30.04.2016 Author: Salman Rafi Sheikh

The U.S. keeps ‘Un-freezing’ Its Relations With Iran

345344455Despite its Gulf allies’ displeasure, the U.S. continues to ‘un-freeze’ its relations with Iran. While it appears to be a clear policy shift vis-à-vis Iran, it seems to have been greatly influenced by the developments taking place in the Middle East than by any natural change in the course of events. The U.S., as it stands, is luring Iran into its axis as a means to not only to pacify its Gulf allies’ deep concerns but also to influence the outcome of Geneva deliberations over Syria. The latest twist in this behalf came with the U.S. decision to buy something from Iran that it cannot produce itself: heavy water for non-nuclear use. The choice of Iran carries a lot of significance as it signifies the U.S.’ current priorities as the latter could have bought the same material from other countries such as Canada and India.

Although the deal may be worth only $8.6 million but it involves the purchase of 32 tons of heavy water from the Atomic Energy Organization of Iran. The announcement came after the very recently held meeting between John Kerry and Iran’s Foreign Minister Mohammed Javad Zarif in New York. The meeting and the announcement to engage in some sort of economic activity with Iran have both happened at a time when Iran’s central leadership, particularly its religious section, was increasingly growing skeptical of the potential benefits of the nuke-deal and the U.S. intentions behind really re-opening the space for Iran in the international economic and financial markets.

Speaking to the media after the meeting, John Kerry went on to say, “United States is committed to doing our part as we believe it is in our interest to ensure that… the nuclear agreement… is in fact working for all participants… It is mutuality that was created in this, and it’s important that we make sure there is mutuality in its implementation.”

Although there was talk of impending “serious differences” between both countries on a good number of issues, both Kerry and Zarif implicitly stated their countries’ intentions to not only to resolve those issues but also to carry forward their relations into areas that were previously shrouded deep in sanctions.

While it appears too much and too early to see these developments as the beginning of the end of Iran-Russia alliance, it does point out how Iran is trying to engage with the West on the whole to re-capture its space in the global market, dominated as it is by the West, that it had previously lost to its rivals, particularly Saudi Arabia. On the other hand, as Iran approaches the West to gets its assets un-freezed, the West, on its part too, has already started to flood the Iranian market, posing a serious challenge for the Russian business counterparts. As Russian daily Kommersant noted in one of its stories about how business was undergoing change in Tehran, “Tehran is not giving any privileges to its Russian allies. Past achievements do not count and market competition seems to have started anew from a clean slate.”

Explaining Iran’s global position and emphasising the need to form policies and relations according to the dictates of national interest, Zarif said, in an interview to Iranian news agency, “The craft of diplomacy aims at exploiting the available resources globally. We have strategic ties with Russia and we are close partners in Syria. But we do not want to remain as a consumer market, but would seek an active role in the global production chain.” Clearly, Tehran’s national interest is fast economic recovery. Only then can it translate its economic wealth into other forms of power of both military and non-military nature to strengthen its position in the region.

Tehran’s ‘desperation’, on the other hand, to revive its economy is also increasing due primarily to its current government’s concerns over the possible return of ‘conservatives’ to the government. Many believe in Iran that if Rouhani fails to show achievements in the economic arena, it only strengthens those very same conservative quarters within the establishment who resist his desire for détente with the West, some of whom also happen to be beneficiaries of the protected economic climate—hence, Zarif’s emphasis on lifting of all sanctions.

Accordingly, both Kerry and Zarif were reported to have worked out an amicable method to prod foreign business deals with non-sanctioned Iranian firms, whereby Washington would approve the new rules under which Iran will be able to get the full benefit of the nuclear deal, including access to the frozen funds held by foreign banks.

As far as the U.S. interest is concerned, it stands to benefit from an economic revival in Iran; for, a better economic position would discourage the revival of the policy of ‘economy of resistance’ that continues to hold tight in Iran despite conservatives’ defeat in elections. Were Iranian economy to stay stagnant, it would allow the conservatives to politically challenge Rouhani’s policy vis-à-vis the West and further enable them to criticize and propagate against the hard-achieved nuke-deal. Furthermore, such developments within Iran would also allow the party in the U.S. opposing the deal to build public opinion against it. Obama administration seems to be aware of this possibility and, perhaps, it is for this reason that Kerry expressed his government’s willingness to not stand “in the way of foreign banks engaging with Iranian banks and companies.”

While Iran seems to be trying to balance its relations with both the West and Russia, Iran’s overtures to the U.S. cannot be simply taken to be against Russia. Such a conclusion can be drawn only on the basis of an oversimplified understanding of Russia-Iran relations that go deeper than mere co-operation in Syria. While sanctions are yet to be lifted, Russia continues to be a major destination of Iranian exports that the latter further uses to finance its needs. Zarif had no hesitation accepting this in the interview he gave to the above cited Iranian news agency.

Salman Rafi Sheikh, research-analyst of International Relations and Pakistan’s foreign and domestic affairs, exclusively for the online magazine “New Eastern Outlook”.