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The latest wave of sanctions against Iran comes into effect today. Such measures are largely predicated on a “rational actor model” in which the west hopes Iran’s leaders will eventually find it in their own interests to give up their nuclear programme. The problem with such a strategy is not that Iran’s leaders are irrational but that such a game only works if the west knows how Iran evaluates costs and benefits and the options Iran believes it has available.
After the failure of previous sanctions, the west has imposed a new set of much tougher sanctions while Iran has adopted a more assertive stance vis-a-vis the west, stating that it will respond to economic and military threats with its “own threats”. Why, then, has Iran failed to respond to international pressure?
According to the basic sanctions model, the target of sanctions will alter its behaviour in the desired direction when the costs of defiance become greater than its perceived costs of compliance. Yet despite Iran’s reliance on oil, the structural weakness of its economy, and deep economic costs such as the sharp rise in inflation, negative economic growth and increasing unemployment, it has failed to bend. This should prompt policymakers to ask how Iran evaluates the costs of sanctions and defying the west.
First, for Iran’s leaders, ideological and security concerns trump economic ones: the security of the ruling class and being seen as protecting the Islamic Republic’s founding myths.
The regime has emphasised three central myths since its creation in 1979 – “Islamic justice”, “divine rule” and the “struggle against imperialism” – all of which are essential for maintaining its power and legitimacy. Hence, in the eyes of the Iranian leadership, any damage to these myths is of far more importance than, for example, losing even billions of dollars.
Second, the west and Iran do not share an understanding of what the goals of the sanctions actually are. The goal of the west is to prevent Iran from becoming a nuclear power but that would only succeed if its existing leaders switched policies or were replaced by new, more accommodating, leaders as a result of internal pressure. In the latter case, the economic sanctions would supposedly increase discontent among the middle class and so revive protest activity.
For its part, Iran believes that the goal of sanctions is to prevent the spread of the Iranian model in the region and to demonstrate to the world that the Islamic Republic is a failed model not to be emulated by Arab revolutionaries. Thus, according to the strategic thinking of the west, Iran is being pushed into a corner where it must choose between preservation of the regime and the continuation of its nuclear programme together with its regional ambitions.
Rationally, Iran will choose the preservation of the regime. In the eyes of supreme leader Ali Khamenei, however, continuation of its nuclear programme and pursuance of its regional ambitions constitute that preservation of the regime. He believes that promotion of the Iranian model in the Middle East is the key to the regime’s long-term security and so external pressure from sanctions is tolerable in the short term.
Given this view, Tehran believes it must wait patiently for an inter-related set of changes that ultimately favour it. Iran sees an economic crisis that increasingly cripples the west. Also, Iran may believe itself to be close enough to join the nuclear club already – that it will soon reach the point where circumstances radically shift in its favour.
Sanctions also play into Khamenei’s efforts to consolidate his power and justify internal suppression. Hence, Iran may actually view sanctions not as a cost, but as a benefit. Iran can – and does – point to sanctions as the suffering it bears in its role as the standard bearer of resistance in the Islamic world against what it regards as US imperialism.
On this view, the Islamic Republic is a model to be emulated by Arab revolutionaries, the successful export of which only further legitimises the three founding myths of the regime. Sanctions are therefore an economic investment with short-term costs that will pay large dividends in the long term.
Iran is not playing chess, no matter how much the US and the EU might wish it to be so. With Iran and the west playing different games, a peaceful resolution in the near future seems very unlikely.
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Introduction
Cuba has been at odds with the United States since Fidel Castro assumed power in 1959. Successive U.S. administrations have tried tough measures including prolonged economic sanctions and designation of Cuba as a State Sponsor of Terrorism, but none substantially weakened Castro’s rule. In February 2008, Fidel formally resigned from office, sixteen months after transferring many powers to his brother Raul due to illness. Despite stirrings of U.S. economic interest in Cuba and some policy softening under President Barack Obama, experts say that normalization of U.S.-Cuba relations is unlikely in the near to medium term. Tensions increased in early 2010 when the United States included Cuba on a list of fourteen countries whose citizens will receive additional screening in the wake of the attempted Christmas Day bombing of a Detroit-bound flight. The Cuban government denounced the measures (Reuters), saying they were “politically motivated” and a “hostile action” by the United States.
What is the status of U.S.-Cuba relations?
They are virtually nonexistent. There is a U.S. mission in Havana, Cuba’s capital, but it has minimal communication with the Cuban government. Since 1961, the official U.S. policy toward Cuba has been two-pronged: economic embargo and diplomatic isolation. The George W. Bush administration strongly enforced the embargo and strengthened travel restrictions. Americans with immediate family could visit once every three years for a maximum of two weeks, while the total amount of family remittances an authorized traveler could carry to Cuba was $300, reduced from $3,000 in 2004. Obama signaled an intention to remove travel and remittance restrictions, which he implemented on April 13, 2009.
