The over-promised land
It is proving harder than expected for investors to make a start
IT was billed as a once-in-a-generation opportunity. Iran is the “biggest new market to re-enter the global economy in decades”, British trade officials said in January, predicting more than $1 trillion of investment over ten years. “Iran is a new region to conquer,” said an imperial-minded boss of a French luxury-goods firm this month. Sanctions had kept outsiders from an oil-rich economy worth an estimated $400 billion. Although an American trade embargo remains in place, firms from other parts of the world were expected to scramble to enter after the lifting of nuclear-related sanctions in January. At first glance the influx has begun. Soon after the IAEA, the international nuclear watchdog, said Iran had fulfilled the terms of an agreement with big powers, European firms trumpeted deals potentially worth billions. Airbus said it would sell Iran 118 jets, with bigger orders possibly to follow. PSA Peugeot Citroën and Renault-Nissan said they would assemble and sell cars to Iran’s 80m people. Analysts foresaw record car sales this year. So many delegations of would-be investors flocked to Tehran that visitors reported struggling to find rooms in the smog-choked city. Earlier this month Italy’s prime minister, Matteo Renzi, became the latest to lead a gaggle of businessmen there, predicting a golden era for industrial ties. Italian fashion firms, such as Versace and Roberto Cavalli, and a French cosmetics firm, Sephora, have opened shops in Tehran or plan to do so. In cafés in north Tehran, where peroxide hairdos poke from veils, rumours circulate about a European arm of an American turbine-maker that has agreed a big joint venture. Local “business enablers”—such as Ilia, run by well-connected Iranians and Germans—are popping up like mushrooms. They offer to help outsiders navigate markets, set up joint ventures, rent offices, find pre-paid credit cards and more.
