In Iran, State-Backed Companies Win From Lifted Sanctions

Feb 06, 2016 · 84 comments
David H. Eisenberg (Smithtown, NY)
I assume the workers will be local and the management French. The CEO of PSA Peugeot Citroen should read On Wings of Eagles before he sends anyone over there to supervise. Not that everything happens the same way again, and France seems fine with paying for hostages, but this is essentially the same group of Iranians in charge as in 1978-79, just older, with the same mission. Of course, it could be profitable, and I hope it works out for them, but. . . here's a CNN report from last year about western companies doing business in Russia. http://money.cnn.com/2014/07/31/news/companies/adidas-russia/
change (new york, ny)
FOR God's sake, it is Iran's money and Iran's economy. Our arrogance is showing.
Robin LA (Los Angeles,CA.)
The current and near term manufacturing climate within Iran must be examined through the optics of imposed sanctions. In the absence of meaningful and productive international exchange, for many years, Iranian know how and entrepreneurship remained committed to developing their self-reliant domestic economic system.

In a nut shell, they get by making and using their own stuff in "Glocal" manner! The advanced things they can't make, are "somehow" imported, smuggled or "brought in" (sanctioned smuggling). (Visitors to Iran seem to always be struck by the wide availability of every vice.)

So many livelihoods are dependent on the continued functioning of this established chain of consumption. Small manufacturers and small business people. represented in part by the powerful Bazari's cannot and will not allow a sudden overnight change in import export policy. It takes time for habits and patterns of consumption to change. What Iran needs is a "soft landing", a cushioned entry into the world's global marketplace.
Mark Thomason (Clawson, Mich)
The sanctions were only just lifted a few weeks ago. Of course benefits have not "trickled down."

A few big actors had the money, manpower, and political connections to be ready in advance and get in there first. They only just got there. Even their deals were only just signed in the last week or two.

This story stinks of complaining by those who hate the deal.
j. von hettlingen (switzerland)
With this oligarchic economic system, ordinary Iranians will hardly benefit from the lifting of sanctions, because the small and medium-sized enterprises (SMEs) don't hold sway over the country's economy, like those in the West.
Since the 1979 Revolution leaders had been talking about improving the country's economy and reducing poverty. These goals had not been achieved due to clientelism and corruption. The oligarchs among the clerics and the military have no desire to let outsiders share the fruits of the lifting of sanctions, making them all the more powerful and wealthy.
dn32844 (USA)
They are just taking path of the U.S. crony capitalism, which puts interests of corporations and money masters ahead of welfare of the nation as a hole. A progressive system of government follows Britain, Germany or France and not the U.S., which is corrupt from its root.
Syed Abbas (Dearborn MI)
After the euphoria of the Deal and dreams of the peace dividend, why do I feel sick in my guts?

The nuke negotiations were a smokescreen. The White House neocons dragged on to seek assurances from Iranian neocons, and got them, that the benefits of the Deal would to their 1% who would then deal with Capitalism's 1%.

No wonder there were smiles all over. Birds of the same feather.
earth first (canada)
Hmmm. Sounds like America.
DSS (Ottawa)
Just imagine if it was us getting the money. To you think for one minute you would get any of it? No, it would go to the 1% who control our economy and it would go for arms to sell to Saudi Arabia, or to open McDonalds or Starbucks shops across Tehran. If by chance anyone thinks that money should have stayed at home to help Americans, then how would it be used? Health insurance for all? Improved public education? Repairs to infrastructure. To help all Americans is not what those that are the most critical of this agreement really want. Cut through the smoke and mirrors and you will find what is happening in Iran is just what the American Oligarchy wants.
Charles W. (NJ)
"Repairs to infrastructure?"

We might get infrastructure repairs if the democrats would drop their demands that all such repairs be done only by union members who would then kickback most of their union dues to the democrats. The GOP would be crazy to go along with putting kickback money into the pockets of the democrats.
David H. Eisenberg (Smithtown, NY)
I'm imagining, DSS. And what I am imagining is that like some Iranians, some workers would be getting jobs. Isn't that getting the money too? What do you prefer? That those people be in the government instead? And how long do we have to hear that we pay more for education and health than anyone else with bad results before we realize that maybe giving the money to the government isn't the answer?
Matthew (Tewksbury, MA)
The mullahs aren't liberalizing Iran like the progressives say they would after the Iran deal passed. I'm stunned. I thought the educated Iranian youth would lead Iran from the shadows into the 21st century if only the Great Satan would be nice. Instead the mullahs have taken more American hostages, have stormed yet another foreign embassy, and are posed to elect a hard-lined parliament.

