With Coffers Running Dry, Iran faces a Strategic Choice
In a discussion with Dr. Raz Zimmt, Mr. David Peyman of the US State Department stressed that economic sanctions are a foreign policy tool to achieve foreign policy goals. Sanctions are implemented to encourage changed behavior, bur are crafted so as to avoid undesired side effects that could undermine US interests elsewhere. Regarding Iran, the objective of the maximum pressure campaign is to deprive the regime of revenues used to engage in malign activity in region and against its own people. Essentially, Iran must choose between continued nefarious activity and use of whatever money it has at its disposal for domestic purposes. Although the sanctions have only been in effect for 14 months and the oil export waivers for specific countries were canceled only 8 months ago, there are already tangible results. Funding for Iraqi Shiite militias has been slashed; the Iranian defense budget has been cut by 29% and the IRGC budget by 17%; and Hezbollah lacks funding. The sanctions have also highlighted the regime corruption, and austerity measures taken by the regime have prompted the population to take to the streets to oppose the regime (with hundreds subsequently killed by the regime). The Iranian economy is in a depression, with high unemployment, a high inflation rate, and 17 out of 18 pension funds bankrupt. Likely ahead are more US sanctions, expanded in scope and in strategic targeting.