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Opinion | Obama's Gamble with Iran: How Many More Spins of the Wheel?


14 Apr 2012 07:50Comments

Sanctions are beginning to bite both ways.

Reza Sanati is a research fellow at the Middle East Studies Center in Miami and a Ph.D. candidate at the Florida International University School of International and Public Affairs
[ opinion ] In Las Vegas, "When you're up, walk away" is a common refrain. One need not be an avid gambler to understand its meaning. It's an exhortation to those who have had good fortune in a high-risk setting to be satisfied with their winnings and restrain themselves while conditions remain favorable.

This was the position that U.S. President Barack Obama found himself in May 2010, when Iran, Brazil, and Turkey agreed to the Tehran Declaration, a revival of a trust-building nuclear fuel swap deal that was reached in October 2009 between Iran, the International Atomic Energy Agency (IAEA), and the P5+1 group (the five permanent U.N. Security Council members -- the United States, Great Britain, France, Russia, and China -- along with Germany). The earlier deal, which would have seen Iran send out more than half of its stockpile of low-enriched uranium (LEU) in exchange for fuel for the Tehran Research Reactor (TRR), fell apart when the Western powers rejected Tehran's condition that the swap happen in phases on Iranian territory. After months of back-channel wrangling, Brazil and Turkey finally brought the deal back to life almost entirely along the lines demanded by Washington. Yet almost simultaneously with this diplomatic breakthrough came the announcement of Russia's and China's acquiescence to new Security Council sanctions on Iran.

Weighing the success of having Iran agree to transfer out a significant portion of its LEU against the long, arduous efforts to resolve the West's concerns about its nuclear program, as well as ceaseless Republican grandstanding on the issue, Obama decided to place his bet on sanctions. Judging from public statements and leaks to the press, it appears that the administration chose to forgo the diplomatic opportunity in hopes that, with amplified pressure, a more favorable arrangement could be forced upon the Iranians -- possibly a halt to all enrichment. Since then, the administration has continued to place its chips on sanctions, reaping certain tactical benefits in the meantime: individuals associated with Iran's nuclear program have been assassinated; Iran's centrifuge technology has been subjected to sabotage, most notably via the Stuxnet computer worm; and militant activity in Pakistani, Afghan, and Iraqi border towns has spilled into Iranian territory, killing many border guards and lending support to assertions that a "covert war" is being waged against Iran.

But as with any gamble, the other party tends to fight back.

Increased sanctions, sabotage, and other covert activity notwithstanding, Iran has made steady advances in enrichment technology and hardened its nuclear sites, the most prominent case being the underground Fordow facility in Qom province. At the time of the Tehran Declaration, Iran desperately needed to resupply the TRR with 19.75 percent-enriched uranium, which it did not possess, to make medical isotopes for cancer patients.

The United States was confident that, because Iran was barred from purchasing the necessary fuel on the open market and lacked the indigenous capacity to generate it on its own, it could kill the fuel swap deal and force an arrangement more favorable to its interests on Iran. However, the United States guessed wrong about the Islamic Republic's technological sophistication. The dismissal of the Tehran Declaration was used by Iran as justification to enrich its LEU to 19.75 percent, and this past February, successfully installed indigenously manufactured fuel rods in the TRR. This development essentially eliminates the incentive for Iran to duplicate the prior arrangement it sought to make with the United States.

On a regional level, the Arab revolutions have changed not only the domestic scenes in the Middle East, but have also put increasing strain on the American position in the region. With bedrock allies in Egypt, Tunisia, and Yemen gone, while Jordan and the Arab states of the Persian Gulf, particularly Bahrain, wrestle with various degrees of unrest, the traditional context in which the United States wielded power has eroded -- a situation compounded by the collapse of U.S.-Pakistani relations. This makes any potential military action against Iran that much riskier and something that Washington openly admits it wants to avoid. While the crisis in Syria, a traditional Iranian ally, has posed new challenges to Tehran, for the first time since the end of the Cold War, it has brought great-power competition to the region, as Russia and China have blocked attempts at intervention by the U.S.-led West. Washington hoped that the damage to Iran's image from its continuing support for the regime of Bashar al-Assad would make newly empowered Arab citizens in the region more willing to view Tehran's nuclear efforts through the U.S. lens. Yet the results of the most recent polling from the Arab world are unambiguous: an overwhelming majority of the Arab public does not believe that the Iranian nuclear program poses a threat to their countries.

At the beginning of the year, Washington doubled down on its previous gamble, applying and pushing for the most far-reaching, comprehensive sanctions ever placed on Iran, of which the most significant directly enacted by the United States are restrictions on the state's Central Bank. The U.S. moves were accompanied by, and arguably prompted, the announcement from the European Union that it would impose an embargo on Iranian oil purchases and Iran's expulsion from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), effectively barring it from conducting many formerly routine international financial transactions. But these harsh measures, aimed at cramping Iranian revenue streams and undoubtedly putting massive economic pressure on the country's middle class, have come at the high cost of escalating oil prices, both for Europe and the United States.

As negotiations with Iran take place this weekend, Obama faces a stark choice between options either of which could derail his chances at a second term. As the stakes have gotten higher, some stories apparently planted by the administration with the press indicate that it has dropped its demand that Iran halt all uranium enrichment, now tacitly accepts the Islamic Republic's production of LEU, and might even tolerate current levels of 19.75 percent enrichment as long as steps are taken to make it difficult for Iran to convert its centrifuges to the production of highly enriched, weapons-grade uranium. (Other "leaks" have suggested that the administration plans to take a much harder line.) For its part, statements from Tehran have signaled that it may accept those terms, provided they come with a significant deescalation of sanctions.

While the contours of a trust-building deal with Iran have changed, its purpose remains the same. Obama finds himself in a similar position to the one he faced in May 2010. The administration can accept this new arrangement with Iran, which -- though it would not come close to immediately resolving its many issues with Tehran -- could lead to further cooperative measures and a lessening of tensions. The cost: political players in the United States who cultivate belligerently anti-Iran postures will surely cry foul, pointing to past failures with North Korea as an example.

Or, in this election year, the administration can forgo a deal for short-term electoral considerations, which will almost certainly lead to even more onerous economic pressures on Tehran. Yet, as we are now witnessing, such moves are already taking a toll on Western economies; the full implementation of currently announced sanctions, let alone the institution of new ones, will further constrain oil supplies, destabilize markets, and likely send prices soaring. This option will severely endanger the U.S. and E.U. economic recoveries -- again giving fodder to Obama's domestic opposition.

However, if Obama can come to terms with accepting a trust-building deal with the Iranians, Republican backlash notwithstanding, he can tackle the short-term dilemma of high energy prices, given the deflationary effect of the lifting of sanctions on Iran's oil exports. A deal would also provide a new framework for détente with Iran and vastly improve the odds of averting a catastrophic war. If Washington does exhibit the flexibility that some reports have suggested, a deal is possible that addresses Iran's legal and reasonable interests in its nuclear program, while ensuring that it cannot make a mad dash toward a bomb.

Will Obama still spin the wheel, or will he be satisfied with his winnings and walk away?

Copyright © 2012 Tehran Bureau

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