Iran Simultaneously Boasts of Foreign Investment and Expands Foreign Hostility

Previously, Iran and the France-based manufacturer Airbus had announced that they concluded an agreement of the same type. Iran is set to purchase 118 Airbus jets, and the existence of this deal has been widely regarded as a source of additional pressure on Boeing as it weighed the costs and benefits of reentering the Iranian market alongside its competitor, and risking the consequences of falling afoul of outstanding American sanctions on the Islamic Republic.

As of Wednesday, Boeing had not confirmed the Iranian claim about a finalized deal. But CNN quoted a Boeing official as saying that it is the company’s policy to allow customers to take the lead in making such announcements. But while this lends credence to the Iranian claim, Boeing’s further comments suggested that the completion of any such agreement is by no means a foregone conclusion. That is, the American company cautioned that an agreement would be entirely dependent upon American approval, and perhaps other, related factors.

However, there is considerable evidence that this approval will be forthcoming. After all, the Obama administration has been criticized by many of its detractors in the Republican-dominated Congress for acting as a personal sales representative for the Iranian investment market. And in spite of these criticisms, the Associated Press quoted Secretary of State John Kerry as saying that the administration would be open to even more discussions with potential investors regarding the extent to which they will be permitted to do business with Iran without facing consequences from the US.                                                        

More than that, Kerry even went so far as to say that he thinks “there are places where the United States could give confidence where there is doubt,” in order to make sure that Iran sees the benefit of ongoing enforcement of the Joint Comprehensive Plan of Action, which was implemented in January as the US and the European Union lifted economic sanctions related to the Iranian nuclear program.

Speaking from Norway, the secretary of State appeared to come close to acknowledging his critics’ notions that he has gone too far in selling European businesses on the investment opportunities implicit in the nuclear agreement. “I have personally gone beyond the absolute requirements of the lifting of sanctions to personally engage with banks and businesses and others who have a natural reluctance after several years of sanctions,” he said.

Numerous recent reports have emphasized, however, that this arguably excessive salesmanship has so far been insufficient to convince international banking institutions of the long-term viability of the Iranian market. Consequently, many Western businesses retain their reluctance. In fact, a Bloomberg report last week quoted some European executives as saying that they were still dissatisfied with the work that the US has done to clarify the lingering dangers of enforcement of banking restrictions and sanctions on Iran’s human rights violations and support of international terrorism.

On the other hand, Reuters reported on Wednesday that while major international banks were still keeping their distance from Iran, numerous small banks have taken advantage of the situation by entering the Iranian market and conducting transactions in various local currencies, while continuing to steer clear of transactions that involve the US dollar and violate restrictions on connections between the American and Iranian financial systems.

Iranian officials themselves have claimed that there are 200 such banks currently operating in the country. And Reuters adds that their presence has apparently helped to facilitate the slow but steady growth of European trade with the Islamic Republic. Figures for that trade increased by approximately 22 percent over a period of four months.

On one hand, this seems to undercut recent, recurrent Iranian complaints that lingering American threats have slowed the pace of Iran’s recovery. But on the other hand, it still represents a volume of trade that is far below pre-sanctions levels, in spite of the fact that Iran claims to have already recovered its average daily oil output to levels not seen since 2011.

While European businesses and the Obama administration are apparently engaged in a project to further raise this trade statistics, Iran’s adversaries both within the US government and in the Middle East region are working to hold that recovery back. However, much like the US is divided on this issue between the White House and the Republican Congress, the Gulf Arab states are apparently divided over the extent to which they will act against the Islamic Republic in the midst of current political and economic tensions.

Analysts have pointed out that many of these states, or many elements within them, have significant need for economic collaboration with Iran, regardless of their stronger allegiances to regional rival Saudi Arabia. This apparently held a number of those countries back from completely following the Saudis in severing ties with Iran in January after Iranian mobs attacks the Saudi embassy and consulate. Most of Saudi Arabia’s close allies went so far as to downgrade their diplomatic relations with Iran, but now Gulf News reports that these gestures have been largely, albeit conditionally reversed.

