Sunday,22 October, 2017
Current issue | Issue 1300, (16 - 22 June 2016)
Sunday,22 October, 2017
Issue 1300, (16 - 22 June 2016)

Ahram Weekly

Suspicions on Iran

A year after the signature of the Iranian nuclear deal, Iran has failed to gain the trust of international investors, writes Camelia Entekhabifard

Al-Ahram Weekly

Everything from prayer rugs to fruit is labelled “Made in China” in Iran these days, with such goods, poor in quality and cheap, being seen as the price the country has had to pay for the international ostracism that followed its nuclear programme.

The world was suspicious that Iran’s nuclear programme had military goals, and the resulting international sanctions made ordinary Iranians frustrated with the ruling system, causing Iran’s politicians to give up their nuclear ambitious and negotiate an agreement with the international powers, even if Iran has always claimed that its nuclear programme had only peaceful purposes.

Almost a year ago, on 14 July 2015, a nuclear deal was reached with the P5+1 group of the five permanent members of the UN Security Council and Germany in Vienna and the sanctions related to the Iranian nuclear programme were lifted.

The first effects of the deal in Iran came with the Iranian public being liberated from cheap Chinese goods and the tasteless apples and oranges imported from China. Chinese goods had been imported to Iran in exchange for the oil that Iran was exporting to China. Iran’s choice was limited. It was a case of oil for junk or oil for nothing.

The other concerns Iranians had were over their nation’s ties with Russia. Russia’s reputation in the historical memory of many Iranians does not go much further than its meddling in their internal affairs and its looting and occupation.

Seeing Russia become Iran’s best friend and seize the opportunity to buy Iranian oil cheaply in return for charging the country a lot to build a new power plant was painful for many Iranians, to say the least.

Yet even now that the nuclear deal has been signed Iran’s doors are still closed to many foreign investors. Over the past year Iran has not been able to build up enough trust among the international community to make investors comfortable about entering this still largely untouched and attractive market.

The sanctions have been lifted, but Iran’s behaviour has not changed as much as the Western powers had expected. Its regional meddling and military presence in Syria, along with the divisions between the government and the rest of the state in Iran, are all matters of concern.

In a 2016 report, the US State Department names Iran as a top sponsor of global terror, and the nuclear deal has not stopped some Iranian groups like the Revolutionary Corps Force and the Al-Quds Force from behaving in the ways they choose. The US report also said Tehran was supporting the conflicts in Syria and Iraq and was implicated in violent Shia opposition raids in Bahrain.

Despite such negative reports Iran has received some benefits from the nuclear deal, but not as many as political leaders such as supreme leader Ayatollah Khamenei may have wanted. The $100 billion of Iranian assets abroad that have now been unfrozen under the nuclear deal have not reached Iranian hands as the international banking system still sees risks in engagements with Iran.

The concerns come from doubts about whether the United States will in the longer term remain committed to the sanctions relief. There are also fears of political instability in Iran, if the moderate government of President Hassan Rouhani is not able to overcome the radical groups and make the ground safe for the easy entrance of investors.

Such contradictions among the political leaders in Iran and uncertainty about working with the international banks have meant that Russia and China are still seen as the most reliable friends of Tehran.

The nuclear-related sanctions have been lifted, but other US sanctions, particularly those seen as a threat to foreign banks, remain in place. Foreign banks having access to the United States banking system have fears that if they do business with Iran, which has been found to support terrorism, they themselves could face punishment.

As a result of such contradictions, Iran has a long way to go to convince the international community that it has separated itself from its revolutionary past and its own internal radicals. Expanding trade with Russia and China remains its best alternative until foreign companies start to show more interest in coming to Iran.

Giving the upper hand to the Revolutionary Guards in Syria and Iraq and closing his eyes to the Russian presence in Syria may be the heavy price Rouhani has to pay in order to keep the nuclear deal alive.

While the world expected to see more diplomatic activity from Iran when the nuclear accord was reached last year, the government in Tehran now has its work cut out for it in fully implementing the nuclear deal, no matter how difficult and challenging this will be for the future of Iran.

Because of its lack of public support, Rouhani’s government cannot do anything in foreign policy if it does not first make moves to meet the demands of Iranian domestic politics.

The compromise on the Syria conflict was not easy to make for either Iranian Foreign Minister Mohamed Javad Zarif or Rouhani. But leaving the ground to the Russians and the Revolutionary Guards is the price the administration will have to pay in order to hold onto the nuclear deal.

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