An Evaluation of Western Sanctions on Iran

The effectiveness of Western sanctions on Iran can be evaluated by three key criteria: Whether they have had a significant impact on Iran’s economy, whether they have a set and achievable end-goal and whether the sanctions have been supported and upheld by allying states. These three criteria are crucial to the effectiveness of sanctions, as outlined in a previous essay,[1] and can therefore be used to judge if Western sanctions of Iran have been effective in achieving their desired goal. These criteria can also be used to assess exactly why Western sanctions of Iran have been effective, in comparison to numerous other failed sanctions.

The current impact of the Iranian sanctions on Iran’s economy has been significant. Since 2011 the Iranian Rial has been continuously depreciating. Iranian oil exports have also decreased because of EU sanctions and as such the main consumers of Iranian oil are now China, India and Russia. This dependency on trade with China, India and Russia represents a weakness in their trading power. It has led to increase inflation and the banning of Iranian banks by the EU and US has prevented Iran’s ability to deal with Western based multinational corporations (MNCs). According to a report by the World Bank Group: “the imposition of sanctions on Iran’s oil exports had a serious negative effect on the Iranian government budget.”[2] Public welfare has also decreased with the government removing food, electricity, water and gas subsidies in 2010 and an estimated unemployment rate of 35% due to low export demand.[3] The Iranian economy has lost approximately $17.1 billion USD in export revenue.[4] Such statistics highlight the significant impact that Western sanctions on Iran have had on the Iranian economy, largely due to the Iranian economy’s reliance upon oil exports to the EU and services from American MNCs. Despite economic relief being provided by China and Russia, the Iranian national economy has failed to recover from the impact of such sanctions. These findings give credence to argument that Western sanctions have been extremely effective in halting the Iranian economy.

In assessing the goals of Western states in sanctioning Iran, the West has used their sanctions to halt the Iranian nuclear program. This goal, unlike most goals of sanctioning states, is a practical and achievable goal that attempts to restrict Iranian military and political power in exchange for economic power. This fact combined with Iran’s heavy reliance upon trade with the West highlights the fact that Western sanctions on Iran have been extremely effective and that their outlined goal was achievable. The recent Iran nuclear framework agreement to end Western sanctions in exchange for the ceasing of Iran’s nuclear program highlights the efficacy of sanctions as a method of conflict resolution. The willingness of Iran to give up their sovereignty in exchange for economic power emphasis the effect that such sanctions have had and can have on a state by efficiently targeting its economy and setting realistic and practical goals.

Another important factor in the effectiveness of the Iran sanctions is the fact that they were multilateral and supported by numerous Western states. The sanctions involved restrictions imposed by the UN on arms trade with Iran, Iranian assets and Iranian banking. American sanctions when further by completely banning any American firms from dealing with Iran which greatly restricted Iran’s access to Western markets and services. EU sanctions also supported American sanctions by restricting Iran’s access to European markets and arms trade. European sanctions had the greatest impact on Iran by completely preventing their access to any Western markets, greatly devaluing their trading power. The involvement of Western states, other than the US, such as the EU and Australia played a large role in having an impact on Iran, by completely restricting Iran’s dealing to economically developing states such as India, China and Russia. It is as such that a major aspect of the efficacy of the Iranian sanctions was the fact they involved multiple economically developed states that the Iranian economy was reliant upon.

The effectiveness of Western sanctions on Iran, as an exercise of coercive state power, cannot be understated. Because of the multilateral nature of the sanctions, the significance of Western markets to the Iranian economy and a set and achievable end-goal for the sanctions, Western sanctions have been extremely effective in coercing Iran into ending their nuclear program. The 2015 Joint Comprehensive Plan of Action, signified the end of the Iranian nuclear “issue” with Iran dismantling their nuclear program in exchange for sanctions relief. This case study demonstrates the coercive power of sanctions as method of conflict resolution and the requirements for such sanctions to have an impact upon a state.

[1] Butler, Umar. 2017. The Efficacy of Sanctions as a Method of Conflict Resolution. February 8. Accessed February 11, 2017.

[2] Ianchovichina, Elena, Shantayanan Devarajan, and Csilla Lakatos. 2016. Lifting Economic Sanctions on Iran: Global Effects and Strategic Responses. Policy Research Working Paper, World Bank Group.

[3] Peterson, Sabrina M. n.d. Iran’s Deteriorating Economy: An Analysis of the Economic Impact of Western Sanctions. Accessed February 12, 2017.

[4] Mufson, Steven. 2015. What ending sanctions on Iran will mean for the country’s economy. August 12. Accessed February 12, 2017.