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VALENTINA SCHENSNOVICH. IRAN UNDER NEW US SANCTIONS. Analytical Review.
Keywords: Islamic Republic of Iran (IRI); Hassan Rouhani; Ali Khamenei; IRGC; JCPOA; USA; Donald Trump; West; sanctions; EU; GDP; oil exports and imports; non-oil exports; foreign investment; budget; Fatah; economic recession; "economy of resistance"; social protests; forecasts.
Valentina Schensnovich,
Research Associate, INION RAN e-mail: vl-lyuba9@yandex.ru
Citation: Schensnovich V. Iran under New US Sanctions // Russia and the Moslem World, 2022, № 1 (315), P. 86-104. DOI: 10.31249/rmw/2022.01.08
Abstract. The article contains the analysis of the changes that occurred in Iran in 2018-2020. During this period, the US administration again began to pursue a policy of sanctions pressure on Iran. The sanctions affected Iran's religious, political and military leaders. It should be emphasized that the sanctions are aimed primarily against the Islamic regime of Iran.
Introduction
The authors of the articles analyze the situation that occurred in 2018-2020 in Iran. After the conclusion of the Joint Comprehensive Plan of Action (JCPOA, 2015), Iran began to
restore its economic potential and strengthen its political influence in the region. The government of Hassan Rouhani has embarked on expanding ties with the West, gradually limiting the influence of the Islamic Revolutionary Guard Corps (IRGC) inside and outside the country. However, since 2018, the United States has resumed the policy of tough sanctions pressure on Iran. The US sanctions affected almost all sectors of the Iranian economy, the most efficient companies in the country.
The articles consider the main trends in the socio-economic and political development of Iran after the US withdrawal from the JCPOA and the return of American sanctions. The intensification of confrontation with the United States in the region, the economic downturn, the growth of internal protest potential, the confrontation of political elites, the radicalization of power, the coronavirus pandemic - all this threatens the stability of the Islamic regime.
The US Sanctions
The sanctions regime has become a constant factor of development for Iran since the creation of the Islamic Republic of Iran (IRI), N.M. Mamedova PhD(Economy), IOS RAS [3] notes. Its introduction was explained to the population of the country as the desire of the West and Israel to destroy the Islamic regime and served as a factor uniting Iranian society with the authorities.
After 2007, the sanctions regime acquired an international character, which was associated with the development of Iran's nuclear program. The sanctions are mainly directed against companies associated with the extraction and export of Iranian energy resources to the world and regional markets. In response to the sanctions, at the initiative of the country's leader, Rahbar Ali Khamenei, the concept of the "economy of resistance" was developed under the government of Mahmoud Ahmadinejad. Its goal was to reduce the dependence of the country's economy on
the export of crude oil and on the import of components necessary for the operation of Iran's industrial enterprises.
N. Mamedova gives a macroeconomic analysis and assesses the political situation in Iran. After 2012-2013, when GDP fell by 7.7 per cent, the fall in oil prices on the world market intensified the negative effect of sanctions. The deteriorating economic situation began to threaten not only economic development, but also the Islamic regime. As a result, the pragmatic interests of the ruling clergy outweighed ideological considerations - Rahbar Ali Khamenei was forced to negotiate a reduction in the nuclear program. The religious leadership supported the arrival of the team of pragmatist Hassan Rouhani, close to the reform wing of political forces, which resulted in the signing of the JCPOA in Vienna on July 15, 2015. In January 2016, the parliaments of the countries participating in the signing of the treaty confirmed their agreement with it, which meant the beginning of the official lifting of sanctions. The dynamics of Iran's GDP has become positive again.
The author notes that GDP growth in 2016-2017 was mainly due to oil production. The share of oil in Iran's exports, even in the most difficult years for Iran, was more than 60 per cent, and only in 2015-2016 it almost equaled non-oil exports (50.6 per cent). As a result of the improvement of the economic situation, the positions of the liberal wing of the political forces that shared the views of the Hassan Rouhani team on the need to expand ties with the West strengthened, the IRGC's influence has decreased -both inside and outside Iran - the secularism tendencies that periodically manifest themselves in Iran have intensified. The situation began to change radically after Donald Trump came to power in the United States. D. Trump said in May 2018 that the "highest level" of sanctions will be imposed against Iran, which will affect banks and companies operating in all sectors of the Iranian economy without exception. But the main thing for the country was the ban on purchases of Iranian oil, the main source of foreign exchange earnings.
