Substitutes & Incentives

Substitutes. Sometimes the best strategy is not to impose sanctions, but to offer a country something that it wants in return for its agreement to halt WMD activities. Some countries, for example, may decide to develop nuclear weapons because they fear a more powerful neighboring country may attack them. In a case like this, a nuclear weapon state (NWS) can offer to help the country considering WMD by agreeing to defend it with nuclear arms. This type of security guarantee, also known as a nuclear umbrella or extended deterrence, can give the would-be proliferator a substitute for developing nuclear weapons. For example, the United States has extended a nuclear umbrella to Australia, Japan, South Korea, and many Western European countries. Some of these countries had considered building nuclear weapons of their own but then decided not to. Another approach is for a powerful country like the United States to become a reliable supplier of advanced conventional weapons (aircraft, tanks, etc.). This supplier arrangement can help a country defend itself without WMD.

In 1995, the five nuclear weapon states (United States, France, Great Britain, Russia, and China) recognized by the Nuclear Non-Proliferation Treaty (NPT), codified a pledge (UN Resolution 984) not to use nuclear weapons against any non-nuclear weapon state (NNWS) unless that state attacked it in alliance with another nuclear-armed state. This pledge, known as a negative security assurance, was also included in the final document produced by the 1995 NPT Review Conference (RevCon). The inclusion of negative security assurances in the RevCon played a major role in ultimately successful negotiations between NWS and NNWS to extend the NPT indefinitely. It is widely believed, therefore, that negative security assurances, in addition to extended deterrence, are vital components of the global nonproliferation regime.    

Incentives. If a country engaged in WMD activities is desperately poor, other states can offer economic aid if the country agrees to stop its weapons program. This overall approach is called offering incentives. There are problems with this approach, however. One is that it can encourage countries to start or accelerate WMD programs in the hope of getting economic aid, international approval, and other benefits. In addition, many people object to the idea of paying off countries that engage in activities that are condemned by the vast majority of countries in the world. The 1994 Agreed Framework, negotiated between the United States and North Korea, is one example of an incentive approach that failed to yield positive results. More recently in September 2005, the United States promised North Korea that it would not attack it and would provide energy and other aid in exchange for North Korea's promise to dismantle its nuclear weapons program and rejoin the NPT. But once again the incentives failed as the parties disagreed on the terms of the agreement. On October 9, 2006, North Korea announced that it had tested a nuclear device in part because it felt threatened by the United States.

Beginning in 2003, Western countries, fearing that Iran planned to develop nuclear weapons, offered political and economic incentives to Iran in exchange for Iran's promise to suspend its uranium enrichment and reprocessing activities. Iran initially agreed to this approach, but in 2005 it resumed enrichment activities and declared its right to develop a complete nuclear fuel cycle. In response, the United States and several European countries urged the International Atomic Energy Agency to refer Iran to the UN Security Council for possible sanctions. In late September 2005, the IAEA adopted a resolution reporting Iran to the UN Security Council for its many failures to comply with its IAEA safeguards agreement and NPT obligations. On July 31, 2006, the UN Security Council passed a resolution giving Iran a month to suspend uranium enrichment or face sanctions. Despite European countries' promises of technological and commercial incentives, Iran said that it would continue its enrichment program. 

On December 23, 2006, the UN Security Council unanimously adopted Resolution 1737 calling on Iran to suspend all proliferation sensitive nuclear activities, including those related to uranium enrichment, plutonium reprocessing, and the development of nuclear weapons delivery systems. The Council mandated that all states prevent the transfer to Iran of materials, equipment, technical and financial assistance that could contribute to these activities. However, the resolution also urges a negotiated, diplomatic solution to curbing Iran’s proliferation sensitive nuclear activities. Iranian officials have pledged to continue the nuclear program despite the sanctions and earlier proposed incentives.

Sometimes, however, offering incentives is the best strategy available and works well. In the early 1990s, the United States successfully used incentives with Ukraine to encourage Ukraine to return its nuclear weapons to Russia. Washington offered Ukraine additional foreign assistance to close the deal. Likewise, in 1994, the United States used incentives to encourage Kazakhstan to transfer 581 kilograms of highly-enriched uranium from Ulba Metallurgy Plant in northeastern Kazakhstan to Oak Ridge National Laboratory in Tennessee in a secret project known as "Sapphire." U.S. compensation to Kazakhstan, though undisclosed, was estimated at between $10 and $20 million, in both cash and in-kind assistance.
 

Further Reading:

	Arms Control Today, David Cortright and George Lopez, "Bombs, Carrots, and Sticks: The Use of Incentives and Sanctions"
	Arms Control Today, Oliver Meier and Gerrard Quille, "Testing Time for Europe's Nonproliferation Strategy"
	NTI Country Profile, Japan
	NTI Country Profile, South Korea
	NTI Country Profile, North Korea
	CNS, North Korea Special Collection
	NTI Country Profile, Ukraine
	NTI Country Profile, Kazakhstan
	NTI, Country Profile, Iran
	CRS, Sharon Squassoni, "Iran's Nuclear Program: Recent Developments"
	CRS, Kenneth Katzman, "Iran: U.S. Concerns and Policy Responses"
	NTI, Jean du Preez, "The Role of Security Assurances"
	Arms Control Association, Fact Sheets, "U.S. Nuclear Policy: 'Negative Security Assurances'"
	Nonproliferation Review, George Bunn, "The Legal Status of U.S. Negative Security Assurances to Non-Nuclear Weapon States"

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