Economic sanctions can more often than not be considered a peaceful way of making war. Indeed, this tool of foreign policy seems to be the preferred mode of action when war is not an option. The first economic sanctions can be traced back as far as 432 B.C. – it was issued by the Athenians upon the city-state of Megara. Nowadays, sanctions have been used to reach a wide array of goals, such as regime change in Latin America or promoting human rights during the Carter administration in the 1970s. However, time does not mean that such a tool is perfect. Many scholars, observers and think tanks are questioning the strategic usefulness and morality of sanctions, these critics will be developed further down.
In modern foreign policy history Iran has been one of the most hard-hit regimes by sanctions. On May 8th, 2018 the United States withdrew from the Joint Comprehensive Plan of Action (JCPOA) – commonly referred to as the “Iran Nuclear Deal” – which ensured limited economic sanctions on Iran at the cost of its nuclear weapon program. As the US left the JCPOA sanctions came back into place, destabilising an already fragile Iranian economy.
A historical overview of sanctions imposed on Iran
Iran is one of the states which has been the hardest hit by sanctions, maybe only seconded by North Korea. We can identify more than a dozen rounds of sanctions against the Islamic regime, however we shall only look at the most important ones.
The first round started on November 1979 when Iranian students stormed the US embassy in Teheran. Jimmy Carter – the president at the time – announced that all Iranian imports to the United States are to be banned and $12 billion worth of assets to be frozen. Sanctions pursued slowly until 2007 when the United Nations Security Council adopted resolution 1747 which imposed further sanctions on the regime as it failed to comply with the Council’s demand to suspend its uranium enrichment program – all fifteen members unanimously voted in favour. Resolution 1747 was shortly followed in 2008 by resolution 1803 which further denounced the violation of Iran’s obligation to cease uranium enrichment, which is a core component in the confection of nuclear weapons. Nonetheless, this steady line of sanctions took a hold in 2015 when the Iranian regime signed the JCPOA – treaty which was respected by the regime until 2019, and unsurprisingly, since the main arbiter, the United States, left the deal in 2018 and reimposed crippling sanctions on Iran.
In a recent statement by the E3 – France, Germany, United Kingdom – the three powers expressed their wish to maintain the JCPOA. Unfortunately, without the blessing of the United States, it seems like the treaty is bound to slowly die.
During its long history of sanctions Iran had to resolve to many ingenious schemes to bypass to maintain its economy alive. Iran between 2012 and 2013 established the “gold-for-oil” network. Through Turkey, Iran would trade its oil in exchange for rare metals such as gold. It is believed that in August around $1.45 billion worth of gold was “shipped through the customs office at Ataturk airport’s passenger lounge”. The United Arab Emirates (UAE) also helped devise networks to help Iran sell oil, intriguingly enough the UAE is a close American ally. It was later discovered that it is through parallel networks, based in Dubai that the Khan network thrived – led by A.Q. Khan, a Pakistani nuclear physicist which helped his nation develop nuclear deterrence capabilities.
Nowadays, Iran is ready to deal with emergent powers such as China to relieve its economy from some of the tension it has been subject too. The deal in question will be discussed further down.
Sanctions as an imperfect tool of foreign policy
In mainstream foreign policy culture, sanctions are seen as a non-lethal way to bring security threatening, human right violating or un-democratic states to compliance with their international law obligations. However, all too often sanctions have a negative effect and isolate states even further. Three criticism can be made. First, sanctions motivate sanctioned states to resort to illegal means to lessen the effect of such measures. Second, sanctions encourage what will be defined as “rogue states” to cooperate with other “rogue states”. Finally, sanctions hit disproportionately the everyday population of the sanctioned state, leaving in the long run the political elite relatively unaffected.
In his book, Busted Sanctions, Bryan R. Early investigated the so called “gold-for-oil” Iranian network. This mechanism has been introduced earlier; however, it demonstrates that sanctioned states have no issue with resorting to illegal means to alleviate some of the effects of sanctions. Furthermore, the profile of the two states which made the “gold-for-oil” network possible, and by doing so challenging American authority, is quite interesting. On the one side there is Turkey which is a NATO member, on the other the UAE, which is a close ally of the United States. Imposing sanctions on Iran has therefore backfired on the United States and weakened the trust that it had in its partners. By trading gold for oil Iran has received multiple instalments of gold which are now untraceable and have vanished from the gold market. Some of the rare metal, Early argues, has most likely fallen into the pocket of Iranian leaders and been sold for personal gain. The lack of transparency of this operation is a direct hit to everyday Iranians which will not be able to profit from selling their oil.
