The Specter of Trump Over Iran’s Economy
The Specter of Trump Over Iran’s Economy
On Saturday night, the Governor of the Central Bank of Iran appeared on national television to provide an analysis of Iran’s currency and economic situation following Trump’s arrival, an action that was generally very good and timely, and naturally received considerable attention. The Governor’s statements were correct in some instances and incorrect in others. Some of the correct points, such as the lack of dependency or connection circles with the Western economy, were not necessarily positive and are considered negative.
The incorrect points, such as the claim that Iran’s economy is unaffected by Trump’s election, were said out of necessity and to reassure the audience. Of course, Mr. Farzin is not a foreign minister or a foreign policy analyst, and it should not be expected that he would make political statements. However, he could have presented the incorrect parts differently. Perhaps because he is a manager from the Thirteenth Government, he still thinks he should speak in the same framework as the previous government, whereas in the new government, one should avoid making unrealistic or highly unlikely statements and speak honestly with the people.
He believed that the dependency circles of Iran’s economy on the US and even Europe are limited and that we do not have high economic relations with them.
Therefore, the US elections and Trump’s presidency do not have a significant direct impact on Iran’s economy, and as we observed after Trump’s election, currency market fluctuations were less than one percent. However, in terms of indirect effects, the US economy is large and affects the entire world economy. Our currency experienced a decline of less than one percent in value, showing one of the least reactions compared to the currencies of other countries in the world.
Our economy demonstrated on the very first day that it has high resilience against this event of Trump’s coming to power. Iran’s economy is not the same as it was eight years ago when Trump’s election would have had a significant impact on it.
It seems that although these statements are somewhat reassuring, they are not realistic on one hand and merely analytical and descriptive on the other, while people need policy responses as well.
In fact, any analyst can make such statements, and people might accept their analysis more, but for various reasons, people do not have much trust in the officials’ analyses. Therefore, they should speak about their policies, which was practically absent in this conversation.
The first question that should have been answered for the people is whether Trump will continue the same behaviors from eight years ago or if we are facing a different Trump. In any case, what threats and opportunities does Trump pose for Iran’s economy?
There is significant evidence suggesting that we should expect a different Trump from eight years ago. Yesterday, and only three days after Trump’s victory, an important event occurred.
In his latest position, Trump explicitly announced that he will not invite Nikki Haley, the former US ambassador to the United Nations, or Mike Pompeo, the former Secretary of State, to join the Trump administration, which is currently forming.
We all know that these two, alongside John Bolton, formed the anti-Iranian triangle in Trump’s first administration. They had radical and extreme positions not only regarding Iran but also on other issues, which ultimately led to John Bolton’s separation from Trump, while the other two remained in his administration.
Now Trump has reached a point where he not only does not invite the remaining two to his administration but also officially announces it at the first opportunity. This is positive news, especially regarding Trump’s potential stance on Iran.
We do not believe that Trump will necessarily undergo a significant change. From this perspective, one can assume the worst of his policies and prepare for it, but the other side of the coin is also important, and we should not close the door on the possibility of more conventional policies from Trump.
If the Governor of the Central Bank had presented such an approach in a reasoned manner based on evidence, it would have played a greater role in calming the mental and psychological space of the people.