In light of the Nuclear agreement reached on 14 July 2015 between the Permanent Members of the Security Council, Germany and Iran, we interviewed Researcher Agnese Macaluso of The Hague Institute. She has written a Working Paper on the Iran sanctions and is part of the Conflict Prevention Program.
1. Without getting into the specifics of the Nuclear Deal, can you more generally explain why this deal is important?
The relationships between Iran and the U.S. have been deeply paralyzed since 1980’s. This is the first time major world powers have successfully engaged in substantial talks in more than three decades. Of course the deal will need to be endorsed domestically both in Iran and the U.S. The latter will require congressional approval, which will take at least 60 days and will be a big challenge for the White House. The deal may also negatively affect US relationships with traditional partners such as Israel, which strongly opposes the deal.
Even if the deal is accepted and ratified, the question remains as to whether and to what extent it will be implemented, as many provisions will be in place for a decade or so. Despite these challenges, this is an historical deal. It proves that dialogue and engagement are crucial to solve crises and promote change.
2. In what way will this deal affect the Iranian people in your opinion?
The biggest gain for the Iranian people is the relief of sanctions. Sanctions have been in place for more than 30 years. Specifically since 2002 the sanctions have not only affected the nuclear sector and the main pillars of the economy in Iran but also increasingly directly affected various aspects of ordinary Iranian people’s lives, as demonstrated by the steady rise of inflation and unemployment, the shortages in the health sector and the development of illicit trafficking of goods to overcome sanctions. Indirect effects are more difficult to measure but, for example, the gasoline ban has pushed Iran to increase in-house production. The low quality of available facilities and the shortage of raw materials has led to an increase in air pollution, which of course directly affects Iranian people’s daily life.
Even if the sanctions were lifted immediately, it would take time for the Iranian economy and society to recover. For example studies show that the oil sector will need at least 5 to 6 years to get back to its pre-sanction performance, while it is more difficult to calculate how quickly standards of life will improve.
3. In Working Paper 2 you wrote on: The Apparent Success of the Sanction Regime. In this paper you assessed whether the shift toward dialogue by Iran is a direct consequence of the sanction regime. What were your main findings?
It is true that sanctions have played an important role in bringing Iran to the table. However we should not consider the outcome of the negotiations to be a direct result of the sanctions. Sanctions have been in place for years and the nuclear program has continued to develop. Also, although they have been painful, Iran has adopted its economy to sanctions and has been able to turn to alternative trading partners.
The deal is not a result of the sanctions, which on the contrary have fed mutual distrust. History has shown that without engagement and negotiations, sanctions are ineffective. It is only after Iran was recognized as an interlocutor that these considerable achievements could be achieved.
4. In your Working Paper you mention that under President Obama the strictest and most invasive sanctions package, CISADA, as part of a larger set of sanctions, were imposed on Iran. How do you regard Obama’s role?
Obama has applied the stick-and-carrot strategy. He has imposed further economic limitations on Iran and has been able to bring on board the EU in this effort. However, he has combined economic restrictions with engagement and dialogue. In addition, his rhetoric has been strikingly different over the last few years. He understood coercion alone could not bring about political change. Recognizing the need to engage with Iran as an interlocutor, rather than viewing it as a pariah state to isolate, has marked a historical shift in U.S. policy toward the country.
5. Looking forward, you are now writing a Working Paper that will be published in September, in which you are looking specifically at the negotiation dynamics and sustainability of the Nuclear Deal. What can you tell us about your upcoming piece?
In my upcoming piece, I analyze how the inequality that has characterized the relations between Iran and the US is now reflected in the negotiation process and might undermine the durability of the deal. It is proven that negotiated agreements that are not based on equality are less durable than those which are based on an equal process and a fair distribution of benefits and burdens.
In this sense, this deal will be a test for future negotiations and more generally, the ability of Iran and the U.S. to normalize relations.