Last Sunday, Iran and world powers signed a landmark interim deal to constrain the Iranian nuclear programme. The hope must be that this will pave the way to a final settlement of the stand-off next year. Nobody can say at this moment whether those efforts will be successful. But Sunday’s deal is a watershed in the decade-long diplomacy over Iran – and therefore a moment to reflect on factors that contributed to an agreement. One factor – indeed the biggest one – was the role that economic sanctions played in encouraging Iran to the negotiating table.
On numerous occasions over the past century, western powers have used economic sanctions as a coercive tool against other states. By and large, those efforts have failed. Sanctions by the League of Nations did not stop Mussolini invading Abyssinia. The US embargoes of Cuba and North Korea had little impact. The apparent failure of UN sanctions against Saddam Hussein was deemed by the US and Britain as a reason to invade Iraq in 2003.
The experience with Iran has been different. When sanctions were first mandated by the UN in 2006, many in the west doubted whether they would be effective. But the energy and banking boycotts have placed huge pressure on the economy. They have certainly hurt the Iranian business community and deprived it of the ability to operate. Sanctions have also forced Iran to negotiate.
But these boycotts are not the only factor to have brought Iran to the table by any means. Serious economic policy mistakes by Mahmoud Ahmadi-Nejad, the former Iranian president, played a big role in undermining the country’s economic condition. And the threat of military action by the US and Israel concentrated minds in Tehran at times. Still, Hassan Rouhani was clearly elected president in June on the back of a popular demand for the country’s economic hardship to be lifted quickly.
What lessons might we draw from the case of Iran about the use of sanctions in general? Some analysts argue that we are entering an era when the US will be technically far better placed to use sanctions to coerce other states. Some note, for example, how the US Treasury has devised an elaborate set of financial sanctions to cut off Iran from the global banking system. An EU decision this year to ban Iranian banks from global clearing was also significant. These “smart” and carefully targeted sanctions are an important part of the US security toolbox.
Others argue that it would be wrong to assume that what we have seen deployed against Iran could be repeated again. The US may have persuaded the world’s major powers to back an oil embargo on Tehran. But when it came to economic sanctions on Syria, it failed to get Russia on side. Besides, the ability of the US to boycott other states by economic means is certain to wane in future years as China becomes an increasingly dominant force in world trade.
Prominent Iranians view this debate differently. From their point of view, last weekend’s deal did not come about because of US-led sanctions. Iranians argue that the deal only happened because the US finally accepted that Tehran should be granted the right to enrich uranium permanently at limited levels. They argue that if the Bush administration had accepted this principle back in 2005, Iran would never have retaliated by consolidating its programme to current levels.
Still, the Obama administration can look back on its Iran sanctions policy – and the subsequent deal – as a diplomatic success. In many areas of foreign policy, President Barack Obama has vacillated. Yet when it came to the challenging and complex task of rallying the world’s big powers to isolate Iran, the Obama administration demonstrated global leadership.
– Financial Times
