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IRAN AND SANCTIONS
Sevak Sarukhanyan
http://www.noravank.am/eng/articles/detail.php?ELEMENT_ID=6785
10.12.2012
Deputy Director of ~SNoravank~T Foundation. Head of the Center for
Political Studies, Ph.D. (Political Science) Sanctions imposed
against Iran caused serious changes in the economic life of the
Islamic Republic of Iran. At the same time they have had a great
impact on political processes either.
Economic impact of the sanctions
Among the sanctions imposed by the United States and E.U. against
Iran rather these two following decisions than the restrictions on
oil import can be considered as the most crucial ones:
1. The first one is freezing up of the transactions of the Iranian
banks and suspension of Iran~Rs participation in SWIFT system. In
consequence, Iran in fact lost an opportunity to buy U.S. dollars from
international financial organizations and banks, which has reduced
the currency inflows into the country and restricted import of the
goods of prime necessity.
2. Almost all the international insurance companies refused to insure
tankers transporting Iranian oil which has considerably axed the volume
of the Iranian oil export (on about 30%). The essence of the problem
is that even the countries which do not support the sanctions were
obliged to restrict buying of the Iranian oil as its transportation
was not insured and in case of any force majeure the buyers would
loose the oil and all they paid for it.
As a result of these sanctions Iran has appeared in a real
macro-economic crisis. On the one hand the revenues from the oil export
have shrunk, on the other hand these revenues are received neither
in dollars nor in Euros; they are received in the currencies of the
countries which buy the Iranian oil. In consequence, Iran is obliged
to import goods from countries which buy its oil, which in its turn
limits seriously the variety of imported goods, because, for example,
Iran cannot import necessary quantity of grain. If previously Iran
bought grain from Canada, today Tehran has to search new sources
among the countries which buy Iranian oil.
In consequence of sanctions rise in inflation can be observed in
Iran: e.g. chicken meet, 50% of which is imported and which is in a
good demand in Iran, became 4 times expensive. Other goods of prime
necessity ~V butter, sunflower oil and flour ~V have also got more
expensive.
At the same time in consequence of the sanctions and economic problems,
at the end of September, the Iranian Central Bank demonstrated that
it cannot curb depreciation of the currency. In one day it went down
in value by 70%, which demonstrated the real scale of macroeconomic
recession in the country.
It should be mentioned that Iran takes serious measures to improve
the economic situation in the country. The most important of them are:
First. For the first time since the Iranian-Iraqi war Iran has fallen
back to the formation of the oil ~Sblack market~T. The main purpose
is the arrangement of alternative ways of oil export to the countries
which formally refused to cooperate with Iran. To attain this goal
the Iranian authorities in September-October factually abolished
the monopoly of the National Iranian Oil Company on oil export, thus
allowing newly formed ~Scooperatives~T independently export oil and
at the same time not to inform where it is exported.
Second. By the decision of the Central Bank of Iran $5 billion was
allotted to the National Iranian Oil Company for the establishment
of the Insurance Iranian National Fund, which would allow insuring
oil transporting ships by their own means and stimulating the former
buyers to restore the volume of oil purchase from Iran.
Third. On the foreign political plane Iran has started looking for new
allies and partners which could help Tehran to solve their economic
problems. Strange as it may seem in this issue Tehran is actively
supported not by China, which has reduced the Iranian oil purchase
volume by 30%, but by India, which has never shown special interest
in the Middle East affairs. The latter came to terms with Tehran in
October on supplying grain to Iran at special prices which would help
Tehran to avoid a sad perspective of raising the prices for bread.
India has also directed its all oil processing capacities to the
processing of the Iranian crude oil, which has to be re-exported to
Iran by means of ~Spetrol for oil~T barter method. No less important
are the measures taken by India in the direction of implementation
of big joint projects with Iran. The most expensive of them is the
building of the railway from the Persian Gulf to Afghanistan which
total cost will be $10 billion. Due to the building of this railway,
which will be implemented mainly by funding of the Indian side,
Pakistan will appear in the factual transport blockade and the Afghani
market and economy will receive a direct access to the Persian Gulf
and South Asian markets by-passing Pakistan, which has a considerable
influence on political and economic life in Afghanistan today.
It should be mentioned that the economic programmes carried out by
Tehran are very likely to be successful because in fact new system
of avoiding the sanctions is formed. How the further development will
proceed depends on the measures taken by the re-elected president of
the United States B. Obama; if he supports new sanctions against Iran,
Tehran will face new kind of economic problems. And if Washington
chooses a dialogue with Tehran, which has been spoken about very
often recently, Iran will manage to avoid further aggravation of
economic situation.
Nevertheless, the resignation of the head of the CIA D. Petraeus
can be considered rather painful for Iran, as the latter was active
supporter of the Iranian-American dialogue.
