Iran rejoins world economy with sanctions relief

Economic isolation ends after UN certifies Iran’s compliance with 2015 accord, even as US unveils separate sanctions.

Iran’s President Hassan Rouhani has described as “historic” and a “great victory” the lifting of sanctions against Iran, declaring that the country is now reopening its doors to the international economy.

The sanctions were lifted on Sunday after the International Atomic Energy Agency, the UN nuclear watchdog, announced the previous night that Iran had complied with its side of the July 2015 accord.

For Iran, long frozen out of the global economy for its contested atomic programme, implementing the nuclear deal will be a welcome change.

More than $30bn in assets overseas will become immediately available to Iran. Official Iranian reports have set the total amount of frozen Iranian assets overseas at $100bn.

A European oil embargo on Iran will end. Already, about 38 million barrels of oil are in Iran’s floating reserves, ready to enter the market, according to the International Energy Agency.

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However, in a move likely to check Iran’s expectations, the US administration imposed on Sunday new sanctions on 11 Iranian companies and individuals for supplying Iran’s ballistic missile programme.

In brief remarks in Washington DC, President Barack Obama repeated the imposition of the new sanctions, while crediting his “smart” diplomacy for helping to cut off every path Iran had to a nuclear bomb.

“This is a good day because once again we are seeing what’s possible through strong American diplomacy,” Obama said at the White House.

The new sanctions came after the US administration delayed the action for more than two weeks during negotiations to free five American prisoners, according to people familiar with the matter. 

Earlier on Sunday, during a speech before parliament, Rouhani said Iran should use the expected influx of money and investments to prompt the “economic mutation” of the country, creating jobs and enhancing quality of life for Iranian citizens.

Iran has been suffering double-digit inflation and unemployment rates for most of the past decade because of the sanctions [Reuters]
Iran has been suffering double-digit inflation and unemployment rates for most of the past decade because of the sanctions [Reuters]

Iran has been suffering double-digit inflation and unemployment rates for most of the past decade.

Celebrations in Tehran were relatively muted at first, because the Vienna implementation announcement came well after midnight.

Newspapers in Tehran largely welcomed the implementation of the deal, with the state-owned IRAN daily writing on its front-page: “The collapse of sanctions”.

But Ghanbar Naderi, an editor of the Kayhan newspaper, said the lifting of sanctions came “too little, too late”.

“This should have been done four years ago,” he told Al Jazeera, pointing to many problems plaguing the Iranian economy, including inflation and high unemployment. 

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Apart from Iran and the world powers avoiding more conflict in the region, “there’s no reason to celebrate” about the sanctions relief.

With the sanctions now removed, Iran is ready to increase its crude oil exports by 500,000 barrels a day, Amir Hossein Zamaninia, Iran’s deputy oil minister, was quoted as saying by the Shana news agency on Sunday.

Iran’s return to an already oversupplied oil market is one of the factors contributing to a global rout in oil prices, which fell below $30 a barrel last week for the first time in 12 years. Iran is the world’s fourth largest oil producer.

Speaking to Al Jazeera from Jeddah, Khaled Batarfi, a senior columnist at the Saudi Gazette daily, said the lifting of Iran sanctions was “expected”, and Saudi Arabia “is ready for whatever comes out” of the deal.

But he dismissed Rouhani’s statement that the nuclear talks could be a model for regional diplomacy, saying the Iranian leader is “not as good” in dealing with “Muslims and Arabs”.

“If he uses this model to solve problems with his immediate neighbours, that will be good news for everyone,” Batarfi said.

“But if they will use this opportunity to expand and to do more of their military intervention in the region, then that’s bad news for everyone.”

In a related development on Sunday, it was announced that four Americans – including Washington Post reporter Jason Rezaian – and seven Iranians were being freed in a prisoner swap.

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Reports said Rezaian left Tehran and had landed in the Swiss city of Geneva.

However, one of the four Americans, Nosratollah Khosravi-Roodsari, was not on the Swiss aircraft that left Tehran on Sunday, Reuters news agency said.

It was not immediately clear whether he opted to stay in Iran or depart separately, an earlier US state department statement said “those who wished to depart Iran have left”.

The official said those who boarded the plane from Tehran included Rezaian as well as Saeed Abedini, a pastor from Idaho, and Amir Hekmati, a former soldier in the US Marine Corps from Flint, Michigan.

Rezaian’s Iranian wife and mother were also both on the plane.

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Source: Al Jazeera, News Agencies