Sanctions Cost Iran $1.2 Trillion Over 12 Years, Businessman Says

Hossein Selahvarzi, the former head of Iran's Chamber of Commerce, says sanctions have inflicted approximately $1.2 trillion in damages on the country between 2011 and 2023.

In comments published on Monday in Tehran's Shargh daily, Selahvarzi discussed the economic opportunities lost in Iran due to the sanctions. His remarks came just days before Iran's presidential election, where a victory for a hardline candidate could potentially prolong the stalemate in Iran's nuclear negotiations with global powers.

Saying that the issue of sanctions has not received much attention during the election campaign, Selahvarzi estimated that the lost per capita income for each Iranian due to sanctions over the 12-year period is around $14,000. In other words, each Iranian has lost an average of $1,202 annually due to the sanctions.

Selahvarzi did not specify the official sources of these figures. He explained that the estimates were based on comparisons with "several countries similar to Iran." He likely compared Iran's GDP and real per capita income with the averages of these countries, attributing the differences to the impact of the sanctions.

Masoud Pezeshkian, the reformist-backed candidate, has criticized the current situation, but the overarching policies are controlled by the Supreme Leader of the Islamic Republic, meaning that no matter who assumes the office of the president, little may change in policies that can help lift sanctions.

On Sunday, former Iranian President Hassan Rouhani said Iran incurred an annual loss of some $100 billion over the past three years due to sanctions that forced the country to sell limited amounts of oil and petrochemicals at discounted rates. Rouhani accused former president Ebrahim Raisi's government of "betraying" the Iranian people by causing $300 billion in damages over the course of three years.

Selahvarzi also commented on Iran's non-oil exports, saying: "The non-oil trade balance turned negative last year, and exports declined." He added that “both exports and imports were significantly impacted by sanctions."

Sanctions have not only hurt Iran's oil revenues and non-oil exports but also contributed to inflation and unemployment. The World Bank predicts Iran's GDP growth to continue its decline in 2024, falling below 2%. Presidential candidates are adamant that Iran's GDP growth can reach 8%, although none of them proposed any tangible plans to reach the long-sought goal.

Despite multiple rounds of negotiations between Tehran and world powers in 2021-2022, no agreement was reached to revive the JCPOA (Iran's 2015 nuclear deal). Lifting sanctions could improve Iran's economic situation, but this hinges on reaching an agreement with global powers.

On Monday evening, Iranian presidential runners will hold their fourth debate, which will focus on foreign policy. No candidate has so far presented any comprehensive and clear plan to resolve strategic foreign relations issues.

Alireza Soltani, political economist told conservative Khabar Online website Monday that the main challenges the next president faces in foreign policy include Tehran-Washington relations, Iran’s nuclear program, and relations with international institutions and regulatory mechanisms, particularly the International Financial Task Force (FATF) and the World Trade Organization.

“Any incoming administration must strive to address the challenges in US-Iran relations. Resolving this conflict can pave the way for improved relations with Europe and many regional countries. Iran has lost numerous regional and international opportunities, both political and economic, due to its strained relations with the US. This includes economic cooperation with neighboring countries and relations with major powers like China and Russia, which have resulted in imbalanced and often unfavorable arrangements for Iran. Reducing tensions with Israel also hinges on resolving this issue,” he said.

According to Soltani, Iran's nuclear program has imposed "heavy economic and security costs on the country." He added that the next president should address the country's "weak economic, monetary, and trade relations," exacerbated by US sanctions, are further strained by international pressures and restrictions. These challenges particularly affect money transfers, attracting foreign investment, and international trade.