UPDATED Iran's Nukes: The Real Story on Vienna Talks and the Deal for Uranium Enrichment

Iran-US-Russia Deal on Enrichment, The Sequel
The Latest from Iran (20 October): Green Waves or Green Mirage?

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UPDATE 1930 GMT: Talks have ended for the day, to be resumed tomorrow. IAEA head El-Baradei said that negotiations were moving forward though more slowly than he had expected.

Julian Borger of The Guardian has a useful summary.

UPDATE 1825 GMT: Yep, that's where the not-so-silly games are heading. Iran, wanting France out of the loop, is talking directly to the US delegation, according to Lara Setrakian of ABC News.

Press TV gives more details: An Iranian source confirms the "positive and constructive" bilateral discussions, adding, "It was agreed that more studies should be held on...renewing the secondary, control and electronic facilities" of the medical research reactor, the source added.

UPDATE 1810 GMT: Oh my, the Iranians are playing silly games now. Having wound up the media with their pre-talk threats, Tehran's delegation decided today to give France a poke in the eye by never showing up at discussions. Other diplomats are insisting that this is not a walkout, and the French Foreign Ministry maintains, "It is a meeting of experts, in which we are participating." However, Iranian officials via Press TV are declaring, "The elimination of France from the deal's draft is certain."

There is a likely explanation for this rather comic manoeuvring. Under the "third-party enrichment" proposal backed by the US, Iranian uranium is to be enriched by Russia and then sent to France to be shaped into metal plates. Tehran may be insisting that Paris is cut out of the process, with Russia sending the uranium, raised to 19.75 percent, directly back to Iran.

Some of the media coverage of yesterday's opening of the Vienna technical talks on Iran's uranium enrichment was beyond hopeless.



It was unsettling to see international broadcasters suddenly and excitedly discovering that there were talks and then, when those talks did not produce an outcome within hours, suddenly and not-so-excitedly proclaiming disappointment. At least, however, that produced comic moments such as CNN's Matthew Chance, like a boy discovering there was no candy in the shop, sinking from "lot of anticipation" to "jeez...all day silence...now the talks have broken up".

Far worse this morning is the spectacle of reporters, despite having some time to collect information and consider, repeating distracting and irrelevant spin as "analysis". The Wall Street Journal goes off on a tangent into nuclear Never-Never Land, "Iran Drops Deal to Buy Uranium in France". Swallowing Iran's eve-of-talks posturing rather than understanding it, The New York Times and David Sanger declare, "Iran Threatens to Back Out of Fuel Deal" with Tehran's "veiled public threats".

Really? Then how does Sanger explain the comment of the head of the International Atomic Energy Agency, Mohammad El Baradei, "We're off to a good start" in the second paragraph of his story? Maybe he could reflect a bit more on the quote handed to him by "a participant" (fourth paragraph):

This was opening-day posturing. The Iranians are experienced at this, and you have to expect that their opening position isn’t going to be the one you want to hear.

The real story, which EA has reported since Glenn Kessler's breakthrough story in The Washington Post last month, is that the deal to ship 80 percent of Iran's low-enriched uranium for processing in Russia and to use that uranium in a medical research facility (rather than for bombs) is on the table. Yesterday's public chest-puffing by Tehran does not change that agenda.

Indeed, both Time magazine and Sanger add details to that deal (although Time, in particular, does not have the professional decency to acknowledge Kessler's original article). Approaching the IAEA, Iran revived the idea --- broached by other countries months earlier --- of third-party enrichment of its uranium stock for the medical facility, and the Obama Administration ran with it during the President's trip to Moscow in early July. The top US official for nonproliferation, Gary Samore, put the proposal to the Russians.

Discreet talks between Iran, the IAEA, Russia, France (which would shape the enriched uranium as metal plates before it was returned to Tehran), and the U.S. followed. On three occasions, twice with El Baradei and once with Russian President Dmitri Medvedev, President Obama stepped in to confirm and advance the initative. The deal was considered at the first direct talks between Iran, the US, and the other "5+1" countries at Geneva on 1 October, producing the agreement for further technical discussions in Vienna.

The very fact that the Administration would be is leaking so much information to well-placed reporters should indicate that the real story here is that the US, irrespective of Iran's public posturing, is going to persist with this proposal. That trumps any misleading headlines from journalists who yearn for drama to break "all day silence" and are prone, beyond the details in their own articles, to the image of a talk-stalling, deal-breaking Iran.

