Nefarious Fallouts of Iran Sanctions: Time for Abandoning Coercive Diplomacy

The article1 demonstrates that on various grounds (socio-economic, politico-diplomatic, geopolitical and geo-economic) that the sanctions regime against Iran has been counterproductive. Crucially for Western policymakers and contrary to officially stated goals, the rapid escalation of economic sanctions during the past few years has been accompanied by the expansion of Iran’s nuclear program. The article concludes by urging the sanctions imposers to prepare the political and institutional grounds for meaningful sanctions relief – a prospect the bulk of Iranians wish for and their President-elect Hassan Rohani is predestined to deliver if the West reciprocates with goodwill.

Iran’s President-elect Hassan Rohani has promised to ease the tensions surrounding the international relations of his country. In concert with the will of the majority of Iranians, the issue of economic sanctions, currently weighing so heavily on day-to-day life in Iran, will be a key to that end.

The purpose of sanctions is to force a political opponent to do what she would not do otherwise. In the case of the sanctions imposed on Iran – during the course of what is commonly but simplistically referred to as the “nuclear crisis” – the stated goal has been to force a reversal of Tehran’s nuclear calculus towards slowing down or even halting its nuclear program. Central to the legitimization of sanctions is a narrative that is put forward sometimes implicitly, at others more explicitly: Sanctions are a means to decapitate evil (read, the Iranian regime), opening the path of democratization for the Iranian people – or in other words, sanctions as a “surgical tyrannicide” in the fight of civilization against barbarity. However, what we can see in reality rather resembles the use of “structural violence” by way of economic sanctions, exerted upon an entire country and its people.

On the politico-diplomatic level: Hardening the fronts

Economic sanctions are preferred and commonly used tactics used in the pursuit of Western foreign policy goals.-The Western reaction to the Syrian crisis2 has been the latest evidence of this. In the Iranian case, sanctions have been an integral part of the transatlantic strategy pursued against Tehran, code-named “coercive diplomacy” in Diplomatic Studies. There, sanctions are usually presented as a quasi-peaceful means and as such inherently part of a purely diplomatic approach geared towards avoiding a military confrontation. However, as the Iraqi case demonstrates, sanctions are the last step before a military strike is opted for. In other words, “smart bombs” are likely to succeed “smart sanctions”. And as Robert A. Pape, a U.S. political scientist known for his work on international security, noted3, sanctions are often a prelude to war, not an alternative to it.

Apart from this worst-case scenario, sanctions have not proven to facilitate the resolution of conflicts; on the contrary, they rather tend to raise diplomatic tension by harden resolve on both sides. A key problem remains that the sanctions are viewed through fundamentally different prisms: While the West conceives sanctions in a cost-benefit framework, i.e. the heavier the costs imposed on the targeted country by way of sanctions, the more willing the sanctioned state will be to offer concessions; Iran on its part sees them as a means of illegitimate pressure against which she ought to resist4. This explains why in the last couple of years the escalation of sanctions was accompanied by that of the nuclear program5. For example, in 2006, before the Iran sanctions were elevated to an crippling levels by the U.S. and the European Union – Iran had a thousand centrifuges, while the number today is much more than tenfold6 7. To this day, however, this reality of the nuclear dynamics in the wake of sanctions remains largely ignored in Western capitals.

Moreover, it should be stressed that policymakers in the West have so far devoted much more time and energy to identify which new set of sanctions are imposed rather than towards creatively engaging to find a diplomatic solutions to decade-old stalemate.

On the socio-economic level: Widening the power gap between the state and society

Contrary to what is commonly claimed when it comes to the domestic effects of economic sanctions, they actually weaken the lower and middle classes, particularly affecting the most vulnerable in society8 – Iranian workers9, women and the youth10. As a result, the power gap between the state and society widens11. This starts to undermine the assumption that sanctions are likely to trigger a system-destabilizing popular. In other words, a person struggling for economic survival barely has the luxury of engaging as a citizen in the struggle for democracy. This explains the firm renunciation of sanctions by Iran’s civil society – voices that the West has largely chosen to ignore.

