Iran is Gearing Up for Economic Revival in 2016

Iran has had several economic sanctions from world powers and the United Nations for several years, and now the country is gearing up for economic revival, provided the sanctions are lifted next year.

The country, which is home to about 80 million people boasts of its tradition of manufacturing and its educated workforce. It also has the largest gas and oil reserves in the world, thus international companies and investors are getting very excited at the prospect of the sanctions being lifted, and many of them are heading to Tehran.

 

Painful times

Iran, for several years, had been isolated economically and the experience had been very painful for its citizens, with their average income falling by over $2,000 from 2011 and their oil production reduced to almost half of what Turkey produces. For the past four years, the country’s economy was put on hold as businesses were held back.

In the past, the bazaaris or the merchants and workers in Iran’s traditional marketplaces were a powerful force. They resist change and were politically conservative. Now they cannot wait for the expats to return to Iran and the restoration of the international trade links. One shop, Pars Carpets located at the Grand Bazaar, continues to display its special carpets with nomadic designs, done in wool and silk. Co-owner Omid Omidvar said that being kept out of the global banking system was very difficult because there had been many tourists yet they cannot buy because the shop cannot process international credit cards.

 

Survivors

However, Iranians are resilient and survivors, and found a way to work around the international sanctions to keep the country open to visitors. Their currency is now stable after losing about 80 percent of its value and inflation rose to 45 percent in 2012.

There are many people who are anticipating the normalization of relations with the Western countries but of course, there are always those people who disagree. An industrialist working for the oil and auto services industries, Alireza Purasharaafi said that he greatly anticipates the time when the full potential of the country is realized although a friend of his wants to leave the country instead.

Anahita Ostadi, a jewelry designer, said she had to struggle with the restrictions in banking as well as surmounting government bureaucracy and high taxes. She added that she hopes Iran will be open to all people, particularly the United States. Her sentiment is shared by the younger generation in Iran.

Supreme Leader Ayatollah Ali Khamenei said that he’d want to avoid importing U.S. consumer goods. However, business owners are of a different mind and are seriously preparing to supply consumer demand for imported goods. The Kourash Complex, Tehran’s first modern mall opened 15 months ago, with 500 stores. It caters to around 40,000 shoppers daily. A men’s wear retailer shop owner, Ali Rezaei said that there is a legitimate demand for products from the United States.

If the sanctions are lifted, the Institute of International Finance forecasts that the growth of Iran’s economy will rise to about 6 percent in 2016 and up to 6.7 percent in 2017.

It is predicted that there will be a battle of wills between President Hassan Rouhani’s government that wants to go forward and the hardliners that are still not willing to change the way they do business.

Image credit: “Tehran01-006“. Licensed under Public Domain via Wikimedia Commons.