From Iran’s point of view, the JCPOA is much more than a nuclear deal. Rouhani and the middle class that elected him twice see the JCPOA as a way to anchor the Islamic Republic’s economic system to the Western world. They see this as more consistent with Iran’s cultural ties to the West developed over the last 100 years. These ties have been further solidified by Iranian migration to the West, where traveling Iranian businessmen are sure to find a close relative. Not so in China or Russia, to which Iran will have to turn if it is rebuffed by Europe. The Islamic Republic’s early orientation summed up by the slogan, “Neither West, nor East,” is rapidly shifting toward the East as Trump humiliates Iran’s moderates.

Even before US President Donald Trump began threatening to re-impose sanctions on Iran, foreign investors looking to do business there were wary. Iranian President Hassan Rouhani failed to get his pro-market agenda off the ground, and now international political developments are playing into Iranian hardliners' hands.

Like other Iranian president before him, President Hassan Rouhani is having a bad second term. Only six months after his decisive re-election, protesters were in streets shouting “Death to Rouhani.” Then came a sharp fall in the value of the rial, by 10% in two weeks, which threatens to undo the principal economic achievement of his first term—lowering inflation—and his plans to lower interest rates. Iran’s Central Bank had to increase interest rates last month to stop the fall of the rial. These are precarious times for Rouhani, who has won two elections promising economic revival.

Despite its flaws, the May 19 presidential election offered Iranian voters a real choice between the moderate incumbent President Hassan Rohani and a hard-line rival, Ayatollah Ebrahim Raeisi. Djavad Salehi-Isfahani writes to The Arab Weekly that Rohani’s decisive win with 57% of the vote, combined with a sweep by reformist candidates in the city council elections in Tehran and several other major cities, gives him a strong mandate to move for­ward with his program of eco­nomic reform.

Djavad Salehi-Isfahani, visiting scholar at the Belfer Center's Iran Project, sheds light on some of the most important economic topics relevant to the 2017 Iranian presidential election. 

For a “managed democracy,” Iran holds remarkably unpredictable presidential elections. And the upcoming election on May 19 is no exception, given that the incumbent, Hassan Rouhani, is facing a tough conservative challenger, Ebrahim Raesi. In this column to Project Syndicate, Djavad Salehi-Isfahani, visiting scholar at the Belfer Center's Iran Project, writes about Rouhani's economic weaknesses and the challenges he faces for reelection. 

This paper constructs and tests the robustness of consistently measured poverty trends in the Islamic Republic of Iran after 2008, using international poverty lines based on U.S. dollars at 2011 purchasing power parity. The constructed estimates reveal three distinct periods of welfare in the Islamic Republic of Iran: increase in poverty and inequality between 2008 and 2009, decline in poverty and inequality between 2009 and 2012, and gradual deterioration of both indicators again after 2012. The results are robust regardless of the choice of welfare aggregate, inclusion or exclusion of different components, and spatial adjustment accounting for regional variation in food and housing prices.

Djavad Salehi-Isfahani critiques Nawaf Obeid's December 16, 2013 post on Iran Matters on the macroeconomic cost of Iran’s nuclear program, in which Nawaf Obaid claims that Iran’s GDP has declined by a whopping 29% in 2013 relative to 2012.  He reports data from a series published by the IMF, which is misleading and needs to be corrected. Nawaf Obeid then responds to this post.

In a post from Neishabour, Iran, economist Djavad Salehi-Isfahani writes that "achieving a long-term deal in the next five months requires not just negotiating with the P5+1, but also winning the battle against [President Rouhani's] critics at home. His real challenge, therefore, goes beyond reaching a deal with the West or selling it to Iran’s middle class. It is to convince the poor and working class that there is something for them at stake in a rapprochement with the West."