Ferdowski Street vendor's Iranian bank notes, Tehran, Jan. 23, 2013. Vahid Salemi/Associated Press/Corbis
July 21, 2013
Sanctions on Iran have taken on a life of
their own as the relationship between Washington and Tehran has steadily
deteriorated. Sanctions were initially imposed nearly thirty-four years ago in
response to the Iran hostage crisis—when revolutionaries seized the U.S.
embassy in Tehran and held diplomats hostage for 444 days. Today, the U.S.-Iran
conflict has expanded into numerous areas, but the United States and many of
its allies insist on a core focus: they believe that the Iranian regime seeks
to develop the technical capability and material to build nuclear weapons on
short notice—though U.S. intelligence believes that Tehran has not yet made the
political decision to weaponize its nuclear capability.1 For its
part, Iran has long insisted that its nuclear program is for strictly peaceful purposes. In an effort
to blunt Iran’s presumed nuclear—and some would argue, regional—ambitions and
increase its leverage vis-à-vis Tehran, Washington has spearheaded a potent
barrage of unilateral and multilateral sanctions. Together with on-again,
off-again negotiations under the auspices of the United Nations Security
Council, Washington has pursued a carrot and stick strategy—now known as ‘dual
track’—utilizing primarily negative inducements to convince Iran to change its
nuclear policy.
Neither
the sanctions nor the diplomacy component of the dual track policy has produced
satisfactory results thus far. As of June 2013, seven meetings between Iran and
the permanent members of the United Nations Security Council plus Germany (the
P5+1) have taken place over a four-year span. In contrast with most negotiation
processes, the two sides actually came closest to a deal in their first
meeting, in October 2009. Since then, diplomacy has steadily devolved into an
exchange of ultimatums and mutual escalation—with Washington and Tehran taking
turns not being able to take “yes” for an answer.
As
in any negotiation, the devil is in the details—and there are many to discuss.
But one detail stands out above all else: What kind of relationship does
Washington want with Tehran? Over the duration of the Obama administration,
America’s preference has been to work towards small confidence-building
measures—without clarifying its long-term objectives. This is better than
nothing, but due to the lack of trust between Washington and Tehran, small
tactical steps are unlikely to work—and to date, they have not worked. If the
Obama administration, together with its allies, does not decide on an end
game—that is, a detailed vision for normal relations with Iran—it cannot
clearly communicate to Tehran the goal of diplomacy, sanctions, cyber warfare,
secret assassination, and any other form of pressure. This is rarely addressed.
Unless Washington and Tehran can see the same light at the end of the tunnel,
the reluctance to take risks for peace will likely remain. And they will be
more likely to continue escalating the conflict toward a military confrontation
that both sides would independently seek to avoid.
With strategic clarity
lacking in both Washington and Tehran, investment in the coercive instrument of
sanctions has grown significantly over the past four years—the severity of
U.S.-led sanctions enforced over the past eighteen months has even taken
veteran Iranian officials by surprise. The combination of sanctions on Iran’s
oil and banking sectors are estimated to have cut Tehran’s oil revenues by as
much as 50 percent—from $100 billion in 2011 to approximately $50 billion in
2012.
Rather than attempting
to impose a blanket economic embargo on Iran, the United States has instead
used its massive leverage over the international financial system to create a
new model for sanctioning Iran. It also laid the foundation for creating
international buy-in through the three rounds of sanctions at the United
Nations. Upon entering the White House, Barack Obama retained the same
priorities, policy vehicles, and many of the same personnel on Iranian sanctions
as his predecessor. Over the duration of his first four years in office, Obama
signed into law the most comprehensive unilateral sanctions framework in
history, led efforts to secure new multilateral sanctions at the United Nations
Security Council, and played an instrumental role in convincing the European
Union to implement its own set of unilateral sanctions.
Unilateral American
sanctions have arguably inflicted the most pain on Iran during Obama’s
presidency. In July 2010, he signed into law the Comprehensive Iran Sanctions,
Accountability, and Divestment Act, which updated the Iran Sanctions Act of
1996 with an array of punitive measures—two of which stand out: the sanctioning
of providing gasoline and other fuels to Iran, and banning the sale of
equipment and services that would help Iran increase its gasoline production
capabilities.2 As these sanctions caused Iran’s imports to fall, the
country was faced with potential fuel shortages, thereby forcing it to
domestically produce gasoline that has caused the chronic pollution in Tehran
to reach even more deadly levels.3
With the U.S.-Iran
conflict no closer to a peaceful resolution after nearly three years in office,
Obama authorized what has been brashly described by American officials as the
“nuclear option” in Washington’s financial war against Tehran, by way of the
National Defense Authorization Act of 2011 (NDAA).4 These sanctions
restrict the access of foreign banks to the U.S. financial system if they
process petroleum transactions with Iran’s central bank.5 Less than
a year later, with congressional pressure unrelenting, Obama signed the Iran
Threat Reduction and Syria Human Rights Act (ITRSHRA). Building on the NDAA
sanctions, ITRSHRA cuts off access to the U.S. market for companies that do
business with Iran’s energy sector and freezes the U.S. assets of persons,
insurers, and lenders that facilitate repatriation of Iranian oil revenues
and/or do business with the National Iranian Oil Company and the National
Iranian Tanker Company.6 Gary Ackerman, a Democratic Party
congressman from New York, describes the intent of this mixture of unilateral
American sanctions: “The goal… is to inflict crippling, unendurable economic
pain [in Iran]. Iran’s banking sector—especially its central bank—needs to
become the financial equivalent of Chernobyl: radioactive, dangerous, and most
of all, empty.”7
With Tehran now facing
what many consider the most draconian sanctions regime in history, does this
mean sanctions are working? Have sanctions increased the likelihood of a
compromise in the nuclear standoff? Or, are sanctions causing hardliners in
Tehran and the West to dig in their heels and eschew the compromises that will
be necessary for a peaceful resolution to the crisis?
