Iran Nuclear Deal: A Game Changer in International Relations?

Sushant Sareen, 

Senior Fellow, VIF

The interim deal struck between the P5+1 and Iran over the latter’s nuclear programme is by all accounts a big breakthrough on an issue, which if it had spiraled out of control, held the very real potential of destabilizing not just the Middle-East and its surrounding regions but also the global economy. But whether this breakthrough, which apart from providing some relief to Iran from the crippling economic sanctions imposed on it by the UN and the US/EU combine, also wards off the immediate threat of hostilities breaking out and buys time for negotiations that lead to ‘a mutually-agreed long-term comprehensive solution that would ensure Iran's nuclear programme will be exclusively peaceful’, can be taken to the next level remains pretty iffy.

If things work out, then there is a good chance of a paradigm shift being affected in the geopolitical and geostrategic equations in the region; if, however, the breakthrough fails to live up to its promise and breaks down, then chances are that conflict, the consequences of which will be horrendous for regional political stability and global economic security, will become unavoidable.

As things stand, the landmark deal signed in Geneva, has opened a window of opportunity for ending Iran’s growing international isolation and preparing the ground for its re-engagement with rest of the world. By virtue of its geographical location, oil and gas resources, and its pivotal position in the restive Islamic world as the non-Arabic and non-Sunni counter to the Saudi-led Sunni bloc, Iran is well placed to play a significant role in the politics of the region. Of course, the all important caveat is that it becomes a player instead of just trying to pull the strings from the sidelines. It is entirely possible that the Ayatollah dominated Islamic Republic doesn’t play ball once the nuclear programme issue is sorted out. In other words, if Iran decides to keep its distance from the tantalizing realignments that are being speculated, then not much will change. But if Iran is able to break out of the Mullah-mandated straitjacketing in which it has been caught for the last few decades, then all the excitement in much of the world, and perhaps apprehensions in some countries, generated by the interim deal will prove to be entirely justified.

What the Geneva deal has done is that it has managed to address the international community’s weaponisation concerns regarding Iran’s nuclear programme and at the same time found a way to let Iran keep the bulk of its current capabilities intact. In other words, while Iran gets to keep its nuclear program, albeit with partial roll-back and under enhanced monitoring, this will eventually be neutered to a level that Iran cannot weaponise. Although top Iranian officials, including the Supreme Leader and President, have repeatedly disavowed any intention of making nuclear weapons, a position that is consistent not just with Iran’s obligations under the NPT and with religious edicts by the Iranian clergy expressing abhorrence for all weapons of mass destruction, the entire Iranian nuclear programme aroused a lot of apprehension and suspicion over its direction and secrecy. Under the Geneva deal, Iran has once again ‘reaffirmed that under no circumstances will it ever seek or develop any nuclear weapons’. Iran has also agreed to a set of measures that effectively freeze, and to an extent rollback, the controversial aspects of its nuclear programme, in particular those related to uranium enrichment and reprocessing. What is more, Iran has accepted an ‘enhanced monitoring’ regime for verifying that it is living up to its commitments.

In return, Iran gets to keep its uranium enrichment capability, albeit with restrictions limiting this to under 5%. Iran has also received some relaxation on the sanctions regime that had been imposed on it. While the sanctions remain very much in place pending the final solution that is yet to be worked out, they have been relaxed to allow Iran to procure essential equipment for civil aviation industry and engage in humanitarian trade. The deal also assures Iran against any new set of sanctions by either the UN or US and EU. This means that a further tightening of the sanctions that were being contemplated has been delayed to give diplomatic negotiations another chance. Iran is also allowed limited oil and petrochemical exports and can receive some its blocked funds. It would however be rather premature to see this relief as a green flag for a return to business as usual, much less for going ahead with some of the mega projects, for instance the Iran-Pakistan (IP) gas pipeline.

There are a number of obstacles that will have to be crossed and torturous negotiations to go through before Iran is really able to re-emerge out of the isolation into which it has been thrust. Perhaps the single biggest problem is going to be the decades of antagonism that has existed between the US and Iran. Add to this the deep distrust of Iranian intentions, not only in the US but also in Israel and the Saudi-led Arab bloc. Although the Obama administration has displayed remarkable foresight and initiative in trying to open the door to Iran, there is bound to be enormous opposition to this from the US Congress and the nuclear Ayatollahs in the West. Apart from the UN sanctions, lifting the sanctions imposed by the US will take a lot of doing, more so with a Republican controlled House of Representatives in place. Then there are the unreconstructed hardliners in Iran who will also be opposed to any compromise or re-engagement with the US. The Iranian President Hasan Rouhani will have to maneuver through the minefield of Iranian politics to ensure that the final deal goes through. As if these obstacles are not onerous enough, there will be the opposition to any such deal from countries like Israel, which sees Iran as an existential threat and a country that hasn’t quite reconciled to its existence, and Saudi Arabia, which apart from sectarian differences with Shi’ite Iran, also sees Iran as a challenger to its dominance in the Islamic world as well as a threat to its security. Both Israel and Saudi Arabia have the potential for stalling, even sabotaging, any prospective deal that brings Iran out of its isolation.

