Iranian Economy Struggles as U.S. Markets Remain Untouchable

An official from the U.S. State Department assured members of the U.S. Congress that Iran would not gain access to American markets, according to Reuters. The Iranian Sanctions Act is set to expire in the later part of 2016, but Republicans intend to renew the restrictions before they expire.

Iran has cooperated with U.S. authorities regarding its nuclear program, but officials levied new sanctions in early 2016 when Iran conducted ballistic missile tests.

An official from the U.S. State Department assured members of the U.S. Congress that Iran would not gain access to American markets, according to Reuters. The Iranian Sanctions Act is set to expire in the later part of 2016, but Republicans intend to renew the restrictions before they expire.

Iran has cooperated with U.S. authorities regarding its nuclear program, but officials levied new sanctions in early 2016 when Iran conducted ballistic missile tests.

Regardless of whether the U.S. fully opens its doors to Iran, many nations and businesses around the world are letting Iran back into the international community, but Iranians grow frustrated as little relief has manifested thus far, and they must contend with various restrictions on the world market.

Non-U.S. companies can do business with Iran, but any institution that engages in Iranian business cannot access the American financial system or use the dollar during transactions. The Obama administration may ease some sanctions for non-American companies that wish to deal with Iran, but the Iranians will face a major problem attaining additional investors if U.S. markets remain off limits.

Aside from outside barriers, President Hassan Rouhani faces internal roadblocks as hardline conservatives reject his reformist approach and he faces opposition from Supreme Leader Ayatollah Ali Khamenei. Iran has a strong youth population, partially explaining why reform-minded politicians gain the most ground, but the conservatives retain the most power.

The hardliners are opposed to the idea of opening Iran up to foreign investment, preferring to rely on a self-reliant recovery; however, the establishment cannot overturn the tide of a changing world, especially as many people in Iran advocate for a new direction in governance.

Although Rouhani enjoys popularity among Iranians, many citizens feel little hope in regards to economic development. Additionally, more people are concerned about youth and general unemployment, and further instability may follow if rampant joblessness continues.

With that, Rouhani and his supporters came out ahead during March mid-term elections, as reform candidates gained more power. The economy has improved since sanctions were lifted, but reformists will have to work closer with the West to gain access to wider markets.

While Obama has signaled a willingness to bring Iran deeper into the world community, the next U.S. president may not be so understanding, which could stall the Persian nation’s advances. The International Monetary Fund forecasts that Iran’s economy will grow 5.0% in 2017, making it the best-performing economy in the region, notes New Europe.

The current situation tells a different story, as the economy stagnates into recession territory, and expansion efforts could grind to a halt based on the outcome of the 2016 U.S. election. Republican presidential candidates have pledged to discard the Iranian deal, and Iran must contend with U.S. congressional members that are determined issue further punishment. In the meantime, Rouhani must also hold sway over Khamenei, who retains the ultimate power over the direction of the country.