Iran V: Sanctions
Competition
AHC
March 16
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, 2012 Akbar Hashemi Rafsanjani said the Islamic Republic was under unprecedented global pressure and that the government was wrong to dismiss the sanctions as no threat to the economy.141 Mojtaba Vahidi, a former top-level manager who served in Iran's finance and industry ministries for more than 20 years, observed that “the economic crisis [that Iran is] witnessing today is a direct result of the sanctions—and Iranian officials who say otherwise are fooling themselves.”142
Iran’s Limited Oil Export Income and Export Vulnerability Iran’s broader economic vulnerabilities are compounded by the fact that its oil revenues have propped up much of the Iranian economy in the past, but have always been limited compared to total national requirements. Figure V.10 provides additional data that show that Iran’s oil revenues are not high in per capita terms, and are only a fraction of the per capita oil earnings of Qatar, Kuwait, and the UAE. To put such data in context, even before the new rounds of sanction in late 2011, the CIA estimated that Iran’s per capita income ranked only 101st in the world while a neighbor like Qatar ranked 1st and the UAE ranked 10th even before the new round of sanctions.143 This mix of economic weak nesses and vulnerabilities potentially makes the Iranian threats to “close the Gulf” described in earlier chapters (and repeated in late 2011 and early 2012) a contingency that would be more damaging to Iran than to any of the Southern Gulf exporting states. Iran’s economy has long been marginal in meeting the needs of its people. The Iranian government cannot support its people without food, fuel, gasoline, and spare parts imports. It cannot maintain or expand its energy exports if it is at war or outside states refuse to deal with it, and the situation is becoming steadily more difficult for Iran even without the crisis that any Iranian military action that caused a major cut in traffic through the Gulf would cause.
141
Reuters, “Iran’s Rafsanjani chides Ahmadinejad over sanctions”, September 14, 2010. http://af.reuters.com/article/energyOilNews/idAFLDE68D06L20100914?sp=true 142 The Wall Street Journal, “Iran's Economy Feels Sting of Sanctions,” Fassihi, Farnaz, October 12, 2010. http://online.wsj.com/article/SB10001424052748703735804575535920875779114.html 143 CIA World Factbook, 2012, https://www.cia.gov/library/publications/the-world-factbook/geos/ir.html, accessed January 6, 2012.
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