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Iran Hit by Sanctions, Cut Subsidies

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Iran, facing four rounds of international sanctions imposed by the United Nations Security Council, has decided on Saturday, November 18 to cut subsidies extended to energy and food items. Iran has been under sanctions regime for a long time imposed due to its nuclear programme, which western countries fear aimed at acquiring nuclear arsenal. Iran has repeatedly cleared that its nuclear programme was not intended to build nuclear programme but for peaceful purposes such as energy and medicine.

Unified Sanctions

However, the US along with its western allies has been pressurising Iran Iran sanctionsto allow IAEA inspectors to inspect its nuclear enrichment facilities. As a member of the IAEA, Iran allowed several times the IAEA inspectors but latter expelled them, saying IAEA was not sending inspectors but spies. As a result, the US lobbied intensively to slap unified sanctions by the UN Security Council and succeeded to convince Russia and China to that effect. Fourth round of sanctions followed in June 2010.

However, Russia and China preserved their business interests with Iran while negotiating with the United States. Many analysts opined the sanctions were substantially weak due to opposition from Russia and China. Some said it was a victor for the United States for persuading China and Russia to impose sanctions. The sanctions resolution was adopted by the 15-nation Security Council in 12-2 vote with Brazil and Turkey casting no vote and Lebanon abstaining.

Deal Ignored

Prior to the Security Council vote, Brazil and Turkey negotiate a truce to shift Iran’s low enriched Uranium to Turkey in a bid to swap it with reactor ready Uranium rods from western countries. However, the truce negotiated by Brazil and Turkey was effectively ignored by the key world powers. Iran President Mr Ahmadinejad described the sanctions as a used handkerchief demonstrating continued defiance of Iran with the western sponsored sanctions.

The US and the EU imposed separate sanctions on Iran latter. Russia criticized the separate sanctions saying they are illegal and against to the spirit of the UN principles.

Sanctions Bite

Though Iran says that the sanctions would not deter its commitment to acquire nuclear technology, the sanctions began to bite its economic interests internationally. Up to 40 individuals including industrialists, scientists were included in the sanctions regime, whose bank accounts abroad are frozen after sanctions to curb Iran’s international trade. Two African countries, Gambia and Senegal, severed relations with Iran recalling their diplomats to Iran in November and December respectively after capturing a ship smuggling arms under building material. It is not known what will happen to Iran investments of $60 million in Senegal. According to the UNSC sanctions, Iran’s shipping vessels can be intercepted and checked to curb weapons’ transportation by Iran.

As a sign of how sanctions affected Iran’s economy, Iran reduced subsidies on energy and food items. As a result, fuel cost will be increased four times. Now, each car will get 60 litres per month at 40 cents (4000 reals) up from 10 cents per litre. Iran said it was paying about $100 billion annually in subsidies of which $4 billion was paid for food subsidies. Price rice will also apply to electricity, water and flour. Economists say the price rise would further increase Iran inflation, which is now at around 20 percent.

Ration on gasoline will be reduced by 15 percent as gasoline imports were sanctioned by the UNSC’s fourth round of sanctions. Iran said poor families would be compensated for reduction in subsidies, with direct cash payments to their bank accounts. Subsidies cut plan is expected to generate revenue of up to $20 billion from which cash payments would be born.

It is learn that Iran deployed additional police to certain centres of Iranian cities expecting the subsidy cut measure would spark unrest. Similar ration reduction of fuel in 2007 had sparked wide spread riots in Iran when people responded by setting fire several petroleum stations throughout the country. It is ironical that the international hegemonic politics are pushing innocent civilians into continued hardships.

About Sekhar

  • Ruvy

    The little Hitlers in Teheran are getting slapped by these wet noodles of sanctions because they are a real threat. They are passing on the pain to the citizenry – not smart – but they may have no choice.

    If the citizenry rises up and throws these bastards ruling them out, maybe there will be a less hostile government in Iran. A government that is not necessarily interested in recreating the Persian empire of old, and shoving Shi’a messianism down everyone else’s throats would be a good thing.

    It would obviate the present need to attack and destroy the sitting regime in Persia. That could only be good for the world.

    But I do not hold my breath.

  • Ruvy

    But while I do not hold my breath waiting for a popular uprising in Persia, one can always hope.

  • http://financialpolitics.net/ Sekhar

    Israel, armed with 400 nukes, is more threat than nukeless Iran, Ruvy.

  • Cannonshop

    400, Sekhar? where are you getting THAT number? Israel’s about the size of Snohomish County-there’s nowhere to PUT 400 nuclear weapons in a country overrun with reporters, tourists, archaeologists and civil disturbances (rioters).

    serously, you can’t just stick a nuclear bomb in the bowling bag under the stairs, they require fairly expensive care and maintenance, and LOTS of security. Cores have to be routinely changed out (decay in the radioactive materials) and then, there’s the storage/disposeal of irradiated ‘waste’ parts.

    40, maybe. 40 weapons could be secured in that environment without identifying where they’re being kept, but 400 looks like a pretty big exaggeration.

  • Ruvy

    Cannonshop, even though you spell like a Brit, you think like an American with the wide open spaces. You would be surprised where things can get hidden here. And how well.

    As for Sekhar’s comment, the point he needs to realize is that an M16 loaded with its banana clip, cocked and ready to fire, is a danger. A dozen M16′s with the banana clips out of them, not cocked but locked on safety, are not a danger – till some stupid kid gets to them.

    However many missiles we have, we have not threatened to use them. The Persians, armed only with a damned centrifuge or two, threaten our destruction day in and day out. Fortunately for us, we take those threats seriously, for it appears that all sorts of mishaps have been befalling the Persian nuclear effort.

