Iran: shifting sands

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The deal between the so-called P5+1 (the permanent members of the UN Security Council plus Germany) and Iran represents a recalibration of power relations in the Middle East.

On the surface the deal, which temporarily eases some of the sanctions on Iran in return for a suspension of is nuclear programme, is a dramatic breakthrough. Beneath it lay the tectonic shifts in a region that was once marked by military standoff and quiescent populations.

It is too early to judge if this deal will be made permanent - the Republicans could still scupper it by voting through a new raft of sanctions, while Israel and US allies in the Arab world have openly declared their plans to stop it going further.

Israeli leader Benjamin Netanyahu denounced the deal as a "historic mistake". He believes an air attack on Iranian nuclear facilities would have been enough. But behind the bluster is the hard truth that most of the key facilities are buried under mountains. It will take much more than a few bombs to knock them out.

The US is not interested in taking such a rash decision when sanctions are clearly working. Barack Obama has pointedly ignored Netanyahu's shrill warnings. In this case the dog is wagging the tail.

Although the Israelis are weary of a nuclear powered Iran, they are not about to be overrun by a million Iranian soldiers. Israel is dependent on the US (and the West) for its national security, as well as for weapons it cannot build itself (such as fighter aircraft), but it still controls an arsenal with terrifying destructive capabilities.

It fears Hamas and Hizbollah, yet neither is in a position to do much damage. Hizbollah is too busy fighting in Syria to present any significant danger, while the Palestinian Hamas movement is reeling from the loss of its key ally, Mohamed Morsi in Egypt.

Saudi Arabia, meanwhile, is fearful of a detente between its US master and its Persian enemy. The Saudi regime survived the Arab Spring, but it faces simmering anger among its Shia Muslims in the oil rich regions. The Saudis see Iranian hands at work in stirring up discontent, instead of their own sectarian policies.

More troubling for the oil monarchies is the continuing disintegration of Iraq, and the entrenched sectarianism that periodically becomes deadly violent. The Saudi calculation is that a militarily humbled Iran will somehow lead to a stable and compliant Iraq. The US experience points in the other direction.

The second dramatic change has come from within Iran itself.

The 2009 Green Revolution, although suppressed, alarmed key sections of the Iranian ruling class. The revolt shook the confidence of a regime that had survived years of external threat, war with Iraq and the prospect of an Israeli or US attack.

But the Iranian economy is buckling under the punitive sanctions. Its car and oil industries are crippled, as are thousands of small factories that are the mainstay for ordinary Iranians. There are limited oil revenues, no banking credit and few imports.

The election victory for the little known reformist candidate Hassan Rouhani in June 2013 was a breakthrough. Many of the Green Revolution leaders are under house arrest, while hundreds of their supporters are languishing in jail. But the pull of the reformers proved too strong. Rouhani's surge in the final days of the presidential campaign sent a strong signal that, although down, the reform movement could still spring surprises.

The message was understood by supreme leader Ali Khamenei. He embraced the reformist president and agreed a new course that would ease the pressure on the economy and the people. Not far from their thoughts must be the Arab Revolutions and the near collapse of their key Syrian ally.

Rouhani's first act was to try and calm the waters with Iran's enemies. With his firebrand predecessor Mahmoud Ahmadinejad in disgrace, and even the hard-line Republican Guards demanding some kind of compromise, the US and its allies found someone to work with.

The P5+1 deal represents a substantial recalibration of US policies in the region, and recognition that the alternative is either a new Iraq or a new Syria - an unpredictable war on Iran, or a potentially messy revolution. With continuing unrest across the Arab world, Iran must seem like a bastion of stability.