The real effects of Iran sanctions

 In Iran

While some are already claiming the effectiveness of US and UN imposed sanctions, Iranian officials are whipping up propaganda to use sanctions to crack down on dissidents. The National Iranian American Council reports:

Earlier this week, Mahmoud Ahmadinejad reacted to the latest round of international sanctions by lashing out at his political arch nemeses, [Green Movement leaders] Hashemi Rafsanjani and Mir Hossein Mousavi, during a televised conference with the heads of Iran’s propaganda machine, the IRIB.

Of course the leaders of the Green Movement have repeatedly spoken out against international sanctions.  Nevertheless, Ahmadinejad pretended as if the opposite were true – not unlike much of official Washington – in order to attack the Green Movement as treasonous.

Meanhwhile, Ramin Mostaghim, correspondent for the LA Times in Tehran, reveals how Ahmadinejad and pro-government groups benefit from sanctions. The following interview took place yesterday with NPR’s Renee Montagne.

MONTAGNE: Now, the U.S. and the U.N. have been keeping up the pressure on Iran, mostly over its nuclear ambitions. What evidence is there that these sanctions are having an effect?

Mr. MOSTAGHIM: In fact, I’m afraid I can say that traditional righteous groups and those who are pro-government are enjoying and profiting from the sanctions, because they have the upper hand in all the international transactions, and Iran has a long border with 15 countries. So there’s always chance to smuggle in and out everything they want.

Of course, it costs money for the people and for the private sectors. But as far as the government is concerned, they are profiting from the situation.

MONTAGNE: Give us a specific when you say the government has been profiting from the situation.

Mr. MOSTAGHIM: If I just want to sell some things outside the country, export some things, as a private sector, I cannot tolerate the sanction-breaking procedure. It would cost me between 15 to 30 percent increase of anything I do. So, I, as a private sector, lose my competitive edge with the government or state-owned enterprises.

So I have two options, either to stop and give up my business, or get connections to the state-run enterprises. And it costs a lot, so I lose and the government gets upper hand.

MONTAGNE: Now, these are state-run enterprises. Can you just list a couple of areas where the state has big enterprises?

Mr. MOSTAGHIM: I mean, apart from gas and oil fields, anything that they import and export in bulk and in larger scale, government has the upper hand.

MONTAGNE: Well, then let me ask you this. We’ve just heard from the Treasury Department’s Stuart Levey that the Revolutionary Guard is being targeted now with sanctions. Revolutionary Guard is a part of the regime, also has a hand in many lucrative businesses, regular sort of businesses. Will these sanctions, you think, inside Iran hurt the regime in the sense that they’re hurting the Revolutionary Guard?

Mr. MOSTAGHIM: I suppose yes, to some extent – not in short term. It hurts them. It costs them a lot. I mean, there might be some riots, yes. A sporadic riot is the by-product of this pressure on the government. But we cannot predict how impoverished people react. They might choose other way, that’s now what we expect them to do.

MONTAGNE: Thank you very much for talking with us.

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