Iran's economy has been mismanaged for years.
The only effort made to redress it -- the removal of the subsidy program in 2010 -- only worsened the situation by contributing to rising inflation and
unemployment. As a result, the Iranian public appears to be having a crisis of confidence in the government's ability and will to tackle the country's
economic problems. This is exacerbated by the fact that there seems to be no end in sight to Iran's problems. In fact, the United States and European Union
are working on further measures to tighten the
squeeze on Iran.
But what is the goal of sanctions? If the objective is to change the Iranian leadership's strategic decision to continue developing its nuclear program,
then clearly, they have not worked. U.S. Secretary of State Hillary Clinton disagrees. In July she said, "We believe that the economic sanctions are bringing Iran to the table." The so-called "P5+1" have indeed been engaged in negotiations
with Iran for most of 2012, but they have not led to anything concrete. Iran continues to make progress in 20 percent enrichment, producing approximately
14.8 kilograms a month.
While sanctions may not change the regime's intentions, they have been effective in curbing Iran's nuclear progress. Sanctions that target Iran's access to
international financial services, transportation, and trade insurance are the best way to disrupt the illegal black market trade that Iran has turned to.
For example, they have limited Iran's access to foreign parts and components necessary for the improvement of its centrifuges.
But today, sanctions are going beyond just slowing the Iranian nuclear program. They are affecting all segments of the Iranian population. Iran faces a
dire fiscal situation, exacerbated by the massive devaluation of the rial. Although the government maintains that the official inflation rate is 25
percent, it has actually spiraled out of control, with some analysts claiming that actual figures are double the government rate. In addition, unemployment
has soared, with estimates stating that
between 500,000 and 800,000 Iranians have lost their jobs in the past year.
Businesses are closing up shop -- especially small and medium-sized companies that had already lost out following the removal of the subsidies in December
2010. Such businesses had been hit hard when consumers switched to buying foreign goods, which had not been affected by the rise in prices. "Business is
drying up, industry is collapsing. There's zero investment," said an Iranian businessman in September.
Every sector of the Iranian economy has been affected. From the energy sector -- the main source of revenue for the government -- to staples such as
foodstuffs, including relatively strong Iranian industries such as automotives. The biggest losers, however, are middle-class Iranians.