Analysis: Lifting of sanctions a blessing for Iran, but could endanger the Islamic regime

Iranian hardliners fear that economic change and openness will bring ideas such as democracy, human rights and sexual permissiveness, which will weaken their hold on the country.

By YOSSI MELMAN
Updated: JANUARY 19, 2016 01:40
Rouhani hails "golden page" in Iran history as sanctions lifted
Tehran’s release Saturday of five Iranian-American citizens, part of a broader prisoner exchange deal between Iran and the US, is just the dramatic first act of something far more important: the realization of the nuclear deal and the lifting of sanctions on Iran.
The prisoner release also suggests that the warming relationship between Tehran and Washington is deeper and broader than the narrow nuclear issue. The two nations could potentially resume diplomatic relations in the future, but this will prove to be a much more difficult task.
Either way, the International Atomic Energy Agency (IAEA) confirmed on Saturday that Iran had fulfilled its part of the Vienna agreement it signed in July 2015 with six world powers. The foreign ministers of Iran and the United States are staying on in Vienna to ensure the process continues without complications.
The requirements on Iran, most of which have been carried out, were to reduce the number of centrifuges enriching uranium to 6,000 from 20,000, to dismantle the nuclear reactor in Arak, to reduce the stock of enriched uranium, to ship any of it that has been enriched to 20 percent, and to continue to give IAEA inspectors access to their nuclear sites.
The agreement is valid for 10 years.
As soon as the IAEA gives its approval, the gradual but swift process will begin for the removal of economic sanctions on Iran, thus ending the decade-long effort by the international community to strangle and cripple the Iranian economy as a way to reduce its nuclear program.
The sanctions began following a 2006 decision by the UN Security Council against individuals and companies associated with the Iranian nuclear and missile programs.
They were expanded unilaterally by Western countries, and eventually most of the world, to the oil and gas industries, the shipping and insurance industries and the banks of the Islamic Republic.
Who had the upper hand in this long and exhausting struggle? That is an ideological and political question.
The answer is in the eye of the beholder. There are those who see it, especially US President Barack Obama and his administration, as a victory for the West and the United States: the submission of Iran to reducing its nuclear program and preventing it from building a nuclear weapon.
However, Israel, the Arab nations and some European countries are pouting and consider the agreement to be a surrender on the part of the United States to Iran, which agreed to the deal only after it had already guaranteed for itself the technology, materials and equipment that would allow it to remain on the nuclear threshold with the bomb within reach. Essentially, the removal of the sanctions will give Iran approximately $100 billion that had been frozen in its accounts abroad and the right to export an additional half a million oil barrels per day.
Expectations are soaring in Iran.
President Hussein Rouhani has promised that 2016 will be “a year of economic prosperity.” Although the lifting of the sanctions against Iran is a blessing, it is fraught with risks to the regime and could leave the high expectations disappointed.
The Iranian economy is based primarily on income from oil exports.
The export of an additional half a million barrels a day will flood the international market, further reducing the price of oil, which has already gone down to under $30 a barrel. In short, Iran’s oil revenue will be a lot smaller than Iran had expected it to be during the nuclear deal negotiations. The income will not be sufficient for all the ambitious plans the Iranian government has in store to improve the economy and relieve the pressure on its citizens.
The Iranian government will need to prioritize its decisions and will have difficulty fulfilling all the expectations and demands of the military and the Revolutionary Guard, as well as the organizations that rely on it for funding, such as Hezbollah, to upgrade its outdated military equipment as Israel had feared it would.
Israeli leaders have expressed concerns about the expected shopping spree of the Iranian military and its proxies, which may bring more instability and terrorism sponsorship to the regime. However, they deliberately tend to forget mentioning that Israel remains the strongest military power in the Middle East and beyond, as the outgoing head of the Mossad, Tamir Pardo, said recently in his farewell interview: Iran and Hezbollah are bleeding in the regional battlefields of Syria, Iraq and Yemen, and Israel retains its monopoly on nuclear weapons, according to foreign reports.
Furthermore, Iran’s Revolutionary Guard, which actually serves as a state within a state and controls at least 30 percent of the Iranian economy, fears that investments from Western companies in Iran will lessen their economic power and influence and strengthen the private sector.
The Revolutionary Guard, like the extremist religious clerics and the rest of the conservative hard-liners in Iran, are also very worried that the opening of the Iranian market to Western investors will bring Western influences into the country that the middle class, especially the youth, will welcome. The hard-liners fear that economic change and openness will bring ideas such as democracy, human rights and sexual permissiveness, which will w


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