It’s time for Iran

In the xenophobic rhetoric dominating the campaign season in the US, Trump’s remarks at the AIPAC convention (American Israeli Public Affairs Committee), which is the largest Jewish lobby group in the US, were not out of place. “My number-one priority is to dismantle the disastrous deal with Iran,” Trump said in a rare scripted speech. “I know deal-making, and let me tell you, this deal is catastrophic — for America, for Israel, and for the whole Middle East.”

He went on to further incorrectly claim that “Under the Iran nuclear deal, we give them $150 billion, we get nothing.” Well, this exaggerated quantum of $150 billion is Iran’s, to begin with, just that it was frozen in assets during the sanctions time. (Also the quantum, more realistically, is closer to $60 billion.)

Ironically, in my last visit to Tehran, I noticed the average Iranian Joe prefer Trump over Hillary. Hillary is infamously referred to as the ‘sanctions lady’ in Tehran and is feared for having galvanised world opinion and leaders in the crushing sanctions in 2010. (Surprisingly, being distrustful of Hillary seems like quite a global phenomenon.)

Adding to this verbal tirade against Iran is the current confusion around sanctions relief. The relief, broadly is relief from the US and UN on energy, financial, shipping, automotive and few other sectors. In commercial terms, think of this largely as Iran being allowed to export its oil freely and de-freezing of its forex reserves held in foreign banks.

Secondary sanctions (sanctions on foreign firms) are still in vogue, which implies that most sanctions that applied to US companies in Iran dealings still remain in place.

Take for example the mega aviation deal, where Iran Air intends to buy 118 Airbus jets for $27 billion from Airbus. The first complication is that Airbus planes, though euro-made, use US-made spare parts, and the US would have to furnish export licenses with end-user agreement to Iran, while sanctions are in place. The next hurdle is the payment mode, as the deal has to be financed in euros and has to be done by a financial entity which avoids the US financial system under core sanctions.

Either way (Hillary or Trump), Iran does not seem better placed with its US relations in the post-Obama scenario. Pampering and ring-fencing of Israel and Saudi can once again become a reality, post 2017. The Iran deal might not be reversed, but the easing of sanctions might go through prolonged administrative delay. Now, to Iran’s relations with the rest of the world. With a population of 80 million, strong customer sentiment and moderates dominating the political space, it is too good a market to miss for the beleaguered global economy. Add to that the sheer geopolitical importance that regional powers would try to leverage, right from the ports like Bandar-e Beheshti (Chabahar) to the Central Asian road and rail access.

Iran stands out as the next big market for European merchandise, Chinese infrastructure and Indian services. If this outreach is to come at the cost of irritation to the US, the choice might be clear. India might have a tightrope walk ahead, trying to enlist US support for its ambitions, like permanent membership of the UNSC and entry into the Nuclear Suppliers Group. This time around, a non-aligned stance is critical to ensure regional might, which might as well be lost to China again.


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