Fletcher Features

Professor of International Politics at The Fletcher School Vali Nasr, F84, and Senior Advisor to Richard Holbrooke, Special Representative to Afghanistan and Pakistan, talks to Imaduddin Ahmed, F11, about his newest book,Forces of Fortune.

What is the central thesis of Forces of Fortune?

How do you see the paradigm shift happening in Iran given that in Iran, a majority of voters oppose free market trade, as shown by Iran’s recent elections? What would induce working class Iranians to support a pro-open market government and laissez-faire policies where their entitlements cease and they have to wait for the money to “trickle-down”?

Ultimately economic discussions are not ones that will be decided by votes at the ballot box. [ . . . ] Everywhere where the middle class has risen, it has not required a plebiscite on behalf of the market. [ . . . ]

In terms of where Iran’s politics is, the private sector, which is supportive of the middle class and also of civil society activists, is an important voice. [ . . . ] There is an element of conservative opinion within the regime in Iran which is also pro-market and is interested in the private sector and on economic issues, if not cultural and political issues, its leaders agree with the middle class.

And [although]you are correct [about the elections], at least a sizable portion of the Iranian population was interested in the private sector and in opening to the world [ . . . ] probably they came fairly close to winning at the ballot box and so next time around they may be stronger [ . . . ]

What would be your plan of action once you’ve selected the countries to work with? How would you catalyze Iran’s integration into the world economy?

We have to persuade governments, sometimes aggressively, to [open up] markets. We have to have a roadmap of what we will do in the beginning, in the middle, at the end. It requires supporting painful economic transformations. It requires having a diplomatic agenda of promoting [opening up]. It also requires us to open our markets. In other words, it’s not rocket science.

That has its own rules. Iran has certain policies that are antagonistic to its neighborhood and to the West. And the West has policies that Iranians perceive as antagonistic.

There are hard politics issues that have to be resolved, like issues between China and the US were not always about money and Treasury bonds, but there were also issues about the Chinese flexing their muscles, threatening Taiwan. Early in the Bush period, there was a forcible landing of an American surveillance plane [in China]. So there are hard issues which cannot be solved by a market explanation. Those issues have to be resolved. Obviously you cannot force Iran to join the world.

And do you see it as a problem for America, without already trading with Iran, as not having any diplomatic leverage?

I cannot speak about the current policy, but the problems we have with Iran are short-run problems that have to do with Iranian policies today. Iran’s potential is all long-run. In other words, they are things that you mentioned. A country which is eager in green technology, in cloning technology, in mastering nano technology. Whose population is 85% literate. Whose cinema is already integrated into world cinema. Whose dissidents are better at Twitter and Facebook than kids over here, and in fact, Iran really made Twitter a company in America. It has all of these things which are not quite the same in other countries, but that potential is not something that is going to resolve things tomorrow morning.

It has the same kind of talent in it that India has in terms of education, or Pakistan. But that talent will only come to the fore and be beneficial if Iran integrates into the global economy. In other words, India is leveraging its bright, young graduates at the world stage, whether it’s in back-office support or IT support or in car manufacturing, in finance, because it has decided to integrate into the global economy. If India had remained insular, it doesn’t matter how bright its kids are. You couldn’t harness intelligence. [ . . . ] You can encourage [Iran’s integration into the world economy], although we do not have much leverage to encourage it.

And in addition to the benefits Iran will reap from global integration, there will be benefits for the rest of the world, right?

In particular for the rest of the region. I say this in my book. Iran is where this whole Islamic fundamentalism business started. And I believe it has the potential to start whatever it is suppose to come after fundamentalism. It has the economic size, geostrategic weight to impact a broad set of regions from Central Asia to the Arab Near East to South Asia; they all border Iran.

[ . . . ] In fact, Iran is creating impediment to access ways because Central Asia cannot get to the Persian Gulf or Arabian Sea without either going through Taliban Afghanistan or through Iran. In other words, Central Asia or the Caucuses are held hostage by Iran’s animosity.

And Central Asia is where a lot of young terrorists are being bred as well, as a result of the economic stagnation . . .

Well [ . . . ] a lot of terrorists, like the Taliban, are young, unemployed, rural kids, who are recruited. [ . . . But] some terrorists are even middle class. The problem is the dominant narrative.

The political, religious narrative in the Middle East tends to support terrorism. In other words, in most of the Muslim world, you do not have the narrative that’s dominant in Dubai or Turkey, which may be upset at US policy, but [which] is [ . . . ]pro-participation in the mainstream of global culture. And that narrative competes with the extremist narrative.

If we look at the case of Indonesia, between the Bali bombing and today, what is most important about Indonesia is that there are not zero terrorists. There still are terrorists. They blew up a hotel a few months ago. What is clear is that the extremists’ narrative is losing to a mainstream narrative. So Jamaat-i-Islamia, which was once popular in segments, is losing its impact on political discourse in Indonesia. That’s more important than finishing off every terrorist.

Is it realistic to believe that Iran may start trading with the USA within the next seven years, by 2016?

It’s all possible, because I think the hard issues that stand between them can go either way. Just as we believe they can precipitate a crisis, it’s always possible between two countries that they can resolve them. And if they can resolve them, it’ll make for a very different dynamic. Now the issues are very difficult and by no means should we downplay their difficulty. [ . . . ]

Dubai: would you go long or short, and why?

I would go long on Dubai in terms of what it has achieved in terms of my theory. Dubai has given Muslims the chance to behave just the same as everywhere else. Yes, they may be Islamic, but they like consumption, they like a good time, and if you give them the right regulations, they’ll invest the same way as other people do.

And with Dubai, it’s not the Arab population that is interesting. It is the rest of the Muslim world that has gone to Dubai to behave in ways that they cannot in their own country, which is behave as investors and most importantly, Dubai became such a fabled place for Muslims, not because it was a business opportunity. The Muslims like Dubai because it is their imaginary paradise of the middle class Muslim. They go there to have a good time. They go there because there’s a mosque, and it’s a very clean, middle-class mosque. They don’t go there because it looks like a closed, Shariah-dominated society. There are restaurants that do not serve alcohol, but they are nevertheless five-star restaurants. And there are five-star hotels, and five-star apartment places and they have fantastic malls. So you know, Dubai proved that the Muslim middle class, yes it may be religious, but it is consumerist. And on that level, Dubai has been a success.

We’re going to be losing you here at Fletcher to the Obama administration next semester. Will we be seeing you back next year?

Yes, and even next semester, we’ll see. Maybe I can continue the way I’ve been here but that’s still to be decided. This semester I’ve divided my time between teaching and between Washington.

Professor Vali Nasr, it’s been delightful, thank you very much.

Thank you.

Imaduddin Ahmed, F11, is a Schmidheiny Global Business Scholar pursuing a Master of International Business at The Fletcher School