June 29, 2015


Pressure on the president : For Hassan Rohani, delivering a deal on Iran's nuclear programme is vital (The Economist, Jun 29th 2015)

SINCE he became Iran's president two years ago Hassan Rohani has transformed the tone of his country's relations with the West. But he has had a tougher time charming his own people. Iranians are tired of the sanctions that have blighted the economy, bringing both unemployment and inflation. Millions of young Iranians now want change. An agreement to end the row with the outside world over Iran's nuclear programme could be the start of it: talks on the deal are in their closing stages in Vienna, supposedly to a deadline of June 30th, but one that is liable to slip a few days more.

For Mr Rohani, a cleric with the common touch, there are big risks. His opponents--he has acquired many in the past two years--fear the adulation a nuclear deal could bring the 66-year-old, and will want to see him fail. "He really could be the history man, who solved the nuclear crisis," says a longtime friend, explaining that Mr Rohani, then a relatively unknown backroom operator, only ran in the 2013 election after telling Iran's supreme leader, Ayatollah Ali Khamenei, that the country needed to transform. 

End of Sanctions Worth Hundreds of Billions to Iran (ERIC PIANIN, 6/29/15, The Fiscal Times)

A combination of tough economic sanctions by the U.S., Europe and the U.N. dating to the U.S.-Iran hostage crisis of 1979 to 1981 have seriously stunted Iran's economy and frozen literally hundreds of billions of dollars' worth of assets and oil revenues. More recently, the U.N. has slapped Iran with additional sanctions for violating the Nonproliferation Treaty of 1967.

Treasury Secretary Jack Lew recently noted that since 2012, Iran's economy is 15 percent to 20 percent smaller than it would have been without the sanctions. Tehran has also lost $160 billion of oil revenues and the use of an additional $100 billion in assets being held in restricted accounts outside the country. 

According to a report last January by Kenneth Katzman, a specialist in Middle East affairs at the Congressional Research Service, the tough sanctions on trade have caused many private Iranian businesses to close, leaving about one in every five Iranian workers unemployed.

The impact of the sanctions on oil sales by Iran has also been substantial. While Iran sold about 2.5 million barrels of oil a day in 2011, during the past year it has averaged just 1.1 million barrels a day, according to Katzman. Roughly half the decline resulted from sanctions by the European Union, which went from purchasing 600,000 barrels a day to almost zero. China and India, meanwhile, cut back their purchases of Iranian oil by a combined 31 percent in a show of support for U.S. policy against Iran.

Finally, U.S. allies have cooperated in freezing vast sums of Iranian assets. Two years ago, Iran held an estimated $100 billion in various currencies in accounts outside the country, but only about $20 billion of those funds were accessible to Tehran. The rest was held in banks adhering to sanctions.

Posted by at June 29, 2015 3:51 PM

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