Time to remove the rose-colored glasses. The Iranian people are not our friends, will never be our friends, and we should stop trying to be nice to them.
Charles W. (NJ)
Carter or Reagan should have nuked Iran off the face of the earth when they had the chance to do so.
leila (LA)
The People are NOT the government. The "educated youth" can not rise up as the mullahs are brutal and ruthless. YOu have absolutely no understanding of how that country works.

Don't kid yourself into thinking American did any good by lifting the sanctions, it didn't. It sold out the Persian people to advance its own short sighted interests which goes like this" the mullahs are better than ISIS so lets make a deal with them ensuring that they stay in power and that way maybe they will help us fight ISIS". STUPID AMERICAN FOREIGN Policy. History will see Obama as Neville Chamberlain, making a deal with the devil mullahs.
Greg (Austin, Texas)
If you were the Iranians, would you trust the USA? We have been at war with them for 35 years sending in teams of killers and assassins. We have murdered their scientists walking down the streets of European cities. We have used cyber terror to destroy their computer systems. We have stolen their money, only now returning it and I imagine without interest. We have embargoed them and harassed them. We call them the 'axis of evil'. And all of this was after 1979. Think of the things we did to Iran before that. We overthrew an elected government in the 1950's and trained their secret police how to kill and torture dissidents. If you read the story carefully it seems that USA sanctions are causing most of the problem. This will take a long, long time to develop trust of the USA.
David H. Eisenberg (Smithtown, NY)
Any reason you think we do these things or is it just that we are bad people? Question for you - why is it that the Syrian refugees don't want to go to Iran, which is so much closer? Based on what you write, it sounds like it must be a lot better than the west.
Antonio Scarpaci (Paris)
Excellent news for Iranians! Very bad news for NYC capitalists! This is how Iranians keep winning - sorry, capitalists. The government will - as they've done since they fought off Saddam - use this money to keep improving the status of the average person over the long run. Best news for Iran I've read in the NY Times in a long time.
Robert B (Brooklyn, NY)
I wrote that this would occur in the comments section of the New York Times when the agreement was released: that money would be hoarded by the few who truly hold power in Iran. I also stated the agreement’s trade-offs were questionable. The chance of a nuclear war in the region was quite real, however not imminent, and the Iranian economy was in ruins. The agreement allowed massive amounts of capital to flow into Iran, including nearly a trillion dollars in "reparations" the United States agreed to give Iran in compensation for the excesses of the Shah of Iran. (One must ask how much that trillion dollars could have helped struggling Americans). Further, the agreement opened the floodgates for the sale of massive amounts of conventional weapons to Iran. The Saudi’s were irate, so the US Military Industrial Complex sold the Saudi’s massive amounts of conventional weapons too. This would increase the scope of the conventional wars already in raging between Sunni's and Shiite's. I was surprised at how many attacked me for these comments. It was stunning that so many thoroughly believed that the agreement would markedly and positively impact the economic, social, political, and military situation in the region, and so viciously and aggressively advocated this position despite all evidence to the contrary. Iran was and remains a ruthless theocracy run by a supreme religious leader with full control of the military. It is remarkable how few seem to understand what that means.
DSS (Ottawa)
Seem to me from what you have said that America wins again. At least the 1% who control our economy through a thriving military industrial complex.
Faramarz Fathi (Boston)
“But to achieve such growth levels, experts here say, particularly in an era of low oil prices, would require an easing of financial strictures that Iran’s conservative leaders show no signs of tolerating.”
How true. Sadly.
Faramarz Fathi
Tom (California)
Sounds like what's going on right here in America...

