Iran's Rowhani has little to show one year after nuclear deal

Iranians tend to turn to metaphors to express their frustration one year after their leaders closed a historic nuclear deal with world powers.

"Many pots and pans, but no lunch and no dinner," says Reza, a small-business owner in Tehran, who did not want to give his last name.

Theoretically, Iran should be a country full of economic opportunities, now that economic sanctions have been lifted in return for the scaling down of Iran's nuclear programme.

However, people have hardly seen any tangible benefits, and the Islamic Republic is still waiting for international trade to boom and for its isolation to end.

"The West has given us its phone number, but it never picks up when we call," says Reza Modudi, deputy chief of the Iran Trade Promotion Organization.

Nearly all Western countries including the United States have expressed interest in doing business with Iran in the year since it sealed the nuclear deal with the United States, Britain, France, Germany, Russia and China in Vienna on July 14 last year.

Over the past 12 months, high-level foreign delegations have come and gone and lengthy business negotiations have been held, but no major contracts have been closed as European banks are still wary of financing such deals.

Europe's large lenders fear that they could violate remaining US sanctions that are related to non-nuclear issues such as human rights and support of terrorism.

"Negotiations with Western delegations are of no use as long as there are no banking ties," says Gholam-Ali Kamyab, vice governor of Iran's Central Bank.

President Hassan Rowhani is more upbeat about the state of affairs that he brought about by championing the nuclear deal.

"We have not reached our final destination, but we have already achieved a lot," he says.

That statement is true especially when it comes to Iran's national and foreign politics.

Rowhani's reformist camp clearly won the parliamentary elections in February and defeated political hardliners who have been critical of the nuclear treaty.

In addition, Foreign Minister Mohammad Javad Zarif has become a sought-after interlocutor for the European Union and for the US.

Washington and Tehran find themselves on opposing sides in the war in Syria, where the US supports the rebels and Iran President Bashar al-Assad, but they both share an interest in fighting Islamic State extremists.

However, political achievements are only one side of the Iran deal.

After Zarif had concluded the agreement with his counterparts from the six world powers, Rowhani promised his citizens that the economic crisis that was caused by the sanctions would soon be over.

Foreign investments were expected to create jobs and to help modernize the country's ageing infrastructure.

But these things have not come to pass.

Iran's plan to order 118 aeroplanes from the European Airbus consortium is one example for how difficult it has been to reestablish business ties.

"We have been negotiating with Airbus for months, but a final contract has not been signed because of the banking problems," Transportation Minister Abbas Akhoundi said.

With 10 months to go until the presidential election, political hardliners use these problems to campaign against Rowhani.

Although Rowhani's supporters can no longer reject criticism about the lack of economic improvement, the government itself is still trying to talk up the situation.

The government likes to point to the oil exports that have resumed, and to the inflation rate that has dropped from 40 per cent to below 10 per cent.

"Even if it's true, we hardly notice any of this in real life," business owner Reza says.

The US is the main culprit because Washington has not given international banks the green light to do business with Iran, many Iranians feel.

If this situation does not change by the end of the year, consequences could be felt in Iranian politics, experts say.

"The nuclear deal is Rowhani's work permit," says an Iranian political scientist who does not want to see his name in print.

Without economic success, Rowhani risks losing his re-election to his predecessor Mahmoud Ahmadinejad, who is supported by the hardliners.

Ahmadinejad's camp stands for a more confrontational foreign policy approach that could scupper Rowhani's partial achievements.

Even though Rowhani has not been able to solve all of his country's internal and external problems, a return of the populist Ahmadinejad would be "definitely the worst option" for the European Union and the US, a foreign diplomat says.

Ahmadinejad is already feeling optimistic. "People are looking forward to my candidature because the government has messed up," he said.

Last update: Sat, 09/07/2016 - 12:00
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