Much to the chagrin of seasoned American politicians and its Middle
East ally Saudi Arabia, sanctions were lifted on Iran on implementation day,
Jan 16th in a ceremony at Vienna. The long standing Vienna talks
included the permanent five plus Germany and the EU agreed on the final Iran
Nuclear deal frame work or Joint Comprehensive Plan of Action (JCPOA) was
signed in July 2015. Iran set a stage for dismantling its nuclear program, in
exchange for decreased economic sanctions. It shipped out 98% of stockpile,
25,000 pounds of low- enriched Uranium (used to make Plutonium) to Russia on
25th December 2015, removed two-thirds of centrifuges and deactivated heavy
water reactor at Arak on Jan 11th. Iran has agreed not to build
heavy- water reactors for the next 15 years and would enrich upto 3.67% of
Uranium. Initial inspections by the UN nuclear watch dog International Atomic
Energy Agency (IAEA) certified Iran has fulfilled its commitments and
recommended lifting of sanctions. At the time of signing pact, it was predicted
that Iran might take at least nine months to concede to conditions ear marked
under first stage of agreement. With Iran headed for parliamentary elections on
26th February Iranian authorities displayed astounding alacrity for
the suspension of international sanctions and for the economic benefits to roll
in.
As started swiftly sailing towards a rosy end, capture of 10
American sailors by IRGC who unintentionally waded into Iranian waters
threatened to inflame tensions. Prompt release of sailors the following day ensured
a hassle-free implementation day. In a conciliatory move, both countries
swapped prisoners marking a new dawn.
The entire saga of Iranian nuclear deal was met with
stringent opposition from the US congress. In his state-of-the-Union address
Obama hailed the Iranian Nuclear Accord as an outcome of “smarter approach”
based on “patient and disciplined strategy”, despite divergent views hitting
the newsstands. In return for suspension of sanctions Iran was expected to
ratify an Additional Protocol of its safeguards to be approved by its
Parliament (Majilis) allowing the officials of IAEA to access the plausible
sites of nuclear facilities other than those notified by Tehran. Iranian
President Hassan Rohani and his US educated foreign minister Mohammad Javad
Zarif were keen on voluntarily renouncing nuclear ambitions in exchange for unrestrained
global financial engagement to give a major fillip to its ailing economy. But Islamic
hardliners like Ali Khamenei wary of threats to Iran from nuclear power
countries stiffly opposed such a move. With an eye on winning popular mandate, Rohani
intends to trumpet his astute diplomatic skills that enabled annulment of
nuclear sanctions that can facilitate rapid economic progress. He will urge the
electorate to vote back moderates to power and weaken the Islamic
hardliners. The West still has its own
doubts about the transparency of Iran’s nuclear revelations with US still
believing existence of a parallel clandestine military nuclear program. But
with international community reserving the right to conduct periodically raid,
such undue fears can be transgressed for time being.
Meanwhile, IRGC in October 2015, to thwart nuclear deal test
fired precision-guided ballistic missile capable of delivering nuclear war inviting
fresh round of sanctions from US over Iran’s missile program. While the
objectives of the deal have been successfully enforced as of now, adherence to
the conditions on long term would depend on new American President.
Several Iranian nationalists largely contend the new dawn for
Iran envisaged by the West. They argue that despite Iran conforming to the
regulations under Iranian Nuclear Accord, US wouldn’t hesitate to cast
aspersions on Iran as an aggressive Islamic Republic and an axis of evil. The
group questioned US bigotry in being hand in glove with Israel, the principle
destabilizer of Middle East, a non-signatory of NPT (Nuclear non-proliferation
Treaty), and currently in possession of sophisticated arsenal but forcing Iran
to forgo its nuclear options. They lashed at the partisan policy of US in
subjecting Iran to the tyranny of sanctions while Saudi Arabia, the hub of
Wahhabism was scot-free. Incidentally ever since imposition of UN nuclear sanctions
in 2006 and subsequent economic isolation of Iran, Islamic fundamentalism
manifest in form of IS unleashed reign of terror in Middle East and other parts
of the World.
