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What The Nuclear Deal Means For Iranians

  • Golnaz Esfandiari

An Iranian laborer sits next to his tools on a Tehran street in April. Despite the nuclear deal, the recovery of an economy deeply affected by sanctions and years of mismanagement will take some time.

An Iranian laborer sits next to his tools on a Tehran street in April. Despite the nuclear deal, the recovery of an economy deeply affected by sanctions and years of mismanagement will take some time.

After feeling the pinch of economic sanctions for years, ordinary Iranians appear eager to soon see the benefits of this week's landmark nuclear deal.

Many believe that more international cooperation will bring improved economic conditions, new business opportunities, and better ties with Western countries.

"Hope has returned into our lives. Before this, I felt there was no future for me and my generation," exclaimed 19-year-old Hamid in Tehran, who was overjoyed about the deal reached on July 14.

Some of the toughest sanctions -- including ones that have cut Iran's ties with the world's financial system -- would be lifted under the deal upon assurances of Iranian compliance.

And that provides room for optimism.

"For the first time in a very long time, I feel I can breathe easily," said one artist in the Iranian capital. Speaking on condition of anonymity, she said she hopes to see a drop in prices of food staples, medicine, and other items.

"The economic pressure on the people has been very difficult," she explained.

But the artist was also resigned to not expect wholesale changes to life in Iran.

"I know the country will not change -- that there will still be corruption and we will see a violation of many of our [political and social] rights," she said.

The deal would ease restrictions on international financial transactions -- a relief for Iranians who have faced difficulties receiving or sending money abroad. And Iranians seeking education at Western universities would no longer be excluded from studying "coursework related to careers in nuclear science, nuclear engineering, or the energy sector," according to the text of the agreement.

Key areas where positive change is anticipated include the reversal both of double-digit inflation and the steep fall of the rial, the national currency.

One journalist in Tehran, speaking on condition of anonymity, said relief on those fronts "would encourage people to spend more money, which is good for business."

Many people, he added, have been waiting for a deal to make financial decisions.

"Now that there is a deal, the uncertainty has been removed," he said.

Analysts warn, however, that the recovery of an economy deeply affected by sanctions and years of mismanagement will take some time.

London-based economist Mehrdad Emadi estimates that it will take between six months to a year for Iranians to see meaningful changes as the result of the removal of the sanctions, which would give Iran access to more than $100 billion in oil revenues currently frozen overseas.

For example, Emadi says that Iranians can expect a reduction in the inflation rate in the coming months.

"For some products [prices] may fall. Also, we should see a small depreciation of foreign currencies vis-a-vis the Iranian currency the rial," he said.

Iran's Economy Minister Ali Tayebnia notes that Iran's economy suffers from "structural problems" that must be dealt with seriously.

Iran's Economy Minister Ali Tayebnia notes that Iran's economy suffers from "structural problems" that must be dealt with seriously.

Many Iranians are hoping to see a boost in foreign investment in the energy sector, the automotive industry, and tourism that could result in the creation of jobs.

But it could take up to three years for the unemployment rate to drop, Emadi adds.

"At the moment, what is really hurting Iranians is not inflation, which has been reduced from 42 percent to 14 percent," he said, "but it is actually widespread unemployment and the fact that more than 60 percent of the economy in terms of private sectors and factories are operating at less than half of their capacity."

Iran's deputy oil minister for petrochemical affairs, Abbas Sheri Moghadam, predicted an "influx" of foreign companies willing to invest in Iran's oil and petrochemical industries.

"We should prepare ourselves for such a day," Sheri Moghadam was quoted as saying by the official IRNA news agency on July 14.

But the same day, Economy Minister Ali Tayebnia expressed caution, noting that Iran's economy suffers from "structural problems" that must be dealt with seriously.

"It's a good event that is happening right now. The imposed restrictions and limitations will be removed from our economy. It will depend on us how we will use the current positive conditions to make our economy flourish," Tayebnia said.

Economist Emadi agrees, estimating that sanctions are to blame for only 30 percent of Iran’s economic problems at most, and saying that "endemic corruption, an inefficient public sector, and a lack of coherent strategy in the oil and gas sector" need to be addressed.

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