One year after the historic nuclear deal, Iran is yet to witness the economic boom it was hoping for although it helped the country emerge as a regional power. The deal, which many say has barely survived and remains fragile, has also led to a regional realignment among Turkey, Israel and Saudi Arabia. Whoever succeeds Barack Obama as the next US President should treat Iran as a ‘natural ally’ and exploit the nuclear deal to his country’s best advantage. Tehran, on its part, wants to protect the deal unless pushed to the wall by Washington.

Any anniversary becomes memorable because in the final analysis, it is symbolic of something having sailed through life’s stormy waters. Therefore, what matters today is that Iran nuclear deal is one year old.

An Iranian flag flutters in front of the UN headquarters in Vienna

The mainstream opinion is that the deal (officially, Joint Comprehensive Plan of Action or JCPOA) has barely survived and remains fragile. Maybe, it is justifiable.

But the reason for saying so is, principally, because both in the United States and in Iran, there are domestic forces which, after trying and failing to block the JCPOA, have still not reconciled to it. You can lead the horse to water but can’t make him drink, after all.

The best evidence of mulish obstinacy is the legislation passed by the US House of Representatives last week to block the Boeing’s $25 billion deal to sell aircraft to Iran. Of course, the chances of the legislation becoming law are zero. President Barack Obama has done the smart thing by forewarning he would veto it.

But the significant thing is the determination of the US lawmakers to undermine the JCPOA under any pretext.

On the other hand, much can be listed on the positive side on the first anniversary of the JCPOA.

The most important point is that Iran has complied with its commitments to dismantle its nuclear program, including shipment of its enriched uranium stockpile to Russia. The International Atomic Energy Agency (IAEA) acknowledges this.

Second, the UN and EU sanctions against Iran have been removed, which facilitates Iran’s integration with the international financial and economic system.

In tangible terms, the main gain for Iran so far has been that its oil production and oil exports have increased, the country is gaining access to billions of dollars of blocked funds abroad, and trade and financial transactions have become easier.

However, Iran complains that the expected financial boost has not happened. Three factors are at work here.

One, the majority of US financial sanctions (relating to non-nuclear issues such as Iran’s human rights record or missile development or regional policies in Lebanon or Palestine, etc.) still continue, which in turn prohibit the use of US dollars in transactions with Iran by other countries.

Two, western banks are wary, given their past scrapes with the US Treasury Department (costing them billions of dollars in fines) of transacting business with Iran in perceived violation of the US sanctions – once bitten, twice shy.

Secretary of State John Kerry has worked to address these concerns but it is going to be a slow process to overcome inhibitions.

Three, Iran too needs to undertake transformative market reforms with a view to instill investor confidence and to ease the overall business climate. A veritable cultural revolution is needed to step out of the autarchic mentality.

The good thing is that there is already a ‘buzz’ in the western business circles that Iran is the last frontier.

Sub-plots are many

To be sure, the Iran nuclear deal has impacted regional and international security. There are negative and positive aspects to it. Clearly, the balance of forces has shifted with Iran’s emergence as a regional power.

Israel, Saudi Arabia and Turkey have to contend with this. (Egypt, Syria and Iraq are vastly diminished countries today.) They are groping for a way forward.

The Israel-Saudi nexus, Saudi-Turkish quasi-alliance and the recent Israel-Turkey normalization are manifestations of the uncertainties in the regional security.

Having said that, the realignment also has sub-plots. The Turkish-Iranian convergence on the Kurdish problem and their shared aversion toward the politics of sectarian rivalry that Saudi Arabia promotes, the two countries’ complementarity in the energy field (Turkey being an interesting market and a potential transit hub for Iranian exports) and trade and investment indeed temper their mutual policies.

Again, there are inherent contradictions in a Saudi-Israeli regional axis, the Saudi-Turkish quasi-alliance and the Turkish-Israeli normalization, which seriously retard their potential and prospects.

Over and above, Russia’s return to the region introduces a geopolitical template that superimposes on the regional alignments. Iran is a beneficiary so far but this may not remain so as the Russian-Iranian relations are also in transition.

The eagerness on the part of Israel and Turkey to harmonize with Russia is borne out of their acute awareness of the new geo-political reality. Again, the dramatic shift in the Turkish policies toward resuscitating the ties with Syria and Iraq can also be seen in this light.

The two regional states that face the specter of isolation are Saudi Arabia and Israel. Each is weighed down by an albatross – Saudi Arabia cannot get over its intense sense of rivalry (mixed with envy, fear and hatred) toward Shi’ite Iran; and, Israel refuses to address the Palestine problem and the Arab-Israeli conflict.

To be fair, it is not easy for either to get out of the present policy rut – much as they pretend to be cleverly maneuvering – because the dilemma is also existential in nature.

Anyhow, such leaps of faith that are required can only be possible under exceptional leaderships who have the ‘big picture’ and a sense of purpose even while navigating the ship of state through choppy waters.

The upshot of it all is that Iran – along with Turkey – is inexorably emerging as a major regional power in the Middle East. These two countries possess the capacity to show flexibility and pragmatism and to leverage their comprehensive national power optimally.

A natural ally

Put differently, the big question today is how the United States chooses to take advantage of the JCPOA. It stands to reason that the Obama administration has a good grasp of Iran’s political economy, where

  • Mainspring of Iranian policies is nationalism rather than militant Islam;
  • Politics of ‘resistance’ had a geopolitical context that is fast receding;
  • Elites are not necessarily ‘anti-American’;
  • Middle class and technocrats are highly ‘pro-western’;
  • Strategic congruence is achievable in regional policies;
  • ‘Red line’ is about preserving Iran’s regime; and,
  • As for the rest, it’s the economy, stupid.

Suffice it to say, JCPOA opens a fantastic window of opportunity for the US’ regional strategies, provided the American mind is capable of seizing the stunning truth that Iran can be a ‘natural ally’.

Today’s discourse – whether the JCPOA has a future beyond Obama’s presidency – actually needs to be turned around on its head to a question of how well the next US president can intellectually comprehend the puzzle that is Iran and can exploit the nuclear deal to his country’s best advantage.

Neither Donald Trump nor Hillary Clinton – or the US Congress – is going to be in a position to dictate to the world community its Iran policies. The US simply lacks the capability to do that in the emergent world order.

And Iran has made it abundantly clear that it intends to preserve the JCPOA spirit in letter and deed for dear life – unless pushed to the wall by Washington.

The feel-good factor on the JCPOA’s first anniversary is justifiable.

Ambassador MK Bhadrakumar served as a career diplomat in the Indian Foreign Service for over 29 years, with postings including India’s ambassador to Uzbekistan (1995-1998) and to Turkey (1998-2001). He writes the “Indian Punchline” blog and has written regularly for Asia Times since 2001.

(Copyright 2016 Asia Times Holdings Limited, a duly registered Hong Kong company. All rights reserved. Please contact us about sales, syndication and republishing.)

M.K. Bhadrakumar

M.K. Bhadrakumar is a former diplomat who served for more than 29 years as an Indian Foreign Service officer with postings including India’s ambassador to Turkey and Uzbekistan.

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