The Politics of Economics

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As Western nations again mull over whether to ratchet up sanctions on Iran, it helps to understand these punitive measures for what they are.

Broadly speaking, sanctions are an infinite array of trade and financial restrictions imposed by one or several nations to pressure the leaders of the countries being targeted to change their policies. It is a form of bullying, righteous or not, that former United Nations Secretary General Kofi Annan once called “a blunt and even counter-productive instrument.”

Sanctions cannot all fit in the one same basket because they are as heterogeneous as the more than 185 countries that have been targeted since World War II. But they also allow for some common denominators.

To begin with, there is a strong component of domestic politics of countries imposing the sanctions because they amount to a middle ground between simple complaining and military action. In other words, it is a good way to convince citizens of the sanctioning country that their government is not sitting idle and that something is being done.

When there is moral international unanimity, as was the case in South Africa with apartheid and the former Yugoslavia with genocide, sanctions are useful because they are easily enforced. The problem is when they are politically motivated and international consensus is weak, as is the case with just about most other sanctions.

Iraq, for instance, was a miserable example. For 13 years, Iraqis were severely punished by the international community without accomplishing their objective of forcing Saddam Hussein out of power. Currently, think of North Korea and Burma. It is safe to say that collective punishment has been largely discredited because it only emboldens leaders being targeted, while strengthening nationalistic sentiment. It also ultimately undermines middle classes of the sanctioned country needed for any political reform.

The new trend is targeted sanctions, which aim to hurt rulers and their top echelon with financial, travel, and military restrictions, while minimizing impact on the general population. These have proved more useful and morally and politically acceptable, but their success depends on how much leverage they ultimately affect rulers. Usually, not much. Think of Zimbabwe and Cuba as failed efforts, although they did work better in the former Yugoslavia.

To be effective, sanctions must be full proof. This requires not only rubberstamping in the UN Security Council, which in itself is hard to achieve. They require international commitment, which implies support, to achieve whatever objective is targeted, whether its regime change or withdrawing troops from a country. Otherwise, they are easy to circumvent and can easily become counterproductive.

That brings us to the Middle East and ultimately a renewed debate over whether to impose more muscular sanctions on Iran.

In Lebanon, sanctions were fruitless due to the lack of consensus. A 1982 UN resolution calling for the respect of Lebanon’s sovereignty in reference to Israel was never enforced, nor did it result in sanctions on Tel Aviv, which in fact saw military aid multiply by four. But the same resolution was used to justify US sanctions on Syria that are still in place. These blanket, politically motivated sanction are simply counterproductive.

Syrian targeted sanctions have had a mixed record due to the lack of international consensus. The US imposed the first round in 2003, but it wasn’t until 2005 when the UN and the international community got involved that Damascus starting feeling the pinch. It has been unable to recover from its economic boom in 2004, before strict sanctions were first imposed.

The reason Syria has been more susceptible to sanctions though is that the US is its top trading partner. Also, the US still holds almost $20 billion of frozen stashed oil revenue of Syria. This year, Damascus said any rapprochement, which now seems close as President Barack Obama decided to send an ambassador, needs to involve the lifting of sanctions.

The current economic crisis is only exacerbating the situation for Syria. Even then, Syria has developed some breathing space from Russia, which has had historic military ties to Damascus, China, Gulf countries, Iran, and other Asian countries. Syrian trade has even increased with the EU for most of this decade, albeit slowly.

Libya is a good example of how sanctions can be counterproductive. After a decade under strict UN-mandated sanctions for its role in the Lockerbie bombing, Libya agreed to pay compensation to the victims. US sanctions were in place for more than a quarter of a century until 2004 after Libya decided to renounce weapons of mass destruction and sponsoring terrorism.

But Muammar al Qaddafi is a pragmatist and a survivor, among many other things. In reality, Western oil companies were operating in Libya long before the sanctions were lifted. His change of heart only came after he realized oil, the country’s only livelihood, would not be able to sustain his economy without international investment.

So what to do about Iran, especially now that the standoff has increased following post-election riots? Iran has survived US sanctions for decades and managed to come out strong, not just developing its nuclear program, but also a formidable space program and indigenous military capability. That is, Iran, while hurt, is more resilient.

However, sanctions have politically reinforced the regime significantly and its power has broadened throughout the Middle East, from Iraq, to Gaza and Syria. Indeed, the more the West ratchets up the pressure, the more avenues the Ayatollahs have found to hurt Western interests.

UN sanctions have so far been targeted and been worded in such a way that enough holes are available to still do business with Iran, as increased trade with Europe and the Gulf over the last few year shows. Meanwhile, Western efforts lack consensus. Iran has gained the higher moral ground, even during recent popular upheaval there.

Russia and China have for some time replaced the vacuum being left by European companies. Bilateral business with China, for example, has increased around 40 percent annually for the last decade.

So will sanctions work on Iran? No. They will embolden the regime, quell any internal dissent, open new doors for Asia and Russia, and above all, accomplish little. The answer to this quagmire lies then with Obama. Cooptation of the Islamic Republic is the only way forward, unless the West wants to confront Iran militarily, which will only delay their intentions anyway.

This is what Nixon did with China. It took three decades, but China is so fully webbed into a globalized world, that it is no longer considered a threat, despite its nuclear arsenal. The only strategy left, the only one that has not been tried, is engagement, and a negotiated way out of useless sanctions.

Andres Cala   - Madrid-based freelance journalist and political scientist specialising in Middle Eastern and European policy, as well as global energy issues.

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