Iranian companies wait for a boon after sanctions

Iranian contractors fell victim to nuclear fines, but a possible nuclear deal gave them hope.
Iranian shopkeepers and customers move between rugs in a shop in Tehran’s main bazaar. With the election of President Hassan Rouhani last year, which has a modest interest in attracting foreign capital, many business owners are considering Iran’s return to its role before the Islamic Revolution, as an attraction strategic world trade.
TEHRAN – The office hall of the Iranian Chamber of Commerce was full and noisy. Deputy Foreign Minister Abbas Araqchi called on dozens of traders and manufacturers to “seize the opportunity” that would result from the easing of international sanctions.

Business people, who had been largely excluded from the global market for years, discussed ways to reach potential investors.

“Why not send a delegation of business people to the congress?” suggested Mahmoud Daneshmand, a veteran of import-export.

The deputy foreign minister, who had understood the impracticability of this proposal, replied in diplomatic terms: “Well, for the moment, the conditions are not good”.

Daneshmand is one of many Iranian entrepreneurs hoping that a political change could bring a boon to the trade. In a formerly successful business class, he and his colleagues tend to avoid politics. But they reached their lowest level and the companies went bankrupt because of sanctions related to the Iranian nuclear program.

With the election of President Hassan Rouhani last year, who wants to engage in foreign capital, it looks like people like Daneshmand. Imagine a nation returning to its role before the Islamic Revolution as a strategic pole of attraction for world trade, reinforced by the legions of Iranian expatriates in Istanbul, London, Los Angeles and elsewhere.

“The horizon is getting brighter and brighter,” 67-year-old Daneshmand said in an interview in his office in downtown Tehran, a stone’s throw from the firm’s offices.

Negotiations on nuclear power will continue next week in Vienna between Iran and six other countries: the United States, Russia, China, Britain, France and Germany. Negotiators hope to consolidate a permanent agreement based on an interim agreement negotiated in Geneva in November. Iran has accepted temporary nuclear restrictions in exchange for limited sanctions.

The Obama administration, which is subject to significant internal criticism of the deal, has tried to downplay the economic benefits for Tehran.

“We have made it clear that Iran is not open to business,” US Secretary of State John F. Kerry told the Senate this week in Washington. “They accept it, they do not do business.”

There is no doubt that sanctions have weighed on the Iranian economy. Prices have risen stagnant employment; and the national currency, the Rial, has fallen by more than 50% in the past year.

Historically considered a nation of traders, today Iran is home to a discouraged and discouraged business world.

“People are losing their purchasing power,” said Mohammad Kurdestani, 60, owner of a carpet shop at Tehran’s Grand Bazaar. Like other traders in the bazaar, he said sales were slow.

“I have a warehouse full of carpets and then this shop,” Kurdestani said. “I have no choice but to sell my carpets while I’m alive or to end my activities if I’ve survived my wares, and every year our business deteriorates.”

Rouhani took office in August, succeeding Mahmoud Ahmadinejad, whose style of confrontation has alienated much at home and abroad. He focused on the Iranian economy and efforts to end the sanctions.

In January, Rohani attended the annual economic summit in Davos, Switzerland, where he spoke to the world’s elite entrepreneurs. He promoted investment opportunities, met with European oil managers and stressed Tehran’s willingness to conclude a permanent nuclear deal that could lead to the complete lifting of sanctions.

Last month, Iran was the scene of many French executives in the delegation, which is widely regarded as the most important trade delegation, and which has been visited for more than a decade.

Daneshmand exported petrochemicals and foods imported from Europe, Brazil and Argentina. But for two years, he said, his activities were virtually paralyzed by sanctions.

Limiting Iran’s access to the global banking system has crippled international trade and has been particularly damaging, he said.

“The import and export market is ruined,” Daneshmand said behind his desk. He wore a white shirt and a red and black striped tie, the latter being a fashion accessory that was badly perceived by the Iranian religious hierarchy as a relic of Western influence.

Nevertheless, the partial lifting of sanctions has made the lives of Iranian merchants more satisfactory. “It is now much easier to rent ships and assure them that they are bringing food, medicine and medical supplies to Iran,” he said.

One of the effects of the transition agreement was to facilitate the export of drugs and medical equipment to Iran. But the rigid banking limits remain.

“If only bank sanctions were lifted, we could start buying raw materials and spare parts for the production of our soft drinks,” said Jamshid Edalatian, 57.

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