Panel Discussion 24/10/2016
Ms Aymen Ijaz, Assistant Research Officer IPRI, gave a presentation on “Geo-Political Implications of P5+1 Nuclear Deal with Iran” on July 28th, 2016 at IPRI Conference Hall.
The Joint Comprehensive Plan of Action (JCPOA) commonly known as the Iran deal is an international agreement on the nuclear program of Iran reached in Vienna on 14 July 2015 between Iran and US, Russia, UK France, China and Germany. Prior to this, an interim accord was signed between Iran and the P5+1 countries in November 2013. For the next twenty months, Iran and the P5+1 countries were engaged in negotiations, and in April 2015 agreed on a Iran nuclear deal framework that resulted in a final agreement in July 2015. The agreement is the result of 12 years of intense and challenging negotiations, which started back in 2003. There are two factors that led to momentum in negotiations: Back channel US diplomacy that started back in 2013 with Iran and Iranian leadership. After being elected as President since 2013, Hassan Rouhani has acted as Iran’s nuclear negotiator and has provided platform for constructive engagement with world, to end Iran’s isolation and remove lifetime sanctions on Iran.
While giving the historical perspective of the Iran nuclear deal, Ms. Aymen stated that Iran signed Nuclear Non-Proliferation Treaty in 1968 as a non-nuclear weapon state and ratified it in 1970. The initiation of Iranian nuclear program can be traced back to 1950’s when it was started by King Raza Shah under US Atoms of Peace Program. Subsequently countries such as France, Russia and Argentina etc. helped Iran in building of its nuclear programme but the Iranian revolution of 1979 halted the overall expansion of the programme. In 1990’s, Iran once again began development of its nuclear Programme. In 2002 and 2003 Iran was alleged of uranium enrichment activities at its undeclared nuclear facilities at Arak and Natanz by International Atomic Energy Agency (IAEA). Back then, the United Kingdom, France and Germany (also known as the EU3) decided to engage with Iran to find a peaceful solution to the Iranian nuclear program. The signing of the Tehran Declaration (2003) and the Paris Agreement (2004): in exchange for nuclear, technological and economic cooperation were signed with Iran.
Following the election of Mahmoud Ahmadinejad in late 2005, Iran resumed its enrichment activities and, as a consequence, talks with the EU3 rapidly collapsed, paving the way to the referral of the nuclear issue to the UN Security Council. In 2005, Iran’s case was taken to United Nations Security Council on its incompliance with the NPT Safeguard Agreement and a series of UNSC sanctions 1696 (2006), 1737 (2006) 1747 (2007) and 1803 (2008), 1835 (2008) and 1929 (2010) and 2224 (2015) were imposed on Iran. From early 2006, negotiations took place with the inclusion of the United States, Russia and China, triggering the constitution of the P5+1, a format which has since been central in driving the mediating efforts in talks with Iran. Since 2009, declaration of uranium enrichment at Fordow, a key nuclear facility, pushed major powers to start diplomatic negotiations with Tehran.
From 2010 onwards, the US and the EU ratcheted up sanctions against Iran, adding unilateral measures going beyond the UN Security Council Resolutions, hitting the country’s energy sector and isolating it from the global financial system. In 2013, Iran delayed inspection of Parchin, a military site near Tehran, when IAEA alleged Iran of conducting covert nuclear tests at the site. Beside such nuclear developments of Iran, the P5+ 1, which includes five permanent UNSC members and Germany, have arranged parallel talks for the diplomatic solution of the Iranian nuclear program. The Geneva Talks, Baghdad Talks, Moscow talks, Almaty Talks and the Istanbul Talks are all part of the negotiation process. Between 2011 and 2013, throughout this long phase no agreement between the parties was reached.
The next part of the presentation covered the Joint Comprehensive Plan of Action (JCPOA) in detail that the JCPOA is a complex and detailed document of about 109 pages (including five annexes) outlining the obligations of the P5+1 and Iran for the next 15 years. The agreement blocks all possible pathways (uranium enrichment and plutonium paths) through which Iran could get access to the fissile material required for building a bomb; for the next decade. It has also increased the so-called breakout time. Under JCPOA, there is also an embargo on sales and purchase of conventional arms for period of 5 years and embargo on ballistic missiles for 8 years. There is a ban on designing warhead and conducting of nuclear tests or detonation of nuclear bombs. Sanctions would be re-imposed incase of violation of agreement, for 10 years with a possibility of 5 years extension. Under the agreement, Iran is mainly committed to:
Reducing its number of operational centrifuges by two third and only first generation centrifuges will be used for uranium enrichment and no advanced centrifuges will be used for next 10 years.
