Challenges confront Iran's new president

Source
Xinhuanet
Editor
Wang Xinjuan
Time
2021-08-06 18:56:55

TEHRAN, Aug. 6 (Xinhua) -- Iran's new President Ebrahim Raisi took office on Thursday for a four-year period after his electoral victory in June, but confronts a challenging domestic and international scene.

Most observers and political commentators agree that the dire state of the Iranian economy and problems threatening the livelihoods of ordinary Iranians desperately need to be addressed.

ECONOMIC WOES

Iran's economy has been exposed to a wider range of internal and external pressures and bottlenecks since the U.S. government under former President Donald Trump quit the international agreement on Iran's nuclear program and re-imposed sanctions on the country in 2018.

Challenges such as the outbreak of the COVID-19 pandemic and as well as the tightening of maximum pressure on sanctions are increasingly plaguing the Iranian economy. The value of the Iranian rial has plummeted, and Iran's chronic inflation problems have once again been aggravated in recent months, with an official annual rate over 44 percent in the Persian calendar month of Tir from June 22 to July 22.

When Iran's economy began to stabilize vis-a-vis the impact of the sanctions, the coronavirus pandemic caused a new contraction of 1.2 percent in Iranian GDP by March 2021 compared to March 2020, with 1.45 million businesses suffering.

The country, currently hit by a fifth wave of the country's outbreak, has reported more than 4 million infections with over 92,000 deaths.

The recession fueled by the pandemic has also caused an increase in unemployment, which reached 2.4 million people in March, according to a report by local Hamshahri daily in May.

According to Hamshahri's report, U.S. sanctions and the effects of COVID-19 have led Iran to a trade deficit of 622 million U.S. dollars in the second half of 2020.

Economic growth, analysts say, will depend on two issues: the acceleration of vaccination against COVID-19 and the lifting of sanctions.

Economic misery isn't alone in requiring Raisi's attention.

Acute shortages of drinking and agricultural water supplies has led to widespread protests in the southwestern province of Khuzestan in July.

DEBATE OVER SOLUTIONS

While Iranian decision makers and analysts agree on the need to focus on addressing such pressing economic woes, other matters cannot be overlooked.

"Improving people's livelihoods is impossible without resuming the nuclear agreement and normal financial relations with countries," Ali Motahhari, an influential politician, said on July 29 to the Young Journalists Club.

In Motahhari's view, Raisi's administration must focus on restoring friendly ties with regional countries, namely Saudi Arabia, the United Arab Emirates, Egypt and Jordan.

The second line of action would be to revive the nuclear deal and approve regulation to lift the country out of the Financial Action Task Force's black list, he said.

Raisi said on Thursday that Iran welcomes any diplomatic proposal for the lifting of sanctions, but the United States urged the new Iranian government to return to negotiations to restore the 2015 nuclear deal, formerly known as the Joint Comprehensive Plan of Action, reiterating the diplomatic opportunity will not last forever.

Yet others believe Iran's present dire situation is the result of its previous administration's focus on improving foreign relations to solve its economic woes.

"At this moment, we can not rely on foreigners," said Hamid-Reza Taraqi, a senior member of the Islamic Coalition Party, to official news agency IRNA in July.

Iran spent years negotiating the nuclear deal and continued to fully abide by it for more than a year after the United States abandoned it, but pact has not brought the country any benefits, he argued.

Raisi must therefore focus primarily on mobilizing its internal capacities, said Taraqi.

The idea that Iran's economic plans must not depend on the state of its relations with the United States and other Western countries has often been repeated by Iran's Supreme Leader Ayatollah Ali Khamenei, and also by Raisi himself on Tuesday at his confirmation ceremony.

"We will certainly seek to lift the oppressive sanctions, but will not tie the people's livelihoods and economy (to the sanctions) or the foreigners' will," Raisi said.

 

Related News

Continue...