On the bigger issue of ongoing commercial transactions—banking ties and foreign direct investment—progress has been halting. President Hassan Rouhani has been thwarted by the supreme leader’s insistence on constructing a “resistance economy” that is protectionist and autarkic in nature. In addition, the provision within the JCPOA that allows any P5+1 capital to snap UN sanctions back into place automatically has established a level of political risk sufficient to deter many Western investors.
In addition, Iran has used the last two years to engage in aggressive actions that have deepened rather than mitigated its isolation. Its extensive support for proxy militant groups across the region—most notably Hezbollah, Shia militias operating in Iraq and Syria, and rebel groups in Yemen—have made Gulf and Arab opposition to Iran even more virulent. So too has Iran’s extensive engagement in ballistic-missile development enabled it to strike its neighbors directly, a point underscored by the nature of its kinetic response to the ISIS attack on the Iranian Parliament last month. Western negotiators had hoped that, by permitting Iran to retain an enrichment capacity, and ending talk of military action, Tehran would feel less threatened. Yet its actions have triggered the opposite outcome. The deepening GCC-Iran standoff now makes it all the more likely that Tehran will find excuses for returning to enrichment when the JCPOA’s restrictions expire.