Greater determination required to improve domestic economy
* By Meysam Mousaei
On Wednesday, October 10, the heads of the three branches of Iranian government were received by the Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei in a meeting on economic issues.
In the meeting, Ayatollah Khamenei urged the members of the Supreme Council of Economic Coordination to make prudent, effective and decisive decisions about the main issues and serious challenges faced by the domestic economy.
The leader stressed that serious and practical decisions are required to be taken to solve a number of key problems besetting Iran’s financial system such as those regarding the country’s banking system, amount of liquidity, employment and inflation rates and the budget planning process.
To this end, Ayatollah Khamenei said, using the ideas and solutions proposed by Iranian economists and those involved in the private sector of Iran’s economy is a principle. Iranian state officials are required to take the guideline seriously.
A large number of the country’s present problems do not stem from economic issues. The solution to these problems should be sought in other areas. The causes of these problems cannot be addressed even by the three branches of the Iranian government as they are not among their responsibilities. For instance, creating hope and pessimism in the society and country’s business atmosphere is a mission to be accomplished by factors far beyond the prerogatives of the three branches of the Iranian government.
Given the existing condition of the domestic economy, out of the main problems besetting the Iranian financial system, there is only a limited number of challenges that can be addressed by these three main bodies of power. Nevertheless, these problems and the solutions to them are not unfamiliar to the officials of the three branches of the Iranian government. For instance, the government is well aware that it is required to combat corruption and it can manage to achieve success in this regard with the assistance of the other bodies in case firm determination is demonstrated to this end.
Or it is crystal clear that when the country is under sanctions, tax incomes earned from speculative activities, such as arbitrage and transactions in foreign currency market, are required to replace oil revenues. In addition, Iranian officials know that the government is required to become more agile and smaller in size and that by handing over state properties, more resources should be allocated for new economic investments and supporting the vulnerable people of the country.
Thus, for Iran to overcome the financial bottlenecks a structural change is required in the domestic economy and the country’s foreign policy. Perhaps the very first steps to improve the the country’s present situation include fighting corruption, increasing tax bases according to global experiences, developing domestic tourism industry by using facilitative regulations to boost the sector’s revenue, revising the political ties with neighboring states, granting the Central Bank of Iran greater independence and adopting more effective financial and monetary policies.
The three branches of the Iranian government are acquainted with the path they must take. They only need to show greater resolution. Nonetheless, to the same extent Iran requires economic reforms, it needs to make changes in its foreign policy.
In case Europe manages to develop a scenario to support Iran and preserve the Joint Comprehensive Plan of Action, signed between Iran and the P5+1 in July 2015, we can overcome the country’s economic instability by making the abovementioned changes. Otherwise, the present route taken by Iran’s economy may fail to bear fruit.
* Meysam Mousaei is a professor at University of Tehran.
Iran’s vice president for legal affairs denounced the US announcement of its withdrawal from the Treaty of Amity, Economic Relations and Consular Rights - signed with Iran in 1955 - saying such a pullout is a lengthy process that faces many obstacles.
In comments on Saturday, La’ya Joneidi slammed the US government’s withdrawal from the Treaty of Amity as an “ill-advised announcement”, saying, “Quitting the Treaty of Amity normally takes one year. Thus, on legal grounds, the US withdrawal will be effective one year after announcement of its exit from the treaty,” Tasnim News Agency reported.
Her comments came after US Secretary of State Mike Pompeo announced on October 3 that Washington was pulling out of the sixdecade-old treaty with Iran that had provided a basis for normalizing relations between the two countries, including diplomatic and economic exchanges.
The US move came hours after the International Court of Justice ordered the United States to ensure that a new round of American sanctions imposed against Tehran this year did not prevent food, medicine and aircraft parts from reaching Iran.
Elsewhere in her comments, Joneidi said the ICJ has issued a binding ruling when the Treaty of Amity was in effect, saying none of the parties can claim that its withdrawal from the treaty would nullify the court verdict.
The court ruling, issued at a time when the treaty was effective, would be itself valid and binding, she explained, saying the treaty signatories are bound to honor their commitments under principles of international humanitarian law.
Joneidi also said that the US has violated the norms of goodwill by withdrawing from the Treaty of Amity after the court ruling, saying the ICJ had called on Washington not to take any action that may contravene the UN court’s future rulings on the lawsuit brought by Iran.
The October ruling by the international court in The Hague was related to a complaint that Iran filed in July, arguing that the new sanctions violated the Treaty of Amity, Economic Relations and Consular Rights, which was signed in 1955. In essence, the ruling sought to protect Iran’s public and economy from what the court described as irreparable damage while justices continue to consider the case against the sanctions.
But in his announcement, Pompeo made clear that the United States would ignore the ruling – simply by scrapping the bilateral treaty with Iran. He also said the court’s decision was outside its jurisdiction and that Iran’s appeals “lacked merit.”