United States Institute of Peace

The Iran Primer

Poll 3: Views of the United States

The majority of Iranians have a favorable view of the American people, but not of the United States in general or the government, according to a new poll by the University of Tehran’s Center for Public Opinion Research (UTCPOR) and IranPoll.com, working in conjunction with the Center for International and Security Studies at Maryland (CISSM). The following are key results from the telephone poll of 1,012 Iranians conducted from Dec. 29, 2015 to Jan. 15, 2016.









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Poll 4: Views on Regional Conflicts, Syria

A majority of Iranians favor sending military personnel to Syria, according to a new poll by the University of Tehran’s Center for Public Opinion Research (UTCPOR) and IranPoll.com, working in conjunction with the Center for International and Security Studies at Maryland (CISSM). A majority also support providing help to Syrian President Bashar al Assad. But more Iranians are in favor of protecting Shiite religious sites (80 percent) and fighting ISIS (87 percent) than strengthening Assad (63 percent). “While it is widely assumed that Iran cares more about preserving Bashar Assad’s hold on power than anything else,” said Nancy Gallagher, interim director of CISSM, “this study reveals that Iranians are significantly more concerned about the rise of ISIS than Assad’s hold on power.” More Iranians also favor providing help to Kurdish and Shiite groups fighting ISIS than Assad. The following are key results from the telephone poll of 1,012 Iranians conducted from Dec. 29, 2015 to Jan. 15, 2016.



Some say that Iran should send military personnel to Syria to help the government of Bashar Assad in its fight against armed Syrian rebels, including ISIS, so that these rebels would not be able to threaten Iran’s interests and security in the region. 
Others argue that Iran should not send military personnel to Syria because this would increase Iran’s enemies in the region and beyond. 
Which of these views is closer to your opinion?
As you may know, the United State has been involved in Syria. Many reasons have been given for the United States’ involvement in Syria. As I read each reason, please say if, as far as you know, this is the most important reason, an important reason, a possible reason, or not one of the reasons behind United States’ involvements in Syria?
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Energy Secretary on Iran Nuclear Deal

On February 2, Secretary of Energy Ernest Moniz discussed the steps Iran has taken to curb its nuclear program and what lies ahead for the nuclear deal at the Woodrow Wilson International Center for Scholars. Moniz played a key role in the negotiations that led to the July 2015 brokering of the nuclear deal between Iran and the world’s six major powers. The following is a video recap of the event.  

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Rouhani on Economy, Elections, Syria

On February 2, President Hassan Rouhani discussed the economy, the upcoming elections, and the Syria conflict in an interview on state TV. The following are excerpted remarks from the interview.


"If U.S. companies are willing to come and invest in Iran, to bring manufacturing to Iran, we have no problem with that.”
"We can see an opportunity...Even if the oil price rises, we should rely more on non-oil exports."
"The leader said sanctions caused 40 percent of the country's problems: 60 percent of our problems are not related to sanctions, they are related to our own internal problems."
"In terms of cars, we must be world class, we must export cars; the recent contracts signed in France involve investment in Iran and manufacturing cars inside the country, and cars will be exported.”
“Now a new atmosphere and condition in interaction with the world and all activities in economic, cultural, and social fields has started and I hope we can make the best use of the opportunity."
“Iran’s strategic location, stability, sophisticated people, educated youths, and energy resources are amongst the reasons of international entrepreneurs and major corporations’ eagerness to participate in Iran’s market."
“Lower oil prices put pressure on us but we should also see the opportunities. We will gradually depart from the false economic addiction which is full dependence on oil, and next year’s budget will depend roughly 25% on oil."
“We should use the advantages of all countries; for us, relations with Asia is very vital and therefor, during Chinese President’s trip [to Iran] we decided to sign a long-term, 25-year contract."



