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Financial Woes In Iran

Financial Woes In Iran

President George W. Bush says the world community wants the Iranian government to change course on the nuclear issue:

“And so our objective with Iran is to peacefully deal with the issue and convince the Iranians to give up their nuclear weapons ambitions for the sake of peace. And that requires more than one voice speaking to them; it requires the international community understanding the stakes of what a nuclear-armed Iran could mean.”

Iran’s refusal to suspend work on technologies that can be used to make nuclear weapons has led to a number of adverse consequences. Since December 2006, the United Nations Security Council has passed two resolutions imposing sanctions on Iran. The text of a third resolution with additional sanctions is currently under discussion by Germany and the five permanent members of the Security Council -- China, Britain, the U.S., France, and Russia.

Private industry is also adding to the pressure on Iran. Stuart Levey, U.S. Under Secretary of the Treasury for Terrorism and Financial Intelligence, cites the recent actions of international financial institutions. “More banks worldwide,” he wrote, “are refusing to deal with Iran in any currency, determining the business is too risky. Foreign-based branches and subsidiaries of Iran’s state-owned banks are increasingly isolated, threatening their viability, as banks and companies resist dealing with them. . . .And there has been a devastating reduction in the foreign investment Iran needs to develop its vast oil reserves.”

Economic mismanagement by Tehran itself is also increasing the financial pressure. Inflation and unemployment are soaring. Corruption is widespread. The Iranian government awards lucrative ‘no-bid’ contracts to cronies in Iran’s Revolutionary Guards Corps and continues to send hundreds of millions of dollars every year to support deadly terrorist groups abroad while the population is neglected at home. The policies of Iran’s leaders, says Under Secretary Levey, “are inflicting hardship on the Iranian people and steadily turning their country into a financial pariah. Whether to continue down this path of isolation is a choice Iran must make.”

Cooperation with the international community will end this isolation. The citizens of Iran will reap the benefits of the incentives package, which will offer Tehran assistance in many areas, including Iran's civilian nuclear program.