Tapping Iran's promising market won't be so easy

The recent diplomatic breakthrough between Iran and a U.S.-led group of six nations, which calls for Teheran to limit its nuclear program in exchange for the eventual lifting of Western sanctions, is far from being a done deal. Weeks of negotiations still remain before any accord is finalized. Then it has to be approved.

But if that finally happens, Iran could see the beginning of the end of those long-standing and crippling economic sanctions. And even the outside possibility of getting access to a new large and lucrative market is prompting many Western investors to look at Iran for its financial potential.

The potential is certainly there. As the research group Euromonitor International noted, Iran has the largest population in the Middle East, with over 77 million people. It also has the region's second-largest economy, after Saudi Arabia, with a GDP of $441 billion last year, thanks to its role as one of the world's largest crude oil producers.

By global standards, about half of Iranians are also considered as middle class and therefore as having some disposable income. "The Iranian urban middle class, particularly the youth, love Western culture and Western goods," Marvin Zonis, professor emeritus at the University of Chicago's Booth School of Business, told CBS MoneyWatch.

And despite the sanctions, Western goods from Europe and even the U.S. are already available in Iran. The United Arab Emirates (UAE) in 2010 officially re-exported well over $8.5 billion of Western goods to Iran, from food to industrial equipment, according to a Carnegie Endowment for International Peace report, although unofficial estimates are much higher.

"That's why Iranians get iWatches almost as soon as we get them here," Djavad Salehi-Isfahani a professor of economics at Virginia Tech and a nonresident senior fellow at the Brookings Institution, said during an interview with CBS MoneyWatch.

"You go to the rich districts in northern Teheran -- there are supermarkets with nothing local," he added. "Everything is imported."

And while Salehi-Isfahani believes Iran will reach some sort of agreement on its nuclear program with the West, he says major ideological and economic obstacles might keep foreign businesses from developing more access to Iranian consumers.

For starters, some big Iranian businesses have benefited from the international sanctions and have established domestic monopolies. An example is some of the high-end hotels owned by "bonyads" -- the semi-governmental organizations that took control of properties and industries confiscated by the Islamic Republic after the 1979 revolution.

"There are people who (have) internal monopolies that would like to keep foreign competition at bay," said Salehi-Isfahani. "And so far, sanctions have done it for them, and in future they will use other means to protect their turf."

There's also Iran's repressive theocracy. The nation's leaders see any expanded trade with Western countries as having "a cultural component that the radicals or conservatives in Iran's clergy consider a 'cultural invasion' -- those are the words they use," added Salehi-Isfahani. "They see trade as a vehicle for penetration of Western values into Iran."

He doesn't expect Iran to be flooded by Western consumer goods in the near future, even if the Islamic Republic allows more trade.

"I think it would be more trying to get investment, technology," he said, "so that Iranian production would benefit and there would be more jobs. I think that's the focus of the government. The question is whether they can successfully convince the middle class to hold back on this pent-up demand for foreign goods."