Stopping the Ayatollahs

Economic sanctions alone do not have the power to stop Iran's nuclear program.

By MENASHE AMIR
Ahmadinejad cartoon 521 (do not use) (photo credit: Avi Katz)
Ahmadinejad cartoon 521 (do not use)
(photo credit: Avi Katz)
Throughout the seven years he has been in office, Iranian President Mahmoud Ahmadinejad has repeatedly claimed that sanctions don’t have the slightest effect on Iran’s economy. Iran, he insists, is a rich country with huge foreign reserves and a healthy economy. But what has been happening over the past several weeks in the Iranian marketplace dramatically belies his hollow boast.
From the first reports of Western intentions to impose stringent sanctions targeting Iran’s oil trade there has been utter chaos in local markets. Foreign currency rates have been climbing by the day, sometimes even by the hour. The value of the dollar almost doubled within a fortnight. The price of basic commodities sky-rocketed and shortages began to be felt.
Money-changers were not alone in refusing to do business because of the fluctuating exchange rate; major corporations refused to sell their wares on the grounds that they couldn’t set a price. Judiciary head Ayatollah Sadeq Amoli-Larijani actually threatened to sentence foreign currency speculators to death. Although no one took him seriously, the very threat underlined the gravity of the situation.
Ahmadinejad claims Iran has foreign currency reserves for another 150 years. But leading players in the Iranian economy warn that the reserves have almost been depleted. Some even argue that within six months the Iranian people could face acute food shortages and even hunger.
Iran insists it won’t have any problem selling 2.2 million barrels of oil a day. That is true. The snag is that with the boycott of the Central Bank, the transfer of payment for Iranian oil has become difficult and expensive. The problem surfaced in a recent $3 billion oil sale to India. Turkish banks charged the Iranians astronomic fees for arranging the transfer of part of the money. The Iranians are demanding the rest in Japanese yen, but the Indians refuse to comply.
One of the solutions Iran is considering is barter. But there is not all that much it really needs in exchange from some of its key oil clients. And it desperately needs hard currency to pay for a vast range of essential goods. Moreover, the spiraling currency rates will also hurt local production, which for years has been suffering from poor management and limited cash flow, and will now have to pay more for imported raw materials.
The new sanctions have already had a devastating effect on public morale. In conversations with Persian radio stations in Europe and the US , Iranian phone-in listeners spoke of widespread panic buying. And Iranians who phoned in to Israel Radio’s Persian service wanted to know when the war would start and which areas would be bombed. Many speakers expressed willingness to endure major suffering as long it is relatively short and geared to bringing down the regime.
Many also welcomed a military strike, on condition that it does not target civilians or national infrastructure.
Do these latest economic sanctions alone have the power to stop Iran’s nuclear program? The answer is a resounding no.
But if the sanctions are combined with other actions that pose a real threat to the regime, the answer is very possibly yes.
In 1988, Iranian spiritual leader Ayatollah Ruhollah Khomeini was forced to drink the poisoned chalice: backing down and accepting a cease-fire after eight years of war with Iraq, because, he said, “the need to ensure the existence of the Islamic regime takes precedence over all else.”
Israel, the US and the rest of the international community must devise a combination of measures that seriously threatens the survival of the Iranian regime. That is the only way to force the current spiritual leader Ayatollah Ali Khamenei to follow in his predecessor’s footsteps – and back down over the nuclear program.
Menashe Amir, an expert on Iran, was head of Israel Radio's Persian service and editor of the Foreign Ministry's Persian website.