No, the Iran nuclear deal is not unraveling

Is the Iran deal unraveling? Think again. Brookings, Suzanne Maloney | May 20, 2016Are the wheels coming off the Iran deal? Less than a year after Iran, America, and five other world powers inked a comprehensive nuclear accord, a debate over its terms has erupted anew.

In Washington, the braggadocio of a prominent White House aide is fueling Republican accusations thatPresident Obama deliberately deceived the Congress and the country about Iran and the deal. And in Tehran, frustration over the residual impact of American sanctions has prompted increasingly resentful accusations from Iranian leaders that the United States has failed to live up to its end of the bargain. As a result, some are fretting that the deal is “at risk” and are laying blame on the White House doorstep.

Both claims are spurious, and deserve a more forceful rebuttal from the Obama administration. In the end, however, the ruckus over recent comments by Deputy National Security Advisor Ben Rhodes is largely an inside-the-Beltway drama—one that provides endless entertainment for Washington insiders but has little real significance for deal or American diplomacy.

By contrast, Iran’s dissatisfaction presents a serious diplomatic dilemma for Washington. But it should not be interpreted as evidence that the deal is “unraveling.” Rather, the chorus of complaints from Tehran demonstrates the accord signed in July 2015 is working exactly as it was intended—forestalling Iranian nuclear ambitions while amplifying the incentives for further reintegration into the global economy.

Obama’s handling of this first real test of the nuclear agreement will be crucial for sustaining its credibility. For the sake of the deal, and for any prospect of a durable Thermidor for the revolutionary state, Washington should resist the temptation to assuage Iran’s post-deal growing pains. If Iranians wants wholesale economic rehabilitation, their leadership needs to embrace the kind of policies that would yield that—in other words, meaningful political, economic, and foreign policy reform.

“Iranophobes” and “thieves”

Not surprisingly, Iranian officials are seeking a quicker fix, and they have mounted an intense campaign to wrest supplementary sanctions relief from Washington. Their principal argument is that the theocracy has been stiffed. On an April visit to Washington, Valiollah Seif, the head of Iran’s Central Bank, questioned the benefits of the nuclear agreement, insisting that Tehran has received “almost nothing” of the sanctions relief that was promised as part of the deal, formally called the Joint Comprehensive Plan of Action (JCPOA). Mohammad Javad Zarif, the country’s smooth-spoken foreign minister, has contended that “the United States needs to do way more,” warning that “if one side does not comply with the agreement then the agreement will start to falter.”

And Iran’s supreme leader, Ayatollah Ali Khamenei, charged recently that “the Americans are engaged in obstruction and deception, adding: “on paper, the Americans say banks can trade with Iran but in practice they act in such an Iranophobic way that no trade can take place with Iran.”

Adding fuel to the fire are changes to U.S. visa policies that are perceived at constraining Iran’s economic rebound, deliberately inflammatory rhetoric from the U.S. Congress, and a recent Supreme Court verdict that paves the way for a $2 billion payout to victims of terrorist attacks attributed to Tehran or its proxies. Iranian President Hassan Rouhani has described the decision as “flagrant theft” and evidence of enduring American hostility toward Tehran.

Upholding our side of the bargain

Tehran’s narrative plays equally well to its essential constituencies: the revolution’s power brokers, steeped in official narratives of American treachery; an Iranian citizenry impatient for its long overdue peace dividend; and a European business community anxious to reclaim its piece of the pie after an unwelcome five years of having to forgo a lucrative market.

And it wouldn’t be the first time Tehran got cold feet about its nuclear obligations out of an unfortunate sense of that the payoff was insufficient. In 2005, two years after a deal with Britain, France, and Germany to suspend core aspects of its nuclear program, Iran’s leadership soured on that deal and reneged. Anxiety about a repeat performance is promptingnew U.S. efforts to facilitate business in Iran and a mounting debate in the press and on Capitol Hill around additional American sanctions relief.

But Iran’s campaign is grounded in a fundamental falsehood: that Washington has failed to live up to its end of the bargain. In fact, Washington has delivered fully on the sanctions reliefpledged under the JCPOA, and officials in the White House, State Department, and even the enforcement office of the Treasury Department have engaged in extraordinary outreach to clarify remaining restrictions and underscore American commitment to the terms of the deal.

Moreover, the rewards of Iran’s nuclear concessions are actually widely evident—in the volume of new trade and investment that is already underway; in the scope and velocity of diplomatic and commercial reengagement with Iran; in the swifter-than-anticipated revival of oil exports. Heads of state from Italy and India, from South Korea to South Africa are beating a path to Tehran, accompanied by contingents of eager investors. Meanwhile, Iranian officialsincluding Seif—chief of the same Central Bank that was formerly barred by sanctions—headline swanky conferences aimed at wooing European business players. The great Iranian gold rush is on.

Tehran was never promised a rose garden

The catch is that the money is moving more slowly than Iranian officials seem to have anticipated—and the trickle-down effect has been almost nonexistent for the average Iranian. The explanation for this lag is complex and multi-dimensional.

First and foremost, Iran is hard hit by the decline in oil prices, which have fallen by roughly 60 percent since the interim nuclear deal was signed in November 2013. Even in the best of times, the Islamic Republic was never a particularly easy place to do business, and many of its structural economic problems have been exacerbated by a decade of sanctions and the particularly egregious mismanagement of the 2005 to 2013 tenure of Iranian President Mahmoud Ahmadinejad. ………http://www.brookings.edu/blogs/markaz/posts/2016/05/20-iran-sanctions-jcpoa-maloney