Prominent Iranian economist Saeed Leilaz speaks to Rooz about the effects of the United Nations Security Council’s sanctions on Iran’s economy. He believes that a majority of the country’s economic woes result not from the Security Council's imposed sanctions, but from the government's mismanagement of the economy.
Rooz (R): There are various viewpoints on the effects of the United Nations Security Council’s sanctions on the Iranian economy. In your opinion, how destructive are these sanctions?
Saeed Leilaz (SL): I believe that the United Nations’ general aim is to put pressure on the Islamic Republic’s financial veins and economic relations with the outside world. Both the first and the second round of sanctions targeted Iran’s banking and financial systems. The third round of sanctions was weaker and less severe. However, the reality is that all three rounds of sanctions taken together are not able to create serious problems for the Iranian economy. At worst, they will make Iranian imports more expensive and exports a bit cheaper, but the net effect on the Iranian economy could be less than a billion dollars. This number is not a big one for a country that generates 300 million dollars a day in foreign currency revenues.
R: If the sanctions are not affecting the Iranian economy, then what is the reason behind imposing them, in your opinion?
SL: What the Americans are pursuing is Iran's international isolation, and they have been able to achieve that with Mr. Ahmadinejad’s help and their own diplomacy.
R: Do you think the military option is still on the table for America?
SL: I am certain that they are thinking about it, because a nuclear Iran is Washington’s red line. However, right now America is trapped in Iraq and cannot expand its battle fronts; secondly, Americans are now busy with their own domestic elections; thirdly, the price of crude oil is very high and in these circumstances it is impossible to further escalate military tensions in the Middle East; fourthly, in my opinion, American intelligence organizations have reached the conclusion that Iran will not become a nuclear danger until 2010. In other words, there is time up to 2010 to stop Iran and the speed of Iran’s success in achieving nuclear breakthroughs is less than advertised. For this reason, Americans are buying time. On the other hand, though, Tehran is buying time as well to advance its nuclear program. In reality, the situation is like a game. But in this period, which could last three to four years, Americans hope that, not sanctions by themselves, but sanctions coupled with the country’s economic mismanagement would spark changes in Iran. In reality, I believe that the effect of sanctions is one-hundredth of the effect of Ahmadinejad Administration’s mismanagement, meaning that if you divide the economic problems to one hundred parts, 99 parts result for the mismanagement of the Iranian economy and only one part is due to the Security Council’s sanctions. Actually the sanctions allow the Iranian government to hide itself behind them and claim that sanctions cause the problems.
R: What are the effects of the sanctions on various parts of the Iranian society?
SL: The sanctions have not affected the people much. What has affected the Iranian people is economic mismanagement which is a domestic problem. It seems like the radicals do not mind sanctions politically or economically, especially sanctions that are designed so weakly. Such sanctions are not able to paralyze the country, and at the same time, they provide an excuse for the government to announce emergency rule and confront opposition forces. In any case, radical forces enjoy Iran’s isolation.
