by Djavad Salehi-Isfahani
The decision announced last Monday in Vienna to extend the talks aimed at a compressive agreement on Iran’s nuclear program for an additional seven months has resulted in Iran’s currency taking dive. In one week, the rial lost more than 5% of its value in the unofficial market. The devaluation has clear political and economic implications: it will revive inflation, slow or stop economic growth, and increase the pressure on Iranian President Hassan Rouhani as his government tries to make good on the election promises he made 18 months ago.
But will this soften Iran’s negotiating position? To answer this question, we need to look at the basis of this phase of the rial’s devaluation and what it means for ordinary Iranians.
The drop in the value of the rial after the extension was announced on Nov. 24 indicates that expectations in Iran for a final deal were high before the deal failed to materialize. This optimism had kept the rial’s value above what the economics of the situation warranted. In other words, rather than being in “free fall,” as several reports in the press have suggested, the rial is actually adjusting to a new equilibrium.
Two major factors have been putting pressure on the rial in the last few months, neither of which is related to the negotiations or the sanctions. The first is the decline of the price of oil, by more than 30% since this summer, which has reduced the already strained supply of foreign currency to the Iranian economy. As I noted in my previous post, prior to Nov. 24, the rial had remained surprisingly stable despite the falling price of oil.
The rial was also under pressure because Iran’s inflation exceeded that of its major trading partners, making Iranian producers less competitive. Prices in Iran have increased by 23% since Rouhani’s election in June 2013 when the rial traded around 31,000 per dollar. All else the same, the rial would have to fall by 23% to keep Iranian production competitive. That would mean an exchange rate of over 38,000 rials per dollar in the unofficial market and 32,500 in the official market. Presently, these rates are at 34,000 and 26,500.
Of course, all else is not the same. The price of oil is lower, Iran has started receiving around $700 million a month of its unfrozen assets, and there have been changes in economic policy. Some of these changes, like the lower price of oil, would require the rial to devalue further, while others would have the opposite effect.
At the same time, although the rial could continue to decline, currently it’s certainly not in free fall.
An overlooked fact in Western press reports on this issue is that the Rouhani government, populated in part by economists focused on the competitiveness of Iranian producers, had signaled its intention to officially devalue the rial before the Nov. 24 extension was announced. Indeed, officials spoke publicly last month about a (modest) 7.5% increase in the official exchange rate to be used in the 1394 (2015/2016) budget to 28,500 rials to the dollar.
Now on to that burning question: How long will this crisis last?
The pace of devaluation in the free market has quickly slowed down—the rial even rose against the dollar on Dec. 1—but as I mentioned earlier, further drops in the value of the rial are still possible as the reality of the lower price of oil sinks in.
Devaluation is a sign of an underlying imbalance in the economy, so when it happens, people are naturally alarmed. But it is also part of the solution to the same imbalances that need correcting. Consider, for example, that a cheaper rial is good for production and employment, even in a poor business environment hampered by international sanctions and domestic impediments to production, which business people refer to as “internal sanctions.”
Devaluations also redistribute income. In the short-run, inflation, which dropped last year below 20%, will rise as prices for goods bought and sold at the unofficial rate increase. The burden of the higher inflation will fall primarily on people living on fixed incomes, on the public payroll, and those who travel abroad or send money to their children abroad—all of whom compose the better part of the middle class.
Unlike former President Mahmoud Ahmadinejad, Rouhani does not believe in directly paying the poor, so what happens to this segment—about 10-20%— of the Iranian population is less certain. Wages of unskilled workers usually increase with inflation, though not always in tandem. They also rise with demand for labor, which could get a boost from devaluation. However, the 30% increase in the price of bread that was quietly implemented earlier this week, on Dec. 1, will hurt the poor disproportionately, as it was put through without any compensatory mechanism.
Of course, if the Rouhani government is forced to reduce the country’s much larger energy subsidies to balance its budget in the face of falling oil revenues, it may ultimately have to swallow its pride and take up the Ahmadinejad cash transfer mechanism, which Rouhani strongly criticized during his presidential campaign.
Ultimately, the drop in the price of oil will result in lower economic growth and loss of income across the country. But there is no policy that can fully compensate for a large decline in the terms of trade, which the recent decline in the price of oil represents—there are only good and bad policy responses. Allowing the rial to devalue is a good start, but not enough. The government should also be planning policies to help domestic producers rise to the occasion and measures required to protect the poor as prices for basic goods such as bread and energy rise.
]]>by Ariane Tabatabai
With the November 24 deadline for a comprehensive deal between world powers and Iran on the country’s nuclear program now behind us, the negotiating teams have returned to their capitals to debate next steps. They will reconvene in Oman in early December to continue their efforts to strike a deal in seven months.
The extension represents both good and bad news. It shows once again that the parties truly want a final deal and that they are ready to take up the task. At the same time, the prolonged timeframe for a deal won’t be welcomed by various factions back home, who now have more time and room to derail the process altogether.
Indeed, as the negotiating teams were working around the clock to try to bridge the remaining gaps, various groups in Tehran and Washington, as well as in Tel Aviv and Riyadh, were working to get their own concerns onto the negotiating table.
In the United States, some influential members of Congress believe that Iran is in a comfortable position, not really seeking a solution but rather an indefinite extension of the talks to get sanctions relief. But as noted by Secretary of State John Kerry from Vienna on the day the extension was announced, Iran has been complying with the interim deal concluded in November 2013. In fact, the International Atomic Energy Agency (IAEA) released a report the same day showing that key elements of the Iranian nuclear program remain suspended. Tehran, then, is not just kicking the can down the road.
Powerful Iranian figures also have concerns about the extension. They believe that the interim Joint Plan of Action (JPOA), signed last year in Geneva, has effectively suspended important parts of the country’s nuclear program without giving Iran much back in return. However, they are also ignoring an important element of the process: The JPOA has granted Tehran access to some of its frozen assets, as it slowly prepares to reopen its market to international business, and leave its political isolation.
Over the next few months, critics on all sides will become louder, especially as Tehran and Washington continue to engage in cordial settings, raising concerns among some of their respective key constituencies.
The remaining key issues—the number of centrifuges Iran will be able to keep and operate, the timeframe of the deal, and sanctions relief—will likely be the main points of contention for these constituencies.
Other challenges could also arise in the process, including the interpretation of the JPOA over the next several months and the grey areas it includes. For instance, a couple of weeks prior to the deadline, Iran began to feed its IR-5 centrifuges (currently non-operational) with Uranium Hexafluoride, which caused a serious debate among nuclear experts. According to David Albright of the Institute for Science and International Security, this act was a violation of the interim deal. Others, however, including Jeffrey Lewis at the Monterey Institute, rejected the charge, stating that the JPOA does in fact allow Iran to pursue research and development, including this activity. Expectedly, Iran denied that it had failed to uphold its end of the bargain and the US State Department ultimately backed up the Iranian position.
