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The Road Out of Iraq
is Through Tehran
by Joe Duarte
May 13, 2004
originally posted on 5-5-2004 at www.joe-duarte.com 

Editor's note: This story appeared on May 5, 2004 as part of Dr. Joe Duarte's daily column, Market I.Q. On May 12, The New York Times ran the headline: "Shiite Leaders Close to Reaching a Deal to End Stand-Off in Najaf"

The Bush administration is learning something rather unpleasant about Iraq. The way out is likely through Tehran. And that sets up a significant set of very negative logistics for the future.

According to a report on Stratfor.com, citing an Iranian newspaper, negotiations between Shiite cleric Al-Sadr, and the United States are under way, and are being mediated by “representatives dispatched by Qom-based Grand Ayatollah Kazem Hossein Haeri.” The interesting twist, is that according to Stratfor, al-Sadr, is Haeri’s protégé.

The net effect would be three fold in the short term. First, Stratfor notes that the “Iran Daily report suggests Haeri might be engineering a deal that would require the Mehdi Army to stand down and relinquish control to the CPA, allowing the United States to avoid a potentially explosive situation.” Second, Stratfor reports that “Haeri is asking the CPA not to try al-Sadr for the April 2003 murder of Grand Ayatollah Abdul Qasim al-Khoei until after the transitional government takes office July 1.”

And third“ “negotiators representing al-Sadr are lobbying for the Mehdi Army to be recognized as a legitimate political party so it can compete in future elections. The negotiators say if the CPA accepts these demands, al-Sadr will order his men to stand down.”

What the U.S. is asking, in addition to the standing down of the Mehdi Army, is not mentioned. But it would make sense that some kind of retribution, such as the naming, and identifying, or even eliminating of the foreign jihadists involved in much of the mayhem in Iraq, or perhaps even exchange of intelligence about Al-Qaeda.

Another interesting omission from the report, is the fact that Ahmed Chalabi’s name is nowhere to be seen, as a factor.

Stratfor concludes that “Tehran is very interested in stabilizing the situation in Iraq -- quickly -- and Washington has no qualms with Iran's involvement in taming al-Sadr. The more important issue is whether these talks will lead to an agreement, and what the terms would be. If and when a deal is reached, the United States will be able to boast to its allies that it has defused an explosive situation. Tehran again will be able to bring home its importance to the Bush administration, demonstrating its unique ability to exercise influence among Shia of all stripes.”

And while, it is possible that if this is a successful set of negotiations, the United States will be able to spin it positively, the long term success of the venture is dubious. As long as the Shiite majority in Iraq is in charge, the United States and Iran are too far apart ideologically. In fact, if this is first step toward the U.S. withdrawing from Iraq, face intact, one thing will remain clear.

Bottom line? If the U.S. makes a deal with al-Sadr, it will send one message loud and clear. It would essentially legitimize al-Sadr’s standing as a major political figure in Iraq, with Iran and the U.S.’s blessing.

In effect, it would signal that the United States has just christened the newest Islamic theocracy in the World.

Only time would tell if that is a good thing or otherwise. But, we think that it would not be a very long time before the World found out what the results would be.

J.A. Duarte M.D.
President River Willow Capital Management
Author of "Successful Energy Sector Investing"
www.joe-duarte.com

© 2004 Dr. Joe Duarte
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Joe Duarte, M.D.

Joe Duarte M.D. is founder and Editor in Chief of Joe-Duarte.com. Dr. Duarte is a board certified anesthesiologist, a registered investment advisor, and President of River Willow Capital Management, where he manages individual client accounts. His latest books "Successful Energy Sector Investing" and "Successful Biotech Investing" (Prima/Random House) are available on line at amazon.com, barnesandnoble.com, borders.com, Traders Press, and all major online and brick and mortar bookstores in the U.S., U.K. Europe, and Australia. Dr. Joe Duarte’s Daily Market I.Q. is a subscriber service that provides daily intelligence, trading strategies, and technical analysis at www.joe-duarte.com.