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Iran - Tightening Its Belt?

Volume 4 Number 45

By Machla Abramovitz, Managing EditorMachla Abramovitz, Managing Editor | June 4, 2012 | IRAN | More About: Hezbollah, Hamas, Iranian sanctions

Editorial Introduction

June 4, 2012 • Volume 4 Number 45

 

There is no question that international sanctions against Iran are hurting. Andrew Torchia in “Analysis:  Iran Economy Could Limp Along under Sanctions” notes that sanctions are shrinking Iran’s economy and pushing up inflation. Will that be enough to dissuade Iran from pursuing its nuclear ambitions?  Torchia doubts that it will.  Even though they are, in fact, the most stringent sanctions imposed upon a country in fifty years, he reminds, they do not compare with those imposed on Iraq, North Korea and even Cuba who were able to defy international pressure. As long as there are countries willing to buy Iranian oil – and China and India are willing – Iran is financially capable of withstanding these pressures. In many ways, Torchia argues, Iran is better positioned to endure financial hardships than the EU; its gross debt being “just 9% of GDP compared to levels approaching 100% or more for many EU countries.”  Torchia succinctly elaborates on Iran’s economic plight and concludes that given Ahmadinejab’s “aversion to high interest rates” and given his government’s disorganization and inefficiency “a comprehensive policy response to the currency crisis” is probably unlikely.  Regardless, as long as Ahmadinejab can hold on politically, and it appears that he can, financial hardships will probably do nothing to offset Iran’s nuclear ambitions.

 

The U.S. Congress, though, is upping the ante.  Through its Iran Sanctions, Accountability and Human Rights Act, it is pushing forward with an amendment to its new sanctions legislation.  This amendment will attempt to put a stop to Iran’s access to The Society for Worldwide Interbank Financial Telecommunication, better known as SWIFT – the cooperative that facilitates Iranian financial transactions electronically; an access, the US claims, that is in violation of US and European laws. How significant would this be?  Mark Dubowitz and Jonathan Schanzer point out in “Canceling the Mullah’s Credit Card” that Iran’s transactions amounted to $35 billion in trade with Europe alone. Cutting this source of cash, they argue, would go a long way towards helping those who seek peaceful ways of halting Iran’s nuclear ambitions. 

 

How then does Iran’s financial plight play itself out in regards to Hezbollah and Hamas who are being supported by this regime?  Hezbollah has been especially hard-hit. Subsequently, It has turned to other sources to up its revenue. After all, terrorism doesn’t come cheap. As Jonathan Schanzer writes in "Pious Coke Dealers?" American indictments charge "Hezbollah kingpin Ayman Journass with smuggling more than 100 tons of Colombian cocaine with the Mexican Zetas drug cartel, yielding hundreds of millions of dollars for the terror group."  In December 2011, the US government filed suit against 30 American and Lebanese businesses accused of bankrolling Hezbollah by money-laundering these ill-gotten gains. Hezbollah defines itself as devoutly Shiite.  Given its following amongst such, Schanzer argues, it will not only be hard-pressed to justify this rather unholy alliance but also its motivations – is it out to secure justice for its people, as it claims, or to enrich its own pockets?

 

Although very much a beneficiary of Iranian largesse, especially in regards to cash and munitions for use against Israel, Hamas has not quite proved itself to be the Iranian proxy that Hezbollah has.  With the ascendency of the Muslim Brotherhood in Egypt combined with Syria’s precarious position (possibly being on the verge of civil war), Hamas has been showing signs of distancing itself from Syria – and possibly from Iran?  A February 2012 visit between Hamas Prime Minister Ismail Haniyeh and Ayatollah Khamenehi was meant to dispel any tensions between Gaza and Tehran.  According to Mohammad Ataie in “The Hamas-Syrian Split:  a Dilemma for Iran’s Palestinian Strategy” during that meeting Khamenei made it clear that any attempt on Hamas’ part to compromise its “resistance” against Israel, would weaken it.  Of even greater concern is Hamas’ unwillingness to support Syrian president Bashir al Assad.  In fact, two weeks later, Haniyeh made remarks in Cairo in support of the uprising in Syria.  As Ataie points out, Iran now finds itself “locked between two pillars of its foreign policy; that of backing the Palestinian resistance and safeguarding its unique alliance with Syria.”

 

Jonathan S. Tobin (see Links) in “Hamas-Iran Alliance Still Alive and Well” argues that although there may be tensions within Hamas’ leadership [political leader Khaled Meshal and Ismail Haniyah (see Links “Hamas says that its Political Leader does not Plan to Seek Re-election”)], the relations between Iran and Hamas remain as strong as ever.  “The Iran-Hezbollah-Hamas axis is a natural alliance that brings together Islamist rejectionists who wish to keep the flames of conflict burning. Though Hamas is Sunni and Hezbollah and Iran are Shia, they still need each other and have too much in common to break up.”  If true, this is not good news for Israel.

 

 

EDITORIAL BOARD

Machla Abramovitz, Managing Editor Machla Abramovitz, Managing Editor (Canadian Institute for Jewish Research)

Prof. Frederick Krantz, Director Prof. Frederick Krantz, Director (Canadian Institute for Jewish Research)

Rob Coles (Canadian Institute for Jewish Research) Rob Coles (Canadian Institute for Jewish Research)

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