However, while key components of the Iranian program, including the installation of new centrifuges or further work on the Arak heavy water reactor, are suspended under the JPOA, Tehran continues its research and development. This means that a new generation of centrifuges could add fuel to the fire. Ideally, Iran would refrain from such activities while the talks are ongoing. But while such a step would be received positively on the international stage, thereby aiding the confidence-building process, domestically, it would backfire. It would provide conservatives and other hard-liners in Tehran with more ammunition to shoot at the negotiating team and the government generally.
Indeed, balancing international and domestic priorities and expectations is going to constitute a major challenge for Iranian President Hassan Rouhani as the talks continue. If his government is to make any concessions, it needs to show its domestic constituencies that it is not giving up and still making progress on the nuclear program.
The good news is that Supreme Leader Ayatollah Ali Khamenei, the highest authority in Iran, continues to back the negotiating process. He reiterated his support for the negotiators led by Foreign Minister Javad Zarif on Nov. 25, the day after the deadline was missed, saying that Zarif and his team remained standing even as the West tried to force them to kneel. This crucial statement, which reiterated his deep mistrust of the West, came amid increasing pressure from hard-liners in Tehran and will serve in quieting them down for a while.
But as they key countries of Iran and the United States continue to engage, the prospect of prolonged détente, and especially rapprochement between the two long-time adversaries will result in the unity of four unlikely stakeholders—hard-liners in Tehran and Washington, as well as Riyadh and Tel Aviv—in opposing improved US-Iran relations, for their own reasons.
Meanwhile, the stakes are higher than ever. President Obama, who will be dealing with a Republican-dominated Congress as of January, needs a major foreign policy achievement before his term is up in 2016. In the meantime, his ability to effectively “defeat and ultimately destroy” Islamic State forces in Iraq and Syria—another defining element of is presidential legacy—will inevitably be influenced by the outcome of the talks. On the Iranian side, by the new deadline of July 1, 2015, the Iranian president will have spent the better half of his first term almost entirely focused on the nuclear issue, essentially rendered unable to seriously advance other items on his agenda.
In other words, both presidents have been banking on a historic deal, but while the extension of the talks allows Tehran and the West to continue engaging, thereby building the trust necessary for a final accord, it also means more time and room for detractors to sabotage the process.
Ariane Tabatabai is an Associate at the Harvard Kennedy School’s Belfer Center and a columnist for the Bulletin of the Atomic Scientists.
]]>As Iran and six world powers scramble to reach a deal over Iran’s nuclear program by the deadline of Nov. 24 in Vienna, Washington is seeing a flurry of last-minute events focused on the pros and cons of pursuing diplomacy with Tehran.
While advocates from both sides made their arguments on Capitol Hill this week, two distinguished former US ambassadors told an audience here Wednesday that a deal between world powers and Iran over its nuclear program offers “huge advantages” and that the chances of a “complete breakdown” in the talks at this stage are low, even if the prospect of a comprehensive accord being signed before the looming deadline is also unlikely.
Stuart Eizenstat, who played a key role in promoting sanctions against Iran under both Jimmy Carter and Bill Clinton, endorsed the diplomatic process with Iran at a Nov. 19 panel discussion hosted here by the Atlantic Council.
“I am of the belief that an agreement is important, and that there are huge advantages—to the United States, to the West, and to Israel—in having an agreement along the lines of what we see emerging,” he said.
Last month the veteran diplomat, who was named special adviser to the secretary on Holocaust issues last year, offered a key endorsement of diplomacy with Iran in an interview with the Jerusalem Post.
Eizenstat, who currently chairs the Coucil’s Iran Task Force, also emphasized the consequences of failing to reach an accord with Iran:
Without an agreement, one always has to ask, “What’s the alternative?” No deal means an unrestrained [Iranian] use of centrifuges, it means a continuation of the Iranian plutonium plant in Arak, it means no intrusive inspections by the IAEA, it means no elimination of [Iran’s] 20% enriched uranium, it means less likelihood of eliminating weaponization, it means undercutting those who are relative moderates in Iran. So there are enormous implications.
Thomas Pickering, who served as Washington’s chief envoy in virtually every hot spot—from Moscow to San Salvador and from Lagos and Tel Aviv to Turtle Bay (in the run-up to and during the first Gulf War)—meanwhile explained why a negotiated settlement to Iran’s nuclear program is highly preferable to the “military option.”
“Nobody believes that the use of force is a guaranteed, one-shot settlement of the problem of Iran’s nuclear program,” said Pickering, who co-runs the Iran Project, which promotes diplomacy between Iran and the United States, along with several other top foreign policy experts.
Pickering also argued that a deal would open the door to “further possibilities” for US-Iranian cooperation on a host of regional issues, most immediately in serving the president’s plan of “degrading and destroying” Islamic State (ISIS or IS) forces in Iraq and Syria and in bringing stability to Afghanistan.
“I remain optimistic,” he said, “but only on the basis of the fact that reasonable people could agree.”
Pickering argued that domestic politics in both countries could be the ultimate impediment to a final deal.
“The real problem is that there is a lot of unreasoned opposition, in both countries, that is affecting the situation,” he said.
On the American side, the “unreasoned opposition” Pickering referred to is rooted in Congress, where key members of the House and Senate advocate the Israeli government’s position that any deal should completely or almost completely dismantle Iran’s nuclear infrastructure, which would be a non-starter for the Islamic Republic.
Yet whereas Pickering was critical of Israeli Prime Minister Bibi Netanyahu for having “overreached” last November in calling last year’s interim Joint Plan of Action (JPOA) a “historic mistake,” Eizenstat suggested that his hardline stance may actually have toughened the P5+1’s (US, UK, Russia, China, France plus Germany) resolve to minimize Iran’s enrichment program as much as possible.
But Uzi Eilam, the former director general of the Israeli Ministry of Defense Mission to Europe, argued that Netanyahu is “getting used” to the idea that Iran will retain some enrichment capacity under a comprehensive deal.
A deal that includes stringent monitoring by the International Atomic Energy Agency (IAEA) and a third party (Russian) commitment to process Iran’s enriched uranium into fuel and assume responsibility for spent reactor fuel would be enough to meet Israeli security concerns even with an active Iranian enrichment program, said Eilam.
Pickering also noted that sanctions relief remains a sticking point, with the Iranians wanting full relief immediately and the P5+1 insistent on maintaining some sanctions in order to ensure Iran’s continued compliance with the terms of the final accord. But he was joined by Eizenstat in arguing that it would be “almost impossible” (Eizenstat’s words) for both sides to just walk away from the talks at this point.
