German companies flee Iran following riots
Thousands of German firms operate in Islamic republic, but expert for Mideast business says post-election violence has prompted them to freeze activities, evacuate workers
Neugart told a Kuwaiti news agency that "the riots have caused confusion among German companies as to the future of the Iranian market."
Neugart noted that according to information he had, a significant number of German companies operating in the Iranian market have decided at this stage to freeze all their plans in the Islamic republic until the picture became clear.
He also said that most companies have decided to remove German citizens from Iran for vacation following the recent violence on the streets and the daily clashes between security forces and citizens.
Neugart stated that Iran was the third most important commercial partner in the Middle East for the German market, after Saudi Arabia and the United Arab Emirates.
He estimated that hundreds of German companies were directly active in the Iranian market, while thousands of other firms were represented by Iranian agents, in contradiction with statements on economic sanctions against the Islamic republic.
The importance of the Iranian economy for Germany can be seen in the volume of exports last year, which totaled about €4 billion. The first quarter of this year, however, saw a 22% drop in German exports to Iran following the damage caused to German companies in light of the global financial crisis.
Neugart did not address the recent criticism against German companies for allegedly helping the Iranian government, which is using violent means of oppression against the protestors. In the past week, German companies rejected the criticism, claiming they were doing business with Iranian firms and not with the Iranian government.
It should be noted that Iran views Europe as a key target market for energy exports. In 2008, the Iranian exports to Europe totaled some €11.3 billion, 90% in the energy field.
Doron Peskin is head of research at Info-Prod Research (Middle East) Ltd.
