Expert: Sanctions against Iran are lifted, but it is not a reason to predict “boom” in Iran-Armenia relations

Iran has been reconnected to SWIFT, but this will hardly have any impact on its trade and economic relations with Armenia, Sevak Sarukhanyan, Iranist, Director of the Armenian Public Studies Center, has told EADaily. Disconnected from SWIFT Iran could not make big international deals, but there were no such problems with Armenia, he said.

“SWIFT has no major importance in the Armenian-Iranian trade and economic relations. There were some insignificant restrictions, for instance, in the activity of the Iranian Mellat Bank in Armenia and others, but these restrictions have too little impact on the trade and economic relations. The Armenian-Iranian bilateral projects were developing in the ‘neighborhood regime’ despite the sanctions imposed on Iran, including disconnection from SWIFT,” Sarukhanyan said.

It’s not just the SWIFT, the expert said, for the Armenian-Iranian relations lifting of Iranian sanctions is not a crucial point and the mess around it is inexpedient. “The Armenian-Iranian agenda today…I would not call it too rich, but it is not over-fulfilled either.  All relatively big projects have been implemented over the last 20 years, for instance the construction of the Iran-Armenia gas pipeline. As for unfinished big projects, I can outline three, two of which are inherently not connected with the Iranian capital and sanctions directly. The first is the North-South motorway, and Iran is not involved in the financing of that project. The second is the Armenia-Iran Third Power Line – the Armenian side is in search of financing. The third is the construction of HPP in Meghri (south of Armenia – editor’s note), which Iran was to build and operate independently. Yet, it appears that this project has been shelved. During the last few years, Iran’s energy sector has changed dramatically. The Meghri HPP project has not been launched; instead Iran launched three similar projects with Azerbaijan.  In this light, it is not necessarily right that Tehran will think of reanimating the Armenian-Iranian energy project in the visible future,” Sevak Sarukhanyan said.

At the request of EADaily, Sarukhanyan commented on the lifting of some sanctions on Iran out of the context of the Armenian-Iranian relations: “Some observers cannot stop describing the bright and sunny Iranian ‘political-economic morning,’ in fact, things are not that bright. Some sanctions were lifted, of course, but others are still in force. Iran can now export oil and make big international deals. Yet, export of oil from Iran will not resume as soon as tomorrow.  It will take Iran about six months to increase the export bar to 0.5 million barrels a day amid low oil price. Last year, the IMF conducted a thorough analysis of the Iranian economy and arrived at a conclusion that amid current oil prices, resumption of its export will not stop the recession. According to the IMF, Iran’s GDP will decrease by about 2.5% by March even if the oil embargo is lifted,” the expert said.

Rescinding of sanctions is not enough to make real breakthroughs, Sarukhanayan said, Iran needs serious structural reform to liberalize the economic sector. “However, the problem is in the political field. Theoretically, President of Iran Hassan Rouhani is able to tackle the issue. Whether he will manage to settle the problem is a big question. Such decisions must be made inside the parliament of Iran where religious and conservative forces are strong now. These forces will be opposing any reform. In addition, in February, Iran will conduct parliamentary elections and I think Rouhani’s supporters will not just fail to receive majority of votes, they will not even come close to it,” the expert said. For conclusion, Sevak Sarukhanyan said the macroeconomic situation around Iran after the sanctions are lifted will be more favorable, but it is still questionable whether Iran will manage to use that circumstance the right way.

EADaily reported earlier that U.S. and EU adopted a decision on January 17 to lift the sanctions on Iran caused by its nuclear program. US Secretary of State John Kerry made a statement on the decision.  EU’s stand on the issue was confirmed by Federica Mogherini, EU Foreign Policy Chief. The U.S. and EU sanctions on Iran were lifted after IAEA confirmed Iran’s implementation of the nuclear-related measures set out in the Iran nuclear agreement.