Iran: A Beginner's Guide to the Economy, Past and Present

The Latest from Iran (16 October): Rumours and Drama, Khamenei and Karroubi
Latest Iran Video: Selling Ahmadinejad’s Economic Plan (13 October)

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EA's newest correspondent, Mohammad Khiabani, introduces us to the economics preceding and accompanying the post-election situation:

The subsidy system that exists in Iran --- one that benefits both individuals and industry by lowering costs of basic daily goods but is highly inefficient and unfair in the distribution of those benefits ---- was never meant to be permanent. It was an expansion of a earlier set of food and energy subsidies that began under the Pahlavi dynasty, as part of the old regime's economic and social policy.

During the 1980s war with Iraq and the US embargo, when Mir Housain Mousavi was Prime Minister of the Islamic Republic (and not too ideologically different from the Revolutionary Guard in his political positions), the subsidy system expanded into a general distribution network that kept consumption in Iran at decent levels. This involved government-run food centers throughout the country, price controls, nationalization of foreign trade, multiple currency exchange rates, and a rationed goods program. Just as in the Battle of London during WWII, when the average Londoner's nutrition levels went up even while the city was being bombed by the Luftwaffe, the effect of this network in Iran was to equalize the consumption of goods. This helped raise the lower classes' living standards even while Iran's wealth declined from the Pahlavi days of its oil-fueled economic "miracle".

However, since the late 1980s, the Iranian regime has slowly dismantled this system. First it opened up to foreign trade, then it aligned its currency rates, then it allowed foreign investment in small parcels, and it finally attempted to tackle the biggest problem of readjusting the prices of basic goods so that they adjust according to market fluctuations. This is a noble goal, because the richest Iranians get the most benefit from the subsidies of food, energy, and gasoline, simply because they consume more of everything. The Islamic Republic has also, in conjunction with slow economic liberalization, expanded the social safety net for its population over the last 20 years, with a combination of decentralized primary health centers in rural and urban areas, large social insurance funds that operate under the category of "non-governmental" organizations, and initiatives to give everyone at least some form of pension and health insurance.

This long process, seen up close, looks like chaos. But if you step back, it has an odd logic to it, and it has contributed to comparatively good standards of living in Iran versus other middle-income countries, as measured by life expectancy, literacy (including amongst females in a region where rates are historically low), and low infant mortality. If you read Thursday's Wall Street Journal article on China's unraveled health care system, which used to be one of the best in the Third World, Iran does not look that bad.

What does this mean? Yes, social policy in Iran is imbued with politics, just as in any large state (look no further than the daily grind on Capitol Hill in Washington). Factions exist, with constituencies, and they jockey for power and recognition of successful policies.

It is all too forgotten now that privatization, subsidy reform, foreign investment, and welfare expansion were all part of the Khatami administration's economic plans between 1997 and 2005. And in a very Clintonesque move, Ahmadinejad has borrowed some of the best ideas of his predecessor and claimed them as his own. It seems now that the current (and very tendentious) alignment of factions in the Majles has fostered the political will to actually pass a restructuring of subsidies, while those conditions did not exist in the second Khatami term.

Daily politics in Iran has lineages deeply embedded in its past. Even the Revolutionary Guard's intervention in the economy stems from the after-effects of the 1980s war, when President Rafsanjani utilized Guard manpower and engineering expertise for the reconstruction of the country. This also had the added benefit of keeping hundreds of thousands of Iranian veterans employed, with a few of them getting quite rich in the process.

It is difficult to predict how well the government will pull off a restructuring of the subsidy system. While a much smaller implementation of gasoline rationing two years ago resulted in a few instances of gas stations being attacked, today the measure is seen as a success and discussed as a microcosm for the reforms. Plans to utilize the social security system of Iran to distribute cash and aid to the lower 50% of Iranians to offset incoming higher prices may actually expand and strengthen the social safety net. This may also inadvertently decrease the power of religious foundations such as the Imam Khomeini Relief Committee, widely criticized as a non-transparent charity organization, but currently very influential in poor Iranians' lives.

Any look through the microscope at Iranian politics must not be blinkered. Instead, it should be accompanied with a longer-term perspective on Iran's economy and society, one that allows us to talk about Iran with the same kind of language and terminology we use to talk about Turkey, Mexico, China, and any large middle-income country.

