By Alireza Ramezani for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.
Europe must adopt Long-Term Vision for Trade with Iran
Business is increasingly intermixed with politics in Iran’s relations with the world — to the potential detriment to both. For instance, recent developments in bilateral ties indicate that Iran’s longtime economic partner Germany is keen to take advantage of the opening provided by the nuclear deal.
At a June 27 meeting with his Iranian counterpart in Berlin, German Foreign Minister Sigmar Gabriel said his country is eager to bring investment into Iran. However, Gabriel made the latter conditional on further efforts by Tehran to help end regional political crises.
The strongest European economy is thus in effect offering the investment Iran needs to create jobs in exchange for the country’s playing a “constructive” role in the Syria, Yemen and Lebanon crises.
These types of demands for change in Iran’s regional policies have escalated in recent months. Some of them are considered in Tehran as violating the spirit of the nuclear deal. Nonetheless, the fact of the matter is that the Islamic Republic is not in a good bargaining position on the global political stage.
This is particularly the case since the Iranian economy remains in bad shape. Although there is a fragile recovery, there is a need for major foreign investment to be able to create a million jobs per year through 2022, as projected in the country’s sixth five-year development plan.
Iranian officials say the country needs to attract $50 billion in foreign direct investment annually; this would be 11.7% of gross domestic product. In comparison, this figure was 1.9% in 2003, when no nuclear-related sanctions against Iran were in place. As such, it is clear that expectations dwarf the real investment Iran has so far attracted in the post-sanctions era.