The previous round of nuclear talks between the six world powers (Security Council Member plus Germany) and Iran ended in Almaty, Kazakhstan in February, without fanfare but with a cautious note of optimism. After numerous pointless meetings, the west finally concluded that Iran may finally be ready for negotiations. No longer did it insist on including the Syrian, Palestinian, or the Shi’a conflicts as part of the negotiation package.
The recent Almaty II (April 5-6) round of negotiations also began with a note of optimism. Tehran’s insistence that it had its own fresh proposals caught everyone by surprise. Saeed Jalili, Iran’s chief negotiator and his “realistic proposals” turned out to be almost identical to those made some ten months earlier in Moscow. In fact the abyss between the west and Iran were so immense that it seemed unlikely an agreement could be reached in this round of negotiations. The question then is why the abyss? How can it be narrowed, and what price both sides will have to concede? Perhaps a reassessment is necessary:
What the world powers expect from the Islamic Republic?
The west has now lowered its expectations, agreeing to negotiate without preconditions. Its demands are straightforward. As a signatory to the Nuclear Non-Proliferation Treaty, Iran is entitled to enrich uranium for peaceful purposes. However, Iran is expected to be transparent in accordance with the terms of the NPT. It must cease its uranium enrichment at 20 percent, which is apparently a few technical steps short of producing bomb-grade uranium. The Islamic Republic is also expected to suspend its operations at its underground facility at Fordo, near the holy city of Qom. In return the west will facilitate Iran’s petrochemical exports and ease sanctions for the government to deal with gold and precious metals.
What Iran aims to achieve?
Iran demands quid pro quo action for every step it takes. It expects the lifting of US and European sanctions against its oil exports and Central Bank. Tehran hopes that this will facilitate its banking sector to regain access to SWIFT (Society for Worldwide Interbank Financial Telecommunication) network. Currently the Islamic Republic is unable to transfer its revenues from the sale of its oil to its banks. Thus the country is in dire need of hard currency and countries that buy Iranian crude, like China and India, are unable to make payments in hard currency. Iran is therefore forced to barter goods and services in exchange for oil. The sanctions have also limited Iran’s sale of oil from nearly two million to less than 800,000 barrels per day.
Nothing could have been achieved during this round of negotiations. Foremost, the one and only person who could have changed the game play was Ayatollah Khamenei, the Supreme Leader, who was not convinced that now is the opportune time to negotiate. The Supreme Leader regards himself a revolutionary, not a politician. As such he has little faith in diplomacy. Despite the hardship and difficulties that sanctions have imposed on the Iranian people, the Supreme Leader has called for an “economy of resistance” and is convinced that Iran has managed to thwart the pressures imposed by sanctions.
The Iranian presidential elections are only two months away. For the moment, the Supreme Leader feels that the greater hurdle lies within the country. Any compromise with the west would only be interpreted as a sign of weakness. The aftermath of the 2009 presidential elections was a costly affair. The Iranian government lost support of the Green Movement which included a broad coalition of middle class Iranians (reformists, young, women, educated, intellectuals) who were willing to initiate change by working within the system. Presently this coalition, alienated and marginalized as conspiratorial, is labeled the “fatnah,” and its leaders, Mousavi and Karrubi are languishing under house arrest. The present conservative government has managed to paint itself into a corner leaving little or no option available to negotiate with the world, short of back tracking in its own steps. This too would be suicidal.
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Ironically, in his closing remarks at Almaty, Mr Jalili responding primarily to the Iranian media, stated that “the world powers must gain the trust of the Iranian people… must demonstrate their will, sincerity and proper behavior in the future…” He further added that the sanctions have strengthened the Iranians more than ever. In its most recent efforts Iran has tried hard to convince the world that sanctions have failed to prevent the government from enrichment of uranium. A NIAC report published days before the Almaty II meeting entitled Never Give In and Never Give Up states that despite the economic pain, “sanctions have failed to affect the Iranian government’s nuclear policy and are unlikely to do so in the future, given the perceptions and calculations of the Iranian elite.”
The reality is far from the truth. The price Iran has had to pay for its persistence is significant. Recent studies show that the cost of Iran’s nuclear program has exceeded 100 billion dollars, and even the Bushehr reactor, if and when in full operation can only provide 2% of Iran’s electricity. In addition, the sanctions combined with an untimely lifting of subsidies, mismanagement of billions of oil revenues and corruption on a grand scale has caused an economic havoc beyond imagination. In one such grand larceny, three billion dollars disappeared from the Iranian banking system which involved high ranking governmental officials, bankers, investors and Majlis deputies. So far four have received the death sentence.
The value of the Iranian currency, the Rial, has fallen by almost 60% in less than a year. The value of the Rial to the dollar was 120,000 Rials per US dollar a year ago. Today, the average black-market rate is 350,000 per US dollar. While the Iranian Central Bank has announced that a monthly income of less than 1,700,000 Rials for a family of four falls short of the poverty line, this includes no less than 35% of the total population of nearly 80 million Iranians. The private sector is virtually destroyed. Unemployment figures do not exist but is estimated to be 20% while the inflation is estimated to be nearly 30%.
Can a solution be found?
The problem can be resolved only if significant and drastic measures are taken by the Islamic Republic to join the international community of nations and to recognize that a transparent policy, both domestic and international, will return it to a position of respect and authority within the international community.
Iran was and continues to be a significant regional power in the Middle East, along with Turkey, Egypt, Saudi Arabia and Israel. This position is still within Tehran’s grasp if it follows a policy of mutual trust and cooperation, rather than one of confrontation. Iran has problems at home, including with its forgotten ethnic minorities, as well as with its neighbors and the world at large. The Islamic Republic must decide whether it wishes to be another North Korea or a respected member of the international community.