They can work

In this case, they are displacing military action against Iran

Balatarin
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They can work
by Mehrdad Emadi
05-Jul-2010
 

With the most recent round of UN-approved sanctions and seemingly more restrictive additional sanctions introduced by the European Union, Canada, Japan and Australia, there appears to be renewed interest in the effectiveness of sanctions in altering the behaviour of the Islamic Republic of Iran concerning the atomic energy programme of the regime and its real purpose. In this note, I try to explore some of the less often discussed but I hope not less appreciated possible effects of sanctions. 
 
Stated expected effects, sanctions will raise the cost of developing industrial capacity as development of the energy sector in Iran.  Given that 80% of government’s budget and 70 percent of investment in industrial projects come from oil revenues which are under the monopoly of government and now significantly transferred in management to Islamic Guards, Sepah, sanctions will result in a fall in the revenue of government reducing its financial capability to pursue and complete its nuclear energy programme which is suspect of having the capacity to develop military potential for weaponization.  This line of analysis advocates that in light of a very ambitious long range missile programme which already has the assumed capability of delivering a load, be it very small in weight, to most of southern Europe, world community, in the interest of collective security should use sanctions to cause a substantial reduction in the income earning of the present leaders and their security force Sepah which in recent years has expanded its presence in the oil, gas and almost all layers of the economy.  Targeting of the four industries; energy, banking, transport and insurance are seen as weakening of the four pincers which Sepah had developed to complete the nuclear programme to its asserted militarized phase.   
 
What we may see in reality, sanctions are likely to be used by Sepah as an opportunity to use the veil of foreign threat and national security to complete their grip on the economy and increase their revenues from their rent-seeking activities and at the same time displace their private sector competitors.  In reality, sanctions may be used to expand Sepah’s economic empire and its share of the economy. At the same time, sanctions if policed effectively will very quickly see a fall in the growth rate of the economy.  Combined with the poor management skills of Sepah, sanctions could push the Iranian economy into negative growth rate within 12-18 months.  Industrial production is estimated to decline by 15 percent while unemployment rising by as much as another 5-7 percent on top of the existing official 15 percent (22% unofficial).  In a young society where around 70% are under 30 years old, this could mean an unemployment rate of 35% amongst those enter the job market for the first time. 
 
Sanctions are certain to increase cost of conducting trade to the economy, in this case by as much as 50% in some sectors.  In the Iranian economy where imports use 88% of oil revenues, a rise in the cost of trade will be transferred to higher domestic prices.  Those on fixed income, i.e. salaried and waged households will be most affected since they cannot adjust their prices, that is, the value of their labour accordingly.  An accelerating inflation rate is almost certain do deplete the last nuggets of savings of the middle classes and push a large segment into the low income category. 
 
As sanctions have often shown to produce, health spending and education are amongst the first services which governments cut their budgets whilst increasing the resources available to the security and intelligent services.  Low income and middle income families are most dependent on the public sector provision of health and education services in Iran. It is more than likely that access and availability of these two basic services will be affected negatively.  Entitlement to basic health and education are crucial to the development of a healthy and
 
So, why sanctions are used? They are preferred now since they are aimed to deal with the rising influence of Sepah command that has been transferring massive segments of the economy under its ownership and encouraging the mushrooming of corruption and systemic implementation of rent-seeking behaviour in foreign trade and energy sectors and banking.  The rising financial power of Sepah is understood to have significant implications for the military and nuclear programmes approved by the leadership who wishes to see completion of control in the economy as well as over the politics of the country.  Going back to business-as-usual not only actually will make a mockery of human rights of the citizens inside Iran, but may also have serious consequences in dealing with future risks under a new power structure in Islamic republic of Iran.
 
