Iranians fear sanctions, not war, after U.N. report

TEHRAN: When a huge thunder storm rattled windows across Tehran Sunday night, some of the Iranian capital’s jumpier residents awoke thinking Israel was finally making good on its threat to attack.

Ahead of Tuesday’s leak of the latest U.N. report on Iran’s nuclear program, Israeli and Western media speculated it might be enough to prompt the Jewish state to do what it has often said it might – launch strikes to stop Iran getting the bomb.

But the day after the report – which included what the International Atomic Energy Agency called “credible evidence” of military aspects to Tehran’s nuclear program – Iranians were sanguine and said they feared tougher sanctions more than a possible war.

“What I’m worrying about is more sanctions on airlines,” said Nahal, a 26-year-old office manager in Tehran.

A United States measure that prevents Iran importing airplanes or spare parts is one of the more talked-about of the growing range of sanctions the country faces.

Iranians say it has unfairly hit civilians by contributing to air crashes and a general fear about airline safety, particularly on domestic flights.

The actual impact of sanctions on Iran is hard to judge, but Iranians say they think sanctions are affecting them. Some blame hostile foreign powers and others blame their own government.

The United Nations has imposed four rounds of sanctions on Iran due to nuclear concerns since 2006, targeting individuals and companies linked to the nuclear program.

Washington and the European Union have taken tougher unilateral measures that have had a more direct impact on the economy, including a ban on most financial transactions with Iran that has complicated international trade.

But there are no direct sanctions on Iran’s oil and, with crude prices above $100 per barrel, a level Tehran says is “comfortable,” foreign exchange continues to flood into the coffers of the world’s fifth biggest oil exporter – enabling Iran to import all manner of consumer goods.

Western countries have called for tougher sanctions as a result of the latest U.N. report, but Russia has made clear it would block action in the Security Council, meaning any new measures will remain limited.

Iranian supermarkets may lack the glossy sheen of those in the West, but most products – from breakfast cereals to cosmetics – are available. Only steadily rising inflation – not empty shelves – indicates that all is not well in the economy.

A report issued by the International Monetary Fund in August said sanctions had “increased the cost of doing business, limited FDI (foreign direct investment) and technology transfer and have affected international trade and financial transactions.”

Economists say the financial sanctions will have added to price pressures as inflation has risen from single figures to 19 percent in less than a year, but a far more important factor has been President Mahmoud Ahmadinejad’s policy of slashing subsidies on essentials like food and fuel.

The government, meanwhile, says the impact of sanctions has been limited and in some cases beneficial, by pushing domestic companies to be more self-reliant.

The biggest carmaker, Iran Khodro, says it now sources more components within Iran after European suppliers stopped selling to it.

Iran also says it no longer needs to import the 40 percent of its gasoline production it used to buy to make up for a lack of refinery capacity, saying an emergency plan to produce the fuel in petrochemicals plants has made it self-sufficient.

Foreign analysts say that is probably an exaggeration and Iranians have complained about an increase in air pollution which may be due to a drop in fuel quality.

While most Iranians see the economic impact of sanctions as a more tangible threat than any military strike, the ultimate sanction of war does remain in the back of their minds.

A version of this article appeared in the print edition of The Daily Star on November 10, 2011, on page 4.




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