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Global Implications of the Iran Nuclear Deal

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he historic nuclear deal struck between the P5+1and Iran has profound implications for the future ofTehran, the region and the world. The reintegration ofIran into the global economy will boost private sectorsthroughout the country and mitigate the importance ofblack markets, weakening hardliners and boosting themoderates. Nothing in the agreement removes or forbidssanctions on Iran based on human rights or support ofterror groups, so those restrictions will remain in place.With the framework of the deal in place, the world iswatching and waiting to see what will happen in the daysahead.Itamar Rabinovich, former ambassador of Israel to the UnitedStates, opened the discussion stating that there will be aheated debate in the United States for the next 60 days duringwhich the Congress will debate the Iran deal, vote and likelyveto. The debate around the deal ties into the presidential raceand its not likely to abate before the election. He stated thathis evaluation is that the administration will be able to keepthe democrats in support of the deal because it is distinctly apartisan issue and because Congress, at the end of the day,tends not to obstruct the president on foreign policy issues.He continued to state that the deal itself - and weve heardnumerous positions for and against it - is not as bad assome of the critics make it out to be and its not as greatas the administration claims. It will be the legacy project ofthe Obama administrations foreign policy and an issue thathas preoccupied the president since the primaries and thebeginning of his term.The real question is the future. The deal takes back the Iraniannuclear program and checks it for 10 years, but the questionsand the criticism is what will happen after 10 years? Are wemortgaging the future for the sake of the deal? Will the Iranianscheat and does the deal provide sufficient mechanisms formonitoring? How will the United States and other nations reactif the Iranians are caught cheating? Thats the biggest questionmark.Is a future president likely to use force? Or could the regimebe rebuilt a few years down the road? And regionally there is amajor concern about the impact on the politics of the region.1

What will an unchanged Iran, with the influx of hundreds ofbillions of dollars, do in places like Yemen, Syria, Lebanon andIraq?There are very high emotions in the region and they are mostvociferously expressed by Benjamin Netanyahu, the primeminister of Israel, who has made this his legacy project. Heis perfectly messianic about it, and is taking the fight to theAmerican domestic arena. Netanyahu needs to accept the dealand try to improve relations with the United States, primarily tonegotiate with them on a defense package in coordination withthe view of what happens in the region.But Netanyahu will likely continue to fight the president.He does not want to settle, at this point, on a package ofcompensation because he thinks this is a bad deal. He isbanking on having a Republican victory in the 2016 elections.In the region itself, its not going to be the sole issue. As we goaround to the different countries, the conflict continues in eachof them in a different way. The Iranian deal, and reinforcementsof Irans influence, is just going to exacerbate these conflicts,so we should anticipate a very active and tense period in theMiddle East itself.Bruce Jentleson, former senior advisor to the U.S. StateDepartment policy planning director, noted that when theUnited States had the arms control agreements with the SovietUnion, there was a full and serious debate in Congress; and itsimportant that there be a constructive debate on Iran. The twolines of debate on the Iranian deal are: were the concessionsmade by Iran sufficient? And even if they are deemed sufficient,will they be verified and enforced?On this second question, many technical experts disagree.While its prudent to anticipate some cheating, U.S. secretary ofenergy Ernest Moniz, himself a distinguished nuclear scientist,has basically said that while we wont find everything, webelieve we can find efforts that would have the most likely effecton Iran making serious progress to nuclear weapons.The sanctions are multi-faceted from a business perspective;the U.S. sanctions are falling into two categories. Primarysanctions, which affect U.S. companies and U.S. citizens, arentreally being affected by the terms of the agreement largelyuntil we get past Congressional action. Secondary sanctions,which are largely extraterritorial, apply to non-U.S. persons andcompanies through the use of financial transactions involvingthe dollar and certain licensing of U.S. technology. These arebeing more extensively loosened.From a business perspective, weve already seen the Europeansshifting to Iran. The French foreign minister was there this weekand there was a German delegation there a couple of weeksago. Germans have more than 2 billion euros in exports andbelieve they can double them fairly quickly.

The demographics in Iran are pretty interesting with about 60percent of the 70+ million population under the age of 30; asociety which in its own way has secular elements, the highestlevels of literacy in the region other than Israel, and some sensethat some of their policies may not be serving their interests asmuch as they once thought. The president opened the door onthe possibility of broader changes in relations. For example, hesaid that Iran should be part of the conversation on Syria, whichis very different than the U.S. position a year and a half ago.So, there is risk in being both taken advantage of, giving up toomuch too quickly with too little in return, and there is also risk innot taking advantage of an opportunity and doing too little tooslowly and having a possible window of opportunity for majorchange close. We dont know, but its important that peopleassess the risks on both sides and make their own judgment.There is not just risk on one side.Lalit Mansingh, former ambassador of India to the UnitedStates, commented that India welcomes the agreement.India has been working behind the scenes trying to persuadeAmericans and Iranians to put a deal in place. Prime MinisterModi invited President Rouhani to visit India, and India expectsthat once the sanctions are lifted there will be much closercommercial ties with the Iranians.At one time India received 20 percent of its oil from the Iranians,and that has dwindled because of the sanctions. Now India isembarking on a phase of close economic cooperation with Iran,particularly building a route through Iran through the ChabaharPort to Central Asia, which will bypass Pakistan.Mamoon Sbeih, managing director of APCO in the Middle East,said that the Iran deal is the key topic in the Gulf; and whilethere seems to be a single voice on the issue of the deal withIran, in reality the attitude is quite different. Saudi Arabia isprobably as opposed to the deal as Israel and Egypt, and theyare very vocal about it. They believe this will strengthen Iranshand and it has nothing to do with the nuclear aspect.That is the biggest issue in the Middle East and the biggestconcern the Saudis have raised. So in a sense, there is a lot ofdissatisfaction with Irans attitude towards the region and theopposition to the deal has a lot to do with that.Key takeaways:1. The deal is not as bad as some of the critics make it out tobe and it is not as great as the U.S. administration claims.2. There is risk in giving up too much too quickly with too littlein return, and in not taking advantage of an opportunityand doing too little too slowly and having a possiblewindow of opportunity for major change close.3. The biggest issue in the Middle East is the dissatisfactionwith Irans attitude towards the region.4. There is an opportunity for those businesses who carefullylook at the sanctions and identify what is allowed or not inconsidering this new market as it is opening up.Driving Global DialogueFor more information, please visit www.apcoworldwide.com/forum 2015 APCO Worldwide Inc. All rights reserved.