Mounting sanctions suffocate Iran

Small Iranian businesses like market stalls struggle to survive under international sanctions © Getty Images

For almost a year, economic sanctions have stifled Iran’s trade and dried up its bazaars. Iranians are suffering – and with a new EU decision, their hardship could soon get even worse.

No shots have been fired, no bombs have been dropped. But in one sense, the West is at war with Iran: for the past year the Islamic Republic has been under the cosh of some of the most ruthless economic sanctions ever imposed.

Since December, the USA, the EU and their allies have piled severe restrictions on trade with Iran. American and European companies are banned not only from buying Iran’s oil – the country’s most precious resource – but even from doing business with those who have. Iranian banks are excluded from global financial markets, while foreign banks refuse to lend to Iranian companies. Yesterday the EU announced it would tighten these uncompromising sanctions even further.

These might sound like technicalities. But for ordinary Iranians, sanctions have resulted in prolonged hardship. With businesses struggling to borrow money or sell their products, millions have lost their jobs. Still worse, the UN reports shortages of essential goods – food, energy, even medicine. And when in August an earthquake wreaked havoc in the northern city of Tabriz, the injured, isolated victims were cut off from aid.

Combined with economic mismanagement, sanctions have left Iran’s currency in tatters. Over the course of the year inflation has driven the value of the rial down by a staggering 80%.

This month, when the rial lost 40% of its value in a single week, a crisis point was reached. The desperate government chose to halt the slide by force and repression, closing down street traders and banning currency exchange.

Yet the demand for stable currency was such that illegal American dollars were still being sold, even at markets patrolled by the army.

What is the West’s purpose in all of this? To halt Iran’s government in its pursuit of nuclear weapons. In many ways sanctions are working: Iran is certainly struggling, and has this week offered to end the most suspicious of its nuclear enrichment activities.

But this is not enough: the standoff continues. Meanwhile, stuck between a determined international assault on the economy and the defiance of a cornered fundamentalist government, the Iranian people continue to suffer.

The people’s war

‘Barbaric’ and ‘illogical’: this is the verdict of Ayatollah Khamenei, Iran’s theocratic ruler . And many foreigners agree: sanctions hurt innocent people far more than the governments they supposedly target. Are they much more humane than outright war?

For a start, retort those who back the sanctions, nobody is actually being killed. Without any physical violence, a dangerous regime which threatens its neighbours is gradually being weakened. This is not barbarism, they claim, but a triumph for peaceful economic pressure and international cooperation.

You Decide

  1. Many of the countries that are trying to prevent Iran from developing a nuclear bomb already have their own. Does this make their actions hypocritical?
  2. Which is ethically more justifiable: cutting off a country’s economy so that it becomes poor, or bombing its factories and military bases?

Activities

  1. Imagine you are an Iranian shopkeeper whose business is struggling under sanctions. Write a blog post about your experiences, intended for a Western audience.
  2. Write a paragraph explaining inflation, including a definition, three causes and three consequences.

Some People Say...

“In international conflicts, the poor and powerless pay the price for their rulers’ crimes.”

What do you think?

Q & A

Everybody’s getting poorer these days. Why should I care particularly about Iran?
It’s true that many countries are suffering, but Iran is an exceptional case. Imagine if you earned £100 this week, and next week it was only worth £60: that is what Iranians have gone through this month.
Sounds tough. But will the rest of us be affected?
The West hopes that these sanctions will stop Iran from developing a nuclear weapon. Iran’s nuclear weapons programme is often perceived as a serious threat to global stability; if it is halted, this could make the world a safer place.
And if they don’t work?
Some fear that Iran is being backed into a corner, and could respond by blocking the trade routes for much of the world’s oil. Oil prices would rocket, and the standoff could develop into a conflict.

Word Watch

Economic mismanagement
Prudent economic management is not a high priority for many of Iran’s rulers, who are mostly concerned with creating a society that lives in accordance with the rulings of Islam. Over the past decade Iran has repeatedly courted economic disaster.
Inflation
When wages and prices rise throughout an economy, this is known as ‘inflation’. When it happens slowly, this is normal and healthy. But when it gets out of control, a currency can quickly become worthless. In the worst cases, such as 1930s Germany, there are reports of shoppers carrying wheelbarrows full of cash simply to buy groceries.
Nuclear enrichment
The reactions that fuel nuclear power stations and nuclear weapons both involve a particularly reactive isotope of uranium, which makes up only a tiny part of the element in its naturally occurring state. The process of isolating this ‘U-isotope’ is known as ‘enrichment’, and the extent of enrichment determines the uranium’s ‘grade’. Iran has suggested that it is willing to halt enrichment at the highest grade if the West permits the rest of the programme to continue.
Theocratic
English words ending in ‘-cratic’ derive from the Greek word ‘kratos’, meaning rule or authority. They often describe political systems: ‘democracy’ is rule of the people, ‘autocracy’ is rule by an individual, ‘kleptocracy’ is the rule of thieves. ‘Theocracy’, meanwhile, is a system in which religious leaders rule under religious laws – in Iran’s case, Islamic ones.

Subjects

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