Iran: Sanctions Likely to Backfire

A0195508.jpgTEHRAN (FNA) – Iran’s business community is launching its own campaign to counter western economic pressure on Tehran, arguing that European companies are missing big new opportunities.

One of Iran’s most senior business figures was in Britain last week to warn the government and the business sector that the US-led policy of discouraging commercial ties with Tehran was likely to backfire.

While Washington is leading efforts to pass tough new United Nations sanctions against Iran this month, Mohammad Nahavandian, the president of Iran’s chamber of commerce, said the UK’s reluctance to invest in Iran meant it would lose deals to China, India and Russia.

In an interview with the Financial Times, he argued that as much as $200bn (€135bn, £102bn) worth of investment and a greater role envisaged for the private sector would open up in Iran’s energy sector, including petrochemicals, over the next three years.
Mr. Nahavandian dismissed the argument made by the US, UK and French governments that tougher economic sanctions would force the Iranian business community to pressure the leadership to alter its nuclear policy.

“If the business and economic relationship improves then that ultimately will lead to progress in resolving political differences between Iran and the international community,” he said.

The Iranian government’s privatization plans, he predicted, would see investment opportunities opening up in the transport and aviation sectors, while the UK had a particularly strong contribution to make in the provision of financial services.

However, Mr. Nahavandian lamented that Britain – once one of Iran’s biggest trading partners – had seen a steady decline in its economic relationship following the west’s tough sanctions line over Iran’s nuclear program.

The UK government does not actively discourage companies from doing business with Iran, but the increasing reluctance of banks to issue lines of credit or to handle payments – because of US pressure – has undermined the trade relationship.

“Countries such as Britain are sanctioning themselves rather than sanctioning Iran,” said Nahavandian. “Because of short-term, myopic political considerations, British companies are missing out on the opportunities being created.”

By contrast, he said, businesses in other countries – most notably China, India, Russia, Malaysia and South Africa – were set to exploit the opportunities on offer.

Nahavandian made his argument about the need for UK business investment at a meeting with Sir Peter Ricketts, head of the UK diplomatic service.

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