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Iran’s Isolation Fatigue

Iranians want to re-engage with the West, say Sergio Marchi and Ken Lewis. How can Canada meet them half way?

By: /
16 September, 2014
Sergio Marchi
By: Sergio Marchi
Member, CIC Advisory Council

Fresh from a week in Tehran, where we met with senior political and business leaders, the overwhelming message was that Iranians want back in; they eagerly wish to re-engage with the West.

Thirty-five years of isolation from the U.S., and three years of tough sanctions cutting off oil revenues and the European Union market, have taken their toll. Tehran has a fatigued look. Infrastructure requires a massive overhaul, life is stressful and technologies are dated.

Moreover, Iran’s economy is ailing. Inflation, unemployment, and poverty levels are high. People are squeezed, and yet Iranians are not defeated. They are sustained by a long history, a rich culture and a reputable education system.

Outwardly friendly, they spoke frankly about their country.

Below are four take-aways for the Canadian government and business community:

Iranians remain hopeful. Everyone we met believes that the November deadline for the nuclear negotiations will be realized, and that this will trigger an era of openness and reform. That is why people are openly dismissive of the kleptocracy that prevailed under former president Mahmoud Ahmadinejad. Recently, we have seen more revelations of former ministers stealing what little oil wealth Iran was still pumping. People want an economy that works for all, not just for the chosen few who prosper from the embargo.

President Hassan Rouhani enjoys wide public support. Despite battling extremists, he has considerable political currency. People trust him, and his policy of rapprochement fuels new hope. The government is also close to the business community, which strongly believes that ending their isolation is the key to their nation’s development.

For example, Iran and South Korea had the same per capita GDP in 1965; today, the Korean figure is eight times higher. In our session with the president’s chief of staff, Mohammad Nahavandian, he noted that we “need the logical talk of the business community.”

The Canadian government should rethink its approach. Our government’s harsh tone and the closing of our embassy are seen as an error. We have legitimate differences, but with no dialogue, how are we to bridge the gaps?

The Iranian chairman of the Canada-Iran Chamber, Hamid Hosseini, recently said that he felt that Canada had “closed its window into Iran.” British Prime Minister David Cameron recently announced the reopening of Britain’s embassy. We should follow suit.

Canadian business must prepare to re-engage. Before the 1979 revolution, Canada enjoyed a robust commercial presence.

Today, Iran needs a massive infusion of capital and state of the art technology. Despite the sanctions, the U.S. and the EU are already positioning their companies for expected opportunities. Canadian firms will have to play catch-up.

The potential is vast. Vice-president Masood Soltanifar, who heads their tourism industry, told us of plans to quadruple the number of tourists to 20 million over the next decade. To accomplish this, Iran must triple its number of hotels and significantly upgrade its transportation network.

Oil and gas, mining, aerospace, auto parts and agri-food are also sectors needing attention, all of which play to Canadian strengths.

Iranians want to rebuild relationships with Canada and Canadian businesses. This bodes well for finding flexibility in the negotiations. However, if the talks fail, dashed expectations could plunge the country into uncertainty. We can’t afford another crisis in the region.

As the November deadline looms, let us hope autumn’s sparkle will facilitate a winter breakthrough.

A version of this post first appeared in the Montreal Gazette.

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