“We intend to re-open trade with all our neighbors…. and begin cooperation.”~President of the Islamic Republic of Iran, Hassan Rouhani
Earlier this month, 78.4 million Iranians saw the economic sanctions lifted, which were imposed in 1979 after Iran underwent a revolution. During this period, the infamous American Hostage Crisis occurred where a group of Iranians took over the American embassy to protest American intervention in Iran’s domestic affairs. [Note: this recap does not do justice to all parties involved.] At this point, the U.S., France, Britain led the majority of the advanced economies in cutting off diplomatic ties with Iran’s new regime by imposing US, United Nations and European Union sanctions, thus prohibiting Iran from selling its oil, much like the situation in Iraq during the Saddam Hussein era. Both the U.S. and EU froze Iranian assets and refused to trade with Iran by implementing sanctions. Over two decades later, Iran underwent further isolation and sanctioning after Iran developed a nuclear program to explore various technological uses–including peaceful purposes.
In the meantime, the International Monetary Fund served as the awkward “friend of a friend” who hosted a financial wonk/nerd potluck of 188 guests at semi-annual meetings, including Iran whose one-dish gift would be scrutinized. Same may apply to World Economic Forum meetings. However, the World Economic Forum 2016 invited President Hassan Rouhani to articulate what he believed Iran’s agenda should be as Iran gets pulled into a more interconnected global network…of investment? or a pregnant pause to integrate politically for economic gains.
With the 2015 Iran nuclear deal,
#Iran says it has access to $100 billion worth of frozen overseas assets after negotiating its nuclear deal with world powers. On January 16th, the International Atomic Energy Association–agency that faced uncannily similar political pressure with Iraq in 2002– verified that Iran had met all the Iran nuclear deal commitments negotiated by the P5 +1 parties (China, Russia, US, France, Germany, and the UK–note the exclusion of Turkey, a NATO ally) in the Joint Comprehensive Plan for Action and signaled the next step of lifting economic sanctions.
We were too excited on #ImplementationDay, January 16th, to blog about this event. Why? Well, for example, lifting economic sanctions represented a double win for science & technology and
#humanrights: MRI machines allowed to treat cancer patients. Furthermore, Iran is now able to buy new airplanes after three decades of aviation sanctions that led to dangerous flights and many civilian deaths. As such, it was no surprise that EU members jumped at the opportunity to meet this demand and sell hardware for oil. For example, France sold 118 commercial planes to Iran. Immediately before President Rouhani & France reconciled, Italian companies signed contracts estimated at $18.62 billion with Iran.
On the other hand, there are legal issues to consider for Americans and others who want to re-enter into business in Iran after the 37 year hiatus as noted by Managing Parnter Farhad Alavi of Akrivis Law Group.
…plus we wanted to see how American news stations would review and assess this situation from a distance. Take a listen:
- Al Jazeera America’s The Stream with Malika Bilal and citizen journalists on January 26th (It’s been a pain to find the link…for some reason.)
- National Public Radio (United States) program
Beyond Iranian Oil
By the end of 2016, “Iran will likely add around 400,000 barrels per day to the market,” forecasted oil markets specialist, Webster Drake, at the Atlantic Council based in Washington, DC. Although the banking sector in Iran is a remote idea for the US and EU countries, 31 foreign banks have operated in Iran. Two ironic twists in Iran’s banking story:
- Merrill Lynch and the Canada operate banks in Iran among the 31 foreign banks.
- Arab Gulf Cooperation Council members, Bahrain and Kuwait–sworn allies of Saudi Arabia, but whom harbor cold relations with Iran–also operate banks in Iran.
For all the Gulf Arab and Iran tension discussion noted in the U.S., the banking relations raises doubt about how negative the potential for increased relations really are.
In the last 6 months, economists and Iran watchers have focused on Iran’s second biggest industry, automobile production.
Iran Elections for Parliament: #IranElections2-16
On February 26th, Iran will holds its first election since #ImplementationDay–an historic day when the economic sanctions on Iran were lifted. Iran has 290 seats in parliament. The Iranelections will drive Iran’s political economy further into the right or left hand turns.
Reformist factions said that out of the 3,000 candidates they had put forth, only 30 were approved.~BBC News
Now that economic sanctions against Iran have been lifted, it has been informative to see how Iran’s political elites–whether “hawks”, “doves”, “Conservatives” or “Reformists”– will frame what they believe are Iran’s top economic concerns. How will they argue where Iran must posture itself in global affairs? Meanwhile 88 of those must be screened by Guardian Council. The screening process was called into question by former leaders, like Akber Hashemi Rafsanjani, who has ties to both “conservatives” and “reformists”. Of the 12,000 candidates that applied for those 88 contested seats, the Guardian Council rejected 7,000 potential candidates.
One thing does unite Iranian politicians: Managing citizen’s socio-economic expectations as consumers after “Implementation Day”. After that, political camps will diverge on this point depending on how much this agenda item can distract from managing civil society’s political expectations.
“The ingredients are all there,” “Iran has an established history of elections that has put people in the habit of going to the polls. Iranians are used to hearing different opinions expressed in parliament and in the press. They turn out to vote in great numbers, and hold elected officials accountable for their actions.”~Barbara Slavin, recently a senior fellow at the United States Institute of Peace and author of Bitter Friends, Bosom Enemies: Iran, the U.S., and the Twisted Path to Confrontation.