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Ayatollah Khamenei receives Iranian officials, ambassadors of Muslim countries, on 18 May 2015. khamenei.ir
Report 166 / Middle East & North Africa

Iran After the Nuclear Deal

Some in the West hope the nuclear deal with Iran will empower the country’s moderates. But playing Iranian domestic politics directly could backfire. The West should recognise that any change will be gradual, best supported by implementing the nuclear accord, resuming trade, and diplomacy that balances Iranian and Arab interests in the Middle East.

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Executive Summary

With the nuclear accord between Tehran and world powers in force, a chief question is what it means for Iran. The clash between competing visions of the country’s future has heightened since the deal. Many, there and abroad, believe it could rebalance domestic politics. It not only has boosted the profile of those who promoted it, but, more fundamentally, it has opened space for new debates in a domestic sphere that was dominated by the nuclear issue for more than a decade. Yet, the political system, with its multiple power centres and tutelary bodies, inherently favours continuity. As its guardians try to quell the deal’s reverberations and preserve the balance of power, any attempt by Western countries to play politics within the Iranian system – for instance by trying to push it in a “moderate” direction – could well backfire. If world powers hope to progress on areas of concern and common interest, they must engage Iran as it is, not the Iran they wish to see. To start, all sides should fulfil their commitments under the nuclear deal.

The accord comes at a sensitive moment. Over eighteen months, three pivotal elections are scheduled. February 2016 will see polls for parliament and the Assembly of Experts, whose key mandate is to choose the next supreme leader; in June 2017, there will be a presidential poll. With the supreme leader aging, many wonder if the next Assembly (during its eight-year term) will choose his successor, who could reshape the Islamic Republic’s course. President Hassan Rouhani’s competitors are concerned that he and his allies will parlay their foreign policy achievements into electoral victories.

Tensions within the Islamic Republic stem in no small part from its blend of popular sovereignty and religious authority. Theocratic forces seek to maintain the dominance of the supreme leader and other tutelary bodies, while republican forces advocate more clout for popularly-elected institutions. Each camp is further split between pragmatists who seek incremental political evolution and radicals who either resist any change or promote revolutionary transformation. The supreme leader – powerful but not omnipotent – maintains stability by accommodating both theocratic and republican trends. But his affiliation with the former makes for a balancing act that is as complex as it is imperfect.

The precariousness of this equilibrium means that policy shifts when pressure from below is accompanied by substantial consensus at the top. The nuclear talks illustrate this. Rouhani’s election and the sanctions-battered public’s demand for normalcy catalysed the process, but the agreement was not a single man’s achievement. Supreme Leader Ali Khamenei had endorsed bilateral negotiations with the U.S. before Rouhani ran for office. He then supported the new president’s diplomatic push and kept his opponents at bay. But given the leader’s aversion to risk, his support was qualified and did not obviate Rouhani’s need for a coalition with other power centres.

The president, who is from the republican camp, brought on board the most important allies: the pragmatic theocrats, who control the unelected institutions. Almost every powerful group had a say in the accord, which reflected a national, strategic decision to turn the page on the nuclear crisis even as concern remains over the world powers’ commitment. The establishment appears as determined to implement the deal as it was to seeing the negotiations through – and largely for the same reason: to resuscitate the economy by removing sanctions, either as envisioned in the accord or by showing that Iran is not to blame for failure.

Rouhani has encountered difficulties in other spheres. He was forced to freeze priorities behind which he could not generate sufficient consensus, including social and political liberalisation. But his economic agenda, aimed at stimulating growth after several years of recession, is likely to move forward, even though it damages entrenched interests that have profited under the sanctions regime.

Everything suggests Rouhani will continue with a prudent approach, and change is likely to be arduous, slow and modest. Though the U.S. and its European allies might nudge him to move faster, there is no way to speed the reform process and many ways to undermine it. Seeking to empower republicans – touted in certain quarters as a potential by-product of the nuclear deal – will not work, as many theocrats view that tactic as a stalking horse for regime change.

This does not mean giving Tehran carte blanche, domestically or regionally, but issues of concern will need to be addressed judiciously, taking account of Tehran’s legitimate concerns no less than its adversaries’. It also means Iranians – notwithstanding the imperfection of their governance system, which many are the first to acknowledge – should determine their country’s positions without undue external interference. Trying to shape Tehran’s regional calculus through a variety of carrots and sticks is standard foreign policy practice, but trying to shape or short-circuit the decision-making process itself is another matter. As seen in the nuclear deal and now in the economic realm, internal consensus, reached through a credible domestic process, is the only stable basis for progress.

The best option for Western states and Iran is to continue reversing the negative narratives from decades of suspicion and hostility by fully implementing the nuclear accord; creating discrete and non-politicised channels to address other issues of concern or common interest; and, eventually, pushing for regional security architecture that takes account of both Iranian and Arab interests. In the end, Iran and the West may not be able to agree on a range of issues, but trying to game the Iranian system will ensure that they will not.

