Wednesday, 30 May 2012

The Latest from Iran (30 May): Profiting from the Sanctions

0525 GMT: We open with a snapshot of the economy, from Paul Koring of Canada's Globe and Mail:

Sanctions aimed at crippling Iran have been “very good for business,” at least on the shady side of informal banking, says a grey-market currency trader in Tehran.

“A few thousand dollars is easy, even a few million dollars is no problem,” Sattar, the trader, smilingly confirms....

Iranians seeking a few thousand dollars for a shopping spree in Dubai, or a few million to backstop an import deal, find their way to traders like Sattar. Wise to the risks of flouting Iran’s laws and fixed exchange rates, he laughingly gives the Persian name for “the concealer” to a visiting journalist.

“I’ve friends in the Philippines, in Dubai, even in Europe,” he says of an ad hoc network in international-currency traders operating on the margins of the law. “We can move a lot of money and it isn’t just coming and going in suitcases,” he said.

An interesting story, but what matters is perception. And Koring's generalisation --- "An array of sanctions, some stretching back decades, have distorted, but hardly crippled Iran’s economy" --- is not shared by other observers and officials from Washington to London to Paris. That is why, despite the Sattars, the US and its allies are taking the hard line in the nuclear talks, believing they have the Islamic Republic in an economic squeeze.

from EA WorldView: EA Iran

Posted via email from lissping