ON MONDAY, 18th January, Iran returned to the fold of the world economy. The P5+1 group of world powers — United States (US), United Kingdom, France, China and Russia, plus Germany — reached with that country a deal which has been touted as a landmark. This deal has seen the lifting of crippling economic sanctions which arose out of concern that Iran was moving towards building nuclear weapons.With personnel from the United Nations’ (UN) global nuclear watchdog, the International Atomic Energy Agency (IAEA), having had access to Iran’s sites and laboratories, and having certified them as restricted in sensitive nuclear activities, the green light was given for sanctions to be lifted. The ban has, however, not been lifted on importation of ballistic missile technology, and it remains in effect for up to eight years. The weapons’ embargo still remains, and will so remain for at least another five years, unless the IAEA decides that the nuclear programme is entirely peaceful.
Under what is called the Joint Comprehensive Plan of Action (JCPOA), Iran will, for 10 years, be limited to installing no more than 5,060 of the oldest and least efficient centrifuges at Natanz.
Research and development will take place only at Natanz, and not for more than eight years.
There will be no enrichment permitted at Fordo for 15 years, and the underground facility will be converted into a nuclear, physics and technology centre.
The 1,044 centrifuges at Fordo will be used to produce radio isotopes for use in medicine, agriculture, industry and science.
And over the next 15 years, Iran’s uranium stockpile will also be reduced by 98% to 300kg (660lbs), while the country will be committed to keep enrichment level at 3.67%.
Under the JCPOA, Iran will also redesign the Arak reactor, which would make it unable to produce any weapons-grade plutonium, and will not be permitted to build additional heavy-water reactors or accumulate any excess heavy water for 15 years.
This deal has been sealed with IAEA’s inspectors being allowed access to any site once suspicion arises. With this comes the ironclad guarantee that, over the next 15 years, Iran will have 24 days to comply with any request; and if it refuses, an eight-member Joint Commission — including Iran — will rule on the issue, which will determine the punitive steps, including the re-imposition of sanctions, and where a majority vote will hold sway.
It ought to be said that should any part of the deal be compromised, automatic reinstatement of sanctions by the UN will follow, with those sanctions lasting for a minimum of ten years and extending to as much as 15 years.
This deal is not only good for Iran and the countries that signed it, but for the entire world. The threat of nuclear build-up — even as efforts are being made to tie down existing ones, consistent with the Nuclear Non-proliferation Treaty in a world where terrorism is of rising concern — should any nuclear weapon get into the hands of the intolerant and intemperate, carries dire consequences for man and the environment.
With that being said, the lifting of sanctions has returned Iran to the global economy. With Iran having the possibility of stabilising its economy and relieving deprivations among its citizens, there exists the possibility that oil prices will be further reduced. At home, this may be of a more intimate immediate interest. According to Iran, the fall in oil exports was costing it between US$4B and US$8B every month. With its return to the world stage, Iran’s production will surely impact on prices at the market, given that it has unfettered access to sell its product. Its plans to ramp up supply, which is an effort to make up for lost ground, has seen crude oil already being traded on the open market below US$30 a barrel.
What the new deluge means — even as world crude oil revenue is projected to quintuple in 2016 and some wonder if Iran is sitting on an ocean of US$1-per-barrel-oil — is that as Guyana is preparing to enter this market, it will require shrewd planning and management. As such, the country will have to pull together a competent team that understands the industry and the nexus between our development and the role the industry ought to play.
