Iran could develop nuclear weapons capability despite sanctions......
Iran has foreign exchange reserves that cover less than three months of imports, a new report says, but warned that the regime could still “muddle through” long enough to develop a nuclear weapons capability by mid-2014.
The report found that Iran’s banking
system was under growing stress and would have little capacity to defend
its currency if it came under renewed pressure. Photo: ALI AL-SAADI/GETTY IMAGES
5:57PM BST 02 Oct 2013
As the US Congress debate further sanctions, the report found that Iran’s
banking system was under growing stress and would have little capacity to
defend its currency if it came under renewed pressure.
The state of Iran’s finances helped explain the sudden insistence of Iran’s
new president Hassan Rouhani on a “quick”, three-to-six month deal being
brokered between Tehran and the international P5+1 grouping. Talks are due
to open in Geneva on October 15.
“We think the reaction of Rouhani this past week and his desire for a
short-term deal can be partly explained by the fact that Iran’s finances are
much worse than he and his team had expected to see when they first entered
office,” said Mark Dubowitz of the Foundation for Defence of Democracies a
think-tank that has urged a tough line on Tehran.
Iran now has about $80bn in forex reserves, of which only about $20bn is
immediately accessible, according to estimates in the report that was
co-authored with Roubini Global Economics, an international consultancy.
Under the terms of sanctions, Iran has been able to sell oil to some
countries, such as China, Japan and India, but can only spend the proceeds,
estimated at around $50bn, on humanitarian and non-sanctioned goods.
“These funds would not be available to Iran if the currency came under
pressure,” Rachel Ziemba, Roubini Global Economics, who said that Iran’s
economy was now ranked well below most in the Middle East and emerging
market countries as its banking system came under increased strain.
“The economy has become less flexible which reduces the government’s ability to deal with external shocks, and that in our view may account for a more accelerated political timeline that members of the Iranian administration have put forward in recent days,” she added.
Those who remain sceptical about Iran’s sudden softening in recent months, have argued that sanctions must be tightened, not relaxed, if Iran is to be forced to follow through on stated desire to resolve international differences over its nuclear programme.
The Israeli prime minister Benjamin Netanyahu used his speech at the United Nations this week to call for the continued tightening of sanctions, describing Mr Rouhani as a “wolf in sheep’s clothing” and promising unilateral military action if Iran did develop nuclear weapons.
Despite the country’s parlous economic state, sceptics argue that the country’s leadership still holds enough off-book reserves to muddle through for the 12 months needed to install enough centrifuges to reach the point-of-no-return in developing a theoretical nuclear weapons capability.
“We believe that Iran is less than a year from reaching critical nuclear capability, despite these international sanctions that have been designed to prevent Iran from doing so,” said Mr Dubowitz, citing reserves held Iran’s Supreme Leader and the Revolutionary Guard.
“But our assessment is that Iran’s political timeline may be considerably shorter because there is considerable pressure on Rouhani to deliver on his commitment to get sanctions lifted, oil flowing and the economy stabilized as quickly as possible.”
“The economy has become less flexible which reduces the government’s ability to deal with external shocks, and that in our view may account for a more accelerated political timeline that members of the Iranian administration have put forward in recent days,” she added.
Those who remain sceptical about Iran’s sudden softening in recent months, have argued that sanctions must be tightened, not relaxed, if Iran is to be forced to follow through on stated desire to resolve international differences over its nuclear programme.
The Israeli prime minister Benjamin Netanyahu used his speech at the United Nations this week to call for the continued tightening of sanctions, describing Mr Rouhani as a “wolf in sheep’s clothing” and promising unilateral military action if Iran did develop nuclear weapons.
Despite the country’s parlous economic state, sceptics argue that the country’s leadership still holds enough off-book reserves to muddle through for the 12 months needed to install enough centrifuges to reach the point-of-no-return in developing a theoretical nuclear weapons capability.
“We believe that Iran is less than a year from reaching critical nuclear capability, despite these international sanctions that have been designed to prevent Iran from doing so,” said Mr Dubowitz, citing reserves held Iran’s Supreme Leader and the Revolutionary Guard.
“But our assessment is that Iran’s political timeline may be considerably shorter because there is considerable pressure on Rouhani to deliver on his commitment to get sanctions lifted, oil flowing and the economy stabilized as quickly as possible.”
No comments:
Post a Comment