attack ships while in ports throughout the lower Gulf, disrupting oil production and maritime traffic there.

It is unclear, however, what policy objective could be served by an Iranian attempt to block the Strait of Hormuz; even if Iran could do so, this action would harm Iran as much as any other state since it has no other way to bring its oil to market. This is an option of last resort for Iran, to be played only/n extremis, if its vital interests were threatened or if denied use of the Gulf itself. In the near term, Iran is more likely to use the threat of disrupting shipping or closing the strait -- implicitly or explicitly -- to intimidate its neighbors or deter its adversaries. Nonetheless, the U.S. must plan to deal with Iran's growing ability to disrupt the flow of oil fromthe Gulf, even if it seems unlikely for now that Iran will use this capability in the foreseeable future.

Iran's defensive capabilities are also limited, although the military weakness of its neighbors, its strategic depth, and its nonconventional retaliatory capability offset -- to some degree -- its conventional weakness. In the event of a conflict with the U.S., Iran's air and air defense forces could do little to oppose U.S. airpower, which would roam Iran's skies at will, while its navy (which has been routed by the U.S. Navy in the past) would be rapidly defeated. However, it might succeed in inflicting some losses on U.S. forces and disrupting shipping in the Gulf. Perhaps the most effective weapon in Iran's hands in such a scenario would be its ability to strike directly at the U.S. and its interests in the region through subversion and terror.

Subversion and Terror

Terrorism has been a key instrument of Tehran's foreign policy since the Islamic revolution in 1979. Since then, Iranian sponsored and inspired terror has claimed more than 1,000 lives worldwide. The scope and nature of Iranian terrorism has varied over time. Iran's involvement in terrorism was most intense in the decade following the 1979 revolution. During this time, Tehran's preferred methods included bombings, assassinations, and kidnappings, and its arena of operations spanned the Middle East, Western Europe, and Asia. After peaking in the mid-1980s, the number of Iranian sponsored terrorist incidents declined in response to changes in Iran's regional and international environment.

However, Iran continues its efforts to hunt down dissidents abroad, to undermine the Arab-Israeli peace process, and to export revolution to Turkey, Egypt, and North Africa.

In recent years, Iran has increased its reliance on surrogates -- such as Hizballah, Hamas, and Palestinian Islamic Jihad (PIJ) -- to achieve its ends. Iran remains deeply involved in arming, training, and financing these groups, which continue to be involved in terrorism -- sometimes at Tehran's behest, sometimes on their own. And because Iran has, for political reasons, tried to minimize its direct involvement in terrorism in recent years, these groups have become more important to Tehran.

In terms of advancing its national interests, Iran's involvement in terrorism has yielded mixed results. On the one hand, Iranian terrorist successes in the early 1980s burnished the regime's popular image in the first years of the revolution and helped it to consolidate its domestic power base. Moreover, Hizballah hostage- taking also facilitated secret deals between Iran and the U.S., France, and others, that enabled Tehran to recover financial assets impounded abroad, and to trade hostages for arms from the U.S.

On the other hand, Iran's involvement in terrorism has sullied Tehran's image and contributed to the country's isolation, straining its relations with key Western countries and leading many of these to adopt a pro-Iraq tilt during the Iran-Iraq War. Moreover, Iran's attempts to subvert the Arab Gulf states have prompted the Arab Gulf states to rely more heavily on the U.S. for their security, thereby complicating Iranian efforts to achieve a key goal: ending the U.S. military presence in the Gulf.

Moreover, Iran has scored only modest successes in its efforts to export the revolution elsewhere in the Middle East. Historical prejudices and suspicions divide Arabs and Persians, and Sunni and Shiite Muslims, and have generally prevented Tehran from establishing a close working relationship with Islamic movements in much of the Arab world. And because of the corruption and inefficiency of the Islamic regime in Tehran, its military weakness, and its economic problems, few Islamists in the Middle East or elsewhere consider the Iranian revolution worthy of emulation.

The Lebanese Hizballah is Tehran's biggest success story. But even here, Iran's success is qualified. Hizballah has failed thus far to achieve its main objectives: Lebanon is no closer today to becoming an Islamic republic than when Hizballah was founded, nor has Hizballah succeeded in evicting Israel from South Lebanon. And Hizballah's future is uncertain; in the event of an Israel-Syria peace, its freedom of maneuver could be severely constrained. On the other hand, Hamas and PIJ terror has greatly complicated implementation of the Israel-PLO Declaration of Principles of September 1993 and slowed Israeli-Palestinian negotiations. While Iran certainly is not the primary moving force behind these organizations, Tehran can claim indirect credit for their successes. And while Iran has curtailed its efforts to subvert its Arab Gulf neighbors, increased instability in these states in the future -- caused by declining oil revenues, demands for increased popular participation in government, and growing resentment among disenfranchised Shiite communities there -- could tempt Iran to resume its subversive activities in the Gulf.

Finally, Iran has succeeded in killing a number of key expatriate opponents of the regime. While these acts have hurt the opposition and may have bolstered the self-confidence of the clerics, most of the individuals killed by Tehran never were a serious threat to the rule of the mullahs.

