Sanctions Against Iran Would
Guitta, olivieR
Sanctions Against Iran Would Work Too bad they won't be tried. by Olivier Guitta After nearly four years of fruitless negotiations between the EU-3 (France, Germany, and the United Kingdom) and...
...It concludes that the simultaneous freezing of Iranian reserves abroad, imposition of an embargo on Iranian crude exports, and a ban on refined petroleum imports would plunge Iran into a deep hole both economically and socially...
...In the last few years, Iran's consumption of petroleum products has increased 10 percent per annum, putting added pressure on the oil sector...
...The report analyzes the economic and social consequences of potential international sanctions...
...Renault, the leading French automaker, for instance, has invested $2 billion in a joint venture with two Iranian automakers that will be Renault's second-largest operation in the world, turning out as many as 300,000 cars a year...
...And Iran has threatened to renew Hezbollah attacks in France itself if the French take a harsh stance against it at the Security Council...
...There's no reason it wouldn't do so today—if it were actually forced into a corner...
...But this cannot be the last word, given the stakes—the risk of losing the war on jihadist Islam and enduring a nuclear terror attack...
...The evidence that sanctions could work is significant...
...While official French policy remains that a nuclear-armed Iran is unacceptable, President Chirac—who a year ago was leading the effort to secure a tough condemnation of Iran by the U.N...
...Third, French business interests in Iran are huge: a staggering $35 billion in investments, excluding the oil company Total's contracts (Total has invested over $4 billion in Iran...
...In the event of economic sanctions, French companies would be hit hard...
...France is Iran's second-largest source of imports (after Germany), claiming 8.3 percent of the country's total imports...
...so toning town the rhetoric towards Tehran is de rigueur...
...or, failing that, the E.U.—gives every indication of rejecting serious sanctions...
...But it also set a clock ticking: If Iran has not agreed to suspend its enrichment of uranium by February 21, the Security Council may contemplate more severe sanctions...
...Chirac is obsessed with the Lebanese imbroglio, for a number of reasons...
...Not surprisingly, the authors of the report note: "It is important to delay any measures which could affect the population because of the risks of instability...
...he made the statement in a recorded interview with the New York Times and other major publications...
...Rafik Hariri, the former prime minister of Lebanon assassinated on February 14, 2005, was a close friend of his...
...Iran exports 2.5 million barrels of oil a day (3 percent of world consumption...
...In the event of sanctions, the bulk of Iranian industry would be paralyzed after just three to four months...
...Such intervention is surely not a prospect Chirac enjoys...
...In the late 1990s, France signed treaties with the United Arab Emirates and Qatar obligating it to intervene militarily to defend these countries...
...Longtime Chirac observer Franz-Olivier Giesbert, in his biography of Mitterrand, quotes Chirac as speaking contemptuously of the mullahs: "Like all people, Iranians hate losing face...
...If the United States and/or Israel are pushed to act militarily, some of the blame will belong in Paris as well as in Moscow and Beijing...
...of which 40 percent is imported, at a cost of $3 to 4 billion a year...
...Less than a year later, on June 16, 1988, it restored relations—after five French hostages in Lebanon (kidnapped by Iran's proxy, A 1986 bombing in Paris: Iran's Hezbollah) had been freed, attacks on French soil had ceased, and Tehran had sought a rapprochement...
...Relations between Hezbollah and France have been rocky in the past few months, and Chirac is probably seeking to avoid provocation...
...At first glance, it might seem that a country with the second-largest gas and oil reserves in the world has nothing to worry about...
...by Olivier Guitta After nearly four years of fruitless negotiations between the EU-3 (France, Germany, and the United Kingdom) and Iran over the nuclear issue, the U.N...
...Naturally, in the tense atmosphere of the region, the Gulf states are worried about Iran...
...The product of six months' intensive discussion among economists and oil specialists, it was circulated at the highest levels of the regime, and to president Mahmoud Ahmadinejad...
...While he tried to explain away as an off-the-record slip his statement on January 29 that he could live with one or two Iranian bombs (the real problem, he said, is proliferation), role in such attacks finally provoked Jacques Chirac...