Sanctions are and always will have a negative effect on the wellbeing of the citizens of the targeted country but sometimes, they can accelerate positive change and bring about transition to a more participatory policy making framework of governance.  They are the softest of the hard power tools or the hardest of the diplomatic language.  In this case, they are displacing military action against Iran and those who talk about positive engagement may wish to pause and think about the behaviour of the leadership in the last 12 months and even in last 13 years when the Supreme Leader has blocked any attempts to meaningful and lasting reform.  The dead end is one of the making of policies pursued by the leadership and is neither the wish of the West nor the citizens of Iran who wish to pursue a fruitful life and live in peace.

AUTHOR
Dr. Mehrdad Emadi is Economic advisor to the European Union.

Balatarin
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IranFirst

The sanctions are working -see the list

by IranFirst on Mon Jul 05, 2010 05:58 PM PDT

A good article .

----------------------------------

The sanctions are working (see the list).

//iranian.com/main/news/2010/07/05/foreig...

 

The only flaw with the current sanctions is that they are not tied to
human rights violations of IRI. The un-elected criminal regime of IRI
should not come out of any of these sanctions unless the murderers of
Iranians ( ruling Mulahs and IRGC and basij) are brought to justice.
The human rights violation reason/tie-in can be included/added to the
uni-lateral sanction that have already been announced (or will be
announced soon) , by EU, US, Japan,...


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i_support_khamenie

Santions help Iran per Ahmadinejad

by i_support_khamenie on Mon Jul 05, 2010 01:20 PM PDT

So Shamadinejad why weren't you asking the UN in your New York address to impose sanctions on Iran and hence help Iran.

To all "conspiracy theory" folks, with a few loose screws in their head: Iran does not secretly have any nuclear weapons....iran to this date imports the engines used for the cars produced in Iran.

Iran is good at cabinet work for cars but not the engine, mechanics and electrical parts...

Now there is talk IranAir would get refueled in foreign airports. Wonder what Ahmadinejad's answer is to that?


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default

Art + tillery

by Doctor X on Mon Jul 05, 2010 11:52 AM PDT

The emphasis is on "Art"

Tillery refers to the old pastime of Tilleh bazi.

 


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AMIR1973

Ayatooleh Messed Up Yazdi

by AMIR1973 on Mon Jul 05, 2010 11:24 AM PDT

After 8 years, IRI Rapists couldn't do a damn thing against the most incompetent military commander in history, i.e. Saddam. On the other hand, the U.S. defeated that Arab nonsense in just 3 weeks--twice (1991 and 2003). Compare victory in 3 weeks to no victory in 8 years, and you'll see that not even nuclear testicles could do a thing for you. Sorry  :-(


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pastor bill rennick

Brother Amir1973, that's a good one!

by pastor bill rennick on Mon Jul 05, 2010 11:18 AM PDT

The key to winning a symmetric war these days is how quickly one is able to detect, identify, and respond. 

What brother Ayatollah Mesbah Yazdi fails to realize is that by the time the forces of IRI decide to drop their aftabeh and launch their
Al-Hossain missiles, the US bombs will have already been dropped and annihilated them criminals.


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AMIR1973

My sources tell me...

by AMIR1973 on Mon Jul 05, 2010 11:02 AM PDT

That the Ayatooleh Messed Up Yazdi (along with the other West-residing IRI Groupies on this website) are willing to put their own testicles on the line for Emam-e Zaman. 


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pastor bill rennick

Brother Ayatollah Mesbah Yazdi

by pastor bill rennick on Mon Jul 05, 2010 10:53 AM PDT

Are the IRI missiles like the ones brother Sad'dam used during the Desert Storm, see the cartoon below?

//politicalhumor.about.com/library/images/bli...

You would need 1000s of camels and camel testicles to launch your Al-Hossain & Al- Hassan missiles at the American bases? Do you have them? Please elaborate!

 

 

 


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Abarmard

Clueless Author

by Abarmard on Mon Jul 05, 2010 10:50 AM PDT

Intentionally or unintentionally.