The Region 

“The tension [between Turkey and Russia] is indeed very dangerous because both countries are neighbours of Iran with which Iran keeps good and close relations. The Islamic Republic of Iran will do its utmost to reduce and ease the tension, since it regards it against the benefit of Turkey, Russia and the whole region, as well. Some states regretfully assume that the tension is to their benefit and try to escalate tensions among other states and keep it going on to their own wills." 

Nuclear Deal

“All efforts in the JCPOA were focused on eliminating pressures and breaking a fence that enemies of the Revolution and the nation had put up."
“During recent years, the enemies could, as they said, make other countries and the international community follow them. Even our friends and neighbours did not want to have bank transactions with us."
“One of our important aims in JCPOA was people’s more welfare. In JCPOA, we were also seeking the cancellation of resolutions, recognition of nuclear rights, and lift of unjust sanctions."
“The Iranian nation have resisted against the enemies by tactfulness during the past years and this resistance, coupled with all branches joining hands, and more importantly, the Supreme Leader’s guidance was helpful to us and contributed to our success."



“We will certainly turn a golden and brilliant page of the Iranian history book on February 26, because Iran’s political establishment is experiencing for the first time simultaneously holding two elections of Majlis and the Elites Council of Leadership, so the elections are very important for both government and the people." 


“Environmental issues have been the main targets of the government from the very beginning of its formation and the first of its cabinet approvals were the ones about Orumiye Lake, because it is determined to solve environmental issues."

“Although old, used cars are one of the reasons for pollution and there must be some modifications in their systems, but we must make some changes in the heating systems of the houses, as well; for the very reason, the government calls on all people to assist government in this regard. We must also make changes and adjustments in some factories’ structures to reduce the pollution from the industrial complexes."


