North Africa, West Asia

Can Iran turn crisis into opportunity?

Iran is facing what is what is potentially the greatest existential threat it has faced since its inception in 1979.

Mehrdad Khonsari
2 July 2018

People Iran's President Hassan Rouhani's speech at a teahouse in central Tehran on May 8, 2018. Picture by Ahmad Halabisaz/Xinhua News Agency/PA Image. All rights reserved.

“Those who do not learn from history are doomed to repeat it” George Santayana

In face of unprecedented US hostility buoyed by a host of regional adversaries like Saudi Arabia and Israel, the ruling establishment in Tehran needs to tread cautiously if it is to manage what is potentially the greatest existential threat it has faced since its inception in 1979. 

The choices before them are simple: continue as before and risk greater economic hardship, more internal unrest and possible military conflict; or provide instead through dialogue and engagement, real possibilities for economic recovery and a final end to Iran’s international isolation.

In a difficult ride that has endured one crisis after another, the Islamic republic has successfully managed not just to retain total control at home but to extend its influence as a powerful regional player. Yet, its economy is in tatters and the gulf between ordinary people and the regime in general and its hardline ideologues in particular has seriously widened with the passage of time.

Following President Trump’s announcement to withdraw from JCPOA and to reinstate previously removed sanctions, earlier promises to revive Iran’s ailing economy by creating jobs, curtailing inflation, salvaging the national currency and promoting over all prosperity by resolving the ‘nuclear dispute’ seems little more than a fading mirage.

Although the European signatories of JCPOA along with Russia and China have remained faithful to their commitments so long as Iran remains compliant to its obligations, the reality is that the scale of investments and technology transfers needed by Iran is simply beyond their grasp in face of persistent US opposition. The French president, Emanuel Macron, has been quite succinct in pointing out the reality that no European government can force any major private entity to risk jeopardizing its US operations for the sake of doing business with Iran.

The situation was further exacerbated when Mike Pompeo sent a 12-point ‘set of demands’ to the Iranian leadership - telling them amongst other things to give up Iran’s ballistic missile program, end all enrichment activities and cease involvement in every regional country it is currently involved in. Expectedly, his message was immediately rebuked by Ayatollah Khamenei and countered by Iran’s own ’15 point demand list’ as later announced by the Iranian foreign minister, Javad Zarif.

Yet somehow, irrespective of the current toxic atmosphere, the possibility for a potential ‘new deal’ with Iran has deliberately not been blocked by no lesser figure than president Trump himself. This was made abundantly clear in the tail end of his speech removing the US from JCPOA and repeated in more precise terms during the course of his press conference with the visiting Japanese prime minister in early June. This flexibility suggests that much like his earlier hard rhetoric against North Korea, the US President in concert with a responsive Iranian leadership could be a willing partner to once again confound everyone by squaring the circle.

Such a supposition would suggest that any initiative for exploiting possibilities for a more comprehensive ‘deal’ capable of meeting Iran’s broader expectations must now come from the Iranian leadership. Anticipating the urgent nature of this matter, some 100 well known Iranian political and social activists have signed an open letter demanding that direct negotiations with the US should now be actively pursued. While this call has been strongly rejected by hardline quarters close to Ayatollah Khamenei, the spirit of their message has received a positive response from a number of senior advisers close to president Rouhani.

Responding to this challenge while strategically strong in the region, is an obvious advantage for Iran’s bargaining position in what one Iranian journalist has dubbed as the ongoing “public negotiations’ following the ‘maximalist positions’ that have been advanced by both Pompeo and Zarif. The alternative, in the event of added altercations leading to further diplomatic discord and possibly military confrontation with the US, would in all probability weaken Iran’s bargaining position and play more directly into the hands of its regional competitors such as Saudi Arabia and Israel. Such an outcome in concert with continuing domestic protests, could lead to seriously detrimental consequences not just for the ruling establishment but also for the country.

Responding to this challenge while strategically strong in the region, is an obvious advantage for Iran’s bargaining position

The Iranian leadership has never been in a better position – i.e. given the existing level of international irritation with the Trump administration - for advancing its arguments for a more comprehensive new deal following America’s withdrawal from JCPOA. It is ironical that Iran stands to potentially gain a great deal more than an alternative scenario that would have had the US in the agreement but still obstructing the resumption of normal economic ties between Iran and the rest of the world.

It is now incumbent on Ayatollah Khamenei in particular to respond in support of Iranian national interest by not obstructing the start of direct Iran-US talks with the clear purpose of reaching a durable agreement that no longer leaves Iran reliant upon partners incapable of meeting its crucial economic needs. While president Rouhani’s pragmatic government might be amenable to such an outreach, it is those self-serving quarters associated with Khamenei who grudgingly continue to label any rapprochement with the US as a betrayal of the Islamic Revolution.

The hard-liners conveniently forget that while serving as president, Khamenei never opposed either repeated purchases of military equipment from Israel during the Iran-Iraq war nor the invitation that was extended to Robert McFarlane to visit Iran in what later became infamously known as the ‘Iran Gate’ scandal. At the time, pragmatism, not ideology was at the forefront of Khamenei’s consideration, much like the flexibility he later displayed over the nuclear issue when he allowed the Rouhani team to strike the JCPOA deal with the ‘5+1’.

Obstinate rigidity on the part of Khamenei in current circumstances can prove lethal both at home and abroad, while direct dialogue with the US can potentially lead to a situation that might avert economic uncertainties, domestic instability , external humiliation and regional chaos.

While Iran – just as the US - will undoubtedly have to make some concessions for reaching a durable compromise– similar to those made by countries like China, Vietnam and Cuba, each with their own past history of hostility with the US, the gains it can make are significant and well capable of bringing to realization the ambitious hopes of many patriotic Iranians for the future of their country.

Iranian leaders need to appreciate that for the foreseeable future, Europe, China and Russia are incapable of circumventing the US in meeting Iran’s urgent needs. Moreover, they need to realize that either buying time or becoming reliant on countries like China and Russia simply for purposes of counterbalancing the US, quite apart from its limitations, is hardly in the long-term interests of the Iranian people.

Mr. Khamenei, in light of America’s withdrawal from the nuclear deal, may be permitted to take some solace in having previously warned against “not trusting the Americans”, but it is a fact that as matters develop, only he will be held responsible for any harm that should befall upon the Iranian nation as a consequence of his intransigence in allowing for new talks.

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