Iran sanctions are a
highly politicized issue, with domestic political ramifications in Washington
and Tehran, as well as in Tel Aviv and Brussels. Though sanctions have been the
primary policy tool used by the West since concerns about Iran’s nuclear
ambitions intensified in 2002, thus far they have failed to alter Tehran’s nuclear policy. The
question remains: Why? To better understand how sanctions have played out over
the years, it is useful to deconstruct the stated objectives of sanctions, the
internal state of play in Iran in response to sanctions, and the effect that
sanctions have (and do not have) on the diplomatic process.
Changing Iran’s Calculus
The Obama
administration has made sanctions the center of its Iran policy since the first
round of negotiations with Tehran collapsed in November 2009, although its
motivations for doing so and its public pronouncements about the objectives
have varied. Perhaps the most commonly stated objective is changing Iran’s
nuclear calculus, with sanctions being the primary tool used to raise the cost
of Iran’s nuclear pursuits. The overarching goal is to make the cost of
continuing Tehran’s nuclear path too high to bear, thereby leading to a change
in its nuclear policy. The strategy envisions a three-part scenario in
achieving this goal: devastate the Iranian economy with a tacit understanding
that civilian Iranians will be hurt in the process; as sanctions take root and
permeate Iranian society, civilians together with various stakeholders will
pressure the government and potentially create regime-threatening protests;
with the economy weakened—and new fissures created within Iranian society and among Iranian stakeholders—the Islamic Republic’s
regional and international strategic objectives become too costly to continue
at current levels.
A subset of changing
Iran’s nuclear calculus is getting Tehran back to the table and negotiating in
good faith. This logic supposes that sanctions will force key stakeholders in
Tehran to believe that returning to negotiations and seeing them through is the
only avenue for ending the forms of pressure that threaten their domestic,
regional, and international priorities.
Another
key driver of sanctions involves domestic politics in the United States and in
Europe. One of the objectives, say some sanctions advocates, is to strengthen
the credibility and leverage of pro-engagement camps, thereby providing
political cover for politicians who favor non-military solutions to the
conflict between Iran and the West. In the United States and within the
European Union (EU), sanctions serve as a shield against political attacks from
neoconservatives who label negotiations with Tehran as a demonstration of
weakness and naiveté. In Tehran too, sanctions indirectly support the
engagement camp also, by reminding citizens of the consequences of hardline
policies, and providing leverage for factions favoring détente with the West.
Some Western officials
also present sanctions as an alternative to an American or Israeli attack on
Iran, by helping delay Iran’s nuclear program and thereby adding more time for
diplomacy. Rhetoric within the Obama administration has stressed a preference
to resolve differences over Iran’s nuclear program diplomatically, while also
emphasizing “all options are on the table”—including war—to prevent Iran from
acquiring a nuclear weapon. American and European officials further believe
that effective sanctions may help dissuade Israel from launching a unilateral
strike on Iran; Israel has laid down numerous red lines over the past decade in
an effort to demarcate specific developments in Iran’s nuclear program that
would trigger an Israeli attack.
Political signaling is
another key driver of sanctions, with the signals intended to reach three key
audiences: to show political constituents in the United States that Washington
is increasing pressure on Tehran to unprecedented levels; to show Middle
Eastern allies and foes that America is still in charge and make an example of
Iran for its challenge to Pax Americana in the region; and thirdly, to show the
world that Iran is paying such a heavy price for its nuclear pursuits that no
country should seek to emulate Tehran’s path to nuclear capability.
In
order to maintain and increase the heavy price that Tehran pays, a special
emphasis is given to maintaining unity within the P5+1. This logic infers that
Washington must seek to maintain a multilateral approach toward Iran regarding
the nuclear issue—because Tehran is highly adept at exploiting rifts in the
international community. Sanctions are the baseline tactic that the P5+1 can
agree on in an effort to maintain international unity around diplomatic efforts
to place red lines on Iran’s nuclear program.
While these motivations
for sanctions are not mutually exclusive, the central objective is to change
Iran’s nuclear calculus and force it to agree to a deal that it otherwise would
refuse or has already refused. Since that specific objective has not been
achieved thus far, sanctions cannot be deemed to have been successful. This
begs another question: Why haven’t Iranian stakeholders capitulated in some way
under the pressure of severe sanctions?
The Western Animosity Narrative
Sanctions have had a devastating impact on
the Iranian economy. Numerous regime stakeholders openly acknowledge this,
although they also blame Iran’s economic decline on a number of other factors
such as subsidy reforms, varying degrees of mismanagement, and long-standing
corruption.
