President Trump announcing the U.S. pullout from the Joint Comprehensive Plan of Action (JCPOA) on May 8, 2018.
YouTube / CBC News

Now that President Donald Trump  has decided to remove the United States from the Joint Comprehensive Plan of Action (JCPOA), his critics both here and in Europe have been condemning his action. How much does Trump deserve this criticism? Or, how much does this criticism reveal the foolishness of his critics? What comes next with Iran?

The Joint Comprehensive Plan of Action 

The JCPOA  was an agreement between Iran and the five permanent UN Security Council members plus Germany, the so-called P5+1. Concluded at Vienna on July 14, 2015, it limited Iran’s activities in enriching uranium for various periods of time. Iran agreed to eliminate its store of medium-enriched uranium, and to reduce its stockpile of low-enriched uranium by 98%. Iran agreed that for 10 years it would limit its uranium enrichment to a single facility using so-called “first-generation” centrifuges of limited capability. For a period of 13 years, Iran agreed to reduce the number of its gas centrifuges by two-thirds. For 15 years, Iran is required to enrich uranium only up to 3.67%, and not to build any new heavy-water nuclear reactors. After the specified periods of time, none of these restrictions would continue, and Iran would be completely free to continue development of nuclear weapons.

To verify that Iran was holding to these restrictions, the task of monitoring Iran’s nuclear activity and compliance was given to the International Atomic Energy Agency (IAEA).

In return for compliance, Iran was relieved from economic sanctions imposed by the United States, the European Union, and the United Nations Security Council. These included prohibitions of transactions with Iranian banks; transactions involving oil, gas, and petrochemicals; and transactions involving cars, shipping, shipbuilding, and aviation. In addition between $100 billion to $120 billion of Iranian assets frozen in bank accounts, real estate, and other property were returned to Iranian control. Of that amount, only $1.973 billion had been frozen in the United States.

The JCPOA’s Shortcomings

The JCPOA’s  flaws   were so obvious President Obama did not even try to submit it to the Senate for its ratification as a treaty. Obama knew he did not have a prayer of getting the 67 votes needed to convert his executive agreement into a treaty. As a result, because it was an executive agreement, Trump could easily withdraw us from it with an executive order.

Among its glaring faults are the much remarked-upon time limits on the restrictions. By 2030 Iran would be totally free to develop the bomb. An even bigger problem, however, is the agreement is unverifiable. Trump’s European and Democratic critics alike say Iranian compliance is checked by International Atomic Energy Agency (IAEA) inspections of Iranian nuclear sites. They go on to say we have already paid the full price for the agreement by stopping the sanctions and unfreezing Iran’s foreign-held assets. We might as well seize the benefits by having the IAEA keep Iran honest. The problem with such comments is that they are more than a little disingenuous.

For one thing, Iran’s supreme leader, the Ayatollah Ali Khamenei, has flat-out decreed that  Iran’s military sites were strictly off-limits for any verifying inspections. (There is in fact only one that we know of for certain, the one at Parchin.) Instead, the IAEA has an agreement with Iran that the Iranians are allowed to use its own inspectors! This apparently was a secret side agreement until the Wall Street Journal and others blew its cover. Where better to develop nuclear weapons than at a military site to which the West has no access?

As for the other civilian sites, the situation is not much better. The JCPOA does require inspection of suspect facilities with 24 days notice (more like three months when all prescribed procedures are followed according to the Wall Street Journal). This gives Iran plenty of time to disguise or dismantle any evidence. Given Iran’s past duplicity, all these problems make the Iran nuclear agreement completely unfixable. President Trump was fully justified in withdrawing us from the agreement and slapping on new sanctions.

Below is a video of Trump’s speech setting out the reasons for the U.S. withdrawal.

Iran’s Threat To the World, and Its Weakness

So long as the West  does not hinder Iran’s imperial ambitions, that country poses an extraordinary threat to the world. The Iranian menace is magnified by its de facto alliance with Russia and China. American historian Hal Brands, Henry A. Kissinger Distinguished Professor of Global Affairs at the Johns Hopkins University School of Advanced International Studies, puts it this way:

This is happening for two reasons, one geopolitical and one ideological. The geopolitical reason is that what Iran, Russia and China have in common is that they are all trying to weaken, in their own way and for their own motives, an international order that is built on the dominance of the U.S., its allies and its partners. Given the inherent dangers and difficulties of taking on the leading power and its formidable strategic coalition, they are naturally attracted to cooperating with states that share their hostility to the U.S.-led system and can help them nibble away at its edges.  . . . The ideological reason is that these countries also share a commitment to illiberal rule in a relatively liberal age. Admittedly, we have not gone back to the 1950s, when the ideological conflict between Washington and Moscow took on global dimensions. Marxism-Leninism no longer provides the core of the relationship between Moscow and Beijing, as it did in the days of Stalin and Mao. But Russia, China and Iran are all autocratic regimes that see themselves fighting for influence and even survival in a world in which the leading power is a democracy and democratic values are still pre-eminent. Strategic and ideological resistance thus go hand-in-hand.

One particularly important example of Iranian-Russian cooperation is their partnership in Syria allowing the Assad regime to survive. This poses a particular threat to Europe with the channeling of a flood of Syrian refugees into Europe.

