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Why Iran’s Supreme Leader may yet swallow a bitter nuclear deal

Ready to settle? EPA/Abedin Taherkenareh

Amid the intense discussions between Iran and the US over the former’s nuclear enrichment programme, there are signs that the two sides are closer to a nuclear deal than at any point since talks began in 2003. According to “Western diplomatic sources”, the Islamic Republic has prepared to makee significant concessions.

These include a reduction of its current level of operating centrifuges for uranium enrichment, from about 10,000 to 6,000 over the next ten years; shipment of almost all of their uranium outside Iran, to be held in Russia; an agreement to return to the current level of enrichment only after 15 years; and inspections and supervision of nuclear sites by the International Atomic Energy Agency.

The Iranians may also be ready to commit to never using their advanced centrifuges, installed in early 2013 but yet to be put into operation.

There is still a high hurdle to final deal by the July 1 deadline: Iran is insisting that major US and European sanctions, especially on its oil and financial sectors, must be removed with months, while US officials are speaking of a process taking years.

Making the big assumption that the US and its partners agree to lift some of the key sanctions within a year, will Iran’s Supreme Leader give his necessary endorsement so the deal can be implemented?

At a glance, that endorsement might appear beyond hope – and yet, things have been changing for some time.

All bark?

No-one could think for a second that Ayatollah Khamenei is a fond admirer of the US. In his speeches, on his website, and even via Twitter, he consistently rails against the perfidy and dishonesty of America and its government, castigating Washington not only over the nuclear issue but also for everything from its supposed abuses of African Americans and Muslims to its alliance with Israel to its history of “imperialism” to its operation of Guantanamo Bay.

Yet in September 2013, the Supreme Leader accepted the request from his new president, Hassan Rouhani, that the nuclear talks be renewed with the US and the other 5+1 Powers (Britain, France, Russia, China, and Germany).

He has maintained this support for discussions despite the hostility of “hard-line” groups, including at times the elite Revolutionary Guards. He has also publicly backed Rouhani and Foreign Minister Mohammad Javad Zarif against the criticism of MPs and clerics opposed to any agreement.

Still, Khamenei has set high goals for Iran’s nuclear negotiators. In 2014, he said that Iran needed to expand its output of enriched uranium 2000% by 2021 to ensure the self-sufficiency of its civil nuclear program.

In talks with the US and the 5+1 Powers, Tehran’s diplomats set a lower figure; however, the reality of the deal on the table is that Iran – far from any expansion – is cutting its enrichment by at least 40%, a humiliating and debilitating climb-down whatever the true nature of its nuclear aspirations.

But Ayatollah Khamenei might yet give up his nuclear hopes and accept a deal. Why? Because the wait for a break in the negotiations is crippling his country.

Falling apart

A combination of mismanagement, corruption, global conditions, and sanctions have brought Iran’s economy to breaking point. Oil exports have plunged more than 40% since 2012, and earnings from oil sales have fallen from US$100 billion to about US$30 billion. That leaves a giant hole in the proposed 2015/2016 budget, currently to be filled with thin predictions of increased tax revenue and “non-oil exports”.

This is all hitting Iran’s people where it hurts. Unemployment is rising, especially among those under 30. Inflation has fallen from the nightmarish 45% it reached in 2013, but it is still officially above 15% and unofficially higher than that for key products such as food and electricity. Price rises have been accompanied by a subsidy cuts program, which has been a bureaucratic albatross since 2010. The currency, while not yet at the crisis point of 2012, is far from stable.

Reigning supreme. EPA/Abedin Taherkenareh

The Supreme Leader has tried to cover all this with the declaration of a “Resistance Economy” that can withstand the effects of no deal and continuing sanctions, but having as he does a pragmatic side, he clearly knows that this cannot really salvage the economic situation, at least without everyday Iranians making serious long-term sacrifices.

That is why he agreed to renewed negotiations in September 2013, and why he has continued to back the talks: until the sanctions are eased, Iran will never recover, let alone live up to Ayatollah Khamenei’s aspirations of “economic jihad” and scientific and technological advance.

There may be another factor pushing the Supreme Leader towards a deal: the state of his health. In 2014, the Khamenei spent several days in hospital. State media at first put out the line that the operation was for an anal fissure, but eventually conceded that he had undergone a biopsy for prostate cancer.

In the past month, sources inside Iran have reported chatter that the cancer is serious and possibly life-threatening. While they could not confirm the claims, the French newspaper Le Figaro has reported that the Supreme Leader’s cancer is Stage 4 and terminal.

If this is true, Khamenei has a major dilemma on his hands: whether to leave the legacy of a nuclear deal that saved the Islamic Republic from total collapse, or to go to his death with a final act of defiance against the US.

Taking the poison

If he accepts a nuclear deal, he will have to acknowledge that Iran has not achieved its goals – and there can be no way to disguise new restraints on the nuclear program as anything other than a capitulation to the US.

But there is an important precedent. Only months before his death in 1988, Iran’s first Supreme Leader, Ayatollah Khomeini accepted the government’s recommendation of a ceasefire in the eight-year war with Iraq. He said he did so even though the terms, which brought little reward for the loss of hundreds of thousands of Iranian lives, were “worse than drinking poison”.

So despite his profound hatred of the American government, Khamenei might follow his predecessor’s example and take the poison.

But unless the 5+1 Powers can agree to the central condition of a quick lifting of major sanctions, there will be no reason for the Supreme Leader to jump. Instead, the nuclear talks will collapse, and the Islamic Republic – minus Rouhani and Zarif, whose political futures would soon evaporate – will have to take its chances with a “Resistance Economy” and an unrestricted nuclear program.

The Supreme Leader would be making his greatest gamble. It remains to be seen if his Islamic Republic can survive the sanctions and the curse of being an international pariah – And are Iranians willing to take that gamble with him.

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