{"id":3958,"date":"2015-07-16T05:06:37","date_gmt":"2015-07-16T05:06:37","guid":{"rendered":"http:\/\/www.lifeandnews.com\/articles\/?p=3958"},"modified":"2016-08-14T23:08:25","modified_gmt":"2016-08-14T23:08:25","slug":"money-trumps-fear-in-reactions-to-wests-nuclear-accord-with-iran","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/money-trumps-fear-in-reactions-to-wests-nuclear-accord-with-iran\/","title":{"rendered":"Money trumps fear in reactions to West’s nuclear accord with Iran"},"content":{"rendered":"

Jamsheed K Choksy<\/a>, Indiana University, Bloomington <\/a><\/em> and Carol E B Choksy<\/a>, Indiana University, Bloomington <\/a><\/em><\/p>\n

The Islamic Republic of Iran boasts the world\u2019s fourth-largest oil reserves, second-largest gas reserves and the 29th-biggest economy, estimated<\/a> at US$415.3 billion in 2014. Its gross domestic product is growing<\/a> about 3% a year despite the crippling impact of decades-old sanctions.<\/p>\n

Not surprisingly, then, potential economic gains are prevailing over military, terrorism and human rights concerns in shaping responses to the historic deal<\/a> agreed to this week between Iran and six major world powers (P5+1).<\/p>\n

While Iran trails Saudi Arabia as the biggest economy in the region thanks to the latter\u2019s energy dominance, it has many advantages<\/a> over its rival that are sure to become more pronounced as sanctions are lifted. Iran\u2019s economy is more diversified and includes a robust manufacturing sector that supplies domestic and Asian markets with chemicals, plastics, automobiles and household electronics.<\/p>\n

Iran is also set to get a boost<\/a> from about $100 billion in assets currently frozen by US and UN sanctions once the International Atomic Energy Agency (IAEA) certifies that Tehran is fulfilling its part of the deal, probably by the end of the year.<\/p>\n

As sanctions fall away, Iran should rise swiftly back into the major leagues, propelled by larger energy exports that could top $100 billion a year<\/a>, the release of hitherto frozen funds and a highly educated and motivated workforce<\/a>.<\/p>\n

Iran, for its part, has been stressing the economic and stability benefits of the agreement. President Hassan Rouhani emphasized<\/a> to his nation: \u201cWe are on the brink of a new era in the international community.\u201d<\/p>\n

Ever the cautious international bureaucrat, IAEA director general Yukiya Amano simply endorsed the Vienna accord as a \u201csignificant step forward.\u201d But then, the IAEA has no fiscal stake in the plan\u2019s success or failure.<\/p>\n

Most nations, however, do, and are counting on Iran becoming a major market for their goods and services, signaling why money is trumping other concerns when it comes to reactions to the accord. And for those that remain opposed, their rivalry with Iran meant they didn\u2019t expect to gain anything in the first place.<\/p>\n

Here\u2019s a look at how 20 countries with a variety of ties to Iran reacted to news of the accord, and how economic interests were the dominant factor.<\/p>\n

Russia and China await big benefits<\/h2>\n

Russia is one superpower whose stance is as clear as that of many developing countries. President Vladimir Putin has declared<\/a> that relations with Iran \u201cwill receive a new impetus and will no longer be influenced by external factors.\u201d<\/p>\n

Foremost in fiscal terms will be high-tech weapons sales and atomic reactors for civilian energy generation. Russia expects to benefit despite knowing a flood of Iranian oil and gas on the market will lower energy prices, hurting its own main source of income.<\/p>\n

China<\/a> is another superpower that warmly welcomed the deal as a \u201chistoric day.\u201d China, like Russia, plans to sell civilian nuclear plants to Iran and is in talks to invest in gas, oil and rare earth mineral mines in Iran. Beijing, which imports more than 500,000 barrels<\/a> of Iranian crude a day despite the sanctions, also hopes to have fewer problems fueling its economy.<\/p>\n

US, Canada, Australia and UK reactions more mixed<\/h2>\n

In the US and Canada \u2013 which have little need for Iranian oil or other exports but whose companies hope to strike lucrative deals selling technology, energy infrastructure and consumer goods \u2013 the political reaction has understandably been more mixed.<\/p>\n

