Commentary Magazine


Topic: Iran-Iraq War

Why Forfeit Leverage on Iran?

If there’s one thing that hampers American policy, it is our general lack of strategy. As the National Security Council has transitioned into yet another bureaucracy, it has forfeited its main function to enforce policy discipline and shape interagency strategy. Too often, we forfeit leverage which, at any rate, too many in the State Department consider a dirty word.

Iran’s latest economic reports suggest that the United States should have much more leverage on Iran than many in the White House and State Department recognize. On Sunday, the Statistics Center of Iran released economic growth figures which confirm that the Iranian economy shrank 5.4 percent last year. Meanwhile, the Iranian Student News Agency has reported that liquidity has increased 670 percent during the administration of former president Mahmoud Ahmadinejad. Meanwhile, the Statistics Center has also reported that the July-August 2013 inflation rate in rural areas was 42.6 percent, with the 12-month inflation rate at 41.4 percent. Both imports and exports are down according to the Iranian Customs Administration.

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If there’s one thing that hampers American policy, it is our general lack of strategy. As the National Security Council has transitioned into yet another bureaucracy, it has forfeited its main function to enforce policy discipline and shape interagency strategy. Too often, we forfeit leverage which, at any rate, too many in the State Department consider a dirty word.

Iran’s latest economic reports suggest that the United States should have much more leverage on Iran than many in the White House and State Department recognize. On Sunday, the Statistics Center of Iran released economic growth figures which confirm that the Iranian economy shrank 5.4 percent last year. Meanwhile, the Iranian Student News Agency has reported that liquidity has increased 670 percent during the administration of former president Mahmoud Ahmadinejad. Meanwhile, the Statistics Center has also reported that the July-August 2013 inflation rate in rural areas was 42.6 percent, with the 12-month inflation rate at 41.4 percent. Both imports and exports are down according to the Iranian Customs Administration.

The Iranian economy is more than ever dependent upon oil exports. According to Majlis Research Center head Ahmad Tavakoli, per capita reliance on oil revenue under Ahmadinejad was $890. In contrast, the figure was $364 under Khatami, $384 under Rafsanjani, and $608 during the Iran-Iraq War. Subsidies payments are leading to a $40.4 billion deficit.

It would be wrong to blame sanctions for such a dire economic picture: Most of Iran’s economic woes stem from the incompetence of the Islamic Republic. However, it would be even more counterproductive to throw the Iranian regime a lifeline. If the Iranian economy is as bad as Iranian technocrats say it is, then now is the time for more pressure, not less.

Only twice in the Islamic Republic’s history has its leadership reversed course on core policies. The first was about what it would take to release the American hostages. It was not Carter-era persistent diplomacy which forced Ayatollah Ruhollah Khomeini to change his mind, but rather Saddam Hussein: Iraq’s invasion had raised the cost of Iran’s isolation considerably. The second time was with regard to what it would take to end the Iran-Iraq War. After continuing the war six years after first considering an end in 1982, Khomeini finally accepted a ceasefire, likening it to drinking a chalice of poison.

The Iranian government has now filled its own cup; perhaps it’s time with even more robust sanctions to force the regime to take a sip.

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