Nuclear Sanctions Have Limited Effect
Government uses steps taken by international community to explain away domestic economic problems of its own making.
Nuclear Sanctions Have Limited Effect
Government uses steps taken by international community to explain away domestic economic problems of its own making.
Countries opposed to Iran’s uranium enrichment programme, including the United States and its European allies, have to date managed to get three resolutions through the United Nations Security Council imposing sanctions on Iran in hope of making the country mend its ways.
There are rumours that more resolutions might be on their way, and also that other bodies such as the European Union might impose their own sanctions.
The primary objective of such measures is of course to force a change to Iran’s insistence on pursuing the development of a nuclear industry. The more hopeful the countries involved are of achieving success, the more they will persist with sanctions.
What is sometimes forgotten, though, is that the principal victims of economic sanctions are individuals and private businesses, not government. So the greatest losses are by definition suffered by those who have the least input into foreign policy.
In Iran, there is little scope to discuss nuclear policy openly, as such debates are taboo in the media. Meanwhile, the official narrative seeks to drum up support among people from all walks of life for Iran’s right to become a nuclear state.
Yet many educated Iranians, even some officials, are well aware of the cost incurred by pressing ahead with the enrichment programme.
Ehsan, a third-year student at one of Tehran’s technical universities, insists possessing nuclear energy is an “absolute right”, but adds as a proviso, “I believe this effort should be pursued with the minimum of negative consequences such as sanctions and confrontation with the international community.”
“Acquiring nuclear energy at the cost of isolating Iran or creating adversity and economic hardship for the people would not be something to be proud of,” he said.
In early April, former deputy foreign minister Mohsen Aminzadeh spoke of the unprecedented degree to which other countries had lined up against Iran. “I would venture to say that never in the history of international relations has there been this much unanimity against a single country,” he said. “This is the result of policies that have been adopted in the last three years.”
Aminzadeh was speaking at a seminar hosted by the Baran Foundation – an institution established by former president Mohammad Khatami – that to discussed comparisons between the current aspiration for nuclear power and the nationalisation of Iran’s oil industry in 1953.
Aminzadeh blamed Iran’s isolation on the policy changes that followed the election of Mahmoud Ahmadinejad as president in 2005. The previous head of state, Khatami – under whom Aminzade served as deputy foreign minister – had sought to build bridges with the international community. Aminzade attributes the adoption of three successive UN resolutions to the Iranian government’s decision to ditch this policy.
While it is fairly obvious that sanctions have had a negative effect on social and economic conditions in Iran, there are no reliable, publicly available statistics on the extent of this. The authorities have conducted a number of studies, but their findings are only accessible by a limited circle of officials.
Nor is it easy to gauge overall attitudes to the sanctions among the Iranian population. People living in rural areas or in the smaller towns are generally not well-informed about international relations or the nuclear question. Residents of the larger towns tend to follow current affairs more and, depending on their education, to have a greater awareness of the sanctions.
Businessmen and factory owners who import their raw materials from abroad top the list of those who incur the most loss by sanctions.
Mohammad, a leading businessman importing industrial machinery in Tehran, believes sanctions have had a creeping effect on the economy – year by year, the business climate becomes less secure. For example, foreign business partners will not provide credit lines, citing sanctions, and insurance companies abroad increase premiums for Iranian firms, and foreign banks join the sanctions regime. How, he asks, can one do business with the outside world with peace of mind and a sense of security?
Mohammad sees people like himself as the principal victims of sanctions.
A business colleague of Mohammad’s who did not want to be named argues that the countries that imposed sanctions on Iran were making a big mistake if they hoped this would bring the government to its knees. Instead, he said, the Iranian treasury was building up reserves year by year thanks to the astronomical rise in oil prices, while the negative effects were played out in the commercial sector. Companies, especially new start-ups, effectively suffered from two forms of competition, he said – from the Iranian government, with its advantageous position, and from competitors abroad.
Unprecedented international market conditions mean Iranian oil is selling at 100 dollars a barrel.
By contrast, ordinary Iranians tend to view mismanagement at home, not sanctions, as the root cause of economic and social problems, including prostitution and drug addiction.
One indicator of the economic squeeze is that young people are not getting married, because they cannot afford to. Government figures indicate that around 12 million young Iranians of marriageable age remain single. Citing this statistic in an interview on April 30, the deputy head of the National Youth Organisation said that if 800,000 marriages take place every year, the number of young unmarried people exceeds this figure. The officials said this was a serious challenge to government planners.
Among the factors acting as a disincentive to marriage are the dire employment situation and the spiralling price of housing.
The official unemployment rate stands at around 12 per cent of the adult population, although unofficial estimates suggest the figure is over 20 per cent for the 18 to 30 age group.
Rocketing prices for housing, particularly in the larger cities, have turned young people’s plans to buy a home into a pipe dream. Prices in Tehran and other cities have rising threefold or fourfold in the last three years.
In southern parts of Tehran, apartments are selling at around 2,000 dollars per square metre, and around 10,000 dollars in the more desirable neighbourhoods in the north of the city.
Compare these prices with the average monthly income of a civil servant or worker – around 400 dollars.
The Central Bank says year-on-year inflation was 19.5 per cent for the month ending April 21, the first of the new year in the Iranian calendar. Again, unofficial estimates are higher – over 30 per cent.
Raheleh, a 43-year-old management graduate who works for a private company, believes that other than the psychological and political impact, UN sanctions have had little direct economic effect on the government’s finances.
Instead, she blames Iran’s problems on mismanagement by government - particularly the current one – and the lack of a solid and clear economic strategy. She says the government has an interest in using sanctions and other measures applied by the West as a way of covering up its own mismanagement.
From the above, there are a number of conclusions to be drawn on the impact of sanctions, both direct and indirect.
First, the Iranian government uses the sanctions as a way of explaining away economic problems which for which it is responsible itself. Second, this discourse also contributes to turning popular opinion against countries that either sponsor or back the sanctions.
In short, sanctions are unlikely to have the desired effect of altering the Iranian government’s behaviour as long as they consists mainly of economic measures and oil revenues remain as high as they are now. The main losers in this political dispute will be the Iranian middle classes.
Maziar Aqazadeh is a journalist and political commentator in Tehran.
Mianeh is an IWPR-run initiative to provide an open webspace for ideas, analysis and debate for Iranian journalists and writers. This article is taken from Mianeh’s independent bilingual website, http://mianeh.net