While both Iran and the P5+1 continue to insist that they are focused on reaching a comprehensive accord by the deadline, with just three days to go, it appears highly unlikely.
As to how long the talks would go on in the event of an extension, Pickering argued that “short-term would be better than long-term,” though he acknowledged that “short-term is harder to get because everybody’s tired, they want to go home and think.”
Eizenstat added that the impending political change in Washington, where Republicans will take control of the Senate in January and are expected to oppose any deal with Iran, would make a short extension more desirable than a long-term one.
]]>by François Nicoullaud
Paris, France—This is not the first time that we may have trapped ourselves when drafting UN Security Council (UNSC) resolutions that were intended to trap another country—in this case, Iran. The present situation recalls in some respects the period around 1997 when most Security Council members would have liked to rescind, or at least amend, the sanctions adopted against the regime of Saddam Hussein after the 1991 Gulf War, as their effects were obviously getting out of hand: widespread corruption, and the dramatic deterioration of the Iraqi population’s state of health, to name a couple. But any change in the sanctions would have required unanimity from the five permanent members of the Council, and that was definitely out of reach. The situation led French President Jacques Chirac to express his frustration. “We want to convince, not coerce,” he said. “I have never observed that the policy of sanctions can produce positive effects.”
We have not yet reached such a dramatic juncture with Iran. But should it become useful to rapidly lift the sanctions imposed by the four UNSC resolutions between 2006 and 2010 in order to secure a comprehensive agreement on Iran’s nuclear program, the Western negotiators may find themselves incapable of delivering and may instead try to kick the can down the road to some point in the distant future.
Aimed at halting Iran’s military, nuclear and ballistic activities, these UNSC resolutions are not the ones that hurt the most. More destructive are those unilateral measures imposed by the United States and the European Union, since they were designed essentially to destabilize the Iranian economy. But the UNSC sanctions carry with them a “pillory effect” that the Iranians perceive, quite correctly, as deeply humiliating. They also provide the legal bedrock upon which the European sanctions, in particular, have been constructed. The Iranians are therefore anxious to see them lifted as soon as possible through a decision by the Security Council to close the file it opened in 2006 and return it to the forum from which it should never have been taken: the International Atomic Energy Agency (IAEA).
The conditions for terminating these resolutions, however, are also overwhelming. In fact, the people who drafted them seem to have been pursuing two not necessarily compatible goals at the same time.
The first goal was to pile up all the preconditions that the authors believed were necessary to prevent Iran from acquiring a deliverable nuclear device, including:
- suspending all activities related to enrichment and reprocessing, including research, development, and construction of new facilities;
- suspending all activities related to the construction of a heavy-water research reactor;
- providing immediate access to all sites, equipment, persons and documents requested by the IAEA in order to verify Iran’s compliance with the Security Council decisions and to resolve all outstanding issues related to the possible military dimensions (PMD) of the Iranian nuclear program;
- promptly ratifying the Additional Protocol to Iran’s safeguards agreement with the IAEA; and
- suspending all efforts to develop ballistic missiles capable of delivering nuclear weapons.
Considering the context in which these resolutions were adopted, there was little chance that the Iranians would comply with such an elaborate and comprehensive set of so-called “confidence-building measures,” which would have forced Tehran to abandon virtually all of its nuclear and ballistic-missile ambitions.
The second goal was substantively quite different from the first and indeed somehow contradictory. It aimed to push Iran into negotiations, as illustrated by the formula that was included in all the UNSC sanctions resolutions, which ritually expressed the “conviction” that Iran’s compliance “would contribute to a diplomatic, negotiated solution.” Moreover, if Iran suspended its enrichment and reprocessing activities, the Council declared its willingness in return to suspend at least some of its sanctions in order “to allow for negotiations in good faith” and “reach an early and mutually acceptable outcome.”
As we now know, a negotiation process ultimately was initiated, albeit through a radically different path, as the West dropped its demand that Iran fully suspend all its sensitive nuclear activities before entering into substantive talks. One can therefore assume that the second goal will be accomplished as soon as a comprehensive agreement, which will hopefully emerge from the current round of talks in Vienna, enters into force, thus rendering this dimension of the UNSC’s resolutions totally obsolete.
But of course, the resolutions’ first dimension—the exhaustive inventory of “confidence-building measures”—remains in place. Because confidence is essentially an elusive and subjective feeling, taking this path involves embarking on a long-term, winding and always reversible road, the end of which is only faintly discernible now. Such a process is also hardly compatible with the “on-off” mechanism of the Security Council: there is no chance that its resolutions, once cancelled, could be reintroduced. Hence the strong reluctance of the Western powers to commit themselves to such an outcome.
We also all know that the sanctions are much easier to adopt than to rescind, as they tend to create, in the meantime, their own logic and dynamics. They develop new balances of power and vested interests, if only among those in authority who have dedicated themselves so thoroughly to the sanctions’ implementation and enforcement. One has only to recall the notorious example of the general embargo imposed by the Allies against Germany during the First World War whose continuation for several months after the 1918 Armistice unnecessarily prolonged the suffering of the German people and deepened the bitterness of their defeat.
Are Iran’s negotiating partners ready to learn the lessons of history? The Gordian knot that the UNSC sanctions represent should be slashed asunder, if not immediately upon the signing of a comprehensive agreement with Iran, then at least after a moderately short period in which Iran’s determination to comply with its terms could be confirmed. Such a gesture could also be linked appropriately to the formal ratification by Iran’s parliament of the Additional Protocol that Tehran had signed during an unsuccessful round of talks back in 2003—the two moves being equally irreversible.
This would not mean that pending requests made to Iran, such as the ancient issue of the “possible military dimensions” (PMD) of its nuclear program, would have to be abandoned. But it would mean that these requests would thenceforward be dealt with exclusively by the IAEA. It would also mean that the Council, in light of the progress achieved after the signing of a final deal, would no longer consider the Iranian situation a “threat to the peace” under the terms of the UN Charter’s Chapter VII, the only chapter that authorizes the use of coercive measures against a Member State in order “to maintain or restore international peace and security.”
]]>by Peter Jenkins
The absence of any late September breakthrough on the central issue in the nuclear negotiation with Iran—Iran’s mastery of uranium enrichment, a technology that can be used for both civil and military purposes—has triggered speculation that the November 24 deadline for a comprehensive agreement will be missed. It has also sparked renewed debate on whether no deal would be better than the best deal likely to be on offer…
The nub of the enrichment problem appears to be Iran’s reluctance to give up the potential to produce enough highly enriched uranium (HEU) for one nuclear weapon (a “significant quantity” or SQ) in a matter of weeks (perhaps four to six). This puts Iran greatly at odds with the US and EU (and possibly Russia and China, but that is unclear), since the US and EU want Iran to be unable to produce an SQ (to “breakout”) in less than six months and would prefer at least a year.