Representatives from
the Iranian Chamber of Commerce have said that 50 percent of the economic
predicament is a direct consequence of sanctions and the other 50 percent is
due to failed economic policies.8 Mohsen Rezaei, secretary of the
Expediency Council and former commander of the Iranian Revolutionary Guard
Corps, believes that 40 percent of the current economic problems are due to
sanctions, blaming the rest on mismanagement as well as corrupt networks that
are “trying to benefit from the current chaotic situation in the economy.”9
The deputy speaker of the Iranian Majles, Mohammad Reza Bahonar, has said that external
sanctions are causing 50 percent of the current economic difficulties, with the
rest being the consequence of weak political decisions and structural issues.10
Supreme Leader
Ayatollah Ali Khamenei is steadfast in his defiance of sanctions. The escalation
of sanctions has enabled him to strengthen a powerful pre-existing narrative
that portrays Western powers as a brutal, immoral group of governments out to
‘get’ Iran, and that their core interest is to keep Iran underdeveloped and
dependent. This narrative serves to maintain unity in a fragmented power
structure by sustaining the image of an unrelenting enemy. This in turn
justifies a feared security apparatus—to counter that enemy—and mobilizes the
support of a minority segment of society that can be paraded as “popular
support” when needed—on the anniversary of the revolution, during elections,
etc.
As
long as the narrative of Western animosity remains in place, Khamenei will
justify the empowerment of his military-security apparatus as a necessary
instrument for countering threats against the Islamic Republic.11 In
January, he commented that “the sanctions are meant to strain the people’s
patience, incite the people to oppose the Islamic Republic, and increase the
pressure on Iranian officials in order to alter officials’ calculations”—in
other words, he continues to promote the image of a strong external enemy and
the imperative ‘not to give in.’12 Khamenei’s formula for countering
the sanctions—which he describes as “economic warfare”—has been dubbed the
‘economy of resistance, a vague term for a greater degree of protectionism,
support for domestic industry, and lowering the Iranian economy’s dependency on
oil exports.
Khamenei may be the
supreme leader, but his position on nuclear policy is not immovable. There are
Iranian domestic interests and structures that can challenge his narrative, and
create counter narratives enabling a policy course correction. But they are
unlikely to do so in the absence of clear, tangible, and positive potential outcomes
in the event of an Iranian nuclear policy shift. To provide some degree of
flexibility, Khamenei allows experiments, but does not commit to them until he
gets a sense of security about the initiatives—an Iranian version of “leading
from behind.”13 Indeed, the supreme leader can hide behind an array
of institutions when he needs to justify or delay a decision. So, a critical
question is how key constituencies read the current state of play, especially
those layers of power that are closer to Khamenei.
Waiting for Sanction Fatigue
While there is wide
acknowledgement in Iran that sanctions have created economic and social costs
for the country, individuals close to the core of Iran’s power structure are
relishing the narrative of resistance. According to this line of thought, while
Iran suffers economically, it is also gaining newfound respect on the
international stage due to its refusal to succumb to Western pressure. “Those
who are witnessing how Iran is managing its enormous challenges develop a new
level of respect for Iran, and that has given Iran a new credibility on the
international stage,” one influential parliamentarian remarked. “Iran has
become a role model for developing countries and there is a greater willingness
among developing nations to work and trade with Iran.”14 While the
idea that Iran is viewed as a role model or with greater respect is certainly
debatable, it is an argument that is frequently cited by officials as a
vindication of their narrative.
Moreover, this
narrative contends that as long as Iran stands firm, global sanction
fatigue—including in Europe—will ultimately cause the collapse of this policy.
A senior decision-maker in Tehran spoke confidently of the belief that Europe
cannot stomach a return to sanctions-based policies reminiscent of those
imposed on Saddam Hussein’s Iraq. This in turn will slowly unravel the
coalition against Iran. “The sanctions—and especially the continuation of these
sanctions—have exposed Washington’s true character to many international players,
including Western countries,” he said. “I believe that the Europeans won’t
continue to blindly support the U.S. strategy, and the time will come when the
EU or some of the European countries will go a different path and Iran will
wait for that break.”15 A Majles deputy close to Speaker Ali
Larijani echoed this sentiment, expressing a degree of skepticism regarding
Europe’s dedication to sanctions: “In the Majles presiding board, there is an
understanding of what the U.S. is doing. We understand that they have a
strategy to antagonize Iran. However, the big puzzle is the EU’s behavior. It
seems as if the Europeans have fallen into an American-Israeli trap and they
don’t know how to come out of it. If they continue this way, they will lose
more and more of their economic foothold in Iran.”16
Iranian regime
officials—aiming to bolster Khamenei’s hardline narrative—seek to politically
capitalize on the negative impact of sanctions in order to influence the
Iranian populace’s attitudes towards the West. Rather than denying the negative
impact of sanctions, decision-makers in Tehran increasingly acknowledge them to
vindicate their claims of Western hostility towards Iran. “It’s true that the
sanctions are imposing an economic cost on the Iranian people and the regime,
but they are also imposing a social cost on the U.S.,” one influential
policymaker said. “The Iranian people are learning more about the hypocrisy and
the true image of the West. I believe that the Iranians are becoming more and
more anti-Western and that will have long-term costs for the Western countries
in our region.”17 Although it is unlikely that sanctions will turn
the entirety of Iran’s population against the West, Iranians inside Iran have
increasingly voiced their displeasure with both the government and the sanctions that
create new hardships.18 A senior Iranian diplomat echoed as much:
“The society has become nuanced in its political awareness. It can analyze to
see how far the current economic conditions are a result of Western pressure and
Western double standards and to what extent it is the doing of the Iranian
government.”19 Accurate polling is questionable in Iran, yet a long
series of studies—including a recent scientific poll conducted by
Gallup—supports the notion that a strong plurality of the Iranian population
tends to put the blame for the economy on the U.S. rather than on the Iranian
government.20 If this trend holds, the regime will find more
opportunities to strengthen its narrative of resistance and blame the West for
Iran’s deteriorating economy as the duration and bite of sanctions intensifies.
