How Iran will spend the funds it receives from a nuclear deal
Any return to the Joint Comprehensive Plan of Action nuclear deal will likely enrich the Iranian regime with billions of dollars in revenues, as it will lift sanctions on Tehran’s energy, banking and shipping sectors, reintegrate the government into the global financial system, enhance the country’s legitimacy in the world, increase its oil exports, and boost foreign investments, particularly in the energy industry. But the most important question for politicians and policymakers to consider is how will the Iranian regime spend this considerable amount of extra income?
First of all, it is important to point out that we should not expect the extra revenues to trickle down to the ordinary people of Iran and raise their living standards. As Ashkan, a construction worker and father of three who lives in the capital Tehran with his family, said: “People had a lot of hope in 2015 when the nuclear deal was reached. The officials made us believe that the nuclear deal will be good for the people as well. But after the nuclear deal, inflation kept going up, wages stayed the same, the value of the currency kept going down, the price of goods continued to go up, unemployment remained high, and people were still financially struggling during the period of the nuclear deal until the US government of (Donald) Trump left the nuclear deal.”
In addition, expect human rights violations and domestic crackdowns on those who oppose the regime’s policies to rise across Iran, as the hard-liners tend to be the ones who gain more power as a result of the lifting of sanctions. The situation is expected to be much worse this time as the hard-liners control all three branches of government: The judiciary, the legislature and the executive.
The regime will likely first use the extra revenue to increase its military budget. This scenario occurred in 2015 after the original JCPOA was struck. Iran immediately raised its military budget by $1.5 billion, from $15.6 billion to $17.1 billion. At the time, the Iranian Students News Agency quoted Mohammed Reza Pour Ebrahimi, a member of the parliament’s Economic Affairs Committee, as saying: “In addition to the approved figures, $1.5 billion has been allocated to prop up defense of the country and this amount has been approved by this committee.”
Regionally speaking, a nuclear deal will likely escalate Iran’s interference in the domestic affairs of other countries, in spite of what the advocates of the agreement argue. We should recall that former US President Barack Obama promised that a deal with the Iranian government would bring positive changes. To get the JCPOA through in 2015, its proponents raised hopes that engaging with the Iranian leaders would moderate the government’s behavior. For example, Obama pointed out in an interview with National Public Radio that, as a result of the nuclear agreement, Iran might make “different decisions that are less offensive to its neighbors; that it tones down the rhetoric in terms of its virulent opposition to Israel. And, you know, that’s something that we should welcome.”
But the international community witnessed the opposite. For the first time, Hezbollah became emboldened and admitted to receiving financial and military assistance from Iran. In addition, Tehran’s military involvement in Iraq steadily rose. The Iranian regime also became more forceful in supporting and assisting the Syrian government militarily and economically, as well as providing intelligence and acting in an advisory role.
Sanctions relief, as a consequence of a return to the nuclear accord, would help Iran’s Islamic Revolutionary Guard Corps and its elite Quds force, which focuses on extraterritorial operations, to buttress the regime’s proxies, including Hezbollah, the Houthis and Iraqi Shiite militias.
Any new deal will likely escalate Iran’s interference in the domestic affairs of other countries, in spite of what the advocates of the agreement argue.
Dr. Majid Rafizadeh
Finally, do not expect the Iranian regime to curb its nuclear program and fully comply with the terms of the nuclear deal. After the 2015 deal came into effect, Germany’s domestic intelligence agency, the Federal Office for the Protection of the Constitution, revealed in its annual report for 2016 that the Iranian government had pursued a “clandestine” path toward obtaining illicit nuclear technology and equipment from German companies “at what is, even by international standards, a quantitatively high level.”
In conclusion, the flow of billions of dollars of extra revenue into the Iranian regime’s treasury as a result of a new nuclear deal will most likely be funneled into the IRGC, the Quds Force and Iran’s proxy and militia groups, which will ratchet up their military adventurism in the region and interference in the domestic affairs of other countries.
- Dr. Majid Rafizadeh is a Harvard-educated Iranian-American political scientist. Twitter: @Dr_Rafizadeh