Tuesday, 14 July 2015

Did The Economic Sanctions On Iran Work?

A massive moment in international relations today saw an agreement settled between Iran and the P5+1, that accepts (though limits) Iran's right to nuclear energy, while lifting the economic sanctions placed upon the Middle Eastern power for the past decade.

There is much debate over whether the sanctions placed on Iran were effective. The American government has been a champion of economic restrictions, believing that causing economic troubles could pressurise the Iranian government into giving in over its nuclear energy program- and, from a rather cynical point of view, perhaps in the long term even stir up public resentment of the government to the point of its toppling. It wouldn't be surprising- for the US of course was a major force behind the 1953 coup of Iran's first ever elected authority.

But back to the point, there are numerous critics of the sanctions. A primary argument on this side has been that the sanctions have simply been a form of collective punishment, that has stirred resentment among Iranians not for their own government as intended, but rather the Western governments imposing these sanctions that are having crippling effects on their lives.
SANCTION EXPANSION- The 5 most significant bans enforced by sanctions put on Iran
- The sale of weaponry and nuclear technology to Iran (enforced by the United Nations)
- The purchasing of arms from Iran (UN)
- The import of Iranian oil and gas (European Union)
- Any dealing with Iranian banks and financial institutions (EU)
- The freezing of assets* of individuals and organisations believed to be supporting the nuclear 
program, and where applicable a ban on their entering the EU. (EU)

Iranian business did suffer as a result of the sanctions- Iran's oil exports fell by almost two-thirds in the two years following the first sanctions put on them in 2011, costing the country from 4 to 8 billion dollars according to Iran's oil minister. Oil revenue provided for almost half of Iran's government expenditure, meaning that such a hard hit on the Iranian oil industry, combined with Iranian exile from many of the world's financial institutions, translated into a weak currency, leading to inflation reaching as high as 40%. This high inflation has been the primary source of many of the economic hardships faced by the Iranian people in the past decade.

A Gallup poll from 2012 reflects particularly well the suffering faced by Iranian society since the first round of sanctions in 2006, and how this has translated into staunch opposition of Western powers. The poll, which followed EU sanctions banning oil imports from Iran, found that 48% of Iranians had experienced a lack of money to purchase food supplies for their families in the past year, a strong contrast to just 15% in 2005. There is no doubt that this has contributed to the US government having an approval rating of just 7% among Iranians.

In a climate in which many are already disillusioned and frustrated with Western (primarily American) foreign policy in the Middle East, many Iranians see these sanctions as an extension of their interference in the region, an attempt to punish Iran for often vocally opposing the West.

So it seems evident that sanctions have done little in their objective to stir up significant Iranian resentment against their own government; in fact it appears they have worked against western interests.

But what about pressure on the Iranian government? Has the sanctions program played a leading role in finally drawing Iran and the West to an agreement on the negotiations table?

One could conclude that sanctions were effective in pressurising the Iranian government by going straight to the end result. Iran agreed to limiting its nuclear activity, in exchange for removal of economic sanctions- so the sanctions worked, right?

But it could also be argued that there were numerous other motivations for Iran to come and agree at the negotiating table. Arguably even more important than the removal of sanctions, the deal can potentially put to rest a lot of the diplomatic tensions between Iran and the West. Previous negotiations have centred largely around total deactivation of Iran's nuclear facilities, a compromise too far for the Iranian government seeking to diversify its domestic energy production away from oil and gas.

This agreement allows Iran to continue pursuing its nuclear energy production targets. Though production is likely to be far more restricted and monitored under this agreement, the sacrifice is arguably worth the opportunity to redevelop both political and economic relations with the West. This is the issue that has generated the major threat of war in the region, particularly with Netanyahu's zeal for military conflict. "The agreement... removes Iran's nuclear programme from the danger list," says BBC Middle East Editor Jeremy Bowen. "Two years ago, as Israel threatened to bomb Iran, it looked likely to lead to a major Middle East war. That in itself is a major diplomatic achievement."

Hassan Rouhani's foreign policy is proving to be one
of wider diplomatic relations with the West
than his predecessors.
The Iranian government has received international recognition of its right to develop nuclear energy, something that undoubtedly played a significant role in motivating the Hassan Rouhani, as a President seeking to rebuild some of Iran's relations with the rest of the world.

So, it could be said indeed that the economic sanctions played a role in bringing around this agreement on Iran's nuclear program, but it would be perhaps too simplistic to conclude from this that the sanctions were successful on the whole. No doubt, those in Iran who suffered because of them are unlikely to forget soon, and furthermore the political implications of the agreement strongly suggest the sanctions may not have played the greatest role in bringing Iran to the table.

*The freezing of assets is when an individual or organisation's assets (whether it's a property, a business investment or bank accounts) are regulated to prevent the owner from selling or withdrawing them. For example, Iran's Central Bank is believed to have up to $10bn in European central banks that is frozen- currently they cannot withdraw it.
Mohammad M Lone Editor

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