Time is running out for the United States to persuade Iran to halt its nuclear program. As the potential for a diplomatic solution wanes, Barack Obama's administration must consider what steps might dissuade Tehran from continuing its nuclear program without punishing the Iranian people or strengthening those who rule over them, chiefly the Islamic Revolutionary Guards Corps.
Among the options under serious discussion are tougher U.S. or multilateral sanctions. The U.S. Congress, for example, is considering a bill that would sanction companies that provide Iran with refined petroleum products. According to some estimates, Iran relies on gasoline imports to satisfy up to 40 percent of domestic demand. However, sanctions on Iran's gas would only hurt the Iranian population without crippling the Iranian government. Worse, they would most likely enrich and could even strengthen the Revolutionary Guards and their business partners.
The Revolutionary Guards have emerged as Iran's foremost political and economic power broker and also drive major national security policies, especially on the country's nuclear program. Far from being hurt by gasoline sanctions, the Guards may in fact emerge as Iran's unchallenged economic power.
Iran is attempting to privatize state-held enterprises. Although this is supposed to be a competitive process, the Guards have managed to use their political influence and national security powers to sideline most private competitors. Sanctions on gasoline would not only hurt consumers, but damage businesses and companies that have struggled to compete with the Guards' economic expansion. With a virtual stranglehold on the state, the Guards would be able to bypass sanctions through their access to government gasoline reserves and the coffers of President Mahmoud Ahmadinejad's administration. Their competitors will not be so lucky.
The Islamic Republic of Iran has lived under U.S. sanctions for the past three decades. These sanctions have hindered Iran's ability to expand its economy and meet the demands of a growing, and restless, population. But many of Iran's economic woes are due instead to government mismanagement, ineptitude, and corruption. The cost has been less borne by the Iranian government, which relies on oil exports for most of its revenue, than by the educated and professional classes.
U.S. sanctions have even inspired a self-sufficiency movement among the political and military elite. Today, the Revolutionary Guards boast of "indigenously" produced missiles, and Ahmadinejad declares Iran to have become one of the world's great "nuclear powers."
Of course, Iran has relied on foreign (non-Western) suppliers for much of its weapons and nuclear technology. And the government is in desperate need of foreign investment and expertise to keep afloat, never mind improve, its ailing energy sector. Regardless, Iran's rulers, including Supreme Leader Ayatollah Ali Khamenei, Ahmadinejad, and hard-line Revolutionary Guards officers, appear to believe that a nuclear deterrent is worth the costs in economic stagnation. And Iran's international isolation has only empowered the ruling elite, who have no desire to see the masses subjected to Western influences that could culminate in a "velvet revolution."