Diplomatic Challenges and Future Security Concerns

Hi, it's Man Vin here Donald Trump held his eightieth birthday party at the White House over the weekend. Complete with a UFC cage fighting match On the White House lawn Nothing says eighty quite like it. But perhaps his biggest calluse for celebration on Sunday was the much trailed by no means certain, announcement of a peace deal with Iran The deal itself will be signed on Friday in Geneva with a fine print to be worked out in the following sixty days So there's still a lot of uncertainty about the actual detail of the deal But the Pakistani mediators who've been key to the negotiations insist that America And Iran will immediately cease military action. So will this deal actually bring any stability to the Middle East in the long term And can it steady the beleaguered world economy In this extra afternoon episode of the story We're handing over to my colleagues, Jane Garvey and Phe Glover at Times Radio For the latest The oil flows as Donald Trump as tankers begin to move through the Strait of Hormuz. The newly announced peace deal between the US and Iran is meant to lift both the US and Iranian blockades of shipping in the region. Fighting between Israel and Lebanon nearly derailed negotiations, with the Iranians claiming it allowed them to gain last minute concessions And questions over what this means for Iran's nuclear program remain with promises of technical talks to follow. Well, in just a couple of moments, we'll get an American perspective on the deal with a former US ambassador. But first let's speak to Mohammed El Aryan, the economist and former deputy director of the International Monetary Fund. Thank you for coming on the programe again We are delighted to be able to delve into your expertise. And the first question is such a basic one. What's your reaction to this deal So my reaction fe an important first step But there's a lot of open questions There are lots of details to work out It's not clear how the balance of other countries are going to play out. The European countries, the UK are very keen to participate to ensure that this results in peace and security Israel has already said that the Lebanon part of the memorandum of undernderstanding doesn't apply to it There are two economic questions The first is how quickly can oil shipment and production be restored? It is not like putting on flipping on a switch. And finally, there's this notion of scarring How much damage has already been created that will not be easily reversed. So when I look at all this is what economists fe called a necessary but not sufficient condition to a better world. Do you think it will hold I hope it holds I suspect it will hold between the U. S and Iran But it will be subject to lots of tension including on account of Israel Hezbollah dynamics Let's talk specifically about the strait of Hormuz. The opening of that and we completely hear you when you say, you can't just flip on a switch. I mean, there have been tankers stuck there for months now and a very understandable fear about sailing through that particular waterway So for the global economy, can they at least can we at least be hopeful that there will be a return to a place that we were at before? or has that gone forever So I think it turned towards where we were before, but not quite there You see it in oil prices Rnt oil has come down by about five percent today. We're at eighty three, but we're still about fifteen dollars higher than where we were. Are we better than we were in the last two months, yes, but we're not back to where we were. and we won't get back to where we were We were So there's lots of things, the inflation dynamics that have been unleashed. You can't put that genie back in the bottle fee immediately There's also positive elements The big word now is resilience. You're seeing Oil producers in the Gulf look for other ways to reout their supply chains Countries have understood the importance of inventories, precautionary inventories So All this suggests that we are going to go back to a different place and not exactly the place we've come from Isn't it also true that anyt time Iran wanted to up its hold on the world, it now knows that it can use the strait of Hormz? I mean, does that potential threat really decrease with this deal So it is ironic. that Iran now has a weapon that has been shown to be very effective that it did not realize it could use before And it is why both Iran and the U.S are declaring victory It's a fascinating element that you've had three plus months of of hostilities and both sides come out declaring victory. Look We are not going to go back to where we were before, but as I said The region will adjust and you're going to see increasingly new supply chains trying to bypass the strait. That doesn't mean that the strait would not be important. It just means the strait would not be as important as it was before Do you think the people of Iran are in a better place today than they were on let's say, february twenty seventh I don't think anybody is in a better place today than february twenty seventh. Certainly not the people of Iran that have suffered, not certainly not the people of Lebanon, certainly not the people of the Gulf Cooperation Council, the UEE Kuwait. I think the consumer in the rest of the world, the British household is worse off I think when you look back, it's hard to determine what we've gained from this war of choice. And just to be selfish about it, you've mentioned the British householder there now starts to happen if this deal is regarded as something successful and permanent Two things happen. One is lower petrol prices, lower energy prices more generally And the second is lower borrowing costs, meaning more affordable mortgages But we are not going back to where we were on february twenty seventh So it will be better than the last few weeks But again, compared to where we were on february twenty seventh, It's going to be a bigger burden For the government It means slightly