The strengthening of the sanctions regime falls on 20182020. The first package of the US sanctions against Iran, imposed since the fall of 2018, affected more than 700 individuals, various companies, and 50 Iranian banks. By 2020, there was not a single industry or large company that has not been sanctioned. On January 10, 2020, new sanctions were imposed against Iranian companies engaged in the production of high-quality steel in demand on the world market.
The sanctions of January 10, 2020 were the result of measures taken by Iran in response to the murder on January 3, 2020 of Qasem Suleimani, the head of the IRGC Kods unit operating outside Iran. The sanctions affected significant political figures. Among them was, in particular, the brother of Kasem Suleimani, who heads the Basij militia, Golamreza Suleimani. Sanctions against the IRGC were imposed in April 2019. D. Trump declared this structure a terrorist organization. Hassan Rouhani sought to limit the political, military and economic influence of the IRGC, while Rahbar Ali Khamenei considered the Corps the main pillar of the regime. On November 4, 2019, on the anniversary of the 1979 seizure of the US Embassy in Tehran, sanctions were imposed against nine Iranian citizens, including Ali Khamenei's son.
The most painful for Iran are sanctions on purchases of Iranian oil. Most of the agreements signed with Iran by foreign, including European and Russian companies, after the signing of the JCPOA, concerned mainly the participation of these companies in oil exports. The United States has managed to achieve its goal - the export of Iranian oil has more than halved. Under these conditions, Iran is ready to reduce the prices of exported oil. Mamedova concludes: the illegal oil market continues to operate, albeit in limited amounts. Turkey, China, India and other Asian countries remain the main buyers of Iranian oil. Despite the sanctions, oil from Iran enters the market mainly through third-country companies. Many companies in
Europe and Asia faced a dilemma: which is preferable - Iranian oil or attempts to avoid the US sanctions.
Not only Iran, but also the rest of the JCPOA participants found themselves in a difficult situation. Germany, Great Britain and France have developed a special trade and financial mechanism INSTEX (Instrument for Supporting Trade Exchanges) to circumvent sanctions, which Iran has joined. France and Germany tried to expand the number of INSTEX participants and preserve the JCPOA. On November 29, 2019, Finland, Belgium, Denmark, the Netherlands, Norway and Sweden joined this payment system. The author believes that if Iran had joined the international organization FATF (Financial Action Task Force on Money Laundering) - the "Group for the Development of Financial measures to combat money Laundering", which interacts with the UN, the IMF and the World Bank, INSTEX activities could have been more successful. INSTEX was unable to resist the US sanctions until 2020, especially due to the aggravation of Iranian-American relations.
The Budget as a Reflection of the US Sanctions
The impact of sanctions on the state of the Iranian economy was reflected in the formation of the budget for 2020/2021. In the draft budget submitted to the Mejlis in December 2019, oil export revenues were reduced by more than half, although they previously made up the bulk of the budget. As the author notes, Iran's oil revenues are difficult to predict, since the sale agreements are kept secret due to sanctions. The budget is based on the calculation of the oil price of $50 per barrel, but even if the price on the world market is higher, the difference in the price due to which the National Development Fund is formed will not be high, since Iran is forced to sell its oil illegally and at reduced prices.
In order to reduce the budget deficit, which can be estimated at 50 per cent, the new budget assumed borrowing of
about $11 billion from the National Development Fund, as well as income from the sale of government bonds. These bonds belong to the category of "sukuk" - the so-called Islamic securities backed by assets of state-owned companies. There is a high probability that the Central Bank will be forced to increase the amount of money in circulation, which will lead to an increase in inflation. The budget deficit forces the government to reduce capital projects, but, according to N. Mamedova, this will unlikely be able to radically change the system of social assistance to the population. In recent years, Iran has reduced compensation payments by introducing targeted support for the poorest. It has become difficult for the country to maintain prices on the domestic market, to carry out charitable housing projects, to pursue a policy to increase wages, the level of health care and education.
