After August 6, 2018, a new set of sanctions are set to be imposed that may affect the country of Iran, it’s government, and even it’s citizens. For starters, the government of Iran will no longer be able to purchase U.S. dollar banknotes. Countries such as China have heavily invested in bonds sold by U.S. China has approximately 3.13 trillion dollars of US reserves as of February 2018.
What will affect the actual citizens is that Iran will no longer be able to trade in gold and other precious metals. This is important because it may affect negatively the economy and the currency value of Iran. Iran is the 15th richest mineral based country in the world. It’s mining industry accounts for approximately 4% of its’ Gross Domestic Product.
When this happens, it’s usually the ordinary citizens that it affects the most because they will no longer be able to purchase things that they regularly purchase, due to the currency being devalued.
Furthermore, Iran will no longer be able to sell common metals such as aluminum and steel, and other raw materials which may affect the growth of certain industries, which again will affect the average person due to possible loss of jobs and / or lower wages.
Finally, Iran the purchase of the sale of the Iranian Rials will be significantly sanctioned, meaning that would be investors will have a difficult time purchasing bonds which governments usually issue in order to fund public projects such as schools and hospitals. Again, it is the everyday citizen that will feel the negative impact the most.
Iran’s automotive sector will also be subject to heavy sanctions. This means that the sale of the manufacture Iran Khodro, which is Iran’s largest automobile manufacturer may see their industry crippled. This, similar to the automobile crisis in Detroit a few years ago, may lead to the closure of factories, the loss of jobs, and/ or the lowering of wages. This is due to the car not being able to be sold in the open market where any foreign person can purchase and resell the vehicles like they would do for a Toyota or Volkswagen.
The textile and food Industry will also feel the negative impact of the August 6th sanctions. This is critical because the Food industry alone accounts for 16% of the workforce in Iran. As of 2016, Iran exported over $1 billion of product. These sanctions will make it harder for producers of products such as mineral waters, soft drinks, chocolates, and other products will have a difficult time exporting their goods.
This lowering of demand, like with any other business, may lead to lower wages, loss of jobs, or worse, the business having to shut down. The same is true for the textile industry, which accounts for another 12% of the workforce. Again, these sanctions will make it difficult to export world famous products such as Persian rugs. Not being able to export these products may cripple these industries, which in turn will affect 25% of the workforce.
As bad as things may be now for the ordinary citizen, once these sanctions a take effect, things may get a lot worse. It is quite possible that the unemployment rate may skyrocket to new levels that will greatly impact the citizens of Iran. Furthermore, it will be a slow recovery if the sanctions are in affect for a long time. So, the citizens of Iran may have to use up their life savings just to be able to get by until things stabilize and become more bearable. However, with the fluctuation of the Iranian Rials, a person’s life savings may see its value drop to half of what its original value was, or maybe even less.
This is an immigration legal blog. It is not intended to be used as legal advise. For further information please contact the law offices of attorney Ramona Kennedy.
Ramona Kennedy (Attorney) received her Jurisprudence Doctorate in America and is a licensed attorney in California (USA). Ramona Kennedy is a member of American Immigration Lawyers Association (AILA). Ramona Kennedy is fluent in English and Farsi (reading & writing) & speaks Azeri Turkish.
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