The Iran deal is too big to fail

Foreign investors and Iranians are giddy at the prospects from the lifting of sanctions

Towering over one of Tehran’s main squares is a full-length, 40-foot-high photo of President Barack Obama alongside an ancient Persian warrior, both wearing spiffy pairs of shoes. “Be safe and comfortable. Walk with us,” reads the slogan underneath. It is an advertisement for an Iranian shoe company — and a sign of how fervently Iranians are hoping for a nuclear agreement that would ease economic sanctions and perhaps open a new era in relations with the United States.

“People are very excited,” a woman who works near the giant Obama billboard told me. “We are all keeping our fingers crossed. Every time there is a negotiating session, we follow it and are happy that our foreign minister has had success.”

My two-week trip across Iran last month revealed a remarkably pro-American population that is poised for change. Iranians are thrilled that their government has reached a preliminary agreement with outside powers and are eager for a final accord, which all parties say they want to conclude by June 30. The possibility that Iran could emerge from its pariah status and begin rebuilding its ties to the outside world has electrified the country.

Anti-American slogans painted on the long-empty U.S. Embassy years ago are still visible, but those were the only ones I saw. At a hotel in Yazd, a “Down with USA” sign has disappeared since my last visit; by one account, it was “lost” when the lobby was renovated. The fact that a shoe company has chosen to use a beaming Obama to sell its product — and that the government allows it — reflects the rapidly changing social climate.

Iran remains a theocracy in which citizens have only limited political rights. Most people I met said they would prefer a government that reflects the aspirations of a young and globalized population. Few, however, expect that the lifting of sanctions would produce a more democratic society anytime soon.

“It will have an economic effect, and life will be easier, but there won’t be a political effect,” an art student predicted. Then, like almost every other Iranian I met, he hastened to tell me how much he admires the United States. “Let me tell you a fact. Iranian people love American people,” he said. “Those people you see on TV yelling ‘Death to America’ are paid to do that. Anyone who says he doesn’t like America is either working for the regime or afraid to say what he really believes.”

Americans traveling in Iran are repeatedly surrounded by ecstatic Iranians. Many excitedly snap pictures of themselves with their new friends. Some literally jump and shriek with joy when they hear the words, “I come from America.” Reconciliation with the United States is their best hope for better lives, and they are acutely aware that a breakthrough may finally be at hand.

“I make $250 a month, which is not even enough to have a girlfriend,” lamented a 28-year-old college graduate in Shiraz. “For me and my friends, relaxation of relations with the United States is so important. We are not comfortable wıth China, Russia, Israel or European countries, but we feel very close to Americans.”

Sanctions on the Iranian economy, imposed by the United States and United Nations, have been in place for decades. Over the last few years, they have been substantially tightened, isolating Iran’s national bank from the global financial system. The prospect that they may soon be eased has set off a gold rush. Foreign businesspeople fill Tehran hotels. They understand that no other country offers so many new opportunities to make big money.

Iran is the world’s last large untapped consumer market. It has a highly educated population of nearly 80 million that is thirsting for nearly everything the world has to sell. Vast oil and gas reserves and the wealth they represent hold the promise of megadeals.

More than 600 foreign companies sent representatives to the recent Iran Oil Show in Tehran. Majors such as Shell and Total are shaping deals that could be signed soon after sanctions are eased. Chinese, Italian, Russian, Polish, Malaysian and South Korean oil delegations have visited in recent weeks. The director of the National Petrochemical Co. says he is looking for investors to complete 67 unfinished oil and gas projects. These and planned new projects, he estimates, can absorb investments of $60 billion.

The petrochemical industry is hardly the only mass-scale investment opportunity that foreign companies are pursuing in Iran. Iran Air wants to buy 500 new planes. That would make Iran the largest aviation market in the world over the next decade, a prospect that is not lost on Boeing or its main competitor, Airbus.

A senior official of Peugeot, the French auto manufacturer, said recently that his company is “speaking to our Iranian partners on a weekly basis” about reopening its Iranian assembly lines, which once produced 400,000 cars per year. Mercedes, Volkswagen and Renault are negotiating joint ventures to produce the 67,000 trucks that Iran says it needs. They are to replace rickety trucks from China that, according to one Iranian newspaper, “have become synonymous with death.”

Pharmaceutical companies are lusting after the long-closed Iranian market. Google is among high-tech and telecom giants that have begun negotiations with Iran. Manufacturers of machine tools are poised for a bonanza. India wants to build a new port that would give Iran direct access to South Asian markets. Scores of new hotels will be necessary if tourism to Iran is normalized.

After a high-level Iranian delegation visited Berlin last month, the German Economic Ministry calculated that Iran is poised to absorb investments totaling a staggering $100 billion per year. “The fantasies of top German business leaders have been awakened,” Der Spiegel reported. No one knows how many contracts have been negotiated and are ready for signing when and if sanctions are eased, but there are likely more than a few.

The prospect of huge profit adds vital momentum to the negotiations between Iran and six foreign powers that are approaching a climax. The Senate may try to prevent Obama from easing sanctions, but if it succeeds, it could shut American companies out of Iran’s lucrative market. The other five negotiating powers — France, Germany, Britain, China and Russia — would happily fill the vacuum, a prospect that would outrage powerful corporate executives in the United States. Despite the posturing of demagogic politicians, this deal looks too big to fail.

Sanctions have clearly hurt the Iranian economy. Prices are high, medicine is hard to find, and job opportunities are few, especially for the thousands of highly qualified young people graduatıng from Iran’s top-flight universities every year. Yet stores are full, street life is vibrant, and people with money can buy almost anything.

“You want an Apple watch?” a vendor in the Isfahan bazaar asked me wıth a smile. “I can get it for you tomorrow.”

Near the oasıs town of Abarkouh, the owner of a snack bar offered me a smoke and refused to take my money because I am American. Like other Iranians I met, he thinks a nuclear accord would be unlikely to brıng political change but would surely make life better.

“It wıll give us hope!” he cried, waving his arms in the air for emphasis. “It will make us optimistic!”

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