Introducing domestic reforms and pursuing a more active economic diplomacy can help the Iranian economy survive this testing period, says an economic expert.
A large number of economic challenges facing the country have domestic causes so the solution lies within, Albert Beghzian also told the Iranian Diplomacy website in a recent interview, when asked about the prospects of economic betterment.
He said some of the decisive factors are not totally under the country’s control, such as sanctions, oil price fluctuations, tensions between Iran and the United States, the future of Iran’s trade, economic and political relations with Europe and the support provided to Iran by the remaining signatories to the 2015 nuclear deal after the US pullout.
“But, in my opinion, the most important issue is to control domestic factors. If we closely monitor and effectively manage internal factors that affect economic conditions, we will be able to bring the situation under control,” he said.
Beghzian said budget planning, economic management, supervision of banking activities, fiscal discipline and the allocation of government-subsidized US dollars for the import of essential goods fall within the scope of the government’s authority, therefore addressing these matters properly can help the economy recover.
A convergence of factors, including economic mismanagement, uncertainty regarding the survival of nuclear agreement after Washington’s withdrawal, the return of US sanctions, a reduction in purchasing power of lower-income Iranians and soaring inflation, have contributed to the economic turmoil.
Beghzian maintains that all government bodies, particularly the central bank and other economic institutions, should learn from what happened in the previous months and devise effective strategies to tackle economic grievances and stop the situation from getting worse.
Economic Diplomacy
The expert noted that a more active “economic diplomacy” can help encourage other countries to maintain and increase their trade with Iran despite US pressure.
“The heavy shadow of political and diplomatic economic problems and challenges is evident in people’s lives and the economy, but their consequences can be mitigated through economic diplomacy,” he said.
“In addition to increasing the number of official visits to forge closer ties with other nations, the Islamic Republic should enhance its interactions with Europeans to take advantage of the financial mechanism they have set up to maintain bilateral trade.”
Beghzian was referring to a scheme known as INSTEX or Instrument in Support of Trade Exchanges, which Europe has launched to conduct non-dollar trade with Tehran and avert US penalties.
The new trade vehicle will initially be used only for smaller trade, for example of humanitarian products and food, rather than oil-related transactions as repeatedly demanded by Tehran.
Iran has threatened to quit the deal and resume its suspended civilian nuclear program, if other signatories of the pact fail to protect its interests.
