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www.time4education.comTriumphant Institute of

Management Education Pvt. Ltd.

Iran'sNuclear

Ambitions

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Largest Shia republic; Force to reckon within the Islamic World

Rivals Saudi Arabia for hegemony over theMuslim World

Ruled by hard-line Islamic ClericalAdministration since the 1979 IslamicRevolution

Iran: Basic fact-sheet

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Home to worlds largest second gas and fourthlargest oil reserves

Describes the U.S. (since 1979) and Israel asenemies of Islam

U.S. views Iran as a major sponsor of terrorism part ofAxis of Evil

Situation compounded as hardliners are in power Mahmoud Ahmedinejad (prez)

Iran: Basic fact-sheet

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Reasons for Irans confrontationwith the West

Accused by the IAEA/U.S./EU of pursuingnuclear weapons; charge denied by Iran

Tehran says its nuke program is peaceful &aimed at civil energy generation

IAEA asks Iran open its nuclear facilities toinspections

International demands for rollback of nuclearprogram ignored

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Irans Nuclear SitesIrans Nuclear Sites

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Important sidelight

Iran is a member of the NPT NPT forbids members other than the P5

from owning / pursuing nuclear weapons

Iran is also an IAEA member hence it shouldabide by its resolutions

Iran is desperately trying to get into the WTO,a move stymied by the West, esp. the U.S.

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State of the EconomState of the Econom

GDP US$482 bn; contracted by 1% in 2012

GDP Per Capita: US$6419

4th largest oil reserves & 2nd largest oil exporter;

2nd largest gas reserves; energy contributes 25%to GDP

FDI drying up because of sanctions; exchange value ofRial is falling

High misery index: unemployment at over 13% &inflation at over 25%

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What about negotiations?

Talks between Iran & E3 (Britain, France, &Germany) do not yield much

E3, backed by the U.S., adopts carrot & stickapproach

Carrot: Will back Irans entry into the WTO

Stick:Threatens Iran with eventual reference toUNSC for tightening economic sanctions

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22004 - Iran agrees to freeze its nuclear004 - Iran agrees to freeze its nuclear weaponsweaponsprogram in return for E3's support of its WTOprogram in return for E3's support of its WTO

entry bidentry bid

Tehran reneges on this accord after MahmoudTehran reneges on this accord after MahmoudAhmedinejad takes officeAhmedinejad takes office

Iran openly defies the IAEA/U.S./EUIran openly defies the IAEA/U.S./EU

What about negotiations?

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U.S. doesn't rule out military action againstIran to destroy its nuclear facilities

Iran says that it won't give in to pressure tactics

Russia proposes a way out: offers Iran to enrichuranium at nuclear plants in Russia

Iran declines the offer

What about negotiations?

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The Israel factor Iran calls for wiping Israel off the map of the

world

Tehran accused of supporting anti-IsraelIslamic militant groups like the Hezbollah

Israel hints at striking at Iran's nuclear facilitiesto destroy them

Israel puts pressure on the U.S. for militarystrike

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Impact of U.S. Sanctions

No country can buy energy resources from Iran

Also sanctions have banned supply of nuclear-relatedtechnology & materials

Imposed assets freeze on key Iranian individuals &companies

No business/financial transactions with Iran; if anycountry/company is found violating this aspect, thensuch entity will be banned from US financial market

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Already crippling the countrys fragile economy

Would lead to flight of foreign capital

May not be able to sell oil and gas products itsmost important forex earner

The above would have a spiralling effect on theeconomy pulling it down further into a severe crisis

Impact of US Sanction

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What could

happen

next?

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Likely Scenario: Military action

Iran riskspossible military confrontation with theU.S. & Israel

An Iraq-type invasion by the U.S. (aided by Israel& NATO) could try and replace the currentHardliner administration

A favourable dispensation in Tehran would make

the U.S. job much easier

While this appearsfar-fetched, it is being stronglyconsidered by the U.S.

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Impact of negotiations:

Freeze its uranium enrichment program

Abandons weapons pursuit

Opens all nuke facilities to IAEA inspections

Wins EU and U.S. support for WTO entry

Most unlikely to happen!

Likely Scenario: I ran gives in