SANCTIONS ARE ONLY A STOP-GAP


     
     By Patrick Clawson

     Foreign Affairs

     May 9, 2012

     To view this article on our website, go to:
     http://www.washingtoninstitute.org/policy-analysis/view/23645

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     The question is not whether sanctions have worked but whether the
     strategy they serve is correct.

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     To judge the effectiveness of Western sanctions against Iran, it is
     important to first establish their purpose. U.S. officials and their
     European counterparts have set out a number of different goals for
     the sanctions regime, including deterring the proliferation of
     nuclear technology across the Middle East, as other countries
     imitate Iran, and persuading Iran to comply with the UN Security
     Council’s orders to suspend all nuclear enrichment. The sanctions
     have met some of those aims and failed to meet others. But for the
     Obama administration, they have succeeded in one crucial way --
     bringing Iran back to the negotiating table. The question, then, is
     not whether sanctions have worked but whether the strategy they
     serve is correct.

     To begin with, Tehran’s decision to reenter discussions about the
     future of its nuclear program represents a dramatic about-face.
     During the January 2011 round of negotiations between Iran and the
     so-called P5 plus 1 (the five permanent members of the UN Security
     Council and Germany), for example, Tehran rejected any talk of its
     nuclear program. For the next 15 months, it refused to meet until
     the P5 plus 1 accepted the precondition of Iran’s right to enrich
     uranium. In new talks in Istanbul this past March, however, Iran
     agreed to discuss its nuclear efforts and dropped its precondition.

     The Islamic Republic did not do this out of goodwill but because of
     tougher sanctions. By demonstrating a willingness to negotiate and
     working closely with Europe, the Obama administration has rallied
     many countries behind its efforts. This broad coalition has
     established increasingly severe sanctions -- results that the United
     States could not have achieved alone. In March, for example, the
     European Union banned the largest Iranian banks from the Society for
     Worldwide Interbank Financial Telecommunication, the main
     institution used for transferring money between banks across the
     globe, thereby crippling the ability of Iranian financial
     institutions to conduct business. And earlier this year, the
     European Union began imposing an oil embargo on Iran that has
     already reduced the country’s oil exports. In the last six months,
     these measures, along with Iran's erratic economic policies, have
     robbed the currency of half its value and, according to Iranian
     estimates, caused inflation to soar above 20 percent (and likely
     much higher). Iranian Central Bank Governor Mahmoud Bahmani
     described the sanctions “as worse than physical war,” proclaiming
     Iran “under siege.” And Iranian business leaders worry that more
     sanctions are on the way, since the United States and Europe have
     made clear that the longer the impasse over its nuclear ambitions
     continues, the more economic and political trouble Iran will face.

     The sanctions have also helped Washington slow Tehran’s nuclear
     progress. Alongside sabotage, defections, cyber attacks, and
     assassinations, sanctions -- such as the UN ban on the acquisition
     of so-called dual-use items, seemingly benign technologies that
     could be applied to the nuclear program -- have hampered Iran’s
     technological advancement. For example, the Islamic Republic,
     despite its best efforts, continues to use a poor, outdated design
     for its centrifuges, which frequently break down because the country
     cannot obtain better technology or high-quality materials.

     Yet the sanctions do have limits. The EU oil embargo and U.S. and EU
     financial restrictions have largely failed to decrease Iran’s oil
     revenue. Those sanctions would have had much more impact a decade
     ago, when Iran averaged $19 billion a year in oil income. Oil prices
     are now so high that Iran can compensate for Western pressure. Prior
     to the recent sanctions, the International Monetary Fund estimated
     that revenue from Iran’s oil and gas exports in 2012–13 would reach
     $104 billion, $23 billion more than in 2010–11. In March, The Wall
     Street Journal cited estimates that sanctions could cut Iranian oil
     income in half -- painful but still equal to the $54 billion Iran
     earned from oil sales in 2005–6, the year when it decided to provoke
     the West by resuming nuclear enrichment after a three-year pause.
     Even if sanctions could somehow decimate Iran’s economy, there is
     still no guarantee that the regime would end its pursuit of nuclear
     technology.

     Whether or not diplomacy results in an agreement, the sanctions have
     already fulfilled the core objective of the Obama administration --
     namely, kick-starting negotiations. But that is not the right goal.
     Given Iran’s poor track record of honoring agreements, negotiations
     remain a gamble because they may never lead to an agreement, let
     alone one that can be sustained. Rather than focus on talks that may
     not produce a deal, then, the United States should place far more
     emphasis on supporting democracy and human rights in Iran. A
     democratic Iran would likely drop state support for terrorism and
     end its interference in the internal affairs of Arab countries such
     as Iraq and Lebanon, improving stability in the Middle East. And
     although Iran’s strongly nationalist democrats are proud of the
     country’s nuclear progress, their priority is to rejoin the
     community of nations, so they will likely agree to peaceful
     nuclearization in exchange for an end to their country’s isolation.

     The United States could assist democratic forces in Iran by
     providing money and moral support. It could fund people-to-people
     exchanges and student scholarships; support civil society groups
     providing assistance to Iranian activists; work closely with
     technology companies such as Google on how to transmit information
     to the Iranian people; and overhaul Voice of America’s Persian News
     Network, where journalistic standards have suffered under uneven
     management. It could also raise human rights abuses in every
     official meeting with Iranian officials, such as the ongoing nuclear
     negotiations, and bring Iranian rights violations to the United
     Nations and the International Court of Justice. Iran’s supreme
     leader, Ayatollah Ali Khamenei, understands the danger of a popular
     revolution in his country and has done everything in his power to
     prevent it. If the United States is going to take a risk, it should
     aim not for a partial, insecure nuclear arrangement but the best
     return possible -- a democratic Iran.

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     Patrick Clawson is director of research and head of the Iran
     Security Initiative at The Washington Institute.

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