Home / Opinion / Iran Nuke Talks: What if Sanctions are Lifted ? | David Blair
Iran Nuke Talks: What if Sanctions are Lifted

Iran Nuke Talks: What if Sanctions are Lifted ? | David Blair

Iran stands to reap a windfall gain of about 25 per cent of its entire economy if $100 billion (£65billion) of frozen assets are released under a nuclear deal. This sum is likely to be unlocked – in whole or in part – if America and Iran meet Tuesday’s deadline for a final agreement that would settle the confrontation over Tehran’s nuclear programme.

After more than a week of talks with his American counterpart, Mr Zarif released a video message cautioning that there was “no guarantee” of success and “some differences” still remained. But Mr Zarif added: “I see hope because I see the emergence of reason over illusion. I sense that my negotiating partners have recognised that coercion and pressure never lead to lasting solutions, but to more conflict and further hostility.” Mr Zarif stressed that any agreement must relieve Iran of “indiscriminate and unjust economic sanctions”. Noting that America and its allies have “opted for the negotiating table,” he added: “But they still have to make a critical and historic choice: agreement or coercion?” This is the kind of language that unnerves America’s traditional allies in the Middle East, particularly the Gulf states and Israel. They are wary of the prospect of Iran shaking off the burden of sanctions and benefiting from a sudden infusion of cash as the regime’s bank accounts, holding billions of dollars, are unfrozen.

They believe that Iran’s impending windfall could enhance its ability to supply weapons and funds to extremist forces across the region. Officials from the Gulf states predict the money could pass into the hands of their bitter enemies, including Bashar al-Assad’s regime in Syria, Hizbollah in Lebanon and Shia militias in Iraq. In total, Iran is believed to possess between $100 billion and $150 billion of frozen assets. The country’s entire gross national product (GNP), meanwhile, was less than $400 billion (£270 billion) in 2013, according to the World Bank.

If America and its allies opted for caution and chose to ease the restrictions in stages, then unfreezing half of the assets would represent a 12.5 per cent gain for the Iranian economy. In either case, Iran may stand on the verge of one of the biggest windfalls, relative to GNP, ever received by any country. “The money comes without strings attached,” said Randa Slim, from the Middle East Institute in Washington. “This is not a loan, it’s not a grant, it’s not an IMF programme: it’s their money which has been accumulating over the years.”

Given the likelihood of a nuclear deal in the coming days, Iran’s rivals are voicing their fears about what Tehran might do with an extra $100 billion. Privately, one official from a Gulf state asked a Western counterpart whether Iran’s ability to sponsor armed groups was about to be “turbo-charged”. Western diplomats have tried to allay these concerns. They stress that Iran has endured years of economic decline, creating a multitude of pressing domestic needs for these funds. They predict that the regime’s priority would be to use any windfall to secure its own position, notably by trying to create jobs and revive the country’s dilapidated oil and gas fields.

Ms Slim agreed that the first aim of Iran’s rulers would indeed be to spend much of the windfall at home. But Ayatollah Ali Khamenei, the Supreme Leader, would also have to appease hardliners who instinctively oppose a nuclear deal. “He will have to show this constituency, which is in principle opposed to a deal, that they have something to gain,” said Ms Slim. “And that constituency is interested in the revolutionary project of Iran – and that revolutionary project is Syria, it’s Iraq, it’s Hizbollah. He will need to show that a nuclear deal brings more resources to continue that project.”

— Courtesy: The Telegraph

Iran Nuke Talks: What if Sanctions are Lifted ?  | David Blair

Source: http://pakobserver.net/detailnews.asp?id=267663


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