United States Institute of Peace

The Iran Primer

Four Dimensions of Nuclear Chess Game

Gary Sick

      A government negotiating with another government is almost inevitably required to conduct a second negotiation with its own domestic constituents whose own interests will be affected by the outcome. The classic image is the negotiator facing his foreign adversary over one table, then swiveling around to confront his domestic adversaries at a second table.
 
 
            In the current negotiations with Iran over the future of its nuclear program, the United States is facing something even more daunting. It is engaged in at least four separate negotiations at the same time:
 
1) Direct talks with Iran
 
2) Consultations with its negotiating partners in the so-called P5+1 – the five Permanent Members of the United Nations Security Council plus Germany – who must develop a unified bargaining position
 
3) Congress of the United States
 
4) Allies such as Israel and Saudi Arabia, whose interests will be impacted by the outcome.
 
            Success in one dimension of this chess match does not necessarily guarantee success in any of the others, although in the end a successful final outcome will require at least a measure of success in all four dimensions. Ironically, crafting an agreement with Iran could prove to be the easiest part of the diplomatic game. The most difficult challenge may be in the domestic political arena, particularly in the United States. Iran’s hardliners are also poised to challenge potential concessions.
 
            The following is a brief snapshot of the board so far:
 

Engagement with Iran

      By almost any measure, direct contact between U.S. negotiators and their counterparts in Iran has exceeded expectations. American official contact with Iranian officials has been rare, sporadic, and often almost illicit for most of the past 35 years, since the Iranian revolution and the subsequent hostage crisis. U.S. diplomats were often instructed to avoid even casual contact with Iranian dignitaries at routine diplomatic functions. The United States and Iran occasionally worked together openly, such as at the Bonn conference in December 2001, when Hamid Karzai was selected as the president of a new Afghan government. But the relationship had never been able to transcend longstanding political animosity.
 
             That has now changed. A senior U.S. official, who regularly briefs the media on the progress of the negotiations, said the United States and Iran no longer need to hold secret meetings. “When we need to solve problems, [we] email with the Iranians,” the official said. That kind of routine contact suggests that a return to the tensions of the past is progressively less likely – whether or not the current negotiations succeed.
 

Coordination with Allies

       The progress of negotiations so far has been achieved by coordination and discipline among the six major powers—Britain, China, France, Germany, Russia and the United States—who sit on the same side of the table opposite Iran. The cohesion appears to be genuine. The talks have also not been contaminated by policy clashes—especially between Washington and Moscow—over Syria, the Crimea, and East Asia, which could have intruded on the Iran negotiations.
 
 
            The senior U.S. administration official, speaking on background, addressed those issues after the meetings in Vienna on March 19, at a time when the Crimean crisis was dominating the media: “The P5+1… is very united.  We may have some different ideas, we may even have national positions which aren’t identical, but when we are in the room together, we are completely united. . . Everybody is very professional, very serious, very focused. If there is any humor, it’s of the good-natured variety. There are no histrionics. There’s no walking out. There’s no yelling and screaming. It is very professional, very workmanlike.”
 
            The parties have also not digressed from the main topic into other important but tangential issues, such as human rights abuses, ties to extremist forces such as Hezbollah, and Tehran’s support for the Syrian government. The major powers appear to have decided to defer such discussions until the nuclear issue has been resolved one way or another.
 

The U.S. Congress

      Many senators, both Republicans and Democrats, are intensely skeptical of the talks. Even before negotiations had begun in earnest, 59 senators from both parties supported a new round of sanctions, including a commitment to support Israel in the event it should attack Iran, a clear signal about potential future opposition. The Obama administration strongly opposed the bill, which did not get sufficient Democratic support to bring it to a vote.
 
      The administration has been careful to brief members of Congress throughout the negotiations, and the executive branch has diligently enforced existing sanctions during talks. Yet Congress may still intervene once terms of a deal are known. In the past, legislators have called for Iran’s program--including all centrifuges and enrichment sites—to be completely dismantled. Opposition has invoked “the four no’s: no enrichment, no centrifuges, no stockpile of enriched uranium, and no heavy water reactor.” 
 
            The administration has signaled that those terms exceed the requirements of the Nuclear Non-proliferation Treaty. It is expected to present any agreement with Iran as an executive agreement not requiring a two-thirds vote of the Senate for ratification. Nevertheless, cooperation with the Congress will be required in order to remove the many layers of sanctions imposed on Iran over the past 35 years. Most observers expect this domestic negotiation to be even more rancorous than the actual negotiations with Iran.

