Iran rejoins world economy as sanctions are lifted

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Iran rejoins world economy as sanctions are lifted

9:13 CAT | 17 Jan 2016

Al Jazeera / Economic isolation ends after UN certifies Iran's compliance with 2015 accord, even as US unveils separate sanctions.

Iran’s President Hassan Rouhani has described as “historic” and a “great victory” the lifting of sanctions against Iran, declaring that the country is now reopening its doors to the international economy.

The sanctions were lifted on Sunday after the International Atomic Energy Agency, the UN nuclear watchdog, announced late on Saturday that Iran had complied with its side of the July 2015 accord.

For Iran, long frozen out of the global economy for its contested atomic programme, implementing the nuclear deal will be a welcome change.

More than $30bn in assets overseas will become immediately available to Iran. Official Iranian reports have set the total amount of frozen Iranian assets overseas at $100bn.

A European oil embargo on Iran will end. Already, about 38 million barrels of oil are in Iran’s floating reserves, ready to enter the market, according to the International Energy Agency.

In a speech in Tehran on Sunday, Rouhani appealed for investments from around the world.

“This is a historic and exceptional day in the political and economic history of our nation,” he said.

“The engine of our economy has started again. We need investments to keep that wheel of the economy of the nation rolling.”

But in a sign that Iran is unlikely to quickly warm up to the US, the US administration imposed on Sunday new sanctions on 11 Iranian companies and individuals for supplying Iran’s ballistic missile programme, the US treasury department said.

In brief remarks in Washington DC, President Barack Obama also reiterated the imposition of the new sanctions, while crediting his “smart” diplomacy for helping cut off every path Iran had to a nuclear bomb, and free Americans from Iranian prisons.

“This is a good day because once again we are seeing what’s possible through strong American diplomacy,” Obama said at the White House.

The new sanctions come after the US administration delayed the action for more than two weeks during negotiations to free five American prisoners, according to people familiar with the matter.

Earlier in on Sunday, during a speech before parliament, Rouhani said Iran should use the expected influx of money and investments to prompt the “economic mutation” of the country, creating jobs and enhancing quality of life for Iranian citizens.

Iran has been suffering double-digit inflation and unemployment rates for years.

Rouhani said his country needs up to $50bn in foreign investment per year to reach its goal of eight-percent annual growth.

Celebrations in Tehran were relatively muted at first, because the Vienna implementation announcement came well after midnight. But on Sunday, many Tehran residents expressed optimism about Iran’s future economic prospects.

Newspapers in Tehran largely welcomed the implementation of the deal, with the state-owned IRAN daily writing on its front-page: “The collapse of sanctions.”

With the sanctions now removed, Iran is ready to increase its crude oil exports by 500,000 barrels a day, Amir Hossein Zamaninia, deputy oil minister, was quoted as saying by the Shana news agency on Sunday.

Iran’s return to an already oversupplied oil market is one of the factors contributing to a global rout in oil prices, which fell below $30 a barrel last week for the first time in 12 years.

Iran is the world’s fourth largest oil producer.

Meanwhile, as news of the lifting of sanctions rolled on Sunday, it was also announced that four Americans – including Washington Post reporter Jason Rezaian – and seven Iranians were being freed in a prisoner swap.

Reports said Rezaian left Tehran and has landed in the Swiss city of Geneva.

But according to Reuters, one of four American prisoners released, Nosratollah Khosravi-Roodsari, was not on the Swiss plane that left Tehran on Sunday.

It was not immediately clear whether he opted to stay in Iran or depart separately, an earlier State Department statement said “those who wished to depart Iran have left.”

The official said those that boarded the plane from Tehran included Rezaian as well as Saeed Abedini, a pastor from Idaho, and Amir Hekmati, a former soldier in the US Marine Corps from Flint, Michigan.

Rezaian’s Iranian wife and mother were also both on the plane.

Source: Al Jazeera and agencies