Brief US-Iranian
History
Iran shares a huge border with Russia and acted pivot for the
US Middle East foreign policy till 1979. In 1953 CIA with MI-16 organized a
coup, Operation Ajax, to overthrow democratically
elected Prime Minister Mohammed Mossadeq
who wanted to nationalize the Anglo-Iranian oil Company (AIOC). Post-coup US
remained Iran’s one of closet ally by extending emergency financial aid till
the fall of pro-American Shah of Iran era in 1979. Shah was replaced by
anti-American Ayatollah Ruhalloh Khomeini,
who described US as the Great Satan
for allowing the Shah of Iran to enter US.
Angered student revolutionaries held 52 American diplomats hostage for
444 days in US embassy at Tehran. Thus hostilities between the countries
escalated. In fact US under Atoms for
Peace program provided assistance to Iran for development of nuclear
technology. Iran signed NPT in 1968 and ratified as non-nuclear state in 1970.
Following the Iranian Revolution in 1979, US broke away with Iran. In 1980’s
Iran sought Pakistan’s help to rebuild its nuclear program.
Implementation day marked the end of 36 yearlong economic
isolation of Iran. US first imposed sanctions on Iran in 1979 when hostages
were held in US embassy in Tehran and blocked Iranian assets worth $12 billion
in US overseas banks and imposed embargoes on trade. Assets were released and
sanctions on trade were lifted following Algiers accord in 1981. US extended
logistical military support to Iraq in Iran-Iraq wars and pursued sanctions
against Iran while it removed Saddam Hussein’s government from the US list of State Sponsors of Terror in 1984. US
government authorized sale of poisonous chemicals and deadly viruses to Iraq.
In 1987 US levied trade embargo on charges of abetting international terrorism
through Shiite Islamic Organization, Hezbollah and “non-belligerent shipping in
Persian Gulf”. US organized Operation
Praying Mantis on Iran in 1988. In 1995 US imposed a ban on involvement in
Petroleum development in Iran and extended to all trade and investment
activities in 1997. In 2010, US passed Comprehensive
Iran Sanctions, Accountability and Divestment Act under which food stuffs,
carpets and any Iranian goods and services worth more than $100 couldn’t be
imported. In 2011, sanctions were further tightened and extended to financial
and technological support to Iranian companies. In 2006 UN imposed sanctions in
response to the proliferation of nuclear and ballistic missile programs banning
export or procurement of arms and related material from Iran. EU in 2012,
announced ban on import of Iranian crude oil & petroleum products and froze
assets of Iranian Central Bank in EU.
In 2003, prior to Iraq war and later in 2007 President
Ahamadinejad of Iran proposed a grand bargain to resolve outstanding issues
between both the countries. But US dismissed it as a ploy and publicity stunt. US
contended that Iran was aiding the Iraqi insurgents with weapons and explosives
and that Iran’s Quds force is training the Shiite Militants.
Consequences
Iran has been reeling under the burden of sanctions imposed
by UN, EU and US. As of now only US nuclear sanctions are lifted but sanctions
pertaining to abetting terrorism and human rights abuses remain. The most
potential of the sanctions include restrictions on doing business with the Islamic
Revolutionary Guards Corps (IRGC) that control major part of Iranian economy.
Now Iran’s oil, gas and banking sectors can resume international operations.
This essentially implies that Iranian Oil revenues which were frozen in the
international banks might be released. Though the real numbers are not yet
clear, initial estimates indicate that $100 billion might be pumped into
Iranian economy, US Treasury indicates it is $50 billion and Iranian estimates
puts it around $29 billion.
