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Experts: Iran's Foreign Policy Undermines Economy

Experts on Iran's economy say that its foreign policy is undermining its domestic economic health, RFE/RL's Radio Farda reports.

In conjunction with the Persian New Year on March 20, economists consulted by Radio Farda say Iran will likely experience yet another year of economic
underperformance. They attribute this in part to international tensions generated by the policies of President Mahmud Ahmadinejad, which they said are
deterring foreign investment.

One expert, Ahmad Alavi of the University of Stockholm, told RFE/RL that the loss of foreign investment has created tensions even within Iran's conservative leadership.

There are other ways that Iran's foreign affairs limit its economic performance. Paris-based economist Jamshid Asadi told RFE/RL that banking
measures taken against Iran by the international community make it difficult for Iranian banks to do business with U.S., European, Asian, and Middle Eastern banks.

Another economist, Fereidoun Khavand, said there is little to be hopeful about for Iran's economy in the coming year. He added that the low growth rate and high inflation have created conditions resulting in stagflation -- a condition during which inflation and economic stagnation occur at the same time and
remain unchanged for a significant period of time.