The current U.S. and E.U. policy toward the Iranian nuclear issue aims at increasing crippling sanctions on the Iranian economy while trying to engage Tehran. But so far it has not changed Tehran's calculus, and the reason is that Iran's domestic politics makes it almost impossible to give up on the nuclear issue; hence the deadlock but also the dramatic escalation on both sides.
Iran's domestic dynamics, key to understanding the deadlock.
Like anywhere else, people in Iran care more about inflation and jobs. Today, the current government's popularity is at its lowest point due to its inability to put the economy back on its feet. The state of the Iranian economy and currency is catastrophic and there is no consensus on whom to put the blame. A vast majority of citizens and politicians criticize President Ahmadinejad mainly for domestic issues while others blame the West for the economic downturn. And many blame only the West.
Still, there is a strong desire to see Ahmadinejad step down from power. His term ends in June 2013, but he was summoned by the Majles (Parliament) who has questioned him on economic issues and his populist reforms. He knows that he is politically isolated and that it is impossible for his camp to win the next elections.
Unfortunately, there are few reasons to be optimistic regarding the next presidential election. First, many people are skeptical about the fate of their votes after what happened in 2009. Second, it is going to be extremely difficult for reformist candidates to go through the Guardian Council's filter and run for the presidency. We saw during the last legislative election earlier this year that candidates had not only to be loyal to the principle of the Velayat-e Faqih (Guardianship of the Islamic Jurisprudence), but they had to firmly believe that Iran is going through a soft war, a foreign plot whose aim is to topple the Islamic republic.
This is central. Tehran perceives the Western approach as an attempt to bring "regime change." Its policy is therefore guided by "regime survival," hence the deadlock.
Though there are different views within these administrations, the E.U. and U.S. governments affirm that sanctions are implemented to tackle the nuclear issue and prioritize avoiding nuclear proliferation. However, some U.S. legislative forces and interest groups believe that a crippled economy could create space for regime change. This is what Tehran perceives.
The efficiency of broad unilateral sanctions.
First, it is a fact that today "smart" or "targeted" sanctions have disappeared from the political discourse. It means that there has been a shift, or an unbalanced escalation, in the 'dual-track' approach. This approach advocated for sanctions on the nuclear program and the Sepah-e Pasdaran (Revolutionary Guards) which hold an important share of the Iranian economy and which is on the U.S. State department list of Foreign Terrorist Organization (FTO).
But today, this shift toward broad sanctions has a high cost to the Iranian citizens, and has worsened the country's human rights problems. Ahmad Ghavidel, head of the Iranian Hemophilia Society, wrote in the Washington Post story "this is a blatant hostage-taking of the most vulnerable people by countries which claim they care about human rights." Also, according to Professor Muhammad Sahimi, a prominent Iran expert with contacts in Iran's pharmaceutical industry, the "shortage of drugs will soon become a catastrophe if not addressed."
Second, as we no longer talk about smart or targeted sanctions, but broad and indiscriminate sanctions, it means that what many feared last year, and wrote about, has become truer than ever: escalation begets escalation. And each time we are pushing toward a point of no return. Today, the escalatory process is getting out of control of politics.
The strategy did not include punishing the people for the action of their non-democratic institutions. But we have transitioned into a terrible situation where both countries are going to escalate, and it is going to continue until at least the next Iranian presidential election in June 2013 (and the Iranian people are the main losers since they don't have the tools that the government and the Sepah-e Pasdaran have to circumvent sanctions).
As long as they have diplomatic space and chips to bargain, both parties will continue to escalate to try to get more from the negotiations. And who has more bargaining chips? It is the U.S. and the E.U. which are getting the upper hand on the broader international chessboard where the Russians (and the Chinese) are the main competitors.
It is perhaps true that the U.S. government will have more leverage to offer a better sanctions relief package (with endgames formulated from the start) after the November 6 election, but there are reasons to doubt the likelihood of progress since both sides will still have "bargaining space" to negotiate. It is a real game of chicken. One is bigger than the other, and this is why some believe that sanctions work. The Iranian people are suffocating and the Iranian State, which is more resistant, is also losing but at a slower pace.
Where does it lead?
One should never forget that Iran also has politics. The current Iranian government will most probably not change its behavior with the current P5+1 proposals because it will be a deadly political move (a move that Khamenei doesn't want to take responsibility for since it would further weaken him politically).
Gone is the Khatami era where Iran's ambassadors had good relations and communication with European governments. Since Ahmadinejad's election in 2005, almost all of those ambassadors have quit or were forced out, and have been replaced by Ahmadinejad's network. This current government is responsible for Iran's image in the world and this diplomatic shift was a real blow to the confidence building process between the EU3 and Iran. A change in Iran's diplomatic behavior is therefore more than necessary -- next chance is in June...
But the political problem is not only in Iran. U.N. security council resolutions demand that Iran suspends its uranium enrichment, which is moving it closer to the capability to assemble a nuclear weapon. Though the imminence of a nuclear weapon in Iran is not approved by U.S. intelligence agencies, which believe that Tehran is years away from being able to assemble a nuclear weapon, many reports still affirm that Iran should have had a nuclear weapon many years ago (starting in 1984!).
As a result, (Western) politics and reports will keep on saying that the "clock is ticking" and this is why the political reasoning drives to a tightening of crippling sanctions. This political decision-making is closing the space to find the possible technical deal that would put an end to the dramatic deadlock.
There is not much space remaining to tighten the noose of a state which is more concerned about its own survival (because the stability of the Iranian nation depends on it -- see the results of Iraq and Syria's state erosion). Consequently, an Iranian compromise to the U.S. and E.U. demands is unlikely and the next escalatory step could be one that no one has interest in but will be forced to pursue: military confrontation.
The game of chicken is not a smart game. Yet, the "possible military dimension" of Iran's nuclear program remains a serious concern and must be addressed differently to avoid more blind escalation and more pain on ordinary Iranian citizens. If the U.S. and E.U.'s main concern is to avoid a nuclear armed Iran, then they should rethink the 'dual-track' approach in a more balanced way -- one that would also not cripple Iran's societal change in its confrontation with the Iranian State.