This wide gap on enrichment and the lack of any reason to think that Iran’s negotiators will budge on this point are feeding speculation that agreement by the deadline will be unattainable.The underlying assumption is that the US and EU will not budge either.
I have accepted a poisoned chalice from the editors of Lobelog and will try with the following points to explain why tolerating the Iranian operation of nine or ten thousand—let’s say 10,000—first generation centrifuges (IR-1s) would be the lesser of two evils—the greater evil being no deal—provided it paves the way to a satisfactory settlement of all the other points on the agenda.
1) In the long run the US and EU will have to rely for a non-proliferation assurance, where Iran’s nuclear program is concerned, on the deterrence provided by the International Atomic Energy Agency (IAEA) monitoring of compliance with Nuclear Non-Proliferation Treaty (NPT) obligations, and on Iranian fear that the consequences of non-compliance could be devastating. Perpetual restrictions on centrifuge numbers would imply a perpetual double standard for which there is no basis in international law—and would therefore be totally unacceptable to Iran.
The US and EU tell themselves that relying solely on deterrence will feel more comfortable in ten or twenty years time, because during the intervening years Iran will have been able to build confidence in the peaceful nature of its intentions. In doing so, they tend to overlook that since 2003 the IAEA has not reported any Iranian failure to declare the possession of nuclear material and has not detected any undeclared nuclear activities. Nor has Iran attempted to produce HEU during the last four years, when it could easily have done so.
These years could be seen as evidence of Iran’s intention to comply with its nuclear non-proliferation obligations, and as grounds for confidence that it will not seek to breakout in the coming ten years…
The US and EU may also be overlooking that, if ten years from now Iran has had the potential to breakout in under six weeks but has not attempted to do so, then that will be a stronger reason for confidence in its peaceful intentions than if rapid breakout had not been a possibility.
2) A sense of perspective can be obtained by reflecting that several NPT Non-Nuclear-Weapon States (NNWS) have been and are in a position to breakout rapidly and that this is not generally considered cause for concern. Why not? Because it is assumed that they have no intention of acquiring nuclear weapons. Nearly 30 years after Iran, also an NPT party, was first in contact with the A.Q. Khan nuclear supply network, to obtain enrichment technology, there is still no conclusive evidence that Iran intends to acquire nuclear weapons. Indeed, the US intelligence assessment is that no such decision has been taken.
3) The risk of Iran using the 10,000 centrifuges that it wants to retain to breakout is small. IAEA monitoring, and the impossibility of predicting the consequences of detection are deterrents. If Iran wanted one SQ of HEU, it would be better advised to try to build a small unmonitored enrichment facility to house more efficient second- or third-generation centrifuges.
(In that case, some might ask, why are the Iranians so determined to retain a capacity to produce one SQ in a matter of weeks at a monitored facility? In my view, the explanation must be that they want a quasi-deterrent. Being known to be able to breakout rapidly is not much of a deterrent but it is better than nothing—and it has the merit of not entailing any violation of the NPT.)
4) The US and EU reason that a reaction time of at least six months is needed in the event of a detected breakout, to allow the UN Security Council or a coalition of the like-minded to go through the gears before stopping Iran short of one SQ by destroying its means of production. Going through the gears means first persuasion and then coercion (sanctions). But it is highly unlikely that in breakout circumstances even good friends could persuade Iran to turn back; and there is now ample evidence that the greatest effect of sanctions is to stimulate Iranian defiance.
So in reality the US and EU, faced with evidence of an ongoing breakout, would have only one option: to destroy the 10,000 centrifuges as quickly as possible (unless, when it came to the crunch, the consequences of such action seemed likely to be worse than tolerating Iranian acquisition of HEU). To render the 10,000 centrifuges at Natanz inoperable would be an easy task for the US Air Force, and could be accomplished in well under a month.
The ministers of Iran and the P5+1 at the signing ceremony of the Joint Plan of Action reached on Nov. 24, 2013.
5) Assuming that other outstanding issues can be resolved satisfactorily, a comprehensive agreement on Nov. 24 offers a much fairer prospect than no agreement. A final agreement that includes the following provisions will generate a helpful reduction in tensions on at least one Middle Eastern front: frequent IAEA access to Iranian centrifuge workshops and assembly areas, and to Iranian fuel cycle facilities; changes to the design of the 40 MW reactor at Arak; and all the enrichment-related restrictions Iran offered in November 2013 and that Iran could hardly retract under a comprehensive agreement.
However imperfect, in Western eyes, such an agreement might seem if Iran continues to operate 10,000 IR-1s, it would be a better platform for developing the West’s relations with Iran in positive ways than no agreement. If Iran were given sufficient time, were offered EU as well as Russian civil nuclear cooperation, and were invited to join the Nuclear Suppliers Group, it might decide to adapt its nuclear program in reassuring ways. An agreement would ease political inhibitions to cooperation when Western and Iranian security interests coincide.
Conversely, no agreement could lead quickly to renewed expansion of Iran’s enrichment capacities, a reduction in IAEA access to the minimum required by the NPT, abandonment of the plan to modify the Arak reactor, and who knows what else on a broader canvas.
Those who have been advocating “no deal” seem to assume that a nice alternative would be on offer: continuation of the confidence-building measures that have been in place since January under last November’s Joint Plan of Action. But there is no guarantee that this would be the case.
To date, Iran’s gains in return for those measures have been modest (US and EU sanctions relief having been paltry and, in some cases, ineffective); they would not lose a lot by walking away from the Joint Plan. US and EU negotiators could also find it hard to detain them—their negotiating hand is weaker than “no deal” advocates imagine. If it were strong, this problem would have been resolved to Western satisfaction years ago.
Of course it would be wise of Iran to bear in mind that it will be very hard for the Obama administration to persuade Congress of the merits of a deal that does not make it impossible for Iran to breakout in under six months (irritating though it is for foreigners to be told by US negotiators that Congress will or will not tolerate this or that). It is a regrettable reality that this breakout issue has become totemic. The Iranian negotiators ought to be trying to identify room for compromise on some aspect of it. If they could find some way of excluding the option of using Iran’s stock of low enriched uranium as centrifuge feed material in a breakout, this would extend potential breakout estimates by several months. However, it would also make a quasi-deterrent less impressive. That may put this option on the wrong side of an Iranian “red line.”
Better Deal?
