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Energy and economic diplomacy can trump the nuclear ‘threat’ of the Iran deal

Increased oil and gas revenues amid lifted sanctions are set to raise Iran’s economic fortunes, which ease Middle Eastern tensions. EPA/Abedin Taherkenareh/AAP Image

Energy and economic diplomacy can trump the nuclear ‘threat’ of the Iran deal

Critics of Iran’s decision to sign a nuclear accord with the world’s major powers have been anxious to express their concerns about security threats. Israel and Saudi Arabia have formed an unlikely alliance of opposition and will try their best to derail the agreement.

No doubt the bellicose diatribes from Tehran’s theocracy have provided ample cause to question Iran’s stated aim of peace in the Middle East. But let’s pause to consider whether the nuclear threat narrative really stacks up.

Is the nuclear threat real?

The critics argue that although the new agreement defers Iran’s nuclear enrichment capability by more than a decade, this activity has not been banned outright. This is true, but why would Iran have even entered negotiations if it faced a prospect of no nuclear technology development whatsoever?

If Iran had been wedged into that position, the outcome would probably have been similar to North Korea’s nuclear development, which was able to proceed despite sanctions. Estranged by the international community, Iran could have withdrawn from the Nuclear Nonproliferation Treaty and proceeded as a rogue nuclear weapons state. The new accord’s Joint Comprehensive Plan of Action will see Iran come under greater vigilance than it might otherwise have done had it remained secretive about its activities.

Even if we consider the most extreme pessimistic situation, in which Iran through subterfuge were somehow able to develop a nuclear weapon even under this new enhanced scrutiny, what would it gain? Apart from the bravado of nuclear ownership, the weapons would have no potential for use because there is ample deterrence through mutually assured destruction.

The Bulletin of Atomic Scientists estimates that Israel has at least 80 nuclear warheads – an arsenal big enough to obliterate most Iranian cities. Add to that the enormous nuclear weapons capabilities of the United States, and there is little doubt that Iran would stand no chance if it ever dared (either directly or indirectly, through terrorist proxies) to use nuclear weapons in the region.

Saudi Arabia has even less to fear, being hallowed ground for all Muslims, including Iran’s Shia majority. There is zero chance that Iran would launch a nuclear weapon there.

Perhaps the nightmare scenario for nuclear weapons proliferation would be the use of a nuclear weapon through a stealth terrorist attack to deliberately provoke a war, a scenario envisaged by the 2002 Hollywood film The Sum of All Fears. But as the movie points out, this danger is more likely to materialise through a black market for lost weapons, or independently wealthy rogue elements, than from a state such as Iran.

Prevention of such an eventuality requires better intelligence, closer monitoring of existing nuclear stockpiles, and more attention to the issue of “lost bombs”, which are not currently monitored by International Atomic Energy Authority inspectors.

Energy and national pride

Much of the motivation for nuclear acquisition, whether for civilian or military use, can be traced back to national pride. If the Saudis join an arms race with Iran it would be simply to give a boost to nationalist egos. So it was vital that the Iran nuclear deal had to account for this pride factor.

That is why there are excruciating levels of detail on centrifugal allowances, sunset clauses, and site visitation and monitoring protocols. These measures allow all sides to spin the deal as a win for local political constituencies, but have little substantive impact on the aforementioned “threat”, or lack thereof, of Iran’s nuclear ambitions.

Placating pride is all part of the art of diplomacy and the negotiators in Vienna are to be congratulated for their masterful handiwork. They have also been assisted by middle powers like the United Arab Emirates, which has dropped its ideological scepticism of Shia Persia and congratulated Iran on the deal.

The real cause of the continuing consternation over the Iran deal is a linkage between regional pride and energy supremacy. Iran’s vast oil and gas reserves would compete in the global market and could lead to greater price volatility. More importantly, the deal looks set to reboot an economy that has been starved by sanctions for three decades. With a citizenry that boasts some of the highest university graduation rates for men and women in the region, Iran could capitalise on this cash influx for major economic growth.

Israel is most concerned that such growth could give Iran greater latitude in funding Islamist militant groups such as Lebanon-based Hezbollah. However, if the funding of terrorists is the primary concern, the target of action should be the transactions themselves, which would mean working with the Lebanese government to prevent them. Punishing a nation of almost 80 million people over a relatively narrow issue is unjustifiable, particularly given the past documented history of strategic manipulation of Iran’s vulnerability by regional powers.

Furthermore, Iran’s economic growth is likely to have the same kind of emancipating impact on regional relations that we have seen in China’s thawing relationship with Taiwan. Iran and Israel had strong ties before the 1979 revolution, and economic cooperation might well trump the political hardliners in due course.

The world will need plenty of energy in the coming years. Oil and gas providers, including Saudi Arabia, Iran, and even Israel and Palestine, should consider their reserves as fixed assets that will always find a market in due course. Economic diplomacy, catalysed by energy demand, deserves a chance, and the only way forward along such a positive path is for this deal with Iran to be honoured and monitored with care.

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