- So far, Iranians are upset that after almost three months since the end of international sanctions they haven’t seen any prosperity on the horizon
Gulf News
Ahmed Mustafa
The Nuclear Security Summit in Washington was another occasion for US President Barack Obama to praise the deal he led the West and world powers to sign with Iran over its nuclear activities.
Yet, it was not much assurance to many in the world who fear that the Iranian stock of nuclear materials might find its way into terrorist hands. Obama’s conciliatory tone towards Iran was a measured hint at steps forward in executing the deal so Tehran can get the promised economic benefits.
So far, Iranians are upset that after almost three months since the end of international sanctions they haven’t seen any prosperity on the horizon. Though Iran’s Supreme Leader, Ayatollah Ali Khamenei, blamed that on the Americans, accusing them of not fulfilling their part of the deal, the Iranian public seems to be reluctant to buy into it. For years, during sanctions, it was easy to justify the people’s suffering by blaming the West led by “The Great Satan”. But now the US is no longer a devil, it’s a partner.
The government of Iran’s President Hassan Rouhani was quick to announce deals with western companies, some worth billions, but it seems it all stopped at the point of announcements. Companies are too reluctant to go into business with Tehran despite the easing of sanctions.
One of the main hurdles is that foreign banks are not heeding the political trend and allowing Iranians to use their systems. For example, Swift (Society for Worldwide Interbank Financial Telecommunication) already re-connected four Iranian banks to the system, but not many dealings are going through. Iranian businesspeople and their partners outside complained that they can’t get letters of credit or other banking services because banks are afraid of being liable to sanctions other than those scrapped.
Nobody wants to pay a fine of $9 billion (Dh33 billion), such as the amount BNP Paribas had to pay in 2014 when indicted by the Americans for dealings with Iran. So, the $30 billion Iran was expected to get from its asset freeze has still not transferred because of this banking reluctance. Even the $4 billion owed by Europeans who bought more Iranian oil in last few months are difficult to transfer to Tehran.
As Iran needs almost half a trillion dollars in investments to rehabilitate its infrastructure, those few tens of billions not recovered yet might be just be a drop in a ocean. But even a part of that drop would have been enough to convince people on the streets of Tehran that the nuclear deal bore economic benefits.
Iranians can call for US sanctions to be lifted so the global financial system accommodates Iran again and business deals with the outside world can go ahead. But you can’t ignore the facts that makes it difficult for the world to trust Iran quickly, especially on the business and economic side. The Ayatollah Khamenei still controls everything in the country, leaving the reformist government of Rouhani with limited manoeuvring powers. The period of sanctions was not that bad for Khamenei, as he is said to have amassed a fortune through many entities linked to him. In 2013, Reuters published a three-part investigation into what it called Ayatollah Assets. Now, Khamenei wants certain companies to be the main beneficiaries from lifting the sanctions, mainly the economic arm of the Revolutionary Guard — stamped by many around the globe as a terrorist organisation.
For example, Rouhani and his oil minister Bijan Zangeneh couldn’t get Khatam Al Anbia (A company from the economic arm of the Revolutionary Guard) out of South Pars — a huge off-shore gas field shared by Iran and Qatar. It’s difficult for any big oil company to invest in South Pars and not be suspected of “dealing with terrorist organisation”, even if it hasn’t dealt directly with the Revolutionary Guard-owned company.
That’s why projects to renovate the field, which involves foreign companies or investments, are on hold until further notice. Scepticism towards Iran among foreign businesses has got some remit, not only due to fear of US sanctions still in place, but because the power structure in Iran is a formidable obstacle to the country’s openness to the world.
A senior diplomat said recently that the world will remain wary of Iran as long as its relationships with its neighbours do not improve. Many in the Gulf don’t see any change in Iran policy towards its neighbours with Khamenei in place. So, it might be more time until ordinary Iranians feel any benefits of the nuclear deal.