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Gauging sanctions
Iran feeling pain of measures, but coping
SATURDAY, JULY 19, 2008

The effect of economic sanctions to influence a government's policies is debatable in almost every case, and certainly in Iran's.

Two years ago, the United Nations imposed sanctions on Iran and last year made them stricter. The United States has maintained unilateral sanctions against Tehran as well.

Iran is scheduled this weekend to hold talks with European and U.S. officials about its nuclear program, and there are some signs that the sanctions may be helping.

One purpose of sanctions is to get Iran to negotiate about its nuclear program. Ultimately, the goal is to deter Tehran from nuclear weapons production.

Iran, of course, maintains that its nuclear program is for peaceful purposes. The United States, Europe, Israel and the United Nations believe otherwise.

Both Iran and the United States may be softening their positions a bit, the Wall Street Journal points out. Tehran's foreign minister recently implied that Iran may agree to a freeze on its nuclear program. Meanwhile, the Bush administration is sending an envoy to Geneva this weekend to join European officials in their parley with Iranian officials — contravening the president's policy against direct talks with Iran.

The sanctions have made it harder for Tehran to access international capital markets and use advanced American and European technology. For Iranian businesses, financing large projects and finding suppliers is more difficult, raising costs in Iran's oil and gas sector.

American companies are banned from doing business in Tehran. Several European oil corporations have said Iran is temporarily off-limits for investment. The result? One oil services firm in Tehran told the Journal its costs have increased by as much as 30 percent.

Still, the effect of sanctions on Iran is "debatable," according to a recent congressional report. Talks this weekend may shed more light on the subject.

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