Year after nuclear deal, Iran’s high expectations not met

To sell Iranians on the nuclear deal, President Rouhani promised a new era. But the consensus is it has yet to materialize, and many blame the US.

Joy erupted on the streets of Tehran a year ago Thursday, when Iran signed a landmark nuclear deal with six world powers hailed as a victory of diplomacy over war.

The deal was marketed by both sides as a “win-win”: Iran would dismantle the most controversial aspects of its nuclear program – minimizing the chance of acquiring a nuclear weapon for at least a decade – in exchange for the lifting of sanctions that crippled its economy.

As jubilant Iranians waved flags and heralded an easing of Iran’s isolation, President Hassan Rouhani promised that “a page has turned in the history of Iran.”

But one year later, the 159-page accord is a study in unmet high expectations for change, as hard-liners in both Iran and the US Congress fight to undermine the deal to ensure as little political benefit as possible for the architects of the accord – Mr. Rouhani and President Barack Obama – as well as for their long-term strategic foes, in Washington and Tehran.

Analysts say the Iranian president promised more than he could deliver.

“Rouhani had no choice other than leveraging pent-up public demands to rally elite support for diplomacy; the hype was as indispensable as its ensuing disillusionment was inevitable,” says Ali Vaez, the senior Iran analyst for the Brussels-based International Crisis Group.

“The deal has not ushered in a new era. It is, at best, taking Iran back to where it was before the nuclear crisis,” says Mr. Vaez. “The establishment deemed ending economic isolation as an exigency for preserving its power. Now it fears rapid economic opening could loosen its grip on power.”

All sides have strictly adhered to the letter of the deal: Iran has dramatically reduced the scale of its nuclear infrastructure – reconfiguring a heavy water nuclear reactor and a deeply buried uranium enrichment facility, for example – while keeping a limited capacity to produce fuel for nuclear energy. And non-nuclear sanctions have been lifted, partially ushering Iran back into the global economy.

But the deal has not yet enhanced Rouhani’s ability to fulfill his promise of expanding social freedoms, or of creating a less securitized atmosphere. In fact, the opposite may be true, after steady warnings from Iran’s supreme leader Ayatollah Ali Khamenei, about “infiltration” and “soft war” from the United States and the West.

US and European banks also are proving reluctant to engage with Iran, fearful that non-nuclear US sanctions might bite, thereby depriving Iran of the full hoped-for benefits of the deal. The House is readying new measures this week that will impose further sanctions over terrorism and human rights abuses, or limit Iran’s use of the dollar, all of which the White House says it will veto.

“Iran is keeping its promise … [But] they have tested us,” said Ali Akbar Velayati, the senior foreign policy adviser to Mr. Khamenei, in criticism this week of the continued US pressure.

“If they were defeated in Iraq and Baghdad and Damascus and Aleppo and Fallujah by Iran’s allies, and Iran is still progressing as the region’s first power, they try to take revenge and break their promise in places that they can,” Mr. Velayati said.

In his latest comments on the deal, Rouhani sounds his own notes of caution.

The nuclear deal “promotes global peace, security, stability, and development,” he said Wednesday. But if the other side “wriggles out of its commitments, we are completely ready [in nuclear capabilities] to reach our desired point in a short time span.”

High expectations

Expectations had been high in Iran, fanned by supporters of the deal, that its benefits would be palpable and immediate. Yet Iran has received back only a fraction of the $150 billion of its own funds that it expected, and financing new deals is a major issue because of the Western banks’ concerns.

Iranians’ hopes for the benefits, however, have not yet dissipated.

“Things have not improved, there is no real tangible impact on people’s lives, but there is still a glimmer of hope for better things to come,” says Mohammad Ali Shabani, the Iran editor of the Al-Monitor website, in London.

It was Iran’s shriveling economy – Iranians voting their pocketbooks, as well as promises of greater social freedoms – that helped Rouhani win election in June 2013. He vowed to “end extremism,” engineer a nuclear deal, and resurrect an economy hurt by mismanagement and sanctions.

To make the case for nuclear negotiations back then, Rouhani gave a three-hour PowerPoint presentation to Khamenei with dire predictions of the future. The 10-year economic forecast was that Iran, if sanctions continued, would “be like Bangladesh,” says an Iranian academic with knowledge of the briefing, who asked not to be named.

