Impact of Us Sanctions over Iran

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

References: Ale-Rassol, M. (1993), Freezing Assets: The USA and the Most Effective Economic Sanctions (St. Martin’s Press, New York). Alikhani, H. (2000), Sanctioning Iran (I. B. Tauris, New York). Amuzegar, J. (1997a), ‘Adjusting to Sanctions’, Foreign Affairs, 7, 3, 31– 41. Amuzegar, J. (1997b), ‘Iran’s Economy and the US Sanctions’, The Middle East Journal, 51, 2, 185–99. Askari, H., J. Forrer, H. Teegen and J. Yang (2001), ‘US Economic Sanctions: Lessons from the Iranian Experience’, Business Economics, XXXVI, 3, 7–19. Askari, H., et al. (2003), Economic Sanctions: Examining Their Philosophy and Efficacy (Praeger, Westport, CT). Bergsten, F. (2001), ‘America’s Two-front Economic Conflict’, Foreign Affairs, 80, 2, 16–27. (March/April). Chalabi, F. J. (2000), ‘OPEC: An Obituary’, in P. King (ed.), International Economics and Economic Policy: A Reader (McGraw-Hill, New York), 223. Clawson, P. (1998), ‘Council on Foreign Relations’, in R. N. Haass (ed.), Economic Sanctions and American Diplomacy. Cortright, D. and G. A. Lopez (2002), Smart Sanctions: Targeting Economic Statecraft (Rowman & Littlefield, Lanham, MD). Dadkhah, K. and H. Zangeneh (1998), ‘International Economic Sanctions are not Zero-sum Games: There are only Losers’, CIRA Bulletin, 14, 1, 24–33. Drezner, D. (1999), The Sanctions Paradox: Economic Statecraft and International Relations (Cambridge University Press, Cambridge). Eaton, J. and M. Engers (1999), ‘Sanctions: Some Simple Analytics’, American Economic Review, 89, 2, 409–14. Elliot, K. A. and G. C. Hufbauer (1999), ‘Same Song, Same Refrain? Economic Sanctions in the 1990’s’, American Economic Review, 89, 2, 403–8. Farmer, R. D. (2000), ‘Costs of Economic Sanctions to the Sender’, The World Economy, 23, 1, 93–117. Hufbauer, G. and J. Schott (1983), Economic Sanctions in Support of Foreign Policy Goals (Institute for International Economics, Washington, DC), 97. © Blackwell Publishing Ltd 2005 434 AKBAR E. TORBAT Hufbauer, G. and J. Schott (1985), Economic Sanctions Reconsidered: History and Current Policy (Institute for International Economics, Washington, DC), 626–29. Hufbauer, G., J. Schott and K. Elliot (1990), Economic Sanctions Reconsidered: History and Current Policy (2nd ed., Institute for International Economics, Washington, DC). Huntington, S. (1999), ‘The Lonely Superpower’, Foreign Affairs, 78, 2, 35–49. Kaempfer, W. and A. Lowenberg (1992), International Economic Sanctions: A Public Choice Perspective (Westview Press, Boulder, Co), 67–75. Katzman, K. (2003), ‘Iran: Current Developments and the US Policy’ (Congressional Research Service), July, 8. Krugman, P. and M. Obstfeld (1994), International Economics: Theory and Policy (3rd ed., HarperCollins, London), 110–12. Lake, A. (1994), ‘Confronting Backlash States’, Foreign Affairs, 73, 2, 45–55. Levy, P. I. (1999), ‘Sanctions on South Africa: What Did They DO?’ American Economic Review, 89, 2, 415–20. Nicholson, W. (1990), Intermediate Microeconomics and Its Application (5th ed., Dryden Press), 454–55. Preeg, E. (1999), Feeling Good or Doing Good with Sanctions (CSIS Press, Washington, DC). Pugal, T. and P. Lindert (1999), International Economics (McGraw Hill, New York), 225–33. Struwe, V. M. (1998), The Policy of ‘Critical Dialogue’: An Analysis of European Human Rights Policy Towards Iran from 1992 to 1997 (Durham Middle East Papers, Durham, UK). Torbat, A. E. (2002), ‘The Brain Drain from Iran to the United States’, The Middle East Journal, 56, 2, 272–95. © Blackwell Publishing Ltd 2005