Iran's Supreme Leader Ayatollah Ali Khamenei said Iran would never give in to sanctions, speaking to the paramilitary Basij force at the Imam Khomeini Grand Mosque in Tehran, Iran, Nov. 20, 2013.

Iran's Supreme Leader Ayatollah Ali Khamenei said Iran would never give in to sanctions, speaking to the paramilitary Basij force at the Imam Khomeini Grand Mosque in Tehran, Iran, Nov. 20, 2013. AP Photo/Office of the Supreme Leader

Power or Persuasion: More Sanctions or Bombs for Iran?

In the art of coercive diplomacy, sanctions and military pressure go hand-in-hand and must be feared, but they still have limits. By James Kitfield

As Washington debates the “first step” agreement to freeze parts of Iran’s nuclear program and negotiators prepare for much tougher talks on a comprehensive deal that dramatically rolls back Iranian capabilities, there has been much debate about whether to implement new economic sanctions or military strikes to deny Tehran a nuclear weapon. President Barack Obama himself recently put the chances of reaching a final agreement in the next six months at only 50-50, and the administration has said that failure to reach a negotiated settlement leaves the U.S. two primary alternatives: new sanctions or military action.

“If, in the course of [these negotiations] we fail to be able to reach agreement, we will immediately have the ability to ratchet up new sanctions and take whatever further steps are needed to prevent Iran from acquiring a nuclear weapon,” Secretary of State John Kerry said this week in Washington. “Nothing has been taken off the table.”

The fact that U.S. officials are even debating the efficacy of sanctions versus bombs points to something rare in international diplomacy: coercive economic sanctions that actually work. Iran badly wants relief from them. The United States needs to sustain the fundamental architecture of sanctions to sustain leverage. And Israel and Saudi Arabia would perpetuate sanctions indefinitely as a way to weaken an implacable foe. But the fundamental underpinnings of the sanctions regime and its relationship to the threat of military strikes have been little debated.

In fact, sanctions and the military option coexist on a continuum of coercion, playing to different U.S. strengths and Iranian vulnerabilities. Economic sanctions take much longer to have an impact on their target, for instance, but they have proven more effective in compelling a change in Iran’s long-term behavior than military threats. Actual military strikes, on the other hand, could have a greater short-term impact in degrading Iran’s nuclear capability, but conversely cause Iranians to rally around an unpopular regime that would be even more determined in the long run to acquire a nuclear deterrent against future attacks. The credible threat of a military strike also keeps the international community united behind the sanctions regime as a less onerous option, and yet an actual military attack would almost certainly shatter that consensus.

[Read Defense One's complete coverage of Iran.]

“The essence of coercive diplomacy requires that the threats you make are believed, and carry a price that Iran does not want to pay,” said Dennis Ross, special adviser on Iran in Obama’s first term and counselor at the Washington Institute for Near East Policy. “The Iranians are only negotiating now because they understand the economic consequences of not doing so. But they also need to understand that President Obama is serious when he says the military option has not been excluded, even though he failed to follow-through on military threats to Syria. I believe him, but the important question is whether the Iranians believe him.”

Sanctions that Bite
To grasp why today’s sanctions are potent yet potentially perishable, consider how much more effective they are compared to the more unilateral sanctions that the United States imposed on the Islamic Republic virtually since its founding amidst the takeover of the U.S. embassy in Tehran in 1979. Though he was criticized for it at the time, President Obama’s early willingness to engage Tehran was critical to changing the subject in international forums from U.S. stubbornness to Iran’s intransigence. Obama used Iran’s backhanded response to his outreach to painstakingly construct a layered sanctions regime over a span of years. The United Nations Security Council responded with no less than six resolutions seeking to restrain Iran’s nuclear program, creating legitimate cover for those countries eager to go further.

[Read more: The Return of Coercive Diplomacy]

The U.S. and the European Union built on that foundation, passing ever more stringent sanctions that target specific weaknesses in an Iranian economy that relies on oil exports to fund nearly half of government spending. Iran’s lack of oil refining capacity, and dependency on imports for 40 percent of its gasoline, were likewise exploited. The result has been a fifty percent decline in Iran’s oil exports just since 2011, and gas shortages that have angered the Iranian public.

Empowered by techniques and authorities designed to eliminate terrorist financing over the past decade, the U.S. Treasury Department also methodically built a wall between Iranian banks and the international financial system, country-by-country and bank-by-bank. The role of the U.S. dollar as the global reserve currency was critical in persuading skittish financial institutions that it was too risky to do business with Iran. As a result Iran’s currency has plummeted in value even as inflation has increased to over 50 percent, eating away at the country’s foreign exchange reserves.