more fiscal space But again, not the physcical space that the Chancellor had before this war. Always good to talk to you. We very much appreciate your time. Mohammed El Eran is an economist, former deputy director of the International Monetary Fund. Let's talk now to the former US Ambassador, Gina Abercrombie Win Stanley, now distinguished fellow at the Atlantic Council focusing on the Middle East security and strategy No better person asked the question, what do you make of this? Thank you very much for having me and This is the deal must be done. It had to be concluded and as your previous guest said each side is declaring victory But there are substantial losses to be shared across the board We will see what the coming months will show for the political reputational costs, certainly for the United States and whether the damage done to the Iranian economy has begun a slow leak for the regime there. believe that it is stronger today But the devastation that the war I visited upon Iran means they have a very deep hole to dig out of. Well, let's talk more about the people of Iran. If the grip of the regime has actually been tightened What should the international community do now and in the immediate future If we start to hear stories of really horrendous behaviour emerging from the country, there has been quite a cloud of silence around the ordinary lives of the Iranians because of this conflict, because of the WiFi being cut off, because of people not being able to get in really know what we'd find if everything opened up, do we? Indeed, we don't. And of course, there's been a cloud of silence about many atrocities and horrific situations for the people in the countries around the world and you know, Sudan comes most immediately to mind, but there are many others. So yes, we may find out more as the internet bulks up, but The international community saw what was happening in Iran We had the President of the United States tell the people of Iran hold on help is coming, but that has not proved the case. And at this point, it will be important for substantial financial U assets to go into Iran because that's the only way that the economy can be rebuilt, that people can get a grip on their lives, the rising costs, the lack of access to Fancial instruments, et cera has been borne by the Iranian people far more so than on the leadership. But I wondered, you know whether also all of this will have hardened Iranians' hearts against America So you know people are less likely to be willing to open up the economy to Americans because of that rallying cry from Donald Trump that you referred to, you know, we are there behind you and a feeling that actually There was nothing there behind What was a political statement for him Well, you're right. There is going to be a far less trust in anything that comes out of this administration, definitely and perhaps in future administrations. However, the need for financial assistance, the need for this infusion of cash for businesses, for housing, for the reconstruction of infrastructure What America does do is business, certainly this president does. And I would imagine anyone would set aside personal feelings to do those sorts of arrangements of deals to get that financial infusion in and never mind about the personal feelings about the nation And certainly it doesn't mean that there's going to be increased trust in the policies of the United States. But I mean, if we look at the lessons from history, if we just look at recent history in Iraq and the rebuilding of Iraq And what that did to many people in the region's trust or lack of trust with Americans because a contractor might not always really behave how you imagine a contractor should Well, that's very true But of course, the openings for Iran are not confined to the United States. Certainly Europe, other nations around the world will have opportunities as well And the Iranis may not choose the Americans for all sorts of contractual arrangements. They may choose other nations. We'll have to see. But the importance is getting the funding in to help the Iranian people? Can we talk briefly as well about the Iranian nuclear program? I mean, it was what lay at the heart of the impetus for change from know the cause of change from the outside, the fear that had been felt, particularly by Israel. What do you think happens next with that? Well, it's very clear that we are to a position perhaps comparable to the JCPOA, but certainly the point of negotiations where we were last June and again in February before the United States and Israel decided to attack Iran There are going to be a great deal of questions. The initial feeling is relief. that the strait is going to be reopened, but have many questions about the efficacy of this war. It has certainly set back Iranian capabilities to a considerable degree. Keeping in mind that they didn't start to enrich up to sixty percent until after President Trump agreement, that is a fact And so people will question What did all of this bring us Be we're just back to negotiating There's nothing firm in this first round of the ceasefire, that those negotiations have been delayed. They're extremely technical, extremely complicated. and they do need time I will be shocked that something is resolved within sixty days. This takes time. And that's where we are again Yeah, well, thank goodness that we've got a very patient, patient man in charge of the free world. Lovely to talk to you. We really appreciate your time as well. Gosh. What great guests over the last twenty minutes. That was the former US Ambassador, Gina Abercrombie Win Stanley, now a fellow at the Atlantic Council It was Jane Garvey and Felover talking to the economist Mohammad E Aryan and the former U.S. Ambassador, Gina Abercrombie Win Stanley You can hear more of Jane and Fee every day from two till four PM or on their podcast off air with Jane and Fe We'll be back as usual tomorrow when we'll be looking at the government's proposed social media ban See you then