ASSESSMENTS

Iran's Strategy for Surviving U.S. Sanctions

May 30, 2018 | 17:13 GMT

Iranians shop at Tehran's ancient Grand Bazaar. Historically, food prices and unemployment -- especially in rural areas -- have been the major factors prompting protest and unrest in the country.

(ATTA KENARE/AFP/Getty Images)

Highlights

Now that the United States is piling on sanctions, Iran's government is preparing for an inevitable economic decline. Iran's political factions are in relative agreement about how to handle the economic pressure, at least over the next several months.
Tehran's goal will be to keep its head above water long enough to outlast the current U.S. administration. It will try to increase non-oil exports to make up for the loss of oil sales, implement financial reforms and slow the depreciation of its currency.
Iran's key priorities while it is coping with sanctions will be to keep prices for food and other goods down, minimize protests against the government, and make foreign exchange reserves last as long as possible.
One big question is how long Iran's discouraged population will trust the government's survival strategies before they start to protest against inflation and increasing wealth inequality.

Iran is preparing for major economic and financial challenges now that the United States is ready to implement tough oil-specific sanctions in November. The government in Tehran is unwilling to heed Washington's demands, which include halting its missile program and ending its support for regional militias, because it considers these basic components of the country's defense strategy. So Iran is managing its economy for the long haul, hoping it can insulate itself against the effects of U.S. sanctions long enough to outlast the current U.S. administration....

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