Iran sanctions: lessons learned from Iraq

Photo by Iranian Flickr user Leila

As someone who spent part of the late 1990s working on Iraq, I am adamantly against pervasive, population-centric economic sanctions (as opposed to sanctions directed at elites). Perhaps to a greater extent than the invasion of Iraq by the Bush administration, the UN sanctions regime pushed by the Clinton administration's "dual containment" policy were criminally destructive, paving the way for the past decade's civil war and the complete breakdown of Iraqi society. Charles Tripp, in his history of Iraq, wrote of the sanctions:

Food and medecines were theoretically exempt from the embargo. However, the import of fertilizers, agricultural machinery, pesticides and chemicals that might have a dual use, as well as parts for restoring Iraq's ruined electricity and water purification systems, was forbidden. Within a relatively short time, the effects of these enforced shortages were being felt by the Iraqi population, as malnutrition and disease took their toll, causing infant mortality rates to rise to levels not seen in Iraq for over forty years. This had little impact on the regime's priorities.

A more devastating assessment is made by Geoff Dwyer in his The Scourging of Iraq : Sanctions, Law and Natural Justice, which equates the sanctions with war crimes targeting civilian population. The type of sanctions carried out against Iraq were wrong, just as the current siege of Gaza is wrong, and similar sanctions against Iran would also be wrong.

Photo from Flickr user Iraqwar

So it's somehow alarming to see move for generalized sanctions from the US Congress and energy companies already cutting their links with Iran:

Energy executives said Vitol, Glencore and Trafigura, which have hitherto sold Iran half of its petrol imports of 130,000 barrels a day, stopped supplying Tehran because of mounting political risk. “The political and public relations problems more than outweigh the business rewards,” said one executive.

The sale of petrol to Iran by non-US companies is legal as fuel imports have yet to be included in sanctions against the country. The companies declined to comment.

Vitol’s decision is particularly important as the company is by far the world’s largest oil trader. One executive familiar with Iran’s trade said “Vitol consciously decided not to participate in Iran’s tenders” at the start of the year. Trafigura, the Switzerland-based oil and metals trader, stopped selling to Iran about three months ago, an industry executive said. “They have concluded that there’s too much political and financial risk,” the executive said. Glencore stopped supply in late 2009, breaking a relationship with Iran of more than three decades.

The FT further analyzes where the Iran debate stands, and it's scary to see this line of thinking:

Supporters, including US lawmakers, argue that cutting off supplies would bring the country’s economy to its knees. To cope, they say, Tehran would need to reduce subsidies to slash consumption, an unpopular measure that would also stoke inflation.

The imposition of petrol rationing in the summer of 2007 led to public anger, with protesters setting a dozen fuel stations on fire. Some opposition supporters hope the increase in energy prices or further economic pressure from sanctions may encourage poorer people finally to join the anti-regime Green Movement.

“If the regime faced damaging economic pressure from a significant reduction in gasoline supplies ... it might decide that a nuclear bomb, instead of being the guarantor of the regime’s survival, could be the catalyst of its demise,” says Mark Dubowitz, of the Foundation for Defense of Democracies, which supports sanctions.

I'm not convinced that sanctions would really stop Iran's nuclear program (some argue that they might accelerate it), but even worse is the idea that they would push people to join the Green Movement. We know from the Iraq experience that sanctions hurt more than helped any resistance to the Saddam regime, and gave it extra tools to pacify the population. 

The key question is what kind of sanctions are being envisaged. This talk to reducing access to petrochemicals that are by and large intended for civilian use is worrying. Of course, there are already sanctions that reduce access to special technology or target members of elite groups like the Republican Guards.

Shirin Ebadi, the Iranian activist, is asking for a rights-based UN policy on Iran and dissuading from using sanctions: 

“A military attack or economic sanctions would be to the detriment of the people of Iran,” she said, adding that the government of President Mahmoud Ahmadi-Nejad had ways to circumvent further economic measures and their unintended impact might be to rally people behind the regime.

She called, however, for action against western companies that she said were supporting actively the censorship and repression of the opposition movement.

That last bit means you, Nokia and Siemens. But targeting companies is a messy business, especially since the US itself is not sure to what extent American companies are involved in Iran or that it is giving money to firms with Iran ties.

China is against sanctions. Russia is against sanctions. Even Brazil is against sanctions. Same thing for several UNSC members.

In the Middle East, it appears that Gulf oil and gas producers are encouraging petroleum sanctions, not exactly surprising since it gives them business picking up the slack from, say, what Iran supplies China. David Ignatius wrote yesterday:

To provide economic muscle for the push against Iran, the Obama administration is working closely with Gulf oil exporters, such as Saudi Arabia and the United Arab Emirates. Secretary of State Hillary Clinton visited Saudi Arabia last month to enlist its help in the sanctions campaign -- and, in particular, to lobby China to back the U.N. sanctions resolution.

