NEW YORK - With the nuclear deal between Iran and the world powers complete, American business interests are looking for opportunities. But before all the sanctions are lifted, U.S. and global businesses will have to clear plenty of hurdles before they begin investing in and selling to Iran.
The agreement, which puts strict limits on Iran’s nuclear development for 10 years, calls for lifting economic sanctions by the international community.
Suzanne DiMaggio, a senior fellow and director of the Iran Initiative at New America research group in New York, said Iran is a potential market of 80 million highly educated, sophisticated consumers ready for U.S. products and services, but she believes it will take some time for U.S. major corporations to feel comfortable enough to start investing in Iran.
She added, “They will need to see that Iran is working through this agreement and is complying with it. And, they also want to see that there is some stability there.”
DiMaggio noted that some key restrictions in the agreement will last 10 to 15 years, or even longer.
“There are elements of the deal that Iran has agreed to in perpetuity, that will go on forever," she said.
'Major Player' in Oil
A key to stability in Iran is oil. Iran has some of the largest oil and natural gas reserves in the world, but during the years of sanctions the oil fields were not fully developed.
DiMaggio told VOA that “it is going to take some time and billions of dollars to really bring that oil sector up to snuff.”
But she added, “Make no mistake about it, Iran will be a major player in the oil sector. I think this has other countries like Saudi Arabia worried [about] what will that do to the market that is already down.”
On Wall Street, trader Ben Willis of Princeton Securities predicted there will be an impact when the Iranian supply of oil comes to the worldwide marketplace. He said he thought oil would settle in at a price of around $40 a barrel. So, what is happening on the market?
Willis said, “Right now the market is reacting by buying the major oil companies like Total, Exxon and big producers throughout the world. That being said,” he continued, “I think part of the places that are not being looked at right now is the international investment banking firms that have been thrown out of Iran or forced to leave by sanctions. They will be allowed to go back in.”
With sanctions being removed slowly, by timetable agreement, Paul Wachtel, economics professor at New York University's Stern School of Business, said, “In the short run, the effects will be relatively limited. The sanctions don’t even get removed immediately. There’s a whole sequence of reviews to make sure that Iran follows the agreement before the sanctions have been removed. So I wouldn't expect much to happen for the next six months, a year, maybe two years.
“Beyond that, it will begin to affect the world economy," Wachtel said. "In a sense, Iran is a large economy, it’s got a large population, a well-educated population and lots of economic resources. If this agreement leads to Iran being integrated into the global economy, you have got a brand-new big player in the world economy.”
Will U.S. Be Welcome?
The integration of Iran "will be good for world trade generally," he added. "It would be good for many American industries: consumer goods, producer goods, airplane industry, oil equipment, lots of American industry. But — and there is a big but — the Iranian regime has made no indication that they’re opening up the country to the participation of American consumer goods industry.”
Wachtel raised these questions: “Do they want Amazon in there selling books? Do they want Apple in there bringing in television shows and movies? We’re a long way from that in terms of domestic policies of a very, very repressive Iranian regime.”
Meantime, the celebrating is on in Iran’s capital, Tehran. Young people are looking forward to more involvement in world social media. But the question is, will the Iranian regime open up its economy and liberalize its economic relationships with the rest of the world?