Overall, the strategic
outlook of Iran’s supreme leader is to maintain a clear distance from the
United States. However other stakeholders have developed alternative
agendas. Some segments of the Iranian power structure view a good
relationship with the West as a prerequisite for Iran’s economic and
technological progress. Others believe that Tehran should ease tensions
with the West to provide a greater degree of peace and tranquility in the
region. However, as long as the antagonistic policies of Western countries
remain in place, the Khamenei discourse will continue to dominate.
Undermining Reform
A critical step for sanctions to succeed in
changing Iran’s nuclear calculus is to create room for the emergence of a
competing narrative that paves the way for a shift in policy. Though the
repressive nature of the Iranian regime and its efforts to eliminate any public
debate about the nuclear issue renders the emergence of such a public narrative
next to impossible, this does not necessarily hold true for narratives within
the inner circles of the regime. Thus far, however, no such counter narrative
appears to have emerged among influential elements of the Iranian elite.
“Even though regime
members outside the core can have a voice and influence, it is sad to say that
none of them actually has a strategy on how to amend the national security
policy,” a regime insider explained. “Therefore, the core around Ayatollah
Khamenei is not only the most powerful, but also the only group that has a
strategy, i.e. the ‘strategic distance and antagonism’ to the U.S.”21
At present, there is no discernible competing strategy to the current narrative
favored by Khamenei and the layers of power closest to him. While mainstream
conservatives may be more amenable to negotiations and a nuclear compromise,
they have not formulated a strategy accordingly, as they feel that the dominant
narrative will hold firm. The other reason for the lack of a counter narrative
can be found in the failure of Western countries to craft and communicate an
alternative scenario. In Iranian eyes, there are no indications of how the
dynamics of nuclear negotiations would change if Iran indeed changed its
policy. These interest groups do not seem impressed by offers of the removal or
suspension of some sanctions. Consequently, the core narrative is not only
unchallenged during internal debates, but it is further consolidated by
continued external antagonism.
A former high-level
diplomat and foreign ministry official described the result of this trajectory:
“The status of being in an ‘economic war’ means that a lot of the actual issues
in the country cannot be debated, which is also impeding the political
development of the country. The situation has undermined the position of the
reformists and empowered the hardline elements.”22
Iranian intellectuals
critical of the regime—even though they have diverging views on whether the
Iranian government should show more flexibility or whether Western countries
should adopt a new policy—tend to agree that sanctions only reinforce the
dominant anti-Western narrative, thus making it very difficult for any other
perspectives to emerge. There is also agreement with the notion that sanctions
have undermined the domestic process of democratization, which in turn has
aided long-standing efforts by hardline forces to dominate Iranian politics.23
A
former mayor of Tehran points out that neither Iran’s elite nor its society at
large wish to see the destruction of Iran. Therefore, he says, any internal or
external push that would bring Iran to the brink of “economic destruction” will
be met with a harsh reaction. The problem, he adds, is that most Iranian elites
have not decided whether the West or their own regime is primarily responsible
for the country’s sanctions predicament.24
Regime Change?
Stark divisions over
foreign and domestic policy among the Iranian elite are unmistakable. However,
those divisions do not appear to have affected regime cohesion around the
nuclear issue or on the response to sanctions. And if elite insiders are to be
believed, sanctions have helped strengthen cohesion rather than intensify
rifts. A serving senior minister articulated his view accordingly: “The main
objective of these sanctions has been to impose regime change or at least to
weaken the Iranian regime. They have failed in that objective and in fact, they
are strengthening the core of the Iranian regime, because they have regime
constituents.” The minister says that the main result of sanctions is their
socio-economic costs including the negative impact on Iran’s economic
development. Another current official with influence over Iran’s economic
policies shared this sentiment: “Western governments thought that Iran would
collapse economically after the central bank sanctions. Well, now they know
that they have failed. If they continue this way, it will just strengthen
Iran’s resolve to confront the West.”25
Naturally, regime
officials will tend to toe the party line, which does obscure a clear picture
of the thinking inside the system. However, when crosschecked with former
regime officials and regime-critical intellectuals, a similar sentiment
emerges. A former deputy foreign minister candidly describes a line of thinking
that exists beyond the supreme leader’s inner circle: “It was obvious to us
that the sanctions’ pressure will increase and it was also clear to us that the
main target was to weaken the regime, but that compelled us to stay strong,
work together, and prove the Western strategy wrong.”26 A former
senior Iranian diplomat shared this sentiment, saying that he believes
continued sanctions will further harden Iran’s position in future diplomatic
negotiations.27 It is reasonable to believe that beyond these statements
of bravado, a more conflicted situation exists. The critical question, however,
is whether those internal divisions are having an impact on the strategic
calculations of the regime.