Still, Congress amended the trade embargo in 2000 to allow agricultural exports from the United States to Cuba In 2008, U.S. companies exported roughly $710 million worth of food and agricultural products to Cuba, according to the U.S.-Cuba Trade and Economic Council; in 2001 that figure was virtually zero (total agricultural exports since 2001 reached $2.8 billion as of May 2009). Nebraska, Oklahoma, and Texas have all brokered agricultural deals with Cuba in recent years. Several initiatives are pending in Congress that would ease restrictions (PDF) on Cuban payments for U.S. agricultural exports, according to a 2008 Congressional Research Service report. In May 2009, Senator Max Baucus (D-MT) introduced a bill to facilitate the export of U.S. agricultural commodities and products to Cuba as authorized by the Trade Sanctions Reform and Export Enhancement Act.
Despite initial optimism over Obama’s election, Cuban politicians and citizens are less hopeful (NYT) about a positive relationship developing between the two countries. Raul and Fidel Castro have both criticized the Obama administration. In a recent speech, Raul Castro (AP) accused the United States of ”giving new breath to open and undercover subversion against Cuba.”
What is U.S. public opinion on the isolation of Cuba?
Some U.S. constituencies would like to resume relations. U.S. agricultural groups already deal with Cuba, and other economic sectors want access to the Cuban market. Many Cuban-Americans were angered by the Bush administration’s strict limits on travel and remittances, though a small but vocal contingent of hard-line Cuban exiles, many of them based in Florida, does not want to resume relations with Cuba until the Communist regime is gone. A consensus is emerging among Cuban-Americans that “current policy has failed and that neither the Cuban nor the U.S. government has any business getting in the way of individuals,” Julia E. Sweig, CFR director of Latin American studies, wrote in a February 2009 article in Cigar Aficionado.
Ending the economic embargo against Cuba would require congressional approval. Opinions in Congress are mixed: A group of influential Republican lawmakers from Florida–Lincoln Diaz-Balart, his brother Mario Diaz-Balart, and Ileana Ros-Lehtinen–is strongly anti-Castro. Still, many favor improving relations with Cuba. In 2002, a bipartisan group of senators, the Congressional Cuban Working Group, proposed a set of measures that included lifting the travel ban and allowing private financing of food and agriculture sales. In 2003, both the House and Senate voted to lift the travel ban, but the measure was removed after President Bush threatened a veto. In 2009, Sen. Richard Lugar (R-IN), the top-ranking Republican on the Senate Foreign Relations Committee, released a report calling for U.S. policy changes. He said: “We must recognize the ineffectiveness of our current policy and deal with the Cuban regime in a way that enhances U.S. interests” (PDF)
What is the likelihood that the United States and Cuba will resume diplomatic relations?
Given the range of issues dividing the two countries, experts say a long process would precede resumption of diplomatic relations. Daniel P. Erikson of the Inter-American Dialogue says that though “you could have the resumption of bilateral talks on issues related to counternarcotics or immigration, or a period of détente, you are probably not going to see the full restoration of diplomatic relations” in the near term.
Many recent policy reports have recommended that the United States take some unilateral steps to roll back sanctions on Cuba. The removal of sanctions, however, would be just one step in the process of normalizing relations. Such a process is sure to be controversial, as indicated by the heated congressional debate spurred in March 2009 by attempts to include provisions easing travel and trade restrictions in a large appropriations bill. These provisions passed in a March 10 vote. ”Whatever we call it–normalization, detente, rapproachement–it is clear that the policy process risks falling victim to the politics of the issue,” says Sweig. At the start of 2010, there were several bills before Congress that aimed to lift travel restrictions, but experts think it’s unlikely that these measures will pass (MiamiHerald).
What is the main irritant in U.S.-Cuban relations?
A fundamental incompatibility of political views, experts say. While experts say the United States wants regime change, “the most important objective of the Cuban government is to remain in power at all costs,” says Felix Martin, an assistant professor at Florida International University’s Cuban Research Institute. Fidel Castro has been an inspiration for Latin American leftists such as Venezuelan President Hugo Chavez and Bolivian President Evo Morales, who have challenged U.S. policy in the region.
What are the issues preventing normalization of U.S.-Cuba relations?
Experts say the issues preventing normalization of U.S.-Cuba relations include the following:
- Human rights violations. In March 2003, the Cuban government arrested seventy-five dissidents and journalists, sentencing them to prison terms of up to twenty-eight years on charges of conspiring with the United States to overthrow the state. The Cuban Commission for Human Rights and National Reconciliation, a Havana-based nongovernmental group, reports that the government has in recent years resorted to other tactics besides prison –such as firings from state jobs and intimidation on the street– to silence opposition figures. A 2005 UN Human Rights Commission vote condemned Cuba’s human rights record, but the country was elected to the new UN Human Rights Council in 2006.
- Guantanamo Bay. Cuba indicated after 9/11 that it would not object if the United States brought prisoners to Guantanamo Bay. However, experts such as Sweig say Cuban officials have since seized on the U.S. prison camp–where hundreds of terror suspects have been detained without recourse to trial–as a “symbol of solidarity” with the rest of the world against the United States. Although Obama ordered Guantanamo to be closed by January 22, 2010, in November, he admitted that this deadline would not be met (WashPost).
