Monday,11 December, 2017
Current issue | Issue 1279, (21 - 27 January 2016)
Monday,11 December, 2017
Issue 1279, (21 - 27 January 2016)

Ahram Weekly

A turning point for Iran

The lifting of the international sanctions against it is a huge breakthrough for Iran, even though it remains a challenge for its edgy Arab neighbours, writes Salah Nasrawi

Rouhani
Rouhani
Al-Ahram Weekly

For Iran, the beginning of the implementation of its landmark nuclear deal with the West this week was a moment to celebrate. It was another diplomatic triumph that will end the Islamic Republic’s isolation and reopen the doors to the international economy.

“Today is a historic and exceptional day in the political and economic history of the Iranian nation,” declared President Hassan Rouhani in a press conference following the announcement of the lifting of the Western economic sanctions on Iran.

The lifting of the crippling sanctions came after certification by the International Atomic Energy Agency (IAEA) on Saturday that Iran has successfully completed all the nuclear-related steps to which it had agreed with the 5+1 powers in July.

The 12 years of sanctions have had devastating effects on Iran where millions of Iranians have been left living with a shortage of medical services, basic goods and services. The punitive measures also imposed a state of diplomatic isolation on Iran that weakened its international standing.

The embargo compromised the Iranian economy, and the country suffered from the devaluation of its local currency, the rial, double-digit inflation and an unemployment rate of nearly 11 per cent.

The lifting of the sanctions, however, means the government and people of Iran will now start to feel the enormous benefits of the agreement, which will make this regional power rebound from its misfortune.

The removal of the oil- and gas-related US and EU sanctions means that Iran can now resume its sale of oil and gas worldwide, having been restricted to selling it to a handful of countries, including China and India.

Even with plummeting oil prices, Iran plans to ramp up daily exports by some 500,000 barrels per day from one million barrels currently. It plans further increases in the months ahead.

The cancellation of the embargo also means foreign oil and gas companies are now free to enter Iran’s energy market, with American and European companies poised to become Iranian partners and bringing with them world-class technology.

It will allow Iranian banks to restore ties with the Western banking system and to open new business opportunities in the country to multinational corporations.

More than $30 billion (Iran says $100 billion) in assets overseas will become immediately available to Iran. While the money is expected to be injected into the Iranian economy, much of the funds are expected to be used as foreign currency reserves to protect the value of the rial.

The lifting of the sanctions will also allow Iranians to resume foreign trade and travel, and the transfer of assets to a wide range of individuals and companies. Politically, the lifting of the sanctions on Iran is expected to have a far-reaching implication on the country’s global politics, mostly on its regional standing.

Iran is expected to emerge politically stronger and with its regional influence increased. For precisely this reason, celebrations in the region have been muted. While most Arab nations, such as Saudi Arabia, have abstained from congratulating Iran or welcoming the deal, only Iraq and Oman have voiced positive reactions.

Iraq’s Prime Minister Haider Al-Abadi, whose Shia-led government is one of Iran’s key regional allies, described the agreement as “historic”. Oman’s Foreign Minister Yusuf bin Alawi said: “The spectre of war has disappeared.”

 Right from the outset, Saudi Arabia and its allies in the Gulf Cooperation Council (GCC) have opposed the Joint Comprehensive Plan of Action, as the deal is known, and made every possible effort to thwart the agreement.

Saudi Arabia, an Arab Sunni powerhouse, has been concerned about Shia Iran’s growing regional influence and, from Riyadh’s perspective, a nuclear deal will leave Tehran stronger politically.

Saudi Arabia also suspects that the deal will not stop Iran creating a nuclear weapon, since the deal will only take effect for a relatively short period of time, 15 years, and will not destroy Iran’s technical capabilities to maintain a nuclear programme. The results will embolden Iran and its Shia allies in the region, according to this perspective.

Surprisingly, Iran has wasted no time in throwing down the gauntlet and defying Saudi Arabia for its opposition to the nuclear deal and the lifting of sanctions. Shortly after the announcement of the deal, Rouhani was quick to point to Iranian-Saudi political tensions and the security rivalry that has dominated the two countries’ relationship for nearly four decades.

“Saudi Arabia did not apologise for the pilgrims killed in the human tragedy in Mina,” said Rouhani, referring to the deaths of hundreds of Iranian pilgrims in a stampede near Mecca in September. He also said Saudi Arabia should pay reparations to the Iranian victims.

Rouhani blasted the oil-rich kingdom for “its behaviour towards the people in the region,” which he described as “not proper”. Rouhani specifically mentioned the Saudi-led campaign against the Shia rebel Houthis in Yemen, which he labelled as “the carnage of a Muslim nation”.

Rouhani bitterly criticised the Saudi government for the recent execution of the Shia religious leader Sheikh Nimr Al-Nimr, a vocal critic of the Saudi government. Riyadh cut diplomatic relations with Tehran following Iran’s protests against the execution of Al-Nimr.

On the other hand, Iran has also been raising the blood pressure of observers for some time in many Arab countries over its actions in several regional hot spots.

Saudi Arabia and its Gulf allies have serious questions about Iranian intentions in flashpoints such as Iraq, Syria and Yemen. There is little doubt that the rise in Iranian regional standing as a result of the new deal will raise tensions between Iran and the Saudi-led alliance further.

Saudi Arabia seems intent on trimming Iran’s regional influence by seeking to build a broader Sunni Muslim alliance to confront Shia Iran and its regional allies. Riyadh hopes that heavyweights, such as Egypt, Pakistan and Turkey, will join the 34-country Islamic coalition it said it is creating to battle terrorism but is widely seen as an anti-Iran alliance.

From Riyadh’s perspective, the three powerful Sunni-ruled nations, whose armies are among the largest in the world, could provide the much-needed critical mass to confront Iran.

Such support has been hard to win, however, as Cairo, Islamabad and Ankara have shown no great interest in actively joining such an alliance. Indeed, both Pakistan and Turkey, which have long borders with Iran, have offered mediation between Riyadh and Tehran, sidestepping the burden of having to pick sides.

Inevitably, the prospect of rivalry between the two regional powers is expected to be on an upward trajectory in the post-nuclear deal era.

With several sources of short- and longer-term tension in different arenas already evident, the two countries seem to be heading towards further split. Unfortunately, the key element of this confrontation is the widening Shia-Sunni split engaging the two regional powerhouses and their proxies.

This standoff is perhaps most glaringly apparent in Iraq, Syria and Yemen, which are expected to bear most of the adverse consequences of the competition for regional influence by Iran and its adversaries.

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