TEHRAN, Iran – Last week, ongoing talks between the P5+1 and Iran, meant to address Iran’s nuclear program and sanctions against Iran, were extended until March 2015. Since the Iranian Hostage Crisis in 1979, the United States has imposed some level of sanctions on Iran.
In 2013, the U.S. House of Representatives passed a bill to tighten sanctions on Iran. However the bill stalled in the Senate in hopes that the ongoing talks would result in progress towards common ground and perhaps an easing of sanctions.
Former Secretary of State Hillary Clinton said that the sanctions are supposed to “pressure the Iranian government … without contributing to the suffering of the ordinary [Iranians].” But the evidence is that the sanctions have indeed imposed a humanitarian burden onto the ordinary citizens of Iran.
Despite sanctions not imposing any legal barriers to humanitarian aid for Iran, there is a growing concern that the hardships banking institutions have to bear for financing transactions dealing with Iran are disrupting the flow of much needed aid to the country. Potential penalties that are incurred by banks for breaking sanctions can be a deterrent for legal activity because of complex and overlapping rules.
Food shortages and rising prices have caused riots in Tehran, with people unable to afford even the most basic of necessities. The rial, Iran’s currency, has depreciated 80 percent since the beginning of last year. The depreciation has caused prices for food staples like milk, bread, rice, yogurt and vegetables to almost double.
One of the most alarming consequences the sanctions is the shortage of medicine and medical supplies. While the sanctions legally allow the import of both medicine and medical supplies, the bottlenecking of banking facilities and the scarcity of hard currency caused by the sanctions has restricted the inflow of aid.
As a consequence, the black market for medicine has flourished. Corruption and smuggling are filling the void for legally unobtainable goods. Hospitals and clinics are facing a shortage of hard currency and are unable or late with payments for drugs and supplies. Smaller pharmaceutical companies without ties to the government in Iran are going bankrupt while larger, more connected companies continue to do business.
The shortage of medicine, food and other necessary goods may not be an intended consequence of sanctions against Iran, but it is a consequence nonetheless. Although mismanagement, smuggling and corruption were already part of the economy in Iran before the ratcheting up of sanctions, the harsher sanctions and higher penalties against financial institutions for breaking the rules are deterring humanitarian aid to the country.
– Caitlin Huber
Sources: The Economist 1, Council on Foreign Relations, Common Dreams, Reuters, New York Times, The Economist 2, Wilson Center