The International Monetary Fund (IMF) expects Iran’s economy to take a leap to rise in 2021. Surpassing some Gulf countries and Turkey, IMF expected Iran’s GDP growth to rise to 3.2%.
The USA has exhausted its cards in pressuring Iran. And, on the other hand, Joe Biden’s return to the nuclear deal will lead to an economic leap.
Iran is reorganizing is economic sectors after more than two years of US sanctions. The country aims to find resilience its huge domestic economy.
Iran’s companies are increasingly working to produce goods Iran has been importing for a long time.
Whereas, smaller and growing companies are employing again.
According to Iranian government statistics, the total revenue of Iran’s non-oil industry has grown by 83% in the past two years. This bypasses the sanctioned energy sector.
Ability to survive
Iran’s Central Bank governor said the country’s economy grew by 1.3% from March to mid-September, driven by domestic manufacturing.
Mohsen Tavakul, sanctions expert at the Atlantic Council, said:
“Even if the sanctions cut all Iran’s oil exports, Iran’s economy could still survive.”
Biden administration said it would lift some sanctions if the two countries returned to the 2015 deal.
The 2015 deal, former US president Obama introduced, aims to limit Iran’s nuclear program.
After Trump broke the deal, Iran country has boosted uranium enrichment. This month, it passed a law limiting nuclear inspectors access.
Iranian Foreign Minister Javad Zarif said the US should comply with its previous obligations under the nuclear deal before any negotiations.
Adapting to penalties
The US has long used the dollar power and access to the global bank transfer system, which it effectively controls. It used it as a tool to achieve foreign policy goals in countries like North Korea.
The Trump administration imposed a “maximum pressure” drive to stifle Iran’s economy and force it to renegotiate the 2015 nuclear deal.
However, the Iranian economy is projected to adjust to being cut off from international trade during 2021.
For example, US sanctions prompted French cosmetic company L’Oréal in 2018 to abandon acquisition talks with Zarsima Nami Rasa.
The Iranian company launched its own range of products that have replaced the French brand in several hair salons in Tehran.
Hassan Uskoy, managing director of Zarsima Nami Rasa, an Iranian beauty care company, said: “Sanctions were the appropriate motivation for us.”
The company said its local focus allowed it to retain around 450 workers.
Taking advantage of less competitors
Pakhuma, Iranian domestic appliances producer also benefited from the departure of the biggest competitors from South Korea, LG Electronics and Samsung.
The company built first homemade dishwasher, named Josephine, after the first inventor of the machine Josephine Cochrane.
The companies’ sales of dishwashers and washing machines have increased by 40% and 55% over the past two years.
This allowed the company to employ 600 new workers, according to Mehrdad Nikzad, the Iranian company’s marketing director.
Related:
Battered by U.S. Sanctions, Iran Finds a Lifeline in Domestic Economy
