© 2015 Prof. Farok J. Contractor, Rutgers University
The following comments are based on a telephone interview with Bob Hennelly of CBS News MoneyWatch on July 14, 2015.
The potential for US business to engage with Iran can be summarized in one sentence: Iran exports crude oil but imports gasoline.
This bizarre statement, based on the fact that the Iranians lack sufficient capacity to refine their own oil for domestic use, underscores how, hemmed in by sanctions and the limited worldview of their theocracy, Iranian technology and installed equipment is years, even decades, behind that of the West—not just in the energy sector, but across the board in most industries.
Their economy is already the biggest in the Middle East (except for Turkey)—with a population of 80 million having an average middle-class income of around $13,000 per capita, Iran is a large market, hungry for the latest technology and upgrading of its industries. The investment potential is enormous and will remain so for decades.
But will American firms immediately benefit? Probably not as much as Chinese, Russian, and European companies that will be the first at the gates of Tehran. Why? Faced with a hostile Congress and historical ties to Israel, President Obama has to strike an un-trusting and gradualist stance toward Iran. US regulations can be eased only over time, while Russia and China (two of the five negotiating nations) have already begun to make billion-dollar deals. German and French company representatives are already in Tehran. Moreover, the official opprobrium of the mullahs in charge of Iran is still directed principally against the US as “The Great Satan.” … CONTINUED ON ARCHIVE