Iran last week agreed to hold talks with six major world powers over its nuclear programme, although no date or venue has been set.
Almost all banking transactions pass through Belgium-based Swift, the Society for Worldwide Interbank Financial Telecommunication, which is sometimes called the "glue" that holds the financial system together.
Swift will pull the plug at 1600 GMT on Saturday, in what is all but the final blow to Iranian business dealings.
Oil
Its announcement coincides with news that major money exchange houses in the nearby United Arab Emirates have stopped handling Iranian rials over the last few weeks, something that has further reduced Iran's ability to trade and acquire hard currency.
Iran's business activities had already been restricted by US anti-money laundering legislation which made it risky for banks around the world to do business with Iran, including trade financing.
It is heavily reliant on its oil industry.
China and India have said they will still take Iranian oil, but the only obvious way for Iran to be paid for it is now in gold.
One Iranian businessman said Swift's move would make it now impossible to conduct business with Iran.
Morteza Masoumzadeh, a member of the executive committee of the Iranian Business Council in Dubai and managing director of the Jumbo Line Shipping Agency, told the Reuters news agency: "If Iranian banks cannot exchange payments with banks around the world then this will cause the collapse of many banking relations and many businesses."
Lazaro Campos, chief executive of Swift, said: "Disconnecting banks is an extraordinary and unprecedented step for Swift. It is a direct result of international and multilateral action to intensify financial sanctions against Iran."
That is very interesting news! I have several co-workers who are from Iran, but have been in the states for many, many years. I would tend to think that for the very good people that live there, it could be devastating. One of my co-workers has a mother that is not in the best of conditions that lives in Iran. If I understand the policy correctly, this would eliminate the ability for my co-worker to send financial assistance.
ReplyDeleteHowever, Iran alone has some funny things they do that prevent my co-worker from even returning to Iran. She is a member of the Bahai faith and recently traveled to Haifa, Israel where the Bahai headquarters is located. If she was to return to Iran with a stamp on her passport from Israel, she says they would immediately presume her as a spy and throw her in jail, no questions asked.
While eliminating all international bank transactions may have a negative effect on the many good and decent people of Iran, it is obvious that many nations feel that the consequences of Iran having nuclear programs is far more consequential.
I also work with a few people from Iran and getting access to their funds has already been difficult lately. I have a client that has quite a bit of money held in Iranian banks and in the past he was able to wire money from Iran to Turkey and then finally to his account here. In the last few years however, Iran has restricted money transfers leaving the country to $1000.00 which put him in quite a bind. I can only imagine this will make things much more difficult for everyone.
DeleteHopefully it will turn the populace of Iran further against their ruling party. From what I hear from my Iranian friends the majority of Iranians disagree with the current path of their government, and we can only hope that decisions like these will begin the process of change in Iran.
I recently made a micro-credit loan. The thought that this decision would inhibit these types of transactions as well as those related to the oil industry is disconcerting. But…as in all conflicts, there are always externalities. Negative externalities must be weighed against the outcome. Hopefully the desired outcome will come quickly to minimize the negative consequences to the local and honest business people of Iran.
DeleteThe country is going to struggle due to not being able to have access to trading currency with banks. As seen from the other comments this will hit home with the residents of Iran and those that live abroad. Families will face harder times trying to get cash into the country as well as out of the country. Sounds like those that bank in Iran will have to make transfers daily through several countries just to get a 1k out per day.
DeleteHow do you most effectively establish a sense of what is right and what is fair? Sanctions, and other forms of punishment attempt to send the message of disapproval for ones actions. These serious political issues, the threat of nuclear weapons creation and terror as forms of gaining legitimate power, raise poignant ethical dilemmas for what is the right or best course of action to take. While there are many innocent people (not just in Iran, but India and a larger global reach) who will be impacted by SWIFT's changes to the banking transactions, it seems to have reached a greater level of attention (possibly necessary) to shed light on the nuclear program situation in Iran. What is the best strategy to achieve long term peaceful success for the many countries involved?