I can see that US and EU negotiators face a very difficult choice. They are not to be envied. All their instincts drive them in the direction of depriving Iran of an option (uranium enrichment) that other NPT parties enjoy. So often since 1979 the Islamic Republic has behaved in ways that have alarmed the West, or offended our moral sensibilities, that it is hard for us to leave Iran in possession of the capacity to make a nuclear weapon.
But, as Senator Dianne Feinstein reminded her colleagues in January, the nature of a nation can change over time. The Islamic Republic has sometimes shown scant regard for international law, not least breaching its IAEA obligations over more than a decade prior to 2003, but it does not follow that they are bent on using their enrichment capability to acquire nuclear weapons. There are plenty of reasons why it would be foolish for them to do so. And, frankly, it is not obvious that the US and EU will have a better option on Nov. 24 than to cut a deal on the basis of Iran continuing to operate 10,000 centrifuges.
]]>by Djavad Salehi-Isfahani
Iranian President Hassan Rouhani was elected to office largely on his promise to lift the economy out if its deepest recession since the Iran-Iraq war. One year later, evidence of a recovery is hard to find, but he has achieved a few significant accomplishments.
Rouhani’s most visible accomplishment [...]]]>
by Djavad Salehi-Isfahani
Iranian President Hassan Rouhani was elected to office largely on his promise to lift the economy out if its deepest recession since the Iran-Iraq war. One year later, evidence of a recovery is hard to find, but he has achieved a few significant accomplishments.
Rouhani’s most visible accomplishment is lower inflation, down by more than half from over 40 percent a year ago. The runaway inflation of the last three years that alienated the middle class and even many conservatives from former President Mahmoud Ahmadinejad is now back to a level that Iranians consider normal.
Containing inflation was achieved at considerable cost, though, by keeping government expenditures to a minimum and forgoing any kind of fiscal or monetary stimulus. Rouhani even managed to increase energy prices last April without any protest, indicating that his popularity has so far survived austerity. The energy price hikes were substantial enough to close the budget gap left by Ahmadinejad’s generous — some would say irresponsible — cash transfers. The price of gasoline was increased by 75 percent, diesel by 67 percent, and other energy prices by about 30 percent.
Rouhani’s second economic achievement was restoring the business confidence lost to the erratic economic management of the Ahmadinejad years. He did this by simply getting elected and by appointing a competent team. His election stopped or at least slowed down the hemorrhaging of Iran’s economy, which has been hit by draconian international sanctions and bad domestic policies.
Rouhani’s greatest economic success came in the form of a political victory. He overcame substantial domestic opposition to rapprochement with the West to sign the Joint Plan of Action (JPA) with world powers last November. The economic impact of the JPA has been underwhelming, but without it the economy would have continued to slide.
The agreement can be credited with the strengthening of Iran’s currency, the rial, which is a good indication of rising business confidence. Since November, Iran’s oil exports have also increased by 30 percent, about $7 billion of Iran’s frozen funds have been released, and petrochemical exports, which received specific sanctions relief, have increased.
This spring, auto production (also marked for sanctions relief in the JPA) was up by a whopping 90 percent compared to a year ago according to Mohammad Reza Nematzadeh, the minister for industry, mines and commerce. He also mentioned increases in petrochemicals production by 9 percent and durable goods by 30 percent.
These improvements are most likely lost on the average Iranian, whose job prospects and income has not increased since Rouhani took office. The obvious culprit is, of course, the financial and shipping sanctions that limit Iran’s access to its foreign exchange earnings and continue to choke large sections of its industries. Manufacturers are still using cumbersome and costly channels to procure their raw materials and parts. For them, the optimistic official statements and newspaper headlines proclaiming the imminent “collapse of the sanctions regime,” is just talk. Indeed, while Western critics of Iran’s limited sanctions relief, particularly in Washington, point to the flood of foreign business missions to Tehran, no actual investment has occurred due to the continued uncertainty about the future of the sanctions.
The latest disappointing jobs report shows the limited impact of the JPA so far. Industry as a whole continued to lose jobs last spring, more than 6 months after the signing of the agreement.
There were 700,000 fewer industry workers employed in spring 2014 than when Rouhani took office. These numbers cast doubt on the claim made in a recent report published by the Foundation for Defense of Democracies and Roubini Global Economics that the economic benefit of the JPA “is reflected in increased economic output and improvements in employment within Iran.” National accounts data published last week shows that industrial output for 2013/14 as a whole was down by 4.5 percent and industrial employment has been falling through spring 2014.
Data on personal incomes and consumption published by the Statistical Center of Iran also indicates that economic recovery is yet to come. For the Iranian year that ended on March 20, 2014, real household consumption fell by 5 percent for urban households and 12 percent for rural ones. Their real food expenditures meanwhile fell by 14 percent.
So does the anemic economic recovery weaken Rouhani’s hand in the nuclear negotiations and should the West therefore toughen its position now in order to extract further concessions from Iran?
Sanctions have no doubt increased Iran’s willingness to negotiate, but it would be a mistake to think that more sanctions always brings more concessions. Most Iranians believe their government has held its part of the bargain since last November, so they would see more sanctions now as bad faith on the part of the P5+1 (US, UK, France, Russia, China plus Germany) and blame the failure of the negotiations on them. This would reduce pressure on Rouhani to make further concessions.
Furthermore, the Iranian middle class, after having survived eight years of Ahmadinejad, still regards Rouhani as the best leader to champion its interests. The poor, who, despite years of sanctions are decreasing as a proportion of the total population, are meanwhile relatively well protected. Thanks to the cash assistance program instituted by Ahmadinejad (about $40 per person per month in international dollars) in 2012/13, when average real incomes and expenditures were falling, poverty rates actually fell. At the time, only 5 percent of the population was counted as poor, based on a $5 per day poverty line (in international dollars). Iran’s effective income assistance programs can be adjusted to protect them against further economic deterioration.
The more interesting question is how the course of the talks could affect Rouhani’s presidency beyond its first year.
As they stand now, Rouhani’s plans are helping the private sector lead the economic recovery and letting markets form the basis of economic life in the Islamic Republic. If the talks succeed in the next four months and sanctions are gradually lifted, Iranian businesses are sure to spring into action, as they do when oil money starts to flow. Rouhani will be then be well on his way to a second term.
But Rouhani has reservations about this scenario. In the past, oil-induced booms have deepened Iran’s dependence on the outside world, something that runs counter to the vision of a “Resistance Economy” identified with the Supreme Leader.
If the talks fail, as the Washington hawks seem to wish, Rouhani would have to reverse course; instead of re-integrating Iran into the global economy with the private sector in the lead, he would promote economic self-reliance and resistance to outside pressures, a strategy that fits much better with the state and its para-statals at the helm.
