The Second Iran Deal Must be Better Than the First | Opinion

We don't always get second chances, so when we do, we need to take advantage of them. That's especially true for the next Iran nuclear deal, indirect negotiations of which began in Vienna this week between the Biden administration and Tehran.

The first deal, negotiated under former President Barack Obama and then scrapped by former President Donald Trump, succeeded in so far as it put a stop to Tehran's nuclear program, but failed to create the transformational investment, development and integration that Iran wanted and needed.

For too long, U.S. policy toward Iran has been all stick and no carrot—but it is a carrot that Tehran ultimately wants. For the U.S. to get the concessions it wants—and avoid losing its economic leverage over Iran as it turns to China instead—it must offer more incentives.

Just last week, China sealed a $400 billion investment agreement with Iran. Although no specific figures are available, it is safe to assume that is more than the investment that was committed to Iran from the U.S., U.K. and Europe in the 28 months that the first deal lasted.

This time, we have to make peace pay and work to integrate Iran into an increasingly stable and peaceful Middle Eastern region, where previously intractable divides are rapidly being bridged.

With Iranian elections approaching, public opinion in the country softening and a less hawkish presence in Washington, there is a unique opportunity to tempt Iran toward meaningful reform that leads them in joining the rest of the region. That means much more than just giving up the hope of a nuclear weapon program.

Iran is a sleeping economic giant. Just like its rival Saudi Arabia, Iran is rich in natural resources, most notably oil and gas. When you look at the current state of the economy, it's easy to forget that Iran has the fourth biggest oil reserves in the world and the second-largest gas reserves. It is also rich in zinc, copper and aluminum.

Economic mismanagement from the inside as well as necessary sanctions from the outside are why Iran isn't sharing in its neighbors' progress. Those sanctions aren't just about the Ayatollahs' nuclear program; they started in 1979 after the U.S. embassy was seized by radicals and rumbled on in response to Iranian funding of terrorist groups and proxy wars.

Yet these sanctions need to be supported with the promise of a symmetrical reward if Iran changes. That is what was missing from the first deal, and ultimately why Tehran walked away and into the arms of Chinese President Xi Jinping.

An Iranian woman wearing a protective mask amid the COVID-19 pandemic checks her phone as she walks past a mural painted on the outer walls of the former U.S. embassy in the capital Tehran, on December 30, 2020. ATTA KENARE/AFP via Getty Images

The Iranian regime knows its people want change: 56 percent of Iranians blame them for the tanking economy, versus only 39 percent who blame foreign pressure. The public is also a fan of Biden. Only 29 percent of Iranians consider him completely hostile, compared to Trump's staggering 70 percent.

Biden should learn from history and make sure that the fruits of peace exceed the spoils of war for Tehran. Between 1946 and 1952, Washington invested $27 billion (in today's dollars) toward Japan's reconstruction effort. As a result, Japan turned from being a fervently nationalist and autocratic government into a prosperous, democratic nation—in little under a decade.

More recently, the late Libyan dictator Muammar Gaddafi agreed to pay $2.7 billion dollars in compensation to the 1988 Pan Am Flight 103 bombing victims and end his weapons of mass destruction program and support of terrorists in return for losing his pariah status.

No one can argue that U.S.-Iran relations are worse now than U.S.-Japan relations were after the U.S. nuked the country twice, or worse than U.K.-Libya relations after Gaddafi's agents blew up an airliner over Scotland. America and its allies have shown that they can offer effective investment incentives to rogue states. Now is the time to continue that tradition.

If the U.S. and its allies cannot provide these incentives, others will—without the same conditions, or benefits for the region and the world. The Islamic Republic has happily aligned itself with Beijing despite the latter's problematic relations with Muslims inside its own borders.

Iran knows that a deal with China will never be as lucrative, or offer as much stability, as removing sanctions and better integrating into the wider Middle Eastern region. China's debt traps are well-documented. Iranian policy makers know all too well that selling off their most valuable assets for a discounted rate is not an optimal way to claw out of economic recession or win public support. We need to give them better options.

It may be unthinkable that the ayatollahs will ever join their Gulf neighbors in openness and stability. Many will argue that Iran's rulers have built their power on 40 years of subterfuge, repression and terrorist proxies, and that this is the only existence they can imagine.

Just a few months ago, it was difficult to imagine that peace with Israel would become the norm, not the exception, in the Middle East. It was doubtful that Qatar would rejoin the Gulf Cooperation Council and almost unthinkable that Turkey would cease its support of the Muslim Brotherhood.

Many of Iran's rulers are as tired of their outcast status as its people are. Deprived of their buffers in Ankara and Doha, they are ready to cut a deal.

This time, let's make it a deal so good they can't walk away.

Joshua Jahani is a lecturer at Cornell and NYU and an investment banker. He has written for or contributed to Newsweek, BBC World News and The Independent.

The views expressed in this article are the writer's own.