Clinton, Trump and Iran’s Economy

By the time you are reading this, you probably know who the Americans have chosen as their 45th president.

The outcome of their presidential election will affect the rest of the world. The clearest sign would be its impact on capital markets, oil and gold prices.

Yet, some Iranian economists believe no matter which candidate, Hillary Clinton or Donald Trump, wins the race, the performance of Iran’s economy would remain largely dependent on its own structure.

Iranian economist Mehdi Pazouki said despite the fact that Clinton has shown better judgment than her opponent, the outcome of the presidential election may not be that important for Iran’s economy on a long view.

“Iran’s economic problems are mostly the result of domestic mismanagement,” he said.

“The implementation of the Joint Comprehensive Plan of Action will continue, no matter which one becomes president. The point is we should make the best of this deal and not miss out opportunities to better collaborate with the world.”

Kamran Nadri of Monetary and Banking Research Institute believes that Clinton’s win will have no effect on Iran’s economy.

“Although Clinton is not as flexible as Obama is toward Iran, she is likely to follow in his footsteps,” he says. “But Trump’s victory would lead to a knee-jerk negative reaction by Iran’s financial markets, which won’t last for more than two weeks.”

Nadri noted that the effect of domestic developments on Iran’s economy and financial markets is way deeper than international developments, unless the future US president decides to kill the deal altogether.

Economist Vahid Shaqaqi thinks otherwise: “In the long run, Clinton’s record of friendship with Israel would be more dangerous to Iran than Trump’s presidency. His real-estate portfolio suggests that he will direct his attention on domestic economy, but Clinton will care more about foreign issues and this is of utmost importance to us, as she is very close to Israel.”

On the effect of a Trump presidency on oil and gold prices as well as capital markets, Shaqaqi said Trump terrifies Wall Street and the fluctuations of Wall Street would affect global markets negatively. “But I repeat myself: all these effects will be short-lived.”

Trump’s victory will make Iran’s capital market dip for a short period, says market commentator, Seyyed Hamid Mirmoini.

“Given Trump’s position toward the nuclear deal—he has repeatedly criticized Obama over the “disastrous” agreement—Iran’s financial markets would initially react negatively to his election but this effect won’t be lasting,” he said.   

“The election of Clinton will probably have a positive impact on Iran’s economy. Her support for JCPOA and the similarity of her Iran policy to that of Barack Obama would boost hopes for a better economy. Such positive effects would be enhanced in the short- and long-term.”

Earlier on Sunday, Ali Akbar Velayati, an advisor to the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei on international affairs, said Iran expects no change in the approach of the United States toward Iran with the comings and goings of different American presidents.

“We have witnessed Reagan, Bush, Clinton and Obama presidencies. They all treated Iran the same way, and not one of them is different from the others,” he said in a televised speech, describing the two candidates as “two sides of the same coin”.