02/28/2013 07:31 pm ET Updated Apr 30, 2013

Almaty Talks: A Turning Point in Iran Nuclear Impasse

After eight months of diplomatic hiatus, Iran and the world powers, the so-called P5+1, were finally able to return to the negotiating table -- and, to the surprise of many observers, managed to pull off a potential breakthrough in the decade-long nuclear standoff. I will dare to go even further and call this a potential turning point, perhaps the beginning of a new end in Iran-West nuclear negotiations.

In a minimalist sense, the negotiations achieved a 'low-level' success, with both sides agreeing to continue nuclear negotiations on a more regular and institutionalized basis, portending the commencement of a 'diplomatic process' -- as opposed to military intervention and ever-tightening sanctions -- to resolve the Iranian nuclear impasse. Lower-level representatives from the two sides would meet next month in Istanbul (march 18 and 19) to iron out the technical details of a subsequent high-level meeting on April 5 and 6 for Almaty II. Against the backdrop of rising prospects of a disastrous conflagration in the Persian Gulf, with Washington and Israel refusing to rule out a military 'solution', it means that the talks were able to, at least, dispel earlier fears of a permanent diplomatic hibernation.

Atmospherics and symbolism were also in play. The host of the nuclear talks, Kazakhstan, stands as the world's sole case of a voluntary abandonment of nuclear weapons. Last year, the country's leader, Nursultan Nazarbayev, in an op-ed for the New York Times, encouraged Tehran to come clean on its nuclear program, presenting his country as a model to follow.

"With independence, we became the world's fourth-largest nuclear power. One of our first acts as a sovereign nation was voluntarily to give up these weapons," Kazakh president proudly shared. "Since then, we have worked tirelessly to encourage other countries to follow our lead and build a world in which the threat of nuclear weapons belongs to history." No wonder, Nazarbayev was more than pleased to see his country -- an ambitious and prosperous central Asian nation, which has tirelessly sought the global spotlight -- hosting the crucial negotiations. For sure, he spared no efforts to encourage both Tehran and the West to try something new: to start bargaining instead of blackmailing.

What Went Wrong Previously?

Arguably, the previous rounds of negotiations, notably the Istanbul II, Baghdad, and Moscow nuclear talks in 2012, were simply 'talks', instead of 'negotiations'. To put it simply, both sides were simply sizing up each other, with each side believing it held the upper hand in the negotiations. On the one hand, the West was upbeat about Iran's presumed growing anxieties over the impact of incoming unilateral sanctions, thinking it could coerce Iran into unilateral concessions. As a result, the West prevaricated on even a basic recognition of Iran's peaceful enrichment rights under the Non-Proliferation Treaty (NPT). Tehran, on its part, pushed the boundaries of its enrichment program to improve its bargaining position, and present its nuclear ambitions as a fait accompli, while believing an upgraded sanctions-busting strategy could prevent major economic disruptions.

However, both sides began to realize that in absence of a major reconfiguration in their respective negotiating positions the nuclear talks were headed for collapse -- dramatically raising the prospects of war. Soon, the West realized the limits of the sanctions and how they were basically a humanitarian and economic tragedy for ordinary Iranians, especially the (pro-democracy) middle classes, but the regime would always have enough oil income, resources, and technical know-how to continue its nuclear progress. After all, Tehran astutely used a combination of barter deals, expanded storage capacity, stealthy oil transport, alternative financial channels, sovereign insurance schemes for oil shipment, and flexible-discounted energy deals to woo major Asian buyers, ranging from Turkey and China to India, South Korea and Japan.

Nonetheless, despite some noticeable recovery in Iran's oil exports in recent months, the Iranian economy took a massive hit by the sanctions: the Gross Domestic Product (GDP) contracted between 4 to 8 percent by varying estimates, oil exports halved, oil production reached its lowest levels in three decades, the Iranian currency lost about 75 percent of its value, and people began to talk about an impending medical (and even food) crisis in Iran. Clearly, Iran was far from unscathed. At this point, the only way forward was renewed negotiations.

Re-launching Diplomacy

Immediately after securing his reelection, President Obama found himself in a particularly strong position to relaunch his nuclear diplomacy. Aside from hinting at potential direct bilateral talks with Iran, the Obama administration also pushed for an encouraging bureaucratic re-shuffle in favor of engagement with Iran. By selecting senators John Kerry and Chuck Hagel -- two major figures known for their more dovish stance towards strategic adversaries such as Iran -- as his secretaries of state and defense respectively, Obama sent a clear signal to the Iranians that he meant real business. In response, major political figures and institutions in Tehran, ranging from President Ahmadienjad and Foreign Minister Ali Akbar Salehi, to the Speaker of Parliament Ali Larijani as well as the all-powerful Iranian Intelligence Ministry, began to express their hopes for a negotiated solution to the nuclear issue (and even an expanded grand bargain) to resolve bilateral U.S.-Iran differences.

