SEATTLE, Washington — Despite the international crisis that the COVID-19 pandemic has created, American sanctions against Iran and Venezuela remain in place. These sanctions make it much more difficult for the two nations to engage in international trade at a time where access to international markets is essential to provide for the medical needs of their people. In the last few weeks, Washington has elected to tighten these sanctions amid the growing international healthcare crisis, an act many critics fear is intended to maximize internal pressure on the two governments and stir regime change.
Impacts of Sanctions on the Venezuelan Economy
Venezuela has remained under sanctions since the Obama administration labeled it a national security threat in 2015. The Center for Economic and Policy Research published a study showing that the sanctions imposed on Venezuela accounted for 40,000 deaths and the loss of at least $6 billion in oil exports between 2017 and 2018. Although the United States insists these sanctions do not place restrictions on the imports of medicines and essential resources, the sanctions are designed to heavily reduce the export potential of Venezuelan oil.
This has also reduced the ability of the country to import many medicines and provisions not produced within its borders. In 2019, the Trump administration imposed a near embargo upon Venezuelan oil, which is expected to produce a further 67 percent reduction in oil exports for this fiscal year. The continued drop in revenue will create an even starker reduction in Venezuela’s ability to import essential medicines.
These sanctions have been damaging the Venezuelan economy for years leading up to the outbreak of COVID-19. Estimated damages to the economy were valued at $130 billion between 2015 and 2018. Venezuela’s foreign income earnings have plummeted 90 percent since the U.S. put the sanctions in place as the health sector continues to contract and international investors steer clear of the heavily blockaded economy.
Sanctions During A Crisis
In a recent statement, Venezuelan president Nicolas Maduro claimed that the sanctions made it increasingly difficult to obtain testing kits for COVID-19. Despite the blockade, the government is remaining vigilant in tackling the threat posed by COVID-19, assuring the safety of its constituents. Maduro proclaimed that aid from neighboring Cuba, whose production of Interferon proved to be effective in treating the novel coronavirus earlier this year when deployed in China, as well as observing the guidelines set forth by the World Health Organization will be essential for Venezuela to weather the storm posed by the global pandemic.
Members of the United Nations have condemned sanctions against Venezuela for violating aspects of the U.N. charter affirmed in 1970. The charter outlines, “the duty of States to refrain in their international relations from military, political, economic or any other form of coercion aimed against the political independence or territorial integrity of any state.” In February of this year, Venezuela filed a lawsuit in the International Criminal Court against the United States sanctions, citing the breaking of the United Nations accords as well as the severe humanitarian costs of these sanctions as reasons for the suit.
Impacts of Sanctions on the Iranian Economy
Iranian sanctions resumed in 2018 after the Trump administration pulled away from the Joint Comprehensive Plan of Action (JCPOA), more commonly referred to as the Iran Nuclear Deal. The deal had lifted the majority of sanctions on Iran in return for a de-escalation of the country’s nuclear ambitions. According to World Bank projections made before the outbreak of COVID-19, United States sanctions would create an external shock on Iranian oil exports and contract the Iranian economy by 8.7 percent in 2019.
As with Venezuela, the United States maintains that sanctions on Iran do not place restrictions on medicines and other essential goods. Closer examination of sectors of the Iranian economy shows that, while the sanctions do not deliberately limit the trade of these goods, their debilitating restrictions on the overall economy produce the same effect. After the United States pulled out of the JCPOA, a number of businesses pulled their operations in the country, including Siemens, a medical technology company that produces ventilators.
In 2017, Iran met 98 percent of its internal demands for medicines. Domestically produced medicines and the Iranian pharmaceutical industry were valued at $6 billion. Iranian factories that produce these medicines are largely dependent upon foreign imports. However, as sanctions have intensified, they have stalled Iran’s ability to produce its own medicines. Many Iranian medical professionals saw these shortages coming and attempted to raise alarms about the coming crisis. However, sanctions remained in place. As of March 31, total cases of COVID-19 in Iran had reached 44,605. Almost 3,000 people have died from the virus.
France, Germany and the U.K., in a decision that shook international orthodoxy, completed the first-ever deal with Iran through the EU Iran Instrument in Support of Trade Exchanges (INSTEX) on March 31. Although the medicines and medical devices traded in this exchange do not directly treat COVID-19, the supplies will lessen the burden on the struggling Iranian healthcare system, resulting in more people being treated than otherwise would. The mechanism was designed in 2018, following the United States pulling out of the JCPOA, as a means to keep the agreement alive as well as provide a bypass to U.S. sanctions between Iran and the EU.
Need for a Change in Strategy
The outbreak of COVID-19 has imposed conditions that will forever change the political landscape. The continuation of these sanctions within this atmosphere of fear and malady weaken rather than strengthen America’s standing in the world. Easing sanctions on Iran and Venezuela in this time of global catastrophe would be a welcome sign that the United States is committed to its principles of human rights. Likewise continuing to double down on this policy of economic warfare will only further ostracize America from the international community and depict a lack of leadership on the international stage.
– Perry Budd