For many years, Iranian officials steadfastly insisted on their country's right to enrich uranium. That position -- coupled with a deep suspicion around the world Iran was covertly developing a nuclear weapon -- effectively turned the country into a pariah state.
The international community imposed harsh sanctions in 2011 and 2012 as a way to force Iran to open up its contested nuclear program. Those sanctions targeted the country's most valuable export commodity, oil. The restrictions not only cratered the economy but cast a black mark over the country as a whole.
Hundreds Of Billions In Lost Revenue
While it's impossible to calculate the total cost of the sanctions and international isolation that followed, it must certainly amount to many tens, if not hundreds, of billions of dollars.
Just in terms of lost oil revenue, the Iranian Oil Ministry estimated in 2013 the combination of the European Union embargo and U.S. sanctions was costing the country $4 billion to $8 billion a month. In 2012, revenue from oil exports fell $26 billion from the previous year.
And that's only oil. Limitations on Iranian exports in other sectors, including agriculture, the automotive industry, and construction, plus strictures placed on financial transactions, likely inflicted losses on a similar scale -- if not even more.
The Iranian economy has been in recession, or tottering on the brink, for several years now. The International Monetary Fund (IMF) said Iran's economy expanded in 2014 just 1.5 percent after contracting the previous two years. In 2015, the Iranian economy is not expected to fare better as a steep drop in world oil prices has added another external shock and any real sanctions relief could still be some months off.
Was It Worth It?
Against the backdrop of international sanctions -- and the harsh penalties they imposed on the economy -- it's fair to ask the question of whether it was worth it. Would Iran have been better off working with the international community from the start on its nuclear program?
Judging simply from the terms of the framework agreement announced on April 2, it's hard to make an obvious case for the Iranian position.
The agreement significantly prolongs the amount of time that Iran would need to enrich enough uranium for one nuclear device to at least a year. The current estimated time is two to three months.
Iran has also agreed to cut the number of installed centrifuges used to enrich uranium and to reduce its own stockpiles of enriched uranium that can be used to make nuclear weapons.
The International Atomic Energy Agency (IAEA), additionally, will be granted "regular access" to all of Iran's nuclear facilities, as well as to the supply chain feeding the country's nuclear program.
In return, the Iranians can expect a relatively quick lifting of the most onerous of the sanctions imposed over its nuclear program, provided all goes according to plan.
In other words, the deal essentially restores the status quo to the years around 2000-02 or again in 2009 -- when Iran had a chance to come to the table without having to endure three years of tough sanctions.
Progress At A Price
Ali Vaez, an analyst from the Brussels-based International Crisis Group, says Iran does have some tangible takeaways from holding out so long over making a nuclear agreement. "Obviously, Iranians have made tremendous progress and they now master the nuclear knowhow. I think there's no doubt about it," he says. "But this has come at an enormous price for them."
More importantly, going forward, Vaez says Iran has a chance to shed its pariah status and benefit from sanctions relief. "Now, we are at a place that Iran's right to enrichment has been implicitly recognized and Iran is able to have a meaningful enrichment program," he says. "It's going to benefit from nuclear cooperation with the P5+1 [the five permanent member of the UN Security Council plus Germany], and in return it's going to see the United Nations Security Council resolutions lifted."
Bad Timing, Policy Mistakes
Scott Lucas, an Iran specialist at Birmingham University in Britain and editor of the EA World View website, says bad timing was partly to blame in the failure to reach an agreement, but also that Iran made some key miscalculations along the way.
He says that in the earlier years, up until 2005 or 2006, when Iran had a chance of getting an agreement through the EU3 (France, Germany, and Britain), poor relations between the United States and Iran made a deal impossible.
Lucas says the Iranians had a better chance in 2009 that they simply failed to act on. "The Iranian supreme leader [Ayatollah Ali Khamenei] didn't trust the Americans at that point, so he pulled the plug on the deal," he says. "By the time the Iranians realized their mistake, the Americans decided they were going to go through sanctions through the UN." That strategy proved unexpectedly successful, he says.
Iranians around the world celebrated a framework agreement that promises not only to restore some measure of prosperity to the country but also to reopen it to the rest of the world. The question remains why the country waited so long to do it.