Shamseddin Hosseini, minister of economy and finance from the Islamic Republic of Iran, discussed the impact of Western sanctions on the country’s economy in an interview with The Wall Street Journal’s Jay Solomon. Here are excerpts from the interview.
What has been the impact of the mounting economic sanctions on Iran?
The sanctions have created a lot of disturbances for us, but we have overcome those challenges and difficulties and tried to make up for what was lacking. The economic capacity of the Islamic Republic is quite high. A nuanced look at the history of the people of Iran shows that when they are faced with an external pressure they become extremely united and stand up on one front.
How is being cut off from the SWIFT financial network impacting Iran?
We did forecast all of this. And, in reality, we were fully aware that they would use any tool in their arsenal against us…SWIFT was a means of economic transfer back-and-forth and then it became a political tool. With a little bit more effort, the replacements for SWIFT are being used.
What will be the fallout from the European Union’s oil embargo?
If they announce that they will put even ever more stricter sanctions on Iran’s oil industry, the first ones to complain will be the people of the United States and of the Euro-zone countries because they will be forced to dig into their already constricted budgets a few cents more to pay for each gallon of gas. I do believe that the more they ratchet up the pressure on the sanctions, it will be like a very strong punch against a wall. Maybe you will harm the structure of this wall, but there is a high possibility that it will ricochet back.
How is the overall health of Iran’s economy?
As a result of all the efforts brought to bear…a section of our oil industry exports have decreased. But our oil revenues have increased. And, as I alluded to earlier, the non-oil exports have also increased…Iran is the world’s 17th largest economy. The Iranian economy is a strong economy, and it has a particular framework and enjoys many pluses.
What type of economic growth are you forecasting for Iran?
Certainly, our growth rate will be different and certainly higher than that projected by the IMF…All together, we believe that we will revisit growth rates of 6%, if not higher, God willing, for that year as well. Why? We’ve seen considerable investment in various sectors…During the current year, they will actually see production.
Are sanctions forcing Iran to find new international trading partners?
One of the results of the sanctions will be a very different makeup of out trading partners…This framework will be to the detriment to the West and in the favor of the East and its traders and businessmen.
Does Iran see a new global trading systems emerging?
We aren’t talking just about Iran losing faith in the dollar and the euro. I do believe the trust of the Americans, as well as the Europeans, have also decreased in their currencies.
Have the international sanctions forced Iran to accelerate economic reforms?
In my opinion, in result of the sanctions, the thought process, and the time frame, increases that goes behind this reform process. Everyone wants to run, but in cases of emergencies everyone will run, like it or not.
Has price reform in Iran hurt the people and fueled inflation?
Under our free will, and on purpose, [gasoline] gets quadrupled, and we increase the price of oil gas tenfold, and we increase the price of grains by 50%, of course it will impact inflation. But this energy, this price pressure, was necessary for economic reform. But people need and have been continuing their lives and their resourcefulness.
Is Iran pursuing nuclear weapons?
We are a religious country. And, in reality, all of our laws must be according to religious guidelines. In our religious framework, weapons of mass destruction, including nuclear weapons, are strictly forbidden.
Why is nuclear power so important for the Islamic Republic of Iran?
The economies of future generations need…new scientific knowledge. Therefore, bearing that weight today, and enduring the hardship, is much better than not giving the knowledge that the next generation needs.