Sanctions Help, Not Hurt Iranian Regime Tikun-Olam Tikun Olam-תיקון עולם
►http://www.richardsilverstein.com/2012/10/07/sanctions-help-not-hurt-iranian-regime
Sanctions Help, Not Hurt Iranian Regime
by Richard Silverstein on October 7, 2012 · 16 comments
in Mideast Peace
The prevailing narrative among those western nations and media supporting sanctions against Iran is that it is harming the regime by gradually depriving it of support in much the same way that a failing heart eventually deprives a body of oxygen. But what if everything they know about sanctions is wrong? Matthew Boesler has written an incisive analysis of the impact that sanctions are having on Iran. He makes an extremely persuasive case that they are helping, not hurting the regime.
In order to understand this counter-intuitive argument you have to begin with the pre-sanctions period. During that time, the country sold oil and amassed considerable foreign currency reserves including dollars. The argument by those who do not understand the Iranian economy is that hyperinflation will make the value of the rial worthless. Eventually people will be pushing wheelbarrows full of cash in order to buy a loaf of bread as they did in Weimar Germany.
But this is wrong for a number of reasons. First, Iranians do not buy bread in dollars. They buy them in rials. The price of bread in native currency isn’t increasing. It is stable. There are massive subsidies for those items deemed necessities. Those subsidies protect the working class base of the regime’s support. But they leave one major part of society vulnerable. The middle classes.
The middle class wants more than bread. It wants iPads, smartphones, and other desirable foreign goods. It wants to buy them for personal use and it wants to import them to sell to others inside Iran. This is the sector that is being devastated by sanctions. These are the things Iranians will no longer be able to afford.
But the regime has never relied on the support of the middle class. The merchants in the bazaar and the money changers are emblems of the middle class. They are the ones who rallied in 2009 to bring down the regime. They funded the protests. They hate the ayatollahs. So the regime does not need them. It only needs the votes of the poor working class to stay in power.
So when you read the wishful thinking of Israeli leaders who crow about the coming downfall of the Islamist government, when you read the unsupported claims of David Sanger that sanctions are forcing the leadership to consider the price it is paying for its nuclear program–remember this article. And tell the world that the prevailing narrative is all wrong, as it often is. Sanctions don’t kill the regime. They strengthen it.
If there is any theme to this blog it is that just about everything that the Israeli and U.S. leadership believes about its approach to the Muslim-Arab world is wrong. It is based on assumptions that reflect our needs and prejudices rather than reality. When we conduct policy based on what we want to happen rather than what will happen, then we’re headed for a fall.
The only threat to Iran that Boesler notes is that it can maintain this system just as long as it maintains its foreign currency reserves to pay for whatever basic necessities it does need to import. If that runs out, then the game’s up. But one should ask the west, do you trust that you can starve and strangle Iran long enough for that to happen? And if you can’t, you’ve further cemented the ayatollahs’ ironclad domination of Iranian society for years, if not generations to come.