Caught in the Middle: How Sanctions Affects Iranians

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SLINGERLANDS, New York — Once a major U.S. ally in the Middle East, Iran has become one of the top global adversaries to the United States. Over the past two years, the relationship has devolved into a vitriolic, combustible one, moving closer and closer to outright war. The sharpest turn took place in 2018. Former President Trump’s withdrawal from the JCPOA, often referred to as the Iran Nuclear Deal, reinstated U.S. sanctions in Iran with 700 new measures tacked on. These sanctions have significantly hampered the Iranian economy but have not achieved the stated objective of bringing them back to the negotiating table to work out a better deal or to curtail Iran’s nuclear aspirations. They have, however, succeeded in devastating Iran’s poor. As the economy has contracted, the poor have been the most vulnerable.

The Joint Comprehensive Plan of Action (JCPOA)

The relationship between the U.S. and Iran has swung back and forth between animosity and friendship arguably since the 1950s. In 2015, however, the path was one of cautious diplomatic cooperation. The signing of the JCPOA released Iran from the yoke of U.S. sanctions, some of which were decades old.

For Iran’s part, the country promised “a series of steps, including dismantling and redesigning its nuclear reactor in Arak, allowing more intrusive verification mechanisms and limiting uranium enrichment for at least 15 years.” The deal represented a shift towards increased diplomatic ties between the two nations as U.S. proponents felt they had bought at least a decade of assurance that Iran would not develop nuclear weapons.

“Maximum Pressure”

On May 8, 2018, President Trump fulfilled his campaign promise of withdrawing from the JCPOA. He began ratcheting up hostilities between Washington and Tehran in what was branded as a “Maximum Pressure” campaign. Beyond sanctions, this has included the designation of Iran’s army, the IRGC, as a foreign terrorist organization (FTO). This was the first such designation in U.S. history. IRGC attacks on U.S. oil tankers, surveillance drones and protests outside the U.S. Embassy in Baghdad, Iraq continued this trend of mounting escalation until things came to a peak in January.

Most experts agree that the U.S. and Iran probably came closest to war in January 2020. On Jan. 3, President Trump ordered the assassination by drone strike of Commander Soleimani, widely considered one of the most influential men in Iran. The act served to greatly expedite the domino effect of war posturing. News outlets all over the world predicted what a war between the two nations would look like. Meanwhile, U.S. sanctions in Iran climbed to their current heights. According to Al Jazeera, “America has more sanctions against Iran than it does on North Korea, Cuba, Venezuela and Libya combined.”

Under Pressure

These accumulated sanctions have severely damaged Iran’s economy. In the past two years, oil exports have dropped from about four million barrels per day to just more than two million in 2019. The Rial, Iran’s currency, lost half its value by December 2019 while prices for domestic products soared. This means that basic necessities like food, beverages, medicine and petrol have all seen serious price hikes.

Such a painful economic cocktail has manifested in stark realities for Iranians. Around 33% of the population lived in poverty in 2019, and the country’s GDP had contracted by 6% in 2020. The coronavirus pandemic has only exacerbated these hardships with lockdowns hurting the informal economy. The informal sector has become a critical part of the country’s survival under decades of U.S. sanctions in Iran. The informal sector makes up nearly 37% of the overall economy.

Beleaguered, not Broken

These sanctions are consistently credited with causing the current economic decay in Iran though government corruption and inefficiencies are likewise sources of ire for the people. The stated objective of these sanctions has been “to preserve the safety of the region and to protect American lives.” The strategic goal was to pressure the government in Tehran back to the negotiating table to create a new nuclear deal more favorable for the U.S. This never came to fruition, and Tehran has continued its campaigns for increased regional power while even managing to quell some of the largest protests in the country’s history.

Wendy Sherman, who led negotiations under President Obama, has said time and again that sanctions are not meant to bring down a government. Rather, they exist to bring them to the negotiating table. With an innovative and creative population that is accustomed to navigating tough U.S. sanctions and powerful allies like China and Russia, the government has managed to survive President Trump’s “Maximum Pressure” campaign.

Mending the Relationship

With the inauguration of President Biden, there is a belief that the two countries will return to diplomatic tools of engagement. A return to the JCPOA would signal a shift away from sanctions. Iranians could once again see a stable currency and growth in the economy as they had in the years following the signing of the 2015 deal. Naturally, there are major obstacles in both political camps for negotiations.

Iran’s Foreign Minister, Dr. Javad Zarif, has stated unequivocally that while Iran seeks a return to the JCPOA, it will not renegotiate the deal. The country’s conservative politicians vehemently oppose President Rouhani’s proposals of reinstatement. Meanwhile, the incoming Biden administration will face fierce opposition from American conservative lawmakers on its diplomatic efforts. Both sides have shared rhetoric of returning to an Obama-era of engagement; however, neither is so naive as to think that the clocks can simply be turned back to 2015. Roughly 85 million Iranians paying the price of the difficult relations between the two countries.

Scott Mistler-Ferguson
Photo: Wikimedia Commons

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