The One-Year Report Card of the JCPOA

On January 17, a year has passed since the implementation of the Joint Comprehensive Plan of Action (JCPOA). The public opinion in Iran, a significant portion of which celebrated the signing of the JCPOA and considered its implementation as the beginning of an economic opening in their lives, seems to have lost its previous enthusiasm and appears tired and hopeless on the anniversary of this event. Given the often surprising obstacles that arose in the way of implementing the JCPOA and the risks that weigh on its future, this despair and fatigue is completely understandable. However, despite the prevailing doubts about the performance and future of the JCPOA, one must avoid hasty and emotional judgments about it. The achievements and failures of this agreement should be examined in light of the multitude of complexities present in Iran, the Middle East, and the world. Iran is going through one of the most complicated and dangerous passages in its contemporary history. The Middle East is burning in the greatest tensions of the past hundred years. The global system of international relations is also shaking due to political developments, including in Europe and America, and without reconstructing its foundations, maintaining international security to avoid uncontrollable explosions will be impossible. Contrary to what its opponents in various political factions in Iran claim, the JCPOA is not 'much ado about nothing.' And contrary to what its unwavering supporters expected, it cannot solve the myriad pains of Iran. This agreement is the result of conditions that arose under the pressure of crippling economic sanctions against Iran and emerged from the interactions and reactions both within the Islamic Republic and among the sanctioning powers, in the twists and turns of countless negotiations between the two sides of this transaction. Its achievements are undeniable. Its limitations are clearer than the sun. Its future is also shrouded in ambiguity. If there had been no JCPOA... the nuclear negotiations between Iran and the P5+1 group, if they had not borne fruit, could have had dire geostrategic consequences for the country and posed very serious threats to its security. Some powerful countries in the region were counting on this scenario to finish off Iran. But even if we set aside the scenario of a potential war in the event of failed negotiations, and only consider the economic consequences of the failure of talks, there is no doubt that the intensification of sanctions could have led to the following results: 1) A drop in Iran's oil exports to a level of two to three hundred thousand barrels per day. 2) A further decline in the country's foreign currency earnings, and consequently, an unstoppable rise of the dollar to above ten thousand tomans. 3) A surge in the inflation rate to over one hundred percent. 4) The severing of what remains of Iran's financial connections with the outside world, a dizzying rise in the costs of all kinds of transactions with abroad, a further collapse of economic activity, a fall in Iran's growth rate to below negative ten percent, and an increase in the number of unemployed. 5) The 'Venezuelanization' of Iran's economy, with the difference that Venezuela is located in a relatively tension-free geographical area, whereas Iran is surrounded by the worst regional turmoil. In the camp of the opponents of the Islamic Republic, some believe that the failure of nuclear talks and the deepening of the Islamic Republic's difficulties could pave the way for Iran's liberation from the theocratic regime and advance it towards democracy and progress. This notion not only ignores the painful and lasting wounds of economic sanctions on Iran and Iranians but also forgets that the failure of nuclear talks, by radicalizing the internal and external atmosphere of the Islamic Republic, could lead to further isolation of the country and strengthen the most hardline factions of the ruling apparatus, paving the way for even harsher repression of civil society in Iran. It is no coincidence that these factions have been eagerly awaiting the failure of nuclear talks and still speak of the fruitlessness of the JCPOA. Achievements of the JCPOA It is completely natural that some within the country, due to their affiliation with specific factions in the Islamic Republic, assess the JCPOA as entirely fruitless. Beyond them, those who claim that the JCPOA was a barren agreement and brought no positive results for Iran's economy interpret and analyze the realities of the country and its international relations to suit their own narratives. In the year since the implementation of this agreement, the JCPOA has managed to provide a better breathing space for Iran's economy in several areas. Here are a few examples: 1) Iran's oil production and exports have largely returned to pre-sanction levels. The volume of Iran's oil and gas condensate exports in the current month has doubled compared to the sanctions period, reaching about two million eight hundred thousand barrels per day. This event has allowed Iran to have a stronger position in its confrontation with Saudi Arabia to maintain its share in global oil production. Additionally, all sanctions related to oil tankers, including in the area of insurance, have been largely lifted. 2) The countdown for holding Iran's first oil and gas tender has begun, with 29 major European and Asian companies approved by the Ministry of Oil to participate in this tender. If this tender, which is set to be held in about two months, does not face any unexpected problems, Iran will be able to secure part of the necessary investment and technology for repairing and developing its gas and oil resources. 