In Iran, US sanctions are being felt, with harsher measures to come
| Tehran and London
One sign of the impact of stepped-up American sanctions on Iran can be found on the northeast edge of Tehran: anxiety at Iran鈥檚 largest charity for children diagnosed with cancer.
Mahak, a private charity with a $60 million annual budget that cares for 17,500 patients across the country, free of charge, is deeply concerned that crucial drug supplies from abroad are already dwindling as foreign banks and suppliers cease doing business.
While humanitarian goods such as medicine are exempt from US sanctions, which were reimposed after President Trump withdrew the United States from the multinational deal to curtail Iran鈥檚 nuclear program, the severe banking restrictions that are part of the sanctions regime have just as negative an effect.
Why We Wrote This
Do sanctions on countries hit the right targets? While humanitarian goods are exempt from US sanctions, one Iranian charity says it鈥檚 struggling to buy medicine because of restrictions on banks.
Even with a specific license from the US Treasury to transfer charitable donations to Mahak, banks normally used by the Iranian charity in Europe won鈥檛 forward the cash, it says.
鈥淵ou want to talk about realities?鈥� asks Arasb Ahmadian, the chief executive officer of Mahak. 鈥淭he reality is that no companies, no banks want to be involved in any operation with Iran鈥檚 name, because they don鈥檛 know what will happen to them.鈥�
While the charity has successfully imported a year鈥檚 worth of some medicines, Mr. Ahmadian says, inventory is empty of four specific drugs that have short expiration dates and therefore can鈥檛 be stockpiled. And pharmaceutical companies and banks abroad are not filling those gaps, fearful that they will incur mammoth US fines, he says.
鈥淐an you ask these sanctions designers what we should do?鈥� he asks.
When Mr. Trump unilaterally withdrew from the landmark 2015 nuclear deal, it was despite continued support for the deal from European countries, Russia, and China, which have all vowed to help Iran soften the sanctions blow in order to keep Iran committed to the accord.
Firms pulling out
Now Iranians are bracing for the next round of US sanctions, with Washington set to impose broad new measures on Nov. 4 designed to bring Iran鈥檚 lifeblood oil exports to zero.
The European Union is creating a mechanism it calls a 鈥渟pecial purpose vehicle鈥� to circumvent the US measures, under which Washington can cut off or fine any bank that enables transactions with Iran.
But for months, big Western companies that signed lucrative deals with Iran such as Boeing, Airbus, and European vehicle manufacturers, as permitted and encouraged by the 2015 nuclear accord, have been pulling out of Iran.
And the White House has made clear that its new sanctions, which Trump says will be 鈥渢ougher than ever before,鈥� aim not just to compel Iran to negotiate a broader deal that limits its ballistic missile program and support for regional proxy forces 鈥� a concession that Tehran rejects outright 鈥� but also to deepen antigovernment anger among Iranians themselves.
Indeed, the sanctions are biting at the same time that Iran鈥檚 economy has reeled this year, with a collapse of the currency, soaring inflation, layoffs and widespread protests, all combined with the expectation of more sanctions-induced hardship.
One joke told pithily by Iranians sums up what it鈥檚 like to be caught in the US-Iran sanctions stranglehold.
鈥�Mushak hast, pushak nist,鈥� the joke goes: 鈥淢issiles we have, diapers we don鈥檛.鈥�
Silver lining for ideologues
To help Iranians brace for the added hardship, the government of President Hassan Rouhani has announced plans to provide food packages to 9 million people from low-income families.
Officials have also tried to reassure panicking Iranians that current shortages will be overcome, and high prices will be checked. Iran has stockpiled enough wheat for a year. And the head of the 鈥淪upreme Council for Cyberspace鈥� has even floated the possibility of creating a digital currency that would bypass US sanctions rules.
US efforts are 鈥渄efinitely doomed to failure thanks to our great nation鈥檚 spirit of resistance,鈥� Mr. Rouhani declared on Oct. 23.
But Khorasan newspaper last week reported a 47.5 percent price rise for basic goods in a single month ending Oct. 20, attributing it to the looming US sanctions.
Regime ideologues say Iran is locked in an 鈥渆conomic war鈥� and see a silver lining in the renewal of US sanctions, because they force Iran to be self-sufficient, despite the economic pinch.
鈥淲e believe the current situation is good for Iran. Why? The idea that we need to solve our economic problems through the Europeans 鈥撀爀ven the US 鈥撀爄s gone forever,鈥� says Hossein Shariatmadari, editor of the hard-line Kayhan newspaper. 鈥淭his is a big achievement.鈥�
But that is far from the majority view. In mid-October, four newspapers that span Iran鈥檚 political spectrum published a joint editorial, in which they cited the Declaration of Independence to decry US sanctions as an assault on the 鈥渃ertain unalienable rights鈥� of Iranians to 鈥渓ife, liberty, and the pursuit of happiness.鈥�
The editorial read: 鈥淪anctions have brought about destructive repercussions for the lives of millions of Iranian citizens who legitimately enjoy the right of life.鈥�
Less inventory, fewer jobs
As the new energy sanctions loom, it鈥檚 not just a charity like Mahak that is feeling the pinch. On the opposite side of Tehran, on its western outskirts at a sprawling modern supermarket, for example, retail salespeople hired to sell foreign appliances have been losing their jobs by the dozen as inventories are depleted.
鈥淭hey told me at the end of the month they don鈥檛 need me,鈥� says a young salesman with an industrial design degree, who has sold food processors and microwaves there for two years and asked not to be named.
The number of sellers on the floor went from 70 last March to 45 in late summer. Soon the eight or nine rows now stacked with appliances will shrink to one or two.
Stealing has become an increasing problem, says the salesman, who has a thin beard and worn black shoes. Someone tried to walk out the door the night before with a small food chopper that was on display.
Indeed, the Tehran police have warned that robberies are increasing in the capital, because so many Iranians are hoarding gold and cash dollars at home, as a hedge against economic disaster.
鈥淢y grandfather always said: 鈥業f your stomach is empty, you have no religion,鈥� 鈥� says the salesman. He mentions one Iranian food company that fired 100 people in one week, and another rice wholesaler that let 700 people go.
Job losses are growing and were one reason for widespread protests that erupted last winter and continue episodically around the country.
One factory owner who asked not to be named says he fired 50 people three months ago, out of a workforce of 250. He says his brother, who owns a cardboard factory south of Tehran, recently planned to fire most of his 300 workers. But intelligence officers came and told him to keep them on the payroll because it was a 鈥渘ational security issue.鈥�
鈥淎ll these companies are at the end, all are waiting,鈥� he says.
