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Iran: Nuclear deal economic turning point

Published : Jan 18, 2016, 6:14 am IST
Updated : Jan 18, 2016, 6:14 am IST

Iranian President Hassan Rouhani said the nuclear deal, sealed with world powers last year and paving the way for Saturday’s lifting of most US, European, and UN sanctions, could be a turning point fo

Iranian President Hassan Rouhani said the nuclear deal, sealed with world powers last year and paving the way for Saturday’s lifting of most US, European, and UN sanctions, could be a turning point for Iran’s economy.

While the deal brings Iran back into the international fold, Tehran finds itself embroiled in sectarian conflicts in West Asia and at odds with regional Sunni heavyweight Saudi Arabia, which views the US-Iran thaw with deep suspicion.

“The nuclear deal can be used as a model for resolving regional problems... we want to have close ties with our neighbours. Saudi Arabia is the source of problems in our relations,” Mr Rouhani told a press conference after earlier hailing the deal as a “golden page” in Iran’s history.

Despite those regional tensions, the lifting of sanctions and the prisoner deal considerably reduce the hostility between Tehran and Washington that has shaped West Asia since Iran’s Islamic Revolution of 1979.

Speaking to Parliament earlier on Sunday, Mr Rouhani, a pragmatist elected in 2013 on promises to end Iran’s years of sanctions and isolation, said he looked forward to an economic future less dependent on oil exports.

These are nevertheless likely to jump now that the United States, European Union and UN have scrapped the crippling sanctions in return for Tehran complying with the deal to curb its nuclear ambitions.

But Mr Rouhani noted bitter opposition to the lifting of economic curbs from arch foe Israel, some members of the US Congress and what he called “warmongers” in the region — an apparent reference to some of Iran’s Gulf Arab adversaries.

Presenting the draft budget for the next Iranian fiscal year, which begins in March, Mr Rouhani told Parliament the deal was a “turning point” for the economy of Iran, a major oil producer which has been virtually shut out of international markets for the past five years.

He later said he expected five per cent economic growth in the next Iranian fiscal year beginning in March and assured foreign investors of political and economic stability.

“The nuclear negotiations which succeeded by the guidance of the Supreme Leader and support of our nation, were truly a golden page in Iran’s history,” he said.

Tens of billions of dollars’ worth of Iranian assets will now be unfrozen and global companies that have been barred from doing business there will be able to exploit a market hungry for everything from automobiles to airplane parts.

In Tehran, ordinary Iranians were cautious about what the future holds after the lifting of sanctions. Many have lived under sanctions or wartime austerity for so long that they have no concrete expectations about what the future might hold.

Iran’s Gulf Arab adversaries were silent on news of the nuclear deal’s implementation, in what is perhaps a sign of unease at the rapprochement.

Mr Rouhani took a swipe at its critics. “Everybody is happy except the Zionists, the warmongers who are fuelling sectarian war among the Islamic nation, and the hardliners in the US Congress,” he said.

The International Atomic Energy Agency ruled on Saturday that Iran had abided by the 2015 agreement with six world powers to curtail its nuclear programme, triggering the end of sanctions.

However, the United States on Sunday announced new sanctions linked to Iran’s ballistic missile programme, just a day after sanctions targeting its nuclear programme were lifted.

Five Iranian nationals and a network of companies based in the United Arab Emirates and China were added to an American blacklist, the US treasury department announced in a statement.

The network “obfuscated the end user of sensitive goods for missile proliferation by using front companies in third countries to deceive foreign suppliers,” the statement said, adding that the five individuals had “worked to procure ballistic missile components for Iran”.

Adam J. Szubin, under-secretary for terrorism and financial intelligence, said that “Iran’s ballistic missile programme poses a significant threat to regional and global security, and it will continue to be subject to international sanctions.”

Location: Turkey, Ankara