Domestic Economy

8% Growth Achievable After Sanctions Lifted, Says Tayebnia

8% Growth Achievable After  Sanctions Lifted, Says Tayebnia8% Growth Achievable After  Sanctions Lifted, Says Tayebnia

"The (western) sanctions against Iran are expected to be lifted in the near future," as anticipated by Minister of Economic Affairs and Finance, Ali Tayebnia on Monday, who added, "Iran can achieve economic growth of more than 8 percent, relying on all of its internal resources."

Speaking on the sidelines of the Fourth Conference on E-Banking and Payment Systems, Tayebnia said: "Iran is currently faced with critical issues resulting from an improper economic structure, wrong policies in the past decade as well as the imposed sanctions."

The minister's anticipation regarding the lifting of sanctions – imposed on Iran by the US, the EU and the UN Security Council over its nuclear energy program – comes as economic experts and analysts have been wondering for quite some time as to how a potential lifting of the sanctions will influence economic developments in Iran.

> Preparing for Post-Sanctions Era

"There is no doubt that a gradual lifting of sanctions will pave the way for greater economic ties between Iran and the world. However, Iran needs to generate a momentum in its international trade to ensure prosperity," says economic expert and former member of the parliament's budget and planning committee, Abbas-Ali Noora it in an interview with IRNA.

The expert described the problems associated with money transactions and import of technology as two major burdens on manufacturers and businessmen as a result of the sanctions.

He also referred to inflation as one of the most pressing problems, which has been accentuated by the sanctions. "As the sanctions pushed Iran to buy its essential commodities through intermediaries, they partly contributed to rising inflation."

Since the key bottleneck in economic development is the shortage of capital investments, Noora suggests the first step to be taken by the government following the likely lifting of sanctions could be to attract investment by foreign companies as well as expatriates, who will be able to invest in a sanctions-free environment.

He also believes the government must be focused on boosting productivity, "rather than pursuing failed policies of the previous administration, which were focused on expanding infrastructure and welfare projects."

Noting that Iran currently exports many of its natural resources in raw form, without value added, the expert described this policy as "harmful since it creates relatively few jobs and leaves the economy at the mercy of external market forces."

He also criticized the implementation of privatization policies in Iran, outlined in the amendments of Article 44 of the Constitution, based on which some 80 percent of the companies subject to Article 44 are to be transferred to public ownership, 40 percent of which would be conducted through the so-called Justice Shares Scheme and the rest through the bourse organization. The government is to keep the title of the remaining 20 percent.

Noting that the government has failed to implement "real privatization," Noora said "if the privatization process had been properly implemented when the country was generating huge wealth from oil sales, we would be facing far less economic problems right now."

It is evident that for Iran to achieve economic prosperity, major reforms in the domestic and international policies are required. A comprehensive nuclear deal will only be a first step in this direction, which will enable Iran to reinvigorate its trade ties with other countries and generate a new momentum in productive activities.