Those familiar with the Iranian political system know that elected officials and even the Supreme National Security Council are not the ultimate decision-makers when it comes to Iran’s nuclear program, its ballistic missile development, and other sensitive areas. These are the purview of Supreme Leader Ayatollah Ali Khamenei and the government is tasked with carrying out his decisions.
The Joe Biden administration has taken several steps to try to make it easier for Khamenei to show “heroic flexibility” by returning to full compliance with the 2015 Joint Comprehensive Plan of Action (JCPOA) to negotiate a more comprehensive accord. The United States withdrew the demand by the Donald Trump administration to “snap back” United Nations (UN) sanctions on Iran and extend a conventional arms embargo and rescinded strict limitations on the movement of Iranian diplomats in New York. The US has promised to lift all nuclear-related sanctions if Iran rolls back its actions following the implosion of the deal and hinted at ending opposition to a $5 billion loan for Iran from the World Bank. At the same time, the US has demonstrated deterrence by continuing patrol flights of American B-52 bombers in the Persian Gulf, accompanied by Saudi, Israeli, and Qatari jet fighters. The US also retaliated for rocket attacks on US personnel in Iraq by bombing a base of Iran-backed Iraqi militias in Syria.
Khamenei considers the US steps insignificant. The UN Security Council had already rejected US efforts at snapback and extending the arms embargo. Though the World Bank loan has yet to be approved, there are some reports that a few billion dollars in Iranian oil revenues frozen in foreign accounts have been released to Iran. Even if the US fully returns to the JCPOA, hundreds of other sanctions on Iranian economic sectors, entities, and individuals will remain under authorities linked to terrorism and human rights. Khamenei has also stretched Iran’s regional muscles—drone attacks by the Houthis on Saudi oil installations and a rocket attack on the Ain-al-Assad base in Iraq—to show that he is not intimidated by US deterrence.
With the departure of the Trump administration, Khamenei appears to believe that the danger of a war with the US has diminished. He expects the Biden administration to return to the JCPOA on Iranian terms. However, he is ready to wait for a few more months to achieve an equally if not more important domestic political objective: replacing the centrist administration of President Hassan Rouhani with a more hardline figure.
Iran would certainly benefit from sanctions relief sooner rather than later. One year after the start of the pandemic, the Iranian economy has lost 1.5 million jobs, according to the Statistical Center of Iran. The best recent performance of Iran’s economy was the creation of about five hundred thousand jobs a year when its gross domestic product growth rate was slightly over 6 percent in the early 2000s. Moreover, Central Bank of Iran statistics show that, in the first three quarters of the current Iranian calendar year—which ends on March 20—Iran earned less than 16 percent of anticipated oil and gas export revenues. The point-to-point inflation rate (which people actually feel, not the annual rate) in February 2021 was 48.3 percent, with food rising by 59.9 percent. Khamenei needs sanction relief to have access to Iran’s frozen assets abroad and to enable Iran to sell its crude oil and receive revenues through proper banking channels.
A recent temporary agreement with the International Atomic Energy Agency to allow monitoring of Iran’s nuclear facilities for another three months bought time for diplomacy to resolve the impasse over the JCPOA’s return. Yet three months before Iran’s presidential election is too soon for Khamenei to go back on his anti-American stance. With a more radical Iranian president in office, there will be no moderate scapegoats on whom to blame the poor economy. Thus, only after Khamenei’s choice is in office will he agree to broader talks that address Iran’s ballistic missile program and regional interventions. The breakthrough for this de-escalation process cannot come too early or it will undermine Khamenei’s election plans. Until then, he will continue the same unyielding position.
Khamenei worries that an early economic opening could turn the tide of public opinion in favor of the moderate-reformist camp by giving Iranian people hope. While, at present, it looks as though turnout for the June 18 presidential elections will be historically low, a breakthrough with the US has the potential of translating into a bigger showing that would work against Khamenei’s plan to put a hardliner in the presidential office.
For Washington, limiting and containing Iran’s regional policies as well as securing tough controls over the Iranian missile program may be almost as important as stopping Iran from having nuclear weapons. The question is whether to revive the original JCPOA and use it as a basis for a broader agreement or to skip the two-stage policy and instead press Iran to agree to broader negotiations at the outset.
Despite Khamenei’s tough rhetoric, a broader negotiation is not impossible. Khamenei is on the record in 2015 and 2018 saying that the JCPOA was a test for American intentions and that Iran would engage in negotiations with the next US president after Trump. In fact, this negotiation is more plausible if Khamenei succeeds in putting his choice in the presidential office. Therefore, for his plan to work, Khamenei needs to maintain an unyielding position for now.
The author, who is well versed in the Iranian political scene, asked to remain anonymous.
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