Converting its nuclear facility Fordow into a civilian nuclear, physics, and technology centre; with no uranium enrichment for 15 years.
Redesigning and modifying its Arak heavy water reactor, to stop production of weapon grade plutonium.
Removing 98 % of its current stockpiles of enriched uranium, limiting them to 300kg for next 15 years.
Capping its enriched uranium to 3.67 per cent, significantly below the level needed to create a bomb.
Research and development will take place only at Natanz and be limited for eight years. The 1,044 centrifuges at the Natanz site will produce radioisotopes for use in medicine, agriculture, industry and science.
Similarly, about 20 tonnes of heavy water the Arak facility produced will be shipped to the US via a third country, according to Iranian officials and about 6 tonnes will be retained to make medical isotopes.
Implementing the Additional Protocol, enabling IAEA inspectors to access the country’s nuclear facilities.
Under the JCPOA, Iran also accepted enhanced levels of IAEA monitoring, constituting confidence-building measures. The agreement also states that Iran will address the IAEA’s concerns about what it calls the Possible Military Dimensions (PMDs) of its nuclear programme.
In return for Iran’s commitment to constraining its sensitive nuclear ambitions, Tehran would be granted the possibility to continue its research and development activities in a manner that does not accumulate enriched uranium. Furthermore, P5+1 agreed to lift the multilayered nuclear-related sanctions imposed by the UN, the EU and the US in phases as Tehran implements its end of obligations; Iran stands to gain access to its overseas frozen assets of more than $100bn. Iran will be able to resume selling oil on international markets and using the global financial system for trade.
Some key developments took place after signing of the nuclear deal. In July 2015, Iran had almost 20,000 centrifuges. Under JCPOA, it will be limited to installing no more than 5,060 of the oldest and least efficient centrifuges at Natanz for 10 years. According to BBC, by January 2016, Iran had drastically reduced the number of centrifuges installed at Natanz and Fordo, and shipped tonnes of low-enriched uranium to Russia. Before July 2015, Iran had a large stockpile of enriched uranium and nearly 20,000 centrifuges, enough to create eight to 10 bombs, in two-to-three months’ time – the so-called “break-out time”. The White House says the JCPOA will remove the key elements Iran would need to create a bomb and increase its break-out time to one year or more. In December 2015, the IAEA’s board of governors has voted to end its decade-long investigation into the possible military dimensions of Iran’s nuclear programme.
The Iranian nuclear deal has geo-political implications both at regional and at global level. Although Iran’s Supreme Leader Ayatollah Ali Khamenei, has asserted several times that the JCPOA will not be accompanied by a breakthrough in U.S.-Iran relations or any change in Iran’s regional policies. President Rouhani has always supported improvement in Iran-US relations and with the West. Iran will have more influential role in regional politics. In the presence of two nuclear armed regional states i.e. Pakistan and India, a non-nuclear Iran will help maintain a regional nuclear balance and to stop regional nuclear arms race. The deal would help Iran maintain better relations with regional countries. More opportunities for trade and investment would open between Iran and the regional countries.
In the context of Pakistan-Iran relations, there will be further development on Iran-Pakistan gas pipeline project (IP) and further collaboration on Chahbahar, so that Gwadar and Chahbahar both can act as sister ports. Pakistan also wants to keep harmonious relations with Iran to avoid sectarian chaos and violence, in the light of having 20% Shia population in Pakistan. Iran and India relations will enhance with more investment in Chahbahar although India is already investing $ 500 million in it. During the recent visit of Modi to Tehran in May 2016, both the states signed several agreements for co-operation in the fields of infrastructure, energy, trade etc. India would build stronger ties with Iran to have easy access to Central Asia, Afghanistan, Middle East and Europe.