In July, the New York Times revealed a 400-billion-dollar deal between Iran and China. Such a deal not only ensures a foothold for China in the Middle East, but also challenges the authority of the United States of America which labels Iran as a rogue state with which trade and ties are forbidden. Furthermore, the “Comprehensive Strategic Partnership between I.R. Iran and P.R. China” – the name of the deal – leads us to question the efficacy of sanctions since, in this case, American sanctions encouraged two “rogue states” to cooperate closely. China, an American rival, was able to establish this deal only because Iran was weak enough, due to sanctions, to accept terms which are very advantageous for itself. The deal states that China will receive a regular supply of oil at a heavily discounted price for the next 25 years. In exchange, China will have access and be able to invest in Iranian banking, telecommunication, ports, railway and other strategic sectors of activity. This deal is part of the Chinese “belt-and-road initiative” strategy. Such a cooperation could wrongly be regarded as a good thing for the Iranian people. It will undoubtably create new opportunities for entrepreneurs and jobs for the unemployed. However, we must consider the fact that China gains disproportionately and has been able to go through with the deal solely because Iran, on its knees due to sanctions, was left with no choice but to agree. Furthermore, it could be argued that it is immoral to trade with a state which actively suppresses free speech in its country and abroad and which is systematically repressing, if not cleansing, a fringe of its population, the Uighurs. On that note, the CFR (Council on Foreign Relations), went as far as to question whether Uighur repression can be considered as a genocide. It should be stated that the West, and many other countries, are not impervious to the criticism of trading and cooperating with China.
Finally, economic sanctions are approximate tools of foreign policy which disproportionately hit civilians rather than regimes. Sanctions are employed to coerce state leaders and policymakers into changing policies by applying economic pressure. However, think tanks such as CEPR(Center for Economic and Policy Research) and Brookings have found that it is ordinary people which are the most effected by the measures. In a paper entitled Economic sanctions threaten population health: the case of Iran, published in 2019, the researchers concluded that:
“economic sanctions have adversely affected population health in Iran, by impairing SDH, health care delivery, and access to care. In fact, despite the exemption of health necessities and humanitarian goods from these sanctions, health as a fundamental human right, among others, has been compromised and most probably will be compromised by the new wave of sanctions. Moreover, the adverse health impacts will be greater among vulnerable populations, including those on low-income, the chronically ill, children, women, and the elderly”
Not only do sanctions affect the vulnerable fringe of the sanctioned country but can also have spillover effects globally. Indeed, due to the American extraterritoriality law, many European companies were not allowed to do business in Iran when trading in dollar, which, when used to trade, subjects the company to American law. The consequence is that some European businesses have had to close due to the restriction on trade, and this while the JCPOA which limits Iranian sanctions is still in active. In a way, the United States considers that its domestic law supplants international law.
An alternative to sanctions?
With regards to the US, the CEPR recommends that the president’s power to single-handedly impose unilateral sanctions be limited. This would mean that the Congress has more authority on which and when sanctions can be imposed. However, this reform must be accompanied by more multilateralism. In some instances, sanctions have been able to meet partial success, however, when imposed in concert with other states the result of sanctions highly exceed the result of unilateral sanctions. Multilateralism is also a way to safeguard humanitarian exemption from sanctions – such as food, drugs etc.
Ultimately, sanctions should be replaced by a new foreign policy strategy to coerce “rogue states” into compliance with their international law duties. States should establish more cooperation, alliances and economic treaties with opponent of rogue states. In effect, the United States, in order to coerce China to comply with international humanitarian law, could multiply its partnership with states such as Taiwan, South Korea or Japan which are being threatened by China’s expansionist projects. By strengthening regional powers, the balance of power in the region could tilt back towards democratic and humanitarian states. There are to this day very little, if any studies which analyse the effect of this “positive strategy”. Indeed, contrary to sanctions which are “negative strategies”, which coerce by limiting a regime, “positive strategies” seek to multiply cooperation between states. By missing out on such opportunities the “rogue state” can, by its own accord, reform and align with humanitarian, liberal and democratic values, therefore becoming a potential candidate to economic trade partnership.