Iran's Currency Crisis Is Decades in the Making

◢ The experience of countries such as China show that currency devaluation can be managed and even turned beneficial for the economy by enabling the growth of exports. But in Iran, the devaluation of the rial has never been proactively managed, and subsequent administrations have only sought to respond to repeated currency crises, about once each decade. As Iran faces another such episode, it remains to be seen whether a real monetary policy might finally emerge.

7 Charts That Challenge the Distorted View of Iran's Economy

◢ There is a growing sense that Iran has squandered its chance to join the ranks of the BRICs—Brazil, Russia, India, and China—which count as the great emerging markets of the world. As sanctions return, as the rial sheds value, and as protests become routine, Iran is increasingly portrayed as an economic basket case where state collapse is just around the corner. But comparing Iran’s macroeconomic performance with Brazil, another country that has contended with widespread protests and economic angst for over three years, paints a very different picture.

Iran: The Case for Protecting Humanitarian Trade

◢ A crisis is looming in Iran’s healthcare sector: patients are reporting shortages in life-saving medicine. The situation is expected to worsen once US sanctions on Iran are reimposed in November. European and US companies that can provide the advanced medicine and equipment needed to treat chronic diseases inside Iran are grappling with how to sustain their operations. New US sanctions will put the health of ordinary Iranians at risk. Europe can take concrete steps to minimize this—steps which also support its ongoing commitment to the nuclear deal.

Here's How the European Commission Will Allocate EUR 18 Million in Iran

◢ This month, the European Commission approved an initial tranche of EUR 18 million in development funding from an larger package of EUR 50 million that has been allocated to support projects in Iran. This represents a highly significant, “first-of-its-kind,” intervention to support Europe-Iran trade and investment. However, the funding is not primarily intended as an attempt to mitigate the effect of returning U.S. secondary sanctions. As made clear in the “action document” which details how the development funding will be distributed, the European Commission has allocated the funding “in line with the European Consensus on Development” to provide “targeted support in the areas of Prosperity, Planet and People.”

For Payment Service Venmo, 'Persian🍕' Raises Alarms

◢ Venmo is a “digital wallet” connected to one’s bank account that allows users to instantly send and receive money. Venmo users commonly include little messages when sending money to friends. But as a recent experience shows, including the words “Iranian” or “Persian” in a memo, even in reference to a pizza dinner among Iranian friends, can have transactions blocked for further review. Yet including the word “cocaine” in a payment memo will not lead to a compliance review, despite the violation of Venmo’s user agreement. This reflects the unique stigma around Iran transactions.

Can Europe Defend Itself And Iran From U.S. Sanctions?

◢ In an op-ed published in the German newspaper Handelsblatt, German Foreign Minister Heiko Maas declared that the “the US and Europe have been drifting apart for years.” In order to defend the JCPOA and protect European companies active in Iran from U.S. sanctions, Maas has outlined three initiatives: “establishing payment channels independent of the US, a European monetary fund, and an independent SWIFT [payments] system.” This has given many in Iran hope that Europe might still be able to create an “economic package” to save the JCPOA. But Maas’s vision is not an economic package. It is an economic process, which may prove transformative, but only in the long term.

Iran's Currency Crisis is a Supply-Side Story

◢ On Monday, the Iranian rial sank to a historic low. But those Iranians who scrambled to convert their rials into dollars found it difficult to do so—as they have for months. This important detail of the current crisis has gone largely unexamined. While the determinants for demand for foreign exchange are well understood, the second determinant of market prices—foreign exchange supply—remains subject to mere passing mention. This is a mistake. Iran’s currency crisis is a supply-side story.

Can Chinese Investment Bring Sunshine Back to Iran's Solar Industry?

◢ Renewable energy has been one of the brightest sectors in the Iranian economy, achieving 70 percent growth in the last Iranian year according to official data. But this encouraging growth is now in doubt. The Trump administration’s unilateral withdrawal from the JCPOA nuclear deal has brought economic uncertainty for local investors and made foreign direct investment increasingly difficult. While there are steps the government can take to reassure local and foreign investors, as with other sectors of Iran’s economy, the withdrawal of European investors from Iran’s solar industry may mean that “Chinese money turns out to be the only option.”

As Economic Anxieties Deepen, This Clinic Helps Iranians Manage Debilitating Stress

◢ These are stressful times in Iran. According to a recent study, 80 percent of Tehran residents experience at least one major stressful event per year and 45 percent report feeling stress due to the present economic situation. The Aramesh Multidisciplinary Pain Clinic recently launched new neuropsychotherapy services—never before offered in Iran—to help individuals better manage debilitating stress. Despite these interventions by the private sector, Iran’s government has yet to recognize rampant stress as a genuine public health crisis.

European Executives in Iran Ask: 'Should I Stay or Should I Go?'

◢ Many European businesses are pulling out of Iran for fear of being entangled in US sanctions. But these companies are overstating the complexity of the situation. Compliant business in Iran is not only possible, it is also ethically important because it helps support employees who not only face unemployment but will also no longer be influenced by values that promote increased understanding and tolerance in Iranian society. Recognizing such social obligations, Western companies in Iran cannot hide behind the sanctions if their real reason to leave or restructure is lost business result from the management’s lack of business skills, capabilities, and commitment.

