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Analysis: Round Three with Iran

Council on Foreign Relations

July 5, 2007
Prepared by: Lionel Beehner

The economic noose around Iran may be tightening. Domestically, the government’s plan for gas rationing, in a country that exports the second-largest amount of crude oil, sparked protests and chants of “Ahmadinejad should be killed!” (This Backgrounder explores Iran’s poorly run energy sector). Iran’s economy has also felt the effects, notes the Guardian, as inflation and unemployment rates soar close to 30 percent. Externally, a financial squeeze caused by sanctions, in addition to more general U.S. Treasury pressures on international banks, has hurt Iran’s standing and crippled its financial sector. The sanctions, contained in UN Security Council Resolutions 1737 and 1747, are to encourage Tehran to suspend its uranium-enrichment program, which outside powers believe is a ruse to develop a nuclear bomb, something Iran denies. The passage of the two UN resolutions, Matthew Levitt of the Washington Institute for Near East Policy writes in the Wall Street Journal Europe, “made the country’s professional classes, which are proud of Iran’s integration in the international system, feel the sting of diplomatic and economic isolation.”

A third round of proposed sanctions looms. Projections of what they will include run the gamut. Levitt recommends a two-way arms embargo (banning imports and exports). Mike Jacobson, also of the Washington Institute, suggests an independent monitoring team (JPost), which has proven successful for past sanctions regimes imposed against Sudan, Somalia, and Liberia. Tougher travel bans against select Iranian officials should also be put in place, Jacobson argues. Others suggest tougher inspections of Iranian cargo for nuclear material and/or freezes of more Iranian assets overseas.

Read the rest of this article on the cfr.org website.

Copyright 2007 by the Council on Foreign Relations. This material is republished on GlobalSecurity.org with specific permission from the cfr.org. Reprint and republication queries for this article should be directed to cfr.org.