Iran remained inexplicably calm this summer as various parts of the sanctions rolled out from the United Nations, Washington, and Brussels. The country’s press was occupied with reporting on the new policy initiatives from the Ahmadinejad administration, such as removing the thirty-year old subsidies on energy; reviving population growth by encouraging families to have more children as part of its conservative agenda; relocating a large part of the government bureaucracy from the earthquake-prone Tehran to the provinces; and wresting control of Iran’s mammoth private Islamic Azad University from Ahmadinejad’s powerful rival, former President Rafsanjani. All these initiatives have logics of their own but, curiously, none are directly concerned with the tightening of sanctions.
Even Tehran’s sophisticated middle class seemed unconcerned until the news came, on July 16, that the Educational Testing Service (ETS), the company that offers the Test of English as a Foreign Language (TOEFL) and the Graduate Record Examinations (GRE), was halting these exams in Iran because the latest round of UN sanctions prevented Iranians from paying the fees for the tests. Two weeks later the problem had been resolved and the tests resumed. However, as the first widely reported effect of the sanctions, this incident helped underline the fact that sanctions have unintended consequences that could hurt those far removed from the intended target – Iran’s Revolutionary Guards.
Unfortunately, not all the unintended consequences of the sanctions can be reversed this easily. Iran’s youth, who came to the streets in large numbers last summer to protest fraud in the re-election of President Ahmadinejad, and who for a while not only seemed to threaten his government but shook the foundations of the Islamic Republic, may turn out to be the biggest victims of the sanction. The sanctions are not expressly intended to hurt Iran’s economy, but there is little doubt that they will. The only hope for youth to find employment is the creation of new jobs but Iran’s economy is in deep recession and in no position to create new jobs unless private investment resumes. Sanctions scare away private investment and thus significantly reduce any chance of economic recovery.
Rather than serving as a unifying diplomatic exercise to highlight Iran’s troubling regional activities, the [Warsaw] summit primarily highlighted America’s diplomatic isolation from its European allies.