A year ago on August 5, Ebrahim Raisi, the President-elect of Iran took the formal oath of office and replaced his moderate predecessor Hassan Rouhani. His election for the top position in Iran is a shot in the arms of the conservative clerics since Raisi is known as the diehard radical, close to the patriarch Ayatollah Khamenei.
To some commentators, he is the most likely leader to succeed the patriarch when he is no more. What are the national problems looking into his eyes and how is he likely to react? This is what we intend to discuss here.
On May 8, 2018, then President Donald Trump announced that the US was withdrawing from the Joint Comprehensive Plan of Action (JCPOA) and signing a presidential memorandum to institute the “highest level” of economic sanctions on Iran. In a statement, then Secretary of the Treasury office, Steve Mnuchin stated that sanctions would be re-imposed subject to certain 90 days and 180 days “wind-down periods.”
Reacting angrily, Iran said that since the US had rescinded the nuclear deal unilaterally, she was not bound to honour the agreement. Thus the agreement between the P5+1+EU and Iran on the JCPOA that had found the culmination of 20 months of “arduous” negotiations seemed to be heading towards a collapse. The question at hand is if the tide is not stemmed, what will be its consequences?
Iran is an important oil-producing country in the Gulf region. After she was formally declared the Islamic Republic in 1979, the regime of the clerics (Ayatollahs) has never been on friendly terms with the State of Israel and the Kingdom of Saudi Arabia for different reasons.
Iran’s animosity towards Israel is for two reasons. One is that Iran wants to impress upon the Arabs that she is more Islamic than they are, and is practically following the Islamic teaching of how a Muslim is supposed to treat a person of the Jewish faith. The second reason is that the strong Jewish lobby in the US Congress is traditionally opposed to Iran and influences the US policy towards Iran.
Iran-Saudi acrimony lies essentially in the well-known ethnic, linguistic and cultural divergence. Together with that, for too long a time, the staunch nationalism of the Iranians never forgave the Arabs for their conquest of Iran a millennium and a half ago. The Shia faith, a branch of Muhammadanism, is also a subtle manifestation of Iranian nationalistic underpinning.
Given domestic constraints and the imperative of safeguarding her political and economic interests, the US considers it her duty to defend the integrity of both Israel and the Saudi monarchy. This brings forward the confounding relationship between the US and Iran and its fallout, especially on countries that depend on Iran for energy resources like India.
Iran’s quest for attaining nuclear capability became known to the western powers as early as 2003. To the US, a nuclear Iran meant the disruption of the balance of power in the Middle East. In particular, the State of Israel and the Kingdom of Saudi Arabia consider it a direct existential threat for them.
Before we discuss why former President Trump withdrew from the nuclear deal, it should be recorded that former Iranian President Hasan Rouhani had reacted coolly to the new situation and said that Iran did not think that with the withdrawal of the US, the deal had died. He said Iran would continue to remain engaged with other signatories to the deal who had indicated that they would not like to roll up the agreement.
The friction of sorts between the European powers (UK, France, Germany, Russia and the EU) and the USA on the issue of the US declaring it would re-impose economic sanctions on Iran could be anticipated. After all, they had their oil and trade interests.
Why the US withdrew
During the presidential campaign, Trump referred to the JCPOA as the worst deal ever negotiated and pledged to renegotiate it. On May 8, 2018, President Trump announced that he has withdrawn the United States from the JCPOA and signed a presidential memorandum to institute the “highest level” of economic sanctions on Iran. In a statement, Secretary of the Treasury Steve Mnuchin stated that sanctions would be re-imposed subject to certain 90 days and 180 days “wind-down periods.”
On May 21, 2018, the then Secretary of State Mike Pompeo presented the Trump administration’s new strategy on Iran after the US violation of the JCPOA in a speech at the Heritage Foundation, promising to “apply unprecedented financial pressure on the Iranian regime” and work with allies to deter Iranian aggression. If the United States were to pursue a new deal, Pompeo listed 12 demands for Iran, including:
(a) Stopping enrichment of uranium,
(b) Ending the proliferation of ballistic missiles and the development of nuclear-capable missile systems.
(c) Allow the International Atomic Energy Agency to have “unqualified access to all sites throughout the entire country.”
(d) In exchange, the United States would be prepared to end “the principal components of every one of our sanctions
(e) Re-establish full diplomatic and commercial relationships and allow Iran to have “advanced technology”.
Secretary of State Pompeo announced the creation of the Iran Action Group, responsible for “directing, reviewing, and coordinating all aspects” of the State Department’s Iran strategy and led by Brian Hook with the title Special Representative for Iran.
In his address to the UN General Assembly on September 27, 2018, the then Israeli Prime Minister Benjamin Netanyahu revealed what he described as a secret nuclear warehouse “storing massive amounts of equipment and material from Iran’s secret nuclear weapons program.”