In the narrow, security-focused discussion of Iran that passes for analysis these days in the US, the broader issues of importance to Western leaders are easily lost. But for those interested in longer-term relations with Iran, it helps to bear in mind that the current negotiations are not just about Iran’s nuclear activities; they are also about the direction that Iran’s economy will take in the coming decade, and who could benefit from it.
Photo: Iranian President Hassan Rouhani visits the Shahid Rajai Port Complex port in Hormozgan Province on Feb. 25, 2014.
]]>by Ellie Geranmayeh
In recent weeks, hard-line members of the US Congress have stepped up their game of obstructing diplomacy with Iran. Resolving the Iranian nuclear conflict has been used as a chip in domestic politics rather than a foreign policy issue pursued through a multilateral track. Opposition to incentivized diplomacy with Iran is [...]]]>
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Ellie GeranmayehIn recent weeks, hard-line members of the US Congress have stepped up their game of obstructing diplomacy with Iran. Resolving the Iranian nuclear conflict has been used as a chip in domestic politics rather than a foreign policy issue pursued through a multilateral track. Opposition to incentivized diplomacy with Iran is likely to intensify with the looming US mid-term elections and the November 24 deadline for the extended negotiations. Powerful factions in Congress are signaling that they will try to tie the hands of the US executive when it comes to fulfilling its obligations under a reasonable final deal. Given how sanctions against Iran’s nuclear program operate, the hawks in Congress are not just a problem for the US president — they are a problem for Europe, too.
President Barack Obama has presidential authority to negotiate with Iran on its nuclear program and issue temporary waivers on easing sanctions. At some point, the administration and Congress will have to see eye to eye in order to legislate for permanent sanctions relief as part of a comprehensive agreement. The on-going debate on Capitol Hill around this issue has vast implications for European companies that have been severely limited in their ability and willingness to do business with Iran due to the secondary effect of US sanctions. European companies took a large financial hit to endorse the sanctions regime against Iran since 2006. They understandably want a durable deal allowing them to trade with Iran without risking US Treasury penalties or a future US president dramatically altering the policy on Iran to Europe’s detriment.
Europeans companies have good reasons to worry that Congress won’t play ball as part of a final deal agreed to by Iran and the P5+1 (US, UK, France, China, Russia plus Germany. US lawmakers have called for fresh sanctions and/or for existing sanctions, which are suspended under the interim nuclear deal, to be reinstated. These measures would clearly spoil the spirit of good faith in the negotiations and go against the interim nuclear deal agreed to last November. Other members of Congress have proposed restricting the presidential waivers on sanctions against Iran. Most recently, a bill attempting to restrict the president’s ability to implement a final deal unless Congress can be satisfied that the funds released to Iran are not directed at terrorism or human rights abuses has also been circulated. This puts a huge burden on implementation timelines for a final deal and an impossible bar for the US executive to meet.
Powerful lobby groups and senators have campaigned Congress to shift the goal posts for the nuclear talks to include Iran’s role in sponsoring terrorism and its human rights record. Representative Eliot Engel has predicted that even if a final deal was reached, Congress would not allow the lifting of sanctions until Iran stopped being a “bad actor” in the region. Engel unhelpfully omitted to note what exactly this means or how to measure when Iran is being a force for good. Although these are all areas of concern for the West, they are unconnected to Iran’s nuclear program and rest outside the parameters of the nuclear talks. Proponents of these measures know well that the outcome of actually endorsing such conditions will squeeze Iran out of the talks. The European strategy of tackling human rights issues in tandem with supporting the nuclear talks provides a better model for progress on both issues.
The position of Congressional hawks is at odds with the P5+1’s overriding objective of removing potential threats posed by Iran’s nuclear program and lifting associated sanctions. Focusing on this goal is partially easier for the EU, which, unlike the US, has maintained clear divisions between sanctions targeting Iran’s nuclear program and those directed at human rights and terrorism. Europeans also have a different psychology when it comes to tacitly accepting Iran’s limited enrichment capability. For example, the UK Foreign Affairs Committee recently backed diplomacy with Iran and publicly acknowledged that “there is probably no prospect of a lasting deal which does not allow Iran to enrich uranium”. This stands in stark contrast to the hard-line position by Israel and certain members of Congress insisting Iran dismantle all its centrifuges and cease uranium enrichment on its own soil.
Without doing Obama’s job for him, Europeans should outline their interests and reasons for backing a final nuclear deal within the US political debate. Although this may not have much sway with the hawks, it could have a noticeable impact on those members of Congress who are sitting on the fence when it comes to diplomacy with Iran. Sceptics must be reminded that Iran has fully implemented the interim nuclear deal, which has in turn provided a stringent inspection on Iran’s nuclear program. A final deal can fulfill the checklists Western powers need to ensure Iran is unable to make a clandestine dash for the bomb. The alternatives to diplomacy, of upping sanctions or engaging in military conflict, cannot wholly eliminate Iran’s capacity for nuclear weapons. These actions will further destabilize an already turbulent and unpredictable region. They would also remove the potential for Iran to become a constructive actor in countries like Iraq.
Diplomacy with Iran has been a true exercise in patience, and there is a long road ahead. Congress should be wary of being perceived as the unreasonable actor in the nuclear talks. After all, it was the Europeans who in the early 2000s persuaded a reluctant US administration to follow the dual-track approach of sanctions and dialogue that avoided war and resulted in last year’s interim accord. But it was also Europe, rather than the US, that accepted the high costs associated with sanctioning Iran’s oil and banking sector, which was fully endorsed by Congress. If the US legislature obstructs a final deal without due cause, the international consensus behind sanctioning Iran to address proliferation concerns would be in danger. This could result in unwanted consequences not only in the Iranian case, but also in building future partnerships with Europe on sanctions, notably with respect to Russia.
– Ellie Geranmayeh is an ECFR policy fellow and the author of the recently published report, “Détente with Iran; how Europe can maximise the chances of a final nuclear deal.”
Photo: US Secretary of State John Kerry and German Foreign Minister Frank-Walter Steinmeier brief the press about their bilateral consultations during negotiations with Iran in Vienna on July 13, 2014.
]]>by Derek Davison
One of the unintended consequences of the decision to extend the international talks on Iran’s nuclear program is the growing number of neoconservative calls for even more pressure on Iran. So it was on July 28 that the Gemunder Center Iran Task Force, a creation of the Jewish [...]]]>
by Derek Davison
One of the unintended consequences of the decision to extend the international talks on Iran’s nuclear program is the growing number of neoconservative calls for even more pressure on Iran. So it was on July 28 that the Gemunder Center Iran Task Force, a creation of the Jewish Institute for National Security Affairs (JINSA), hosted a panel discussion, “The Elusive Final Deal with Iran: Developments and Options Going Forward,” the participants of which all agreed on the need to “pressure” Iran now, and presumably forever, or at least until a new regime takes over in Tehran (which will be any day now, surely).
