Deal or no deal, Iran’s problems are only going to worsen
Without doubt, any revival of the Joint Comprehensive Plan of Action nuclear deal will provide the Iranian regime with financial benefits that it desperately needs.
The agreement will help the regime reintegrate into the global financial system and partially address one of the worst budget shortfalls since its establishment in 1979. The Tehran regime is estimated to be running a $1 billion deficit per month and, without the nuclear deal, this will further increase inflation and devalue the nation’s currency, the rial.
The nuclear deal will also indirectly assist Iran’s proxies, as Tehran is experiencing significant funding problems for its militias and terror groups across the region. Hezbollah leader Hassan Nasrallah previously made a public appeal for donations to the group, saying: “The sanctions and terror lists are a form of warfare against the resistance and we must deal with them as such. I announce today that we are in need of the support of our popular base. It is the responsibility of the Lebanese resistance, its popular base, its milieu (to battle these measures).”
It goes without saying that the cash-strapped clerical regime is desperate to see sanctions lifted and for billions of dollars to flow into its treasury once again. This would allow it to provide revenue for the Islamic Revolutionary Guard Corps and escalate its military adventurism and projects in the region, which include financing and arming terror and militia groups in Lebanon, Iraq, Syria and Yemen.
Nevertheless, it would be a mistake to argue that the revival of the nuclear deal will solve the Iranian regime’s core problems.
The social, economic and political landscape in Iran has changed significantly since 2015, when the nuclear pact was first reached with the UK, China, Russia, France, the US and Germany. To begin with, the regime is much more unpopular both at home and in the Middle East. Six years ago, the so-called moderate President Hassan Rouhani promised to improve people’s economic situations via the nuclear deal and to normalize relations with the rest of the world. Many people gave the Rouhani administration a chance, but soon came to realize that the deal did not help ordinary people or change the regime’s destabilizing behavior in the region.
Protests against the regime have increased in recent years, with thousands of demonstrators killed by the IRGC. According to Amnesty International, various branches of Iran’s government have been involved in these abuses and crimes. “Iran’s police, intelligence and security forces, and prison officials have committed, with the complicity of judges and prosecutors, a catalogue of shocking human rights violations, including arbitrary detention, enforced disappearance, torture and other ill-treatment, against those detained,” it said.
Despite the regime’s deployment of brute force, the deep frustration and anger shared by many in the country continue to rise.
Dr. Majid Rafizadeh
Despite the regime’s deployment of brute force, the deep frustration and anger shared by many in the country continue to rise. This discontent will not go away even if a nuclear deal is reached.
First, Iran’s economic problems are systemic and result from the country’s corrupt financial system. The current currency crisis is not an anomaly: The rial’s value has plummeted almost continuously for the past 40 years — from a dollar rate of 70 in 1979 to as low as 292,000 as of last week. This trend will continue as long as the Iranian regime fails to address the country’s rampant corruption. The financial system has been designed to benefit officials and those at the top rather than ordinary people.
Second, the Iranian regime needs to attract foreign investment to address its financial woes. But even with a revival of the nuclear deal, Western corporations and businesses will be extremely cautious and will prioritize political and economic stability for their investments. What if the nuclear deal collapses again?
Third, even with a deal, the US Congress can still impose sanctions on the Iranian regime, government organizations and individuals for human rights violations or terrorism.
Fourth, the Biden administration will be unable to lift many of the sanctions imposed during the previous US administration because these were passed by an overwhelming vote in Congress, with support from both sides of the aisle. Some of the most important curbs imposed on the Iranian regime came through the Countering America’s Adversaries Through Sanctions Act of 2017, a key initiative against Iran and one that will likely continue to be a robust blow to Tehran.
Overall, the Iranian regime’s underlying crisis will worsen even if a nuclear deal is reached with the world powers.
- Dr. Majid Rafizadeh is a Harvard-educated Iranian-American political scientist. Twitter: @Dr_Rafizadeh