A phenomenon where the worst people on Earth "legally" steal from others... It's called "Free Market Capitalism"... And those with the least scruples reap the greatest rewards.
Cassowary (Australia)
So trickle-down economics fails as dismally in Iran as the US? No surprises there. Fat cats of any stripes just don't like to share.
Wakan (Sacramento CA)
This is the result President Obama had expected. Is the NY Times surprised he didn't admit it during the so called "deal".
Martin Landau (Ringoes, NJ)
Look at how the French are the first to jump into partnerships with Iranian industry. They have no shame. I don't think they ever met an oppressive regime they didn't like.
Scow2man (chapel hill nc)
Neither did Jimmy Carter -- or Barak Obama
John W Lusk (Danbury, Ct)
For years GE sold to Iran despite our restrictions
David H. Eisenberg (Smithtown, NY)
Well, d'uh. But, what really interests me is the number of comments critical of this deal and Pres. Obama. You don't find that a lot in the NY Times. Makes me think this agreement was unpopular enough to crack some partisan's group think.
M J Earl (San Francisco)
This is a surprise to some? They were expecting everyday citizens to benefit in some way?
Ye gads.
AVR (Baltimore)
Obama should have listened to Prime Minister Netanyahu. Too late.
WestSider (NYC)
We should have a reward for the most idiotic comment of the day.
CMS (Tennessee)
And an award for the most astute observation of the day. Good call, WestSider.
lloydmi (florida)
All must applaud Obama's legacy of reaching out!

With the eclipsing of China, Iran, Cuba, as well as newly industrial Haiti, will represent the future for American technological engagement.
Mike (NYC)
How do you say "oligarch" in Persian?
WestSider (NYC)
Seems to bother you that some oligarchs may not share your religion?
Ted (Seattle)
What is your first clue? Is Obama and The New York Times really that ignorant?
Even I know what tyrants do. Oppress, steal, kill. Obama's and Hillary's unbelievable fantasy of giving those dedicated to killing them and us $150,000,000,000 is nearing insanity. There no surprise here, ignorance and inexperience coupled with ideological blindness risk the safety of all of us.

http://www.periodictabet.com
Seldoc (Rhode Island)
The sanctions were only lifted a couple of weeks ago. It's far too early to be assessing what the impact will be.
WestSider (NYC)
Wait till Israel is forced to pay its own debt to Iran, that will really get their blood pressure to boiling.

"Report: Swiss Court Orders Israel to Pay Iran $1.1 Billion in Oil Pipeline Dispute
Israel says won't pay Iran oil pipeline venture debt, regardless of court's ruling in dispute dating back to before the 1979 Islamic Revolution."

Haaretz and Aluf Benn May 20, 2015 8:10 PM

read more: http://www.haaretz.com/israel-news/1.657394
Jackson (Any Town, USA)
All of Israel's debts due for payment to the U.S. are forgiven at their maturity. Israel obviously expects the same courtesy from Iran.
dja (florida)
Like most top down organizations , whether they are communist,fascist,religious, Republican, or Department of Defense, the fat is always skimmed off the top for "friends in need". I have no doubt at some point privatization shall take place, putting state run industries and natural resources in the hands of future oligarchs,
Charles W. (NJ)
You forget to add Democrat to your list? Look at the political "machines" that have run most major US cities for the past 50 or so years, their "bosses" are perfect examples of oligarchs.
WestSider (NYC)
According to news reports Iran's funds were released only on Monday, but NYT Iran bashing committee rushes to do an accounting of who benefits from the release. It seems Netanyahu writes NYT articles these days.

Instead of rushing to bash Iran, maybe it's worth covering racism in US campuses, after all, NYT spent lots of ink last year worrying about discrimination on campuses.

Buried in an AP piece:
http://www.nytimes.com/aponline/2016/02/04/us/ap-us-university-of-chicag...

Massive coverage a year ago:
http://www.nytimes.com/2015/03/06/us/debate-on-a-jewish-student-at-ucla....

http://www.nytimes.com/2015/03/07/us/readers-drawn-into-debate-over-ucla...

http://www.nytimes.com/2015/04/15/us/student-coalition-at-stanford-confr...
A. Stanton (Dallas, TX)
Mr. Netanyahu told us where this was heading, so we can't blame this one on him.
Rob Littell (NYC)
What did the author expect? That poverty bound isolated Christian's, or even the average Iranian, would be the beneficiaries of the State's economic liberation? The only story would be if the cronies did not benefit.
craig geary (redlands fl)
More is certainly trickling down than when the US deposed their elected government and installed the avaricious Reza Pahlavi.
More is certainly trickling down than when the US armed that nice man Saddam Hussein to slaughter 1,000,000 Iranians.
Vizitei Yuri (Columbia, Missouri)
One had to be a devout Obama follower to ever believe that it would be any other way. The deal with Iran will match ACA as one of the biggest of president's follies.
Neildsmith (Kansas City)
It's their money. None of our business.
Jack M (NY)
The greatest indicator of liberalism is an inability to distinguish between the implications of degree and context.

