Iran’s Economy a ‘Masterpiece of Structural Ambiguity’

The existence of a quasi state has caused differences over policies and the direction of Iran’s economy. For instance, the Rouhani administration would like to see Iranian banks join the global banking network and establish digital platforms for online payments. The quasi state apparently begs to differ.

Last December, Terrapinn, an international events company, was set to hold the Iran Payments 2016 Conference in Tehran, to focus on the future of banking, online payment systems and governance. Many observers viewed it as a first step toward facilitating partnerships between foreign and Iranian banks to modernize the banking sector. Instead, Nasim Online, a news agency linked to the security services, claimed credit for having exposed a “British-Zionist” plot to infiltrate Iran’s economy.

One day before the opening of the conference, Terrapinn received word that it had been canceled. Moreover, when the government-owned Iran Air began negotiations to acquire Airbus and Boeing aircraft in 2015, quasi-state firms called for the domestic production of passenger jets or the purchase of Russian-made Sukhoi planes.

Addressing the business community in June, Rouhani expressed his frustration. “We wanted to transfer the economy to the people, instead we took parts of it from an unarmed government and gave them to an armed government,” he said. “This is not privatization.”

Thus, while the president won re-election, it is clear that his opponents can still very much frustrate his plans and that his promises of structural reform face a formidable challenge.

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