Even if Chitchian’s plans can be carried out, it is understood that they will depend upon a high degree of foreign investment. And although Iran News Update previously reported upon the continuing expansion of economic relations between Iran and such countries as India, South Korea, and Australia, it is nonetheless true that ever-important American businesses and industries are still holding back from this rush to investment. That wariness is having a global impact, and depending on the course of US-Iranian relations over the next several months, it could even convince foreign entities that the continued pursuit of Iranian trade is not in their best interests.
Despite familiar Iranian rhetoric about a “resistance economy” and ability to thrive independent of the US, it is clear that Iranian officials are eager to secure foreign investment from at least certain American businesses. Case in point, Iran’s English-language broadcast network Press TV reported on Thursday that Abbas Akhoundi, the country’s minister for roads and urban development, had formally invited the aircraft manufacturer Boeing to talk with Iranian companies and explore the prospect of helping Iran to modernize its aging commercial air fleet.
And Boeing is reportedly interested in these talks, having received clearance from the US government in mid-July to begin exploring the re-opening of trade relations with the Islamic theocracy. This simultaneously highlights two circumstances: the fact that the US is not, as a rule, isolated from the push for foreign investment, and the fact that leading American companies had been constrained against reentering the Iranian market, at least over the short-term.
This was discussed in more detail in an editorial by Al Monitor, which was re-published by US News and World on Thursday. It points out that Boeing had previously engaged in unofficial talks with Iranian entities while waiting for formal authorization from the US, but also that it had kept these talks secret, partly out of fear of the political consequences if highly skeptical American lawmakers and citizens became aware of them.
These informal impediments to American reentry into the Iranian market are supplemental to the legal and structural obstacles that still exist, including the need for special licenses, the prohibition on the use of American banking institutions for transactions with the Islamic Republic, and a range of sanctions that remain in effect related to Iran’s human rights abuses and support of international terrorism.
And it is not only the United States that continues to use the terrorism issue as a basis for limiting or discouraging outside investment in the Islamic Republic of Iran. Breaking Energyrecently reported upon the mid-February statement issued by the 37-nation-member Financial Action Task Force regarding the outstanding risks of re-integrating Iran into the global transaction system.
The FATF’s warnings to its member states’ banks focused in large part upon the persistent Iranian deficiencies in addressing the organization’s guidelines for anti-money laundering measures and countering the financing of terrorism. In fact, the task force indicated that it could even strengthen countermeasures against Iran, related to the tendency of Iranian banks to deliberately hide illicit activities, thereby retaining the country’s status as a “high-risk jurisdiction.”
The Breaking Energy report notes that the adoption of FATF guidelines could be extremely beneficial to the Islamic Republic, but also that it is entirely unclear whether the regime will take effective steps to do so, considering that past efforts have never made it out of the Iranian parliament.
Al Monitor appeared optimistic about the possibility that the results of last week’s Iranian national elections could help to improve the country’s prospects for engagement with the international community. The same possibility was considered by CNBC in a report dealing with concerns that lingering restrictions could allow the US to be “left behind” much of the rest of the world when it comes to reentering the Iranian market.
Al Monitor indicates that the provision of American investment to Iran will depend upon a mutual tamping-down of rhetoric directed against each government by the other. But this will clearly be difficult on the American side as long as Iran continues to provide money to terrorist groups like Hezbollah, as well as openly defying international standards in that regard.
CNBC adds that even if the new makeup of the Iranian parliament promotes more constructive engagement with the West, the situation is complicated on the American side by the forthcoming presidential elections in November. The US government and American companies are unlikely to seriously pursue new investment until after that election is determined, and depending on the results it is possible that a new president will use Iran’s ongoing support for terrorism as a pretense to dispense with the nuclear agreement and much of the Obama administration’s Iran policy.