No. 241

SANCTIONS: SMARTER THAN SHOOTING

STONE the crows! Could sanctions be superior to sabre rattling?

Sanctions got a bad name in the 1990s when Saddam Hussein managed to convince public opinion in the West that the US was to blame for the damage they did to Iraq.

But it seems they have, finally, worked on Iran, which appears to have agreed to a 15-year pause on technology to weaponise its nuclear program.[i]

If so, it is good news indeed. The West has no stomach for war over Iran’s nuclear ambitions just as NATO is not really prepared to fight Russia over Ukraine – the 5000 strong ready-response force is more a symbolic than strategic if the Russians really rolled.[ii] So a great deal depends on the success of sanctions – deny and deprive is far better than destroy and despise as Churchill might have said.

Sanctions certainly pushed Tehran towards the table. Freezing assets, banning banking ties and ending trade hurt the Iranian economy but EU and US bans on oil exports was the slammer, with income dropping from $US95bn in 20111 to $US $74bn in 2012.[iii] According to the World Bank, sanctions drove a 5.8 per cent decline in GDP in 2012-13 and 1.7 per cent in 2013-14. And yet inflation is running at 16 per cent. [iv]

Youth unemployment in Iran is over 20 per cent and just 35 per cent of people participate in the formal economy. With 60 per cent of the population under 30, a rotting economy offering no opportunity for the young obviously means strife for any government.[v] Nor does the government have much to room manoeuvre in managing economic decline, with 76million people on the welfare roll just about the entire population is eligible for cash grants.[vi] In essence, the government is struggling to keep the lights on, literally – demand for electricity is growing by 6 per cent per annum while capacity is increasing by a third of that.[vii]

It isn’t just sanctions and generalised mismanagement that make life miserable in Iran. The country is a socially controlling kleptocracy, with the clerisy’s Revolutionary Guard controlling a third of the economy and its militia suppressing dissent and enforcing dress codes on the streets.[viii] And, while there is a choice of candidates in presidential elections, they are all pre-approved by a council of religious leaders.

The obvious solution to Iran’s problems is for the state to stop bossing people about, powerful people to move away from the trough and government grow the economy. President Hasan Rouhani can’t do much about the first two; Revolutionary Guard leaders actually benefit from sanctions by controlling smuggling.[ix] But he can look to expanding the economy by securing an end of sanctions. There is talk that this could catalyse an astonishing 8 per cent in annual economic growth.[x]

If the nuclear deal holds it will be a big win for sanctions, which a decade back were considered to have failed against Iraq, basically because in a globalised world trade would always find a way to flow, wheat for weapons, of disgraceful memory, being an obvious Australian example. [xi]

Robert Pape set out the real politic case against sanctions in an influential paper which examined their effectiveness throughout the twentieth century and concluded the evidence is against their breaking nations’ will:

Pervasive nationalism often makes states and societies willing to endure considerable punishment rather than abandon what are seen as the interests of the nation, making even weak or disorganised states unwilling to bend to the demands of foreigners. In addition, states that have modern administrative capabilities can usually mitigate the economic damage of sanctions through substitution and other techniques. Finally, even when such capabilities are lacking and ruling elites are unpopular they can still protect themselves and their supporters by shifting the economic burden of sanctions onto opponents or disenfranchised groups.[xii]

Which is what happened to ordinary Iraqis under Saddam Hussein, when it seems sanctions worked way too well, with tens of thousands of deaths due to embargoes on everything from food to medicine.[xiii] That people perversely blamed the US for sanctions, instead of the evil dictator who created the need for them, obscured the obvious – that sanctions created far less misery than the war that followed.

Even so, the sanctions that have brought Iran to the table now are much smarter, calculated to do economic rather than humanitarian damage.[xiv] This makes smart sanctions, easier to sell; as Daniel Drezner puts it they “can be imposed indefinitely with minimal cost … they clearly solve the political problem of ‘doing something’ in the face of target state transgressions”.[xv]

And in Iran’s case, it seems what they did was good enough. Impeding (let alone stopping) Iran’s nuclear weapons program would be very difficult, requiring a strategic air campaign rather than just precise hits on underground nuclear facilities.[xvi] While the US talks tough about a surgical strike with super-duper bunker-busting bombs, the Crows have heard that all before. [xvii]

Inevitably there is nothing to stop Tehran delaying and distorting the in-principle process now agreed.[xviii] But sanctions provide a much more nuanced response than bomb/not bomb – in this case forcing the regime to acknowledge that ordinary Iranians are sick of the price they are paying for their government’s nuclear ambitions. And if the Iranians fudge then sanctions will start again (although this would take time) because nobody has a better idea. Republican opponents of the deal say there is no trusting Tehran and the sanctions should stay in place, which rather makes the case.[xix]

Sanctions, they’re better than shooting.


 

Speeches written, cases made. Faster and cheaper than your agency. Stephen4@hotkey.net.au

 


ENDNOTES

[i] ABC/AFP “Iran nuclear deal: President Hassan Rouhani says agreement could open ‘new page’ with world,” ABC News April 4 @ http://goo.gl/RGQec6 recovered on April 5

[ii] Ben Farmer, “Russian tensions could escalate into all-out war, says NATO general,” The Telegraph February 20

[iii] BBC News, “Iran nuclear crisis: what are the sanctions,” March 30 @ http://goo.gl/7JifHF recovered on April 5

[iv] Oxford Analytica, “Iran: budget signals caution over sanctions relief,” March 20, 2015 recovered on April 5

[v] World Bank, “Iran Overview,” @ http://goo.gl/n240Wa September 30 2014 recovered on April 5

[vi] Oxford Analytica ibid

[vii] Monavar Khalaj, “Electricity shortfall drains Rouhani’s growth drive,” Financial Times, February 9

[viii] Mark Gregory, “Expanding business empire of Iran’s Revolutionary Guard,” BBC News, July 26 2010 @ http://goo.gl/8Znixp recovered on April 5, Pomegranate, “Fashion Police,” The Economist, May 5 2013 recovered on April 5

[ix] Scott Shane, “After agreement, analysts weigh deal’s effects on Iranian politics,” New York Times April 3

[x] Norman Laurence, “Iran’s economy stands to get boost in nuclear deal reached,” Wall Street Journal, April 3 2015

[xi] Hossein Askari et al “US economic sanctions: lessons from the Iranian experience,” Business Economics, 36 3 (July 2001) 7-19

[xii] Robert A Pape, “Why economic sanctions do not work,” International Security 22 2 (Autumn 1997) 90-136, 93

[xiii] David Rieff, “Were sanctions right?” New York Times, July 27 2003

[xiv] Eric S Edelman et al, “The dangers of a nuclear Iran,” Foreign Affairs, 90, 1 (Jan/Feb 2011)

[xv] Daniel Drezner, “Sanctions sometimes smart: targeted sanctions in theory and practice,” International Studies Review 13, 1 (March) 2011 96-108, 104

[xvi] Matthew Kroenig, “Time to attack Iran,” Foreign Affairs, 91,1 (Jan/Feb 2012)

[xvii] Julian E Barnes and Adam Entous, “Pentagon upgraded biggest ‘bunker buster’ bomb as Iran talks unfolded,” Wall Street Journal, April 3

[xviii] Suzanne Maloney, “Marathon Iran nuclear talks yield a milestone agreement but the deal is not yet done,” Brookings Institute, April 2 @ http://goo.gl/ooxzAt recovered on April 5

[xix] Burgess Everett, “Fate of Iran bill rests with Democrats,” Politico, April 2 @ http://goo.gl/Bv432n recovered on April 5

'2012