Translations via Reuters and president.ir

Economic Trends: January 2016

Cameron Glenn

The most significant development in January was the implementation of the nuclear deal, which awarded Iran partial relief from U.S., U.N., and E.U. sanctions. European and Asian companies quickly took steps to establish a foothold in the Middle East’s second largest economy.
Days after the deal was implemented, Iran engaged in a number of high-profile diplomatic visits. Chinese President Xi Jinping visited Iran on January 22 and 23 and signed 17 agreements. It was his first visit to the Islamic Republic. Two days later, President Hassan Rouhani embarked on his first trip to Europe. During the four-day visit, Iran inked deals worth $43 billion with French and Italian companies. China, Italy, and France were major trade partners with Iran before sanctions were tightened in 2010, and all are eager to boost economic ties.
Nonetheless, there may be limits to Iran’s economic windfall from sanctions relief. Some companies are more cautious to pursue business in the Islamic Republic, fearing they will run afoul of remaining U.S. sanctions for terrorism and human rights violations. Iran’s corruption and difficult business environment may also deter foreign investors. And as Iran prepares to ramp up oil and gas exports, it must contend with low oil prices and the need for billions of dollars of investments. The following is a rundown of major economic developments in Iran in January.
Sanctions Relief
January 16 marked the nuclear deal’s Implementation Day. After the U.N. nuclear watchdog determined that Iran had fulfilled its commitments under the agreement, the Islamic Republic received long-awaited relief from economic sanctions that have crippled its economy. “Today is a historical and exceptional day in the political and economic history of the Iranian nation,” said President Hassan Rouhani. A U.N. arms embargo and ballistic missile restrictions on Iran will remain in place, as will non-nuclear U.S. sanctions.
Iran also gained access to billions of dollars on Implementation Day. The Islamic Republic holds at least $100 billion in frozen assets, but much of that amount is tied up in debts or other pre-existing obligations. As a result, Iran may receive closer to $55 billion, according to U.S. Secretary of State John Kerry and Treasury Secretary Jacob Lew. Iran’s central bank governor Valiollah Seif, however, claimed in January that only around $30 billion would be available to Iran immediately. After Implementation Day, Seif reported that Iran had transferred funds from some of its overseas assets in held banks in Japan and South Korea, though he did not specify how much.
Iran also regained access to the international financial system. SWIFT, a Belgian system used to transmit payments, reportedly began the process of restoring service to Iranian banks. But U.S.-based payment systems – including credit cards – will still not function in Iran.
Foreign Investment
On January 16, Rouhani said the nuclear deal "opened new windows for engagement with the world." He estimated that Iran needs $50 billion annually in foreign investments to reach its goal of eight percent growth. Central Bank Governor Valiollah Seif said on January 20 that the $50 billion figure “isn’t farfetched” and that investment could offset the impact of low oil prices. According to the president’s chief of staff Mohammad Nahavandian, “Iran may be one of the most promising emerging markets of the coming decades.”
Foreign companies have been flocking to Iran since before the nuclear deal was signed. More than 140 economic delegations from 48 countries visited Iran between March and December 2015, according to Mir-Abutorab Badri, an official with the Trade Promotion Organization of Iran. Around half of them were from Europe and North America.
In January, some companies quickly took steps to re-enter the Iranian market. Daimler, a large German manufacturer of commercial vehicles, reached preliminary agreements to produce and sell trucks in Iran. European firms including Airbus, Peugeot, Danieli, and Saipem signed deals during Rouhani’s trip to Italy and France.
Other firms, however, are concerned that investing in Iran could backfire in the event of “snapback” sanctions or policy changes under the next U.S. president. Foreign companies are restricted from trading with more than 200 Iranian entities still sanctioned by the United States for non-nuclear reasons. Corruption, lack of transparency, poor transportation infrastructure, and other issues in Iran’s business environment could also deter potential investors. Iran ranks 119th out of 189 countries in the World Bank’s ease of doing business index, and 136th out of 175 countries in Transparency International’s corruption perceptions index.