Political influence of the sanctions
Economic problems and worsening social situation have had serious
impact on the domestic political life in Iran. On the one hand
the Iranian parliament with the majority of its members, which
are connected with the spiritual authorities of the country,
criticized the president and claimed him to be the main person to
blame for the misfortunes, and on the other hand M. Ahmadinejad
seems to realize that the spiritual authorities and Majlis would
not choose the way of impeachment of the president in order not to
aggravate economic situation in the country by panic and he acts
bravely. That is why in October the president initiated Iranian
~Sprison scandal~T by expressing a wish to visit prison in Tehran
and meet the prisoners. There are many supporters and friends of
Ahmadinejad among the latter. They has been arrested and sentenced
to prison on different charges in a course of the year. Though the
General Prosecutor and heads of the Supreme Court rejected his appeal,
nevertheless M.Ahmadinejad demonstrated to his political team that
he was still independent and did not compromise to the spiritual
authorities of the country.
Quite opposite today is the behavior of the ex-president of Iran
A.A.Hashemi-Rafsanjani, whose relations with the spiritual leader Ali
Khamenei in recent months has become rather warm. Setting relations
between Hashemi-Rafsanjani and A.Khamenei is more than necessity
because it is Khamenei who can influence the criminal cases opened
against the son and daughter of the former president. It can be
stated that Hashemi-Rafsanjani has already achieved this goal ~V the
charge of ~Santi-state actions~T brought against his son was changed
to ~Sabuse of official position~T and the charge of ~Streason~T
brought against his daughter was changed to ~Sparticipation in civil
commotions~T. As for Khamenei, he is also obliged to set the relations
with Hashemi-Rafsanjani because under the aggravating confrontation
with the West returning of ~Spro-American~T Hashemi-Rafsanjani to the
mainstream politics can be used for arranging a possible dialogue
with the West. In this aspect it is not strange at all that at the
Summit of the Treaty of non-Aligned States which was hold in Tehran
in August, together with Ali Khamenei Hashemi-Rafsanjani who sat next
to the spiritual leader also played a host.
Strange as it may seem, in Iran the rumors that Hashemi-Rafsanjani
is going to stand for the presidency in 2013 elections and receive
the support of Ali Khamenei are spread. This is conditioned by the
fact that the ex-president of Iran is known all over the world as
reformer and supporter of the dialogue which may result is softening
of the situation round Iran. One cannot say it for sure how possible
the nomination of Hashemi-Rafsanjani is but while making forecasts,
it should be mentioned, that even if everything goes the way they say,
Hashemi-Rafsanjani will hardly change sharply the line of the nuclear
programme because it was the ex-president of Iran who restored in
1991 the suspended after the Islamic revolution nuclear programme of
Iran and directly assisted the development of the uranium enrichment
technologies in the IRI.
At the same time one more fact should be mentioned ~V the economic
crisis demonstrated real consequences of absence of mutual cooperation
between the government and parliament. As a rule, adoption of a
bill by Majilis directed to the resolution of certain economic issue
becomes a real problem because any document which is received from
the government is used for criticizing the president; this postpones
adoption of that bill and hampers dynamic response.
That is the reason why the parliament and spiritual circles started to
discuss eagerly the issue of abolishment of the post of the president
and its substitution by the post of the prime-minister. Unlike
president who is elected by means of a direct voting the prime-minister
should be elected by the parliament and represents interests of the
majority in the legislative body. This, in its turn, should result
in more serious cooperation between the parliament and government and
bring bigger opportunities for taking operative governmental decisions.
It should also be mentioned that the political relations and
discussions in Iran in the months to come will even more stir up,
because on the one hand they will be influenced by the economic crisis
and on the other hand by the approaching presidential elections.
~SGlobus~T analytical journal, #11, 2012
Return Another materials of author SIGNIFICANCE OF NUCLEAR
ENERGY FOR ARMENIA [27.09.2012] ON THE REGIONAL POLICY OF
IRAN[28.06.2012] TURKISH FACTOR IN ~SLEVIATHAN~T AND ~SAPHRODITE~T
ENERGY ~SWARS~T[03.05.2012] POLITICAL DEVELOPMENTS IN IRAN AND
POSSIBLE IRAN-US COLLISION[22.03.2012] IRAN AND DEVELOPMENTS IN
SYRIA[26.01.2012] ON REGIONAL ENERGY DEVELOPMENTS[05.12.2011] IRAN:
DOMESTIC POLITICAL AND REGIONAL DEVELOPMENTS[26.09.2011] POLITICAL
PROCESSES IN IRAN: IDEOLOGICAL STRUGGLE [21.07.2011] POLITICAL
PROCESSES IN IRAN[27.06.2011] DEVELOPMENTS IN IRAN[13.06.2011]
From: Baghdasarian
Sevak Sarukhanyan
http://www.noravank.am/eng/articles/detail.php?ELEMENT_ID=6785
10.12.2012
Deputy Director of ~SNoravank~T Foundation. Head of the Center for
Political Studies, Ph.D. (Political Science) Sanctions imposed
against Iran caused serious changes in the economic life of the
Islamic Republic of Iran. At the same time they have had a great
impact on political processes either.