ReplyDeleteThis will be a geopolitical fracas I think. Look at the postings I wrote below. It took weeks to gain agreement on stopping access to SWIFT, and it took a multinational representation in order to make the case to the organization. Are there opportunities there still, sure. The rich moved their money well in advance of the announced deadline. Those with more meager means will face inflation and lowered supply. They'll become restless and will protest to their disadvantage (aka see Syria). Elections are being held later in the year for A-Jad so expect him to rig an election and gain approval from clerics who have dreams of Iran's potency in the region and world. There may be a resurgence in the moderate sector, but those who tried it last time left the electoral field in fear of their family's lives. For business, it looks like a high risk and necessary high return opportunity. China is stepping up to the plate on that one, but charging and absorbing enormous fees to make the transactions and negative fallout worthwhile.
DeleteThis EU Sanction is indeed an ethical issue. The question is, “Do you let the economy in Iran tank and punish the country as whole because of something their government is doing? In my opinion, the best philosophy for this issue is to take a Utilitarian approach. Utilitarian’s believe that the proper course of action is the one that maximizes the overall happiness of individuals and does the greatest good for the greatest amount of people. In this case, no matter what the negative circumstances maybe for the innocent Iranian people involved, the decision by the EU to attempt to put a halt to Iran’s drive for nuclear weapons is the decision that will bring the greatest amount of good to the greatest amount of people.
DeleteI totally agree, Utilitarianism is the best option. A few will have to suffer for a greater cause, for the greater good.
DeleteIf cutting off the money train to the country helps to push Iran into compliance with nuclear sanctions then so be it. Sure their economy and people will suffer. They probably do not even realize the power and technology of nuclear weapons. Utilitaianism, sure, why not! Stop the nukes!
DeleteThis is only the latest attempt to change Iran's behavior. Other sanctions have been ineffective. With the increasing threats of attack and retaliation related to Israel and the rest of the world the governments are slowly tightening their grasp around Iran. Obviously, the goal is to avoid the use of physical force.
ReplyDeleteAs mentioned before, this may be the lesser of two evils, when considering the reaching economic effects of a nuclear battle.
Let alone the human toll and the probable disproportionate response of a nuclear Israel. Israel has never announced the presence of tactical nuclear weapons, but I believe it's been suspected for some time that they did. I also think people of the United States genuinely like Iranians - they are warm, hospitable, well educated, sophisticated and friendly people. I believe the world would welcome a moderate Islamic State coming out of this rather than the very tightly controlled one that exists now. That being said, however, it's vital for world business interests to see whether there are other business options on the horizon or to see whether the lack of funds exchange and currency valuation exchange will defy adaptation. Could be that transactions will start to look like the old Russian ones - money in a suitcase, or barter.
DeleteI say BROVO to the EU for trying this strategy, instead of using physical force. It will be interesting to see what happens to businesses that have a presence in Iran. Will they leave or will they use this as an opportunity to be more creative and innovative in their business dealing and make this a home base advantage in the long run?
DeleteIt seems like when you attempt to fix problems with physical force it only escalates the problem. It will be interesting to see if this tactic is effective or not. The unrest and status of Iran is making business very difficult for companies. When there is money to be made, companies will stay. I believe they will find a creative and innovative way to still make profits while operating in Iran.
DeleteI agree with what you are saying. This is one of the latest attempts to control Iran using sanctions. I'm not sure the message will ever come across the way that it is intended. I start to think that Iran should realize that if they want to improve their position within the world they need to play by the worlds rules (meaning What America wants). But their leadership doesn't necessarily see the value in that. They see value in nuclear power. Eventually there may come a choice of whether or not they try to implement physical force. I hope they do not and continue to try to lure Iran into cooperation through other means. Someday they will see the value in becoming a more active member of the global business market.
