Do American sanctions on Iran matter to Kenya?
The USA and Iran have been at loggerheads since 1979 when a revolution in Iran brought to an end an American leaning regime.
Sixty-six American hostages were held at the American Embassy in Tehran for 444 days. They were released after Ronald Reagan became the president in 1981; fueling rumours that hostage crisis played a role in defeat of Democrats led by Jimmy Carter. Iran thereafter became an Islamic Republic led by religious leaders, a theocracy.
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The revolution was followed by Iran-Iraq War (1980–1988) which ended in a ceasefire. USA supported Iraq then led by Saddam Hussein; not unexpected, the Iran revolution was only a year earlier and the loss of Iran was still fresh in American minds.
Some observers think this war, cemented the Iran revolution by whipping patriotism. Saddam Hussein by invading Iran was probably taking advantage of the weakened nation after the revolution. He underestimated the new regime. We all know his fate after the two gulf wars and his adventurism in Kuwait. Politics is very unforgiving.
Forward to 2002 when Iran nuclear ambitions became public. USA and her allies left nothing to chance to stop Iran nuclear ambitions. Iranian threat is seen more to the Middle East than to American mainland. Of great concern is Israel, often in proxy war with Iran in Syrian and other hot spots.
Did you see the American made F-35 Fighter in use by Israel recently? Do you recall Israeli bombing Iraq nuclear reactor in 1981? Such preventive strikes are part of Israel strategy in addition to ambiguity on nuclear weapons ownership and centrality of USA and regional allies, notes Gerald M Steinberg of BESA Centre for Strategic Studies at Bar Ilan University in Israel.
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Sanctions were the weapon of choice to stop or slow down Iran’s nuclear ambition. Few political leaders want to put boots on the ground if they can avoid. North Korea knows that and has played games with the West. Sanctions are easier to use, but the direction of war is hard to predict once it starts.
The USA, EU, and her allies with backing of UN have put sanctions on Iran. In US there is even an Iran Sanctions Act of 1996, amended which prohibit procurement contracts with the US government, financial transactions subject to US jurisdiction and transactions with respect to property and interests in property subject to US jurisdiction, says the US state department.
The sanctions also targets export of weapons and particularly nuclear-related technology like equipment which could be used for uranium enrichment. Processing uranium to weapon’s grade is a difficult process.
Transactions with Iranian banks and financial institutions are also banned and so are import, purchase and transport of Iranian crude oil and natural gas. The latter is painful because Iran is a major oil producer. Sanctions are an economic weapon. It is like denying your children pocket money to make them behave well.
The Obama administration got into a deal with Iran in 2015. It could be a sign that sanctions were working. In the deal called Joint Comprehensive Plan of Action (JCPOA), Iran sanctions were to be eased after promising to scale down nuclear activity from reducing uranium stockpiles and ceasing research that could result in nuclear weapons.
Some restricts run up to 2031. Inspectors from the International Atomic Energy Agency (IAEA) were to be given unfettered access to nuclear sites and oil exports were to resume and use of international financial transaction.
But once Trump won power, he promised to walk out of the Obama deal and he did despite his European allies being for the deal. He says he has plan B.
Last week, the USA secretary of state upped the game with 12 points demands on Iran and promise of tougher sanctions if Iran does not comply. The demands include. “Providing the IAEA with unqualified access to all sites throughout the entire country and give a full account of the prior military dimensions of its nuclear program. Permanently and verifiably abandon such work in perpetuity, stop uranium enrichment and never pursue plutonium reprocessing.”
This is at the heart of the sanctions. Iran, the plan also demands “end its proliferation of ballistic missiles and launching or development of nuclear-capable missile systems. ”Remember North Korea’s missiles? The USA seems to believe that Iran is still developing nuclear weapon secretly.
Iran must also “release all US citizens, as well as citizens of our partners and allies.” Also, Iran must “cease harbouring senior Al Qaida leaders, end the Iran revolutionary Guard support for terrorists and militant partners around the world, end its threatening behavior against its neighbors includes its threats to destroy Israel, end threats to international shipping and end destructive cyberattacks.”
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The use of proxies by Iran beyond its borders, particularly alleged connection with terrorists alarms US and her Middle East allies.
These are heavy demands. Some think, they are driven by Iran’s success in Syrian War, where with support of Russia, Bashir Assad has retained power and almost crushed the rebels. Iran has played a decisive role in turning the tide of Syrian civil war with weapons and boots on the ground.
Israel and USA are alarmed by this turn of events. They worry that Iran would be more aggressive and a bigger threat if it ever acquired a nuclear bomb. Of more concern is the way Iran is able to export her influence into other countries in the Middle East like Syria, Yemen and neighboring Iraq. It seems, US and her allies feel their interests are threatened by Iran and will not watch and wait.
Enough digression. Should we worry about sanctions in Iran?
The trade between Kenya and Iran is not that high but there is a huge potential with trade delegations from Kenya visiting Iran lately. Such trade could be built on the myth that some East Africans along the coast came from Shiraz in Iran. We could export our agricultural products and import oil from Iran.
The most direct effect of sanctions will be felt through rising oil prices. Renewed sanctions means less oil exports from Iran. The law of economics will come into play with low supply leading to rise in oil prices. Remember Iran has the world’s fourth highest oil reserves. Never mind the threat of electric cars.
The recent fall in oil prices was partly resulted from Obama’s Iran deal which allowed Iran to export oil leading to oversupply. The new Trump sanctions could reverse this fall. Oil producing countries are smiling with half the mouth. Car owners in Kenya have noted the rising oil prices. New Iran sanctions could lead to even higher prices in future. Will our oil stabilise that? And why are we slated to export oil then import processed oil products? Why not process it? Can someone explain the economics behind this decision?
Sanctions on Iran will reduce trade with her trade partners which might be our trading partners. If Iran trades with say India and they can’t export to Iran, Indian businessmen may not get money to import from us.
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Smugglers will have a field day because of sanctions. Naturally, sanctions lead to shortage of some goods with their prices skyrocketing. If you can access them through the black market, you will make huge profits.
We can’t forget that it is usually the ordinary people who suffer in case of sanctions. The leaders are often well insulated from such suffering. It is rarely said loudly that sanctions can be used to force regime changes. If ordinary people suffer too much with shortages of essential products, they could rise up against their leaders.
But leaders are adept in blaming outsiders for such suffering. They can also trade with other friendly countries, or develop own industries to reduce the shortage. South Africa did that in Apartheid era. North Korea leader is still in power despite sanctions.
The other down side of sanctions is slowing down trade which is often the road to peace. Do you recall Ronald Reagan’s constructive engagement with South Africa?
American firms will be hurt too; they would have exported a lot to Iran if earlier deal held. Years of sanctions have left Iran with a huge hunger for high tech including planes. Besides nuclear ambitions, Iran is a market. Other countries could fill the void by trading with Iran. That includes Russia and China.
But some think, the timing of sanctions has to do with USA mid-term elections which seems to suggest republicans will perform badly. Politicians often distract our minds around polls time with side events.
If the events portends threat to the country and you portray yourself as the defender that can easily translate into votes. The renewed sanctions on Iran could also be distraction from North Korea’s postponed meeting. What do you think?
—The writer teaches at the University of Nairobi.