Iran Nuclear Deal Diplomatic Victory Achieved, Political Challenge Ahead

Cover Story

From a political point of view, alongside this crisis Iran was also facing an intense competition from key regional powers, among which are its staunchest rivals - Israel and Saudi Arabia

In July 2015, Tehran and the P5+12 signed a historic agreement that would, if ratified, solve the Iranian nuclear crisis – one of the world’s longest and most acute crisis related to nuclear proliferation – and open up tremendous political and economic prospective for the Middle East. The agreement was reached despite staunch opposition from some major actors of the region, particularly Saudi Arabia and Israel.

The crisis broke out in 2002 when the opposition Mujahidin-e-Khalq revealed before the international community that Iran was secretly building two nuclear facilities, one for nuclear enrichment in Natanz and the other for the production of heavy water in Arak. According to the revelation, Tehran violated its obligation to declare before the IAEA (International Atomic Energy Agency) any development of nuclear technology in Iran. Tehran responded by saying that its motivation to go covert was to avoid US pressure against the development of civil nuclear programme, and assured the international community that its nuclear ambition was non-military in nature.

However, the use of P1 and P2 centrifuges, capable of enriching uranium fuel by up to 90 percent, could not but give rise to suspicion. Tehran was also suspected of using laser uranium-enrichment technique. Significantly, Mohamed ElBaradei, then IAEA Director General, announced that Iran was building a nuclear reactor of 40-megaton power3. Also, as Thérèse Delpech pointed out, since laser technique consumes much more energy than it produces, one could not infer anything but that it was intended for military purpose4.

More broadly, in a 2008 interview, Olli Heinonen, then Deputy Director of IAEA, said that the Iranian programme raised several key questions regarding its nature: Who was there when the decision of starting that programme was taken (military and civilians)? Who were the main decision makers? Who is still in charge of the programme today? And, a question of paramount importance: to which extent the military are still involved in that programme?’5

For Heinonen, other questions had also raised suspicion, notably the implication of Dr. Abdul Qadeer Khan, ‘Father’ of Pakistan’s nuclear bomb, who had been somehow involved in the Iranian programme. These questions are, inter alia, what were the secrets he sold to the Iranians? Did he, himself, offered his services or did the Iranians contact him? Furthermore, just knowing Khan’s involvement in the Iranian programme contributed to increased IAEA suspicion about this matter.

For another key IAEA analyst, Iran would not aim at developing a nuclear bomb, as such, but rather at acquiring the capability of rapidly developing one in case their strategic environment becomes threatening for the country.6

Notably, tension and suspicion mounted in the early 2010 when a secret underground nuclear facility was discovered in the Iranian city of Qum. An alarming report7 was then released by the United Nations in 2011 stating that Iran had tried to acquire the know-how and some capabilities to produce a nuclear explosive device.

This protracted crisis – from 2003 to 2015 – led to several rounds of mutually instructive negotiations between the P5+1 and Iran. These negotiations resulted in several, though short-lived, agreements. The two most significant ones being the agreements of 2003 and 2004 (with the EU) by which Tehran agreed to suspend its programme in exchange for economic aid. Another major agreement, also short-lived, was signed in 2010 after Barak Obama’s election, by which Iran agreed to transfer large quantities of uranium stockpiles provided some of the UN sanctions voted against them were lifted. However, this agreement also failed to materialise.

During the same period, the US, EU and the United Nations imposed a series of international sanctions, which severely hit the Iranian economy. Those sanctions resulted in the collapse of several major Iranian banks, a dramatic foreign investment drop and a striking rise of inflation, ranging from15 percent to 35 percent between 2003 and 2015. The unemployment rate remained stable at around 11 percent, with an insufficient economic growth average of 2.8 percent to absorb it. Moreover, an estimated $150 billion Iranian financial asset was frozen in international banks.

It is noteworthy that the spike in global oil price, which took place at that time, mostly benefited some oil exporting countries, such as Algeria, Libya and Saudi Arabia, which saw their economies grow significantly. However, the international sanctions had prevented Iran to take full advantage of the high oil prices.

