The threat of nuclear attack by nations like North Korea and Iran has had the international community on edge for years. To combat growing fears, major world powers, including the United States and most of the European Union, have adopted economic sanctions against both nations. These sanctions have hit hard, with Iran’s economy crumbling steadily on international watch. Amid calls for further tightening of these sanctions, an important question is raised: Are they accomplishing anything?
In his testimony given before the Senate Armed Services Committee on March 5 , General James Mattis, the top U.S. Commander in the Middle East, claimed that the sanctions are not having their intended effect. According to the Senate Committee, these effects are intended “to stop Iran from obtaining nuclear weapons.”
The Obama administration has remained steadfast in its willingness to initiate communication with the Iranian government, but there has been minimal progress on the negotiation front. And so, with the question of whether the sanctions are effective when left unanswered, we are forced to question the cost at which they are being implemented — and whether these costs outweigh the expected benefits.
By design, the sanctions are meant to isolate Iran from the international financial system altogether. This undoubtedly has had a massive impact on the country’s citizens and their everyday lives. The hardships of the Iranian people have been acknowledged but are recognized as a necessary evil in the pursuit of nuclear non-proliferation through economic sanctions. The plight of the average Iranian seems to be a distant concept for most Americans, but for me personally, and surely for Iranian-Americans across this country, it is close to home. I have more relatives than I can count living in Iran, and their cost of living has increased by an almost insurmountable degree.
With a currency crisis that was slowly developing even before economic sanctions were put in place, the rial, Iran’s official currency, has been devalued by almost half — 12,500 rial are now equivalent to one U.S. dollar. To clarify: two years ago, when I visited Iran with my parents, the price of one kilogram of chicken — a bit more than two pounds — was around 20,000 rial. Now, the same amount of chicken will cost about 60,000 rial. In comparison, in the United States, from the start of the recession in late 2008 to January 2013, the price of chicken per pound only increased by about 30 cents. All of these values may seem relatively small, but keep in mind that the overall cost of living in Iran is much higher than in the United States.
The Iranian government reports a 25 percent inflation rate, but based on direct reports, the numbers clearly do not add up. The government also reported an unemployment rate of 15.5 percent, but international economists estimate a number closer to above 20 percent, with almost one million job losses in the past year.
The price of almost everything has increased dramatically, and although Iran ranks fourth largest in the world’s overall oil reserves, even the price of oil has skyrocketed. The overview of U.S. restrictions regarding business dealings with Iran is extensive, and with the constraints on imports, exports and oil production, we have almost reached a full trade embargo.
Oil imports to the European Union have been cut off completely, and a country that previously derived 90 percent of its export revenue from oil experienced a 45 percent decline in earnings from 2011 to 2012. China, Japan and South Korea have continued to import from Iran, but international pressure on these nations to forgo Iranian oil has been increasing.
Supplementing the decline in oil sales is a sharp decline in international investments, which would undoubtedly help to offset profit losses. Restrictions on all financial transactions with banks in Iran have kept foreign banks from investing in a multitude of ventures — even those that are not restricted, such as humanitarian trade.
Without the hard currency provided by oil revenues and investments, production of medication and medical supplies has declined, and imports from foreign pharmaceutical companies have decreased by 30 percent since 2011. Lines extend outside of pharmacies, and local pharmacies frequently run out of medication. My aunt, who was diagnosed with multiple sclerosis 10 years ago, has to travel two hours to the outskirts of Tehran to wait in long lines for medication that has tripled in price over the past year. Most of the time the medicine is in stock, but sometimes it is not. The same experience happens for my diabetic grandmother, and for the hundreds of thousands of other patients in Iran.
While the fear of nuclear attack is foremost in everyone’s mind, and avoiding conflict quickly follows for the Obama administration and much of the world, the effects of international actions must be recognized. These economic sanctions may be intended to pressure the Iranian government into negotiating, opening up investigations by the International Atomic Energy Agency, however unlikely, abandoning uranium enrichment altogether, but in reality they are applying the greatest pressure on average Iranians. Avoiding war is surely essential, as is the welfare of individuals around the world, and based on current observations of the international climate, any further tightening of these sanctions should be avoided unless care is taken to prevent more hardships from befalling the people of Iran.
Nina Golshan is a staff columnist. Email her at [email protected]