Monthly Archives: October 2013

Is US shifting its position on Iran’s nuclear program, allowing Tehran to enrich on its soil?

According to an article in Tuesday’s Guardian, and the Wall Street Journal, Iran is willing to accept  intrusive inspections of Iran’s nuclear facilities ( outlined in the document known as the Additional Protocols without officially  acknowledging its acceptance of the document),  in return,  Iranians expect sanctions relief and breathing room for their economy.  The Iranian foreign minister & lead negotiator,  Javad Zarif, posted a message on his Facebook account saying the Geneva talks were “the start of a difficult and relatively time-consuming way forward”. He said: “I am hopeful that by Wednesday we can reach agreement on a road map to find a path towards resolution. But even with the goodwill of the other side, to reach agreement on details and start implementation will probably require another meeting at ministerial level.”  According to the Guardian,  ” Iran is also prepared to negotiate on the number of centrifuges it uses to make 3.5% enriched uranium, suitable for fuel for nuclear power stations, and on how much each centrifuge makes.”

All of this still could fall short of the demands by US and Europeans for closing of the facility at Fordow, and scaling down of operations at Arak nuclear power plant.    Yet,   Iranian change of tone and  willingness to address the concerns of the P5+1 group is clearly a step forward in the diplomatic dance between Iran and P5+1.


Bahman Baktiari

For the first time, US delegation for nuclear talks with Iran includes sanctions expert.

WASHINGTON (Reuters) – October 12, 2013

The U.S. delegation to next week’s talks about Iran’s nuclear program includes one of the U.S. government’s leading sanctions experts, a hint that Washington may be giving greater thought to how it might ease sanctions on Tehran.

Undersecretary of State Wendy Sherman, effectively the State Department’s third-ranking diplomat, will lead the U.S. delegation to negotiations between Iran and six major powers in Geneva on Tuesday and Wednesday, the State Department said.

The central issue at the talks, which will involve Britain, China, France, Germany, Russia, the United States and Iran, will be to explore what, if any, steps Iran might take to curb its nuclear program and what, if any, sanctions relief the major powers may offer in return.

Western powers are concerned that Iran is seeking to develop atomic bombs. Iran denies that, saying its nuclear program is solely for peaceful purposes.

The U.S. delegation will include Adam Szubin, the director of the Treasury Department’s Office of Foreign Assets Control, or OFAC, and among the U.S. government’s foremost experts on sanctions.

Szubin has led OFAC since 2006 and is responsible for administering and enforcing the U.S. government’s economic sanctions programs to advance foreign policy and national security objectives.

The U.S. team also includes James Timbie, senior adviser to the undersecretary of state for arms control and international security; Puneet Talwar, senior director for Iran, Iraq and the Gulf States on the White House National Security Staff; and Richard Nephew, principal deputy coordinator for sanctions policy at the State Department, a U.S. official said.

(Reporting by Arshad Mohammed; Editing by Peter Cooney)

Iran’s new governor of the Central Bank says he is reversing all of Ahmadinejad’s Policy

Bloomberg; “Iran’s central bank Governor Valiollah Seif said he’s reversing policies introduced under former President Mahmoud Ahmadinejad that led to a surge in money supply, to curb one of the world’s highest inflation rates.

Seif, in his first interview with an international news organization since taking office in August, said President Hassan Rouhani’s cabinet has agreed to separate monetary and fiscal policies. That will allow the central bank to focus on “controlling liquidity and bringing down inflation.”

Rouhani inherited an economy in recession as sanctions against Iran’s nuclear programweakened its currency and accelerated inflation to about 40 percent in September. While the central bank will struggle to alleviate the effects of sanctions, analysts at Eurasia Group and the Economist Intelligent Unit have said Seif can resist government policies to provide cheap credit, a policy introduced under Ahmadinejad, which led to a surge in the ratio of bad loans to 15 percent.” Full Article Here.

