Externalities of a Deal

For the first time, it looks like a deal will finally happen (or not, depending on whom you ask) between the P5+1 and Iran. Either way, this preliminary announcement marks a historic turning point in negotiations with conservative Islamist countries like Iran. The United States has been tightening its financial straightjacket on Iran since the fall of the Shah in 1979, and the UN and Europe joined in almost a decade ago. But while the framework of the deal may or may not help prevent Iran from gaining nuclear capabilities, it unleashes other dangerous side effects. Economists call these unintended consequences “externalities,” and the externalities in this case are incredibly complicated and undeniably dangerous. By lifting its leash-like sanctions on Iran, the West may unintentionally allow Iran’s sphere of influence and support for terrorism to grow.
Iran is a country that publicly sponsors terrorism and extremism across the world. It has been a longtime supporter of Hamas, the terror group based in Gaza that has committed countless war crimes and suicide bombings against Israel and others, and supplies them with millions of dollars worth of weapons. Just north, they created the “political party of God,” known in Arabic as Hezbollah, in Lebanon. Since its inception in 1982, Hezbollah has initiated countless suicide bombings, assassinations, terror attacks, and rocket launches across the Middle East. In addition, Iran has allied itself with Al-Qaeda since the 1990s and has supported their terrorist activities, possibly including the September 11 attack on U.S. soil. When the United States was hunting those responsible, Iran sheltered hundreds of top suspects from facing justice for their crimes. Most recently, Iran has trained insurgents causing the severe instability in Yemen, which is becoming another territory ripe for extremist takeover. Simply put, Iran has its arms in many hotbeds of terrorism across the Middle East and has been at least partially responsible for several major terrorist campaigns in recent memory.
Now, the Iran nuclear program is an entirely different story, as stopping Iran from achieving a nuclear bomb is (as evidenced from above) a top priority to maintain world peace. Iran has continuously professed their desire to destroy Israel, America, and other Western nations. Allowing the country to have nuclear bombs to back up their rhetoric is a risk that the West cannot afford to take. Indeed, this agreement comes at a high price: lifting sanctions removes the only deterrent stopping Iran from enveloping the entire Middle East. Sanctions have caused the Iranian currency to plummet in value as inflation has soared, pulling millions of Iranians down with it. And while normal economies would experience an export boom in the face of devaluation, universal embargos on Iran from the West have countered this potential helping hand, increasing pressure on the country. Iran has even admitted to the sanctions’ efficacy.
While the removal of sanctions is contingent upon Iran’s adherence to the terms of the deal, it is naïve and perilous to think Iran will stop its bad behavior with the sanctions lifted. Iran is a defiant theocracy, with a lethal amount of hubris in its mission to destroy America. Since the sanctions have had crippling effects on Iran’s economy in the recent past, there is no way to know what Iran might do with its newfound billions. Iran may tone itself down to appease the West in the midst of a deal, but it is already entrenched in multiple positions of influence across the Middle East, and the influx of money could quite possibly embolden the country. The nuclear question may be solved, but issue of Iran’s sphere of influence may only be getting started.
With all these externalities, the question arises of whether the central activity is still worth the side effects. In this case it probably is, as a nuclear Iran could be potentially catastrophic. However, ignoring the implications for counter-terrorism policy could be equally as dangerous, and these potential threats must be monitored just as closely as the Iranian nuclear program.