Tehran/Istanbul/Brussels, 15 December 2015

U.S. President Trump and Iranian President Rouhani address the general debate of the General Assembly’s seventy-fourth session, 24 and 25 September 2019. Flickr/The White House, UNMedia/United Nations, CRISISGROUP

Iran Briefing Note #15

Iran Briefing Notes, of which this is the last of a series of 15 that began on 20 June 2019, highlight and provide context for major events featured on International Crisis Group’s Iran-U.S. Trigger List. This infographic resource tracks key flashpoints between Iran, the U.S. and their respective allies in the Middle East. 

Events of Note

Download the printable PDF and browse our interactive U.S.-Iran Trigger List for more updates. 

19 September: UAE signs on to U.S.-led International Maritime Security Construct.

20 September: U.S. sanctions Iran’s central bank, national development fund.

20 September: U.S. announces troop deployments to Saudi Arabia.

23 September: Joint UK/France/Germany statement says “Iran bears responsibility” for 14 September Aramco attack.

24 September: U.S. embassy in Baghdad issues security alert warning of “heightened tensions in the region” a day after rockets were launched toward Green Zone.

24 September: President Donald Trump tells UN General Assembly that “as long as Iran’s menacing behaviour continues, sanctions will not be lifted; they will be tightened”.

25 September: JCPOA ministerial meeting takes place in New York.

25 September: In UN General Assembly address, President Hassan Rouhani tells U.S. to “stop the sanctions so as to open the way for the start of negotiations”.  

25 September: U.S. Secretary of State Mike Pompeo announces “new action to disentangle the Islamic Revolutionary Guard Corps from the Iranian economy”; new sanctions designations.

25 September: President Trump issues a proclamation “to restrict and suspend the entry into the U.S., as immigrants or non-immigrants, of senior government officials of Iran, and their immediate family members”.

26 September: Supreme Leader Ali Khamenei contends that the Europeans “cannot be trusted at all, as they have betrayed all their commitments”.

27 September: Stena Bulk announces that Stena Impero, detained by Iran in July, "has now left Iranian waters". 

Ships in the Night

French President Emmanuel Macron on 24 September asserted that “the conditions … for a rapid return to negotiations have been created”. “It is now up to the Iranians and the U.S. to seize these conditions and work together to relaunch momentum”, he added.

Why it matters: Presidents Rouhani and Trump spent much of the week within a few New York city blocks from each other, but Iran and the U.S. remained poles apart on a diplomatic breakthrough. Despite efforts by President Macron and others to facilitate a direct and unprecedented meeting between the two leaders, the core conundrum, apparent for some time, remained unresolved: Tehran expects a financial reprieve before engaging in discussions that could lead to a meeting between the two presidents, while President Trump wants a meeting with his Iranian counterpart as the first step toward eventual sanctions relief. So long as neither side is willing to budge, their respective strategies – in Iran’s case, flexing its muscles on the nuclear and regional fronts; in Washington’s, the application of maximum economic coercion – remain a recipe for escalating tension. Yet the non-occurrence of a tête-a-tête ought not discourage fresh attempts to fashion a tactical de-escalation.

JCPOA Watch

In remarks after chairing a 25 September JCPOA ministerial meeting, EU High Representative Federica Mogherini stated that “there is a will to try and preserve the deal”, but also acknowledged that “it is increasingly difficult to do it”.

Why it matters: Iran’s incremental breaches of the 2015 nuclear deal, and Europe’s limited capacity to provide the economic benefits the agreement was meant to deliver, are sorely testing its core bargain. The most recent EU-Iran trade data illustrates the challenge in offsetting the impact of unilateral U.S. sanctions: for the period from January to July 2019, Iran’s exports collapsed by almost 94 per cent compared to last year; total trade was a quarter of 2018 levels. Furthermore, while the E3 (France, Germany and the UK) have thus far generally managed to keep the nuclear portfolio distinct from their concerns on other aspects of Iranian regional behaviour, the two sides traded barbs over Iranian culpability in the 14 September Aramco attack, which could portend a further straining of the thread by which the JCPOA still hangs.

Programming Note

This briefing note series was conceived and launched in June as a supplement to Crisis Group’s coverage and analysis of U.S.-Iran tensions. What was originally envisioned as a temporary endeavour has, owing to the rapidity and significance of developments on the regional and nuclear fronts, continued over fifteen editions. This is the final instalment. Yet we will continue to track developments on a daily basis through the Trigger List platform, as well as longer-form Crisis Group publications, and will introduce new formats as events dictate.

What to Watch

7-8 October: Warsaw Process working group meeting on cybersecurity in South Korea.

10-11 October: Warsaw Process working group meeting on human rights in the U.S.

21-22 October: Warsaw Process working group meeting on maritime and aviation security in Bahrain.

24-25 October: Warsaw Process working group meeting on energy security in Poland.

4 November: 40th anniversary of the U.S. embassy hostage crisis.

5 November: Iran’s next announced deadline for further reducing its JCPOA commitments.

8 November: Next quarterly International Atomic Energy Agency report on Iran’s nuclear program.

14-15 November: Warsaw Process working group meeting on missile proliferation in Romania.

Download the printable PDF and browse our interactive U.S.-Iran Trigger List for more updates.