The substance of the discussion closely mirrored JINSA’s July 17 report, “Improving the Prospects for an Acceptable Final Deal with Iran,” which also focused on “pressure.” The panel repeatedly made the case for more pressure, which highlighted the shifting goalposts that have marked the neocon approach to the talks between Iran and the P5+1 (US, UK, France, China, and Russia plus Germany) since they began.
America and its allies were supposed to pressure Iran into negotiating and bringing its nuclear program into compliance with international expectations. Now that Iran is (again) negotiating and is in compliance, the calls for increasing pressure continue from neoconservative think tanks and certain actors on Capitol Hill.
When Ray Takeyh of the Council on Foreign Relations talks about the importance of increasing pressure on Iran while “giving them a way out,” it’s not quite clear how that differs from what has already happened up until this point. Now American pressure is supposed to leverage not just Iran’s participation in the talks, not only its compliance with its NPT obligations, but also inspire Iranian capitulation to the agenda of American hawks. Iran’s failure to capitulate is proof positive that it hasn’t been pressured enough. Either the Iran hawks aren’t getting the hang of this “negotiating” thing or they consider “pressuring” Iran the end, not the means.
So what should pressure amount to when it comes to Iran and the nuclear talks? According to the JINSA report, Iran “respects only strength” (that really is a direct quote), so naturally a “credible” military threat is required. This requires more public threats of a military response, more public pledges to defend America’s regional allies from alleged Iranian aggression, more public tests of US “bunker buster” weaponry like the Massive Ordinance Penetrator (MOP), and more weapons sales, including MOPs, to Israel.
The panel also heavily emphasized the idea that America must “compete” with Iran regionally, “interdicting Iranian actions” as Ambassador Dennis Ross put it. This would presumably ratchet up the “pressure” on Iran. But the chaotic state of affairs throughout the Middle East right now makes it almost impossible for the US to adopt an across-the-board policy of opposing Iranian action everywhere. There are three regional flashpoints where Iran is currently active: Gaza, where it may be strengthening its support for Hamas; Syria, where it supports Bashar al-Assad against the rebel factions trying to unseat him; and Iraq, where it supports the Shia-led government (even if its support for Nouri al-Maliki is waning) and opposes the Islamic State (IS).
In Gaza, the US can and will oppose Iranian activity that might harm Israeli interests, but in Syria the picture becomes muddled, since America supports some of the rebels fighting Assad (the Free Syrian Army) but opposes others (the al-Qaeda affiliated al-Nusra Front and IS, also opposed by Iran). Meanwhile, in Iraq, for all practical purposes the US and Iran are on the same side, backing Maliki (or at least Baghdad) against IS and the Baathist Naqshbandi Army, though Washington has emphasized the need for a policy of reconciliation between Baghdad and Iraq’s disaffected Sunnis. JINSA’s report notes, in something of an understatement, that “the United States has been reticent to counter Iranian attempts to bolster its Shiite allies” in Syria and Iraq. Well, there’s a reason for that; doing so would materially damage US interests in Iraq and would risk the rise of a greater threat in Syria.
The panelists disagreed somewhat on the ideal length of a comprehensive deal. Ross, somewhat more realistically than his fellow panelists, suggested that an acceptable deal would sunset after 20 years, whereas former George W. Bush officials Stephen Rademaker and Eric Edelman seemed to be unhappy with a deal that would ever sunset. Rademaker specifically objects to language in the JPOA indicating that at the conclusion of a comprehensive solution, “the Iranian nuclear programme will be treated in the same manner as that of any non-nuclear weapon state party to the NPT.” While this would still leave Iran subject to Article III of the Nuclear Non-Proliferation Treaty, specifically its requirement that states comply with safeguards negotiated with the International Atomic Energy Agency (IAEA) to prevent the development of a nuclear weapon, Rademaker insists that Iran should remain under the terms of a comprehensive deal indefinitely. This is certainly a non-starter for the Iranians, who have been clear that they will only accept a deal under which Iran will ultimately be treated like any other NPT-signatory, but maybe they’re only insisting on that point because the US hasn’t “pressured” them enough yet.
Iranian Foreign Minister Mohammad Javad Zarif and US Secretary of State John Kerry shake hands after world powers reached an agreement with Iran over its nuclear program on November 24, 2013. (Fabrice Coffrini/AFP/Getty Images)
]]>The recently extended nuclear negotiations with Iran have had to compete for front-page attention with acute crises elsewhere. The agreement to extend both the negotiations and the interim commitments associated with them for another four months has nonetheless provoked comments from the usual quarters, including those who have never wanted any agreement [...]]]>
The recently extended nuclear negotiations with Iran have had to compete for front-page attention with acute crises elsewhere. The agreement to extend both the negotiations and the interim commitments associated with them for another four months has nonetheless provoked comments from the usual quarters, including those who have never wanted any agreement with Iran and continue to try to sabotage the negotiations. Here are some key facts to bear in mind about the extension itself:
The extension makes possible a continuation of major negotiating progress. The progress to date has been remarkable. Few would have predicted it even a year ago. As Secretary Kerry commented in a statement on Friday, it was less than a year ago that a U.S. secretary of state and an Iranian foreign minister met for the first time in more than three decades. The key events making this possible were the advent of a new Iranian president with a much different orientation from that of his predecessor, and the willingness of the United States and its negotiating partners to seize this opportunity. The negotiations have gone from a standing start with no communication to an important interim agreement and a common text for a final agreement, with some remaining bracketed language and gaps yet to be negotiated.
The need for an extension is not surprising. In fact, the interim agreement, known as the Joint Plan of Action, that was reached last November specifically provided for the possibility of an extension beyond the original target date. The matters being negotiated are complicated and highly technical, from the design of nuclear reactors to the details of international financial transactions.
Both sides are negotiating seriously. The Iranian side has demonstrated its seriousness through its compliance, as confirmed by the International Atomic Energy Agency, with all of its commitments under the Joint Plan of Action. It also has demonstrated its seriousness through its acceptance already of lopsided concessions while gaining little so far in return (see next key fact). Nothing in the history of these talks, or of the history of the Iranian nuclear issue before the talks began, suggests that Iran needs to be squeezed harder to get it to negotiate earnestly and flexibly.
