x Abu Dhabi, UAEWednesday 26 July 2017

Currency crisis is a self-inflicted injury for Iran

Iran need only look to North Korea to see what becomes of a hermit nation that chooses its nuclear programme over its people's welfare.

Iran's economy has been squeezed by various sanctions for over three decades. But this week, western measures designed to pressure the country over its nuclear programme bit hard as the currency went into free fall. Tehran, predictably, bit back.

"Enemies", said President Mahmoud Ahmadinejad, are behind the collapse of the rial, which has lost nearly a third of its value against the dollar. The economic malaise is the work of "individuals and ringleaders", he added. "Security institutions must act."

Mr Ahmadinejad's bluster aside, he is partially correct. The pain felt in Iran's economy - including inflation that is hitting ordinary Iranians - is being orchestrated by outside powers. Unless Iran drops the obfuscation regarding its nuclear programme (which only Tehran seems to believe is purely peaceful), there is little sign the United States and its allies will ease sanctions.

But what Mr Ahmadinejad says is of progressively little consequence. Even before he was a lame duck president - this is his last year in office - nuclear policy was set by Ayatollah Ali Khamenei and other ruling clerics. Negotiations have consistently failed, so the departure of an antagonistic president will probably solve little. As the International Atomic Energy Agency reported last week, Tehran still bars access to Parchin, where Iranian scientists are suspected of working on nuclear weapons.

The nuclear programme may be the proximate cause of sanctions, but Tehran is playing a dangerous game across the board. Its military role in Syria is another gamble to maintain influence in the region, but it further raises the stakes in already contentious relations with its neighbours.

There have been glimmers of hope for renewed talks recently. In New York on Monday, Iran's foreign minister, Ali Akbar Salehi, denied that Iran had "chosen to go nuclear, in the sense of weaponisation" because doing so "would attract more threat". No rational country, he said, would challenge the US on this issue. It may be true that Tehran has not decided to build a nuclear weapon, but the evidence is overwhelming that it seeks "break out" capability, which would allow it to quickly build a weapon if it chose.

All the more reason to reopen channels of negotiation. Reports that Israel will endorse another round of sanctions, rather than pursue immediate military action, gives a window of opportunity for meaningful talks.

The alternative is self-inflicted isolation. Iran need only look to North Korea to see what becomes of a hermit nation that chooses its nuclear programme over its people's welfare.