LOOK WHO’S HELPING UNDERWRITE THE ‘RADICAL ENTENTE’: WHY ARE TOKYO, BONN BAILING OUT TEHERAN, PYONGYANG?

(Washington, D.C.): Truth really is
sometimes stranger than fiction. After
all, it is hard to imagine a more
unlikely time for key G-7 nations to be
coming to Iran’s rescue at the
very moment when: it has emerged as the
leading state sponsor of international
terrorism; its malevolent activities are
in evidence from the Persian Gulf to
Manhattan; it is aggressively seeking the
violent overthrow of Egypt’s political
leadership and the installation of
radical islamic regimes throughout the
Middle East (e.g., Sudan and Algeria);
and it is engaged in a massive offensive
military build-up, including an effort
covertly to acquire nuclear and other
weapons of mass destruction (WMD).

What is more, one of the most
important contributors to Teheran’s
aggressive weapons acquisition program is
another leading member of what the Center
for Security Policy has termed the
“Radical Entente”: North Korea.
In fact, Pyongyang has developed an
odious strategic partnership with Iran.
In exchange for Teheran’s oil — which
represents a substantial, if not
decisive, ingredient in North Korea’s
offensive military potential — Pyongyang
supplies advanced Scud missiles to Iran.
In due course, it will probably also
transfer (if it has not already done so)
warheads capable of deploying biological,
chemical and nuclear weapons for those
missiles.

This malevolent barter arrangement is
the more remarkable insofar as Iranian
oil traded for North Korean arms is
revenue that is not available for other,
more pressing Iranian economic
activities. And at the moment, Iran can
scarcely afford to make such sacrifices
given the following evidence that its
economy is in free fall:

• Unemployment and inflation are
  both running around 30 percent.
• The Iranian rial has recently
  collapsed, losing some 45 percent
  of its value in the past few
  months.
• Total Iranian indebtedness has
  gone from virtually zero in 1988
  to some $35 billion today.
• Payment arrearages on Iran’s
  outstanding external debt are
  somewhere between $5-10 billion
  (probably on the higher side).
• Demographic growth is crushingly
  high (3.6 percent annually)
  adding one million people to the
  population every eight months.

The parlous economic condition of a
dangerous nation that sits astride the
strategically vital oil lifeline of the
Persian Gulf is eerily reminiscent of
that of Iraq in the summer of 1990.
Indeed, some members of the U.S. security
community are concerned enough about
these parallels to issue warnings that
Iran — like Saddam Hussein’s Iraq before
it — may seek to find in renewed
militarism relief from economic and
financial disaster. There is little doubt
among these experts that the West is
going to face a confrontation with Iran
in the near- to medium-term, a
probability that can only be increased as
Iran succeeds in accruing a substantial
arsenal of weaponry of mass destruction
and the means to deliver them throughout
the Middle East, and perhaps beyond.

Western Nations to the
Rescue

Incredibly, this ominous backdrop is
the context for an extraordinary decision
by Germany and Japan. The Center for
Security Policy has learned that Bonn
and Tokyo are in the process of
rescheduling Iran’s multi-billion dollar
short-term debt despite repeated U.S.
demarches urging them not to. Make
no mistake about it: By so doing, these
key allies are very simply helping
facilitate all of the above developments.

Unfortunately, such a prospect is par
for the course for Germany, a nation that
has not shrunk from selling poison gas
manufacturing facilities to Libya or from
serving as the principal supplier of
weapons of mass destruction to Saddam
Hussein. In fact, Bonn has consistently
demonstrated nothing but contempt for
strategic export controls and refuses to
exercise restraint even in instances
where Germany’s own security interests
may be put in mortal danger.

Western nations who are the
targets of the Radical Entente’s enmity
have reason to expect more from Japan,
however. This is particularly
true insofar as the entire population of
the Japanese home islands is now at risk
of annihilation from the nuclear weapons
and No Dong missiles of North Korea,
thanks in no small measure to its
profitable arms trade with Iran and other
pariah states. In other words, if
Iran is kept afloat by official Japanese
debt rescheduling arrangements — and
therefore Iran is able to afford to
continue its oil-for-arms deals with
North Korea — Tokyo will be
contributing directly to the endangerment
of the Japanese people.

The Bottom Line

The Center for Security Policy
believes that it is high time to analyze
thoroughly — and to staunch — the hard
currency lifeblood of Kim Il Sung’s
regime. At present, this financial life
support derives principally from three
sources: (1) remittances by Japanese
citizens of North Korean descent
totalling some $600 million-$1 billion
annually; (2) trade relations with China
and (3) the Iranian-North Korean
arms-for-oil barter arrangement. Clearly,
as long as these three income sources
remain intact, North Korea can afford to
continue to ignore the International
Atomic Energy Agency (IAEA) and the
modest efforts made by the United States
and other Western powers to date to
assure the IAEA’s access to all of
Pyongyang’s nuclear facilities.

In addition to Japan
immediately declining to reschedule
Iran’s debt and suspending further
remittances to North Korea, the Center
believes that it must move forthwith to
seize the assets and arrest the
principals in the Japanese trading
company that is reportedly involved in
transferring some 40 Foxtrot diesel
submarines from Russia to North Korea.
The assertion that these aging subs are
simply being bought by Pyongyang for
scrap metal is absurd. In fact, they
could play — at the very least by
providing critical spare parts for
Pyongyang’s existing inventory of
submarines — no less consequential a
role in North Korea’s strategic ambitions
than the Kilo-class subs recently bought
from Russia by Iran are currently playing
as a threat to free passage through the
Strait of Hormuz.

The Center also calls upon the U.S.
and other interested governments to make
public at once all available information
concerning the sources and uses of every
dollar, deutschemark and yen comprising
Pyongyang’s hard currency cash flow.
Similarly, the names of every country and
company — including agencies and
enterprises of the People’s Republic of
China — contributing to North Korea’s
trade and financial viability must also
be made a matter of public record.⁽¹⁾
And finally, any foreign entity
that is not inhibited by their own
government from engaging in such
transactions and persists in doing so
should be barred from the U.S. market via
import controls.

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1. In this regard,
it is worth noting that comparable
information is still not
available concerning the Western
suppliers of Iraq’s war machine and WMD
program.