THE RISKS OF DOING BUSINESS WITH IRAN

THE RISKS OF DOING BUSINESS WITH IRAN

by Dr. Majid Rafizadeh

Investors should be extremely cautious about doing business with Iran. Having assisted numerous profitable international companies in the region, I would strongly argue that at the moment, the risks of making long-term investments in Iran outweigh the benefits.

I totally understand why investors may find Iran appealing at first glance. It is still known as the largest untapped emerging market in the world.

It is the second-largest economy in the Middle East and North Africa after Saudi Arabia.It has an estimated $1.35 trillion of purchasing-power parity, making it the world’s 18th-largest economy.

It has the region’s second-largest population after Egypt, and is the world’s 17th most populous nation, with some 82 million people. Iran’s market appears to be multidimensional, with very profitable energy, consumer, mining and tech sectors. Foreign products — primarily American, followed by European then Asian — are very popular among Iranians.

Western firms may jump to invest in Iran because they do not want to fall behind their Asian counterparts. The impetus for European companies may be Europe’s slow economic growth. But due to geopolitics, volatility and the changing dynamics between the US and the region, all these attractions should not delude companies into investing.

The first major risk is linked to Washington’s Iran policy. US pressure and sanctions on Tehran will likely continue to escalate, affecting American and non-American companies. The US may re-impose its sanctions bill that targets non-American companies doing business with Iran. If a company does business with both countries, its investments could be in peril. Quitting Iran’s market would not be easy for those with long-term investments.

The second danger concerns political stability. Most of the young population are disenchanted with the ruling clerics. This, and increasing regional pressure from a united front of Arab states and the US, do not provide a ripe environment for investors to do business with Iran.

The US may re-impose its sanctions bill that targets non-American companies doing business with Iran. If a company does business with both countries, its investments could be in peril.

Thirdly, Supreme Leader Ali Khamenei and the Islamic Revolutionary Guard Corps (IRGC), which controls much of Iran’s economy, are tightening their grip on the market. This state-generated economy creates less competition and more bureaucracy. Some foreign industries and companies will find it challenging and not lucrative to do business with Iran, particularly given legal trade frameworks and limited labor laws.

The next risk relates to UN Security Council (UNSC) sanctions. If the nuclear deal collapses or it is proved that Tehran is violating it, sanctions may be re-imposed. Finally, some Iranian entities and individuals are still blacklisted, for reasons including violating UNSC resolutions and crimes against humanity. When doing business with Iran, it is difficult to know if these entities and individuals have stakes in those business deals.

This can lead to legal issues and impact the credibility of investors and firms. Similarly, countries in the region that are negatively impacted by Tehran’s activities may decide not to deal with those foreign companies. In addition, most profits go to the regime, not the people, so doing business with Iran would empower the regime to further repress the population and advance its regional hegemonic ambitions.

• Dr. Majid Rafizadeh is a Harvard-educated, Iranian-American political scientist. He is a leading expert on Iran and US foreign policy, a businessman and president of the International American Council. 

ANALYSIS: Is it time for the US and Saudi Arabia to combine efforts on Iran?

By Heshmat Alavi, Special to Al Arabiya EnglishMonday, 10 July 2017

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The new administration in Washington has chosen to stand alongside its Arab allies to voice a clear message. This is how this message reads: The regime in Iran is domestically repressive and resorts to flagrant human rights violations, and expansionist outside of its borders, wreaking havoc across the Middle East and beyond.

To take the next needed step, an all-out strategy is necessary to rein in Tehran and confront its belligerence inside the country and beyond.

Far too long the international community has failed to recognize the fact that the regime in Iran is controlled by aggressive fanatics that will literally stop at nothing to seek their interests, while knowing their internal status is extremely fragile.

Important lessons

While it is high time for the United States to lead the West and Saudi Arabia to lead the Arab world in this initiative, there is no need to launch yet another devastating war in the Middle East. The past 16 years have taught us many important lessons:

- The war in Afghanistan toppled the rule of Taliban and the al-Qaeda safe haven, and yet the lack of a legitimate post-war strategy allowed Iran take complete advantage of this void.

