A senior official from the International Monetary Fund (IMF) says that Iran faces a challenge similar to post-Soviet Eastern Europe in modernizing and transforming its economy to take advantage of the opportunities presented by the landmark nuclear accord.

David Lipton, first deputy managing director of the IMF, told a conference at the Carnegie Endowment in Washington June 29, “Iran faces a fundamental choice.” The Islamic Republic can stick with a largely oil-based closed economy with heavy state involvement or seek greater integration, private enterprise and foreign investment, he said.

“The first will fail to generate employment” for Iran’s youthful population, Lipton said, while “the second can succeed but will require a transition on a scale and type countries in Eastern Europe went through” after the collapse of the Soviet Union and its hold over the Eastern Bloc.

Lipton said that while he was not sure what choice Iran would make, he and other members of the first IMF management team to visit Iran since the 1979 revolution found Iranian officials “very interested in restoring growth without rekindling inflation.”