Economy, Business And Markets

Gov’t Urged Not to Have High Hopes on Sanctions Relief

Gov’t Urged Not to Have High Hopes on Sanctions ReliefGov’t Urged Not to Have High Hopes on Sanctions Relief

The role of international connections is undeniable in economic growth; however, the problems with the domestic economy are not limited to international connections, economist Hassan Sobhani said on Satuday.

If Iran’s nuclear negotiations yield positive results and western imposed sanctions on Iran are lifted, the domestic economy will be relieved even if temporarily, he added.

Iran and the six world powers known as the P5+1 are in middle of talks to limit Iran’s nuclear energy program.

“Even if Iran’s frozen oil revenues are released, the administration should not get any ideas because the assets belong to the Central Bank of Iran (CBI), the economist said in an interview with Eghtesad News.

With repossession of the assets, the domestic economy will surely prosper, but this will not directly benefit the government. For the government to have a better economy it should sell more oil and raise more revenues, he said. “In other words prosperity of the economy does not necessarily result in domestic economic growth or vice versa.”

Sobhani opined that raising revenues through taxes is a potentially viable solution but must come about with a long term plan. If the economy of a country is healthy and operating well it will take at least 15 years to implement a tax-based economy.     The prospects for such a scheme, however, are grim for Iran, he said, explaining that the fourth economic development plan (2006-2011) was meant to spare the economy of the need for oil-based revenues, but to no avail. Almost a decade has passed since the plan was devised, but the country is still nearly 60 percent dependent on oil exports.