When the dollars start pouring in, what will Iran do?

When the sanctions are lifted, Iran will have many options at its disposal, writes Majid Rafizadeh

The provocative comments made by Mohammed Javad Zarif, Iran’s foreign minister, on social media last week have ratcheted up tensions. Vahid Salemi / AP Photo

The day that Iranian leaders have been waiting for is on the horizon. According to the terms of the nuclear accord – which was reached in July between Iran and the P5+1 group – “implementation day” boils down to a sequence of critical compliance issues related to its nuclear programme. These included Iran significantly decreasing its stock of installed centrifuges, reducing its enriched uranium stocks, making changes to its Arak heavy water reactor facility and curtailing its research and development on some aspects of its nuclear programme.

Implementation day means that Iran will begin to receive major sanctions relief.

Iran will recoup roughly $90 billion (Dh 330bn) of assets, European countries will lift sanctions on major industries such as gold and metal and the US will remove major Iranian entities and individuals from banned lists. More crucially, Tehran will re-enter the international financial system and sell oil on the open market.

The major loophole of the deal is that if Iran decided to resume its nuclear proliferation after sanctions were lifted, there would be no adequate mechanism to roll penalties back into place.

In addition, European companies will invest in the largest untapped emerging market in the world – representing more than an estimated $1 trillion of value – so the West will have no financial incentive to push for the reimposition of sanctions if Iran heads towards building a nuclear bomb.

Moreover, the one-year breakout time will not give an adequate amount of time to react even if the international community caught Iran cheating. Finally, after 10 years, Iran will be allowed to enrich uranium or spin centrifuges at any level that it desires and the embargo on Iran’s ballistic missile will be lifted.

So, will implementation day influence the Islamic Republic’s foreign policy?

By analysing Iran’s foreign policy closely, all signs point to the notion that Iran’s reliance on the application of hard power in the region will escalate.

Iran used to prefer utilising soft power, such as empowering Shia communities to influence domestic politics of other countries.

But since the nuclear deal was reached, Iran has increasingly used its Revolutionary Guards to financially and militarily support Tehran’s proxies in Yemen, Iraq, Lebanon and Syria.

Unfortunately, the Iranian people are less likely to see the fruits of sanctions reliefs. Most of the financial gains are going to go the military because they have a monopoly on Iran’s political and economic establishments. They can easily make the case to the supreme leader and to parliament that they need the cash to defend the country’s security at this critical time.

Iran’s diplomatic skills have definitely improved in the context of its dealings with the West, but have significantly deteriorated in its regional relationships.

The supreme leader continues to make inflammatory speeches and tweets, and the attacks on the Saudi embassy and the testing of ballistic missiles in the region have significantly ratcheted up tensions, as have the barbed and provocative comments made by Mohammed Javad Zarif, Iran’s foreign minister, on social media last week.

All of this suggests that Iran is searching for regional superiority and pre-eminence, which will only exacerbate regional crisis and potentially turn it into a major conflagration.

With more dollars in its treasury and with the West leaning towards Tehran, the Islamic Republic will continue to support Bashar Al Assad, the ruling Shiite politicians in Iraq, Hizbollah, the Houthis and its other proxies.

Implementation day will be a delightful day for Iranian leaders – both hardliners and the moderates – as well as P5+1, but the question remains whether it will also mark the beginning of a regional conflict.

Dr Majid Rafizadeh is an Iranian-American scholar and president of the International American Council on the Middle East

On Twitter: @majidrafizadeh