D-Day for Iran

Yuri Glushkov exclusively for Vestnik Kavkaza
D-Day for Iran

December 17th could be a turning point in the modern history of Iran and the entire region of the Greater Caucasus and the Middle East. Since that day the Islamic republic can become free of the sanctions imposed by the UN and other countries, primarily the EU and the United States.

Klondike of opportunities

The IAEA meeting, which should give an assessment of Iran's readiness to fulfill the obligations related to the agreement on the Iranian nuclear program, is scheduled for December 16. For Iran it means its return to the world economy.

In any case, the majority of politicians and businessmen working with Iran believe in it. Pessimistic forecasts of experts about the time of lifting the sanctions against Iran indicate that the country will be free of the burdens only by spring and the regime against the Iranian economy will not be removed completely.

Entrepreneurs, however, await the removal of barriers on trade with Iran with great impatience and are already preparing the ground for a leap to Persia.

In the autumn months in Tehran's hotels its hard to find a decent room for guests from around the world. Business is actively looking for opportunities to be the first in the section of the huge cake, closed for years by sanctions or prejudice. Representatives of Iran actively tout thematic business conferences in Europe and Asia. Transportation, oil and gas, petrochemicals, infrastructure projects and production of consumer goods are all areas of the focus of the business community.

"A year or two ago, the capital of Iran was like a 'desert' – there were very few foreigners, only pessimism and discouragement around, but today the picture has changed dramatically. The representatives of Iranian businesses are in great demand and it became much more complicated to arrange a meeting in Tehran," one of the European businessman moving between Tehran, Anzali (port on the Caspian coast of Iran) and Bandar Abbas (port in the Persian Gulf) since July said in an interview.

Iran, frozen under sanctions for several years, "is a Klondike for business opportunities. The country has something which is interesting to Europe, and Iran itself needs new technologies for the development of industries weak after sanctions, and it will have money soon, a lot of money," the businessman stressed.

Iranian money for Iran

Iranian holdings will gradually return to the country. After the lifting of the embargo tens of billions of dollars will be available for payment during the procurement of the necessary equipment for the development of the locomotive of the economy – the oil and gas industry. Iran will receive about $29 billion by January 2016, after the foreign banks unfreeze the state-owned assets, the representative of the Central Bank of Iran said. The total amount could be much higher, since this amount does not include frozen funds of Iranian private companies caught in the sanctions list.

Another source of saturation of the Iranian economy is the debts of the Western companies, which remained since the introduction of the sanctions regime. Thus, according to the Iranian side, the British company BP has to pay Iran about $5 billion, the French company Total about $4 billion, the Italian company Eni also has billions of dollars of debt. The promise of a refund will be a ticket to the Iranian market and a guarantee of obtaining new contracts, the Iranian economist believes.

About 60 oil and gas projects in Iran are 60%-80% ready. They have not been completed because of the sanctions regime, and today can be run in a further development. This information was voiced at a recent conference in Moscow by the Director General of Himtrans, which is member of the RusIranEkspo group. According to him, the Iranians are ready to receive anyone who comes with investments and new technologies. There is some risk for the Russian business that if the West is lifting or will lift the sanctions from the Iranian companies, then part of the Russian companies in recent years have fallen under Western sanctions. Iranians carefully monitor this process and are beginning to "reject" Russian companies from the sanctions list.

Transit is a window for earnings

Russian business, however, can make money on transportation of cargoes to Iran via Azerbaijan and the Caspian Sea. According to the information from the representatives of transport companies, shippers began to cut the transit of goods through the land crossing at the Turkish-Iranian border in Bazargan. The situation in south-eastern Turkey in recent months has become unstable because of the increased number of terrorist acts and terrorist attacks against the Turkish military. As a result, a part of the freight traffic of eurotrucks changed its route to the transit through Georgia and Azerbaijan to the bridge between Azerbaijani Astara and Iranian Astara.

Business opportunities will increase when the Baku-Tbilisi-Kars railway will be fully put into operation in the coming year, and after the connection of railways between Azerbaijan and Iran in Astara. But the entrepreneurs have to hurry, as Tehran and other Iranian cities have fewer and fewer free places in hotels.