An Iranian oil worker rides his bicycle at the Tehran’s oil refinery south of the capital Tehran, Iran. Image Credit: AP

The barter system is deemed the oldest form of exchanging goods between buyers and sellers and rooted in history. It was the first form of exchange before the emergence and circulation of money.

A farmer could exchange wheat with a piece of cloth, and a cattle breeder could offer the animals in lieu of household items. With time development, some types of coins appeared as intermediate items in purchases, including copper and silver. Later on, humankind made rapid advances in commercial and financial transactions and now being conducted within minutes among countries and individuals using high-speed devices and applications.

With that in mind, the EU, which is opposing US sanctions on Iran, had no option but to agree with the regime and go back in time to reinstate the barter system to bypass sanctions. By doing so, the EU is throwing a lifeline to a regime, which is suffering from an exacerbated crisis resulting from its irresponsible actions, interference in others’ affairs and defiance of the international community.

A strong question needs to be raised here. Will the barter system work in the age of digital economy and the information revolution? One needs to know what exactly is to happen as the Iranians had tried bartering with India and other countries while previous sanctions were imposed before the nuclear deal.

As we can see, there is a clear contradiction between an old style of trade and today’s financially advanced systems. Such an old mechanism cannot work in any way whatsoever. A1920’s model car engine cannot be installed to operate an electric vehicle.

It is right that some forms of barter will go on and Iran will take, in exchange for its oil or gas, some of its basic needs such as foodstuff, medicines, machines and equipment; yet, that will be within limits given it is conducted within a complex system of exchanges.

It is a fact these basic needs are not what Iran really cares for, rather it cares about getting cash for its influential leaders and financing operations and foreign groups as well as sabotage actions elsewhere, including in Europe even though it is trying to circumvent US sanctions.

Last week, French police raided an Iranian centre and seized weapons and contraband meant for carrying out terrorist attacks. Germany extradited an Iranian diplomat who conspired against a conference called by the Iranian opposition in Paris last June.

Thus, it is unlikely the European Union, and even China or India, will pay for their purchase of Iranian oil in hard currencies, such as the euro, as the dollar will be banned from November 5, which means the failure of the barter mechanism.

As a result, the Iranian regime is facing a real dilemma, seeing that the noose is tightening around it and is also losing more sympathisers. France has discovered Iran’s secret actions, as did Germany and Brussels, the headquarters of the EU, as well as Latin American nations such as Argentina. Russia had begun to feel the premeditated and malicious intentions of Iran in Syria and Iraq. Given all these, the Mullah regime’s isolation will undermine the barter system despite its limited use.

Iran has only one way out of its dilemma, namely to reconcile with the international community, stop financing terrorism and interfere in others’ affairs, and playing a positive role in resolving the crises of the region. And move its modest economic and military capabilities away from intimidation.

Only these will dissipate Iran’s economic crisis.

Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.