US presses for more economic sanctions

The Bush administration announced its intentions to increase the ongoing pressures on the Islamic government in Iran. US Secretary of State, Condoleeza Rice, said the new sanctions include severance of all financial ties with three of Iran’s largest state-run banks, the Revolutionary Guard Corps and its Quds force and a host of other institutions related to the government. These banks and institutions form the main bodies in the Islamic Republic where the powerful revolutionary guard corps controls large foreign transactions and oil export revenues.

The latest announcement by the White House isn’t the first time that the US government tries to persuade the Iranian government to freeze its nuclear program. The Bush administration already has devised various forms of punitive measures on Iran in the past where even White House’s closest allies expressed doubts on the effectiveness of such methods. Now the question is if the implementation of new sanctions could have any effects on the Iranian government’s drive to reach the fast approaching nuclear threshold.

Without any doubts, The United States and its allies have a huge advantage when it comes to placing financial and monetary sanctions on Iran, but the fact is, their combined efforts could have only a limited influence on the Iranian economy. The situation in Iran cannot be compared to countries like North Korea or Libya with regards to international sanctions. Iran enjoys an enormous geopolitical leverage making the country almost immune from the severest of sanctions. It is also a main exporter of energy to world’s markets. Any kind of sanctions on Iran could have adverse effects on the international markets for a long term, particularly in Europe which relies on much of its oil and gas imports from the outside.

Iran is also self-sufficient in producing most of its strategic agricultural crops such as wheat and rice thus making it difficult to implement a similar Iraqi ‘Food-For-Oil’ program, during the last years of Saddam Hossein in power. In those years, the Bush the father and Clinton administrations successfully managed to control Iraq under Saddam to accept exporting limited amounts of oil in return for food and medical supplies to an Iraq that was experiencing shortage on almost every item. Iran’s size and military strength also make the enforcement of sanctions a daunting task as compared to Iraq or Libya.

The Iranian chief nuclear negotiator dismissed the sweeping new sanctions as nothing new. “Sanctions have been imposed on us for the past 28 years. The new sanctions, like those before, will have no effect on Iran’s policies.” Also, the head of the Revolutionary Guard, General Mohammad Ali Jafari, warned that the guard would respond to any military attack “fiercely.”

The idea of a military response to Iran’s nuclear program toppled with Turkey’s proposed military venture into northern Iraq is shaking the already volatile energy and financial markets around the world. The US dollar keeps falling against the other major currencies and the price of a barrel of oil is quickly touching the $100 mark it reached in 1980 soon after the Islamic Revolution in Iran took place. There is a fear that dollar’s devaluation might spiral out of control as China or Japan both of which hold large sums of dollar in their reserves might decide to dump their dollars before it becomes too weak against the other currencies.

So what should the United States and its allies do under these circumstances? This can be a hard question to answer. Given the course of events and the actual circumstances, there might be a somewhat sounder solution to resolve the Iranian nuclear ambitions. Contrary to those who hold the view that Iranian issue must be resolved through additional pressures, including military interventions, there are those who believe the issue can better be resolved through normalization of ties.

US Vice President Dick Cheney and his camp comprise the group of hardliners inside the US administration who push for extreme measures against the Islamic Republic. Russia and China and most other countries, however, seek to resolve the Iranian issue through softer measures. Last month president Putin’s visit to Iran substantiates this later point of view. Yesterday on a tour of visit to Portugal, Putin said ‘The Iranian nuclear issue can not be solved like a madman with a knife in hand who moves around, pointlessly.’

All suggestions point to the fact that Cheney’s camp might have to accept the reality by listening to the other camp, namely to start normalization of ties with Iran in all its aspects before the world goes on the brink of another devastating war.

Masood Kazerani is a freelance journalist/ reporter specializing in current world affairs, travel and tourism. He writes for:

Masood Kazerani is a freelance journalist/ reporter specializing in current world affairs, travel and tourism. He also writes on various subjects about his current country of residence – Iran. He can be reached by email: or through a news website he is currently contributing to:

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