Economist</p>
<p>Saeed Laylaz, economist and former advisor to
ex-Iranian President Mohammad Khatami, says Iran&#039;s government
actually benefits from U.S-led sanctions because they provide a
convenient excuse for the country&#039;s economic
difficulties.</p>
Iran's government actually benefits from U.S-led sanctions
because they provide a convenient excuse for the country's economic
difficulties, an adviser to a former Iranian president told CNBC.
Large swathes of Iran's economy have been hit by long-term sanctions imposed by the U.S. and other countries in a bid to halt Iran's progress to building its own nuclear weapons. Iran, which Iran insists that its nuclear industry is solely for peaceful means, and officials from the U.S., Russia, China, Britain, France and Germany are locked in negotiations to hammer out a permanent deal
that would see sanctions lifted, but some hardliners are fighting hard against giving up too much of the program.
In response to the stalemate with his ministers, Iranian President Hassan Rouhani called over the weekend for the issue to be put to public referendum, rather than parliamentary vote.
Large swathes of Iran's economy have been hit by long-term sanctions imposed by the U.S. and other countries in a bid to halt Iran's progress to building its own nuclear weapons. Iran, which Iran insists that its nuclear industry is solely for peaceful means, and officials from the U.S., Russia, China, Britain, France and Germany are locked in negotiations to hammer out a permanent deal
that would see sanctions lifted, but some hardliners are fighting hard against giving up too much of the program.
In response to the stalemate with his ministers, Iranian President Hassan Rouhani called over the weekend for the issue to be put to public referendum, rather than parliamentary vote.
Read MoreIran's president threatens vote on nuclear deal
Saeed Laylaz, an economist who advised Iran's former president, Mohammad Khatami, told CNBC that many inside the Iranian ruling regime actually "love" the sanctions, because they provided a smokescreen for their mismanagement of the economy.
"Inside the government of Iran, there have been, and there are, a lot of people who love this sanction, because they need it… the Islamic Republic of Iran can hide its mismanagement of the country and organised looting of Iranian wealth," he told CNBC on Tuesday.
Laylaz, a pro-reformist, added that the U.S. also benefited from its poor relationship with Iran, which provided an excuse for its continued military presence in the Middle East.
"The Islamic Republic of Iran and the United States need the radicalism of each other…. A controllable radicalism is useful for both sides, because the U.S can say that in the absence of Bin Laden or Saddam Hussein, they can say they (Iran) are radical and they (the U.S.) have to be militarily in the Persian Gulf and the Middle East. And the Islamic Republic of Iran can hide its mismanagement," he said.
Saeed Laylaz, an economist who advised Iran's former president, Mohammad Khatami, told CNBC that many inside the Iranian ruling regime actually "love" the sanctions, because they provided a smokescreen for their mismanagement of the economy.
"Inside the government of Iran, there have been, and there are, a lot of people who love this sanction, because they need it… the Islamic Republic of Iran can hide its mismanagement of the country and organised looting of Iranian wealth," he told CNBC on Tuesday.
Laylaz, a pro-reformist, added that the U.S. also benefited from its poor relationship with Iran, which provided an excuse for its continued military presence in the Middle East.
"The Islamic Republic of Iran and the United States need the radicalism of each other…. A controllable radicalism is useful for both sides, because the U.S can say that in the absence of Bin Laden or Saddam Hussein, they can say they (Iran) are radical and they (the U.S.) have to be militarily in the Persian Gulf and the Middle East. And the Islamic Republic of Iran can hide its mismanagement," he said.
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In 2013, the year Rouhani came to power, the Iranian economy shrunk by 1.9 percent. However, gross domestic product grew by 1.5 percent last year and is seen expanding 2.2 percent in 2015 by the International Monetary Fund. It continues to battle high inflation and unemployment.
"The economic problems of Iran basically come from inside of the economy," said Laylaz. "We have had a lack of investment… Our main problem over the past 10 years has been a lack of productivity; you know the productivity trend in Iran has been negative for the past four or five years ago."
With that in mind, Laylaz said that the benefits of a nuclear agreement and consequent ending to sanctions should not be overstated.
"Nuclear talk cannot solve this problem… I am against the idea of trying to exaggerate the impact that removing the sanctions on the economy of Iran will have in the future, because in this case if there is be no positive trend, everybody will blame Mr. Rouhani."
With WTI prices falling below $50 per barrel and Brent crude futures reaching a 5-½-year low, Laylaz noted that any price below $70 hurt the highly oil-dependent Iranian economy.
"Less than this amount means less projects of the government, which means less economic growth and less job creation."
Read MoreIran says Saudi Arabia should move to curb oil price fall
In 2013, the year Rouhani came to power, the Iranian economy shrunk by 1.9 percent. However, gross domestic product grew by 1.5 percent last year and is seen expanding 2.2 percent in 2015 by the International Monetary Fund. It continues to battle high inflation and unemployment.
"The economic problems of Iran basically come from inside of the economy," said Laylaz. "We have had a lack of investment… Our main problem over the past 10 years has been a lack of productivity; you know the productivity trend in Iran has been negative for the past four or five years ago."
With that in mind, Laylaz said that the benefits of a nuclear agreement and consequent ending to sanctions should not be overstated.
"Nuclear talk cannot solve this problem… I am against the idea of trying to exaggerate the impact that removing the sanctions on the economy of Iran will have in the future, because in this case if there is be no positive trend, everybody will blame Mr. Rouhani."
With WTI prices falling below $50 per barrel and Brent crude futures reaching a 5-½-year low, Laylaz noted that any price below $70 hurt the highly oil-dependent Iranian economy.
"Less than this amount means less projects of the government, which means less economic growth and less job creation."
Read MoreIran says Saudi Arabia should move to curb oil price fall
Katy Barnato
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