Iranians take measured view over breakthrough

Tehran: Iranians welcomed the country’s nuclear agreement with world powers in the hope that it will lead to a lasting deal that will bring prosperity to a blighted economy. Most in the country have been tuned in to televisions during the Persian New Year holidays to monitor the marathon talks in Switzerland for the past eight days.

“It is great news. We have suffered from insecurity and uncertainty for too long not knowing what was going to happen,” said Mastaneh, a 40-year-old divorced woman from a middle-class family who is looking for a job. “The economic stagnation in recent years has meant that my family and relatives have not been able to make any decisions even as small as upgrading a car.”

Zari, a 43-year-old masseur, said she did not expect the agreement to help turn Iran into a paradise. “But we shall be able to have better planning for our lives from now on and I personally can have more hope for the future of my only daughter,” she said.

International sanctions over the nuclear programme combined with populist domestic policies have not only brought high inflation — currently at around 16 per cent — but have paralysed many industries which are either shut down or functioning at 50 per cent of capacity.

Youth unemployment of around 27 per cent has created an army of educated young people who cannot find jobs, putting many families under financial pressure. The agreement is not expected to lead to any immediate breakthrough in Iran’s economy but it can have a quick psychological impact, analysts say.

“This itself is good enough to have a significant psychological impact both politically and economically on the Iranian population and the business community [which] could translate into positive reactions in the forex, stock and real estate markets as well as increased consumer and business spending,” said Amir Cyrus Razzaghi, head of Ara Enterprise, a private consulting group.

“Although no major immediate foreign investment inflow is expected at this point, the same psychological impact would lead many foreign companies to put Iran on their expansion map, looking more seriously into the Iranian market,” he added.

But some businessmen are more sceptical. “I’m not sure what this agreement does for Iran in the interim. Certainly when and if there is a final deal the devil will be in the details as to when and how western companies can access the Iranian market,” said Amir Handjani, an Iranian-American oil and gas executive in Dubai.

“Right now without a signed comprehensive agreement no western company, other than those that have permission from the US Treasury or EU regulators will take the reputational risk and buck sanctions. The risks far outweigh the rewards for now.”

Financial Times