From a political point of view, alongside this crisis Iran was also facing an intense competition from key regional powers, among which are its staunchest rivals - Israel and Saudi Arabia. However, the collapse of Saddam Hussein’s regime in Iraq in 2003 and the rise to power of Shia alliance in Baghdad freed Tehran from one of its most enduring enemies, which it turned into an ally. Hence, an Iraq-included ‘geo-strategic continuity’ was established with Tehran’s historical allies Syria and Lebanese Hezbollah, forming the so-called Shia crescent, which has increased the fear of Israel and of the Sunni monarchies, particularly the Saudis.

Moreover, the start of the Arab Springs and the civil wars in Syria and Yemen has further complicated the situation. Indeed, Saudi Arabia offered its full support to the opposition groups in Syria in order to overthrow Assad’s regime, a regime backed militarily and economically by Iran and Hezbollah. At the same time, Saudis have intervened directly against the Shia Houthis insurrection in Yemen and in bringing down pro-Saudi Yemeni President Abd Rabo Mansour Hadi in January 2015.

The emergence of the Islamic State (ISIS) in Iraq and Syria also increased Tehran’s rivalry with Riyadh, as their direct military commitment against ISIS in Iraq made Iran an independent participant to the international coalition to fight against the terrorist organisation.

Finally, the indefectible support of Tehran to Syria, Hezbollah and Hamas and their threats against Israel has always made Tel Aviv overwhelmingly wary and vigilant against any agreement between Iran and the P5+1, considering that a deal with Iran would, at best, postpone its ambition to acquire nuclear bomb.

Inspite of the challenges ahead, this last deal gives major advantages to all the parties involved. Indeed, Iran, given its potential and a population of roughly 80 million, could represent a major market in the region. Even with international sanctions, Iran – second only to Russia in terms of proven gas reserves, mostly undeveloped; and fifth world oil producer (2012 statistics) – was able to export large quantities of oil during global oil price hike. However, it could not fully utilise its oil revenues nor import essential goods for the country. This means that, Iran today represents an important market where investment and import needs are expected to rise, along with its financial resources.

Indeed, with more than 15 percent of the world’s proven oil reserves and the world’s second largest natural gas reserve, Iran can count on its future potential to successfully return in the international financial markets. Notably, few days after the signing of nuclear agreement, several European leaders returned to Tehran and met with their Iranian counterparts to explore the possibilities of investing in the country. Among them, the most emblematic one was the presence of Laurent Fabius, the French Foreign Minister, as the head of a large economic delegation. In addition to the investment interests shown by Total, the French international petroleum company; several large hotels are being constructed throughout the country by the French hospitality giant AccorHotels group in a bid to tap into the future of tourism and an automobile plant by Peugeot PSA.

Energy sector is an important industry in Iran. However, the Iranian oil and gas installations are rather outdated, with an urgent need to expand, upgrade and modernise. And by all accounts, the technologies and know-how related to the domain are in Western European countries8. Some experts argue that modernising the oil infrastructure would need a massive investment of around $180 billion. The other extremely attractive sub-sector is the natural gas, a form of energy much more environment-friendly than coal and oil.

Given that the end of international sanctions against Iran is in sight, the opening of the Iranian gas sector to foreign investments should reduce excessive dependency of many countries, notably European, on Russian gas. Notably, the French oil company Total had signed several agreements with Iran in the late 1990s to explore natural gas in Iran, a move abandoned by it because of US pressure following international sanctions against Iran’s nuclear ambition. No doubt, the lifting of sanctions should open new perspectives for the EU countries.

Another key element is political stabilisation of the Middle-East and the reintegration of Iran within the new regional geo-strategic system. As a matter of fact, since the 1979 Islamic Revolution, Iran has been perceived as one of the major candidates for regional leadership, and a potential challenger of the US control over the region. As a consequence of this political tension, major confrontations broke out, prominent among which was the Iran-Iraq war, in which the Western powers supported Iraq while Iran was backed by Syria, Hezbollah and Hamas.

