The economic sanctions imposed on Iran last year when President Trump pulled out of the nuclear year have left the regime in a dire situation.
“They have fewer resources. We can see it with the Shia militias in Iraq,” said Secretary of State Mike Pompeo.
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“We think the Iranian government will shrink, that their GDP will shrink by as much as 12 or 14 percent this year…This will reduce their capacity to purchase the things they need, the equipment they need, the materials they need, to inflict terror around the world.”
Iran’s GDP grew by more than 12% in 2016 and by more than 3% in 2017. Last year, the economy grew at a rate of -3% and is expected to do twice as worse this year.
Reports suggest that 17 of Iran’s 18 government-funded retirement funds are losing money (this includes MILITARY pension funds). According to official documents, government subsidies for food, drugs, and fuel are also running out.
US officials point to Iran’s troubles as evidence that Trump’s “maximum pressure” campaign is working, while Iranians claim the sanctions are unfair.
“I noted the repeated statements by @SecPompeo that Iran must change its policies in order for Iranians to eat is pure #EconomicTerrorism,” tweeted Iran’s foreign minister, Javad Zarif. “Tying bread & medicine to politics is to kill & starve people into submission. Iranians will never capitulate.”
In the meantime, Trump is considering a proposal by French President Emmanual Macron to provide $15 billion in credit to Tehran if Iranian leaders agree to comply with the terms of the 2015 nuclear deal. He is also considering lifting the sanctions in exchange for a face-to-face meeting with Iranian President Hassan Rouhani.
Author’s Note: The best-case scenario for Trump is that the economic situation in Iran will spur a military coup. This would prove the power of US sanctions and perhaps convince other countries to cooperate with us in the future.
Editor’s note: Military organizations in tyrannical countries that support dictatorships or oligarchies are notoriously impatient when it comes to shortages that affect them. A failed military pension will not be tolerated. We could very easily see a military coup against the religious leaders of Iran.
If a coup in Iran is successful, then strategies using sanctions will become more popular, and Trump and the U.S. will rise in reputation, having used this successfully.