Since the economic sanctions imposed by the U.S. and the West have begun to come into effect, Iran is feeling the pinch. Its currency, food prices, standard of living, and ability to trade on the global marketplace have become severely marginalized. Based on recent developments, Iran may now be ready for serious diplomatic talks with the West. In exchange for foregoing what the West sees as a threatening nuclear enrichment program, Iran may appeal to the West to lift the onerous sanctions currently straining the country's economy.
Though Tehran continues to act tough about the sanctions, Iran may be ready to make concessions. The U.S. and the West may have a real opportunity to resolve this international problem through peaceful and diplomatic means in the near future.
Recently, there have been obvious signs that Iran is facing severe economic strains due to the sanctions imposed on it by the West. They have created a host of problems that threatens to undermine the authority and legitimacy of the current regime in Tehran. The regime has gradually diminished Iran’s ability to provide for its people in terms of food, living standards, financial stability and health care and pursue its own policies as it wishes.
First, Iran’s currency — the rial — has fallen in value by approximately 40%, which has caused considerable harm to the Iranian economy by stringently limiting the buying power of the Iranian people, thereby causing growing unrest among the population. Since Iran has been cut off from the international banking system, Iran’s foreign currency reserves have been depleted, the main cause in the alarming devaluation of the rial.
Due to this currency crisis, the average Iranian now has trouble paying for food and everyday needs. Black markets have sprung up to meet a growing demand for foreign currencies. Like Germany in the aftermath of the Crash of 1929, Iran faces a highly unstable and weakening currency problem that could seriously undermine the regime in Tehran.
Second, Iran’s vital oil exports have been cut by two-thirds since 2011 due to the sanctions, which went from approximately 2.5 million barrels a day in 2011 to 1 million by October 2012. As the Iranian economy, including 70% of Tehran’s revenues, is based on the export of oil, the sanctions have made a serious dent in the Iranian government’s ability to operate.
At present, Iran has decided to curb exports and stock up on oil due to high airfares to pressure the West. The government already has problems subsidizing the cost of filling up the family car of average Iranians, as well as other subsidy programs funded by its oil-driven revenue base.
Finally, the Washington Post reported that Iran might face a health care crisis due to the sanctions’ effect on the budgets on hospitals in Iran. Doctors and nurses have been instructed by the Iranian Government to operate under “war-time conditions.”
“[This] means our hands are tied. We’ve been given a list of over 120 drugs that we are not to prescribe, because we simply don’t have them,” said Dr. Nasrin, a doctor at a government hospital in Shiraz.
The medicines and treatments still available for serious illnesses including cancer, heart problems and diabetes are carefully rationed based on dire need. For now, over-the-counter drugs are still widely available. The price of health care has multiplied, and supplies are dwindling with limited funds to buy more.
In sum, Iran faces serious challenges to the livelihood of its people and the survival of the regime in the long run. With a diminishing standard of living bearing on them, the leaders of Iran would be remiss and unwise to not to engage in diplomatic talks with the U.S. and West in earnest, if they hope to weather the economic sanctions.
In the past, Iran has been reluctant to engage in serious and meaningful talks with the U.S. and the West on its controversial nuclear program, but now it appears to be interested in doing so. The ball, now, appears to be in the U.S. and West’s court, as Iran has continued to express their evident interest in seeking a diplomatic solution to their economic woes while the U.S. and West have yet to move the talks forward.
During the final weeks of the 2012 presidential election, news of talks with Iran was leaked to the New York Times. This story noted that the Iranians wanted to talk after the election. According to Mr. Ahmadinejad, “[e]xperience has shown that important and key decisions are not made in the U.S. leading up to the national elections.”
Now that the election is over, talks can resume. However, Iran and other Arab leaders have expressed impatience at the delay in the nuclear talks. This was due to the fact that the United States has put the date for Nonproliferation Treaty (NPT) talks (originally scheduled to be held in Helsinki, Finland) on hold, with no new date for continued talks.
When asked about this potentially indefinite delay, Ali Asghar Soltanieh, the Iranian nuclear envoy, stated that: "It is a serious setback to the NPT and this is a clear sign that the U.S. is not committed to the obligation of a world free of nuclear weapons."
Though this response is “tough” in terms of its tone, this development should be regarded as a positive sign for observers interested in a diplomatic solution to the Iran Nuclear Problem. The underlying message from Tehran is clear: Iran is ready and eager for talks with the West. It’s worth noting that the economic sanctions have not stopped Iran from continuing to build up its military strength in spite of the suffering of its people.
Now, the impetus is on the U.S. and the West to seek a diplomatic compromise with Iran. Therefore, the negotiators sent to talk with Iran should be ready to make concessions in exchange for relaxing the economic sanctions. The question now is what terms the U.S. and the West will accept to start lifting the economic sanctions crippling Iran.
The terms of a eventual settlement should include mutually desired terms. The Iranians should be allowed to have a nuclear program so long as the sole purpose of the program is for energy and civilian purposes, including medicine and other non-military applications. The program should be monitored by the IAEA and/or another independent organization to ensure that the first term is fulfilled.
In return, the U.S. and the West will lift the economic sanctions based on progress made in implementing a regime that oversees Iran's transparent and peaceful nuclear program. With luck and diligence on both sides, the economic sanctions will be lifted to restore the living standards of the Iranian people.
In pursuing this compromise, the U.S. and the West are given the security guarantees that they desire and the Iranians get to preserve their honor and integrity. The key is to be cool and practical in talks, while allowing both sides to present their actions that are in their political interests. The U.S. . and the West get to say they prevented Iran from becoming a nuclear threat, and Iran gets to say that it protected its national pride and sovereignty.
Iran is ready to talk in earnest due to the effective results of the economic sanctions. The U.S. and the West can capitalize on this by seeking a diplomatic solution that is a win-win for both sides with decisive action and sensitive handling of the diplomatic talks.