Iran's Nuclear Programme: Obama's Balance Wobbles

The Latest from Iran (3 October): Debating Mousavi’s Strategy
Iran’s Nuclear Programme: Big Win for Tehran at Geneva Talks
Latest Iran Video: Nuclear Official Jalili on CNN (1 October)
Iran’s Nuclear Programme: Obama Remarks on Geneva Talks

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It only took 24 hours for the Obama Administration, after the "substantial progress" of Thursday's Geneva talks on Iran's nuclear programme, to hit the choppy waters of Washington and Tehran politics.

On Friday morning, it was looking very good for the White House. Most of the US media were putting out the news of Iran's agreement to invite the International Atomic Energy Agency to inspect the Qom enrichment facility and to ship uranium to Russia to be enriched. They were adding the Administration's gloss that this was all made to a forceful American stance which had pushed the Iranians into concessions.

By Friday afternoon, the public-relations glue had come unstuck, as a State Department briefing turned into black comedy. (Watch the clip from the 8:44 mark.) The first wobble was over the "third-party enrichment" which had supposedly been established. Journalists challenged that Iranian officials were saying only that they had agreed to consider the proposal; the Department spokesman, unprepared for this information, could only warble about an "agreement in principle".

He came off even worse in the second exchange over Iran's invitation to inspect the Qom plant, after he said there was "no hard-and-fast deadline" for the inspections. Why then, journalists clamoured, had Barack Obama pointedly mentioned on Thursday night a "two-week deadline"? Caught between his opening line of flexibility and the inconvenience of the President's firm marker, the spokesman, umm, stammered.

This would all be good voyeuristic fun if it did not pont to the two larger problems for the Administration. The first is that the Iranian Government is not going to go gently into the diplomatic night playing its assigned role. Tehran, in our view, was already going to be conciliatory at the opening discussions in the hope of getting more discussions. It was not going to jump into any hard-and-fast deal.

The spin that the US Government "forced" Iran's concessions only adds to the dfficulty. Not wanting to appear to be forced into anything, Iranian officials "clarify" that firm measures have not been agreed but must be the subject of further talks, in this case, technical discussions in Vienna on 18 October and the next Iran meeting with the 5+1 powers, possibly at the end of this month.

The second and even greater challenge for the Obama Administration from within. There has always been a group of officials in the Executive who saw negotiations as a process that had to be endured before, with the Iranians inevitably breaking the talks and/or agreements, more pressure could be put on Tehran.

So, even as the "significantly positive" outcome of Geneva was being announced, they were tossing a bucket of red herrings to the media. There might be even more "secret" sites that Tehran had not declared. Iran still had enough uranium to make The Bomb. The Israelis were watching carefully. (Juan Cole points out how all these diversions made their way into Friday's New York Times.)

The loudest of these heckles was that, whatever happened at Geneva, The Iranians Weren't Really Serious. Yesterday morning The Wall Street Journal, which might as well declare that it is a propaganda sheet masquerading as news, declared in its opening paragraph, "Analysts cautioned that the Iranians merely may be seeking to defuse pressure for sanctions while continuing their nuclear program." (The two "analysts" were an Israeli reservist general and George W. Bush's "special envoy on nonproliferation issues".)

Lo and behold, this morning The New York Times headlines, "U.S. Wonders if Iran Is Playing for Time or Is Serious on Deal". Helene Cooper splashes about "administration officials" warning "the trick now for Mr. Obama...will be to avoid getting tripped up", which is actually only one "senior" official (Who is he/she? On the side of those pushing for a lasting agreement with the Iranians? On the side of those seeing no prospect of an agreement?) putting out the dampening comment, “That’s the big ‘if,’ isn’t it? Will they do it? No one wants to do a premature victory lap.”

Let's just put this basic comment out, already fearing that it will disappear in the media wash. The Iranian Government is playing this process "long". It is likely to allow an IAEA inspection of Qom, although even this will be subject to discussions on conditions, but other issues including third-party enrichment, will go into a set of committees. Any agreement will take months, rather than weeks, of contact.

From the start, the Obama Administration --- split between different factions --- have been locked into playing the process "short". A quick result had to be obtained, otherwise sanctions would have to be sought quickly. That is why all the fatuous talk of deadlines --- December? September? October? --- has loudly accompanied and even out-shouted the complexities of engagement.

The President has been unable to extricate himself from this unproductive dilemma. So once again, we will have a two-week cycle of domestic fury, even though the Administration has no stick to wield, before the technical talks in Vienna.