After years of negotiations, world powers have reached a deal with Iran on limiting Iranian nuclear activity in return for the lifting of international economic sanctions. Negotiations between Iran and six world powers - the US, UK, France, China, Russia and Germany - began in 2006 and were concluded in July 2015 with the agreement that Iran would scale back its sensitive nuclear activities to ensure that it cannot build a nuclear weapon and the international sanctions on Iran would be lifted.
The re-integration of Iran to the international scene and the normalisation of relations between Iran and the West will be definitely faced by complex issues for Iran and its international interlocutors as it follows decades of struggles. However, these agreements presents an opportunity for trade and geopolitical cooperation for both sides that can be capitalised on.
On the 26th of January, leading experts will convene to discuss the trade and geopolitical implications of the Iran deal. The round table is an experts' consultation to examine different topics including:
- Trade Implications
- Iran and the West
- Iran and Arab Relations
- Syrian Conflict and the War on Daesh
- Iran and Israel Relations
- Maryam Nemazee, Journalist Broadcaster for Bloomberg and Aljazeera -( Chair)
- H.E Mohammed Hassan Habibollahzadeh, Charge D'Affaire of Iran to the UK
- Ellie Geranmayeh, Policy Fellow, European Council on Foreign Affairs
- Lord Hannay, Former UK Ambassador to the UN
- Simon Moore, International Director at CBI
- Tobias Ellwood MP, Minister for Middle East and North Africa, Foreign and Commonwealth Office
- John O'Rourke, Head of MENA Division, European External Action Service
- Richard Howitt, Member of the European Parliament, Member of Committee on Foreign Affairs
- Campbell Keir, Energy and UK Infrastructure Director at UKTI
As part of the deal, Iran will have international sanctions gradually lifted, which could lead to resurgence in its economy. Iran will now become the largest country to re-join the global marketplace since the breakup of the Soviet Union. By some estimates, Iran’s economy will grow by an additional two percentage points, to more than 5 percent GDP growth, within a year.
According to the World Bank, the Iranian economy loses out on $50 billion annually as talent looks elsewhere for work today as 25 percept of Iranians with a post-graduate education live in developed OECD countries. Removal of sanctions will perhaps persuade some educated Iranians to take their chances at home.
The International Energy Association forecasts that an end to sanctions will allow Iran to ramp up production by an additional 600,000 to 800,000 barrels per day within months, roughly 4 percent of global output. The re-entry of Iranian oil to the global market could lower 2016 forecasts for world crude oil prices by $5-$15 per barrel. That’s good news for oil consumers but bad news for Saudi Arabia, which stands to lose significant market share in years to come as both Iran and Iraq increase production and exports.
Iran and the West: The deal should present the catalyst that could eventually lead to rapprochement between Iran and the West in tackling security issues in the region. The outcome of this normalisation discourse, in the relationship between the West and Iran, is significant in transforming the relationship between the two sides. In the optimal scenario, Iran and the West will join forces to defeat ISIS and restore order in Syria through a democratic transition.
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As Iran re-enters the global economy, its consumer market of 78.5 million people—the second largest population in the Middle East after Egypt—will attract plenty of international interest.
Iran needs all the help it can get—its run-down energy sector requires some $200 billion in investment for much-needed upgrades. Iran’s transportation minister has announced that the country will need to replace as many as 400 commercial aircraft over the next 10 years; that’s at least $20 billion in potential revenue for foreign aviation companies.
While Iran's trade partnerships have been shifting toward Asia in light of Western sanctions, a nuclear deal could boost its trade relationship with the West.
The World Bank expects to see an increase in foreign direct investment from multinational corporations into Iran that could reach $3 billion. That would be double what foreign direct investment was during the sanctions period of 2012 through 2014.
Iran-and Arab Relations: The perceived competition between Iran and its Arab neighbours also suggests that it would be useful for Iran to engage with its Arab neighbours. Iran’s influence in Iraq, Bahrain, Syria, Yemen and Lebanon presents serious concerns to the Gulf States. In addition to that, the Iranian dispute with United Arab Emirates over an island in the Persian Gulf presents another challenge to Iran’s relations with the Gulf States. Due to the sectarian affinity, Iran relations with Gulf States will define, to a large extent, its relations with other Arab countries. It will be important to see Iran’s approach to its relations with the Gulf States and its response to concerns of these countries, which are to some extent legitimate.
Syrian conflict and the War on ISIL: Iran's leverage over the Syrian regime has been mentioned by experts in calling for engaging Iran in efforts to resolve the Syrian civil war. Iran's backing of the Shi’a Government in Iraq and discriminatory policies towards Iraqi Sunnis were major catalysts in alienating the Sunni population in Iraq. These two facts are major factors in the rise of ISIL in Iraq and Syria. There is no official declared cooperation between the West, their Arab allies from one side and Iran on another side in both conflicts.
In the Syrian civil war, Iran is backing the continuity of the brutal Asad's regime, whilst the West and their Arab Allies are supporting a regime change. In the fights against ISIL, defeating ISIL is in the interest of both sides and that what they are engaging in doing through military actions without any declared coordination.
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