DeleteFrugal Innovation in Asia
DeleteI read an interesting article from economist.com today which discussed Asia's innovative and cheap ideas which would allow many "poor to middle class" to be able to afford and enjoy many things that they do not currently have. The article mentions, "Asian engineers would reimagine Western products with all the unnecessary frills stripped out. The cost savings would be so huge that frugal ideas would conquer the world...They also argue convincingly that it will change rich countries, too." For example, Walmart, which created “small mart stores” to compete in Argentina, Brazil and Mexico, is reimporting the idea to the United States. If these ideas take hold, it could drastically change the business practices in the US. The article can be found at: http://www.economist.com/node/21551028
I think that the underlying thought here related to international business environments is that much of the world economy relies on the economies of other countries and the import/export relations of trade. It is interesting to note that without the access and flow of cash through SWIFT, the economy of a country can be virtually shut down. Certainly, it is interesting to imagine what would happen to our economy if China was no longer able or willing to export goods to the US.
ReplyDeleteThis is another example of an outside variable on a firms international strategy. The results of this action will reach far beyond the borders of Iran. I know a few people in the oil recovery industry here in the US that are working with countries in that part of the world. This will certainly be a big factor as they adapt strategies to manage the disruptions.
The population will be poor to be sure. The wealthy already took their money out of the country since they had the means and the deadline for ending SWIFT access was announced well in advance, in time for government and upper class to protect assets or at least put them in safe haven. Kind of brings to mind the AAA of Ghemawat Aggregation, Arbitrage, and adaptation. In this case the aggregation of funds elsewhere presents a opportunity for traders to make money outside of an Iranian home base. The adaptation is to deal with Iranians outside and risk potential retaliation (use a foreign intermediary), and look for differences in the landscape that can present opportunity - discounted products in exchange for cash. MNCs have been hoarding cash, so this may be a good time for a firesale (not meant to be a pun) of products. The Iranian government also probably put significant money in Swiss banks and they could ostensibly conduct oil trade and payment through hard currency to either a state account (now likely frozen) or to the accounts of trusted individuals. This won't stop Iran from selling oil, it just makes a time from from which they'll have to figure out how to continue. Blocking the SWIFT system was a tricky move, but has been under discussion for a few weeks... it's risky on a geopolitical status as it's the first time this has been done and now the precedent is set. From an international status, it sends a giant inconvenient truth to Iran and a warning to others. It will be interesting and frightening to see how it reveals and what an Iran in despair would do. If I understand my news source "the Daily Show with Jon Stewart", it's an election year in the US, Israel, and Iran. Expect a lot of pontification by candidates all around. The hardest one to keep his job will be the Iranian leader Ahmadinajad. He'll be looking to shore up a conservative clergy from the right.
DeleteI worry that this sanction may only hurt the poor and innocent individuals whose businesses and job opportunities may suffer greatly. In one NPR article, they take the viewpoint that the sanction will not be a "silver bullet" so long as there is another country willing still to do business with Iran. For countries who have a different moral compass, or perhaps are not concerned about any moral compass, I might wonder if they wouldn't simply jump right into this as an opportunity to make profit.
DeleteI like the examples the NPR article provides of how Iran could potentially get around the sanction:
"For example, he adds, "China says, 'We're going to buy Iranian oil and deposit the money in a Chinese bank.' That Chinese bank then makes those funds available to Iran."
The bank can buy soybeans in China or BMWs in Europe, Askari says, and then ship them to Iran without involving Iran in the transfer of funds.
There are other means of moving money as well, including creating front companies to transfer funds, or the old-fashioned expedient of carrying suitcases full of bills and crates of gold bullion from place to place.
The link to the entire article is here: http://www.npr.org/2012/03/19/148917208/without-swift-iran-adrift-in-global-banking-world
Thanks for sharing the article. After reading it, I also feel the people most affected by the sanctions will be small businesses and individuals. While the intent to limit business with Iran to persuade or change government policy is good….. there will always be a black market or means to transfer funds. Large organizations most affected by these changes will find alternative means like the ones mentioned in the article. It’s scary to think that countries without a moral compass will now be conducting business/allying with other countries without one as well.