Reflecting the divisions within the US about Iran\u2019s potential martial threat, Republican presidential hopefuls such as Jeb Bush denounced<\/a> the agreement as \u201cdangerous, deeply flawed, and shortsighted.\u201d<\/p>\n

Democratic candidate Hillary Clinton, however, is less fearful of this threat and more focused on pitching economic welfare to American voters. She described<\/a> it as \u201can important step\u201d \u2014 one that she helped set the groundwork for as secretary of state.<\/p>\n

Canada, which severed diplomatic relations in 2012 over Iran\u2019s nuclear and human rights violations, said it needed to examine<\/a> the deal further before taking any specific action, even as pressure mounts to embrace the fiscal benefits of reestablishing ties.<\/p>\n

Australia greeted the deal by stressing<\/a> \u201ccaution at least as much as the welcome,\u201d but its exports<\/a>, largely grains, to Iran are small at $222 million.<\/p>\n

The UK, which also participated in the negotiations, has increased its trade<\/a> over the past year by 36% to $109 million. London hopes to gradually restore calm to a relationship that broke off in 2011.<\/p>\n

Israel, the GCC and the Sunni\u2013Shiite struggle<\/h2>\n

Israel lives under the verbal threat of annihilation by Tehran and naturally does not expect to have any commercial dealings directly or indirectly with the Ayatollah\u2019s regime.<\/p>\n

Freed from economic considerations, Prime Minister Netanyahu called<\/a> the deal \u201ca bad mistake of historic proportions.\u201d<\/p>\n

Certainly, seen from Jerusalem, the anti-Semitic leaders of the Islamic Republic could deploy vast portions of their newfound funds to strike terror via Hezbollah and Hamas. Consequently, antipathy and fear of Iran had brought Israel closer to erstwhile Arab foes in opposing Iran.<\/p>\n

Saudi Arabia, for example, which is locked in a sectarian struggle against Iran for dominance in Iraq, Syria, Yemen and the Gulf, had its diplomats speak confidentially<\/a> about \u201cextremely dangerous\u201d Persian expansionism in the wake of the nuclear deal.<\/p>\n

Fellow Gulf Cooperation Council (GCC) members Kuwait<\/a>, Bahrain<\/a> and Qatar<\/a>, also part of this Sunni\u2013Shiite struggle, were much more nuanced in their reaction.<\/p>\n

All three Gulf monarchies know full well that the deal provides<\/a> both economic benefits and costs. Iranian cash soon to be heading their way will boost real estate, luxury goods and consulting services. At the same time, higher Iranian oil and gas exports will eat into their established energy-based income streams. Iran\u2019s oil minister is already planning to boost exports<\/a> by 500,000 barrels per day within six months and top out at 2.5 million barrels per day within a couple of years. This will be a particularly major blow to the Saudis, whose crude oil will become far less vital to the global energy market.<\/p>\n

Two other GCC member states, the United Arab Emirates (UAE) and Oman, are taking a more positive approach, regarding Iran\u2019s economic and strategic reemergence as inevitable. The UAE, which has been rebuilding non-energy trade<\/a> with Iran that\u2019s now worth $17 billion, extended<\/a> \u201ccongratulations\u201d coupled with hope that the agreement will contribute to \u201cstrengthening regional security and stability.\u201d<\/p>\n

Oman, which helped sow the seeds of this agreement by opening up communication channels between Iran and the US, went even further, hailing<\/a> the agreement as a \u201chistoric win\u2013win.\u201d<\/p>\n

Oman has longstanding commercial ties with Iran in addition to a confessionally mixed population of Ibadi, Sunni and Shiite Muslims. So it cannot afford to foment intrafaith tensions that would rip apart its society and doom its emerging status as a diplomatic and mercantile hub.<\/p>\n

Iran\u2019s allies praise deal<\/h2>\n

Iraq\u2019s Shiite government is allied with Iran confessionally and dependent upon it both commercially and in the battle against the Islamic State. Accordingly, Iraq sees<\/a> the deal as a \u201ccatalyst for regional stability.\u201d<\/p>\n

Indeed, long after the US is gone from its soil, Iraq\u2019s Shiite majority knows that maintaining not just political but economic clout over its restive Sunni population north of Baghdad will depend on Tehran\u2019s largess via militias and cross-border trade.<\/p>\n

