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Lifting of Sanctions is Not Lifting Poverty in Iran

lifting-of-sanctions-is-not-lifting-poverty-in-iran

The 2015 nuclear deal promised much to the people of Iran. With the lifting or waiving of sanctions, it was hoped that an economic boost would occur for the Iranian people. But that has not happened.

“Despite the promises of the Rouhani government and the U.S. administration’s belief that the billions of dollars released to the mullahs’ regime would provide services to the people, thus far the only path of expenses has lined up with purchasing Russian sophisticated weapons or reenergizing the Revolutionary’s projects that would only embolden the elite,” according to an article in April 2016 of the Iran News.

The funds have also allowed Iran to become more active in various regional conflicts, often at the expense of their people. “The regime is using the new funds for its terrorist activities abroad…Yet, at the same time, the Iranian people have become poorer. Some officials of the regime have acknowledged that around 80 percent of Iranian people are living below the poverty line,” said Hossein Abedini of the Foreign Affairs Committee of the National Council of Resistance of Iran (NCRI).

According to the World Bank, “The January 2016 lifting of the nuclear-related sanctions will provide a short-term boost to Iran’s economy. For the recovery to be sustained, longstanding structural reforms are needed.”

The sanctions relief included the partial removal of constraints on Iran’s oil exports, and the supply chain in key sectors of the economy, and on the international and domestic banks’ international transactions. It also gave Iran partial access to its frozen assets held abroad.

Iran’s economy expanded at a considerable pace during the first half of 2016, powered by rising oil production and exports due to the lifting of the economic sanctions, according to Focus Economics. But Iran has had difficulty in bringing foreign investment into Iran and their oil fields, which require a significant update to pull oil out of the fields.

Additionally, analysts have warned that growth was failing to trickle down to ordinary people, with unemployment rising during that same period. The renewal of sanctions by the U.S. and exposure of Iran’s involvement in training terrorist cells and forces being sent to Syria, Iraq and Yemen are both reasons that may make it difficult for Iran to court already wary foreign investors.

Various sources have also noted that Iran suffers from fraud at multiple levels throughout the government and that the IRGC is also in control of large sections of government-held companies. The result is that little of the money is truly reaching the majority of Iranians. It has been noted by Iranian officials that the government “lacks the will” to address the widespread fraud and corruption. L

For the Iranian people, it means an economic lift is unlikely to occur in a way that benefits the average Iranian.

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