After ratcheting up pressure on Iran, the Trump administration has offered Iran to talk things out. But this diplomatic carrot is way smaller than the stick of American economic might that Iran is being beaten up with. The EU is in a position to abide by the Iran nuclear accord in-name only. Meanwhile, a court ruling in Britain is expected to freeze Iranian assets in that country. The going is getting tough for Iran.
Iran has faced sanctions many times over the last few decades. It has led the country to become self-sufficient in manufacturing and not become too dependent on imports. Being an oil-exporting country, its lowest trade surplus was of nearly $8 billion in 2001 and of $81 billion at its peak in 2012, as per Trade maps.
But Trump-led attack has been amongst the most severe in Iranian history with no loopholes being left open for traditional markets of oil such as India. While European countries are trying to salvage trade ties, they have cautioned Tehran that they may not be able to prevent investors from bolting from Iran to protect investments in the US.
As a result, Iran’s Rial has lost more than half its value since April. Protests have broken out across Iran since the start of this year over high prices, water shortage, and power cuts. Just last week, hundreds of people rallied in cities across the country to protest against inflation, which was caused, in part, by the weakening Rial. Prospect of further Iranian assets being frozen or seized abroad has added fuel to the fire.
Iran’s President Rouhani, who has successfully evaded public scrutiny over economic management in the past, has been summoned by the parliament for the first time to answer for Iran’s growing economic difficulties. Already, a new central bank governor has been appointed and the president’s economic team’s reshuffle is in the wings.
While high-level Iranian officials have rejected the prospect of talks with the US, it is unclear where this road will lead to or what is Trump’s end game, assuming he has one. If his hardliner stance leads to an eventual regime change, it will come about only after a long period of unrest. Pakistan has already faced adverse consequences because it has one neighbour going through decades of turmoil. With troubles of its own, Pakistan can ill-afford to have two bordering countries going through increasingly turbulent times.
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