Up until three years ago, the image of Iran depicted by the media was closer to “Iranophobia”, with roots in anti-Iranian sentiments. So the best achievement of the nuclear deal (the Joint Comprehensive Plan of Action) was to clean up this image and show the true picture of the Iranian society and economy to the world.
JCPOA (agreed on July 14) was the product of a collective wisdom within the government apparatus—a wisdom that favors advancement over diversion from the natural path to economic development.
Given the deepening recession, unemployment and domestic economic problems of the past decade, every pragmatic economist would acknowledge this fact.
JCPOA reconciled Iran’s economy with the world economy and rekindled hopes of doing business in Iran. Today, it’s up to us to figure out a way to make it work for our economy. But we need to take account of a few points.
High Expectations
Iran’s economy had distanced itself from international markets. Even today, despite reconnecting with the world, it is hard to bridge that gap.
Over the years, we failed to keep up with technological changes, we have even forgotten the principles of trade negotiations or it’s better to say, we have not learned new negotiations skills.
So it will take time for Iranian economic entities to adapt themselves to new conditions. Change does not happen overnight and this is the realty of the economy.
Business Environment
Foreign investors are quite familiar with the business rules in international markets, but Iran’s business environment bears little resemblance to those markets. If we intend to host foreign investors, we need to work out a quick solution.
For instance, the so-called Improvement of Business Environment Act has yet to be implemented properly. Tax and social security laws as well as many other basic economic rules require revision.
The most important of all is that Iran’s administrative apparatus is swamped with rules and regulations, ultimately giving rise to cumbersome bureaucracy. It is not easy for private sector businesspeople to work under the circumstances, let alone their foreign counterparts.
Significant improvements have occurred after the implementation of the nuclear deal such as visits by as many as 180 foreign delegations to Iran. Normally, it would take long hours of negotiations to reach deals with trade partners.
With lower oil revenues, which appears to be here to stay, Iran’s economy is in pressing need of foreign investment.
National consensus would help reach economic improvement. Once we accept the fact that investment is essential for advancement, we would set the stage for receiving it.
JCPOA is a golden opportunity that can be seized to reach this objective, provided we employ the same collective wisdom and prudence that led to the nuclear deal.