NEAL CONAN, HOST:
While Iran was among the principal topics at the Republican presidential debate last night, Tom Donilon, President Obama's national security adviser, delivered a speech yesterday afternoon on efforts to prevent the development of nuclear weapons in Iran. Speaking at the Brookings Institution here in Washington, the national security adviser noted the recent report by the International Atomic Energy Agency, which raised a lot of questions about Iran's intentions but stopped short of an outright declaration that a nuclear weapons program is currently underway. Donilon, however, minced few words.
TOM DONILON: The facts are undeniable. Despite decades of Iranian denial and deceit and notwithstanding the setbacks I've described, it should be clear for all the world to see that under the guise of a purely nuclear secure - civil nuclear program, the government of Iran is seeking to develop a nuclear weapons capability. Now, put simply, the Iranian regime has not fundamentally offered to alter its behavior, but we have succeeded in slowing its nuclear program. And the international community has the time, space and means to affect the calculus of Iran's leaders, who must know that they cannot evade or avoid the choice we've laid before them.
CONAN: National Security Adviser Tom Donilon said the U.S. will use every tool available, including new sanctions announced earlier this week and said sanctions have left Iran weaker, more isolated, more vulnerable and badly discredited.
DONILON: At home, Iran is feeling tremendous pressure. It's harder for banks that support Iran's nuclear program and terrorism to engage in international finance. Just recently, President Ahmadinejad called sanctions, quote, "the heaviest economic assault," unquote, in the country's history. Continuing the quote, "Every day our banking and trade activities and our agreements are being monitored and blocked," he said, "and our banks cannot make international transactions anymore."
It really is becoming exceedingly difficult for Iran and its business entities to deal in euros or dollars anywhere in the world. It's becoming increasingly difficult, if not impossible, for them to deal in the legitimate banking system in the world. We've also made it harder for Iran, for the Iranian government to purchase refined petroleum and goods, services and materials to further develop Iran's oil and gas sector. According to the Iranian oil minister, the country is facing a shortage of $100 billion in investment deals for the oil and gas sector, a shortage that will increasingly affect future revenues.
Other sectors are being affected, as well. The international business community is shunning Iran. Major companies - Shell, Toyota, Kia, Repsol, Deutsche Bank, UBS, Credit Suisse and a long list - have ended or drastically reduced business with Iran, again, as a result of the decisions made by the Iranian leadership. Now, the impact of sanctions is compounded by rampant corruption and patronage in Iran. The Islamic Revolutionary Guard Corps continues to expand its involvement in the legitimate Iranian economy.
At a time when the Iranian people are being squeezed by a shrinking economy, the coffers of the IRGC, as it's called, are being filled, and these funds are passed onto violent movements in Iraq, Syria, Lebanon and Yemen. This only adds to Iran's economic woes and, with it, to the frustration of the Iranian people. As a result, Iran's economy is increasingly vulnerable. Inflation we estimate is around 20 percent; unemployment is persistently high.
And contrary to what's been written, frankly, on this, despite high oil prices, Iran will have negligible economic growth this year. These are the heavy costs the Iranian regime has chosen to impose on its people by flouting its international obligations.
CONAN: National Security Adviser Tom Donilon also argued that Iran is increasingly isolated in the region, that it's failed to attract great support in Iraq, failed to intimidate the Arab states of the Persian Gulf and failed in what he describes as cynical attempts to take advantage of the Arab Spring.
DONILON: Today, in the face of a region increasingly united against Tehran, Iran is basically down to just two principal remaining allies. And I wanted to go through this in some detail. The Assad clique - the Assad group, if you will - in Syria and Hezbollah. And like Iran, they, too, are fundamentally at odds with the forces that are now sweeping the region. The Assad regime - the Assad group, if you will - Tehran's most important ally, is thoroughly isolated and now increasingly and universally condemned.
The Arab League, appalled by the region's brutality, has shown remarkable leadership and taken the extraordinary step of suspending Syria's membership. In Turkey, Prime Minister Erdogan's government, which spent a decade deepening its ties to Syria and invested a lot in this, says it no longer will be fooled by Assad's promises. And today, Prime Minister Erdogan joined the international chorus calling for President Assad to step down.
The handwriting is on the wall. Change is inevitable. As President Obama has said, and I quote, "Through his own actions, Bashar al-Assad is ensuring that he and his regime will be left in the past, and the courageous Syrian people who have demonstrated in the streets will determine its future."
