Cutting Off The Money
This is a very quiet but enormous success that the administration has managed to pull off. They have been able to choke off Iran's access to the world's financial institutions with a very low key campaign. In doing so, they have severely damaged Iran's ability to function in the modern world. There is virtually no foreign investment inside Iran right now. That is directly the fault of Mad Mahmoud Ahmadinejad and has greatly aided the US effort to cut off the flow of money to Tehran.
The U.S. campaign, developed by Treasury Secretary Henry M. Paulson Jr. and Secretary of State Condoleezza Rice, emerged in part over U.S. frustration with the small incremental steps the U.N. Security Council was willing to take to contain the Islamic republic's nuclear program and support for extremism, U.S. officials say. The council voted Saturday to impose new sanctions on Tehran, including a ban on Iranian arms sales and a freeze on assets of 28 Iranian individuals and institutions.
"All the banks we've talked to are reducing significantly their exposure to Iranian business," said Stuart Levey, Treasury's undersecretary for terrorism and financial intelligence. "It's been a universal response. They all recognize the risks — some because of what we've told them and some on their own. You don't have to be Sherlock Holmes to see the dangers."
The new campaign particularly targets financial transactions involving the Iranian Revolutionary Guard Corps, which is now a major economic force beyond its long-standing role in procuring arms and military materiel. Companies tied to the elite unit and its commanders have been awarded government contracts such as airport management and construction of the Tehran subway. The practice has increased since the 2005 election of Iranian President Mahmoud Ahmadinejad, U.S. officials say. The Revolutionary Guard — of which Ahmadinejad is a former member — is part of the hard-line leader's constituency.
"The Revolutionary Guard's control and influence in the Iranian economy is growing exponentially under the regime of Ahmadinejad," Levey said in a speech in Dubai this month.
The campaign differs from formal international sanctions — and has proved able to win wider backing — because it targets Iran's behavior rather than seeking to change its government. "This is not an exercise of power," Levey said in the interview. "People go along with you if it's conduct-based rather than a political gesture."
Iranian importers are particularly feeling the pinch, with many having to pay for commodities in advance when a year ago they could rely on a revolving line of credit, said Patrick Clawson, a former World Bank official now at the Washington Institute for Near East Policy. The scope of Iran's vulnerability has been a surprise to U.S. officials, he added.
This is exactly what caused Russia to suddenly stop work on the reactor they have been building. One suspects that this also had something to do with the Iranians reverting to their old hostage-taking behavior that they started their regime with. Their violation of Iraqi territory to grab 15 British sailors and marines begins to look like a real act of desperation.
By Chris, Tuesday, 27 March , 2007 @ 7:29 am
Wait, was this accomplished by the same administration that’s populated by cretins and reprobates? I thought they were totally incompetent, that our foreign policy was a disaster, and that the whole world hated us. Do you mean to say that we actually got other countries to follow our lead on a policy?
Imagine that.