Private Sector Pressure
For its part, the private sector is unhappy
about the current state of affairs, especially the negative impact of
sanctions—and government policies—on private sector activity. But in their
private lobbying campaigns, rather than pushing for a different foreign policy,
they have tended to focus on lobbying the government to secure concessions for
the private sector, thereby acknowledging that they do not have the necessary
political influence to change nuclear policy. The main forum for such lobbying
has been regular sessions titled “Dialogue between the Iran Chamber of Commerce
and the Government,” which involve the president of the chamber (Mohammad
Nahavandian) and key ministers (finance, commerce and industry, agriculture,
petroleum, etc.). Ayatollah Khamenei’s decision to declare the current calendar
year as the “Year of Domestic Capital and Domestic Industry” is likely related
to these lobbying efforts.28
Thus
far, the private sector has secured a number of concessions. Numerous product
categories of imports have been included in the currency exchange priorities so
that such companies can use favorable currency exchange rates for their
imports.29 The implementation of the second phase of subsidy reform
has been delayed (this was achieved through direct interaction between the
private sector representatives and the Majles).30 A decree by the
Expediency Council on “Drive to Self-Sufficiency in Industry, Agriculture,
Defense, and Security” has been finalized—a document to promote local industry
and local production. This was also the result of lobbying with the Expediency
Council.31 Permits have been issued for private sector companies to
participate in the exportation of petroleum (including crude oil) and
petrochemical products.32
In
February 2013, Ayatollah Khamenei signed a decree on “General Policies on
Domestic Production and Protection of Iranian Labor and Capital.”33
The latest evidence that domestic industry is lobbying to improve the
investment environment manifested itself when the supreme leader’s decree
highlighted twenty-three new benefits to Iran’s private sector, including but
not limited to: promotion and protection of the production of strategic goods,
as well as goods that are required for domestic manufacturing; completion of
the value chain of raw materials and products, and an end to the sale of raw
materials; promotion of producing goods in the domestic market, the competitive
production of which will lead to net hard currency revenue for the economy;
management of hard currency resources emphasizing the needs for domestic production
and entrepreneurship aiming at maintaining the value of the national currency;
an increase in the role of the private sector and cooperative sectors in
domestic production; and the breaking of all monopolies in production,
commerce, and consumption.
While
it is correct to say that a number of these initiatives will also benefit the
quasi-governmental sector, the central point is that the Iranian business
community (private or quasi-governmental) is mainly focused on improving its
own operational and investment climate rather than lobbying for a change in
nuclear strategy. Moreover, while Western intelligence suggests that the
Iranian business community has put pressure on Khamenei to shift his nuclear
stance, no publicly available information has been able to confirm this. In
spite of the bite of sanctions, Khamenei’s narrative of resistance continues to
dominate, and key stakeholders seem more intent on seeking concessions from the
government rather than pressing for a change in its nuclear policy.
Talking to America
While there was
greater diplomatic activity in 2012 and 2013 compared to 2011, there are no
signs that sanctions have compelled Tehran to ‘come back to the table’ in the
manner that the sanctioning states desire. Meetings over the past year have
failed to produce a compromise. Tehran signaled openness to halting the
production of medium-enriched uranium (MEU) at the 19.75 percent level—a level
of enrichment needed to produce medical isotopes for cancer patients, but also
an important step closer to the 90 percent level required for nuclear weapons.
However, Iran resisted calls to cease activities at its heavily fortified
underground enrichment facility in Qom and ship out its stockpile of MEU. In return, Tehran sought the lifting of sanctions and/or
upfront recognition of its right to enrich—demands the U.S. and its allies
rejected. Tehran dragged its feet in scheduling the most recent meetings,
either seeking to create the perception that it is in no hurry, or truly
believing that it could afford to play for time—or perhaps seeing little
benefit in coming to the table at all. In any case, there are no signs yet that
the sanctions noose around Tehran’s neck, as State Department Spokesperson
Victoria Nuland has put it, has softened the Iranian negotiation position.34
Some
foreign policy hands in Tehran contend that in spite of increasingly
uncontrollable infighting within the regime, viewpoints among various political
factions have converged on the nuclear issue. Even influential foreign policy experts,
who were sidelined by President Mahmoud Ahmadinejad and later joined opposition
leader Mir-Hossein Moussavi’s presidential campaign in 2009, believe that
“succumbing under pressure only invites more pressure,” and have even privately
circulated proposals such as withdrawing from the Nuclear Non-Proliferation
Treaty (NPT). Though Iranian officials no longer deny the immense impact of
sanctions on the Iranian economy, Khamenei has reinforced his refusal to allow
sanctions to affect Iran’s nuclear policy. Iran won’t negotiate “with a gun
held to its head,” he stated on February 7, 2013, in response to Vice President
Joe Biden’s call for direct U.S.-Iran talks. In a speech on February 16, he
expanded on his reasoning with a direct reference to sanctions and the notion
that Tehran will react positively to incentives as opposed to pressure:35
Sanctions are painful
and they are a nuisance, but there are two ways to react to such pain: One
group are those who start begging for forgiveness, but a brave nation like Iran
will try to mobilize its inner resources and to pass through the “danger zone”
with determination and courage… The Americans should show that they don’t want
to bully us, that they won’t engage in evil acts, show us that their words and
deeds are not illogical and that they respect the rights of the Iranian people,
show that they won’t push the region into further confrontations and that they
won’t interfere in the internal affairs of the Iranian people—they will see
that the Islamic Republic has good will and the people are logical. This is the
only way to interact with the Islamic Republic.
