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The Lasting Price of Sanctions

February 6, 2013 Topic: Sanctions Region: IranIraq

The Lasting Price of Sanctions

Will penalties imposed on Iran result in the same kind of unintended consequences seen in Iraq?

It’s not hard to see why Hans Von Sponeck called the sanctions against Saddam’s Iraq “a different kind of war.” During the 1990s, several UN agencies estimated as many as 500,000 children died in a crisis that saw hyperinflation, the decay of vital infrastructure and a collapse of GDP to just $15 billion.

Nobody is suggesting sanctions against Iran—which are being further strengthened today—are as severe, but the crisis has nonetheless seen a crippled health service, over 30 percent unemployment and an estimated 110 percent rate of inflation. And just as in Saddam’s Iraq, sanctions may be making the regime stronger.

Despite this, many still contend that containment in 2002 was working and that “smart sanctions” should have been given more of a chance. But as sanctions became more targeted, UN humanitarian coordinator for Iraq Denis Halliday was noting the negligible difference they made to the lives of Iraqis whose society he said was still being “destroyed.”

According to Von Sponeck, “smart sanctions” failed to address the “strangulation of the civilian economy.” A similar problem exists today in Iran where sanctions target regime elements like the Islamic Revolutionary Guard Corps (IRGC). But since the IRGC run up to 30 percent of Iran’s economy, civilians also suffer while the wider embargo causes indirect problems such as the recent healthcare crisis.

Just as sanctions are now thought to be strengthening IRGC control, Saddam’s regime in Baghdad clung to power seemingly impervious to rising public anger, periodic bombing and the collapse of revenues. Fanar Haddad has argued that if anything, sanctions made Saddam’s patronage more valuable and command greater loyalty, an effect opponents of sanctions have frequently highlighted. In today’s Iran, regime elements have become masters of smuggling and the black market, rather like Saddam and his elite in the 1990s.

And there is a further price. The devastating loss of human capital could make it far harder to construct a legitimate post-regime government or even one accommodating to the west. Consider the results of last year’s Gallup poll in Iran on nuclear military power. Results show the danger of educated Iranians leaving Iran or being silenced by the regime as it gains greater legitimacy for resisting the West, Israel and sanctions: “Iranian adults with higher education are more likely to oppose developing Iran's nuclear power for military purposes, and are more likely to oppose cutting ties with countries that impose economic sanctions on Iran.”

The majority of Iranians who support some kind of nuclear capability may have a harder attitude toward the west as a result of the hardship they currently endure, a potential problem outlined in a report by
The Iran Project. Those who seek regime change must therefore consider the prospect of another disarmament crisis in a post-theocratic Iran.="#fullscreen">

Indeed, some in the now tragically cowed Green Movement support a similar system of government to the one currently in place. Nazila Fathi from the Harvard Belfer Center explains the socially corrosive effect of sanctions:

We can already see how the sanctions have undermined the Iranian middle-class and civil society. People who rose in 2009 against the regime - at one point the regime acknowledged that three million had staged an anti-government protest, have retreated to their homes and are silent. They're simply under too much economic pressure to care about politics or human rights violations.

She continued by explaining the desperation caused by sanctions:

 . . . Sanctions not only ruin the modern, moderate, educated middle class, they turn people sour and brutal. People are losing loved ones because of a lack of medication. People are cutting down on food and their children's education. Workers are losing their jobs and God knows where they turn to feed their children. None of this undermines the Islamic Republic. Iraq and the violence that followed Saddam's fall, should be a lesson.

If a post-Khamenei Iran did not support western designs (probably pursuing some kind of nuclear ambition or opposing Israel), the situation would be similar to the disappointment coalition leaders felt in Iraq following Saddam’s demise. Confronted by groups like the Sadrists, the coalition soon found that some of Iraq’s main political actors derive their power not from the promise of Western-style liberty or even a peaceful view of Islam.

Destitute and angry, Sadr’s supporters found solace in the cleric’s uncompromising vision. Not only had they been oppressed by Saddam, but by a sanctions regime which ensured that when Americans entered Sadr City in Baghdad they were met with angry looks from the people they had recently freed from Saddam’s tyranny.

Hayder al-Khoei from the Centre for Academic Shi’a Studies highlights how the sanctions period laid the groundwork for some of the political conditions we see in Iraq today:

In every sense of the word, the sanctions crippled Iraq. The sanctions might have been a short-term success for the US because they managed to contain Saddam’s regional ambitions and isolated him internationally but it came at too great price for both the Iraqi people and later the Americans themselves.

The middle-class in Iraq was virtually destroyed; it led to a brain drain and caused widespread corruption throughout the country. Even today, ten years after the US occupation, Iraq is still suffering from the effects of the sanctions.”

As Paul Pillar has argued, ending the current impasse will involve using sanctions and sanctions relief for their correct purpose: as a tool of leverage rather than a blunt instrument for battering Iran. A deal involving sanctions relief and close nuclear cooperation won’t end the problem of the Iranian regime, but in this long game it could buy the time to let it fail on its own accord in the face of mounting regional setbacks. Instead we have the current badly coordinated
approach that Vali Nasr recently characterized as a “failing strategy.="#fullscreen">

The questionable tactic of broad sanctions needs to be re-appraised in the context of a regional strategy, lest we find ourselves dealing with their consequences for years to come.

Robert Tollast is a frequent contributor to the Small Wars Journal, Iraq Business News and Global Politics Magazine. Based in London, he is currently conducting interviews with Iraq experts and veterans of the conflict.

Image: Flickr/Photohome_UK. CC BY 2.0.