Jan 3, 2016, 10:00 AM
News Code: 81904412
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Foreign firms rush to get in on Iran ‘gold rush’

Tehran, Jan 3, IRNA - With Washington’s economic sanctions against Tehran set to continue even after the implementation of the nuclear deal, investment in what many believe is the world’s last great emerging economy may prove too risky for US firms.

According to Tehran-based English newspaper, Iran Daily, With Washington’s economic sanctions against Tehran set to continue even after the implementation of the nuclear deal, investment in what many believe is the world’s last great emerging economy may prove too risky for US firms.

American companies risk missing out on a ‘gold rush’ in Iran if sanctions are lifted as expected this year under the nuclear deal, experts have warned.

Companies from Asia and Europe are already flocking to do business in the emerging economy, which is set to come in from the cold.

But while the accord has been billed as a flagship of Barack Obama’s foreign diplomacy, the US might be among the last to benefit commercially. Only a small fraction of US sanctions - those related to Iran’s nuclear activities - will be suspended as part of the deal, which also allows for a ‘snapback’ of all sanctions in the event of non-compliance.

Although US companies’ foreign subsidiaries will be allowed to engage with Iran, a minefield of regulatory, transparency and legal issues could present more risk than reward in the eyes of many.

Investors are also likely to be wary of the next US presidential election, with Republican candidates vowing to scrap the deal if they come to office.

Other countries, however, appear to have embraced the deal and Iran’s potential as a sleeping giant. “If you want to see optimism, you just go to Dubai airport at about 8 a.m.,” Adam Smith, a lawyer focused on international trade compliance, told the Atlantic Council thinktank in Washington recently. “Ten flights a day between Dubai and Tehran, all packed.

“It’s really quite amazing and every discussion you have with big companies, small companies, middle companies throughout the Persian Gulf starts exactly the same way. They say, ‘Mr. Smith, please have some tea. Let me tell you about my recent trip to Tehran’. It’s exactly the same discussion every single time. Even companies that are subsidiaries of US companies: really, it’s everybody.”

Speaking at the same event, Nadereh Chamlou of the National Iranian American Council suggested that Americans were being uncharacteristically downbeat and lacking in can-do attitude. “I actually sense a great deal of pessimism in this room,” she said. “Whenever Americans talk, they talk in very pessimistic terms. I think five minutes after you arrive in Iran you will see the incredible potential the country has ... Already what you find in the country is mind-boggling.”

Chamlou has visited Iran three times this year and recently organized a visit by 35 of her former World Bank colleagues, including half a dozen Americans, who found it an eye-opener. She added: “They kept telling me, ‘Take us to where the real Iran is’. I kept saying, ‘This is the real Iran! Where do you want me to take you?’

“They were asking, ‘Where are all the people dressed in black from top to toe? Where are all the poor people?’ They were amazed. People looked good and well fed.

They dressed nicely in the stores. Tehran is a very clean city; you don’t find a cigarette butt anywhere.”

Iranian President Hassan Rouhani, visiting New York earlier this year, sought to persuade American chief executives that Iran’s door is open, and this week it sent a major shipment of low-enriched uranium materials to Russia - a key step in implementing the nuclear deal. The US is determined to maintain sanctions.

Chamlou said: “The constraints are more on the American side. I think the world is watching the United States more than it is watching Iran. It is important to really keep a little bit of an optimistic perspective in mind. The other countries are doing it. When you go to Tehran, it’s impossible to find a hotel room. It’s impossible to find a hotel room in any of the other cities as well.”

As the US Congress continues to snipe at the deal, Asian and European countries face significantly lighter restrictions on operating in Iran. British Chancellor of the Exchequer George Osborne has said he will lead a party of UK businesses to Tehran next year. Glenmore Trenear-Harvey, a British intelligence analyst who went on a fact-finding trade mission in October, observed: “We were very much Johnny-come-lately. So many delegations were already ahead of us.

“Americans, at the moment, are really going to be at the end of the queue ... As often happens, politicians haven’t the faintest idea of the commercial implications of bloviating.”

With a population of 80 million, Iran has been described as the world’s last great emerging economy. Despite its huge oil and gas reserves, US energy companies are treading carefully.

But Iran’s youthful population, promising Internet sector and middle class consumer base could prove tempting for less capital-intensive enterprises.

**Excerpts from a larger article published in theguardian.com