Iran’s economy could achieve five or six percent growth in the next Iranian calendar year, which begins in March, according to Central Bank Governor Valiollah Seif. In a January 11 speech, President Rouhani echoed Seif’s optimism. “Despite all difficulties this year, economic growth of the country will be positive and I assure the people of Iran that next year (1395) will be the year of economic growth,” he said. The International Monetary Fund predicts Iran’s economy will grow between four percent and 5.5 percent next year.
Iran GDP
State Budget
On January 17, Rouhani presented a draft budget of $75 billion to parliament. The budget was around 4.2 percent higher than the previous year, with the expectation that sanctions relief will boost the economy. Government spokesman Mohammad Bagher Nobakht noted that only 25 percent of Iran’s state budget will depend on oil revenues, compared to around 60 percent in the past few years.
On January 13, oil prices fell below $30 a barrel for the first time in 12 years. Oil Minister Bijan Zanganeh blamed the low prices on political motivations behind overproduction. “There is a political will behind OPEC indecision over the production ceiling in the organization,” he said.
Despite low prices, Iran plans to quickly increase oil production. After Implementation Day, Iranian officials ordered an increase in production of 500,000 barrels per day, which they hope to achieve within six months. They planned to increase output by 1 million barrels per day within a year.  “If Iran does not increase its oil production, neighboring countries may increase their production…and take Iran’s share,” said Rokneddin Javadi, head of Iran’s National Oil Company. 
In its January oil market report, the International Energy Agency noted that “There are considerable uncertainties around the quality and quantity of oil that Iran can offer to the market in the short term and the not inconsiderable challenge of finding buyers willing to take more oil into an already glutted market.” The agency also predicted that global oil supply could exceed demand by 1.5 million barrels per day in the first half of 2016. Iranian officials, however, remained optimistic. “There are [oil] customers, and there have been negotiations in this regard,” Zanganeh said on January 19.
In late January, Iran’s Bank Mellat set up accounts with European banks to collect billions of dollars of overdue oil payments. Iran signed deals with Russian oil company Lukoil, Greek oil refiner Hellenic Petroleum, Italian oil services company Saipem SpA, and Italian energy group Ansaldo Energia.
On January 30, a group of students protested outside the Iranian Oil Ministry against the new Iran Petroleum Contract (IPC), chanting that the contracts would lead to the “plundering of national wealth.” The Oil Ministry introduced the IPC to replace the old “buy-back” contracts unpopular with foreign firms. Amid the protests, the National Iranian Oil Company announced that it postponed an oil conference in London due to issues obtaining visas.
Iran oil
Natural Gas
On January 11, President Rouhani attended the inauguration of phases 15 and 16 to develop the South Pars field, the largest gas field in the world. Iran plans to complete phases 17-21 of its 24-phase development plan within the next Iranian calendar year, according to Managing Director of the Pars Oil and Gas Company Ali Akbar Shabanpour.
Tehran hopes to increase gas exports and secure $40 billion in foreign investments now that sanctions are lifted. On January 19, Managing Director for International Relations of the National Iranian Gas Company Azizollah Ramezani said that Iran “is well-placed to sell gas to all countries,” including Europe.
Exporting natural gas requires expensive pipeline infrastructure or liquefaction – a process that liquefies natural gas and makes it easier to export. Building this infrastructure would cost billions of dollars and take years. On January 26, Managing Director of the National Iranian Gas Exports Company Alireza Kameli said that Iran was pursuing the development of liquefied natural gas (LNG) capabilities and hopes to be able to export LNG to Europe by 2018. Kameli also said in January that Iran was in the midst of negotiations to export gas to Oman and use its vacant LNG facilities.