DeleteI think the goal of the international community should be to try and force change in Iran without teh use of violence. If it is true that a majority of Iranians want change I believe this route has the highest likelyhood of success. In my opinion military intervention by either the U.S. or Israel would be a terrible decision. Not only would it add more instability to an already dangerous region, but it would probably turn the people if Iran against the West as well. As crazy as the rulers of IRan seem to be I beleive they are stil rational enough to realize that if they don't agree to some reforms they will run the risk of another Arab(or in this case Persian) revolution.
ReplyDeleteThoughtful. You've read on this one. I can tell. The Iranian population seems to be ready for the types of reform that brings their country back into the relative sophistication and wealth distribution it once had. The HBR suggests that Iranians are very ready for consumer goods and their leaders know it's only a matter of time before another set of protests come up. Also, you're right, attacking would be a very bad move for a very large number of reasons. It would spur support from other Shiaa Muslim sects, would likely bring in Syria, would threaten a now neutral and rational Jordan, would cause attacks of opportunity from Palistinians and Lebanese would put Turkey in an awkward position to be a refugee acceptor, and would give Syria license to clamp further on its own people while the world isn't watching. China would probably try something stupid in Tibet, and Burma would probably crack down again. It's a rough situation isn't it? Assuming those things won't happen, Iran would be forced to discount sell on credit and then collect later. THey would confiscate all hard currency in the nation however that won't be much because the wealthy class probably didn't keep their money in Iran anyway. The middle and lower classes, with money in the mattresses or hard currency in a hard currency bank account won't have any options and they are least likely to be able to protect themselves.
DeleteSo what's a poor MNC to do? Remembering the McKinsey Grid this looks like a stop and hold situation, although the international management lit would say this is a RATS situation where potential prospects must be seen in light of whether they're relevant, appropriable, and transferable and go for those. Discounted oil for future accounts payable looks good as do the other export sectors like agricultural products. The problem is in the money. I almost think one would have to launder it, or float it ashore. Then again, what good would that do besides pay a growing restlessness in a well equipped military and a population who's tolerated rampant corruption, state subsidies on everything (now about to go away - it is a state regime) and 22.5% inflation annually. Iran enjoys the 9th highest government budgetary surplus (CIA World Factbook) at 8%. This money hasn't gone to the population, so, by removing all rights to SWIFT, I think this opens Iran and the while region up to a great deal more instability and risk.
First off, if you think it's a good idea to type while feeding a 7 month old, just read all of my typos in that last post and you will change your mind.
DeleteI agree with you that this situation would call for a wait and see approach. I just don't see how a MNC could safely make money in Iran right now (at least legally). Though if Iran does start seeing changes, there will definately be opportunities in the coming years. I read an essay a few years ago about how the politicians got most of the credit for the fall of the Soviets, when we really should be thanking McDonalds and Coca-Cola. The premise being that once they slowly allowed some Western companies inside their shell, the citizens would start demanding more and more, and thus change would come from within. While I am not China expert, I think we may have seen a very similar phenomenon happen there over the past decade.
Having done the academics with seven month olds (I've had three girls) I empathize. Keep at it. Kids sleep sometimes.
DeleteIran has vowed to destroy Israel. Experts claim that Iran is making nuclear weapons to use on Israel and destroy them. Cutting off their ability to complete financial transactions, is a sanction that, along with other sanctions could convince Iran to stop making nuclear weapons. Thats the argument anyway. On the flip side - how can we blame Iran for trying to protect themselves, which is something all of us would do. In addition, this will have a direct affect on all the Iranian people, and I am not necessarily convinced that it's fare to punish the country as a whole.
