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With international sanctions on Iran being lifted, the country boasts one of the most advanced and diversified economies in the Middle East and North Africa region, a leading online publication that provides analysis on political risk and geopolitics for the business community said. Financialtribune reported.
Global Risk Insights added that Iran will become the next Middle Eastern economic superpower by 2025.
The Iranian nuclear deal struck at Vienna last year will undoubtedly lead to a tectonic shift in the Middle Eastern balance of power, allowing Iran to confidently reenter the international fray.
Discussions concerning the emergence of a reenergized Iran persist, with the Saudis in particular fearing an Iranian domination of the Middle Eastern landscape for the foreseeable future.
Unshackled economically, Iran is more than likely on course to become a regional economic superpower over the next 10 years, with growth rates of around 3.5% expected this year. This would place Iran as the second fastest growing economy in the MENA region.
According to the International Monetary Fund, since 2011, sanctions have wiped off between 15-20% from Iranian GDP.
In addition to this, the nuclear deal will also unfreeze billions of Iran’s overseas assets (estimates range from anywhere between $50 billion and $150 billion). This infusion of liquidity into the Iranian economy, coupled with the fact that Iran is already MENA’s most diversified economy, provide the ingredients for Iranian economic superpower status by 2025.
Additionally, Iran will also be able to add a further 1.5 million barrels of oil per day to the world markets. While it will not be able to match Saudi Arabia’s overall oil output, Tehran does hold a distinct advantage over its rival by virtue of the fact that the House of Saud, despite recent efforts to diversify, remains a one-trick pony heavily reliant on petrodollars to prop up its economy.
Buffeted by international sanctions, Iran remains rich in natural resources. Iran’s economic future appears bright, with circumstances conducive to regional superpower status by 2025.
Understanding Iran’s Middle Eastern role over the next decade cannot be disentangled from its relationship with Riyadh.
Though Saudi Arabia fears a normalization of the US-Iranian relationship, while both Iran and Saudi Arabia continue to look for incremental advantages in their relative positions across the region. The Saudi-Iranian tensions will continue to dominate the regional landscape.
Vali Nasr, one of the world’s preeminent scholars on Shia Islam, argues that Saudi Arabia and Iran will continue to tussle for power and the collapse of the Arab world has intensified this battle for predominance.
As the winds of change sweep through the region, the Saudis’ insecurities have heightened, with the Saudis fearful of American move towards the Iranians in the form of the nuclear agreement.
Riyadh sees the deal as Iran returning to the region, which in turn will see an Iran that is very difficult to contain. Saudi Arabia has also lost its position as America’s premier ally in the region.
All of these factors explain why the Saudis continue to use the sectarian card, in order to create Sunni hostility against rising Iranian influence. This is a tactic by which the Saudis are hoping to block the rising Iranian influence.
Iran has obvious potential to dominate the MENA region economically, as its economy heats up post-sanctions. Its well-diversified economy will enjoy the benefits of a return to international trade, aiding it in its quest for regional dominance.