The situation in Iran on the eve of the 41st anniversary of the Islamic Revolution, primarily due to external economic pressure from the United States, has become more complicated. Nevertheless, the regime, despite economic difficulties, the researcher concludes, remains strong in terms of social support for the population. In addition, the experience of neighboring countries, such as Syria, Iraq and Libya, shows that confrontation with the legitimate authorities leads to chaos and deterioration of the situation of the population. Negotiations with the United States are one of the solutions to the problems that have arisen, but the consent to hold them depends on the position of the country's leader, Ali Khamenei. The religious leadership of the country has repeatedly demonstrated its ability to prioritize in order to preserve the Islamic regime, to expand the limits of its evolution.
The Goals of the US Anti-Iranian Policy
E.V. Dunaeva PhD(Hist.), IOS RAS, Associate Professor of the IAAS of Lomonosov Moscow State University and V.I.
Sazhin PhD(Hist.), Professor of IOS RAS [1] argue that D. Trump's anti-Iranian policy, implemented by him since coming to power, led to the US withdrawal from the JCPOA in 2018 and the introduction of tough sanctions that undermine the Iranian economy. However, by the spring of 2019, it became clear that the American president's goal of causing economic damage to Iran in order to provoke social upheavals in the country that could lead to regime change had not been achieved. Despite psychological pressure and sanctions, Iran manages to survive, maintain internal stability and maintain its position in the Middle East. In May 2019, the United States increased the sanctions pressure by removing privileges for 8 importing countries of Iranian oil, trying to "turn to zero" its exports and put maximum pressure on the Iranian economy. According to the researchers, the administration of D. Trump has set the task to force the Iranian leadership to sit down again at the negotiating table with the United States on its terms on a wide range of issues, ranging from nuclear and missile programs, Tehran's activities in the Middle East and ending with human rights. If this plan were implemented, Iran's policy would undergo drastic changes. D. Trump's challenge to Iran creates a difficult situation inside and around the country.
The US withdrawal from the JCPOA has shaken up the nuclear deal, which in the future could turn into disastrous consequences. Although the United Kingdom, France and Germany, as participants in the JCPOA, opposed D. Trump's anti-Iranian policy, at the same time they were unable to force entrepreneurs of their countries to work with Iran under sanctions measures. Tehran was waiting and hoping for Europe. However, over the past time, the EU countries have not been able to adjust the INSTEX mechanism for Iran. The religious and political leadership of Iran, which sought to preserve the JCPOA in the face of tougher sanctions and the failure of EU countries to fulfill their obligations, decided not to withdraw from the nuclear
deal. Tehran has announced a reduction in the fulfillment of part of its obligations, signaling to the EU that it is ready for a full return to the JCPOA at any time when the partners lighten the sanctions burden. At the same time, Iran called on other participants to fulfill the terms of the agreement - to counteract the United States and circumvent American sanctions. However, since May 2019 Tehran has begun to implement a plan that provided for a phased suspension of the implementation of some points of the nuclear deal. During this time, Iran has succeeded in rebuilding its nuclear infrastructure. The amount of stored enriched uranium and heavy water was enlarged, the enrichment level was increased from 3.76 per cent to 4.5 per cent. At the same time, Tehran has maintained cooperation with the IAEA and constantly declares its readiness to return to the terms of the agreement in the event of the lifting of the US sanctions.
If the resolution on maintaining the regime of lifting sanctions against Iran is not adopted, the Security Council will re-introduce sanctions measures against Iran, which will be of an international nature. The EU can join the US and impose its own sanctions against Iran. Under these conditions, the Iranians may, in response to the actions of the EU, withdraw from the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), which radical circles in the country are calling for, as well as from the control of the IAEA. Thus, Iran will open a free path for the unaccountable development of its nuclear program, including its military component. It is necessary to take into account the reaction of Israel and the United States to the uncontrolled development of Iran's nuclear potential. In this case, the researchers say, the probability of an Israeli and/or US strike on Iranian nuclear facilities will approach, which will be the beginning of a serious conflict in the Middle East.
