How they live under sanctions? Iran`s experience
Abstract. The study deals with the world practice of imposing economic sanctions by some states against others, including factors affecting the achievement of the goals set by the initiator of the sanctions pressure. Close attention is paid to the Iranian case, including an analysis of its main macroeconomic indicators, counter-sanctions measures, as well as quantitative measurement of the impact of sanctions on the Iranian economy. The work is based on the study of scientific literature devoted to the topic of sanctions pressure as a tool for achieving foreign policy goals, as well as on the analysis of the dynamics of Iran`s macroeconomic indicators published by the Central Bank of Iran and the World Bank. The observation period is 1978-2020. It is revealed that sanctions are far from always successful, and their effectiveness is influenced by a number of factors, including the scale of the goal, the relationship between the initiator and the target before the sanctions episode, the duration of the sanctions, the political regime and the state of the economy in the target country. An analysis of the dynamics of Iran`s macroeconomic indicators has shown that living under sanctions means high inflation, a significant devaluation of the national currency, and a slowdown in the economic development. However, in the long term, there are also positive aspects: technological development, economic diversification, and the growth of non-oil and gas exports.
Keywords: Iran, the USA, sanctions, counter-sanctions measures, macroeconomic indicators, economic damage
Highlights:
♦ the use of economic sanctions by one state against others in order to achieve certain economic and political goals is a common phenomenon in recent history;
♦ the success of the application of economic sanctions depends on a number of factors;
♦ the history of sanctions pressure on Iran goes back more than 40 years, including several periods of strengthening and weakening;
♦ high inflation, significant devaluation of the national currency, low rates of the economic development and significant volatility in the dynamics of Iran`s economic indicators are characteristic of almost the entire period of the sanctions pressure;
♦ in the long term, there were also positive effects of the sanctions pressure: technological development, economic diversification, growth of non-oil and gas exports formed as a result of the policy of self-sufficiency.
Marina V. Frants - Institute of Social and Economic Researches of Ufa Scientific Center of the Russian Academy of Sciences, Ufa, Russia