    In other words, the Persians are the maniacs here. And viewing just a few videos of how they punish offenders with flogging should give the clue as to what vicious, savage bastards they really are, and why we take their threats so seriously.

    So long as these bloodthirsty bastards of theocrats rule there, Persia delenda est! Persia must be destroyed!

  • John Lake

    “Wet noodle” notwithstanding, ruvy makes some good points.
    Early in this interesting article you, Sekar, seem to suggest that the US has manipulated Russia and China, in the matter of these strict sanctions. I doubt whether either of those nations would agree.
    The sanctions are indeed harsh; it matters not what the American Obama administration does, it is still subject to criticism and still decried by adversaries as weak.
    There is agreement that if we take Iran at its word – and Ahmadinejad has a strange way with words – Iran is a threat to peace. This is made more serious, because in the case of Israel/Palestine, that threat is based on emotion, and prejudice.
    Ahmadinejad has held office in Iran these many years, because the people admire his courage and his steadfast continuation to seek military equality with larger nations. Now that the sanctions are having their effect, the people may see wisdom in determining a new, less aggressive leader.

  • Cannonshop

    #5 Ruvy, the Israeli Nuclear arsenal is well concealed enough to be deniable, hence, it’s doubtful that there are “Hundereds” of weapons in Israeli hands. Nukes are fairly easy to detect (in part, because of the Cold war and the need to detect them at a distance, evolution of measure/countermeasure in meeting the need to observe/conceal them), and further, there’s a NEED (Percieved) for the major nuclear powers to detect them-particularly in Israel and Iran.

    A small number can be more easily kept “at the ready” than a large one, is easier to hide, and further, it furthers Israel’s interests for the exact numbers or even existence of the hardware to be kept in doubt-if you know where they are, even a very LARGE number of weapons are vulnerable to surgical strikes (Witness the grounding of Arab Air-Forces in 1967-airforces that outnumbered the Israelis by over three to one). Nuclear weapons are tools of Deterrence, when you lack space, you must rely on stealth-and stealth is not served by large arsenals of weapons, but rather by small arsenals well concealed and frequently moved to prevent an enemy from establishing their location.

    Enemies, in this case, ranging from Iran, to Syria, to the United Nations Security Council and all the intelligence assets at that bodie’s members’ disposeal.

    40 is a relatively realistic number for Israeli Nukes, 400 is ridiculously optimistic, see? (and I concede to the probability of being wrong-but without verified public records, I’m going to go with the smaller, more efficient and strategically sensible number, rather than the panic-generating larger number… I think Israelis are probably smarter than that, but not superhuman…)

  • http://financialpolitics.net/ Sekhar

    Hi Cannon, John and Ruvy,
    Actually, the information of Israeli nukes was provided by BBC internet version several times in a graphic form. It is neither my estimation nor exaggeration. Whenever BBC publishes an article on nuclear program of Iran or any other country, it publishes that map also.

    Thank you for providing information on securing nukes, Cannon.

    John, Iran words means those spelled by Iran’s officials or its president and other ministers. As I observed several times, Ahmadinejad’s words of wiping out Israel or destruction of Israel etc. were not true. He was misquoted by western media including BBC and CNN and other prominent multimedia and print media. As I wrote in my previous comment I have done research like thing on internet over wiping out of Israel and denial of holocaust attributed to Ahmadinejad.

    Regarding Holocaust denial, I found that what Ahmadinejad said was –if west was concerned with holocaust and if they really believe that the holocaust was carried out on Europe then the west should have formed Israel on European soil itself. Why should Palestinians who had nothing to do with the holocaust, lose their own land for a crime perpetrated by some other country–, out of this, “if they really believe” was picked up out of context by western leaders. They said Ahmadinejad did not believe holocaust had happened. The media immediately covered their statements and gave extensive coverage for several days. Western media continue to mention it whenever occasion arises. I think you remember what Goebbels did during WW-II. Bush, Angela, Sarkozy and former UK PM lead this Goebbels campaign against Ahmadinejad.

    One or two days later, Ahmadinejad gave clarification of what he actually said but it was completely ignored by western media. It was only published by official media of Iran and China and some interested bloggers. “Wiping out Israel” was also similarly manipulated. I published that information as it is on my blog some 8 months back.

    Why did they misquote? Because, Ahmadinejad raised the question of who should actually be punished for holocaust. If Ahmadinejad’s contention is debated, people of western countries will begin to think of facts. Homeland for Israelis was brought forward as compensation to holocaust victims i.e. Israelis. But, the compensation offered by Europeans, victimised Palestinians. Europeans’ idea of homeland for Israelis was also born from their covert plan of evacuating Israelis from the Europe, particularly the leading nations like the UK, France, Austria, Germany and some other countries.

    Palestinians have considerable sympathy among European people. If Ahmadinejad’s statements were seriously debated, anger on Israel for Palestinians plight will be diverted to the Europe and its supporter the US. That is why western politicians and media will always be cautious at Ahmadinejad’s statements.

  • Cannonshop

    Gotta remember something, Sekhar-the Arab nations surrounding the former Palestinian Mandate threw the jews out in exactly the same fashion in the 1930′s, and expressed broad and heartfelt support for the regime that carried OUT the Holocaust during the 2nd world war. You don’t hear a lot about Syrian, Jordanian, Egyptian, or Iraqi jews-because those nations ran them out on a rail before the second world war. Enforcing a return of hte lost homes, properties, businesses, etc. from THAT would be as nasty, if not moreso, than what was done creating the nation of Israel in the first place-the only real difference being that it would be more convenient for the Arabs to go around killing jews if the jews don’t have an army or a safe haven.