Iran V: Sanctions
Competition
AHC
March 16
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, 2012 issue basis. Ankara will continue to position itself as a growing regional power and seek to extend its commercial and diplomatic ties as well as its broader appeal throughout the Arab world. This does not mean that Turkey will not support efforts to end Iran’s nuclear programs and limit its political and military influence in the region. It does mean it is important for US policy makers to understand that the freelance foreign policy in Ankara does not represent any real allegiance to Iran. In fact, both countries recognize that they are long-term rivals, and that nearterm cooperation is driven by expediency and immediate self-interest. Therefore, the US should expect Turkish compliance with UN sanctions, but anticipate some pushback on other, less important, aspects of its regional agenda.
The Effect of Sanctions Despite past Iranian rhetoric to the contrary, the existing sanctions are hurting the Iranian economy and their impact will increase steadily over time if they are widened and applied with any consistency. There is no way, however, to be certain of their political and economic effect, or whether what is an escalating process of confrontation between Iran and the US, Europe, Arab Gulf states and other countries will lead Iran into new forms of political and asymmetric warfare or serious clashes or conflict. Iran has made far franker admissions that sanctions are having a major impact. In a rare declaration by a top Iranian official, President Ahmadinejad declared before Iran’s parliament in late 2011 that the current sanctions against Iran were “the heaviest economic onslaught on a nation in history,” adding “every day, all our banking and trade activities and our agreements are being monitored and blocked.”129 Given the growing tension between President Ahmadinejad and Ayatollah Khamenei, these statements should not be taken at face value. As antagonism between Iranian leadership grows, the increasingly marginalized President may be willing to criticize a leadership he sees as political rivals. Still, as only one indicator, Iran’s currency, long held artificially high by a regime that could afford to subsidize it, lost 35 percent of its value between September 2011 and early January.130 The basic economic data on Iran are notoriously uncertain, and far too much analysis focuses on macroeconomic estimates for the total economy that do not provide any reliable way to estimate the impact of sanctions in any detail. There is no reliable way to measure the GDP in purchasing power parity terms, income distribution, per capita income in real terms, inflation, poverty levels, real and disguised unemployment, and the impact of corruption. There is no reliable way to measure the impact of a corrupt state sector whose spending is distorted by unreported shifts in spending to the military and Islamic Revolutionary Guards Corps, a corrupt religious establishment and its “charitable” Bunyods, spending on “civil” nuclear programs, and the real world allocation of the money the state has spent of subsidies and income supplements. Moreover, Iran may face far more drastic sanctions before the end of 2012. The US has put pressure on the international banking system that could potentially prevent Iran from using the Society for Worldwide Interbank Financial Telecommunication ("SWIFT") which operates a
129
“Iran’s growing state of desperation”, Fareed Zakaria, FareedZakaria.com, January 4, 2012.
130
“Iranian currency slides under latest U.S. sanctions”, Thomas Erdbrink, Washington Post, January 2, 2012.
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