Obama and Iran’s Return to the Global Economy

US President Barack Obama has joined Iranian President Hassan Rouhani in promising Iran’s return to the global economy. Both, however, know Iranians’ patience is running thin.

Last month, on March 20, Obama released his eighth and final online video greeting for Nowruz, or the Iranian New Year. He used references to cultural symbols, food, and even poetry to communicate with his Iranian audience.  

His message inspired spontaneous responses on social media. Many Iranians welcome his tone and the contents of his message, both of which have changed significantly since the days of unveiled hostility between Washington and Tehran. 

But when it came to the economy, Obama, like his Iranian counterpart, talked of the future rather than results.

Obama, like Rouhani, spoke of the economic benefits of the JCPOA, or Joint Comprehensive Plan of Action, as last year’s nuclear deal is known.
Obama emphasized that while the Iranian people might not see benefits  of JCPOA right away, they would be undeniable.

He spoke of more jobs for Iranian youth, adding that young Iranians would find jobs as Iran gains access to new technologies. These jobs are supposed to be created by startups and new firms.  

But Many Iranian listeners wondered why Obama talked of the future while, as the President of the most powerful economy in the world he ought to have the ability to speed up the implementation of JCPOA.  

As hardline radicals in Iran and Republican presidential hopefuls in the US continue to attack JCPOA, President Obama is aware that the Iranian people’s support for JCPOA is one of few factors guaranteeing its success.

Obama even mentioned certain Iranian products that can now be exported to the United States. He said, “Americans are eager to buy more of your beautiful Persian carpets, caviar, pistachios and saffron.”

Many Iranians interpreted the statement as a promise of a boost in trade with the United States.  But despite special allowances for certain products, US sanctions continue to affect Iran’s private sector, which  needs a boost in trade with the US. 

Iranian exporters are waiting for an opening in trade with the US. American consumers might be eager to buy Iranian products, but there is no news of mass imports from Iran entering the US.  

Iranian businesspeople are still waiting for officials to introduce a framework for Iran-USA trade.

The only actual change Obama was able to cite in his Nowruz message was the one that has taken place in Iran’s tourism industry. Recent reports indicate a remarkable increase in the number of foreign tourists visiting Iran, many of them from North America and Europe. 

Many of these visitors use social media to share their experiences of traveling in Iran, and online groups and pages dedicated to these travels are growing rapidly on platforms such as Facebook, where one group of visitors now has more than 44 000 members. 

The increasing demand for travel to Iran has justified new projects in Iran’s hospitality industry. Accor, a major French hotel operator, is constructing two new hotels in Iran, according to media reports. 

Iranian media also report that United Arab Emirates-based Rotana is considering new projects in Iran. Like Hassan Rouhani, Barack Obama knows Iran’s economy needs all the investment it can get. Both presidents need to show that any boost in Iran’s economy has been made possible by the JCPOA.

Despite Obama’s positive tone and many apposite references, his final Nowruz message contained nothing groundbreaking. American entrepreneurs and their Iranian counterparts are keenly aware that Iran-US trade is not yet possible. 

US sanctions on Iranian banks remain in place. Most lawyers or international business consultants warn interested businesses that nothing has changed in the existing procedures.  There some way left to go before Persian carpets enter American markets en masse.  

Nor did Obama’s positive tone mask the challenges his administration faces in opening trade. Like his counterpart in Tehran, he is wary of fierce opposition at home to any opening with Iran -- at least as long as Iran is still designated a state sponsor of terrorism. 

Rouhani and his supporters are also aware that any opening in trade with the US will harm the interests of those who benefited most from sanctions. 

Given such political challenges, one wonders if US demand for Iranian products is strong enough to create American political will to open trade further. 

One thing is certain: Iran does not benefit from a monopoly in any of the markets it hopes to enter, from rugs to caviar to saffron to pistachios.

To return to American markets, Iranian products need rebranding, marketing, investment support, along with better infrastructure for trade.  

Iranians are aware of these difficulties. What they fail to understand is that why President Obama has chosen to promise them a better future and greater economic opportunities instead of acting to reduce these barriers.  

Iranians are used to hearing about a rosy future from their own politicians, but it seems they must get used to American politicians promising them the same. For them, that is the clearest outcome JCPOA has so far produced.