World Economy

Iran's president threatens vote on nuclear deal

Iranian President Hassan Rouhani called for a variety of economic reforms and even tabled the possibility of a referendum on the country's controversial nuclear negotiations during a speech on Sunday.

"As the enforcer of our constitution, I would like, even for once, to see conditions ripe to implement a tenet of the common law calling for major issues - economic, social, political and cultural - to be put to public referendum rather than parliamentary vote," he said at an economic conference in Tehran.

Despite clear provisions in the constitution, it would be the first time since the 1979 revolution that a policy issue was put to a vote in the country.

Conservative hardliners have a strong grip on parliament, and are opposed to signing a deal about the country's contested nuclear program with a group of Western nations while under the pressure of sanctions.

The group – known as P5+1 -- include the U.S., U.K., France, China, Russia and Germany. A deadline for a deal has been extended to July 1.

Rouhani, who became president in August last year, also touched on the recent slide in oil prices and argued for an end to international isolation. Oil prices fell to fresh five-and-a-half-year lows lows on Monday after having lost more than half of their value since the middle of last year.

Iranian President Hassan Rouhani
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"Our political life has shown we can't have sustainable growth while we are isolated," he told the audience. "The time is past when it used to be said that if a foreign investor comes to Iran, our independence will be in danger."

Sanctions have hurt the economy in Iran, which is also battling stubbornly high inflation and unemployment. The International Monetary Fund forecasts growth for 2015 -- before the substantial drop in global oil prices – of 2.2 percent, compared to 1.5 percent in 2014.

Unlike its counterparts in the oil-rich Gulf, Iran has curtailed its budget for the coming fiscal year in response to falling crude prices, and used an oil price of $72 a barrel as a basis, down from $100 dollars in the previous period. Brent crude was trading around $55 a barrel on Monday.

For the economy to prosper, Rouhani also said the country needed to reduce the influence of government monopolies, foster more competition and fight corruption.

Last month Rouhani lamented Saudi Arabia's refusal to cut oil output.

"Iran and people of the region will not forget such conspiracies, or, in other words, treachery against the interest of the Muslim world," the Associated Press reported Rouhani as saying during a cabinet meeting.

The most recent report by the International Energy Agency (IEA) showed Iran's crude production was steady at 2.76 million barrels per day (bpd) in November. Exports are limited to 1 million bpd as part of a sanctions agreement reached in 2013.

"He is challenging the supreme leader and the conservatives with this proposal because he knows that in a popular vote the majority are likely to support a compromise solution that will not be acceptable to conservatives," Nader Habibi, Henry J. Leir Professor of the Economics of the Middle East at Brandeis University.

"It is very likely that this proposal (to resort to direct popular vote on important foreign policy issues,) will be rejected by the supreme leader, Ayatollah Khamenei,"