While no doubt painful for Tehran, U.S. sanctions are riddled with exemptions and may be in place mostly to sideline hawks, writes Robert Dreyfus.
Like the fairy-tale Big Bad Wolf, the United States and the European Union continue to huff and puff and say that economic sanctions will blow Iran’s house down.
Referring to new U.S sanctions that can be levied against third-party purchasers of Iranian oil and to the ban, imposed July 1, by the EU against Iranian exports to Europe, Secretary of State Hillary Clinton declared, “Iran’s leaders will understand even more fully the urgency of the choice they face.” Stretching for an historical analogy, the New York Times compared oil sanctions against Iran to the pre-World War II U.S. embargo on oil shipments to Japan, adding, in case anyone forgot, that in response Japan opted to “strike before they were weakened.”
But while the new sanctions will inflict a significant measure of pain against Iran’s already struggling economy, virtually no one in Washington believes that they will compel Iran to make unilateral concessions at the bargaining table over its nuclear enrichment program. And, experts say, Iran can get along fine for the foreseeable future with a little belt-tightening.
“Consider the Iranian economy, which is nowhere near collapse,” wrote Hossein Mousavian, former spokesperson for Iran’s nuclear negotiating team and the author of The Iranian Nuclear Crisis, A Memoir, and Mohammad Ali Shabani, a political analyst in Tehran, in The National Interest. “The reality is not that ‘Iran is on the verge of a choice between having a nuclear program or an economy,’ as Cliff Kupchan, a senior analyst on the Middle East at the Eurasia Group, insists. [The] Islamic Republic will still rake in an estimated $40 billion from oil this year. That’s roughly twice as much as when Mohammad Khatami was president a decade ago.”
The only way sanctions against Iran make sense is not as policy, but politics.
Since 2009, when the first round of talks stalled between Iran and the United States, Russia, China, Britain, France and Germany, the so-called P5+1, the Obama administration has used economic sanctions as a way of kicking the can down the road. Rather than make real concessions to Tehran, including recognition of Iran’s right to enrich, if Iran accept air-tight international oversight by the International Atomic Energy Agency, the White House used the sanctions as a way of deflecting pressure from neoconservatives, hawks, and right-wing backers of Israel in the United States who demanded confrontation with Iran. Inside the administration, few if any officials actually believe that sanctions will work as intended, namely, to force Iran to comply with UN Security Council resolutions that demand a stop to enrichment. Since 2009, President Obama has opposed, deflected, and tried to weaken sanctions legislation enacted by Congress. Were sanctions too draconian, and were the United States to move overtly toward military confrontation with Iran, the P5+1 coalition would instantly shatter and both Moscow and Beijing would align more closely with Tehran.
Photo Credit: Via Wikimedia Commons
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Piotr Berman
Sanctions will not work for several reasons.
One is exactly what the article describes: if the importers of Iranian oil do not agree with the current US policy toward Iran, there is really not much US can do. Granting "exemptions" pastes over American (relative) impotence. If American negotiating positions are unreasonable, it will be noticed and treated as such.
The second reason is that oil revenue is not necessary for the economy, and forcing the economy to operate will less oil revenue may be beneficial if done right. Primarily, the country can develop more labor intensive non-oil export and do some import substitution, thus stimulating domestic industries and employment. The outcome can be that consumption will go down (ouch) but employment may go up (good). Iran also cannot use international banking much, bwahaha! As we know, stimulating domestic consumption with loans can lead to collapse. Investing oil revenue abroad can lead to huge losses, basically, wasted oil. Financial autarchy has some benefits of gold standard (not a good idea, but with some common sense elements, as huge tides of electronic money create cycles of speculation and depressions).
Import substitution may have its own pitfalls,
George Archers
USA/EU's plan to get out from the financial mess is by pirating /controlling of middle east oil–all of it. Iran's oil booty is the cherry topping. Snice 1900s middleast has been invaded countless times–for control of it's oil.
WWI WWII –look hard–find both started for sole purpose of controlling middle east oil wealth :^(
Dantes
Sanctions will not work, when a nuclear weapon is within Iran's grasp. If anything, this will embolden them to push ahead. Once they go nuclear then what? Sanctions will be dropped. As for Obama, pretty much everything he does is a ruse or worse, which is why Iran loves to taunt the US so much.
Andrew
This is why the Obama administration cannot be trusted to do what is needed about Iran and why Israel can only rely on itself. When Iran retaliates after an Israeli strike by firing missiles at US bases, its hand will be forced.
Brad
This article severly underplays the effect that the sanctions are having on Iran. Oil production has already been cut by 1/3 because they have nowhere to put the excess and no one to sell it to. They are renaming and repainting their oil tanker to make people think they are new ones when really they are just being used to store extra oil while they sit at the harbor with no orders for the oil the ship holds. Esitmates are that 2/3 of the Iranian commercial fleet is just being used for storage right now and some ships are even starting to loose their crews.
Please tell me how that has "little effect" on the overal economic picutre in Iran.
Mark Thomason
One of Iran's biggest problems internally has been its fantastically expensive subsidy of gasoline. This will allow the government finally to limit that problem. It will eliminate the need to import so much refined product gasoline.
No doubt it is inconvenient, but it is not unmixed with blessing for them. It closes the biggest hole in their budget and the largest problem of their oil industry.
USA
On this earth, ONLY the USA has the ability to co-ordinate effectively its political, diplomatic, military policies like no other nation on the planet. It is a truly an advanced country in most ways!
John Chan
Romans thought the same way too even before its collapse.