Nuclear Deal with West: Heightened Public Expectations Could Threaten Rouhani (Etemaad, Iran)

Allowing the Rest of the World to Speak Directly to Americans
Promoting Peace, Diplomacy and Cross-Cultural Understanding

Home

Archives

About Us

Non-U.S. Newspapers

The Daily Star, Lebanon

[Click Here for More Daily Star cartoons]

Nuclear Deal with West: Heightened Public Expectations Could Threaten Rouhani (Etemaad, Iran)

How much will the nuclear agreement between Iran and the P5+1, if it is signed in June, contribute to an Iranian economic revival? Writing for the state-controlled Etemaad newspaper, former Majlis member Dariush Ghanbari warns that public expectations must be kept at reasonable levels, or eventual disappointment will endanger the moderate government of President Hassan Rouhani.

By Dariush Ghanbari*

Translated By Puyan Daryaban

April 6, 2015

Islamic Republic of Iran - Etemaad – Home Page (Persian)

Although the political agreement between Iran and P5+1 countries heralds better conditions for the Iranian economy, we shouldn't forget that Iran's economic problems are not only related to sanctions, hence will not be settled when sanctions are lifted. That is why modest expectations of increased economic activity must be maintained, particularly at the macro level, because expecting a miracle or that Iran will suddenly become a completely different country than it is now is utterly unreasonable.

Nevertheless, the nuclear deal between Iran and 5+1 will undoubtedly have an impact on the Iranian economy. No one doubts the positive effects. It would appear that the outcome of the talks will allow the economy, held hostage by the West, to emerge from recession and expand more energetically than in the past. These hopes, again, particularly on the macro level, are indeed reasonable. Forecasting potential economic developments is always a challenge, but recent trends show that the exchange rate of the rial compared to foreign currencies will strengthen to some extent, and stricter government enforcement of the exchange rate than before is likely. Of course, we should not assume that the currency will strengthen by 10,000 rials to the dollar!

Posted By Worldmeets.US

[Editor's Note: The official rate of exchange is now 1$=>28,500 Iranian rials, but the street exchange rate, which is what most people are obliged to use, is now 1$ => 33,900 Iranian rials].

It seems likely that the dollar rate will finally fall to 28,500 rials, which is today's official government rate. Obviously, even this amount of strengthening in the currency will be helpful in overcoming a significant number of economic problems. Another major change will be the opening to Iran and Iranian companies to pursue trade and commercial transactions. Increases in trade will stimulate and revive Iran's recession-hit economy. In addition, Iran's frozen assets could finally be released. All of these factors indicate that a possible nuclear deal will have a discernible effect on people’s lives which will begin to be felt by the end of the year.

The psychological impact of the agreement is also important. For the past ten years Iran has been under unfair Western pressure. The West didn't like Iran developing its nuclear industry, but Iranian diplomacy was firm and held its ground. In the end Iran has been admitted into the world's nuclear club, which is a fact no one can deny any longer.

Another impact of the nuclear deal is that it will render the Iranian economy more transparent, which will encourage manufacturers to invest in the country. But none of this should lead us to conclude that all of our economic problems will be resolved overnight. To have such expectations will only weaken the government. For example, expecting a 20-30 percent drop in housing prices is quite unrealistic.

While the nuclear deal between Iran and the West may lead to an opening up of Iran's economic and political atmosphere, no one should expect a miracle or that all of our problems will vanish. After resolving the nuclear standoff the government will have to turn to other pressing issues, so public expectations must coincide with the government’s actual resources - not beyond them.

*Dariush Ghanbari is a former Member of the Majlis [Iran's national parliament]

#IRANTALKS Tweets

CLICK HERE FOR PERSIAN VERSION

blog comments powered by Disqus

[Posted By Worldmeets.US, April 6, 2015, 4:09am]

Live Support