U.S. and Iranian Strategic Competition

 

        The Iranian regime's economic policies and its response to sanctions imposed on it by the U.S. and the international community provide additional insight into the country's strategic competition with the U.S. and other states. Since the overthrow of the Shah in 1979 and the founding of the Islamic Republic, the dynamic of U.S.-Iranian strategic competition in the Gulf has been marked by economic competition and the imposition of sanctions on Iran by the U.S. and the international community.

 

        While Iran cannot hope to directly compete with the U.S. or force the international community to lift sanctions, its responses to the economic challenges presented by sanctions and economic embargoes are a telling indication of Iran's strategy. These responses reflect the Iran's attitudes toward competition with the U.S. as well as Iran's will to continue to confront the international community over issues such as Iran's nuclear program, support for terrorism, and arms trafficking.

 

        Iran's messages are not unified. There are contradictions and variations in statements emanating from Iranian officials regarding the effects of sanctions on Iran's economy as well as how the regime perceives the country's economic situation. Iranian officials often claim that sanctions have had a beneficial effect on the country in that they have forced innovation and technological development, but at the same time demand that sanctions be lifted before any direct talks or negotiations with the U.S. and other Western countries take place. Additionally, while some Iranian officials have claimed that sanctions have had no negative effect on the nation's economy, others have cautioned their colleagues that the economic implications are not to be taken lightly.

 

        The collection of statements in the main report shows that the degree to which sanctions and other external economic pressures affect Iranian economy has become a central theme in Iran's rhetoric. Some officials claim they have no negative effect, and actually empower Iran by driving innovation and technological advancement, while others acknowledge their deleterious effects. These statements serve to illuminate how Iran perceives competition with the U.S. from an economic perspective.

 

        Key members of the Iranian leadership have repeatedly stated that sanctions have no effect on the country's economy. On November 13, 2010, the Secretary of Iran's Expediency Council, Mohsen Rezaei stated that, "so far, sanctions have left no effect on the peoples' lifestyle."  Such statements are not uncommon. In late November 2010, a close confidant of and adviser to President Ahmadinejad stated that increased financial restrictions and sanctions have had "no noticeable effect" on Iran's economy.  Lastly, on October 30, 2010, Shakour Akbarnejad of the Iranian Parliament's Economic Commission stated that "history has shown that sanctions have left no negative impact on the Iranian nation's movement and we have, in a word, become accustomed to them."

 

        On December 8, 2010, Deputy IRGC Chief in Information and Communications Technology Brigadier Hossein Mazloumi made the following remarks during the opening ceremony of the 4th National Electronic Defense Seminar at Khajeh Nasir Tech University: "The positive effects of sanctions is easily observable both in our universities and at the industrial firms that are active in this hi-tech field."

 

        "During the course of the past decade the Islamic Republic of Iran has been witness to eye catching advancements in electronic defense field and particularly during the past five years, keeping in mind the huge investments made in the technological firms, many products in the field have been produced…Today diversified types of ESM terminals and other technological products are designed and manufactured by the mighty Iranian engineers and the country's capabilities keep on increasing with the passage of each new day."

 

        On December 28, 2010, Iranian President Mahmoud Ahmadinejad made similar remarks in a speech in Iran's Alborz Province: "We told them that when they confronted U.S., we stood up and they did not gain any result, while Iran achieved its goal…."We told them that if they want to continue their previous path, the Iranian nation is fully prepared and will give ill-wishers a response that will make the enemies repent."

 

        "But if you have come for honest cooperation and if you have come to recognize the indisputable rights of the Iranian nation, then such an attitude would be beneficial to all; we prefer the second option…But if you once again choose the first option under the influence of the devils, then Iran will show the same response that it has, thus far, shown, this nation does not allow any world power to usurp even an iota of its rights."

