Maybe Those Iranian Sanctions Really Are Working!

At least that is the impression one gets from Ya Libnan:

Iran’s economy is under increasing strain four months after the latest international sanctions against Tehran, say Iranian businessmen, traders and consumers, who describe spreading pain from inflation, joblessness and mounting shortages.


In interviews from within Iran, these people paint a picture of unsteady supply chains and disrupted exports. Ordinary Iranians say they worry they will be caught paying more for goods and services even as the government trims subsidies.

Iran’s Central Bank hasn’t released official gross domestic product, inflation and other data for three years. But anecdotally, these Iranians say, weaknesses in their economy appear to have been magnified since June, when the United Nations, European Union and U.S. began stepping up measures aimed at deterring Tehran’s nuclear program.

“Every morning, we go to work wondering how we will manage the day,” says Gholam Hossein, a Tehran brick-factory owner. “The market is chaotic and unpredictable. One day we can’t move our goods from the port. Another day we can’t open a letter of credit.”

An industrial-machinery importer says operating costs have risen at least 30% because of new shipping and insurance restrictions on Iran-bound cargo, costs to be passed on to consumers. A retired accountant in Tehran says her pension is now stretched thin. “Inflation is putting a lot of pressure on people,” she says. “It’s on everyone’s minds.”

Of course, that does not mean that Iran is anywhere near to throwing in the towel.

It is still too early to say whether new international measures will force the intended concessions. Iran has sizable hard-currency reserves to absorb shocks, and the isolation of its banking sector protected the country from the worst of the global financial crisis.

Iranian President Mahmoud Ahmadinejad told reporters in New York recently that the economy is healthy. He and other Iranian officials say Iran is adept at surviving sanctions and that the new measures will only make the country more self-sufficient.

Nevertheless, the article goes on and on giving anecdotal evidence that the sanctions are in fact taking a toll--and the fact remains that Iran to begin with has not exactly exploded with prosperity since Ahmadinejad took over.

In fact, there are other sources that indicate that Iran is in trouble:

1. The Chairman of the Expediency Discernment Council and Chairman of the Council of Guardians, Rafsanjani, said that throughout the entire period of the revolution never have such severe sanctions been imposed on Iran. I call upon you and upon all official functionaries to treat this seriously and not with humor. Over the past 30 years we have had wars and military threats but we never predicted such a calculated, arrogant attack on us. (Mehrnews, Sept. 14)

2. Chairman of the Iranian Majlis, Larijani, said. “I’m not saying that the sanctions do not have any effect, but their effect is very small.” (Syrian al-Watan, July 2)

Khabar Online, a website associated with Larijani, reported (July 21) acknowledgement that Iran has gradually entered a state of international isolation.

3. The Iranian President’s Chief of Staff and personal associate, Rahim Mashaei, said that “when they say sanctions have no effect, it doesn’t mean that there’s no economic effect, but that it won’t have the effect of changing the Ahmadinejad government’s policy.” (Fars, Aug. 4)

4. The Chairman of the Iranian Atomic Energy Agency, Salehi, in an unusual statement, said, “It cannot be said that the sanctions imposed on Iran are without effect.” He added that the sanctions will probably cause a slowdown in Iran’s nuclear progress, but will not stop it. (Reuters, Isna, July 7)

5. The Iranian President’s First Vice President, Rahimi, said of the latest sanctions that the current situation is the most sensitive since the revolution, while stressing the need for cooperation and for taking care of all the organizations to prevent the sanctions from having an effect. He emphasized that the government will not allow the Iranian people to suffer from the pressure stemming from the sanctions, rejected the claim that the sanctions explain the recent price increases, and called upon the relevant bodies to supervise the situation in the economy to prevent what he described as “the psychological effect” deriving from the sanctions. (Mehr, Aug. 16)

6. Foreign Minister Mottaki announced the establishment of a headquarters to take special economic steps to deal with the sanctions imposed on Iran. (Irna, June 30)

7. Minister of Trade Ghadanfari and Economic Minister Hosseini claimed at a joint meeting that the sanctions have no significant effect on the Iranian economy although, according to them, it’s possible that Iran has paid a certain price. In another statement by the Minister of Trade, Ghadanfari, reflecting deep concern about the ramifications of the sanctions on the Iranian shipping fleet, he wondered what crime Iran had committed that caused sanctions to be imposed on its ships. He added that they needed to be protected and that Iran has a special defense plan in this regard. (Fararu quoting Dunya al-Iqtisad, June 14)

8. The head of the Iranian Chamber of Commerce, Nahavandian, remarked that the sanctions policy will not achieve any results, “even though the prices of imported products might rise.” In another statement Nahavandian said that Iran is facing what he described as “a new wave of threats” on its economy; the sanctions are like a military war, and they should be taken seriously. He added that the sanctions are preventing Iran from exercising its right to be present in the international arena, and they must not be “naïve” and disregard them because the sanctions will have their effect, eventually, on the Iranian people. Yet he claimed that the people reject the language of pressure. He concluded that it is imperative to work on every front to lift the sanctions, since they prevent the country from progressing and its next generation must be protected. Nahavandian further said that the sanctions will lead to higher prices of goods, which will affect the rate of unemployment and inflation in Iran, so the government has to act seriously and announce that it will compensate the economic sector for the losses. Special attention and breaks are necessary. (Fararu, June 14; Aftab News, July 29, Aug. 8; ISNA, Aug. 9)

9. The Governor of the Central Bank of Iran, Bahmani, said in reference to the sanctions imposed by the EU that Iran is in an all-out (economic) war on all levels. (Iran Press News, Aug. 28)

10. The leader’s representative in the Khorasan region, Ayatollah Tabasi, a senior religious institutional personality, said with regard to the effect of the sanctions on the economic situation that “we aren’t saying that adopting the Security Council resolution is not affecting Iran’s economic situation, and on the other hand I am certain that with a more suitable policy perhaps we wouldn’t have reached this situation” [of sanctions against Iran]. (Sabz, June 24; DayPress, June 24)

11. The Chairman of the Iran-China Joint Chamber of Commerce and a senior conservative figure, Askar Awladi, said that the sanctions are causing increased expenses in Iran’s trade, but Iran is capable of circumventing them. (Sabz, July 1, Poolnews)

12. A member of the German Bundestag on behalf of the FDP (liberals), Rainer Stinner, said after returning from a meeting in Teheran (Aug. 9) that representatives of the regime and members of the Majlis whom he met expressed concern that the sanctions might have a significant effect on Iran’s exports and imports (AP, Aug. 9).

The biggest question then is what it will take--and for how long--before Ahmadinejad cries uncle.
I'm not holding my breath.

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