Did the “Maximum Pressure” Campaign Against Iran Fail?

One of the key defenses of the Biden administration’s strategy toward Iran is that the Trump administration approach, called “maximum pressure,” failed.

The Trump approach was based on an assessment of the Iranian economy. The theory was that if Trump won re-election and Iran was faced with four more years of intense economic pressure, it would agree to a serious and comprehensive negotiation. That negotiation would include not only Iran’s nuclear program but its support for terrorism and its missile program.

Recent date from the IMF shows why this theory was persuasive. The IMF’s most recent “Regional Economic Outlook: Middle East and Central Asia,” reports that Iran’s “Gross Official Reserves” fell from an average of $70 billion in 2000-2017, and $122.5 billion in 2018, to $12.4 billion in 2019 and an amazing $4 billion in 2020. At that level Iran was on a rough par with countries such as Azerbaijan, Bahrain, Armenia, and Georgia. By contrast, in 2020 Algeria had $46.7 billion in reserves, Iraq had $54.1 billion, Libya $51 billion--and Afghanistan $8.6 billion, twice as much as Iran.

What explains the collapse in Iran’s reserves? The “maximum pressure” campaign. And the argument that 'faced with a continuation and even intensification of that campaign, Iran would have had to negotiate' seems entirely reasonable.

Instead, the Biden administration’s approach is to give Iran sanctions relief and an injection of tens of billions of dollars if it agrees to go back to the 2015 nuclear deal, the JCPOA. Acknowledging that the JCPOA is inadequate, the Biden administration says we do need a “longer, stronger, and broader” agreement that lasts longer and covers Iran’s missile program and its support for terrorism. But by lifting most sanctions and allowing Iran access to all that cash, this policy would largely eliminate Iran’s incentives to negotiate a new deal.

Whenever we hear that “the maximum pressure campaign failed,” we ought to recall that IMF statistic:  Iran’s reserves almost disappeared between 2018 and 2020. The Biden policy, which suggests that Iran will concede more while the pressure on it is reduced, is simply illogical. As the old saying goes, hope is not a strategy.