 

        Some Iranian officials have gone so far as to claim that sanctions have benefitted Iran by engendering technological innovation and self-reliance. While speaking to reporters at the 11th exhibition of nuclear achievements at the Islamic Azad University of Mashad on November 13, 2010, the Deputy Head of the Atomic Energy Oranization of Iran, Behzad Soltani, stated the following: "All (Iran's) achievements acquired in the nuclear industry have been made during the period of sanctions….Western Sanctions have enhanced the level of our nuclear achievements in the country and caused U.S. to develop many nuclear technologies indigenously."

 

        On March 6, 2011, Ahmadinejad made similar allusions to the alleged positive effects of sanctions on Iran's scientific and industrial development, stating that "the Iranian nation learned to rely on their (own) resources and capabilities... and as a result, made great scientific achievements" as a result of sanctions.

 

        The same officials do, however, indirectly allude to the detrimental effects of sanctions on Iran's economy. On October 18, 2010, Majles and Foreign Policy Committee member Mahmud Ahmadi-Bighashsaid stated that the "elimination of all sanctions and resolutions against Iran must accompany the new round of negotiations" over Iran's nuclear issue.  Addressing the inauguration ceremony of the construction phase of a railroad project in Mashad, Ahmadinejad stated that despite sanctions, "the Islamic Iran will continue the country's construction under the worst conditions, and the pressures imposed (on Iran) by the arrogance through its sanctions [sic] leave no effect on Iran's power."  While this statement affirms that sanctions have not diminished Iran's "power," terms such as "worst conditions" and "pressures" tacitly refer to the damaging effects sanctions have had on the country's economy and infrastructure.

 

         Perhaps the regime's strongest reference to the effects of sanctions and economic competition between Iran and the country's opponents since September 2010 came on April 3, 2011 when Ahmadinejad called for the current Iranian calendar year to be "The Year of Economic Jihad" when speaking to a gathering of senior Iranian officials.  

 

        The President's website reportedly stated that "economic jihad should be realized in every aspect of all Iranian's lives."  Supreme Leader Khamenei likewise named the new Iranian year "The Year of Economic Jihad," and called or the Iranian nation and government to "prepare the grounds for a decade of economic growth."  

 

         While these statements do not make direct reference to economic hardship, competition with the West or the U.S., or sanctions, the use of the term "jihad" is telling. It implies that the Iranian regime is calling on its people to make the same kind of unrelenting sacrifice and effort to improve the country's economic situation as would be made in a holy war. Furthermore, calls for economic holy war contradict statements that claim that Iran's economic situation has improved; they imply that the regime sees itself as engaged in a dire economic struggle.

 

         There are, however, individuals within the Iranian government who appraise Iran's economic situation more honestly, cautioning their colleagues about the dangers of economic sanctions and criticize the regime's economic policies. In September 2010, former Iranian president Ayatollah Ali Akbar Hashemi Rafsanjani stated the following while speaking to Iran's Assembly of Experts: "I would like to ask you and all the country's officials to take the sanctions seriously, and not as a joke."  

 

         Similarly, in late October 2010, the head of Iran's Chamber of Commerce, Mohammad Nahavandian, stated that "sanctions can't halt the importation of goods into Iran, but estimates indicate that the cost of imports has increased 15 to 30 percent."  Earlier that month, Nahavandian stated the following regarding the regime's economic policies:

 

         "It is a little bit difficult to see a clear economic strategy from the government... Different ministries are coming up with different policies. It seems they react to the facts of the day."

 

         These statements are in direct contradiction with the regime's usual rhetoric that sanctions are ineffective. This rhetorical dissonance is revealing in terms of how the regime responds to its economic pressure and shows that the regime's rhetoric is posturing in an attempt to make the condition of Iran's economy seem better than it is.

 

         In spite of such occasional elements of realism, Iran's continued denial of the increasing economic hardship imposed by U.S. and international sanctions does provide an important indicator of Iran's intentions regarding the U.S. It indicates that Iran may well continue to ignore concerns about its nuclear program, ballistic missile development, and support for terrorism, and continue to undermine U.S. interests in the region.