Following our number 95 (read here for free), we are pleased to welcome Master Ardavan Amir-Aslani who is a business lawyer in Paris. He has published several books on Iran and the Middle East, the last of which, From Persia to Iran, 2500 years of history (L’Archipel, 2018).
On the 8th May, the United States withdrew from the Iranian nuclear agreement signed in Vienna on the 14th July 2015. This decision brought about the re-establishment of sanctions which had been lifted, as well as the implementation of new sanctions on multinationals who want to invest in Iran.
This decision has been seen as an injustice in Tehran, especially when considering Iran’s full compliance with the provisions of the nuclear agreement, which was officially confirmed by the AIEA in eleven successive reports, the last of which intervened on the 9th of May by Yukiya Amano, President of the IAEA.
Since 2015, Iran has destroyed its heavy water reactor at Arak, as well as 14000 centrifuges at Natanz and Fordow, and it has transferred its enriched uranium to Russia. This amounted to a total loss of almost 100 billion dollars which Iran had invested in its nuclear industry.
However, the dismantlement of the nuclear infrastructure allowed for the opening up of the Iranian economy to foreign projects. In July 2015, the consulting firm McKinsey predicted, optimistically, up to a trillion dollars of investment in Iran over the next twenty years.
The Group P5+1 (China, USA, France, UK, Russia, and Germany) was evidently willing to reach a visible agreement on Iranian nuclear policy, yet there were two notable points of tension: The Iranian ballistic programme and the Iranian presence in the Middle-East. Still marred by the memory of the bloody 8 year war against Iraq, Iran explained these points as essential acts in the defence of their national sovereignty and autonomy in the face of aggression. It should nevertheless be noted that Iran’s missile program has a limited range of 2000km which, de facto, leaves Israel out of its reach, and demonstrates the willingness of Iran to engage in negotiations on these particular points.
By concentrating the negotiations in Vienna on the nuclear issue and its economic counter-parts, Barack Obama, the mastermind behind the agreement, did little to conceal his hope of integrating Iran into the international economy and easing tensions in the Middle-East.
Despite all of these efforts, the agreement has not lived up to Iranian expectations. Although being a signatory of the agreement, the US never waived sanctions imposed on Iran on the grounds of human rights violations and an alleged support of terrorism. Intimidated by the prospect of American sanctions, banks refused to guarantee foreign investments in Iran. In the 3 years since the signing of the agreement, Iran has only received 10 of the 200 billion dollars initially estimated. Difficulties have built up against the Iranian economy which, among other things, has experienced a drought over the last five years, as well as a 40% fall in the value of the Iranian Rial against the Dollar.
From an Iranian point of view, the Vienna Agreement is a complete economic fiasco, of which the blame lies upon the United States who have ignored their own signature. However, the negative consequences do not stop there.
On a political level, the American decision strengthened Iranian Conservatives in their ongoing conflict against the more moderate President, Hassan Rohani. Given that they never believed in the benefits promised by the agreement and labelled them as being “weak and useless”, they claimed it was delusional to hope that anything positive may come from the Americans, who in fine only had one objective: to bring about regime change in Iran. The recurring declarations of Mike Pompeo, Donald Trump’s new Secretary of State, and of John Bolton, National Security advisor, seem to confirm their analysis.
The Iranians, disappointed by the failed promises of the pragmatists in power, were unable to hide the sadness and disenchantment that they felt towards Rohani. A number of them look upon the arrival of the next decade with concern and may even plan to leave the country. In terms of both economic development, and the liberalisation of society (such as maintaining the use of the application Telegram and introducing women into his government) the Iranian President over promised and under delivered. He now finds himself in an extraordinarily fragile position, stuck between a hammer wielded by the conservatives and an anvil held by the people.
Since Trump’s decision, Iran has entered into a sequence of delicate diplomacy. The European Union is hosting meetings with its Iranian counterparts in order to try to find a solution enabling the survival of the Vienna Agreement. The issues raised (the creation of a European OFAC or a European sovereign fund, obtaining exemptions from American sanctions for European firms who have already invested in Iran, amongst others) will not meet the urgent needs of the Iranian economy. In addition, Abbas Araghchi, spokesman for the Iranian Foreign Ministry, confirmed the Iranian President’s intention to withdraw Iran from the agreement and to recommence uranium enrichment if no other effective strategy emerges from these negotiations. This eventuality, were it to come to fore, would harm Iranian oil exports. Although this represents a potential catastrophe for the already fragile Iranian economy, it remains very possible.
Iranians quickly understood that policies followed in Washington tend to shake up the world order. On the 8th May, Donald Trump effectively confirmed that multilateralism does not exist. He has already carried out a number of actions, such as the transfer of the American Embassy from Tel-Aviv to Jerusalem, which is contrary to the general consensus held by the international community. This is further proven by his ongoing battle against Europe with regards to trade barriers on steel. The attitude of the two Korean nations, who are – supposedly – holding a summit on the 12th June, constantly switching from cancellation to a reserved sense of optimism on its progress, perfectly illustrates the distrust that America has brought to the world.
Iran now knows that the Europeans will not respond with the required urgency. However, leaving the Vienna Agreement would risk justifying American military action on its positions in the Middle-East. The Trump administration has been influenced by the anti-Iranian diplomacy of Saudi Arabia and the extreme right of Israel, who are represented by the hard-line right-wing group Likoud.
Reaching a new agreement with the US seems to be the most viable option in ensuring an exit from this crisis. One could therefore say that the firing of Iranian rockets at the Golan was not an ideal starting point on the matter. But make no mistake, these missiles were weak and of very short range. They should be considered as a demonstration of force rather than a declaration of war. To diplomatic ends, the Iranians have long recognised the pertinence of the saying “might is right”: Power is always right.
A. Amir Aslani