The Impact of Economic Sanctions on Daily Life in Iran
By Giorgia Piantanida
The JCPOA Withdrawal and Sanctions
When President Trump stepped out of the Joint Comprehensive Plan of Action (JCPOA), he said it was a “horrible, one-sided deal” that “didn’t bring peace, and never will.” While this agreement was intended to be a bilateral, international agreement with benefit to both sides, Trump and his administration withdrew from this agreement and in its place, imposed extreme sanctions that have had immense impact on the daily lives of the Iranian people.
As the sanctions have played out, it has become apparent that history will not view the Trump administration’s decision kindly. The JCPOA was a largely effective treaty in several ways. In just the first year of the deal, the Iranian economy grew 12.3%. And in return, the enrichment of uranium, among other substances, was restricted and observed. The JCPOA helped Iran build its economy and improve the lives of its citizens, whilst blocking them from building a nuclear bomb-- which was the intended mutually beneficial outcome. However, there were also arguments emphasizing possible drawbacks of the plan and concerns that the plan did not ensure the peaceful nature of Iran’s nuclear program. Trump’s 2018 withdrawal from the plan marked a definitive change in the United States’ willingness to work toward a mutual agreement, and the imposition of heavy sanctions have been starkly impacting everyday life in Iran ever since.
In many ways, Trump’s harsh sanctions have had a devastating effect on the country and its citizens. In the next fiscal year, Iran’s oil sector, which is the country’s most profitable sector, is set to shrink by 70%. This economic harm is compounded by the Trump administration’s threats to impose sanctions on countries that import from Iran as well. This widely disincentivizes engagement with Iran in favor of an economic relationship with the United States.
Impact On Supplies and Businesses in Iran
These sanctions have a widespread global impact, but have most severely impacted Iranian families; especially in regards to their wealth and purchasing power. Study supplies, such as pens, which are imported from elsewhere have been scarce, if available at all. The price of basic goods, such as beef and milk, has doubled, and the costs for businesses to sell those goods have risen quickly as well. This has forced businesses to raise their prices, and put strain on buyers, while also surviving on small profit margins. Iranians are living through the wake of these sanctions and dealing with the increased inflation, decreased access to essential medical care, eliminated disposable income, and scarce or empty markets.
Businesses that had to import raw goods to make their products have suffered severe financial losses, and in some cases have been forced to completely shut down. Once sanctions were put in place, many countries around the world cut ties to Iran in order to keep their relationship with the US alive. Attempts to transfer money from outside the country to Iranian citizens are often stopped by banks, and many people try to leave in order to get a stable job that allows for a steady income. However, visas are increasingly hard to receive from the government, which hampers attempts to find a new life elsewhere.
Another example of the impact of sanctions is the creation of Iranian national ID cards. National ID cards are important to Iranians, as they are documents that identify each citizen. Recently, ‘smart’ ID cards have been created, in an effort to help digitize social services and make them more easily accessible. However, these new cards were originally meant to be manufactured abroad. Under the new sanctions, the cards have encountered a complete stop in production, as Iran tries to find a new way of making them. The problem began in 2017, and production only significantly sped up last year. Almost 60 million people have applied to receive one of these cards since their inception in 2012, yet only about 48 million have received them.
Impact On Finance and Health in Iran
The Trump administration also declared the entire Iranian financial sector a threat to the security of the United States. Therefore, large banks cannot do business in Iran, and their practically overnight withdrawal from the country has led to increased economic instability. In fact, any business under US jurisdiction who engages with Iran is subject to persecution by the United States government.
The repercussions of the sanctions have also infiltrated Iran’s health industries. Iran has universal health care, which has been absorbing the economic health impacts, but will likely crumble if prolonged sanctions continue. The system was not set up to sustain such harsh economic blows and is already seeing signs of breakage. Without financial and banking ties to outside countries, Iran’s health sector cannot get the monetary aid it requires. Iranian’s right to health and access to medicine has been hampered and lives are at risk.
The Iranian government has been fighting to survive under the crippling sanctions, but it’s abilities are limited. The United States is increasingly portrayed as petulant and impossible to appease, especially as they keep tightening the noose on Iran via restrictions.
Closing
The JCPOA was originally created because Iran’s nuclear activity was leading to in-country instability which could have led to violent conflict down the line. Diplomacy measures to stop that conflict before it started was chosen as a more effective and much safer route. The Trump administration's return to sanctions, after breaking trust with Iran on a fragile deal, is in many ways leading further toward the internal instability that was supposed to be avoided with the initial JCPOA agreement. We’ve never quite been here before-- Iranian trust in the US is very low, likelihood of instability in Iran is high, and a global pandemic is killing thousands every day. Iranian lives matter, their survival matters, and the United States must take action immediately to address the sanctions’ role in the increased instability.