By 2020, tensions between Iran and the United States had reached a peak. The escalation of tension began in May 2019. At that time Tehran, which was waiting for the resolution of the conflict over the nuclear deal in connection with the imposition of
sanctions, lost hope and moved to decisive action. In the summer, a "tanker war" broke out in the Persian Gulf, the Islamic Revolutionary Guard Corps (IRGC) destroyed an American drone, Saudi Arabia's oil facilities were hit by Iranian missiles, Iranian hackers intensified cyber-attacks against the United States. At the end of December 2019 a bombardment of the American military base in Iraq near Kirkuk has begun. The United States blamed the Hezbollah group, supervised by Tehran, for these actions and carried out airstrikes on Iranian targets in Syria and Iraq. In response, Iraqi Shiites in Baghdad tried to storm the US embassy. Following this, D. Trump ordered the destruction of Iranian General Qasem Suleimani, believing that he was behind the attack on American bases in Iraq and the embassy in Baghdad. However, despite the provocative rhetoric towards each other, neither Tehran nor Washington are interested in a large-scale war, the authors emphasize. At the same time, with the current state of relations between Iran and the United States, which are in a "gray zone" where a hybrid war is going on, even, at first glance, an insignificant episode can lead to catastrophic consequences.
The Economic Situation in Iran
The strengthening of the sanctions regime in 2019 led to a reduction in oil exports. Currently, Iran does not officially provide any data on the sale of hydrocarbons, because, trying to circumvent sanctions, it uses black export schemes. Iran's annual oil export revenues have decreased by more than $10 billion. Negative dynamics in the oil and gas sector (- 37 per cent) caused a drop in economic growth.
One of the main problems of the Iranian economy in 20182019 remained inflation, for the year its growth amounted to 35.1 per cent. The government, despite its attempts to regulate prices, the introduction of restrictions on the import of luxury goods, failed to keep consumer prices. As a result, food prices in
cities increased by more than 40per cent, manufactured goods by 28-35 per cent, which led to a decrease in the purchasing power of the population. Attempts to level the situation by increasing salaries, allowances, and targeted assistance payments failed to weaken the process of rise in prices due to the devaluation of the rial and led to an increase in the money supply in circulation, amounting to 29 per cent over the past year.
Compensating for the budget deficit due to the reduction in oil revenues, the government, within the framework of the "economy of resistance" strategy, pays great attention to import substitution in order to develop non-oil exports. Despite the difficult situation in the sanctioned manufacturing sector, in 2019-2020 the Iranian automotive industry localized the manufacture of parts of components at local factories, refusing to purchase parts abroad and saving EUR 16.7 million. Exports of non-oil products for the year amounted to $38.5 billion. It becomes a source of replenishment of the revenue side of the budget in the context of a reduction in oil revenues. The main directions of Iranian non-oil exports remain China - 23 per cent, Iraq - 22 per cent, Turkey - 12.9 per cent and the UAE - 10.6 per cent.
The need to mobilize internal potential to ensure the growth of production was emphasized by the country's spiritual leader Ali Khamenei. Special attention will have to be paid to the diversification of production, the creation of new capacities in the petrochemical industry and the promotion of exports to Asia. In this regard, the authors note the entry into force in October 2019 of Interim agreement on a free trade zone between Iran and the EAEU. By the end of 2018, Iran's exports to the EAEU countries increased by more than 27 per cent. However, the overall situation remains difficult. The reduction in revenues will not allow the government, even using the reserves of the National Stabilization Fund, to support production and realize its social obligations.
