Sanctions: A Threat or Opportunity?

Saturday, June 14, 2008

Golbahar Majidi

A glance at management of economic sanctions:

International developments and unsuitable conditions in a country will lead to a special economic crisis and in a country like Iran even a short-term change may affect the national economy. Due to its political and foreign diplomatic conditions, Iran is always exposed to economic sanctions and those sanctions have been intensified at times, especially in recent years, under the impact of the United Nations Security Council resolutions.

Meanwhile, management of economic sanctions is an important and infrastructural issue which calls for special mechanisms to be adopted to reduce or minimize the impact of economic sanctions.

Economic sanction is an organized plan by one or more states to reduce economic, trade and financial relations with a country in order to put more pressure on it. This is done for various political purposes and is a tool used by capitalistic systems in order to punish countries that do not conform to their policies within the framework of the new world order.

Since the nationalization of the oil industry up to the victory of the Islamic Revolution (Feb. 1979) and during the Iraqi imposed war (1980-88) and the current nuclear standoff, Iran has always been target of economic sanctions and the United States has used it more than any other country in order to disrupt the economic situation in Iran and put pressure on the country. However, the Iranian nation has always relied on its potentialities to meet its needs and has been able to not only bring the United States to its knees, but also to use the opportunity offered by sanctions to achieve its goals in different fields.

Therefore, economic sanctions have been there since many years ago, however, they have been toughened during recent months, giving rise to new concerns in this regard.

Our enemies have always tried to find new excuses to put more pressure on Iran and, therefore, the nuclear case has provided them with new grounds to enhance those pressures. Management of economic sanctions is the main way of causing this threadbare ploy used by the American administration to fail.

Naturally, every country will face different short-, medium-, and long-term challenges and a major concern for economic planners even in developed countries is how to oppose economic sanctions and crises because they will be of public concern when they cover basic commodities. Under sanctions, the least economic disorder may cause a major economic crisis.

Under these conditions, economic experts have different viewpoints about sanctions. Some maintain that sanctions are not detrimental, but offer Iran with an opportunity to manage sanctions and provide the country with suitable conditions for economic and technological growth.

Others maintain that economic and technological growth would be only possible on a peaceful economic background which helps domestic industries to gradually develop. Considering existing conditions, many domestic industries which are dependent on exported raw materials, will suffer heavy losses.

The main issue, however, which is highlighted by experts with different viewpoints, is management of sanctions and optimal use of domestic resources and facilities which can turn sanctions into an opportunity for the country.

Priority should be given to producing knowledge

Adel Azar, member of Economic Commission of the seventh Majlis maintains that in the modern world and era of information technology, those countries would be more successful in fighting off economic sanctions that avail more of knowledge economy and give priority to those who can produce knowledge including the elite, scientists and experts. Of course political and group programs should be formulated and analyzed within an expert and scientific framework.

Explaining about management of bank sanctions, he noted that banking economy is one of the most important components of global economy, adding, “One of the most basic pillars of international exchanges including exports and imports is money and it flows through banks. Therefore, in international crises, especially when political exchanges are involved, banks play a decisive role.

However, due to capacities of the Iranian banking system and the type of transactions carried out by the Iranian banks with international banks as well as in view of rivalries between the American and European banks, we will never face major difficulties in this regard.”

“It is true that the Americans may put pressures on international banks, especially other countries’ banks, since they are apparently committed to free economy and competition and their banking system is run like an economic corporation which should be profit making, but many banks, especially those which are not controlled by Americans will not comply with sanctions. Therefore, although many of our banks have been put on the blacklist by the Americans, they are easily transacting with international banks.”

Threats turned into opportunities

Mohammad Khoshchehreh, another member of the seventh Majlis Economic Commission, also noted that 28 years after the victory of the Islamic Revolution, experiences have shown that many threats, especially those which faced the country soon after the victory of the Revolution like the imposed war, were not only controlled through wise management of the late Imam Khomeini, but many threats have been turned into opportunities. He maintained that self-sufficiency in military and defense industries has been achieved as a result of the sanctions.

“In many instances when they have put embargo on export of capital and even intermediate goods to Iran, good management has led the country toward independence. We have 28 years of management of economic sanctions in our country.”

The MP then noted, “The impact of sanctions is directly related to the way they are managed. On the one side, we must not be fearless in confronting any kind of sanctions and, on the other side, we must not be daunted, but we must find an intermediate and wise way to manage sanctions in a proper manner.”