Iran hosted its first aviation summit in 40 years on January 24 and 25, attended by representatives from more than 100 companies. “Airplane building companies are all eying a greater share in the country’s market,” said Secretary of Iran’s Aviation Companies Association Maghsoud Asadi Samani. Foreign airlines, including Air France-KLM SA, Lufthansa AG’S Eurowings, Austrian Airlines, and Emirates Airline, all plan to increase flights to Tehran. 
During Rouhani’s trip to France, Iran Air signed a $25 billion deal with Airbus to purchase more than 100 commercial jets. Iran also negotiated a deal to buy up to 40 passenger planes from France-based company ATR. Deputy Transport Minister Asghar Fakhrieh Kashan indicated that the Islamic Republic is interested in purchasing planes from Boeing, the world’s largest aircraft manufacturer. But the U.S.-based company is reportedly still assessing the potential risk of sanctions violations.
Iran has one of the world's oldest aircraft fleets due to years of sanctions. The Islamic Republic currently has 251 passenger planes, but around 100 are out of service due to difficulties obtaining spare parts. Iran needs to buy 500 planes to update its fleet within the next 10 years, according to Minister of Roads and Urban Development Abbas Akhundi.
United States
Implementation Day resulted in only modest changes to trade ties between Iran and the United States. The deal lifts some restrictions on foreign subsidiaries of American companies. But U.S. businesses are still largely barred from trading with Iran, as sanctions for terrorism and human rights violations remain in place. There are limited exceptions for aviation, carpets, and other goods. 
On January 15, President Barack Obama issued a presidential memorandum allowing civilian aircraft exports to Iran. Sanctions had prohibited U.S. manufacturers from selling planes, though the 2013 interim nuclear deal lifted bans on selling spare parts. Reports circulated in late January that the United States and Iran were in talks to establish direct commercial flights between the two countries, but U.S. officials denied the claims.
Iran plans to resume its shipments of saffron to the United States for the first time in 15 years, according to the head of Iran’s Saffron Exports Development Fund Mohammad-Javad Rezaie. Iran will also resume carpet exports to the United States in 2016.
Chinese President Xi Jinping visited Iran on January 22-23, following visits to Egypt and Saudi Arabia. Chinese and Iranian officials signed 17 agreements in energy, industry, transportation, technology, and other fields. The two countries also released a joint statement outlining broad goals for cooperation in politics, economics, cultural affairs, security issues, and foreign policy.
“Geographically, Iran has got the capacity to become a hub for China’s economic activities in the Middle East and Central Asia and Caucasus,” Rouhani said during the meeting with Xi Jinping. "In cooperation with the Iranian side and by benefiting from the current favorable conditions, China is ready to upgrade the level of bilateral relations and cooperation so that a new chapter will start," the Chinese President said after the meeting.
China has been Iran’s largest trade partner since 2009, and it continued to buy Iranian oil after sanctions were tightened in 2012. Iran is keen to secure Chinese investment in its ailing oil and gas industry. President Xi also considers Iran to be a crucial component to his “One Belt One Road” initiative, which aims to build transportation infrastructure across Central Asia and is framed as a renewal of the Silk Road.  
During Rouhani’s visit to Italy from January 25 to 27, Iran and Italy signed around $18.4 billion in deals for cooperation in energy, infrastructure, shipbuilding, and mining. The two countries signed 14 MoUs, including a deal with the Parsian Oil & Gas Development Company to upgrade the Pars Shiraz and Tabriz refineries. Iran also signed more than $6 billion in contracts with steel firm Danieli. On January 27, Iran and Italy issued a joint statement outlining a roadmap for bilateral cooperation.
Italy was Iran’s largest European trade partner before sanctions were tightened in 2010. Sanctions forced Italy to cut bilateral trade to one fifth of its previous volume. "After the JCPOA, we are more eager to have Italians before any other European nations to start a constructive interaction with their Iranian partners in the economic fields," Rouhani said in a meeting with Italian Prime Minister Matteo Renzi on January 25.
Rouhani arrived in France on January 27 for meetings with French Foreign Minister Laurent Fabius, President Francois Hollande, and a group of French business leaders. On January 28, French and Iranian officials signed 20 agreements for economic, political, and cultural cooperation. During Rouhani’s visit, French Foreign Minister Laurent Fabius said that “Iran is a great country with a bright prospect, and today major French companies are seriously determined to start cooperation with Iran.” Iranian ambassador to France Ali Ahani said that French President Francois Hollande plans to visit Iran after the Iranian new year in March.
French companies signed a series of lucrative business deals with Iran in January. French automaker Peugeot announced it had reached a deal with Iran Khodro worth $436 million to manufacture 200,000 cars per year in Iran. Energy company Total signed a deal to buy up to 200,000 barrels of Iranian crude oil per day. Airbus finalized a deal to deliver more than 100 commercial jets to Iran. And Bouygues and Aeroports de Paris are in talks with Iran to build a second terminal at Tehran’s airport.
United Kingdom
Rouhani said that “The Islamic Republic of Iran welcomes European companies and transfer of capital and technology in finance and banking,” in a phone call with British Prime Minister David Cameron on January 19. He added that “This resolve between the top officials of both countries has provided a serious momentum for relations.” Deputy Head of Iran’s Civil Aviation Organization (ICVO) Mohammad Khodakarami said on January 27 that a British Airways delegation had arrived in Tehran to discuss resuming flights.
After Implementation Day, the Bank of England reactivated licenses for Persia International Bank, Bank Melli, and Bank Sepah International, who will be allowed to resume operations once they take steps to comply with U.K. financial regulations.
South Korea
On January 25, South Korea opened a business center to facilitate trade between Korean and Iranian companies. The Export-Import Bank of Korea plans to provide more than $5 billion in financing for Korean companies who wish to do business in Iran. South Korean President Park Geun-hye is reportedly considering a trip to Iran, which would be the first visit by a South Korean president to the Islamic Republic. 
In January, Iran and Egypt resumed oil trade, which had been halted in 2012. “Iran has no limitations on the sale of crude oil and oil products to Egypt, and any official request will be considered when it is made,” Managing Director of the National Iranian Oil Company Roknoddin Javadi said. Iran and Egypt severed diplomatic ties in 1980 after Cairo offered refuge to the shah.


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