Is the promise of Iran’s riches all it’s cracked up to be?

"Everybody wants to take us to dinner," exclaims Nader Ghadessi of the Iranian Business Council in Dubai. And he's not wrong.

The west's new deal with Iran came into effect earlier this year. The headlines beamed around the world were in praise of nuclear non-proliferation, of epic bouts of high-wire negotiations and high-minded foreign policy goals (US secretary of state John Kerry, it was reported, flew the equivalent of sixteen times around the world as he shuttled to various theatres of negotiation).

But in Iran they weren't celebrating the nuclear deal - they were welcoming the end of sanctions which had made substantive business relationships with the West almost impossible. Trade between the EU and Iran dropped from Euros 28 billion in 2012 to Euros 6 billion in 2014.

The Iranians hoped that the relaxation of sanctions would bring a better standard of life. "The last ten years have been basically under economic pressure - severe economic pressure," explains Ghadessi.

"When these sanctions landed, the whole country had to sacrifice many things about infrastructure, anything about the long-term building of the country. Anything that is basic and needed for the long run, we had to leave it, because we needed to go for the day-by-day survival of the country."

The relief on the streets of Tehran was perhaps only matched by the gimlet-eyed intent of European business and political leaders, who had been forced to stand by while other nations solidified their relations with one of the gems of the emerging markets. An educated, young country of 80 million people had strengthened its ties with China - the first Beijing-Tehran train ran this February - South Korea, and elsewhere.

Just five days after the deal was signed, a German government plane carrying vice-chancellor Sigmar Gabriel and a top Siemens executive touched down in Tehran. They were followed by innumerable trade delegations. Italian prime minister Matteo Renzi brought dozens of companies with him on his visit last month, signing seven trade agreements. His visit coincided with the opening of a Roberto Cavalli store in Tehran, with the Italian designer lured by the capital's burgeoning and prosperous middle classes.

Everybody wants to take the Iranians to dinner, it seems. Including Ireland. Following on from a visit by a delegation of Bord Bia companies last week, Enterprise Ireland is leading a trade visit of nine medtech companies to the country this week. But is the promise of Iran's riches all it's cracked up to be, or do Irish exporters need to beware?

Source: Business Post

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