The report quoted Kuwaiti Foreign Minister Khalid al-Jarallah as saying, “We look forward to the ambassadors of the Gulf Cooperation Council (GCC) returning to their posts in Tehran. However, this matter is directly linked to Iran’s policy in the region and its commitment to the essential principles of the United Nations Charter with regards to the non-interference in the domestic affairs of other countries and the respect of their sovereignty.”

It is not clear what change in Iran’s behavior Kuwait may have been responding to in reestablishing ties with Iran, considering that the Islamic Republic remains deeply involved in the defense of Syrian dictator Bashar al-Assad, continues to wield considerable influence over Iraq through a number of Shiite militias, and continues to fight a proxy war with Saudi Arabia through its support of Houthi rebels in Yemen.

One possibility is that the Gulf Arab states have seen positive signs in Iran’s latest comments on a possible internationally negotiated truce in Syria. However, at the same time that the Iranians have expressed newfound interest in such a truce, they have also warned against an agreement that “strengthens terrorists.” As “terrorist” has been used by Tehran as a catch-all term for any opponent of the Assad regime, this commentary seems to suggest that Iran remains committed to securing a solution only on its own terms.

Even Secretary of State Kerry spoke out against the apparent duplicity of Iran and its Russian allies over the Syrian situation, in his comments on Wednesday. “The United States is not going to sit there and be used as an instrument that permits a so-called cease-fire to be in place while one principal party is trying to take advantage of it to the detriment of the entire process,” he said.

The danger of continuing Iranian aggression in the region could harm the prospects for reconciliation between Iran and its traditional regional adversaries at a time when relations among them are already particularly strained. What’s more, if anxiety continues to build among those adversaries, it could even foster unlikely alliances against the Islamic Republic. On Wednesday, the Jerusalem Post reported that Israeli Foreign Minister Dore Gold had expressed the opinion that Israel and the Sunni Arab states could have common cause in their fight against Iranian regional influence.

In a larger sense, if anxiety about that influence continues to grow, it could also further undermine Western confidence regarding the possibility of newfound investment in the Islamic Republic. These prospects are already dimmed by the perception of contrasting Iranian and Western interests in the Middle East; they are made worse still by the apparent possibility of a return to open hostility between Iran and the West.

As a matter of fact, that hostility has never quite evaporated on the Iranian side. Despite last summer’s nuclear agreement – or perhaps because of it – there has been a significant increase in anti-Western propaganda coming from Supreme Leader Ali Khamenei and other Iranian officials. In some cases, this propaganda has been directed against citizens and permanent residents of Western countries who have been arrested in Iran. The growing list of these arrests has contributed to severe concerns about the dangers faced by foreign investors should they travel to Iran, thereby diminishing the attractiveness of that market.

And the propaganda against those arrestees continues to expand. On Wednesday, Agence-France Presse reported that the Iranian Revolutionary Guard Corps had released a statement alleging that the British-Iranian woman Nazanin Zaghari-Ratcliffe, who was arrested in April after visiting her family in Iran, was “involved in the soft overthrow of the Islamic Republic through… her membership in foreign companies and institutions.”

The statement went on to suggest that the program coordinator for the Thomson Reuters Foundation, who was traveling with her two-year-old daughter when she was arrested, is one of “the heads of foreign-linked hostile networks.” Her British husband was quoted as calling the allegations “complete nonsense,” and he noted that Thomson Reuters does not even do work in Iran, much less provide its employees with opportunities to carry out missions directed by foreign media and intelligence services.

The IRGC statement seems to clearly ascribe guilt to Zaghari-Ratcliffe based solely on her association with Western entities. Previous arrests, both of dual nationals and native Iranians, have given markedly vague descriptions of the aforementioned “hostile networks” even going so far as to say that arrestees could be prosecuted for performing missions on behalf of foreign entities without knowing that they were doing so.