News / Economy

In Tehran, Optimism in Wake of Nuclear Deal

Iranian Consumers May See Little Benefit From Nuclear Deali
November 27, 2013 8:01 PM
The nuclear deal between world powers and Tehran is spurring hope of some revival for Iran's struggling economy. The interim deal eases some of the crippling sanctions against Iran, as long as Iran makes good on promises to limit or freeze some of its nuclear activities. But whether the results will meet the expectations of everyday Iranians is less than certain. VOA's Jeff Seldin has more.
The nuclear deal between Tehran and the so-called P5+1 — the United States, Britain, China, France and Russia, plus Germany — is spurring hope of some revival for Iran's struggling economy.
On the streets of Tehran, and in the bazaars, there seems to be a newfound confidence — particularly for consumers such as Nahid Habibi, a Tehran resident who is perusing gold jewelry.
"People have more motivation to buy. There is more confidence among shoppers," she says. "I personally feel that it is less likely that I lose out if I buy merchandise."
Even currency dealers who have seen the rial's value dive by 80 percent compared to the U.S. dollar are optimistic.
"The good atmosphere is the result of the talks, it can't be more obvious," said Hossein, a currency dealer who chose to withhold his last name.
While the Geneva talks resulted in an agreement by Tehran to freeze key aspects of its nuclear program in exchange for an easing of sanctions on gold, the auto sector and petrochemical exports — providing about $1.5 billion in revenue — whether results will meet expectations of the average Iranian citizen is less than certain.
While the interim deal will ease some of the crippling sanctions so long as Tehran officials make good on promises to limit or freeze some nuclear activities, the question of whether it will help the country's struggling economy remains to be seen.
"I think the average Iranian has very high expectations for what this will mean for them in a day to day basis. And in terms of what they are going to experience in the days, weeks and months to come, it's going to be very, very little," says Matthew Levitt, Director of the Stein Program on Counterterrorism and Intelligence the Washington Institute for Near East Policy.
That could leave Iranian President Hassan Rouhani with a "crisis of rising expectations," Levitt says, forcing him to finalize a deal with world powers or put Iran into spin mode, finding ways to blame the West for a failure to reach any final agreement.
But it's not just Iranians who are getting their hopes up. Plenty of international businesses are also starting to eye the possibilities in a country where experts say there is plenty of demand for American goods.
"I don't see an immediate gold rush into Iran, but I certainly see companies being interested in it and looking at it," says Clif Burns, an export law attorney at Washington-based firm Bryan Cave. "As the sanctions progress, they will explore more activity in Iran."
While U.S. officials say that so far nothing has changed and trade embargoes remain firmly in place, some Iranians already see signs of hope.
“The only thing that I do get worried about when I go to Iran is the effect of sanctions on the airlines — with Iran Air, where the planes are actually going to have a malfunction because of not getting the part because of sanctions," said Ali, an Iranian-American graduate student who spoke to VOA on the condition he not be identified to protect friends and family in Iran."
Those worries will ease as the interim deal signed by Iran and world powers allows for some safety-related repairs and inspections inside Iran for certain Iranian airlines.

Jeff Seldin

Jeff works out of VOA’s Washington headquarters and is national security correspondent. You can follow Jeff on Twitter at @jseldin or on Google Plus.

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