Report: Western firms lining up to revive business with Iran
Wide set of European, US companies stand to regain lost Iranian trade in wake of Geneva agreement, Wall Street Journal reports. From Siemens to Nestle, western companies 'following developments closely'
While Israelis are considering the strain on relations with the US in the backdrop of the Geneva nuclear deal, in Tehran the future looks bright, at least economically.
As part of the agreement, western powers identified a small group of sectors for Iranian sanction relief, but a much wider set of European and US companies also stands to regain lost Iranian trade, the Wall Street Journal reported. The list includes pharmaceutical firms and medical-equipment makers as well as food companies and traders.
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Western governments singled out Iran's automotive and aviation sectors for temporary sanction relief, while allowing petrochemical exports and trade in gold and other precious metals. But the deal also clears the way for GlaxoSmithKline and Sanofi to restart selling many of the drugs they had cut back on because of increasingly stiff financial sanctions, according to the report. Germany's Siemens may now also be able to send in more medical devices.
These and billions of dollars of other goods have long been classified as humanitarian in nature and not specifically subject to sanctions, the WSJ explained. But banking and insurance restrictions enforced as part of the overall sanctions regime prevented companies in many cases from getting paid, curbing European and US exports to Iran of everything from wheat and chocolate bars to diabetes medicine, the report said.
Swiss food company Nestlé was among those forced to scale down its Iran business after banks refused to transfer revenue back from Iran. In response to the report, the company said it was "following closely the developments in this process, but it is too early to say how they will affect our operations."
Procter & Gamble Co, whose Oral-B mouthwash continues to be sold in Iran, declined to comment.
A Siemens representative said it "doesn't want to speculate about possible outcomes (of the nuclear pact) and their implications."
Meanwhile, in Iran a public debate regarding the agreement, albeit a quiet one, is still be waged. Hardliners who oppose reconciliation with the US have not publically challenged President Hassan Rohani but warned him of the implications.
“Our ideology will not be undermined by some negotiations,” Mohammad Reza Naqdi, the hard-line head of the paramilitary Basij force, told reporters prior to the signing of the agreement.
While the agreement was widely embraced by the Iranian public, experts doubt calm will be maintained for long. They estimate that just one nod from Supreme Leader Ali Khamenei will be enough to unleash mass rallies against the agreement, the New York Times reported.
“They are biding their time,” watching from the sidelines, eager to pounce on any perceived signs of backtracking, weakness or capitulation, said Farshad Ghorbanpour, an Iranian journalist close to the Rohani government. “When the opportunity arises they will strike back, searching for pretexts and playing into possible snags during the negotiations,” he said. “This is in no way a done deal.”
If such a signal is made, hardliners have the funds and willingness to mobilize considerable opposition. “Instead of being able to put political muscle on the streets, his (Rohani's) only chance of survival is to improve the economy,” Ghorbanpour said.
But even there, the hard-liners play a critical role, according to the NYT. “There is a group of nouveaux riches who found wealth in the sanctions,” said Saeed Laylaz, an economist with close ties to the Rohani government. For years, the new Porsches, Maseratis and Ferraris snaking their way through the narrow alleys of upscale North Tehran were among the most visible effects of the sanctions.
The drivers of these luxury cars, mostly young men in their 20s, are commonly referred to here as “aghazadehs,” the children of those with connections to power.
According to Mr. Laylaz, “instead of trying to take their wealth, Mr. Rohani will ask them to invest it into the economy.”
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