Isfahan, Iran. (Credit: aris_abdullah/Bigstock)
Isfahan, Iran. (Credit: aris_abdullah/Bigstock) (via: bit.ly)

Understandably, investing in or even doing business with Iran under the threat of US President Trump withdrawing his government’s support for the 2016 Iran nuclear agreement (JCPOA) is a challenge. The high level of concern among Iranian elites was palpable at a Dialogue of Civilizations Research Institute (DOC) round-table in Berlin on 14 September, titled ‘Business in and with Iran: The Opportunity of the Decade’ and uniting experts on Iran from the United Kingdom, Russia, Germany, and the country itself. As the US president’s next quarterly JCPOA certification is scheduled for 15 October, Tehran has but four weeks to determine the reaction should Donald Trump’s decision indeed go the way many pundits expect.

A good year and a half after the implementation of one of the most substantial multilateral accords since World War Two, both the world and Iran herself are still unsure as to the re-integration of the Middle Eastern country into the global economy. There are signs of hope though, even if Trump were to drop the Sword of Damocles. The president’s insistence on alleged Iranian JCPOA violations, without providing a piece of evidence so far, has resulted in firm commitments by the other signatories, the UK, France, China, Germany, and Russia, that whatever Trump decides they will faithfully stick to their part of the deal. That is backed up by the International Atomic Energy Agency (IAEA) in Vienna, the JCPOA monitoring body, which confirms that the Iranian nuclear stockpiles remain within the limits of the agreement. The resilience of the none-US parties to JCPOA only strengthened when Trump sent Nikki Haley, US ambassador to the UN, to Austria in August, evidently tasked with pressing the agency to be more aggressive in its inspections regime. However, no smoking gun appeared.

Of course the fear among international businesses, in case the US revoke JCPOA, is that the United States’ legal system will punish them for reviving their Iranian activities after the sanctions disappeared in early 2016. This in fact is one of the reasons, if not the only one, that the Iranian return to the international business theatre came out in not so fast or euphoric a fashion as many expected. At least Tehran feels bolstered by the arms-length approach by the other JCPOA signatories with respect to Donald Trump’s undisguised hostility towards the agreement. Saied Khatibzadeh, Research Attaché at the Iranian Embassy in Berlin, referred to an international court judgement limiting US leverage in terms of penalising foreign companies for breaching international sanctions regimes. Whether that suffices to alleviate boardroom concerns regarding the risks of an Iranian exposure is a different question.

The potential and the opportunities of the Iranian economy are however impressive. Christopher de Bellaigue, a Farsi-fluent British publicist and scholar on Iran, underscored the point that with a population of 80 million and the world’s largest natural gas reserves, Iran is a prime location both for the marketing of consumer goods and the sourcing of raw materials. Vladimir Korovkin, Head of Growth and Innovations Research at the Moscow School of Management’s Skolkovo Institute for Emerging Market Studies (SIEMS), ând co-organiser of the DOC event, stressed the amount of diversification beyond oil and gas as well as the high levels of education and urbanization, in particular among the young. With 60% of the consumer class below the age of 30, sanctions-starved Iran must seem like a dream for any FMCC manufacturer.

There are contrasting voices too. Ali Fathollah-Nejad, Associate at Harvard’s Kennedy School of Government and Associate Fellow at the Berlin-based think tank DGAP – a foreign policy consultant to, among others, the German government – objected to the positive assessment of the economic policy under President Hassan Rouhani by most of the Iranian participants. He claimed that “Rouhani’s neoliberal doctrine has failed Iran” and doubted its long-term sustainability not the least because the policy was, in his words, benefiting merely the elite rather than larger sections of the population. Fathollah-Nejad met with explicit criticism from his compatriots, some of whom accused him of not being familiar with contemporary Iran, in particular with the changes since Rouhani’s election in 2013. Opposition also arose when he insisted on Iran being run by an “authoritarian regime”.

Fathollah-Nejad’s views, to the outside observer, reminded of typical mainstream Western perspectives of non-Western countries –  and the Iranian participants’ reaction of similiar statements by Chinese, Russian, or even Indian representatives when confronted with alleged shortcomings of their respective electoral, government, or legal systems, in particular the claim that their systems were somewhat inferior to, for instance, those of Switzerland or Germany, or the US. Indeed, the guests from Tehran represented government or government-affiliated organisations, but their reaction did not seem to reflect propaganda-instigated, ideological dogma. Rather, it underlined the perception of fundamental cultural misunderstandings, supporting the view that there is no single yardstick for progress and democracy – rule by the people – such as there is a standard metre bar stored in Paris since 1799.

However, the DOC event made clear that Tehran will hardly succumb to international pressure, no more than it did when signing the JPCOA agreement – nor inded any more than the other ascending Eurasian powers will it let the US, Europe, or the West at large determine the future of Iran. It was Abbas Maleki, ex-deputy of the Iranian Ministry of Foreign Affairs and Vice Chancellor of Sharif University, who presented the charts that outline the future of his country in the very centre of the slowly developing Eurasian spider web: at the crossroads of the Chinese Belt and Road Initiative, focusing on East-West logistics from the Pacific to the North and Baltic Seas, and the cross-Caspian North-South Corridor backed by India, Iran, and Russia. Western Europe, on those charts, looked like an appendix on the outskirts, the recipient of streams of deliveries – as long as it can pay for them.

Something that is indeed true: So far the reality is a fraction of what might be if and when. Foreign direct investment, as explained by Amir Alizadeh from the German-Iranian Chamber of Commerce in Tehran, totals at around 19 billion US dollars. Even neighbouring Turkey has only 80-something Iranian investment projects under operation, Germany about ten less – a large number in comparison. German-Iranian trade peaked at circa 5 billion dollars in 2010 and has since decreased to less than half of that. But the Iranians have not been sitting idly. In terms of numbers of automobiles produced, their country surpasses Italy. Highly competitive home appliances made in Iran are being exported across the region. As is the case with Russia, the sanctions significantly increased Iran’s integration with the non-Western Eurasian economies. One of the biggest German investors, plasterboard manufacturer Knauf which operates four plants in Iran, supplies construction material to countries from Iraq to Pakistan, to the extent that the company was appointed Iranian exporter of the year.