Similarly, Iran-Afghanistan relations will improve as Iran may want to join the peace process. Iran wants reconciliation with Taliban against ISIS threat in Afghanistan and to protect Shias in Afghanistan after US troops withdrawal, Iran also wants a stable and peaceful neigbbourhood. Both countries have areas of mutual interests such as combating drug trafficking. Iran wants to utilize Afghan mineral resources and Afghanistan wants an access to water port like Chahbahar. Iran-China relations will develop as China wants to have good relations with the regional countries. President Xi Jinping was first to visit Iran after the nuclear deal and signed several agreements for co-operation in cultural, education, technological, military and security sectors. China wants to have access to Chahbahar and water routes and to other regions such as Central Asia, Middle East etc. China also wants to develop initiatives such as One Belt One Road (OBOR) and China-Pakistan Economic Corridor (CPEC) in collaboration with Tehran.
At global level, the Iranian nuclear deal would change the balance of power in the region. The deal would end Iranian isolation and would result in an increase in the Iranian diplomatic engagement with the West. It will improve Iran-US relations. Iran’s role in the Middle Eastern politics would increase significantly. Iran has already influential role in Iraq, Syria, Yemen, Bahrain and Lebanon. Iran’s troops are fighting side by side with Iraqi government against ISIS in Iraq and Syria. Iran is backing Asad’s regime in Syria against rebel forces. Iran is allied with Hezbollah in Lebanon and it is supporting Houthis in Yemen and Dawa party in Bahrain, a country with 80% Shia population. The deal has impacted US relations with Saudi Arabia, Qatar, Israel and other Gulf states which see Iran as a potential threat to their security. They believe that Iran’s nuclear deal has just halted Iran’s nuclear program for the time being but still Iran has know-how of nuclear technology and now after lifting of economic sanctions, and with increased financial resources it can make nuclear bomb anytime in future by violating the deal. The ballistic missiles tests conducted by Iran in October 2015 and in March 2016 have further added to their fears.
Iran would explore new trade avenues wit EU, in the context of Ukrainian crisis, EU wants to end its dependence on Russia. The Iranian oil and gas would impact market sharing trend of Saudi Arabia and Russia particularly. Infact, EU was Iran’s largest trade partner in 2012. The defence co-operation between Iran and Russia would increase as Russia has provided Iran with S-300 long surface to air missiles, and in 2016 its first phase of sale was implemented. Russia arms trade with Iran would increase and both would co-operate against rebel forces in Syria. Iran after the deal would pace up its efforts to fight against ISIS threat in the region with increased financial, military and diplomatic means.
Since the Iranian nuclear deal has been signed there has a boom to Iranian economy with economic developments such as signing billion dollar contracts with Boeing and Airbus, jumping up of Iranian Ryal to 31,000 vs. US dollar. According to Reuters, since sanctions were lifted, however, Iran’s crude exports have soared. Tehran has doubled its exports since a year ago. Iran’s old customers in Asia and Europe have slowly returned, and the country’s market share of global crude exports has returned to a pre-sanctions level. According to International Institute of Political Science (IIPS), the country’s potential production level is likely to increase from 1.6 million barrels per day (mb/d) in 2014 to its pre-sanction level of 2.4 mb/d in 2016. By June 2015, China’s imports of Iranian oil increased by 26 per cent. The World Bank estimated that lifting sanctions would increase Iran’s gross domestic product (GDP) by 5.1 percent in 2016/2017 and 5.5 percent in 2017/2018. Economists estimate 7% growth in economy after removal of sanctions. After sanctions were lifted, the Islamic Republic sharply ramped up its oil and gas output. Oil production climbed from 2.9 million barrels per day in January to 3.8 million barrels per day in late May 2016.The IMF also predicts that average inflation will drop from 15.1% in the 2015-2016 to 11.5% in the 2016-2017.
From the Guardian’s Survey Report, it is evident that one year after the nuclear deal, Iranians are disappointed.74% of those polled recently say there has been no improvement in their living conditions since the nuclear deal, 75% of the public blames US for that. The poll, conducted for the Center for International and Security Studies at Maryland (CISSM) by the independent polling organization IranPoll.com in June 2016, shows that right after the deal was reached on July 14 last year, 76 percent of Iranians approved of it. That figure has since dropped to 63 percent in June 2016.