Iraq, Iran : the lesson of sanctions

François Nicoullaud


In 1990, Saddam Hussein did not understand that the world had changed with the fall of the Wall. He thought that the USSR would protect him from America after the invasion of Kuwait, and paid dearly his mistake. Abandoned by the Soviets, Iraq had to bear the cost, first of a war lost, and second of international sanctions, on a scale and harshness still unmatched today.

On the 6th of August, 1990, four days after the invasion of Kuwait, the Security Council adopted, with the approval of its five permanent members, Resolution 661 implementing an overall embargo on imports from, and exports to Iraq, and on all financial movements. It envisaged a kind of safety valve for the supply of humanitarian goods, but this provision did not come into effect until 1996, in the form of the “Oil for Food” program, because of Iraq’s initial resistance to further controls. After the liberation of Kuwait, Resolution 687, adopted on the 3rd of April, 1991, again with the assent of the five Permanent Members, launched the search and destruction of all nuclear, biological and chemical weapons, and of missiles over a 150 kilometer range. Two days later, Resolution 688 condemned the repression of civilian populations, especially the Kurds, and opened the way to the famous “right of humanitarian intervention”. Finally, moving beyond the decisions of the Security Council, the United States, Great-Britain and France set up two no-fly zones, one as soon as April 2011 in Northern Iraq, to protect the Kurds, the second in the South on the following year, to protect Shi’a populations.

Over the years, the toll inflicted by the embargo on Iraqis’ health and welfare raised growing questions in the international opinion. Humanitarian NGOs started producing reports detailing how sanctions were entailing hundreds of thousands deaths, especially among children. In 1997, the French president, Jacques Chirac, declared at an international Summit in Hanoi : “Our goal is to convince, not to compel. I have never seen a policy of sanctions producing anything positive.” The year before, France had stopped contributing to the Northern no-fly zone. It withdrew from the Southern one in 1999. In the meantime, Iraq was bearing grudgingly the international inspections set up by Resolution 687. By December, 1998, the United States inflicted on the country a wave of targeted strikes, in principle to degrade its suspected WMD capacities, more likely to help topple Saddam Hussein’s regime. But the Regime held on, and a new war had to be launched in 2003 to finally bring it down.

How do sanctions against Iran compare to such a history? First, Russia, succeeding the USSR, and China, do not look at the world as in 1990, and have developed growing reservations regarding the use of sanctions. And the Iranian case, in its outset, did not carry a violation of international law as blatant as the Iraqi case, which saw the massive aggression of a UN member state by another member state. Russia and China have consequently refused to endorse an embargo expanding beyond the points of contention, i.e. nuclear, military and ballistic. These sanctions having produced but a feeble impression on the Iranian regime, the United States and the European Union have resolved to resort to their own additional sanctions, interrupting all oil-related business, and progressively drying up all financial flows with Iran. And to reinforce the efficiency of these sanctions, the United States set up “secondary sanctions”, compelling third parties to join in. In the past, such a practice had been strongly opposed by the European Union. This time, it has quietly endorsed US pressures on a vast array of countries, especially in Asia, to convince them to reduce their purchases of Iranian oil, and to interrupt their monetary transactions with Tehran, except for trade expressed in their national currencies. In spite of its unwavering support, the European Union has been submitted, like everyone else, to the pressures of the American Administration and Congress, for instance when the question arose to forbid to Iranians banks access to European automated banking services.

But this new architecture of sanctions suffers from a lesser legitimacy than the Iraqi set of sanctions, which was placed entirely under the aegis of the United Nations. The great consumers of Iranian oil : China, Japan, India, South Korea… have reduced their purchases only in the proportion required to avoid punition by the United States. True, Iranian oil exports have been cut by half. But this oil is sold at a price fluctuating between 80 and 100 dollars per barrel, as the price of the barrel seldom went over 30 dollars from the beginning of the Islamic revolution, in 1979, to the election of Ahmadinejad as president, in 2005. Furthermore, an unknown share of the Iranian production is, in all likelihood, sold under a few other pavilions. And quite obviously, some banks exotic enough to be able to dodge American monitoring succeed, at the proper price, in managing exchanges between Iran and the outer world.