Iran already has the biggest motivation to conclude the negotiations swiftly. The P5+1 (the United States and its negotiating partners) clearly got the better deal in the interim agreement. The Joint Plan of Action froze or rolled back the aspects of Iran’s nuclear program with the most concern regarding possible weapons proliferation, as well as introducing international inspections more intrusive and frequent than what any other nation undergoes. In return Iran got only minor sanctions relief, involving peripheral matters such as airplane parts and access to a small fraction of its overseas financial assets to which it has been denied access. This pattern continues under the additional agreement struck as part of last week’s extension of the talks. Iran has committed to hasten the conversion of its remaining supply of medium enriched uranium into reactor fuel plates, which would make it even more difficult to use the material in weapons. In return it gets access to only a small additional slice ($2.8 billion out of more than $100 billion) of its frozen overseas financial assets. The main, debilitating sanctions regarding oil and banking remain in place. Iranian President Hassan Rouhani directly, and Supreme Leader Ali Khamenei indirectly, have a big economic and political stake in reaching a final agreement promptly.
Diplomacy remains the surest way to preclude an Iranian nuclear weapon. The extension does not change this reality. With a negotiated agreement, Iran’s nuclear activities would be subject to the most extensive international inspection and monitoring arrangements ever implemented, and Iran would have multiple major motivations not to let the agreement break down. Without an agreement, there would be far less comprehensive inspections, much less of an Iranian stake in keeping its program peaceful, and a political swing in Tehran away from those most determined to keep it peaceful.
This article was first published by the National Interest and was reprinted here with permission.
Photo: US Secretary of State John Kerry sits across from Iranian Foreign Minister Mohammad Javad Zarif in Vienna, Austria, on July 13, 2014, before they begin a bilateral meeting focused on Iran’s nuclear program. Credit: State Department
]]>by Ellie Geranmayeh
The violence in Iraq has provoked serious considerations by the West as to whether cooperation with Iran is worth testing to secure regional stability. In the last decade, both sides have avoided expanding their dialogue beyond the nuclear issue in fear of giving the other side leverage or poisoning the [...]]]>
by Ellie Geranmayeh
The violence in Iraq has provoked serious considerations by the West as to whether cooperation with Iran is worth testing to secure regional stability. In the last decade, both sides have avoided expanding their dialogue beyond the nuclear issue in fear of giving the other side leverage or poisoning the talks. Now the search for ways to de-escalate the violence in Iraq comes at a critical juncture in the negotiations over Iran’s nuclear program. While the terms for a final deal will not be impacted, Iran’s strategy in assisting Baghdad can add to or undermine the general confidence-building process in the talks. If Iran decides to be constructive, it gains points in the “trust bank” alongside the continued implementation of the interim “Joint Plan of Action” reached in Geneva last year. However, if Iranian actions inflame the Iraqi crisis or directly undermine Western interests, the ongoing process of détente could be seriously damaged.
In addition to the potentially constructive role Tehran could play in stabilizing conflict zones such as Syria and Iraq, the West has also been influenced by the “Rouhani factor.” The foreign policy of Iran’s new president has triggered unprecedented improvements in Western relations with the Islamic Republic. For Europeans, the signing of the interim nuclear deal last November opened the doors for increased contact through ten foreign ministerial visits to Tehran. Last week’s announcement of the UK embassy re-opening was a clear signal that Iran and the UK need and intend to enhance their direct channels of dialogue. The frankness of the White House and some influential Republicans towards potential collaboration with Iran in securing Baghdad was also a welcomed surprise. The culminations of these measures have been instrumental to trust-building with Iran after a cooling off period under former President Mahmoud Ahmadinejad.
Despite this new positive tone, Iranian-Western strategic cooperation on Iraq remains farfetched. Tehran has fresh memories of how its intelligence sharing with the West in 2001 in Afghanistan was rewarded by the Bush administration with an “axis of evil” badge. Powerful factions within Iran’s Revolutionary Guard Corps also believe that the Islamic State in Iraq and Syria (ISIL or SIS) has reached its height of power and faces inevitable decline. This reduces the need to make concessions on Iraq that do not serve Iran’s core interests. Meanwhile, Western powers view the Iranian Quds Force as having systematically undermined their interests in the region and see Iranian interests in Iraq as running contrary to the Western drive for national cohesion.
What should be expected and encouraged at the moment is the emergence of a transactional relationship between the West and Iran on regional security. The ISIS quandary may provide the right platform for both sides to engage on such concerns sooner than originally thought possible, and perhaps before a comprehensive nuclear deal is reached. The West’s current strategy in the region is anything but a success and testing the alternative route of dialogue with Iran may yield more concrete results. If security in Iraq and Afghanistan both unravel in the coming year, the Obama administration would face a true regional nightmare.
For Iran, taking a constructive role in stabilizing Iraq is an opportunity to demonstrate that when its interests overlap with the West, a zone of positive, mutual interaction is indeed possible. This cooperation involves the added bonus of laying foundational stones for further positive engagement. The two sides should at least explore areas where their regional policies can be more complementary, or at minimum not destructive to the interests of the other. This would have a positive impact for the nuclear talks by boosting the momentum required for achieving and implementing a final deal.
The recent Middle Eastern uprisings, rooted in domestic political grievances, have morphed into broader and now sectarian struggles in which the West lacks the ability to achieve its objectives and stability on its own. Going forward, Western powers require new and improved methods of implementing their policy agendas in the Middle East where the future power balance between Iran and Saudi Arabia will be vital to security. Working exclusively with one side of this fault line may not aid long-term Western interests — at times, the goals will be more closely aligned with Iran, and in other instances, will overlap better with Saudi Arabia and/or Israel. A more transactional relationship with Iran offers the West the option to balance opposing regional stakeholders and apply its leverage more effectively.
Western powers do not share Iranian ambitions, but given the Middle East’s dangerous regional trajectory, achieving some form of dialogue aimed at preventing a full regional implosion would be mutually beneficial. As demonstrated by the recent crisis in Iraq, there are instances of overlapping interests that make an alliance of convenience between Iran and the West an obvious choice. It is worth attempting — and in the end necessary — for the West to engage all sides when formulating sustainable solutions to the security threats, extremism and humanitarian crises overrunning this region.
The West has practiced a similar strategy in the past. For example, it accepted and at times encouraged cooperation between opposing March 8 and March 14 Alliance movements in Lebanon knowing full well that the alternative of civil war would further threaten its interests. This is not to suggest that the West or Iran will halt support towards traditional allies. Nor will Iran dramatically relinquish partnerships that safeguard Iranian interests. However, events in the coming months could create the political space necessary on both sides to selectively de-escalate shared hostility in pursuing some common regional goals. The new crisis in Iraq could just be “exhibit A.”
This article was first published by LobeLog and was reprinted here with permission. Follow LobeLog on Twitter and like us on Facebook
– Ellie Geranmayeh is an ECFR policy fellow and the author of the recently published report, “Détente with Iran; how Europe can maximise the chances of a final nuclear deal.”
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