The
sanctions have, however, achieved one outcome: There is an elevated and intense
debate in Tehran on the issue of talking to America for the purpose of
establishing a better relationship with Washington. It is in this context that
Khamenei’s statement is so critical, as he is not rejecting the argument that
Iran should establish relations with Washington, but rather the notion that it
should do so while facing escalating economic pressure orchestrated by the
United States. Khamenei is in essence declaring that the conversation about
establishing relations with the U.S. (by first accepting the invitation for
bilateral talks) will not translate into real action until Washington’s
sanctions-based approach is ended.36
Although
the deep-seated distrust between the United States and Iran has also been
heightened by sanctions and the crisis over Tehran’s nuclear program, these are
only two of many issues dividing them. However, the nuclear program remains the
top priority for U.S. policymakers working on Iran—often to the detriment of
more important issues, such as the deteriorating human rights situation in the
Islamic Republic.
An
Iranian nuclear bomb is neither imminent nor a foregone conclusion. The sixteen
U.S. intelligence agencies judge with high confidence that Iran has conducted
no nuclear weapons-related experiments since 2003, that it currently has no
nuclear weapons program, and that it has not made the political decision to
pursue nuclear weapons.
In theory, this provides ample political space
for Obama to pursue a sustained process of diplomacy dedicated to ensuring that
Iran’s nuclear program remains verifiably peaceful. In practice, however, we often
see the opposite from Washington—self-imposed time limits on diplomacy,
unprecedented coercive measures, and sensationalistic government-fed
journalism about an imminent Iranian nuclear weapon. Why the disconnect?
At
present, Iran is pursuing a strategic middle ground called nuclear latency: It
aims to build a nuclear energy program that would allow for the production of a
nuclear weapon on short notice if an existential threat came to the fore. This
is often referred to as the “Japan option”—after the country that has made
significant investments in peaceful nuclear energy without developing key
expertise to produce a nuclear weapon or its corresponding delivery systems.
Like Japan, Iran’s technological sophistication, its access to uranium and plutonium,
and its experience launching satellites and missiles lend credence to the
argument that it could theoretically build a nuclear weapon. But even after
doing so, a weapon would require at a minimum one full year to complete—and
American intelligence would almost certainly detect such efforts.
Nuclear latency does
not violate Iran’s international obligations, but it does arguably provide the
Islamic Republic with a geostrategic equalizer in a region that America has dominated
for decades. Numerous alternative explanations for opposing Iran’s program have
been offered: Iran’s nuclear program will stunt the growth of nascent and
future democracies in the region, fatally undermine the Nuclear
Non-Proliferation Treaty, cause Iran’s Arab neighbors to lean toward Tehran, or
encourage nuclear proliferation throughout the Middle East.
Some of these
concerns hold merit, others are more far-fetched. But all of them fall under
the umbrella of a larger concern—arguably America’s primary concern—regarding
Iran’s nuclear program: a nuclear-capable Iran will enable the emergence of a
regional power that fundamentally rejects the notion of a Pax Americana for the
Middle East.
And therein lies the
rub: Iran will not enter into the regional security framework as it exists today,
and the United States will not change the existing framework to accommodate
Iranian preferences and goals. At face value, this seemingly zero-sum game puts
Washington and Tehran on a collision course that can only end in war unless one
side blinks.
The saving grace,
which prevents this scenario from becoming a forgone conclusion, is that to
date, diplomacy has not really been tried. There has been one forty-five-minute
bilateral meeting between the United States and Iran during Obama’s first four
years in office. This does not constitute a real diplomatic effort. Embarking
upon a sustained diplomatic process on Iran’s nuclear program will not solve
the larger U.S.-Iran conflict. But it can serve as an important foundation from
which dialogue can continue on other equally important issues.
Drinking the Cup of Poison
Overall, sanctions have succeeded in putting
tremendous pressure on the Iranian economy. Rather than show greater
flexibility, however, the Iranian government’s response thus far has been responding
in kind by increasing pressure on the West. Tehran has continued to expand its nuclear program, it has sought
ways to circumvent sanctions rather than acquiesce to them, and it has doubled
down on the foreign-threat mindset that empowers Iran’s hardline security and
intelligence communities—the very elements that benefit from a continuation of
the crisis. All this indicates a significant gap between the stated goals of
the sanctions policy—a change in the Iranian calculus in regard to its nuclear
program—and what sanctions have actually achieved.
Some
sanction advocates posit that sanctions will not necessarily yield results in a
linear manner; Tehran, they explain, may be able to resist sanctions for an
extended period of time, only to massively yield to the pressure after an
inflection point has been reached. The view suggests that judging the track
record of sanctions thus far is therefore inappropriate and misleading. In an
arena where diplomatic efforts are judged harshly and expected to yield extensive
results almost instantaneously, this argument also accepts a political reality
in which timelines and deadlines for sanctions can hardly be guaranteed.37
However, even if the
notion of a non-linear process is accepted, signs of an inflection point must
become evident at some stage, such as the emergence of a narrative within the
elite that challenges the status quo policy and presses for a change. The
existence of widespread discontent and anger against the Iranian regime should
not be misconstrued as such an inflection point, that is, as pressure from
society (or stakeholders) to shift Iran’s nuclear policy per se.
