The theater of economic curbs
Yesterday's edition of the New York Times reported on page one that the economic sanctions leveled against Iran by the United States are not working — if by working one means that the country shows any signs of ditching its nuclear program.
Oh, it’s not like the sanctions have completely flopped: Inflation is gargantuan, and the currency has melted. But the Times reporters found that Iran’s citizens have yet to riot over prices. New high-rises are rising high over Tehran and a Chinese-built highway interchange is similarly soaring. Shops are filled with goods, and new eateries seem to be opening daily. In response, the Obama administration has decided to do the thing it does when sanctions don’t work (and not working is something sanctions frequently do): It’s adding more sanctions.
For all the clarity the Times brought to the subject, the piece could have been headlined “US Doubles Down on Hopeless Initiative Against Iran.” Not only are the existing sanctions not working, the Times reported, but unnamed senior Obama administration officials doubt that the new sanctions would work. In detailing the mechanics of the sanctions, the piece left the reader to understand that just about the only positive thing about sanctions is that they’re not as nasty as war. But that might change, too. The Times’ kicker reported an upcoming military exercise in the Arabian Gulf in which the US and its allies will practice intercepting banned weapons and technology bound for Iranian ports, which may result in the worst of both worlds — sanctions and war.
The United States has levied sanctions on so many countries over the years, with so little success, that a template must exist over at the Times for stories such as today’s. Time and again we’ve been told by the government and news reports that the sanctions had shattered the Iranian economy and that the country really couldn’t take much more. Yet Iran stands, and the Obama administration proposes yet another wave of sanctions. The United States made economic sanctions its foreign policy tool of choice in the post-Cold War era, as Richard N. Haass explained in Foreign Affairs 15 years ago, because they’re a politically painless way for presidents to look as though they’re doing something as they seek to arrest weapons proliferation, stop wars and topple foreign governments.
The president’s sanctions golf bag contains a dozen or more clubs. According to Haass, these include “arms embargoes, foreign assistance reductions and cutoffs, export and import limitations, asset freezes, tariff increases, import quota decreases, revocation of most favored nation (MFN) trade status, votes in international organizations, withdrawal of diplomatic relations, visa denials, cancellation of air links, and credit, financing, and investment prohibitions.” Haass called sanctions “a form of expression, a way to signal displeasure with a behavior or an action.”
“Sanctions alone are unlikely to achieve results if the aims are large or time is short,” he wrote, calling to mind the limited success of the measures against Iraq, Libya, Cuba, North Korea, Iran and other nations. He continued: “Sanctions can weaken a country, but it usually takes civil disturbances, civil war, invasion or the threat of invasion to change a regime or its direction.”
For US sanctions to have real bite, they must prohibit or limit trade by nations in addition to the directly sanctioned nation, which in practice means that imposing sanctions on countries like Iran ends up causing geopolitical problems for the US with its big trade partners, like China, France or Russia. And the more materially onerous the sanctions, the greater the tendency for the sanctioned nation’s people to unite in resistance against the sanctions issuer, which is what the Times appears to be observing in Iran.
This isn’t to suggest that economic sanctions never work. In the case of Iran, we know that oil sanctions by the United States and the European Union have cut exports by as much as 70 percent. But there’s not much evidence that all this hurt will cause Iran to change its policies or instigate a revolution. One comprehensive study found that the smaller a targeted nation’s GDP and the larger the targeting nation’s GDP (or group of nations’ GDP), the greater likelihood that sanctions will cause the targeted nation to bend. If sanctions are piled on slowly, they’re less likely to work than if they all dumped on a targeted nation at once. But if the target has a supportive patron, as Cuba once did in the Soviet Union and now has in Venezuela, or if the target finds a way to market its goods and resources around the sanctions, as Iran has, this likelihood can vanish.