https://www.npr.org/2020/01/16/796781021/why-irans-economy-has-not-collapsed-amid-u-s-sanctions-and-maximum-pressure
The U.S. has imposed many sanctions on Iran which has put Iran's economy in jeopardy. Perhaps, the U.S. was too optimistic that these sanctions would crash Iran's economy and end the regime. This is partly due to the fact that Iran has been under sanctions since the 80's, so they know how to find ways to operate even with harsh U.S. sanctions. This year Iran's GDP is on track to decrease 9%. But during the hostage crisis they're GDP decreased 50% and the economy still didn't crash. Part of the reason they have been able to stand these harsh sanctions is because they have good relations with some regional partners that help keep them afloat. Do you see Iran's economy failing in the near future or do you think they'll be able to hold of for the long run?
4 comments:
Although it is intriguing to see Iranian economy to able to withstand US sanctions, one must not forget that it is the average Iranian who is hard hit by the US sanctions. With the devaluation of Iranian Rial and the rise in prices of food products, I believe Iranians will not tolerate any more and this will influence the power of the reformist Hassan Rouhani.
I believe that these sanctions will certainly halt the Iranian economy in the short run, however I believe over time their economy will stabilize in part due to their rich supply of oil.
I believe that the US alone may not be able to crash their economy, as they have many other very wealthy trade partners nearby and around the world that is able to help keep them afloat. In addition, it seems that from administration to administration the US has not been consistent on how they would want to deal with Iran, therefore we haven't seen sustained disdain towards the placement of sanctions. From a US standpoint I can see the constant back and forth politics getting in the way of any forced collapse of Iran. However, their internal politics in addition to US Sanctions also could result in some sort of change.
I can see that in the near future, Iran's economy will drop a fair amount and I predict that GDP will lower and unemployment to rise because of the withdrawn sanctions from the US. However, like every economy, there are fluctuations and cycles where economies will struggle and prosper; therefore, since they have other trading partners and their oil industry, they have the possibility to strengthen their economy again. According to the article, they have done it in the past, so I think they will have enough resources to do it again.
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