World Bank Predicts “Windfall” For Iran Once Economic Sanctions Lift
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As the lifting of economic sanctions against Iran appears more and more likely, the World Bank has begun making new predictions for the embattled nation’s post-sanction economy. According to the World Bank, the relief from years of crippling sanctions could lead to an “economic windfall” for Iran.
As the lifting of economic sanctions against Iran appears more and more likely, the World Bank has begun making new predictions for the embattled nation’s post-sanction economy. According to the World Bank, the relief from years of crippling sanctions could lead to an “economic windfall” for Iran.
According to a report by Sputnik, the World Bank’s chief economist for the Middle East and North Africa, Shantayanan Devarajan, said of the matter, “[We are] calling it an economic windfall, that’s a technical term in economics, which is a one-time increase in resources accruing to a country, and that’s what this is.” He added that there are some “political ramifications” for the process, which is why the World Bank very carefully selected the term “economic windfall” to describe the situation.
The US government’s negotiation team, spearheaded by the Obama Administration, estimate that Iran should gain more than $55 billion in annual economic output once the nuclear agreement is formally ratified.
The “political ramifications” to which the World Bank referred include forces within the US legislature critical of the nuclear agreement. These forces use the term “windfall” in a negative manner, arguing that the economic boost will merely end up creating additional problems in the Middle East.
In response to such critics, Davarajan argues that the amount of money is less important that how Iran decides to use it. He urges the Islamic theocracy to spend the funds on sustainable growth rather than on short-term programs designed for security or exacting political vengeance.
In a report produced by the World Bank in August, the World Bank suggested that Tehran should invest its “economic windfall” in domestic infrastructure and upgrading telecommunications. According to the World Bank, these investments will be crucial to the nation in the coming decades, helping it shift away from an oil-based economy to one more rooted in technology. Should it fail to do so, as the world decreases its use of oil in coming decades, Iran could find its economy contracting without any means of transitioning.
Iran’s economy has been in a slump since 2012 after imposing a new wave of crippling sanctions in response to Iran’s nuclear development programs. The nation even experienced a two-year recession. However, under the Joint Comprehensive Plan of Action (to which Iran and the United States agreed in July), all nuclear-related sanctions against Iran would be lifted as a condition of Iran’s agreement to maintain a solely peaceful nuclear program.
Nevertheless, as noted, the plan is not without critics that may be able to stall its ratification by the United States. Should that occur Iran’s future remains much murkier, as will its response and its role in international affairs?
