Daniel Lacalle, a famous economist believes that Iran will continue to trade with China and the European Union.
Speaking to ILNA news agency, Lacalle stressed that negotiating with the Trump administration could be positive, I would say that Mexico and Canada, as well as North Korea have seen commitments from Trump that have been maintained. Daniel Lacalle has a PhD in Economics and is author of Escape from the Central Bank Trap, Life In The Financial Markets and The Energy World Is Flat.
Below is his full interview with ILNA:
Do you agree with those experts that say "Iran's oil embargo will boycott the global economy"?
The oil embargo is unlikely to boycott the global economy. If we remember the past embargo, Iran was still exporting up to 2 million barrels per day, so the impact was very small. It is more likely that we see differences in policy between the European Union and China that continue to purchase Iran oil and goods, and the US. So I believe Iran will continue to trade with China and the European Union and the impact on the global economy will likely be limited.
Is it right to use dollar as international tools to pressure other countries? This US policy is not limited to Iran and includes other country such as Russia and Turkey.
The US dollar remains the world reserve currency, and the reason why it does is that other competing currencies, like the Yuan and the Euro, are riskier and the monetary policy the countries follow is not attractive for traders globally. That is the reason why companies and traders prefer the dollar. We would need to understand why there is no alternative to the US dollar in global trade, and that is because the other options seem to be weaker and less accepted by global traders.
By ending oil waivers, Iran was seeking to exchange oil with the basic needs of the people, what could be the consequences of human rights?
It is important that any difference between politicians does not affect the underprivileged, children and the elderly. Therefore, it is important to set up humanitarian channels and to ensure that the populations do not suffer due to differences in politics. Basic needs should not be part of any embargo.
Some in Iran believe that negotiating with Trump has no effect, because the other party does not adhere to any commitment. Do you agree with that?
Negotiating with the Trump administration is probably going to be more complicated than with other administrations in the US, but if I have to be positive, I would say that Mexico and Canada, as well as North Korea have seen commitments from Trump that have been maintained.
It seems that the American target of sanctions is the Iranian nation, and not just Iran goverment, what is your opinion?
Sanctions are always a challenge because it is so difficult to avoid hurting the people. This is why it is so important to keep the negotiation conversations open even in the most challenging times.
Why European countries do not stand against the Trump policies?
The European Union cannot simply oppose sanctions from the US, but I believe most countries have decided not to follow the sanctions.
What are the political, economic and social consequences of chaos and war in the region?
Obviously, the biggest problem in the region is the lack of peace and the very negative humanitarian consequences. The biggest consequence is that poverty rises and countries remain in crisis despite strong oil prices and rising exports. There needs to be a way for the nations in the region to achieve bilateral agreements and avoid the differences to focus on the positives, which are many. I am sure that Iran and the neighbor countries can reach strong agreements that boost the economy and improve welfare.