Greater de­ter­mi­na­tion re­quired to im­prove do­mes­tic econ­omy

Iran Daily - - National -

* 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.”

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