Economic impact of the sanctions
Among the sanctions imposed by the United States and E.U. against
Iran rather these two following decisions than the restrictions on
oil import can be considered as the most crucial ones:
1. The first one is freezing up of the transactions of the Iranian
banks and suspension of Iran~Rs participation in SWIFT system. In
consequence, Iran in fact lost an opportunity to buy U.S. dollars from
international financial organizations and banks, which has reduced
the currency inflows into the country and restricted import of the
goods of prime necessity.
2. Almost all the international insurance companies refused to insure
tankers transporting Iranian oil which has considerably axed the volume
of the Iranian oil export (on about 30%). The essence of the problem
is that even the countries which do not support the sanctions were
obliged to restrict buying of the Iranian oil as its transportation
was not insured and in case of any force majeure the buyers would
loose the oil and all they paid for it.
As a result of these sanctions Iran has appeared in a real
macro-economic crisis. On the one hand the revenues from the oil export
have shrunk, on the other hand these revenues are received neither
in dollars nor in Euros; they are received in the currencies of the
countries which buy the Iranian oil. In consequence, Iran is obliged
to import goods from countries which buy its oil, which in its turn
limits seriously the variety of imported goods, because, for example,
Iran cannot import necessary quantity of grain. If previously Iran
bought grain from Canada, today Tehran has to search new sources
among the countries which buy Iranian oil.
In consequence of sanctions rise in inflation can be observed in
Iran: e.g. chicken meet, 50% of which is imported and which is in a
good demand in Iran, became 4 times expensive. Other goods of prime
necessity ~V butter, sunflower oil and flour ~V have also got more
expensive.
At the same time in consequence of the sanctions and economic problems,
at the end of September, the Iranian Central Bank demonstrated that
it cannot curb depreciation of the currency. In one day it went down
in value by 70%, which demonstrated the real scale of macroeconomic
recession in the country.
It should be mentioned that Iran takes serious measures to improve
the economic situation in the country. The most important of them are:
First. For the first time since the Iranian-Iraqi war Iran has fallen
back to the formation of the oil ~Sblack market~T. The main purpose
is the arrangement of alternative ways of oil export to the countries
which formally refused to cooperate with Iran. To attain this goal
the Iranian authorities in September-October factually abolished
the monopoly of the National Iranian Oil Company on oil export, thus
allowing newly formed ~Scooperatives~T independently export oil and
at the same time not to inform where it is exported.
Second. By the decision of the Central Bank of Iran $5 billion was
allotted to the National Iranian Oil Company for the establishment
of the Insurance Iranian National Fund, which would allow insuring
oil transporting ships by their own means and stimulating the former
buyers to restore the volume of oil purchase from Iran.
Third. On the foreign political plane Iran has started looking for new
allies and partners which could help Tehran to solve their economic
problems. Strange as it may seem in this issue Tehran is actively
supported not by China, which has reduced the Iranian oil purchase
volume by 30%, but by India, which has never shown special interest
in the Middle East affairs. The latter came to terms with Tehran in
October on supplying grain to Iran at special prices which would help
Tehran to avoid a sad perspective of raising the prices for bread.
India has also directed its all oil processing capacities to the
processing of the Iranian crude oil, which has to be re-exported to
Iran by means of ~Spetrol for oil~T barter method. No less important
are the measures taken by India in the direction of implementation
of big joint projects with Iran. The most expensive of them is the
building of the railway from the Persian Gulf to Afghanistan which
total cost will be $10 billion. Due to the building of this railway,
which will be implemented mainly by funding of the Indian side,
Pakistan will appear in the factual transport blockade and the Afghani
market and economy will receive a direct access to the Persian Gulf
and South Asian markets by-passing Pakistan, which has a considerable
influence on political and economic life in Afghanistan today.
It should be mentioned that the economic programmes carried out by
Tehran are very likely to be successful because in fact new system
of avoiding the sanctions is formed. How the further development will
proceed depends on the measures taken by the re-elected president of
the United States B. Obama; if he supports new sanctions against Iran,
Tehran will face new kind of economic problems. And if Washington
chooses a dialogue with Tehran, which has been spoken about very
often recently, Iran will manage to avoid further aggravation of
economic situation.
Nevertheless, the resignation of the head of the CIA D. Petraeus
can be considered rather painful for Iran, as the latter was active
supporter of the Iranian-American dialogue.
