THE BLOG

Iran Sanctions: Collective Punishment

Watching the third presidential debate between President Obama and his republican challenger Mitt Romney, I was struck by the sheer indifference of both candidates to the debilitating impact of sanctions on the Iranian people. I found it highly ironic (if not totally disingenuous) that while they both passionately spoke of supporting the democratic aspirations of people across the Middle East, including Iran, there was hardly any trace of concern for tens of millions of ordinary Iranians who are struggling to cope with the absolute terror of spiraling inflation, collapsing currency and unfathomable economic uncertainty due to the crippling sanctions of the West.

Both candidates were gripped by much fanfare and exuded animation when they spoke of 'supporting the Iranian people' during the widespread post-electoral protests in 2009, but there was a deafening silence over the fate of the very same people they so professedly admired and respected when the issue of sanctions came up. Although there was a consensus over the heavy toll of sanctions, both candidates couldn't hide their intentions to further push the envelope -- until the Iranian regime acquiesces.

The ironies of the debate further compounded my astonishment at the recent recipient of the Nobel Peace Prize award, the European Union. It was perhaps as unbelievable as the EU winning a Nobel Prize in economics would have been, with the eurozone in total disarray. After all, the EU is responsible for much of Iran's economic isolation, for there has been no significant economic relationship between Washington and Tehran for more than three decades.

To further tighten the squeeze around an already beleaguered economy, the newly-minted Nobel Laureate has imposed an additional set of sanctions against Iran's gas exports as well as financial institutions, making any kind of transaction -- whether commercial or humanitarian -- between Tehran and much of Europe almost impossible. This came just days after the momentary free fall of the Iranian rial, prompting unprecedented pockets of protests in Iran's commercial heart, the Bazaar.

Although touted as 'targeted' measures against Iran's nuclear and ballistic programs, the sanctions are ruthlessly eroding the very foundations of a $900 billion economy, upon which almost 75 million Iranians depend for daily survival. In the language of international law, we are speaking of 'collective punishment.' Since Western sanctions directly hit Iran's main exports, namely oil and gas, and shut out Iran's major financial institutions, including the Iranian Central Bank (banke-e-markazi), from mainstream global financial channels, it comes as no surprise that they are affecting Iranians of all walks of life, especially the poor and the majority lower-middle class population.

Iran is finding it increasingly difficult to access international markets for purchase of even the most basic commodities, from food to clothing and medicine, as it struggles to process multi-billion oil deals in foreign currencies. It is already forced to engage in barter deals with countries such as India and China, which are crowding out Iran's large domestic industrial base. Due to financial sanctions and growing American pressure, even regional trading partners such as the UAE and Oman have increasingly denied Iranian traders short-term loans, credit financing, and banking access, while more liquid traders are forced to rely on unscrupulous financial intermediaries and/or highly expensive payment schemes to conduct trade transactions.

Sanctions on major Iranian ports and shipping companies (allegedly affiliated with the IRGC) are also responsible for a dramatic drop in cargo traffic, with the government forced to undertake emergency food purchases to prevent mass starvation. To make matters worse, EU sanctions have also prevented global insurers from providing coverage for Iran's oil tankers, complicating Tehran's ability to sell its oil to even key Asian costumers such as Korea and Japan.

The real depth of the humanitarian impact of these sanctions is yet to be ascertained, but no less than the UN General Secretary Ban Ki Moon has already expressed his consternation by recently stating, "The sanctions imposed on the Islamic Republic of Iran have had significant effects on the general population, including an escalation in inflation, a rise in commodities and energy costs, an increase in the rate of unemployment and a shortage of necessary items, including medicine."

When a deadly earthquake hit Iran's northwestern provinces in early August, causing massive casualties and infrastructural damage, many international aid agencies as well as members of the Iranian Diaspora found it almost impossible to make direct humanitarian donations. The problem is that many essential products -- from medicine and advanced medical equipments, to even diapers as well as agricultural inputs -- could fall under the notorious 'dual-use items and technology' category. Worryingly, inflation is said to have surpassed the 25 percent threshold. By June, the price of chicken tripled, while that of vegetables increased by almost 99 percent, grain by 56 percent, bread by 33 percent, and fruits by 67 percent. These figures are set to further deteriorate in coming months, because much of Western sanctions took effect only by July.

Despite hints at possible one-on-one talks between Iran and the U.S., specifically after the November presidential elections, it is far from clear whether Obama (or Romney) would ever engage Tehran in a substantive and sustained kind of diplomacy that befits the complexity of the ongoing nuclear conundrum. What is clear is that the damage has been done, the Iranian people are suffering dearly, and it will take years, if not decades, to reverse the misery, hunger and hardship brought about by the sanctions. Even if there will be a breakthrough in upcoming negotiations, the current regime of sanctions in place will take a considerable amount of political will, legal amendments and time to ease.

Personally, I can't help but draw a heart-wrenching comparison between those nostalgic and hopeful moments I spent in Tehran back in the spring of 2009, when the country was drenched in an election fever and President Obama promised to reach out to the Iranian nation, on one hand, and today's utter misery, cynicism and mutual-hostility in a winter of destructive sanctions, which is bringing two great nations ever closer to confrontation, on the other.