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Iran: The Psychology of Sanctions

(National Interest) Mark Dubowitz - Economic sanctions are Washington's preferred instrument of coercive statecraft for confronting challenges to the international order, including from Iran's revolutionary regime. Their psychological impact should never be underestimated. Too rapid a shift from fear to greed in the international business community, and from despair to hope in the Iranian market, can blunt the effectiveness of sanctions. Unfortunately, the sanctions environment for Iran has changed in the past year. Tehran has been on a modest recovery path since the second half of 2013. Western sanctions pressure has de-escalated since the last U.S. congressional sanctions came into effect in mid-2013. The decision to de-escalate the economic pressure reduced the once overwhelming Iranian and international fear of sanctions and buoyed hopes of an Iranian economic recovery. Iran has nearly halved its 40% plus inflation rate, is stabilizing its previously plummeting currency, and is projected for positive growth after losing 6-7% in GDP between 2012 and 2014. Positive shifts in the perceptions of Iran globally - as well as inside the country itself - are fueling a recovery beyond what the interim agreement intended. By changing the sanctions environment, Western negotiators may have inadvertently triggered indirect economic relief to Tehran that is much greater than the U.S. government estimate of $7 billion - and decreased pressure on the regime in the process. The writer is executive director of the Foundation for Defense of Democracies.
2014-05-23 00:00:00
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