After a decade of isolation, the last major frontier market is opening up to the outside world. Iran is back.
It’s fitting that the lifting of Western sanctions, triggered by Iran’s implementation of an international nuclear pact, comes as the World Economic Forum begins.
Two years ago at Davos, President Hassan Rouhani stood before a packed conference hall and talked of his country’s desire to emerge from the shadows of sanctions. He also outlined what Iran has to offer.
Having achieved the first goal, the president now needs to prove to the Iranian people that opportunity beckons after years of isolation and hardship.
When sanctions peaked between 2011 and 2014, Iranians saw their incomes plunge by more than 20%, to just over $5,300 on average. At one point, the Iranian rial fell by up to 80%, the price of basic goods skyrocketed and the economy suffered a period of hyperinflation.
And while other oil producers were enjoying prices of $100 a barrel for three years running, sanctions cost Tehran about $50 billion in lost revenue each year.
Iran is eager to open a new chapter. Foreign Minister Mohammad Javid Zarif said at the weekend that now was the time for “economic engagement.”