Regional Allies

      The concerns of regional states – notably Israel and Saudi Arabia– constitute the fourth dimension of this complex negotiation that a senior U.S. official has described as a Rubik’s Cube. Prime Minister Netanyahu has been outspoken in questioning the prospective nuclear deal, especially if Tehran is allowed to retain any ability to enrich uranium. In a CNN interview on April 27, he denounced it as “a terrible deal,” since it would leave Iran as a nuclear threshold state. He told an American audience: “Don’t let it happen.” That perspective could influence Congressional opposition.

 

 

 

  

Gary Sick, principal White House aide for Iran and the Persian Gulf on the Carter administration’s National Security Council, is now executive director of Gulf/2000, an international online research project on the Persian Gulf at Columbia University.

Click here to read his chapter on the Carter administration and Iran.

 

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Photo credits: Chess board by Prayitno/ more than 1.5 millions views: thank you! (Flickr: Chess) [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons, UNGA Ashton Security Council by European External Action Service via Flickr

 

Economic Trends : Month of April

Garrett Nada

      The biggest news in April was a gasoline price hike as President Rouhani began long-delayed subsidy reform. The cost of a liter jumped 75 percent; consumption reportedly declined by half within days. The move follows Supreme Leader Ayatollah Ali Khamenei’s warning that Iran will have to develop an “economy of resistance” to handle hardships. Additional cutbacks planned for food, water and electricity subsidies may have deep political and social impact—and potential opposition. But if consumption of water is not curbed, Iran could face water shortages this summer because of misuse or overuse of a dwindling resource.

            The International Monetary Fund reported that Rouhani’s government has taken effective steps toward economic stability. But economists also warned that more comprehensive reforms are needed to spark growth and create new jobs. The Statistical Center of Iran reported that youth unemployment averaged 24 percent during the previous Persian year, which ended on March 20. 
 
            Despite the uncertain outlook for Iran’s economy, several European delegations – from Austria, Britain, France and Switzerland—visited Tehran in April to strengthen bilateral ties and explore future trade. Iran’s non-oil exports actually rose by 10.4 percent compared to the same month in 2013. But oil exports fell for the second month in a row, down to 1.1 million barrels per day from 1.3 million in March. The following is a run-down of the top economic stories, with links, and videos of Rouhani’s comments in April.
 
 
DOMESTIC DEVELOPMENTS
 
Subsidies: 73 million citizens — some 95 percent of Iranians — signed up for cash handouts, despite government attempts to discourage affluent and middle-class families from registering for the $18 monthly payments. Tehran is projected to save some $482 million per month after some 2.4 million waived the handouts. Rouhani pledged to be transparent about how the money will be spent.
 

 

Gasoline: Subsidy cuts on gasoline raised the price of gasoline 75 percent to 7,000 rials for the first 60 liters, up from 4,000 rials. The price of each additional liter beyond 60 was raised to 10,000 rials from 7,000. Gasoline consumption was nearly halved in the days following the April 25 subsidy cut.
 
Natural gas: Iran is on course to become the world’s largest importer of natural gas by 2025 unless it controls rising consumption, according to the head of Iran’s Ministry of Petroleum Research Center.
 
Utilities: Electricity and water prices have risen by 20 percent on average since March.
 
IMF report: The International Monetary Fund reported that Rouhani’s administration has taken important steps to lower inflation. But economists warned that “Iran’s near-term economic outlook remains uncertain.”
 
Corruption: Iran’s judiciary has given Babak Zanjani until March 2015 to pay back his $2 billion debt to the National Iranian Oil Company. The businessman was allegedly involved in skirting oil sanctions and financial corruption. He never forwarded the oil revenue to the oil ministry, citing sanctions-related difficulties
            
Military’s role: Chief of Staff Genearl Hassan Firuzbadi claimed that the armed forces have “no economic mission” but will fully support Rouhani’s government with its workforce and resources.
 
Inflation: The Statistical Center of Iran reported that inflation dropped 5.7 percent during the second half of the previous Persian calendar year, which ended on March 20. By the end of the year, inflation was down to 34.7 percent.
 
Rouhani announced that serious steps will be taken to curb inflation this year and that price hikes would be minimal.
 
