How would an Iran ‘agreement’ impact on Iran’s geo-political situation?

Conflicts Forum's Weekly Comment, 27 Feb - 6 March 2015

We do not know whether there will be an agreement between Iran and the P5+1. This type of negotiation is always vulnerable to implode at the eleventh hour. And we do not know what any such agreement – were it to materialise - might include. But leaks suggest the following: that the US’ prime objective (and key requisites for Israel and the US Congress) is that the so-called break-out capacity must extend for more than a year, and that this requirement, in itself, dictates a number of variables. These are: the type and number of centrifuges; caps on LEU holdings; limits on higher percentage enrichment; the disposal of all uranium holdings above these ceilings, and a system of verification. Furthermore, the US Administration has, as its second priority, to freeze Iran’s break-out capabilities for a decade or more – in the hope that after this Iranian generation of leaders passes from the scene, Iran may be ‘tipped’ back into the western sphere. (In fact, President Obama made the demand for a double digit year freeze almost an ultimatum in his interview published on the eve of the Netanyahu address to Congress).

The break-out issues form the core of the ‘technical’ aspects of the negotiations (there are other issues of course), but if there were some understandings here, these aspects could form the scaffolding for a framework document that would lay out a path to further negotiations on the political issues. But these latter precisely are the thorny issues on which wide gaps remain: How long would ‘the freeze last’? When and how would sanctions be lifted? And importantly, what would this mean? What would ‘normalisation’ of relations between Iran and the US actually constitute? In other words, would a successful completion to the verification period mark an end to contention between the two states? Or, will other issues – such as human rights - continue to be raised, and block Iran’s acceptance by the west as a major regional power?

Why then should America be so concerned to have such an ambiguous and unresolved outcome? And would the present negotiation framework actually achieve America’s objectives? What would be its impact on Iran’s geo-political orientation? Might it result in the eventual tipping of a new Iranian generation toward the West?

The essential background to understanding the desire to strike even a loose bargain with Iran is rooted in America’s politico-military failures in the Middle East (Afghanistan, Iraq, Libya and Syria). In all these cases, the US has failed to turn its undoubted military capabilities into solid political achievements; but rather, use of military force has brought it clear political reverses. Understandably, then, there is a reluctance in Washington to use decisive military force in a repeat performance, especially in the case of Iran. America, in short, no longer believes in brute military intervention bringing home the political goods (hence the move into drone, covert, cyber and geo-financial warfare, believing that these tools can bring America some political leverage - lost on the field of conventional military intervention).

But in respect to Iran, the situation is more complex: There is no assurance that decisive US military action (short of using nuclear weapons) against Iran’s nuclear programme will even bring a military success (against multiple hardened underground sites) – let alone bring a satisfactory political result. Destruction of Iran’s nuclear programme, in short, may be effectively beyond America’s military capacity (and political will). This is the ‘known unknown’, in Rumsfeldian terms. This fact, (and most of the Israeli security elite concur on the limitations of military action), essentially leaves America with the only real option of trying to negotiate some limiting arrangement with Iran. There is really no other alternative (given the US political realities), which is why we hear such frustration expressed by the US Administration at Netanyahu, when the former pokes at the talks strategy: Obama simply grinds his teeth and says: so what do you (Netanyahu) suggest, adding wryly to his own question - you offer absolutely nothing. As Fareed Zakariya commented in the Washington Post, "Netanyahu entered never-never land, painting a scenario utterly divorced from reality”.

Of course, the narrative remains that sanctions caused Iran to come to the table, and sanctions can be increased. But did they bring Iran to the table? What brought Iran to the table was a feeling held by an articulate, and quite western-orientated faction in Iran, that it was Iran’s style of rhetoric and pugnacious diplomatic stance that was underpinning sanctions, more than anything: change the style and substance of Iranian diplomacy and a deal could be reached, this faction led by President Rouhani argued, and succeeded in persuading the electorate of their case. (In the event, it has proved over optimistic: being ‘not-Ahmadinejad’ was not, in itself, sufficient to change western policy).

But an agreement with Iran would be important for America for another reason: it would also help resolve the Administration’s conundrum about how to manage a dismembering Middle East: The world has changed with accelerating speed around an America, which wishes neither to entangle itself deeper in its complex rhizome-like conflicts, nor dares to leave the region entirely alone.