Yet, each member of this autocratic axis is extraordinarily weak economically. I demonstrated this separately for China and Russia in the posts How Probable Is a Trade War With China? and Taming Putin’s Russia. We can accomplish the same task for Iran in the same way, by comparing the GDP of Iran with that of the United States. We should do this in three ways. First, in the worst case of possible war, we would be interested in the ability of each country to harness assets for their military and naval forces. We should then look at the real GDP of each country. Below is a plot of each country’s GDP in constant 2010 U.S. dollars.

Not only is the Iranian economic output minuscule compared to that of the United States, its rate of increase is much, much slower than that of the U.S.

Second, we should take a look at a comparison of GDP per capita. This has implications on Iranian popular discontent with their government, as will be discussed in the next section.

Note that in the years just before and after the Iranian revolution their per capita GDP fell significantly, and in all the years since it has recovered only slightly. Finally, we should compare the rates of growth of the two countries’ GDPs. We do this with the per capita GDP growth rates below.

If Iran were an undeveloped free-market economy, we would expect its growth rate to be much larger than that of the U.S. This is because an undeveloped economy can create growth simply by investing more or putting more of their population to work. Effecting growth is considerably more difficult for a developed economy. Investing in increased production of already existing goods is more likely to create costly surpluses. In addition, a country with a developed economy probably already has close to complete employment of its employable population. In order for a developed economy to grow, it must invest in creating higher productivity or in generating brand new kinds of products. That is much harder to do.

However, Iran does not have a free-market economy. It is an autocratic theocracy that is harnessing its economy to feed its military machine and fund islamic terrorism in many countries. This results in the wild swings between large positive growth and almost equally large negative contractions we see in the plot above. That is why the Iranian per capita GDP has hardly grown at all since the ayatollahs took charge. Their people seem to be losing patience.

Does Iran Face Another Revolution?

From the plots above,  you can readily appreciate how economically weak the Islamic Republic of Iran is. This weakness is something the United States can exploit to thwart Iran’s geopolitical aims. Unfortunately, many European leaders show no desire to follow the U.S. and leave the agreement. Without their participation in renewed sanctions, the effectiveness of U.S. sanctions would be greatly limited. For this reason, the Trump administration will give any European company thinking of dealing with Iran a choice: They must decide with whom they want to do business. With whom can they earn the most? They can trade either with Iran or with the U.S. They can not do both. For non-Iranian companies presently doing business with Iran, they have a 90 or 180 day wind-down period, depending on the sanction involved, to stop dealing with Iran. If foreign companies continue to do business with Iran, they will be subject to secondary sanctions prohibiting their dealing with American companies.

As with Russia, a very respectable argument can be made that the huge increase in U.S. oil and gas production resulting from “fracking” has done more to harm Iran than the old sanctions did.  Nevertheless, any extra economic strain caused by the new U.S. sanctions will limit the assets Iran has to fund overseas military activities and terrorism from Hezbollah and Hamas. It would limit what they could devote to their wars in Syria and Yemen. Finally, such economic strain could help drive a larger wedge between the mullahs and the Iranian people.

In fact, the regime of the Iranian mullahs appears to be increasingly vulnerable to the hatred of its own people. This hatred has been engendered by the economic want imposed on the Iranians, as well as by the mullahs’ tyrannical rule.

Today, the hostility toward the Pahlavi regime during the Iranian revolution seems increasingly to be transferred to the rule of the mullahs. The decay of the regime’s authority has progressed to the extent that Reuel Marc Gerecht and Ray Takeyh on the Wall Street Journal claim “the theocracy now resembles the Soviet Union in its dying days.” 

And no wonder! Gerecht and Takeyh point out,

Once in power, Iran’s Islamists faced open rebellion from the revolutionary factions that objected to their republic of virtue. This was a battle waged in the streets as well as in Parliament and the press. The mullahs proved more ruthless than their liberal and Marxist detractors.

Actual rebellion in the streets has broken out a couple of times, once in 1999 with a revolt by university students, and once in 2009 with the Tehran protests of the Green Movement.

Although the Green Movement was quite bloodily suppressed, it appears to be surviving underground. After the Green Movement, however, whatever legitimacy the regime had in the eyes of many if not most of its people simply vanished. The truth of this can be seen in the declining observance of the Muslim religion within Iran. Gerecht and Takeyh report,

Meantime, government reports, the controlled press and even senior Revolutionary Guard commanders reluctantly confess the truth: Islam is growing weaker within Iran. Mosques, thinning out for 30 years, are now mostly empty even on religious holidays. Seminaries have few recruits, and the government of God has trouble supplying mosques with prayer leaders. Secularism is on the rise, particularly among the youth, among whom religious observance has declined precipitously.

While Iranian religious enthusiasm ebbs as a silent resistance to the ruling mullahs, those religious autocrats have responded by becoming even more tyrannical in their rule. The death sentence is now liberally meted out for a great many nonviolent offenses. You can expect to be put to death for any of the following offenses: Apostasy, “insulting the prophet”, homosexuality, adultery, and drug-related offenses. Even children are subject to the death penalty.

Regime change in Iran seems a real possibility. That probably is the only result that could guarantee that theocratic Iran does not get nuclear weapons together with the missiles to deliver them.

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