Valdai Club

For the average Iranian voter, the lifting of economic sanctions is a breakthrough. The population was hit hard by the sanctions, however, over the past two years Rouhani’s government has undertaken measures to mitigate their effects.

On January 16, the United States and the European Union lifted their economic sanctions against Iran after IAEA, the international nuclear energy watchdog, confirmed Tehran had taken the required steps to dismantle its nuclear weapons programme as part of the deal struck last year.

The move means that Iran will now be able to export its crude oil to Europe, which bought 20 per cent of its oil exports before the sanctions were introduced in 2012.

It will also lead to unfreezing of Iranian foreign reserves in accounts around the world, which amount from 30 to 50 billion dollars, according to different estimates.

Irina Zvyagelskaya and Elena Dunaeva, senior research fellows with the Russian Academy of Sciences Institute of Oriental Studies told Valdaiclub.com what domestic and international implications the lifting of sanctions had for Iran.

According to Zvyagelskaya, the nuclear programme was Iran’s national idea. “The government explained to the nation that international sanctions and lowering living standards as a result were the price Iran had to pay for becoming stronger,” she said. Therefore, it is crucial for the Iranian authorities to demonstrate that the programme will not be abandoned altogether.

She was echoed by Dunaeva, who said Iranian President Rouhani stressed that the peaceful nuclear research (in particular, for medicine) would be continued.

While most states welcomed the Iranian nuclear deal, it was fiercely opposed by Israel, Zvyagelskaya said. Israel believes Iran harbors plans to develop nuclear weapons (something Tehran never admitted) and can resume its nuclear programme at any time.

For the average Iranian voter, the lifting of economic sanctions is a breakthrough, Dunaeva said. The population was hit hard by the sanctions, however, over the past two years Rouhani’s government has undertaken measures to mitigate their effects.

In particular, the inflation rate went down from almost 40 to 18 per cent, according to official data, she said. Also, Iran has been able to partially retain its social security programmes introduced in 2009 at a time of high oil revenues.

“As part of market reforms Iran is gradually cancelling government subsidies for oil and food staples, but continues to provide targeted aid, which encompasses 76 million people out of Iran’s population of 80 million”, Dunaeva said. Iran is one of the few countries doing that, she added, pointing out that these measures were approved by the International Monetary Fund.

But whether Iran is able to fully benefit from lifting of sanctions amid falling oil prices hinges on a complex of political and security factors, the scholar said.

“It depends on whether Iran enhances its military component due to the security situation in the Middle East and growing confrontation with Saudi Arabia in particular”, Dunaeva pointed out.

Meanwhile, on Sunday, January 17 the United States imposed new sanctions on Iranian companies and individuals over the test of a ballistic missile conducted last October. The announcement, prepared several weeks ago but delayed by the Treasury Department, came shortly after four American citizens held in custody in Iran were freed and arrived in the United States.