The signing of the nuclear deal with Iran last month touched off an unseemly rush by European governments and investors to cash in on a hydrocarbon-producing country with a deep need for investment and 80 million deprived consumers.
The weekend after the end of the talks, Germany’s energy and economics minister was in Tehran with a delegation of business executives. French Foreign Minister Laurent Fabius, who struck a pose as skeptic of the deal before it was concluded, landed a few days later. Investors from Spain, Italy and Switzerland, among others, are joining what some are describing as an incipient gold rush.
Most likely, the bracing reality of Iran will bring most back down to earth. Iran is No. 130 out of 189 nations on the World Bank’s ranking of ease of doing business. Corruption is rampant and many industries are controlled by the malignant Revolutionary Guard, whose leaders oppose any opening to the West. It remains to be seen whether even big oil companies such as France’s Total and Italy’s Eni, which worked in Iran before sanctions were imposed, will be offered sufficient incentives to invest in new production at a time of a global oil market glut.
For investors on the fence, we have some advice: Before joining the crowd in Tehran, wait to see what happens to Washington Post reporter Jason Rezaian. Three weeks after the nuclear deal was signed, Rezaian still sits in Tehran’s notorious Evin prison, where he has been held since his arrest on July 22, 2014. His continued detention violates multiple Iranian and international laws, including one very simple one: An Iranian statute says no suspect who has not yet been convicted may be held for more than a year, unless accused of murder.
The charges against Rezaian have never been publicly announced, but according to his lawyer they include espionage and aiding a hostile government, not homicide. Many analysts believe his prosecution has been orchestrated by hard-liners in the Revolutionary Guard and judiciary to undermine the nuclear deal and discredit its chief negotiator, Foreign Minister Mohammad Javad Zarif, who has called Rezaian “a good reporter” and a “friend.”
These circumstances should raise several questions for those contemplating investment in Iran. Can the government of Zarif and President Hassan Rowhani be relied upon when it makes promises about terms for Western companies — or will it be sabotaged by Revolutionary Guard commanders who wish to defend their corrupt economic interests and keep the West out? If there are legal disputes, can Iranian courts be relied upon to enforce even straightforward laws? And will Western business owners visiting Tehran be safe from the fate of Rezaian — a correspondent duly credentialed by the Ministry of Culture and Islamic Guidance who was abducted by security forces and held in solitary confinement for months without charge while being subjected to harsh interrogation?
Unless and until Rezaian is released, no investor in Iran can safely set aside those concerns.
FROM AN EDITORIAL IN THE WASHINGTON POST