Bloomberg News

Rouhani Victorious as Nuclear Deal Offers Respite

November 25, 2013

Iranian Media Explore Chance to Break Taboos in Rouhani Opening

The interim agreement is likely to vindicate Iranian President Hassan Rouhani’s policy of engagement with the world and pacify some of his political rivals at home. Photographer: Andrew Burton/Getty Images

Iranian President Hassan Rouhani’s deal with world powers may strengthen his hand against hardliners opposed to his policy of detente and bolster his popularity at home, where sanctions have drained the economy.

“Rouhani has won a major domestic victory,” Ghanem Nuseibeh, the London-based founder of Cornerstone Global Associates, which advises clients on risk in the Middle East, said by telephone. “He said he would help the economy and work on easing the sanctions, and less than six months later, he has a deal.”

On the fifth day of talks in Geneva with negotiators for a group of world powers, Iran agreed yesterday to curtail its nuclear activities in return for an easing of some economic restrictions imposed on the nation. The two sides aim to conclude a comprehensive accord within six months that would reassure the West that Iran doesn’t harbor nuclear-weapons ambitions, a charge it denies. Rouhani’s foreign minister, who negotiated on Iran’s behalf, received a hero’s welcome upon his return to Tehran.

The interim agreement is likely to vindicate Rouhani’s policy of engaging the world and pacify political rivals who had challenged the overhaul of ties with the U.S. in particular as going too far. Rouhani, elected in June on a message of moderation, held a 15-minute phone call with President Barack Obama in September, the highest-level exchange between the sides since the Islamic revolution in 1979.

‘Safe Grounds’

“The hardliners will still criticize him for sure,” Salman Shaikh, director of the Brookings Institution’s Doha Center in Qatar, said by telephone. Rouhani’s “on fairly safe grounds. Supreme Leader Ayatollah Ali Khamenei will continue to support him in his current approach.”

Khamenei, the ultimate authority in the Islamic Republic, in a letter to Rouhani yesterday said the nation’s nuclear negotiators deserved “to be praised and thanked,” according to the state-run Fars news agency, which published the document.

The accord marks “a starting point for a new chapter for the Iranian nation,” Rouhani said in an address yesterday. “The world came to realize that respecting the Iranian nation will bring about positive results and that threats won’t bear fruit.” The president said Iran “has never and will never seek weapons.”

Strike Balance

Rouhani’s challenge since his election has been to strike a balance between delivering on campaign pledges, including greater freedoms for the Iranian people, and avoiding the appearance of compromising Iran’s security. That would offer ammunition to politicians opposed to rapprochement with the U.S.

Under the interim deal, Iran must improve cooperation with United Nations monitors, commit to eliminate its stockpile of uranium enriched to 20 percent levels and halt advanced centrifuge installation, the White House said in a statement. Iran also won’t commission its Arak heavy water reactor, which, if it became operational, could produce plutonium and give the country a second path to nuclear weapons. The country would be rewarded with as much as $7 billion in sanctions relief.

Some 800 Iranians massed at the airport in the capital, Tehran, to welcome Foreign Minister Mohammad Javad Zarif and his team of negotiators returning from Switzerland, the Tehran-based Shargh newspaper reported. The crowd, consisting mostly of young people, chanted Iran’s national hymn and slogans including, “The ambassador of peace has come,” as they waited for his arrival.

Hero’s Welcome

“No to sanctions, no to insults, no to surrender,” Iranians sang, some holding posters of Rouhani, a video by Fars showed. Hundreds surrounded Zarif’s car, who leaned outside the window, waving to the crowd as they chanted, “Dr. Zarif, thank you, thank you.”

“The credit is all Rouhani’s and, of course, Zarif’s,” Nafiseh, 35, a teller working in a private Iranian bank in central Tehran, said as a deal in Geneva appeared imminent.

Iranians will take “pride in the fact that the country can negotiate with world powers in such a professional way and that will increase his popularity,” Ali Dadpay, assistant professor of economics at Clayton State University in Georgia, said of Rouhani in a phone interview. Iran’s business community is likely “to now believe more in him and the fact that he has his priorities right.”

Economy Squeezed

The sanctions on Iran have pushed oil output to the lowest since 1990 and squeezed the economy, which contracted more than 5 percent in the fiscal year that ended in March. Iran’s currency, the rial, lost more than half its value in the year before Rouhani’s election. Inflation was 40 percent last month.

“If sanctions are removed, our economic situation will be good again,” said Alireza, 28, who studies architecture in Tehran. “If Iran is able to use all its resources, it will become an important, powerful country.”

It will take some time for the benefits of the agreement to be felt on the street, Dadpay said.

Rouhani has showed Iranians “that he can deliver,” he said. “However for people to be really thankful, he or she needs to see a change in prices and more jobs.”

To contact the reporters on this story: Ladane Nasseri in Dubai at lnasseri@bloomberg.net; Dana El Baltaji in Dubai at delbaltaji@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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