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Iran Digs In Its Heels as Sanctions Bite Harder

With U.S., EU and UN sanctions continuing to hit the Iranian economy, Iran’s game of “chicken” isn’t working out that well. The Financial Times reports:

A delay in feedstock imports, a result of sanctions, has pushed the price of chicken up 30 per cent over the past week alone. Prices for other staples are also soaring, including grains, up 55.8 per cent; fruits, 66.6 per cent and vegetables, 99.5 per cent.

The government is hearing from average Iranians hurt by the economic squeeze:

Public dissent is already growing over the pace of consumer price inflation and high unemployment, which is caused partly by the international crisis over the country’s nuclear programme. But despite these internal pressures, Iranian analysts do not expect the economic woes to make the Islamic regime halt its nuclear programme.

In the face of inflation, deteriorating business, and public discontent, the mullahs are staying the course. Even with an ocean of oil under their feet, and even though their country is a major earthquake zone where nuclear reactors would pose a permanent threat, the mullahs are risking bankruptcy to complete an alternative energy project as quickly as possible.

Either they are much more worried about global warming than they let on, and so are willing to risk national bankruptcy in order to transition away from hydrocarbon fuels on a crash basis, or they have some other, non-civilian goal in mind for their nuclear program.

But even as Iran refuses to yield, its worth noting the surprising success of these sanctions. At the beginning of the process, nobody thought that sanctions could drastically affect an oil exporter. The news from Tehran proves that they can, and it’s a good lesson to have on display.

You can bet that countries that aren’t oil exporters, such as China, are watching closely, and that some of them will be taking steps to protect themselves from this kind of economic punishment in the future. The folks in Beijing can well imagine, say, a massive crackdown in Tibet or some other development that stirs world opinion against them. Just in case, they are going to be thinking hard about ways to insulate their economy from sanctions; Russia and many other countries are doing the same thing.

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  • Jim.

    They still haven’t driven up the price of chicken as much as animal-rights types have in California with their absurd “ovine Lebensraum” regulations.

  • Walter Sobchak

    If you want to understand how much impact sanctions will have on Iran, look at North Korea, whose rulers lack the religious fanaticism of Iran’s by a factor of one million.

    The NoKo rulers are willing to let their people eat grass, rather than change their ways. The mullahs of Iran, want their people to die for them and call those deaths martyrdom.

    Sanctions may well make the Iranians miserable, but they will not deflect the will of their rulers by a millimeter.

  • RAZ

    My understanding is that Foggy Bottom has waived the application of the sanctions re purchases of oil being made by Iran’s top customers, including China and India. If those waivers had not been extended, what would the result have been in terms of Iran’s ability to contest the nuclear issue?

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