In on Iran, the second largest economy in the

In July 2015, Iran entered into a landmark nuclear agreement
“Parameters for a Joint Comprehensive Plan of Action (JCPOA)” with six world
powers (P5+1) the US, UK, Russia, France, China, and Germany to limit its
sensitive nuclear activities for more than a decade in return for the lifting
of crippling sanctions. This agreement has been a landmark foreign policy
achievement of Obama’s presidency. Now in Presidency, Donald Trump finds the
deal lenient and is unwilling to recertify it. This deal resulted a global
impact creating opportunities for countries and re-establishing frozen
relationships. If such strategic important international
deals had to be signed and rescinded on the whims and perceptions of individual
leaders of the leading nation and their electorates, the entire system would
collapse; and collapsing it is, with North Korea under no one’s control and
measures underway to ensure that Iran too would head the same way.

The deal involved limited
installations to 5060 Centrifuges involving Uranium enrichment, restrictions on
Nuclear research & development, barred to operate and build heavy water
containing Plutonium suitable for nuclear bomb, extraordinary and robust
monitoring, verification and inspection from global nuclear watchdog IAEA,
increase in ‘Break out Time’ from 3 months to one year and most importantly
lifting sanctions on selling oil in international markets and using Global financial
system. Had Iran violated any aspect of the deal, the UN sanctions would
automatically ‘snap back’ into place for 10 years and extensions. However, the
senior official electorates and the leaders of allied governments have influenced rump to withdraw from the deal this April 2018 as the costs
of blowing up the deal outweigh the benefits.

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The major impact of the broken deal will be on Iran,
the second largest economy in the Middle East and North Africa region after
Saudi Arabia. The Iranian economy strongly recovered in 2016, on shoulder of significant
rise in oil production and exports. In 2016, the economy registered a
strong oil-based come back, with an annual growth rate of 13.4 percent,
compared to a shrinkage of 1.3 percent in 2015. The country resumed selling oil
on international markets with $48 Bn in 2017 and using the global financial
system for trade. Iran is accessing more than $100bn in assets frozen overseas,
mainly United States. The sanctions have cost Iran more than more than $160bn
(£102bn) in oil revenue since 2012 alone. Re implementation of sanctions will
have a boomerang effect on the economy re building back itself to 2015 as a
slow economy.

United States have overestimated their efforts of
managing the economy on their own. Stepping back the economy out of the deal
would not only erode the integrity of the U.S, it would also effect the
international nuclear non-proliferation drive, and set a poor precedent that
would surely put strain on the ongoing multinational efforts at finding a
peaceful solution to the Korean nuclear deadlock through negotiations. Worse,
the move could remove the systems in place that monitor Iran’s nuclear
activity, and would certainly make proliferation more likely and burn all conceivable
options short of war with Iran and Korea.

 

A well founded and solidity Iran is
in the national interest of India. With oil price splurging highs with 99.4% from
their 2016 low, imposing sanctions on Iran would affect the oil prices and
trade relations with major countries. India has been one of the few countries
doing billions of dollars of trade with Iran, despite the sanctions having been
before. Current bilateral trade between India and Iran is about $14bn with the
balance of trade heavily. Indian exports to Iran were around $4.2bn last
year. Implementing sanctions will fuel in the current rising prices high
and as India spends nearly $1 billion in import costs for every dollar increase
in global crude prices which will lead to negative balance of trade. Resuming
restrictions on selling of oil in international market will cut back production
of oil leading to inflation turmoil in India. Secondly, the realm of Indian
businessmen that Iran is difficult to capture, or even turning to more
competitive international players due to opening up of the economy can rest for
some while as the negotiation power has been dragged down via restrictions.
Thirdly, development of Iran’s Chabahar port, which is strategically
significant as an entre-pot being the gateway to Central Asia in providing
access to Afghanistan shall ignite for early development. As Israel and several
West Asian states are at loggerheads with Iran, India must tactfully use its
diplomacy to balance its equations. The deal has multi-sectoral implications
for India from economic to geographic and so it must capitalise on the
opportunities from the changing fiscal policies. So it is this unpredictability
which will rear its ugly head, which is never good for any international
business and trade; the last thing India needs at a time when its economy is in
re-stabilisation mode is an increase in its oil bill.

 

Stringent sanctions reimplementation
de-stabilise the economic and security situation in Iran, which has close links
with China. The two countries have economic, business and energy treaties, with
China depending on petroleum imports from Iran while latter looks to China for
investment, particularly road trade and infrastructure plan. 

 

The Iran nuclear deal has the
potential to affect the UAE economy as UAE has economic ties with Iran and the
GCC’s ( Gulf Cooperation Council) geopolitical rivalry with their neighbouring
countries. Firstly, expatriates from Dubai have made huge profits as the
commercial centre for new business ventures in Iran, adding to its role as the
centre of Middle Eastern commerce and host of scores of company headquarters.
Secondly, UAE has stood strongly with oil producing countries for aggressively
high rate and due to nuclear deal had put stress on UAE and budget deficits of
the nation. Implementation of sanctions would relief UAE’s rising pressure on
their price control through cartel.

 

The nuclear deal had played a vital
role in ensuring nuclear non-propagation and harmonizing peace and stability in
the Middle East for the world. President
Trump’s obsession with isolating Iran could witness the return of a far more
robust mechanism of monitoring and preventing breaches through alternatives
ignored by previous administrations.

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