Impact of Us Sanctions over Iran

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IMPACTS OF THE US TRADE & FINANCIAL SANCTIONS ON IRAN 407

Impacts of the US Trade and Financial Sanctions on Iran
Akbar E. Torbat
California State University

1. INTRODUCTION

T

HE United States has increasingly used economic sanctions in recent years as a means to promote its foreign policy objectives. The US unilaterally, and/or through its influence at the United Nations’ Security Council, has imposed economic sanctions on certain countries that have challenged its wishes. The US is concerned that possible access to nuclear, chemical and biological weapons by the so-called ‘rogue states’ may endanger its interests in some parts of the world (Huntington, 1999). The US regards preserving its domination over the Persian Gulf countries strategically very important due to the fact that these countries possess about two-thirds of the world oil and gas reserves. Since its inception in 1979, the Islamic Republic has challenged the US domination of the Persian Gulf region. In response, the US has used economic sanctions to force the Islamic regime to change its hostile behaviour. The economic sanctions on Iran were originally started by President Jimmy Carter in 1979 and have been more or less in effect in various forms until the present time. President Clinton used economic sanctions for dual containment of Iran and Iraq during his administration. In April 1995, he tightened the sanctions by announcing comprehensive trade and investment embargoes against Iran. The official reasons for imposing the embargoes were Iran’s continued support for terrorism, pursuit of access to nuclear weapons, and supporting groups that use violence to oppose the Middle East peace process. Surprising to many observers, the US did not include the clerical regime’s abuse of human rights as one of the official reasons for imposing the embargoes. The literature on sanctions is concerned with assessment of effectiveness of unilateral and multilateral sanctions as well as their costs to the target and sender countries. Examples are the work of Hufbauer, Schott and Elliot (1990) and Richard D. Farmer (2000). Some researchers have contended that sanctions

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policies are generally ineffective in the post-Cold War era.1 Some others, however, have argued that sanctions can be an effective foreign policy tool when targeted smartly on the ruling decision makers (Cortright and Lopez, 2002). The US sanctions on Iran provide an interesting case for examining these arguments and can shed light on how the sanctions’ effectiveness could be improved. The effectiveness of US sanctions on Iran has been specifically investigated in a number of studies. Jahangir Amuzegar (1997a and 1997b) argues that the US sanctions have not produced the anticipated results or transformed the Islamic regime. Patrick Clawson (1998) indicates that the sanctions have not persuaded Iran to change its behaviour. Kamran Dadkhah and Hamid Zangeneh (1998) point out the US can better achieve its goals through some sort of dialogue with Iran. Ernest Preeg (1999) claims that the net assessment of the economic impact of US sanctions on Iran is negative and believes the US should unilaterally lift the sanctions. Hossein Alikhani (2000) has conducted a general study of the sanctions against Iran from a political and historical standpoint. His overall evaluation is that the sanctions have failed politically to influence Iran. Also, Hossein Askari et al. (2001) have examined the economic sanctions on Iran. They believe, despite significant cost on both countries, Iran’s objectionable policies have not changed, and therefore the US should be more restrictive in the use of economic sanctions. This article assesses the effectiveness of the US unilateral economic sanctions on Iran by a somewhat different approach...
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