Iran Rouhani

Iran Uses Economic Sanctions To Become Third Biggest American Adversary

In 1953, after Iran’s democratically elected Prime Minister Mohammad Mosaddegh threatened to limit the oil reserve control of the Anglo-Iranian Oil Company (now BP, British Petroleum) and threatened to nationalize the country’s oil industry, the United States CIA put “Operation Ajax” (“Operation Boot” in the United Kingdom) into action. This successful coup d’etat put the Shah of Iran back into power and reestablished Iran’s oil policy in a favorable direction for Anglo-American interests. Thus began US involvement in attempting to control the Iranian government that holds approximately 10 percent of the world’s oil reserves and is “too close for comfort” to America’s closest ally in the Middle East with its vehemently anti- Israel position.

America’s Desire To Recapture Control Of Iran

The Western puppet regime of the Shah stayed in power in Iran for 26 years, until the 1979 Iranian revolution deposed the Shah and Grand Ayatollah Ruhollah Khomeini took over, establishing the Islamic Republic. Since then, the United States has been tightening the economic and political noose around Iran to varying degrees. In response to the 1979 revolution, President Jimmy Carter placed economic sanctions on Iran. Put another way, he engaged in “economic warfare,” with the country. These sanctions included the freezing of assets, including property.

In 1987, President Ronald Reagan placed a second round of sanctions that were expanded in 1996 to include any firm doing business with Iran.

A third round of sanctions in 2006 were expanded to encompass banking and insurance transactions, shipping and web-hosting services in addition to the preexisting sanctions on oil, gas, the export of refined petroleum products and any dealing with Iran’s Islamic Revolutionary Guard.

Trump’s Intensification Of Iran Sanctions

These already crippling sanctions were expanded for the fourth time in September of 2019 after President Trump withdrew from the Iran Nuclear Deal and the country was subsequently alleged to have perpetrated an attack on a Saudi oil field. These new sanctions specifically targeted the Iranian National Bank with the US threatening to sanction “any country that purchases oil from Iran.”

This type of sanctioning or “economic warfare”, isn’t unique to Iran. Currently, America has about 8,000 (7,967 as of March 2019) sanctions in place around the world. While this is a lot, under President Bill Clinton it’s estimated that around 40 percent of the world’s populations (2.3 billion people) were subjected to some form of US sanctions. Nonetheless, given the tumultuous nature of the Middle East, Iran’s oil reserves, and the country’s strongly anti-Israeli stance, Iran is undoubtedly currently the biggest target for sanction by the US.

What Is America’s Sanctions Strategy?

America uses these sanctions to disrupt not just Iran’s national government but to impact all areas of the affected country, typically with a desire to cause unrest in the populace and change the regime. This economic strangling in place of an active or sponsored military coup d’etat has been the preferred method for the US government for decades now. Naomi Klein refers to the disruption of both the economy and the sociopolitical environment as “the Shock Doctrine” and is explained in detail in her book by the same name.

While “economic warfare” had been practiced for decades, the marriage between the economy and the sociopolitical aspect of a country began to take full shape in Indonesia and Greece in the 1960s. The strategy was fully realized by Milton Friedman and his “Chicago Boys” who assisted the CIA in the overthrow of socialist President Salvador Allende in Chile in 1973 through a combination of economic and sociopolitical manoeuvring and subversion. The successful coup resulted in the death of the Chilean leader. He was replaced with the American-endorsed dictator General Augusto Pinochet. Pinochet promptly privatized all of what Allende had nationalized. This allowed Western multi-national companies to bilk the country of both resources and money. Under the guise of “free-market capitalism”, this is the desired end game of Friedman’s plan and the US sanctions philosophy.

Overthrow, Replace, Plunder: Different Justifications, Same Strategy

Under the guises of “anti-communism” and the Drug War, Friedman’s ideas became the template for most of Latin America or anywhere America determined a threat. Today, “anti-terrorism” has been added to the list of reasons to enact this model of economic warfare.

Often requiring some element of military force to be effective, economic warfare prevents growth, prohibits manufacturing and causes businesses to fail which results in higher unemployment. Sanctions and economic strangulation also squeezes the middle class. Ironically, while these sanctions are designed to punish a regime or government, a disproportionate amount of the burden of them lands at the doorstep of the poorest and most vulnerable.

The efficacy of sanctions or this type of “economic warfare” remains questionable. In almost every case, some form of the military advisor or involvement was required to see the sanctions fully realized. The military involvement was either sanctioned and sponsored by America or was direct use of American troops. For example, during the Salvadoran Civil War from 1979 to1992, the US-supported and financed the creation of a junta to change the political environment. More recently, 13 years of international sanctions against Iraq in the 1990s and early 2000s starving and slowly killing hundreds of thousands of its population still ended up with the 2003 US-led invasion.

Iran’s Economic Nosedive And Resulting Civil Unrest

In Iran, the Milton Friedman boilerplate of strangling a country into submission by using both the economy and sociopolitical measures has seen the country spiral into an economic nosedive. This, in turn, has led to civil unrest. While these current sanctions were meant to bring Iran to the negotiating table to discuss their nuclear program, it’s not working. According to the NY Times, “the Iranians may be trying to reassemble the elements of the nuclear program and they have not yet re-engaged in negotiations. But the uprisings are soaking up political time and attention.”

These most recent sanctions on Iran have pushed Iranian citizens into the desired result of open protests, but the Iranian government and military have responded differently than other countries have in the past. Instead of ceding ground they have responded with even more ruthlessness. In November of 2019, Iran’s Supreme Leader Ayatollah Ruhollah Khomeini summoned his forces to “do whatever it takes” to quell the current uprising. They did this by opening fire on unarmed Iranian protesters. While both the US State Department and Amnesty International put the death toll in the hundreds, the Iranian Interior Ministry reported to Reuters that the crackdown has led to a death toll closer to 1,500.

Sanctions Are Hurting Iranians More Than The Iranian Government

It seems as though the traditional model of sanctions and “economic warfare” is working as designed but not having the desired outcome of regime change. While citizens feel the brunt of them, they have only strengthened the resolve of Iranian hard-liners. They argue that “any negotiation” with America is futile because all the US wants is regime change and is vociferously “anti-Islam.” Moreover, because of America backing out of the nuclear deal, Iran’s government can often successfully argue that America’s government is inherently untrustworthy.

No one anticipated the resolve of the Iranians. Despite negative economic growth, the halving of Iran’s oil output and the skyrocketing cost of gas for its citizens that led to the current uprising, Iran’s leaders show no sign of acquiescing to American demands or caving into international condemnation and pressure.

Trump Is Strengthening Iran’s Hardliners

Almost unwittingly, combined with everything else, these latest sanctions by President Trump have almost made America an ally in Iran’s “quest for political dominance.” While these crippling sanctions continue to force Iran towards the edge of economic collapse they’re also leading Iran to align itself with the two largest foes of America: China and Russia.

As Iranian leadership continues to spout anti-American rhetoric, its citizens continue to suffer and the economy marches toward certain implosion, the Iranian Navy is preparing for four days of naval exercises with America’s two other adversaries, Russia and China.

It’s fair to say that Iran is facing its toughest period since the 1979 revolution. It’s also fair to say the current situation is not America’s desired result of the ongoing economic sanctions.