December 6, 2018
A report issued by the Arab Strategy Forum in Dubai has estimated the total cost of Iran’s nuclear program to have exceeded more than $500 billion since 2006.
The report titled ‘The Economic Costs and Consequences of Iran’s Nuclear Program’, found that international economic sanctions have cost Iran more than $500 billion to date.
The costs of developing and operating infrastructure and facilities for the program have added some US$50 billion to the bill, it said.
The Arab Strategy Forum is set to take place on Dec.12 in Dubai. Its report was issued at a panel discussion on Wednesday in collaboration with Al-Ahram Center for Political and Strategic Studies.
Led by Dr. Sultan Mohammed Al-Nuaimi, Associate Professor at Abu Dhabi University and Expert on Iranian Affairs, the discussion drew the participation of prominent academics and media personalities.
In addition to the cost of the Iranian nuclear program, the report “examines the consequences of the program in terms of economic hardship among the population,” Nuaimi said.
According to the report, the adverse economic situation in Iran has led to frequent protests in various regions across the country throughout the past years, with protesters citing inflation, unemployment, poverty, and corruption as their primary concerns.
The United States decided in May to withdraw from the 2015 nuclear deal and reimpose sanctions on Iran, making the situation worse.
The report highlights how the ongoing sanctions on Iran have limited foreign direct investment, FDI, flow to the country. Moreover, foreign companies have canceled new investment contracts worth tens of billions of dollars, especially in the energy sector that needs between $130 billion and $300 billion of new investments to maintain productivity until 2020.
As a result, unemployment rates in Iran have risen, especially among youth. About one-third of the country’s young people have no job opportunities, which fuels their frustration with the local economic situation. The value of the Iranian rial has also plummeted due to sanctions, especially the recent US sanctions, which led to a surge in the price of the US dollar on the black market to IRR112,000 in August 2018, compared with IRR36,000 on the official market in early 2018, before the new sanctions regime.
The inflation rate has witnessed unprecedented levels and is projected to reach an annual average of 203 percent by end-2018 according to some estimates, said the report.
Various economic sectors in Iran were affected by the sanctions and their consequences, it said.
Notably, the oil sector, which the country’s economy heavily relies on, has seen production and exports decline. The Iranian industrial sector, another target of the recent US sanctions, has also suffered. The agricultural industry has borne the negative impact of insufficient automation and the absence of modern technologies, and, to make matters worse, the local industrial sector is unable to provide an alternative. International sanctions have also led to the deterioration of Iran’s infrastructure due to the drop in public revenue from oil exports and the reluctance of foreign companies to invest in the sector.
Also, the sanctions have restricted knowledge exchange and imports of modern equipment, which has adversely affected the technology sector. This has resulted in heavy wear of Iran’s infrastructure, especially energy networks, which has caused significant annual losses due to reduced efficiency and productivity.