Iran's Deadly Ambition. Ilan Berman
When the hardcover edition of Iran’s Deadly Ambition went to press in spring 2015, the nuclear deal between Iran and the countries of the P5+1 (the United States, United Kingdom, Russia, China, France, and Germany) had not yet been concluded. Back then, the substance of what was being negotiated behind closed doors in Vienna, Austria, and Lausanne, Switzerland, was the subject of extensive coverage in the media and the topic of even greater speculation in Washington and assorted foreign capitals. But the true extent of the compromise that was eventually reached over Iran’s nuclear ambitions wasn’t yet known.
Now it is. In July 2015, with great fanfare, the Obama administration formally unveiled the Joint Comprehensive Plan of Action (JCPOA), as the nuclear deal with Iran is formally known. With its release, the American public got its first real glimpse at the extent of the diplomatic bargain struck with Iran.
We have discovered that the agreement is not as bad as it was initially believed. It’s actually much worse.
While the JCPOA can be said to include some beneficial elements—short-term constraints on Iranian uranium enrichment, a reduction in the number of centrifuges operated by the Islamic Republic, and a delay of the regime’s “plutonium track”—it is materially deficient in at least three key respects.
First, the new nuclear deal does not dismantle Iran’s nuclear capability, as originally envisioned by the United States and its negotiating partners. Contrary to the Obama administration’s pledges at the outset of talks in November 2013, the JCPOA does not irrevocably reduce Iran’s nuclear potential. In fact, it does the opposite: under key provisions of the accord (specifically, those contained in the document’s four annexes), the P5+1 nations have actually committed themselves to strengthening and reinforcing Iran’s nuclear infrastructure and processes over the next ten years.1
As a result, the JCPOA enables a slower but ultimately stronger Iranian nuclear program. And when the agreement expires less than a decade from now, the Islamic Republic will be much closer to a breakout capability than it is today, constituting what some have called a “patient pathway” to the atomic bomb for Iran’s ayatollahs.2
Second, the new nuclear deal incentivizes further proliferation on the part of Iran and its neighbors. Although President Obama has claimed that the JCPOA closes off all pathways by which Iran can acquire a nuclear capability,3 the agreement actually focuses on just one of two such routes: indigenous development (the regime’s domestic facilities, stockpiles, and nuclear know-how). It does not seriously address the parallel track by which Iran can acquire such a capability: clandestine procurement of components from abroad.
This represents a serious oversight, because Iran maintains active proliferation relationships with a range of suppliers, including the regime of Kim Jong-un in North Korea and private commercial entities in the People’s Republic of China. These connections—detailed extensively in Chapter VI—have been essential to Iran’s ballistic missile and nuclear advances to date and will enable the Iranian regime to still make progress on its nuclear effort in spite of heightened scrutiny over its domestic activities.
Moreover, Iran’s advances have nudged other countries in the Middle East to accelerate their own nuclear plans in response. Most conspicuously, regional rival Saudi Arabia has threatened to pursue its own nuclear option as a strategic counterweight, likely by leveraging its extensive and ongoing strategic relationship with Pakistan.4 As a result, there is significant potential for a destabilizing cascade of proliferation in the region in coming years, the logical end point of which will be the emergence of multiple nuclear aspirants along Iran’s periphery.
Third, and most significant, the nuclear deal has set in motion a fundamental unraveling of the international sanctions regime painstakingly erected over the preceding decade and a half and designed to curtail Iran’s global menace. Through both direct and indirect means, the JCPOA has put Iran on the cusp of an economic windfall of unprecedented magnitude.
THE GREAT SANCTIONS GIVEAWAY
In short order, the United States and its partners in the P5+1 released to Iran some $100 billion in previously escrowed oil revenue. As of “implementation day,” January 14, 2016, Iran received unfettered access to these funds without limitations on their use.
The scope of this stimulus is enormous. It amounts to roughly a quarter of Iran’s annual GDP, which totaled $415 billion in 2014.5 That sum rivals the entirety of the European Recovery Program (known as the Marshall Plan) launched by the Truman administration in 1948 in the aftermath of World War II—an initiative that disbursed $13 billion ($120 billion in today’s dollars) to seventeen countries in Europe over the span of four years. The proportional impact of such relief for Iran is analogous to America’s $16.7 trillion economy receiving an infusion of roughly $4.2 trillion—approximately five times the stimulus that stabilized the U.S. financial sector following the 2008 global economic crisis.
The White House has tried to minimize the significance of this concession. Early on, administration officials argued that the Iranian regime would use any windfall overwhelmingly for benign activities, such as improving domestic conditions or strengthening its economy.6 More recently, they have argued that the economic benefits—while indeed extensive—remain largely unrealized by the Islamic Republic. Thus, in his April 2016 speech before the National Gala dinner of J Street, a liberal political action group that supports the Iran deal, Secretary of State John Kerry noted that Iran had so far received just $3 billion of the overall total.7
Both characterizations are deeply misleading. Iran can indeed be expected to utilize a significant portion of the economic relief rendered by the P5+1 for domestic purposes. But the sheer volume of unblocked funds means that the Iranian regime will be able to significantly augment its expenditures on everything from supporting international terrorism to modernizing its military, with detrimental effects for both regional and American security. At the same time, Iran’s delay to date in accessing the totality of this aid is a reflection of political choices in Tehran rather than of real-world constraints. Simply put, the Iranian regime can use the entire sum of more than $100 billion. It just has not chosen to do so—at least not yet.
Nor is it accurate to say, as some have argued, that adverse global economic conditions will wipe away any benefit that the Iranian regime might receive from sanctions relief.8 While Iran’s initial windfall is indeed somewhat dampened by the low world price of oil, the Iranian regime is adapting by revising its budget downward, focusing on non-oil exports, and significantly expanding domestic taxation.9
Additionally, the stimulus enshrined in the JCPOA will invariably be augmented by the benefits of expanded post-sanctions trade between Iran and countries in Europe and Asia. The agreement will also greatly strengthen the inevitable reintegration of Iran into global institutions from which it was previously proscribed, such as the Society for Worldwide Interbank Financial Telecommunications (SWIFT).10
In the meantime, America is proffering still more economic carrots to the Islamic Republic. In the months since the passage of the JCPOA, in response to dissatisfaction in Tehran about its anemic economic recovery so far, the Obama administration has sought to provide the Iranian regime with ever-greater sanctions relief. The justification propounded by top administration officials is that Iran has yet to reap real benefits from the deal, and therefore a further sweetening of the pot is necessary to ensure that Iran continues to abide by the agreement’s terms.
In the service of this goal, the White House launched an effort in the spring of 2016 to facilitate Iranian access to the U.S. dollar.11 The initiative touched off a political firestorm on Capitol Hill, with irate members of Congress protesting that the plan effectively reneged on promises made by the White House last summer in its attempt to sell the nuclear deal to a skeptical Congress. Among those was Treasury Secretary Jack Lew’s pledge to the Senate Foreign Relations Committee in July 2015 that, irrespective of the provisions of the new nuclear deal, the administration was committed to keeping existing, and extensive, trade restrictions in place.12
Congressional pressure, as well