Unemployment: The Statistical Center of Iran reported that the average unemployment rate for the Persian year that ended on March 20 was 10.4 percent. Female unemployment was 19.8 percent, more than double the rate for men – 8.6 percent. Youth unemployment was even higher at 24 percent for those between ages 15 and 24.
 
Exchange: The official exchange rate hovered around 25,500 rials to the dollar for much of April. Vice President for Planning and Strategic Supervision Mohammad Baqer Nobakht announced that Iran will take a phased approach to unifying the multi-tier exchange rates.
 
Housing: Minister of Housing and Urban Development Abbas Akhundi announced that some 700,000 Mehr housing units would be allocated to low-income families.
 
Water: “Tehran, along with 10 other major cities, is at risk of water shortage,” according to Deputy Energy Minister Rahim Meydani. He warned that water shortfalls could impact half of Iran’s population in summer 2014 if consumption isn’t cut by as much as 20 percent.
 
INTERNATIONAL NEWS
 
Oil: Reuters reported that Iran’s oil exports fell in April for the second month in a row. Exports were down to about 1.1 million barrels per day from 1.3 million in March, perhaps due to lower demand from Indian buyers.
 
Chinese contract canceled: The National Iranian Oil Company cancelled a $2.5 billion deal with China National Petroleum Corporation for developing the giant South Azadegan oil field. The project had been stymied be repeated delays.
 
Energy deal with Iraqi Kurdistan: Rostam Ghasemi, head of the Iran-Iraq Economic Development Committee and a former oil minister, traveled to Erbil and signed an agreement with the Kurdish Regional Government to build oil and natural gas pipelines. The Kurdish government would receive 3 to 4 million liters of refined oil and natural gas in return for pumping crude oil to Iran.
 
Exports: Non-oil exports rose by 10.4 percent to $2.82 billion in the first month of the new Persian year (March 21 to April 20) compared to the same period in 2013.
 
Imports: Imports grew to $2.51 billion during the first month of the Persian year, up 21.53 percent compared to the same period in 2013.
 
Spare aircraft parts: Boeing and General Electric announced that they received licenses from the U.S. Treasury to export certain spare parts for commercial aircraft to Iran. Sanctions relief for Iran outlined in the interim nuclear deal allowed the Treasury to issue the licenses.
 
Russia oil-for-goods deal: Iranian officials have reportedly made progress on brokering a $20 billion oil-for-goods deal with Russia. Moscow would buy up to 500,000 barrels a day in exchange for equipment and goods.
 
Turkey free trade zone: Iran’s ambassador to Ankara, Alireza Bigdeli, announced that Tehran is planning to start talks on setting up a free trade zone in Salmas city near Turkish border.
 
Indian payments: India is expected to pay Iran $1.65 billion in oil payments during the next three months thanks to limited sanctions relief under the interim nuclear deal, according to Reuters.
 
Foreign Delegations: Diplomats, lawmakers and businesspeople from the United Kingdom, France, Austria, Switzerland, Nicaragua, Latvia, and Azerbaijan visited Tehran to boost bilateral ties and trade.
 
Pakistan pipeline: Pakistani Foreign Ministry spokesperson Tasnim Aslam denied reports that plans to complete the multi-billion dollar natural gas pipeline from Iran to Pakistan have been scrapped. She blamed delays on international sanctions on Iran and lack of investment.
 
Garrett Nada is the assistant editor of The Iran Primer at USIP
 
Photo credits: Gas station in Arak by SaMin SAmIN (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC-BY-3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons
 
EVENT: The Rubik’s Cube (tm) of a Final Agreement

The clock is ticking on a nuclear deal with Iran. The deadline is July 20. An unprecedented coalition of eight Washington think tanks is hosting three discussions on the pivotal diplomacy to coincide with the last three rounds of talks. The first event — "The Rubik’s CubeTM of a Final Agreement" — on May 13 will explore the 10 disparate issues to be resolved and the many formulations for potential solutions.
 