3) Another outcome of the JCPOA is the signing of two very important contracts for the purchase of one hundred and eighty airplanes from the American consortium Airbus and the American company Boeing. The contract with Boeing can be considered the most significant agreement between Iran and the United States in the years following the Islamic Revolution. The value of this contract is reported to be close to seventeen billion dollars, but what gives it more importance is its 'symbolic' significance. In relations between countries, especially those that have been in conflict for many years, symbols hold great importance. Iran's national airline (Homa) became one of the leading and renowned companies in the developing world in the field of civilian aviation with Boeing airplanes before the revolution. This era ended due to the Islamic Revolution and the hostage crisis at the U.S. embassy, and for the past four decades, there has been no direct transaction between Iran and Boeing. The agreement that Iran has signed with Boeing after this long period is not merely a commercial agreement. Passenger airplanes are not ordinary goods that conclude in a simple buying and selling process. American Boeings come with a long period of services and spare parts and pave the way for long meetings and consultations between Iran and various American economic circles. The main importance of the Boeing contract lies here. 4) The JCPOA has reduced the costs of foreign trade and financial transactions and has also allowed Iran to regain access to oil revenues. 5) Overall, the signing of the JCPOA has helped improve Iran's international image as a country with a glorious history and enormous potential. The significant increase in the number of foreign tourists in Iran is one of the most important manifestations of this transformation. A more important consequence is the renewed interest of foreign investors in Iran. However, turning this interest into practical initiatives for investment in Iran requires other conditions that, given the limitations of the JCPOA and the internal deadlocks in Iran, are still not in place. Limitations of the JCPOA Those at the top of the power hierarchy in the Islamic Republic, due to their lack of understanding of the requirements of international relations and without considering national interests, have placed Iran in the quagmire of crippling international sanctions and bear a heavy responsibility towards future generations. The wounds inflicted on Iran's economy due to the recent years of sanctions cannot be healed overnight with the signing of an agreement called the JCPOA. Following the signing of this agreement, the level of expectations regarding its outcomes rose significantly, and the false notion formed that with this event, Iran had miraculously entered a new path. However, Tehran's business circles quickly abandoned their fantasies. About five months ago, the 'Market and Money Commission' of the Iran Chamber of Commerce warned in a report that 'until the complete lifting of sanctions, in an optimistic scenario, Iran's economy will be grappling with the consequences for at least a decade.' The JCPOA does not mean 'the complete lifting of sanctions.' The JCPOA only pertains to the lifting of sanctions related to Iran's nuclear file (known as secondary sanctions) and its provisions have so far been respected by both the Islamic Republic and the countries of the group known as the P5+1. In contrast, what has not been sufficiently considered by domestic and foreign economic circles is the set of sanctions known as 'primary' that were implemented by the U.S. against Iran in the years following the Islamic Revolution, related to issues such as 'terrorism' or 'human rights.' The existence of these 'primary sanctions' prevents Iran from utilizing the potential capacities of the JCPOA, including for attracting foreign investment and technology. It should be explained that immediately after the conditions for signing the JCPOA were established, the major European and Asian companies began to prepare for investment in Iran, and large economic delegations lined up to enter this country. However, it did not take long before, faced with the difficulties arising from the 'primary sanctions,' the enthusiasm of foreigners for entering Iran cooled down. The most important problem is the reluctance of major European banks to grant credit lines for investment projects in Iran. Following heavy penalties imposed by the U.S. judicial system against several European banks (especially a nine billion dollar fine against the French bank BNP), participation in transactions with Iran has become a nightmare for these banks. It is evident that without the support of banks, investment in Iran will be very limited. Also, without this cooperation, all operations related to trade and investment, including obtaining insurance and banking guarantees and opening credits, will face difficulties. On the other hand, conducting dollar transactions with Iran faces numerous obstacles. Additionally, the regulations governing the activities of Iranian banks in various areas, including money laundering, are not aligned with international regulations, which is also a significant barrier to European banks' cooperation with investment projects in Iran. However, the most significant barrier to foreign investment in Iran is the very critical stance of Donald Trump, the elected President of the United States, regarding the JCPOA. One can be optimistic and consider his promise to 'tear up the JCPOA' as merely an electoral slogan that is not necessarily going to become the policy of the next U.S. president. But even if we do not take 'tearing up the JCPOA' seriously, it cannot be ignored that some of Mr. Trump's associates have spoken of a fundamental 'revision' of this agreement. After all, this significant ambiguity weighs heavily on the JCPOA, and as long as the White House's policy regarding this agreement is not clarified, Iran cannot become an attractive and safe country for foreign investors. In addition to all these deterrent factors, the difficulties arising from Iran's legal, political, and economic structures must also be considered. This is another story.