In political-economic terms, the sanctions have largely paralyzed Iran’s civilian economy while state and semi-state economic entities – especially those associated with the Revolutionary Guards – have been able to benefit by monopolizing imports of various goods via black market routes. In fact, those companies having access to state resources have been able to meet the rising costs caused by sanctions. Another phenomenon is the enormous growth in the volume of bilateral trade between Iran and China (still about $ 40 billion according to the Iran-China Chamber of Commerce and Industries which is closely related to the regime) – to the detriment of producers and jobs in Iran12. Therefore, one can argue that the politico-economic power configuration in Iran has been bolstered by sanctions.

On geopolitical and geo-economic levels: Putting a brake on Iran’s development

Widely ignored, there is a salient geopolitical reasoning behind the imposition of sanctions: If you cannot control or influence a country, you will resort to weakening it; and the most effective means to do so is via economic and military sanctions.

Sanctions have contributed in limiting Iranian prowess, on a geo-political level. In fact, there are beneficiaries of the Iran sanctions regime all around. For one, China is certainly a big profiteer. In the wake of the U.S.-pressured withdrawal of the Europeans from the Iranian market, Iran was virtually handed over to China on a silver plate – something Beijing is indeed quite appreciative of. China’s economic presence in Iran can be witnessed all across the board: from the construction of the Tehran Metro to the exploration of Persian Gulf oil and gas fields13.

In particular, Iran’s technocrats – a prime victim of the sanctions – observe this development with great concern. Among other things, they have seen that a healthy competition between different foreign competitors is sorely missing, and that the lack of high-tech (formerly delivered by the West) has reduced the quality of domestic production. All of this has a negative impact (mid- and long-term) on Iran’s economic and technological development. If the situation remains unchanged, such damage can hardly be exaggerated. As another case in point, the sale of Iranian oil to large customers such as China or India has turned into barter – a de facto “junk for oil” program has emerged14. In addition, during the past couple of years China has been given preferential rates by Iran for its oil imports.

Finally, some of Iran’s neighboring countries also benefit from the sanctions. Most significantly, due to the energy sanctions against Iran, Russia can safeguard its quasi-monopoly on Europe’s energy supply – a strategic interest held by Moscow which is unlikely to be reversed. To a much lesser degree but still noteworthy, Turkey – which has turned into the sole land trade corridor reaching Iran from the West – has seen its profits in its dealings with Iran risen sharply. Not surprisingly, its business press has been cheering the Iran sanctions as providing Ankara with a competitive trade advantage15. Also off the radar, Qatar which in the Persian Gulf is sharing the world’s largest gas field with Iran, has been able to exploit South Pars much more rapidly than Iran given the latter’s lack of access to advanced technologies. This has resulted in a tremendous gap of revenues between the two countries of many several billion dollars.

Conclusion

Ultimately, the policy of sanctions is counter-productive not merely on one but various levels, most sensitively on diplomatic and socio-economic grounds. The sanctions – whether called “crippling” or “targeted” – ultimately affect the civilian population. Hence, “smart sanctions” are as much an oxymoron as “smart bombs”. And like their military counterparts, it is ultimately the “collateral damage”16 of the “targeted sanctions” that hit worst.

Despite the political need to seriously reconsider sanctions as a tool for a judicious and solution-oriented foreign policy, there are many political and institutional barriers to overcome before the extremely dense web of Iran sanctions can be dissolved – which remains not only a huge political challenge but also a moral one. The first step in this direction will be the sober realization among policymakers that while sanctions do have effects, these are not the ones officially proclaimed or desired – neither in socio-economic terms nor in the dynamics of Realpolitik when it comes to altering Tehran’s nuclear calculation. If, however, the sanctions against Iran continue we might, sooner that we would like it, approach the specter of an Iraqization of Iran – with all its adverse effects internally (destruction of society) as well as externally (war and destabilization of an already too fragile regional balance).

