Gulf News

Iran lost $500b due to nu­clear pro­gramme

SANC­TIONS HAVE COST COUN­TRY AD­DI­TIONAL $500B, RE­PORT SAYS

- BY JUMANA KHAMIS Staff Re­porter

The to­tal cost of Iran’s nu­clear pro­gramme has ex­ceeded $500 bil­lion since 2002, ac­cord­ing to a re­port ti­tled The Eco­nomic Costs and Con­se­quences of Iran’s Nu­clear Pro­gramme.

The re­port, is­sued by the Arab Strat­egy Fo­rum (ASF) in col­lab­o­ra­tion with the Cairobased Al Ahram Cen­tre for Po­lit­i­cal and Strate­gic Stud­ies, was dis­cussed at a panel yes­ter­day ahead of the ASF sched­uled for De­cem­ber 12 in Dubai.

The re­port also found that in­ter­na­tional eco­nomic sanc­tions have cost Iran more than $500 bil­lion from 2006 to 2017, while the costs of de­vel­op­ing and op­er­at­ing in­fras­truc­ture and fa­cil­i­ties for the pro­gramme have added some $50 bil­lion to the bill.

Dr Sul­tan Mo­ham­mad Al Nuaimi, As­so­ciate Pro­fes­sor at Abu Dhabi Univer­sity and an ex­pert on Ira­nian af­fairs, said the ef­fec­tive­ness of the US sanc­tions will ul­ti­mately de­pend on the re­sponse of in­ter­na­tional play­ers.

He said while Euro­pean com­pa­nies are ex­pected to re­spond to the sanc­tions to avoid po­ten­tial losses, some Asian firms may con­tinue to work with Iran or even ex­pand their col­lab­o­ra­tion.

Hus­sain Su­laiman from the Al Ahram Cen­tre said for­eign com­pa­nies have can­celled new in­vest­ments, es­pe­cially in the en­ergy sec­tor that needs $130 bil­lion to $300 bil­lion of new in­vest­ments to main­tain pro­duc­tiv­ity un­til 2020.

The con­se­quences of the new US sanc­tions on Iran will de­pend on how other coun­tries com­ply, ac­cord­ing to speak­ers at a panel dis­cus­sion yes­ter­day, ahead of the Arab Strat­egy Fo­rum (ASF), which will take place on De­cem­ber 12 in Dubai.

Speak­ers dis­cussed a re­port is­sued by ASF, in col­lab­o­ra­tion with the Al Ahram Cen­tre for Po­lit­i­cal and Strate­gic Stud­ies, un­der the ti­tle ‘The Eco­nomic Costs and Con­se­quences of Iran’s Nu­clear Pro­gramme’.

While the first in­ter­na­tional sanc­tions on Iran were im­posed af­ter the rev­o­lu­tion in 1979, sanc­tions re­lated to the coun­try’s nu­clear pro­gramme in 2012 are con­sid­ered to have had the strong­est eco­nomic con­se­quences on the state. The re­port es­ti­mates the to­tal cost of Iran’s nu­clear pro­gramme to have ex­ceeded $500 bil­lion since 2002.

It also found in­ter­na­tional eco­nomic sanc­tions have cost Iran more than $500 bil­lion from 2006 to 2017, while the costs of de­vel­op­ing and op­er­at­ing in­fras­truc­ture and fa­cil­i­ties for the pro­gramme have added some $50 bil­lion to the bill.

Dr Sul­tan Mo­ham­mad Al Nuaimi, As­so­ciate Pro­fes­sor at Abu Dhabi Univer­sity and Ex­pert on Ira­nian Af­fairs, said the ef­fec­tive­ness of the US sanc­tions will ul­ti­mately de­pend on the re­sponse of in­ter­na­tional play­ers, both gov­ern­ments and com­pa­nies.

He pointed out that while Euro­pean com­pa­nies are ex­pected to re­spond to the sanc­tions to avoid po­ten­tial losses, some Asian com­pa­nies may con­tinue to work with Iran or even ex­pand their col­lab­o­ra­tion un­less the US ad­min­is­tra­tion de­cides to pres­sure those gov­ern­ments.

“The re­port cal­cu­lates the costs of Iran’s nu­clear pro­gramme, di­vided into two cat­e­gories – di­rect ex­pen­di­ture on in­fras­truc­ture and op­er­a­tions, and in­di­rect eco­nomic sanc­tions,” said Al Nuaimi.

It also looks at the cost of op­er­a­tions and losses en­dured by Iran due to the sanc­tions im­posed on the coun­try be­tween 2006-2016.

Eco­nomic losses in 2018

The re­port shows con­struc­tion of the Bushehr nu­clear power plant ac­counted for the ma­jor­ity of in­fras­truc­ture costs in Iran’s nu­clear pro­gramme, with to­tal cost reach­ing as much as $12 bil­lion, mak­ing it one of the most ex­pen­sive nu­clear power plants in the world.

Al Nuaimi said due to new sanc­tions fol­low­ing the US ad­min­is­tra­tion’s with­drawal from the Iran nu­clear deal, eco­nomic losses are ex­pected to surge in 2018.

“The ad­verse eco­nomic sit­u­a­tion in Iran has led to fre­quent protests in var­i­ous re­gions across the coun­try through­out the past years, with protesters cit­ing in­fla­tion, unem­ploy­ment, poverty, and cor­rup­tion as their main is­sues,” said Al Nuaimi.

The on­go­ing sanc­tions have also lim­ited for­eign di­rect in­vest­ment (FDI) flow.

Hus­sain Su­laiman, from the Al Ahram Cen­tre pointed out that for­eign com­pa­nies have can­celled new in­vest­ment con­tracts worth tens of bil­lions of dol­lars, es­pe­cially in the en­ergy sec­tor that needs $130 bil­lion to $300 bil­lion of new in­vest­ments to main­tain pro­duc­tiv­ity un­til 2020.

As a re­sult, unem­ploy­ment rates have risen, es­pe­cially among the youth – one-third of the coun­try’s young peo­ple have no job op­por­tu­ni­ties.

Su­laiman pointed out the value of the Ira­nian rial has also plum­meted due to sanc­tions.

In­fla­tion has also reached un­prece­dented lev­els and is pro­jected to reach an an­nual av­er­age of 203 per cent by the end of 2018, ac­cord­ing to some es­ti­mates.

 ?? Pankaj Sharma/Gulf News ?? Dr Sul­tan Al Nuaimi (left) and Hus­sain Su­laiman at the Arab Strat­egy Fo­rum 2018 panel dis­cus­sion in Dubai yes­ter­day.
Pankaj Sharma/Gulf News Dr Sul­tan Al Nuaimi (left) and Hus­sain Su­laiman at the Arab Strat­egy Fo­rum 2018 panel dis­cus­sion in Dubai yes­ter­day.

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