Analysis |

One Year On, Nuclear Deal Has Not Produced Wonders for Iran

Internal political rivalries are sabotaging deal by not enabling the growth and development that Iranians expected.

A photo of Dr. Zvi Bar'el.
Zvi Bar'el
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Iranian President Hassan Rohani speaks at the inauguration of the new parliament in Tehran on May 28, 2016.
Iranian President Hassan Rohani speaks at the inauguration of the new parliament in Tehran on May 28, 2016.Credit: Ebrahim Noroozi / AP
A photo of Dr. Zvi Bar'el.
Zvi Bar'el

It’s been a year since the signing of the nuclear agreement between Iran and the world powers. While it may be exaggerated to say, in this case, that time flies when you’re having fun, it can at least be said that the Iranian nuclear issue has been removed from the public agenda in Israel, as it has been in most of the world.

In Iran, on the other hand, it has been a sad birthday celebration, without cakes and sweets or surprise packages. A public opinion survey conducted in Iran last month and released this week found that only 62.6 percent of the public still support the nuclear agreement, in contrast to the 75 percent who supported it last August, a month after it was signed.

Only 5 percent of Iranians believe the Western powers made substantial concessions to Iran, compared to 22.6 percent who thought so last year; 74 percent say that the economic situation hasn’t improved, while only a few percent expect their situation to improve in the next year or believe that the United States will keep its commitments under the agreement.

Especially troubling, is the plunge in support for President Hassan Rohani. Only 38 percent have a “very positive” opinion about the president, compared to 61 percent last August. The main reason for this is the economy, not the concessions Iran had to make under the agreement.

Rather than decreasing, unemployment stands officially at 11 percent, meaning some 2.5 million people are out of work. The actual number of unemployed is thought to be much higher – probably totaling more than 3.5 million – as many people have despaired of registering in the employment agencies and are not included in the official statistics.

Estimated growth this year will probably be between 1.5 and 3 percent, significantly lower than Rohani’s 5 percent forecast. He also promised to add hundreds of thousands of work places for university graduates following new investments in Iran.

Although Iran has signed large-scale development agreements, investors are still wary, primarily because the American sanctions that are still in effect – imposed because of Iran’s support of terror and the development of ballistic weapons, according to the Americans – prohibit dollar deals. Terror and ballistic missile may not be connected to the nuclear agreement, but the lack of investment on the part of foreign investors – who cannot make transactions in dollars – is seen by Iran as a penalty stemming from the United States’ failure to keep its end of the nuclear agreement.

Hence the warnings made by senior Iranian officials, including Rohani, that unless the United States keep its commitments, Iran will also stop holding up its end of the agreement.

Rohani may be the last to want to sabotage the agreement, just as President Barack Obama is making efforts to prevent legislation that could harm it. But both leaders are forced to maneuver among powerful political forces, as their countries prepare for presidential elections.

Former President Hashemi Rafsanjani, a member of the Assembly of Experts – the clerical group in charge of appointing a successor to Supreme Leader Ali Khamenei – warned this week that “groups in Iran are competing on describing the agreement as a failure. They don’t understand that the agreement’s failure will weaken IranThey’re sacrificing the nation’s interests for partisan, factional achievements.”

Seventy-five American politicians and former senior military figures signed a letter to Obama recommending “developing a policy to expand the cooperation with Iran and reduce the conflicts.” Among other things they propose opening a diplomatic channel with Iran.

The nuclear agreement is expected to be the main engine driving the Iranian presidential campaign. Rohani has so far scored two important victories in the agreement’s wake, with the Reformists gaining impressive achievements in two election campaigns – for the parliament and the Assembly of Experts.

The parliament, which is charged with approving Rohani’s economic reforms, will determine whether he will be able to translate the nuclear agreement into an economic upheaval that can prove to the public that the agreement has real benefits.

By now, it is clear that the struggle for Rohani’s successor will not be a shoo-in for the radicals. But Rohani is now in a race against time. With only a year left to the elections, any delay in implementing the economic reforms could be critical to his chances of winning.

Other contenders have not come forward yet, but Iranian media has reported that Mahmoud Ahmedinejad, Rohani’s predecessor, is preparing a return to political life. Qassem Soleimani, commander of the Quds Force, also reportedly wants the post. Both these men are highly popular – 75 percent of those who took part in the survey supported Soleimani (if Rohani was to step down,) while 62 percent supported Ahmadinejad.

These figures reflect the deep disappointment with the nuclear agreement’s aftermath. Last month Rohani had to deal with a shocking corruption case that exposed the huge wages paid to senior bank and state officials. For example, the director of the national development fund takes home more than $18,000 a month and bank managers get even more. Rohani promptly fired some bank managers, but the president who promised to root out corruption in the administration has now been tainted.

Rohani can expose the depth of corruption in the Revolutionary Guards, the smuggling network that bankrolls it and the personal involvement of senior officials in the robbery of state funds. But meanwhile he is making do with demanding transparency.

On the other hand, Rohani can boast economic achievements. Iran has resumed oil sales of some 2.5 million barrels a day, about a million barrels less than before the sanctions, and says it has restored about 80 percent of its previous markets. It is rehabilitating its passenger air fleet and tourism is budding. But the country took a blow when the U.S. House of Representatives passed bills intended to thwart a $25 billion aircrfaft deal with Iran. The deal consisted of selling Iran 80 Boeing aircraft and leasing 20 others.

While the president could still veto the legislation, it shows what obstacles Rohani faces on his way to an economic breakthrough.

For years, the U.S. administration strived to influence the Iranian regime, encourage Reformists and support presidents seen as moderate. The nuclear agreement is a major leverage not only to block the Iranian nuclear program but to strengthen the Reformists and Rohani. But just when there’s a chance to help an Iranian regime that attempts to restrict the radical forces, the U.S. is sabotaging it, not on the basis of strategic considerations but due to internal political rivalry.

Meanwhile Iran is continuing to implement the agreement’s clauses. The International Atomic Energy Agency, which is supervising the agreement’s execution, says in its last report that the Iranians have not violated or deviated from the agreement. However, the problems may arise from the IAEA’s side. The agency is having difficulty covering the annual $10 million cost of supervising the agreement. It needs 70 experts, 45 of them supervisors for the Iranian agreement, and has a shortage of 20 supervisors worldwide.

It is not clear whether the nuclear agreement’s signatories will agree to finance the IAEA’s supervision, whose cost will reach some $100 million in 10 years.

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