Implementation day approaches, but don’t expect a dramatic turnaround

Earlier this week it was reported that Iran has taken the core out of its heavy-water nuclear reactor at Arak and filled it with concrete. The deputy director of Iran’s nuclear program later disputed the concrete part, saying that the core was going to be modified with Chinese technical assistance, but the US is saying that it has been filled with concrete. Yeah, I don’t know either. The Joint Comprehensive Plan of Action requires (see section B) that the Arak plant be modified so as to reduce the amount of weaponizable plutonium it produces as a waste product to a level that would eliminate Iran’s “plutonium pathway” to a hypothetical nuclear weapon. Whether that means modifying the existing core or destroying that core and creating a new one seems beside the point; the International Atomic Energy Agency has to verify that the reactor has been modified to meet the JCPOA’s terms, regardless of how it gets there.

Arak is one of the last major items remaining on Iran’s “to do” list before the JCPOA can move forward. In late December, Iran shipped about 25,000 pounds of low enriched uranium to Russia, checking off another of the JCPOA’s boxes. Once the IAEA has verified that Iran is in full compliance with the JCPOA’s terms, which could happen any time now, the world will have arrived at “Implementation Day,” which is the point at which Iran’s verified compliance is rewarded by the lifting of nuclear-related sanctions by the US and EU and the suspension of UN Security Council resolutions regarding Iran’s nuclear program. Iran can be expected to recoup billions of dollars in currently frozen assets, though the value of those frozen assets, and the portion of them that will be available to Iran immediately, is open to some interpretation, and the interpretation unsurprisingly tends to get colored by political concerns. Deal proponents argue that Iran is only (well, “only”) going to get maybe $30 billion of an estimated $100 billion in total assets right away, while deal opponents argue that Iran will immediately be given all the money that exists or ever has existed, plus a book of IOUs redeemable for as many as ten (10) free back rubs, or something like that.

One big question is what this is going to mean for the Iranian economy and its political landscape. The dream scenario from a Western perspective would be for all that cash to wash over the country, making everybody’s lives instantly better and rocketing Hassan Rouhani’s popularity skyward just in time for next month’s big Iranian elections. This seems unlikely. The money will help, no doubt, but its effects will take some time to be felt and will undoubtedly be mitigated by, and if it seems like I’m harping on this that’s because I am, cratering oil prices, which are murder on an energy-based economy. Whatever Western foreign investment Iran sees once the sanctions come off will take time to manifest, both because business deals take time to negotiate and because companies are going to be wary of engaging too quickly with a country that is still a target of international sanctions and where orchestrated mobs might up and start tossing Molotov cocktails at your office building if things don’t go well. Hopefully the Iranian electorate is savvy enough to understand that real economic improvement isn’t going to happen overnight.

To be sure, there are areas where things may quickly improve in Iran–they’re just not necessarily the kinds of things that large segments of the population will notice. It should quickly become easier for Iranian doctors and hospitals to obtain medicines and medical supplies, because even though those items were exempt from the sanctions to begin with, the banking restrictions that formed the core of the sanctions regime made it difficult or impossible for Iranians to pay for them. There are other areas:

Sanctions have impacted ordinary people in other serious ways as well. Iran has been prevented from purchasing spare airplane parts since 1995 due to U.S. sanctions, and as a result, it has seen twenty-eight civilian airplane crashes — in which more than 500 people have died — in the past fifteen years alone. The international sanctions regime has also led to increased air pollution in the country, greater hardship for Iranian students studying abroad, and the rise of a shadow black market in Iran.

These are all important things, but nothing that might swing an election–and anything having to do with Iran right now has to be viewed in an electoral context. It will be up to Rouhani to manage people’s expectations and to highlight the areas where sanctions relief is making life in Iran immediately better.

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