Lifting sanctions hasn't brought the promised economic benefits, but regional influence is at its strongest since the revolutionby Christopher de Bellaigue / August 10, 2016 / Leave a comment
On a recent trip to Iran with a group of westerners, sitting in the boardroom of a mid-sized producer of white goods in the foothills of the Zagros Mountains, someone in our party alluded in passing to the recent lifting of sanctions. The Chief Executive of this family business, a United States-educated Master of Business Administration who is looking forward to handing over to his son, himself recently returned from studies abroad, interrupted the speaker and asked if she was joking—“about the sanctions, I mean.” He smiled at our puzzled expressions. “Contrary to what you all think, this country is still living under sanctions.”
Of course some sanctions against Iran have come off. We watched it happen on 16th January, when—much sooner than sceptics had expected—the Iranians were commended for carrying out their commitments with regard to mothballing or reconfiguring key parts of their nuclear industry, and John Kerry, US Secretary of State, announced that his country and the European Union would “immediately lift nuclear-related sanctions.” (That focus on “nuclear-related” sanctions is all important: US terrorism- and human rights-related sanctions remain in place, meaning that most American business with and investment into Iran remains illegal.)
Iran is now able to sell its oil to Europe for the first time since early 2012—as well as other commodities such as steel and petrochemicals; its banks have been reconnected to Swift, the interbank messaging service that handles cross-border payments; and some of the world’s biggest companies, from Shell to Peugeot, Airbus to Danieli, have been falling over themselves to get a piece of the world’s last big frontier market.
This is the theory of what has been happening over the past four months. What the CEO in the Zagros meant when he said that Iran continues to live under sanctions is that theory and practice are so far apart as to make his life indistinguishable from pre-January days. His company remains unable to access top-of-the-range German components without long delays, and export remittances still have to come through a shell company in Dubai. The old frustrations of extra costs and compromises on quality—the Chinese are usually ready to supply what the west will not—haven’t gone…