Sanctions on Iran won't work

Why won't sanctions on Iran work? The easy and simple answer is because sanctions never work. They almost always starve the people, make them resentful, and they hardly ever achieve that for what they are intended. It will be no different in the case of Iran should the international community go ahead and first refer Iran to the Security Council early next year, and then apply sanctions.

There are several precedents to consider. In Iraq, for example, a decade of sanctions did nothing to weaken Saddam's hold on power; thwart his nuclear ambitions; or cause a regime change from within.

However, sanctions did starve the Iraqi people both physically and intellectually. The sanctions policy isolated Iraqis from the rest of the world and forced them to take on lucrative businesses in order to survive. Sanctions also kept Iraqi oil off the market.

Main reason

The second example is the former Yugoslavia. Sanctions failed to keep the warring sides in Bosnia from acquiring weapons, which was the main reason for imposing them in the first place.

Bosnia was transformed almost overnight into one of the most militarised zones in Europe since there were no dearth of suppliers.

Later sanctions against Serbia did nothing to stall Milosevic's hold on and abuse of power. Muammar Gaddafi's Libya is yet the another example.

Ironically it was the use of the military option that directly or indirectly stimulated change in all three cases.

While it is still early to pass judgment on the validity and viability of the use of force in the case of Iran, there is certainly compelling evidence which suggest this would be a serious mistake. It is certainly timely to consider the absolute inadequacies of the present sanctions regime.

Sanctions don't work for four simple reasons. There are always economic incentives particularly for countries where the industry is underdeveloped and thus uncompetitive on the open market to cheat.

Second, there are no enforcement mechanisms that would discourage cheaters.

Third, elements of game theory, and thus rational behaviour, would suggest that a sanctions regime can also be a zero-sum game for third parties involved, and thus cheating actually becomes the preferred, and indeed, the rational strategy.

Finally, the international community almost never agrees on how long the sanctions should last. For example in the case of Iraq, some European states argued for the suspension of sanctions as early as 2000, which means states will resume cooperation unilaterally.

The other major issue of concern in the case of Iran is the lack of any real consensus to apply sanctions. The P5 are not in agreement. China and Russia both have reservations. China needs all the energy it can get to feed its economic expansion. It is moulding Iran into a significant, if not vital, energy supplier for Beijing.

Russia too needs Iran to stay online. The price of oil would increase with Iran under sanctions, which paradoxically is not good news for Russia in the long run.

A too high price would probably produce a real economic incentive to increase investments and R&D money for alternative energy production.

Finally, Europe should have no interest in sanctions against Iran because of the lesson learned or what should have been learned in Ukraine, which is that the EU desperately needs to diversify its gas imports.

Iran's gas could become a vital third or fourth source of energy for Europe. A number of member states get 100 per cent of their imported gas from Russia, 90 per cent of which passes through Ukraine.

Such over-reliance on a single source and/or supply grid is not only strategically shortsighted given the threat of terrorism and present vulnerability of critical infrastructure to asymmetric attacks, but also economically irresponsible.

Options for dealing

The options for dealing with Iran's nuclear programme are thus three.

The first (and current) option is to apply persuasion and negotiations in hope of significantly stalling the nuclear development process.

The goal should be to insert as many verification mechanisms into the negotiations as possible.

The second option is to apply force and knock out Iran's nuclear capabilities if negotiations fail.

Finally, there is always the option of accepting a nuclear Iran and opting for a new stable nuclear equilibrium in the Middle East (this probably means also allowing Iran to develop a nuclear second response capability).

Which of the three is the worst is difficult to say without doing a comprehensive short and long term cost-benefit analysis. But it is possible to say at this point, which of the options will not work at all: The sanctions.

Borut Grgic is the director of the Ljubljana Institute for Strategic Studies