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Iran The Spectre of Sanctions


27-06-2010

Angus Taverner

Director- Global Affairs


Tag: UAE Public Policy Iran Geostrategic Affairs economy
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After more than a year of preparatory diplomacy, the Obama administration led the UN Security Council (UNSC) into imposing a fourth round of sanctions against Iran over its refusal to give ground on its nuclear programme.  The merchandise the UNSC produced, however, may be as detrimental to the rest of the Gulf neighborhood as it is to Iran. 
Just days before the sanctions vote, Turkey and Brazil, current members of the UNSC, brokered with Iran and tried to sell to Council members an agreement for nuclear fuel swap to replace the similar arrangement that foundered months ago.  With varied intensity, UNSC permanent members spurned this package as little more than 11th hour grandstanding intended to help Iran to avoid punishment for its intransigence. 
A UNSC majority (Turkey and Greece voting against and Lebanon abstaining) favored the new sanctions, though these had far less bite than the US had professed it was seeking.  The vote did give the US a diplomatic victory because it included yes votes from China and Russia.  And it importantly reduced Irans range of options for financing its nuclear programme and pushed Iran onto its back foot in reputation termsfor the moment. 
But the sanctions, coming down hard on weapons sales or transfers and on a larger number of banks and personal accounts of top level Iranians, will impinge further on trade and investment relations between the UAE and Iran.  The UAE is already taking steps to close more companies that concentrate on the Iran trade and is tracking even more carefully the flows of monies between UAE and Iran.  The UAE seems to be showing that it will, as it has in each of the preceding three rounds of sanctions, live up to its UN obligations.  This early initiative may help deflect some of the pressure that will flow toward the UAE from the sanctions that the US and the EU will try to impose in excess of the UN sanctions.  No matter how much the UAE may wish to preserve its remunerative trade with Iran, it could only at high political cost fail to enforce UN sanctions. 
In contrast to the multiple ways in which the UAE has cooperated with the international community in developing its nuclear energy programme, Iran has tried to deny and to thwart the collective drive of leaders of the international community.  First, the revelation of a hitherto secret reprocessing facility near Qom last September made abundantly clear that the Iranian leadership had been economical with the truth.  Second, the outcome of last years contentious elections seemed to reveal significant dissent inside Iran.  It exposed the Supreme Leadership to scrutiny that dented its aura of invincibility and gave the lie to the dysfunctional and mendacious group think that seems to characterise Tehrans dealings with the world.
Third, the change of guard at the IAEA at the start of this year has introduced greater clarity in the agencys criticisms of the problems it faces in trying to track Irans nuclear progress.  The new DG, Yukiya Amano, sanctioned the release of an intelligence-based report showing that Iran has indeed engaged in research that would have utility only in a weapons programme.
So what, we may ask? Is the international community going to allow Iran to cock a snook at it until one day the world wakes to find that Iran has withdrawn from the Non-Proliferation Treaty, expelled all IAEA inspectors and is proudly announcing that it is now a nuclear capable nation?  The answers seem to be gathering shape through the fog of Irans continuing obfuscation.
The response to so what? is that Iran will either become a dangerous pariah an altogether more capable and dangerous version of North Korea that will challenge the international communitys patience particularly in nearby Tel Aviv.  Or in an act of pragmatic diplomacy the community may embrace the so-called Grand Bargain theory of events:  Iran becomes a de facto nuclear power, akin to Pakistan and India, and acquires the respect that nuclear weapons confer. Of course this outcome would encourage others to follow suit: not just North Korea, Syria or Burma; but Saudi Arabia, Venezuela and Brazil. 
If the international community is not prepared to accept either version of Iran, it may do one of three things.  First, it could initiate an alternative version of the grand bargain a major realignment of western policy that hugs Iran close and smothers it with attention.  Or, second, it could make more determined strides to sanction Iran so that the leadership and the IRGC feel genuine pain instead of reward.  (Current sanctions help IRGC increase its command of Iran's economy.)  

The opposition in Iran is not likely to launch the counter-revolution that some wish.  The reality would more likely be further repression and growing instability around Iran. This would have repercussions for the UAE.   

Finally, the military option remains.  This Israel favors and President Ahmadinejad, some say, seems to be goading Israel into it.  The White House could be hoping quietly for this as well, but not until it has recovered its major forces from Iraq and the surge in Afghanistan has slowed.  Whenever it would come, the UAE would be caught in the cross-fire.  So the UAE wrestles with balancing its desire to preserve its trade relations against its wish that sanctions work. 

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