So, it is looking for a new less ambitious posture: It is reaching for a (nineteenth century) balance of powers solution, by which America tries for limited, frozen conflict outcomes, but deliberately does not aim higher. Indeed, these limited conflicts are viewed even as possible tools which can help America to make the balance. They can be used to tip the balance this way or that – to suit America’s interests - between the four powers that make-up the power ‘balance’ in the region: Israel, Saudi Arabia, Turkey and Iran. America is playing the old Imperial game of divide and rule – and of course Iran is an essential cog to this piece of balance and counterbalance mechanism. Not surprisingly, Israel resents losing its place as America’s pole ally. It is being demoted to the status of just one among a ‘concert’ of powers.

But will the US objectives be achieved through a framework agreement – should such a thing transpire? In fact, the very blueprint of America’s approach to the talks paradoxically may lead, not to a ‘tipping’ of Iran towards the West, but to the East. If sanctions are not to be lifted, but merely suspended every six months by Executive Order, for a period of several years, which western energy major will care to invest long-term against such a short-term risk window of six months – and with a sword of Damocles too, hanging poised for re-imposition, for more than a decade? In fact, we already can see that the Chinese, who were temporarily pushed back (to provide some space for a mooted European return), have now begun to flood back into Iran. A decade long western ‘freeze’ will almost certainly ‘cook’ Iran – including the new generation - into its Eurasia orientation, both economically and culturally.

What is even more doubtful, however, is the entire notion that the Middle East – in its present condition – can be ‘played’ as a balance of power, rubic cube. The concept worked in Europe in the nineteenth century in part because there were well-defined nation states, a modicum of stability, a certain commonality of world view, and a degree of consensus about the rules of the game. None of this holds true for the Middle East today. None of the four powers pays particular deference to the US; none are particularly atuned to western interests; and some of the key actors are not nation states. But mainly there is no stability; rather we see the eroding of it everywhere. How would a balance of powers matrix help resolve Libya, for example?

It is fair to ask what else could America do? But to that perhaps, there is no answer. It seems more likely that these regional states will seek to make their own balance of power, irrespective of US designs.

So what are Iran’s options? It is cut off from the western global financial system, excluded from the so-called international community, and under sanction? Well, Iran is not so isolated, far from it. Russia and China are keen to establish a strategic relationship with Iran, and much of the non-West is open to forging closer trade and political relations. Iran’s strategic situation in the region is solid, and growing stronger (in Iraq, Syria and Yemen). Domestically, Iran has emerged as a more cohesive society from the turmoil of 2009. Iran has applied for membership of the SCO, and its application may be accepted this summer.

Of course sanctions and the drop in the oil price have had their effect, but exports (non-oil and oil) are rising well. More significantly, strategic geo-economic shifts are changing the Iranian calculus (China’s proposed Eurasian economic corridor through to Turkey offers the region a different pole of economic activity to that of Europe), and trade and commercial opportunities are being fundamentally altered by the Russo-Chinese initiative to set-up an analogue financial and trading and clearing system outside of the dollar-based sphere.

Iran has already dropped the dollar as a means of trading. And as the non-dollar economic system expands with a SWIFT financial clearing system alternative already launched, with Central Bank non-dollar currency swaps in place and a putative ‘non-dollar jurisdiction’ banking system under construction by China and Russia, Iranians are now more plainly seeing the alternative (and getting fed up with hanging on the eternal ‘will they/won’t they’ lift sanctions hiatus).

So, as Iran sees it, there is an alternative. But Iran may yet agree to a ‘political’ agreement, and one which does not resolve its conflict with the US. Why? Because Iran understands that the US (at least for now) is not seeking escalation with Iran, but rather the reverse: America needs Iran in order to help smooth its exit from Afghanistan; it needs Iran’s parallel contribution to the containing or defeating of ISIS; to finding a solution in Syria, Lebanon and Yemen. In short, America will be discreetly needing Iran in many areas (and thereby anyway indirectly confirming Iran’s pivotal regional status). In brief, facts on the ground are already demonstrating the new balance of power on the Middle East ground, and a political agreement would somehow reflect this shift, and perhaps also lower the political tensions with America – even if the situation in terms of US sanctions remains largely unchanged.

And if America takes a different turn with the Presidential election campaign promising to bid up the rhetoric of interventionism, or if Congress retaliates with more punitive sanctions, Iran will likely ‘up’ its enrichment programme, and re-commence 20% enrichment.