Iranian people fear new wave of sanctions

Mustafa Ibrahim, 52, has been dreading a new wave of sanctions for more than a year. Since the first wave was imposed on Iran in December 2006, there has been a visible impact on his printing business. It has made doing business directly with European manufacturers and dealers of printing plates cumbersome, forcing him to seek the costly services of middlemen in Dubai. Profits have shrunk by nearly half, and he is now considering opting for cheaper Chinese imports, which he fears will diminish his quality.

The third wave of UN sanctions envisaged on Tuesday by foreign ministers of the big powers meeting in Berlin – although yet to be finalised and voted on by the UN Security Council – might increase the severity of economic blockades, he frets. "These days doing business with any country other than China and Russia is nearly impossible," said Mr Ibrahim. "In this fight with America, the Iranian government, as always, will remain unaffected by sanctions; common people like me will suffer."

The foreign ministers from the five permanent members of the Security Council – China, France, Britain, Russia and the United States – plus Germany agreed on a draft resolution that would tighten financial and travel sanctions in response to Iran's refusal to halt uranium enrichment which they fear may one day lead to the production of a nuclear weapon.

Momentum for a third resolution had diminished after the American National Intelligence Estimate, a declassified US intelligence report, reported in December that Iran's nuclear ambitions were civilian, not military. But Bush administration officials countered that Iran's weapons programme could easily be restarted.

The Iranian President Mahmoud Ahmadinejad remained defiant yesterday, saying: "The Iranian nation has chosen its path and will continue with it."

But on the streets and in the shops of the capital Tehran, the first two rounds of sanctions have had a visible effect. Prices of foreign consumer and electronic goods have risen by 50 per cent in the past six months. Sanctions create import restrictions and make it difficult to gain credit from international banks, hitting supply, claim Iranian businessmen.

"The entire approach to Iran, by quarantining it, sanctioning it and isolating it, is counterproductive," says Nader Hashemi, from the University of Toronto. "It will only hurt the Iranian people and strengthen the most authoritarian elements within the regime."

Some observers say the Iranian government will withstand any sanctions short of an international ban on the purchase of its oil and natural gas. However, its economy is largely stagnant – facing chronic unemployment estimated at up to 20 per cent and an inflation rate of 19 per cent.

Although they do not create concrete restrictions per se, the sanctions make many international firms wary of doing business with Iran lest they come under the scrutiny of the US Treasury Department. The Bush administration has also announced that it will penalise any company doing business with Iran's Revolutionary Guards, the country's ideologically driven parallel military force.

The sanctions, US officials say, are meant to strike at Iran's leadership without weakening the economic status of Iranians. But Shahriar Khateri, director of Tehran's Chemical Warfare Victims Research Unit, has seen at first hand how Iranian Kurds gassed by Saddam Hussein in 1987 have been affected by the halting of a medical research collaboration with Newcastle University. "The only crime of chemical victims is that they are Iranians. Thousand of them are paying a heavy price for it," he said.