ReplyDeleteI somewhat agree with you thought. Unfortunately if the world tries to thwart the country's leadership the people are affected. Unless the people put leaders into power that will benefit them economically they will continue to be the victims of the world's sanctions against Iran.
DeleteThat is an interesting point. While we may all agree that a nuclear armed Iran is a bad idea, how can the U.S. really be the police against it when we are nuclear armed enough to destroy the planet many times over, and are the only country to use nuclear weapons against our enemy.
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ReplyDeleteSorry, I didn't update my profile, It's late.
DeleteIt’s apparent that the international community is sending a message to Iran that it is not acceptable to participate in the proliferation nuclear weapons; however, these types of broad sanctions may have a unifying effect which could bolster support for an already unpredictable government. I was reading an editorial from a Forbes contributor (http://www.forbes.com/sites/timworstall/2012/03/16/perhaps-this-iranian-sanction-will-really-bite/) that indicated that this type of sanction may not be effective at restricting money from oil exports due to the nature of oil transactions. With the main source of revenue coming from oil, the desired effect of restricting money and therefore, stopping Iran’s nuclear program may not be accomplished.
The government of Iran cares more about nuclear weapons and dominating the Middle East than it does about its own people and while this sanction by will be painful, I think it will be difficult to obtain the desired effect. This is especially true if Russian and China are not in full support of the sanctions. China is still going to buy oil from Iran which will allow them to keep the nuclear program going.
The Economist seems to have the same view. The prevailing seems to be that Iran will continue its nuclear ambitions in a sort of new cold war for the mid-East. This puts Pakistan, India, and Iran in a standoff situation where Iran would benefit from alliance with either Pakistan or India, however, Pakistan would be more likely. I also believe they feel they need to respond and protect from American actions and longtime almost colonial history in Iran. With The US in Iraq and on the other side in Afghanistan, the government probably feels rather closed in. Their response to the American encampment is to threaten Israel. According to the BBC's interview of a former UK Middle East envoy, he felt that the Iranian government was "very rational". To me, that seems to point to a predilection for power in the region and ability to project influence. Think about it - if the Iranian government tests a warhead underground, the price of oil will go up significantly. The sales of oil to China or elsewhere will more than pay for the nuclear program and Iran will try to dominate the politics of the Mid-east that Saudis now dominate. From our class point of view, a firm would significantly have to re-examine its transferable and non-transferable advantages to see whether FSAs can be created on efficiency or on rapid response to trade and geopolitics. I think the range around the bounded rationality part of that picture has to get bigger and firms would really need to look elsewhere, but also accept that a method for dealing with greater complexity or chaos as a FSA as either a resident or transferable FSA is now necessary. It would be a whole other ball-game, wouldn't it?
DeleteIt would absolutely change the ball game for any global company that currently does or intends to transact business with Iran in the future. All US brokerage firms on the other hand are prevented from transacting business with Iran since the Patriot Act of 2001 specifically covered under the Anti-Money Laundering Act. I go through training every year discussing red flags and countries we can not transfer to or from and Iran is always one of them. By enforcing this on bank holding companies we are likely to isolate Iran further pushing them to develop nuclear weapons programs. While the US would not feel a direct impact from this in terms of transactions we would see an even more problematic impact in oil prices and in term in market levels. People and businesses are rightfully very sensitive to oil prices. We would be risking the US recovery by enforcing this sanction. A large part of the recovery we have seen since 09’ is related to corporate earnings which would suffer across the board with increased oil prices. Other countries are later in the economic cycle such as Europe and China would also see substantial implications. This could result in the hard hit for China that many have been worried about effecting the global markets.
DeleteThe other piece that is brought up several times is the impact to those who send money to family members. I have a good friend who is an Iranian immigrant and US citizen. He still has family who lives there and owns property he can not collect sell or used to his inability to return. This act would further impact the likelihood of him ever being able to collect on this property. It seems like for the sake of the broader population we should be able to look for alternate solutions to this act. While I am unsure what they should be, as I mentioned before it feels like we are backing them further into a corner they do not want to be in or maybe they do?
