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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

Israeli PM Netanyahu presents imagery of an Iranian "secret nuclear site" in Jerusalem on 9 September. Prime Minister of Israel

Iran Briefing Note #13

Iran Briefing Notes highlight and provide context for the previous week’s major events featured on International Crisis Group’s Iran-U.S. Trigger List. This infographic resource tracks developments on key flashpoints between Iran, the U.S. and their respective allies in the Middle East.

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

Events of Note

6 September: National Security Advisor John Bolton shares imagery of Adrian Darya 1 off Syrian coast, adds “Iran’s not getting any sanctions relief until stops lying and spreading terror”.
 
7 September: Iran detains towboat and 12 Filipino crew on suspicion of fuel smuggling.

7 September: Iranian nuclear agency briefs details of “third step” JCPOA breaches, including the activation of advanced centrifuges.

8 September: Acting International Atomic Energy Agency (IAEA) director general in Tehran for meetings with senior Iranian officials.

8 September: Iran’s foreign ministry indicates that “the Adrian Darya oil tanker finally docked on the Mediterranean coast and unloaded its cargo”.

8 September: Secretary of State Mike Pompeo estimates that Iran’s “GDP will shrink by as much as 12 or 14 per cent this year”.

9 September: Hizbollah claims to down and retrieve Israeli drone.

9 September: Airstrikes reportedly hit “Iran-backed militias” in Al-Bukamal on Syria’s border with Iraq.

9 September: Israeli military says “a number of rockets were fired from Syria toward Israel… all failing to hit Israeli territory”.

9 September: Prime Minister Benjamin Netanyahu claims that Iran “conducted experiments to develop nuclear weapons” at a secret site, Abadeh; Foreign Minister Zarif hits back saying that “the possessor of real nukes cries wolf”.

10 September: Drone strike reported against Iraqi paramilitary weapons facility in Anbar province.

10 September: Secretary of State Pompeo contends Iran’s “lack of cooperation with IAEA raises questions about possible undeclared nuclear material or activities”.

10 September: President Donald Trump announces departure of John Bolton as U.S. national security adviser.

10 September: U.S. Treasury announces sanctions designations against “fifteen leaders, individuals and entities affiliated with terror groups”, including from the Islamic Revolutionary Guard Corps Qods force and Hamas.

September Surprise

Prime Minister Benjamin Netanyahu on 9 September claimed to expose a “nuclear weapons development site” near Abadeh and called for “pressure, pressure and more pressure” against Iran.

Why it matters: Netanyahu’s disclosure, based on Iranian archives exfiltrated by Israeli intelligence last year, left some key details unaddressed: namely, what sorts of experiments Iran had conducted and when. But it underscored the recent prioritisation of Iran’s nuclear activities as the most pressing issue for Israel’s military and intelligence services. The timing of the announcement, just days before Israelis head to the polls on 17 September, led Netanyahu’s political rivals to cry foul; his office insisted the disclosure was appropriate given parallel developments in Vienna (see below). Expect Netanyahu to throw more surprises, particularly if, as Israeli officials have reportedly concluded, the prospects for some kind of U.S.-Iran diplomatic breakthrough increase.

Once More into the Breach

A spokesperson for the Atomic Energy Organization of Iran (AEOI) on 7 September confirmed that “we have started lifting limitations on our research and development imposed by the [nuclear] deal”, including the activation of advanced centrifuges.

Why it matters: Iran’s third step in reducing its compliance with the JCPOA furthers its staggered breaches to add urgency without emergency vis-à-vis European efforts aimed at countering the economic toll of U.S. sanctions; a 60-day clock is already running toward the next rollback. French Foreign Minister Jean-Yves Le Drian on 8 September asserted that “the channels for dialogue are still open… [but] Iran must give up such actions”. Meanwhile, the IAEA’s Acting Director General, Cornel Feruta, on 9 September told the IAEA Board of Governors that in Tehran the previous day he “stressed the need for Iran to respond promptly to Agency questions related to the completeness of Iran’s safeguards declarations”. “Time”, he added, “is of the essence”.

Signed, Sealed… Delivered.

Iran’s diplomatic spokesperson on 8 September announced that the Adrian Darya 1, which was released from detention by Gibraltar last month after Tehran provided “written assurance” that the crude oil cargo would not go to a recipient blacklisted under EU sanctions, had “unloaded its cargo” at an unnamed Mediterranean destination.

Why it matters: Following a commando operation, a seizure, a U.S. warrant, a release, a renaming, a sanctions designation, a failed financial inducement and a sighting off the Syrian coast, the 2.1m barrels aboard the Iranian tanker have apparently found a home. But while Tehran trumpeted the sale “despite all the malicious attempts” to block it, there will almost certainly be consequences: the UK – one of Iran’s three European JCPOA interlocutors – on 10 September protested that “Iran has shown complete disregard for its own assurances” and plans to pursue the matter at the UN. The setback is also unlikely to deter continued U.S. efforts to disrupt Iran’s evasion of its unilateral sanctions, leaving the hatch open to future rounds of intrigue on the high seas.

Exit John Bolton

President Donald Trump on 10 September announced that he had “informed John Bolton last night that his services are no longer needed at the White House”, adding that “I disagreed strongly with many of his suggestions”.

Why it matters: In the hours before President Trump announced his sacking, National Security Advisor John Bolton fired off two tweets. The first contended that “two weeks from the UN General Assembly, you can be sure Iran is working overtime on deception”, while the second declared that “we stand strong against regimes that sponsor terror”. As the White House debates whether and how to respond to French proposals to de-escalate tensions ahead of the General Assembly, the departure of perhaps the most hardline voice on Iran inside the administration could move the needle toward U.S. acceptance of limited sanctions relief, which Trump has been considering and which Bolton opposed, in return for Iran returning to compliance with the nuclear accord and agreeing to enter into negotiations over a broader deal. Some reduction in sanctions was one of Iran’s prerequisites for a meeting between Trump and President Rouhani on the margins of the General Assembly. A package deal would still need to be agreed, and Tehran appears very leery of such an encounter. But Bolton’s departure could mean more flexibility on the U.S. part, and greater confidence on Iran’s.

What to Watch

12 September: Prime Minister Netanyahu in Sochi for meeting with President Putin.

16 September: President Rouhani in Ankara for Syria summit with Presidents Erdoğan and Putin.

17 September: Elections in Israel.

17-30 September: UN General Assembly, which Iran has announced Rouhani will attend; JCPOA Joint Commission meeting on the sidelines.

22 September: 39th anniversary of start of Iran-Iraq war.

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

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