The controversial US$300 billion fund for Iran for peace: will the United States pay for it?

On Sunday, The United States and Iran digitally signed the peace agreement. That document, called memorandum of understandingwas formally signed on Wednesday by the president donald trump and by his Iranian counterpart Masud Pezeshkian. Now begins a 60-day period of substantive negotiations where we will basically talk about the Iran nuclear program and the fate of the 440 kilos of uranium enriched to 60% that the Islamic Republic possesses.

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According to the 14-point memorandum of understanding, in the point 6 it is pointed out that The United States is committed, together with its regional partners, to developing a comprehensive plan, agreed upon by both parties, for the rehabilitation and economic development of the Islamic Republic of Iranguaranteeing a financing of at least US$300 billion. The implementation mechanism of this plan, as part of the final agreement, will be defined within a period of 60 days.

This point of the agreement is one of the most controversy generates. Asked about this on Wednesday during the G7 summit being held in France, the president of the United States, donald trumpdenied that the document includes a $300 billion investment fund for the reconstruction of Iran. “We are not going to invest. It is a false story,” he pointed out. Besides, He stressed that the document is not definitive. “It is a memorandum of understanding,” he said.

He also said that he is not asking Gulf countries to invest in Iran: “I have not done it. If they do it, great, but it seems to me that they will not do it again for a long time, until they learn how they should act. In the end, it is a question of behavior. But we are not going to invest.”

But hours after that statement, the United States published the peace agreement with Iran and it contains the $300 billion fund.

What exactly is the fund and what are the conditions?

According to the Reuters agency, The $300 billion is not a check that Iran will receive when signing peace. It is about a promise of future investment conditional on Tehran signing a definitive agreement during the next 60 days.

It is a investment and reconstruction fund for the economic development of Irannot compensation or a direct transfer to Tehran by the United States.

Reuters specified that the idea is create a financial vehicle that attracts private capital from Gulf countries such as Saudi Arabia, Qatar and the United Arab Emirates; from American companies and investors from Asia, Africa and Latin America.

The promised investments cover the sectors of energythe logistics, the manufacturing industry and the transporta source told Reuters.

Another Iranian source told ‌Reuters that Tehran had initially requested $400 billion from the United States as compensation for war damage, but Washington refused to do so.

So, as an alternative, the idea of ​​the $300 billion fund arose, which will be called “Reconstruction and Development Fund”.

According to sources from the Axios portal close to the conversations, the idea of ​​the fund came from Qatar and was discussed with the United States and Iran for several weeks.

On Monday, the vice president J.D. Vance told CBS that Access to the fund will be conditional on Iran verifiably renouncing the development of nuclear weapons, allowing international inspections and complying with the agreement’s commitments.

Vance even stated that Iran It would not get those benefits “unless it is completely transformed.”

He also highlighted that the money would not come from American taxpayers.

Could strengthen Iran’s military capacity

For the international analyst Roberto Heimovitsthe fund would have a direct impact on the strategic capabilities of Iran.

“It will definitely strengthen Iran’s military capacity, because a central and indispensable component of military power is economic power.”, held in dialogue with The Commerce.

He explained that the financing of weapons, ammunition, fuel, logistics and training depends on the available economic resources, so an injection of that magnitude would represent “a huge source of military strengthening for Iran”.

To measure what the amount contemplated in the agreement means, Heimovits pointed out that the 300,000 million dollars are equivalent to more than the entire GDP of Peru.

The analyst indicated that although Trump has denied that there is such a commitment, he stated that, if confirmed, it would be an unusual situation in an armed conflict.

“It would be a very anomalous situation for the party that was winning militarily to pay reparations to the party that was losing.”he indicated.

Along these lines, Heimovits considered that the fund could be interpreted as indirect compensation to Iran for the damages suffered during the conflict. “If those 300,000 million appear in the agreement, in any form, it is like a reparation that the United States would be paying to Iran; and worse still, it could be considered a quota for Iran to agree to reopen the Strait of Hormuz… the United States would be paying it an extortion to agree to lift the blockade.”

The end of the nuclear program is not guaranteed

Heimovits also warned about the implications that the fund would have on the nuclear negotiations. He said Tehran could use the issue as an element of pressure to demand compliance with economic commitments before advancing concessions on its nuclear program.

“Iran could say: if the United States does not comply with giving me the 300,000 million, then I do not have to comply with the nuclear part”he warned.

The analyst was skeptical about the possibility that it would finally Iran agrees to dismantle its nuclear program. He said the mixed messages sent by Trump during the war would have reinforced the Iranian perception that Washington has military capabilities but lacks the will to employ them.

“I don’t think they are going to give in on the nuclear program, especially in the critical part of the inspections.”held. “Iran believes that the United States has the military force, but not the will to use itso it is likely to maintain its positions and prolong the negotiations.

For Heimovits, this scenario would maintain one of the main concerns of Israel and several countries in the region: the possibility that Iran retain strategic nuclear capabilities despite the agreement reached with Washington.