Recently, President Barrack Obama of the United States and President Nicolas Sarkozy of France urged reluctant members of United Nation Security Council to pass immediate economic sanctions against Iran. The action is to stop Iran from progressing in its nuclear program which American and others fear could be deployed against Israel and other nations.
Economic sanctions are imposed as imposed on a state by one or several states to persuade or compel it to abide to resolution recommended by general body.
In the analysis of Gary Hafbauer (2007), an economic sanction should be geared towards measuring likely resultant costs and benefits not only on the concerned nation but other countries on trade-exports or import or both. Economic sanctions in some instances have been a blessing in disguise to some countries whiles other it was adversely felt. Most of such sanctions between 1970s and 1980s according to United State Institute of International Economy had positive outcome in less than one in five cases.
The consequence of the economic sanctions might not be as unbearable as the U.S might predict, since many of the sanctions were unilateral, thereby reducing the impact of the sanction because in the globalised economy there are many suppliers as well as the markets. In fact, China and Russia have been the major parties opposing any further sanction against Iran just as they have come to rely on the Islamic Republic for energy imports and exports. Other countries symphatic to Iranian plight include Japan and China.
In view of the China and Russia economic relations with Iran, previous sanctions on Iran’s oil and gas sectors had failed to achieve the desired result as those nations continued to invest billions of dollars in Iranian economy.
In attempts at predicting the effects of the sanctions on the Iran’s economic activities, many observers have pointed out that a new round of sanctions could target Iran’s gasoline imports because Iran as the world fourth largest oil producer, it still imports 40% of its gasoline.
A sanction against Iran’s gasoline imports would draw many economies backward. The Iran’s gasoline importation would ultimately pose negative consequence to its suppliers which include some European countries, Great Britain and Russia. In additioneconomic sanctions may also reduce trade activities by denying investment, foreign exchange or credit to the target economy and other nations that rely on it.
Some scholars like Michael William (2005) point out that military strike is often more effective than economic sanctions at persuading a rogue nation to comply with international will. They observe that previous sanctions imposed on Iran have caused general economic hardship, illness and poverty, civilian death and indeed poor civilians bear most of the cost of economic sanctions. But unfortunately how do we describe the unfortunate military action against Iraq? Who are the losers? US, Britain and their allies who are contnuously been condemned for that reckless invansion that cost their tax payers’ money.
Though previously imposed sanctions by the U.S might have prevented Iran from acquiring new aircrafts and parts, it nevertheless afford the country to look inwards for alternatives and from other friendly nations. America businessmen claim that the effects of even limited unilateral U.S sanctions go well beyond target sectors as the nations concerned, like Iran in this case avoid patronazing U.S products and services thus giving firms in other countries a competitive advantage in those markets.
Some of the U.S sanctions in the past were also reported to have backfired and posed negative consequence to the U.S exports like the case in 1995. This followed by the reduction of more than 200,000 jobs and loss of nearly $1 billion annually in export sector wage premiums.
After withdrawal, sanctions are said to pose longtime negative effects on the concerned economy and the fear of this could force it to develop on its own which may later boost the nation’s economy and in return reducing the exportation efficiency of the former suppliers. As a result, it would not be a surprise that other foreign firms have continued to replace those from US, the sanction-instigators. China is today the beneficiary of diplomatic approach to global issues.
University of Abuja