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.

The Efficacy of Sanctions as a Method of Conflict Resolution

The efficacy of sanctions and trade embargoes, while being important methods of exercising coercive power, is largely dependent upon the specific economic profile of a targeted state, the goals of the sanctioning state and the amount of parties involved in the embargoes. States must properly assess the needs of other states to maximize their damage to another state’s economy. They must also set realistic, practical and achievable goals, and in most cases, they must be done multilaterally as to maximize the impact on another states economy. These three requirements are crucial to the success of sanctions as an effective method of conflict resolution.

For sanctions to maximize their potential economic impact on a state, and thus be an effective method of conflict resolution, they must first be able to have a significant effect a targeted state. An example of a state successfully effecting another state through sanctions would be the refusal of the United States to grant finical aid from the Marshall Plan (1948) to the Netherlands as a result of their continued colonization Indonesia. This eventually resulted in the independence of Indonesia in 1949. By directly preventing a state from a resource that is crucial to their survival, in this case that being money needed for the post WWII recovery of the Netherlands, a state can maximize their potential to harm another state. When this requirement is not met, the power of sanctions to resolve conflict diminishes. One example of this would be the contemporary sanctioning of the Netherlands by Saudi Arabia for their failure to punish a Danish cartoonist that insulted Islam. Such sanctions have proved to be largely ineffective due the fact that the Netherlands has never had a large reliance on export to Saudi Arabia nor the import of goods from Saudi Arabia. These two case studies demonstrate that a requirement of effective sanctions is for them to be crucial to economy of a targeted state.

Another requirement of effective sanctions is that realistic, practical and achievable goals are set by states in their sanctioning of other states. An example of the failure of a state to achieve their goals in sanctioning a state would be the sanctioning of Cuba by the United States from 1960 to 2016. While the US-Cuba trade embargo has been effective in crippling and drastically hurting the Cuban economy, it has largely failed in that the Cuban government has yet to end its implementation of Communist policies, which was the United States’ set goal in implementing their Cuban sanctions. This failure was cemented by the 2016 agreement to end the US’ trade embargo of Cuba. This case demonstrates how setting unrealistic goals in the implementation of sanctions can result in the failure of said sanctions to be effective tools of conflict resolution.

An extremely important aspect of the success of sanctions is that they be supported by other states. While there are cases such as the US v. Finland (1958-1959) and US v. Taiwan (1976-1977) economic sanctions that achieved the unilateral goals of the sanctioning states, in most cases states that have a diversified economy that trades with multiple states and does not heavily rely upon one single state, are usually unharmed. Cases such as the US’ sanctions of Burma and US sanctions against Russia demonstrate that when implemented unilaterally, sanctions can be largely ineffective. A good example of the effectiveness of multilateral sanctions would be the sanctions of South Africa by the international community during the 1960s which proved extremely effective in the ending of the Apartheid system by the South African government due to the fact that the sanctions were multilateral in nature. As evident by these examples, the more states that join in sanctions, the more effective sanctions will be as a tool of conflict resolution.

In conclusion, sanctions if implemented correctly and efficiently, through the setting of practical goals, intelligent targeting of states’ economies and the multilateral adoption of such sanctions, can be an extremely powerful and coercive tool used to achieve goals and end conflict by states. Such requirements are crucial to the success of sanctions as a tool of conflict resolution. When these requirements are not fulfilled sanctions can “backfire” upon sanctioning states due to their own economic losses from preventing export to and import from sanctioned states.