The coalition includes the U.S. Institute of Peace, RAND, the Woodrow Wilson Center, the Arms Control Association, the Center for a New American Security, the Stimson Center, the Partnership for a Secure America, the Ploughshares Fund, and staff from the Brookings Institution and the Center for Non-Proliferation Studies.
Agenda:
 
9:30- 9:35 AM: Welcome
 
    Ambassador William Taylor
    Vice President, Center for Middle East & Africa, U.S. Institute of Peace
 
9:35- 10:15 AM: Moderated Panel Discussion
 
    Robert Einhorn
    Senior Fellow, Brookings Institution and former Special Advisor to the Secretary of State
    Alireza Nader
    RAND Corporation and author of Iran After the Bomb
    Joe Cirincione
    President of the Ploughshares Fund
    Colin Kahl, Moderator
    Center for New American Security and former Deputy Assistant Secretary of Defense
 
10:15-11:00 AM: Q&A
 
 

Report: Improvement in Iran Press Freedom

            Press freedom in Iran has improved for the first time since 1999, according to a new report by Freedom House marking World Press Freedom Day. Despite the marginal progress, Iran still ranked as one of the 10 least-free countries in the world— along with Cuba, North Korea, Syria and others.The organization ranked countries on a 100-point scale with lower numbers signifying greater press freedom. The Islamic Republic’s score fell from 92 to 90 in 2013 “based on a relative improvement in the number of imprisoned journalists and reporters’ increased willingness to push the boundaries on political coverage.” The following are excerpts from the report.

 
            The world’s eight worst-rated countries, with scores of between 90 and 100 points, remain Belarus, Cuba, Equatorial Guinea, Eritrea, Iran, North Korea, Turkmenistan, and Uzbekistan. In these states, independent media are either nonexistent or barely able to operate, the press acts as a mouthpiece for the regime, citizens’ access to unbiased information is severely limited, and dissent is crushed through imprisonment, torture, and other forms of repression. In 2013, conditions remained largely stable in the majority of these countries, although slight improvements could be seen in some due to the growing ability of citizens to access alternatives to state propaganda, via satellite television, internet-based news platforms, or the circulation of thumb drives and DVDs… [A]fter several years of decline in Iran, the country’s score bounced back from 92 to 90 points in 2013 based on a relative improvement in the number of imprisoned journalists and reporters’ increased willingness to push the boundaries on political coverage, including on the June presidential election.
 
Iran's Press Freedom Score, 1993-2013
The lower the numeric score, the greater the press freedom.
10 Worst-Rated Countries on Press Freedom (out of 197 rankings)

Bahrain - 188
Syria - 189
Equatorial Guinea - 190
Cuba - 190
Iran - 190
Belarus - 193
Eritrea - 194
Turkmenistan - 195
Uzbekistan - 195
North Korea - 197
 
Click here for the full report.
 

US Report on Iran’s Support of Extremism

      Iran used its Islamic Revolutionary Guards Corps Qods Force and regional proxies to “implement foreign policy goals, provide cover for intelligence operations and create instability in the Middle East” in 2013, according to a new report by the State Department. Tehran also continued supporting Palestinian militants in Gaza and its Lebanese proxy, Hezbollah – which has played a key role in defending the Assad regime in Syria. The following is an excerpt from the Bureau of Counterterrorism’s annual report.

 
IRAN
 
            Designated as a State Sponsor of Terrorism in 1984, Iran continued its terrorist-related activity, including support for Palestinian terrorist groups in Gaza, and for Hizballah. It has also increased its presence in Africa and attempted to smuggle arms to Houthi separatists in Yemen and Shia oppositionists in Bahrain. Iran used the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and its regional proxy groups to implement foreign policy goals, provide cover for intelligence operations, and create instability in the Middle East. The IRGC-QF is the regime’s primary mechanism for cultivating and supporting terrorists abroad. 
 
            Iran views Syria as a crucial causeway in its weapons supply route to Hizballah, its primary beneficiary. In 2013, Iran continued to provide arms, financing, training, and the facilitation of Iraqi Shia fighters to the Asad regime’s brutal crackdown, a crackdown that has resulted in the death of more than 100,000 civilians in Syria. Iran has publicly admitted sending members of the IRGC to Syria in an advisory role. There are reports indicating some of these troops are IRGC-QF members and that they have taken part in direct combat operations. In February, senior IRGC-QF commander Brigadier General Hassan Shateri was killed in or near Zabadani, Syria. This was the first publicly announced death of a senior Iranian military official in Syria. In November, IRGC-QF commander Mohammad Jamalizadeh Paghaleh was also killed in Aleppo, Syria. Subsequent Iranian media reports stated that Paghaleh was volunteering in Syria to defend the Sayyida Zainab mosque, which is located in Damascus. The location of Paghaleh’s death, over 200 miles away from the mosque he was reported to be protecting, demonstrated Iran’s intent to mask the operations of IRGC-QF forces in Syria. 
 