- The invasion of Iraq was unnecessary and again played into the hands of Tehran’s regime, providing it the opportunity to spread its devious mentality of fundamentalism, sectarian extremism and terrorism.

- The Arab Spring has reiterated to us that without an alternative opposition, no regime change will render any positive outcome. The current state of Libya is an unfortunate reminder.

- Most important of all, the international community is coming to understand that a policy of engagement and appeasement vis-à-vis the regime in Iran will only further fuel instability. Take the cases of Syria and Yemen, for example, where Iran has allocated enormous manpower and financial/logistical resources to create the mayhem it thrives on.

Remarks by Prince Turki Al Faisal at the Free Iran Rally in Paris July 1, 2017

Remarks by Prince Turki Al Faisal at the Free Iran Rally in Paris July 1, 2017

NCRI - On Saturday, July 1st, The National Council of Resistance of Iran (NCRI) held their annual “Free Iran” rally, which was attended by some 100,000 people, including hundreds of high ranking political supporters from the US, the EU, and dignitaries from around the world.

One of the speakers at the event was Honorable Prince Turki Al Faisal, former Saudi ambassador in the United States and United Kingdom. And the current chairman of King Faisal Foundation's Center for 

Research and Islamic Studies in Saudi Arabia.

His speech was as follows:

In the name of Allah the Merciful

And peace and blessings be upon our Prophet Muhammad and his family and disciples

Mrs. Maryam Rajavi

President Ahmed Al-Ghozali

Ladies and gentlemen,

Peace, mercy and blessings of God be upon you.

I am honored and thankful once more for inviting me to participate in your annual meeting. It is the forum where the sons of Iran, who have left Iran due to the injustice of the Velayat al-Faqih rule, meet with representatives from many countries of the world who have suffered the terrorism of this government, the largest sponsor of terrorism. This meeting is to remind the world of the crimes of this regime against its citizens, its neighbors and of its threat to regional and global security and stability.

Dear brothers and sisters,

During last year’s gathering, I chronicled what brings us together, which is not only geography, but also the bonds of humanity. There were Arab tribes who settled in Persia and created family bonds with you as well as Persian masses who came for the Haj pilgrimage and established familial ties with us. We are also gathered behind the statement "There is no God but God, and Muhammad is the Messenger of God." We share a historical legacy that contributed to the advancement of human civilization.

Countries of the Gulf Cooperation Council (GCC) in the Arab and Persian Gulf and their neighbor Iran lived in a state of coexistence until the Khomeini revolution of 1979. The conditions, then, changed from co-existence to confrontation. Khomeini and his followers sought to replace the logic of co-existence with confrontation, which became known as the policy exporting the revolution. The language of relations among countries was infused with the logic of so-called revolution, which hid an expansionist and aggressive agenda. The logic of revolution and coup made it difficult or rather impossible to come to an understanding. It replaces politics, diplomacy and policies of non-interference in the internal affairs of others. Moreover, the outward strategy of the Guardianship of the Jurist (Velayat-e Faqih) swapped the attitude of stability with a mindset of coup and turmoil.

Khomeini lived in exile between 1963 and 1979 due to his political conditions and his partisan spirit, and in this way he did not differ from the other groups of political Islam holding the spirit of coup and the desire to secede from the state. In Najaf, he lived to broadcast his pro-coup teachings, centered around the idea of Guardianship of the Jurist (Velayat-e Faqih) on the nation. He compiled these ideas in a book entitled "Islamic government."

Dear sisters and brothers,

The highest-ranking Shiite jurists have rejected this idea and have shown that Khomeini’s ideas contradict the fixtures of religious jurisprudence of the imams, whether in the city of Qom in Iran or in Najaf in Iraq, or everywhere else that Ja’fari clerics reside. Among the stories quoted about Khomeini when he started to take up residence in Najaf was that he shared a room with another student. A mosquito entered the room and his colleague suggested using insecticides to kill it. But in a Sufi atmosphere and while pretending to fear God in the pre-revolutionary days, Khomeini is said to have objected to this suggestion, saying that the mosquito must not be killed as it is a creature of God. Instead, he proceeded to use his robe to force the mosquito to exit the room.