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pastor bill rennick

Sanctions won't work brothers and sisters...!

by pastor bill rennick on Mon Jul 05, 2010 07:00 AM PDT

It has never worked before! But bombing has worked! Just look at the west and east of Iran. Is Sad'dam there? No! Is Mulla Omar there? No! Now, if the American liberating forces bomb the mullahs then they won't be there either! Of course some bacheh mullahs will continue making troubles for the invading Army but so what? Mullahs and their nochehs will continue jofftak andazee like a bunch of donkeys but eventually they must go and completely destroyed!

Trust me bombing does work!


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amgw4

You people didn't know this was an Israeli propaganda website?

by amgw4 on Mon Jul 05, 2010 06:44 AM PDT

Niloufar and AY, this is not an Iranian website. It is an Israeli propaganda website which has taken the domain name Iranian.com for their use. There are about 10-20 rabid zionists on here spewing the most extreme of AIPAC propaganda on here daily. The few Iranians who come here know this, but we come any way because occasionally you will find an interesting video or story on Iran.

 


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AMIR1973

alirezag (aka amgw4): Completely delusional

by AMIR1973 on Mon Jul 05, 2010 06:39 AM PDT

"Boom in Iran": I suppose that refers to the fact that IRI's GDP per capita is lower than that of economic powerhouses like Botswana and Gabon. In related news, I hear IRI is about to land a man on the moon too  :-)


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AMIR1973

If West-residing IRI Groupies are upset, something must be right

by AMIR1973 on Mon Jul 05, 2010 06:37 AM PDT

Cheerleaders of the biggest killer of Iranians, i.e. the IRI, and West-residing IRI propagandists are a little miffed that the oil money trough may finally start being impacted. In the true nature of hogs, these IRI Cyber Groupies are understandably upset that the gravy train seems to be in the initial steps of beng derailed.


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amgw4

Completely incoherent

by amgw4 on Mon Jul 05, 2010 03:43 PM PDT

The sanctions prevent foreign energy companies from doing business with Iran and make it hard to move money out of Iran. There is currently a boom in Iran as people rush to replace contracts they had with foreign companies with new contracts with Iranian companies. To give an analogy, it would be like Germany/Japan/China imposing sanctions on the US. You woudl see the US economy boom like never before. In addition, wealthy Iranians are forced to take the money they had put into European banks out and put them back into Iranian banks, because they worry the European banks will freeze access to their funds. It's much harder for rich Iranians who make money in Iran but keep their money outside of Iran. In addition, they will probably have no effect on the revolutionary guard because although theoretically western companies/banks are supposed to bar only contacts with RG, in reality they do not want to be responsible for distinguishing RG/nonRG and so will likely end all activities with Iran.

I wish the author would make specifically reasoned arguments, i.e. this will cause this will cause this, so you can criticize in detail, but all he does is make general statements followed by absurd predictions. But it's very sad to see the idiots advising people like the US and EU. This person is a yes man, basically tells his bosses what he thinks they want to hear for money, but he is not doing his job. (Or maybe he is a brilliant Iranian agent who pushes for sanctions that will be most advantageous to Iran, in an attempt to appease people pushing for military action.)

 


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Niloufar Parsi

what garbage

by Niloufar Parsi on Mon Jul 05, 2010 05:56 AM PDT

it should have come with a 'stench' warning.


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Fred

Right on the money

by Fred on Mon Jul 05, 2010 03:20 AM PDT

What you state is way over the head of those who like to reform the unreformable Islamist Rapists while all power equations stay intact also disregarding the fact that Iran and Iranians can't take Islamists' innate barbarity any more.

 

This part of your opinion piece says it all:

“[sanctions]They are the softest of the hard power tools or the hardest of the diplomatic language.  In this case, they are displacing military action against Iran and those who talk about positive engagement may wish to pause and think about the behaviour of the leadership in the last 12 months and even in last 13 years when the Supreme Leader has blocked any attempts to meaningful and lasting reform.”


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