Sanctions have thus far
failed to produce an inflection point, nor are they likely to do so. The
combination of suppressing open debates about the nuclear issue, the manner in
which sanctions “vindicate” Ayatollah Khamenei’s narrative of Western animosity
aimed at “defeating Iran,” and the absence of convincing and enticing
incentives—such as meaningful sanctions relief—to change Iran’s nuclear policy
has prevented the emergence of a credible counter narrative within the Iranian
elite. In the words of Roberto Toscano, a former Italian ambassador to Iran:
“[P]ragmatic voices
within the regime… should be capable of convincingly stressing that both
national interest and regime survival would be better pursued by abandoning not
only [Iran’s] provocative rhetoric but also its ideological intransigence. The
problem is that this is made more difficult by sanctions, a godsend for those
who are trying to rally Iranians around the regime and against external
pressure.”38
Moreover, stakeholders in the system such as
the business community have focused on seeking economic concessions from the
regime rather than lobbying for a shift in Iran’s nuclear stance. The absence
of meaningful sanctions relief on the negotiating table appears to have
prevented the emergence of incentives for the business community to forcefully
challenge the regime’s nuclear strategy.
Successful cases in
which enormous external pressure shifted the Islamic Republic’s policy on a
central national security issue—such as Ayatollah Ruhollah Khomeini’s decision
to “drink the cup of poison” and end the debilitating war with Iraq—included
both a challenge to the dominant narrative and influential stakeholders pushing
for a policy shift. In the case of the Iraq-Iran war, this was made possible
because it was clear to the Iranians that accepting a UN-mediated truce would
unquestionably end the war with Iraq and they had confidence that Saddam Hussein could deliver on his end
of the bargain. Tehran does not perceive a similar situation today, as two key
issues remain unclear to the regime: What sanctions would be lifted if Iran
were to succumb to Western pressure, and perhaps more importantly, whether the
West has the political ability to deliver on sanctions relief.
An Existential Concern
A pressure strategy that lacks the
sophistication and flexibility to help unravel the dominant narrative in the
sanctioned state and entice stakeholders to push for policy changes is unlikely
to succeed and may be counter-productive. In the case of Iran, a continuation
of the current approach will likely consolidate the anti-Western narrative and
render a compromise more difficult.
The United States and the
EU believe sanctions have put Iran on a one-way path towards economic collapse
unless it yields on the nuclear issue. Accepting the P5+1 proposal is a
rational move, as they see it, and rejecting it is either the result of
miscalculation or ideological rigidity.
Iran
perceives a different reality. Khamenei’s behavior suggests he is aware of his
regime’s unpopularity. Since 2009, the regime has lost several constituencies,
rendering the few who support the regime and believe it to be legitimate all
the more politically crucial to regime survival. To these constituencies, the
narrative of resistance against the West to uphold Iran’s independence is
essential. Any move by the regime that will be perceived by this constituency
as a capitulation to Western demands, i.e. a violation of the regime’s
narrative, risks turning them against the Khamenei. Mindful of Khamenei’s
already weak support base, the loss of these last constituencies could be
existential and prove a greater threat to the regime’s survival than even a
military confrontation with the United States. While the regime does not hold
out hope for actually winning a war against the U.S., it certainly believes it
can survive a war—and even come out of it stronger at
home. Thus, it is highly unlikely that the regime will succumb to the sanctions
pressure at a time when its narrative remains unchallenged within the elite,
key stakeholders are not visibly lobbying for policy shifts, no meaningful
sanctions relief is put on the table by the P5+1, and capitulation poses an
existential threat to the regime.
Any
calibration of the sanctions policy should focus on promoting a discourse that
can undo the consolidated narrative that Western governments are opposed to
Iran’s progress, and can offer a solid prospect—such as
meaningful sanctions relief—and clear arguments to Iranian stakeholders who
have the ability to change the debate inside Iran. These measures can
dramatically change the prospects of shifting Iran’s nuclear calculus.
This essay is adapted from “Never Give In
and Never Give Up: the Impact of Sanctions on Tehran’s Nuclear Calculations,” a
study published by the National Iranian American Council in March 2013.
Bijan Khajehpour is the managing partner of
Atieh International, a strategic consultancy, which he co-founded in 1994. He
has contributed to Iran
at the Crossroads and
Security
in the Persian Gulf: Origins, Obstacles, and the Search for Consensus, among other books. He is an editorial board
member of Goftogu,
a Persian quarterly on culture and society.
Reza Marashi is research director at the
National Iranian American Council in Washington, DC. He previously served in
the Office of Iranian Affairs at the U.S. Department of State. His articles
have appeared in the New York Times, Foreign Policy, Atlantic, and National Interest. On Twitter: @rezamarashi.
Trita Parsi is the founder and president
of the National Iranian American Council in Washington, DC. He is the 2010
recipient of the Grawemeyer Award for Ideas Improving World Order. He is the
author of Treacherous
Alliance: The Secret Dealings of Iran, Israel, and the United States, which earned a 2008 Arthur Ross Book Award
from the Council on Foreign Relations. His most recent book is A
Single Roll of the Dice: Obama’s Diplomacy with Iran. On Twitter: @tparsi.
