Embargoes of Mass Destruction

With recent news of Obama possibly talking peace with the new Iranian leader Hassan Rouhani everyone is talking about sanctions. When the Iranian leader spoke in the General Assembly he chided the West for their use of sanctions. Every single pundit in the news treated what he was saying like it was “dictator talk” however I beg to differ. Let me explain using Libya the effect to which sanctions don’t create peace and don’t hurt the dictator, rather they hurt the civilians that have it in their best interest as well to get rid of a tyrant.

Between the incident of the Lockerbie Bombing to 2004 Libya was under Iran-like sanctions. Oil trade was limited, most imports thwarted, and many more sanctions imposed by the UN, the United States and Europe. Their actions, while well intended in their aims as the Libyan government had conspired and blew up planes killing hundreds of innocent civilians, did not hurt Gadhafi, on the contrary it made him stronger. It made the 80s and 90s a nightmare for many Libyans.

You have to understand that Libya has very little agricultural development and lacks a strong manufacturing base. Limiting imports hurt Libyans’ wellbeing and health. This induced a cycle of poverty still around today, especially in the rural areas. I still remember stories told by my father of no bananas in Libya for 5 years and sometimes no apples. The little I remember of this sanction period was terribly high prices for used cars from Tunisia. Many people reverted to using old Peugeots from the 50s, very similar to the old American cars in Cuba. As you can imagine if you stunt the demand of an economy to that degree you create a society lacking development and the poverty cycle starts spinning.

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Prices in Libya were affected to a large degree by the lack of trade. Country was plagued by periods of high inflation and following this terrible deflation. The central bank was too focused on making the Libyan Dinar good to follow a rule of keeping the monetary base in equilibrium to avoid hurting the already stagnant Libyan incomes. When the government couldn’t cash in on the oil revenues it created a new constitution based on the Green Book. From this came the infamous Law No. 4 which allowed the government to take any land at will and trust me it took this power in the name of “socialism and equality.” It took any capital, broke it down and sold it to poor African nations.

These sanctions didn’t hurt Gadhafi. He wasn’t forced to liquidate the National Oil Company (NOC). It continued and with it came more political corruption. He wasn’t forced to be nicer and only changed his mind because he saw his gain not Libya’s. The “Green Revolution” took off because of the sanctions. The images of America as the devil and Gadhafi as a savior were perpetuated. More Libyans were imprisoned because of this and millions more lived in ignorance of the world outside of them.

Just looking at Libya’s GDP is insane.  You can clearly see when the sanctions ended. The GDP grows 10 times over in a matter of 18 years. This is not a boom, this is a penal colony finally set free. Libyans literally were living in a penal colony with the actual criminal, Gadhafi, as the warden. Some tried to be Cool Hand Luke and get out but every time they are tracked, to the extent that there were rumors among Libyans that the government assassinates expats.

Now Libya is in no better shape than 30 years ago before the sanctions. However, at least it gets a fresh start. The lack of value politicians put into free trade is tremendous and the lack of empathy they have to civilians of other nations is outrageous. Everyone likes to put personalities at the forefront of any culture and from that stipulations about what they “deserve” are made. Nationalism is not dead, not even in the West. It lives on in poor policies. What I am saying is not isolationist dribble but rather I am asking countries to interact, hardly an isolationist view. In the relations that are peaceful free trade exists. When a leader is an enemy of an influential country the civilians of the nation being vilified are hurt. This story is not as simple free trade equals lasting peace. Dialogue needs to exist as well.

It is obvious the Iranian leader would hate the sanctions; partly to vouch for his government in front of the populace and partly because it’s true, but if you think sanctions are hurting the Ayatollah you’re wrong. He is still driving BMWs and living comfortably however the rest of Iran lives in a world of high inflation and low wages. They don’t deserve to pay for the mistakes of their leaders, especially when the leaders don’t represent them. Sanctions are just tools of war and nothing else.

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One Comment on “Embargoes of Mass Destruction”

  1. […] historical evidence of their trade one can see that in 2003 when the sanctions were lifted trade boomed. So, really the projections are understated and this is why I am proposing that the central bank […]


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