- Cuban exile community. The Cuban-American community in southern Florida traditionally has strongly influenced U.S. policy with Cuba. Both political parties fear alienating a strong voting bloc in an important swing state in presidential elections. Though the Bush administration’s tightened travel restrictions upset many Cuban-Americans, hard-line Cuban exiles still lobby for regime change.
Will Raul Castro introduce significant changes in Cuba?
Raul Castro has signaled his intention to reconsider the structure of the Cuban government and the country’s economic system. Several changes related to agriculture, including a decision in 2008 to give individuals land for farming, were meant to spur food production on the island. The demotion of two cabinet officials in February 2009 was presented by the Cuban government as a step in Castro’s reform of Cuban bureaucracy. Most experts agree, however, that Raul Castro will not introduce significant economic reforms in the near term. He has indicated a willingness to consider criticism of the Cuban system, however, and some believe he may eventually introduce economic reforms that move Cuba toward a Chinese model, in which economic freedoms are introduced while the state retains a grip on political power.
Raul has signaled he is willing to engage in dialogue with the United States. At the same time, says CFR’s Sweig, seeking normalized bilateral relations with the United States is clearly not a priority for the Cuban government, which has moved to diversify its relationships in the region. “Cuba no longer seems to need to see the relationship with the United States improve as rapidly as it might well have, for example, when the Soviet Bloc collapsed and it lost its Soviet subsidy overnight,” Sweig told CFR.org in a March 2009 interview. A recent Human Rights Watch report found that Cuba’s judicial system remained oppressive, saying, “Raul Castro’s government uses draconian laws and sham trials to incarcerate scores more [political prisoners] who have dared to exercise their fundamental freedoms.”
Why is Cuba on the State Sponsors of Terrorism list?
According to the State Department, Cuba remains on the list because it opposes the global war on terrorism; supports members of two Colombian insurgent groups, the Revolutionary Armed Forces of Columbia (FARC) and the National Liberation Army (ELN); and provides safe haven to several Basque ETA members from Spain. But some experts say there is little evidence to support the State Department’s allegations.
The State Department reaffirmed its position after Cuba protested its addition to the list of countries whose citizens require heightened screening upon entry to the United States. State Department spokesman P.J. Crowley said, “Cuba is a designated state sponsor of terrorism, and we think it’s a well-earned designation given their long-standing support for radical groups in the region.”
What is the status of Cuba’s economy?
After introducing a few market reforms–opening up Cuba to tourism, allowing some foreign investment, and authorizing self-employment for certain occupations–in the early 1990s, the Cuban government reasserted central control. In 2004, Cuba reverted to a peso economy, with the government as the only body authorized to exchange pesos into dollars. Since Raul assumed power in July 2006, he has encouraged dialogue about the Cuban system, and in particular, the economy. This has led experts to speculate he might institute economic reforms. However, the economic devastation wrought by three hurricanes in late 2008 has “taken an enormous amount of energy and momentum away” from the government, according to Sweig. The global financial crisis is also taking a toll on Cuba. Currently, the economy is divided into the following revenue streams:
- Nickel. Cuba has the third-largest nickel reserves in the world. Nickel is the country’s biggest export, bringing in roughly $2.7 billion in 2007 (Reuters). Nickel prices dropped over 40 percent in 2008 and severely affected Cuba’s nickel export earnings.
- Tourism. Now the economy’s largest source of revenue, tourists–primarily from Canada and the European Union–bring some $2.7 billion into the country, according to the Cuban government.
- Remittances. Academic sources estimate remittances total more than $1 billion a year, most coming from families in the United States. If limits on remittances are lifted, this figure could increase substantially.
- Sugar. Sugar was long the primary industry in Cuba, but production has plummeted due to outdated factory equipment. In 1989, production was more than 8 million tons, while the harvest in 2005 was only 1.3 million tons. The 2008 hurricanes damaged sugar crops in the eastern part of the country.
- Foreign investments. Cuba receives hundreds of millions of dollars in foreign investments from Venezuela, Spain, and China. Experts believe foreign investment from Venezuela might decline as the country suffers financial difficulties as a result of the fall in oil prices in late 2008 and early 2009.
How does Venezuela assist Cuba?
In October 2000, Chavez and Castro signed the Integral Cooperation Accord, an agreement that specified an exchange of Venezuelan oil for Cuban goods and services. Venezuela now sells Cuba some 90,000 barrels of crude oil daily at preferential prices. Florida International University’s Martin calls the relationship “very intimate,” and says it is getting “stronger and stronger every year.” Chavez also helps Castro from an ideological standpoint. In addition to removing any incentive to approach other countries for economic assistance, Chavez’s support means that Cuba no longer stands alone against the United States. This “provides them with a kind of insurance policy that they haven’t had since the Soviet bloc collapsed,” Sweig says. Other experts point to Cuba’s burgeoning friendship with China as an indication of the growing worldwide support for Castro’s regime.
So what exactly you proposing? To bomb them?