Protest Actions
At the beginning of 2018, a wave of opposition demonstrations swept across the country, which demonstrated the growing discontent of the population with the deteriorating socio-economic situation and the actions of the authorities. Although the unrest was suppressed for several days, individual actions and strikes continued in 2019. These speeches were caused by delays in the payment of pensions, salaries and social benefits, the closure of enterprises, and the reduction of state subsidies. The inefficiency of the management system demonstrated by the government, the unfeasibility of many promises made against the background of the ongoing, but without much success, fight against corruption, the bankruptcy of industrial enterprises, the growth of unemployment - all this leads to an expression of distrust of the authorities.
In November 2019, a protest broke out, the reason for which was the decision to raise gasoline prices and set quota for its release at lower prices. During the November actions, the focus was mainly on everyday difficulties and the problem of unemployment, and the protests were mainly of an economic nature. At the same time, political appeals against the regime were heard in some cities and attacks on religious institutions and clerics, who were accused of forgetting the disadvantaged, were observed. However, these actions did not receive support. The unrest was severely suppressed. The number of dead and wounded people exceeded hundreds. According to the authorities, an external factor played a big role in the emergence of the protests. However, neither representatives of the Organization of the Mujahideen of the Iranian People (OMIN) nor pro-Shah forces have a significant influence in Iranian society, although some groups of young people show interest in their propaganda materials on Internet sites and in social networks.
Iranian political scientists note the growing separation of power from the people and the more radical and destructive nature of the actions of the protesters, the increase in the participation of young people under 30 in riots and the large coverage of the territory. The factor of activation of such actions may be the struggle of political elites playing out their own scenario. Radical conservative forces, sharply criticizing the actions of the president, accusing him of being ready to make concessions to the West, are whipping up the discontent of the masses, provoking them to speak out against the government.
Aggravation of the Internal Political Struggle
The US withdrawal from the JCPOA and the aggravation of socio-economic problems in the country weakened the position of the government of H. Rouhani, have practically nullified its achievements in reaching an agreement with the world community and strengthened the positions of those who criticize the conservative president's policy. Since the radical conservative wing relies on the support of the IRGC, fears are expressed in society, because the current situation opens up the possibility of military interference in political life, which could lead to the radicalization of the country's foreign and domestic policy. Holding of parliamentary elections in February 2020 and the presidential elections in the spring of 2021 exacerbated the internal political struggle.
On the eve of the elections, the liberal camp found itself in a difficult situation. Since President H. Rouhani failed to fulfill his promises, supporters of reformers and moderates could not count on the support of the population. According to social surveys at the beginning of 2020, 85 per cent of the population are dissatisfied with their situation and the situation in the country and show political indifference. Many reformist candidates were not allowed to participate in the elections. The majority of votes was received by the conservative coalition (75 per cent). Liberal
candidates who refused to act as a united front under the slogan of reforms received 9 per cent of the vote. The remaining seats are occupied by independent deputies and representatives of religious minorities, who are allocated 5 seats in parliament. The analysis of the new deputy corps shows a 2-fold increase in comparison with the previous composition of the Mejlis of representatives of the IRGC and the clergy, among whom radical conservatives predominate.
The new alignment of forces in parliament may significantly complicate the last year of the government's work, since the conservative Mejlis will seek to weaken the president and the positions of moderate forces as much as possible in order to prevent their candidate from being re-elected in the presidential elections of 2021. However, since conservative MPs represent different currents and they have strong internal disagreements, it is unlikely that they will present a united front and demand the resignation of the cabinet or the withdrawal of the IRI from the JCPOA. In the light of the presidential elections of 2021 the lack of progress towards improving the situation in the economic sphere poses a threat to the conservatives. But, in the authors' understanding, it is impossible to solve the country's problems in the short term.
Iran's Nuclear Program
As noted by J. Karami the DSc(Political Science), the University of Tehran, and E.V. Dunaeva PhD(Hist.), IOS RAS [2], since the beginning of the 21st century, the main problem in Iran's relations with the international community has been the development of its nuclear program. European states tried to force Tehran to make concessions in order to restrict Iran's access to nuclear technologies. Without reaching an agreement, they handed over Iran's "dossier" to the UN Security Council, which introduced a system of international sanctions. At the same time, the United States and the European Union imposed tougher
sanctions on Iran, including an embargo on the purchase of Iranian oil and disconnected it from the SWIFT international settlement system. Other countries have also joined this package, fearing to fall under secondary sanctions. Only after the liberal -minded H. Rouhani, came to the leadership of the executive power, according to the researchers, there appeared opportunities to reach a compromise.