Therefore, the nuclear deal could indeed be the first step towards Iran’s reintegration within the regional and international relations game. Rather than being a source of greater contention, Iran could play a stabilising role. Tehran must give a priority to the war on ISIS – the most dangerous Islamist international terrorist organisation – and further engage troops and military assets in Syria and Iraq to help them fight the organisation. Indeed, ISIS is a common major threat to Iran and the Western powers. So, this deal could only foster and reinforce cooperation against ISIS. Yet in the past four years, Iran has become the main supporter of Assad’s regime, providing him money, weapons and troops and as a consequence made his regime dependent for its survival on the Iranian support. Hence, Iran could play the role of ‘a responsible power’ by forcing the Assad’s regime to make realistic concessions to its domestic political opposition through a political agreement, a sort of peaceful Arab Spring, that would safeguard the Syrian regime, which has been its only ally in the region since 1979.

The Syrian regime’s survival is of key importance for Iran as it would simultaneously preserve its second most important ally in the region, the Hezbollah. Indeed, Hezbollah’s survival has always been central in Iran’s foreign policy as it allows Tehran to project its power within the region. For instance, Iran’s support for the Syrian regime has been an efficient instrument to exert pressure on Israel. Conversely, Hezbollah depends heavily on Iran for money and military supports. In that context, with Iran reintegrated in the regional game and its interests taken into account, it could lead Hezbollah to implement a more moderate pathway in its enduring confrontation with Israel. Finally, regarding the Hamas, even though Iran has provided financial and military supports to the organisation, its support is not as decisive as it is in the most regionally-strategic cases of Syria and Hezbollah.

While this nuclear deal allows tremendous prospective, it also has its own challenges. First, Israel led by Benjamin Netanyahu’s government is one of the strongest opponents to the agreement. Although Iran had good relationship with Israel under the Shah regime, it has become, for ideological reasons, one of the strongest enemies of Israel since 1979. Its support to Hezbollah since its creation is a manifestation of this intense confrontation through proxies. And, Israel considers the disclosure of Iran’s nuclear weapon ambition as an existential threat, or in Netanyahu’s own words, a condition for ‘a nuclear holocaust.’ This explains Israel’s passionate quest to prevent Iran from acquiring such a weapon, in some cases by assassinating Iranian scientists involved in the programme. Virus attacks on Iran’s software system of their nuclear installations as well as air strikes threats on their facilities etc are other examples. The opposition to this deal led ‘by ricochet’ to much more strained relationships between Israel and Obama’s Administration. Indeed, Jerusalem claims that this deal with the P5 + 1 does not stop Iran from acquiring the nuclear weapon and would instead, at best, just delay it, Iran being allowed to keep the civilian components of their programs. In more prosaic term, this deal would pave the way for a return of Iran in the regional game, while ‘it still refuses to recognise Israel’. Moreover, Iran maintains close relationships with Syria and Hezbollah, with which Israel has always been in direct conflict. So, in spite of the US renewed insurance and commitments to Israel’s security, should the deal not be killed by the US Congress, the possibility that Israel goes ahead with a pre-emptive strike against Iran’s nuclear installations is not to be excluded. Indeed, there are precedents in 1981 in Iraq with the Osirak reactor and, more recently, in 2007, in Syria.

