Baku, Azerbaijan, June 26
By Dalga Khatinoglu - Trend:
Economic expert says that restrictions imposed on Iran come into three broad categories and each one needs a different period of time to be removed.
While Iran persist on elimination of economic sanctions, the West says lifting sanctions would be carried out gradually, some immediately, others will take time depending on the kind of sanctions.
"The starting point of this assessment is the assumption that Iran will arrive at a comprehensive agreement with P5+1 in the management of its nuclear research and energy program. As a result as it has been announced many times by the US and the EU officials, sanctions encompassing the 1929 Resolution of the UN Security Council will become void", Mehrdad Emadi consultant at the U.K.-based Betamatrix International Consultancy told Trend June 26.
Emadi said the restrictions imposed on Iran come into three broad categories. "They are aimed at finance and banking, the energy sector, and high precision engineering and manufacturing connected to defense. Within this context, over time various limitations have been introduced against Iran that in certain cases have become a multilayer net of redlines, preventative measures and punitive instruments with crossovers between the three categories. It is important to become aware of this complexity since in the removal of sanctions, entities which have been included in sanctions for more than one reason will be amongst those that will not see an immediate release from them".
According to Emadi's opinion, those business and finance entities that have been banned from trade and financial transactions just because of their legal identity and geographical base will be easiest to free from the existing restriction. There may be many banks, insurance firms and companies involved in foreign trade that fall into this category and, he expects within a three months period they will see lifting of sanctions on their activities.
"The second group of entities to be released from restrictions are those that in the past may have had some links with the Revolutionary Guards and businesses under their auspices but they can not be demonstrated beyond indicated links to have had involvement in Iran's nuclear program. This category of firms and entities will see a more gradual removal of restrictions affecting them and when they do they still will stay under a transparent monitoring system. This I expect to see becoming more regulated but able to operate non-military trade and finance within twelve to eighteen months as long they stay within the parameters of transparency introduced globally in banking and trade since 2005," Emadi said.
The Iranian expert says that there seems to be a third grouping of entities that will be most closely observed in the post-agreement period and shall be facing a robust system of monitoring and regulation. "These will by firms who are connected to Iran's space programme, the long range missile technology and advance engineering. I speculate that for this group to become integrated into the global trade and finance, we may need a period of five to ten years during which increased transparency on the part of Iran will help confidence-building concerning the non-aggressive nature of these areas. But this category is very small in their significance in the economy and even in the technological advancement of the country".
In conclusion, Emadi believes that though the political leadership in Iran has been insisting on a single step removal of sanctions, in practice what we may observe is rapid removal of restrictions facing the civilian economy and banks involved in trade and finance with no established links with the Revolutionary Guards, their businesses and Iran's nuclear sector. "But even the third category should see an easing of restrictions as Iran continues to demonstrate its cooperation in order to affirm the non-military aspects of its program".
On the perspective of lifting sanctions, Emadi said the most significant impact will be the removal of restrictions on foreign investment and partnership on the economy that will increase the GDP growth rate by more than 2 percent and the growth in foreign trade which he expects to see in the range of 15-35 percent per annum for at least five years with the Western economies. "If managed coherently, a small leapfrog in the economy and sustain higher growth for a decade are within the reach of the country," expert added.
P5+1 Group (United States, Britain, France, China, Russia and Germany) reached a politic agreement with Iran on April 2, while the sides have been attempting to achieve a comprehensive nuclear agreement by self-imposed deadline on June 30.
Edited by CN