Europe's SWIFT Problem

◢ German foreign minister Heiko Maas recently penned an article in which he said that "it’s essential that we strengthen European autonomy by establishing payment channels that are independent of the US, creating a European Monetary Fund and building up an independent Swift system." So what exactly is Maas's quibble with SWIFT, the Society for Worldwide Interbank Financial Telecommunication? SWIFT is a proprietary messaging system that banks can use communicate information about cross border payments. This November, U.S. President Trump has threatened to impose sanctions on SWIFT if it doesn't remove a set of Iranian banks from the SWIFT directory. 

International Airlines Are Leaving Iran. Here’s Why.

◢ News that British Airways and Air France are axing their service to Iran was met by anger from Iranians, who felt the airlines were bowing to political pressure from the Trump administration. To better understand whether commercial or political considerations are driving these decisions, Bourse & Bazaar spoke to an executive from one of the international airlines now withdrawing from Iran. The executive’s account provides a more precise picture of why numerous airlines have determined that flying to Tehran is no longer commercially viable. 

Despite Political Drama, Iran's Private Sector Banks Continue March on Compliance

◢ The political drama surrounding the FATF action plan has overshadowed the role of Iran’s private sector banks in improving their compliance protocols while actively pushing for stronger regulatory requirements. Banks such as Bank Pasargad, Middle East Bank, and Saman Bank enjoy both large market capitalizations and a crucial role as intermediaries with the international financial system, lending these relatively young institutions considerable influence. But policymakers in Europe, scrambling to preserve banking ties with Iran in the face of returning U.S. sanctions, have overlooked the imperative of engaging Iran’s private sector banks as agents for change.

Iran's Government Steps in to Address Paper Crisis, But Papers Over the Cracks

◢ Iran is battling a paper crisis. Gradual price hikes have been increasing pressure on book and newspaper publishers over the last year, but the scale of the crisis became clear when Culture Minister Abbas Salehi announced on August 4 that the country has just enough newsprint paper in storage to meet two months worth of demand. The government has rolled out a support package that includes importing paper as an essential good. But the move defers real reform that is needed to address a decades-long problem of corruption and inefficiency.

Rising Prices Push Homebuyers Out of Iran's Capital

◢ A 41 percent rise in Tehran City’s average home prices has left some residents, especially renters, with no option but to leave the capital for more affordable housing units in suburban areas close to Tehran. As per the latest national census, Karaj was the top destination for residents moving out of Tehran during the five years to December 2017. In just the last three months, more than 53,000 individuals have moved from Tehran to Karaj City. In the first quarter of the Iranian fiscal year, the Karaj housing market recorded 65 percent growth in home sales and an 18 percent increase in the average price of residential units.

Iran Sanctions Hopes Fly on Possible Delivery of Eight ATR Aircraft

◢ In a recent interview, French Economy Minister Bruno Le Maire expressed optimism for the delivery of eight ATR turboprops to Iran as part of a contract with Iran Air, the country’s national airline. Le Maire spoke of being “hopeful that the United States will provide authorization to deliver these aircraft.” The ATR deliveries, like the three Airbus deliveries made prior to President Trump’s withdrawal from the Iran nuclear deal, are highly symbolic of the hope and expectations for increased trade and investment following the implementation of the Joint Comprehensive Plan of Action (JCPOA).

Iranian Women Face Uphill Battle Toward Equal Pay

◢ According to data compiled by IranSalary, the country's first specialized online platform for remunerations, Iranian women earned 27 percent less than their male counterparts in the previous Iranian year (ended March 2018). The wage gap has widened in recent years, rising from an average of 23 percent three years ago. For Aseyeh Hatami, Founder of IranTalent and IranSalary, bringing greater equality to Iran’s job market is a personal and professional mission.

Brexit Britain Must Match EU Efforts to Save Iran Nuclear Deal

◢ With the UK poised to leave the European Union, Brexit Britain can no longer rely on EU economic measures to protect the Iran nuclear deal. The UK government needs to parallelize its efforts with those of the EU, following the example of EU member states such as France and Austria in order to explore the use of state-owned financing entities to open sanctions-compliant investment channels. The Iranian government should insist that the UK shows greater initiative as a party to the JCPOA.

Encouraged by Government, Iranian Entrepreneurs Dream of 'Smart Cities'

◢ Spearheaded by the Ministry of Information and Communication Technology and the Ministry of Roads and Urban Development, the Iranian government is promoting the adoption of smart city technologies to improve the efficiency and livability of Iranian cities. Drawing on government support, major corporations and new startups alike are developing and implementing new technologies in Iran, many of them homegrown.

US Officials Warn of ‘Deceptive Web’ of Iran Business, But Hamper Transparency Efforts

◢ In a recent speech, Under Secretary of the Treasury Sigal Mandelker warned that foreign companies that maintain a presence in Iran must conduct “extra due diligence to keep them from being caught in Iran’s deceptive web.” But background conversations with several compliance specialists reveal that US sanctions are a major barrier to key AML/CTF reforms in Iran. Industry-standard compliance software is not accessible for Iranian end users, leaving some experts to conclude that Iran is being “set up to fail.”