Then there is dysfunctional Syria, where the tottering regime is a client beholden fiscally, commercially and militarily to Tehran.<\/p>\n

Having just accepted<\/a> a $1 billion line of credit from Iran, Bashar al-Assad could hardly do anything but praise<\/a> the agreement as \u201ca great victory” and \u201ca fundamental turning point.\u201d Presumably, Assad hopes that if he can just hang on to Damascus a little longer, Iran will be more empowered in convincing the US and EU that the Alawite ruling class can still secure Syria against the Islamic State.<\/p>\n

Neighbors see gains from trade, oil flows<\/h2>\n

Istanbul, despite being a regional rival of Tehran on the political stage, declared<\/a> that \u201cthe nuclear deal is great news for the Turkish economy,\u201d will lead to investment and help reduce the price of oil.<\/p>\n

Indeed, Turkey\u2019s economy, presently Iran\u2019s third-largest trading partner, will benefit both from larger flows of cheap Iranian gas and oil to its own consumers and from tariffs on energy that passes through its borders to European countries.<\/p>\n

Likewise, the entire Turkish supply chain \u2013 from corporations to individuals \u2013 stands to reap windfalls from goods flowing through its borders to Europe and beyond.<\/p>\n

Pakistan and India, similarly, hardly feel threatened by Iran even despite Tehran\u2019s influence on Afghanistan, due to their own nuclear capabilities. Thus, each welcomed the deal and its economic impacts.<\/p>\n

Pakistan expects<\/a> \u201ceconomic growth along with an increase in trade” especially through the Iran-Pakistan pipeline. Iranian gasoline, smuggled across the border of Baluchistan and Makran provinces, has long kept the Pakistani economy afloat. But those supply lines provide no tax revenues. Now, as energy imports can take place freely and overtly, the central government in Islamabad stands to benefit.<\/p>\n

India also expressed<\/a> delight at additional \u201cenergy cooperation and connectivity\u201d plus a reaffirmation of each country\u2019s \u201cright to peaceful uses of nuclear energy.\u201d India has an ever-rising demand for fuel, and Iran is positioned a short distance away to deliver a steady supply.<\/p>\n

Kazakhstan\u2019s officials hailed the accord as they expect swift gains from a recently inaugurated trans-national railway<\/a>. The Central Asian nation also plans to work with Iran toward enhanced cooperation in the energy-rich Caspian Sea.<\/p>\n

Jockeying for position<\/h2>\n

China is currently Iran\u2019s largest trading partner<\/a>, with non-fuel trade expected to rise from $13 billion in 2014 to at least $80 billion by the end of this year. Rounding out the top five<\/a> are the UAE, Turkey, the European Union and South Korea. Seoul also quickly joined Iran\u2019s other top trading partners in welcoming the nuclear deal.<\/p>\n

As the end of sanctions bolsters Iran\u2019s economy, these 20 and many other countries will be competing over the coming months and years to enjoy the benefits that will accompany the nuclear accord taking effect.<\/p>\n

Clearly it\u2019s no surprise that money is dominating reactions, rather than ideals or even fear. For better or worse, global and regional responses are being shaped by fiscal calculations. Even security and strategic interests are being seen in commercial rather than military terms.<\/p>\n

It\u2019s the economy, stupid.<\/p>\n

\"The<\/p>\n

Jamsheed K Choksy<\/a> is Chairman, and Distinguished Professor, Department of Central Eurasian Studies at Indiana University, Bloomington <\/a>.
\nCarol E B Choksy<\/a> is Lecturer, School of Informatics and Computing at Indiana University, Bloomington <\/a>.<\/p>\n

This article was originally published on The Conversation<\/a>.
\nRead the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Jamsheed K Choksy, Indiana University, Bloomington and Carol E B Choksy, Indiana University, Bloomington The Islamic Republic of Iran boasts the world\u2019s fourth-largest oil reserves, second-largest gas reserves and the 29th-biggest economy, estimated at US$415.3 billion in 2014. Its gross domestic product is growing about 3% a year despite the crippling impact of decades-old sanctions. […]<\/p>\n","protected":false},"author":40,"featured_media":6197,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/3958"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/40"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=3958"}],"version-history":[{"count":1,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/3958\/revisions"}],"predecessor-version":[{"id":3959,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/3958\/revisions\/3959"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/6197"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=3958"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=3958"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=3958"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}