Insight — Bourse & Bazaar Foundation

◢ 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.

Sep 5

Sep 5 Can Chinese Investment Bring Sunshine Back to Iran's Solar Industry?

Sepehr Arefmanesh

◢ 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.”

Aug 29

Aug 29 As Economic Anxieties Deepen, This Clinic Helps Iranians Manage Debilitating Stress

Maziar Motamedi

Society

These are stressful times in Iran and people are seeking relief. 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 economic situation.

Aug 27

Aug 27 Europe's SWIFT Problem

J.P. Koning

◢ 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.

Aug 24

Aug 24 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.

Aug 21

Aug 21 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.

Aug 13

Aug 13 Iran's Government Steps in to Address Paper Crisis, But Papers Over the Cracks

Maziar Motamedi

◢ 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.

Aug 6

Aug 6 Rising Prices Push Homebuyers Out of Iran's Capital

Sepehr Arefmanesh

◢ 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.

Aug 2

Aug 2 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).

Aug 1

Aug 1 Iranian Women Face Uphill Battle Toward Equal Pay

Maziar Motamedi

◢ 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.

Jul 31

Jul 31 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.

Jul 30

Jul 30 Encouraged by Government, Iranian Entrepreneurs Dream of 'Smart Cities'

Rana Jalali

◢ 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.

Jul 24

Jul 24 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.”

Jul 19

Jul 19 Negotiations On Legal Status of Caspian Sea Approach Finish Line

Stanislav Pritchin

◢ Negotiations on the international legal status of the Caspian Sea, which started in 1996, appear to have at last reached the finish line. After 22 years, the five countries around the sea have come close to signing a convention on its legal status. If they do, it seems that the agreement will allow to pave the way for the construction of the underwater the Trans-Caspian Gas Pipeline and other projects and will also close the access to the sea for the armed force of third countries.

Jul 18

Jul 18 Three Years Later: Europe’s Last Push on the Iran Nuclear Deal

Ellie Geranmayeh

◢ The Iran nuclear agreement marked its third anniversary in a gloomy state. Many hoped that the resolution of the nuclear dispute would result in a new understanding between the West and Iran, opening a pathway for detente rather than confrontation. Relations between Europe and Iran have certainly made gains in this direction, but the Trump administration’s maximalist stance on Tehran has created an extremely hazardous environment for all remaining stakeholders in the nuclear deal.

Jul 17

Jul 17 Could Trump Deliver Iran an Oil Windfall?

Richard Nephew

◢ The president’s recent statement that OPEC may have something to do with the president’s own decision to create a crisis with Iran. While attention is duly paid to how much Americans have to pay at the pump, a more subtle and complicated story will soon play out with respect to Iran and the reapplication of US sanctions ordered by Trump on May 8, 2018. In fact, unless oil prices are contained, the primary result of the president’s action may be to ensure that Iran profits from the oil market risks that sanctions have created.

Jul 6

Jul 6 Iran Shows New Savvy in Defining Outcome of Key Nuclear Deal Meeting

◢ Iran has finally learned how to use the Joint Commission of the nuclear deal to tackle its economic challenges. Iranian foreign minister Javad Zarif got what he needed from the ministerial meeting. Two months following Trump’s abrogation of the nuclear deal, the remaining parties to the agreement proved able to present a consensus position on the need to protect Iran’s economic interests in direct contravention of the declared US policy. On practical implementation, bilateral exchanges are the preferred route forward.

Jun 29

Jun 29 Europeans Beat Back Americans as FATF Gives Iran More Time on Financial Reforms

◢ At its plenary meeting in Paris, the Financial Action Task Force (FATF) opted “to continue the suspension of countermeasures” related to Iran’s inclusion in the so-called “blacklist” of countries with deficiencies in anti-money laundering (AML) and combating financing of terrorism (CFT) standards. The suspension will be in place until October 2018. The suspension can be seen as a victory for European and Iranian multilateral cooperation in the face of the increasingly hostile American posture.

Jun 27

Jun 27 As Trump Goes Nuclear On Iranian Oil, Europe Must Match His Brinkmanship