The Far-Eastern Sweet Potato

Why Tehran won't budge

Whether economic sanctions against states are a useful instrument to compel governments is a question that remains to be answered. A frequent criticism is that unless sanctions are surgically implemented to target specific individuals or firms, they usually do not have much of an impact on a regime and rather the deleterious consequences are felt by the population, as happened in Iraq in the 1990s. In Iran’s case, the sanctions put in place by the UN, the US and the EU have largely failed to dissuade Tehran to abandon its sensitive nuclear program, which certain states believe serves as a front for a nuclear weapons program. Even news of a second round of US-EU sanctions, which would go beyond those already put in place through the UN, appear not to be overly worrying to Tehran.

Why? Three reasons come to mind.

First, the more heated the war of words becomes between Tehran, Washington and Jerusalem, the higher the price of crude, which in recent months has proven a windfall for Tehran’s coffers. Just last week, comments by Israeli Transport Minister Shaul Mofaz to the effect that an Israeli attack against the Iranian nuclear program was virtually “unavoidable” drove up oil prices by nearly 9 percent to a record US$139 a barrel. Consequently, the more the US (John McCain, Hillary Clinton, conservative think-tanks) and Israel (Mofaz, Ehud Olmert, AIPAC) threaten war against Iran, the higher Tehran’s ability to mitigate the impact of economic sanctions becomes. It’s simple. As a major oil producer—the world’s fourth-largest — Iran stands to gain from high oil prices, let alone record-high ones like the one we have experienced in recent weeks.

The second reason why the sanctions probably won’t work is that despite its isolation, Tehran still has important allies — mainly Russia and China. As news broke out on Tuesday of a possible new round of US-EU sanctions, Tehran was withdrawing assets from European banks. It would not be too far-fetched to imagine that it will move them to Chinese or Russian financial institutions instead. As long as the international community remains at odds over Iran, or as long as some states like China and Russia refuse, for various reasons, to follow the US’ lead, countries like Iran will have the means to weather economic sanctions.

The third, less obvious reason, is that Iran’s position is becoming increasingly untenable, so much so that some decision-makers may have reached the conclusion that conflict is not only inevitable but desirable. It would not be the first time that a government has appeared to act irrationally (Japan before World War II, or North Korea, readily come to mind) in the face of seemingly insurmountable odds; in fact, when a government comes to see a status quo as untenable, its threat perception and assessment of cost and consequences becomes distorted. While, from the outside, its chosen path seems only to lead to unavoidable defeat or destruction (again, Japan pre-WWII, or Palestinian militants versus Israel), for the actors anything other than the status quo is desirable. In Iran’s case, this could mean that war with Israel and the US would be better than an agreement that forces it to abandon its nuclear work but leaves the Middle East unchanged, which is likely what would happen if peace came under Israeli and US terms (and explains why the Israeli-Palestinian “peace process” has availed to nothing, as it always reflected Israeli, rather than Palestinian, or more equitable, conditions). Also at play are the ramifications of a Shiite resurgence in neighboring Iraq following the US invasion in 2003, which cannot but give Tehran hope of greater regional clout.

Given this situation, the international community can impose any set of sanctions it wants and the end result will be the same. Unless leaders come up with a new Middle East that distributes power more evenly and looks less like a proto Israeli-US empire (or aUS-led Sunni axis), war with Iran at some point will be a likely, if not inevitable, scenario. Mofaz may have made his comment for different reasons, but deep down he was right. It is, perhaps, unavoidable.