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Is Iran's Currency Crisis Evidence that Sanctions Are Working?
(Foreign Policy) Michael Singh - Sanctions are only partly to blame for Iran's economic travails. The regime's maladroit domestic response to the sanctions and its loose monetary and fiscal policies have made matters far worse. This is arguably the result of years of economic mismanagement in Iran, particularly under Ahmadinejad. However, the Iranian regime is relatively sheltered from the present crisis. Oil exports remain high at 1.2 to 1.5 million barrels per day, meaning that the regime's foreign exchange income is considerable. And in any event its oil income is dollar-denominated, protecting it from exchange rate risk. As a result, Iran's economic crisis is unlikely to directly cause the regime to change its nuclear calculus. By implication, the U.S. and our allies should be careful not to count on the current sanctions to resolve the nuclear crisis by themselves. Rather than hoping that giving current sanctions "time to work" will force Iran back to the negotiating table, the U.S. and our allies should add further pressure to the regime and the elites who comprise it, including through additional targeted economic sanctions, diplomatic isolation, bolstering the credibility of our military threat to the regime, and support for the Iranian opposition. The writer is managing director of the Washington Institute for Near East Policy.