...Then, too, France has soldiers in the UNIFIL contingent in south Lebanon...
...In that instance, French firmness worked...
...The implication is that sanctions could seriously weaken the regime...
...Iran consumes half a million barrels of petroleum products per day, Olivier Guitta is a consultant on foreign affairs and counterterrorism in Washington...
...Iran would lose between $1.5 and $2 billion in annual revenue...
...France severed diplomatic ties with Iran on July 17, 1987...
...Also, numerous French multinationals have entered the Iranian market in the past two years...
...Heightening the vulnerability of the Iranian economy to sanctions is the fact that half of its imports come from Western countries, including 40 percent from the European Union...
...In any such case, France would be treaty-bound to send troops to the region to retaliate against Iran...
...But as the report notes, 85 percent of Iran's revenue comes from the sale of oil abroad...
...Indeed, it may be that much of the world is resigned to letting Iran have nuclear weapons...
...In addition, none other than France is now going wobbly...
...And the prospects of this are getting dimmer by the day...
...Unrelated confirmation that isolating Iran might be an effective policy comes from the French experience in the late 1980s...
...Consider the economic picture inside Iran...
...Whatever his reasons, it appears that even Chirac—until recently, one of the toughest on Iran—is giving up...
...Security Council on December 23 passed Resolution 1737...
...It also insists on the need to continue threatening Western nations with a "cold winter," a way of stressing that rising oil prices would have a huge negative impact on Western economies...
...And there are grounds to believe that this backtracking reflects a good deal more than presidential inadvertence...
...Second, Lebanon...
...At the same time, Iran imports most of the refined products it uses, like gasoline...
...Interestingly, the commission seems to distance itself from the hard line personified by President Ahmadinejad...
...Last year, the Saudi daily Al Riyadh reported that the leaders of the Iranian Revolutionary Guard, angered by Qatar's alliance with the United States and allegedly Israel, were threatening to attack Qatari oil and gas facilities by sea and air should a military confrontation occur between the United States and Iran over the nuclear crisis...
...It imposed limited, almost meaningless, sanctions on the mullahs' regime...
...The report amounts to a warning to the regime that it could not withstand major economic pressure, because of the structural weaknesses of the Iranian economy and its fragile financial situation...
...An embargo on these exports would have a great impact, though it would not be felt for at least a year...
...The report underscores the vulnerability of the Iranian economy—especially the oil sector—to sanctions...
...For either economic or diplomatic isolation to be fully effective, however, every major nation would have to be on board...
...A roughly 100-page report prepared by the foreign affairs and defense commission of the Majlis, the Iranian parliament, and dated September 2006 was recently leaked to the French daily Le Monde...
...They have their dignity...
...According to the report, "the members of the regime who were interviewed by the commission indicated that any deterioration of the economic situation could cause social disturbances that would weaken domestic stability...
...Qatari diplomats have been reminding France of its commitments...
...Apparently Tehran was unwilling to be cast as a pariah on the international scene, preferring to compromise to regain its honor...
...The Majlis report recommends "making every political effort to prevent the imposition of sanctions, while protecting the interests of the country and the national honor...
...As a result, the report says, Iran "would be forced to modify its national priorities, and to devote the bulk of its resources to preventing major social upheaval, which could cause a deterioration of living standards for an important part of the population...
...An embargo would destabilize Iran's economy and weaken its rate of exchange, while discouraging private investment...
...Rising consumption should come as no surprise, given population growth and the government-subsidized price of gasoline, among the lowest in the world at 800 rials a liter, or about 33 cents a gallon...
...First, there is France's alliance with the Gulf monarchies...
...It mentions that Iran can use economic leverage with countries that depend on it for oil (Japan, China) and "political and military dissuasion" with others...
...Chirac is surely taking this into account...
...Knowing of Iranian involvement in 11 terrorist bombings in the streets of Paris between December 1985 and September 1986, Jacques Chirac, then prime minister, decided to act...
...So if you treat them like chimpanzees . . . " And, "as long as you behave like savages, we will not have diplomatic relations with you...
...It is clear that Russia and China went along with Resolution 1737 only because its sanctions were so mild...
Vol. 12 • February 2007 • No. 22