Rohani’s pragmatic attitude undoubtedly presents a welcome opportunity towards the aim of alleviating the multi-level liability that sanctions constitute. But at the end, we must be realistic to the extent that it is up to those who have imposed the sanctions who will have the task of initiating the necessary steps towards their removal. The ball is now in the West’s court; it would be the “height of irresponsibility”17 – to quote Joschka Fischer – if one missed this opportunity offered by the Iranian people who have already paid dearly for an utterly miscalculated transatlantic “coercive diplomacy”.

 

1 This article is based on a talk the author gave at the first expert conference on Iran sanctions to have taken place in Europe. Organized by the Paris Academy of Geopolitics at the French Senate on 3 June 2013, the conference assembled legal and economic experts as well as three former European ambassadors to Iran and former UN Secretary General Boutros-Ghali. The passages on Rohani have been added in retrospect. return to main text
2 http://www.counterpunch.org/2013/05/27/will-eu-sanctions-once-again-target-the-civilian-population-of-syria/ return to main text
3 Pape, R (1998) Why Economic sanctions still don’t work, International Security, Summer, 23 (1), pp. 66-77, available at: http://muse.jhu.edu/journals/ins/summary/v023/23.1.pape.html (accessed July 12th 2013) return to main text
4 International Crisis Group Report (2013), Spider Web: The Making and Unmaking of Iran Sanctions, Middle East Report no. 138, Feb 25 2013, available at: http://www.crisisgroup.org/en/regions/middle-east-north-africa/iraq-iran-gulf/iran/138-spider-web-the-making-and-unmaking-of-iran-sanctions.aspx (accessed July 12th 2013) return to main text
5 Marashi, R (2013) Report: Why sanctions aren’t working? National Iranian American Council, available at: http://www.niacouncil.org/site/News2?page=NewsArticle&id=9077 (accessed July 12th 2013) return to main text
6 http://www.iaea.org/Publications/Documents/Board/2013/gov2013-27.pdf return to main text
7 http://www.slate.com/articles/news_and_politics/recycled/2009/09/why_does_iran_need_so_many_centrifuges.html return to main text
8 http://www.iranhumanrights.org/wp-content/uploads/A-Growing-Crisis.pdf return to main text
9 http://www.iran-echo.com/echo_pdf/echo15.pdf return to main text
10 http://belfercenter.hks.harvard.edu/publication/20409/irans_youth_the_unintended_victims_of_sanctions.html return to main text
11 http://www.fathollah-nejad.com/index.php/2013/04/iran-civil-society-triangular-dynamic/ return to main text
12 http://thediplomat.com/china-power/chinas-trade-and-investment-in-iran-plummets/ return to main text
13 Carvalho, S (2012) Iran seeking China funding to complete Metro Project, Monday October 15th 2013, available at: http://www.reuters.com/article/2012/10/15/us-emirates-iran-finance-idUSBRE89E0PT20121015 (accessed July 12th 2013) return to main text
14 Lakshmanan, I & Narayanan, P (2012) India and China Skirt Iran Sanctions With ‘Junk for Oil’, Reuters, 30th March 2012, available at: http://www.bloomberg.com/news/2012-03-29/india-and-china-skirt-iran-sanctions-with-junk-for-oil-.html return to main text
15 Kiliç, A (2010) Iran sanctions may mean competitive trade advantage for Turkey, Today’s Zaman, 11th June 2010, available at: http://www.todayszaman.com/news-212767-iran-sanctions-may-mean-competitive-trade-advantage-for-turkey.html return to main text
16 http://www.fathollah-nejad.com/index.php/2010/03/smart-sanctions-iran/ return to main text
17 http://www.yourmiddleeast.com/opinion/joschka-fischer-a-glimmer-of-hope-in-iran_16020 return to main text

Iran’s former president Mahmoud Ahmedinejad and China’s Politburo Standing Committee Member He Guoqiang upon his arrival for a meeting in Tehran on 16 July 2011, re-afferming these countries strong ties. China’s oil imports from Iran increased by around 50% in the first half of 2011 compared to the same period the year before.

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