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Is Iran’s citizenry key to the nuclear agreement’s success?

December 11, 2016


MAAIS office

Djavad Salehi-Isfahani presents the Iranian perspective of the nuclear deal to Jackson School audience on Dec. 1.

Members of the international community have reacted to the 2015 Iran nuclear agreement with varying degrees of ambivalence, contempt and jubilation. The result of years of work and negotiation, the agreement is an attempt to prevent Iran’s development of nuclear weapons capabilities while rolling back economic sanctions that have taken a toll on Iranian citizenry.

In creating the nuclear deal, which encourages Iran to let go of its nuclear weapons program over the next 15 years, U.S. officials and a cautious but open administration under Hassan Rouhani have laid the groundwork for a new relationship between Iran and the global economy. But will it work?

Professor Djavad Salehi‐Isfahani

Future success hinges on whether the Iranian population embraces the global economy and whether Iran’s citizenry can access benefits extended through the deal, according to Djavad Salehi-Isfahani, professor of economics at Virginia Tech and a Brookings Institution fellow.

On December 1, Salehi-Isfahani presented the Iranian perspective one year into the nuclear agreement. He opened his talk, titled Iran After the Nuclear Agreement: Love and Hate Towards the Global Economy, with a unique assessment of Iran’s national identity: Iran’s dependence on an oil economy, Salehi-Isfahani says, has divisively shaped its integration with the manufacturing- and export-based economies of the world.

Whereas economies based on manufacturing can facilitate a sense of national pride by creating goods for a global exchange, Salehi-Isfahani says oil trade is impersonal and rife with exploitation. Iran’s historic dependence on oil has created a deep-rooted skepticism of global market participation thanks to Western exploitation. For years the benefits of globalizing Iran’s oil trade were unevenly distributed and mostly inaccessible to average Iranians, despite large oil booms through the last four decades.

Salehi-Isfahani believes that the success of the Iran nuclear deal is rooted in popular support. The short alleviation in sanctions has already boosted Iran’s annual economic growth rate to around 6 percent, according to Salehi-Isfahani. But without the Iranian citizenry’s buy-in, the initiative is doomed to fail, taking Iran’s opportunity for future economic security and prosperity along with it.

To sell the deal, Rouhani’s administration must acknowledge its polarizing political challenges, especially for those who have been neglected by the benefits of a globalized oil economy. Efforts must focus on increasing domestic economic competition, attracting foreign investment in job creation and developing technology and manufacturing sectors that can compete globally, Salehi-Isfahani says.


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