Could the Iranian nuclear agreement lead to a decrease in sectarian politics in the Middle East?

John Kerry and Mohammed Javad Sarif

What impact will the agreement between the P5+1 (the US, Russia, China, Great Britain, France, and Germany) and Iran have on sectarian politics in the Middle East?  Is it true, as many Western analysts argue, that sectarianism is ingrained in the region's political fabric?  If so, does that mean that the agreement will do little to reduce sectarian tensions? Or could the decision by Iran to submit to demands by the international community to eschew developing nuclear weapons lead to major political change in the Middle East?

The assessment offered here argues that the recent nuclear arms agreement will have significant positive ramifications for Middle East peace and stability.  Indeed, analysts in the Arab world are already picking up on the agreement's implications for Iran's relations with the predominantly Sunni Arab Middle East.  An example is Umar Qaddur's Op-Ed piece, "Does a less nuclear Iran mean that it will be less Shiite as well?, that appeared in al-Hayat, on December 1st. 

First, the Iran - P5+1 agreement has already had a significant impact on the Iranian economy.  Second, it has improved relations between Iran and the Gulf states, especially Kuwait, Qatar and the United Arab Emirates.  Third, if the 6 month agreement turns into a long term solution to Iran's efforts at nuclear weaponization, then it will probably mean a change in Iranian politics towards Iraq and possibly even towards the Syrian crisis.  Finally,  if a long term agreement follows a 6 month rapprochement between Iran and the international community, then we will certainly see a reintegration  of Iran into the global economy with all the political ramifications that such a development implies.  Let's examine each on of these issues in turn.

An immediate impact of the nuclear agreement has been to invigorate the Iranian economy and raise hopes among the Iranian middle classes in particular that they can look forward to a brighter future.  Many Iranians are tired of the crippling sanctions they have endured as a result of their country's nuclear weapons program and fear the possibility of a Israeli or even US military attack.

In the first day after the agreement was announced, purchases of foreign currency dropped 30% in the expectation that the Iranian rial would rise in value in relation to the dollar.  During the last month, the Iranian stock market has experienced a significant improvement, increasing 14% in value.  Private sector entrepreneurs and public sector managers have welcomed the lessening of constraints on Iran's ability to purchase spare parts and other supplies necessary to insure the proper functioning and growth of the economy.

Iranians have been suffering under a 40% rate of inflation which may actually understate the actual level.  The middle classes have increasingly found it difficult to sustain their standard of living.  The loosening of international sanctions has given the middle class a new sense of hope that their economic fortunes might improve.  Coming on the heels of the decisive victory of the moderate cleric, Hassan Rouhani, over hardliner Saeed Jalili, middle class Iranians also hope that the state's turn towards at least some liberal reforms may be in the offing.

What is key here is the chafing that the middle classes have felt under the severe international sanctions regime that will continue to cost the country at least $30 billion this year even with the agreement (see The Economist, November 30).  Their delight at the nuclear agreement was evident at Teheran's airport when large crowds welcomed Foreign Minister Mohammed Javad Sarif and his negotiating team back to Iran, while extolling the virtues of President Rouhani.  If more  moderate elements within the Iranian polity acquire greater influence, then the ability of hardliners, such as the Revolutionary Guards, to continue to play the sectarian politics game could very well decline.

Now that the cat has been let out of the bag, there will be no forcing it back in.  The very fact that Supreme Leader Ali Khamanie praised Rouhani and the agreement indicates that hardliners are aware of middle class discontent.   If hardliners seek to return to the approach of former president Mahmoud Ahmadinejad, who consistently called for the destruction of Israel and whose policies were instrumental in bringing about the harsh sanctions regime, and no long term structural relief occurs, the regime could face not only increasingly severe economic constraints, but greater expression of middle class discontent.  We need only remember what occurred in June 2009 when thousands of Iranian turned out to protest the reelection of Ahmadinejad as president in what many considered to be a stolen election.

The recent whirlwind tour of Foreign Minister Mohammed Javad Sarif to Arab Gulf states indicates that Iran wants to tone down, if not eliminate, the "cold war" that has pitted it against Saudi Arabia and its Gulf Cooperation Council allies.  The visit by the UAE's foreign minister to Teheran and Iran's indication that it is willing to discuss the status of three islands near the Straits of Hormuz seized from the UAE by the Shah in 1971 - Abu Musa and the Greater and Lesser Tunbs - are further indicators of improved relations between the Arab Gulf and Iran. And while Saudi Arabia has indicated that " this is not the right time" for a meeting, Iran has called for just such a meeting which will undoubtedly occur in the near future.

