By Ian Bremmer
Amidst the rubble of cynicism in Washington and the international community, there's been one sign of hope for American foreign policy: the West's negotiations with Iran regarding its nuclear program. Remarkably, things seem to be shifting: diplomats have emerged from the latest round of negotiations emitting good vibes. The West's crippling sanctions, led by the U.S., have worked.
But before we discuss what's in flux, let's recap what the status quo has been: the West, dubious of Iran's vow that it is only investing in nuclear research and enrichment for energy and medical reasons, has set up a system of sanctions meant to choke the Iranian economy. The United States and Israel have tried to postpone Iran's progress behind the scenes: the most significant example was 2010's Stuxnet computer worm that damaged Iranian nuclear enrichment infrastructure. Meanwhile, Iran has responded with a stubborn march toward nuclear breakout capacity, and little willingness to negotiate. The sanctions, however, have begun to take a significant toll: sanctions have more than halved Iran's crude exports since they tightened in mid-2012, cutting budget revenues by at least $35 billion a year. In Iran, we've seen massive inflation and black market demand for dollars.
To date, the range of possible outcomes have looked like a bell curve. We had a small, "fat tail" risk of the situation deteriorating and military strikes against Iran occurring (led by some combination of the United States and Israel). On the other end of the spectrum, we had an incredibly slim chance of a breakthrough deal that could peacefully keep Iran from going nuclear. The status quo — tightening sanctions and Iran's slow movement toward nuclear breakout capacity — was the overwhelmingly likely occurrence.
But this year, the curve has shifted. The chance that the status quo simply continues is much reduced; the likelihood of the best or worst outcome — a military strike or a breakthrough deal — has risen significantly (although neither one is probable by any means).
So what changed? Two critical things. First of all, Iran's domestic politics have shifted, at least in part thanks to the sanctions regime. In August, Hassan Rouhani took office after being elected on a promise for moderation and (relatively) more open dealings with the West, as well as a pledge to fix Iran's hobbled economy. Without Mahmoud Ahmadinejad as president, the West is more amenable to negotiations.
The second major factor is that Iran is getting significantly closer to nuclear weapons capability. Per the August International Atomic Energy Agency's (IAEA) report, the regime is on pace to become nuclear-weapons capable in 2014 or 2015 — and that window could narrow further. Iran is approaching nuclear breakout capacity, the point at which it could conceivably race to produce sufficient material for a nuclear weapon and hide it in a secure location before the U.S. or Israel could amass a military response to stop them. A realistic worst-case scenario could see breakout time drop to around 10 days — a span too short to assemble an effective response — by the middle of next year.
These two factors explain why the talks are so important: they are more likely to succeed, and there are now much higher stakes if they do not.
At the talks last week, American and Iranian officials met for an hour, Iran ran through a PowerPoint presentation about its proposed solution to the stand-off, and Iran and the West issued a joint statement praising the "positive atmosphere" of the get-together.
Happy days! But this is no guarantee of future success. This is just the beginning of the negotiations, and despite Rouhani's open stance towards the West, the Supreme Leader Ayatollah Khamenei still calls the shots. (Though word from Iran is that Khamenei is behind the talks.) The sequencing is perhaps the most complicated part: the Iranians want the sanctions reduced before they scale back the nuclear program. The United States will demand the other order. On top of that, Iran wants to hold on to the right to enrich uranium; the Americans say that's not acceptable.
Meanwhile, there are headwinds outside of Iran. Congress agreed to delay a vote on more stringent sanctions to allow the first round of talks to proceed; now the executive branch is pressing the Senate to delay the vote once more. But convincing Congress to delay additional sanctions is a far cry from convincing them to lift existing sanctions should a deal be struck. On top of that, Saudi Arabia has protested thawing U.S.-Iran relations by refusing its seat on the United Nations Security Council and announcing a major "shift away from the U.S." This won't make negotiations any easier.
Lastly, of course, there's the chance that Israel may not be satisfied with a deal even if the Americans are. Recently I met with senior Israeli officials who thought the likelihood of a comprehensive deal was 25 percent. But a comprehensive deal that Israel could stomach? Less than 5 percent. After all, Netanyahu outlined Israel's four key conditions in a recent speech — they add up to a nonstarter for Iran. If this latest round of negotiations breaks down and Iran still sprints to breakout capacity, the Israelis will likely attack themselves if the Americans won't.
The worst-case scenario is that the West and Iran come close to a deal, but it falls apart, in a manner that the international community blames predominantly on the United States and Israel. This would embolden major markets like China and Russia to flout the sanctions, thus unraveling the West's best bargaining chip with nothing to show for it in return. The West gets blamed, U.S. credibility is reduced even further, and Iran continues full speed ahead toward nuclear capability.
That's what the American-led sanctions have been able to avoid thus far, but we may be reaching the inflection point. The chance that the status quo continues is diminishing. Success is closer now than ever — but that only makes the situation more precarious than ever before.
(This column is based on a transcribed interview with Bremmer. )
(The views expressed here are author's own.)