The Biden-Harris victory in the US election has been welcomed by Iran’s rulers and people, who see it as a positive development. An Iranian newspaper summed up the change in two words: “It’s over.” The outgoing administration, egged on by Israel, has waged an openly declared economic war against Iran since May 2018, when Donald Trump delivered on a presidential campaign promise by exiting the 2015 agreement providing for the dismantling of Iran’s nuclear programme in exchange for sanctions relief. Trump not only reimposed sanctions which had been lifted under the nuclear deal but also ramped up secondary sanctions to threaten governments, companies and individuals seeking to do business with Iran and with Iran’s allies.
Iran has responded by stepping up production of low enriched uranium beyond limits set by the deal and developing a new generation of centrifuges capable of more rapid enrichment than the centrifuges specified. Both these actions can be reversed if the US returns to compliance with the terms of the deal, which has the force of a treaty, as it was approved by the UN Security Council. The other five signatories of the deal — Britain, France, China, Russia and Germany — and the UN and European Union have criticised Trump for unilaterally pulling out of an international treaty and urged him to return while Iran was in full compliance. Their calls fell on deaf ears and the reimposing of secondary sanctions has threatened with punishment powers, firms and businessmen from engaging with Iran. Iran’s foreign assets have been frozen and it has been excluded from international banking. Its oil exports have dwindled, diminishing imports, notably of medicine for diabetics and heart patients.
Iran’s economy grew by 12.5 per cent during 2016, when the deal took effect, and 3.7 per cent in 2017. Although sanctions were reimposed in May 2018, they took some time to bite. During 2019 its economy shrank by 9.5 per cent, largely due to the plunge in oil exports. In November 2018, before sanctions were imposed on oil, exports were two million barrels a day. A year later they had fallen to less than 200,000 barrels a day. Due to Iran’s reliance on oil exports, its currency rapidly devalued, inflation soared and millions of Iranians descended into poverty before the COVID-19 pandemic swept across the country.
On the political front, Iran’s hardliners made a comeback in parliamentary elections in February of this year, weakening reformist President Hassan Rouhani ahead of the presidential election next June. Rouhani and the moderates had been weakened by the ordeal accelerating sanctions had inflicted on the country and its people, the Guardians Council had eliminated discredited moderates from the list of candidates standing for the majlis, and those who remained were few, leaving the hardliners in charge.
Tensions between Iran and the US rose steeply after the Trump administration assassinated highly popular Iranian Quds Force General Qassem Soleimani in January and have remained high all year. Pundits predicted that Trump might launch an “October surprise” attack on pro-Iranian militias in Iraq in a bid to boost his chances of winning the presidential election. Fortunately, he did not prove them right and he did not secure a second term.
Rouhani has welcomed the election of Democrat Joe Biden, who served as vice president in the Obama administration, which negotiated the nuclear deal and has pledged to re-enter it if victorious. Rouhani said, “Now, an opportunity has come up for the next US administration to compensate for past mistakes and return to the path of complying with international agreements through respect for international norms.” He pointed out that the Trump policy of “maximum pressure” “was doomed to fail” and argued that Iran “considers constructive engagement with the world as a strategy”.
Such a policy is completely at odds with the line and actions adopted by the erratic, eccentric, and punitive Trump administration which have created consternation and chaos on the world scene. Biden intends to reverse the damage done and revert to constructive dialogue and policies. He has said he will return to the Iran nuclear deal once Iran is compliant and, hopefully, build on its provisions. Once Trump’s sanctions regime is lifted, Iran and Iran’s economy will be able to recover, Iranians will regain a sense of security, and the country will be able to re-enter the international community. An isolated and sanctioned Iran has not been in a position to engage with other regional and global leaders.
Britain, France and Germany are expected to try to facilitate US re-entry into the nuclear deal while assuring Iranian compliance. The Biden administration should be able to reverse Trump’s sanctions initially imposed to frustrate international dealings with Iran but this could be complicated by the latest round, the Caesar sanctions, which target foreign and non-Iranian businessmen and firms seeking to do business with Lebanon and Iran’s ally Syria. European proponents of the deal will also have to consider offering an economic package, compensate for losses that would ensure Iran would meet its commitments.
European leaders and Biden will be under pressure of time to achieve progress on reviving the nuclear deal as its moderate backer Rouhani is set to leave office once his successor is elected in mid-2021. Rouhani will be in office for negotiations to prosper and for a pragmatist rather than a hardline ideologue to succeed him.
However, Trump is conspiring with Israel to boost sanctions not connected to the nuclear programme but to Iran’s ballistic missile programme, alleged Iranian involvement in “terrorism” and Tehran’s human rights violations. Secretary of State Mike Pompeo is said to arrive in Israel on November 18th with the aim of maximising Trump’s “maximum pressure” campaign on Iran in order to make return to the nuclear deal as difficult as possible ahead of the January 20th inauguration of Biden. This effort can only continue to destabilise an already destabilised and polarised region.