Iranians still waiting for dramatic economic change


sada

30/04/2017

Tehran – The Grand Bazaar in Iran’s capital bustles with shoppers strolling past stacks of gold brocade pillowcases, rows of gleaming coffeepots and bins filled with red barberries.

The din of afternoon chatter echoes off the bazaar’s high ceilings. But inside Mohsin Daliri’s small shop, only one or two customers linger to inspect his piles of lush Persian carpets; they eventually leave without a purchase.

“There have been no tangible changes in the market. There was hope upon hope that things would get better, but in reality, it stayed the same. My business is suffering from stagnation. There is no positive impulse in the market,” he says, noting that despite the lifting of sanctions, some Western countries were still not importing his wares.

“After Nowruz [the Iranian new year], business was really bad. Many merchants haven’t reopened their stores and have even laid off staff … People believe the nuclear deal was fake,” Daliri adds. “All we got were three aeroplanes and nothing else. Banking transactions, the use of credit cards – none of this was fixed, and this is very important for moving the market forward.”

The implementation of the nuclear deal in early 2016 was hailed by President Hassan Rouhani as a turning point for Iran’s economy. “The nuclear deal is an opportunity that we should use to develop the country, improve the welfare of the nation, and create stability and security in the region,” Rouhani said at the time, citing a “golden page” in the country’s history.

Indeed, there have been signs of improvement: According to a February report from the International Monetary Fund (IMF), the lifting of sanctions and consequent rebound in oil exports spurred growth in Iran, with expectations that it would reach 4.5 percent over the medium term. However, “banking system weaknesses, structural bottlenecks, and hesitation by foreign banks to re-establish financial links have held back expansion of non-oil activity”, the IMF noted.

And with unemployment in the country of 80 million people surpassing 12 percent last year, many average Iranians feel they have not personally benefitted from the nuclear deal.

Amid this backdrop, the economy will be the single most important issue in next month’s presidential election, noted Ariane Tabatabai, an Iran political analyst and visiting professor at Georgetown University in Washington.

“Many haven’t really seen the impact of sanctions relief on their own lives. Part of this is due to Iran’s own economic and political challenges: corruption, mismanagement, lack of regulations and the [Islamic Revolutionary Guard Corps]’s presence in key sectors of the economy,” Tabatabai told Al Jazeera. “But part of it is due to external, primarily US, factors. President Trump’s rhetoric on Iran and the deal – the uncertainty surrounding his Iran policy and the future of the deal – all make risk-averse businesses less likely to jump into the Iranian market.”

Gholamreza Kiamehr, an economic expert and independent journalist who spoke to Al Jazeera from inside a modest financial office in central Tehran, maintained that the nuclear deal has provided a crucial opening in the Iranian economy. Domestically, inflation has fallen from more than 40 percent when Rouhani took office to just 7.5 percent last year.

“The nuclear deal was a breakthrough turning point, which laid the grounds for the lifting of sanctions, including banking sanctions, especially the SWIFT, which was very significant for banking systems to initiate real business,” Kiamehr said, referring to the reconnection of Iranian banks to a global transaction network. Still, major challenges remain, including the exclusion of foreign debit cards and credit cards from the market.

Gholamreza Kiamehr, an economic expert and independent journalist who spoke to Al Jazeera from inside a modest financial office in central Tehran, maintained that the nuclear deal has provided a crucial opening in the Iranian economy. Domestically, inflation has fallen from more than 40 percent when Rouhani took office to just 7.5 percent last year.

“The nuclear deal was a breakthrough turning point, which laid the grounds for the lifting of sanctions, including banking sanctions, especially the SWIFT, which was very significant for banking systems to initiate real business,” Kiamehr said, referring to the reconnection of Iranian banks to a global transaction network. Still, major challenges remain, including the exclusion of foreign debit cards and credit cards from the market.

Meanwhile, back at Tehran’s Grand Bazaar, opinions on Iran’s economy vary from shop to shop. Some business owners tell Al Jazeera that the market has improved somewhat since the nuclear deal; others say it has gotten worse; still others say they have seen no change.

Sayid Behnam Amin, who owns a small jewellery shop, says that he does not expect to see meaningful economic reforms until banking sanctions are fully lifted.

“Without that, nothing will change, and that won’t happen because the US is resisting it,” Amin tells Al Jazeera.

“As long as international debit and credit cards are not operational, tourists can’t make many purchases, and this means the [changes following the nuclear deal] will not have a tangible impact.”

Fonte: Al Jazeera

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