Do Hard-Liners really want to Stop Foreign Investment?

By Alireza Ramezani, for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.

Ultraconservatives in Iran are stepping up their crackdown on civil liberties in a move to send a message to the West — and the United States in particular — that the July 14 nuclear deal with six world powers does not mean that Tehran will liberalize its political system.

To this end, they are using, or as moderate President Hassan Rouhani has noted, “playing with,” remarks made by Supreme Leader Ayatollah Ali Khamenei (pictured) on likely US political and cultural infiltration of Iranian society.

Infiltration — a term generally referring to the actions of the United States or figures in Iran who seek to repair bilateral relations — has remained a major concern for Iranian ultraconservatives decades after the Islamic Revolution, which led to a split between the once allied countries. But the economic dimension of this matter seems to have long been neglected, and that is seemingly because Iranian conservative leaders see economic infiltration as less dangerous than foreign political and cultural influence.

Many activists and economists believe that economic infiltration has already occurred in Iran, particularly after crippling Western sanctions cut off the country’s ties with the outside world, pushing the Iranian market to meet its needs through the few countries that maintained significant economic relations, such as China and India.

Indeed, amid the rising US pressure on the Iranian economy, the two Asian countries remained as major consumers of Iranian crude oil, but were barred from using banking channels to transfer dollars as payment. As a result, billions of dollars of low-quality goods were exported to Iran in exchange for oil in the past few years. In the Iranian calendar year ending March 20 alone, Iran’s imports from China and India stood at $12.73 billion and $3.82 billion, respectively, according to Iran’s Customs Administration.

China and India made large profits in the absence of a normalized relationship between Iran and the outside world. Both policy and economic experts over the past decade constantly complained about the low quality of these imported goods, especially those arriving from China, but their criticisms fell on deaf ears.

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