Nonetheless, heading into Almaty nuclear talks, both sides -- aware of the domestic politics dimensions of the multilateral negotiations -- tried to project a relatively tough position, with the West hinting at minimal sanctions' relief (i.e., the lift on the ban of precious metals and gold trade between Iran and hydrocarbon customers) and a quasi-recognition of Iran's enrichment rights, specifically at 3-5 percent purity levels. In exchange, the West insisted on its long-standing 'stop-shut-ship' demand: an immediate halt to 20 percent enrichment levels, shutting down of the heavily-fortified Fordo enrichment plant, shipping out of Iran's stockpile of medium enriched uraniaum, and a new comprehensive inspections regime, the so-called Additional Protocol (AP), covering non-nuclear facilities such as the Parchin military complex. Predictably, Iran dismissed this supposed 'revised' position by the West, arguing it did not meet Iran's position, which boils down to two basic demands: (i) An unequivocal recognition of Iran's peaceful enrichment rights; and (ii) reversal of all sanctions, including the latest unilateral Western measures. In Tehran, amid an intense political atmosphere ahead of the upcoming presidential elections in June, varying political figures struck a defiant tone, urging Iranian negotiators to stand their ground and defend Iran's sovereign enrichment rights. To reiterate the 'irreversibility' of its enrichment drive, Iran (again) stepped up its rhetoric just ahead of the negotiations, with top officials announcing the installation of 180 advanced IR-2m centrifuges at the Natanz enrichment facility, new uranium mines discovery, and proposed sites for future nuclear facilities.

However, beyond semantics and bombast, in a telling sign of Iran's willingness to explore a mutually-acceptable compromise, it actually slowed down its mid-level uranium enrichment and fed 28 kg of its 20 percent enriched uranium into conversation facilities for fuel production, according to the latest IAEA report. This meant that Iran (again) 'voluntarily' stepped back from nearing the critical threshold (of 240-250 kg stockpile) to build a nuclear bomb. Meanwhile, Supreme Leader Ayatollah Khamenei also made it very clear that the only way for Iran to negotiate with the U.S. -- and the world powers for that matter -- was for the latter to stop "point[ing] the gun at Iran and say either negotiations or we pull the trigger," because "pressure and negotiations do not go together." To make it clear that Tehran was for substantive bargaining this time, the supreme leader ruled out "negotiation for the sake of negotiation," which, according to him, only allows the West to use negotiations as a tactical move to "sell [its] gesture to the world."

The Beginning of a New End?

Encouragingly, the West -- sensing the urgency of getting down to real negotiations and diplomatic haggling to resolve the brewing crisis -- did manage to modify and upgrade its offer to Iran in Almaty, prompting Iran's Chief Nuclear Negotiator Saeed Jalili to describe the talks as a 'turning point', while FM Salehi (in Vienna at the time) said he was 'very confident' that an agreement could be reached. On their part, American diplomats, most notably the newly-installed Secretary of State John Kerry (in Paris at the time), described the 'talks' as useful and potentially the beginning of a serious engagement on the nuclear issue. So, what went right? Well, according to the New York Times, the world powers "dropped their demand that Iran shut down its enrichment plant at Fordo... [and] in another apparent softening, that Iran could keep a small amount of 20 percent enriched uranium for use in a reactor to produce medical isotopes." Also, the West reportedly offered some sanctions relief: resumption of gold and precious metals trade and allowing some petroleum trade and international banking between Iran and its energy customers. All of these in exchange for stringent restrictions on Iran's above 3-5 percent enrichment activities and suspension of enrichment at Fordo followed by more intrusive inspection to ensure non-diversion of existing stockpile into nuclear warhead. In effect, the West has recognized not only Iran's basic enrichment rights, but it has also provided Tehran some room to resume medium-level enrichment for medical purposes as well as a 'face saving' opportunity vis-à-vis Fodo by not demanding an outright shutdown of the facility.

As Michael Mann, the spokesperson of the European Union's Chief Negotiator Catherine Ashton, puts it "The onus is very much on the Iranians [now]." It is clear that the Iranians are pleased with this apparent 'shift' in the West's nuclear position. Once again, however, Iran's 'domestic politics' is a crucial variable in the nuclear negotiations -- just when the Obama administration seems to have gained some room for maneuvering. It is highly unlikely to expect a major breakthrough until Iran smoothly finalizes its upcoming presidential elections with a 'unifying' candidate, who could rally the support of all important figures and factions within the country to make a lasting deal with the West.