US Sanctions and Adversity: Report

EghtesadOnline: Three senior aides to President Hassan Rouhani spoke this week at an international meeting in Tehran and reexamined the Donald Trump’s economic war on the Iranian people.

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12 October 2019

Foreign Minister Mohammad Javad Zarif, Vice-President for Legal Affairs Laya Joneydi and central bank boss Abdolnasser Hemmati said how the United States has tried and failed to break independent peoples and is unable to play the bully round the globe.

The international conference on "Global Economy and Sanctions" was held Oct. 9-10 at the prestigious Alzahra University in collaboration with the Ministry of Science, Research and Technology’s Center for International Scientific Studies and Collaboration.

It brought together local and foreign economic experts and government dignitaries to exchange views on the destructive motives behind sanctions US governments impose on countries opposed to US bullying and impact of the US provocations on the common people and world economies, Financial Tribune reported.

Zarif, the first keynote speaker looked at the “altered rankings of major economies” and expansion of the communications and IT sector, which have given unprecedented momentum to banking and financial transactions, and have globalized the distribution and exchange of goods and services.

“These phenomena can both be promising and also entail risks. Holding promise in the sense that it creates and paves the way for the growth of the developing world. Perilous, because it intensifies the vulnerability of independent nations, vis-à-vis the political agenda of some big powers,” he said.

Zarif said unlike in the past, roadmaps of diplomatic communities are not limited to political and security issues. Rather new foreign policy is seen from the prism of welfare, economy and social subjects.

Expanding Diplomatic Space

“It is for this reason that the diplomatic platform is also dealing with a diversity of subjects. We see that after US President Donald Trump took office, the diplomatic space, more than ever before, has emerged as a venue for: talks to cut ballooning negative trade balances among states and regions, raising or reducing tariffs, sanctions or easing of sanctions, fighting financial crimes on the international level and energy policies for strategic competition.

Trump walked out of the nuclear deal Tehran signed with the six world powers last year, in defiance of other signatories, namely Russia, China, France, Germany and the UK, and unleashed a new wave of economic sanctions against Iran self-described as the "toughest ever".

“Interrelations of economies on the global scale have created the grounds where the US government, as the world’s largest economy, having almost a quarter of the capacity of the global economy, better conditions in financial markets, and the power to influence the behavior of other countries, is abusing its elevated position to confront independent governments like in Iran,” he told the conferees.

The 2015 nuclear agreement, better known as the Joint Comprehensive Plan of Action, paved the way to easing international sanctions against the country. In exchange Iran agreed to limit the scope of its nuclear program. Following the US unilateral walkout, Tehran responded by gradually reducing its commitments in the JCPOA.

“The so-called instruments of financial and economic warfare have become a norm in today’s international literature. There was a time when such tools were used as an option only to restrict some activities in the target country. However, regarding the new US sanctions, such tools of warfare have been targeting the health and livelihood of the Iranian people,” he stressed.

As a case in point, despite the fact that the US claims medicine and food are exempt from sanctions for "humanitarian" reasons, in effect the sanctions are preventing lifesaving drugs as well as other essential goods from reaching the country due to complications in payment and the reluctance of foreign firms to deal with Iran lest they run afoul of US wrath.

Economic Terrorism

Referring to misuse of the word “sanctions” in describing the US’ Iran policy, Zarif said, “When the US secretary of state says that if the people of Iran want food they should capitulate to what we (US) say; this is not sanctions in the earlier sense of the term. If and when a central bank, as a state institution is embargoed to the extent that it is officially banned from functioning in the humanitarian domain such as food and medicine, this does not fit the sanction word.

Reiterating his strong conmenation of the mercurial US leader and his hawkish aides, Zarif said, “Thus, the term “economic terrorism” is the most appropriate definition for such behavior. Here the intention of US sanctions is economic war against the people to force them to rethink their views and vision, irrespective of the fallout of the conflict and its effects on the health and quality of life of the people.”

US restrictions, according to Zarif, included the refusal of countries and companies to wosrk with Iran, decline in Iran’s share in the international energy market, inability to have enough access to oil export revenues, increase in the price of imported goods, rising costs of trade and declining power to compete.

“Add to this the tanking of the national currency, volatility in the domestic currency market, assorted hurdles to developing the tourist industry, lack of presence of major international companies in Iran and difficulties in procuring machinery for the key oil industry and finding new customers for our oil,” he added.

The Iranian rial lost about two thirds of its value against the dollar last year. Part of the losses have been recuperated lately following ad hoc measures taken by the Central Bank of Iran.

Case in the ICJ

The second keynote speaker the vice president for legal affairs, Laya Joneydi, who is in charge of Iran’s lawsuit against the US at the International Court of Justice.

US sanctions are illegitimate from a legal point of view, she said. “It not only violates a 1955 Treaty of Amity between the two countries that encouraged trade, investment and closer economic relations, it is also against the territorial principle [a principle of public international law under which a sovereign state can prosecute criminal offences that are committed within its borders], and against the principles of free trade, she said.

Last year, the Hague-based ICJ voted in favor of  Tehran by ordering Washington to ensure its sanctions did not include certain forms of trade, including humanitarian aid, food and medicine. The provisional ruling cannot be enforced and the US immediately terminated the treaty, saying aid was never a target of its sanctions.

“The path US is following now is reversing international law designed to guarantee the security and ease of trade by injecting insecurity and aggravating trade relations.

Such a violation of Iran’s state sovereignty and its relations with other countries via imposing restrictive trade laws has left no way for Iran but to take countermeasures,” she said.

Note of Optimism

The third speaker, CBI head Abdolnasser Hemmati, talked of US attempts to create an atmosphere of instability and uncertainty, discouraging foreign investments, undermining economic growth, hammering the rial, plotting protests by guilds and painting a dismal picture of Iran’s economy.

“They were plotting the idea of higher inflation and supply shocks that harmed manufactures. Those who engineered the sanctions were in fact targeting the monetary and foreign currency markets.

All our countermeasures since the re-imposition of sanctions were focused on controlling the monetary and forex markets by preventing capital flight and curbing speculative demand for money,” he said.

Hemmati concluded by saying that he is optimistic about the future of the economy and that sanctions must be viewed as an opportunity to shield the economy against foreign shocks.

The conference had 30 speakers centering on economic, legal, political and social aspects of sanction including “challenges and opportunities of economic sanctions”, “legal aspects of sanctions”, “objectives and consequences of sanctions at the domestic, regional and international levels”, “political economy of pharmaceuticals and sanctions”, “sanctions on Cuba and Russia”, “world order and sanctions”, “sanctions and media”, “sanctions and energy sector”, “sanctions and migration” and “sanctions and higher education”.

Gholamhossein Hassantash, an energy analyst; Mohammad Hadi Mahdavian, former economic deputy at the CBI; Farshad Momeni, professor of economics at Allameh Tabatabee University and Ivan Timofeev, foreign policy analyst at the Russian International Affairs Council were among the participants.