Iran: Economic Consequences of Nuclear Deal
By Staff Writer
The 2015 Iran nuclear deal was supposed to bring benefits for all parties involved, and the rest of the international community. Iran agreed that it would limit its nuclear activities and in exchange it would benefit from the lifting of sanctions that were crippling the Iranian economy. These sanctions included those regarding the banking, oil and trade sectors.
United States President Donald Trump has slammed the deal and vowed, on a number of occasions, to scrap it. Although the deal is currently still intact, Trump has vowed to make a decision about its future by 12th May.
The deal was agreed between Iran and the United States, China, Russia, the United Kingdom, Germany, France and the rest of the European Union. All parties, except the United States, have reaffirmed their commitment to the deal in recent months.
The negotiation that was carried out during Obama’s administration was, according to many, very lenient and too many concessions were given to Iran. Obama promised that the people of Iran’s situation would improve and that the domestic problems would get better. However, did this happen?
With regards to oil exports, Iran’s economy grew but not as expected. Due to the hike in oil experts, there was a significant growth of the country’s GDP in the 12 months following the deal’s implementation. However, the growth has staggered off and decreased. Iran’s target for economy growth was at 8 per cent per year, but it is estimated that it will be half this year.
The Iranian currency has experienced difficulty and instability for a number of years. In 2012, it lost around 60 per cent of its value against the dollar due to both the mismanagement of the currency market and the sanctions which limited Iran’s access to the international banking system. When the nuclear deal was signed, the Iranian regime’s President Hassan Rouhani promised the people that the exchange rate would not continue to fluctuate. However, the recent uncertainty surrounding the future of the nuclear deal has caused the currency to plummet again. It has lost almost half of its value against the dollar in the last eight months.
Non-oil exports rose once the nuclear deal was signed but many of its agricultural exports are suffering – not because of the economy but because of the Iranian regime’s mismanagement of the nation’s resources. Farmers and land workers are seeing their livelihoods destroyed before their eyes because the Iranian authorities are not doing anything to protect the environment. It is also diverting rivers and waterways, meaning that a large number of people are left without water and are seeing their crops disintegrate.
The nuclear deal could have made a big difference with regards to the Iranian economy, not least because Iran was given access to billions of dollars’ worth of frozen assets that were released in the process. The people of Iran should have been the first people to benefit; but they didn’t. The Iranian regime funnelled it to other ventures such as the conflict in Syria, international terrorist groups, militias and proxy groups in the region, and so on.