It’s up to Iran to seize the chance to consolidate international trust

The lifting of sanctions opens up the nation to billions of dollars in investment and finance that will allow 80 million people to emerge from severe hardship

PUBLISHED : Friday, 22 January, 2016, 12:51am
UPDATED : Friday, 22 January, 2016, 2:12am

The lifting of international sanctions on Iran is a triumph for diplomacy over confrontation and conflict in the world’s most troubled region. It follows the deal reached six months ago with a coalition of the US, China, Russia, Britain, France and Germany that will limit Iran’s ability to produce nuclear weapons. It also marks a turning point in the hostility between the US and Iran that has shaped Middle East tensions since 1979, as evidenced by Iran’s quick release of two US Navy patrol boats and their crews after they unintentionally entered Iranian waters earlier this month. Certification last weekend by the UN nuclear watchdog that Tehran had fulfilled its initial commitments was followed by a US-Iran prisoner swap.

However, despite Iran’s acceptance of strict rules on compliance, enforced by international inspection and verification, the deal has implacable critics who distrust Tehran, notably regional adversaries Israel and Saudi Arabia.

Tehran therefore must uphold it in letter and spirit, if it is to consolidate the trust necessary for international acceptance. Having been a pariah state on the international economic stage for more than a decade, it can hardly afford not to.

The sanctions have ravaged one of the region’s most vibrant economies, with 80 million people now set to emerge from severe hardship. The change will restore Tehran’s access to tens of billions of dollars in frozen assets, and is forecast to lift GDP growth to a cracking 6 per cent from 3 per cent, prompting the attention of international investors. Indeed, President Hassan Rowhani has held out the prospect of up to US$50 billion worth of international investment and finance in the coming year.

Iran’s hand may have been forced by the collapse in the price of oil, its only significant export. That does not detract from the significance of the pact. Hopefully, once Iran’s leaders have access to US$100 billion worth of assets and investment, they will not be tempted to test the resolve of the US to uphold an agreement that runs for 15 years.