WASHINGTON (Dispatches) -- American news publication Foreign Policy has cast aspersions on U.S. claims that its sanctions were having a crippling effect on Tehran saying in a headline that "Iran is just doing fine”.
The Trump administration kicked off what it called a "maximum pressure” campaign against Iran a year ago this week, reckoning that it would send Iran’s economy into a "death spiral,” leaving Tehran the choice to either surrender or collapse.
"Neither of these predictions came to pass,” Foreign Policy wrote. "Rather, Iran now enters its second year under maximum pressure strikingly confident in its economic stability and regional position,” it added.
According to the magazine, Iranian officials "are therefore likely to continue on their current course: Iran will go on tormenting the oil market while bolstering its non-oil economy—and it will continue expanding its nuclear program while refusing to talk with Washington.”
After the U.S. withdrew from the 2015 nuclear deal, Iran expected that other signatories of the agreement would shore up its economy and sustain its oil exports. While the Europeans devised a financial mechanism to bypass U.S. sanctions, they could do only so much to support trade with Iran because their companies shunned trade with the country, owing to U.S. pressure.
The formative years after the most hard-hitting U.S. sanctions ever kicked in proved hard going as Iran’s economy entered a recession, inflation soared and the currency lost 60 percent of its value.
While Trump and his aides tout these statistics as evidence of the sanctions’ success, there are signs that Iran’s economy is stabilizing.
Iran’s rial has rebounded from its record lows of 190,000 to the dollar to stabilize at above 110,000 and employment continued to rise. According to the International Monetary Fund and World Bank estimates, Iran’s economy will rebound to near zero percent growth next year.
"The Iranian economy stays afloat in part because it is diversified—a trait that Washington often overlooks,” Foreign Policy said.
Iran’s service, agricultural, and non-oil industrial sectors were able to cushion the blow from the collapse of oil revenues under sanctions in 2017 during which crude oil accounted for only 43 percent of Iranian exports—as compared with 78 percent in Saudi Arabia.
"The non-oil sectors generate most of Iran’s economic output and jobs. They have proven more resilient under U.S. sanctions than the energy sector, which relies heavily on access to the global market,” the U.S.-based magazine said.
Sitting pretty over $100 billion of reserves which can cover any gaps, Iran’s top state officials are taking proactive steps to live out Trump’s dreams. The government plans to underwrite its operating budget without oil revenue which will shore up Iran’s economic stability at least over the next year, Foreign Policy said.
The magazine touched on the objectives of the maximum pressure campaign, saying while Washington sought to raise the cost of Iran’s regional role, Iran "now seems likely to spend its second year under U.S. sanctions buttressing an already strong regional position.”
"Neither the Islamic Republic nor its regional activities have suffered a deathblow from the return of sanctions. But diplomacy involving the United States and Iran may have taken a fatal hit,” it said.
According to Foreign Policy, Leader of the Islamic Revolution Ayatollah Seyyed Khamenei "likely views Iran’s domestic and regional situation as stable, and so he will feel no need to allow high-level meetings between Iranian officials and a U.S. administration perceived as hostile—especially during an election year in the United States.”
On Sunday, Ayatollah Khamenei underlined the need for a ban on negotiation with the US, saying it is one of the ways to block American infiltration.
"A repeated ban on negotiation with the United States is one of the important means to block their infiltration into our dear Iran," the Leader said as Iran marked the 40th anniversary of the U.S. embassy takeover.