Rouhani's Greeting to Europe; The First Step of a Long Journey

They say every departure has a return, and this proverb applies not only to family gatherings but also significantly in international relations. Mohsen Jalalpour, the President of the Iran Chamber of Commerce, Industries, Mines and Agriculture, has been frequently writing on his personal Telegram channel about his daily communications with Iranian ambassadors in France and Paris. He discusses his conversations with Iranian diplomats at the Iranian embassies in Paris and Rome, which are coordinating Hassan Rouhani's first European trip. According to him, the 'private sector' has taken the lead in organizing the Iranian President's trip to Europe for the first time. Two weeks before the Iranian President's trip, Jalalpour traveled to Paris, Rome, and Milan to prepare for Rouhani's visit. The numerous and repeated visits of European economic and commercial delegations to Iran in the months following the signing of the nuclear agreement between Iran and global powers have created hope among the economic officials of the eleventh government that in the upcoming months, known as the post-sanctions era, they can attract significant foreign investments in Iran's economy. In his last televised interview in October this year, Hassan Rouhani reiterated this point and these hopes, stating that the main intention of the government in advancing nuclear negotiations was economic reconstruction and the need for investment and the transfer of modern technology and know-how to Iran's economy. Now, the eleventh President is a traveler to Europe, perhaps to take another step towards opening the doors of Iran's economy to the world. Mehrdad Emadi, an economist residing in Britain, emphasizes the importance of this trip, stating, 'France is the second-largest economy in the Eurozone and the third-largest economy in the European Union, and in terms of economic relations with Iran, except during Sarkozy's presidency, these relations have been extensive and growing.' According to Emadi, 'France has always distanced itself from countries like Britain and the United States in its economic relations with Iran.' This economist and analyst believes that Rouhani's trip to Paris is a sign of the importance of rebuilding and developing economic relations between Iran and France in Tehran's view. Emadi describes the economic relations between Iran and France as having a 'long historical background' dating back to before the 1979 revolution. He further discusses the significance of economic relations between Iran and Italy, stating, 'Italy is a very important country for Iran in Europe, as it is the most significant economy in the Mediterranean region, and many important projects for Iran in the Mediterranean, such as participating in the European gas market and reclaiming Iran's share of the European energy market, pass through Italy.' Italy is one of the European countries that maintained its relations with Iran even during the most difficult and restrictive years of economic sanctions and has had a positive view of Iran's economy and its position in the region and the world. The first step of a massive project According to Emadi, Rouhani's trip to the two European countries is even more economically significant than the Iranian President's trips to New York and his presence at public gatherings of the United Nations. This economic advisor to European companies describes Rouhani's trip to Rome and Paris as an indirect message to British and American investors that Iran is rapidly returning to the global economy and reclaiming its rightful place, and if they delay, they will miss this rare opportunity. Emadi characterizes this trip as 'a small step in a massive project' that, despite all the internal problems in Iran, will bring about remarkable changes in Iran's economy within the next two to three years. Italy and France are among the European countries that, despite reducing their level of relations during the years of increased pressure from economic sanctions against Iran, have still tried to maintain their economic communication bridges with Iran alongside Germany, Switzerland, and the Netherlands. According to statistical reports from the Iran Trade Development Organization on foreign trade performance in the first half of 2015, clear signs of increased foreign trade volume with Europeans can be observed. In these six months, Switzerland, Germany, Italy, France, and the Netherlands joined the list of the top 10 countries from which Iran imports. The volume of Iran's exports to Italy increased by 57% in this six-month period, making Italy one of the top 10 target export markets for Iran. In the first half of 2015, compared to the same period last year, the volume of Iran's exports to Europe grew by 7.5%. Although Iran's imports from Europe during this six-month period decreased by 12% compared to the same period last year, this decline in imports was not exclusive to Europe, and in fact, this decrease was the smallest decline in the value of Iran's imports among other continents. These statistics may indicate a shift in Iran's economic approach towards Europeans and vice versa, a sign that has emerged even before the operationalization of the revival of economic relations between Iran and Europeans. Ali Tayebnia, the Minister of Economic Affairs and Finance of the eleventh government, also announced the drafting of a 'roadmap for Iran's economic cooperation with the world' on the eve of Hassan Rouhani's first trip to the green continent to convey Iran's serious message for joining global economies. According to Mehrdad Emadi, an economist and expert on Iranian economic issues, there is hope that several industrial sectors will witness transformations in the future during Rouhani's trip to the two European capitals. This economist, excluding oil and gas projects, which he says are beyond the reach of the private sector and are intergovernmental projects, considers Iran's automotive industry, transportation sector, and tourism projects as suitable areas for joint cooperation between Iran and France. He notes that 'the French are very eager to engage in banking services in Iran.' Infrastructure projects such as investment in water management and supply projects, as well as the development and investment in renewable energy production, are other areas where Emadi believes cooperation and joint investments could take shape during this trip. Military and security forces; the brakes on investors However, all these aspects present a positive side of attracting foreign investment, while the other side of the coin includes the obstacles and problems that Hassan Rouhani, the President of Iran, also acknowledges. In his last live televised interview, he emphasized that 'attracting investment requires security.' The Iranian President stated that alongside opening the doors of Iran's economy to the global economy, 'structural reforms' must occur within Iran's economy, the banking system must undergo transformation, and corruption must be fought. He acknowledged that without a serious fight against corruption, creating a competitive environment, and reducing operational costs for investors, no investor would be willing to invest in Iran's economy. Mehrdad Emadi, who manages an economic consulting firm in Britain, categorizes the factors causing uncertainty for foreign investors entering the market and participating in Iran's economy into two general categories. Military and security semi-governmental companies and institutions have made Iran's economy high-risk. According to Emadi, 'the image presented of Iran outside is that Mr. Khamenei is still not aligned with the resumption of extensive relations with the West.' He states, 'Although I do not entirely agree with this assessment, nonetheless, this image creates concerns for investors, especially energy investors whose investments are typically long-term.' Emadi adds, 'As long as a clear and unified voice does not emerge from Iran in the context of rebuilding relations with Europe, this concern will persist.' The second significant concern of foreign investors, which Emadi believes is considerable, is the worry about the presence of non-governmental entities with strong security and military ties in the economy, making the Iranian market very high-risk. Emadi asserts that 'foreign companies can never compete with an entity or company that has security ties, whether in execution or in contract signing, and this issue significantly diminishes the attractiveness of the Iranian market and economy for investment in long-term projects.' Although this economist hopes that with 'more assured and transparent steps from the government, these companies and institutions will quickly comply with all Iranian regulations and change their behavior to resemble that of private sector companies,' he simultaneously considers the presence of these companies in Iran's economy as 'the most significant brake on investment in Iran.' Hassan Rouhani has chosen the capitals of Iran's most important commercial and economic partners in Europe for his first European trip. A journey that, according to Mohsen Jalalpour, the President of the Iran Chamber of Commerce, has many private sector activists and members of the chamber's delegation accompanying the Iranian President, seeking a way out of recession through the markets of these countries or attracting their investments in an atmosphere filled with fear, hope, and expectation.