Iran's economy and the Western sanctions

Staying in Iran during the Ramadan at the height of the summer heat is not easy but it is an interesting experience that allowed me to get closer to the Iranian people’s daily life and understand the hardships they have to endure. They already have a currency that is losing ground every day, rising inflation on most basic items and it now takes millions of rials to buy anything valuable in today Iran.

While it is heartbreaking to see the situation the Iranian government is inflicting on their own people, particularly women who have to wear the veil and are prohibited to sing, we cannot stop feeling some sympathy for the Iranian people who are going to get struck once again by the Western sanctions.

Iran would feel hardly a new round of Western sanctions

Iran’s economy dramatically improved in 2016 as Western countries lifted their sanctions following the 2015 agreement on Iran’s civil nuclear programme and people have felt some reprieve.

Now everything looks bleak again for the Iranians since the election of Trump in the USA and its very anti-Iran stance. Since then, the US imposed sanctions on any countries that would buy Iranian oil. In early August, the US House of Representatives voted a bill to impose a new round of sanctions on Russia, North Korea – and Iran. As oil represents 80% of the Iranian economy, this could trigger inflation which is already in double-digit territory – and up to 30% per year for some basic food items – accelerate the fall of the rial and might trigger a banking crisis. All this will be hardly felt by the Iranian people and the Western powers should consider if Iranians are going to blame them or they government for their worsening economic conditions.

Iran is sending positive signals

The US are trying to isolate Iran while it is actually showing encouraging signs. Moderate President Rouhani has been re-elected for a four-year term in June and the Iranian Parliament has just approved its Cabinet including for the first time a defence minister not affiliated to the hard-line Revolutionary Guard. And most of all, Iran is on the same side as Western countries in the fight against the self-proclaimed Islamic State and even was a victim of one of their terrorist acts in June.

The West needs a peaceful country in between Syria, Iraq and Afghanistan

Now the US led by Trump is trying a gamble. They believe that the Iranians will turn against their government under the plight of the economic sanctions but nothing could be less certain. They could also turn against the West as they see them enforcing unfair sanctions against them after broking a peace deal. One must remember history. Most Iranians have nothing against the West. They turned against the US after the Revolution as the US had been the strongest ally of Iran during the years of the Shah who had just been defeated, just like the Shah had turned to the US for support against the two other big powers – the British and the Soviets – who had invaded their country during World War II. But now the West needs a peaceful and stable Iran as nothing would be worse for the West and the world than an Iran in unrest or under a civil war that would leave the field for the Daesh terrorists on its Western borders of Iraq and Syria to join with the Taliban terrorists on its Eastern borders of Afghanistan and Pakistan. Also, whether the West likes it or not, Iran is an inescapable part in the table to find a peace deal in Syria.

s Eastern borders of Afghanistan and Pakistan.

#Iran #USA #MiddleEast #Oil #Sanctions