Testing the Diplomatic Option with Iran: The Stakes for the Iranian People

Bahman Baktiari and Nader Habibi

For the first time in more than 30 years,  the United States and Iran have engaged in high-level diplomatic talks in the hope of resolving the nuclear impasse.   The unprecedented telephone conversation between President Obama and the Iranian President Hassan Rouhani is a positive development after three decades of acrominous dialogue.   The stakes for both governments cannot be underestimated. Both presidents face daunting domestic challenges,  Obama has to convince Congress and the Israeli government that Rouhani represents the best chance for a diplomatic resolution of the nuclear impasse.   Rouhani has to navigate the minefield of the Iranian political system to make sure hardliners do not derail his initiatives.

Yet,   the stakes are much higher for the Iranian people.  They want these negotiations to succeed, and as much as statements like “recognizing the right of the Iranian people to access peaceful nuclear energy ”is reassuring to political leaders in Iran, what Iranian people need to see is  tangible relief from  some of the  sanctions,  reparation of Iran’s international image, and  better opportunities for young Iranians who struggle to make a living for themselves and their families.

By their large participation in the June Presidential elections the Iranian voters demonstrated that they are well aware of the high stakes involved in the current nuclear impasse.    The financial and oil sanctions   have taken a heavy toll on Iranian economy and its young population.  GDP growth per capita declined from an average 3.5 percent per year between 1997 and 2004 to 1.5 percent between 2005 and 2010.   As a result, Iran is currently experiencing record high unemployment along with very high inflation rates. While the over all unemployment has recently approached 14% for the entire economy the youth unemployment is well above 20%. The economy has sunk into a recession in 2012 with a negative five percent economic growth.  Iran’s standing on the 2012 Human Development Index published by the United Nations Development Program has declined in 2012 to 76 out of 186 nations. Between 2010 and 2011, it had already declined by six positions on the UNDP index.

Under such economic conditions, young Iranians do anything in order to move to another country in search of job and a more secure living.   According to the International Monetary Fund (IMF), in a ranking of 91 countries with the largest brain drain,  Iran is at the top of the list  with between 150,000-180,000 of its university graduates leaving the country every year.  For the first time in Iranian history,   we hear  about  “Iranian boat people”  risking their lives on refugee boats headed to Australia.  Instead,  they have ended up on an islamd prison created by the Australian government to block refugee boats from entering the country.   According to available data,  more than 5 million Iranians live abroad today,  a staggering number since a majority of them have emigrated since 1979 revolution.

Some critics believe that even a  partial lifting of sanctions  before the Iranian government agrees to major concessions will send a wrong signal to the Iranian government. The U.S. congress is moving in the direction of imposing new sanctions before the negotiations can get off the ground.   However,  this will send the wrong signal to the Iranian people. They  will perceive such a move as an attempt by the U.S. congress to undermine the negotiations.  If it was not for the vote of the Iranian people that resulted in the election of Rouhani,  there would not have been a negotiating partner that speaks of moderation, and a determination to resolve the nuclear impasse.   Furthermore,  maintaining the sanctions will enhance the position of the hardliners and the Supreme Leader who are looking to transform any small set-back into a major failure.

The United States should view the Iranian people as an important stakeholder in the current negotiations.   As President Obama stated in his UN speech,  “Iran’s genuine commitment to go down a different path will be good for the region and the world, and will help the Iranian people meet their extraordinary potential in commerce andculture, in science and education.”   By lifting some of the sanctions and relieving the economic pressure on Iranian people at the start of the nuclear negotiations,   the United States will  not only demonstrate its  good will and credibility to Iranians,  and it would also increase their stake in success of the negotiations.    This will put  more pressure on Iranian government to deliver on its promises and show more flexibility.  Otherwise,    the Iranian people will blame their own government if the negotiations fail.

Nader Habibi is the Henry J. Leir Professor of the Economics of the Middle East,   at Brandeis University’s Crown Center for Middle East Studies.

Bahman Baktiari  is the Executive Director of the International Foundation for Civil Society in Salt Lake City, Utah.