US, UN and EU sanctions against Iran were lifted on 16 January 2016. This is a major step spelling the end of a 40-year dispute. Although some conservative circles in the US, Israel and Saudi Arabia are cautious when it comes to an agreement, much of the world has welcomed the ending of tensions. The Iranian public, who experienced great difficulties under the sanctions regime, poured onto the streets to celebrate. The ending of a major problem without recourse to arms or civilian deaths gives us all hope for the future.
Sanctions against Iran began with the occupation of the U.S. Embassy in Tehran in 1979, and turned into a full embargo in 1995. Following the revelation of Iran’s secret nuclear plans in 2002, the embargo was expanded to include financial assets, arms sales, civil and military corporations, the oil sector and technology transfers; an oil embargo was initiated in 2012. During the embargo, Iranian assets worth $100 billion and the assets of the Iranian Central Bank were impounded. The automotive industry was also included, oil production fell by half and automobile manufacture fell to 40%.
In the wake of the recent treaty, Iran’s nuclear program has been entirely lifted under the supervision of the International Atomic Energy Agency and enriched uranium has been removed from the country. Concrete has been poured over facilities to make them inoperative. With the lifting of sanctions, Iran released five US citizens, including the Tehran bureau chief for the Washington Post, Jason Rezaian, who had been charged with spying. The U.S. also made a similar gesture, allowing five imprisoned Iranian citizens to return home.
With the lifting of sanctions, $100 billion belonging to Iran in international banks will be released. Trade prohibitions with Iran will also be eased. Iran will be able to once again do business with the rest of the world. Iran’s announcement that it will begin exporting 500,000 barrels of oil a day is regarded by analysts as meaning that low oil prices will probably become a more-or-less permanent fixture. Although Iran is going to start exporting oil again, it is not likely that it will recoup its losses any time soon.
Oil that was for years sold for around $100 a barrel is today fetching $30-40. That means losses of billions of dollars to Iran. Iran was forced to almost entirely freeze oil exports during the embargo. Since the global flow of money is controlled by the U.S. SWIFT system, even Iran’s limited oil sales could only be made in return for goods. Despite hitches, the lifting of sanctions is expected to benefit Iran in economic terms. However, in order for economic and social well-being to be permanent, Iran needs to maintain this climate of reconciliation and become a part of the international community.
The treaty doing away with its nuclear plans created an air of optimism throughout the world. Neighboring Azerbaijan and Armenia warmly welcomed the lifting of sanctions. Federica Mogherini, the EU high representative for foreign affairs and security policy, and one of the architects of the agreement, has announced that the EU wishes to take part in the rebuilding of Iran. With the ending of sanctions, Italy and France have signed cooperation agreements worth billions of dollars; Japan has suspended its own sanctions. Having said that, some still remain reserved. The anti-Iran lobby in the USA maintains that too many concessions have been made and that the nuclear program could be restarted.
The Turkish Foreign Ministry issued a statement welcoming the agreement in August 2015. This emphasized the importance of resolving the problem by diplomatic means. It is clear that the two regional giants – Iran and Turkey – will now be collaborating in many areas following the lifting of sanctions.
Turkey today has more than 200 investments in Iran and that number is expected to rise quickly in 2016. Commerce between the two countries never reached their true potential due to banking sanctions. The freeing of money transfers means that there will be many more Turkish goods in Iran, particularly textile goods. Turkish companies’ joint investment projects and know-how transfers in target markets during recent years are regenerating the country’s industries and doubtlessly, a similar process awaits Iran.
The Central Bank being made independent and structural reforms in the financial sector in the wake of Turkey’s 2001 economic crisis have resulted in a secure environment for foreign capital. Iran needs to benefit from that experience in order to attract foreign capital.
Turkey is one of the world’s largest natural gas consumers. It obtains significant quantities of gas from Iran. Iran’s natural gas reserves are the closest and the largest source. It is highly probable that we will see joint investments between the countries in that sphere. In addition, when the TANAP pipeline, which will connect the reserves in the Caspian Sea to Europe, is completed, this will represent a major boost to Iranian exports as well.
The volume of trade between Iran and Turkey, which was around $2 billion in the time of the late President Turgut Ozal, rose to $15 billion by 2002 under the Erdogan administration. That is expected to increase many times over in this new era.
The real task facing the two countries now is to produce a political plan to put an end to conflicts in the region. The lives of millions of Muslims are today in danger in Syria and civil war is waiting in the wings in Iraq: Yemen and Bahrain are wracked by sectarian conflicts. It is a matter of urgency for the two great Muslim powers to convert sectarian differences into friendship and collaboration and to strive together for peace in the Middle East.
The embargo we have summarized here inflicted scarcity on 80 million people despite their country’s wealth. The Iran-U.S. crisis may now have come to an end, but the conflict between Israel and Palestine and civil strife in Lebanon, Syria, Iraq and Yemen are still ongoing. It is innocent Muslim people who have suffered the most from disagreements in the region transforming into armed conflicts over the years. Although U.S. Secretary of State John Kerry says that the word is now a safer place with the lifting of sanctions on Iran, there is still a great deal of work to be done to ensure true security. Iran needs a reduction in tensions in the region more than anyone and one important way of bringing that about is through being good neighbors.
Adnan Oktar's piece in EKurd Daily: