America’s full financial firepower is about to be trained on two members of the Axis of Diesel, Iran and Venezuela. US Secretary of State Mike Pompeo set out 12 demands to Tehran this week with all the latent menace of 19th-century gunboat diplomacy. Unless they were met, he said, Iran could expect “the strongest sanctions in history”. He was in effect demanding total surrender, the abandonment of Hezbollah, instant access to Iranian military sites, a complete withdrawal from Syria. Or else.
The tone may seem brash but the threat of economic warfare is not a Trumpian innovation. The US Treasury became every bit as essential to the projection of American forces as the Seal commandos after 9/11 — their forensic accountants even began to deploy the same right-on jargon, promising to “take down” hostile actors. Barack Obama, squeamish about the use of America’s physical might, enthusiastically expanded the use of sanctions against rogue states. To use the strong influence of the US on the international financial system seemed to him a moral alternative to sending troops into battle.
Sometimes, the pressure works. When Osama bin Laden’s Abbottabad hideout was stormed, his documents revealed al-Qa’ida’s financial woes. And Iran came to the negotiating table to sign the 2015 agreement curbing its nuclear program only because sanctions had left it gasping for breath.
Read the article by Roger Boyes in The Australian