Iran

Iran Deal Good for All the Economies?

Boons hoped for not just in Iran but around the world.

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Julia Maudlin/flickr

While Iran hawks in the U.S. are freaking out—Iran may soon be able to buy and sell conventional arms as freely as almost every other country in the world and to develop a purportedly peaceful nuclear program as a number of countries have done before it—the Iran deal announced today could have powerful positive effects on the economy not just of Iran but the rest of the world too.

Russia, and China, were the primary negotiators pushing to lift the arms embargo—they were widely perceived to be doing so in order to sell arms to Iran themselves, something Gulf Arab countries have not been keen on. But the U.S. has been working on billions of dollars of defense contracts for allies in the Middle East, specifically in preparation for a potential Iran deal.

But it's not just arms merchants expected to see more business in the wake of Iran deal. There are theoil companies of course. And a number of European companies, ranging from aerospace companies to tobacco and food and beverage concerns, are expected to be potential winners when Iranian markets open up in the next six months—this is largely because those companies had presences in Iran before sanctions forced them to suspend their business operations.

American firms, on the other hand, have been mostly prohibited from doing business in Iran since the Islamic revolution in 1979. It doesn't mean American companies don't have market penetration in Iran—Iran's consumers are familiar with products from firms like Apple and Phillip Morris because of a thriving smuggling network, and even with brands like Starbucks thanks to knock-offs.

Central planners, naturally, are worried about the effect permitting Iran to sell its oil on a global market will have on prices. Iran has the fourth largest crude oil reserves in the week. They extract 2.8 million barrels of oil per day and say they can increase their capacity by a million barrels a day over the next year.

Entrepreneurs in Iran caution that the lifting of sanction won't be an economic cure-all for Iran. The CEO of an Amazon-like company in Iran, said the biggest benefits will be access to foreign investment and new e-commerce technology.  "This is not Russia in the 1990s," one banker told The Guardian. "Some people make it sound like a gold rush. There won't be one because there is already a free market and free trade here." For people who want to add value Iran is the place to be. It could be the best emerging market for years to come."

Those opposed to trade with Iran, of course, are free to choose not to trade with it. Lifting the sanctions means that political opposition won't place limits on the choices of others.

NEXT: Obama's Nuclear Deal with Iran is the Worst Option, Except for all the Others

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  1. American firms, on the other hand, have been mostly prohibited from doing business in Iran since the Islamic revolution in 1979. It doesn’t mean American companies don’t have market penetration in Iran

    Halliburton stock is up today on the news.

    1. Maybe Halliburton is up-but for sure, so is Hizbullah (all reputable sources put it as an Iranian funded and controlled party/army/thug force/community service agency), the Houthi’s fighting a possibly winning civil war in Yemen, on Saudi’s southern border, and Yemen being a big source of terrorist bombers that we had better contacts with the (now loosing) Govt with. The Houthi’s are Iranian clients-their stock is now up. The Muslim Brotherhood and Hamas (an offshoot of the MB) are both supported, but not controlled by Iran-so their stock now rises. Iran has killed many Americans and is holding various Americans on trumped up charges at any one time. Russian, Pakistani and N Korean nuclear weapons secrets sellers-their stock is up, because the other Persian Gulf and Near East States aren’t going to wait for the Iranians to tweet :”Suprize! We got a bomb!” They know that such a tweet is coming-and will start shopping for a secret Nuke weapons program soon.
      Yeah, give peace a change. And give these classic bad guys a chance to do all noted above, at the same time.

  2. And every analysis from within Iran says the populace is eager to do business with America. Like Cuba. It’s a dream for those who really support free markets, as opposed to neo-cons.

    1. Yeah Joe, because giving money to a government so it can fund prisons and oppress the living fuck out of its own people is totally the free market. I mean when malignant midgets like you run down to Cuba that money is totally going to the Cuban people. The government I am sure is going to use that for the common good.

      Yeah, Joe, we know no evil no matter how great is totally fine with you as long as a government is doing it. We know who you are. You don’t need to remind us what a sorry, sad little man you are.

      1. The neo-cons are in the house!

        1. They’ve always been here. You just never looked in the closet.

  3. It won’t do anything for Iran’s economy long term. Iran is poor for the same reason every other country in that world that is poor is that way; its government. The government is just going to steal the money. And since stolen money is free money and no amount of free money is ever enough, that money will quickly be spent and Iran will be just as poor then as it is now.

    They will however get a decent sized nuclear arsenal and a lot of funding for terrorists operations around the world. So there is that upshot.

    And while this may not do the world economy much good in the long run, a nuclear war in the Middle East will most certainly do a lot of harm.

  4. Iran Deal Good for All the Economies?

    Just think of thermonuclear war as a giant stimulus!

    1. Think of all the broken windows to be fixed.

    2. Make sure you round up all the bottlecap hoarders first.

  5. But the U.S. has been working on billions of dollars of defense contracts for allies in the Middle East, specifically in preparation for a potential Iran deal.

    This would hardly seem like an outcome to trumpet an an economic good.

    1. Seriously: Government-sponsored oligopolies will get more contracts from a rogue government?

      That gets a big “yay” around these parts?

      Its bizarre, how a deal that, at best, will do nothing at all, and at worst will have all sorts of terrible long-term effects, not one single one of them in any way promoting liberty or freedom anywhere at all, is being cheered on here at Reason.

      Leaving aside whether we should be in the Mideast at all, its been perfectly clear for quite some time that nobody, but nobody, is going to war with Iran. Saying this deal prevents something that wasn’t going to happen anyway is pure eyewash, that only a purblind ideologue/partisan would ever believe.

      Which makes me wonder: why are so many people cheering this on? I mean, I’m assuming nobody on these boards or at Reason is in line to land a phat arms contract with Dubai or anything, so what is the upside?

  6. Central planners, naturally, are worried about the effect permitting Iran to sell its oil on a global market will have on prices.

    Let me guess (since the article is paywalled) – they’re scared shitless prices will go down. Because the central planner’s job is to make sure everything gets LESS affordable over time.

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