Now analytically, what does this mean? The end of the Assad regime would constitute Iran's greatest setback in the region, a strategic blow that would further shift the balance of power in the region against Iran. Tehran would have lost its closest ally in the region, having actively funded and assisted in very material ways the regime's brutality and the killing of its own people. Iran will be discredited in the eyes of the Syrian people and any future government. Iran's isolation from the Arab world will have deepened, and Tehran's ability to project violence and its instability in the Levant. Through its violent proxies, Hezbollah and Hamas will be vastly diminished. That's our analytical judgment.
CONAN: National Security Advisor Tom Donilon in a speech yesterday at The Brookings Institution. NPR foreign correspondent Mike Shuster joins us now from NPR West in Culver City. Mike, always good to have you on the program.
MIKE SHUSTER, BYLINE: Hi, Neal.
CONAN: And, Mike, that's a different characterization than we often hear about Iran, which seems to, in other's estimates, be burgeoning.
SHUSTER: I think it's the most detailed accounting of the Obama administration policy toward Iran. And through Tom Donilon's analysis, you get a picture of how they view Iran. And I think their view is a whole lot closer to reality, at least the reality that I saw when I visited Iran many times in recent years. But I think that they are looking carefully at just what shape Iran is in, either in its attempt to control events or influence events in the wider Middle East or to pursue smart or, in this case, not so smart economic policies or how far they've gotten really in their nuclear program. And Donilon and others in the White House see Iran coming up short in each of those categories.
CONAN: It is unusual for the national security advisor to make such a detailed statement on such a sensitive issue as Iran. Why do you think now?
SHUSTER: Well, I think there's been a lot of talk in the air and a lot of criticism of the Obama administration, particularly from the right and the Republican Party and more recently Republican candidates running for president characterizing Obama's approach to Iran, which initially was open to diplomatic engagement. But the criticism has been very sharp, and I think that the White House wanted to put somebody out there to explain in more detail, more thoroughly just what the Obama policy is with regard to Iran and to try to analyze whether it's been a success or not.
CONAN: The picture that Tom Donilon painted, though, is a country that is seemingly exhilarating towards crisis economically and strategically.
SHUSTER: Well, I think that that probably is true. There have been economic sanctions on Iran, both unilaterally from the United States and multilaterally through the United Nations for many years now. And they have built in intensity over time. The most recent round of sanctions that the United States has imposed on Iran, particularly to try to dry up the use of its banking sector in pursuing the nuclear program, appears to have been - become more successful gradually. And there's talk of even greater sanctions now.
I have to - I always wonder about this. The United States has, essentially, tried to put the screws on Iran's banking sector in order to prohibit the movement of a very large amount of money through the banking sector, which comes from selling oil every day on the international market. And despite the claims of the White House and others that this is successful, it's fairly clear that, somehow, the government of Iran does acquire millions and billions of dollar over time to sell its oil. How it does it right now is somewhat of a mystery, given the pressure on the banking sector that the United States is leading.
CONAN: Other parts of the speech, the national security advisor talked about the internal divisions within Iran. And just this week, senior advisor to President Ahmadinejad arrested.
SHUSTER: I know. This is really an extraordinary story. This is a man - he's name is Ali Akbar Javanfekr, and he's been a close advisor to Ahmadinejad since he was first elected president in 2005. And he - overtime, he has made some quite critical remarks about the hard line, cleric-oriented, religious-oriented leaders of Iran, implicitly suggesting that these are criticisms of the supreme leader, Ayatollah Khamenei.
And earlier this week, there were security forces that entered a newspaper that he controls, with - fired tear gas as far as we know, really made a mess of the newsroom and put him in handcuffs. This is a pretty extraordinary step to take against someone as close to the president of Iran as Javanfekr was. And it really shows - I think, it demonstrates if we need even greater evidence that there is really serious tension between the two conservative power centers in Iran, between those around Ahmadinejad, the president, and those around Khamenei, the supreme leader.
CONAN: I'm sure other people wonder, these are the two conservative wings. Do they not worry that they are weakening each other, their position in general, and leaving an opening for those who might be interested in reform or, indeed, a revolution?
SHUSTER: Well, there is much talk of that in Iran, but Ahmadinejad is coming to the end of his second term, four-year term as president. And he's limited to only two terms. But it's fairly clear that he enjoys his position on the world stage and wants to - he has demonstrated that he wants to extend his influence. Ayatollah Khamenei does not seem to be in favor of that. And, in fact, there's a lot of talk about whether Khamenei may move to eliminate the office of presidency all together.