In July 2015, by signing the JCPOA, Iran showed its readiness to go to the limitations of its nuclear program. The IAEA established control over the fulfillment of all obligations of the IRI, and its permanent access to all nuclear facilities of the country was ensured. Iran's victory can be considered recognition of its right to peaceful nuclear activities. Despite attempts by Republicans in Congress to oppose this international document, they failed to block it. The US President's decree of January 16, 2016 lifted sanctions against Iran imposed in the context of its nuclear program.
The government of H. Rouhani had high hopes for the JCPOA. It was supposed that by assuming commitments to reduce nuclear activities, Iran would be able to participate in international trade, attract investments, and develop cultural and humanitarian contacts. Tehran's chances of participating in conflict resolution processes in the Middle East were increasing. The JCPOA defused the international situation around Iran, opened up opportunities for the country's return to the world economic market. The lifting of sanctions has led to positive changes in the economy. The government managed to reduce inflation, increase the inflow of foreign currency by restoring oil production and exports, and ensure economic growth.
Donald Trump against the JCPOA
The US administration that came to power in 2017 came to the conclusion that the JCPOA does not meet the interests of the West and contributes to strengthening the political and military
power of the Islamic regime. On May 8, 2018, Donald Trump officially announced the US withdrawal from the agreement under the pretext that Iran continues to develop nuclear weapons. At the same time it was announced the curtailment of cooperation with Iran and the restoration of unilateral sanctions. Russia and China strongly condemned the US position. It was noted that America's unilateral actions discredit international diplomacy, as well as strike a blow to the authority of the IAEA. The religious and political leadership of Iran decided to preserve the JCPOA, demonstrating loyalty to international obligations.
Tehran was not ready to renegotiate and expand the agreement, which the United States insisted on. Washington's discontent is caused not so much by the nuclear program, but by the regime itself, pursuing an independent political course and strengthening its positions in the Middle East. Donald Trump pursued the goal of destabilizing the economic situation in order to push the people of Iran to oppose the government. However, the regime has confirmed its stability and readiness to resist any threats, as evidenced by the numerous demonstrations that took place on the anniversary of the revolution, the authors note.
The Sanctions Regime in the New Conditions
The introduction of an embargo on the purchase of oil was supposed to damage the recovering economy of Iran and, possibly, in the future, lead to a change of power. However, by such actions, the United States has been drawn into conflict with many states. Realizing that it would not be able to turn unilateral sanctions into multilateral ones and create a united anti-Iranian front, the United States made concessions. Eight states - Greece, Italy, India, Turkey, South Korea, Japan, China and Taiwan -until May 2019 were able to continue importing oil while reducing the volume of purchases. The funds received by Iran from these sales could only be spent on humanitarian needs.
In the current situation, the sanctions are not officially international in nature, and even the European Union recognizes their illegitimacy. At the beginning of 2019 The United Kingdom, Germany and France stated that in order to preserve the JCPOA, they created a tool to support commercial transactions to circumvent sanctions — INSTEX. Tehran assessed this initiative as a step towards dialogue, hoping that this mechanism will help to carry out settlements on oil sales and purchase other goods it needs from European firms.
Conservative forces inside Iran stated: Iran has surrendered its positions in the nuclear sphere, which does not meet the national interests. With the beginning of the implementation of the Joint Plan, its opponents directed all the force of their criticism at the moderate liberal H. Rouhani. His opponents realized that the agreement is a real success of the government, it strengthens the positions of liberal forces in power and increases the chances of H. Rouhani for re-election as president. Strengthening of anti - Iranian rhetoric with the arrival of Donald Trump and the withdrawal from the JCPOA strengthened the positions of these groups and intensified calls for withdrawal from the agreement and the resumption of nuclear activities inside Iran.