Political influence of the sanctions
Economic problems and worsening social situation have had serious
impact on the domestic political life in Iran. On the one hand
the Iranian parliament with the majority of its members, which
are connected with the spiritual authorities of the country,
criticized the president and claimed him to be the main person to
blame for the misfortunes, and on the other hand M. Ahmadinejad
seems to realize that the spiritual authorities and Majlis would
not choose the way of impeachment of the president in order not to
aggravate economic situation in the country by panic and he acts
bravely. That is why in October the president initiated Iranian
~Sprison scandal~T by expressing a wish to visit prison in Tehran
and meet the prisoners. There are many supporters and friends of
Ahmadinejad among the latter. They has been arrested and sentenced
to prison on different charges in a course of the year. Though the
General Prosecutor and heads of the Supreme Court rejected his appeal,
nevertheless M.Ahmadinejad demonstrated to his political team that
he was still independent and did not compromise to the spiritual
authorities of the country.
Quite opposite today is the behavior of the ex-president of Iran
A.A.Hashemi-Rafsanjani, whose relations with the spiritual leader Ali
Khamenei in recent months has become rather warm. Setting relations
between Hashemi-Rafsanjani and A.Khamenei is more than necessity
because it is Khamenei who can influence the criminal cases opened
against the son and daughter of the former president. It can be
stated that Hashemi-Rafsanjani has already achieved this goal ~V the
charge of ~Santi-state actions~T brought against his son was changed
to ~Sabuse of official position~T and the charge of ~Streason~T
brought against his daughter was changed to ~Sparticipation in civil
commotions~T. As for Khamenei, he is also obliged to set the relations
with Hashemi-Rafsanjani because under the aggravating confrontation
with the West returning of ~Spro-American~T Hashemi-Rafsanjani to the
mainstream politics can be used for arranging a possible dialogue
with the West. In this aspect it is not strange at all that at the
Summit of the Treaty of non-Aligned States which was hold in Tehran
in August, together with Ali Khamenei Hashemi-Rafsanjani who sat next
to the spiritual leader also played a host.
Strange as it may seem, in Iran the rumors that Hashemi-Rafsanjani
is going to stand for the presidency in 2013 elections and receive
the support of Ali Khamenei are spread. This is conditioned by the
fact that the ex-president of Iran is known all over the world as
reformer and supporter of the dialogue which may result is softening
of the situation round Iran. One cannot say it for sure how possible
the nomination of Hashemi-Rafsanjani is but while making forecasts,
it should be mentioned, that even if everything goes the way they say,
Hashemi-Rafsanjani will hardly change sharply the line of the nuclear
programme because it was the ex-president of Iran who restored in
1991 the suspended after the Islamic revolution nuclear programme of
Iran and directly assisted the development of the uranium enrichment
technologies in the IRI.
At the same time one more fact should be mentioned ~V the economic
crisis demonstrated real consequences of absence of mutual cooperation
between the government and parliament. As a rule, adoption of a
bill by Majilis directed to the resolution of certain economic issue
becomes a real problem because any document which is received from
the government is used for criticizing the president; this postpones
adoption of that bill and hampers dynamic response.
That is the reason why the parliament and spiritual circles started to
discuss eagerly the issue of abolishment of the post of the president
and its substitution by the post of the prime-minister. Unlike
president who is elected by means of a direct voting the prime-minister
should be elected by the parliament and represents interests of the
majority in the legislative body. This, in its turn, should result
in more serious cooperation between the parliament and government and
bring bigger opportunities for taking operative governmental decisions.
It should also be mentioned that the political relations and
discussions in Iran in the months to come will even more stir up,
because on the one hand they will be influenced by the economic crisis
and on the other hand by the approaching presidential elections.
~SGlobus~T analytical journal, #11, 2012
Return Another materials of author SIGNIFICANCE OF NUCLEAR
ENERGY FOR ARMENIA [27.09.2012] ON THE REGIONAL POLICY OF
IRAN[28.06.2012] TURKISH FACTOR IN ~SLEVIATHAN~T AND ~SAPHRODITE~T
ENERGY ~SWARS~T[03.05.2012] POLITICAL DEVELOPMENTS IN IRAN AND
POSSIBLE IRAN-US COLLISION[22.03.2012] IRAN AND DEVELOPMENTS IN
SYRIA[26.01.2012] ON REGIONAL ENERGY DEVELOPMENTS[05.12.2011] IRAN:
DOMESTIC POLITICAL AND REGIONAL DEVELOPMENTS[26.09.2011] POLITICAL
PROCESSES IN IRAN: IDEOLOGICAL STRUGGLE [21.07.2011] POLITICAL
PROCESSES IN IRAN[27.06.2011] DEVELOPMENTS IN IRAN[13.06.2011]
From: Baghdasarian