Iran is on the FATF blacklist and its food prices have soared by more than 50% with the inflation rate at 45% and thousands were protesting at the drying of a river in Isfahan Province.
The nuclear talks in Vienna between the USA and Iran conducted through European intermediaries will begin next week. The talks, suspended from late June, are essential for Iran, which seeks to free itself from the yoke of US sanctions. But any deal, if reached, wouldn’t be a guarantee to set things right.
Domestically, Iran isn’t in excellent shape. The economic situation is worth raising concerns. American sanctions complimented with shortages caused by COVID-19 have led to some worrying figures. The Statistical Centre of Iran has placed the inflation rate at 45%, while some consider the number higher in actuality. Since last year, food prices have soared by more than 50%, and a significant proportion of the Iranian population is labelled with the term ‘impoverished’. Printing more notes because of sanctions has fueled inflation, and the currency has lost considerable value.
Moreover, protests are being reported in the country. The latest was reported on the 20th of this month, which saw thousands protesting at the drying of a river in Isfahan Province. It was apparent that the fury was being vented at the government’s inaction. The water problem was also an issue in the July protests in Khuzestan province, which were also accompanied by the death of two people. The protests of 2019-2020 can hardly be forgotten. Three years mired in protests are apt to show that all isn’t well within Iran and that the picture isn’t good.
Oil is the commodity that carries a considerable share of Iran’s economy. Oil production, which was in millions before the famous decision of Donald Trump, has slumped to figures of a few hundred thousand. The leading importer has been China, and Iran has managed to generate some billions, though clandestinely. The Chinese are also complying with the US sanctions, with Iranian ships being prohibited from reaching Chinese ports and Beijing using the UAE as a transit point for its goods bound for Iran.
It must be mentioned that oil isn’t a sustainable source, especially when one considers the changes in the energy sector in the wake of the increasing threat of climate change. Iran is a nation that hasn’t stated its net-zero target, but this uncertainty cannot be sustained for long. The Iranian energy sector’s make-up would have to be changed to catch on with the current trends and increase the share of renewables. It is considered that almost a quarter of the country’s territory is suitable for generating solar energy. But for growing the renewable sector, which currently makes up 7% of the total energy output. It may sound simple, but looking at Iran’s foreign policy shows that all isn’t colourful and rosy.
Iran’s foreign ambitions are powered by the backing of certain groups, like Hezbollah, which are designated terrorist organizations, and this mark that a compromise at Vienna will not be an antidote for Tehran’s troubles. It still features on the FATF blacklist. Its roles in Lebanon, Iraq, Syria and Yemen have been important in maintaining its presence, but these are still sticking thorns that shall give the Middle East no peace. Its foreign policy is based on arms instead of constructive money, and this road cannot be travelled upon far.
To counter Western-backed measures against it, Tehran has adopted the policy of looking eastwards.
But here, too, it would be cautious since success isn’t guaranteed. China might have signed a 25 year deal for cooperation and has made it a part of its BRI initiative, but Beijing has its paws worldwide, which means that it wouldn’t be a strong backer. China hasn’t entangled itself in any of the Middle-Eastern conflicts. It mainly deals with the same Saudis or the Israelis as with the Iranians. Also, it must be mentioned that the influx of cheap Chinese goods hasn’t been a pleasant sign for Iran’s small businessmen. Deepening trade relations would put it on a back foot and hamper its self-sufficiency capacity, which is vital for maintaining itself.
With Russia, too, there aren’t any signs of a positive outcome. Engaging with Moscow means inviting isolation and further tensions since the United States would not want Iran to act under Russian influence. The Russians have already seemed to woo Afghanistan, not without success, which adds to the Central Asian nations already courted successfully. Iran’s addition would strengthen Russian presence in the region. Iran’s relationship with Russia seems to have more words since trade relations between the two aren’t a figure that might spell strong friendship. To deepen ties in other spheres shall not be much fruitful when one takes in the whole picture.
To forget Israel would be a crucial mistake. The Jewish nation hasn’t received with favour the US attempts to achieve any settlement with Iran. Israel leaves no chance to paint Iran’s nuclear ambitions as dangerous and lacking any noble intent. Its shadow war with Tehran is well known, and it hasn’t shown lately any signs of abating soon.
Iran, therefore, seems to be in a difficult position. It wants that its foreign policy objectives carry on smoothly, but at the same time, it needs that isn’t subjected to painful sanctions, which eventually make its people the sufferers. The talks at Vienna have laid bare the fact that Iran needs a change, but it is up to its leaders to decide how it shall be achieved. Meanwhile, the resumed negotiations show some positive signs, but they don’t assure to put a full stop to Iran’s troubles.
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