On Thursday, January 28, the Senate approved legislation that allows the President to impose sanctions on any entity that exports gasoline to Iran, or help expand its refining capacity by denying them loans from American financial institutions. A largely similar legislation has already been passed by the House of Representatives. The legislation is supposedly intended to pressure the Islamic Republic to give up its uranium enrichment program.
The Senate bill extends sanctions to companies that build oil and gas pipelines in Iran and provide tankers to move Iran’s petroleum. It also prohibits the U.S. government from buying goods from foreign companies that work in Iran’s energy sector. So, in effect the Senate bill imposes sanctions on Iran’s entire oil and natural gas industry.
Iran has the world’s third biggest oil reserves, but imports a significant fraction of its gasoline to meet domestic demand, because it lacks enough refining capacity. Anticipating the gasoline sanctions for at least two years, Iran has been working hard to reduce its dependency on imports of gasoline, reducing it from 40 percent of total consumption to 25-30 percent. In addition, as I described in a previous article, Tehran can take several relatively simple steps to further reduce its dependency on the gasoline imports.
Although in his State of the Union address on Wednesday January 27, President Obama warned Iran that it faces "growing consequences" over its nuclear program, the administration was not overly interested in the legislation. On January 4th, Secretary of State Hillary Clinton stated that (emphasis mine):
"Our goal is to pressure the Iranian government, particularly the Revolutionary Guard elements, without contributing to the suffering of the ordinary [Iranians], who deserve better than what they currently are receiving."
This is a position that she reiterated on January 11.
P.J. Crowley, the State Department spokesman, reiterated the Administration position on January 5th (emphasis mine):
"As the Secretary said, one possibility is to focus more specifically on the Revolutionary Guards, the IRGC. We’re taking a much more prominent role within Iran. We want to do this in a way that can target specific entities within the Iranian Government but not punish the Iranian people, who are clearly looking for a different relationship with their government."
Thus, the Administration is apparently seeking targeted sanctions that hurt only the Islamic Revolution Guard Corps (IRGC), the elite hard-line part of Iran’s military that essentially runs the country. Clearly, gasoline sanctions is not one of them. The U.S. business groups had also warned the administration that the bill would undercut the President’s strategy of working with U.S. allies in finding a diplomatic solution to Iran’s nuclear program, because the legislation targets the U.S. allies’ companies that do business with Iran.
But, the Israel lobby and its agents in the Senate, Senator Joseph Lieberman and others, wanted the legislation approved, and so it was. Indeed, the passage of the legislation was praised by the American-Israel Public Affairs Committee, which called for even tougher sanctions.
The legislation is terrible news for ordinary Iranians that have been struggling to make ends meet, amidst the deep crisis that their nation has been facing in the aftermath of the June 12 rigged presidential election. At least a million Iranians work in the transportation sector of Iran’s economy, with millions more depending on transportation for their work and business, not to mention the agriculture sector that also relies heavily on transportation.
In addition, it is well-known in Iran that there is a gasoline “Mafia” that is linked to the IRGC. They sell the gasoline that is subsidized by the government in neighboring countries at a much higher price and make a huge profit. The sanctions, which inevitably would lead to much higher gasoline price in Iran, would only tighten the “Mafia’s” grip on the gasoline market, hence increasing the power that the IRGC already has, completely the opposite of the effect that the legislation is supposedly intended for.
If the purpose of such legislation is to create hardship for Iranians in order to motivate them to put pressure on their government, there is no need for it. A great majority of Iranians are already deeply angered about what has been happening in Iran in the aftermath of the June 12 rigged presidential election. There have been almost constant demonstrations; daily arrests of political figures, journalists, university students, human rights advocates and ordinary people; thousands have been detained; dozens have been murdered; show trials have been held; unjustified sentences have been handed out to the imprisoned people, and several have been hanged.
These developments have given birth to the Green Movement that has been gathering strength over the past several months. The Green Movement’s leaders, former Prime Minister Mir Hossein Moussavi, former parliament Speaker, Mehdi Karroubi, and former president Mohammad Khatami, have opposed sanctions, particularly those that hurt only ordinary Iranians. But, while the sponsors of the Congress sanctions bill pay lip service to the bravery of Iranian people and their courage to push the hardliners, they also hurt them by imposing such sanctions, because the goal is not to help the Iranian people, but satisfy Israel and its lobby.
If the purpose of such legislations is to hurt Iran’s economy to the point that it would cripple the hardliners and prevent them from pursuing their nuclear program, there is no need for them. First of all, Iran’s nuclear program has significantly slowed down, due to both the internal crisis and technical difficulty. The Obama administration concedes that, even if Iran were to produce a nuclear weapon, it does not have a breakout capability for up to three years, ample time for both diplomacy and to see where Iran’s internal developments take the nation.
Secondly, Mahmoud Ahmadinejad’s economic policy – if it can be called as such – is already damaging Iran’s economy and people’s economic welfare greatly. Inflation is rampant, to the point that the government is seriously thinking about devaluing Iran’s currency, the rial. Beginning in the upcoming Iranian New Year that will start on March 21, Ahmadinejad will eliminate all the subsidies to basic commodities, food stuff, etc., and will remove all price controls. Iran’s most prominent economists have warned that the action will increase the rate of inflation to 60 percent (from its current official rate of close to 30 percent), further impoverish millions of Iranians, and ruin many businesses.
In addition, Iran has a labor movement that is increasingly stronger and more vocal.
The movement is demanding better pay, more labor-friendly laws, uprooting of corruption, and cutting off the hands of the IRGC from the economy. The labor movement only adds strength to the Green Movement.
Therefore, Iran’s internal developments and dynamics are doing what even the best-intentioned pieces of legislation by foreign powers cannot achieve, namely, making the Iranian people even more determined to push for a democratic political system, rule of law, and a completely free press that would reveal the depth of corruption and mismanagement by the hardliners that are the root cause of the terrible economic situation in Iran.
Iranian people do not need, nor have they called for, foreign interference in their internal affairs (which the gasoline legislation intends). They can address their problems by themselves. What they need are moral support and strong and meaningful condemnation of the gross violations of human rights that are daily occurrences in Iran.
If sanctions are to be imposed, they should strip away the power of the hardliners to block the free flow of information by making available to Iranian people the technology to break the hardliners’ grip on the internet, blocking websites, and slowing down the internet traffic, and other means of mass communication. If sanctions are to be imposed, they should isolate the IRGC leaders and their allies in Iran’s conservative camp, not hurting Iranians just when their century old struggle for democracy is beginning to bear fruit.
