The West’s Economic War with Iran

September 20, 2023

More than 40 years ago, a financial war enfighting between the West and Tehran took place. Because of the Shah’s revolution, Reza Pahlavi was overthrown because he was considered a U.S. prodigy. That’s why power was transferred to the Shiite clergy, and revolutionaries seized the U.S. Embassy, demanding that Washington provide the former ruler to restore all kinds of wealth.

After these actions, the West stopped buying Iranian oil and deposits were frozen in foreign banks. After diplomatic ties were severed, a sanction was imposed on all exports, both medicines and foodstuffs. Sanctions were constantly changing, showing a variety of reasons: support for terrorism, the development of a missile system, violations of all human rights, and others. Also, Iran was cut off by the Swift system, completely cut off from world banks, operations with dollars were banned. Oil production stopped here, so in 2020 only 2 million barrels per day were extracted from the earth’s intestines. Before the revolution, more than 6 million economies fell completely into recession as all goods and products became more expensive.

In 2010, the United Nations banned arms exports of various materials and equipment for the nuclear industry. In 2012, sanctions were imposed that hit the financial district and the oil sector. This isolated the country from the entire financial and economic system. And in 2021, GDP was about 0.58%. After disconnecting with swift’s system, Iranians began to apply other calculations. All Visa bank cards, mastercard system replaced camel system. Authorities have proposed alternative methods of limited settlement by issuing an informal remittance financial settlement system. The system’s annual turnover is estimated at more than $100 billion.

Iran’s minimum wage is rising too slowly in the face of hyperinflation. In 2022, the average salary is only $200, and the basket of essentials is twice as expensive. Most residents work informally or don’t even receive such a salary. In 2020, about one-third of the population lived in poverty.

Banking in Iran after sanctions imposed

During the sanctions, Iran was cut off by the Swift system and cut off entirely from Western banks, which were all international payments. According to Iran’s international payments website P98 Cash 10 years later, the country has established its own camel banking system. This is the national electronic payment system that is calculated with its help in Iran. In 2002, it was created to operate ATMs and various transactions based on plastic bank cards. In order for the Central Bank to issue the Camelpool card, most iranian financial institutions issued cards that operated only through POS terminals and ATMs. After the introduction of Camelab, all banks operating in the country must adhere to all its rules and be able to connect to this system.

In December 2017, 54,300 ATMs nationwide were connected to the payment system. In 2005, an agreement was signed with the UAE’s um Bahraini self-network to connect its systems to the work of Camelba. In 2007 and 2008, the system was connected to ATMs in Qatar, Bahrain, Kuwait, thanks to which residents of Iran and Arab countries could use bank cards. In the long run, it is planned to link the camel system with visa and MasterCard card.

Many sanctions were imposed on Iran, introduced in two periods, and negatively affected not only the Iranian economy, but also the country’s full development. That’s why all international systems stopped cooperating with Iran, so the country had to introduce its own payment system. For this reason, the camelbol system was developed, which is implemented not only in Iran, but also in many Arab countries, Eastern Europe. It is now the fourth country in the world to establish a high-quality international payment system for various operations.