World

Bishop and Zarif talks; Greek bailout beyond even Putin; Jokowi holds hopes for Chan and Sukumaran. By Hamish McDonald.

Final touches close in Iran nuclear deal

Iran’s foreign minister Mohammad Javad Zarif (centre) is followed by US Secretary of State John Kerry as they arrive to deliver statements after nuclear talks in Switzerland last week.
Credit: REUTERS

Both the Republican majority in the United States congress and the Israeli government have backed off this week from their outright opposition to the nuclear agreement forming between Iran and six major powers.

But it will be a tense few weeks until Barack Obama earns the Nobel peace prize awarded at the start of his presidency.

The framework agreement announced on the cusp of Easter and Passover has Iran agreeing to limit uranium enrichment at its Natanz complex to the grade only useful in civilian power reactors, to cut sharply its nuclear fuel stockpile, and to reduce its number of centrifuges by two-thirds to 5000 operating centrifuges. The underground Fordow facility near Qom would be turned to research, with its enrichment confined to medical isotopes. A heavy water reactor will be modified to reduce its production of plutonium, another fissile material. Compliance will be monitored through “intrusive” inspections, resulting in a lifting of economic sanctions on Iran. Overall, this would reduce the “breakout” time to build a bomb to one year, and provide plenty of warning signals.

The details need to be agreed  on by June 30, and despite the euphoric response on the streets of Tehran, there are different perceptions among the negotiating parties about how a final deal would play out. Many Iranians will be expecting an immediate reward in easing their economic deprivations, while Obama said sanctions would be lifted only after Iran carried out its commitments.

The Iranian president, Hassan Rouhani, will have to keep nurturing hope of easier times and better access to the Western world among Iran’s young population, while placating older Islamic revolutionary elements that not too much has been given away.

The dire warnings of American and Israeli sceptics can only help with the latter element: they point out the 10- to 15-year expiry of the agreement, continuing enrichment capability, and retention of enriched uranium part way to weapons grade. If Iran does cheat once sanctions are lifted, it will be hard to get agreement to reapply the sanctions.

But the alternatives to this agreement aren’t especially prospective either. More drastic economic sanctions, assuming wide international compliance could be obtained, might eventually cause regime collapse but not before Tehran hardliners made a dash to build a bomb, a process currently measured in a few months. A military strike might delay a bomb only two or three years, and harden resolve in Tehran meantime to cause as much trouble as possible for the West.

In Washington, the Republicans are waiting for the final agreement, and Obama is looking to their new head of the senate foreign relations committee, Bob Corker, to work out a compromise to head off bills tightening sanctions that would kill the agreement. In Israel, the minister for intelligence and strategic affairs, Yuval Steinitz, listed additional nuclear curbs Israel would like to see in Iran. These are unlikely to be included but indicate Prime Minister Benjamin Netanyahu has accepted Israel has to live with the agreement, and take Obama up on his offer of additional US defence co-operation to keep his country’s military edge.

Bishop, Zarif talks

Already, the draft agreement has changed the atmospherics of the Middle East, and our foreign minister, Julie Bishop, will be going to Tehran next weekend at a fascinating time.

She will be talking to her Iranian counterpart, Mohammad Javad Zarif, and other leaders about the framework nuclear agreement, which she said Australia welcomed, and “other important bilateral and regional issues”.

This turns out to be a very well-timed visit, as the scramble for economic opportunity is now well and truly on. Aside from the usual agricultural trade with Iran, Bishop may be scouting out the prospects of inserting Australian businesses into many of the other sectors that would be opened after sanctions, such as banking, communications, education and engineering. Some 20 years ago, for example, BHP was looking closely at the feasibility of a natural gas pipeline from Iran to India, either across Pakistan or (more securely) along the Arabian Sea continental shelf. BHP was warned off by the Americans, but this project is now being talked about in India.

On the “regional issues”, Bishop will be alert for signs of a more co-operative Tehran. President Rouhani said he hoped the draft agreement would be the “first step” to “the end of tensions” with hostile countries. If that means the US, this would have to involve co-operation beyond the nuclear issue, towards political-security solutions in Syria, Iraq, and Lebanon and, who knows, Israel and Palestine.

The Arab nations of Sunni persuasion, chiefly the Saudis, are not happy. An Iran co-operating with the US recalls the American entente with the Iranian shah’s regime before 1979, pushing them to one side. An Iran not co-operating, but with more money and technology after the lifting of sanctions, could be stirring up Shia populations across the region even more effectively than now.

Greek bailout beyond even Putin

This suggests the Saudis will not be tightening up the oil taps immediately to lift prices, so as to limit Iran’s scope for causing trouble.

Washington will also want to keep up the pressure on Russia’s Vladimir Putin, who as well as pressuring nervous Eastern European countries (several of which are hastily reintroducing compulsory military service) has been fishing in the East Mediterranean.

Putin has just hosted the president of the Greek half of Cyprus, and extended a $US2.5 billion soft loan, and on Wednesday he received the new prime minister of Greece. Alexis Tsipras will be grateful for any help he can get, as he tries to renegotiate terms of the €240 billion bailout from the European Central Bank to fulfil his election mandate. The day he arrived in Moscow, his treasury managed to sell €1.1 billion in six-month bills, helping repay €460 million to the International Monetary Fund on Thursday.

The Russians might be able to help with some short-term liquidity. But with public debt of some €317 billion, as against Greek GDP of €181 billion (estimated at end of 2014), the Greek financial catastrophe looks beyond Putin’s help, as much as he’d like to draw the Greeks and Cypriots into a new Orthodox Christian community.

Still, hope springs eternal and Tsipras has come up with a new get-out-of-jail-free card. His government this week calculated that Germany owes Greece €279 billion in reparations for damage and suffering in World War II. The Germans say the issue was settled with a payment of 115 million Deutschmarks in 1960.

Jokowi holds hopes

The legal efforts to extricate Myuran Sukumaran and Andrew Chan from death row on Nusakambangan island continued, with dismal results.

The main hope now is a change of mind by Indonesian president Joko Widodo, perhaps after a realisation of how badly he is being served by many of the supposedly political allies in his government.

As put in a trenchant op-ed piece in the Fairfax newspapers this week by Tim Lindsey and Simon Butt, both senior academic lawyers who closely study Indonesia’s legal system, Widodo is looking a “weak and isolated” president as a nexus of corrupt police and politicians set about neutering the widely respected Corruption Eradication Commission (the KPK). The task now is to persuade him that clemency is not weakness, and continuing with what will be five dozen executions in his first year in office will not make up for failings against corruption.

At least Australia now has an ambassador in Jakarta who can get about and meet Indonesian officials and leaders. Over two months after his arrival in town, Paul Grigson finally got in to present his credentials to the president on March 19.

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This article was first published in the print edition of The Saturday Paper on Apr 11, 2015 as "Final touches close in Iran nuclear deal". Subscribe here.

Hamish McDonald
is The Saturday Paper’s world editor.  

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