Australian sanctions will hurt Iranians not the Iranian Government

On 25 January 2012, Foreign Minister Rudd stated at a London news conference that “The reason is very clear. The message needs to be delivered to the people of Iran, the wider political elites of Iran, as well as the government of Iran, that their behaviour is globally unacceptable.” He later added that Australia’s actions are “not a piece of idle philanthropy on the part of Australia's foreign policy. This costs, but it is a cost worth paying”. The statement pre-empted the Australian government adopting a series of sanctions to ban oil imports from Iran. These actions come as the West bunkers down around the slender Hormuz Strait, with as many as twelve naval ships sent from the U.S., Britain and France to ensure that Iran doesn’t commit any acts of oil tanker sabotage or block the narrow water way.

Foreign Minister Rudd’s statements were somewhat baffling for two reasons. First, in relation to his message to the Iranian people, what do the people of Iran have to learn from the Iranian Government’s recent belligerence, which they don’t already know? In fact, it’s unfair to point the finger at the majority of Iran’s populace, which after President Ahmadinejad’s 2009 election results, came out in the millions to protest against his ‘victory’. Moreover the 2009 Iranian street protests (the Green Revolution), have been cited as one of the influencing factors contributing to the ‘Arab Spring’, a movement warmly embraced by Rudd.

Indeed in Egypt the death of Khaled Said, at the hands of the Egyptian mukhabarat (secret security services) was publicly likened to the assassination of Ms. Neda Agha-Soltan by members of Iran’s Basij paramilitary forces. It’s worth considering the fate of those who tried to bring about change during Iran’s Green Revolution. What’s certain, is that they undoubtedly deserve more respect than Rudd’s recent finger waving statements.     

Secondly, Foreign Minister Rudd highlighted the costs the Australian government will have to pay to ban the import of oil from Iran. Interestingly Australia’s current trade with Iran is at an all-time low, with liquefied propane and butane gas making up Iran’s major export to Australia. Now that those oil-related imports will be wiped of the sheet, other imports such as fruit, nuts and tobacco will remain as Australia sole import from Iran, totalling less than AUD$20 million a year.  As such, it’s worth rectifying the actual costs to the Australian economy.  

Globally the storyline is similar, if oil from Iran is embargoed, supply will still be present in the face of rising global demand.Indeed only a few weeks ago (and surely not by coincidence) the leading supplier of oil, Saudi Arabia, stated it was ready to meet any possible rise in the global demand for oil. These and other actions from nations, such as Japan and South Korea, which both have chosen to follow suit to reduce their dependency on Iranian oil, point to a unified trend and have both been praised by the U.S. administration.  

Hence, the global community seems ready to bear a world without Iranian oil. Notwithstanding this new strategic posture, Iran will still continue to sell its oil to its major importers like India and China, who both rejected the U.S. call for sanctions. So after the huff and puff about this recent round of oil sanctions on Iran subdues, who will pay the ultimate cost?  

Foreign Minister Rudd’s statement as accurate as it may be viz-a-viz Iran’s government is awfully undeserving on Iran’s populace, who will bear the brunt of the cumulative effects of the sanctions. A paper from the Institute for International Economics, Can Sanctions Stop the Iranian Bomb?, stated that “harsh sanctions would punish the Iranian people, not the Tehran elite [or] the army”.Additionally, in a recent CNN article, “Sanctions take toll on ordinary Iranians”, the ultimate fate of these sanctions will be to hurt the economic capabilities of Iranians. This outcome is contradictory to the purpose of sanctions: “Those who study the impact of sanctions argue that they must hurt in order to be effective, but not to the point where they break the economy, like they did in Iraq.”

It’s worth considering the effects of this round of sanctions on the people, and not least the moral implications it will have on those who continue to defy the government to fight for their freedom.

Rudd’s support for the sanctions will have an implied ‘cost’ on Australia’s overall trade, as negligible as it may be. It will also limit Iran’s ability to sell its oil related products. Rudd’s 25 January 2012 statement however portrays a lack of understanding about the difference of opinion that exists in Iran and the challenges faced by Iran’s people. The statement lobbed them all into one homogenous group which is aligns itself with the Iranian Government. It’s hoped that Rudd’s advisors retain the capability to recognise the long-term implications that Iranians and the international community will pay to test this new strategy.