Blog Post

Economists hesitate to explain to people that they should borrow less. The advice sounds too “schoolmarmish.” It seems to lack sympathy for those whose incomes are not keeping up with the standard of living that they had expected based on historical trends. But for those concerned with the reach of the nanny state, the state is precisely what encourages citizens to borrow. And it does nobody any favors to get them overly indebted, as the millions of homeowners who went underwater in the housing crisis ten years ago discovered.

It was just one year ago that then-President Obama, seeking a modus vivendi with Tehran, said that America’s Gulf allies need to “share the Middle East” with the Iranians. That view of the Middle East was decisively repudiated this week, with Trump clearly aligning the United States with the majority of the Sunni Arab world, and Israel, against Iran.

In this blog post to Iran Matters, Mohammad Mostafavi-Dehzooei, Associate at the Belfer Center's Middle East Initiative, writes about President Hassan Rouhani's top achievements during his previous term and the obstacles facing him for reelection.

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. 

With the Iranian presidential elections on the horizon, indicators are pointing towards another shift in Iran’s factional alignments. In this blog post for Iran Matters, Iran Project Director Payam Mohseni argues that Iran’s conservative and theocratic forces are overcoming the stark divisions within their power base and gaining significantly more unity and cohesion in their support of Raisi and opposition to Rouhani.

Arash Pourebrahimi, former visiting fellow in political economy at Harvard University, writes to Iran Matters on the true war that awaits President Rouhani after the May 19th presidential election: the successorship of the Supreme Leader. Pourebrahimi argues that while Rouhani has a good chance of reelection, he faces a tough battle in gaining the wider institutional support he needs to be influential in deliberations over the Supreme Leader's successor.

Farhad Rezaei, research fellow at the Center for Iranian Studies (IRAM) in Ankara, writes to Iran Matters on the implications of the IRGC's missile tests for the Rouhani administration, the Trump administration, and the upcoming Iranian presidential election. 

If NAFTA is to be renegotiated, improvements could include strengthening labor and environmental protections, improving dispute-settlement mechanisms, adding new issues areas, and including more countries.  Is that pie in the sky?  The negotiators already did it last year.  It was called TPP.  

The case of Halkbank reveals a short-term disjointed relationship between Turkey and Iran. The Turkish government cites Halkbank’s economic success as evidence of a rising Turkey. Regarding the transfer of 51% of the bank’s share to the newly established Turkish Sovereign Wealth Fund in February 2017, the bank occupies a central role in the domestic and international policies of the Turkish state. For Iran, on the other hand, this relationship was a part of the ongoing strategy of creating alternative mechanisms to bypass the impact of sanctions. Therefore, there was a mutual economic interest for both countries, with Halkbank acting as a facilitator of this exchange. And while economic interest was at the core of the relationship, this cooperation established between Iran and Turkey spilled over into the political sphere in a limited manner. The political relations between Turkey and Iran have continued to fluctuate, stifling any possibility of a meaningful long-term political alliance. A number of recent regional and domestic developments have set further constrains on the emergence of a Turkey-Iran partnership.

US Treasury Secretary Steven Mnuchin  needs to explain to his boss that China is no longer manipulating its currency, preferably in time for Trump’s meeting with Chinese President Xi Jin Ping, scheduled for April 6-7.  Neither is Germany.