The End of the Iran Deal Spells the End of Iranian Moderates

    Ali Fathollah-Nejad

    Security, Middle East

    A government supporter holds a poster with images of Iran's late leader Ayatollah Ruhollah Khomeini (R) and Supreme Leader Ayatollah Ali Khamenei during a protest against opposition demonstrations during Ashura in Tehran

    The end of the Iran Deal will strengthen the hand of Tehran’s hardliners.

    When announcing the United States’ unilateral withdrawal from the Iran nuclear agreement, Donald Trump rationalized his decision as one that served the aspirations of Iranians to live in peace and prosperity. “[T]he future of Iran belongs to its people. They are the rightful heirs to a rich culture and an ancient land, and they deserve a nation that does justice to their dreams,” the President said. However, taking a sober glance at the ramifications of his decision offers a very different outcome for the “proud nation of Iran.” Trump’s decision actually helps push Iran into more authoritarian waters—both domestically and geopolitically—while eclipsing Iranians’ hope for a better future.

    Economically, the re-imposition of U.S. sanctions targeting Iran’s financial system and oil sales will strengthen the hand of Tehran’s hardliners. As legal channels of trade become illegal once again, Iran’s shadow economy will flourish as it did under Presidents Bush and Obama’s “crippling sanctions” regime. Semi-state entities affiliated to the IRGC and the conglomerates operating under the name of religious foundations are believed to control the majority of Iran’s economy. These businesses and organizations will be able to use their black channels and secretive methods to import needed goods. As a result, these black market groups will extract outrageous profits from ordinary Iranian due to elevated prices. In addition, such smuggled goods and price gouging will push back against Iran’s infant private sector. This is bad because it was precisely the possibility of an increasingly transparent banking sector in the wake of the Rouhani Administration’s dealings with Europe that was a thorn in the side of those entities’ political-economic dominance.

    It is true that these very semi-state and state entities did benefit almost exclusively from the Iran deal’s economic dividends. For instance, there was the repatriation of billions of frozen assets which filled Tehran’s pockets and invested in its expansionist regional policies. However, since much of that money has been spent, some hardliners believe there is no longer any benefit to staying in the deal.

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