U.S. sanctions on Iran depend on economy

The U.S. decision to reimpose sanctions on Iran’s oil, banking and shipping sectors this week aims to comprehensively address Iran’s destabilizing influence by targeting its regional activities and its missile program, while seeking to reopen the nuclear accord reached in 2015. It is a very tall order.

Reconstructing a universal sanctions regime will be difficult. Key international players, like China, Russia and the EU, oppose the U.S. move and have pledged to continue trading with Iran.

The key will be the reaction of international companies. Faced with the choice of doing business with Iran or the U.S., most will choose the U.S., notwithstanding EU efforts to shield European firms from U.S. retribution. An already weakened Iranian economy will feel the hit and Iranian frustration will grow.

Increased economic hardship, however, will not necessarily translate into diplomatic flexibility. Iran feels encircled by enemies. Extending its influence across the region and its sophisticated missile program provides Iran with strategic defensive depth and a credible deterrent capability.

Lebanon’s Hezbollah, for example, is a key plank in Iran’s forward security posture in confronting Israel. Friendly Shia-led regimes in Iraq and Syria reinforce those links while broadening Iran’s security cordon on its own border. Support for the Houthis keeps the Saudis bogged-down and embarrassed in Yemen. Iran’s missile program is its answer to the high-end arms purchases by hostile Gulf Arabs states.

Getting Iran to sacrifice these strategic assets in exchange for a new agreement — which could be abandoned on another U.S. whim — will be a tough sell in Tehran.

While the U.S. has said that new sanctions are aimed at changing Iranian behaviour, for many in Tehran, this is about regime change — as it has been since the revolution. They might not be wrong.

But if that is the goal, the question is: Change to what exactly? There are no real alternatives.

The external opposition has little traction inside Iran. The idea that the National Council of Resistance of Iran (viewed by many in Iran as little more than a terrorist cult) or Monarchists could step in to replace the mullahs is a delusion.

If change comes, it will have to come from within. But it is not clear what that would look like.

It won’t come from the ballot box. Iran’s pseudodemocracy offers only hallucinatory hope for change. The elected president has no ability to influence the behaviours that concern us. Power rests with the supreme leader and ordinary Iranians have no ability to influence who sits in that chair.

Fundamental regime change would require a second revolution and Iranians are not ready for that. Those Iranians old enough to remember the last one are not thrilled with how that turned out. The younger generation has few regional examples to inspire them.

While the leadership cannot blithely ignore the hardships being endured by average Iranians, the system’s survival is its priority. There is no tolerance for dissent and little compunction about brutally crushing it. Demonstrations earlier this year were easily put down and the violent repression of the Green Movement in 2009 still resonates.

As economic times get tougher now, the security establishment will become even more repressive and change even more elusive.

It is important to remember, as well, that there are millions of Iranians who continue to support the regime and will do what it takes to defend it.

While new U.S. sanctions might not wring the desired concessions from Iran, there are those who suggest that at least it will undercut Tehran’s ability to pursue its destabilizing regional activities by limiting the funds available for them.

Maybe not. These programs are security priorities for Iran. Money will be found and allocated as necessary. Additionally, the kind of funding needed to wreak havoc doesn’t have to be substantial, especially now that the Syrian war is winding down.

For the Iranian leadership, calculating the relative security risks of the options before it — compliance or resistance — is really not that difficult. Surrendering the strategic assets demanded by the U.S. would be a trip to the unknown. Conversely, they are supremely confident in their ability to deal — however harshly — with whatever internal challenges may arise. They’ve done it before.