“Critics claimed that economic sanctions had rarely ever worked, but over time we were able to leverage the power of the U.S. economy to convince the international financial sector it was not worth dealing with Iran because of the risks, and that steadily increased Tehran’s isolation,” said Jonathan Schanzer, vice president of the pro-sanctions Foundation for the Defense of Democracies and a former Treasury Department official. Sanctions advocates are worried about the “first step” deal with Iran precisely because it impacts the psychology behind Iran’s isolation. “Our greatest concern is that it took years to put this sanctions regime in place, and you cannot just turn them on and off like a spigot. When we start easing back on sanctions, a lot of businesses and countries will take that as a ‘green light’ to look for opportunities to do business with Iran again, and at that point it becomes far more complicated to try and ratchet sanctions pressure back up.”

The Obama administration, understanding that psychology has played a critical role in sustaining the Iran sanctions regime, continues to stress that the fundamental sanctions architecture that has deprived Iran of more than $80 billion in oil revenues since 2012, and denied Tehran access to the international banking system, remains very much in place.

Psychology continues to play an important role in sustaining the Iran sanctions regime, and that is where perpetuating it indefinitely becomes tricky. As long as the country was led by the Holocaust-denying firebrand Mahmoud Ahmadinejad, it was an easy diplomatic job to cast Iran as the villain and international outlier. That psychological dynamic has shifted, however, with the election of the smiling and supposedly moderate cleric Hassan Rouhani as Iran’s new president. Rouhani may actually represent someone who can cut an acceptable deal. Certainly the desire of the Iranian public to crawl out from under the burden of sanctions led to his election as a perceived pro-reform candidate. Unsurprisingly, Rouhani demanded an upfront easing of sanctions as a sign of good faith. If the Obama administration refused, or if Congress enacts new sanctions even as talks get underway, it could undermine Rouhani with hardliners in Tehran, and erode support for sanctions by convincing the international community that the United States is being unreasonable.

“Up to this point the Iranians have been seen as the intransigent party, but if the United States looks uninterested in reaching a deal or seeks an outcome no one believes is achievable, then our partners in the international sanctions coalition will start to view us as the unreasonable party, and they will leave the sanctions coalition,” said Robert Einhorn, a former senior State Department nonproliferation official, speaking this week at the Center for Strategic and International Studies. “That’s why just because some sanctions are good, more are not necessarily better at this time.”

Bombing Iran
A decision to militarily destroy Iran’s nuclear program involves an equally complex dynamic. While the oil-dependent Iranian economy is particularly susceptible to coercive sanctions, for instance, Tehran has gone to great effort and expense to disperse and harden its nuclear infrastructure against potential attack. A U.S.-led air operation to destroy that complex, including a uranium enrichment facility at Fordow that is buried under more than 200 feet of rock, would likely require a campaign lasting many weeks and involving hundreds of aircraft sorties and targets (to include six nuclear sites, Iranian air defenses, command-and-control installations, air force squadrons, navy elements and Revolutionary Guard Corps bases).

Perhaps the most exhaustive public study of the military option was the 2012 report “Weighing Benefits and Costs of Military Action Against Iran,” which was conducted by a group of former senior U.S. military and diplomatic officials, to include two former Central Command commanders with responsibility for Iran (retired Adm. William Fallon and retired Gen. Anthony Zinni). The report concluded that extended U.S. military strikes could set back Iran’s nuclear program for up to four years.

However, the group also concluded that the likely costs and unintended consequences of such an attack would be daunting. They include direct and indirect Iranian retaliation against Israel and U.S. facilities in the region, and by its terrorist proxy Hezbollah; a jump in oil prices that threatens another global recession; and a destabilizing cycle of escalation and counterattack in an already volatile Middle East that could lead to an all-out regional war. More to the point, the group also concluded that such a U.S. strike would likely unify the Iranian public behind the government, and break the hard-won international consensus behind economic sanctions and against Iran’s nuclear program. “We believe that if Iran’s nuclear program is attacked by the U.S. or Israel…support for maintaining sanctions against Iran could be substantially weakened. Weapons sales to Iran that are now prohibited by sanctions could resume, as might the sale of materials that could be used for making a nuclear weapon.”

Sanctions and the threat of military action to thwart Iran’s nuclear weapons ambitions are often presented as "either/or" options, but they are mutually reinforcing up until the moment that diplomacy fails. In the unlikely event that Iran, like North Korea, is willing to beggar itself in total isolation in its quest for nuclear weapon, then no amount of economic arm-twisting will dissuade it. That’s when the continuum of coercion reaches the end of the line.