The other major uncertainty regarding the Iranian deal also comes directly from the Sunni Arab world, from Egypt, and from the Gulf monarchies, notably from Saudi Arabia. Indeed, those States which did not take part in the negotiations fear that Iran would emerge militarily, politically, diplomatically and economically much stronger, and therefore be in a position of expanding its influence and its model over the region. Thus, even if all of them have cautiously and publicly endorsed that deal, Iran and those countries have been, nevertheless, engaged into an intense rivalry war through their proxies. So, it is in that context that, regarding the Syrian crisis, Saudi Arabia, Turkey and Qatar have, since January 2015, put their differences aside and decided to throw all their weight on their respective groups to unite them in their combat against Assad’s regime and Hezbollah, providing them with advanced weapons, such as Tows missiles. That common action has led to major victories for the rebels in northern and southern Syria against the regime, which led many specialists to argue that, hadn’t been Iran’s massive support to Assad’s regime, it would have surely collapsed by June 2015. Yet, the possibility that ISIS could benefit from this action is unlikely seen by the Gulf monarchies. Indeed, as explained by an analyst based in Qatar, ‘The Saudis consider ISIS as a temporary threat that would eventually disappear, while Iran represents a long-term lasting threat’9. So, it is clear that the Syrian civil war is a vivid manifestation of a fierce competition for influence between Assad’s regime and Hezbollah, both supported by Iran, and the rebels, backed by Saudi Arabia, Turkey and Qatar.

These tensions are more noticeable in the case of the Yemeni civil war. Indeed, a Saudi-led coalition has been backing Sunni Yemeni President, AbdRabo Mansour Hadi, confronting an intense rebellion from the Houthis, a Shia minority, who inflicted heavy defeats on Hadi’s loyalists, succeeding in chasing out the president from power. Therefore, considering that a Houthi dominated State, supported by Iran, was unacceptable on its borders, Saudi Arabia led a Sunni Arab coalition, backed up by the US, launching massive air strikes against the Houthis and providing a large military support to the troops loyal to President Hadi. This was presented as a rightful assistance to the recognised and legitimate authority of President Hadi. In fact, it is mostly a clear manifestation of the intense defiance between Iran and Saudi Arabia. Thus, the nuclear deal and the possible return of Iran in the regional game just contributed to an increase of the level of violence between Iran and the regional powers, as exemplified by Saudi Arabia’s involvement in the Yemeni civil war.

Finally, one should stress that this outcome constitutes a first major step to the Iran reintegration into the international community of nations. Thus, taking into account its interest, the expected result is that Iran will move from a defiant State towards a stabilising one. Both from the economic and political point of view, Tehran could positively use its influence and play an active role in Afghanistan, Iraq and Syria.

Yet, several challenges remain ahead. The implementation of the agreement extends over a period of 10 years, and although none of the involved parties has any interest in breaking this deal, such a possibility yet remains. In that regard, its viability will also heavily depend on several factors, notably on, whether or not, this agreement will be ratified by the Congress, supported by Obama’s successor, or by the other Middle-East regional powers, fearful of the growing Iranian influence, which might be, somehow, tempted to re-establish, at their advantage, a better regional balance of power.

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Author

Dr. Djallil Lounnas

Dr. Djallil Lounnas is assistant professor of international studies at School of Humanities and Social Sciences, Al Akhawayn University, Morocco.

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    References

    See Robert Litwak, Regime Change : US Strategy Through the Prism of 9/11 (Washington: Woodrow

    Wilson Center Press, 2007), p. 432.

    P5+1 refers to the 5 permanent members of the UN Security Council (USA, Russia, France, Great Britain, China) and Germany. The six countries have been negotiating with Iran since the start of the Iranian nuclear crisis in 2002.

    Shannon N. Kile, The Controversy over Iran’s Nuclear Programme, in Kile, Shannon N., Ed. 2005, Europe

    and Iran: Perspectives on Non Prolifération, (Oxford: Oxford University Press, 4).

    Thérèse Delpech, L’Iran, la bombe et la démission des nations (Paris: Collection CERI/Autrement, 2006), p. 16.

    Interview conducted by the author with OliHeinonen, then IAEA Deputy Director, Vienna, Austria, June 2008.

    Interview with an anonymous IAEA responsible, May-June 2008.

    IAEA report, Implementation of the NPT Safeguards Agreement and Relevant Provisions of Security Council

    Resolutions in the Islamic Republic of Iran, Report by the Director General (November 8, 2011).

    On line: http://www.iaea.org/Publications/Documents/Board/2011/gov2011-65.pdf.

    Interview with an OPEC Iranian expert, June 2008, Vienna, Austria.

    Anonymous discussion with a regional expert on the Middle-East, March 2015.

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