We need another negotiation!

During his presidency, Donald Trump imposed very harsh and unprecedented sanctions on our beloved country, the harmful effects of which on the economy, business activities and people’s daily lives are not hidden from anyone.

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Today, as Trump’s tenure in the White House Oval Office comes to an end, Biden will soon replace him; This question has seriously occupied the minds of economic activists and the public opinion of the Iranian society, what changes will Biden’s presence in the presidency lead to.

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The answer to this question has two political and economic aspects that affect the Iranian economy and our lives.

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In fact, the effect of Biden’s presence in the White House is a combination of the answers to these two questions.

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First, will Biden’s presidency mean a move by the United States to form a new agreement with Iran or to return to the UN Security Council and eventually untie the knot of sanctions?

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Second: What will be the impact of opening the sanctions clause on the Iranian economy on business activities and people’s daily lives?

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The answer to the first question is the job of politicians and political scientists, and in their specialty, but let’s be optimistic that Biden’s presence in the White House will make a significant difference to the sanctions regime in the short term. (Although this assumption does not make much sense)
The question for economic activists, policymakers, and senior government officials in the country’s economy, and the subject of this memo, is how the lifting of sanctions will affect the future of Iran’s economy.

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The shortest answer I can give to this question can be drawn by comparing the Iranian economy to the body of a human being.

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Iran’s economy is an unfortunate man who has long had healthy food and water (ie good business environment and quality economic governance and efficient institutions and norms in regulating economic relations and productive investment, etc. In short, anything that stimulates sustainable economic growth Has been deprived.

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During Trump’s presidency, tyranny under the false pretense squeezed the throat of this unfortunate man and numbered his breath. Now that oppressor is gone and this man’s throat is free from the pressure of his paw. Has anything good happened to this man? Definitely yes! Has his life expectancy increased? Yes! From a few minutes to a few days and maybe a few months or a little more! With this change, does a good fate necessarily await the man in our story? Are the doors of happiness opened for him and he is on the path of growth and excellence? Definitely not! Air is essential for human survival; But it does not replace water and food.

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Iran’s economy, which for many years, on a scale of decades, under the burden of heavy interventions and unprofessional regulations and distribution of rents and subsidies, has remained from sustainable growth based on increasing productivity and developing productive capital and selling intergenerational wealth resources in these years. Like oil, the system has become a breathing space in this unbalanced situation.

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Now we can hope that with Trump gone and possibly a change in American behavior (which, of course, has its place, if and when it has plenty), this breathing space will open; But that never means moving Iran’s economy toward a productive balance.

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Iran’s economy needs fundamental structural changes not only in the field of production and domestic trade, but also in the field of international trade and attracting foreign investment in order to gain competitiveness and create an atmosphere of value creation.

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In fact, if Biden’s arrival leads to the lifting of harsh US sanctions against the Iranian economy; One can hope that in the short term the business situation and people’s livelihoods will calm down and maybe even open; However, a fundamental and lasting change in the country’s economy, which we also need for long-term economic growth and success in international trade, has a difficult path and is, of course, independent of political change in the United States.

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The widespread distribution of subsidies in the Iranian economy, on the one hand, has led to the renting of the business environment and, on the other hand, has distorted the signaling effect of productivity.

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The combination of these two factors has led to a focus on zero-sum games and unproductive relationships, which are based on gaining a larger share of raw resources and government-subsidized subsidies; Become the main strategy of the country’s economic actors in the private sector. This focus on zero-sum games, in turn, has weakened the institutions and norms that support positive plus-sum games in the Iranian economy, and has trapped the country’s economy in zero-sum traps.

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