FROM THE ANTHOLOGY: Iran and the Bomb

Adjusting to Sanctions

Courtesy Reuters


The American-driven sanctions against Iran were meant to transform the "backlash state" into a law-abiding, cooperative, and constructive member of the world community. Washington expected trade and investment restrictions to cripple the productive base of the economy and curtail Iran's ability to support international terrorism or acquire sophisticated military hardware. Economic hardship and fiscal austerity would demoralize the population and turn it against the regime. And domestic popular discontent and external political isolation, Washington hoped, would bring the clerical leadership to its senses.

Inadequate hard data make an objective assessment of the sanctions difficult. Supporters of the policy claim that the cost to Iran has been immense, even greater than expected; critics dismiss the policy as self-defeating and divisive. What is certain, however, is that the economic, psychological, and political impact of the American sanctions has not produced the anticipated results or transformed the regime. Although the comparison may seem invidious, the Iranian economy under sanctions is in certain respects healthier and more stable than many developing economies the United States has assisted. Militarily, Iran appears to be stronger now than in 1989, and is certainly less vulnerable than some U.S. allies in the region. The embargo has isolated Washington rather than Tehran.

Iranian officials concede that the boycotts have caused some economic "difficulties" but do not give details of their nature or magnitude. The affected areas, however, are not hard to identify. Finding non-U.S. buyers for Iranian oil and non-Americans to invest in Iran's offshore oil and gas fields has not been cost-free. Banned imports from the United States have been obtained through third parties at extra cost or substituted for from lower-quality sources. Replacing or renovating defense, industrial, and oil equipment based on American components has been more expensive or less satisfactory. Rescheduling of short-term arrears on debt to other countries has taken place under less favorable terms. Some foreign investors have shied away from lucrative projects in Iran under the threat of U.

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