ReplyDeleteThis EU sanction to prohibit companies such as SWIFT to continue to provide specialized financial messaging services to EU-sanctioned banks is a bold move. I’m posting a video that touches on the topic for those who are just joining into the blog.
ReplyDeletehttp://www.youtube.com/watch?v=14EucjcweG8
It will be interesting to see if these sanctions will have an impact in other economies since Iran has a part in the exportation of the world oil. Iran may retaliate by blocking their exports of oil and lower the supply of oil around the world. Unless Saudi Arabia in able to increase their output of oil exports to compensate for the lower supply, oil prices could increase around the world as well. Israel has expressed interest in attacking Iran in order to stop the pursue of nuclear technology, and Iran has warned Israel and the US that if that happens, they could close the strategic Strait of Hormuz, which apparently about 17 percent of the world’s oil passes through this water way, although countries such as the US will try everything to keep this from happening. So this may have an impact not only against Iran, but also many economies all around the world, but the threat of nuclear weapons must be addressed.
ReplyDeleteAlso consider the implications the sanctions might have with the Israel-Gaza situation. The conspiracy theorist in me wonders if it had a direct impact on the sanctions. An article in WSJ on Friday 3/16/2012 discusses how a 2 day old cease fire between Israel and Gaza militants faltered when Prime Minster
DeleteNetanyahu accused Iran of guiding recent hostilities through Palestinian proxy groups.
Netanyahu went as far as calling the area a “forward operating base for Iran.” Netanyahu used the latest hostilities from Palestinian’s as “another reason why Israel couldn’t risk allowing Iran to obtain a nuclear weapon.” Netanyahu is convinced the motivating factor for Gaza aggression is Iran. Netanyahu also said Israel would act against Iran even without the approval of the US.
These are frightening claims with far reaching consequences and I wonder if the sanctions that came down on Iran were motivated in small part to placate Israel and avoid increasing escalation in the region?
Rodrigo brings up an important point in international business. In the global environment economies are interconnected and dependent on each other. I think it is probably hard to predict when doing business or placing sanctions what the full effects of the ramifications to other economies will be. In this case, given Iran’s previous behavior, it is likely that there will be negative ramifications before Iran gives in and stops nuclear weapon production. On a smaller scale when doing international business, opening or closing factories, or exploiting countries natural resources, etc. could all have international ramifications that need to be considered when operating a global business.
ReplyDeleteIt is interesting how the impact of one thing can effect the whole world economy. International Business is tricky because you can put yourself at risk through transfer prices, hedges etc. When we begin to sanction countries we really begin to effect everyone else around us. Rodrigo had a good point we may want to think about the consequences before we act, though the nuclear threat does need to be addressed and taken care of before anything really drastic does come out of it.
DeleteDona makes a good point on the interdependence of economies in varying regions. In fact, just today Joe Parkinson wrote in the WSJ how the Iran sanctions have put a significant damper in the Turkish trade. Parkinson illuminates on how multiple Turkish businesses will be stuck with thousands of dollars of inventory as Iranian orders have been cancelled or defaulted on. This is unfortunate as there was a recent boom in bilateral trade between Turkey and Iran related to improving diplomatic ties last year.
DeleteThe article also states all Turkish banks but one has stopped processing payments for Iranian customers for fear of being frozen out of international markets by the new sanctions regime while higher costs have seen Iranian tourist visiting Turkey tumble. Travel agents report that tourist numbers and hotel bookings have fallen as much as 80% from last year and tourist spending has dropped sharply.
I think this is a bit unfortunate as Turkey and Iran have been surging in their trade over the past decade and politics have intervened to do some major damage across numerous sectors. Ankara was expecting two million Iranians to show up for the Persian New Year now they will be lucky to see half that.
