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Iran has grown stronger from sanctions, finance minister says

From Elise Labott, CNN Senior State Department Producer
  • Hosseini: Sanctions make Iranians invest in the country
  • Iran's finance and economic minister says rising oil prices have helped
  • "Plenty of countries are cooperating with us," the Iranian official says
  • Iran continues to face sanctions over its nuclear program

Washington (CNN) -- During a rare news conference in the United States, Iran's finance and economic minister held up a copy of U.S. News & World Report from 1980.

On the cover was a picture of then-President Jimmy Carter and Iran's then-Supreme Leader Ayatollah Khomeini with the caption, "Where Will It All Lead?" The issue featured an article about the United States' tightening of economic sanctions against the regime in Tehran while keeping the military option on the table.

"Iran has faced sanctions for 30 years," said Shamseddin Hosseini, who is in Washington for International Monetary Fund meetings this weekend. "And yet Iran's economy is stronger."

The message: Iran hasn't exactly welcomed the sanctions plaguing the country for three decades. But it has adapted and can continue to do so.

"It goes without saying that Iran has faced some trouble from sanctions," Hosseini told reporters. "But the positive effects are it made Iranians invest in the country. ... We can pass the obstacles produced and made by sanctions."

Hosseini argued that while Iran faced some economic hardships after the world financial crisis of 2008 and 2009, it has bounced back better than ever, thanks to rising oil prices over the past few years.

While Iran once raised money on the international market and relied on foreign investment, Hosseini said Iran now "relies more on domestic, internal resources."

For example, he said, Iran transferred its reserves from foreign banks and made that capital available to domestic firms. He said doing so has increased internal demands for projects, construction and labor.

Many Iranian firms have increased their worth on the country's stock exchange as a result, helping Iran's stock exchange to increase a whopping 48 percent in the past six months. That, Hosseini said, is one of the best records for any stock exchange in the world.

"When you block the stream of water, it goes another route," he said.

And the sanctions haven't necessarily hindered external trade, according to the finance and economic minister. Hosseini said Iran's nonoil exports have increased 23 percent over the past six months, and imports have increased 24 percent during the same period. He added that Iran's trading partners are "determined to continue" trading.

"The world of trade and investment is very appealing," Hosseini said. "Plenty of countries are cooperating with us."

Although Hosseini has been to Washington for IMF meetings in the past, he has kept a low profile until now, as have other Iranian officials who have made rare visits to Washington.

Iranian leaders visit the United Nations regularly, but the U.S. State Department must approve their travel to the United States. The United States does not have relations with Iran, and Pakistan represents Iranian interests in the United States.

This more high-profile visit could be an effort to show the recent barrage of international sanctions against Iran over its nuclear program has not hurt the Iranian economy, a point Iranian President Mahmoud Ahmadinejad made when he was on the sidelines of the U.N. General Assembly last month.

His comments sharply contradict arguments by U.S. and other Western officials that Iran is feeling the bite of a recent round of sanctions in the latest U.N. Security Council Resolution and subsequent, tough unilateral sanctions by the United States and the European Union.

"There is no reason to ignore any opportunity to clear the real picture when there is confusion," Hosseini said, adding that Iran has faced "no substantive obstacle" in finding money. However, he acknowledged countries and private international firms prefer to be discreet to avoid pressure from the United States.

Hosseini blasted the World Bank and IMF on Friday for denying Iran development and humanitarian loans, claiming they were not part of U.N. sanctions.

"The shocking point is that, based on inquiry made from the legal department of the World Bank, the developmental and humanitarian projects are excluded from the imposed sanctions on Iran," Hosseini said.

He said in meetings with World Bank officials, a "negative opinion of some countries" is cited as a reason for not lending to Iran.

"My fundamental question is whether such behavior is based upon good governance or political considerations," Hosseini said, adding that the bank's articles of agreement state the bank is "forbidden to have any kind of interference with the political affairs of the member countries nor can be influenced by the political inclination of members countries."