            Iran has historically provided weapons, training, and funding to Hamas and other Palestinian terrorist groups, including the Palestine Islamic Jihad (PIJ) and the Popular Front for the Liberation of Palestine-General Command (PFLP-GC), although Hamas’s ties to Tehran have been strained due to the Syrian civil war. Since the end of the 2006 Israeli-Hizballah conflict, Iran has also assisted in rearming Hizballah, in direct violation of UNSCR 1701. Iran has provided hundreds of millions of dollars in support of Hizballah in Lebanon and has trained thousands of its fighters at camps in Iran. These trained fighters often use these skills in support of the Asad regime in Syria.
 
            Despite its pledge to support Iraq’s stabilization, Iran trained, funded, and provided guidance to Iraqi Shia militant groups. The IRGC-QF, in concert with Hizballah, provided training outside of Iraq as well as advisors inside Iraq for Shia militants in the construction and use of sophisticated improvised explosive device technology and other advanced weaponry. Similar to Hizballah fighters, many of these trained Shia militants then use these skills to fight for the Asad regime in Syria, often at the behest of Iran.
 
            On January 23, 2013, Yemeni authorities seized an Iranian dhow, the Jihan, off the coast of Yemen. The dhow was carrying sophisticated Chinese antiaircraft missiles, C-4 explosives, rocket-propelled grenades, and a number of other weapons and explosives. The shipment of lethal aid was likely headed to Houthi separatists in Northern Yemen. Iran actively supports members of the Houthi movement, including activities intended to build military capabilities, which could pose a greater threat to security and stability in Yemen and the surrounding region. 
 
In late April 2013, the Government of Bosnia declared two Iranian diplomats, Jadidi Sohrab and Hamzeh Dolab Ahmad, persona non grata after Israeli intelligence reported they were members of Iran’s Ministry of Intelligence and Security. One of the two men had been spotted in India, Georgia, and Thailand, all of which were sites of a simultaneous bombing campaign in February 2012, according to Israeli intelligence. Both diplomats were subsequently expelled from Bosnia. 
 
            On December 29, 2013, the Bahraini Coast Guard interdicted a speedboat filled with weapons and explosives that was likely bound for Shia oppositionists in Bahrain, specifically the 14 February Youth Coalition (14 FYC). Bahraini authorities accused the IRGC-QF of providing opposition militants with explosives training in order to carry out attacks in Bahrain. The interdiction led to the discovery of two weapons and explosives cache sites in Bahrain, the dismantling of a car bomb, and the arrest of 15 Bahraini nationals.
 
            Iran remained unwilling to bring to justice senior al-Qa’ida (AQ) members it continued to detain, and refused to publicly identify those senior members in its custody. Iran allowed AQ facilitators Muhsin al-Fadhli and Adel Radi Saqr al-Wahabi al-Harbi to operate a core facilitation pipeline through Iran, enabling AQ to move funds and fighters to South Asia and also to Syria. Al-Fadhli is a veteran AQ operative who has been active for years. Al-Fadhli began working with the Iran-based AQ facilitation network in 2009 and was later arrested by Iranian authorities. He was released in 2011 and assumed leadership of the Iran-based AQ facilitation network. 
 
            Iran remains a state of proliferation concern. Despite multiple UNSCRs requiring Iran to suspend its sensitive nuclear proliferation activities, Iran continued to violate its international obligations regarding its nuclear program. For further information, see the Report to Congress on Iran-related Multilateral Sanctions Regime Efforts (November 2013), and the Report on the Status of Bilateral and Multilateral Efforts Aimed at Curtailing the Pursuit of Iran of Nuclear Weapons Technology (September 2012). 
 
Click here for the full report.  
 

Rouhani on Freedom, Economy & Nukes

            On April 29, President Hassan Rouhani defended his administration’s foreign and domestic policies in a primetime address on state television. He dismissed hardliners who have opposed his outreach to the West and economic reforms that have recently raised prices. Rouhani said that he is proud of his government for creating an atmosphere in which citizens can criticize policies – “even though sometimes [they] make a mountain out of a molehill.” The president was also upbeat about prospects for nuclear negotiations and the lifting of international sanctions. The following are excerpted remarks from his semi-official Twitter account.

Nuclear Negotiations and Sanctions


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