In the long run, the regime's corruption, inefficiency, and repressive policies, which have produced growing popular disenchantment and widespread unrest, will pose a greater threat to clerical rule than exiled opposition members.

Iran's capacity for subversion and terror remains one of Tehran's few levers in the event of a confrontation with the U.S., since it otherwise lacks the ability to challenge the U.S. on anything near equal terms. In the event of such a confrontation, Iran might try to subvert Kuwait, Bahrain, Qatar, the U.A.E., and Oman -- all of which host important U.S. military facilities -- in order to undercut U.S. power projection capabilities in the region. Further, it has the means to launch a destructive terrorist campaign spanning several continents. And because some of the groups that Iran could mobilize on its behalf (such as the Lebanese Hizballah) possess small, clandestine cells in various parts of the world, such a campaign would be very difficult for the U.S. to counter. Although neither Iran nor Hizballah have targeted U.S. personnel or interests since 1991, Iran is keeping its options open: Iranian agents have continued to surveil U.S. missions and personnel from time to time, and Iran could resume attacks on U.S. interests in the Middle East, Europe, South America, and elsewhere should it decide to do so. And while funding for Iran's intelligence services have been cut in recent years due to the country's financial woes, their ability to carry out terrorist spectaculars has probably not been hampered, since these operations cost little relative to their potential payoff.


The threat that Iran poses to U.S. interests comes from two extremes of the threat spectrum: biological and nuclear weapons on the one hand, and Tehran's capacity for subversion and terror on the other. These are the two threats, however, that the U.S. will find the most difficult to counter. An Iran armed with biological or nuclear weapons (the former is probably already a reality) could -- at the very least -- raise the potential risks, and the potential stakes of U.S. military intervention in the Gulf, and reduce the freedom of action of the U.S. and its allies there. And Iran has in the past shown an ability to use terrorist surrogates to strike painful blows against U.S. interests, while obscuring its involvement in such acts in order to escape retribution.

The U.S. also faces a secondary threat to its interests in the form of Iran's naval buildup in the Persian Gulf. While the U.S. and its allies in the region are reasonably well prepared to deal with this threat, Iran could nonetheless disrupt the flow of oil from the Gulf and inflict losses on U.S. naval forces there if it desired to do so. And if it were willing to use chemical or biological weapons against U.S. naval forces, American casualties could potentially be heavy (particularly in the latter case).

However, the costs of a major confrontation with the U.S. could be devastating for Iran, resulting in the destruction of much of its military and civilian infrastructure, and leaving it without the ability to defend itself by conventional means. Moreover, hard experience over the past decade has shown Iran that it has neither the funds needed to replace significant combat losses, nor a reliable supplier capable of doing so. Consequently, it will try to avoid a major confrontation with the U.S. that could lead to losses it cannot replace, although under current circumstances, a miscalculation by Iran leading to a clash with the U.S. -- along the lines of the accidental downing of an Iran Air Airbus by the U.S.S. Vincennes in July 1988 -- cannot be ruled out.


Estimating a Timetable for Iran's Nuclear Program

It is impossible to know with any degree of certainty how long it might take Iran to develop a nuclear weapons capability. Before the break-up of the Soviet Union, it was possible to posit fundamental milestones for any given nuclear program. For instance, programs based on the plutonium route generally require 4-7 years for construction of a plutonium production reactor; 1-2 years of running the reactor to produce sufficient plutonium for a weapon; several weeks to separate the plutonium from the spent fuel; and anywhere from several months to several years to manufacture a weapon. Programs based on the enrichment of uranium by gas centrifuges generally require about 10 years to build a centrifuge enrichment facility; 1-2 years to produce enough enriched uranium for a weapon; and several months or several years to manufacture a weapon. Thus, nuclear programs in the developing world have generally required about a decade to produce their first nuclear device.

Based on these kinds of calculations, public CIA assessments in the early 1990s estimated that it would take Iran 8-10 years to produce nuclear weapons. By comparison, an unclassified 1993 Russian Foreign Intelligence Service report estimated that even with the necessary levels of investment and outside assistance, Iran would probably need more than ten years to develop nuclear weapons.

However, the collapse of the Soviet Union transformed the international proliferation landscape. It is now nearly impossible to forecast, with any degree of accuracy, possible timeframes for the production of an Iranian nuclear weapon. Because it may be possible to buy both fissile material (plutonium or enriched uranium) and expertise in the former Soviet Union, Iran (and others) might be able to bypass the most difficult step in acquiring a nuclear weapon the production of fissile material - and go directly to weaponization.

The recent discovery in Europe of plutonium and enriched uranium smuggled out of the former Soviet Union raises the possibility that the diversion of fissile material may in fact have already occurred. Iran's acquisition of fissile material in this way might thus dramatically foreshorten the time required for it to develop a nuclear weapon. On the other hand, if Iran fails in these efforts and has to produce the fissile material itself, it could take a decade or more to do so. And if domestic unrest were to plunge the country into chaos (at present an unlikely prospect), efforts to acquire a nuclear capability could be significantly delayed, or thwarted altogether.