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US sanctions against Iran are working

Contrary to the many naysayers, US sanctions against Iran are being felt at every level of Iranian society. More importantly they are slicing directly into the Mullah Regime.

Those who doubt the efficacy of the sanction need to look at the bald statistics. Iran’s ability to export gas and oil is at its lowest pitch since 2009. President Trump’s latest decision to curtail exemption waivers will further ratchet up the pressure on Iran’s stricken economy, which is already showing signs of serious contraction. This is confirmed by an annual statement by the World Bank, which stated that Iran’s ‘economy is expected to contract by 1.4% on average between 2017/18-2020/21, experiencing a fall in exports and consumption on the demand side and a contraction of the industry sector on the supply side.’

The World Bank’s overview also predicted that inflation will rise ‘above 30% in the coming years, as inflationary expectations spiral and consumer sentiment falls leading to once again a period of stagflation for Iran.’  The IMF also supports the bleak outlook. Its latest World Economic Outlook states that ‘Prospects for 2018–19 were marked down sharply for Iran, reflecting the impact of the reinstatement of US sanctions.’ This comes on the heels of assessments that 34% of Iranians are now living in absolute poverty.

The truth is that Iran is buckling under the iron ring fence of 21st century sanctions that are both all-encompassing and ‘smart.’ President Rouhani has repeated his assertion that Iran ‘will evade’ the sanctions, but increasingly he cuts a deluded figure, in denial at the scale of US methods and their scope.

Of course, the US could have placed blanket bans merely on oil and gas but the ‘Trump Doctrine’ - as articulated in Secretary of State Mike Pompeo’s remarks in October 2018 - called for a far more complex array of sanctions.  Pompeo argued that ‘corruption goes all the way to the top. Iran’s supreme leader, Ayatollah Ali Khamenei, has his own personal, off-the-books hedge fund called the Setad, which is worth $95 billion. That untaxed and ill-gotten wealth, often earned by expropriating the assets of political and religious minorities, is used as a slush fund for the IRGC. In other words, Iran’s leading holy man captains the kind of plundering characteristic of Third World strongmen.’

Therefore, the decision was made to go after the wealth of individuals, as well as exports. Moreover Pompeo’s comments of last October showed that the Trump administration had a plan to increase the pressure on Iran with a rolling agenda of sanctions. Pompeo’s thinking demonstrated this when he said  ‘Iran’s leaders—especially those at the top of the IRGC, such as Qasem Soleimani, the head of the Quds Force—must be made to feel the painful consequences of their violence and corruption. Given that the regime is controlled by a desire for self-enrichment and a revolutionary ideology from which it will not easily depart, sanctions must be severe if they are to change entrenched habits.’

This plan came to fruition last week, when the US designated the IRGC as a terrorist organisation. It is worth remembering that the IRGC has its tentacles deep in Iran’s business sector and is reputed to control approximately 20% of Iran’s economy.  Behnam Ben Talebu, a senior fellow at the US Foundation for Defense of Democracies said that the new proscription ‘enhances Washington’s ability to punish those who provide material support to the IRGC...banks, businesses, and other financial institutions will have to tread even more carefully if they continue to transact with Iran.’

With the regime and its apparatus firmly in its sights, the US appears to be intent on neutering Iran’s ability to wage terror and pursue its WMD programme. This week Pompeo said ‘We’ve made clear our seriousness of purpose.’ He went on to add that ‘If they're prepared to come to the table and negotiate those things to get to that outcome, fantastic. If not, the campaign with which we've been engaged ... will continue.’ Thus Pompeo’s remarks show that the rolling out of sanctions has not ended and new pressure will continue to be applied. The resolution of the US in this respect is obvious.

The Mullah Regime could choose to turn away from its reckless and bloody path, but the rhetoric that utters forth from Tehran indicates otherwise. For the moment the Mullahs seem stuck in their medieval mind-set. Their perverse worldview only serves to continue the misery inflicted across the region by Iran’s terror chiefs and proxies. Misery is likewise visited on millions of Iranians who suffer under the rule of the Mullahs. Yet sanctions will certainly continue to tighten the noose around big players in Tehran. Moreover, in a sign that the US wishes to also remind Iran’s leaders of its hard power assets, a two carrier group has this week sailed into striking distance of the country.