I believe the sanctions imposed against Iran this past weekend are necessary. This is another diplomatic attempt by the United States and the international community to convince Iran to stop its production of nuclear weapons. By severing Iran's link to the world financial system, it will become increasingly difficult for Iran to conduct business.
ReplyDeleteTargeting the country's oil sector, which accounts for 90% of its exports to the European Union and is the second largest oil producer in OPEC, will further cripple the country's economy.
I believe these sanctions will have a ripple effect that will be felt by the Iranian people, the Iranian government, and by the international community as well. Added pressure will be felt by Iran as the date of July 1 nears when an oil embargo will go into effect. Will the effects of all of these sanctions combined be enough to convince Iran to change its ways? Only time will tell.
I found this New York Times article on the cyberweapon called Stuxnet to be very interesting. Take a look.
ReplyDeletehttp://www.nytimes.com/2011/01/16/world/middleeast/16stuxnet.html?_r=1&pagewanted=all
MPR News published an article yesterday citing an Iranian-American writer who attempts to provide us with an Iranian perspective on the sanctions that are now being enforced stating "In Iran, political change cannot be brought about by coercion, sanctions or exiles and their enablers, despite what American politicians might think..." "Instead, it will come slowly -- too slowly for an American election cycle, to be sure. And it will come only after Iranians are no longer hungry and the government has no excuses left, including national security, to deny the people's civil rights." The general perception of the Iranian people is that if others can have these types of nuclear programs why can't we; the Iranian government as done a good job imbedding this idea. That being said, the Iranian people don't blame their own government for this current situation, they blame the US government. This situation make me fear another war.
ReplyDeleteYes, this frightens me as well. The power of nuclear weapons today are probably so much more powerful than they used to be at first that a nuclear war could possibly destroy the entire world. I can see their point being valid in the way of how they put it. If other nations can have it, then why can’t we to defend ourselves? But it seems that they don’t realize that we should be moving away from this kind of thinking and become better, especially now that the world is becoming more global than before. It’s even scarier when countries like Iran could to hold this type of technology and actually use it at any time. They don’t see that there are many countries in the world that don’t have these types of weapons and have no need for them. Hopefully this will pressure them to abandon this pursue, but I doubt it really will.
DeleteAnd me as well. In my opinion, no war is a good war. I think all diplomatic efforts should be exhausted. But I agree with you Rodrigo, Iran does not want to be coerced by any country, especially the United States.
DeleteThe funny thing is that Iran leaders claim that they are not pursuing nuclear weapon technology. Then why is it so difficult for them to open up their military facilities and give more access to the UN inspectors in order to prove their claim that they don’t have nuclear weapons? If that was true and they did not have nuclear weapons, than they would not have a problem proving their claim. There are a lot of good people in Iran who has nothing to do with this issue, but the leaders themselves and the way they protect their claim without offering any kind of proof is where the problem is. Other nations want to avoid the possibility of a nuclear war, and it’s sad to see that a lot of good people and their economy will suffer because of this. I believe that every nation in the world has the right to defend themselves against threats, and it’s a tough position to be in for every nation who does not have much of a clear idea of what leaders in Iran might do since they are trying to be so secretive.
ReplyDeleteAgreed! My thinking is that for the world to allow a country such as Iran to possess a nuclear weapons plant that country must have a long reputation of proving itself as a knowledgeable, trustworthy, reliable, safe, stable sound country. Iran as fallen short in these areas. The fact that it will not allow UN inspectors to evaluate its military facilities is red flag number one; is there something to hide? Secondly, the mind set of "If other nations can have it, then why can’t we to defend ourselves?" shows lack of education in its most scary form. This reminds me of my childhood when arguing with my siblings over something they got and I didn't. When speaking of weapons of mass destruction, why wouldn't Iran/any country want to provide as much transparency as possible, if for no other reason than it has something to hide.