With lifting of nuclear sanctions Iranian economic growth is
expected to surge to 5% from 3% and world markets will now have one more
million barrels oil per day plunging the oil prices further. Sources indicate
that Iran plans to offer discounts on oil prices triggering a price war with
Saudi Arabia. Iran’s revenue from oil exports can increase by $10 billion and
it can save $15 billion annually in cheaper trade. Interestingly, while Asian
and European companies can trade with Iran, US firms and American nationals are
barred. Incidentally limited cooperation between US and Iran has started in
2015 to fight IS. Iran is only country in the Middle East that vehemently
condones Islamic State. Despite the rising clamor of paradoxes, Iran unlike its
neighbors endowed with robust political system offers a ray of hope where hardline
theocrats have few takers. US by toppling the Saddam Hussein’s regime in Iraq
not only destabilized Middle East and rendered Saudi Arabia powerless since
Iraq was lost to Shiite rule, but expedited aggressive rise of IS. Presently,
Middle East is whacky with Saudi Arabia snapping diplomatic relations with
Iran. Saudi Arabia threatened by resurgent Iran constituted a regional alliance
against terrorism roping in Sunni States. Amidst tragic consequences, Iran
emerged as a strategic winner earning international acceptance, through
voluntary abdication of military nuclear options.
A new regional dynamic is envisioned with President Xi Jingping
scheduled to travel to Saudi Arabia, Egypt and Iran next week. Pakistan Prime
Minister Nawaz Sharif accompanied by Army Chief Raheel Sharif paid an impromptu
visit to Riyadh and Tehran to balance its relations between immediate neighbor
and financial benefactor. Clearly Iran is now regarded as a key player in the
Middle East geopolitics.
Indian Opportunity
Iran being reinstated into the realm of Middle East regional
framework, Modi government must seize every opportunity to rejuvenate
diplomatic and commercial ties. Iran is India’s largest supplier of crude oil. India
maintained trade relations with Iran despite the economic sanctions and with
lifting of curbs, it is going to be a mixed for India on trade front. India
followed a rupee based payment system to evade US sanctions that banned Iran
from making purchases in dollars. India bought crude oil from Iran by
depositing the payment in Indian banks and Iran expended the same money to buy
commodities from Indian markets. With restrictions lifted, Iran’s choices are
not constrained. While Indian companies can invest in Iranian infrastructure
projects which are in need of a major revamp they have to compete with foreign
firms. The proposed India-Iran oil pipeline can now be a reality. India owes $6.5
billion to Iran which is frozen for some years, can now be remitted and infused
into commercial projects. Iran has the second largest gas reserves. India can
collaborate with Iran in enhancing its refining capacity.
Iran is of immense strategic significance to India and a
gateway to Central Asia. NDA I evinced great interest in Iran’s Chabahar port,
70 km away Gwadar port of Pakistan with a strategic potential of enhancing
India’s maritime presence in Arabian Sea and Straits of Hormuz. With Islamabad
blocking India’s access to Afghanistan, Iran and Central Asia through its
territory, India is looking for an alternate link that bypasses Pakistan. India
has already invested in construction of Delaram-Zaranj road link in Afghanistan
that can extend to northern Iran. Building robust network of rail and road connections
linking Chabahar port in Iran can augur India’s connectivity to land-locked
Afghanistan and Central Asia. With Modi government pitching for popularization
of the International North South Transport Corridor (INSTC) for strengthening
commercial ties with Central Asia, Russia and Iran India is now keen on
investing in infrastructure development of Chabahar port. India needs Iran’s
cooperation in controlling volatile Baluchistan movement. Indeed with West
largely endorsing the nuclear program of Iran, it may even consider shifting
base from Pakistan to Iran. Beyond the rhetoric of soft diplomacy and oil ties
India has to deftly maneuver its relations with countries in the Middle East
with Israel is bitterly opposing India partnership with Iran. India can ill
afford to ignore Saudi Arabia, largest supplier of oil and its allies, for Modi
is keen on tapping sovereign wealth fund of Gulf countries.
@ Copyrights reserved.
No comments:
Post a Comment