Braveheart

Braveheart

The just concluded cap on Iran’s nuclear weapons ambitions, while an ‘interim agreement’, is yet another demonstration of the Obama administration’s ability to defuse a crisis that had the potential to cause grievous economic harm to the world at large.

Coming  on top of the successful resolution of the Syrian ‘Chemical Weapons’ crisis, albeit with strong Russian help, the duo of foreign policy breakthroughs means an evolution to the politics of war that had plagued the Middle East of late. It also means, for India that imports over 70% of its oil, that we can expect greater stability in petroleum prices going forward with excellent portends for rupee stability and our CAD.

This breakthrough with Iran comes after a 35 year gap filled with mistrust and heaped economic sanctions, some $ 7 billion worth of which have been eased by this accord. It has been rightly characterised by CNN  as the moving of a ‘diplomatic mountain’. And if it is followed through with a comprehensive agreement in six months’ time as projected, will result in a profound shift in the contentious politics of the Middle East, with great economic spin-offs for many, including India.

This ‘Iran Nuclear Deal’, may mean the beginning of a new era of global economic prosperity after several years of slogging dog- days, ever since the economic crisis began in January 2008. And America, with an economy still in crisis itself, has had the wisdom to not indulge itself in yet another set of horrendously expensive wars in Syria and Iran. Particularly, since this time, there is no other country in a position to defray its costs either. The US which has a reputation for War being its ‘Number One Export’, has refrained, twice in a row, from adding to the stereotype. And analysts have been quick to suggest that this accord with Iran may go down in history as President Obama’s finest foreign policy success.

Domestically in America, the gung-ho militarist mood of the George W Bush era may be shelved indefinitely, and perhaps rightly so, given the less than truthful basis of the war with Iraq and its untruthful bogey of the “Weapons of Mass Destruction”.  And these are definitely economically grim times.

Not long ago, the world witnessed a confrontation when ‘Obamacare’, a medical insurance system aimed at the poor, garnered so much opposition from the Republican Party that it brought the US Government’s finances to a standstill. It threatened a default on US sovereign debt, and combined with the proposed tapering of stimulus by the US Federal Reserve Bank, may yet emerge as a crisis point once again.

This successful agreement between the Iranians, with a reputation for being tough negotiators, and the 6 world powers involved, will also result in the continued lifting of a large number of crippling economic sanctions, just as it also has in the Syrian context. Iran is itself in considerable economic distress with a quarter of its eligible people unemployed, and will be hugely benefited with its trade flows taking off afresh. This is  also good for India, with its cordial relationship with Iran, in terms of bilateral trade.

Pakistan will have less leverage over the US withdrawal from land-locked Afghanistan, less hold over Afghan fighters recruited to harass India in Kashmir, and on the plus side, better economic relations itself with Iran.  Afghanistan too can develop much better diplomatic relations with its Iranian neighbour and not be quite so dependent on Pakistani good graces, or be intimidated as much by its dictates.

This ‘historic’ agreement and its implied consequences have left Israel suspicious of Iran’s sincerity to not pursue a weapons programme as pledged.  They think the Iranians may use these coming months to accelerate their uranium enrichment and weapons programme etc. The Saudis, long the beneficiaries of the US estrangement with Iran, are also not very pleased.

As a major Shia nation, amongst a large number of Sunni nations in the region, Iran is once again emerging onto the world stage as a full partner. This has been absent since the fall of the Shah Reza Pahlavi. The geopolitical situation therefore may indeed be stabilising thanks to the recent positive developments in both Syria and Iran, but, as usual, it cannot please vested interests that have been profiting from the rifts and conflicts in the region.

But, in an economically troubled world coming out of recession in painfully slow degrees, these are very good and necessary developments. Two huge crises with the potential to result in devastating wars that would have completely broken the back of the already precarious ‘energy’ economics, are on their way to fruitful benefits for many. The P5+ 1, namely the US, the UK, Russia, China, France, and Germany have pulled off a very worthwhile accord with a more practical and less ideologically driven Iran under President 

Hassan Rouhani, who rightly expects the treaty to ‘open new horizons’.

China, often seen as a military threat to India, is taking its international obligations more and more seriously, as is Russia. They are now, without a doubt, not only amongst the world’s great powers, but growing more influential by the day. They too are not inclined to be confined to being regional players anymore. This shift in priorities helps India, particularly in its strategic equation with Pakistan. China is likely to take a more defensive role to support its old ally Pakistan going forward. It is likely to discourage Pakistani aggression against India. For itself, it has been signalling a less belligerent posture with India on border talks etc. lately. This is because China stands to gain much greater dividends from leveraging its trade and industry initiatives with an India which has enormous potential.

The age of multilateralism, in which India could also play a significant role, despite its present weakness, may be well and truly dawning.

(975 words)

November 25^th, 2013

Gautam Mukherjee