DeleteThat was my thought exactly. If Iran has nothing to hide, then welcome the UN inspectors so that they can see for themselves that the country poses no threat. But, because of Iran's behavior and especially its resistance, the national community is becoming more suspicious of Iran.
ReplyDeleteThere was an article posted today on cnn.com stating that 11 countries are reducing the amount of oil that they purchase from Iran. As the article mentions, this was probably not an easy decision by these countries. They now have to find alternate energy sources which will need to be more renewable. One of the many reasons behind this change is "The United States is leading an unprecedented international coalition of partners that has brought to bear significant pressure on the Iranian regime to change its course." The article can be found at: http://www.cnn.com/2012/03/20/world/meast/iran-oil-sanctions/index.html?hpt=wo_c2
ReplyDeleteGreat Article. Countries are bailing on Iran to avoid the sanctions. Not only is this impacting Iran's economy but the countries who are bailing out as well. No one wants sanctions put against them and some of these countries will find out by March 30th if they met the requirements or not.
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ReplyDelete"Eleven countries, including Japan and European nations, have significantly reduced their Iran oil purchases and should not be subject to new U.S. sanctions, U.S. Secretary of State Hillary Clinton told Congress Tuesday. The countries are Japan, Belgium, the Czech Republic, France, Germany, Greece, Italy, the Netherlands, Poland, Spain, and the United Kingdom, according to a State Department statement." http://www.cnn.com/2012/03/20/world/meast/iran-oil-sanctions/index.html?hpt=wo_c2
ReplyDeleteWay to go!!! Boycotting is an effective tool against pretty much everything, more so to a corrupt, lunatic government.
The World needs to continue to apply these types of sanctions against Iran. I think the ultimate solution to incorporating Iran into the global economic community is to eventually incentivize their leaders enough through some type of trade relationships. China was viewed to be a hazardous country to work with once upon a time, but they effectively entered the WTO and have become an economic power. Now - Iran will never be China - but they certainly can eventually become a country that is not viewed as rogue or unstable.
ReplyDeleteThere's quite a bit on that. The government seems to be one that plays to the whim of the conservative clerics. They'll be around until someone clever finds himself in the position to offer reforms from the seat of Ayatolla. The government of Ahmadinajad plays simultaneously to the population and the religious Shariah right. Last election cycle, and there is another one this year, a moderate came up for election (Rafsanjani..sp?) but didn't win, and when the election faced contestation, the government put it down pretty quickly through water cannons, tanks, and bullets. Nonetheless, the flicker shown at the time shows that Iranians would like to live under conditions of greater freedoms to media, consumer goods, movement, and communications. HBS has a case out that is becoming prophetic - "Are Iranians ready for western consumerism?". The end result seems to be they are. The struggle seems to present itself in such a way that it'll be a hard won fight to get there. Firms with the inward knowledge of Islamic tradition, governmental affairs, and appropriate good and services are waiting. The US won't let that happen though from US companies. The hard part lies there I think, for a US company would have to find a business level strategy that allows trade to, around, and with Iran after this whole thing is done.
ReplyDeleteThis post got me thinking about the risk of conducting business within hostile or potentially hostile regions. Although there is opportunity to make a profit in these areas, organizations need to be well diversified before deciding to enter. At any moment political decisions can affect the way people do business with that country. Unfortunately innocent Iranians and businesses who conduct international trade are now victims such political decisions. I do feel this decision is wiser than taking any form of military action, but I’m interested if similar tactics were used in other situations and how successful they were.
ReplyDeleteToday on the Wall Street Jrnl’s cover page is an article about “Iran’s Spymaster.” According to the article Major General Qasem Soleimani, Iran’s spymaster, has agreed to help fund Syria with military aid. This is the same general that allegedly responsible for arming Shiites in Iraq in an effort to harass American soldiers. In addition, this same general is being tied to recent bombings in India and Thailand. It appears that this is one way that Iran can show opposition to world sanctions. In addition, it strengthens relations with countries that are not seen as friendly to the West.
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