Foreign Policy Research Institute A Nation Must Think Before it Acts Iran’s New and Dangerous Moment

Iran’s New and Dangerous Moment

Politicians, pundits and analysts will no doubt continue to debate whether the terms of the P5+1 nuclear deal with Iran, the so-called Joint Comprehensive Plan of Action (JCPOA), could have been more favorable to the West, whether the United States pressed too hard and too fast for a deal and whether a deal should have been reached at all. Likewise, there will be considerable speculation regarding just how closely the U.S.-Iran prisoner exchange was tied to the deal. Many will also ponder why the Iranian-Americans released to Iran chose to remain in the United States. Finally, many will wonder whether the Iranian capture and release of American sailors was deliberately timed to virtually coincide with “implementation day,” the day when Iran was deemed compliant with the requirement to dismantle its nuclear weapons program, and the process of releasing frozen Iranian funds began.

It is unlikely that clear answers will emerge regarding any of these developments anytime soon. What is certain, however, is that Iran stands to receive anywhere from $50 to 100 billion resulting from the removal of sanctions imposed in response to its nuclear program. The lower figure amounts to just under one-eighth of Iran’s total gross domestic product in 2014; the larger amount represents about a quarter of Iran’s GDP that year. Since many, if not most, of these funds will flow to the central government, Tehran will enjoy a degree of budget flexibility unheard of since the days of the Shah.

The boost to the Iranian economy will not be limited to the influx of funds unfrozen by the lifting of sanctions under the JCPOA. International businesses, including foreign subsidiaries of American corporations, are already lining up to invest in what all agree is a large, and sophisticated, Iranian market. Iran is also determined to increase its oil production despite a drop that has resulted in petroleum prices below thirty dollars a barrel, the lowest in a dozen years. Both taxes on foreign investments and petroleum revenues will add even more billions to Tehran’s coffers.

What will the mullahs do with their newfound cornucopia? Apologists for what they invariably call “the Islamic Republic” (there are actually other states whose official names include that term—Afghanistan, for instance) are certain to claim that these monies will be applied solely to boost a sagging economy. No doubt some, perhaps most, of those funds will do so—but not all. They also are needed to accelerate Iran’s ongoing thrust for regional hegemony.

Iran has long since expanded its influence beyond what…

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