A senior analyst has taken stock of the achievements of the Iran’s nuclear deal with the six major world powers or Joint Comprehensive Plan of Action one year after the historic accord was signed.
Calling the marathon negotiations that led to the nuclear agreement between Iran and the six world powers “unprecedented in Iran’s history”, Hussein Abdoh-Tabrizi said the JCPOA was a very positive and fundamental step that also protected the country’s strategic interests.
Emphasizing the role of the nuclear negotiators, the advisor to the minister of roads and urban development said, “They managed to prevail, keeping in mind the domestic economic structure and the complexities involved, bringing the negotiations to a conclusion.
However, if the “negotiating skills of economic and monetary experts were at the same level, or at least close to it, things would certainly be different today”, he said as reported by banker.ir.
“In general, it must be said that the JCPOA has had its achievements; trading costs decreased, dealings in international markets eased, the country’s transportation sector improved and all in all many windows of opportunity for economic development presented themselves,” he said.
“But there is one sector that has not yet fully evolved and its internal reforms have not yet been finalized. That is the money and banking sector,” he added.
Noting that the US dollar has proved “troublesome” for the country’s financial sector on two fronts, the analyst said the greenback has had a negative impact on Iran’s international trade – for its ban in Iranian transactions–and has created a backdrop for “some abuse of power”.
According to the analyst, Iran’s banking system is in difficulty when it comes to international dealings; Europe has a strong proclivity for being present in Iran’s markets and to commence investment partnerships, but their (EU) financial sector “does not dare support them.”
In other words, says Abdoh-Tabrizi, “the interest of their financial sector don’t line up and because they had to pay hefty fines to the US as a result of some previous collaboration with Iran during the sanctions era, they do not want to take risks in dealing with Iran. This is at a time when European manufacturers are enthusiastic in wanting to invest in Iran.”
Thursday marked the first anniversary of the nuclear deal signed between Iran and the US-led world powers.
To mark the day, US Treasury Secretary Jack Lew said the deal, meant to give Iran some economic relief in exchange for curbing its nuclear program, is working. But Javad Zarif, Iran’s foreign minister, took to Twitter to dispute Lew’s claims, implying that Washington is not living up to the terms of the agreement. He accused the US of “short-sighted bragging” and “lackluster implementation of the obligations enshrined in the agreement.
Protecting Single-Digit Inflation
The senior economic advisor said the Rouhani government had had an undeniable achievement in controlling runaway inflation. Citing the global drop in commodity prices as one of the major reasons of the decline in inflation rate, he said, “the achievement of bringing down inflation to single digits was a direct outcome of infrastructure reforms which have now laid bare all the problems.”
Abdoh-Tabrizi sees high stock prices as one of the problems brought to the surface saying it was exposed that stocks and shares were “mostly bubbles after the inflation declined.”
In June, Iran’s headline inflation fell below 10% as the Central Bank of Iran’s monetary policy bore fruit. It was the first time in 26 years that average inflation fell to single digits, with the last time being in 1990 -- when Iran was emerging from the carnage of the 1980-88 Iraq-imposed war that killed an estimated one million people on both sides.
The government needs to protect the achievements of the single-digit inflation rate, accept the risk of long-term plans and avoid indulging in ostentatious and short-term plans with possible quick returns, he said.