The first flaw in the deal according to Trump is that it isn’t entirely permanent; the restrictions on Iran’s nuclear program would start to relax about 10 years after the deal was signed (though the agreement not to build a nuclear weapon is permanent). The second is that the deal didn’t cover other problematic things Iran was doing including ballistic missile development and its support for violent militias around the Middle East (like Hezbollah in Lebanon).
On October 10, 2015, Iran tested a medium-range ballistic missile, the Emad, a more precise version of the Shahab-3, and believed to be capable of carrying a 750 kg payload over 1,700 kilometres. The US raised the issue that testing ballistic missiles violated the Security Council Resolution 1929 (2010), which prohibits Iran from testing nuclear-capable ballistic missiles.
What future bodes?
With stalemate dogging the JCPOA 2015 after the US withdrawal in 2018, and sanctions imposed, Iran is reeling under an acute economic crisis, the rising price of essential commodities and increasing unemployment among the youth. A wave of dissatisfaction runs among the youth which is an indication of a desire for change in the existing social dynamics.
In his maiden press conference, President Raisi made some statements that indicate the broad contours of his foreign policy as well as his perception about the chances of revival of the nuclear deal of 2015.
These statements are not encouraging. For example, about the US and the JCPOA, he says: “Iran will not talk to the US on the revival of the JCPOA of 2015 unless the US lifts economic sanctions imposed on Iran”. He also declared that Iran would resume its program of enrichment of uranium since the US had rescinded the nuclear deal unilaterally.
The US and the Western signatories to the JCPOA think that a hard-line approach to the mission of reducing tension between Iran and the US will not be helpful and even may be counter-productive. In their view Iran with nuclear capability will be a threat to Israel and Saudi Arabia, both enjoying not only close friendship but also strategically important relations between them. The attack in the waters of Oman on an oil tanker run by an Israeli company is suspected to have been conducted by Iranian terrorists. The British Prime Minister then joined the Israeli Prime Minister in raising the finger of suspicion towards Iran – her denial notwithstanding.
The question that invites our attention is how the hard-line President Raisi is going to address the crucial ground situation facing him. These are (i) the nuclear or JCPOA issue (ii) severe economic crisis resulting from economic sanctions (iii) handling the restive unemployed youth force in the country, (iv) resumption of normal relations with the west and the US, and (v) giving space to moderate Islamic ideology in the dynamics of post-revolution Iran and shaping a more tolerant, more robust and more compliant society.
Onslaught on economy
The end of sanctions waivers on oil exports and the restoration of US sanctions in 2018 once again cut deeply into a vital source of national revenue: oil and petroleum products account for 80 per cent of Iran’s exports. By mid-2020, oil exports had plummeted to below three hundred thousand barrels per day.
Additionally, in October of that year, the United States imposed sanctions on eighteen major Iranian banks, causing the Iranian Rial to fall further against the US dollar. Inflation is the biggest concern. According to a report by the labour ministry, food inflation crossed the “crisis” threshold in the month ending June 21, with over two-thirds of staples like meat, rice and fruits seeing an average annual price hike of at least 24 per cent.
Other food essentials have exceeded even that, with prices of butter, chicken and liquid oil skyrocketing by 121, 118 per cent, and 89 per cent in the past year, respectively. Global food prices have spiked this year as economies scale back COVID-19 restrictions and reopen for business, triggering supply bottlenecks.
Meanwhile, the wide range of US sanctions unrelated to the nuclear program has added to the damage. Multinational firms fear being punished by the United States for transacting with sanctioned Iranian entities associated with, for example, the Islamic Revolutionary Guard Corps (IRGC) which holds sway over many industries. With sanctions deterring international trade, black markets have boomed, enriching the IRGC at the expense of the regular economy.
What is the outlook for an agreement? We find that this narrative depends on how the JCPOA will be handled by stakeholders. As we see, the nuclear impasse is going to become a decisive factor for stabilization or otherwise of the entire Middle East with ramifications reaching the whole world. European signatories of the deal, including the EU, are against the sanctions. Most of them have bilateral agreements in the realms of energy, technical and scientific cooperation, trade and commerce, etc. They would not want the disruption of those relations.
While uncertainty prevails at all levels, President Joe Biden has said the United States would rejoin the agreement if Iran returns to compliance. But at the same time, he has also said he wants to negotiate a broader deal that addresses Iran, and other activities, such as its missile program.
On the other hand, Iran wants the United States to return to the original deal. Nevertheless, she has asserted that she is not willing to discuss the expansion of the accord further. “Regional and missile issues are non-negotiable,” said Raisi shortly after being elected as president in June 2021.
However, he also said that his government will support the talks with the other JCPOA signatories in Vienna to bring Washington and Tehran back to the original deal. Here lies the role of the European signatories to the deal of 2015.
Significantly, Russia and China both have disapproved of the re-imposition of sanctions on Iran. They demand that sanctions should be lifted. President Biden is not in a mood to widen the gulf of differences with Iran and probably will not give political rivals any chance of maintaining an upper hand in the JCPOA conundrum.
(The writer is a former Director of the Centre of Central Asian Studies, Kashmir University, India)
(Disclaimer: Views expressed above are author’s own)