We "torture" prisoners and ISIS tortures prisoners. Trump is no different than a Nazi. Israelis shooting a terrorist who targeted an innocent child are no different than the terrorist himself. The knife wielding surgeon, and the knife wielding killer - all are judged on the most superficial, reflexive, emotional appearances.

Here too you can expect a litany of liberal comments noting how there is "no difference" between Iran favoring their (government btw) corporations and US favoring corporations. There are already many similar comments. The scale and context will, as usual, never be taken into account.

True, the US has problems with lobbying and corporate power - that is in no way comparable to the near dictatorship of Iran. Go ask all those protesters who were jailed in 2011-2012. Ask those who were killed by the riot police or the Basij militia where they would rather conduct business. Amazing how everyone has completely forgotten what happened. Everyone acts surprised that these guys are still the same ruthless dictators they always were.

The men in the white turbans are not your friends, nor, the friends of anybody else.
Seldoc (Rhode Island)
Conservatives who forever fancy themselves the smartest guy in any conversation usually aren't.
Kimbo (NJ)
Is this really news?
Did anyone really expect a different outcome?
We can send them some Democrats to straighten out the misalignment of wealth. Bernie can head there if he fails to win the nomination.
DSS (Ottawa)
Are you talking about Iran or the Republican Party?
abo (Paris)
Didn't sanctions just end? Isn't a bit too early to judge what the effects will be?
Wizarat (Moorestown, NJ)
The initial benefit will go to the large organization and most of them due to sanctions regime are essentially if not totally could be partially owned by the State. The airline industry however would have both government owned as well as private and they would be the beneficiary of the Airbus orders etc. Petroleum sector is government owned and initially the benefit would be for them.
In order to facilitate B2B contacts between the US and Iranian companies in the private sector, the small business association must ask the US Congress to stop cutting its nose to spite its face, the people who are getting hurt by not having an opportunity to compete in the Iranian market are the ones we call Small Business.
The large businesses are exempt from the sanctions regimen such as Boing and Lockheed etc.
The US Congress is short sighted by keeping its sanctions on Iran as the Chinese, Europeans, and even the Israeli companies are vying for Iranian business. China has entered into a deal worth over $600 Billion over 10 years and so has others.

US companies are allowed to import, Carpets, Pistachio, and Caviar while the biggies can export planes (civilian) and spares. Time for us to take another look at our house and fix it before it is too late and the peace dividend is picked up by others.

The small Iranian businesses would certainly be seeing the rewards of the deal as it moves through their system. It is too early to comment and decide that it is not working.
JW (New York)
Yet, I'll bet you're the first person to dispute trickle-down economics in the US. If it's trickle-down from the ultra rich and mega-corporations advocated by Republicans, it must be wrong; but if it's trickle-down from theocratic mullahs controlling Iran (when they're not vowing to wipe Israel off the map, or sponsoring cartoon festivals mocking the Holocaust) the tune changes and we should give them the benefit of a doubt. No?
Wizarat (Moorestown, NJ)
@JW

It is not the trickle down effect I am supporting, Because it doesn't work we know that, What I am suggesting that we are hurting our own small businesses by keeping these Congressional sanctions in place. The big guys have other options such as a company incorporated in EU etc but the small businesses here are suffering as they are being left out from the so called peace dividend.

