Another U.S. crisis

Re-imposing sanctions on Iran will hurt Turkey. How can we prepare for a new U.S. blunder

Dünya Executive - - COVER PAGE - Ilter TURAN Columnist

On August 7, the U.S. re-imposed the first round of sanctions on Iran that were eased under the nuclear deal signed in 2015, targeting financial transactio­ns that involve U.S. dollars, the automotive industry, the purchase of commercial airliners and precious metals, including gold. The move was expected, and more sanctions targeting Iran’s oil sector are expected in November, American actions, neverthele­ss, caused some rancor among U.S. allies, including Turkey. A return to isolating Iran, critics say, will only make the world less safe and potentiall­y destabiliz­e the Middle East further. What is the logic behind the sanctions and how will they affect Turkey?

►Firstly, let’s look at Iran: What effect w ll these sanct ons have on Iran an pol t cs and soc ety?

To begin with, this will increase the economic hardships that Iranian society is experienci­ng at a time when it is already amidst economic difficulti­es. An estimate made by an Iranian economist suggested that this latest round of sanctions will leave another million people jobless. The value of the Iranian rial has been declining steadily and recently there have been demonstrat­ions against the government because of economic hardships. The immediate effect of the embargo will be to make life even harder for the moderate elements in the Iranian government, which is al- ready accused by conservati­ves of having yielded too much to the West on the nuclear issue, arguing that the West was not to be trusted in any case. The immediate effect will be economic and political difficulti­es for the moderates and this may bring about change allowing the conservati­ves to gain the upper hand, which they had steadily lost over the last few years.

►The nuclear deal was supposed to strengthen the moderates n Iran. The Trump adm n strat on argues that cancel ng the deal w ll be more effect ve n conta n ng Iran and forc ng t to behave. Who’s r ght?

We have to understand that the U.S. has adopted a position that is not exclusivel­y related to the Iranian production of nuclear weapons. By all indication­s, the nuclear deal was working. There was no immediate likelihood, at least for longer than a decade, of the Iranians coming out with deployable nuclear weapons. When you look at the American attitudes and policies toward Iran, the opposition to its nuclear activities appears to be a part of a broader package in which the Americans want the Iranians out of Syria; to cut down Iranian influence in Iraq and possibly to reduce Iran’s cooperatio­n with Russia. The two issue areas – the nuclear agreement and the general anti-Iranian posture of the U.S. - are merged in this particular case. To be fair, we should add that there are other countries that share the goal of reducing Iranian influence in the region, but hesitate to say it openly to avoid intensifyi­ng the conflict or losing economic benefits. More generally, what we are witnessing is a U.S. that is conducting its foreign policy in a highly polarized way. The polarizing policies affect how the Americans interact with the Russians, with the European Union and the countries in the Pacific region. The question is: will the Iranian affair affect these relations in a substantia­l way? The answer is yes but only somewhat. First, if the U.S. succeeds in the containmen­t of Iran in terms of securing its withdrawal from Syria, a reduction of its influence in Iraq, etc., then other countries will become apprehensi­ve that the same American capabiliti­es might at some point be also used in imposing sanctions on them. Second, if successful, Iran’s containmen­t would also increase American influence in Syria. But this is only one possible outcome. Alternativ­ely, Iran’s withdrawal might lead to the intensific­ation of internal conflict. It may be that the US is trying to do too much and, in the long run, losing its cards in offering leadership to the world. Thus, the multipolar internatio­nal order with its highly unpredicta­ble outcomes is making an even stronger comeback and leading us into a period of volatile politics.

►How are Amerca’s allies react ng to all this?

As we have discussed in our earlier interviews, we have a situation here where one country – the U.S. - is trying to impose its views on all other countries in the world. And we have already observed that this has caused a strong reaction on a variety of fronts. No one wishes to go along with the Americans, including its closest partners like the European Union. But the critical question is: even if they don’t like it, will they be forced to go along with the Americans? The answer appears to be yes, very likely. While there is a general unhappines­s about the way the U.S. has decided to deal with Iran, the Trump administra­tion has put the choice rather clearly: those who trade with Iran will not be able to trade with the U.S. Of course, in implementa­tion, this system will have to be softened because there are linkages that simply cannot be broken. The deprivatio­ns various societies suffer as a result of ending trade with Iran are not equal. The best example is Turkey, which imports Iranian natural gas. In the past when the Americans imposed sanctions on Iran they granted a waiver for imports of Iranian gas into Turkey, particular­ly Turkey’s Eastern provinces where it is needed to heat homes in the winter. There will have to be some special dispensati­ons like that again and it would be prudent for Turkey to start moving on these as quickly as possible. The less time there is, the more difficult it becomes to make special arrangemen­ts. We should also remember that Turkey has already had some experience­s concerning not abiding by the rules of the embargo. Mr. Zarrab is in prison in the U.S. for illicit operations and the government is negotiatin­g to get the deputy governor of Halk Bank back home to complete a sentence he has already received. This is an area where serious outcomes may ensue if the rules are not observed and if arrangemen­ts for waivers are not made.

►The Turkish government’s rhetoric suggests it does not intend to abide by the rules. Can it resist?

There is a general agreement internatio­nally, if not shared in the pronouncem­ents of the Turkish government, that the state of the Turkish economy is rather brittle. It will need understand­ing, accommodat­ion and support from internatio­nal economic agencies and major powers if it is to survive the pending economic difficulti­es. So, despite the rhetoric, it seems Turkey is not in a position to challenge the American sanctions. We will need to look beyond the rhetoric and examine what Turkey actually does. Inevitably, no country can say, “Oh well, we welcome the American embargo. It is a wise move and we will abide by what it says.” That’s simply not possible. People will register their displeasur­e but neverthele­ss, violating the rules of the embargo is another question. There will be significan­t costs and countries will have to decide whether the costs are worth it.

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