Economy, Not The Great Satan, May Be Iran’s Greatest Foe

After nearly a decade in power, Iran’s President Mahmoud Ahmadinejad has stepped aside and left the world stage to his successor Hasan Rouhani.

Unfortunately for Iran, he left the Iranian economy in tatters and facing the enormous burden of international sanctions resulting from his pursuit of nuclear weapons.

Robin Wright lays out the enormous economic challenge facing Rouhani when he is sworn in on August 4.

“Iran’s currency has lost about half its value since mid-2012. At least one out of four young people is now unemployed–including 4 million university graduates–in a country where more than half the voters are under 35. The Central Bank put inflation at 36 percent this spring, but Rouhani said his incoming team estimated that it was closer to 42 percent. Disgruntlement is visible. Sporadic demonstrations, including a July rally by steelworkers outside parliament, have protested unpaid salaries and layoffs,” she writes in The Atlantic.

The Western-educated Rouhani, however, may be more open to the notion of improving relations with the United States with whom it shares some common interests.

William Luers, Jessica Tuchman Mathews, and Thomas Pickering write in Reuters that the two nations both benefit from stability in Iraq and Afghanistan and the end to the Syrian war. They contend that “a lifting of sanctions that could lead to both a settlement of issues between them and more vibrant trade in a region now strapped by conflict and economic decline.”

However, any move to lifting sanctions seem unlikely considering the House of Representatives just passed legislation tightening sanctions on Iran.

Ironically, as Andrew Davenport argues in US News World Report, strengthening sanction is somewhat of an empty threat considering the difficulty in actually enforcing the sanctions.

“Despite the fanfare that accompanies each new round of sanctions, however, including those that went into effect on July 1, the fact is that most of these provisions are never enforced. More often than not, the only penalty that sanctions violators confront is exposure to enhanced market risks,” he notes.






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