Passengers on the Tehran underground, June 10, 2020 (AFP)

Senior diplomats have convened in Vienna to discuss US re-entry into the 2015 nuclear deal. There are statements of “road maps” and “constructive” discussions.

But the question remains: if the talks stall and everyone leaves Vienna without an accord, can Iran survive the economic effects?

A Resistance Economy?

After almost two years of formal, often tough negotiations, the nuclear deal of July 2015 was considered one of the most significant diplomatic victories in recent history. Americans, Iranians, and the rest of the 5+1 Powers (UK, France, Germany, China, and Russia) stood side by side. The yoke of economic sanctions on Iran would be lifted. In returns, Tehran would give up advanced uranium enrichment, and put its program under the observation of the International Atomic Energy Agency.

In theory, all was going well until the arrival of Donald Trump, who made it a priority to remove the US from “the worst, horrible, and laughable deal”. Multiple layers of sanctions were imposed, notably in November 2018, on the banking sector, oil industry, imports, exports, companies, enterprises, and Government offices and individuals.

No doubt those sanctions have hindered the nation, which is not only battling the sanctions but also a global pandemic — a task made all the harder with difficulties in the import of vital medical supplies and vaccines.

In his Iranian New Year speech, the Supreme Leader called for the country to boost domestic production over the reliance on imports. The Government claims non-oil related revenues have grown by about 83% over the last two years. There are more small to medium-sized companies, and innovations in production and sales of goods. Platforms such as Instagram and Telegram have been used for promotions during Covid-19.

Domestic production is still limited by the banking sector’s reticence to provide business loans to start-up
companies, and successful companies bought out by semi-state entities. But independent businesses are growing in sectors from technological manufacturing to real estate to retail sales. Hipster food trucks are springing up across towns and cities in Iran.

If the nuclear deal is renewed, foreign investment and trade should surge. A booming tourism industry is expected, with Iran looking to re-kindle the Boeing and Airbus deals for more than 180 aircraft to bring visitors to some of the world’s oldest culture and art and its most beautiful natural scenery.

But should the deal collapse, then Iran will turn to its domestic markets, seeking increased production, job growth, and self-reliance. Hope will be placed in the recently-signed memorandum with China, projecting $400 billion in investment over the next 25 years. Taken together, the domestic programs and links with Beijing will seek to renew infrastructure.

The prospects for this approach are unknown. But the significance for Iran’s tactics in the nuclear talks in clear: at least in public, the Supreme Leader’s “Resistance Economy” is more than a slogan — it is the guarantee that Tehran will not give way to what it sees are demands, rather than an acceptance of its nuclear future, military forces, and regional position.