Iran: The Real Cost Of Sanctions

Courtesy Of Al-Jazeera

The United States has unveiled aggressive new sanctions targeting Iran's currency and car industry that are among the toughest yet. They are aimed at making Iranian money all but unusable outside the country.

The latest measures mark the first time Iran's currency, the rial, has been directly targeted by sanctions.

The sanctions apply to foreign financial institutions making what is described as significant transactions in the rial, and those holding significant amounts of the currency outside Iran. However, the meaning of 'significant' in this case, has not been made clear. The sanctions also ban the sale of goods and services to Iran's car industry, the second largest employer after the energy sector. Iran's currency has been in free fall for some time, losing two thirds of its value in the past two years.

The sharpest drop came at the end of September 2012. On September 24, it would have taken 24,600 rials to buy one US dollar. By October 2, the cost of a dollar had risen to 39,000 rials - a 59 percent drop in the value of the currency in just one week.

These latest sanctions are the ninth round of restrictions imposed by the US. Diplomatic ties were broken in 1980 following the storming of the US embassy in Tehran. Successive US measures have prohibited almost all trade with Iran.

The United Nations ratified four rounds of sanctions between 2006 and 2010, over Iran's uranium, enrichment programme.

The European Union has also imposed its own restrictions, most notably, bans on the import, purchase and transport of Iranian crude oil and natural gas in 2012.

The UN imposed a near-total financial and trade embargo against Iraq in 1990. But 13 years of sanctions resulted in malnutrition, disease and a lack of clean water and medical supplies.

So, what is the human cost of sanctions against Iran?

To discuss this, Inside Story with presenter Veronica Pedrosa is joined by guests: Bahman Farmanara, the owner of a family-run textile business in Tehran, Raymond Tanter, the founder of the Iran Policy Committee, and author of the book: Arab Rebels and Iranian dissidents; and Shashank Joshi, a research fellow of the Royal United Services Institute, who has also written the book: Permanent Crisis: Iran's Nuclear Trajectory.