Socio-Economic Consequences of the Return of Sanctions
While under sanctions, Iran has managed to develop various schemes to circumvent them. Even under the conditions of multilateral oil sanctions, it found ways to adapt to them and sold oil to non-state companies at low prices, used secretly leased tankers, turned off the geolocation systems of oil tankers during oil transportation, resorted to barter transactions. The impossibility of completely squeezing Iranian oil from the international market is also noted in OPEC. Some importing countries were able to create their own financial instruments to pay for Iranian supplies using national currencies. Such payment
schemes have already been used in relations with China, India, and Turkey. An agreement has been reached on the transition to settlements in national currencies between Russia and Iran.
In an effort to reduce the share of oil revenues in the country's total revenues, the Government of Iran is betting on the development of other industries, including oil refining, to reduce crude oil exports in the future. It is planned to diversify exportimport directions. Particular attention is paid to the Asian direction as a whole and neighboring countries as potential importers of Iranian products. Attention to the East is the trend of Iran's economic diplomacy. In the context of the complication of relations with the West, Iran has relied on its geopolitical resource - direct access to international waters and proximity to 15 states in order to activate trade and economic relations. For 2019-2020 Iran has managed to increase the volume of non-oil exports to neighboring countries. 44 per cent are manufactured goods, 32 per cent are petrochemicals, 11 per cent are gas condensate, 9 per cent are agricultural products, the rest are mineral raw materials and hand-made goods, mainly carpets. These countries are also considered as suppliers of goods.
In the context of the return of broad American sanctions, J. Karami and E. Dunayeva note, Iran is going to sign a Temporary agreement on the formation of a Free Trade Zone (FTA) between the EAEU and Iran, which will lead to a significant increase in trade turnover. The year that has passed since the US withdrawal from the agreement has shown: Although Iran is facing difficulties, it has not lost this economic war. In an effort to minimize losses, Tehran is looking for opportunities to compensate for the lost oil revenues, is ready to use both internal reserves and economic diplomacy.
Researchers note the "reverse actions" of the US sanctions. Instead of the expected overseas growth of Iranians' protests against the authorities, there is a consolidation of society based on condemnation of Washington's actions. This fact can be seen as a moral victory for Tehran. The strengthening of psychological
pressure from the outside, the increase in the military threat contribute to the growth of anti-Western sentiments, national cohesion. The Islamic leadership of Iran, the authors conclude, demonstrates a willingness to use diplomatic tools to preserve the regime.
Conclusion
The challenges that Iran has been facing lately complicate the socio-economic situation and threaten the stability of the Islamic regime. The fall in oil prices leads to a reduction in a small part of the income that can be obtained by circumventing US sanctions. A further decline in living standards, rising unemployment, and the collapse of small businesses, inevitable in a crisis, will lead to an increase in protest potential and to new, possibly more massive and destructive actions. The Government is taking measures to increase salaries, pensions, allocates benefits to combat the pandemic that has brought Iran to the brink of a humanitarian catastrophe, and offers interest-free loans. Reports on the launch of the INSTEX mechanism for the purchase of necessary medicines and their delivery to Iran from the UK, France, Germany gives hope for the possibility of transactions and the expansion of cooperation between the EU and Iran, and the accession of other states to this mechanism. According to the evidence, the United States gave permission to several international banks to unfreeze Iranian accounts for the purchase of humanitarian goods, while emphasizing that there is no question of lifting sanctions. However, without lifting sanctions and carrying out structural changes in the economy and political sphere, it is impossible to solve the problems of Iran on a long-term basis.
According to the authors of the articles, Iran has only one way out in the future - negotiations. Iran already has the opportunity to negotiate with the Europeans, Russia and China,
this is necessary to form a real base of contacts between Iran and the United States, the researchers emphasize.
References
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2. Karami, J., Dunaeva E. V. Iran in the face of new threats // Svobodnaya mysl, 2019. - № 5 (1677). - P. 47-62.
3. Mamedova N. M. The situation in Iran in the light of the new sanctions // Bulletin of the Diplomatic Academy of the MFA of Russia: Russia and the world. - 2020. - № 2 (24). - P. 159-175.
