IMF confirms Iran's economy has stabilized after months of sanctions-busting oil exports, as concerns deepen over spiraling Western leverage

Agence France-Presse (AFP) on Monday outlined the details of a new International Monetary Fund report concluding - pre the outlet – that "Iran's economy is stabilizing" and will grow in 2014 "even if sanctions relief under [the interim Joint Plan of Action (JPA)] deal proves short-lived." The assessment details a wide range of already-known macroeconomic indicators converging on the conclusion that Tehran is managing to mitigate the economic pressure that Western negotiators have said is critical to securing nuclear concessions. Xinhua's coverage the report, published under the headline "UAE seeks more trade ties with Iran after IMF's positive outlook," linked the economic improvements to long-standing fears that the JPA's partial sanctions relief would trigger a kind of gold rush in which no entity wanted to be the last to access Iran's newly reopened markets. Bloomberg had already reported over the weekend that Tehran is engaged in extensive discussions with European and Asian businesses over future economic initiatives. The New York Times today published an article that, at the bottom of the piece, gestured toward the IMF report and conveyed assessments from a range of experts evaluating the significance of Iran's ongoing, five month streak of surging past its permitted levels of oil exports. The Times quoted Mark D. Wallace, chief executive of United Against Nuclear Iran, declaring that the Obama administration’s insistence on the robustness of the sanctions regime was being "wholly contradicted by reality." It also quoted Mark Dubowitz, executive director of the Foundation for Defense of Democracies, noting that the dynamic "enhances Iranian nuclear negotiating leverage and makes it more difficult to conclude a diplomatic deal" that would see the Islamic republic meeting its international obligations. The top of the Times article, meanwhile, was devoted to evidence suggesting that ''the Iranians have seen little in the way of a boost from the sanctions relief they had been expecting." This is the second such article published in as many weeks by a top U.S.-based media outlet. It is not clear how to reconcile such assertions - which presume that Tehran has yet to see relief from a sanctions regime so crippling that it coerced hardline mullahs into conducting negotiations - with the broad range of quantative economic indicators indicating that Iran's economy has stabilized. Suggestions that the Iranians just got really lucky seem unlikely to rise to the level of social scientific rigor that analysts would find persuasive. Some observers have also made the point that Iranian economic improvement erodes Western leverage regardless of its cause, a risk that diplomats and lawmakers have urged Congress to offset by passing legislation locking in future pressure should negotiations fail.

 

Top Iranian cleric Ayatollah Imami Kashani declared in a nationally televised sermon on Friday that Tehran would continue pushing forward with its nuclear program despite the intentions of the country's "enemies," prompting the Wall Street Journal - which read the boast against the backdrop of similar remarks recently aired by other senior figures - to assess that Iranian leaders "show no signs of preparing [the] public for concessions to [the] West." Top officials from the government of Iranian President Hassan Rouhani, up to and including Rouahni himself, have repeatedly and explicitly ruled out concessions on uranium enrichment, plutonium production, and ballistic missile development which U.S. analysts consider to be absolute minimums for putting a nuclear bomb beyond Tehran's reach. Supreme Leader Ayatollah Ali Khamenei last week barred Iranian negotiators from trading away what he described as the country’s "nuclear achievements." This weekend Iran's atomic energy chief Ali Akbar Salehi went further, insisting, first, that Tehran has a right to enrich uranium to weapons-grade levels of purity and, second, that Iran will need 30,000 additional centrifuges to meet its energy needs. U.S. experts - including prominent supporters of the Obama administration's diplomacy with the Islamic republic - have calculated that any deal putting Iran's atomic program beyond use for weaponization would have to include prohibitions on the creation of highly enriched uranium and require Iranian scientists to dismantle thousands of already-existing centrifuges. Evaluating red lines set by Iranian officials, CNN host Fareed Zakaria had already last January worried that the P5+1 global powers and the Islamic Republic were headed towards a "diplomatic trainwreck" and that he was not "even quite sure what they’re going to talk about if these are the opening positions." Zakaria noted at the time that "it’s very hard to walk back” the absolutist positions taken by Iranian leaders. Obama administration officials have sought to answer skeptics by suggesting that hardline Iranian declarations are just bargaining positions, while skeptics have countered by pointing out that - even as bargaining positions - the widely broadcast statements may raise Iranian public expectations and close off necessary compromises.