It's a surprise, Neal. I mean, this has been going on for the better part of a year. But after the disputed election - presidential election in 2009, when the clamp down really came on the liberals and the reformists, to see the two conservative power centers in effect consuming themselves and undermining the government of Iran, the government that they are in control of is quite extraordinary.
CONAN: Mike Shuster, NPR foreign correspondent. We're talking about a speech given yesterday by Tom Donilon, the national security advisor. You're listening TALK OF THE NATION from NPR News.
And strong words, not just about Iran, Mike, but also about Syria. The handwriting on the - is on the wall, said Donilon. Change is inevitable.
SHUSTER: It certainly seems so. Syria really is a key Arab ally of Iran and, effectively, the only key Arab ally that controls a state. And Syria has been important to Iran, and to Iran extending its influence in the Arab Middle East for many, many years. I think there's a great deal of concern in Iran among conservatives about what it will mean if the Assad government or when the Assad government falls in Damascus. The pressure has been so strong inside Iran to say something about this that this has actually also divided Ahmadinejad from the supreme leader, Ali Khamenei. They have said different things and taken different position with regard to the Assad government.
Effectively, Ahmadinejad recognized that Iran could not be seen as completely backing a government that almost everyday sends its troops out to shoot down unarmed civilians in the streets just next door. So there's a good deal of concern about what's actually happening in Syria, in Iran, as well as the uncertainty that the fall of the Assad government will bring.
CONAN: In - when the United States and President Obama announced that the - all combat troops will be withdrawn from Iraq by the end of this year, many of his critics said this is a gift to Iran. In his speech, Tom Donilon said, wait a minute. We look at polls. Only 14 percent of the Iraqi public expresses a positive opinion about Iran. And they're not likely to take over there.
SHUSTER: Well, this is where sort of simplistic judgments about the political situation in Iraq can get you into trouble. Yes, the government in Baghdad is a Shiite government and it's leaders have good relations with some in Tehran and spent some time in Tehran in the past, but it's fairly clear from - when you go to Iraq and you talk to both Shiites and Sunnis about Iraq, they don't want to become the puppet in any way of the Shiite government in Tehran. I mean, Tehran does have some significant influence among some quarters and forces in Iraq, but it's quite clear that the Shiite government in Baghdad wants to be independent and pursue an independent future for Iraq.
CONAN: The national security advisor, also the latest senior American official, this goes all the way to the president, to talk openly about the alleged Iranian plot to assassinate the Saudi ambassador in Washington, D.C., in a restaurant half a mile from the White House. And Tom Donilon said: I have to confess, I was initially struck by the reaction in some quarters, those who looked at the plot and said, is this really how Iran operates? This doesn't sound like Iran. He said, well, as those of you in this room know so well and those who have followed this story for the last 30 years, this is exactly how Iran has operated.
SHUSTER: You know, this was a pretty amazing story, and a lot of people shared Tom Donilon's initial skepticism. I have to tell you, Neal, I had a conversation last week with a very senior U.S. military official, and we talked about this a little bit. And he said that he was, too, flabbergasted by the news of this. But then he looked me in the eye and he said, but I know it to be true. This is obviously from the intelligence that the administration and the Pentagon hasn't made public. But there seems to be absolute conviction inside the administration that this was a real plot.
CONAN: And given that unlikely that we are going to see any sign of a new opening to Tehran, absent a fundamental change in policy, which does not seem to be forthcoming.
SHUSTER: No, it doesn't. And, in fact, one of the things that Donilon didn't talk about were the covert operations that are underway that are clearly the work of the CIA and other Western intelligence agencies. And that seems to be where much of the pressure is coming on Iran, and it's quite clear that that's going to continue as well.
CONAN: Pressure from the Mossad, as well.
SHUSTER: That's right. Yeah. I mean, the, you know, we've heard the story about the Stuxnet worm, and it destroying a certain number of gas centrifuges that enriched uranium in Iran. And there's every reason to believe that these - that the success of that cyber attack will lead to additional cyber attacks.
CONAN: Mike Shuster, thanks very much for your time today.
SHUSTER: You're welcome, Neal.
CONAN: Mike Shuster, NPR foreign correspondent, with us from NPR West in Culver City, California.
Tomorrow, Dave Isay of StoryCorps will be here. This year's Day of Listening focuses on the teacher you want to thank. John Donvan will be sitting in for me tomorrow. Have a happy Thanksgiving, everybody. This is the TALK OF THE NATION from NPR News. I'm Neal Conan in Washington. Transcript provided by NPR, Copyright NPR.