Sanctions

A sign that everyone is getting prepared for early reduction in Sanctions.

http://america.aljazeera.com/articles/2013/11/25/sanctions-againstirancouldbegineasingnextmonth.html

A New Beginning

Last weekend, an agreement was signed in Geneva that represents the first step towards Iran returning to the global commercial community. The details of this are well covered elsewhere so I wont repeat them, but those that have glanced at my other blog (a Scotsman in Asia) will know that I have been anticipating this for some time. 

Iran is an amazing country that is much misunderstood given the hostility with the West that has existed since the Islamic Revolution. It is not my job to repeat history as I am looking forward and I strongly believe that whilst hurdles remain, economically it is probably the most exciting country in the world today, taking over that mantle from China. Lets just pause for a few highlights (I apologise if you disagree with certain statistics but the overall gist is accurate)

•2nd largest reserves of Oil in the World (1st being Saudi Arabia)

•2nd largest reserves of Gas in the World (1st being Russia)

•World’s largest zinc reserves.

•Over 10% of the known reserves of Copper in the World

•4.5 billion tons of iron ore resources with 2.5 billion tons categorized as recoverable.

•Proven reserves of 320 tons of Gold

•Abundant reserves of other minerals

•A population of 75 million of which significantly over half are aged under 35.

•A Highly educated workforce with a literacy rate above 91% (97% for adults aged between 15 and 24)

It is my belief that the agreement last weekend marks the first steps towards a full relaxation of economic sanctions and I'd go even further to say that Iran will become a key relationship and friend of the US and other Western countries in the future.  However, lets not get ahead of ourselves, lets just look at what can be done immediately. 

Firstly, Iran requires a massive investment in infrastructure. Everything from roads to airports to oil refineries to power generation.....it is almost never ending. One look at the age and state of the country's aircraft provides a taste for the state of many other parts of the economy. 

Thankfully, the country has an under-explored wealth of natural resources. As such, it should have increasing access to the international financial markets so it can finance the necessary infrastructure. Of course, the race to supply money and equipment by the likes of China will also help. However, it is my belief that Iran will not want to become overly behoven to China (or the US) in the way certain emerging African countries have become. 

My intent in starting this blog is not to become the pre-eminent Iranian blog. That is far better left to people currently based in Iran and Iranians abroad who currently have a more accurate insight. Rather it is to reflect my observations as an outsider that sees probably the biggest macro-economic opportunity left in my lifetime and wants to become involved. 

I am sure that I am naive on many things, but so long as I recognise that, it is ok. I am sure that in my journey, I shall make mistakes. Heaven knows I've made plenty of mistakes in my past. However, if I am correct in my overall perspective that so long as we treat Iran and Iranians with respect and ensure that commercial terms are fair (to everyone....I dont intend to be a pushover!), then fun can be had and money made! 

I have already signed contracts preparing for the lifting of sanctions (but fully intend to respect the law and not jump the gun) and am looking forward to this blog becoming an interactive debate and exchange. 

cheers, Fraser