Wednesday,18 July, 2018
Current issue | Issue 1243, (23 - 29 April 2015)
Wednesday,18 July, 2018
Issue 1243, (23 - 29 April 2015)

Ahram Weekly

Improvements for Iran

The recently signed agreement on Iran’s nuclear programme is already leading to improved economic forecasts for the country, reports Camelia Entekhabifard in New York

Al-Ahram Weekly

With the biggest sand storm in 40 years still clouding much of the region, the sky over the eastern shores of the Gulf and Iran is quite bright and dazzling.

Part of this brightness is due to the pleasant weather of spring, but part of it may also be due to the forecast of great economic improvements which has been made following the comprehensive nuclear deal between Iran and the western powers.

The Framework Agreement on Iran’s nuclear programme that was signed on 2 April in the Swiss city of Lausanne guaranteed business opportunities for Iran if the country limits its nuclear programme.

The negotiators of the P5+1 countries, the five permanent members of the UN Security Council plus Germany, will meet again with the Iranians in Vienna on 22-24 April to begin working on the comprehensive deal document.

The final deal, supposed to occur sometime before the end of June, will guarantee economic improvements for the Iranians as well as opportunities for foreign investors.

Already big firms and investors are lining up to enter Iran on the breeze of the final deal, and the prospect of the lifting of sanctions has shaken the market and excited investors.

The political changes in the region and within the P5+1 countries might not suit some regional countries as they are used to running their own business without partners and changes usually face resistance no matter how good they are for everyone.

Furthermore, next year’s regional budgets have already taken a hit as a result of the significant drop in the oil price, and the only way Iran can restore its economy is through the nuclear deal as the country’s re-entry to the oil markets may cause another drop in oil prices.

Iran’s access to billions of dollars of its own assets that are frozen or deposited outside the country is another financial benefit of the nuclear deal regardless of the oil market.

 No matter how difficult the path to the final agreement may be, all the evidence suggests that Iran’s political leaders are eager and working hard to overcome the barriers before the deadline in spite of all the propaganda and stones thrown in their path.

As a result, Iran’s nuclear programme will no longer be considered a threat to world peace and stability. However, there is another side to this deal which has added to the resistance to it, and this is the attitude of Iran’s Arab neighbours.

The importance of the deal is not about Iran making friends with the US, as some countries have feared, being already on their guard even before the deadlines came. Regime change in Iran is not on the western powers’ checklist, and nor is suddenly making Iran their greatest ally.

However, Iran’s neighbours are still looking for reassurance that they will not be harmed by the US and western countries’ deal with Iran.

It looks as if from now to the end of June attention will shift from making the deal to calming the region and giving regional countries assurances that this deal benefits all of them.

With this in mind, US President Barack Obama has invited Arab leaders to a meeting at Camp David at the end of this month.

Iran has not taken any steps to open up to its neighbours, as the war in Yemen is being stoked by a Saudi-led coalition against the Iranian-backed Houthis.

Despite this new confrontation and threats to investors, Iran is becoming more attractive as a result of its capability to provide a safe market for foreign investors, however.

With the exceptions of the UAE and Qatar, which are safe for both visitors and investors, other regional countries, even Saudi Arabia, do not have the attractions that Iran has despite Saudi Arabia’s excellent relations with western countries.

However, there is a difference between opening up markets and opening the society, which is related in Iran’s case.

It would be wishful thinking to suppose that an improved economy and the end of sanctions might lead to a secularist president coming to power in Iran or the normalisation of its relations with the US.

The nuclear deal is like a single energy shot that will boost Iran’s economy, but that is all. 

There will be no reduction of the pressure on intellectuals and reformers in Iran or on the way the negotiations are handled, since these matters are considered national security concerns in Iran. However, an improved economy will make people better able to tolerate the regime’s pressures.

A relevant example is China, which when the sanctions against it were lifted and it achieved semi-normalised relations with the US did not become a major US ally or change internally because of its changed relationship with the US. 

Social and political activists in China are still under enormous pressure from the Communist regime, regardless of the international community’s protests.

In the same way in Iran, the nuclear deal allows Iran to play a bigger role in the region through diplomatic means.

 Despite claims that the lifting of the sanctions might help the Iranian Revolutionary Guards to increase their revenues to fund more groups like Hizbullah and Hamas, the deal may in fact reduce such groups’ incomes.

Former Iranian president Mahmoud Ahmadinejad called the Iranian-backed militias “smugglers”, and the claim has been repeated by current president Hassan Rouhani.

The sanctions have helped many people with links to extremists, and lifting the sanctions will affect a big chunk of the Revolutionary Guards’ assets, believed to have been made from the black markets and smuggling.

The termination of the sanctions will hurt smugglers in Iran, including in a part of the armed forces, and it will assist the government and the rule of law when business is regulated and legitimised.

Iran is not at the negotiation table because the regime is short of cash to fund its regional proxies, and in fact the sanctions help it to raise the money it needs.

Iran is negotiating because the sanctions hurt ordinary Iranians, and this public pressure caused the election of Hassan Rouhani who promised to solve the nuclear issue and see the sanctions lifted.

There has been a shift in Iran’s leadership and policy towards a different path but not necessarily one leading to major reforms.

The forecasts are promising if Iran can manage the remaining talks with the western powers peacefully and diplomatically.

Meanwhile, Iran’s Foreign Minister Mohamed Javad Zarif is due to visit New York next week to deliver a speech at the United Nations at a conference on the Nuclear Non-Proliferation Treaty.

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