The New York Times reports that Western sanctions against Iran have put the country on the brink of economic collapse, with restrictions on financial transactions in particular having created severe hard currency shortages.

Businesspeople in Iran have seen this coming and have been adapting, said one economic analyst, who asked not to be named to avoid trouble with the government. “But the government is slow and way too optimistic in their predictions,” the analyst said. “Now they are starting to feel the full force of what has been unleashed on them.”

Iran’s expulsion from the Swift global banking network has compounded the country’s difficulties and forced the regime to physically transport money into and out of Iran. International sanctions are being credited by some analysts with having forced the Iranian regime to at least make overtures to the West, even as the country’s Supreme Leader Ali Khamenei has in recent months banned meaningful concessions to the West and insisted that negotiations must not include any Iranian “retreat.” Commenting on the efficacy of sanctions, Brookings Institute senior fellow Michael Doran this afternoon emphasized that they must be kept up and lifted only when Iran’s nuclear program is “fully dismantled.” An opinion piece in the Economist, which was generally favorable to the prospect of dialogue between the United States and Iran, also noted that sanctions were “crucial” in pushing Iranian leadership to the negotiating table.

One reason to keep a tough stance is the politics within the regime. At least for now, negotiations are supported by pretty much all sides in Tehran. Crucially, the hardliners in the Revolutionary Guard Corps, a paramilitary force that has taken over large parts of the economy in recent years, are suffering badly from Western sanctions. They are less opposed to a nuclear deal than they once were; in some cases their personal fortunes may depend on one.

The Economist called for President Barack Obama to approach any negotiations in a “clear and tough” manner, and to pursue a comprehensive strategy that addressed Tehran’s uranium enrichment work, its plutonium-related activity, and its existing stockpiles of enriched nuclear material. Iranian negotiators are set to meet with the P5+1 countries – the U.s., Russia, China, the U.K, France, and Germany – in mid-October.

[Photo: PBS NewsHour / YouTube]