This week, the year-long negotiations between Iran and the major powers regarding the Iranian nuclear program ended in failure. The most that the negotiators could accomplish was to agree to continue talking for another seven months.

When the negotiation process was extended in July 2014, many observers, me included, were optimistic that an agreement was possible. I wrote at the time, “Once the July 20 ‘deadline’ passes, the negotiators will be faced with the brutal reality that this is the last, best chance to contain Iran’s nuclear program without military action and a likely regional war.”

Unfortunately, it now appears that there is no overlap in the positions of the two sides. The most that the Iranians are willing to give on with regard to restraints on their nuclear program is less than the U.S. is willing to accept, and the most that the U.S. is willing to give on with regard to sanctions relief is less than the Iranians are willing to accept.

We now face the reality of a stalemate going forward. While most western media coverage has been focused on U.S demands and politics, the Iranian perspective is at least as important. In order to understand the Iranian position we need to examine culture, internal politics, economics and regional and global geopolitics.


Iran, having a long, proud Persian history, united by a common Shite religious tradition, even though being culturally and ethnically diverse, is able to maintain a powerful sense of nationalism. Looking back on their ancient Persian history, Iranians strongly support their “rightful” position as a regional power.

Ninety percent of Iranians are members of the Shite branch of Islam and as such see themselves as followers of Imam Hussein, the grandson of the Prophet Mohammed and the third Shia Imam, who was killed and beheaded by the Umayyad caliph in 680 CE in Karbala in present day Iraq. This event, commemorated by Shia Muslims each year in a Day of Mourning (Ashura), instills in Shiites a strong sense of sacrifice, even to the point of martyrdom, in defense of a just cause.

These cultural factors make it unlikely that Iranians will be bullied into giving up their rights under the NPT (Treaty on the Non-Proliferation of Nuclear Weapons) by the threat of harsh sanctions.


Domestic politics also greatly affects how Iranian leaders deal with the U.S and the nuclear issue. In broad terms, the Iranian political landscape, as in the U.S., is divided into two camps: the traditionalists (principlists), who oppose any compromise or engagement with the west, and the modernists (reformists), who favor engagement and flexibility in dealing with the West. These two camps compete for influence with the Supreme Leader who is the ultimate decision maker in national security affairs.

President Hassan Rouhani, an experienced political player in the Iranian system, while leaning toward the reformist camp, tries to have one foot down in each camp. The extension of the talks into 2015 has brought them right into the middle of the political posturing going into Iran’s parliamentary elections.

The failure of the negotiations, a major part of Rouhani’s engagement platform, will give the principlists backing for their position that “negotiations with the U.S. are a waste of time, as the U.S. policies will never change.”

As an Iranian source told me, “It is a reasonable estimate that the next parliament might have a different setting.” A more hostile Parliament will make it very difficult for Rouhani to keep his U.S.-educated, fluent-English speaking Foreign Minister, Javid Zarif, in power.

Widely ignored in the Western media, but perhaps more important than the Parliamentary election, is the 2016 election of the Assembly of Experts. Among other responsibilities, the Assembly of Experts is tasked with choosing the Supreme leader. With Supreme Leader Ali Khamenei, being seventy-eight years old and seemingly in poor health, this Assembly of Experts is almost certain to select the next Supreme Leader. The worldview of this person will affect U.S/Iran relations for years to come.


Following the collapse of the nuclear talks, Republicans in the U.S. Congress have wasted no time in threatening additional economic sanctions on Iran.

Ignoring the issues of the perception in Iran that sanctions are intended to destabilize the Iranian political system and the unwillingness of Iran to continue negotiations under threat, the economic impact of sanctions on ordinary Iranians is diverse. There are winners and losers.

The winners from continued sanctions are those who profit from the major enterprises involved in skirting sanction, including, but not limited to, the Iranian Revolutionary Guard, as well as private businesses protected from global competition by the sanction restrictions.

Perhaps surprisingly, other winners are the growing number of tech entrepreneurs who are able to clone western tech products and build their businesses without fear of competition from large western companies.

Among the losers are those who depend on imported products either for sale or as components, those needing western medical products and those who wish to partner and to expand globally. The point is that there is a not insignificant constituency supporting isolation from the west and building, what the Supreme Leader calls a “resistance economy.”


As Iran’s leaders look out at the world around them, they can’t help but conclude that the arc of history is bending in their direction. Regionally, as Shia populations become more assertive, Iran’s relations with Iraq, Syria, Lebanon and Yemen have rarely been stronger.

Iran’s rivals, such as Saudi Arabia, Israel, Bahrain and Egypt, faced with increasing internal dissent and unrest are being forced to turn inward and deal with their own problems.

Globally, Russia and China, increasingly realizing that the U.S. has the ability to deploy what I call the financial neutron bomb, using the dollar denominated global financial system to destroy a country’s economy, have begun to get serious about establishing an alternative system. Such an alternative system cannot but help Iran deal with U.S. sanctions.

Seeing the racially and economically divided U.S. politically gridlocked and the economically stagnant European Union more divided than united, Iran must conclude “time is on our side.”


Barring a major turnabout by either side, it seems unlikely that another seven months of talking will change the outcome. For Iranians no deal may be better than a bad deal. We may have missed, and maybe lost, “the last, best chance to contain Iran’s nuclear program without military action and a likely regional war.”