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Can sanctions relief revive Iran’s economy?

© AFP

Text by Thomas HUBERT

Latest update : 2013-11-24

The six-month international accord on Iran’s nuclear capabilities, agreed Sunday, will partially lift sanctions and unfreeze billions of dollars in revenue, which could help Tehran tackle its economic difficulties.

The partial lifting of international sanctions following Sunday’s agreement on Iran’s nuclear capacities came as a breath of fresh air for many Iranians suffering from degraded economic conditions and a lack of imported goods.

“The short-term effect is obviously the psychological one,” AFP’s Tehran correspondent Mohammad Davari told FRANCE 24. “People have been waiting for relief from sanctions for the past couple of years and they’ve struggled with the daily consequences of the sanctions with the rising prices and so on.”

Michael Brooks, an analyst at the US political radio show Majority Report, said the Iranians’ desire to see an easing of trade restrictions gave President Barack Obama a strong hand in the negotiations, after his administration imposed several years of “incredibly ruthless and far-reaching sanctions” on Tehran.

“The Iranians need to get their economy moving, that’s Rouhani’s job,” Brooks told FRANCE 24.

Recession

Figures from the International Monetary Fund show Iran in its second year of recession. The country’s annual economic growth rate has fallen from 8% highs in 2002 and 2003, during a decade of intensifying sanctions by the US, the European Union and the United Nations.

International trade with Iran collapsed last year, when its imports fell by 20% and its exports by 28%.

Iran economist Saeed Leylaz: "hopeful about the future"

Saeed Leylaz, an economist and political commentator in Tehran, told FRANCE 24 that he estimated the revenues available to Iran will increase by “between 50 and 100%” as a result of the nuclear agreement.

“The car industry or the petrochemical industry are very important for the economy of Iran. It means that we will have a much better financial and economical situation in the country – especially, the inflation pressure on poor people will decrease sharply,” Leylaz added.

Journalist Mohammad Davari said the next six months would give the Iranian authorities an opportunity to invest billions of dollars in additional revenue into the country’s ailing economy.

“In the longer term though, some people are asking what will happen if there is a permanent deal, if all the sanctions will be lifted. A lot of people right now are asking for that,” he said.

 

Date created : 2013-11-24

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