Iranians hope deal on country's nuclear program will ease sanctions, boost economy
Sanctions imposed by the U.S., Europe, the UN, Canada, and others have crippled Iran's economy
CBC News correspondents Derek Stoffel and Nahlah Ayed are reporting from inside Iran as the deadline nears for a final agreement on the country's nuclear program.
Mohammad Sharif is a regular at Tehran's stock exchange. As an investor, he's got a keen interest in how his stock portfolio is faring. As an Iranian, he's hopeful that international talks on Iran's nuclear program will boost the economy, and turn his financial fortunes around.
"The stock market has been [hit] hard by the sanctions," Sharif said. "If those sanctions are lifted, I think there will be an increase in the market."
Sanctions imposed by the United States, Europe, the United Nations, Canada, and other countries have crippled Iran's economy, which fell into a two-year-long recession that only ended last year. The global community initiated a series of economic penalties to curb Iran's ability to develop a nuclear weapons program.
"Our economy has been paralyzed because of these sanctions. It's really hurt our economy," said Sharif, who estimates that his market portfolio has lost 40 per cent of its value over the last five years.
Several rounds of sanctions have targeted various sectors of the Iranian economy.
Measures brought in by the United Nations block the sale of heavy weapons and nuclear technology to Iran while freezing the assets of key companies and individuals.
Canada's sanctions are similar to those imposed by the United States and European nations, which block most financial transactions involving Iranian businesses, among other measures.
The crackdown on banking transactions has hurt Iran's state-owned oil industry, which has seen its production plummet due to an embargo by the European Union. The Iranian government is unable to collect on the oil it does sell. It's estimated that Iran has been unable to recover about $120 billion in oil revenues.
Shutting down international banking has hurt ordinary Iranians as well.
Small businesses, from the sellers of Persian carpets to the corner store owner, are unable to process foreign credit card transactions, meaning visitors from abroad have to carry significant amounts of US dollars or Iranian rials when in Iran.
Sharp rise in food prices
Food and retail prices have also increased. A litre of milk is the equivalent of about 85 cents Cdn, which is a five-fold increase since 2008. Meat and rice prices have risen dramatically, as well.
"People can still afford by and large to get milk, and to get eggs, to get meat, to buy these things. But they're buying perhaps less of them," said Golnar Motevalli, a business reporter for Bloomberg News in Tehran.
Iran's central bank estimates that the economy would see at least two per cent growth if sanctions are eased.
The prospect of economic recovery has business leaders — inside and out of Iran — optimistic of what could be a sizeable boom. Iran's economy is in the global top 20 and years of economic penalties have left it a rather untapped market.
"It's a dawn of a new era in our economy, in our technological sector and how we interact with people around the world," said Ali Tehraninasr, business development director at Saba Idea, one of Iran's largest internet companies, which runs aparat.com, Iran's version of YouTube.
"We're very optimistic and hopeful that things will go good."
The effects of sanctions have touched almost every Iranian, which explains why there is a widespread feeling that relief may be on the horizon, if a final deal is reached on the nuclear issue.
But financial experts warn that economic recovery will not happen overnight.
"It may take possibly up to a year," said Motevalli of Bloomberg News. "I think officials have said this as well, that we have to be patient. Once sanctions have been lifted, it's not going to be a sort of night and day change."
Yet hardly anyone here wants to talk about the prospect of these negotiations failing, which would see the sanctions remain in place.
Mohammed Sharif, the investor, refused to predict what would happen to his portfolio. "It is impossible! I can't even consider that they do not reach a deal. We are alive with hope."