Friday, February 05, 2016

Hey, they are just like us


Now that the sanctions have been lifted, Iran is working its way back into international commerce. And under the color of limiting western influences in Iran, the ayatollahs in charge are making sure that their BFF's are the ones who benefit.
Behind the headlines announcing big business contracts with European companies it is becoming increasingly clear that, so far, the only deals being struck have been with the state-backed conglomerates. These are the groups that dominate major industrial and commercial sectors of the Iranian economy and are tightly controlled by pension funds and investment companies linked to state organizations, like the Revolutionary Guards.

As a result, little or nothing is trickling down to the lower levels of Iran’s beleaguered but still enormous private sector. “We have a conflict of interest with the government,” said Bahman Esghi, the secretary general of the Tehran Chamber of Commerce. “Because they have outgrown all their competitors.”

All the major international deals signed in recent weeks have involved state or semistate-backed industries. The national carrier, Iran Air, signed at deal to buy more than 100 planes from Airbus. The Iranian Mines and Mining Industries Development and Renovation Organization, one of the largest state entities, started a $2 billion joint venture with an Italian steel producer, Danieli. PSA Peugeot Citroën of France will invest $439 million in carmaker Iran Khodro.

But when smaller private businesses reach out to their foreign counterparts the response they get is still: how will you pay? Nuclear sanctions might be lifted but almost all international banks continue to shy away from the Iranian market because of unilateral American regulations that label Iran as a state sponsor of terror.

“We are not getting any credit, inside or outside of the country, we can’t make transfers and the government has other priorities,” Mr. Esghi said. Next week Mr. Esghi, the public face of the largest private business ownership organization in the country, will be shutting down his own business, a bus factory, and sending his remaining 14 employees home. The reason, he said, is that there is no work and no prospect of any, even after the lifting of sanctions.

“I’ll be the unemployed secretary general of the Tehran Chamber of Commerce,” he said. “Ironic, isn’t it?”
If you have the connections you have a deal, just like in America. And sadly we still label Iran a state sponsor of terrorism while we maintain normal relations with Saudi Arabia and Israel. That kind of thinking may explain why we have Donald Trump and Ted Cruz running for president.

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