Commentary Magazine


Iran Negotiations Are Bearing Fruit (for Iran)

President Barack Obama’s much-vaunted nuclear outreach to Iran is finally bearing fruit, although perhaps not in the way the White House expected. Certainly, when it comes to the fundamental issues relating to Iranian centrifuges and the duration of any extra inspection regime, the two sides are as far apart as ever, and they will remain so: Iran recognizes that despite senior American officials’ protestations to the contrary, the White House would rather have a bad deal than no deal.

When it comes to the Iranian economy, however, the negotiations have been nothing but positive. According to Iran’s Central Bank, the Iranian economy contracted by 5.4 percent in the Iranian calendar year ending on March 20, 2013. Obama’s team promised Iran perhaps $7 billion in sanctions relief just to come to the table to negotiate. Such relief was strategically inept, the equivalent of giving a little kid desert first and then inviting him to the table to eat his spinach. If the Iranian leadership’s goal was economic relief, they achieved it even before talks began.

The Obama administration has assured that sanctions relief was reversible, and if Iran didn’t play ball, they’d be back in the same dire position they had put themselves into before. That, of course, was nonsense. Momentum matters in international relations, as does greed. Once sanctions were loosened, it would be near impossible to ratchet up significant pressure again.

For Iran, the decision to talk rather than to compromise is the gift that keeps on giving. Consider the latest headlines:

  • Iran has announced that in the first five months of the Iranian year (March 21-August 21, 2014), trade volume has increased 136 percent.
  • The deputy finance minister announced yesterday that foreigners’ willingness to invest in Iran has increased 500 percent. In addition, Iran has announced that they have received more than 300 European and Arab trade delegations.
  • Iranian officials singled out Qatar, the tiny, gas-wealthy Persian Gulf emirate that increasingly finances terrorist groups and encourages the growth of radical Islamism abroad, for its willingness to invest in Iran.

Between 2000 and 2005, European Union trade with Iran more than doubled. At the same time, the price of oil quintupled. Iran took that hard currency windfall and invested it in its nuclear and ballistic missile programs. As Iran redoubles its investment in its military, nuclear, and ballistic missile programs, the region will be paying the price for years to come for allowing Iran such a cash windfall without winning anything in exchange.

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