The economic allure of a more open Iran

The recently announced breakthrough agreement between a U.S.-led group of six nations and Iran that would limit but not destroy Teheran's nuclear program is far from settled.

But if all goes as planned, the deal would slowly phase out years of Western economic sanctions against Iran. And just the outside possibility of an Iran once again open to international trade has many global investors salivating when they consider the financial opportunities.

Obama defends Iran nuke deal as criticism grows

Not that it's going to be easy, especially when you consider Iran's repressive and autocratic government. As the BBC points out, the Islamic Republic's economy is mostly under the control of "powerful entities close to the country's Supreme Leader, the security forces and the military, some of whom are hardly accountable to anyone, let alone the judiciary."

Iran is also the world's fifth-largest oil producer, and while it might take several years after sanctions are lifted for its oil to find its way westward, the additional 1 million barrels per day a post-sanction Iran says it wants to export would surely affect the always-volatile oil market.

Still, many Iranians remain nostalgic about the American goods and services they had access to before the 1979 revolution, and they're apparently quite ready to hail the return of those products to their country.

In 2013 Reuters reported on the very active black market in Iran for American "muscle cars" and noted how many Iranian consumers and businesses are impatiently waiting for the rules to change.

Implications of the Iran nuclear deal

"Iran is a huge market and everyone is on the starting block waiting for sanctions to be lifted," a source familiar with the Iranian car market told the wire service at the time. "As soon as that happens, they'll be in."

Ahmed Mushfiq Mobarak, an economics professor at Yale University, said U.S. companies could benefit greatly from a reopened Iranian market, especially because Iran has a larger population than any Western European country besides Germany and is the second-largest country in the Middle East after Egypt.

"With an educated population and a thriving and growing middle class in Iran, I suspect there is a pent-up demand for sophisticated American products from the telecommunications and from the service (banking, financial services) sectors," Mushfiq Mobarak told CBS MoneyWatch.

"The middle class and upper classes in Iran, which would form the consumer base for such American products, (are) estimated to comprise about 50-60 percent of the population of a very large country."

And looking further into the future, if relations between Washington and Teheran ever do become normalized, Mushfiq Mobarak said American companies could also benefit from Iranian students, researchers and developers.

"Iran has traditionally possessed a much stronger educational infrastructure than other countries in the Middle East, Central and Western Asia," he noted. "Iran could prove to be an important supplier of (the) science and engineering talent that contributes to future innovation for the U.S. economy."

f

We and our partners use cookies to understand how you use our site, improve your experience and serve you personalized content and advertising. Read about how we use cookies in our cookie policy and how you can control them by clicking Manage Settings. By continuing to use this site, you accept these cookies.