LATEST: As New Sanctions Come Into Effect, US Treasury Secretary Threatens — “The Alternative Is Worse”

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Amid chatter over whether President-elect Hassan Rouhani will “engage” with the West, fuelled by Rouhani’s nationally-televised speech this weekend, Monday morning brings another interesting smoke signal.

Former President Hashemi Rafsanjani — Rouhani’s most powerful backer — used his Twitter account to assert that the new government and its officials should make efforts to improve Iran’s status in the world:

Rafsanjani framed his call for engagement with the “healthy space of the elections” — backing of the Supreme Leader’s exaltation of the “political epic” — overcoming the “negative space” of Iran’s enemies

Rafsanjani then explained that he has known Rouhani for 35 years as a person who has always acted according to principles:

The former President concluded that Iran is in a good position, with the special privilege of “having its children in many parts of the world, such that if there were a space for investment, they would serve Iran lovingly”

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Imports Fall Sharply

Customs data show that imports fell by 26.11% between March and June.

As New Sanctions Come Into Effect, US Treasury Secretary Threatens — “The Alternative Is Worse”

While analysts in the West and Iran continue to ponder how far President-elect Hassan Rouhani will go in engaging with the US and Europe over Iran’s nuclear program, US Treasury Secretary Jacob Lew has a different message for Iranians on Monday, one that does not offer the new President any room at all for maneuver in negotiations:

“It would be the best thing for Iran and the best thing for the world if economic sanctions worked because the alternatives are worse for Iran and for the world,” Lew said.

Lew made his comments as far-reaching new sanctions came into effect on Monday.

The sanctions, enforced by Lew’s Treasury Department, were signed into law in January as part of Washington’s annual national defense authorization act, and expanded via an executive order in early June, before the Presidential election.

The embargoes target the Iranian energy, shipping and shipbuilding sectors. They prohibit the sale, supply or transfer of “significant” goods or services by non-U.S. companies.The Treasury Department has published a full list of what is included in the sanctions.

The sanctions, Lew said, were the “toughest sanctions in history” — and they are working, in the sense that they are crippling Iran’s economy:

“We are seeing it in Iran’s GDP, we are seeing it in the value of the rial, in the employment rate, in the inflation rate. It’s not a pretty picture from an economic perspective.”

Lew ends with this reassuring message for ordinary Iranians:

“The goal is not to hurt the Iranian people. The goal is to change their decision,” the Obama administration official said.

Rouhani’s Foreign Policy: Engage the Gulf States

In President-elect Rouhani’s engagement strategy, one of the key strands will be improving relations with the Arab States of the Gulf.

Rouhani has emphasised a better diplomatic position with Iran’s neighbours, and this weekened there were at least three messages from different outlets backiing the approach.

On Saturday, Foreign Minister Ali Akbar Salehi met the new Emir of Qatar, with both men calling for the expansion of ties and use of influence to help settle regional problems and promote stability and security.

Mehr News English backs up the diplomatic message with a headline story on a statement by the foreign ministers of the Persian Gulf Cooperation Council, highlighting “the importance of maintaining peaceful relations with Iran”.

And Seyed Hossein Mousavian, former member of Iran’s nuclear negotiating team and a Rafsanjani-Rouhani ally, writes in the Arab publication Asharq al-Awsat, “It is Time for Security Cooperation between the Gulf states and Iran”.