By INU Staff
INU - Earlier this week, it was reported that India’s ONGC Videsh Ltd. had committed to investing the equivalent of three billion US dollars into Iran’s Farzad-B gas field, which has been given particular priority by the Iranian government and affiliated companies in the wake of the nuclear deal that released the country from numerous economic sanctions. According to Rigzone, the three billion dollar investment is just part of a broader set of commitments that Indian firms and officials are pursuing, which could total to as much as 20 billion dollars in the immediate future.
This in turn is of course only one aspect of the broader growth in foreign investment that the Islamic Republic of Iran has experienced since the nuclear deal went into effect in January 2016. It is unsurprising to see such nearby economic partners as India contributing to this trend, especially considering that Indian-Iranian transactions are so important to the former’s economy that it was granted special exemptions to US sanctions in the past.
What is more significant, however, is the apparent growth of investment and business dealings coming out of the West and particularly the US itself. This has been slow in coming, as has been widely reported in the international media. The Iranian regime continues to think of the US and its allies as bitter enemies of the Islamic Republic, and Supreme Leader Ali Khamenei has used this to urge the return to a “resistance economy” that urges domestic development instead of reliance on foreign capital.
Meanwhile, American policymakers have pointed to persistent Iranian rhetoric as justification for a skeptical attitude toward the nuclear deal’s implementation and business dealings with Iran. This point of view has taken on new prominence since the election of President Donald Trump, who insisted on the campaign trail that the Joint Comprehensive Plan of Action was among the worst deals ever negotiated, and that his administration would renegotiate it.
In a report published on Monday, Al-Monitor pointed out, as numerous other outlets have pointed out in the past, that Trump has stepped back from this promise and the associated rhetoric since taking office. Although he has evidently remained committed to rigorously enforcing the JCPOA and possibly also to finding ways to strengthen it, there are growing questions about what effect his policies might have on the prospects for expanded Western investment in the Islamic Republic.
If anything, the answers to these questions became even more uncertain on Tuesday amidst reports that Iran’s Aseman Airlines had signed a preliminary deal with Boeing to purchase 30 commercial jets, with an option to later order an additional 30. The sale expands upon an earlier deal with which Boeing arranged to sell 80 aircraft to IranAir. The earlier deal had been brokered while Trump’s predecessor Barack Obama was still in office, and it generated a good deal of criticism from US policymakers, particularly Republicans, some of whom worried that the US-made jets would end up being used by Mahan Air, which is still under sanctions as a result of its use by the Iranian Revolutionary Guard Corps in illicit activities such as arms smuggling.
But even though the Trump administration has helped to embolden Western criticisms of the nuclear agreement and its consequences, Trump himself has notably had little to say about the aircraft sales, perhaps because they reflect well upon his domestic promises regarding the generation of industrial and manufacturing jobs for American workers. In any event, the Reuters report upon the Aseman sale indicated that Trump had voiced no public opinion whatsoever. The initial sale of 30 aircraft would reportedly involve a list price of 3.4 billion dollars.
If the full range of sales goes ahead, it may bode well for European firms seeking similar deals, many of whom are required to receive licenses from the US Treasury Department authorizing them, because those deals involve trade in American-manufactured parts, or among entities that also have operations within the US. The British energy giant BP, for instance, has extensive operations in the US which necessitate American licensing, but according to Reuters it has already received the relevant licenses in the case of its intended investment in Iran’s Rhum gas field.
Nevertheless, it is too early to regard these recent developments as indications that the Trump administration is seriously reconsidering its aversion to normalized Western relations with the Islamic Republic. Indeed, the Al-Monitor article points out that uncertainty about Trump’s overall policy has kept European eagerness in check, such that figures for exports to and imports from Iran are still well below their pre-sanctions levels.
European entities, no doubt, are still keenly aware of the 15 billion dollars in penalties that they were forced to pay during the Obama era for violations of US sanctions. It is unrealistic to think that the Trump administration will be less rigorous in its enforcement of these same sanctions. And although Al-Monitor concludes that the White House will not directly undermine the nuclear deal with the enforcement of currently suspended sanctions, both the White House and Congress are considering other measures that could make the business environment more restrictive, such as the blacklisting of the Revolutionary Guards.
These and other factors lead Al-Monitor to the further conclusion that the bulk of Europe will maintain a “wait-and-see” approach to their potential financial dealings with the Islamic Republic, at least until after Iranian presidential elections in May, and perhaps considerably longer than that.
Meanwhile, even as the US government signs off on a growing number of financial transactions with the Islamic Republic, there are things that Tehran and its affiliates might do to demonstrate the potential consequences of such dealings, and thus to prompt the Trump administration toward a more restrictive approach. Last week, the National Council of Resistance of Iran reported that an Iranian-Canadian dual national named Ghoban Ghasempour had been brought up on charges in Washington, D.C. for using his business networks to enable the smuggling of missile testing components into the Islamic Republic. Two other individuals implicated in the same scheme have yet to be charged, but the arrests highlight the persistent operations of anti-Western entities like the Revolutionary Guards, who have been deemed responsible for all of Iran’s recent, illicit ballistic missile tests while also controlling upwards of half of the Iranian GDP.