 

A suspected terrorist attack on an Israeli family driving in the West Bank - assailants riddled the family's car with bullets as it was en route to Passover dinner on Monday - has reportedly claimed the life of one man, left his wife and child injured, and thrown into doubt efforts to put Israeli-Palestinian peace talks back on track. Israeli officials late last week had already provided grim predictions regarding the possibility that the two sides might ink a final status agreement before the April 29th deadline of a nine-month U.S. peace push spearheaded by Secretary of State John Kerry. A subsequent three hour Sunday night meeting ended without reports of progress. Nonetheless officials on both sides - and analysts in the West - had in recent days taken to emphasizing that the parties might substantively advance the prospects for peace outside of the Kerry framework, either in concert with each other or via uncoordinated unilateral steps. The bilateral Sunday night meeting between the parties had already been held without the presence of Washington's mediator Martin Indyk, who in any case had seen his position complicated in recent days by reports that he was driving a media campaign to scapegoat Israel for the collapse of the Kerry initiative. Washington Post columnist Jackson Diehl on Sunday made the case that "[a]lmost every positive development in Israeli-Palestinian relations has happened outside the 'peace process,'" and that the U.S. has played a positive role when it backed up and bolstered pragmatic leaders from the two sides. Diehl blasted the Obama administration for instead "chos[ing] to embrace the ever-failing peace process," a move that he insisted "not only has foundered, but it also has partly reversed the more organic change that was underway." Palestinian Authority (PA) President Mahmoud Abbas had in recent weeks abandoned the high-stakes negotiations and instead resumed a campaign of diplomatic warfare against Israel, submitting applications to 15 international treaties. The gambit put the Palestinians on the wrong side of core Oslo Accord commitments, stretching back decades, under which they committed to abstaining from diplomatic moves that would upgrade the status of disputed territories. It risked confirming fundamental worries that Ramallah will eventually exploit a structural asymmetry in peace talks - Jerusalem is expected make irreversible territorial and security concessions, while the Palestinians are asked to reciprocate with reversible agreements - by pocketing Israeli concessions and then abandon talks anyway. It remains unclear whether Palestinian diplomats will be able to walk back Abbas's turn to international legal instruments, after Switzerland confirmed late last week that it had accepted the Palestinian request to accede to the Geneva Conventions.

 

Turkey's Hurriyet Daily News on Saturday summarized a weekend speech given by Prime Minister Recep Tayyip Erdogan as one in which the Turkish leader "lashe[d] out at all his 'foes'," outlining that Erdogan "maintained his angry criticism of the Constitutional Court, the Gezi Park protesters, Twitter and the Gulen movement." Erdogan and his Justice and Development Party (AKP) have sought to ban Twitter since the eve of recent nationwide local elections, in a move widely seen as aimed at limiting discussions of a graft scandal that had ensnared top AKP elites including Erdogan and his family. That corruption investigation had in turn been driven by elements in the police and judiciary linked to the Islamist movement of U.S.-based cleric Fethullah Gulen. For its part the Constitutional Court had ordered the government to remove the Twitter blackout, prompting ongoing and angry denunciations by Erdogan and other government officials. Agence France-Presse (AFP) documented comments from Erdogan's Saturday speech branding Twitter a "tax evader" and promising to "go after" the popular microblogging platform. Reuters read the controversy as one of many in which Twitter's nature "as a public, broadcast medium and its viral network model" had led to it being "viewed as a particularly destabilizing force by some governments," including by Iran. Meanwhile Hurriyet reported that skirmishes between Erdogan and the Constitutional Court are widening, after the Court partially overturned a judicial bill that would have shifted power to the justice minister. The outlet noted that the legislation had been "drafted by the government amid the graft allegations."


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