The United States says that the Iranian economy is in a downward spiral, with no prospect for near-term relief, as the country is being isolated and sanctions are having a real impact on the ground, exacerbated by the regime's own mismanagement of its economy.
Iran exports over one million fewer barrels of crude oil each day than it did in 2011, costing the country between $3-$5 billion per month, according to U.S. Under Secretary for Political Affairs Wendy Sherman, who testified before the Senate Foreign Relations Committee on Wednesday.
All 20 importers of Iranian oil have either significantly reduced or eliminated oil purchases from Iran. Financial sanctions have crippled Tehran's access to the international financial system and fueled the depreciation of the value of its currency to less than half of what it was last year.
Foreign direct investment in Iran has decreased drastically as major oil companies and international firms as diverse as Ernst & Young, Daimler AG, Caterpillar, ENI, Total, and hundreds more have divested themselves from Iran.
The International Monetary Fund projects that the Iranian economy will contract in 2013. "This is a significant decrease from the over seven percent growth six years ago, and far below the performance of neighboring oil-exporting countries," Sherman said as he submitted a written statement before the Congressional panel, chaired by Robert Menendez.
He said Iranian oil exports would continue to decline as Washington continued to increase the pressure by implementing the law through their engagement with the last remaining six importers of Iranian oil. "Iran's currency will remain volatile as we block Iran's revenue streams and block its access to funds held abroad. And we will continue to track, identify, and designate individuals and entities assisting Iran's proliferation efforts and attempting to evade sanctions on Iran," Sherman said.
He also warned that "as long as Iran continues on its current unproductive path, the Administration will continue to assess and implement potential additional sanctions on sectors and industries that can serve as pressure points. We look forward to continued strong collaboration with members of Congress to develop smart sanctions and increase pressure on the regime, while maintaining the strong coalition we have built through sustained diplomatic efforts with partners."
"We continue to coordinate closely with all of our international partners, ensuring stringent implementation of existing sanctions and encouraging strong domestic measures on Iran," Sherman said, calling on American allies that failure to move together "would signal divisions to Iran that it could and likely would exploit."
At the same time, Sherman said the United States "remain committed to ensuring that legitimate, humanitarian trade can continue for the benefit of the Iranian people," noting that "we take no pleasure in any hardship our sanctions might cause the Iranian people in their everyday lives, and it is U.S. policy not to target Iranian imports of humanitarian items."
Sherman discussed the Obama Administration's approach to the multiple challenges posed by Iran - by its nuclear ambitions, its support for international terrorism and destabilizing activities in the region, and its human rights abuses at home. He also spoke about those challenges, laid out the multi-sectored strategy the government is pursuing to counter them, and the consequential choices ahead for America and its allies.
For comments and feedback: editorial@rttnews.com