Khoshchehreh has also noted that a thought-provoking point under the present circumstances is that the United States and other hegemonic powers have made economy a tool to pressure countries. “Before that, they used military or political means. Now the United States intends to find our weaknesses and use them to influence us. Therefore, we must choose a sensible way to confront sanctions which can be quite harmful, especially in financial and monetary fields where they can disrupt economic networks. We must act quite logically and refrain from merely changing slogans,” he said.

He maintained that if Iran adopted this policy, it could also avail of experiences gained during the past 28 years in order to control sanctions and offset their impact. “If we followed suit with the Imam (Khomeini), we could turn sanctions into an opportunity.”

Khoshchehreh also believed that a think tank should be established to manage sanctions by drawing upon the viewpoints of independent and committed experts who attach importance to protection of national interests of the country.

Active diplomacy needed

Morteza Tamaddon, member of the seventh Majlis Plan and Budget Commission, has noted that Iran should prevent issuance of more Security Council resolutions through interaction with countries and an active diplomacy based on dialogue.

“In the next stage, our diplomats should use effective dialogue with heads of other states to make them understand that issuing such resolutions is injustice to Iran,” he added. Tamaddon said that in addition, Iran should put its foreign assets in secure banks and prevent possible damages to them. “We must secure our assets because they may try to damage them under specific circumstances,” he said.

He maintains that Iran should also make international bodies to recognize its rights and make bullying countries to reduce pressures on the country. “Our representatives in international bodies can play an active role in this regard. Inside the country, we must prepare the public opinion and tell people what has happened, so that, they would support officials in their efforts to get out of the current situation,” he said. The MP stated that the sanctions are economic, but their solution is political.

“Therefore, we must try to increase regional agreements between Iran and other countries in order to reduce economic pressures and find suitable ways for procuring what we need from outside the country. This can be achieved through active regional treaties,” he opined.

Tamaddon stated that regional treaties are in fact, a way to fight sanctions and to influence their markets. “In this way, economic companies in countries that have imposed sanctions on us will be used as a tool to put pressure on their governments,” he said.

Hadi Haqshenas, Majlis deputy from Bandar Anzali and another member of the seventh Majlis Economic Commission, also maintained that sanctions were general and included many commodities and due to their negative impact on the Iranian economy, the Iranian government should try to offset their effect through self-sufficiency.

“For example, self-sufficiency in rice and wheat can reduce pressures resulting from sanctions. However, we need a long-term strategy with regard to industrial products. Unfortunately, our foreign policy has worked in such a way that our apparent friends in the world are not true friends and they have voted against us in the Security Council. Therefore, to oppose economic sanctions, we must review our foreign policy,” he said. The MP added, “Another way to manage sanctions is to help people come to grips with reality and help the government.”

Haqshenas further noted that another method to manage sanctions is to support domestic production, adding, “During eight years of the imposed war, we were under sanctions. We can support domestic production by, for example, buying wheat at guaranteed price and become self-sufficient in producing other goods. With regard to industrial commodities, such as auto parts, some of which are still imported, we must try to become self-sufficient.”

Iraj Nadimi: Good planning needed to offset sanctions

“In order to manage economic sanctions against our country, we must first believe that the United States is an enemy of Iran and has long-, medium-, and short-term plans to show its animosity toward our country. The outcome of all those plans is to pitch the world against us.”

Iraj Nadimi, another seventh Majlis MP, continued by saying, “The second thing in which we must believe is that secondary sanctions are different from primary sanctions. For example, we were under sanctions imposed by the United States from the outset, but those sanctions were not international and there were no (Security Council) resolutions to convince countries that they cannot sell their commodities to Iran and if they did, they would also come under sanctions.

The third fact is that our people’s attitude to economy is very different from what it was 10-20 years ago because in our country, parties have worked in such a way that they have highlighted economic needs and the poverty feeling. Therefore, even if the economy has not the first say in people’s lives, it is among the most important issues of their lives.

We must increase our diplomatic friends and this should be carried out by signing contracts. Then we must do everything to reduce the costs of economic sanctions.

As for economic products, we are either exporter or importer, so, we need markets. Therefore, we cannot solve our economic problems without attention to diplomatic relations.

In order to know our enemies, to know the present economic situation of the world, the current economic conditions in the country, and to find a way out of the current dire straits, we must first strengthen our Foreign Ministry. We need people who would be knowledgeable and also to be attached to the Supreme Leader and the revolution.

We must determine our priorities and differentiate between small industries and large industries and those industries that increase our dependence on imports or need heavy investment. Then we must determine priorities of economic plans. The government should privatize many companies that are affiliated to it and free thousands of billions of rials which are spent on these companies to allocate them to the welfare of people.”


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