DE FACTO
EMBARGO AND ITS ECONOMIC REFLECTIONS
The Iranian
society increasingly began to believe the view that “there
is no other institution or country that assists America in
the economic field and in attaining its’ goals in the Middle
East as much as Iranian state”, and it faces a big social
explosion because of the possibility of embargo in a near
future… A two-fold increase is observed in the imports even
of the products used just for daily needs compared to the
last year. Therefore, the threat of an imminent embargo
creates an atmosphere for social explosion in the society.
Iran needed
to import goods amounting to 10 billion Dollars every year
in order to reach 5 % growth rate which it had attained 8
years ago in the economy. Whereas, its imports now amount to
65 billion Dollars in order to attain a 4 % growth rate, and
this situation can be described as a “disaster in the
economy”. Because today many products ranging from fruits,
meat and chicken to various raw materials are imported to
Iran in return for billions of Dollars. Iranian State will
pay 900 Dollars aid to every citizen and a great part of
this amount was determined as ‘fuel’. This explosion in the
imports, which had also been tried during the Shah regime,
is called “the Netherlands disease”. This year, Iran’s
import record was determined to be 900 Dollars per person.
Given that this amount is 50 Dollars high from that of Shah
regime (800/850$), the ruined state of the economy will be
revealed.
Meanwhile,
following the adoption of the law stipulating “the
imposition of sanctions on companies, institutions or states
that give support to Iran in a way to enable it to produce
mass destruction weapons” by the US Assembly of
Representatives in late September and its approval by the US
President George Bush after being passed by the Senate
without being subject to any debate, the embargos that were
suggested to be applied against Iran, have de facto come
into force although they are not officially put into force…
Certain Western companies have resorted to a method of
removing the names of Iranian companies included in the
lists on their web sites, despite continuing to make
business with Iran. Particularly for the last two months,
well-known European banks do no more accept Letter of Credit
account bonds from Iran and require them to be insured.
Because, these enterprises which export goods to Iran want
to guarantee themselves. The amount of guarantee that was
around 0.5 % in the last year, increased as high as 80 - 107
% after this event and this caused an obvious increase in
the price of goods imported by Iran.
Mohammad
Reza Behzadian, ex-Chair of the Tehran Chamber of Commerce
and an importer of basic commodities told in his statement
that “Even the rumor of sanctions on Iran adversely affected
commercial atmosphere of the country and the resulting
anxieties impeded all kinds of economic activities, Iranian
businessmen had to face with the obstructions of banks in
the procurement of all kinds of goods. The statement of
Haydar Pourian, editor of the monthly publication Iran
Economics, saying that “the private sector in the country
cannot take decisions for new investments due to their fears
of the sanctions” comes to foreground as another dimension
of future threats.
The
statements of President Mahmud Ahmedinejad made on the
occasion of orphans’ day organized by the Khomeini Charity
Committee and emphasizing that “In the face of the latest
threats of the Western world, the potential embargo to be
imposed on Iran by the European and other Western countries
will have no effect on their decisions; in case the enemies
of the Iranian people consider imposing embargo to their
country, Iran will in return impose an embargo on the
Western world; and that their enemies have been de facto
imposing embargo on Iran for 27 years and these initiatives
were not a new thing” and also his expression that as long
as the Iranian youth possessed their will, faith and
resistance, victory and success would be continuous, remain
insufficient to prevent the economic crisis in the country.
The
mentioned embargos that are implemented de facto, in other
words without being named, began with “the most sensitive
field’, that is foreign currency transfer, such as the
embargo imposed on Saderat Bank on the grounds that ‘it
gives financial support to terrorism’. Currently the economy
of Iran make a lose of 10-15 billion Dollars annually due to
the economic embargo and the obligation to make trade with
Euro instead of Dollar. In the past 6 years, in parallel
with the 40 % decline of the worth of Iranian currency
against Dollar, our international purchasing power decreased
40 %. Despite all the protective policies of Ahmedinejad,
“expectation of sanctions” resulted in a big decline in
Tehran’s Securities Exchange. Meanwhile, international
‘Rating Institutions’ also declared that Iran’s credit
rating was downgraded to a significant extent.
The USA,
which does not hurry in confronting Iran for now, rather
attempts to radicalize the situation in our country, to
bring the talks into a deadlock and to force Iran into a
difficult situation in the international platform. The USA
has a capacity of storing 1 billion barrels of oil daily,
and as its storage facilities are now full, the price of oil
is falling. Therefore, the government of Ahmedinejad, which
based its budget on the sale of oil with high price, may
experience hard times with the fall in oil prices. Only one
solution is left behind to revive the economy of Iran:
Privatization… Economists make estimations that “Iranian
government will privatize 80 % of existing public
institutions and organizations in the coming period and the
state will obtain 215 billion Dollars of income as a result
of the implementation of privatization”.
