No Pause in US Economic War on Iran

By Stephen Gowans

David Cohen, a US Treasury Department undersecretary, took pains in The Wall Street Journal (December 10) to point out that despite the sanctions relief provided for in the November interim nuclear agreement between Tehran and the P5+1 [1], that the US-led economic war on Iran continues largely unabated. Cohen’s message is that the relief package “is economically insignificant to Iran,” while US-led oil sanctions, trade disruptions, and efforts to isolate Iran from the US banking system—which remain in place despite the deal—continue to hobble Iran’s economy.

I warned in an October article that no matter how it looked on the surface, an accord with Iran would represent an insignificant concession by Washington, a point Cohen confirms. The reality, however, has not been widely grasped, and the deal has been misconstrued in many quarters as a possible precursor to a detente and normalization of relations between the West and Iran. Cohen dashes this illusion.

Washington estimates that Iran “will stand to receive $6 billion to $7 billion in relief” over the agreement’s six-month term but lose “about $30 billion in oil revenue” as a result of continued “oil, financial and banking sanctions.” In other words, the relief package will mitigate the impact of sanctions, but only mildly—and the remaining sanctions will continue to bite deeply.

What’s more, the insignificant level of sanctions relief comes on top “of the roughly $80 billion Iran has lost since early 2012 because of US and European Union oil sanctions, and of the nearly $100 billion in Iran’s foreign exchange holdings that are mostly restricted or inaccessible due to U.S. financial and banking sanctions.”

Cohen reminds us that the US economic war has badly battered Iran’s economy. GDP contracted by five percent last year. Inflation is running at about 40 percent. And Iran’s currency, the rial, has lost 60 percent of its value against the US dollar in the last two years. For Tehran, the prognosis is grim. And sanctions relief—what little there is—is insufficient to brighten the outlook. The economy continues to shrink.

Cohen says Washington will continue to make Iran’s economy “suffer,” maintain the “pressure,” keep “Iran’s oil revenues depressed,” and ensure that “latent interest in trade” with Iran will be held back by bullying anyone “who thinks now might be a good time to test the waters.”

No matter how far Tehran goes in the final negotiations in limiting its nuclear program, it’s unlikely the West will abandon its efforts to bring about regime change in Tehran, or relinquish economic warfare as a regime change tool. Sanctions are likely to be a permanent feature of US policy on Iran, ending only when, and if, US foreign policy goals are brought to fruition and a Western oriented, pro-foreign investment regime comes to power in Tehran.

That’s because Washington’s ambitions go beyond depriving Iran of an independent means of producing nuclear fuel and preventing it from securing the theoretical capability of mounting a nuclear self-defense, to changing its economic and foreign policies. This can be seen in the reality that the US-led economic war didn’t begin in response to Iran enriching uranium. It began when Iran extricated itself from the US orbit by overthrowing Washington’s puppet, Mohammad Reza Pahlavi, in 1979. Ever since, Washington has deployed sanctions to prevent Iran from:

• Building ballistic missiles;
• Supporting Hezbollah, Hamas and Islamic Jihad;
• Exercising influence in the Middle East;
• Exporting arms;
• Dealing with unrest and subversion at home (stoked by the misery created by Western sanctions);
• Monitoring and censoring domestic internet communications. [2]

So, even if Iran agreed to give up uranium enrichment altogether and to permanently shut-down its Arak heavy-water reactor, Tehran’s support for Palestinian and Lebanese resistance organizations, its backing of Syria, and its predilection for promoting local enterprise and maintaining state-owned enterprises at the expense of foreign investors, would continue to evoke US hostility.

As Cohen points out, the idea that Washington has suspended its punishing economic war on Iran is an illusion. Until Iran’s independence from US domination is brought to an end, Washington’s war on Iran’s economy—and its people—will continue.

1. The five permanent members of the UN Security Council (the United States, Britain, Russia, China and France) plus Germany, also known as the E3/EU+3, E3 referring to the United States, Russia and China and the EU3 denoting the three largest countries of the EU: Germany, France, and Britain.
2. Kenneth Katzman, “Iran Sanctions”, Congressional Research Service, July 26, 2013.