1 Unclassified Statement for the Record on
the Worldwide Threat Assessment of the U.S. Intelligence Community for the
Senate Select Committee on Intelligence by James R. Clapper, director of
National Intelligence, January 31, 2012, available at
http://www.washingtonpost.com/wp-srv/world/documents/james-clapper-senate-testimony.html
2 The Comprehensive Iran Sanctions,
Accountability, and Divestment Act of 2010, available at
http://www.treasury.gov/resource-center/sanctions/Documents/hr2194.pdf
3 Thomas Erdbrink. “Annual Buildup of Air
Pollution Chokes Tehran,” The New York
Times, January 6, 2013, available at
http://www.nytimes.com/2013/01/07/world/middleeast/tehran-is-choked-by-annual-buildup-of-air-pollution.html?_r=0
4 Jay Solomon. “Senators Press Obama on Iran’s
Central Bank,” The Wall Street
Journal, August 8, 2011, available at http://online.wsj.com/article/SB10001424053111904480904576494463569720404.html
5 Imposition of Sanctions with Respect to the
Financial Sector of Iran, available at
http://www.cov.com/files/upload/Iran%20Sanctions_Section_1245.pdf
6 The Iran Threat Reduction and Syria Human
Rights Act, available at: http://www.govtrack.us/congress/bills/112/hr1905/text
7 Donna
Cassata. “Congress Rebuffs Easing of Iran Sanctions,” Bloomberg Businessweek, December 9, 2011, available at
http://www.businessweek.com/ap/financialnews/D9RGSQVO0.htm
8 Interview with Iranian Chamber of Commerce
official in Tehran
9 Ahmad Rezaie. “Mohsen Rezaei: Poverty and
Economic Sanctions are the Main Opponents of Iran’s Next Government,” Kabir News, November 27,
2012, available at http://kabirnews.com/mohsen-rezaei-poverty-and-economic-sanctions-are-the-main-opponents-of-irans-next-government/3590/
10 Interview with Bahonar on Iranian television,
aired October 29, 2012
11 Survival of the Islamic regime is an important
factor in decision-making and behavior. As long as it provides the basis for
the regime behavior, it can be easily justified. Even the Expediency Council,
which Rafsanjani heads, is an institution to provide for the “expediency of the
regime,” i.e. an instrument to prolong the life of the regime
12 Full text of Khamenei’s speech available at
http://english.khamenei.ir//index.php?option=com_content&task=view&id=1737&Itemid=4
13 One good example of such an experiment was
direct U.S.-Iran talks over Iraq in 2006
14 Interview
with senior Majles deputy who is relatively influential in the top layers of
the regime
15 Interview with former high-ranking minister
who is still influential in the key foreign policy and national security
circles
16 Interview with Majles deputy close to Ali
Larijani
17 Interview with former high-ranking minister
who is still influential in key foreign policy and national security circles
18 Numerous
interviews with Iranian businessmen, students, and retirees. See also “Killing
Them Softly: The Stark Impact of Sanctions on the Lives of Ordinary Iranians,” International Civil Society Action Network (July 2012), available at
http://www.icanpeacework.org/iran/
19 Interview with senior Iranian diplomat
20 Mohamed Younis. “Iranians Feel Bite of
Sanctions, Blame U.S., Not Own Leaders,” Gallup, February 7, 2013, available at
http://www.gallup.com/poll/160358/iranians-feel-bite-sanctions-blame-not-own-leaders.aspx
21 Interview with well-positioned businessman
with links to the security apparatus
22 Interview with former high-level diplomat and
foreign ministry official
23 Interviews with five Iranian intellectuals who
wished to remain anonymous
24 Interview with a former mayor of Tehran
25 Interview with current official in the
country’s business community who has influence over trade and economic policies
26 Interview with former deputy foreign minister
who is still close to the foreign policy and national security circles
27 Interview with former senior Iranian diplomat
28 This is what Khamenei entitled the current
Iranian year in his March 2012 New Year speech, available at
http://english.khamenei.ir//index.php?option=com_content&task=view&id=1620&Itemid=4
29 Izabella Kaminska. “Iranian Rial-ity, or When
Gresham’s Law Goes Awry,” Financial
Times, October 8, 2012, available at http://ftalphaville.ft.com/2012/10/08/1196301/iranian-rial-ity-or-when-greshams-law-goes-awry
30 “Iran Parliament Votes to Suspend Subsidy
Reform Plan,” Reuters, October 7, 2012, available at
http://www.reuters.com/article/2012/10/07/iran-economy-idUSL6E8L72TC20121007
31 For more on this decree, see
http://www.hamshahrionline.ir/details/197372 (in Persian)
32 “Iran Busts Sanctions with Private Oil Sale,” UPI, May 11, 2012,
available at
http://www.upi.com/Business_News/Energy-Resources/2012/05/11/Iran-busts-sanctions-with-private-oil-sale/UPI-75661336742400/
33 Khamenei’s full decree available at
http://www.leader.ir/langs/fa/index.php?p=contentShow&id=10308 (in Persian)
34 “E.U. Agrees to Ban Iranian Oil
Imports,” Voice of America, January 3, 2012
35 “Iran’s supreme leader rejects
direct talks with U.S., Associated
Press, February 7, 2013; “Iran’s Khamenei rebuffs
U.S. offer of direct talks,” Reuters, February 7, 2013. Khamenei’s full speech available at Aftab News,
http://www.aftabnews.ir/vdceff8z7jh8vei.b9bj.html (in Persian); and interview
with foreign policy expert at government think tank, January 2013
36 Conversation with senior Iranian
diplomat, November 2012; conversation with foreign policy advisor to the
Iranian National Security Council, November 2012
37 See Trita Parsi. A Single Roll of the Dice—Obama’s Diplomacy with Iran (Yale University Press, 2012) and others
38 Email correspondence with Ambassador Roberto
Toscano, February 19, 2013