Since the late 1950s, Iran has displayed considerable interest in nuclear technology and energy development. From the 1950s to 1979, Iran received much needed technical support from the United States, as it agreed to focus all efforts towards a peaceful nuclear program. When the United States began funding Iran’s complex of research facilities—known as the Tehran Nuclear Research Center (TNRC)—the US became a key booster for the country. With this assistance came greater confidence and ambition in the country’s quest for nuclear energy. In 1973, the Shah of Iran vowed to exponentially increase the country’s nuclear progression, and by the tail end of the century, he had delegated the bulk of nuclear responsibility to the Atomic Energy Organization of Iran (1).
In the succeeding years of that promise, Iran coordinated major deals and contracts with foreign suppliers. This allowed Iran to further accelerate its nuclear programs and invest in nuclear education and training for its personnel. Soon after, Iran purchased a 10 percent share—worth one billion dollars—of a French power plant, and then another 15 percent stake in a South African uranium mine worth $700 million. By the end of 1979, the country developed a foundation for nuclear technologies. However, they lost much of their best nuclear talent following the end of the Iranian Revolution. Many of the country’s major nuclear projects, such as the Bushehr Nuclear Power Plant, were suspended as a result, prompting Iran to seek foreign investment and support at the turn of the century (2).
Between 2003 and 2009, Iran was the focal point of many negotiations regarding sanctions and nuclear technology prohibition. In October of 2003, Iran agreed to negotiations with the International Atomic Energy Agency (IAEA) and the EU-3 (the United States, France, and Germany) to suspend all uranium enrichment activities. However, Iran maneuvered around the word “suspension,” continuing to produce centrifuge components and ongoing small scale-conversion experiments. This forced the EU-3 to bury Iran in renewed sanctions. But in November of 2004, Iran signed a deal with the EU-3 vowing to sustain momentary suspension of uranium enrichment and other activities, such as manufacturing, installing, testing and operating centrifuges. Yet tension in the international community only ascended, as Iran continued to undercut and renege on their promises (3).
In 2009, Iran notified the IAEA that it would start progressively enriching portions of its low enriched uranium by as much as 20 percent. Just a few days later, Iran declared that it had already reached 20 percent and was contemplating on increasing that number. In addition, Iran’s President Ahmedinejad announced that the country had plans to build 10 more uranium enrichment facilities. In December of 2009, the United States House of Representatives passed a bill assuring the implementation of sanctions on foreign countries that contributed to Iran’s efforts by supplying oil. Following these events, President Obama signed the Iran Threat Reduction and Syria Human Rights Act into law in 2012, further tightening sanctions on Iran. The European Union also increased sanctions on Iran, regulating imports, financing, insurance and the brokerage of Iranian natural gases, while eliminating the support of distribution or safe-housing for Iranian oil. Later that year, the United States and the rest of the P5+1 agreed to entertain new negotiations with Iran in regards to lifting sanctions (4).
In July of 2015, the P5+1 agreed with Iran to sign the Joint Comprehensive Plan of Action (JCPOA). The treaty served as a mechanism to delay the time in which Iran reaches full construction of nuclear weaponry. The pact states the following (5):
(i) Reducing Uranium Stockpile – The deal forces Iran to dispose of approximately 97 percent of all its uranium. This would mean going from 10,000 kg to roughly 300 kg of uranium. This is much less than it takes to power just a single nuclear weapon.
(ii) Uranium Enrichment – A purity of 90 percent uranium is the target in order to make a nuclear weapon. The deal forces Iran to reduce its uranium purity significantly, down to roughly 3 percent after a 15-year period.
(iii) Centrifuge Reduction – Iran is expected to reduce their inventory of centrifuges by two-thirds,from 19,000 to 5,000. But they are also allowed to have up to 1,000 more for development and research. If Iran cooperates with this part of the deal for the next decade, it will take them up to one year to create enough fuel for a single nuclear weapon.
(iv) Inspections – UN inspectors will have the authority to monitor nuclear sites and other sites, including military sites in Iran.
(v) Sanctions Relief – The United States, the EU and the UN will lift selected energy, economic and financial sanctions on Iran.
A New Economic Outlook
Although the implementation of the JCPOA earlier this year served as a mechanism to delay Iranian nuclear projects, it also has positive implications for the country’s economy, in which it may take a few years to see results. Using aggressive price discounts to win back market share in the oil sector, Iran has increased its oil exports from 1.3 million barrels a day to 2.3 million. Iran has also made great strides in reconnecting with many of its foreign and outside investors, such as the International Group of Protection and Indemnity Clubs, as they raised the level of reinsurance for shipping Iranian crude oil from $80 million to $830 million since April of this year. The increase in oil output is expected to increase the country’s GDP by about 4 percent this year. Iran’s main economic issue is the continuous act of cronyism by government officials. As a result, potential reforms that would enable the country’s economic and cultural advancement are unlikely. Internationally, it will be interesting to see if the cynicism from other countries about Iran’s governmental system will further delay the prosperity of the once again integrated state (6).
(1) "Iran." Nuclear Threat Initiative. N.p., n.d. Web.
(4) "Joint Comprehensive Plan of Action." U.S. Department of State. U.S. Department of State, n.d. Web.
(5) WSJDigitalNetwork. "The Iran Nuclear Deal Explained." YouTube. YouTube, 02 Sept. 2015. Web. 4 Oct. 2016.
(6) "Iran's Modest Economic Changes Since JCPOA Implementation." - The Washington Institute for Near East Policy. N.p., n.d. Web. 03 Oct. 2016.
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