It is time to face reality and that is the fact if we do not adjust our sanctions on Iran the losers would be our Small Businesses and not Iran.
Socrates (Downtown Verona, NJ)
"little or nothing is trickling down to the lower levels"

Iran Republicans have never been happier !
PDM (Salt Lake City)
The comments seem to be highly political. Instead of the usual vitriol towards Obama, it is now directed towards Clinton and Kerry. I find it amazing how similar the situations in our country and theirs.
Iver Thompson (Pasadena, CA)
Sounds like Iran's distribution system is not too unlike America's. What other things are we going to be surprised to find out we have in common with each other as the future unfolds. Maybe we'll find out we're long lost brothers or something. How exciting.
JW (New York)
Yes, then they'll have to change those weekly hate rally placards to "Death to My Long Lost Brother; Death to Israel."
Iver Thompson (Pasadena, CA)
Just like Jacob and Esau? Even more exciting.
A Guy (East Village)
Rome wasn't built in a day.
maryann (austinviaseattle)
I think everyone needs to give this some time before we declare it a failure. The economy of Iran has been in suspended animation since 1979. Theocrats or not, they probably don't want everyone rushing the gravy train all at once.

Frankly you can't blame them for being cautious about establishing strong cultural and economic ties to the West. Many middle eastern countries who have didn't end up so well.

Let them be. Let their government decide how to manage their internal economy, just like we do ours. Sooner or later, they'll need to deal with their own citizens. Good luck to them all.
Amanda (New York)
What exactly are the Middle Eastern countries that did better by not establishing ties with the West? The country with the least ties to the West globally is North Korea. How's that working out for them? I'm a little disappointed this was a Times pick.
Valerie Hanssens (Philadelphia, PA)
Yeah that's an odd statement, seems the middle eastern countries with ties to the west do very well, if Qatar, the U.A.E., Saudi Arabia, and Jordan are anything to go by.
maryann (austinviaseattle)
The Sharif of Mecca, who in exchange for supporting the Allied Powers in World War I was promised control of Arab lands from Egypt to Persia. Europe screwed him over with the secret Sykes-Picot Treaty, which divided up the middle east into to spheres of influence controlled by Britain and France. The Russians published the secret treaty when their assents were denied, shocking the Arabs and forcing the British High Commissioner to resign. These culturally insensitive divisions are blamed for much of the conflict in the middle east.

Iran: Democratically elected PM Mohammad Mosaddegh was deposed by the CIA and British intelligence when he nationalized their oil fields. He was a secular democrat; we gave them the Shah.

Iraq: We supplied Saddam Hussein with weapons during the Iran/Iraq war, then we put his head on a pike. He provided free education and the best public healthcare system in the middle east to his people. He used oil profits to diversify their economy. Now Iraq is a bombed out parking lot.

Palestine: With the creation of Israel by the West after World War II Palestinians were displaced from their homelands. Many still live as refugees.

North Korea is not in the Middle East.
CMS (Tennessee)
“Our bigger companies are our top priority,” said Amin Amanzadeh, a financial reporter for several Iranian newspapers. “They are the only ones who can handle foreign investment. Also, if they improve the whole economy will.”

----------------------------

Watch conservatives show up here and argue trickle-down economics, as described above in the very last sentence, doesn't work.

A thick irony if there ever was one.
hppmartone (NYC)
Another trickle down economy.
Cathy (Hopewell Junction NY)
Imagine that. In Iran, insiders get the spoils, outsiders don't. Politically connected benefit more than the little people. Unlike in the US.

Oh, wait. Never mind.
JW (New York)
Though I can't recall the US ever vowing to wipe another country off the map; or sponsoring cartoon festivals mocking the murder of 6 million Jews. Unlike Iran.
Cathy (Hopewell Junction NY)
Just speaking about the flow of money, JW. I am not sure that there is a country anywhere in which the powerful and connected don't receive the greatest benefits. Any expectation otherwise seems a tad naive.
TPierre Changstien (bk,nyc)
What a shock. The exact people we need to keep a check on are the primary beneficiaries of Obama's recklessly novice policies.
Slann (CA)
" little or nothing is trickling down" Unbelievable! Mr. Erdbrink, are you really living under the thoroughly discounted and documented delusion of "trickle down economics"? Good God, man!
A corrupt power structure, as the one existent in Iran, would never do anything less than reap any and all profits and hoard them within the state-approved oligarchy.
The Iran deal was about the development of nuclear weapons, not some pipe dream of fiscal democracy. Please.
Jonathan Katz (St. Louis)
Wealth for the Revolutionary Guard, and no medical equipment for sick people. That's Iran (when it's not sponsoring terrorism, blowing up Marine barracks and U. S. Embassy in Beirut, etc.).
Un (PRK)
President Obama and John Kerry are the Dumb and Dumber of foreign policy. However, Kerry has yet to top Clinton in bad judgments. Read the news today about Libya and the growth of ISIS and the new move to send more American military equipment and ultimately troops to eastern Europe because Clinton has emboldened Russia. And, how about Syria? Looks like Assad will now take out the American backed fighters in Alleppo. And, did anyone else but me read the article about Clinton and Obama were actually secretly arming terrorists through Saudi Arabia? How stupid can she be?
PDM (Salt Lake City)
Wow!! Thanks so much for sharing.
CMS (Tennessee)
Here we go.