The biggest gainers in the event of a deal will of course be Iran and the US. Asides of Iran managing to establish its independence and credibility through first defiance and then compromise with the international order and the US proving the efficacy of the sanctions regime and then using this to effect a compromise formula, there are other significant advantages that both these countries will get if they manage to strike a comprehensive deal on the nuclear issue. Iran was clearly reeling under the impact of the sanctions and any further tightening would have led to not just the complete collapse of the economy but also led to the downfall of the regime as a consequence of the mounting economic hardships. Not only has Iran managed to avoid this calamity by creating the much needed space for its economy, it has also embarked on the path that leads out of its isolation which in turn opens opportunities for playing a big role on the regional stage. Standing as it does on the cross-roads of Central Asia, South Asia and the Middle-East, Iran can and has an important, even pivotal, role to play. With Iran on board, tackling the emerging strategic challenges in Afghanistan, Central Asia, Middle East (both Levant and the Arab countries of the region) and Pakistan become more manageable. There is also a reasonably good chance that with Iran’s opening up to the rest of the world could lead to internal political reform that limits the overbearing influence of the clergy.

For the US, re-engagement with Iran gives it alternatives to some of the strategic logjams in which it is caught. For one, Iran is an effective counter to the rising Sunni Arab extremism and assertiveness. Much of the Islamist radicalism that is wreaking havoc both in the region – Syria being a prime example where Saudi backed Islamists linked to or adhering to the Al Qaeda philosophy have carried out unspeakable crimes – and around the world finds its roots in the export of Wahabi/Salafi ideology from countries like Saudi Arabia and its allies like Qatar. Engagement and partnership with Iran will help to bring stability and moderation in hotspots like Syria, Lebanon (where the Iran backed Hezbollah has become a major player) and Iraq. Ties with the US can also help in moderating the Iranian stand on Israel, which will work to the latter’s advantage. Iran can provide the US with an alternative access into Afghanistan which by ridding the US of its dependence on Pakistani GLOCs not only makes the post 2014 US presence in Afghanistan more viable but also takes away from Pakistan the leverage it has used to play both sides of the game in Afghanistan, which is the main reason for the resurgence of the Taliban. Moreover, Iran can serve as an excellent transit route to and from Central Asia. This will give a huge fillip to not just the Iranian economy but also the economies of the Central Asian States. And while on economics, Iran’s re-admittance into the international system will have huge economic dividends for the Western economies because the pent up demand in Iran works to the advantage of both the West and Iran.

Apart from Saudi Arabia which has good reason to sulk at the prospect of a rapprochement between the US and Iran, Pakistan too stands to lose a lot of its significance. The IP pipeline will probably lose its attractiveness for Iran once other markets open up. The desperation that forced Iran to practically fund the entire project will no longer be there. This means Pakistan will have to find the money if it wants this pipeline. What is more, the price at which the Iranian gas will be available – apart from US sanctions, the pricing of the Iranian gas coupled with the security issues surrounding the pipeline which would run through Pakistan as well as the transit fees Pakistan was demanding were all responsible for India backing out of the project – if the pipeline is built will be one that Pakistan can neither afford nor has the money to pay in hard currency. Pakistan’s failure to build the pipeline on its end will impose a heavy penalty on it to the tune of around $ 3 million per day. While Pakistan will lose its monopoly over the GLOCs, it will also see its dream of becoming the transit route for the Central Asian trade go up in smoke. Politically, Pakistan could see greater Shia assertiveness which in turn could have a serious impact on the internal security situation in Pakistan. But the unkindest cut of all for Pakistan will be that the myth of its geography being its biggest asset will be blown apart. Everything Pakistan offers in terms of geography for rest of the world, Iran offers better, especially in terms of security and stability. Once Iran opens up, Pakistan’s geography will be relevant only to the extent that it offers India a land route to Afghanistan and beyond. In other words, Pakistan's geography will become dependent on India. But as far as India is concerned, its dependence on Pakistan’s geography will end because Iran will offer an equally good, if not better, connectivity to Afghanistan and Central Asian states, more so since India is already involved in the Chabahar port project and the road and rail links from there to Afghanistan and Central Asia.

A rapprochement between the US and Iran is clearly going to be a game-changer in the realm of international relations. It promises to bring about tectonic changes in the current alignments, postures and policies of various countries in the region. But at the end of the day, the possibility of this happening will become real only if both the principal players keep their eye on the big picture. And that will involve not just some hard bargaining as well as big compromises but also getting over the decades of mistrust and malevolence that has defined the relationship of these two countries.