True also, the Iranian riyal has lost about two thirds of its value in dollars, but it was until recently, as a matter of prestige, maintained at a grossly overrated level. Its present value is much closer to the economic truth. This correction has certainly encouraged inflation. But it offers margins of competitiveness quite unheard of to the Iranian industry, which was until now stifled by Asian productions. It offers an opportunity to raise the proportion of non-oil exports in the Iranian trade balance. This devaluation has therefore positive aspects. Of course, the Iranian population pays dearly for these sanctions, and also for the erratic management of the economy by the Iranian government, as was the case in Saddam’s Iraq. In theory, imports of humanitarian products, like food and medicine, do not fall under the embargo. But the complexity of the system make such imports more or less impracticable, except for exceptional cases as when some giant of the food industry, like Cargill, deems it convenient to sell corn to Iran. All things considered, the shock created by sanctions is not as heavy as it was in Iraq. The sheer size of the Iranian population – 75 million inhabitants versus 20 million Iraqis at the turn of the century – acts as an absorber. And in spite of serious shortcomings, the level of self-sufficiency of the Iranian economy, in agriculture as well as in industry, is clearly higher than in Saddam’s Iraq.

Could the Iranians be less resigned than the Iraqis to be taken as hostages by their government in its quarrel with the outer world? If they were to rise from submission, would the Regime be ready to show itself as merciless as the former master of Baghdad, or the present master of Damascus? The Iranian civil society has already paid a heavy price for the upheavals entailed by the rigged elections of 2009. It is not in a position to challenge again the Regime. On the other hand, this Regime will probably hesitate to rig the upcoming presidential election as grossly as last time. All in all, one does not see coming from the horizon the internal crisis which could undermine the Islamic Republic to a point where it would have no other choice but to give up to the West.

And the present nuclear showdown is here to last quite a while. The last round of negotiation in Almaty, at the beginning of April, has revealed a wide and enduring gap between the parties, even if there has been some progress in the quality of their exchanges. A breakthrough seems for the moment out of reach, all the more as Iran is going to be absorbed in the presidential election and the installation of its new president until the end of summer.

In order to hasten the moment when Iran’s economic collapse and political isolation would drive it to a full surrender, can we envisage to exert on the Regime even higher pressure? François Hollande, the French president, has been declaring at the beginning of March : “France will take its responsibilities in order to maintain pressure, to harden the sanctions, so as the Iranian rulers abide by their international commitments, by the Security Council’s resolutions.” But then, it becomes somehow difficult to see what kind of crushing sanctions could complement the present ones. Such sanctions will not be able to rely on the legitimacy of the United Nations. They will have to take into account the low motivation of most third countries to partake in such an escalation, as well as the growing ingenuity of Iran in dodging the embargo. One cannot therefore exclude that, as in the Iraqi case, sanctions will not be able to bring the desired outcome.

Then, again as in the Iraqi case, comes the temptation to resort to force. But Tehran is taking great care to avoid offering to the United States the opportunity to intervene. It stays cautiously behind the red line defined by President Obama as the beginning of the production of a nuclear explosive device. It stays even behind the red line defined by Prime Minister Netanyahu as the possession of enough 20% enriched uranium to obtain in a matter of weeks, by further enrichment, enough highly enriched uranium for a first atomic bomb. And the US administration will not dare to build a case like the one which led to the invasion of Iraq. To show how times have changed, the US Intelligence Community, much to the chagrin of the neoconservatives eager to knock heads with Iran, reminds regularly since 2007 that the Islamic Republic has interrupted its clandestine nuclear program by the end of 2003, and has not, since then, taken the decision to produce nuclear weapons.

There should be a third way to come out of the crisis, but it implies a deep change in the parameters of the negotiation. There is one idea, and only one, on which such a change could be built : the recognition of Iran’s right to enrich, but enshrined in a system of controls powerful enough to practically forbid any access to the Bomb. Ali Khamenei, leader of the revolution, has recently supported such a formula in a public speech. Now, if there were an interest in exploring it, the initiative rather belongs to the West. It belongs in reality to Barack Obama, the sole Western leader in a position to boost the negotiation as the European leaders have chosen to stand back, for lack of imagination, lack of cohesion, and lack of political will.

 François Nicoullaud, political analyst, former French ambassador to Tehran


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