The upcoming edition of The Weekly Standard will evaluate how the White House is positioning itself in relation to growing evidence that the Iranian economy is improving much faster than it should be given previous White House assurances about the limited scope of sanctions relief provided by the interim Joint Plan of Action (JPA). The White House had been blasted by skeptics for misjudging the benefits of the JPA, and more specifically for miscalculating at least two dynamics. Administration economists were criticized for straightforwardly undercounting the value of the eased sanctions, making an array of undergraduate-level and easily identifiable math errors, while administration diplomats were said to have far too glibly dismissed the possibility that even a mild easing in sanctions would trigger a feeding frenzy that further eroded the international sanctions regime. Empirical evidence has piled up in recent weeks indicating that skeptics were correct and the Obama administration was wrong. Writing in the Standard, Hudson Institute Senior Fellow Lee Smith, noting among other things that White House economists were unlikely to have made undergraduate-level calculating errors, asserts that “the plan rather was to get Iranian president Hassan Rouhani lots of cash, the more the better,” on the hope that it would become “in his interest to petition Supreme Leader Ali Khamenei for more concessions on the nuclear file.”

“The administration wanted to strengthen Rouhani’s position vis-à-vis the hardliners,” Iran’s Revolutionary Guard Corps (IRGC), says Mark Dubowitz, executive director of the Foundation for Defense of Democracies, whose work has been central in building the Iran sanctions regime. According to Dubowitz, the White House wanted to empower Rouhani while weakening figures like Quds Force commander Qassem Soleimani, who use their proximity to Khamenei to argue against concessions.

Accordingly, businesses sensing a new climate have flocked to Tehran. “Administration officials said our estimate of $20 billion was exaggerated,” says Dubowitz. “But they had to know about the secondary effects of sanctions relief. They were counting on it. It was key to their whole economic strategy of giving Iran’s economy a lift to incentivize Rouhani to deliver more on the nuclear file. As Iran’s economy continues its shift from a deep recession to a modest recovery, and Congress challenges administration officials on the impact of sanctions relief, administration officials may begin to change their tune and claim that this was their strategy all along.”

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