America's economic incentives in dealing with Iran Accord
With the recent Joint Comprehensive Plan of Action (JCPOA) agreement between Iran and the West, it seems as though, within the past decade, economic stability and integrity have become the essential concern of world leaders. Countries that have not been strong enough to withstand their own economic markets have been putting forth efforts to repair or rebuild some sort of financial backbone. On the other hand, economically strong nations are in a race to augment their markets to recover from recent economic hardships and return to prosperity. The JCPOA does just that.
With the Chinese stock market and Greek monetary collapse, there are no incentives in the international community to support the recent independent United States accord with Iran. After a month-long plummet, which still continues, the Chinese markets have lost upwards of $3.2 trillion. The United States should no longer depend on competing with world powers in international markets — they must establish ties with developing economies, like Iran, by transforming into an export economy rather than relying heavily on imports.
Could it be that the nuclear negotiations between the U.S. and Iran have more underlying meanings than just trying to keep nuclear weapons off the plate of Iranian nationalists? America is using the Iranian aspiration for a more flourishing economy to their own benefit, in order to revive their own markets subsequent to the recession in 2008. Perhaps with these negotiations, the U.S. economy can stabilize and flourish once again, leaving the two nations open to economic, industrial and social growth.
After more than thirty years, it seems the sanctions and embargoes imposed upon Iran by the U.S. will soon come to an end, and the flow of products and resources can once again surge between the two countries and their allies. After imposing economic, trade, scientific and military sanctions on Iran, it may be time to stray away from the notions of reprimanding and instead realign on a more peaceful and strategic path between the soon-to-be newly reconciled nations.
Currently, the U.S. relies more on imports as opposed to exports, leaving the country susceptible to the accumulation of massive debts. The U.S. dependence on foreign countries has caused it to lose domestic production and self-sufficiency throughout the years.
The 2008 economic crash created a massive internal implosion of financial allocations. Companies and distributors throughout America determined it more economical to produce goods in markets such as neighboring Mexico and rivaled China. Such economic practices help increase national deficits. For every one billion dollars in trade deficits it is estimated that there would be a loss of roughly 9,000 jobs. With the trade deficit debt accumulating to upwards of ten trillion dollars, there is an absence of nearly twelve million domestic jobs.
In efforts to repair the already crippled economy, Congress passed the Budget Control Act of 2011, which raised the national debt ceiling by $400 billion, bringing it to $14.7 trillion, in efforts to patch up the already broken markets. As a result of the implementation of the bill — which would involve more borrowed money — nations around the world had downgraded the credits of the United States and the S&P market from a rating of AAA to AA+. As of May 2011, approximately 40 percent of U.S. government spending relied on borrowed money.
The U.S. needs to find ways to expand their economy to help bolster its international economic dominance. Since the end of World War II, there have been no significant American advances in regards to medical or industrial transformations. China has now been recognized as the world’s largest exporter, the U.S. taking second. Since the 1970’s Deng Xiaoping, the successor of Mao Zedong, led China into a far-reaching strive for market economy reforms. He influenced the nation to move away from agricultural to putting more focus and emphasis on factories, markets and industrial facilities. Continuing that same mindset as Deng, it has been recorded that in 2011, 250 million Chinese workers were relocated from their rural farms to more booming urban cities where factory jobs are more predominant.
With rivaling China’s continued economic growth internationally, the U.S. needed to find an international partner to help broaden its reach to foreign markets that could help boosts its economy. Could Iran be the dark horse for the re-emergence of the U.S. after more than thirty years of sitting on the other side of the table? Iran, having proved resilient to sustain their own economic status, could use the nuclear accord not only to its own advantage but to the advantages to the United States as well.
There are countless needed vicissitudes Iranian officials realize they are missing. One essential need is the creation of new aircrafts for its aviation industry. Alireza Jahanigirian, the head of Iran’s Civil Aviation Organization has made public that their current aircrafts simply are “not functional” for flight. Out of their limited 250 available aircrafts, only 150 are deemed flight worthy, while the rest do not have the necessary spare parts to be repaired due to the embargo. It has been said by Iranian officials that once the sanctions are lifted, there will be a steady flow of parts and aircrafts to Iran.
Once ratified, the nuclear accord would be advantageous for both countries: Iranian travelers would not only feel safer, but the new fleet of airplanes would be a source of revenue for the parties. For both countries this could mean a rekindling of fortunes.
Arash Irani is a School of Arts and Sciences junior majoring in political science with a minor in history.