eyes on the U.S.

American Sanctions Are Back On Iran — Will It Work?

Life (as usual?) in Tehran
Life (as usual?) in Tehran
Gil Yaron


BERLIN — Thousands of students marched through Tehran last weekend, and state television broadcast the protest march live. The crowd burned U.S. flags and pictures of President Donald Trump in front of the building of the former U.S. embassy. And, yes, they chanted: "Death to America."

After the U.S. withdrawal from the nuclear treaty in May, the second round of sanctions against Iran started this month. The purchase of oil and petrochemical products from Iran's national oil company and other corporations in the country is now prohibited. The oil industry, of course, is central to the Iranian economy.

But while Israeli Prime Minister Benjamin Netanyahu praised the new round of sanctions as a "historic step," the European Union made its displeasure clear. The EU's Foreign Affairs Commissioner, Federica Mogherini, expressed her regret at the return of sanctions, along with the foreign ministers of France, Germany and Britain, who had also signed the agreement in 2015. The countries want to save the deal, under which Iran renounced the development of nuclear weapons.

The question is: What have the sanctions achieved so far, and what will new sanctions bring? One thing is certain: The first round of sanctions, which came into force at the beginning of August and bans Iran from buying and selling U.S. dollars, and from trading in precious metals, has serious consequences for the country. The Iranian currency lost 70% of its value last year.

Not a fake — Source: Donald Trump's Twitter account

According to the Iranian central bank, food prices have risen 46.5% since September 2017. Numerous international corporations have stopped doing business in Iran for fear of American penalties. Oil exports, from which the government finances half of its entire budget, fell from 2.5 to 1.5 million barrels per day. Since half of Iranians depend on social assistance the International Monetary Fund expects a recession next year, while a study by the Iranian parliament predicts a decline in economic output of up to 5%.

This economic pressure should "fundamentally change Iran's destabilizing behavior," U.S. Secretary of State Mike Pompeo declared. He has drawn up a list of 12 demands, including the end of the proliferation of ballistic missiles, an end of Tehran's support to terrorist organizations and of its military involvement in Syria. Washington also wants to renegotiate the nuclear treaty with Iran. Tehran is the main adversary of the U.S. and its allies in the region and has repeatedly threatened Israel with extinction. Washington's calculation is simple: the involvement of the Revolutionary Guards abroad is expensive. According to estimates by Western secret services, the Lebanese militia Hezbollah alone receives more than $700 million a year from Tehran. Yet "the population actually needs this money," says Professor Uzi Rabi, Director of the Moshe Dayan Center for Middle Eastern and African Studies at Tel Aviv University.

Tehran has remained tough.

It is generally accepted that it was the sanctions that led Iran's political leaders to make significant compromises within the framework of the 2015 nuclear deal, the same one that Trump has withdrawn from in order to bring the regime back to compromise.

So far, Tehran has remained tough. It's said that the treaty will not be renegotiated or subjected to new conditions. The regime claims that it's well prepared for the new sanctions. According to media reports, India wants to invest $500 million in Iranian ports. Russia and China are considering establishing alternative trade routes via Iran to bypass the Suez Canal. At the same time, Tehran is expected to temporarily store large quantities of oil in Asia so that it can participate in Asian markets.

In addition, the U.S. is allowing eight countries to continue sourcing oil from Iran, including India and Iraq. The EU plans to set up a mechanism that will allow European companies to bypass U.S. sanctions. Nevertheless, Iran expert Uzi Rabi believes that "Nobody can compensate for the U.S. sanctions, neither the EU, Russia nor China."

In any case, the U.S. sanctions have had an impact on Iran's domestic policy. In large cities like Isfahan, Shiraz, Mashhad, and Tehran, there were summer protests against poverty . Thousands of demonstrators have blamed the regime's aggressive foreign policy for their plight. But the level of discontent has not yet reached a critical mass.

Iran's Supreme Leader Ayatollah Ali Khamenei recently declared that the risk of the regime being destabilized to be small: "America's goal has been to reestablish the domination it had (before 1979) but it has failed. America has been defeated by the Islamic Republic over the past 40 years."

Uzi Rabi sees it differently. "Tehran will change its policy if and when sanctions actually threaten the rule of those in power."

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In Argentina, A Visit To World's Highest Solar Energy Park

With loans and solar panels from China, the massive solar park has been opened a year and is already powering the surrounding areas. Now the Chinese supplier is pushing for an expansion.

960,000 solar panels have been installed at the Cauchari park

Silvia Naishtat

CAUCHARI — Driving across the border with Chile into the northwest Argentine department of Susques, you may spot what looks like a black mass in the distance. Arriving at a 4,000-meter altitude in the municipality of Cauchari, what comes into view instead is an assembly of 960,000 solar panels. It is the world's highest photovoltaic (PV) park, which is also the second biggest solar energy facility in Latin America, after Mexico's Aguascalientes plant.

Spread over 800 hectares in an arid landscape, the Cauchari park has been operating for a year, and has so far turned sunshine into 315 megawatts of electricity, enough to power the local provincial capital of Jujuy through the national grid.

It has also generated some $50 million for the province, which Governor Gerardo Morales has allocated to building 239 schools.

Abundant sunshine, low temperatures

The physicist Martín Albornoz says Cauchari, which means "link to the sun," is exposed to the best solar radiation anywhere. The area has 260 days of sunshine, with no smog and relatively low temperatures, which helps keep the panels in optimal conditions.

Its construction began with a loan of more than $331 million from China's Eximbank, which allowed the purchase of panels made in Shanghai. They arrived in Buenos Aires in 2,500 containers and were later trucked a considerable distance to the site in Cauchari . This was a titanic project that required 1,200 builders and 10-ton cranes, but will save some 780,000 tons of CO2 emissions a year.

It is now run by 60 technicians. Its panels, with a 25-year guarantee, follow the sun's path and are cleaned twice a year. The plant is expected to have a service life of 40 years. Its choice of location was based on power lines traced in the 1990s to export power to Chile, now fed by the park.

Chinese engineers working in an office at the Cauchari park


Chinese want to expand

The plant belongs to the public-sector firm Jemse (Jujuy Energía y Minería), created in 2011 by the province's then governor Eduardo Fellner. Jemse's president, Felipe Albornoz, says that once Chinese credits are repaid in 20 years, Cauchari will earn the province $600 million.

The Argentine Energy ministry must now decide on the park's proposed expansion. The Chinese would pay in $200 million, which will help install 400,000 additional panels and generate enough power for the entire province of Jujuy.

The park's CEO, Guillermo Hoerth, observes that state policies are key to turning Jujuy into a green province. "We must change the production model. The world is rapidly cutting fossil fuel emissions. This is a great opportunity," Hoerth says.

The province's energy chief, Mario Pizarro, says in turn that Susques and three other provincial districts are already self-sufficient with clean energy, and three other districts would soon follow.

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