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Experts: Iran's Foreign Policy Undermines Economy

March 28, 2010

Experts on Iran's economy say that its foreign policy is undermining its domestic economic health, RFE/RL's Radio Farda reports.

In conjunction with the Persian New Year on March 20, economists consulted by Radio Farda say Iran will likely experience yet another year of economic underperformance. They attribute this in part to international tensions generated by the policies of President Mahmud Ahmadinejad, which they said are deterring foreign investment.

One expert, Ahmad Alavi of the University of Stockholm, told RFE/RL that the loss of foreign investment has created tensions even within Iran's conservative leadership.

There are other ways that Iran's foreign affairs limit its economic performance. Paris-based economist Jamshid Asadi told RFE/RL that banking measures taken against Iran by the international community make it difficult for Iranian banks to do business with U.S., European, Asian, and Middle Eastern banks.

Another economist, Fereidoun Khavand, said there is little to be hopeful about for Iran's economy in the coming year. He added that the low growth rate and high inflation have created conditions resulting in stagflation -- a condition during which inflation and economic stagnation occur at the same time and remain unchanged for a significant period of time.

Source: http://www.rferl.org/content/Experts_Irans_Foreign_ Policy_Undermines_Economy/1995898.html

Copyright (c) 2010. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.