Lausanne Agreement and Iran's Economy: Hopes and Ambiguities

Radio Farda - The impact of the nuclear agreement on Iran's economy is the subject of a discussion between Mir Ali Hosseini and Fereydoun Khavand, an economist based in Paris. Fereydoun Khavand: The Lausanne agreement has a general aspect, and negotiations over the details of a final agreement will continue for about three months. Nevertheless, there is no doubt that this agreement is very good news for all active forces in the country, economic decision-makers, investors, entrepreneurs, and business circles, who after several years of hardship can hope for the lifting of the dark clouds over Iran's international relations. Iran is a country with a several-thousand-year history in international trade, and it has a 150-year history in the industrial sector with renowned figures. All these traditions and talents, which had been severely damaged due to the revolution, war, and wrong economic policies, were completely exhausted under the pressure of recent sanctions, cutting off Iranians' connections with the world and leaving them paralyzed against their foreign competitors. The national currency of Iran collapsed, inflation surpassed forty percent, growth rates turned negative, and about fifteen to twenty percent of Iran's gross domestic product went up in smoke. The most important consequence of the Lausanne agreement is the potential for a significant change in the general atmosphere of Iran's economy. How can these potential opportunities for change be turned into reality? One cannot expect miracles from the Lausanne agreement. Until a final agreement on the details is reached, a kind of anxiety will continue to ripple through the general atmosphere of Iran's economy. But more importantly, there are very significant structural obstacles that prevent the flight of Iran's economy, even after all sanctions are lifted: a bloated and costly government, numerous state and semi-state companies, corruption, and the lack of necessary reforms in various fields, from banking to labor law and the tax system... If Iran wants to become an active member of the international economic community after the lifting of sanctions, it must clarify these obstacles. How have Western economic circles reacted to the Lausanne agreement? European economic media often consider this agreement a decisive step towards creating the conditions for foreign investors to enter Iran. 'Les Echos,' the most important economic newspaper in Paris, writes that currently no country is under the watchful eye of investors as much as Iran. Nevertheless, 'Les Echos' warns investors not to think they can easily make money in Iran. In Iran, according to 'Les Echos,' eighty percent of the economy is under the control of the government and religious institutions, and the country is known for instability in laws and the arbitrariness of the bureaucratic system.