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Effectiveness of the U.S. Sanctions on Iran - Gökberk Bilgin

Last week, the Iranian president Hassan Rouhani announced that Iran would take another step in reducing its commitments to the 2015 Joint Comprehensive Plan of Action (JCPOA) nuclear deal by restarting its nuclear development. This statement brings new questions on the effectiveness of the U.S. sanctions on Iran. Although the limitations on exports, Iranian government displays an indifferent attitude against the sanctions. So what makes a sanction successful? Why is the United States failing to get the expected results from Iran?

According to the article, “Why Sanctions Do Not Work?”, we view the sanctions as the liberal alternative to war since the First World War. However, the analysts are remaining skeptical about the effectiveness of this foreign policy tool. Many argue that the outcomes that the sanctions offer are not as decisive as the military force. Furthermore, the definitions are mostly confused by general readers.

Today, there are three main strategies of international economic pressure economic sanctions, trade wars, and economic warfare.

An economic sanction is a policy to decrease the economic welfare of a state by reducing international trade to coerce the target government to change its political action. By looking at the change in the Gross National Product (GNP) of the sanctioned country, we can see whether the policy succeeded or failed.

A trade war occurs if a state threatens to inflict economic harm or inflicts it to persuade the target state to agree to terms of trade more favorable to the coercing state.

Finally, economic warfare is a tool to weaken adversary’s total economic potential to undermine its military capabilities, either in a peacetime arms race or in an ongoing war. Since the overall productive capacity creates a possibility for the military size, the policymakers use this tool to prevent possible threats. By looking at the change in the military production of the sanctioned country, we can see whether the policy succeeded or failed.

For example, if the U.S threatens Iran with economic punishment if it continues to develop a nuclear program, then it is an economic sanction. If the threat comes because of copyright infringement, then it is a trade war. Finally, if the U.S. conducts a

cyber attack on Iranian nuclear facilities, then we consider it as the economic warfare.

Robert Pape states that economic sanctions can be successful if they meet three criteria.

1. Target state conceded to a significant part of the coercer’s demands.

2. Economic sanctions were threatened or applied before the target changed its behavior.

3. No more-credible explanation exists for the target’s change of behavior.

Of course, applying a sanction to a country has its consequences. One of the most important of these consequences is that it triggers the nationalistic movements in the sanctioned state. Rather than undermining the government, society can tolerate the damage. In the Iranian case, public opinion shows that there is a significant resistance against U.S. policies.

Another critical issue is that economic adjustment also buys time to seek alternatives, such as other trading partners or smuggling opportunities. According to Bloomberg news, despite the sanctions, Iranians continue to supply oil to China both directly and indirectly. In the direct method, tankers are offloading millions of barrels of Iranian crude to Chinese storage tanks located in the Chinese ports. On the other hand, they also send their petroleum by mixing it with other countries crude so it cannot be recognized. Furthermore, Iran and China agreed on developing the Iranian oil fields with the Chinese investment of $280 billion. Another $120 billion will also be spent on Iran’s transport and manufacturing infrastructure.

With the Chinese deal, the first criteria, conceding to coercer’s demands, becomes automatically violated. Moreover, Iran gained the support of China and Russia, two permanent members of the United Nations Security Council.

The announcement on restarting the nuclear development plan violates the second criteria. We see that by complying with the U.S. sanctions initially, the Iranian government bought time to adjust its economy and political situation. As they get support from other sources, they immediately returned to follow their former policies.

Alongside the economic sanctions, the military threat in the Strait of Hormuz is still a problem for the Iranians. To balance the situation, they also added military involvement to their deal signed with China. According to that, 5,000 Chinese security personnel will be located in Iran that creates a basis for the broader engagements.

Overall, the results show that the effectiveness of the U.S. sanctions remains far away from the theoretically expected outcome.


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