At an IISS–Americas event jointly organised and hosted by the US–UAE Business Council on 24 February, I argued that the economic benefits to Iran from the accord over its nuclear programme will, over time, make it a less hostile nation.

As I have previously written, the desire for sanctions relief as soon as possible incentivised Iran to carry out its initial requirements under the nuclear deal, termed the Joint Comprehensive Plan of Action (JCPOA), quicker than most foreign observers thought possible. Finishing it up by mid-January and then striking two other deals on detainees and impounded assets gave President Hassan Rouhani’s government and supporters bragging rights prior to the 26 February elections for Parliament and the Assembly of Experts.

Iranian business with the Western world will not resume quickly. European banks remain cautious about handling transactions with Iran, even those that seem clearly legitimate, lest they fall foul of remaining US sanctions and the fining authority of various US jurisdictions, including not just the US Treasury but also local prosecutors in Manhattan. 

Iran is getting access to unfrozen revenues from oil sales, however. And even though the amount is less than $50 billion – far less than the $150bn figure trumpeted by fact-averse US presidential candidates – it provides immediate help to the Iranian economy. 

To keep the money flowing from new oil sales and to encourage the additional trade and investment it seeks, Iran has a strong incentive to faithfully implement the nuclear deal. Only if new sanctions were imposed that blocked these economic benefits would Iran have reason to break the deal and resume its march toward a quick nuclear-weapons break-out capability. Whoever moves into the White House next January 20 would be foolish to give Iran such an excuse without good cause.  

It is legitimate to ask whether Iran’s ongoing missile development or regional meddling would give such cause. The claim is sometimes made, for example, that Iran has been emboldened by the deal to flex its muscles in the region. For the most part, however, this muscle flexing pre-dates the JCPOA.

Iran’s recent missile tests, while probably not a violation of the current Security Council resolution, which gives Iran arguable leeway on missiles that are not necessarily designed for nuclear-weapons delivery, are particularly worrisome to Iran’s neighbours. In Gulf states there are rumours that President Barack Obama wants to visit Iran before he leaves office. Such a visit is fanciful, unless it were to be tied to a significant ‘deliverable’, such as Iranian agreement to limit its missile tests, something that also seems unlikely.  

With regard to Iran’s regional activities, there is a tendency for exaggeration. Ever since the 1979 Revolution, the Islamic Republic of Iran has been seen as a revisionist actor, exporting its revolution, supporting terrorist groups and seeking to dominate its region. But while the Iranian Revolutionary Guards (IRGC) still foments trouble, the paradigm is shifting, as Jane Kinninmont writes. In Yemen and Lebanon, Iran continues to support rebels and non-state actors, albeit not as the instigator of trouble in the former. In Syria and Iraq, on the other hand, Iran plays a conservative role, struggling to prop up existing regimes and casting itself as the defender of order, improbable as that may seem.

At a recent IISS workshop with security experts from Iran and GCC states, there was general agreement that reaching the nuclear deal was important. Participants differed, however, in their assessment of its potential impact in other areas. While Iranian participants were optimistic that the deal would stimulate future cooperation on regional issues, Arab participants generally viewed the JCPOA as just ‘buying time’ before Iran resumes a drive in 15 years for nuclear-weapons capabilities. And at that point, Iran will be stronger economically and militarily.

I also worry about Iran’s nuclear capabilities when the JCPOA limits come off. It is therefore vital that the next 15 years not be wasted. Concerted efforts are needed to induce Iran to become a better neighbour. The deal can help, because every year that it is faithfully implemented will help to create trust that the nuclear programme is peaceful.

The troubles in Yemen, Syria, Iraq and Lebanon will be hard to resolve without first overcoming the enmity between Iran and Saudi Arabia. Reconciliation will likely be harder for the Saudis, who view Iran as an existential threat, given its larger population, economy and size in addition to its threatening rhetoric and adventurism. Iranians do not have a mirror image of Saudi Arabia. They may not like or respect the kingdom, but they do not fear it. Iran is thus more ready to compromise on Yemen and to reach a modus vivendi with respect to Lebanon. While Alawite-controlled Syria is deemed to be vital, Iran should be able to manage differences regarding Iraq and Bahrain.  

For the United States, upholding the JCPOA will help foster conditions that would allow for Iran-Saudi detente. Firstly, economic improvement will enhance the relative power of Rouhani and other pragmatists. Secondly, as Richard Nephew argues, to the extent that Iran feels less isolated and more secure, it is more likely to take a constructive approach to regional issues.

It was not expected that the JCPOA would bring quick changes to Iran’s behaviour at home or abroad. Supporters of the deal anticipated, rather, that the regime would continue to be a dangerous and repressive. Hardliners would fight back to try to keep Rouhani from becoming too powerful. Over time, though, and probably in the span of the 15-year JCPOA, generational and social transitions are coming to the Islamic Republic.

There will be ups and downs, and tensions could get worse. The key, as Nephew put it, is to ensure that Iran understands that, while it has a place in the region, it will not be permitted to dominate. Washington must demonstrate that it will not abandon its partners or interests in the Middle East, or its values. While firmly pushing back on IRGC meddling, the US should meanwhile encourage its partners to seek detente. 

Mark Fitzpatrick (@FitzpatrickIISS) is Executive Director of IISS–Americas. His article ‘Iran: A Good Deal’ appeared in the October–November 2015 issue of Survival.

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