China is vulnerable to Iranian oil pressure because it imports about 540,000 barrels per day from Iran. So the Saudis and Emiratis have been assuring Beijing that they would be prepared to offset any shortfall in Iranian crude shipments.

The UAE has already boosted its oil exports to China as part of this pressure campaign. Shipments have increased from about 50,000 barrels per day last year to 120,000 now, with a goal by year-end of up to 200,000 barrels. Over the next few years, the UAE is offering to increase that export volume to China to about 500,000 barrels per day, which would nearly equal the current Iranian total.

Prince Saud al-Faisal, the Saudi foreign minister, traveled to China late last week to enlist its support against Iran. The Saudi message to Beijing, according to one U.S. official, is: "If you don't help us against Iran, you will see a less stable and dependable Middle East." Meanwhile, a high-level Israeli group also visited China last weekend, according to the Financial Times. The delegation included Stanley Fischer, the governor of Israel's central bank. Fischer, an eminent economist who is respected by Chinese officials, would be able to explain the impact of the planned sanctions regime.

The Israeli visit led one prominent energy expert to speculate privately that if sanctions fail to alter Iranian behavior, the Israelis might use military means to halt Iran's oil exports.

The campaign against Iran was the central topic during a recent visit to Washington by the UAE's foreign minister, Sheik Abdullah bin Zayed al-Nahyan. He urged administration officials to include Iran's vulnerable neighbors in the Gulf Cooperation Council -- Saudi Arabia, Qatar, Oman and others -- in their planning for dealing with Iran. "We will find ways to do more with them," said the senior administration official.

So, quite aside from being strategically opposed to Iranian dominance, a bunch of Middle Eastern countries stand to benefit by potentially replacing Iran as a source of oil. And on the American side, it's not clear whether a sanctions policy towards Iran is being devised by reasonable people, or the usual gang of neocons and Israel lobbyists who include some of the same people that destroyed Iraq through the 1990s sanctions:

Lobby groups in the US are helping to push and even draft tough congressional legislation against Iran that could tie President Barack Obama's hands as he seeks international consensus on dealing with Tehran's nuclear ambitions.

The lobbyists range from the bipartisan United Against Nuclear Iran (UANI) to conservative think-tanks that opposed from the outset Mr Obama's stated aim of dialogue and engagement with Tehran.

. . .

Among the original founders of UANI, just before the 2008 presidential election, was Dennis Ross, former US Middle East negotiator. He was appointed a few months later to the State Department to advise Hillary Clinton, secretary of state, on Iran and the Gulf. He was later moved sideways to the National Security Council to become White House adviser on Iran.

His replacement at the State Department is John Limbert, previously a board member of NIAC. The fluent Persian speaker and former hostage at the US embassy in Tehran, who is married to an Iranian, is a key proponent of efforts at reconciliation.

UANI's founding advisory board included Gary Samore, now Mr Obama's non-proliferation "tsar", and R. James Woolsey, a former CIA chief who also chairs the advisory board of the rightwing Center for Security Policy (CSP). Its founder, Frank Gaffney, is a critic of Mr Obama's policy of reconciliation with the Muslim world.

That Dennis Ross is in government service again is painful enough, but the idea that he shapes Iran policy, including sanctions, is terrifying. I'm all for smart sanctions, for instance against the foreign bank accounts of dictators (plenty of US-allied ones to look into, by the way). The Economist, which is pushing for sanctions because of the threat Iran represents to the sanctity of the Non-Proliferation Treaty (not an altogether wrong argument, but short-sighted when it excludes looking at Israel's nuclear arsenal on the legal ground that Israel never signed the NPT — in that case no country should sign the NPT), may have a good middle ground:

Hence the case for policies that punish the regime and spare the people. Existing sanctions have frustrated some illicit imports for its nuclear and missile programmes. Routine searches of Iranian ships and planes at foreign ports and airfields would catch more—and sting too. Banking restrictions have earned the president the ire of merchants and MPs. These can be tightened and extended. America’s Congress favours slapping a ban on gasoline imports which, given Iran’s shortage of refining capacity, could bring the economy to its knees. But that would allow Mr Ahmadinejad to blame outsiders just as he is about to incur the people’s wrath by cutting petrol subsidies. A bar on investment in the oil and gas industry and on weapons imports would be smarter.

Unfortunately, with people like Ross at the helm and the lobby-controlled Congress, that does not seem the direction things are headed towards. Personally, I prefer no sanctions to bad sanctions.

Also see:

What James Lindsay and Ray Takeyh Get Wrong About Iran | Stephen M. Walt