Iran Ayatollahs Fear Collapse of Economy
The ayatollahs now fear the collapse of the Iranian economy
“Death to America”. Iranian MPs in Parliament in Tehran shout these words as they burn a US flag. This is one of the first reactions to the announcement of the exit from the Washington nuclear agreement. Anger, yes, but also fear. Fear of an economy that gets worse day by day. For a currency that is falling. For those prices that in cities are literally crushing the citizens of the Islamic Republic. The crisis that crosses Iran is a profound evil that does not spare even the countryside, devastated by a drought that has been going on for five years.
by Eugenia Fiore Bennati
A lifeline. This was how President Hassan Rohani presented the nuclear deal to the country. An agreement that should have finally opened the doors of the West to the Iranian economy – limiting gradually the isolation of the country – and bringing huge foreign investments, jobs, opportunities. Now, what remains is just a big question mark.
Collapse economy, lack of freedom and prospects. Not to mention the popular discontent, already well rooted in recent years, which will now have a surge. “We will see more immigration, more unemployment, more bankruptcies, more poverty,” Amirhossein Hasani told the New York Times, an Iranian merchant who once produced kitchen equipment and now seeks more than anything else to survive. “Some may think that this will lead to a regime change, but the protests will be stopped and the government will be able to govern the country again. We will only become poorer. ”
The restoration of US sanctions
“We will establish the highest level of economic sanctions”. With these words Donald Trump, 15 months after his arrival at the White House, announced the farewell to the agreement that in 2015, under the administration of his predecessor Barack Obama, was signed by Teheran with the countries of 5 + 1 (i.e. USA, China, Russia, United Kingdom, France and Germany). They spend a few minutes and the Iranian president, Hassan Rohani, appears on state TV and threatens to restart the uranium enrichment as soon as possible.
The turnaround in Washington raises big questions even for European allies. “All countries that will help Iran on nuclear power could be heavily sanctioned by the US” said Trump. And indeed it is precisely the US secondary sanctions – that is, those involving third parties (including European ones) – those that the US president wants to reintroduce.
To understand what the consequences of the US exit from the agreement can be, we need to take a step back. As reported by Italian media Sole24ore the thaw with Tehran had triggered a race by European and American companies to re-enter the Iranian market. With huge investments in infrastructure and aeronautics, the race has led to the creation of numerous new jobs. In Iran, yes, m also in the US. Just to give an example: last December Boeing obtained a 16 billion contract for the delivery of 80 aircrafts to the Iranian flag carrier. A deal that could, or at this point could have, translate into 100 thousand jobs in the US.
As reported by ISPI, the provisions expiring on May 12 relate substantially to bank sanctions related to all financial transactions involving the Central Bank of Iran (CBI) or other designated Iranian financial institutions. “They therefore fall on all those countries that buy Iranian oil, good whose trade passes compulsorily through the CBI”, writes the Research Institute. Taking this into account, plus the fact that oil accounts for 15% of GDP in the Islamic Republic, the consequences could be disastrous. And not just for a driving sector like the oil industry. The suspension of sanctions, in fact, had contributed to the reintegration into the international financial system. A fact that has improved the conditions for the conduct of commercial activities in sectors not related to oil & gas.
According to the statement by the national security advisor John Bolton, the restoration of US sanctions will be immediate for new contracts, while for old contracts it will take place after a transition period between 90 and 180 days. The White House intends to proceed by applying the principle of extraterritoriality of American laws under which the US can sanction non-US corporations doing business with entities in embargoed countries if they have dealings with the United States or use dollars for transactions.
Original article by Eugenia Fiore Bennati:
Translation by Costantino Ceoldo – Pravda freelance
Photo By en:User:Amirskip4life (original: I created this work entirely by myself.) – en:File:Hafez 880714 095.jpg, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=10085540
See more at http://www.pravdareport.com/world/asia/11-05-2018/140933-iranian_economy-0/