It was an uphill battle “to convince the supreme leader,” who was told that there “will be people on the streets” if there was no change, says the academic. Now “the average person has not received the benefits” of the deal, he says, but “feels things are going in the right direction.”

Popular support slipping

That view mirrors results of a telephone poll released Wednesday by IranPoll.com, a Canadian polling company, carried out on behalf of the University of Maryland, in which more than 1,000 Iranians from across the country were asked their views about the deal, compared with a similar poll immediately after the accord was reached a year ago.

Polling in Iran is notoriously difficult, with pollsters often frustrated by Iranians’ unwillingness to accurately reflect their thinking – especially on political issues.

Yet in this poll, approval for the deal slipped from 76 percent to 63 percent in the past year, with those saying they strongly support it cut in half, to 22 percent. More than 80 percent still say developing Iran’s nuclear program is “very important,” while more than 60 percent say engagement with the West should increase.

Yet crucially, 73.7 percent of Iranians polled said living conditions “have not improved,” while slightly more believed the US was “trying to prevent” Iran’s economic normalization.

US animosity toward the Islamic Republic “has not finished with this agreement,” Abbas Araghchi, one of Iran’s senior nuclear negotiators, told state-run IRIB television this week. Likewise, neither has Iran altered its missile program or other policies that brought about non-nuclear US sanctions, he said.

“Our problem with the States is that they have carried out their commitments in the agreement, but [added] limitations and propaganda beyond the agreement,” said Mr. Araghchi.

Can Rouhani win second term?

Another problem has been over-selling the benefits of the deal at home. Doing so “opened [Rouhani’s team] up to the kind of criticism and sniping you see today from the conservative side, but … Rouhani is counting on pragmatism prevailing at the ballot box,” says Mr. Shabani. “By pragmatism, I mean the willingness to vote for the lesser of evils. It’s not a flattering way to secure ballots, but it works.”

It worked last February, when a “hope” list of candidates backed by Rouhani and popular reformist figures trounced many conservatives in voting for parliament and the Assembly of Experts, the clerical body that will choose the next supreme leader.

Much of the jockeying now about the nuclear deal and its impact centers on Iran’s next presidential election, in June 2017. Hard-liners suggest Rouhani may have invested so much hope in the nuclear deal – and in the US and Western side upholding their side of the bargain – that he could become the first one-term president in a generation.

Still, sanctions relief has already brought “significant benefit” to Iran, notes Vaez, such as oil production returning to pre-sanctions levels; a boost of trade with the EU by 22 percent; and $3.5 billion of a foreign direct investment in Iran in the first quarter of 2016 – breaking a decade-long record.

Washington’s behavior has also been closely watched in Tehran.

“For Rouhani and his allies, the fact that the White House proactively lobbies to ensure effective sanctions relief and threatens to veto new sanctions are proof that Iran can deal with the US,” says Vaez. “But for opponents, the fact that you can deal with the devil doesn’t change the devil.”

Missile tests at issue

Khamenei once lauded the negotiators, calling them “sons of the revolution,” and last month said he “prayed for them and I continue to do so.”

But he also stepped up a tone of suspicion last fall, warning that Americans can never be trusted; that any new US sanctions on Iran will wreck the deal; and that the US should expect no cooperation on other thorny issues like Syria.

Hard-liners and military officers echo that criticism, even as the Islamic Revolutionary Guard Corps (IRGC) pushed the limits of the deal with ballistic missile launches this spring. Such tests are not meant to be conducted on missiles designed to carry nuclear warheads, though Iran says its missiles are not for that purpose.

UN chief Ban Ki-moon this week told the Security Council, in a confidential update reported by Reuters, that Iran’s missile tests “are not consistent with the constructive spirit” of the nuclear deal, but he stopped short of calling them a violation.

German intelligence reported last week, meanwhile, that Iranian “illegal proliferation-sensitive procurement” continued in 2015 at “a qualitatively high level,” especially with nuclear- and missile-related items.

Iran dismissed these reports.

“Why don’t you believe the enemy’s untrustworthiness and deceit?” Brig. Amir Ali Hajizadeh, commander of IRGC air forces said last week. “In order to eliminate our defensive power … they tell us today not to have missiles, tomorrow they will say, ‘why do you advise in Syria?’ then ‘Why do you support Hezbollah?’…. We should never think that the enemy’s demands have a ceiling.”