Domestic Economy

Lesson of Sanctions: Expansion of Regional Ties

Lesson of Sanctions:  Expansion of Regional Ties
Lesson of Sanctions:  Expansion of Regional Ties

The economic sanctions imposed by the West have taught Iran to think of further strengthening its relations with the neighboring states rather than counting on western ties, President Hassan Rouhani said on Thursday.

"Western countries have never been reliable partners for economic cooperation because they tend to trample upon their own interests and those of their partners under difficult situations," Rouhani said, while addressing a meeting of Iran-Azerbaijan chambers of commerce in Baku, ISNA reported.

The president's two-day visit to Azerbaijan, made in an attempt to further figure out possible avenues of trade and investment with the neighboring state, is part of his government’s broader policy to expand business partnership with neighboring states as a means to dilute the impact of the sanctions on the national economy.

In late October, President Rouhani said that his administration has plans to increase economic ties with the neighbors and a number of big powers, which could be performed even under sanctions.

Since 2010, the United States, European Union, and the United Nations have imposed several rounds of sanctions against Iran's economy in a bid to maximize pressure over Tehran to abandon its nuclear energy program.

The Iranian nation has managed to curb the negative effects of sanctions and effectively carry out its economic programs despite all pressures, Rouhani said. "Iranians have been able to nullify the impacts of sanctions."

The western sanctions, mainly targeting Iran’s oil sector and its banking system, have left severe impacts on the country's economy. Iran’s crude oil and condensate exports averaged 1.1 million barrels per day in 2013, 1.4 million bpd less than the volume exported in 2011. The exports of oil has not yet reached the original level in 2011, despite President Rouhani’s attempt in the past year to settle the nuclear dispute with the West and open the economy to world markets.

In Baku, he said that his administration's economic policy has ushered in "economic recovery," adding, "Since last fifteen months, our short-term plan was to facilitate growth and encourage investment. Our long-term plan, however, is to achieve sustainable economic development. So far, we have been able to curb the inflation and create positive growth."

In spring 2014, Iran's economy grew by 4.6 percent ending eight consecutive quarters of recession, according to the Central Bank of Iran.

On Thursday, Mohammad Nahavandian, the president’s chief of staff, said that the national economy will go ahead regardless of what the result of the nuclear talks might be.

"Although sanctions are still in place, Iran’s economy has shown that it is resilient, that it has stepped out the recession and it is on the path of growth," he said, adding that it is the West which must be blamed for the possible failure of the ongoing talks between Iran and the six world powers, known as the P5+1.

Iran and the group (the US, Russia, France, China, Britain and Germany) have held several rounds of  talks since last year, the latest of which held in Muscat on Tuesday last week,  to hammer out a final deal to end  12 years of impasse over Tehran’s civilian nuclear work.

Although under the terms of the Geneva Accord, both parties are to refrain from making public comment over the talks, media speculations show that there are a number of discrepancies which are yet to be resolved. One such issue insisted upon and demanded by the Iranian negotiators is the process whereby the West should immediately lift all sanctions after the final deal is reached by the November 24 deadline.

Some experts in Tehran advise the Iranian government not to mix up the issue of the lifting of sanctions with a "comprehensive deal" by the November 24 deadline. They believe that the sanctions removal and other issues can be put on agenda once the "outlines" of the comprehensive deal between the two sides is reached.

"Iran should not mix up the sanctions with the comprehensive deal," Ali Bigdelli, a Tehran-based professor of economics told Eghtesad News this week.

He predicted that the West would agree in the coming days upon removing one third of the sanctions, and the rest will be removed once other non-nuclear issues between the parties are settled in the future.