These developments not only bode well for increased stability in the Gulf, but for a decrease in the shrill "Sunni-Shiite" political rhetoric that has characterized much of Gulf politics since the 1979 Iranian Revolution.  They will also constrain the ability of sectarian groups on both sides of the ethno-sectarian divide to manufacture Arab-Iranian hostility to promote their own personal agendas.

A third possible ramification of the initial and hopefully long-term agreement is the possibility of Iran playing a more constructive role in Iraqi politics.   At present, Iran is sponsoring a number of Shiite militias in the south to assure that Iraqi prime minister Nuri al-Maliki understands its ability to influence "conditions on the ground," and thus does not work against their interests in Iraq. These militias create serious political instability, seen especially in the ongoing battles between the remnants of Muqtada al-Sadr's Mahdi Army (Jaysh al-Mahdi) and the so-called League of the Righteous People (Asa'ib Ahl al-Haqq), led by former Mahdi Army commander, Qays al-Khazali, that is currently supported by Iran (see al-Hayat, December 1).

A reinvigorated Iranian economy, a more robust middle class, and a willingness to conclude a side agreement with the US over their respective spheres of influence in Iraq may lead the Islamic republic to withdraw its support of destabilizing militias and inside rely more heavily on wielding its economic influence inside Iraq through increased trade and investments.  Such efforts, especially if they involved explicit messages to Iraq's Sunni Arab minority of such a new policy orientation, could greatly reduce sectarian tensions which represent a political powder keg at the moment as violence continues to escalate throughout Iraq.

While the US and Iran have been at loggerheads since the 1979 revolution, each has an interest in  containing the power of radical Sunni Islamists in the region.  A potential beneficial outcome of a US-Iran rapprochement, assuming Iran is serious about limiting its nuclear energy program to peaceful uses and allowing meaningful verification of the program, could pay dividends in the Syrian civil war.

In return for greater Western help in curtailing groups like the Nusra Front (Jabhat al-Nusra) and the Islamic State of Iraq and the Levant (al-Dawla al-Islamiya li-l-'Iraq wa-l-Sham), Iran might be willing to ease Bashar al-Aad out of office in return for a government that was not hostile to Iranian interests in Syria but which was willing to implement democratic reforms and engage in a policy of national reconciliation.  Such a turn of events would dramatically undercut the power of both Sunni and Shiite sectarian elements in Syria, especially given the overwhelming rejection of sectarian politics by the vast majority of the Syrian populace.

Finally, and this might be the most important impact of the mini-agreement between the West and Iran on ending its nuclear weapons program, we may see new investment by Western firms in the Iranian economy.  The World Bank has indicated that Iran's oil industry cannot alone sustain a population of 82 million.  To meet its energy and production needs, Iran needs to import natural gas.

The interest that many Western oil firms have expressed in investing in Iran's energy sector, and the outmoded sector's need for investment to upgrade production, could signal the beginning of Iran's  reintegration into the global economy.  The impact of significant foreign investment and renewed economic growth would constitute another blow to the regime hardliners who have used sectarian identities to promote a radical foreign policy that has made Iran a pariah state in the Middle East.

The key here will be the United States.  On the one hand, the Obama administration and it allies in the P5+1 must keep the pressure on Iran to dismantle its nuclear weapons capabilities and provide for an inspection regime whereby the international community can be assured that nuclear energy is only being developed for peaceful domestic uses.

Attempts by the US Congress into impose new sanctions on Iran - assuming Iran lives up to its agreements - must be blocked through a campaign to educate American lawmakers on the stakes involved in preventing more conflict in the Middle East, such as an Israeli attack on Iran, and the regional nuclear arms race that would certainly ensue should talks break down and Iran proceeds to actually develop nuclear weapons.  Having Saudi Arabia (which reportedly has asked Pakistan if it could purchase nuclear weapons), Turkey, Egypt, and perhaps Algeria seeking to develop nuclear weapons in the world's most unstable region would constitute a disastrous turn of events

At a most basic level, the ability not only to keep Iran at the negotiating table and moving towards a final agreement, but the ability to ratchet down sectarian identities and violence in the Middle East as well, lies as much in Washington, London, Paris, Moscow, Beijing and Berlin, as it does in Teheran.