Righties make gigantic foreign policy messes and leave them for everyone else to clean up, yapping at everyone's heels the whole time that the cleanup isn't to their liking.

How the likes of Hagel and Kasich still claim an R membership without a straight jacket stuns.
JW (New York)
So glad Obama, Kerry and Clinton straightened everything out.
Tibby Elgato (West County, Ca)
Their economy works exactly like the US economy. All benefits from govt. actions go to insiders while the people are left to suffer. Why is this even news? Before complaining about what Iran does, let's fix things at home.
Grove (Santa Barbara, Ca)
How surprising.
We have a lot more in common with Iran than we ever imagined.
Stuart Wilder (Doylestown, PA)
Well, duh! John Kerry's fantasy that ending sanctions would do anything for whatever constitutes the average freedom loving, entrepreneurial Iranian proves as vapid as his other pontifications. Iran, Egypt, Cuba, Russia, China, North Korea, Syria and their ilk are not nation states— they are criminal enterprises that require fear and corruption to stay in power. The less we do to enthusiastically facilitate the flow of hard currency into their borders the better off we, and ultimately their citizens, will be. We have to deal with them every once in a while, but Kerry's enthrallment with cutting deals with these thieves is nauseating and embarrassing.
mabraun (NYC)
Then what would you? What should the US and West do in spite and instead of lifting sanctions. . . give us a hint . . . hmm?
Stuart Wilder (Doylestown, PA)
We can talk to them. but hold our noses and make them know we do not like them. I was not against the nuclear deal, but I was against the gloating. They are shooting missiles at our boats, imprisoning our sailors, and testing ICBM's as if tweaking the nose of the giant. They do that to those they think are weak, not, say, to Russia or China. This is how our position, and our maneuverability, gets eroded day after day around the world, and for no good reason other than strong and thoughtful leadership. It pains me— I vote and will always vote Democrat, but I just don't think that diplomatically we are better off the last 8 years than if McCain had been elected.
Joe J. (New York)
If it is true that small business cannot access capital because of terror-based sanctions, this is another reason why Obama and Kerry were wrong on the Iran deal. The deal allowed the hard-liners to gain at the expense of the people. The hardliners are controlling the upcoming elections, are gaining economic power at the expense of the people, and continue to support Assad and terror.

I suspect that Obama and Kerry knowingly made a high-risk gamble that the nuclear deal would empower the supposed democratic forces in Iran. At this early juncture, the pendulum is swinging against the Obama/Kerry plan. The theocrats, IRG and their statist cronies are not only maintaining the status quo but moving to consolidate power, as many predicted. It is sad that Obama could not be straight with us and acknowledge his high-risk, high-reward strategy rather than viewing reasonable countervailing views are personal and political attacks.
JW (New York)
And with his signature foreign policy "triumphs" being this questionable Iran deal while deciding to risk a power vacuum in the Mideast in return for "bringing the troops home" and "not doing stupid stuff" and a Nobel Peace Prize for nothing, while his signature domestic achievement Obamacare subject to the end of the risk corridor in 2017 when all government subsidies of health insurers' losses on the exchanges ends thus risking either sky-rocketing premiums and/or deductibles then or a complete decimation of provider networks and benefits to control costs, Obama's legacy may have a rough road ahead. One the progressive Left may not want to be reminded of 10 - 20 years or so from now.
Steve (New Haven)
Meanwhile, more than a decade and trillions of dollars later, the regressive Right may not want to be reminded of Iraq and the lives lost in that stupid war that further unsettled the Mideast while empowering Saudi Arabia and Iran.